004-03 - Port of Bremerton - ContractINTERLOCAL AGREEMENT
BETWEEN
THE CITY OF PORT ORCHARD AND THE PORT OF BREMER TON
FOR WASTEWATER SERVICES
This is an Interlocal Agreement entered into between the City of Port Orchard (hereafter
"City') and the Port of Bremerton (hereafter "Port'), herein designated as "Parties. "
WHEREAS a principle mandate of the Port is to create economic development, and
WHEREAS the Port is owner of over 1700 acres of land designated under the Growth
Management Act as an Urban Growth Area, with Airport and Industrial zoning in the Kitsap
County Comprehensive Plan, and said land is planned by the Port and Kitsap County as the
location of major employment growth in the future; and
WHEREAS the Kitsap County Comprehensive Plan calls for the addition of 9350 jobs in the
next 20 years on lands at and surrounding the Port's lands, said area being named the South
Kitsap Industrial Area (SKM); and
WHEREAS in order for the Port to full its economic development mandate it must ensure that
adequate infrastructure is available, including wastewater treatment; and
WHEREAS the Port is owner of a Washington State Department of Ecology approved on -site
waste water treatment plant located in the Port's Olympic View Industrial Parr said plant
having a limited 72,500 gallon per day domestic waste treatment capacity; and
WHEREAS the City of Port Orchard is a provider of urban services and has stated that it will
provide wastewater collection and treatment service to the South Kitsap Industrial Area to
stimulate economic development and job creation in South Kitsap; and
WHEREAS there is a need identified in the County Comprehensive Plan and in the SKIA sub
area plan now being drafted by Kitsap County for expanded wastewater treatment capacity to
the SKIA area, and
WHEREAS the Port, through a series of communications over a number of years with both the
City of Port Orchard and the City of Bremerton and through technical documents developed
during the SKU sub area planning process, has determined that connection to the City of Port
Orchard wastewater collection system will be the most economical and efficient method of
providing municipal wastewater service to the Port and SKU lands; and
WHEREAS the City has advised that its existing and planned collection system, and the existing
and planned capacity of its wastewater treatment facility, can accommodate the anticipated
flows from the SKU service area defined below; and
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WHEREAS the City has stated a willingness to expand its service area to include Port and
SKD service area lands and assume the ownership of the Port's wastewater facility and the
operational and administrative duties that accompany ownership; and
WHEREAS on November 13, 2001, the Port and the City entered into a Letter of Intent to
facilitate the expanded provision of wastewater treatment service to the Port and the SKIA
area;
NOW THEREFORE, in consideration of the mutual promises of the Parties to this Interlocal
Agreement, the Parties agree as follows:
1. Service AreaDesinnation
A. The service area of this Interlocal Agreement for the City's providing of wastewater
service, hereafter known as "Service Area", will be the (1) Port of Bremerton
properties, which include Bremerton National Airport and Olympic View Industrial
Park, (2) the Olympic View Sanitary Landfill, including Waste Management's new
transfer station, and (3) such other property designated by Kitsap County to be within
the South Kitsap Industrial Area, as defined by the SKIA Sub Area Plan (see Exhibit
f%. The City agrees that it will amend it planning and wastewater documents, as
necessary, to indicate said Service Area.
B. The wastewater planning will anticipate service to the entire Service Area. However,
the specific service planning may be phased to accommodate market growth and
economic development patterns.
C. Annexation of the Service Area is not a prerequisite for wastewater service.
2. Port On site Plant
A. The Port will retain ownership of its on -site treatment plant and collection system
within the Olympic View Industrial Park until the wastewater system connects to the
City collection system.
B. The Port will contract with the City to administer and operate the Port's wastewater
collection and treatment system during the period from Kitsap County adoption of the
SKIA Sub Area plan to the time of connection of the Port's wastewater system to the
City's wastewater collection system.
C. The City shall be responsible for administering connections, setting of the sewer fees,
collection of the revenue and payment of the applicable wastewater expenses.
D. Service Area wastewater customers shall pay the out -of -city surcharge, as established
by City ordinance. This surcharge is currently 50% of the in -city rate.
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E. New sewer connections and expansions shall pay the applicable sewer fees, as
established by City ordinance.
F. Existing customers, as listed on Exhibit -15 , shall not be charged the following
retroactive sewer fees as defined in City Ordinance lh :
1) Connection fee
2) Fee in Lieu of Assessment for collection
G. At the time the wastewater of these properties is treated at the City's wastewater
treatment facility, all the Service Area customers shall be required to pay all applicable
fees, which shall include the Kitsap County ULID #6 Latecomers Fee and the City's
Facility Fee.
H. The existing Port wastewater facility is described in Exhibit LC .
3. Property Transfer
A. The Port agrees to transfer its wastewater collection system, at no additional charge, and
free and clear of all liens or other valid claims, to the City at the time that Service Area
wastewater is pumped to the City wastewater collection system. Until the transfer is
completed, the Port shall retain all risk of loss to the system, except for that caused by
the sole negligence of the City.
B. The Port will retain ownership of its wastewater treatment facility (aeration ponds,
settling ponds and drain -fields) and associated property. The Risk of loss to the facility
and associated property shall remain, at all times, with the Port, except for loss caused
by the sole negligence of the City.
C. Upon assumption of ownership of the collection system, the City shall assume all
obligations related to the US Economic Development Administration agreements that
assisted in the funding of the collection system. EDA agreements are provided as
Exhibit '.y7 .
4 Compensation. equitable
A. The parties acknowledge good and valuable consideration for the asset transfers, and
assumption of obligations contained herein. The Port is receiving value because of the
City's sewer system will allow for continued economic growth on its property. The
City is receiving value for its increased obligation by charges user fees, and obtaining
the benefit of economies of scale in operating its treatment system.
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Port City
5. Easement Documentation
A. Property deeds and recorded easements (WSDOT, Mtsap County, etc.) are listed in
Exhibit E for reference purposes.
B. At the time of transfer of the collection system, the Port shall provide the City utility
easements for all portions of the collection system without additional cost to the Citv.
Unless mutually agreed otherwise, all utility easements shall be 20 feet wide. The
easement conveyance document shall warrant that the easement areas are clear of liens
and any other claims that would adversely affect the intended purpose.
6. Availability of Capacity of the Port's on -Site Wastewater Treatment Plant
A. Prior to the City's assumption of management and operation of the Port's wastewater
system, the Port will have the capacity of the existing treatment facility determined by a
qualified company, mutually agreed to by the Port and City.
B. The last 10,000 gallons per day of treatment capacity is reserved for the Port and any
party or parties it so designates. If the capacity limit is modified, the "last 10,000
gallons will be based on that newly modified maximum limit.
C. The capacity between the existing capacity and the last 10,000 gallons shall be available
to any Service Area property on a first -come -fast -serve basis.
D. The City will manage the allocation of capacity of the Port's treatment facility.
E. No residential property will be served by the Port's treatment facility during Phase 1,
described below, unless both the City and the Port agree
7. Customer Status
A. The existing customers are listed in Exhibit .V .
B. The Port and City shall notify the existing customers of the change in system
management and provide the City with points of contact for future inquiries.
C. Existing customers shall be subject to future rate adjustments and costs for wastewater
collection and treatment, as established by City ordinance.
d. Rates and Service Charees
A. Rates for the Service Area shall be established by City ordinance.
9. Developer Extension Requirements
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A. Developer Extension Agreements within the Service Area shall be in accordance
with City ordinances.
10. Pre-treatment
A. All Service Area customers shall comply with applicable Federal, State, Health, and
Local Government laws and regulations for wastewater systems.
B. Prior to issuing a sewer permit, the City shall provide the Kitsap County Health District
an opportunity to review and comment upon the wastewater connection.
C. The City shall be responsible for administering the wastewater treatment system, which
includes pre-treatment requirements.
IL Implementation Responsibilities
Phase I (City assumption of treatment plant and collection system operation and wastewater
service)
A. Phase 1 is defined as the period from when the SKIA Sub Area Plan is adopted by
Kitsap County until the Service Area wastewater is pumped to the City's collection
system.
1) The Port shall retain ownership of its treatment facility and collection system
and insure the same for all risks durine all three Phases. The risk of loss
from any and all causes, other than the sole nerligence of the City, shall
remain with the Port until the collection system is transferred to the Citv at
which time the risk of loss to the collection system shall be the City's except
for loss caused by the sole nerlieence of the Port
2) The Port shall contract with the City to manage and administer the wastewater
treatment system that now serves the Port's Bremerton National Airport and
Olympic View Industrial Park areas, which systems will be available to the
Service Area in the manner described in this agreement.
3) The City shall be responsible for the following:
a) Routine maintenance of the wastewater system including but not
limited to pump repair.
b) Rate setting and financial management of the system
c) Coordination with the Department of Ecology, Kitsap County Health
District, and other agencies with regards to wastewater treatment.
d) Sewer permitting for new accounts and coordination with Kitsap
County Department of Community Development.
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e) Auditing of the wastewater treatment accounts by the State of
Washington.
4) The Port shall be responsible for the following:
a) Previous actions or issues regarding the Port's wastewater system.
b) Debts or financial obligations associated with the wastewater system
established prior to ownership of the collection system by the City.
c) Providing leadership in the SKIA development process.
d) Participating in the anticipated LID or ULID or other funding
mechanisms which will fund Phase 2
e) Capital improvements including but not limited to Pump replacement
B. The planning and construction of the wastewater connection between the Port's system
and the City's system is considered Phase 2 and can occur simultaneously with Phase 1.
Phase 2 (Construction of transmission and pumping facilities to City collection line)
C. Phase 2 shall commence with passage of a Resolution from the City authorizing the
planning for the connection of the Port's collection system to the City's collection
system.
1) The City shall be responsible for the following:
a) To serve as lead agency for planning the implementation of the
connection of the Port's collection system to the City's collection
system.
b) Cooperate with the Port in investigating alternative technologies,
means and methods that may be more cost effective than pumping the
Service Area's wastewater to the City's collection system. .
c) Maintaining its Comprehensive Sewer Plan and the Capital Facilities
Plan to reflect the wastewater needs for the service area in a manner
consistent with the Growth Management Act and the Act's capital
facilities planning requirements.
2) The Port shall be responsible for the following:
a) Support the local improvement district or other funding mechanism to
help fund the required collection system.
b) Cooperate with the City in investigating alternative technologies,
means and methods that may be more cost effective than pumping the
Port's wastewater to the City's collection system.
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3. The City shall not be responsible for funding any of the required Phase II
construction and related costs. It will cooperate in the formation of an LID, so long as its costs
associated therewith are reimbursed from the LID funding.
Phase 3 (Operation of the Service Area collection system)
D. Phase 3 will commence when the connection of the Port's wastewater collection to the
City's collection system has been accepted by the City.
1) The City shall be responsible for the following:
a) Maintenance and operation of the wastewater system
b) Rate setting and financial management of the system
c) Coordination with the Department of Ecology, Kitsap County Health
District, and other agencies with regard to wastewater treatment.
d) Sewer permitting for new accounts and coordination with Kitsap
County Department of Community Development.
2) The Port shall be responsible for the following:
a) Compliance with rules and regulations of the City wastewater program.
12. Dispute Resolution
A. In the event any suit, action or other proceeding shall be brought in connection with
any of the terms or conditions of this Interlocal Agreement, the Parties hereby
stipulate that jurisdiction and venue of each suit, action or other proceeding shall be
in Kitsap County, Washington.
13. Indemnification and Hold Harmless
A. Each Party shall indemnify and hold the other harmless from any claims, in law
or equity, of whatever kind and nature, and from all sources, whether known or unknown at
this time, arising directly or indirectly, from matters which regards to which the other party
has assumed the risk of loss.
B. Each Party shall indemnify and hold the other party harmless from any claims,
in law or equity, of whatever kind and nature, and from all sources, whether known or
unknown at this time, arising directly or indirectly, from their own actions, or their failure
to act when they had an affirmative duty to take action.
C. The indemnity and hold harmless requirements in paragraph 13 shall extend to
the officers, elected official, employees and agents of each party. The requirements also
include the costs, expert witness fees, and attorneys fees incurred with regards thereto,
whether or not legal action is commenced, or if the matter is resolved in mediation,
arbitration, or litigation.
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D. In the case claims for damages, or other relief, in which it is alleged that both
parties are negligent, then the parties will work together to minimize duplication of effort in
providing the defense, and each party will be responsible to indemnify and hold the other
harmless only to the extent of the percentage of liability attributable to that party.
14. General Provisions
A. Sole Agreement. This Agreement may not be amended or modified in any
respect whatsoever except by instrument in writing signed by the parties hereto.
B. Captions. The captions of this Agreement are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
C. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
D. Severability. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as it such invalid or unenforceable provisions were omitted.
E. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together constitute but one and
the same instrument. This Agreement may be executed (i) on an original, (ii) a copy of an
original, or (iii) by a facsimile transmission copy of an original followed by delivery of an
original.
F. Exhibits. The exhibits attached hereto, together with all documents incorporated
by reference therein, form an integral part of this Agreement and are hereby incorporated into
this Agreement wherever reference is made to them to the same extent as if they were set out in
full at the point in which such reference is made.
G. Incorporation of Recitals. The recitals are incorporated in the body of this
Agreement as if set forth at length.
H. Time of the Essence. The time for performance of the parties hereunder is of the
essence of this Agreement.
I. Attorney Fees Recoverable. In the event any suit or action is instituted to
enforce or interpret any of the terms of this Agreement including any action or participation in
or in connection with a case or proceeding under any Chapter of the Bankruptcy Code or any
successor statute, the prevailing party shall be entitled to such sum as the court may adjudge
reasonable as attorney fees in such suit, action or proceeding or upon any appeal from any
judgment, order or decree entered. therein.
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J. Interpretation, No Presumption. It is acknowledged by the parties that thi
s
Agreement has undergone several drafts with the negotiated suggestions of both and therefore
no presumptions shall arise favoring either party by virtue of the authorship of any of its
provisions.
K. Binding Effect. This Agreement and the terms, covenants, benefits and duties
set forth herein shall inure to the benefit of and be binding upon the parties, their heirs,
successors, legal representatives and assigns of each of the parties.
L. No Waiver. No waiver of any default under this Agreement shall constitute or
operate as a waiver of any subsequent default hereunder, and no delay, failure or omission in
exercising or enforcing any right, privilege or option under this Agreement shall constitute a
waiver, abandonment or relinquishment thereof or prohibit or prevent any election under or
enforcement or exercise of any right, privilege or option hereunder.
9/ ' >,( L<<_�•,/vR (c , o3
Dated this day of *aay,-2902-. --
CYTY PORT ORCHARD
LESLIE J. WEATHERILL, Mayor
APPROVED AS TO FORM:
�4rr7� 6J� -A4 for) �1Ct1 r
Attorney
PORT OF BREMERTON
CHERYL KINCER, President
APPROVED AS TO FORM:
ATTEST:
81
, City Clerk
AgkOL I . 6173C-Al
wmgjkll
BILL MAI AN, Secretary
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