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Resolution No.13-51 CITY OF TIGARD, OREGON TIGARD CITY COUNCIL RESOLUTION NO. 13- -T I A RESOLUTION APPROVING THE THIRD AMENDMENT TO THE WATER PARTNERSHIP INTERGOVERNMENTAL AGREEMENT, INCLUDING THE PURCHASE OF THE MAPLETON PROPERTIES,THE SHIFTING OF FOUR MILLION GALLONS A DAY OF CAPACITY TO TIGARD AND AUTHORIZING THE MAYOR TO EXECUTE THE AMENDMENT WHEREAS,in August 2008 the cities of Tigard and Lake Oswego entered into a water partnership formalized in the Intergovernmental Agreement Regarding Water Supply Facilities, Design,Construction,and Operation (Agreement);and WHEREAS,this third amendment will update Exhibits 6 and 7 of the Agreement;and WHEREAS,Lake Oswego has offered and Tigard desires to transfer an additional four million gallons per day of program-wide capacity to Tigard for an agreed to price;and WHEREAS,with the approval of land use permits,it is now realized that the Mapleton properties are necessary for the completion of the program and thus Tigard is now obligated by the Agreement to purchase a proportional share of those properties from Lake Oswego;and WHEREAS,the Lake Oswego and Tigard City Councils are required to approve this amendment;and WHEREAS,an error in the original Exhibit 6,Determination of Tigard Buy-In,needs to be corrected;and WHEREAS, the revised Exhibit 6 corrects a previous math error and now includes Tigard's buy-in of the Mapleton properties;and WHEREAS, the revised Exhibit 7,Allocation of System Improvement Costs to the Parties, has been updated and sets Tigard's system improvement costs at$154 million,which includes inflationary costs through 2016. NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that: SECTION 1: The Tigard City Council hereby approves Attachment A, the Third Amendment to the Intergovernmental Agreement Regarding Water Supply Facilities, Design, Construction, and Operation and authorizes the mayor to execute the amendment. SECTION 2: The Tigard City Council hereby approves the revised Exhibit 6,the Determination of Tigard Buy- In,as included in this third amendment to the Agreement. SECTION 3: The Tigard City Council hereby approves the revised Exhibit 7,Allocation of System Impromment Costs to the Parfies,as included in this third amendment to the Agreement. SECTION 4: This resolution is effective immediately upon passage. RESOLUTION NO. 13- S Page 1 PASSED: This l o day of "CPmJIV )2013. May City of Tigard ATTEST: City Recorder-City of Tigard RESOLUTION NO. 13- Page 2 THIRD AMENDMENT TO INTERGOVERNMENTAL AGREEMENT REGARDING WATER SUPPLY FACILITIES, DESIGN, CONSTRUCTION,AND OPERATION THIS THIRD AMENDMENT to Intergovernmental Agreement Regarding Water Supply Facilities, Design, Construction and Operation (Third Amendment) is effective this 19th day of December 2013, by and between the City of Lake Oswego (Lake Oswego) an Oregon municipal corporation, and the City of Tigard (Tigard), an Oregon municipal corporation. Lake Oswego and Tigard may also be referred to individually herein as a "Party" and collectively as "Parties." Recitals WHEREAS, on August 6, 2008 the Parties executed an Intergovernmental Agreement Regarding Water Supply Facilities, Design, Construction and Operation (Agreement); and WHERAS, since the execution of the original Agreement, the scope of the Project under the Agreement has changed from beginning with an "Initial Expansion" of Supply Facilities to provide Capacity of 32 million gallons of water per day (mgd), to instead encompass the full contemplated "Long Term Expansion," with a Capacity of 38 mgd; and WHEREAS, the Parties have concluded that it is in the best interest of both to adjust the allocation of Capacity from the expanded water supply facilities to transfer 4 mgd of Capacity from Lake Oswego to Tigard, resulting in 20 mgd being allocated to Lake Oswego and 18 mgd being allocated to Tigard; and WHEREAS, the shift in allocation, plus the addition of Mapleton Drive properties as assets under the Agreement and correction of original "buy-in" calculations, necessitates a payment from the City of Tigard to the City of Lake Oswego based on new costs share applied to costs paid by Lake Oswego on the 4mgd to date and the additional "buy-in" amount for the Mapleton Drive properties; and WHEREAS, Exhibit 6 to the Agreement outlining Tigard's buy-in costs, and Exhibit 7 to the Agreement setting forth an allocation of system improvement costs to the parties, require adjustments reflecting the changes described in these recitals; and WHEREAS, the Parties desire to expedite the timeframe for reviewing the Agreement to consider whether changes are necessary or desirable to reflect the transition from an agreement regarding construction to an agreement regarding long term operations; NOW, THEREFORE, THE PARTIES AGREE TO THIS THIRD AMENDMENT AS FOLLOWS: Section 1. Updating References and Eliminating Inconsistencies. The Agreement is amended to refer to a single Expansion having 38 mgd Capacity, in place of all references to an Initial Expansion or a Long Term Expansion. Section 2. Allocation of Capacity. The Agreement is amended to adjust any statements of allocations of Capacity to state an allocation of 20 mgd to Lake Oswego and 18 mgd to Tigard. Specifically, and without limiting the foregoing, Section 4.3 of the Agreement is amended to read as follows: 4.3 Allocation of Capacity At the completion of the Expansion, Tigard's allocation of Capacity shall be 18 million gallons of water per day, and Lake Oswego's allocation shall be 20 million gallons per day. Section 3. Payment. Within 60 days following the execution of this Third Amendment,Tigard shall pay Lake Oswego the sum of Five Million One Hundred Thirty One Thousand Three Hundred Ninety Dollars ($5,131,390), consisting of$1,272,846 as an additional "buy-in" amount that results from adding the Mapleton Properties to the Agreement assets and correcting original buy-in calculations, plus$3,858,544 to reimburse Lake Oswego for costs paid to date by reason of the 4 mgd of Capacity that is transferred to Tigard pursuant to Section 2 of this Third Amendment. Section 4. Sales to Others. Article XI of the Agreement is amended to read as follows: Article XI Sales to Others In addition to the Existing Wholesale Customers, Retail Customers of any Party, existing mutual aid agreements, or extension of service to service areas identified in the Carollo Report, either Party may contract for the sale or use of water within that Party's allocation of Capacity to any other person, provided that the contract is on a surplus basis. Any additional sale of water contracts that are not on a surplus basis, or any other contracts for sale or use of the Supply Facilities, shall require the approval of the other Party and compliance with the terms of this Agreement.Any revenues derived from the sale of water to another entity shall be paid to the Managing Agency. Net proceeds from such sales shall be credited back to the Parties based on a method as mutually agreed. Net proceeds shall be those proceeds remaining after expenses, renewals and replacements and contingencies are paid. Section 5. Modifications to Governance and Management Structure. Section 15.1 of the Agreement is amended to read as follows: 15.1 Modification to Agreement Within one year after approval of this amendment, the Oversight Committee shall undertake a review of all agreements to date to consider any modifications to the terms and conditions of this Agreement that may be necessary or desirable, including any modifications needed to transition from an agreement regarding construction to an agreement regarding long term operations. Matters that may be considered include, but are not limited to, changes in ownership, water rights limitations, conditions of approval and legal settlements, governance and management structure. At the recommendation of the Oversight Committee, the Councils for the parties may consider: 15.1.1 Modification of the existing Agreement(s); 15.1.2 Replacement of existing Agreement(s) with a new Agreement: 15.1.3 Creation of a Supply Agency under ORS Chapter 190. Section 6. Revision of Exhibits. Exhibit 6 (Determination of Tigard Buy-In)and Exhibit 7 (Allocation of System Improvement Costs to the Parties) are revised to read as set forth in attached Exhibits 6 and 7. Section 7. Entire Agreement. Except a specifically amended by this Third Amendment,the Agreement dated August 6, 2008 as subsequently amended by the first Amendment and the Second Amendment remains in full force and effect. IN WITNESS WHEREOF the Parties have dated and signed this Agreement City of Lake Oswego City of Tigard lah 9113 do Mayor Dated Mayor Dated ATTEST: ATTEST: 1�� 111 nr' Gt l� l0 City Reco r Dated City RecordeO Dated APPROVED AS TO F APPROVED ITO F M: V / City Attorney Dated ( City Attorney Dated EXHIBIT AMENDED AND CORRECTED TIGARD BUY-IN Net Original Cost Reproduction Tigard Tigard Share Asset Tax Map Tax Lot Clackamas Co.Deed Cost Allocation Clackamas River Intake&Pump Station $ 1,911,733 $ 1,832,454 0.000/6 $ - Clackamas River Intake Land* 2 2E 20CA 15001 Bk 173,Pg 900-902 $ 10,450 $ 260,000 14/38 $ 95,789 Computer System/Software $ 214,222 $ 72,311 14/38 S 26,641 Finished Water Transmission $ 2,111,711 $ 5,440,227 0.00% $ - General Plant $ 61,500 S 15561 14/38 $ 5,733 Raw Water Transmission $ 612,137 $ 2,460,521 14/38 $ 906,508 Waluga Reservoir $ 1,281,427 $ 1,960,196 0.00% $ Subtotal $ 1,034,671 Waluga Reservoir:Land Reservoir Property 2 1 E 07 AD 03100 Doc 72-06414 n/a $354,508 14/38 S 130,608 Waluga Res#1' 2 IF 07AD 00700 Doc 76-36977 n/a $1,407,287 14/38 $ 518,474 4800 Carmen Dr' 2 1 E 07AD 00900 Doc 92-063461 $ 323,300 $945,353 14/38 $ 348,288 Vacant Parcel* 2 IF 07AD 01000 Doc 92-063461 $ 323,300 $945,353 14/38 $ 348,288 Water Treatment Plant $ 9,731,005 $ 11.704,894 0.00% $ - Water Treatment Plant Land 4260 Kenthorpe Way-parcel 12 IF 24BD 00300 Bk 688,Pg 581 n/a $2,425,478 14/38 S 893,597 4260 Kentho Way-parcel 2' 1 2 1 E 24BD 00401 Doc 79-35248 1 n/a $271,975 14/38 $ 100,201 Subtotal $2,339,456 l 4245 Mapleton Dr.*(RMV) 2 1E 24BD 01200 Doc 89-10200 $ 85,000 S 509,554 18/38 $241,368 4305 Mapleton Dr.'(RMV) 2 1E 24BD 01300 Doc 95-33429 S 190,000 $ 504,459 18/38 $238,954 4315 Mapleton Dr.*(RMV) 2 1E 24BD 01400 Doc 89-13210 $ 116,000 $ 504,459 18/38 $238,954 xxxx Mapleton Dr.'(RMV) 2 1E 24BD 01500 Doc 89-13210 $ - Totals 'less 2006-108190 $ 16,971,785 $ 31,614,589 Subtotal $719,276 -Net reproduction cost for these properties are based on an appraisal conducted by Integra Realty Resources(July 2008). Total S 4,093,404 Corrected Tigard Buy-in Mapleton Property Total= $719,276 Other WTP property total= $2.339,456 All non-property totals= $1,034,671 Total Tigard Allocation= $4,093,404 Prior Paid by Tigard= ($2.820,558) Balance Due= $1,272,846 EXHIBIT 7 ALLOCATION OF SYSTEM IMPROVEMENT COSTS TO THE PARTIES Cost of Lake Oswego Tigard Improvements Allocation(%) Share($) Allocation(%) Share($) Project Costs* Water Treatment Plant -38 mgd Expansion $ 74,966,399 37.16% $ 27,857,514 62.84% $ 47,108,885 River Intake Pumping Station $ 12,932,668 20/38 $ 6,806,667 18/38 $ 6,126,001 Raw Water Pipeline $ 24,540,330 20/38 $ 12,915,963 18/38 $ 11,624,367 Finished Water Pipeline $ 52,856,778 WTP to South Side of Oswego Lake $ 25,583,609 20/38 $ 13,465,057 18/38 $ 12,118,552 South Side of Oswego Lake to North Side of Oswego Lake $ 9,732,139 12/30 $ 3,892,856 18/30 $ 5,839,283 North Side of Oswego Lake to Waluga Reservoir $ 13,466,442 0% $ 500,000** 100% $ 12,966,442 Waluga Reservoir to Bonita Pumping Station $ 4,074,588 0% $ - 100% $ 4,074,588 Waluga Reservoir $ 8,329,497 1.7/3.5 $ 4,045,756 1.8/3.5 $ 4,283,741 Bonita Pumping Station $ 8,273,901 0% $ - 100% $ 8,273,901 Sub-Totals $ 181,900,000 38.20% $ 69,483,813 61.80% $ 112,415,760 Program Costs Program Management,Permitting,Construction Management $ 34,696,785 38.20% $ 13,254,172 61.80% $ 21,442,613 Sponsor/Staff Cost(wages,transfers,materials&services,testing) $ 13,257,000 38.20% $ 5,064,174 61.80% $ 8,192,826 SCADA System Services $ 1,861,684 38.20% $ 711,163 61.80% $ 1,150,521 Legal,Land Use/ROW and Other Professional Services $ 9,644,000 38.20% $ 3,684,008 61.80% $ 5,959,992 Construction Contingency $ 8,437,000 38.20% $ 3,222,934 61.80% $ 5,214,066 Sub-Totals $ 67,896,000 38.20% $ 25,936,000 61.80% $ 41,960,000 Total Costs $ 249,796,000 38.20% $ 95,419,800 61.80% $ 154,375,800 -Project costs include design,construction,and mitigation contingency and are presented in 2014 dollars(assumed mid-point of construction). -Lake Oswego's half of cost to upsite this reach of FWP to 36-inch so that existing 18-inch can be retired;otherwise,LO pays D%of new pipe in this reach.