Loading...
City Council Packet - 01/17/2017 IIICity of Tigard TIGARD Tigard Workshop Meeting—Agenda TIGARD CITY COUNCIL BUSINESS AND WORKSHOP MEETING MEETING DATE AND TIME: January 17,2017 - 6:30 p.m. MEETING LOCATION: City of Tigard-Town Hall- 13125 SW Hall Blvd.,Tigard,OR 97223 PUBLIC NOTICE: Times noted are estimated. Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for Council meetings by noon on the Monday prior to the Council meeting. Please call 503-718-2419 (voice) or 503-684-2772 (MD -Telecommunications Devices for the Deaf). Upon request, the City will also endeavor to arrange for the following services: • Qualified sign language interpreters for persons with speech or hearing impairments; and • Qualified bilingual interpreters. Since these services must be scheduled with outside service providers,it is important to allow as much lead time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting by calling: 503-639-4171,ext. 2410 (voice) or 503-684-2772 (TDD -Telecommunications Devices for the Deaf). VIEW LIVE VIDEO STREAMING ONLINE: http://liye.tigard-or.gov Workshop meetings are cablecast on Tualatin Valley Community TV as follows: Replay Schedule for Tigard City Council Workshop Meetings-Channel 28 •Every Sunday at 12 a.m. •Every Monday at 1 p.m. •Every Thursday at 12 p.m. •Every Friday at 10:30 a.m. SEE ATTACHED AGENDA !IPI • City of Tigard Tigard Workshop Meeting—Agenda TIGARD TIGARD CITY COUNCIL BUSINESS AND WORKSHOP MEETING MEETING DATE AND TIME: January 17,2017 -6:30 p.m. MEETING LOCATION: City of Tigard-Town Hall- 13125 SW Hall Blvd.,Tigard,OR 97223 6:30 PM 1. BUSINESS AND WORKSHOP MEETING A. Call to Order- City Council and Local Contract Review Board B. Roll Call C. Pledge of Allegiance D. Call to Council and Staff for Non-Agenda Items BUSINESS MEETING 2. CONSIDER LOCAL REVIEW BOARD CONTRACT AWARD FOR 118TH AND DERRY DELL CREEK PROJECT 6:35 p.m. estimated time WORKSHOP MEETING 3. RECEIVE COUNCIL REQUESTED TRAINING ON LAND USE AND QUASI-JUDICIAL DECISIONS 6:45 p.m. estimated time 4. DISCUSS PROPOSED IGA ON FUTURE GOVERNANCE BETWEEN LAKE OSWEGO AND TIGARD PARTNERSHIP 7:15 p.m. estimated time 5. NON AGENDA ITEMS 6. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If an Executive Session is called to order,the appropriate ORS citation will be announced identifying the applicable statute.All discussions are confidential and those present may disclose nothing from the Session. Representatives of the news media are allowed to attend Executive Sessions,as provided by ORS 192.660(4),but must not disclose any information discussed. No Executive Session may be held for the purpose of taking any final action or making any final decision. Executive Sessions are closed to the public. 7. ADJOURNMENT 7:30 p.m. estimated time AIS-2988 2. Workshop Meeting Meeting Date: 01/17/2017 Length (in minutes): 10 Minutes Agenda Title: Contract Award for 118th and Derry Dell Creek Project Prepared For: Lori Faha Submitted By: Kelly Burgoyne, Central Services Item Type: Motion Requested Meeting Type: Local Contract Review Board Public Hearing No Newspaper Legal Ad Required?: Public Hearing Publication Date in Newspaper: Information ISSUE Shall the Local Contract Review Board award a contract for stream bank stabilization and outfall repair engineering,stream restoration,and construction management services on Derry Dell Creak at 118th Court? STAFF RECOMMENDATION /ACTION REQUEST Staff recommends the Local Contract Review Board award a contract for this project to Wolf Water Resources,Inc. for an amount not exceeding$167,615 and further authorize the City Manager to take the necessary steps to execute the contract. KEY FACTS AND INFORMATION SUMMARY Two sections of stream bank on Derry Dell Creek are in need of repair.The first,is located just downstream of 118th Court on city-owned property. The stream bank stabilization at this location will protect private property at the top of the bank and a sanitary line and public trail at the bottom of the slope. The second area is located just upstream of 118th Court. It is a severely eroded stream bank at a public stormwater outfall. This problem outfall will be replaced with one designed to deliver stormwater to the creek without eroding the stream bank or causing additional channel erosion. The northern stream bank of Derry Dell creek,just downstream of 118th Court,has produced 2 significant landslides,one in 2005 and a recent slide in December of 2015. This continued bank failure is threatening private property at the top of the slope and threatening existing sewer infrastructure on city owned property at the base of the slope. If additional sliding is allowed,the stream will damage a popular trail and the backyards of adjacent private property owners. These slides have also delivered significant silt into the creek. The goal of the project at this site is to stabilize the steep stream bank so no additional damage is done to private property,public sewer infrastructure,or the Pathfinder Trail. The project will also create a more stable stream channel at the base of the slope and will revegetate the area with native riparian plantings. Wetland and stream mitigation will likely be required by local,state,and federal regulatory agencies. Tigard hopes to stabilize and improve stream banks and channels downstream of the project area to address any mitigation requirements. This strategic planning of mitigation sites will allow the project to address additional erosion issues on Derry Dell Creek between 118th Court and 115th Avenue. The purpose of this project is two-fold. First, the project will repair two severely eroding and sliding stream banks on Derry Dell Creek as described above. Second,and equally as important,is to evaluate stream conditions between 115th Avenue and 118th Court. This includes identifying and inventorying significant channel incision and stream bank instability issues,identifying threatened sanitary,stormwater,and trail infrastructure,evaluating risks to private property,and using this information to choose stream channel mitigation sites that will address the most serious of these problems. The project should also,if needed, provide a report that identifies,prioritizes,and describes projects needed to stabilize channel incision and eroding stream banks which threaten public and privately owned infrastructure along the creek between 118th Court and 115th Avenue. The City issued a Qualification-based Request for Proposal (QBS) in late October 2016 for engineering and construction management services for the project. Firms were ranked based on the following criteria: •Project Understanding,Approach,and Interest; •Proposed Project Team; •Experience and Qualifications;and •Project Management and Availability. The City received responses from five firms and,after ranking them based on the criteria,selected Wolf Water Resources,Inc. as the top firm. Staff entered into negotiation with Wolf Water and was able to reach an agreed upon project cost of$167,615 for the work. Staff finds no infractions against the firm in the state's databases. As such,Wolf Water Resources,Inc.is receiving staffs recommendation for award. OTHER ALTERNATIVES The Local Contract Review Board may reject the contract award and direct staff to either renegotiate the work,resolicit the work,or pause the work. To do so may put the stream banks,ravine slopes,private property and city trail and sewer infrastructure in more jeopardy however. COUNCIL OR CCDA GOALS, POLICIES,MASTER PLANS DATES OF PREVIOUS CONSIDERATION This is the first time the Local Contract Review Board has been presented this contract award item. Fiscal Impact Cost: $167,615 Budgeted (yes or no): Yes Where Budgeted (department/program): Storm/Sanitary Funds Additional Fiscal Notes: The contract is for an amount not to exceed $167,615. This is within the project budget. The current Capital Improvement Program has $110,000 budgeted in FY 2017 for Design and Engineering Services with an additional$22,000 available in project contingency;and$801,000 budgeted for FY 2018 for design completion,construction management and the construction contract. (A contractor will be selected through a separate bid process to construct the project upon completion of design.) AIS-2868 3. Workshop Meeting Meeting Date: 01/17/2017 Length (in minutes):30 Minutes Agenda Title: Receive Council-Requested Training on Land Use and Quasi Judicial Decisions Prepared For: Tom McGuire, Community Development Submitted By: Tom McGuire,Community Development Item Type: Update,Discussion,Direct Staff Meeting Type: Council Workshop Mtg. Public Hearing: No Publication Date: Information ISSUE Council requested a training where they could debrief and/or discuss land use and quasi-judicial decisions with planning staff and the city attorney. STAFF RECOMMENDATION / ACTION REQUEST KEY FACTS AND INFORMATION SUMMARY As part of their 2016 goals,City Council requested a land use training to help with future decision making. The training is to be focused on helping Council better understand the Tigard Development Code as well as land use reviews and approval criteria.The training will also include a discussion of past quasi-judicial decisions. In this workshop meeting,the city attorney and planning staff will lead Council in a training to discuss examples of situations that raise questions about approval criteria and decisions.During the course of a land use hearing,issues may arise that test the limits of the procedural rules;this training will focus on the best way to proceed in these types of cases -with the goal of making good decisions while staying within procedural rules.The training will focus on a set of specific land use questions that the city attorney and planning staff will discuss with Council. OTHER ALTERNATIVES N/.1 COUNCIL GOALS, POLICIES,APPROVED MASTER PLANS This is the fulfillment of a 2016 goal. DATES OF PREVIOUS COUNCIL CONSIDERATION Not previously considered. Attachments Council Memo " City of Tigard T I G A R D Memorandum To: Honorable Mayor and City Councilors From: Tom McGuire, Assistant Community Development Director Re: City Council Workshop - Land Use Training Date: December 14, 2016 As part of your 2016 goals, you requested a land use training to help with future decision making. The training is to be focused on helping Council better understand the Tigard Development Code as well as land use reviews and approval criteria. The training will also include a discussion of past quasi-judicial decisions. In this workshop meeting,the city attorney and planning staff will lead Council in a training to discuss examples of situations that raise questions about approval criteria and decisions. During the course of a land use hearing, issues may arise that test the limits of the procedural rules;this training will focus on the best way to proceed in these types of cases -with the goal of making good decisions while staying within procedural rules. The training will focus on a set of specific land use questions that the city attorney and planning staff will discuss with the Council. The following are the specific questions to be discussed: Land Use Hearing Curveballs . . . And How to Hit Them What does it mean? Sometimes the code criteria are not clear and are capable of more than one interpretation. Or,the applicable Comprehensive Plan goals and policies are in apparent conflict. Reversal: The staff and Planning Commission are favorable towards an application, but the Council decides it should be denied. The Rules Lead to a Bad Result: In deliberations the Council concludes that application of the rules leads to a result that the Council does not want to see happen. New Plan: Late in the hearing process the applicant offers an important change in the development plan. New Additions: During consideration of new legislative amendments, the Council decides that additional amendments are necessary involving code sections not referenced in the official notice. "I Didn't Get Notice:" A witness in the hearing objects to the hearing process, claiming correctly that the required notice did not get to her. Late Breaking New Evidence: After the close of the record, staff becomes aware of new evidence that it believes the Council may find relevant to its decision, even though it could be properly excluded as beyond the deadline. Unusual Witness: During the appeal hearing at the City Council a member of the Planning Commission, who voted on the matter, steps up to testify against the application. What Were They Thinking? The outcome of a case turns on whether to apply a code interpretation made by a previous Council, an interpretation the current Council considers to be wrong. Final Written Argument: New Issue or New Evidence? When the applicant files a final written argument, which by statute closes the evidentiary part of the hearing, a new argument appears, never previously addressed in the case. Time is Running Out: Close to the end of the running of the 120-day clock an opponent asks for more time to present"important new evidence." Sherlock Holmes: After the close of the evidentiary hearing, and before deliberation begins, a Council member interviews several people about key issues in the case. SUPPLEMENTAL PACKET Land Use Hearing Curveballs FOR lir / 117 iU1-3 . . . And How To Hit Them (DATE OF MEETING) During the course of a land use hearing there are sometimes issues that arise which test the limits of our procedural rules. In this study session we will discuss examples of fact situations that raise questions about the best way to proceed to achieve the dual goals of making a good decision and staying within the procedural rules. Ambiguity in the Law: The code criteria are not clear and are capable of more than one interpretation. (Particularly with Comprehensive Plan amendment cases where comp plan goals and policies can sometimes conflict) The Reversal: The staff and Planning Commission are favorable towards an application, but the Council decides it should be denied. The Rules Lead to a Bad Result: In deliberations the Council concludes that application of the rules leads to a result that the Council does not want to see happen. The New Plan: Late in the hearing process the applicant offers an important change in the development plan. "I Didn't Get Notice:" A witness in the hearing objects to the hearing process, claiming correctly that the required notice did not get to her. The New Evidence: After the close of the record staff becomes aware of new evidence that it believes the Council may find relevant to its decision. Land Use Hearing Curveballs TMedits2110626_1 LORF/1/17/201710/11/2016 r Unusual Witness: During the appeal hearing at the City Council a member of the Planning Commission, who voted on the matter, steps up to testify against the application. What Were They Thinking? The outcome of a case turns on whether to apply a code interpretation made by a previous Council, an interpretation the current Council considers to be wrong. Final Written Argument: New Issue or New Evidence? When the applicant files a final written argument, which by statute closes the evidentiary part of the hearing, a new argument appears, never previously addressed in the case. Time is Running Out: Close to the end of the running of the 120-day clock an opponent asks for more time to present "important new evidence." Sherlock Holmes: After the close of the evidentiary hearing, and before deliberation begins, a Council member interviews several people about key issues in the case. Land Use Hearing Curveballs TMedits2410626 11PDR€/1/17/201710/11/2016 AIS-2901 4. Workshop Meeting Meeting Date: 01/17/2017 Length (in minutes): 15 Minutes Agenda Title: Discuss Proposed IGA on Future Governance Between Lake Oswego and Tigard Partnership Prepared For: Dennis Koellermeier,Public Works Submitted By: Judy Lawhead,Public Works Item Type: Update,Discussion,Direct Staff Meeting Type: Consent Agenda Public Hearing: No Publication Date: Information ISSUE Review progress being made regarding the intergovernmental agreement with Lake Oswego on future governance of the Lake Oswego-Tigard Partnership. STAFF RECOMMENDATION / ACTION REQUEST This is a briefing and discussion only. No action is necessary. KEY FACTS AND INFORMATION SUMMARY The attached draft intergovernmental agreement (IGA) outline has been presented to the Lake Oswego / Tigard Water Partnership (LOT) Oversight Committee (OVC).This draft IGA outline proposes the creation of a new intergovernmental entity as the governance model for LOT,in accordance with ORS Chapter 190. Previous discussions with council,and more specifically the Tigard representatives to the OVC,led staff to pursue this model. A work group led by the city managers of both cities developed and evaluated five different governance models. Two models emerged from that evaluation: 1) the proposed new intergovernmental entity model; and 2) a continuation of the current model,with certain changes naming Lake Oswego as the managing partner. For a variety of reasons,Tigard OVC members and staff are proposing the new intergovernmental entity model. The next steps for this issue include a proposed joint meeting between the Tigard and Lake Oswego city councils early next year,with the goal to reach consensus on a preferred governance model. From there, an implementation plan can be created in parallel with the upcoming annual budget process for each city. OTHER ALTERNATIVES Council could direct the Oversight Committee members to pursue a different future governance model. COUNCIL GOALS, POLICIES,APPROVED MASTER PLANS N/A DATES OF PREVIOUS COUNCIL CONSIDERATION The council has received periodic briefings related to OVC discussions about governance. Attachments LOT Governance Agreement AgendaQuick©2005-2017 Destiny Software Inc.,All Rights Reserved 9/2/16 INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITIES OF LAKE OSWEGO AND TIGARD CREATING THE LAKE OSWEGO-TIGARD WATER COMMISSION This Agreement is made and entered into by the City of Lake Oswego, an Oregon municipal corporation (Lake Oswego) and the City of Tigard, an Oregon municipal corporation (Tigard) who may also be collectively referred to as "Cities"and the "Parties". RECITALS WHEREAS, the Cities entered into an Intergovernmental Agreement Regarding Water Supply Facilities, Design, Construction and Operation dated August 6, 2008 (2008 Agreement) that provided for the repair and replacement of existing water system Supply Facilities (as defined therein) owned by Lake Oswego and for the joint construction of new Supply Facilities so that upon completion of construction the Cities would jointly own the combined Supply Facilities with sufficient capacity to fully develop the water rights held by Lake Oswego and apply that water to beneficial use; and, WHEREAS, the 2008 Agreement, as amended, provided for the design, construction and allocation of costs and ownership of Supply Facilities between the Cities as well a pledge in trust by Lake Oswego that Tigard would have rights of use and occupancy of the real property upon which the Water Treatment Plant is located and use of the water permits and certificates until Initial Expansion of capacity to 32 million gallons per day occurs; and WHEREAS, on December 9, 2008, the Parties executed a First Amendment to the 2008 Agreement that provided for the purchase price to be paid to Lake Oswego by Tigard for percentage ownership in certain assets, including real property, and that the real property interests would be conveyed by warranty deed and a Tenancy in Common Agreement would be executed within 90 days of completion of Initial Expansion; and, WHEREAS, on December 14, 2010, the Parties executed a Second Amendment to the 2008 Agreement that provided for adoption by each City of the Supply Facilities Capital Improvement Program according to the ownership percentage allocations; and, WHEREAS, on December 19, 2013, the Parties executed the Third Amendment to the 2008 Agreement that provided the 38 mgd capacity would be allocated at 20 mgd to Lake Oswego and 18 mgd to Tigard; and WHEREAS, the 2008 Agreement also provided, among other things, that Lake Oswego would be the Managing Agency to manage construction; budget, invoice and recover cost share allocations from each City; and undertake the operation, maintenance, repair and replacement of the jointly owned Supply Facilities so as to treat, convey and deliver finished water to the respective distribution systems of the Cities; and, WHEREAS, the 2008 Agreement provides that the Parties would each appoint two representatives to an Oversight Committee to oversee the Managing Agency and provide 24512.003\4830-6932-9720.v1 9/2/16 recommendations to the respective City Councils as necessary including post construction recommendations regarding new agreements for governance; and, WHEREAS, the Oversight Committee has recommended and the Cities have agreed to enter into this Agreement to create an intergovernmental entity pursuant of ORS 190.010, ORS 225.050 and their respective municipal charters to provide for the governance, operation, maintenance,repair and replacement of the Supply Facilities, and being advised, NOW,THEREFORE, it is agreed between the Parties hereto as follows: Section 1. Establishment. The Lake Oswego-Tigard Water Commission is hereby established pursuant to ORS 190.010 and ORS 225.050 and the municipal charters of each City and this Agreement has been approved by duly adopted ordinance of each City. Section 2. Definitions. As used in this Agreement, the following terms when capitalized shall have the following meanings: 2.1 Agreement—this Agreement 2.2 Capacity — capability from the various components of the Supply Facilities to produce or deliver water; measured in cubic feet per second (cfs), gallons, gallons per day (gpd), gallons per minute (gpm), million gallons per day (mgd), or other comparable measurement and available based on current operating conditions consistent with generally accepted engineering and operating practices. 2.3 City of Lake Oswego — an Oregon Municipal Corporation in Clackamas, Multnomah, and Washington Counties, Oregon. 2.4 City of Tigard — an Oregon municipal corporation in Washington County, Oregon. 2.5 Curtailment Plan — A written plan developed for curtailment of water service in accordance with OAR Chapter 690 Division 86 rules. 2.6 Demand — the amount of water used or projected to be used by a Party and imposed on the Supply Facilities to serve a Party's Retail Customers its Existing Wholesale Customers and ultimate service area measured in cfs, gallons, gpd, gpm,mgd, or other appropriate measurement. The basis for determining Demand may be waived or modified by the Parties due to unusual circumstances such as a fire, emergency, etc. 2.7 Existing Wholesale Customers — the Lake Grove Water District, River Grove Water District, Skylands Water Company, Glenmorrie Cooperative Association, and Alto Park Water District who are served at wholesale by Lake Oswego as if they were a Retail Customer of Lake Oswego under the terms and conditions of this Agreement. The Cities of King City and Durham and the Tigard Water District are contractually served by Tigard and for purposes of this Agreement 24512.003\4830-6932-9720.v1 9/2/16 shall be defined as existing wholesale customers. The parties recognize that the status of these entities are contractual and may change over time as determined by the affected Party to this agreement and the existing wholesale customer. 2.8 Fiscal Year—the time period as defined under ORS 294.311(17). 2.9 Local Government Investment Pool (LGIP) —The Oregon State Treasurer's Local Government Investment Pool, subject to regulatory oversight by the Oregon Secretary of State and administered by the Oregon State Treasury. 2.10 Planning Forecast — the document submitted by the Parties in accordance with Section which shows the Demands of each Party to be imposed on the Supply Facilities and the Capacity owned or leased by each Party in such facilities. 2.11 Property — Property shall be parcels of real property owned in fee simple, by easement or other interest over, under or upon which the Supply Facilities are or will be located properties subsequently acquired shall be acquired as tenants in common in proportion to the Parties' allocation of capacity. 2.12 Retail Customers—A user within the Party's service area boundary to which users may be added from time to time by annexation, extra-territorial extension of service, merger and/or consolidation or by intergovernmental agreement among the Parties pursuant to ORS 190. A municipal corporation or other entity, which purchases water for resale, shall not be considered a Retail Customer. 2.13 Service Area— The existing and future service area for each Party as set forth on Exhibit 2, and as may be modified by the Parties or pursuant to Section 23.7 of this Agreement. 2.14 Supply Facilities — the facilities constructed and utilized by the Parties under the 2008 Agreement consisting of Water Treatment Plant Facilities, Transmission Facilities, Water Storage Facilities, and other facilities necessary for treatment and conveyance of potable water to the Parties. A map of the Supply Facility components is provided in Exhibit_, which exhibit may be updated and revised by resolution of the Parties. The map is for illustrative purposes only and shall not be considered a legal description of the Supply Facilities 2.15 Surface Water Rights — those water rights held by Lake Oswego registered with the State of Oregon Water Resources Department, which allow for diversion of water for use at the Water Treatment Plant Facilities. The Surface Water Rights are more fully described in Exhibit , which exhibit may be updated and revised by resolution of the Parties. 24512.003\4830-6932-9720.v1 9/2/1 6 Section 3. Purpose. The purpose of the Commission is to operate, manage, maintain, and control the water supply and distribution system to provide a municipal water supply to the cities of Lake Oswego and Tigard and to the Commission's contractual surplus water purchasers. Section 4. Powers. The Commission, acting through the Commission shall have the following powers: (a) To purchase, own, hold, appropriate and condemn land, rights-of-way, and water or water rights either in its own name or in the name of the cities of Lake Oswego and Tigard. (b) To purchase and acquire from within or without Lake Oswego or Tigard other water works, water pipelines, water right, or any interest therein. (c) To provide a Commission to manage the business and affairs of the Commission and the Supply Facilities. (d) To issue, sell, or otherwise dispose of bonds or other securities for the Supply Facilities only, including authorization under ORS 288.805 through 288.945, but only upon approval of each City Council. Any financing or debt covenants related to the Supply Facilities shall not adversely affect existing indebtedness of a Party. (e) To adopt system development charges, fees, other charges and the set rates for the Supply Facilities. (f) To perform, pursuant to ORS 190.003 - 190.250, all powers either City possesses pursuant to their respective Charter or ordinances or applicable State or Federal laws, which are necessary to efficiently construct, operate, maintain, repair, replace and expand its Supply Facilities. Section 5. Membership. The Commission shall consist of the Mayor of Lake Oswego and two members of the City Council of Lake Oswego, and the Mayor of Tigard and two members of the Tigard City Council. All members appointed shall serve at the pleasure of the City Council that appointed them. Unless a member is replaced by the appointing council, each member shall be appointed for a term of two years, and shall serve until the expiration of their term of office and the appointment of their successor. Members may be reappointed to succeeding terms. Appointments to fill vacancies shall be for the remainder of the unexpired term. Section 6. Chair and Vice-Chair. At the first meeting in January of each year,the Commission shall elect from its members a Chair and Vice-Chair to serve a 1-year term. However,the person serving as Chair shall alternate each year between a member from Lake Oswego and a member from Tigard. Section 7. Meetings. Regular meetings of the Commission shall be conducted not less than quarterly on a date and at a time as the Commission may designate. The Chair, upon motion, may, or at the request of two members of the Commission, shall, by giving notice to members of the Commission, call a previously unannounced special meeting of the Commission for a time not earlier than 24 hours after the notice is given, unless an emergency exists. In cases of an emergency, notice reasonable under the circumstances shall be given. Four members of the 24512.003\4830-6932-9720.v1 9/2/16 Commission shall constitute a quorum.No action may be taken by the Commission unless a majority of the Commission,present, including at least one member from each City,votes to support the action proposed. Section 8. Management. The Commission may appoint such positions as it deems prudent or necessary for the effective management and operation of the Supply Facilities, which shall include the following: (a) General Manager. The Commission may appoint a General Manager, who shall be an employee and perform administrative and professional management duties for the Commission,in addition to specific functions enumerated in a Job Description which shall be prepared for this position.The General Manager shall report to and serve at the pleasure of the Commission. The Commission may also authorize the General Manager to employ staff. (b) Managing Agency. If a General Manager is not appointed,the Commission will approve one of the Parties to be the Managing Agency (c) Duties. The General Manager or Managing Agency (collectively "Managing Agent") shall manage and coordinate the operation, maintenance, repair and replacement of the Supply Facilities, approve contracts and change orders subject to applicable purchasing rules, take such actions reasonably necessary during an emergency and conduct the day-to-day business affairs including: water quality testing and regulatory compliance, payment of invoices, accounting, budgeting, operation and maintenance of the Supply Facilities, planning, project management, maintaining records, and other such duties as required. Each Party shall pay its share of costs in accord with the terms and conditions of this Agreement. (d) Advisory Committee. The Advisory Committee shall be comprised of the Managing Agent and the City Managers of each city,or their designees. The members of the Advisory Committee may invite such of their staff members to attend Advisory Committee meetings as they deem necessary. The Advisory Committee shall meet as often as is necessary, and shall review the activities,policies,operation, personnel and fiscal affairs of the Commission,and make appropriate recommendations to the Commission. Section 9. Ownership of Assets. 9.1 Real Property and Supply Facilities. Each of the cities shall own an undivided interest in the Supply Facilities as set forth in Ex. . Contemporaneously, with the execution of this Agreement, Lake Oswego has delivered a Warranty Deed and a Tenancy in Common Agreement has been executed by the Parties for the Real Property. The Parties agree that except as provided herein,the Property is dedicated for water supply purposes. The Parties intend that their relationship, with respect to the Property, be as tenants in common. Lake Oswego and Tigard 24512.003\4830-6932-9720.v1 9/2/16 shall be responsible for all costs related to the Property in proportion to their respective interests as set forth on Exhibit_. Such costs shall be included in the monthly invoices under Section 9.2 Water Rights, Permits, and Certificates. Surface Water Rights held by Lake Oswego shall not be transferred under any of the real property transfers. Surface Water Rights shall remain in the name of Lake Oswego. By execution of this Agreement,Lake Oswego agrees to hold these permits or certificates for the benefit of Tigard and Lake Oswego to the extent of the rights of each under this Agreement. Development and beneficial use by the Parties of water authorized in the Surface Water Rights of Lake Oswego, but undeveloped as of the date of this Agreement, shall accrue to the benefit of all Parties,to the extent of their rights under this Agreement,without regard to ownership. 9.3 Covenant. The Parties declare that the Property is and shall be held, conveyed, hypothecated, encumbered, leased, rented, occupied and improved subject to the limitations, restrictions, covenants and conditions set forth in this Agreement, all of which are declared to be in furtherance of a plan established for the purpose of constructing and operating the Supply Facilities. All such limitations, restrictions, covenants and conditions are intended to run with the Property, and to inure to the benefit of and be binding upon all parties having or acquiring any right,title, interest or estate therein. Other incidental uses shall be limited or restricted to the extent they conflict with water supply purposes. 9.4 Partition. Following transfer and so long as this Agreement is in effect, no Party shall seek or obtain through any legal proceedings a judicial partition of the Property or sale of the Property in lieu of partition, without the prior written consent of the other Party. Section 10. Financial Management. 10.1 Budget. The Managing Agent shall prepare a budget for the Supply Facilities for each Fiscal Year. Each Party's proportionate share of the expenses of operation and maintenance of the Supply Facilities, including reserves for repair and replacements, permitting, design and construction and other expenses as may be incurred, shall be estimated, and set forth in the annual budget, and the amount estimated shall be recommended to be included as operating expenses, in each Party's individual adopted budget. If the budget includes accumulation of funds designated for a particular purpose or future use, such amounts shall be accumulated in a restricted or earmarked fund. 10.2 Schedule. A draft budget shall be prepared and distributed to the Advisory Committee by March 1st for comment. A draft budget shall be prepared and distributed to the Commission by April 30th. The final budget must receive approval by each Party by June 30th. If any Party uses a biennial budget cycle, the dates above shall remain the same for the applicable budget preparation year 24512.003\4830-6932-9720.v1 9/2/16 and that Party shall update the budget amounts anticipated for the off year for the benefit of the other Party's budget process. 10.3 Periodic Reports. The Managing Agent shall maintain an independent budget control procedure and provide budget reports at least quarterly to the Commission not later than 30 days after the end of each quarter. This report shall show expenditures and receipts by budget item for each transaction through the last working day of the preceding quarter. 10.4 Asset Management Program. The Managing Agent shall create a thorough inventory all of the assets associated with the Supply Facilities, including physical facilities and real estate holdings. The inventory shall describe the current conditions of these Supply Facilities, their current value (replacement cost less depreciation), and repairs and replacements that may be necessary. The inventory shall include a schedule for repairs and replacement. The Advisory Committee may propose policies to the Commission that guide, schedule and fund the repair and replacement of the assets and suggest amendments to the Supply Facilities Capital Improvement Program. The Asset Management program shall be based on prudent utility practices and industry standards. 10.5 Audit, Record Keeping; Access to Records. The Managing Agent shall cause an annual audit to be conducted pursuant to the requirements of ORS 207.425, 297.455, 297.465 and 297.466. The Managing Agent shall maintain its books and records in such manner that the Supply Facilities and expenditures related thereto are separately stated and capable of review without being combined or mixed with the nonsupply facility assets. The Managing Agent shall maintain all fiscal records relating to the Supply Facilities and Project in accordance with generally accepted accounting principles. In addition, the Managing Agent shall maintain any other records pertinent to the Supply Facilities and Project. All such fiscal records, books, documents, papers,plans, and writings shall be retained by the Managing Agency and kept accessible as required by law. Each Party and its authorized representatives shall have access to all books, documents,papers and records of the Managing Agency which are directly related to the Supply Facilities and Project for the purpose of making any audit, examination, copies, excerpts and transcripts. Section 11. Council Decisions. Approval by the Councils of each Party is required for: (a) Any sale, transfer, lease, exchange, or other disposition of any Property over, under, or upon Supply Facilities are located; 24512.00314830-6932-9720.v I 9/2/16 (b) Entry to any mortgage, pledge, encumbrance or refinance of the Property or Supply Facilities; (c) Approval of any budget; (d) Approval of revenue bonds or other financing obligations for the Supply Facilities; (e) Approval of any nonemergency expenditure by the Commission that has not previously been approved and budgeted or a capital improvement project not listed on the Supply Facilities Capital Improvement Program; (f) Approval of any decision to burden the Property or Supply Facilities with additional easements, licenses, or other encumbrances or to use the property for non-water related purposes. (g) Approval of amendment of the Agreement to allow a new Party to join; (h) Approval of modification,alteration or dissolution of this Agreement; (i) Approval of a Supply Facilities Capital Improvement Program and amendments. Section 12. Personnel. If the Commission appoints a General Manager as the Managing Agent and other Commission staff are hired as employees, the Commission shall be responsible for complying with all applicable state and federal laws and for all employment related benefits and deductions, workers' compensation premiums and pension contributions. To the extent that any Party uses its own employees in the performance of its duties under this Agreement, that entity shall be so responsible. Decisions regarding employees shall be the sole responsibility of the entity who employs him or her. Section 13. Cost of Water. Lake Oswego and Tigard shall each pay the Commission for the water each City uses through a commodity rate. The commodity rate shall be established pursuant to the guidelines in this Agreement. 13.1 LOT shall treat the parties to this Agreement as a separate class of customer from any of the wholesale surplus water customers. The rate to be charged to the parties to this Agreement shall initially be established by the Commission. In performing rate studies, LOT shall give due consideration to accepted rate making methodologies recommended by the American Water Works Association. 13.2 Operation and Maintenance Costs. The costs of operation and maintenance shall be allocated between the Parties according to water delivered from the water treatment plant to each Party's connection point to their distribution systems measured in hundred cubic feet(cef)imposed on the Supply Facilities multiplied by the 24512.003\4830-6932-9720.v1 9/2/16 operations and maintenance expense rate in $/ccf. The method for calculating the rate and water use determination of payment shall be agreed to by the Commission based on the budget and anticipated water use considering the previous 12 months' water use. At the end of each year,actual unit costs will be calculated and reconciled. 13.3 Billing and Payment. Each Party shall receive an invoice monthly from the Managing Agent representing one-twelfth of the allocated operations and maintenance budget amount for that Party. The invoice may also include required payments for renewal, repair, and replacement(proportionate to ownership)or the Managing Agent may send a separate invoice. Payment is due within 30 days of receipt of the invoice. On March 1st of each year,the Managing Agent will send an invoice calculating actual water usage as compared to estimated annualized expenditures in the budget and reconcile them. The respective Parties will pay(or receive credit for overpayment toward the next invoice)based upon this reconciliation. As soon as reasonably possible after June 30th of each year,the Managing Agent will conduct a similar reconciliation and the Parties will pay or receive credit for overpayment as appropriate on the next invoice in the new fiscal year. 13.4 In the event of extraordinary circumstances or a major casualty or loss which requires emergency expenditures to maintain a sufficient water supply, LOT may impose upon the Parties an emergency surcharge to pay for such expenditures. The surcharge shall be allocated between the Parties to this Agreement in an equitable manner which takes into consideration the benefit to be derived by each party from the expenditure. Section 14. Use of Supply Facilities. The Parties shall each use the Supply Facilities in a manner consistent with prudent water utility practices and to minimize interference with each other's use of its respective share of Capacity to meet its demands. Prudent practices shall include a mutual commitment to conservation and use of water without waste implemented in each Party's Water Management and Conservation Plan. The Parties anticipate that instances of overuse of Capacity by a Party will be rare and the Parties shall resolve such instances on a case-by-case basis. Unless caused by system operation conditions not caused by the overusing party, any use of 10%or greater by either Party(or third party user)than its share of Capacity for two consecutive years or three out of five years shall be overuse. The overusing Party(or third party user)shall compensate the other party at a lease rate as may be fairly and equitably agreed upon by the parties. Section 15. Mutual Forecast Submittal. In order to make timely, reasonable and prudent judgments concerning meeting respective demands for capacity,the need to lease capacity,the ability to lease capacity, and the terms and conditions of any such Lease,the Parties shall each submit to the other commencing February 1,2018 and February 1 of each fifth year thereafter, a 10- year planning forecast. The planning forecast shall set forth the respective projected water 24512.003\4830-6932-9720.v1 9/2/16 demands,capacity to serve that demand, and identify any deficiencies in capacity by year for the 10-year period. Demand shall include any sale of water from capacity agreed to or reasonably anticipated within the ten-year time frame. The capacity requirement for the Supply Facilities shall consist of the average of five consecutive days containing the highest average peak day demands (mgd)imposed by the Parties,for the summer period of May 15 to October 31. The Parties shall agree on an appropriate course of action as they deem reasonably available and prudent,under the forecasted circumstances,including,but not limited to, leasing capacity from one to the other,both within and without the timeframe of such planning forecasts. Section 16. Supply Facilities. 16.1 Water Treatment Plant Facilities. Except during a curtailment event for any reason, each Party shall have or obtain Capacity in the Water Treatment Plant Facilities, to serve the Demand of the Party during the Summer Period and the Winter Period up to the respective allocations. The Capacity requirement for Water Treatment Plant Facilities shall consist of the average of the five (5) consecutive days containing the peak day demand (mgd) imposed on the Supply Facilities by the Party for each Summer Period and Winter Period. Capacity in the Water Treatment Plant Facilities may be obtained by purchase of excess existing Capacity, capacity expansion of the Water Treatment Plant Facilities and/or leasing of Capacity from another Party. 16.2 Transmission System. The Parties agree to maximize the use of the existing Transmission System for the benefit of the Parties before construction of new transmission facilities. The Parties have agreed on connection points for delivery of water from the Transmission System as set forth in Exhibit _, which exhibit may be updated and revised by resolution of the Commission. To the extent that a Party needs additional Capacity in the Transmission System, the Parties agree to sell or lease available Capacity in the Transmission System prior to construction of new transmission facilities. 16.3 Finished Water Storage. The Parties agree to construct additional shared storage facilities where efficient and economic for both Parties. Notwithstanding this provision, each Party shall construct and operate separate adequate finished water storage within its distribution system to meet their respective operating and emergency conditions as set forth in the Operations Manual. To the extent that a Party cannot do so, it may make a request to the other Party for supplemental storage. If the Party providing supplemental storage agrees to provide such storage, then the Party receiving such supplemental storage shall compensate the other Party as mutually agreed. Section 17. Expansion. 17.1 Policy. The Parties agree that use of the Supply Facilities should be accomplished first by utilizing the Capacity in the Supply Facilities to serve the needs of the Parties. The Supply Facilities should be expanded only after the Parties are 24512.00314830-6932-9720.v] 9/2/16 projected to be using all Capacity, within a reasonable planning horizon or at such other times as the Parties deem appropriate. In determining the appropriate time to begin expansion of the Supply Facilities, the Parties shall consider the time required to provide for environmental reviews, design, permits and construction. Therefore, the Parties agree to lease Capacity to another Party as provided for in Section—to reasonably and prudently defer capital improvements and costs thereof. 17.2 New Surface Water Rights and Expansion. The Parties agree that finding opportunities to acquire new water rights(surface or ground)may be of great significance to their long range needs. This may include the purchase of existing Surface or Ground Water Rights or application for permits for surface, ground or stored water rights. The Parties agree that new sources shall be acquired jointly in proportion to the Party's ownership interest in the Supply Facilities or by the Commission. If a Party elects not to participate in the acquisition of additional water,the other Party may proceed individually. 17.3 Expansion Rights in New Supply Facilities. The Parties shall use reasonable and prudent utility standards in determining as to when and to what size New Supply Facilities should be constructed. Such determination shall take into consideration the Demand requested by the Parties,the Capacity of the Water Supply Facilities, prudent utility planning standards and the available Surface Water Rights, and Transmission System owned or capable of being leased or expanded by the Parties. Based on the Planning Forecast of Section 15, a Party shall provide written notice to the other Party of its desire to expand the Supply Facilities. The Commission shall place the proposed project on the Capital Improvement Program. The intent of the Parties is to place the proposed project on the Commission's CIP for a period of five years. In the third year of the CIP,the Parties shall each decide whether to accept or reject participation in the expansion. Notice by a Party to participate in an expansion shall be in writing and specify the percent participation in the expansion. Each Party shall have the right to participate in the expansion in at least the same percentage level as the Party's percent ownership in the Supply Facilities at the time of the proposed expansion. A party may proceed individually if the other elects not to participate so long as the non-participating Party is held harmless from financial obligation. 17.4 Other Assets. There may arise other improvements which do not directly in and of themselves, provide for expansion of the Supply Facilities. In such circumstances,the Parties shall mutually determine the appropriate financial participation by each of the Parties. They shall consider the purpose for the construction of the asset and the benefits to be received by each of the Parties from the asset in determining the financial participation requirement of each. A party may proceed individually if the other elects not to participate so long as the non-participating Party is held harmless from financial obligation. 24512.00314830-6932-9720.v1 9/2/16 17.5 Bonita Road Pump Station. Tigard's Bonita Road Pump Station is capable of providing water from Tigard to Lake Oswego if necessary. The Parties acknowledge this is beneficial to Lake Oswego in those circumstances, but the frequency is difficult to predict. If this Pump Station is used for the benefit of Lake Oswego, Lake Oswego shall pay Tigard's costs to supply water, including Tigard's costs to purchase water from other entities, as if it were a short-term lease. Tigard will invoice Lake Oswego on a monthly basis in such circumstances. Section 18. Leasing. 18.1 As provided for in Section 17, the Parties shall lease to the other Capacity in the Surface Water Rights and Supply Facilities to the extent available according to the planning forecast. Each Party has a right to lease from the other the unused portion of their respective allocations of the total 38 mgd Capacity. Each Party shall lease to the other Lake Oswego such unused capacity as may be determined by Lake Oswego to be reasonably available and prudent to be leased or as they may otherwise agree. 18.2 Terms and Conditions. The term of any lease for Supply Facilities shall be for a term and upon such conditions as the Parties determine. A lease shall be an interim measure that allows the Parties to defer expansion or new construction of Supply Facility components and to provide Parties with a near-term stable planning horizon. The Parties do not intend to have perpetual renewal terms. The lease payments shall be determined according to the formula on Ex. or as mutually agreed. 18.3 Curtailment of Leasing Capacity. The Parties agree that a condition of any lease shall be that the lessee Party shall be provided Capacity to the same extent that Capacity is available to serve the lessor Party's Demand. Curtailment of Capacity resulting from reduced availability of water for all new water supplies developed after the effective date of this Agreement shall be shared equally among the parties. Section 19. Sales to Others. Except for the Existing Wholesale Customers, existing mutual aid agreements, or extension of service to a Party's service area, neither Party may contract for the sale or use of the Supply Facilities to any other entity or person who is not a Retail Customer of any Party without 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 Agent. 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 20. Withdrawal. 24512.003\4830-6932-9720.v1 9/2/16 20.1 Complete or Partial Termination of Interest. Any Party may elect to terminate all or part of its participation in this Agreement and withdraw from the Supply Facilities as designated(full or partial) by giving written notice of its desire to terminate to the remaining Party(ies), and stating a date for termination which shall be not less than five (5)years from the date of notice. The remaining Party receiving notice of termination shall have the first option to purchase the terminating interest. If Tigard terminates in whole or in part, the purchase price shall not include any value for water as those water rights remain with Lake Oswego. If Tigard completely terminates from this Agreement, it shall not receive water unless Lake Oswego agrees in writing. If Tigard partially terminates, its_mgd capacity shall be adjusted to reflect its retained, proportionate interest. The Parties shall meet for the purpose of establishing the price for the terminated interest. The meeting shall be held within 90 days following receipt of notice of termination. Notice to the selling Party of the other Party's intent to buy all or a portion of the terminating interest shall be given no later than three (3)months after receipt of the written notice of the Party's desire to terminate. If the remaining Party purchases less than the full portion of the terminating interest,the Parties also agree that any unpurchased interest may be sold to another local government party so long as that other local government party becomes subject to all terms and conditions of this Agreement. The terminating Party shall use best efforts to find another local government partner to buy the remaining unpurchased interest or to assign or lease capacity so as not to unduly burden the remaining party. Consent by the remaining Party for another local government party to purchase,take assignment or lease the Supply Facilities to this Agreement shall not be unreasonably withheld. Any assignment or lease of an unpurchased interest to another local government shall not relieve the Party from its obligations under this Agreement. Negotiations of the terms of sale, assignment or lease to another local government Party shall include the non-terminating Party as to those terms which directly impact its operational and financial interest. 20.2 Sale of Assets. A Party may offer to sell to the other Party its ownership interest in an identified portion of the Supply Facilities (e.g., a percent of the Transmission System). Notice of the proposed sale shall be given to the other Party by the Party wishing to sell. Such notice shall specify the material terms and conditions of the sale. The terms and conditions of Section 21.1 shall apply. The Party may also assign or lease the unpurchased interest to another local government Party. Consent to such assignment or lease shall not be unreasonably withheld or relieve the Party from its obligations under this Agreement. 20.3 Valuation of Interest. The Parties shall meet to agree upon a price within 90 days of the receipt of notice under Sections 20.1 or 20.2. The price shall be fixed by determining the terminating/selling Party's interest in the subject assets using the 24512.003\4830-6932-9720.v1 9/2/16 Depreciated Replacement Cost Value or a mutually agreed. Nothing herein shall prevent the Parties from agreeing upon a price through negotiation and unanimous consent. Sales, assignments or leases to third parties are not subject to the valuation formula of this Section. 20.4 Payment. The payment price for the subject interest shall be paid in full on the date of termination set forth in the notice of intent to terminate/sell or award of arbitration or court. Interest shall commence to accrue from the date of agreement arbitration or judgment at the Local Government Investment Pool rate. If a Party fails to pay the purchase price in full at the date of termination,then the terminating/selling Party shall have the right to sell or transfer or assign the subject interest to any other government entity as provided in Section 20.1 or 20.2. 20.5 Default and For Cause Termination. The failure of a Party to perform any duty imposed upon it by this Agreement shall constitute a default. The non-defaulting Party shall have the right to give the defaulting Party a written notice of default, which shall describe the default in reasonable detail and state the date by which the default must be cured, which date shall be at least 60 days after receipt of the notice of default, except in the case of a failure to advance funds, in which case the date shall be 30 days after receipt of the notice of default. 20.6 Opportunity to Cure. If within the applicable period described in Section 20.5 the defaulting Party cures the default, or if the failure is one (other than the failure to make payments)that cannot in good faith be corrected within such period and the defaulting Party begins to correct the default within the applicable period and continues corrective efforts with reasonable diligence until a cure is effected,the notice of default shall be inoperative, and the defaulting Party shall lose no rights under this Agreement. If,within the specified period, the defaulting Party does not cure the default or begin to cure the default as provided above,the non- defaulting Parties at the expiration of the applicable period shall have the rights specified in Section 21. 20.7 Rights Upon Default. If the defaulting Party has not cured the default as provided in Section 20.5, it shall have no voting rights under this Agreement until the default has been cured. In addition,the non-defaulting Party may pursue any other remedy available at law or in equity against the defaulting Party, including but not limited to, an action for damages, costs of obtaining substitute water or other performance. Dispute Resolution is a condition precedent to pursuing any remedy. 20.8 Dissolution of the Agreement. This Agreement may be dissolved by mutual agreement. Upon dissolution,the Parties shall agree on a Dissolution Plan and schedule to wind down and dissolve the business affairs. Unless modified by the Dissolution Plan,the dissolution shall be effective only after all debts and 24512.003\4830-6932-9720.v1 9/2/16 obligations are paid or provision for payment is made. Each Party shall assume a share of the debts and obligations in proportion to their ownership in the Supply Facilities unless the instrument or transaction that created the debt or obligation specified otherwise. The Parties shall execute those documents necessary to vest proportionate ownership of the Supply Facilities and Property in each Party and execute a post dissolution water supply agreement and a management agreement for the Supply Facilities and Property. Nothing herein shall prevent a Party from accepting cash or other consideration in lieu of continued proportionate ownership in the Supply Facilities and Property. The cost of dissolution shall be treated as an operation and maintenance expense. 20.9 Termination or Dissolution by Lake Oswego. If Lake Oswego elects to terminate this Agreement, or if the Parties mutually agree to dissolve this Agreement, Lake Oswego agrees to provide Tigard with treated water sufficient to supply million gallons per day so that Tigard is always assured of having sufficient source to supply its capacity share and usage of the Supply Facilities. If Tigard is allocated additional capacity in the Supply Facilities by the provisions of this section shall apply to that increment of water. Negotiation of a mutually agreeable water supply agreement shall be a condition precedent to any termination of this Agreement by Lake Oswego or Dissolution Plan. 20.10 Unreasonable Withholding of Consent. Unreasonable withholding of consent shall be those reasons other than financial considerations, availability of alternate water sources, water usage characteristics, water service territory, water demand forecasts,technical or operational expertise, history as a recognized local government water service provider, ownership, control or operation by or for a private entity or person, and other relevant matters considered in reasonable and prudent utility management. Section 21. Dispute Resolution. The Parties hereby agree that resolution of any disputes shall follow these steps. However, nothing shall prevent the disputing parties (Disputing Parties) from waiving any of the steps by mutual consent. 21.1 Dispute Resolution Steps. Step One: (Negotiation) A Party shall give notice of the dispute (Notice Date). The Managing Agent shall commence a meeting of the City Manager or other persons designated by each of the Disputing Parties. Those designees shall negotiate on behalf of the Party they represent and attempt to resolve the issue. If the dispute is resolved at this step, there shall be a written determination of such resolution, signed by each City Manager or other designated persons and ratified by the governing bodies,which shall be binding upon the Disputing Parties. Step Two: (Mediation) 24512.003\4830-6932-9720.v1 9/2/16 If the dispute cannot be resolved within thirty (30)days at Step One,the Disputing Parties shall submit the matter to non-binding mediation. The Disputing Parties shall attempt to agree on a mediator. If they cannot agree, the Disputing Parties shall request a list of five (5)mediators from an entity or firm providing mediation services. The Disputing Parties shall mutually agree on a mediator from the list provided. Any common costs of mediation shall be borne equally by the Disputing Parties. The Parties shall agree upon a mediator within 10 days of request for mediation and mediation shall be completed within 60 days of the Notice Date. If the issue is resolved at this step, a written determination of such resolution shall be signed by each City Manager or other designated persons, and ratified by the governing bodies, which shall be binding on the Disputing Parties. Step Three (Arbitration) After exhaustion of the preceding processes, all disputes or claims arising out of this Agreement shall be submitted to binding arbitration under the rules and processes of U. S. Arbitration and Mediation of Portland, Oregon or similar mutually agreed process. Each Disputing Party shall select an arbitrator and the two shall appoint a third arbitrator. All costs of arbitration shall be borne equally. The Oregon Rules of Civil Procedure relating to discovery and the Oregon Evidence code shall apply. The decision of the panel shall be binding. Nothing herein shall prevent the Disputing Parties from selecting a single arbitrator by agreement. 21.2 Legal Fees. Each Disputing Party shall bear its own legal and expert witness fees at all stages of proceedings, including any appeals. Section 22. Notices. Any notice herein required or permitted to be given shall be given in writing and effective when actually received by hand delivery or by the United States mail, first class postage prepaid, addressed to the Parties as set forth below. The Parties shall notify the Managing Agency of any change of address or title for receipt of notices under this Agreement. City of Lake Oswego City of Tigard Attn: City Manager Attn: City Manager 380 A Avenue 13125 S.W. Hall Boulevard P.O. Box 369 Tigard, Oregon 97223 Lake Oswego, Oregon 97034 24512.003\4830-6932-9720.v1 9/2/16 Section 23. General Provisions. 23.1 Instruments of Further Assurance. From time to time, at the request of a Party, each Party shall, without further consideration, execute and deliver such further instruments, and shall take such further action as may be reasonably required to fully effectuate the purposes of this Agreement. 23.2 Entire Agreement. This Agreement embodies the entire agreement and understanding between the Parties hereto with respect to the Supply Facilities and supersedes all previous agreements and understandings relating to the Supply Facilities except as provided herein. The Parties agree that the 2008 Agreement shall terminate as of the effective date of this Agreement. 23.3 Assignment, Sale or Transfer. No Party shall have the right to sell,transfer or assign its interest in this Agreement(or any portion thereof)or asset(s),without the prior written consent of the other in accordance with requirements of this Agreement. No Party may sell,transfer, assign its interest or sell water to an existing wholesale customer in the other Party's service area as set forth on Exhibit 2 without the prior written consent of the other Party in accordance with the requirements of this Agreement. 23.4 Severability. In case any one or more of the provisions contained in this Agreement shall be invalid, illegal, or unenforceable in any respect,the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 23.5 Headings. The Article, section and subsection headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 23.6 Force Majeure. No Party shall be considered in default in the performance of its obligations under this Agreement to the extent that the performance of any such obligation is prevented or delayed by any cause, existing or in the future, which is beyond the reasonable control of the affected Party, including, but not limited to, Acts of God, earthquake, labor disputes, civil commotion, war events beyond the reasonable control of the Parties, such as regulatory restrictions or requirements, permit issuance, and the like. In the event a Party claims that performance of its obligations was prevented or delayed by any such cause,that Party shall promptly notify the other Parties of that fact and of the circumstance preventing or delaying performance. Such Party so claiming a cause of delayed performance shall endeavor to the extent reasonable to remove the obstacles which preclude performance. 23.7 Consolidation, Merger, Annexation. 24512.003\4830-6932-9720.v1 9/2/16 23.7.1 Change of organization is defined as the consolidation or merger of a Party with another city under ORS 222.610 et seq. 23.7.2 Any new entity created by change of organization involving a Party to this Agreement shall require prior consent of the other Party as to the successor or surviving entity's entitlement to be an owner of the Supply Facilities, based on the entity's legal, financial and technical ability to assume the original Party's obligations under this Agreement. Such consent shall not be unreasonably withheld. If the surviving or successor entity is approved, the original Party/Parties' obligations and rights hereunder shall be binding upon and inure to the benefit of the surviving or successor entity, and that entity shall be subject to all obligations of this Agreement. 23.7.3 Annexation of or provision of service to an area beyond that area identified for each party in Exhibit , and any transfer of a Party's territory to a Water Authority formed by one or more cities, water districts, or both, shall require the prior consent of the other Party, which shall not be unreasonably withheld considering capacity and demands and other system factors. Annexations or service to identified areas shall not require consent. 23.8 Survival of Covenants. Any provision of this Agreement which, by its terms has or may have application after the expiration or earlier termination of this Agreement, including all covenants, agreements, and warranties, shall be deemed to the extent of such application to survive the expiration or termination of this agreement. 23.9 Indemnity. To the extent permitted by the Constitution and laws of Oregon, each Party agrees to defend, indemnify and hold harmless the other from and against any and all actual or alleged claims, damages, expenses, costs, fees, including but not limited to attorney, account, paralegal, expert and escrow fees, fines, environmental costs and/or penalty (collectively "costs"), which may be imposed upon, claimed against, or incurred or suffered by the Party, unless and to the extent it was resulting from an individual Party's negligence or willful misconduct. 23.10 No Third Party Beneficiaries. The Parties hereto are the only Parties to this Agreement and the only persons or entities entitled to enforce its terms. 23.11 Franchise Fees, Right of Way Fees. A Party may not change a franchise fee, right of way fee or utility license fee on any Supply Facilities. IN WITNESS WHEREOF the Parties have dated and signed this Agreement. CITY OF LAKE OSWEGO CITY OF TIGARD 24512.003\4830-6932-9720.v1 9/2/16 Mayor Mayor Dated Dated ATTEST: ATTEST: City Recorder City Recorder Dated Dated City Attorney City Attorney 24512.003\4830-6932-9720.v1