042-19 - Resolution - Amendment to 2007 Reimbursement Agreement for Utility System Improvements with McCormick CommunitiesRESOLUTION NO. O42-L9
A RESOLUT ON OF THE C W OF PORT ORCHARD, WASHINGTON, APPROV NG
THE FIRST AMENDMENT TO 2OO7 REIMBURSEMENT AGREEMENT FOR UTILITY
SYSTEM MPROVEMENTS W TH MCCORM CK COMMUNIT ES, tLC FOR
DEVETOPMENT OF NFRASTRUCTURE N THE 580/650 WATER ZONES.
WHEREAS, the City of Port Orchard owns and operates a municipa! water system that
services the areas known as McCormick Woods and McCormick West, which comprise hundreds
of acres of land owned by McCormick Communities, LLC (the "McCormick Property"); and
WHEREAS, the McCormick Property is mostly served by the Port Orchard water system,
and was previously served by the McCormick Water Company, lnc. On September 1, 1998 the
City purchased the assets of the McCormick Water Company, !nc. and undertook by contract the
obligation to serve the McCormick Property; and
WHEREAS, the 1998 Agreement also allowed the McCormick Property owners to obtain
water services from a differ purveyor if the City was unable to provide the service; and
WHEREAS, the McCormick Property is within the areas known as both the 580 Pressure
Zone ("580 Zone"l and the 650 Pressure Zone ("660 Zone"l, with development to date happening
within the 580 zone which is served by both the City of Port Orchard and the City of Bremerton;
and
WHEREAS, on July 10, 2OO7, Port Orchard and GEM L, LLC ("GEM") entered into a
Reimbursement Agreement For Utility System lmprovements ("2OO7 Agreement"). ln this 2OO7
Agreement, the City and GEM agreed that the City was "unable to fund" the Water Facilities and
agreed that if GEM constructed these Water Facilities, GEM would receive reimbursement as
described in this 2OO7 Agreement; and
WHEREAS, GEM chose not to construct these Water Facilities but the 2OO7 Agreement
remains in effect; and
WHEREAS, McCormick Communities, LLC ("McCormick") is GEM's successor as owner and
developer of the McCormick Property, and on December 30, 2015, GEM and McCormick entered
into an Assignment, Assumption and Consent whereby GEM assigned to McCormick all of GEM's
right, title, and interest in the 2007 Agreement; and
WHEREAS, the 2OO7 Agreement called for the construction of a L.L million gallon
reservoir to serve the 580 and the 560 water zones; and
Resolution No. 042-19
Page 2 of 4
WHEREAS, McCormick has requested to build only a 580 zone reservoir at this time which
is addressed by this First Amendment to the 2007 Agreement with the 550 Zone reservoir to be
built at a later time and subject to a future agreement between the parties, or further
amendment to the 2007 Agreemen$ and
WHEREAS, a portion of the 580 Zone also is within the City of Bremerton, and a portion
of the 580 Zone within the City of Port Orchard is served by the City of Bremerton's Water System;
and
WHEREAS, Port Orchard receives water from the City of Bremerton under an lnterlocal
Agreement between the cities to help Port Orchard serve the 580 Zone. The 580 Zone is served
by both Port Orchard's and Bremerton's respective water systems; and
WHEREAS, the Cities of Bremerton and Port Orchard recently entered into a new
lnterlocal Agreement between them for serving the 580 zone; and
WHEREAS, while the additional source from Bremerton has helped with the lack of
adequate water source, there remains an issue of inadequate water storage for the 580 and 660
zones for both Port Orchard and Bremerton; and
WHEREAS, on June LL,20L9 after learning that the City is over-subscribed for the current
water system and at risk from a public health and safety perspective, the Port Orchard City
Council enacted Ordinance No. O2O-I9, imposinga six month moratorium on the acceptance of
applications for building permits in the City's 580 and 550 Zones in order to provide the City
adequate time to evaluate the water system needs to ensure adequate water and fire flow for
these zones; and
WHEREAS, on )uly 2,20L9, McCormick filed and served a legal challenge to the first
moratorium, Kitsap County Cause No. 19-2-01896-18, asserting that the City Council violated the
Open Public Meetings Act, Chapter 42.30 RCW, when it adopted this moratorium; and
WHEREAS, Ordinance No. 020-19 was reaffirmed by adoption of Ordinance No. 020-19-A
on July 23,2019 following a public hearing; and
WHEREAS, as part of negotiating this Amendment to the 2007 Agreement, Port Orchard
amended the moratorium on October 8,2OL9 by adoption of Ordinance No. 039-19. Following
this adoption, McCormick dismissed its action on the moratorium; and
Resolution No. 042-L9
Page 3 of 4
WHEREAS, on August L3, 20t9, McCormick filed a Complaint For Declaratory and
lnjunctive Relief and Damages, Kitsap County Cause No. 19-2-02310-18, but McCormick has not
yet served this Complaint on the City; and
WHEREAS, after imposing the Moratorium, Port Orchard approached Bremerton about
purchasing additional water to serve the 580 zone for the McCormick development, and
Bremerton responded that it will provide additional water for an interim period only if (1) Port
Orchard enters into a new lnterlocal Agreement with Bremerton, (2) Port Orchard enters into a
new Agreement with McCormick for the system improvements, and (3) McCormick makes
improvements to Bremerton's water system; and
WHEREAS, in response, and in order to obtain water for the McCormick Property in the
580 zone, McCormick has negotiated a Public Utilities Construction Agreement with Bremerton
and also a Reimbursement Agreement for Utility Extension Agreements, pursuant to which
McCormick will construct certain water system facilities to serve the McCormick Property; and
WHEREAS, the First Amendment to the 2007 Agreement provide assurance to Port
Orchard that McCormick will make certain improvements for both storage and source in the Port
Orchard 580 Zone; and
WHEREAS, at the time of this First Amendment to the 2OO7 Agreement, multiple
agreements have been put in place to address the 580 Zone water infrastructure. (1) the City of
Port Orchard has entered into a new lnterlocal Agreement with the City of Bremerton for water
source in the 580 Zone; (2)the City of Bremerton has entered into an agreement with McCormick
for certain water improvements; and (3) the City of Port Orchard has received concurrence form
South Kitsap Fire and Rescue (SKFR) to allow interim nesting for fire flow purposes in the existing
580 Zone Reservoir during the time period in which McCormick is constructing the new City of
Port Orchard-McCormick 580 Zone Reservoir and transmission main as outlined in this
Amendment; and
WHEREAS, following the execution of this First Amendment to the 2007 Reimbursement
Agreement For Utility System lmprovements and the lifting of the Moratorium, McCormick wil!
agree to dismiss its lawsuit for damages; and
WHEREAS, the City Council finds it in the public interest to authorize the Mayor to execute
the proposed Amendment Agreement which amends the 2007 Agreement which is attached to
this Resolution as Exhibit"L"; now, therefore,
THE C TY COUNC t OF THE C TY OF PORT ORCHARD, WASH NGTON, DOES HEREBY
RESOTVE AS FOLLOWS:
Resolution No. 042-L9
Page 4 of 4
Section 1. The Mayor is hereby authorized to execute this First
Amendment to the 2OO7 Reimbursement Agreement for Utility System lmprovements in
substantially the form attached hereto as Exhibit"L".
PASSED by the City Council of the City of Port Orchard, SIGNED by the Mayor and attested
by the City Clerk in authentication of such passage this 26 day of November 2019.
Robert Putaan Mayor
ATTEST:
Bra v earson, MMC, City Clerk
FIRST AMENDMENT TO 2OO7 REIMBURSEMENT AGREEMENT FOR UTILITY
SYSTEM IMPROVEMENTS
This FIRST AMENDMENT TO 2OO7 REIMBURSEMENT AGREEMENT FOR
UTILITY SYSTEM IMPROVEMENTS ("Amendment") is entered into between the City of Port
Orchard, a Washington municipal corporation ("City" or "Port Orchard") and McCormick
Communities, LLC, a Washington limited liability company ("McCormick"). City and
McCormick are each a "Party" and together the "Parties" to this Amendment.
The Parties agree as follows.
RECITALS
A The City owns and operates a municipal water system that services the areas known as
McCormick Woods and McCormick West, which comprise hundreds of acres of land
owned by McCormick as depicted in Exhibit A (the "McCormick Property").
Many acres of the McCormick Property have received preliminary plat approval, and
other acres have received final plat approval, and McCormick has sold some of the
resulting lots to builders.
The McCormick Property is mostly served by the Port Orchard water system, and was
previously served by the McCormick Water Company, Inc. On September l, 1998 the
City purchased the assets of the McCormick Water Company, Inc. and undertook by
contract the obligation to serve the McCormick Property.
The McCormick Property is within the areas known as both the 580 Pressure Zone ("580
Zone") and the 660 Pressure Zone ("660 Zone"), with development to date happening
within the 580 zone which is served by both the City of Port Orchard and the City of
Bremefton (the area served by Bremerton is known as McCormick North and is not
depicted on Exhibit A).
The 2007 Reimbursement Agreement for Utility System Improvements called for the
construction of a I .l million gallon reservoir to serve the 580 and the 660 water zones.
McCormick has requested to build only a 580 zone reservoir at this time which is
addressed by this Amendment. The development of the 660 zone reservoir will be subject
to a future agreement between the parties, or further amendment to the 2007 Agreement.
A portion of the 580 Zone also is within the City of Bremerton, and a porlion of the 580
Zone within the City of Port Orchard is served by the City of Bremerton's Water System.
Port Orchard receives water from the City of Bremerton under an lnterlocal Agreement
between the cities to augment Port Orchard's supply to the 580 Zone. The 580 Zone is
served by both Port Orchard's and Bremerton's respective water systems. Port Orchard
AMENDMENT # I TO 2OO7 UTILITIES AGREEMENT
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receives such water by means of a water system intertie at Anderson Hill Road and SR
16. The Cities of Bremerton and Port Orchard recently entered into a new Interlocal
Agreement between them for serving the 580 zone.
On July 10,2007, Port Orchard and GEM l, LLC ("GEM") entered into a
REIMBURSEMENT AGREEMENT FOR UTILITY SYSTEM IMPROVEMENTS
("2007 Agreement"), which is Exhibit B to this Amendment. [n this 2007 Agreement,
the City and GEM agreed that the City was "unable to fund" the Water Facilities
described and depicted in Exhibit A to the 2007 Agreement, and the City and GEM
agreed that if GEM constructed these Water Facilities, GEM would receive
reimbursement as described in this 2007 Agreement.
GEM chose not to construct these Water Facilities but the 2007 Agreement remains in
effect. McCormick is GEM's successor as owner and developer of the McCormick
Property, and on December 30, 2015, GEM and McCormick entered into an
ASSIGNMENT, ASSUMPTION AND CONSENT whereby GEM assigned to
McCormick all of GEM's right, title, and interest in the 2007 Agreement.
Today Port Orchard continues to be unable to provide sufficient water to the McCormick
Property in the 580 zone to serve the lots with preliminary and final plat approval. The
City has obtained additional source from Bremerton for the 580 zone for several years.
While this has helped with the lack of adequate water source, there remains an issue of
inadequate water storage for the 580 and 660 zones for both Port Orchard and Bremerton.
On June ll,20l9 the Port Orchard City Council enacted Ordinance No. 020-19,
imposing a six month moratorium on the acceptance of applications for building permits
in the City's 580 and 660 Zones.
On July 2,2019, McCormick filed and served a legal challenge to the first moratorium,
Kitsap County Cause No. I 9-2-01896- 18, asserting that the City Council violated the
Open Public Meetings Act, Chapter 42.30 RCW, when it adopted this moratorium.
' McCormick has since dismissed this action in consideration of the City Council
amending the moratorium by means of Ordinance No. 039- 19.
On July 23,2019 the City Council conducted a public hearing and enacted Ordinance No
020-19-A to "reaffirm" Ordinance No. 020-19 and to continue the moratorium
(collectively these two moratorium ordinances are referred to herein as "the
Moratorium").
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AMENDMENT #I TO 2OO7 UTILITIES AGREEMENT
MCCORMICK COMMUNITIES / PORT ORCHARD
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' On August 13,2019, McCormick filed a Complaint For Declaratory and Injunctive Relief
and Damages, Kitsap County Cause No. I 9-2-02310- l 8, but McCormick has not yet
served this Complaint on the City.
o After imposing the Moratorium, Port Orchard approached Bremerton about purchasing
additional water to serve the 580 zone for the McCormick development, and Bremerton
responded that it will provide additional water for an interim period only if (l) Port
Orchard enters into a new Interlocal Agreement with Bremerton,(2) Port Orchard enters
into a new Agreement with McCormick for the system improvements, and (3)
McCormick makes improvements to Bremerton's water system.
ln response, and in order to obtain water for the McCormick Property in the 580 zone,
McCormick has negotiated a Public Utilities Construction Agreement with Bremerton
and also a Reimbursement Agreement for Utility Extension Agreements, pursuant to
which McCormick will:
Construct facilities to complete Bremerton's Well I R in its Anderson Creek
Wellfield or other comparable improvements to its water system, as directed by
Bremefton;
Construct a new water transmission main from Well I R to the existing water main
in Anderson Hill Road SW; and
c Install a generator and automatic transfer switch at Bremerton's Anderson Hill
Pump Station.
In addition, Port Orchard requires McCormick to agree to make the improvements
described in Section 2 below before Port Orchard will rescind the Moratorium.
At the time of this Amendment, multiple agreements have been put in place to address
the 580 Zone water infrastructure. (l) the City of Port Orchard has entered into a new
Interlocal Agreement with the City of Bremerton for water source in the 580 Zone; (2)
the City of Bremerton has entered into an agreement with McCormick for certain water
improvements; and (3) the City of Port Orchard has received concurrence form South
Kitsap Fire and Rescue (SKFR) to allow interim nesting for fire flow purposes in the
existing 580 Zone Reservoir during the time period in which McCormick is constructing
the new City of Port Orchard-McCormick 580 Zone Reseruoir and transmission main as
outlined in this Amendment.
AMENDMENT AGREEMENT
The City and McCormick affirm that the most efficient and appropriate way to fund and
construct the improvements to Port Orchard's water system that the City requires is
pursuant to the 2007 Agreement that GEM assigned to McCormick in 2015. Section 8 of
the 2007 Agreement gave GEM the right to assign its rights and obligations upon 60 days
prior written notice to the City. GEM did not give such notice prior to its assignment to
McCormick, but the City has been aware of the 2015 assignment and hereby waives its
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AMENDMENT #I TO 2OO7 UTILITIES AGREEMENT
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right to such prior notice and consents and agrees to such assignment from GEM to
McCormick, and hereby agrees that McCormick is the Developer under the2007
Agreement.
The City and McCormick hereby amend the description of the Water Facilities (Exhibit
A to the 2007 Agreement), and substitute the following Water Facilities that shall be
constructed by McCormick for the 580 Zone:
a.Before the end of 2019, McCormick will commence construction (clearing,
grading, and erosion control) on the City's Well l2 water campus, in preparation
for constructing a new reservoir to serve the 580 Zone (called the "City of Port
Orchard-McCormick Woods 580 Zone Reservoir"), at a size to be agreed upon by
Port Orchard and McCormick. The size of the reservoir shall be sufficient to
provide stacked storage for fire flow capacity.
Within 90 days of execution of this Amendment McCormick will post a bond to
ensure construction of a reservoir up to l.l million gallons in size; if the City and
McCormick agree that the reservoir will be smaller, McCormick may reduce the
size of the bond proportionately.
By the end of the third quarter, 2020, McCormick will construct a second
transmission main between the new City of Port Orchard-McCormick Woods 580
Zone Reservoir, which will at that time be under construction, and the existing
water system within McCormick Woods, in order to facilitate future separation of
the Port Orchard and Bremerton water systems.
By the end of the fourth quarter, 2020, McCormick will finish construction of the
new 580 Zone reservoir and related site improvements, including the transmission
main described in 3.c above. The transmission main shall be sized such to
accommodate both the 580 Zone and 660 Zone build out.
All of the facilities described in the2007 Agreement, as modified by this
amendment, shall be constructed to the applicable standards in place at the time of
permit application, including the standards set by the Washington State
Department of Health, Office of Drinking Water and the City of Port Orchard.
The City and McCormick hereby agree to negotiate in good faith to reach agreement on
the issues below for the purpose of providing appropriate reimbursement for McCormick
to also construct the following water facilities on the following schedule:
By the end of the first quarter, 2020, McCormick will drill and make operational a
pilot well at the proposed location of new Well 12, for the purpose of allowing the
City to use the pilot well to obtain data to secure a water right and to facilitate
design of the well.
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AMENDMENT #I TO 2OO7 UTILITIES AGREEMENT
MCCORMICK COMMUNITIES / PORT ORCHARD
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b. By the end of the second quarter,2023, or within l2 months of the City obtaining
the required water right and permits for Well 12 if the City has not obtained those
rights and permits before July,2022, McCormick will commence drilling Well l2
and installing the casing, pumping and water quality equipment necessary to put
this well into service
Section 4 of the 2007 Agreement is hereby amended to state that all notices to the
Developer shall be sent to the Developer care of the following persons by both email and
U.S. mail:
Eric Campbell
12332 NE I l5th Place
Kirkland, WA 98033
eric@nr sp grou p I I c.com
Nick Tosti
805 Kirkland Avenue, Suite 200
Kirkland, WA 98033
n i c ktost i,'a-)grna i I .co m
Section 5 of the 2007 Agreement is hereby amended to state that the 2007 Agreement
shall remain in force and effect for 20 years from the City's approval of the Certified
Costs instead of l5 years.
The 2007 Agreement as amended by sections 3, 5, and 6 above shall remain in full force
and effect.
In consideration of the commitments made by McCormick above, provided that the bond
is in place, the City shall rescind the Moratorium at its next regular Council meeting (if it
has not already done so before this Amendment is executed) by a repealing ordinance,
and the City agrees not to impose a future moratorium without first giving McCormick
reasonable notice and an opportunity to first address the Council. However, McCormick
agrees that if the water system improvements described in Section 3 are not completed by
the end of 2020, that the City may impose a new moratorium and, in such case,
McCormick waives its rights to challenge that moratorium.
Upon rescission of the Moratorium by the City, McCormick will dismiss its Complaint in
its second action, Kitsap County Cause No. l9-2-02310-18.
The City and McCormick further agree to negotiate in good faith in an effort to enter into
one or more future agreements regarding development of the McCormick Property, to
address such issues as construction of a future 660 Zone reservoir and booster pump
station, construction of traffic improvements, and extension of existing entitlements.
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AMENDMENT #1 TO 2OO7 UTILITIES AGREEMENT
MCCORMICK COMMUNITIES / PORT ORCHARD
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10.
Such negotiations will also address full waiver for McCormick's claims against the City
and the parties' agreement on satisfaction of performance under the 1998 Agreement.
By agreeing not to serve the City with the Complaint in Kitsap County Cause No. l9-2-
02310-18, McCormick does not waive its right to file a damage action in the future.
McCormick agrees to continue negotiating with the City in good faith in an effort to
avoid the need for such legal action.
1l Non-Waiver of Breach. The failure of a Party to insist upon strict performance of any of
the covenants and agreements contained herein, or to exercise any option herein
conferred in one or more instances shall not be construed to be a waiver or
relinquishment of said covenants, agreements, or options, and the same shall be and
remain in full force and effect.
12. Resolution of Dispute s and Governine Law. If an y dispute arises between the City and
McCormick under any of the provisions of this Amendment, jurisdiction of any resulting
Iitigation shalI be filed in Kitsap County Superior Court, Kitsap County, Washington.
This Amendment shall be govemed by and construed in accordance with the laws of the
State of Washington. The non-prevailing party in any action brought to enforce this
Amendment shall pay the other parties' expenses and reasonable attorney's fees.
13. Written Notice. All written communications regarding enforcement or alleged breach of
this Amendment shall be sent to the parties at the addresses listed below, unless notified
to the contrary. Unless otherwise specified, ohy written notice hereunder shall become
effective upon the date of both emailing and mailing by registered or certified mail, and
shall be deemed sufficiently given if sentto the addressee atthe address stated below:
McCORMICK:CITY:
Nick Tosti
805 Kirkland Avenue, Suite 200
Kirkland, WA 98033
n i c ktost i [P. gnr a i l.co rn
Rob Putaansuu, Mayor
City of Port Orchard
216 Prospect Street
Port Orchard WA 98366
rputaans u u@c itvofbortorc ha rd. u s
A copy shall also be transmitted to the City
Clerk at the above address.
14. Assignment. Any assignment of this Amendment by McCormick without the written
consent of the City shall be void. If the City shall give its consent to any assignment, this
paragraph shall continue in full force and effect and no further assignment shall be made
without the City's consent.
AMENDMENT #I TO 2OO7 UTILITIES AGREEME,NT
MCCORMICK COMMUNITIES / PORT ORCHARD
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Eric Campbell
12332 NE I 15th Place
Kirkland, WA 98033
eri c(g) m sp group I I c.com
l5; Modificatign. No waiver, alteration, or modification of any of the provisions of this
Amendment shall be binding unless in writing and signed by a duly authorized
representative of the City and McCormick.
16. Severability. The provisions of this Amendment are declared to be severable. If any
provision of this Amendment is for any reasons held to be invalid or unconstitutional by a
court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the
validity or constitutionality of any other provision.
17. Time is of the essence. All time limits set forth herein are of the essence. The Parties agree
to perform all obligations under this Amendment with due diligence.
18. Entire Agreement. The written provisions and terms of this Amendment, together with the
Exhibits attached hereto, shall supersede all prior verbal statements of any officer or other
representative of the parties, and such statements shall not be effective or be construed as
entering into or forming a part of or altering in any manner whatsoever, this Amendment.
. The entire agreement between the parties with respect to the subject matter hereunder is
contained in the 2007 Agreement and exhibits thereto, and this Amendment and the
Exhibits attached hereto, which may or may not have been executed prior to the execution
of this Amendment. All of the above documents are hereby made a part of this Amendment
and form the Amendment document as fully as if the same were set forth herein. Should
any language in any of the Exhibits to this Amendment conflict with any language
contained in this Amendment, then this Amendment shall prevail.
19. Effective date. This Amendment shall be effective as of 20t9.
IN WITNESS WHEREOF, the parties have executed this Amendment on thirl(r day of
November,2019.
MCCORMICK COMMUNITIES, LLC CITY OF PORT ORCHARD
By'
Its:
By:
Its: Mayor
APPROVED AS TO FORM:
ifer S. R rts
orney for
ry OVED AS TO FORM:
Patrick Schneider
Attorney for McCormick Communities
AMENDMENT # I TO 2OO7 UTILITIES AGREEMENT
MCCORMICK COMMLINITIES / PORT ORCHARD
Page 7
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Orchard
ATTEST:
Port Orchard City Clerk
STATE OF WASHINGTON
COUNTY OF KITSAP
I certify that I know or have satisfactory evidence that Mr. Rob Putaansuu is the person
who appeared before me, and said person acknowledged that he signed this instrument, on oath
stated that he was authorized to execute the instrument and acknowledged it as the Mayor of Port
Orchard to be the free and voluntary act of such party for the uses and purposes mentioned in the
instrun.ent.
Dated:
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AMENDMENT #I TO 2OO7 UTILITIES AGREEMENT
MCCORMICK COMMI.JNITIES / PORT ORCHARD
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NOTARY PUBLIC in and for the
State of Washington. residing at:
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My Commission expiresl - )j')E
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STATE OF WASHINGTON
COUNTY OF I( '
Dated: N U Ver""Wr l'\20-]3
AMENDMENT #I TO 2OO7 UTILITIES AGREEMENT
MCCORMICK COMMLNITIES / PORT ORCHARD
Page 9
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NOTARY PUBLIC in and for the
State of Washington, residing at:
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My Commission expires:jl t7 )sD)a.-rr--_7-
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I certify that I know or have satisfactory evidence that the person
who appeared before me, and said person acknowledged that trument, on
oath stated that @/she) was authorized to execute the instrum t as the _rvte-r.ts.zr-of McCormick Communities. LLC to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
NIKEA SMEDLEY
NOTARY PUBLIC 1205999
STATE OF WASHINGTON
COMMISSION EXPIRES
MARcl{ 19,2023
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REIMBURSEMENT AGREEMENT
FOR UTILITY SYSTEM IMPROVEMENTS
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This Agreement ("Agreement") is made and entered into this /d of luly, 2OO7
("Effective Date") by and between the City of Port Orchard, a rnunicipal corporation ("City"),
and GEM l, LLC, a Washington limited liability company ("Developer") (individually a
"Party" and collectively the'?arties").
RECTTALS
A. City is a second class city located in Kitsap County, Washington, duly
organized and operating under Chapter 35.23 RCW and is authorized to furnish water and
sewer service to property owners within and without the City in the manner provided by law.
B. City's capital improvement plan ("CIP") provides for the construction by the
City of certain capital water facilities including an approximately 1,100,000 gallon reservoir,
pump station and other related improvements.
C. In that City is unable to fund the construction of the above described capital
water facilities at this time, Developer is willing to construct these water facilities, as
described and depicted on Exhibit A attached hereto and incorporat€d herein by this reference
("Water Facilities"), at the Developer's cost and be reimbursed by the City for such cost on the
terms and conditions set forth in this Agreement; now, therefore,
AGREEMENT
In consideration of the following terms and conditions, the Parties agree as follows:
l. Construction of Water Facilities. Developer shall construct at its own expense
the Water Facilities in accordance with a design and specifications approved by ttre City.
Upon completion of construction of the Water Facilities and approval of the construction by
the City, the City shall accept and own the Water Facilities as facilities of the City.
Maintenance and operation costs of the Water Facilities after acceptance by the City shall be
borne by the City.
2. Cost of Water Facilities. Following the completion of construction of the
Water Facilities and as a condition of final acceptance of the Water Facilities by the City, the
Developer shall certiff to the City the final design, engineering, construction and restoration
costs incurred by the Developer directly applicable to the construction of the Water Facilities
and shall submit such supporting vouchers, invoices and other data'as the City may require to
the City to substantiate the certified costs ("Certified Costs"). The City reserves the right to
approve, or modifr and approve, the Certified Costs as reasonable and subject to
reimbursement to the Developer.
RETMBURSEMENT AGREEMENT
FOR UTILIry SYSTEM IMPROVEMENTS - Page I of 5 Y4N
City
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3. Amount and Method of Reimburlement. After the City's approval of ttre
Ccrtificd Costs, the Devclopcr shall be reimburscd by the City the arnount of One Thousand
Dollars ($1,000.00) per Equivalent Residential Unit that connects to the City's water service
system in what is commonly known as the Western Service Area, which is dcpicted on
Exhibit B attached and incorporated herein by this reference (the "Rcimbursement Area").
Reimbursement payments made pursuant to this Agreement shall be paid to the Developer on
a quarterly calendar basis commencing at the end of the first calendar quarter following the
City's final approval of Certified Costs.
4. Notices.
A11 notices to be sent to the Developer, including amounts collected under this
Agreement, shall be sent to the Developer at ttre following address:
GEM 1, LLC
4978 SW Lake Flora Road
Port Orchard, WA 98367
All notices to be sent to the City shall be sent to the City at the following
address:
City Clerk
City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
The Developer is responsible for providing the Ciry with a valid mailing address
throughout the duration of this Agreement. The Developer shall have ttre right upon sixty
(60) days prior written notice to the City to change the address where payments of the
re.mbursement amounts are to be sent by the City. The City shall send the amounts payable to
the Developer under this Agreement to the Developer's mailing address by rnail. Any amount
being returned by the postal service for any reason shall automatically become the funds of
the Ciry six months frorn the date of the return of thc mailing and shall be placcd into the
City's Cumulative Reserve Fund Water-Sewer Capital Outlay Debt Service and
Maintenance and Operation, pursuant to POMC Chapter 3.36
5. Termination of ttre Right-to Reimbur_sement. This Agreement shall remain in
force and effect for fifteen (15) years from date of the City's approval of the Certified Costs
pursuant to Section 2 herein or full rcimbursement of Developer's costs, whichever occurs first
(the "Reimbursement Term"); provided the Reimbrxsement Term shall be extended for the time
duration of any moratorium, phasing ordinance, concurrency designation, or other governmental
action that prevents making applications for, or the approval o{, any new development within the
Reimbursement Area.
REIMBURSEMENT AGREEMENT
FOR UTILITY SYSTEM IMnROVEMENTS - Page 2 of 5 VtA
City Developer
3D_
6. Endre AgreemEnt Binding_Natr:re. This Agreement constitutes the entire
agreement between the Parties conceming reimbrusement for the cost of the Water Facilities
and is binding upon the heirs, executives, administrators, successors and assigns of the
Parties.
7. Exhibits. All exhibits referred to in this Agreement are by this reference made
a part of this Agreement as though set forth in full.
8. Assignme,nt. The Developer shall have the right to assign its rights and
obligations under this Agreement only upon sixty (60) days prior wriffen notice to the Cify.
In the event of an assignment, such person or entity shall be referred to as the Develcper or
'Developer' s Assigns",
9. Effective Date. This Agreement shall be effective the date set forth above
(".Effective Date").
10. Time of Essence. All time limits set forth herein are of the essence. The
Parties agree to perform all obligations under this Agreement with due diligence.
I l. F$rttrer Action. The Parties agree to cooperate and execute all furttrer
documents, applications and other instnrments required to carry out the purposes of this
Agreement including, but not limited to, compliance with applicable SEPA and other
environmental and land use development rules and regulatioru relating to the installation of
the Water Facilities.
12. Entire Apreement. This Agreement contairu the entire agreement between the
Parties with respect to matters addressed herein. This Agreement shall not be modified or
amended except in writing signed by both Parties.
13. Severabiljly. The enforceability, invalidity, illegality or tennination of any
provision of this Agreement shall not render any other provision of this Agreement
unenforceable, invalid or illegal, aod not tgrminate this Agreement or impair the rights or
obligations of the Parties, including Developer's right to receive reimbursement from the City.
DEVELOPER GEM I LLC,AWashington
Limited Liability Company
By: Granite Land Company,
A California Corporation,
Its Manager
REIMBURSEMENT AGREEMENT
FOR UTILITY SYSTEM IMPROVEMENTS - Page 3 of 5
t.
Scott Wolcott
President, Granite Land CompanY
By:-9
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DevelpBpr
uil,
CITY OF PORT ORCHARD
Kim Abe[, Mayor
Approved as to Form:
ty Attomey
City of Port Orchard -
STATE OF WASHINGTON
COUNTY OF KITSAP
I certiff that I know or have satisfactory evidence that KIM ABEL, Mayor of the City
of Port Orchard is the person who appeared before me, and said person acknowledged that she
signed this insuument, and acknowledged it to be her free and voluntary act on bchalf of said
city for the uses and purposes mentioned in the tnstrument.
DATED: J ()J@
NAIvIE:n0
(Print Name)
Notary Public in and for ttre
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)
)
SS
of
Commission Expires:t'l
STATE OF WASHINGTON
COUNTY OF
)
)ss
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I ccniS that I know or have satisfactory evidencc that SCOTT WOLCOTT is the
person who appeared before rne, and said person acknowledged that he/she signed this
instrument, on oath stated that he/she was authorized to execute the instrument as the
R.EIMBURSEMENT AGREEMENT
FOR UTILITY SYSTEM IMPROVEMENTS - Page 4 of 5
City Developer
President, Granite Land Company, Manager, of GEM l,LLC, a Washington limited liability
cornpany, pursuant to the provisions of the Limited Liabiliry Company Agreement of said
company, and acknowledged it to be the free and voluntary act of said company for the uses
and purposes mentioned in the instrument.
DATED:
(Print Nanre)
Notary Public in and for the State of Washington
Commission
REIMBURSEMENT AGREEMENT
FoR UTILITY SYSTEM IMPROVEMENTS - Page 5 of 5 Wre
Cify
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CAL FO N A ALL.PU POSE ACKNO LE G ENT
State of Calilornia
County of SocpqmOfr\rr
On r\ f ra l$ot before me,DQg\T2AB " Nghap Pub\ \c
Dat6 c
personally appeared
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the lnformation below is not required by law, it may prove
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Attached Document
p.personally known to me
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to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/herltheir signature(s) on the
instrument the person(s), or the entity upon behall of
which the person(s) acted, executed the instrument.
WITNESS my hand and seal
Signaturo ol Notary Public
OPTIONAL
valuable to persons relying on the
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Document Date
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Signer ls nting Signer ls Representing:
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