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06/13/2007 - Packet rz � Completeness Review for Boards, Commissions and Committee Records CITY OF TIGARD Intergovernmental Water Board Name of Board, Commission or Committee ��ne. 13, 2j07 Date of Fleeting To the best of my knowledge this is the complete meeting packet. I was not the meeting organizer nor did I attend the meeting; I am simply the employee preparing the paper record for archiving. This record came from Greer Gaston's office in the Public Works Building. Kristie Peerman Print Name Signature 3AL b 3 Date Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and the Unincorporated Area AGENDA Wednesday, June 13, 2007 Tigard Public Library 5:30 p.m. 2nd Floor Conference Room 13500 SW Hall Blvd. Tigard, OR 97223 1. Call to Order, Roll Call and Introductions Call the meeting to order, staff to take roll call. 2. Approval of Minutes -May 9, 2007 Motion from the Board to approve the minutes. 3. Public Comments Call for any comments from the public. 4. Novelo Credit for Leak Request-Amanda Bewersdorff- (5 minutes) 5. Novelo Appeal of Leak Credit-Amanda Bewersdorff- (5 minutes) 6. Discussion of Tenancy in Common Agreements, Amendments to the 1993 Intergovernmental Agreements, and Bargain and Sale Deeds, and a Commercial Lease of the Water Building -Attorney Ramis - (20 minutes) 7. Consider a Tenancy in Common Agreement for the Water Building -Attorney Ramis - (10 minutes) 8. Consider a Tenancy in Common Agreement for the Canterbury Property-Attorney Ramis - (10 minutes) 9. Consider a Commercial Lease with the City of Tigard for the Water Building - Attorney Ramis - (10 minutes) 10. Water Supply Options - Dennis Koellermeier(5 minutes) 11. Informational Items -Dennis Koellermeier 12. Non-Agenda Items Call for non-agenda items from Board. 13. Next Meetings - • June 19, 2007, 6:30 p.m. Joint Meeting with the Tigard City Council Tigard City Hall, 13125 SW Hail Blvd., Tigard Oregon • July 11, 2007, 5:30 pm Location to be announced 14. Adjournment Motion for adjournment. Continued Executive Session: The Intergovernmental Water Board 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. Sign-in Sheet Intergovernmental Water Board Meeting Date: .Tune_ /3, Zoo:i - Name Do you wish If yes, please give your address please print to speak to the Board? John Q. Public Yes 13125 SW Hall Blvd. Tigard OR 97223 ;qelv 5e T, )N R �(A 47 l C� L Intergovernmental Water Board (IWB) Meeting Minutes June 13, 2007 Tigard Public Library Following approval of these minutes it was noted the 2nd Floor Conference Room footer reflected an incorrect 13500 SW Hall Blvd. date (June 11, 2007). This has been correcteq to read June Tigard, OR 97223 13, 2007. , Members Present: Gretchen Buehner Representing the City of Tigard Patrick Carroll Representing the City of Durham George Rhine Representing the Tigard Water District Bill Scheiderich Member at Large Dick Winn Representing the City of King City Members Absent: None Staff Present: Public Works Director Dennis Koellermeier Quality/Supply Supervisor John Goodrich City Attorney Tim Ramis Accounting Supervisor Amanda Bewersdorff IWB Recorder Greer Gaston Note: Agenda items are recorded in the minutes in the order they were considered. This order varies from the agenda, thus the discrepancy in numbering. 1. Call to Order, Roll Call and Introductions Commissioner Scheiderich called the meeting to order at 5:36 p.m. 2. Approval of Minutes — May 9, 2007 Commissioner Carroll motioned to approve the May 9, 2007, minutes; Commissioner Buehner seconded the motion. The minutes were approved by unanimous vote. Note: The following agenda items were considered together. 4. Novelo Credit for Leak Request 5. Novelo Appeal of Leak Credit Ms. Bewersdorff provided background information regarding this credit for leak request. Based upon the prescribed process, a credit of$650.84 was calculated. Credits exceeding $500, or credits for repairs taking more than ten days, require IWB approval. Ms. Bewersdorff also explained the Novelos were requesting a credit in additional to the $650 mentioned above. Their remaining balance after the credit was $740.82. Ms. Bewersdorff recommended approval of the initial credit, but suggested the Board not approve an additional credit until the Novelos processed the balance of the bill through their insurance company. If denied by the insurance company, the issue could be brought before the Board at a future meeting. Intergovernmental Water Board Minutes June 13,2007 1 A timeline for payment and processing the insurance claim was discussed. Commissioner Carroll motioned to: ■ Issue the $650 credit ■ Allow the Novelos a maximum of three months to resolve the remaining balance ($740)with their insurance company ■ If required, bring the matter back to the Board Commissioner Buehner seconded the motion. The motion was approved by unanimous vote. 3. Public Comments Marland Henderson, 11795 SW Katherine Street, Tigard, described his background serving on the Water Resource Board and his involvement with the redevelopment of the downtown. Mr. Henderson distributed a handout to the Board. This document is on file in the IWB record. He proposed using reclaimed or recycled water in conjunction with upcoming improvements to Tigard's downtown area. Mr. Henderson proposed the installation of a one-foot transmission pipe for reclaimed water be included in the City of Tigard's Burnham Street improvement project. Eventually this pipe could be connected to a future pipeline which would extend from the Durham treatment plant, along Hall Boulevard, to Burnham Street. Mr. Henderson said the reclaimed water could be used in irrigation and cleaning, as a water supply for toilets, and to enhance the creek. Mr. Henderson asked for the Board's endorsement of his proposal. The Board decided to invite a representative from Clean Water Services to make a presentation at an upcoming meeting in order to obtain information on the capacity, logistics, and feasibility of such a project. Mr. Henderson was invited to the Board's next meeting. Note: The following agenda items were considered together: 6. Discussion of Tenancy in Common Agreements, Amendments to the 1993 Intergovernmental Agreements, and Bargain and Sale Deeds, and a Commercial Lease of the Water Building 7. Consider a Tenancy in Common Agreement for the Water Building 8. Consider a Tenancy in Common Agreement for the Canterbury Property 9. Consider a Commercial Lease with the City of Tigard for the Water Building Mr. Koellermeier provided a brief introduction to this item. He stated the legal documents were intended to implement changes the Board had been discussing for more than two years. Mr. Ramis brought updated packets of materials and provided them to the Board and audience members. The packets contained the following: ■ Resolution (unique to each jurisdiction) ■ Amendment to 1993 Intergovernmental Agreement (IGA),(unique to each jurisdiction) ■ Tenancy in Common Agreement for the Canterbury Property ■ Tenancy in Common Agreement for the Water Building ■ Bargain and Sale Deed for the Water Building Intergovernmental Water Board Minutes June 13,2007 2 ■ Bargain and Sale Deed for the Canterbury Property ■ Water Building Commercial Lease These materials are on file in the IWB record. Mr. Ramis provided introductory comments. He noted the legal documents reflected the Board's input during previous discussions. The concepts addressed in the documents include: ■ Vesting ownership in the IWB member jurisdictions based on a percentage formula and, thereby, resolving ownership questions. This would remove the issue of"other" versus "system" assets. ■ Providing for control of property through tenant in common agreements which would be based on either the majority vote of the four member jurisdictions, or the majority vote of the four member jurisdictions and the member-at-large. ■ Assigning a standard approach to the division of maintenance responsibilities between landlord and tenant with regard to the City of Tigard leasing the water building. Mr. Ramis summarized the documents as follows: Resolution This is the fundamental authority document whereby the governing (unique to each body authorizes its representative to the IWB to take action on the jurisdiction) amendment to the IGA, bargain and sale deeds, and the tenant in common agreements Amendment to the Amends IGAs between the City of Tigard and Durham, King City, IGA and the Tigard Water District (TWD) (unique to each jurisdiction) Key feature: Item 4, page 2- Three jurisdiction votes are required to sell or purchase real property. The Board requested the member jurisdictions should be listed in this section of the amendment. They also agreed on dividing this section into two paragraphs, one establishing criteria to sell the property, and one establishing a quorum of the Board. Tenancy in Key Features: Common Item 5, page 2- Ownership Interest Agreement for the This is based on a formula spelled out in the 1993 IGAs. Canterbury Property Commissioner Buehner requested some kind of system be established regarding the reallocation of ownership proportions. This is to take place every 24 months. Commissioner Carroll requested language be added stating ownership proportions would be recalculated at the time of sale. Item 18, page 4- Restriction's on Sale of Owner's Interest If an Owner sells, the sale must be to one of the other member jurisdictions. Intergovernmental Water Board Minutes June 13,2007 3 Item 19, page 5 - Sale of Park Property Allows the sale upon a vote of three out of the four Owner jurisdictions. The Board discussed item 19's reference to item 11. It requested item 11 reflect proceeds be placed directly into the capital improvement fund and not left to the Board's discretion. The Board also discussed amending the original IGAs, at a later date, to state proceeds be placed in the capital improvement fund. Mr. Ramis stated he would change the language in all the documents based upon the Board's direction on this matter. Item 21, page 5 - Required Vote for Determination Addresses who votes on issues other than the sale of the property The Board discussed what would happen to money deposited in a capital improvement fund should one of the member jurisdictions withdraw. The withdrawing jurisdiction would have a claim on a certain percentage of money in the capital improvement fund. Mr. Ramis responded it would be treated as a provisional withdrawal and if an agreement could not be reached, the matter would be settled by the County Board of Commissioners. The Board concluded further review and revision of the original IGAs will be needed to address this matter. Current practice has been for all five members of the Board, including the member-at-large, to vote on issues other than those related to the sale of property. The Board indicated it wanted to continue this practice and would like item 21 amended accordingly. Mr. Ramis stated he would make this change in both Tenancy in Common Agreements. Mr. Koellermeier said partitioning of the Canterbury property will begin after the legal documents are finalized. Mr. Ramis noted the agreement describes the process for selling the surplus property, but the Board needs to refine details such as the size of the property, what's on the property, etc. Tenancy in Key Features: Common Item 19, page 4- Right of First Refusal Agreement for the The City of Tigard has the right of first refusal if the majority of the Water Building owners decide to sell the property. Timelines regarding the sale process are specified. Intergovernmental Water Board Minutes June 13,2007 4 Bargain and Sale These reflect the same ownership percentages as the other Deeds for the documents. Water Building and Canterbury Commissioner Buehner asked that the deeds reference the fact Properties that ownership interest was subject to review every two years. Commissioner Carroll requested language regarding recalculation at the time of sale also be added. Water Building Lease between the IWB and the City of Tigard Commercial Lease Key Features: Item 1.1, page 2 - Original Term The term of the lease runs through 2018. Item 1.3, page 2 - Renewal Options There are renewal options for two successive terms of five years each. The Board discussed including a "termination for sale" in the lease, but ultimately it decided such a provision was not needed. Should someone want to purchase the property, they would need to negotiate an acceptable deal with the landlord (owners) and the tenant (City of Tigard). Mr. Ramis asked the IWB Commissioners to take the resolution back to their respective jurisdictions for consideration. Mr. Ramis said he or Mr. Koellermeier could attend these meetings if requested. Mr. Ramis also offered to talk with any member jurisdiction's legal counsel, should they have questions. Note: Commissioner Scheiderich left the meeting at 6:29 p.m. Mr. Koellermeier described the calculations used in Exhibit B of the lease. Based upon Portland Metropolitan averages for office and warehouse space, the water building should generate $178,891 per year in rent revenue. Water operations currently account for$104,715 of this space. This results in an annual rental balance of$74,175 that is not related to water functions. Mr. Koellermeier noted a 70 percent City of Tigard rent credit, as Tigard has 70 percent ownership in the property. Mr. Koellermeier advised the exhibit provided was not the correct version. He focused on explaining the concept of how the rent was calculated, since some of the figures were not accurate. Building improvements from the walls out, typically the responsibility of the landlord, amounted to $177,379. These improvements were paid for by the City of Tigard out of a non-water fund. Amortized on an annual basis over the terms of the lease, this amount will be credited against the rent owed by the City of Tigard. Commissioner Carroll said the Board had agreed rent from non-water activities was going to be placed in the water budget. He questioned the 70 percent rent credit for the City of Tigard asserting rent should go into the water fund. He stated the City of Tigard Intergovernmental Water Board Minutes June 13,2007 5 should not receive a 70 percent rent credit as listed on the exhibit. The City of Tigard should pay about $60,000 ($74,175 rent minus $14,190 improvement credit) in rent for non-water activities located in the water building. Commissioner Winn suggested the lines related to the City of Tigard ownership credit be removed from the exhibit. The Board concurred the City of Tigard should pay approximately$60,000 in annual rent. Mr. Koellermeier said the exhibit would be changed to reflect the Board's direction. The Board agreed for the City of Tigard to pay an annual rent payment which would be placed in the water fund. This payment would be made in July. Commissioner Carroll requested the payment date be specified in the lease. Note: Commissioner Rhine left the meeting at 6:45 p.m. Commissioner Carroll asked for public comment on this item. Ken Henschel, 14530 SW 144th Avenue, and Commissioner-Elect for the TWD, said he had received legal advice and advice from the Special Districts Association of Oregon to the effect that an IGA could not be amended without going through a process of public comment, hearings, etc. He expressed concern that the Board should employ a more formal process. Mr. Ramis said he had spoken with the TWD's legal counsel and the TWD counsel could advise Mr. Henschel on the matter. Based on questions from the Commissioners, Mr. Ramis said he was unaware of any statue requiring an extreme and lengthy process. Mr. Henschel referred to the lease spreadsheet and requested background information on the total amount of square footage, the amount of water and non-water square footage, and how the actual calculations were prepared. Mr. Henschel expressed concern that Mr. Koellermeier had researched and determined the rental rates. He suggested this information should have been obtained by an outside, non-biased source. He recommended that since the City of Tigard had prepared the lease, determined rental rates, calculated square footage, and performed the building asset evaluation, the Board should secure an outside opinion to be sure the information was correct. Commissioner Buehner responded there was clear delineation of the building's water and non-water square footage. Mr. Koellermeier said he would furnish the Board with the background information used to establish the rental rates. Mr. Henschel inquired about a sublease. Mr. Ramis responded this was addressed in item 13. Julie Russell, 12662 SW Terraview Drive, and Commissioner-Elect for the TWD, expressed concern about a new voting procedure which was based on the percentage of ownership. Intergovernmental Water Board Minutes June 13,2007 6 Commissioner Carroll responded this language had been removed from the lease. Ms. Russell commented, based on legal opinion, the appropriate procedure to consider an amendment to the IGA would be to: ■ Have owner jurisdiction and legal counsel review ■ Provide public notice ■ Provide for a period for public comment She added the IGA specifically states on page 14, item 15, that any amendment must be approved by governing bodies. Commissioner Carroll responded the governing bodies were being asked to approve the amendments, and the IWB would consider the documents in July following owner jurisdiction approval. He added the Board's actions made the IGAs more fair and equitable documents, documents which represented the interests of the group as a whole. Commissioner Buehner added it was in the group's best interest for revenues to be placed in the water fund as there would be sizable expenses associated with the implementation of the long-term water plan. Ms. Russell stated the timing of this matter was questionable. She urged the Board to follow correct procedures and provide opportunities for public comment. She said the public was concerned and would assume Tigard was trying to do something inappropriate. Several Board members responded they had been working on this matter for more than a year. Bert Cornick, 14604 SW 141"Avenue, and Commissioner-Elect for the TWD, expressed his support for removing Tigard's ownership credit from the lease. Mr. Cornick added that it would behoove the Board to have an outside consultant evaluate the rent to avoid the appearance of any impropriety. He commented commercial brokers could be contacted to provide a letter of opinion. Several Commissioners stated Mr. Koellermeier had researched the rental rates at the Board's request. Mr. Koellermeier offered to provide the Board with the background information used to determine the rates. Mr. Henschel and Mr. Cornick asserted an outside opinion would fall under due diligence. Mr. Cornick continued by saying Mr. Koellermeier was not technically qualified to determine rental rates and these rates may come into question at some later date. Commissioner Carroll asked if the Board wished to revisit its decision to have Mr. Koellermeier determine the rental rates. None of the IWB members expressed an interest in doing so. Commissioner Carroll suggested the TWD Commissioners-Elect, after taking office, could do their own evaluation if they so desired. The TWD representative could present that information to the IWB at their next meeting. 10. Water Supply Options ■ Mr. Goodrich noted there was a recent peak of 12.5 million gallons per day (mgd). Intergovernmental Water Board Minutes June 13,2007 7 ■ Current water suppliers/sources include: - The Joint Water Commission - The City of Lake Oswego - A City-owned groundwater well - The Portland water contract ■ The City of Tigard is not taking any water from ASR wells yet. Injection has ceased for the summer. ■ The prediction is for a normal summer, and the City is well prepared to meet demand. Mr. Koellermeier reported the new ASR well is at a depth of 900-feet and there appears to be more water in this well than was found at this point in the existing 2.5 million gallon well. This well is slated to be operational by 2009. 13. Next Meetings— ■ June 19, 2007, 6:30 p.m. Joint Meeting with the Tigard City Council Tigard City Hall, 13125 SW Hall Blvd., Tigard Oregon ■ July 11, 2007, 5:30 pm Location to be announced • July 17, 2007, 6:30 p.m. Joint Meeting with the Tigard and Lake Oswego City Councils 11. Informational Items Mr. Koellermeier informed the Board that tours of the Barney Reservoir would be offered again this summer. None of the Commissioners expressed an interest in taking the tour. 12. Non-Agenda Items: None 14.Adjournment: At 7:19 p.m. Commissioner Winn motioned to adjourn the meeting; Commissioner Buehner seconded the motion. The motion was approved by unanimous vote. Greer A. Gaston, IWB Recorder Date: _Tuim._ % o7D4'7 Intergovernmental Water Board Minutes June 13,2007 8 Agenda Item No.: 2— IWB IWB Meeting Date: (p' 0 0: Intergovernmental Water Board (IWB) Meeting Minutes May 9, 2007 Tigard Water Building 8777 SW Burnham Street Tigard, Oregon Members Present: Gretchen Buehner Representing the City of Tigard Patrick Carroll Representing the City of Durham George Rhine Representing the Tigard Water District Bill Scheiderich Member at Large Dick Winn Representing the City of King City Members Absent., None Staff Present: Water Quality/Supply Supervisor John Goodrich City Attorney Tim Ramis Financial & Information Services Director Bob Sesnon IWB Recorder Greer Gaston 1. Call to Order, Roll Call and Introductions Commissioner Scheiderich called the meeting to order at 5:28 p.m. Mr. Sesnon introduced himself to the Board. Commissioner Scheiderich recognized Mr. Ramis. 2. Approval of Minutes—April 11, 2007 Commissioner Carroll motioned to approve the April 11, 2007, minutes; Commissioner Beuhner seconded the motion. On page one, Commissioner Rhine requested an addition to the minutes to clarify that the Tigard Water District had not taken a vote on the disposition of the Canterbury property, but had engaged in a lengthy discussion of the issue. It was agreed a notation would be placed in the minutes. The minutes were approved, as amended, by unanimous vote. 3. Public Comments: None 4. Egbert Credit for Leak Request Mr. Sesnon provided background information regarding this credit for leak request. Based upon the prescribed process, a credit of$739.88 was calculated. Credits exceeding $500 require the approval of the IWB. Commissioner Buehner motioned to approve the credit; Commissioner Carroll seconded the motion. The motion was approved by unanimous vote. Intergovernmental Water Board Minutes May 9,2007 1 5. Logan Appeal of Leak Credit- Bob Sesnon Mr. Sesnon provided background information regarding this appeal of a leak credit. Based upon the prescribed process, a credit of$445.20 was issued. This left a remaining balance of$484.46 owed by Mr. Logan. Mr. Logan was requesting a further credit. Leonard Logan, 10606 SW Windsor Court, Tigard, described how the leak was identified and repaired. Based upon past practice, Commissioner Winn suggested the Board split the remaining balance. This would result in an additional credit of$242.23. Commissioner Winn motioned to approve the additional credit; Commissioner Buehner seconded the motion. The motion was approved by unanimous vote. Non-Agenda Item -Arbor Heights Apartments- Fire Line Leak A memo and credit for leak request information from Mr. Goodrich were given to the Board at the beginning of the meeting. These materials are on file in the IWB record. The Board considered the request. Mr. Goodrich provided background information regarding this credit for leak request. Based upon the prescribed process, a credit of$1,323.12 was calculated. Credits exceeding $500 require the approval of the IWB. Commissioner Winn motioned to approve the credit; Commissioner Rhine seconded the motion. The motion was approved by unanimous vote. 6. Discussion of Water Building Agreement Mr. Ramis distributed rough drafts of the following documents related to the City of Tigard's use of the water building. These documents are on file in the IWB record. ■ Tenancy In Common Agreement ■ Bargain and Sale Deed ■ First Amendment to the Intergovernmental Agreement between the City of Tigard and the Tigard Water District for Delivery of Water Service ■ Commercial Lease Mr. Ramis confirmed the goals of the documents were to: ■ assure the ownership of record is actually in the names of the participating jurisdictions ■ create a lease relationship between those owners of record and the City of Tigard and outline who will manage the building and take on the costs associated with that management • establish clear procedures to address when an owner of record wants to sell their interest or sell the building To address these goals, Mr. Ramis proposed the following documents: • A deed to convey the property in the appropriate ownership interest percentages ■ A lease between the owners and City of Tigard clarifying who will be responsible for building maintenance expenses. This would likely include, via an appraisal process, a first right of refusal for the City of Tigard. Intergovernmental Water Board Minutes May 9,2007 2 ■ Two documents dealing with property sale provisions: 1. An amendment to the Intergovernmental Agreement stipulating that three votes will be required to sell property. 2. Tenancy In Common Agreement to establish the rules under which the owners operate the ownership of the property. Most likely, this would also include, via an appraisal process, a first right of refusal for the City of Tigard. Mr. Ramis summarized the documents. He directed the Board's attention to the following specific items: ■ Tenancy In Common Agreement, page 4, section 18, Restrictions on Sale of the Property and, section 18.1, Right of First Refusal • Amendment to the Intergovernmental Agreement, page 2, section 4.D. ■ Commercial Lease, page 4 With regard to item 4.1 of the Commercial Lease, Commissioner Carroll noted the Board had agreed it was responsible for the HVAC. Commissioner Buehner explained maintenance that is typically the responsibility of a landlord would fall to the IWB, and standard tenant improvements would be the tenant's responsibility. Mr. Ramis confirmed the Board wished to use the model of a typical office building whereby the owner has responsibility for the roof, HVAC, structural integrity of the walls, etc. Commissioner Scheiderich confirmed the Board was renting the building "as is." With regard to HVAC zone adjustments following the improvements, he asked if this cost would be allocated among the owners or done at the tenant's expense. The term of the lease and the City of Tigard's ability to recoup its investment in the building was discussed. Commissioner Scheiderich requested Mr. Ramis' documents state the building was being leased "as is." Commissioner Carroll countered that in previous discussions the Board had decided to repair the building's HVAC system at a cost of about $350,000. Other improvements would be the responsibility of the lessee. Mr. Ramis will review the minutes from previous meetings to determine whether the IWB direction was to: ■ Lease the building "as is," and adjust the lease term to ensure Tigard could recoup its investment. Tigard would pay for all improvements. Or ■ The IWB would pay for landlord improvements, like the HVAC, to make the building rentable, and the City of Tigard would pay for typical tenant improvements. Commissioner Buehner clarified that Tigard would actually perform the repairs, but it was the responsibility of the IWB to make the building rentable. Mr. Ramis noted the HVAC transaction will be completed by the time the legal documents are considered. He proposed the content of the minutes be included as a recital. The Board discussed the fact that the percentage of ownership, per the IGA, would be determined by the number of residential, commercial, and industrial customers within each jurisdiction. Mr. Ramis said the Board could review the calculations prepared by Mr. Koellermeier. Intergovernmental Water Board Minutes May 9,2007 3 The Board agreed to submit any comments to Mr. Ramis at least one week prior to the Board's next meeting. 7. Update on Water Supply Options - John Goodrich Mr. Goodrich provided the following updates: • The Tualatin Valley Water District still appears to be considering the Willamette River as an option. ■ The City of Lake Oswego is working on initial water conservation efforts. 8. Informational Items Mr. Goodrich provided the following updates: • Aquifer Storage and Recovery Wells - 200 million gallons (mg) is stored in ASR wells. - A flow meter at ASR 2 is malfunctioning, but injection will continue as soon as it is repaired. - Non-contract water is available through May. - The target storage amount would be 260 mg; 1.8 mg can be injected per day. - Drilling is underway on ASR 3. - Theoretically, ASR 1 can store about 100 mg, and ASR 2 can store about 260 mg. ■ The City of Tigard has hired a contractor to conduct large meter testing within Tigard Water Service Area. The contractor will check the accuracy of water meters for commercial buildings. Faulty meters may not accurately report water usage. Commissioner Buehner asked for a report on this testing at the next meeting. 9. Non-Agenda Items Note: See Non-Agenda Item -Arbor Heights Apartments-Fire Line Leak under item #5 10. Next Meetings — ■ June 13, 2007, 5:30 p.m. Tigard Public Library, 2nd Floor Conference Room, 13500 SW Hall Blvd., Tigard, Oregon ■ June 19, 2007, Time to be announced Joint Meeting with the Tigard City Council Tigard City Hall, 13125 SW Hall Blvd., Tigard Oregon 11.Adjournment: The meeting adjourned at 6:12 p.m. Greer A. Gaston, IWB Recorder Date: Intergovernmental Water Board Minutes May 9,2007 4 Agenda Item No.: IWB Meeting Date: (o —l3-Q�L- MEMORANDUM TIGARD TO: Intergovernmental Water Board FROM: Amanda L. Bewersdorff,Accounting Supervisory RE: Victor& Mylene Novelo Utility Account DATE: June 5, 2007 The attached credit for leak request is being forwarded to you for your approval at the next scheduled meeting on June 13,2007. The method used in calculating the amount of the credit is based on existing policy however there are extenuating circumstances to this particular request. On January 24,2007 our water department got a call about water running down the street. Our water crews tracked the running water for sometime to finally find that it was coming from a vacant house. When they were first dispatched out they thought due to the amount of water they saw had to be from a main break. When they arrived at the home they found water pouring out from under the doors and when they looked in the windows could see water pouring out of the walls. The meter was turned off and the customer was notified. The customer currently lives in Washington and had purchased the house on November 27,2006. They contacted their insurance company to get repairs made to the plumbing and the damage to their home. Since they were going through their insurance company it took longer then the required ten days,set forth by Tigard Municipal Code (TMC) 12.10.070—Credit For Water Leaks,to get the leak repaired therefore this request for adjustment must be considered by the Board. Please note the meter did remain off until all plumbing repairs were made. The total repair costs to the home were $26,615.13 with$1,104.18 of that being plumbing related. The credit in the amount of$650.84 was calculated for the billing period of November 27, 2006 to January 31, 2007. If the Board so chooses to grant this customer an adjustment since the repairs took more than 10 days then we will also need Board approval due to the amount of the adjustment per TMC 12.03.050. If you have any questions regarding this request,please feel free to call me directly at 503-718-2497. The customer has also stated that they will be requesting additional assistance for the balance remaining on their bill. We are anticipating a letter any day and will forward that request to the board when it is received. Please find attached a history of meter consumption and all documentation of the leak being repaired submitted by the customer. The customer has been notified of the next scheduled Intergovernmental Water Board meeting so they may attend if they so desire. Utility Billing Account History Report n User Name: amanda • ' i City Name: CITY OF TIGARD Printed: 06/05/2007- 10:12:AM Customer Name: NOVELO,VICTOR&MYLENE Owner name: NOVELO,VICTOR&MYLENE Account Status: Active Customer Address: 23831 139TH PL SE Service Address: 11460 SW VIEWMOUNT LN Connect Date: 11/272006 Final Date: KENT, WA 98042 Home Phone: (253)638-0282 Ext. Total Acct Balance: 1,300.00 Business Phone: ( ) - Ext. Deposits: 0.00 Refunds: 0.00 Customer Number:038001 000 Reference Number: 3500660 Tran Date Tran Type Amount Description Water Sewer SWM Penalty Misc StrMnt Sery 7 Sery 8 Current Balance By Service 1,168.77 108.13 15.11 0.00 0.00 7.99 0.00 0.00 05/18/2007 Letter 0.00 Final Notice 05/11/2007 Payment -69.12 -65.64 -2.87 -0.40 -0.21 04/11/2007 Balance 1,369.12 1,234.41 111.00 15.51 8.20 04/11/2007 Billing 77.46 7.86 57.24 8.00 4.36 04/04/2007 Payment -73.87 -70.15 -3.07 -0.43 -0.22 03/06/2007 Payment -100.00 -94.96 4.16 -0.58 -0.30 02/07/2007 Balance 1,465.53 1,391.66 60.99 8.52 4.36 02/07/2007 Billing 1,465.53 1,391.66 60.99 8.52 4.36 Route Sequence Serial 0035-0880-9081 Read Date Reading Consumption 06/04/2007 5,034 5 04/02/2007 5,029 1 01/31/2007 5,028 630 UB-Account History List(Printed: 06/05/2007-10:12:AM) Page: 1 RLCIE-HoQUEST FOR ADJUSTMENT DUE TO A LEAK AThe City of Tigard has a policy of issuing partial credits for leaks that are repaired in a timely manner. The city expects leaks to be repaired within ten days of discovery. Credits are based on your average usage for the same period in previous years. This average is deducted from the total consumption used during the time of the leak. The excess usage is charged at the wholesale rate of water,with the difference between wholesale and resale cost deducted TIGARD from the utility account as the Credit for Leak Please describe the specific circumstances of your request: TO C-(ff Cl dU Scum l i o-' 10 a g e66 I- -Fy 40-e- (oL Yyd- Erre- abwt6bll I'doal e'( I A My 11 dm +n U M)cy felon I 0 !t6je4 4°C cattiC TF -�(1c� nca�l,�r� of cr?amt����s c�►}�� pt-oCC'sS Wf "fi'l� 4) ✓ mh W i i?, OV WSS5 L(6 n c— (�)61!21 . Date leak found: ill;14 Date leak repaired: 4-13D L6-4 Account#: Location of Service: 1 s Vi�N'111QZ(1'l{ �C{rl,v i - 1Cll ei, (9k c7- 1 z 3 Customer Name: Vi CH'/ '� N/V fq& N 6y-r-1U « • Mailing Address: Z3S.31 13Cj� PI. K�,1i� WA X42 (V,3)63x'vZr�- Street address City State Zip pi C23E�C`,_�Il74 DOCUMENTATION YOU MUST SUBMIT COPIES OF PLUMBER'S BILLS AND/OR RECEIPTS FOR PARTS, REQUIRED TO FIX THE LEAK. ----------------------------------------------------------------------------------------------------------------------------------- FOR OFFICE USE ONLY ESL201$118 $2.56 $2.13 $2.74 - 1.14¢ I ,�(90 ` MUR COM IND IRK Markup Previous years usage: � 'f C• — • #penods used x Average Leak Period Leak ccf Markup Credit Adjustment Total Credit:$ Date Issued: u Issued B Apr 30 07 07:52p Gallian Construction Co. 503430-5588 p2 GALUEN CONSTR UC77ON CO., LLC MIKE GAI.LtEN PO BOX 5113 AIAtiA,OR 97007 Office:503-356-0863/503-619-o672 Cell CCB lllOO140 APRIL 30,2007 oWORK PERFORMED AT; b SUBMITTED TO: a NfiME FUCAE S INSURANCE NOVEI.IA a _ ATreNm S1 t pHANIE GRAY SW VIEWMOUNT U ON PHONE971-230-8271 TIGARD,OR 97123 �; Fnx 877-217-1389 r n m �o RE: CLAIM#1009608452-1-1 ALL RECONSTRUCTION WORK IS COMPLETED. I1VV01"CE Total as estimated $26,615.13 Down Payment Received1$ 5.069.32 BALANCE DUE $ 11,545.81 THANK YOUI WE APPRECIATE YOUR BUSINESS! I I� 03/00/2007 11:50 5032601062 SERVPRO PAGE 01/16 G LLIEN CUNSTR UCnON CO AIIEF,G.ALLIEN j PO BOX 5113 ALOHA, OR 97007 (503)819-0672•FAX: (503)430-6680 CCB#1 100140/Bo)rd*d e3'buurrd Urgent Fax Message— Please Deliver ASAP II N TO: Name' JENNIFER MACDONALD _ F Company: FARMERS INS. U En 0 Fax No: 877-217-1389 J 3 Date: 02115/07 _ 0 s 0 FROM: Name' Mike Gallien Cell No: 503-819-0672 The following is our final estimate to repair the Novello residence. _.. Claim 41009608452 Before any work Is started we require approval and 50%deposit. Please review and let me know ASAP as the homeowner is anxious to proceed. ft of Pages (including Cover Sheet): 16 If the reader of this message is not the addressee,you are hereby notified that any distribution,copying or dissemination of the information contained in this transmission is prohibited.if you have received this in error,please notify us by telephone and return Me original to uo at the above address using U.S.Mail. Thank you. 03/08/2007 11:50 5032681062 SERVPRO PAGE 14/16 GA.LLIEN CONSTRUCTION CO LLC MACE GALLIEN 18390 SW SANDRA LANE BEAVERTON,OR 97006 503-356-0863 503-819-0672 cell Accop by Room Ftthnate:2007.03-06-1838 S 'Area:M21n Lcvcl Ltving 1,140.32 4.74% Coat 17.74 0.07% Bamay 883.32 3.67%. Bedl 3,195.86 13.28% v Bed2 3,191.06 13.26% Bea 1,710.98 7.11y. Bed4 1,80838 742% J 13ed5 1,684.82 7.00% Jiatter 1,776.90 7.38% ,n Sbartd9atb 1,22118 5,077E Bath2 544A9 2.26% `�g Bath3 882 88 3.67'Y0 Batlt4 678:13 2.HZ% Batts 54356 226% Batb6 88855 3.69% PublleBath 1,7.26.98 5.10% Rau 1,061.24 4.41% Ha112 134.22 056% Clullty 510.00 2.12% �—. Area Subtotal: Malo Level 23,10091 96.00% Subtotal otArtat 23,10091 96.00% Bata Service Chargee 961.32 4.00% Total 24,062.73 100.00% 2007-03-06-1838 03/06/2007 Page: 13 i i l , 09/00/2007 11:50 5032501062 5ERVPRO PAGE 15/16 I i I GALLIEN CONSTRUCTION CO LLC 1 MIKE GALLILN 18390 SW SANDRA LANE BEAVERTON,OR 97006 503-3564863 503-819-0672 cell Recap try Category _B O&P Iterus "Towl Dollars 0 1,59756 6.00% o C,4,ppvE7CRY N GEr BRAT.DEMOLI.17ON 213.78 0.9y% 7,154.65 26.88% G AOR 58.10 0.22% ELEC MCAL FINISH CAWYNTRY ITRIAMORK 91351 3.73% FINISH I1AIIDNVAIW' 159.11 0.60% IIGSI 87.40 9-13% '1'I UhIB!<PfG 916.30 3.44% T Subtotal 13,234.65 45.97% Gage Service Cbargrs 961.82 3.fi1°o ..�� Overhead 10.00% ]-q7620 4.80 Profit Q 10.00% 1,27620 4.80% O&P Items Subtotal 15,748.87 59.17% Non-O&P Items Total Dollars DRYIVALL J 2,825.43 10.627. FLOOR COVERING-VIl`1YL 3.452.21 1297% INSULATION 1,150.45 4.3z% 3,438.17 12.92%. PAINTING — Non-O&P Item,Subtotal 10,866.26 40."% O&P Items Subtotal 15,748.87 59.17% `r Grand Total =26,615.13 2007.03-06-1838 03/06/2007 ?ago: ll I Agenda Item No.: -S IWB Meeting Date: !o - 13-Q—+- June 4, 2007 Inter-Governmental Water Board City of Tigard Tigard, OR To Whom It May Concern: I would like to appeal to you on our current water bill, Account # 038001-000, for our home in 11460 SW Viewmount Lane, Tigard, OR 97223. We have owned this home for about 15 months now (purchased in 2/06). When we had bought this home, the existing renter had asked if they could stay there until August/September 2006, the date in their original lease agreement with the former owner of the home. Since the former owner had told us that they are very good renters we had agreed for them to finish their lease. The water bill was as high as $1600 because of the incident that had happened in late January. Apparently, a sprinkler pipe in the roof had burst. No one was home to prevent the incident. We live in Kent, Washington that by the time we received a phone call from the Water Division of City of Tigard, a pool of water had already damaged our home (per Water Billing department, the amount of water that burst from the pipes is as much as 3 full size of swimming pools). Our reaction was indescribable when we had heard this. We could not picture in our mind the damage in our home. The amount of water that destroyed the home was overwhelming. However, our home insurance and restoring companies were contacted right away in order to save the home from any molds and further damages. Per the investigation of the insurance adjuster, the heat temperature in the home was not high enough. No one was living in that home since our last renter had left in late November. To top it all, the winter season was severely bitter, winter nights were below freezing temperatures. Almost $60,000 worth of damages was repaired/renovated in the home. The process with the insurance, the contractor, and the mortgage companies to close the case took a while but we were definitely anxious to get the repairs done as soon as possible. However, for the past 5 months that the house was getting repaired I made sure that I still made my utility payments on time and stayed in contact with the Water Billing Department of the City of Tigard (Jamie and Angela), informing them the status of the repair of the home. We have spent more than enough in this home. Since September 2006, we had no one staying in this home. We appeal to you to please allow more credit in our water bill. The house is finally renovated and damages in the sprinkler pipes have been repaired. It is our belief that the home is in a very good condition that this incident will not happen again. We hope for your understanding in this appeal. Please feel free to contact us if you have any questions. Sincerely, Victor& Mylene Novelo 23831 139`'' PI SE Kent, WA 98042 (253) 638-0282 Home (206) 999-5974 Cell 0 a , MEMORANDUM TIGARD TO: Intergovernmental Water Board FROM: Amanda L. Bewersdorff, Accounting Supervisor RE: Victor& Mylene Novelo Utility Account Update DATE: August 21, 2007 I contacted Victor&Mylene Novelo regarding the remaining balance of their water bill after the Board approval of the credit at the June 13,2007 meeting. The Novelo's have paid the balance of their water bill in full and are not requesting additional assistance from their insurance company. A copy of a portion of the June 13, 2007 minutes is attached for your reference. If you have any questions please feel free to call me directly at 503-718-2497. Intergovernmental Water Board (IWB) Meeting Minutes June 13, 2007 Tigard Public Library Following approval of these minutes It was Hated the 2nd Floor Conference Room footer reflected an incorrect 13540 SW Hall Blvd. date (June 11,2007).This has Tigard, OR 97223 13ezoo7n'ej to to read June d Members Present. Gretchen Buehner Representing the City of Tigard Patrick Carroll Representing the City of Durham George Rhine Representing the Tigard Water District Bill Scheiderich Member at Large Dick Winn Representing the City of King City Members Absent: None Staff Present: Public Works Director Dennis Koellermeier Quality/Supply Supervisor John Goodrich City Attorney Tim Ramis Accounting Supervisor Amanda Bewersdorff IWB Recorder Greer Gaston Note:Agenda items are recorded in the minutes in the order they were considered. This order varies from the agenda, thus the discrepancy in numbering. 1. Call to Order, Roll Call and Introductions Commissioner Scheiderich called the meeting to order at 5:36 p.m. 2. Approval of Minutes—May 9, 2007 Commissioner Carroll motioned to approve the May 9, 2007, minutes; Commissioner Buehner seconded the motion.The minutes were approved by unanimous vote. Note. The following agenda items were considered together. 4. Novelo Credit for Leak Request 5. Novelo Appeal of Leak Credit Ms. Bewersdorff provided background information regarding this credit for leak request. Based upon the prescribed process, a credit of$650.84 was calculated. Credits exceeding $500,or credits for repairs taking more than ten days, require IWB approval. Ms. Bewersdorff also explained the NDvelos were requesting a credit in additional to the $650 mentioned above. Their remaining balance after the credit was $740.82. Ms. Bewersdorff recommended approval of the initial credit, but suggested the Board not approve an additional credit until the Novelos processed the balance of the bill through their insurance company. If denied by the insurance company,the issue could be brought before the Board at a future meeting. Interpovemmental Water Board Minutes June 13,20D7 1 A timeline for payment and processing the insurance claim was discussed. Commissioner Carroll motioned to: ■ Issue the$65D credit • Allow the Novelos a maximum of three months to resolve the remaining balance ($740)with their insurance company ■ If required, bring the matter back to the Board Commissioner Buehner seconded the motion. The motion was approved by unanimous vote. 3. Public Comments Marland Henderson, 11795 SW Katherine Street, Tigard, described his background serving on the Water Resource Board and his involvement with the redevelopment of the downtown. Mr. Henderson distributed a handout to the Board.This document is on file in the 1WI3 record. He proposed using reclaimed or recycled water in conjunction with upcoming improvements to Tigard's downtown area. Mr. Henderson proposed the installation of a one-foot transmission pipe for reclaimed water be included in the City of Tigard's Burnham Street improvement project. Eventually this pipe could be connected to a future pipeline which would extend from the Durham treatment plant, along Hall Boulevard, to Burnham Street. Mr. Henderson said the reclaimed water could be used in irrigation and cleaning, as a water supply for toilets, and to enhance the creek. Mr. Henderson asked for the Board's endorsement of his proposal. The Board decided to invite a representative from Clean Water Services to make a presentation at an upcoming meeting in order to obtain information on the capacity, logistics, and feasibility of such a project. Mr. Henderson was invited to the Board's next meeting. Note; The following agenda items were considered together. 6. Discussion of Tenancy in Common Agreements, Amendments to the 1993 Intergovernmental Agreements, and Bargain and Sale Deeds, and a Commercial Lease of the Water Building 7. Consider a Tenancy in Common Agreement for the Water Building 8. Consider a Tenancy in Common Agreement for the Canterbury Property 9. Consider a Commercial Lease with the City of Tigard for the Water Building Mr. Koellermeler provided a brief introduction to this item. He stated the legal documents were intended to implement changes the Board had been discussing for more than two years. Mr. Ramis brought updated packets of materials and provided them to the Board and audience members. The packets contained the following: • Resolution (unique to each jurisdiction) • Amendment to 1993 Intergovernmental Agreement (IGA),(unique to each jurisdiction) ■ Tenancy In Common Agreement for the Canterbury Property • Tenancy In Common Agreement for the Water Building ■ Bargain and Sale Deed for the Water Building Intergovernmental Water Board Minutes June 13,2007 2 CITY OF DURHAM, OREGON DURHAM CITY COUNCIL RESOLUTION NO. 07- A RESOLUTION AUTHORIZING THE CITY OF DURHAM'S REPRESENTATIVE TO THE INTERGOVERNMENTAL WATER BOARD TO VOTE ON AND APPROVE THE SECOND AMENDMENT TO THE INTERGOVERNMENTAL AGREEMENT DATED 12/23/1993 AND FIRST AMENDED 12/31/1999, TO EXECUTE THE TENANTS IN COMMON AGREEMENTS FOR THE WATER BUILDING PROPERTY AND CANTERBURY PROPERTY., AND TO EXECUTE THE BARGAIN AND SALE DEEDS FOR THE CANTERBURY PROPERTY AND WATER BUILDING PROPERTY FROM TIGARD WATER DISTRICT TO INTERGOVERNMENTAL WATER BOARD MEMBER JURISDICTIONS AS TENANTS IN COMMON. WHEREAS, in December 1993 the City of Tigard, City of King City, and the City of Durham withdrew from the original Tigard Water District; and WHEREAS, a remnant of the Tigard Water District, now only representing portions of the unincorporated area to the west and south of Tigard, along with the City of Tigard, City of King City, and the City of Durham formed the Intergovernmental Water Board and entered into an Intergovernmental Agreement for the delivery of water service in December 1993;and WHEREAS, the Tigard Water District is currently the owner of record of the Canterbury Property located at 10310 SW Canterbury Lane in Tigard, Oregon, and of the Water Building at 8777 SW Burnham Street in Tigard, Oregon; and WHEREAS, the Intergovernmental Water Board has determined the need to amend the Intergovernmental Agreement in order to implement recent Board decisions;and based on hecemb r�1993 intergovernment greement, e Intergovernmental Water Board has agreed to take ownership of the Water Building Property and the Canterbury Property as Tenants In Common; and WHEREAS, the City of Durham as a member of the Intergovernmental Water Board must vote on and approve the amendment to the Intergovernmental Agreement, vote to execute the Bargain and Sale Deeds to the Canterbury Property and the Water Building Property, and to execute the Tenants In Common Agreements for the Water Building Property and Canterbury Property; NOW,THEREFORE, BE IT RESOLVED by the Durham City Council that: SECTION 1: T he City Council authorizes its representative to the Intergovernmental Water Board to vote for the approval of the amendment to the Intergovernmental Agreement. Submitted at the IWB Meeting RESOLUTION NO. 07 - n Page 1 By: me, &M 16 Date: -lo -13 - 6:�- Agenda Item No.: �o SECTION 2: The City Council authorizes its representative to the Intergovernmental Water Board to execute the Bargain and Sale Deeds transferring ownership of the Canterbury Property and the Water Building Property to the Intergovernmental Water Board as Tenants In Common. SECTION 3: The City Council authorizes its representative to the Intergovernmental Water Board to execute the Tenants In Common Agreements for the Water Building Property and the Canterbury Property. SECTION 4: This resolution is effective immediately upon passage. PASSED: This day of 2007. Mayor- City of Durham ATTEST: City Recorder-City of Durham i SECOND AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF DURHAM AND THE CITY OF TIGARD FOR DELIVERY OF WATER SERVICE TO THE CITY OF DURHAM THIS SECOND AMENDMENT TO THIS INTERGOVERNMENTAL AGREEMENT (this "Amendment") is made and entered into as of , 2007, by and between the CITY OF DURHAM, an Oregon municipal corporation, (hereinafter "Durham") and the CITY OF TIGARD an Oregon municipal corporation (hereinafter "Tigard"), hereinafter together referred to as "The Parties". RECITALS A. The Partiesreviousl entered into that certain P y INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF DURHAM AND THE CITY OF TIGARD FOR DELIVERY OF WATER SERVICE TO THE CITY OF DURHAM dated December 23, 1993 (the "IGA"), relating to the Parties' creation of the Intergovernmental Water Board (hereinafter "IWB") and the cooperative effort to serve the long term water supply needs of the residents of Durham. B. The Parties hereto desire to amend the TGA: to further ensure consistency across the jurisdictions among rates and services, to clarify the IWB votes required to change ownership of original District assets, to memorialize a new lease between the Intergovernmental Water Board and the City of Tigard for the Water Building, to establish a process for calculating and recording prorated expenses and revenues, and to allow the IWB to use s or expenses in ad�itiJo�o capital-improvemen s. AGREEMENT NOW THEREFORE, in consideration of the terms and conditions contained herein, the receipt and adequacy of which are hereby acknowledged, the Parties hereby amend the IGA as follows: 1. Paragraph 5. Asset Ownership/Water Rates/Revenues , B., is replaced with the following: B. The fees, rates and charges charged by Tigard for providing water services to properties, residences and businesses in Durham shall be the same as those charged within Tigard, and rates shall be consistent among those receiving water services from Tigard under this IGA. Notwithstanding the foregoing, Tigard may impose higher fees, Second Amendment to the Intergovernmental Agreement City of Tigard/City of Durham Page 1 of 4 rates and charges for providing water service to properties, residences and businesses when the cost of providing such service is greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers. Any higher fees, rates and charges imposed for providing water service shall be reviewed by the Intergovernmental Water Board prior to taking effect and shall be limited to covering the actual additional costs of providing such service. When higher fees, rates and charges are imposed, they shall be consistently applied among all member jurisdictions, except that at the request of Durham, Tigard will collect on behalf of Durham additional charges imposed by Durham on Durham customers. 2. Paragraph 5. Asset Ownership/Water Rates/Revenues C. (2) Moneys/Revenues, is replaced with the following: (2) Moneys transferred to Tigard as a result of the division of assets after withdrawal from the original District by Tigard which were previously dedicated by the original District to system capital improvements shall be used solely for system capital improvement by Tigard in accordance with subsection 5.D, except that the Intergovernmental Water Board may at its discretion, and consistent with voting requirements in Paragraph 3.D. of this Intergovernmental Agreement, determine that said moneys may be used for other purposes. 3. Paragraph 5, Asset Ownership/Water Rates/Revenues, G. Accounting, is added to as follows: (3) In fulfillment of the Intergovernmental Agreement's intent to relisbly--and-m-ethod-i_caUy-acso--u--n-t for-e-xp€-n-segs arrd�ev-e rnues-,--I✓xxh-rbit-A showing allocation of ownership interests is attached hereto and incorporated thereby as the model for documenting the use of assets by the City of Tigard. 4. Paragraph 3. Intergovernmental Water Board. D., is replaced as follows: D. A quorum of the Board shall be three (3) members. All actions of the board shall require at least three (3) votes, excluding abstentions. Notwithstanding prior agreements no more than three (3) jurisdiction's votes will be required to purchase, sell, or otherwise act with respect to the original District's real property assets. Second Amendment to the Intergovernmental Agreement City of Tigard/City of Durham Page 2 of 4 By: City of Durham ATTEST: By: Second Amendment to the Intergovernmental Agreement City of Tigard/City of Durham Page 3 of 4 By: City of Tigard ATTEST: By: Second Amendment to the Intergovernmental Agreement City of Tigard/City of Durham Page 4 of 4 EXHIBIT A AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN CITY OF TIGARD AND CITY OF DURHAM ECONOMIC AND ENGINEERING SERVICES, INC. +300 S W Macednm Avaaue,Suha 365 PwJand.OR 97201 (5031223.3033-FAX(503)274.6248 EXHIBIT A SECOND AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF DURHAM AND THE TIGARD WATER DISTRICT Letter Verifying System Asset and Liability Allocations from EES Final Report November 1, 1994 Ms.Beverly Froude Tigard Water District 8777 S.W. Burnham Street Tigard,OR 97223 Dear Ms.Froude: Enclosed please find Economic and Engineering.Services, Inc.'s (EES's) final report of system.assrHt_� d,liab41y,allocations prepared for the Tigard Water District(District). The total of assets equals the total of liabilities. This total amount is $25,620,938 and is allocated as follows: T%ardWater District............:............I............ $5,394,464 (21.0'5%) City of Tigard........::.::......................I............ 17,997,978 (7025%) City of Durham............................................ 1,044,091 (4.08%) City ofKing City.................... 1,184,406 (4,62%) This report and the allocations have been adopted by resolutions passed by each jurisdiction. Copies of the four resolutions are bound into this final report, immediately after this letter. Very truly yours, IP/oma ECONOMIC AND ENGINEERING .a2 ` SERVICES,INC. O R EG o N crl�RT Gilbert R Meigs _ R Project Manager GRM:pp ,roto wpud-p( • 01ympe.WA Belevue.WA Vancouver.8.0 Poraend,OR Wachinglon.D.0 - I SECOND AMENDMENT TINTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF DU RE"AND THE TIGARD WATER DISTRICT City of Tigard Analysis of Proportionate Interest Allocations Updated from Tigard Water District System Assets and Liabilities Final Report- November 1994 Allocation Basis Real Mark t Consumption- Value" Meters* (A) District 641,523 880,511,930 3,671 Tigard 2,093,982 2,822:340,560 12,1.96 King City 130,395 201,727,000 1,238 Durham 74,115 116,051,50 i 358 2,94.0,015 4,020,629, 40 :17,463 Proportionate Interests Proportionate Change From Interests Original District 21.82% 21.90% 21.02%- 21.58% 3.99% Tigard 71.22% 70.20% '69.84% 70.42% -2.96% King City 4.44% 5.C2% 7.09% 5.51% -1.20% Durham 2.52% 2.89% 2.05% 2.49% 0.18% 100.00% 100.05_61.-T00.00% 100.00% 0.00% "Other Assets"Percentages For Allocations District Tigard King City Durham District,Tigard, King City 22.13% 7222% 5.65% 0.00% 100.00% District,Tigard 23.46% 76. % 0.00% 0.00% 100.00% Tigard,Durham 0.00% 96.5 % 0.00% . 3.41% 100.00% " Annual consumption from November 1,2005 through O ober 31.2006 Real Market Value(RMV)Updated as of November 7,2 6 Meter count updated as of October 31,2006 TT0,340T0,340 _ (� +� 6/5/20072.47 PM WD Study Analysis.xls EXHIBIT A SECOND AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN TIIE CITY OF DURHAM AND THE TIGARD WATER DISTRICT CITY OF DURHAM, OREGON RESOLUTION NO. _3ZS-4� A RESOLUTION OF THE CITY COUNCIL, CITY OF DURHAM, OREGON, TO ADOPT THE TIGARD WATER DISTRICT SYSTEM ASSETS AND LIABILITY REPORT AS REVISED BY THE INTERGOVERNMENTAL WATER BOARD (IWB) WHEREAS, the Tigard Water District, in accordance with Section 4 of the Intergovernmental Agreement (hereinafter "Agreement") between the City of Tigard and the Tigard Water District for Delivery of Water Service to Territories Within the District Boundaries has caused preparation of a System Assets and Liability Report; and WHEREAS, the Tigard Water District accepted the report with i amendments on September 12, 1994; and WHEREAS, the Intergovernmental Water Board reviewed the Tigard Water Districts actions and further amendments as proposed by ' Tigard Water District and its consultants, Economic & Engineering Services, Inc. , and unanimously voted to recommend that the cities `` of Durham, �King City, and Tigard formally adopt the plan; and I WAEREAS., the City .of.Durham. apkngwj_gcjges..that it has reviewed the report and amendments and finds its contents to be consistent with the direction given to'the IWB participants within Section 4 of the-Agreement; NOW, THEREFORE, BE. IT RESOLVED $Y.THE CYTY•COUNCIL OF THE CITY ' OF DURHAM THAT: SECTION 1: The conclusions contained within the Tigard Water District System Assets and Liability Report as revised by the Intergovernmental Water Board (IWB) are accepted and adopted. PASSED AND APPROVED this 2'l day of �,�,�,��. , 19 4. First Reading .1-2-7-et ti iIC4 4- " May 17r4 Second Reading ATTEST: Clay Recorder wumWch\54458\1waurb cel EXIIIBIT A FIRST AMENDMENT TO INTERGOVERNNIENTAL AGREEMENT BETWEEN THE CITY OF KING CITY AND THE TIGARD WATER DISTRICT 4. :Division of--Or g1nal` District ,Assets. .-1 .,i .1'=':'J-''' - - '.' ';:l!. .,1'. ..1'._.:' . •ytr'i'Ili:' '.i.' RS'.`t -2 4 'ati'e.Di strict :a tthat at the 'of.:`a-s'' ets: 'fte ::°iwst draws-l.; rvm:% ie ori Final 'Districti 1; :the 'Cit gs °shall`-be:. otisi`stent .w ;t}�`'.Iirhe.:fol'low ng- concepts: • c,Yiide'r al ersanal'.;and .intern ibleproperty. :.AS'sets.: j . ..,"`T�, , 5. Intern UYe .' ro: 'ext .'' ' riclttel.es but .is not 'limited to: moneys, Y , checks, drafts., 'deposits, interest, dividends and income. (2) Assets will be divided into two groups: a. System Assets: Assets necessary for the operation of Tigard' s water supply system throughout the original District, not.including those "other assets" of Tigard. Personal and intangible property are system assets. water: ;mains, exvice installations, structures, fac �,'ities, :iinpr.oveme:nts,or :other, property necessary ,for m... . opexat on o ,the CJty of Tigard's water supply system ' ;ri. ` ` throughout i the original Uls:tr.ic.. are system assets. Assets ' Assets not necessary for the .;opeatn� o the,• City of Tlgarc 's water supply system 00 ' throw out the pri gh genal IDistrict :Other assets shall a 3 "become"Mier. pr9pei-�y df` te urisdiction ; in :.whish.-the- y z ,is 'locae Water; mains;' �servace insta' lations,_ t _ IS tructures„ fac�.litiesr Improvexents�or�other property o: necessary Pori:the operation:.%of. the.. City. of Tigard's = o water supplX.s.ystem thr,oughout.theor gina1 District are < <:oth:er ; ets.r e .' B. All system assets and other assets shall be pledged by the :Cities and the District to -Tigard.. All system assets and other t� H assets shall be managed'by Tigard and shall be utilized by Tigard a in order to provide water services to properties, residences and businesses in the original District. y trtyy H ry C. Should one of the Cities or the District terminate its y M water service agreement with Tigard, the Cities' and the District's proportionate interest in a system asset shall be determined based y ' upon the following formula: ,Jurisdiction.':s ..P,roportionate Interest = (A. + B + C) /3 Jurisdict ori!.s.:Pdr.eenta e.of Ciarrent.Co.rlSum tion in . .. •.F:;`, ,' j ;1I ,,o.�j,g 't}al ,L�}st7C.?,Ct g p ,.1' -,5'.'t. .1,` .� �.I: �.i t,i; :,r1--,�`.�,�`:•.;1',j::i 2,;'l,�:`:<i�''i-• .: '','•'''i';I. ..'� ''B, { �u'r,k'sdi,ct,zo`t1's- •;1?ercen'tage-'of ,Curreht._ al Market -_ ::t •'' s{R•Y1i': �.1:'',•r :.2:'ti�'�,.:i'Y. ,lue .n'`ociial Uisar .ct' _ .. C = Jurisdiction's Percentage of •Current Meters in original District 'The Citiesaricl•the District's proportionate interest in a system :asset cap_ tal,�nprovement shall be based upon the capital improvement':s. ...eprec ated' alite.:'. :.The .depreciated value shall• be based ;.upon the.'r �sefu.l.'aife .'bf the ;capital improvement under ....:.generaly .;accepted 5accounting. :principles. using a. 'straight line '-method, of depreG.i.a don. .- :":,: - ?. •D' =:U ori .ter7dhat 'on s a is .� 5 p ,,y f this .,agreement;, other assets 'shall. becgme; the '.,pragerty:',of t2ie '�iir�sdictibh an .',which the asset is TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT,("Owner"),collectively known as the INTERGOVERNMENTAL WATER BOARD(IWB),and hereinafter referred to as the"Owners".The Owners agree as follows: WHEREAS, the ownership of the Water Building and associated real property (Water Building Property)was vested in the Tigard Water District(TWD)as a single entity and is now owned by City of Tigard,City of King City,City of Durham and Tigard Water District as Tenants In Common;and WHEREAS,the IWB and its member jurisdictions desire to provide for the management and control of the Property; and WHEREAS,the Water Building Property is suitable and has been used for water operations,City of Tigard offices, and IWB and TWD meetings; and WHEREAS, the Owners of the Water Building Property have determined that the preferred disposition of the Water Building property is to lease it to the City of Tigard for use in water operations, as city offices and other related activities. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE WATER BUILDING, located at 8777 SW Burnham Street, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved as the Water Building,a building suitable for water operations, city offices and related activities. The intent of the Owners is to enter into a Lease with the CITY OF TIGARD and to manage and control the Property as Co-Tenants through this Agreement. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership,joint venture,or any other form of business entity. Page 1 of 6—Water Building Tenancy In Common Agreement 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four(24)months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. The expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any,of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty(30)days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property,each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property, except as may otherwise be provided for in the Lease. The Owners shall determine whether to assess the cotenants for the amount required for said improvements,or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement,the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and Page 2 of 6— Water Building Tenancy In Common Agreement deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property,or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property,and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD("Tigard")to manage the property under terms and conditions contained in the Intergovernmental Agreement and the Water Building Lease. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve,for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as specified in the Water Building Lease. None of the Owners, their agents or representatives,shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners,and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property,including but not limited to,any judicial attachment,any judgment lien,any lien arising out of the order or judgment of any court,any lien in connection with taxes claim due any governmental unit,any lien arising under federal or state bankruptcy or insolvency laws,and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement,shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent Page 3 of 6— Water Building Tenancy In Common Agreement (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing,the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation,to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may,within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owners cash, a corporate surety bond,or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit,the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of this Section 18,the Intergovernmental Agreement,and the Water Building Lease(granting Right of First Refusal to the City of Tigard). Upon the withdrawal of an Owner from the I WB,the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner. 18.2 Price. The selling price of the Water Building property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser,except the value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein and in the Water Building Lease to the City of Tigard. In the event that three(3)out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement Page 4 of 6—Water Building Tenancy In Common Agreement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services,Inc.dated November 1994,and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 20. Vote on Sale of Water Building. Subject to the provisions of the Water Building Lease and of this Tenants in Common Agreement Section 18.1 Right of First Refusal,the Owners may sell the Water Building upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise,an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However,the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement,or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 27. BindingEffect.ffect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners,their respective heirs,executors,administrators,legal representatives,successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. Page 5 of 6— Water Building Tenancy In Common Agreement 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co-tenancy. Except as fully set forth herein,there are no presentations,agreements,or understandings,oral or written,among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to,and governed by,the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: I WB Representative for the I WB Representative for the City of King City City of Durham Page 6 of 6—Water Building Tenancy In Common Agreement EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCEL I ' A tract of land in Section 2, Township 2 Soath, Range 1 Vest of the; Willamette Keridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Hara and Hary C. O'Hara, his wife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the vest line of the William Graham Donation land Claim No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the west Donation Land Claim line a distance of 354,3 feet, more or less, to the center line of County Road No. 977; thence South 45' 04' East along the center line of said County Goad; a distance of 95.75 feet; thence South 0' 21' Uest a distance of 132.33 feet to a point, said point being moaumented by an iron pipe; thence South 89' 41' East, a distance of 368,55 feet to n point in the center line of County Road No. 227; thence North 0' 19' East along the center line of County Road No. 227 to a point on the Southwesterly right of way .line of the Oregon Electric Railway Company, as aforesaid; tbence North 41' 5g' West along the South— westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning, PARCEL II A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, fa the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at the point of intersection of the Southi.esterly right of way line of that certain 50 foot strip of right of way conveyed to Oregoa Electric Railvay Company by James R. O'Hara and Mary C. O'Hara, his wife, by deed dated James ry 4, 1907, sad recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the west line of the William Graham Donation Lsnd Claim'lo, 39, said point being msnumonted by an iron nipa; thouce South 43' 00' West along said wast donation laud clsise line a distance of 354,3 feet, more or less, to the center of County Road No. 997; thence North 45' 04' 30" West along the center line of County Road No. 997, a distance of 241,44 feat; thence North 43' 00' Fast a distance of 367.75 feet, more or less, to a point on the Page 2 EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southwesterly right of uny line of that cart�in 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by Rudolph RunziYzr and S. C. Hunziker, his wife, by deed dated Deceelwr 13, 1906 and rt!corded February 16, 1907, on Page 39 of Book 75, Deed Records of Washington Crarnty, Oregon, thence South 41' 58' East a distance of 242.25 feet, more or leas, along said South- westerly right of way line to the point of beginning. PARCEL III A tract of land in Section 2, Township 2 South, Range I Wast of the Willamette Meridian, in the City of Tigard, County of 'Waahingtoa and State of Oregon, described as follows: Beginning et a point in the ceatei of County Road Horth 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Recorde of Washington County, Oregon, said beginning point being also the moat westerly corner of that certain tract of Land conveyed to W. J, Kerry by decd recorded in Book 146, Page 7.05, Deed Records; thence North 42' l9' East along the northveuterly line of said Kerry tract, 367.7 feet to the t,eaterly right of way of Oregon Electric Railway Company; thence Northwesterly along said right of way line 60 feet to a point; thencz South 42' 19' West 374.23 feet, more or less, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' Fast 60 feet, more or has, to the place of begianning. TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT, ("Owner"), collectively known as the INTERGOVERNMENTAL WATER BOARD (IWB), and hereinafter referred to as the "Owners". WHEREAS, the ownership of the Canterbury Property was vested in the Tigard Water District (TWD) as a single entity; and is now owned by the City of Tigard, City of King City, City of Durham, and the Tigard Water District as Tenants In Common; and WHEREAS, the IWB and its member jurisdictions desires to provide for the management and control of the Property; and WHEREAS, on April 11, 2007, the IWB adopted Resolution 07-02, recommending to the Tigard City Council that a portion of the Canterbury property be declared surplus; and WHEREAS, the City of Tigard has expressed an interest in purchasing the surplus property for use as a public park; and WHEREAS, the Owners of the Canterbury Property have determined that the preferred disposition of the surplus Canterbury Property is that it should be sold under the conditions set forth in IWB Resolution 07-02. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE CANTERBURY PROPERTY, located at 10310 SW Canterbury Lane, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference(the "Property"). 2. Co-Tenancy. The Property has been improved with two (2) reservoirs and a storage building. The intent of the Owners is to enter into a sale agreement with CITY OF TIGARD to purchase a portion of the Property ("Park Property") for use as a public park and to continue in ownership of the balance of the Property as Co-Tenants. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. Page 1 of 6—Canterbury Property Tenancy In Common Agreement 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership, joint venture, or any other form of business entity. 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four (24) months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. Until the sale of the surplus portion of the Property, the expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common Agreement, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty (30) days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property, each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property. The Owners shall determine whether to assess the cotenants for the amount required for said improvements, or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. Page 2 of 6—Canterbury Property Tenancy In Common Agreement 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement, the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property, or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property, and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD ("Tigard") to manage the Property under terms and conditions contained in the Intergovernmental Agreement. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as set forth in the Intergovernmental Agreement. None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners,who shall be bound by said determination. Page 3 of 6—Canterbury Property Tenancy In Common Agreement 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property, including but not limited to, any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws, and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner, and the undivided interest released, within ten(10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing, the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may, within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owner's cash, a corporate surety bond, or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit,the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of Section 18 herein, and the Intergovernmental Agreement. Upon the withdrawal of an Owner from the IWB, the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner or Owners. 18.2 Price. The selling price of the Property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser, except the Page 4 of 6—Canterbury Property Tenancy In Common Agreement value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Sale of the Park Property. The Owners may sell the Park Property upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above and the Intergovernmental Agreement. 20. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Canterbury Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold, Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise, an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However, the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. Page 5 of 6—Canterbury Property Tenancy In Common Agreement 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners, their respective heirs, executors, administrators, legal representatives, successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. 29. Inte rag tion. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co- tenancy. Except as fully set forth herein, there are no presentations, agreements, or understandings, oral or written, among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6—Canterbury Property Tenancy In Common Agreement EXHIBIT A CANTERBURY PROPERTY TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY Beginr} pg .At.the-ma,P#,hx(pst agr,or of'Lot Z,..T�.g,9} lvi le �fe ghts a subdivision of rocoed in. $eo.,tion 7] .Tomi hig •.2 9.P� i Range L Me- oP11h6'ijYiJ-4ipQ.tt.q }�eridian, in 1YaelLin(;ton Goon X •,Jr�?B�F+`Mni?�T►. a ;S #rb a ... 9.A,iYa.�t� on ;,the Vfest lire of -said oij., .vz e.lpn 1, f .et t �Qt?::. .fir-:cthanF�.. ut. 7QC!k:• k��, .ouft. kQf.G.� 2 feet theaoo North axtcL patello]�lrith the'17eet ]3 no of eaiid 14t 16 feat to thn' North dine; e thereofl 'thpnc •Nast 261 feet to the phos of beginning; Together with an east ngnt nvor the foli6wln described treat of laruis Bbgi. ■tba.-Nr r haast oprner of the abovQ-dwPtxribed property; thence EnaZ-41ong ttid"�N 4� x 'p s'�i:.`�`i�ardville.Heigh s.' to the copier:qt ?•luidock Avonae, .toha. co: Soli Iii oiig..�aid�o'e7ita -'3 nia,,a-di•st4noe ok ' .f�"p'tr°thence 'i7.e"hit and prwk*1Yei'-w�-6 -the Northiline of'Lot 5,.-to_the_ lapt iine off' tie atiri,io -leperibed tract or land, thence North a.distama of '12 feat to the' place of beginnina.' AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common" with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Water Building and legally described as, See Attached"Exhibit A: Property Description" Subject to any easements,rights of way, and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signed, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) Page 1-BARGAIN AND SALE DEED GAMUNIUMARDREAL ESTATAIWB DOCUMENTSTINALW BBSDEED.DOQ8/99) STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: Page 2- BARGAIN AND SALE DEED GAMUNMIGARDREAL ESTATBIWB DOCUMENTWTNALWBBSDEED.DOQ8/99) EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCEL 1 A tract of land in Section 2, Towship 2 Sojth, Range 1 Weat of the; Willaw tte Kcridiau, in the City of Tigard, County of Washington and State of Oregon, described as follows- Beginning ollowBeginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Hara and Hary C, O'Hara, his wife, by deed dated January 4, 1907 and recorded February, 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the inn t line of the William Graham Donation Land Claim No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the vest Donation hand Claim line a distance of 354.3 feet, more or less, to the center line of County Road No. 977; thence Soutb 45' 04' Bast along the center line of said Cw aty Road; a distance of 95.75 feet; thence South 0' 21' West a distance of 132.33 feet to a point, said point being monumented by an iron pipe; thence South 89' 41' Bast, a distance of 368.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' East along the center line of Ccunty Road No. 227 to a point on the Southwesterly right of way .line of the Oregon Electric Railway Company, as aforesaid; tbence North 41' 58' West along the South— westerly right of way line as aforesaid, a distance of 291.63 feet to the point of Jeginning. PARCEL 11 A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Neridiau, in the City of Tigard, County of Washington and State of Oregon, described an follows: Beginning at the point of intersection of the Southwesterly right of vay line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railway Company by James R. O'Hara and Hary C. O'Hara, his wife, by deed dated Jauim ry 4, 1907, and recorded Pebtuary 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the vest line of the William Graham Donation land Claim In, 39, said point being mouumented by an iron pipe; tbance South 43' 00' West along said wuet donation load claim line a distance of 354.3 feet, more or lase, to the center of County Road No. 997; thence North 45' A' 30" West along the center line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' East a distance of 367.75 feet, more o; less, to a point on the Page 2 EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION — Continued Southwesterly right of way line of that cnrt�in 50 foot strip of right of way convoyed to the Oregon Electric Railway Company by Rudolph Runzilzr and S. C. Hunziker, his wife, by deed dated Decevlwr 13, 1906 and recorded Pebruary 16, 1907, on Page 39 of Book 75, Deed Records of Washington County, Oregou, thence South til' 50' East a distance of 242.25 feet, more or less, along said Swth— westerly right of way line to the point of beginning. PARCEL III .. A tract of laud in Section 2, Townebip 2 South, Rnuge 1 Neet of the Willamette Heridino, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning nt a point in the center of County Road North 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, said beginning point being also the moat westerly corner of that certoia tract of land conveyed to W. J, Rory by deed recorded in Book 146, Page 105, Deed Records; thence North 42' 19' East along the northwesterly line of said Kerry tract, 367.7 feet to the westerly right of way of Oregon Electric Railway Company; thence Northwesterly o"long said right of way line 60 feet to a point; thence South 42' 19' West 374.23 feot, more or less, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' East 60 feet, more or .Lass, to the place of begiunning. AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor")conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common"with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Canterbury Property and legally described as, See Attached "Exhibit A: Property Description" Subject to any easements,rights of way, and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signature, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) BARGAIN AND SALE DEED STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: EXHIBIT A CANTERBURY PROPERTY DEED LEGAL DESCRIPTION OF PROPERTY Hegini ng At..t 1o;.,Aq, thM. of oorner ot'Lot 5 .n anti lle T1s hts a subdivision of rocoe in. sod. 1:-.,TmTi0b1p •.2 S6.Vt. � Range L We oP:'th6,ft -ai�p.ttp Ueridian, iq 3ashin(,ton : L►nJ�Y�, rig+ ui► :.:Y,?Z c ,r;Stu ,m-aq:k iygat�alio j�h� liest lige of -said 4ijW�v-ie.lpn 6�` Tait to.:#� Sou � t::6` ,�r t . .,.t an �. . . ? :. ti �S. ►th.def W i,Q t 5,_ i 2 root; t1ionoe North and.paralloljirlth the'17eet Ano of said lot 165 feet bo the 14orth cine..thereofl 'thenewlYest 2C feet to the place of beginning; Together with an e$agaent ovor the roj3: ri a.ng•described tract of lmndt Regi ,� nAtilo,_Np oast oornar of the abaya daoorlbed. property; thonco Eaat•*4lQng '1`igardvilla .Haigll .s.'" to tho copteriof ?.4uid'ock Avenge, kJ�ci�►co, Long..eaidr�seiita�'-'3:iiih.�p distance ok ':fsiit ' thence ;*.s t and parglYel-w th':'the North,iline of'Lot 5,.-to_the_East 3,ine of t)1e •68 ib -dP;3cribed tract of land, thence North a.distanoo of '12 foot to the' place of beginning COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: , 2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating, Ventilation and Air Conditioning(HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board,the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building,the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property (the "Premises") on the terms and conditions stated below: Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street, Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018,unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on , 2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence, Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a) the rental during the preceding term or(b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew, the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment, the appraiser shall return his [her] decision, which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased "As Is". Tenant agrees to accept the Premises in the current"as is" condition. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B, describing rental costs and credits as agreed upon between Landlord and Tenant. At the commencement of the Lease term and as set forth in said Exhibit B, Tenant will owe the Landlord $22, 252.77 annually, to be accounted for as a credit to the Tenant as reimbursement for the building system costs referenced above in the Paragraph 2.of Recitals, until its cost has been fully amortized. 2.2 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use, but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty, would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked,disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use, handling, and storage of Hazardous Substances and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting),bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting parry is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss, neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building any. Tenant shall pay as due all real property taxes and special assessments if any, levied against the Premises. As used herein,real property taxes includes any fee or charge relating to the ownership, use, or rental of the Premises, other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable, Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall have no obligation to pay any income, profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including (but not limited to)charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning, telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply, the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50% of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 20 days following the date of damage. In such event all rights and obligations of the Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable,except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible, Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10 % per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay,as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall, within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant, from any claim, loss, or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent,the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned,mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease(other than the payment of rent or other charges)within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period, this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building business entities,the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs,the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter,take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises,but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup, refurbishing,removal of Tenant's property and fixtures, costs incurred under Section 15.5,or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs, broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet, and continuing Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10 %per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option,become the property of Landlord. If Landlord so elects, Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within 30 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal,transportation to storage, and storage,with interest at the legal rate on all such expenses from the date of expenditure by Landlord. Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3, the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than '? days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease, the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease, to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of the term of this lease,to place and maintain upon the Premises notices for leasing or selling the Premises. Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due,bear interest at the rate of TEN (10 %) per annum (but not in any event at a rate grater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300)the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts,their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated, or as to any other question involving apportionment or valuation, either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration,and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties, but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Water Building Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building EXHIBIT A TO LEASE. LEASED BUILDING AND PARKING PREMISES o�«f. :ar N uc,f:S j of q y� f. CSO i'Yf /a'LI rna w^e�-rt fr,r , %.s Parking (not to scale) EXHIBIT B TO LEASE CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 COT Rent Credit for 70% Ownership 0.7 Total COT Ownership Credit $51,923.12 Total annual COT Credit for Owner improvements, annualized $14,190.32 Total Annual Rent from COT after Credits $8,062.45 Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation:Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 Amount Annualized to Fully Amortize Improvement Costs $14,190.32 ,July 1, 2007, until Dec 31, 2018 CITY OF KING CITY, OREGON KING CITY CITY COUNCIL RESOLUTION NO. 07- A RESOLUTION AUTHORIZING THE CITY OF KING CITY'S REPRESENTATIVE TO THE INTERGOVERNMENTAL WATER BOARD TO VOTE ON AND APPROVE THE FIRST AMENDMENT TO THE INTERGOVERNMENTAL AGREEMENT DATED 12/28/1993, TO EXECUTE THE TENANTS IN COMMON AGREEMENTS FOR THE WATER BUILDING PROPERTY AND THE CANTERBURY PROPERTY, AND TO EXECUTE THE BARGAIN AND SALE DEEDS FOR THE CANTERBURY PROPERTY AND WATER BUILDING PROPERTY FROM TIGARD WATER DISTRICT TO INTERGOVERNMENTAL WATER BOARD MEMBER JURISDICTIONS AS TENANTS IN COMMON. WHEREAS, in December 1993 the City of Tigard, City of King City, and the City of Durham withdrew from the original Tigard Water District;and WHEREAS, a remnant of the Tigard Water District, now only representing portions of the unincorporated area to the west and south of Tigard, along with the City of Tigard, City of King City, and the City of Durham formed the Intergovernmental Water Board and entered into an Intergovernmental Agreement for the delivery of water service in December 1993; and WHEREAS, the Tigard Water District is currently the owner of record of the Canterbury Property located at 10310 SW Canterbury Lane in Tigard, Oregon, and of the Water Building at 8777 SW Burnham Street in Tigard, Oregon;and WHEREAS, the Intergovernmental Water Board has determined the need to amend the Intergovernmental Agreement in order to implement recent Board decisions;and WHEREAS, based on the December 1993 Intergovernmental Agreement, the Intergovernmental Water Board has agreed to take ownership of both the Water Building Property and the Canterbury Property as Tenants In Common;and WHEREAS, the City of King City as a member of the Intergovernmental Water Board must vote on and approve the amendment to the Intergovernmental Agreement, vote to execute the Bargain and Sale Deeds to the Canterbury Property and the Water Building Property, and to execute the Tenants In Common Agreements for the Water Building Property and Canterbury Property; NOW,THEREFORE,BE IT RESOLVED by the King City City Council that: SECTION 1: T he City Council authorizes its representative to the Intergovernmental Water Board to vote for the approval of the amendment to the Intergovernmental Agreement. Submitted at the IWB Meeting RESOLUTION NO.07- Page 1 By: M 6AM 15 Date: Agenda Item No.: 10 SECTION 2: The City Council authorizes its representative to the Intergovernmental Water Board to execute the Bargain and Sale Deeds transferring ownership of the Canterbury Property and the Water Building Property to the Intergovernmental Water Board as Tenants In Common. SECTION 3: The City Council authorizes its representatives to the Intergovernmental Water Board to execute the Tenants In Common Agreements for the Water Building Property and the Canterbury Property. SECTION 4: This resolution is effective immediately upon passage. PASSED: This day of 2007. Mayor- City of King City ATTEST: City Recorder-City of King City FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF KING CITY AND THE CITY OF TIGARD FOR DELIVERY OF WATER SERVICE TO THE CITY OF KING CITY THIS FIRST AMENDMENT TO THIS INTERGOVERNMENTAL AGREEMENT (this "Amendment") is made and entered into as of , 2007, by and between the CITY OF KING CITY, an Oregon municipal corporation, (hereinafter "King City") and the CITY OF TIGARD an Oregon municipal corporation (hereinafter "Tigard"), hereinafter together referred to as "The Parties". RECITALS A. The Parties previously entered into that certain INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF KING CITY AND THE CITY OF TIGARD FOR DELIVERY OF WATER SERVICE TO THE CITY OF KING CITY dated December 28, 1993 (the "IGA"), relating to the Parties' creation of the Intergovernmental Water Board (hereinafter "IWB") and the cooperative effort to serve the long term water supply needs of the residents of King City. B. The Parties hereto desire to amend the IGA: to further ensure consistency across the jurisdictions among rates and services, to clarify the IWB votes required to change ownership of original District assets, to memorialize a new lease between the Intergovernmental Water Board and the City of Tigard for the Water Building, to establish a process for calculating and recording prorated expenses and revenues, and to allow the IWB to use proceeds from sales of assets for expenses in addition to capital improvements. AGREEMENT NOW THEREFORE, in consideration of the terms and conditions contained herein, the receipt and adequacy of which are hereby acknowledged, the Parties hereby amend the IGA as follows: 1. Paragraph S. Asset Ownership/Water Rates/Revenues , B., is replaced with the following: B. The fees, rates and charges charged by Tigard for providing water services to properties, residences and businesses in King City shall be the same as those charged within Tigard, and rates shall be consistent among those receiving water services from Tigard under this First Amendment to the Intergovernmental Agreement City of Tigard/City of King City Pagel of 3 IGA. Notwithstanding the foregoing, Tigard may impose higher fees, rates and charges for providing water service to properties, residences and businesses when the cost of providing such service is greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers. Any higher fees, rates and charges imposed for providing water service shall be reviewed by the Intergovernmental Water Board prior to taking effect and shall be limited to covering the actual additional costs of providing such service. When higher fees, rates and charges are imposed, they shall be consistently applied among all member jurisdictions, except that at the request of King City, Tigard will collect on behalf of King City additional charges imposed by King City on King City customers. 2. Paragraph 5. Asset Ownership/Water Rates/Revenues C. (2) Moneys/Revenues, is replaced with the following: (2) Moneys transferred to Tigard as a result of the division of assets after withdrawal from the original District by Tigard which were previously dedicated by the original District to system capital improvements shall be used solely for system capital improvement by Tigard in accordance with subsection 5.D, except that the Intergovernmental Water Board may at its discretion, and consistent with voting requirements in Paragraph 3.D. of this Intergovernmental Agreement, determine that said moneys may be used for other purposes. 3. Paragraph 5, Asset Ownership/Water Rates/Revenues, G. Accounting, is added to as follows: (3) In fulfillment of the Intergovernmental Agreement's intent to reliably and methodically account for expenses and revenues, Exhibit A showing allocation of ownership interests is attached hereto and incorporated thereby as the model for documenting the use of assets by the City of Tigard. 4. Paragraph 3. Intergovernmental Water Board. D., is replaced as follows: D. A quorum of the Board shall be three (3) members. All actions of the board shall require at least three (3) votes, excluding abstentions. Notwithstanding prior agreements no more than three (3) jurisdiction's votes will be required to purchase, sell, or otherwise act with respect to the original District's real property assets. First Amendment to the Intergovernmental Agreement City of Tigard/City of King City Page 2 of 3 By: City of King City ATTEST: By: By: City of Tigard ATTEST: By: First Amendment to the Intergovernmental Agreement City of Tigard/City of King City Page 3 of 3 EXHIBIT A AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN CITY OF TIGARD AND CITY OF KING CITY I ' ECONOMIC AND ENGINEERING SERVICES, INC. +300 5 W Macadam Avenue,Suite 365 Portland.OR 47201 15091 223.3033-FAX J50312-74-6246 EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF KING CITY AND THE TIGARD WATER DISTRICT Letter Verifying System Asset and Liability Allocations from EES Final Report November 1, 1994 Ms.Beverly Froude Tigard Water District 8777 S.W.Burnham Street Tigard, OR 97223 Dear Ms.Froude: Enclosed please find Economic and Engineering Services, Inc.'s (EES's) final report of system—wet-and-liability allocations-prepared-for the-Tigard Water-Distnct_(District)_ The total of assets equals the total of liabilities. This total amount is $25,620,938 and is allocated as follows: Tigard Water District..................................... $5,394,464 (21.05%) City of Tigard................................................ 17,997,978 (70.25%) City of Durham............................................ 1,044,091 (4.08%) City of King City........................................... 1,184,406 (4.62%) This report and the allocations have been adopted by resolutions passed by each jurisdiction. Copies of the four resolutions are bound into this final report, immediately atter this letter. ro PRO,cFs� Very truly yours, dots tlei ���r ECONOMIC AND ENGINEERING a2 �� SERVICES,INC. OREGON, ✓�,9 v�'] Gilbert R `Meigs/ — Project Manager GRM.pp winlgm4igardtp i Pao e � o Olympia.WA Bellevue,WA Vancouver.B.c PDriland,OR Washington,D.0 EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGR EMENT BE. THE CITY OF KING CITY AND THE TIGARD WATER DISTRICT City of Tigard Analysis of Proportionate Interest Allocations Updated from Tigard Water District System Assets and Liabilities Final Report- November 1994 Allocation Basis Real Market Consumption` Value" Meters- (A) (B) (C) District 641,523 880,511,030 3,671 Tigard 2,093,982 2,822,340,560 12,196 King City 130,395 201,727,000 1,238 Durham 74,115 116,051,350 358 2,940,015 4,020,629,940 17,463 Proportionate Interests Propoionate Change From tritejests Original District 21.82% 21.90% 21.02% 1.58% 3.99% Tigard 71.22% 70.20% 69.84% 0.42% -2.96% King City 4.44% 5.02% 7.09% 5.51% -1.20% Durham 2.52% 2.89% 2.05% 2.49% 0.18% 100.00% 100.00% 100.00% 1 0.00% 0.00% "Other Assets"Percentages For Allocations District Tigard King City Dur am District,Tigard, King City 22.13% 72.22% 5.65% 0.00% 100.00% District,Tigard 23.46% 76.54% 0.00% 0.00% 100.00% Tigard, Durham 0.00% 96.59% 0.00% 3.41% 100.00% ` Annual consumption from November 1,2005 through October 31,2006 "Real Market Value(RMV) Updated as of November 7,2006 Meter count updated as of October 31, 2006 TWD Study Analysis.xls Tam 2 6/5/20072:47 PM EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF KING CITY AND THE TIGARD WATER DISTRICT CITY OF KING CITY RESOLUTION NO. R-94-17 A RESOLUTION OF THE CITY COUNCIL,CITY OF KING CITY, OREGON, TO ADOPT THE TIGARD WATER DISTRICT SYSTEM ASSETS AND LIABILITY REPORT AS REVISED BY THE INTERGOVERNMENTAL WATER BOARD (IWB) WHEREAS, the Tigard Water District,' in accordance With Section 4 of the Intergovernmental Agreement (hereinafter "Agreement") between the City of Tigard and the Tigard Water District for Delivery of Water Service to Territories Within the District Boundaries has caused preparation of a System Assets and Liability Report; and WHEREAS, the Tigard Water District accepted the report with amendments on September 12, 1994; and WHEREAS,the Intergovernmental Water Board reviewed the Tigard Water District's actions and further amendments as proposed by Tigard Water District and its consultants, Economic & Engineering Services, Inc., and unanimously voted to recommend that the cities of Durham, King City, and Tigard formally adopt the plan; and WHEREAS,the City of King City acknowledges that it has reviewed the report and amendments and finds its contents to be consistent with the direction given to the IWB participants within Section 4 of the Agreement; NOW, THE, BE IT RESOLVED by the KING CITY COUNCIL that: Section 1: The conclusions contained within the Tigard Water District System Assets and Liability Report as revised by the Intergovernmental Water Board(IWB)are accepted and adopted. INTRODUCED AND ADOPTED by the City of King City Council and signed by me in authentication of its passage this 21st day of September , 1994. CITY OF KING CITY, OREGON Lynda M. Mayor - King City ATTEST: PCO By. Te1 B zyk City Recorder RESOLUTION N0, 4-17 Page 1 of I EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF KING CITY AND THE TIGARD WATER DISTRICT 4 Division of Oricilmal_ttDistrict Assets A Pu to oRs �z� 5,�p(a-y,', he'Ditrict :agrees •that the d visign 'of assets after withdzawa'l .from:the 'ot!g 'nal District by the';Cities shall be. consi'sfieiit •with lthe follow ng concepts: r' l,) Assets axxClude;-Peal, personal .and intangible property. "Intanjlble property+' 'includes but is not limited to: moneys, checks, drafts., deposits, interest, dividends and income. (2) Assets will be divided into two groups: a. System Assets: Assets necessary for the operation of Tigard's water supply system throughout the original District, not•including those "other assets" of Tigard. Personal and intangible property are system assets. Water, mains, service installations, structures, facilities, improvements or other property necessary for x y operaftion:othe City• of Tigard's .water supply system through;oa, District are system assets. [yy� i 13X ,,�5SetS Assets not necessary for the .� the City of Tigard's water supply system O p s ,L • �' ; + he; origsnkal +District Other assets shall z 3 �a Z � 'prppe., df it4 '.; gurisdict3on in which..the " �, `' _� ' ed Wate:13 , sezvace installations, e struCtures, ''lities, Improvements .or other property x: 77 p Y "not necessary for+ the .operation of the. of Tigard's °= 0 water •supply ;systen throughout the original District are < other assets. O 00 B. All system assets and other assets shall be pledged by the Cities and the District to Tigard.. All system assets and other r ',�4 assets shall be managed by Tigard and shall be utilized by Tigard > in order to provide water services to properties, residences and r businesses in the original District. > H C. Should one of the Cities or the District terminate its M water service agreement with Tigard, the Cities' and the District's proportionate interest in a system asset shall be determined based Z upon the following formula: -4 J.urisdict.ion':s .Proportionate Interest = (A t B t C) /3 A = Jurisdiction's per.oentage.of Current consumption. in o��.gY1ia1•'Distract '.: B Jurisdictions pe .en. age 'Qf :Current Real Market, �La ue In .original D skri_t C = Jurisdiction's Percentage of .Current Meters in original District The Cities' and the District's proportionate interest in a system asset capital.improvement shall be based upon the capital improvement'.s. depreciated :value. . .The depreciated value shall be based :;upon the uefuJ, 17fe of the ;capital improvement under genera:l1y accepted accounting principles using a. straight line method of depreciation b Upon termination of this. Agreement; other assets .shall become 'the 'properly '•of the ; uri'sdiction in 'which the :asset is located. TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT,("Owner"),collectively known as the INTERGOVERNMENTAL WATER BOARD(IWB),and hereinafter referred to as the"Owners".The Owners agree as follows: WHEREAS, the ownership of the Water Building and associated real property (Water Building Property)was vested in the Tigard Water District(TWD)as a single entity and is now owned by City of Tigard,City of King City,City of Durham and Tigard Water District as Tenants In Common;and WHEREAS,the IWB and its member jurisdictions desire to provide for the management and control of the Property; and WHEREAS,the Water Building Property is suitable and has been used for water operations,City of Tigard offices, and IWB and TWD meetings; and WHEREAS, the Owners of the Water Building Property have determined that the preferred disposition of the Water Building property is to lease it to the City of Tigard for use in water operations, as city offices and other related activities. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE WATER BUILDING, located at 8777 SW Burnham Street, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved as the Water Building,a building suitable for water operations,city offices and related activities. The intent of the Owners is to enter into a Lease with the CITY OF TIGARD and to manage and control the Property as Co-Tenants through this Agreement. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership,joint venture,or any other form of business entity. Page 1 of 6—Water Building Tenancy In Common Agreement 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four(24)months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. The expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any,of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty(30)days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property,each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property, except as may otherwise be provided for in the Lease. The Owners shall determine whether to assess the cotenants for the amount required for said improvements,or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement,the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and Page 2 of 6—Water Building Tenancy In Common Agreement deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property,or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property,and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD("Tigard")to manage the property under terms and conditions contained in the Intergovernmental Agreement and the Water Building Lease. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve,for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as specified in the Water Building Lease. None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property,including but not limited to,any judicial attachment,any judgment lien,any lien arising out of the order or judgment of any court,any lien in connection with taxes claim due any governmental unit,any lien arising under federal or state bankruptcy or insolvency laws,and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement,shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent Page 3 of 6— Water Building Tenancy In Common Agreement (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing,the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation,to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may,within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owners cash, a corporate surety bond,or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit,the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of this Section 18,the Intergovernmental Agreement,and the Water Building Lease(granting Right of First Refusal to the City of Tigard). Upon the withdrawal of an Owner from the I WB,the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale, An Owner may sell, convey or transfer its interest only to another Owner. 18.2 Price. The selling price of the Water Building property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser,except the value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein and in the Water Building Lease to the City of Tigard. In the event that three(3)out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord,the City of Tigard shall determine the Canterbury Property improvement Page 4 of 6—Water Building Tenancy In Common Agreement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services,Inc.dated November 1994,and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 20. Vote on Sale of Water Building. Subject to the provisions of the Water Building Lease and of this Tenants in Common Agreement Section 18.1 Right of First Refusal,the Owners may sell the Water Building upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise,an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However, the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement,or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit,action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners,their respective heirs,executors,administrators,legal representatives,successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. Page 5 of 6 — Water Building Tenancy In Common Agreement 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co-tenancy. Except as fully set forth herein,there are no presentations,agreements,or understandings,oral or written,among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to,and governed by,the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6—Water Building Tenancy In Common Agreement EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DBSCRIPTIO4 i FARM I A tract of land in Section 2, Tovuuhip 2 Solth, Range I Vest of tho; Willamette Yjnridins, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R, O'Marn and Nary C, O'linra, his wife, by deed dated January 4, 1907 and m corded February 16, 1907, on Page 40 of Boob 75, Deed Records of Washington County, Oregon, and the Inot line of the William Graham Donation Uind Claim No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the teat Donation Land Claim line a distance of 354.3 feet, more or less, to the center Une of County Road No. 977; thence South 45' 04' East along the center line of said Couaty Road; a distance of 95.75 feet; thence South 0' 21' Sleet a distance of 132.33 feet to a point, said point being monumented by on iron pipe; thence South 89' 41' East, a distance of 368.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' Fast along the center line of Ccunty Road No. 221 to a point on the Southwesterly right of way line of the Oregon Electric Railvay Company, as aforeeaid; tbence North 41' 5g' West along the South- westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL II A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, is the City of Tigard, County of Washington and State of Oregon, described as follovs: Beginning at the point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railvay Company by James R., O'Hara and Mary C. O'Hara, his wife, by deed dated Jamesry 4, 1907, and recorded l'ebruary 16, 1907, on Page 40 of gook 75, Deed Records of Washington County, Oregon, and the vast line of the William Graham Donation Land Claim 'lo. 39, said point being monumented by as iron pipe; thoace South 43' 00' West along said wast donation lend claim line a distance of 354,3 feet, more or lees, to the center of County Road No. 997; thence North 45' 04' 30" West along the canter line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' Past a distance of 367.75 feat, more or less, to a point on the Page 2 EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southwesterly right of nay line of that cortin 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by Rudolph flunziker and S. C. lbuziker, his wife, by deed dated Dec,!t r 13, 1906 and recorded February 16, 1907, on Pago 39 of Book 75, Deed Records of Washington County, Oregon, thence South 41' 58' East a distance of 7.42.25 feet, more or lees, along said South- westerly right of way line to tha point of beginning. PARCEL III .. A tract of land in Section 2, Township 2 South, Range 1 Hest of the Willamette Heridian, in the City of Tigard, County of 'Washington and State of Oregon, described as follows: Beginning at a point in the center of County Road Horth 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Waobingtoo County, Oregon, Bald beginning point being also the moat westerly corner of that certain tract of land conveyed to N. J. Kerry by deed recorded in Book 146, Page 1.05, Deed Records; thence North 42' 19' P13at along the northwesterly line of said Kerry tract, 361.7 feet to the vesterly right of way of Oregon Electric Railway Company; thence Northwesterly along said right of way line 60 feet to a point; thence South 42' 19' West 374.23 feet, more or leas, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' Fast 60 feet, more or less, to the place of begivaning. TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT, ("Owner"), collectively known as the INTERGOVERNMENTAL WATER BOARD (IWB), and hereinafter referred to as the "Owners". WHEREAS, the ownership of the Canterbury Property was vested in the Tigard Water District (TWD) as a single entity; and is now owned by the City of Tigard, City of King City, City of Durham, and the Tigard Water District as Tenants In Common; and WHEREAS, the IWB and its member jurisdictions desires to provide for the management and control of the Property; and WHEREAS, on April 11, 2007, the IWB adopted Resolution 07-02, recommending to the Tigard City Council that a portion of the Canterbury property be declared surplus; and WHEREAS, the City of Tigard has expressed an interest in purchasing the surplus property for use as a public park; and WHEREAS, the Owners of the Canterbury Property have determined that the preferred disposition of the surplus Canterbury Property is that it should be sold under the conditions set forth in IWB Resolution 07-02. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE CANTERBURY PROPERTY, located at 10310 SW Canterbury Lane, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved with two (2) reservoirs and a storage building. The intent of the Owners is to enter into a sale agreement with CITY OF TIGARD to purchase a portion of the Property ("Park Property") for use as a public park and to continue in ownership of the balance of the Property as Co-Tenants. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. Page 1 of 6—Canterbury Property Tenancy In Common Agreement 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership, joint venture, or any other form of business entity. 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four (24) months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. Until the sale of the surplus portion of the Property, the expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common Agreement, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty (30) days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property, each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property. The Owners shall determine whether to assess the cotenants for the amount required for said improvements, or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. Page 2 of 6— Canterbury Property Tenancy In Common Agreement 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement, the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property, or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property, and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD ("Tigard") to manage the Property under terms and conditions contained in the Intergovernmental Agreement. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as set forth in the Intergovernmental Agreement. None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners,who shall be bound by said determination. Page 3 of 6 —Canterbury Property Tenancy In Common Agreement 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property, including but not limited to, any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws, and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing, the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding, of Liens. An Owner whose interest in the Property is subject to a lien may, within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owner's cash, a corporate surety bond, or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit, the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of Section 18 herein, and the Intergovernmental Agreement. Upon the withdrawal of an Owner from the IWB, the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner or Owners. 18.2 Price. The selling price of the Property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser, except the Page 4 of 6—Canterbury Property Tenancy In Common Agreement value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section I1, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Sale of the Park Property. The Owners may sell the Park Property upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above and the Intergovernmental Agreement. 20. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Canterbury Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold, Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise, an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However, the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. Page 5 of 6—Canterbury Property Tenancy In Common Agreement 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners, their respective heirs, executors, administrators, legal representatives, successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co- tenancy. Except as fully set forth herein, there are no presentations, agreements, or understandings, oral or written, among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6 —Canterbury Property Tenancy In Common Agreement EXHIBIT A CANTERBURY PROPERTY TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY Begin4W .r}t..the,;?Q.ptst ggrnar of'I,ot 5T.��4�,K11e lie�.ghts a subdivision of rocoed in, sedtion 1:l,-7`,�ri4hlp •.2 ;A�? h Range •1 VON"' oPe tho'1" aniotto Meridian, in PlaslLi.n�ton C�:oSid Jx'+8A1►f•}y?i : 4 , 5:° th �'X91...;yQsti a o j he �i@st line of said 1 I e.1pn s .at to.:.# .•:Soni ty � :: i ;sx T.ot,. ,.thHn �.. a C tie_�Sou h. of.u. . o 2 �eetj theaoe •North and.parallo],li ith the'17eet lino of said lot 165 feet to t1hn` North Ithe,thereofy 'thonewivaet 264 feat to the plxee of begi.nnins; Together erith an sasegpnt over the fol.1:6wing•deacribsd tract of JFw4T _ Begi p�thic,•Vgrtheaat oorner of the abova-ooribaa }property; thonco Enst,tg1pxjLT, N :. "' box (i !{'ipardvillo .Hoiall . ,' to fiche conterrgt ),IW-dock AvcAq, tho co, Soil �i 7,ong..said�aaiita 3 i1�;A di s#�nae oS f1a'pt thC� 'fi enreat and qr 1Ye9 wi t)a .the' Northlline of'Lot 5,.to_the.Fust ].dna of the abo;i9 -doppribed tract of land, thence North a.distanoe of 12 foot to the' place of beginnint.--- AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan,LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common" with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Water Building and legally described as, See Attached"Exhibit A: Property Description" Subject to any easements,rights of way, and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signed,Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) Page 1-BARGAIN AND SALE DEED GAMUNATIGARDREAL ESTATRIWB DOCUMENTSIFINAL WBBSDEED.D0Q8/99) i STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: Page 2- BARGAIN AND SALE DEED GAMUNAT1GARDREAL ESTATBIWB DOCUMENTS1FrNAL WBBSDEED.DOC(8/99) EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCEL I A. tract of land in Section 2, Township 2 SoJth, Range 1 Went of the: Willamette Ys ridiau, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by Janice R. O'Hara and Mary C. O'Mara, his wife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Boot 75, Deed Records of Washington County, Oregon, and the Inst line of the William Graham Donation Laud Claim No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the vent Donation band Claim line a distance of 354.3 feet, more or lose, to the center Line of County Road No. 977; thence South 45' 04' East along the center line of said Couaty Road; a distance of 95.75 feet; thence South 0' 21' West a distance of 132.33 feet to a point, said point being monumeated by on iron pipe; thence South 69' 41' East, a distance of 366.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' East along the center line of County Road No. 227 to a point on the Southwesterly right of way .line of the Oregon Electric Railway Company, as aforesaid; thence North 41' 5B' West along the South— westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL II A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, is the City of Tigard, County of Washington and State of Oregon, doscr,ibed an follows: Beginning at the point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railway Company by James R. O'Hara and Bary C. O'Hara, his wife, by deed dated Jaww ry 4, 1907, and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Waahingtoa County, Oregon, and the wast line of the William Graham Donation Land Claim;lo. 39, said point being monumented by an iron pipe; thaace South 43' 00' West along said wsst donation land claim line a distance of 354.3 feet, more or lose, to the center of County Road No. 997; theuce North 45' 04' 30" West along the canter line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' Fant a distance of 367.75 feet, more o; less, to a point on tha Page 2 EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southwesterly right of way line of that cart�in 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by Rudolph lhnzil..er and S. C. Hanziker, his vife, by deed dated Decerlwr 13, 1906 and recorded February 16, 1907, on Page 39 of Book 75, Deed Records of Washington County, Oregon, thanes South 41' 58' East a distance of 7.42.25 feet, more or leas, along said South- westerly right of way line to the point of beginning. PARCEL III A tract of land in Section 2, Townabip 2 South, Range I Weat of the Willamette Meridian, iu the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at n point in the center of County Road North 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, ssid beginning point being also the most ueaterly corner of that certain tract of land conveyed to W. J. Karry by deed recorded in Hook 146, Page 105, Deed Records; thence North 42' 19' past along the northweuterly line of said Kerry tract, 367.7 feet to the weaterly right of way of Oregon Electric Railway Company; thence Northwesterly along said right of way line 60 feet to a point; thenca South 42' 19' West 374.23 feat, more or lass, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' Mat 60 feet, more or leas, to the place of begianning. AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as"Tenants In Common"with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Canterbury Property and legally described as, See Attached "Exhibit A: Property Description" Subject to any easements,rights of way, and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signature, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) BARGAIN AND SALE DEED STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: EXHIBIT A CANTERBURY PROPERTY DEED LEGAL DESCRIPTION OF PROPERTY Bag ier Ag $t.tx1a;;,?�q,?ti171�p5t gornar of'Lot S� Ti,gnrdv4X1e lieighta a subdivision of rocoril in. Sedtion 11.fiomi�hip .2 Saµ }y Range .1 IYe3' oto the lYi .aippttp Meridian, iq tYasl�in(;ton C�.q}jnt ri„sh'�lg ftiy. ii ':t} 'q Sboff;}fib 1'iast line of said +#'�djvo r�.iQn 6:�• :rao� to-:-#4 ,5aii � t::..` }si�n� o . ,.t an gy.. i♦. 4 .4 .1,s► v: 2 .foatj theme Z�arth and paralla3,�with the'liee� An*o of said lot 165 feet to 4W: ?forth line:thereoff thenca'West 261; feet to the place of beginning; Togather idth an eneergent ovor the following-descrtbsd tract of lm-Al _ 9agi �t a•..Npxtl}flact corner of the abovo 4oatribed. property; thence East,r.glops t11@ '#s$ b�'� o .,s:1'igardvilla .HeigY� .s.'' to the c tar:of ?duid'ook Avenge, khQpco_ Soil �s�,ong.:se�arb'oint '31 i ,A distance oT` :fs's�C" thendO` 61bit and p4rg'12e1 tt tfa the Northfline of'Lot 5,.to_the_.East lens of tats��' mb 'sioocribed tract of land, thence North a.distanoe of '12 fent to the' place of beginninQ:- COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: , 2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating, Ventilation and Air Conditioning (HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board,the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building, the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property (the "Premises") on the terms and conditions stated below: Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street, Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018, unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on , 2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence, Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a)the rental during the preceding term or (b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew, the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment, the appraiser shall return his [her] decision, which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased"As Is". Tenant agrees to accept the Premises in the current "as is" condition. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B, describing rental costs and credits as agreed upon between Landlord and Tenant. At the commencement of the Lease term and as set forth in said Exhibit B,Tenant will owe the Landlord $22, 252.77 annually, to be accounted for as a credit to the Tenant as reimbursement for the building system costs referenced above in the Paragraph 2.of Recitals, until its cost has been fully amortized. 2.2 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use, but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty, would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked,disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use, handling, and storage of Hazardous Substances and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting), bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss, neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building any. Tenant shall pay as due all real property taxes and special assessments if any, levied against the Premises. As used herein,real property taxes includes any fee or charge relating to the ownership, use, or rental of the Premises, other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable, Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall have no obligation to pay any income, profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including (but not limited to)charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning, telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply, the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50% of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 20 days following the date of damage. In such event all rights and obligations of the Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible, Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10 % per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay, as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall, within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant,from any claim, loss, or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned, mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means,without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease(other than the payment of rent or other charges)within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period,this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building business entities, the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs, the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter,take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises, but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is,or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup, refurbishing, removal of Tenant's property and fixtures, costs incurred under Section 15.5,or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs, broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet, and continuing Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10 % per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. I 16.2 Fixtures (1) All fixtures placed upon the Premises during the term,other than Tenant's trade fixtures, shall, at Landlord's option, become the property of Landlord. If Landlord so elects, Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within 30 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal, transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by Landlord. Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3,the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than ? days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease,the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease, to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of the term of this lease,to place and maintain upon the Premises notices for leasing or selling the Premises. Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due, bear interest at the rate of TEN (10 %) per annum (but not in any event at a rate grater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300) the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts,their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated, or as to any other question involving apportionment or valuation, either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties, but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Water Building Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building EXHIBIT A TO LEASE. LEASED BUILDING AND PARKING PREMISES :Rr • v� coo_ w} L u.ti, •� rn�r w v x�t av Prov - \�� = Parking (not to scale) EXHIBIT B TO LEASE CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 COT Rent Credit for 70% Ownership 0.7 Total COT Ownership Credit $51,923.12 Total annual COT Credit for Owner improvements, annualized $14,190.32 Total Annual Rent from COT after Credits $8,062.45 Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation: Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 Amount Annualized to Fully Amortize Improvement Costs $14,190.32 July 1, 2007, until Dec 31, 2018 TIGARD WATER DISTRICT, OREGON TIGARD WATER DISTRICT BOARD RESOLUTION NO. 07- A RESOLUTION AUTHORIZING THE TIGARD WATER DISTRICT'S REPRESENTATIVE TO THE INTERGOVERNMENTAL WATER BOARD TO VOTE ON AND APPROVE THE FIRST AMENDMENT TO THE INTERGOVERNMENTAL`--AGREEMENT DATED 12/23/1993, TO EXECUTE THE TENANTS IN COMMON AGREEMENTS FOR THE WATER BUILDING PROPERTY AND THE CANTERBURY PROPERTY, AND TO EXECUTE THE BARGAIN AND SALE DEEDS FOR THE CANTERBURY PROPERTY AND WATER BUILDING PROPERTY FROM TIGARD WATER DISTRICT TO INTERGOVERNMENTAL WATER BOARD MEMBER JURISDICTIONS AS TENANTS IN COMMON. WHEREAS, in December 1993 the City of Tigard, City of King City, and the City of Durham withdrew from the original Tigard Water District; and WHEREAS, a remnant of the Tigard Water District, now only representing portions of the unincorporated area to the west and south of Tigard, along with the City of Tigard, City of King City, and the City of Durham formed the Intergovernmental Water Board and entered into an Intergovernmental Agreement for the delivery of water service in December 1993;and WHEREAS, the Tigard Water District is currently the owner of record of the Canterbury Property located at 10310 SW Canterbury Lane in Tigard, Oregon, and of the Water Building at 8777 SW Burnham Street in Tigard, Oregon; and WHEREAS, the Intergovernmental Water Board has determined the need to amend the Intergovernmental Agreement in order to implement recent Board decisions; and VY iS, based Water Board has agreed to take ownership of the Water Building Property and the Canterbury Property as Tenants In Common;and WHEREAS, the Tigard Water District as a member of the Intergovernmental Water Board must vote on and approve the amendment to the Intergovernmental Agreement,vote to execute the Bargain and Sale Deeds to the Canterbury Property and the Water Building Property, and to execute the Tenants In Common Agreements for the Water Building Property and Canterbury Property; NOW,THEREFORE,BE IT RESOLVED by the Tigard Water District that: SECTION 1: The Tigard Water District authorizes its representative to the Intergovernmental Water Board to vote for the approval of the amendment to the Intergovernmental Agreement. Submitted at the IWB Meeting RESOLUTION NO. 07- Page 1 By: Mk . &A11_5 Date: b-13-07-_ Agenda Item No.: (o SECTION 2: The Tigard Water District authorizes its representative to the Intergovernmental Water Board to execute the Bargain and Sale Deeds transferring ownership of the Canterbury Property and the Water Building Property to the Intergovernmental Water Board as Tenants In Common. SECTION 3: The Tigard Water District authorizes its representative to the Intergovernmental Water Board to execute the Tenants In Common Agreements for the Water Building Property and the Canterbury Property. SECTION 4: This resolution is effective immediately upon passage. PASSED: This day of 2007. I � Chairperson,Tigard Water District ATTEST: Tigard Water District Recording Secretary l FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT FOR DELIVERY OF WATER SERVICE TO TERRITORY WITHIN THE DISTRICT BOUNDARIES THIS FIRST AMENDMENT TO THIS INTERGOVERNMENTAL AGREEMENT (this "Amendment") is made and entered into as of , 2007, by and between the CITY OF TIGARD, an Oregon municipal corporation, (hereinafter "Tigard") and the Tigard Water District, a domestic water supply district existing under ORS Ch. 264, (hereinafter "District"), referred to herein as "the Parties". RECITALS A. The Parties previously entered into that certain INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT FOR DELIVERY OF WATER SERVICE TO TERRITORY WITHIN THE DISTRICT BOUNDARIES dated December 23, 1993 (the "IGA") relating to the Parties' creation of the Intergovernmental Water Board (hereinafter "IWB") and the cooperative effort to serve the long term water supply needs of the residents in the original District. B. The Parties hereto desire to amend the IGA: to further ensure consistency across the jurisdictions among rates and services, to clarify the IWB votes required to change ownership of original District assets, to memorialize a new lease between the IWB and the City of Tigard for the Water Building, o estaMisin a processor ca cu a ing and recording prorated expenses and revenues, and to allow the IWB to use proceeds from sales of assets for expenses in addition to capital improvements. AGREEMENT NOW THEREFORE, in consideration of the terms and conditions contained herein, the receipt and adequacy of which are hereby acknowledged, the Parties hereby amend the IGA as follows: 1. Paragraph 5. Asset Ownership/Water Rates/Revenues B., is replaced with the following: B. The fees, rates and charges charged by Tigard for providing water services to properties, residences and businesses in the District shall be the same as those charged within Tigard, and rates shall be First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 1 of 4 consistent among those receiving water services from Tigard under this IGA. Notwithstanding the foregoing, Tigard may impose higher fees, rates and charges for providing water service to properties, residences and businesses when the cost of providing such service is greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers. Any higher fees, rates and charges imposed for providing water service shall be reviewed by the Intergovernmental Water Board prior to taking effect and shall be limited to covering the actual additional costs of providing such service. When higher fees, rates and charges are imposed, they shall be consistently applied among all member jurisdictions, except that at the request of the District, Tigard will collect on behalf of the District additional charges imposed by the District on District customers. 2. Paragraph 5. Asset Ownership/Water Rates/Revenues C. (2) Moneys/Revenues, is replaced with the following: (2) Moneys transferred to Tigard as a result of the division of assets after withdrawal from the original District by Tigard which were previously dedicated by the original District to system capital improvements shall be used solely for system capital improvement by Tigard in accordance with subsection 5.D, except that the Intergovernmental Water Board may at its discretion, and consistent with voting requirements in Paragraph 3.D. of this Intergovernmental Agreement, determine that said moneys may be used for other purposes. 3. Paragraph 5, Asset Ownership/Water Rates/Revenues, G. Accounting, is added to as follows: (3) In fulfillment of the Intergovernmental Agreement's intent to reliably and methodically account for expenses and revenues, Exhibit A showing allocation of ownership interests is attached hereto and incorporated thereby as the model for documenting the use of assets by the City of Tigard. 4. Paragraph 3. Intergovernmental Water Board. D., is replaced as follows: D. A quorum of the Board shall be three (3) members. All actions of the board shall require at least three (3) votes, excluding abstentions. Notwithstanding prior agreements no more than three (3) jurisdiction's votes will be required to purchase, sell, or otherwise act with respect to the original District's real property assets. First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 2 of 4 By: Tigard Water District ATTEST: By: First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 3 of 4 By: City of Tigard AT'T'EST: By First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 4 of 4 i EXHIBIT A AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN CITY OF TIGARD AND TIGARD WATER DISTRICT i ECONOMIC AND ENGINEERING SERVICES, INC. '\ ( 380 S W Macadam Avenue,Suiie 365 Portland.OR 87201 15031223.3037•FAX(503)274.6248 EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT Letter Verifying System Asset and Liability Allocations from EES Final Report November 1, 1994 Ms.Beverly Froude Tigard Water District 8777 S.W. Burnham Street Tigard,OR 97223 Dear Ms.Froude: Enclosed please find Economic and Engineering Services, Inc.'s (EES's) final report of asset-and iiab'1'Tocations vreoared for the Tigard Water District (District) The total of assets equals the total of liabilities. This total amount is $25,620,938 and is allocated as follows: Tigard Water District..................................... $5,394,464 (21.05°/x) City of Tigard................................................ 17,997,978 (70.25%) City of Durham..............................—....... — 1,044,091 (4.08%) City of King City........................................... 1,184,406 (4.62%) s repo Ud Thnildtatibus- Ulm§ p s e y eac tuns rctton. Copies of the four resolutions are bound into this final report, immediately after this letter. Very truly yours, �D PROs " k ECONOMIC AND ENGINEERING a2 SERVICES,INC. OREGON.,) REGON, �/� �i�BERr �� 1M�\JS Gilbert R Meigs T R. Project Manager GRM:pp wiftraiprdrpl Olympia.WA Bellevue,WA Vancouver.B.0 Poflland,OR Washingion,D.0 I EXHIBIT A FIRST AMENDMENT TC INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TI I ARD AND THE TIGARD WATER DISTRICT i i City of Tigard Analysis of Proportionate Interest All cations Updated from Tigard Water Districts stem Assets and Liabilities Final Report- November 1994 I Allocation Basis Real Mar t Consumption` Value'" Meters— (A) (B) (c) District 641,523 880,511 Q30 3,671 Tigard 2,093,982 2,822,340, 60 12,196 King City 130,395 201,727,,00 1,238 Durham 74,115 116,051, 50 358 2,940,015 4,020,629,)40 17,463 I Proportionate Interests Proportionate Change From Interests Original District 21.82% 21. 0% 21.02%, 21.58% 3.99% Tigard 71.22% 70. I0% 69.84% 70.42% -2.96% King City 4.44% 5. 2% 7.09% 5.51% -1.20% Durham 2.52% 2. 9% 2.05% 2.49% 0.18% 100.00% 100.Q,0% I 100.00% 100.00% 0,00% i "Other Assets"Percentages For Allocations District TigardKing City Durham District,Tigard, King City 22.13% 72. 2% 5.65% 0.00% 100.00% District,Tigard 23.46% 76. % ' 0.00% 0.00% 100.00% Tigard, Durham 0.00% 96. % 0.00% 3.41% 100.00% • Annual consumption from November 1, 2005 through O lober3l,2006 Real Market Value(RMV)Updated as of November 7,2 1 06 Meter count updated as of October 31, 2006 TWD Study Analysis.xis 6/5/20072:47 PM EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BE, THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT CITY OF TIGARD, OREGON RESOLUTION NO. o� A RESOLUTION OF THE CITY COUNCIL, CITY OF TIGARD, OREGON, TO ADOPT THE TIGARD WATER DISTRICT SYSTEM ASSETS AND LIABILITY REPORT AS REVISED BY THE INTERGOVERNMENTAL WATER BOARD (IWB) WHEREAS, the Tigard Water District, in accordance with Section 4 of the Intergovernmental Agreement (hereinafter "Agreement") between the City of Tigard and the Tigard Water District for Delivery of Water Service to Territories Within the District Boundaries has caused preparation of a System Assets and Liability Report; and WHEREAS, the Tigard Water District accepted the report with amendments on September 12, 1994; and WHEREAS, the Intergovernmental Water Board reviewed the Tigard Water District's actions and further amendments as proposed by Tigard Water District and its consultants, Economic & Engineering Services, Inc. , and unanimously voted. to recommend that the cities of Durham, King City, and Tigard formally adopt the plan; and WHEREAS, the City of Tigard acknowledges that it has reviewed the report and amendments and finds its contents to be consistent with the direction given to the IWB participants within Section 4 of the Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF TIGARD THAT: SECTION 1: The conclusions contained within the Tigard Water District System Assets and Liability Report as revised by the Intergovernmental Water Board (IWB) -- --are-accepted and_adopted-•-------------------- PASSED: By unarnrnvuo vote of all Council members present after beingread by number and title only, this o2n'tm day of 1994. 1 a ^1 thy Wheatley City ,. corder APPROVED: This «/-day of Z1994. J Schwartz, -mayor Approved as to form: City Attornyy Date: 9/2y-/954 wam\ach\90024\iwater .rel EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF KING CITY AND THF.TIGARD WATER DISTRICT 4. IDivisi-on of original District Assets: r . A. Pursuant to :ORs 222 540(A) ; the District'agrees that the `.ii'Asi on of assets after withdrawal from' the .origina 'District by the Cities shall be consistent --with ,the ..following- concepts {�) As`sets x�c1.lude;`r�eal,-'personal ;wind intangible property. "Yntang b e prop' ­ 'iricl-ades blit is not-limited to: moneys, checks, drafts., deposits, interest, dividends and income. (2) Assets will be divided into two groups: a. System Assets: Assets necessary for the operation of Tigard's water supply system throughout the original District, not•including those "other assets" of Tigard. personal and intangible property are system assets. Water, .'mains, service installations, structures, facilitl.es, improvements or ,other property necessary for X operation of the C.1ty of Tigard's water supply system 5 , throughout the :original District are system assets. . :;; .; ,�?R_ •• hri {Assets Assets . not necessary for the + a �Oliir,,te, City of ;Tigard's water supply system O O °.�xe" jp]rig1nal District. Ot�►er assets shall z � r' '• become' -the :pr`ri n€ the' puri sdiction i.n which ,the � z Is locate Water mans sere ce `i.nstallatio,ns -I -,:- 1., _T ; .,:.. _>> _ 1 ' structures,, bac. 1ties, improvements .or other property `• '•not r}ee.essary ,fpr; the'.operation _pi. the. city of Tigard's = Q o ' -water supply system throughout: the riginal District are C :other .assets O B. All system assets and other assets shall be pledged by the -Cities and -the District to Tigard.. All system assets and other t: assets shall be managed by Tigard and shall be utilized by Tigard a in order to provide water services to properties, residences and ' > businesses in the original District. a n C. Should one of the Cities or the District terminate its tM water service agreement with Tigard, the Cities' and the District's proportionate interest in a system asset shall be determined based z upon the following formula: ~� Jurisdiction.':s ..Proportionate Interest = (A + B t C) /3 Urs- diction's Per.eentage of.Current Consumption in •. , .�:•:.:•.I•,•y•;. 4,_ l,•�4v\,(-11 ClEt e.�.{S,ryl t•TY , , M1 '. � _ _ .. . 1.-4 411 r.. .t 1 •�{. t .:?' .i� ::'.4+::• .2:r.:"�•���,'-'M.{.4'.,v A• .l�l'iil'!:,7�:�;,.,1•:1- ,� ,, ,r - .. .: . :::•1'•�:ii:�, Si•�•ti A,`r, • •--.' :• �,-�,P., @II''�� a �'uZ'r e. ..t - r, ;;x r.::`, ;, .;,,..,i.i�.;,..a.;), ��•:; -. -. ,. ...' r, a :.. . g, .'.'�?� n Real Market, ; ti� rt7e_:�.x00r. 3i L lstrlca. - - . q,*,j t C Jurisdiction's Percentage of .Current Meters in original District 'The Cities' arid_the District's proportionate interest in a system :asset cap_ tal ,improvement shall be based upon the capital improvement':s. .deprec1ated' :waJue:. The depreciated value shall' be based ` sefu•1,' life,:'of the capital improvement under generaly 'accepted accounting .:principles using a. straight line >aetnod;of dp recial! n , Upon termination of this Agreement; other =assets .shall. become _Ehe"prop$7F,ty `.of the juri-sdict' in 'which the asset is located TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT,("Owner"),collectively known as the INTERGOVERNMENTAL WATER BOARD(IWB),and hereinafter referred to as the"Owners".The Owners agree as follows: WHEREAS, the ownership of the Water Building and associated real property (Water Building Property)was vested in the Tigard Water District(TWD)as a single entity and is now owned by City of Tigard,City of King City,City of Durham and Tigard Water District as Tenants In Common;and WHEREAS,the IWB and its member jurisdictions desire to provide for the management and control of the Property; and WHEREAS,the Water Building Property is suitable and has been used for water operations,City of Tigard offices, and IWB and TWD meetings; and WHEREAS, the Owners of the Water Building Property have determined that the preferred disposition of the Water Building property is to lease it to the City of Tigard for use in water operations, as city offices and other related activities. The Owners agree as follows: I. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE WATER BUILDING, located at 8777 SW Burnham Street, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved as the Water Building,a building suitable for water operations,city offices and related activities.The intent of the Owners is to enter into a Lease with the CITY OF TIGARD and to manage and control the Property as Co-Tenants through this Agreement. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership,joint venture,or any other form of business entity. Page 1 of 6 —Water Building Tenancy In Common Agreement 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four(24)months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. The expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any,of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty(30)days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property,each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property, except as may otherwise be provided for in the Lease. The Owners shall determine whether to assess the cotenants for the amount required for said improvements,or to finance said amount as a j oint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement,the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and Page 2 of 6—Water Building Tenancy In Common Agreement deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property,or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property,and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD("Tigard")to manage the property under terms and conditions contained in the Intergovernmental Agreement and the Water Building Lease. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve,for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as specified in the Water Building Lease.None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners,and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners,who shall be bound by said determination. 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property,including but not limited to,any judicial attachment,any judgment lien,any lien arising out of the order or judgment of any court,any lien in connection with taxes claim due any governmental unit,any lien arising under federal or state bankruptcy or insolvency laws,and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement,shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent Page 3 of 6—Water Building Tenancy In Common Agreement (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing,the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation,to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above,from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may,within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owners cash, a corporate surety bond, or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit,the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of this Section 18,the Intergovernmental Agreement,and the Water Building Lease(granting Right of First Refusal to the City of Tigard). Upon the withdrawal of an Owner from the IVB,the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner. 18.2 Price. The selling price of the Water Building property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser,except the value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein and in the Water Building Lease to the City of Tigard. In the event that three (3)out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord,the City of Tigard shall determine the Canterbury Property improvement Page 4 of 6— Water Building Tenancy In Common Agreement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services,Inc.dated November 1994,and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property,the sale shall be closed. 20. Vote on Sale of Water Building. Subject to the provisions of the Water Building Lease and of this Tenants in Common Agreement Section 18.1 Right of First Refusal,the Owners may sell the Water Building upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise,an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. ` 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However,the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement,or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obli atg ions. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit,action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners,their respective heirs,executors,administrators,legal representatives,successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. Page 5 of 6— Water Building Tenancy In Common Agreement 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co-tenancy. Except as fully set forth herein,there are no presentations,agreements,or understandings,oral or written,among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to, and governed by,the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the I" Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6 —Water Building Tenancy In Common Agreement EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION i PARCEL I f A tract of land in Section 2, Towuship 2 SAth, Range 1 West of tW Wlllauettra xeridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Hara and Nary C. O'Hara, his wife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and tba Inst line of the William Graham Donation Laud Claim No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the teat Donation Land Claim line a distance of 354.3 feet, more or less, to the center Uoe of County Road No. 977; thence South 45' 04' Bast along the center line of said CouaL7 Road; a distance of 95.75 feet; thence South 0' 21' Weat a distance of 132.33 feet to a point, acid point being monumented by an iron pipe; thence South 89' 41' East, a distance of 368,55 feet to a point in the center line of County Road No. 227; thence North 0' 19' Past along the center line of County Road No. 221 to a point on the Southwesterly right of Way .line of the Oregon Electric Railway Company, ae aforesaid; thence North 41' 58' West along the South- westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL LI A tract of Iand in Section 2, Tovnship 2 South, Range 1 West of the Willamette Heridiau, is the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at the point of intersection of the Eoutheesterly right of way line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railway Company by Jamea R, O'Hara and Harz C. D'Hara, his wife, by deed dated Jaminry 4, 1907, and recorded February L6, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, sad the west line of the William Graham Donation Land Claim No. 39, said point being monumanted by an Srou pipe; thance South 43' 00' West along said west donation land claim line a distance of 354.3 feet, more or lass, to the center of Couuty Road No. 997; thence North 45' 04' 30" West along the canter line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' East a distance of 367.75 feat, more o; less, to a point an the Page 2 EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southwesterly right of tray line of that cart�in 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by Rudolph Bunziker and S, C. Eauziker, his wife, by deed dated December 13, 1906 and recorded February 16, 1907, on Page 39 of Book 75, Deed Records of Washington County, Oregon, thence South 41' 58' East a distance of 242.25 feet, more or less, along said South- westerly right of way line to the point of beginning. PAIlCEL III y. A tract of land in Section 2, Township 2 South, Bauga 1 Hast of the Willamette Haridiaa, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point in the center of County Bond Horth 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Waabington County, Oregon, said beginning point being also the Poet weeterly corner of that certain tract of land conveyed to W. J. Kerry by deed recorded in Book 146, Page 1.05, Deed Records; thence Horth 42' 19' East along the northweaterly line of said Kerry tract, 367.7 feet to the westerly right of way of Oregon Electric Railway Company; tbence Northwesterly along said right of way line 60 feet to a point; thence South 42' 19' West 314.23 feat, more or less, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' East 60 feet, more or lees, to the place of beginning. TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT, ("Owner"), collectively known as the INTERGOVERNMENTAL WATER BOARD (IWB), and hereinafter referred to as the "Owners". WHEREAS, the ownership of the Canterbury Property was vested in the Tigard Water District (TWD) as a single entity; and is now owned by the City of Tigard, City of King City, City of Durham, and the Tigard Water District as Tenants In Common; and WHEREAS, the IWB and its member jurisdictions desires to provide for the management and control of the Property; and WHEREAS, on April 11, 2007, the IWB adopted Resolution 07-02, recommending to the Tigard City Council that a portion of the Canterbury property be declared surplus; and WHEREAS, the City of Tigard has expressed an interest in purchasing the surplus property for use as a public park; and WHEREAS, the Owners of the Canterbury Property have determined that the preferred disposition of the surplus Canterbury Property is that it should be sold under the conditions set forth in IWB Resolution 07-02. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE CANTERBURY PROPERTY, located at 10310 SW Canterbury Lane, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved with two (2) reservoirs and a storage building. The intent of the Owners is to enter into a sale agreement with CITY OF TIGARD to purchase a portion of the Property ("Park Property") for use as a public park and to continue in ownership of the balance of the Property as Co-Tenants. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. Page 1 of 6—Canterbury Property Tenancy In Common Agreement 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership, joint venture, or any other form of business entity. 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy, The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four (24) months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. Until the sale of the surplus portion of the Property, the expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common Agreement, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a-portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty (30) days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property, each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property. The Owners shall determine whether to assess the cotenants for the amount required for said improvements, or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. Page 2 of 6—Canterbury Property Tenancy In Common Agreement 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement, the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property, or from the condemnation or destruction of the Property, to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property, and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD ("Tigard") to manage the Property under terms and conditions contained in the Intergovernmental Agreement. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as set forth in the Intergovernmental Agreement. None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. Page 3 of 6— Canterbury Property Tenancy In Common Agreement 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property, including but not limited to, any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws, and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing, the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may, within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owner's cash, a corporate surety bond, or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit, the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of Section 18 herein, and the Intergovernmental Agreement. Upon the withdrawal of an Owner from the I", the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an I" member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner or Owners. 18.2 Price. The selling price of the Property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser, except the Page 4 of 6—Canterbury Property Tenancy In Common Agreement value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Sale of the Park Property. The Owners may sell the Park Property upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above and the Intergovernmental Agreement. 20. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Canterbury Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold, Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise, an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However, the Owners may make determinations without a meeting or telephone conference by obtaining the signed,written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. Page 5 of 6—Canterbury Property Tenancy In Common Agreement 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners, their respective heirs, executors, administrators, legal representatives, successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. 29. Integration.. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co- tenancy. Except as fully set forth herein, there are no presentations, agreements, or understandings, oral or written, among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6 —Canterbury Property Tenancy In Common Agreement EXHIBIT A CANTERBURY PROPERTY TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY Begih4i z .At..t}�e,;�nq. tt est cor�ar of'Lot S, .T�.pc�cly�lle 1ie�aht's a subdivision of rocoril in. $eaklOn 11,,To}m hip .2 :! Range L tiYa3 oPi tlip'1 };7 r�iQ,tte faridian, in wael4rigton �rX�', lYeSt lire of .said gxj=d .ve.lf?n 16 :f .�t to.:.thas=naxtt�er���.. avt. ?pC! tia_,�ou ?3.. ix�4r.w.� �'4 teat; thence •North axed.parm.116 ,Nvith the'Yfest lino of said lot lh'5 feet to the' North line;thereoTi *thence-"}Yost 264 feat to the p].F►os of beginningl Together with an &A-serpent cypr the foil tng•daaoribsd tract of ],,ands $agi. pAt3�'a..14grgt;t�aaet earner of the aboys set abed propprty; thonco Fnat«Alojig Q f.� Y + ecdi x '°fps:�,�i:..`�`ida:dvi]1e .Haig1j1;.$." to the coptar:gX ?.li�rd'ock Aveaaa, .k??.o�co 1 Soak '�7.oug..es .4�aAtev' '3�x�1a_; .dist4nca of` :::t 'i ty"then0 T.6z t and pEWklYdT-wx Ah:.#.hd' Northtline of'Lot 5,• o_the_Fuet line off' t-a'Ji'bji3O,lepersbdd traot of lurid, thence North a.distanoa of 12 .feat to the' place of beginnin8.'• AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as"Tenants In Common" with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Water Building and legally described as, See Attached"Exhibit A: Property Description" Subject to any easements,rights of way,and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signed,Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) Page 1-BARGAIN AND SALE DEED GAIMUNATIGARDREAL ESTATBIWB DOCUMENTSIFINAL W BBSDEED.DOC(8/99) STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: Page 2-BARGAIN AND SALE DEED G:IMUNATIGARUREAL ESTATAIWB DOCUMENTSIFINALWBBSDEED.DOQ8/99) EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCEL I A treet of land in Section 2, Township 2 Soi6, Range I Vest of the: Willamette Keridiau, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Hara and Mary C. O'Hara, his vife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the best line of tbs William Graham Donation Land Clain No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the west Donation Land Claim line a distance of 354.3 feet, more or lees, to the center The of County Road No. 977; thence South 45' 04' Beet along the center line of said County Road; a distance of 95.75 feet; thence South 0' 21' Heat a distance of 132.33 feet to a point, said point being monumented by an iron pipe; thence South 89' 41' Bast, a distance of 368.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' Nast along the center line of Ccvnty Road No. 227 to a point an the Southwesterly right of way .Line of the Oregon Electric Railvay Company, as aforesaid; thence North 41' 58' West along the South— westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL II A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, is the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at the point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railvay Company by James R. O'Hara and Mary C. O'Hara, his wife, by deed dated Jamtary 4, 1907, and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the vast line of the William Graham Donation Land Claim lo. 39, said point being monumented by an irou pipe; tbaace South 43' 00' West along said wet donation land claim line a distance of 354.3 feet, more or lees, to the center of County Road No. 997; thence North 45' 04' 30" West along the center line of County Road No. 997, a distance of 241.44 feat; thence North 43' 00' East a distance of 367.75 feet, more or leas, to a point on the Page 2 EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southvasterly right of uay line of that cart�in 50 foot strip of right of way conveyed to the Oragon Electric Railway Company by Rudolph lhnbiYzr and S, C. Eunziker, his vife, by deed dated Decevbar 13, 1906 and recorded Pabruary 16, 1907, on Pogo 39 of Book 75, Deed Records of Wasbington Crunty, Oregon, thence South 41' 50' East a distance of 242,25 feet, more or less, along said South- westerly right of way line to the point of beginning. PARCEL III A tract of laud in Section 2, Tovnsbip 2 South, Range I Woot of the Willamette Neridinn, in the City of Tigard, County of Washington and State of Oregon, described an follows: Beginning at a point in the center of County Rood Horth 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, said beginning point being also the moat ueoterly corner of that certain tract of land conveyed to W. J. Karry by deed recorded in Book 146, Page 105, Deed Records; thence North 42' 19' East along the northweuterly line of said Kerry tract, 367.7 feet to the weeterly right of way of Oregon Electric Railway Company; thence Northwesterly along said right of way line 60 feet to a point; thence South 42' 19' West 374.23 feet, more or less, to center line of County Road and the eaaterly line of said Burnham tract; thence South 45' 46' Mat 60 feet, more or less, to the place of begioaning. AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common"with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Canterbury Property and legally described as, See Attached"Exhibit A: Property Description" Subject to any easements, rights of way,and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT,THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signature, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) BARGAIN AND SALE DEED STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: EXHIBIT A CANTERBURY PROPERTY DEED LEGAL DESCRIPTION OF PROPERTY BagJhM4 .4t..the;j,.np.=tlM. of aorper of'Lot ., .T gns�v lle die ghta a subdivision of recoriJ in. $east-qn 11-1.-Tom phip -2 9-qu } Range 1 tiYe3 oPe'tF►u 1 AmP.ttp Heridian, in Wae111n(,ton $ ?3 Xi', rig? i?ii►.34i&:: `'�4 'arab trh` :Qo 9� i'� et a o �}ifib West li}e of .said q+!.'1,<,W�v�elpn �; CQet fit td.:.th@ thelifl..l� t,. P :•t1?o..r�.ot1?'• .4,t 2lZ; j thceen •Horth andll .parao],�trith the•17eet An,a,of said lot 1�5$ feet to ilio' North 34ho.-thereofi thenca'lYeat 264 feet to the pl.nae of beginning; Together vrith an ease.gAnt over the fo]lmring•describsd tract of lm-41 ABcorner of the abaysdeat3ribed. prvprsty; thence Eat jopg !jYgardville ,Halgl�ts,•• to tho coptsr,of ?.furd'ock Avenge, t13•ollco- 5oii i. ong-•eaidra'er`1 '93 ia. A s#�nca of :Ssijt;°thence Mirzit and para12a3 vritfi'•the' Horth4line of 'Lot 5,.to_the.Fast lane of' iha••�"bQvd -dpperibed tract o hand., thence Horth a.distanoe of '12 feot_ to the' place of beginnina.`- COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: , 2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating,Ventilation and Air Conditioning (HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board,the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building, the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property (the"Premises")on the terms and conditions stated below: Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street, Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018,unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on ,2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence, Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a)the rental during the preceding term or(b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew,the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment,the appraiser shall return his [her] decision, which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased"As Is". Tenant agrees to accept the Premises in the current "as is" condition. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B, describing rental costs and credits as agreed upon between Landlord and Tenant. At the commencement of the Lease term and as set forth in said Exhibit B, Tenant will owe the Landlord $22, 252.77 annually, to be accounted for as a credit to the Tenant as reimbursement for the building system costs referenced above in the Paragraph 2.of Recitals,until its cost has been fully amortized. 2.2 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use,but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty,would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled,leaked, disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use, handling, and storage of Hazardous Substances and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building I shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation,or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting), bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss,neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building any. Tenant shall pay as due all real property taxes and special assessments if any,levied against the Premises. As used herein, real property taxes includes any fee or charge relating to the ownership, use, or rental of the Premises,other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable,Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law,Tenant shall pay such charge or fee. Tenant,however, shall have no obligation to pay any income,profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including(but not limited to)charges for fuel, water, gas, electricity, sewage disposal, power,refrigeration, air conditioning,telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply, the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50% of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 20 days following the date of damage. In such event all rights and obligations of the Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible, Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien,Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10% per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay,as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall,within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant, from any claim, loss, or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other,execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned, mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease (other than the payment of rent or other charges)within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period,this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building business entities,the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs, the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter,take possession of the remises and remove an persons or property Y � P premises, YP P P Y by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises,but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup, refurbishing, removal of Tenant's property and fixtures, costs incurred under Section 15.5, or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs, broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet, and continuing Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10 % per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option, become the property of Landlord. If Landlord so elects,Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, fumiture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within 30 days after removal was required,Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal,transportation to storage, and storage,with interest at the legal rate on all such expenses from the date of expenditure by Landlord. Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3,the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than ) days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease,the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest; this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease,to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of the term of this lease,to place and maintain upon the Premises notices for leasing or selling the Premises. Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due,bear interest at the rate of TEN (10 %) per annum (but not in any event at a rate grater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300)the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts, their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated, or as to any other question involving apportionment or valuation, either parry may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration,and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties, but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Water Building Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II,Utility Plant in Service)prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property,the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building EXHIBIT A TO LEASE. LEASED BUILDING AND PARKING PREMISES :al!, !x,q j alq K . �i u♦ I wry e♦o ♦� I� >�aL YAP 4M!Va IF�Y Mil \ `\ N = Parking (not to scale) 'N \ Li EXHIBIT B TO LEASE CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 COT Rent Credit for 70% Ownership 0.7 Total COT Ownership Credit $51,923.12 Total annual COT Credit for Owner improvements, annualized $14,190.32 Total Annual Rent from COT after Credits $8,062.45 Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation:Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 Amount Annualized to Fully Amortize Improvement Costs $14,190.32 July 1, 2007, until Dec 31, 2018 CITY OF TIGARD, OREGON TIGARD CITY COUNCIL RESOLUTION NO. 07- A RESOLUTION AUTHORIZING THE CITY OF TIGARD'S REPRESENTATIVE TO THE INTERGOVERNMENTAL WATER BOARD TO VOTE ON AND APPROVE THE FIRST AMENDMENTS TO THE INTERGOVERNMENTAL AGREEMENT DATED 12/28/1993 FOR THE CITY OF KING CITY, AND 12/23/1993 FOR THE TIGARD WATER DISTRICT, AND APPROVE THE SECOND AMENDMENT TO THE CITY OF DURHAM INTERGOVERMENTAL AGREEMENT DATED 12/23/1993, TO EXECUTE THE TENANTS IN COMMON AGREEMENTS FOR THE WATER BUILDING PROPERTY AND THE CANTERBURY PROPERTY, AND TO EXECUTE THE BARGAIN AND SALE DEEDS FOR THE CANTERBURY PROPERTY AND WATER BUILDING PROPERTY FROM TIGARD WATER DISTRICT TO INTERGOVERNMENTAL WATER BOARD MEMBER JURISDICTIONS AS TENANTS IN COMMON. WHEREAS, in December 1993 the City of Tigard, City of King City, and the City of Durham withdrew from the original Tigard Water District; and WHEREAS, a remnant of the Tigard Water District, now only representing portions of the unincorporated area to the west and south of Tigard, along with the City of Tigard, City of I{ing City, and the City of Durham formed the Intergovernmental Water Board and entered into an Intergovernmental Agreement for the delivery of water service in December 1993; and WHEREAS, the Tigard Water District is currently the owner of record of the Canterbury Property located at 10310 SW Canterbury Lane in Tigard, Oregon, and of the Water Building at 8777 SW Burnham Street in Tigard, Oregon;and -W-REREAS,—the—Intergovernmental—Water- -oard_-has__determined__the neesl_to_arne d the _ Intergovernmental Agreement in order to implement recent Board decisions; and WHEREAS, based on the December 1993 Intergovernmental Agreement, the Intergovernmental Water Board has agreed to take ownership of the Water Building Property and the Canterbury Property as Tenants In Common; and WHEREAS, the City of Tigard as a member of the Intergovernmental Water Board must vote on and approve the amendment to the Intergovernmental Agreement, vote to execute the Bargain and Sale Deeds to the Canterbury Property and the Water Building Property, and to execute the Tenants In Common Agreements for the Water Building Property and Canterbury Property; NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that: �Submitted at the IWB Meeting RESOLUTION NO. 07 - By: Page 1 Date: Agenda Item No.: I SECTION 1: T he City Council authorizes its representative to the Intergovernmental Water Board to vote for the approval of the City of Durham, City of King City, and Tigard Water District amendments to the Intergovernmental Agreement. SECTION 2: The City Council authorizes its representative to the Intergovernmental Water Board to execute the Bargain and Sale Deeds transferring ownership of the Canterbury Property and the Water Building Property to the Intergovernmental Water Board as Tenants In Common. SECTION 3: The City Council authorizes its representative to the Intergovernmental Water Board to execute the Tenants In Common Agreements for the Water Building Property and the Canterbury Property. SECTION 4: This resolution is effective immediately upon passage. PASSED: This day of 2007. Mayor- City of Tigard ATTEST: City Recorder-City of Tigard FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT FOR DELIVERY OF WATER SERVICE TO TERRITORY WITHIN THE DISTRICT BOUNDARIES THIS FIRST AMENDMENT TO THIS INTERGOVERNMENTAL AGREEMENT (this "Amendment") is made and entered into as of , 2007, by and between the CITY OF TIGARD, an Oregon municipal corporation, (hereinafter "Tigard") and the Tigard Water District, a domestic water supply district existing under ORS Ch. 264, (hereinafter "District"), referred to herein as "the Parties". RECITALS A. The Parties previously entered into that certain INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT FOR DELIVERY OF WATER SERVICE TO TERRITORY WITHIN THE DISTRICT BOUNDARIES dated December 23, 1993 (the "IGA") relating to the Parties' creation of the Intergovernmental Water Board (hereinafter "IWB") and the cooperative effort to serve the long term water supply needs of the residents in the original District. B. The Parties hereto desire to amend the IGA: to further ensure consistency across the jurisdictions among rates and services, to clarify the IWB votes required to change ownership of original District assets, to ---- —memorialize-a-new-lease-between-th-e-IWB-and-the-C-i-ty-of-T-iga-r-d-for-the-W-ater- --- ---- Building, to establish a process for calculating and recording prorated expenses and revenues, and to allow the IWB to use proceeds from sales of assets for expenses in addition to capital improvements. AGREEMENT NOW THEREFORE, in consideration of the terms and conditions contained herein, the receipt and adequacy of which are hereby acknowledged, the Parties hereby amend the IGA as follows: 1. Paragraph 5. Asset Ownership/Water Rates/Revenues , B., is replaced with the following: B. The fees, rates and charges charged by Tigard for providing water services to properties, residences and businesses in the District shall be the same as those charged within Tigard, and rates shall be First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page I of 4 consistent among those receiving water services from Tigard under this IGA. Notwithstanding the foregoing, Tigard may impose higher fees, rates and charges for providing water service to properties, residences and businesses when the cost of providing such service is greater due to unusual circumstances, including, but not limited to additional cost to pump water up hill to reach customers. Any higher fees, rates and charges imposed for providing water service shall be reviewed by the Intergovernmental Water Board prior to taking effect and shall be limited to covering the actual additional costs of providing such service. When higher fees, rates and charges are imposed, they shall be consistently applied among all member jurisdictions, except that at the request of the District, Tigard will collect on behalf of the District additional charges imposed by the District on District customers. 2. Paragraph 5. Asset Ownership/Water Rates/Revenues C. (2) Moneys/Revenues, is replaced with the following: (2) Moneys transferred to Tigard as a result of the division of assets after withdrawal from the original District by Tigard which were previously dedicated by the original District to system capital improvements shall be used solely for system capital improvement by Tigard in accordance with subsection 5.D, except that the Intergovernmental Water Board may at its discretion, and consistent with voting requirements in Paragraph 3.D. of this Intergovernmental Agreement, determine that said moneys may be used for other purposes. 3. Paragraph 5, Asset Ownership/Water Rates/Revenues, G. Accounting,is added to as follows: (3) In fulfillment of the Intergovernmental Agreement's intent to reliably and methodically account for expenses and revenues, Exhibit A showing allocation of ownership interests is attached hereto and incorporated thereby as the model for documenting the use of assets by the City of Tigard. 4. Paragraph 3. Intergovernmental Water Board. D., is replaced as follows: D. A quorum of the Board shall be three (3) members. All actions of the board shall require at least three (3) votes, excluding abstentions. Notwithstanding prior agreements no more than three (3) jurisdiction's votes will be required to purchase, sell, or otherwise act with respect to the original District's real property assets. First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 2 of 4 By: Tigard Water District ATTEST: By: First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 3 of 4 By: City of Tigard ATTEST: By: First Amendment to the Intergovernmental Agreement City of Tigard/Tigard Water District Page 4 of 4 EXHIBIT A AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN CITY OF TIGARD AND TIGARD WATER DISTRICT ECONOMIC AND ENGINEERING SERVICES, INC. \ ia380 S W Macadam Avenue,Suite 355 Ponland.OR 97201 150.11 223.3033•FAX(5D3)274-6248 EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT Letter Verifying System Asset and Liability Allocations from EES Final Report November 1, 1994 Ms,Beverly Froude Tigard Water District 8777 S.W. Burnham Street Tigard, OR 97223 Dear Ms,Froude: Enclosed please find Economic and Engineering Services, Inc.'s (EES's) final report of set and liability y allocations prepared for the Tigard Water District(District). The total of assets equals the total of liabilities, This total amount is $25,620,938 and is allocated as follows: Tigard Water District..................................... $5,394,464 (21.05%) City of Tigard................................................ 17,997,978 (70.25%) City of Durham............................................ 1,044,091 (4.08%) City of King City........................................... 1,184,406 (4.62%) This report and the allocations have been adopted by resolutions passed by each jurisdiction. Copies of the four resolutions are bound into this final report, immediately after this letter. 9 PRO,, Very truly yours, ECONOMIC AND ENGINEERING 42 SERVICES,INC. OREGON.o� 64`�^7 x"1.•7 Gilbert R Meigs RT R. Project Manager I GRM:pp win\®n`dipn.rpt Olympia.WA aetlevue,WA Vancouver.6.c Porlland,OR Washington,O.0 i EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT City of Tigard Analysis of Proportionate Interest Allocations Updated from Tigard Water District Sys�"item Assets and Liabilities Final Report- November 1994 Allocation Basis Real Market Consumption' Value" Meters- (A) (B) (C) District 641,523 880,511,030 3,671 Tigard 2,093,982 2,822,340,560 12,196 King City 130,395 201,727,000 1,238 Durham 74,115 116,051,350 358 2,940,015 4,020,629,940 17,463 I Proportionate Interests Proportionate Change From Interests Original District 21.82% 21.90(o 21.02% 21.58% 3.99% Tigard 71.22% 70.20°(0 69.84% 70.42% -2.96% King City 4.44% 5.02% 7.09% 5.51% -1.20% Durham 2.52% 2.89% 2.05% 2.49% 0.18% 100.00% 100.00% 1 100.00% 100.00% 0.00% "Other Assets"Percentages For Allocations District Tigard King City Durham District,Tigard, King City 22.13% 72.22% , 5.65% 0.00% 100.00% District,Tigard 23.46% 76.54% 0.00% 0.00% 100.00% Tigard, Durham 0.00% 96.59% 0.00% 3.41% 100.00% Annual consumption from November 1, 2005 through October 31,2006 "Real Market Value(RMV) Updated as of November 7, 2006 Meter count updated as of October 31, 2006 i I 2 0 �{ TWD Study Analysis.xis / i 6/5/20072:47 PM EXHIBIT A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT BETWEEN THE CITY OF TIGARD AND THE TIGARD WATER DISTRICT CITY OF TIGARD, OREGON RESOLUTION NO. ` a A RESOLUTION OF THE CITY COUNCIL, CITY OF TIGARD, OREGON, TO ADOPT THE TIGARD WATER DISTRICT SYSTEM ASSETS AND LIABILITY REPORT AS REVISED BY THE INTERGOVERNMENTAL WATER BOARD (IWB) WHEREAS, the Tigard Water District, in accordance with Section 4 of the Intergovernmental Agreement (hereinafter "Agreement") between the City of Tigard and the Tigard Water District for Delivery of Water Service to Territories Within the District Boundaries has caused preparation of a System Assets and Liability Report; and WHEREAS, the Tigard Water District accepted the report with amendments on September 12, 1994; and WHEREAS, the Intergovernmental Water Board reviewed the Tigard Water District's actions and further amendments as proposed by Tigard Water District and its consultants, Economic & Engineering Services, Inc. , and unanimously voted. to recommend that the cities of Durham, King City, and Tigard formally adopt the plan; and WHEREAS, the City of Tigard acknowledges that it has reviewed the report and amendments and finds its contents to be consistent with the direction given to the IWB participants within Section 4 of the Agreement; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF TIGARD THAT: SECTION 1: The conclusions contained within the Tigard Water District System Assets and Liability Report as by the_ Intergovernmental Water Board (IWB) are accepted and adopted. - - -- PASSED: By ttPa'nrnLn4_o vote of all Council members present after being. read by number and title only, this oRTtl day of 0__177 p'YW , 1994. 'Cathy WheatleyA City ' corder APPROVED: This c:?7�Oday of Z1994 . ' Approved as to form: J Sc wartz, -Mayor ' City Attorn Date: '7427-/95 wam\ach\QOUZ4\Iwa cerb.re! EXHIBIT A FIRST AMENT)IYIENT TO IN'T'ERGOVERNMENTAL AGREEMENT BETWEEN THE CI'T'Y OF KING CITY AND THE TIGARD WATER DISTRICT 4 ;D visiom of 'Oric� naT` District Assets Pr .stees :t at the tiiv.i,s on..°of..`as' ets '.afte `::`itiittLlawa°1rom''•ki� =ori nal;'Distrct b . : ,. g . y 'Cities 'sa1l -be' eohsi��tett _w ti`'_ithe .fo 'lowiig concepts ;Assets.'-Inp.lde'Steal;: pers.k�n-al'.:and ..intangible property. Frites ig by "p .pext)h i!; 'include's iit is not•limited -to: moneys, checks, drafts., 'depos'its, interest, dividends and income. (2) Assets will be divided into two groups: a. System Assets: Assets necessary for the operation of Tigard's water supply system throughout the original District, not•including those "other assets" of Tigard. Personal and intangible property are system assets. Water; rmains, service. installations, structures, .fa�ci�:hles,, iupr'pvemerits...or,,other, property necessary ,for k opezat�.on d ,the cl of Tigard-'s water supply system tYirqugho�l :ytYie orglhal Distr ct, are system assets. ,Assets Assets not Tie.cessary for the a �f operato ' o ;,.t>ze, D'zty `.qf Tigard ss water supply system OO ,; ,., Z fhrougi}out ';_tie ';Qrig�7ra1 +District Other assets shall i be'co a;ahe, Xo e f ' l d1 ct on .in :which.-the. .... •.,• •, rt, ,t r tertians, lsTervice ir�sta ]atons, _ . ... .__<'. . r; structures" '..' acuities,; Improvements ror other properEy _ ot nec.essarX.:fpr;the .operation':of, .t C.ity of Tigard's :water supplx.sy$tem thr,oughout:.the original District are ° < <otier B. Ali system 'assets and other assets shall be pledged by the :Cities and the District to -Tigard.. All system assets and other d y assets shall be ananaged' by Tigard and shall be utilized by Tigard a in order to provide water services to properties, residences and »' T� businesses in the original District. C. Should one of the Cities or the District terminate its y M water service agreement with Tigard, the Cities' and the District's proportionate interest in a system asset shall be determined based 2� upon the following formula: y Jurisdict, ona:' .Proportionate Interest = (A. + H + C) /3 ' Jttrsdicti :hercentage.of.Current.Consumption. in eiit:d`ft H``r" ;Current .al Market a+ 11 Dl . C = Jurisdiction's Percentage of -Current Meters in original District The Cities' arid.the District's proportionate interest in a system :asset cap_ t:al.improvement shall be based upon the capital improvement':s .depr.et: ated':wa]ue;:'. ..The depreciated value shall- be base : uprl ',the :--useful,.of P.., of.. : ..h "based improvement under generaa iy 'accepted accounting ::pr.inciples using' a. 'straight line ;7n+Tthoc of depreci.at1on. - •`;� ,: termialatson :of thzs ;Agreement, other assets :shall. becgte,'the 1,pr.gFer,ty Qf the ]ursdictiori �n ,which the. :asset ,is i TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT,("Owner"),collectively known as the INTERGOVERNMENTAL WATER BOARD(IWB),and hereinafter referred to as the"Owners".The Owners agree as follows: WHEREAS, the ownership of the Water Building and associated real property (Water Building Property)was vested in the Tigard Water District(TWD)as a single entity and is now owned by City of Tigard,City of King City,City of Durham and Tigard Water District as Tenants In Common;and WHEREAS,the IWB,and its member jurisdictions desire to provide for the management and control of the Property; and WHEREAS,the Water Building Property is suitable and has been used for water operations,City of Tigard offices, and IWB and TWD meetings; and WHEREAS, the Owners of the Water Building Property have determined that the preferred disposition of the Water Building property is to lease it to the City of Tigard for use in water operations, as city offices and other related activities. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE WATER BUILDING, located at 8777 SW Burnham Street, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved as the Water Building,a building suitable for water operations,city offices and related activities.The intent of the Owners is to enter into a Lease with the CITY OF TIGARD and to manage and control the Property as Co-Tenants through this Agreement. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership,joint venture,or any other form of business entity. Page 1 of 6—Water Building Tenancy In Common Agreement 1 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four(24)months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. The expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any,of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty(30)days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property,each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property, except as may otherwise be provided for in the Lease. The Owners shall determine whether to assess the cotenants for the amount required for said improvements,or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement,the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and Page 2 of 6—Water Building Tenancy In Common Agreement deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property,or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property,and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD("Tigard")to manage the property under terms and conditions contained in the Intergovernmental Agreement and the Water Building Lease, The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve,for management of the Property. 13. Duties of Propelly Manager. The City of Tigard shall be responsible for performance of all services and duties as specified in the Water Building Lease. None of the Owners, their agents or representatives,shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property,including but not limited to,any judicial attachment,any judgment lien,any lien arising out of the order or judgment of any court,any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws,and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent Page 3 of 6 —Water Building Tenancy In Common Agreement (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing,the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation,to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may,within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owners cash, a corporate surety bond,or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit,the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of this Section 18,the Intergovernmental Agreement,and the Water Building Lease(granting Right of First Refusal to the City of Tigard). Upon the withdrawal of an Owner from the I WB,the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an lWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner. 18.2 Price. The selling price of the Water Building property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser,except the value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein and in the Water Building Lease to the City of Tigard. In the event that three(3)out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement Page 4 of 6—Water Building Tenancy In Common Agreement value as set forth in the System Assets and Liabilities Final Report (Section 1I, Utility Plant in Service)prepared by Economic and Engineering Services,Inc.dated November 1994,and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 20. Vote on Sale of Water Building. Subject to the provisions of the Water Building Lease and of this Tenants in Common Agreement Section 18.1 Right of First Refusal,the Owners may sell the Water Building upon an affirmative vote of three (3) out of four(4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise,an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However,the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement,or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obli atg ions. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners,their respective heirs,executors,administrators,legal representatives,successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. Page 5 of 6 — Water Building Tenancy In Common Agreement 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co-tenancy. Except as fully set forth herein,there are no presentations,agreements,or understandings,oral or written,among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent.be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to, and governed by,the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: _ I" Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6— Water Building Tenancy In Common Agreement EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCBL I A tract of lnad in Section 2, Township 2 SAh, Range I Vest of tho; W i1]auetta "Tidinu, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Hara and Hary C. O'Hnra, his wife, by deed dated January 4, 1907 and recorded February 16, 19D7, on Page 40 of Boole 75, Deed Records of�Waahington County, Oregon, and the gest line of the William Graham Donation band Claim No. 39, said point l-eing monumented by an iron pipe; thence South 43' 00' West along the test Donation Land Claim line a distance of 354.3 feet, more or less, to the center line of County Road No. 971; thence South 45' 04' Stet along tha center line of said County Road; a distance of 95.75 feet; thence South 0' 21' Fleat a distance of 132.33 feet to a point, said point being monumented by an iron pipe; thence South B9' 41' Past, a distance of 368.55 feet to n point in the center line of County Road No. 227, thence North 0' 19' Past along the center line of County Road No. 227 to a point an the Southwesterly right of way line of the Oregon Electric Railway Company, as aforesaid; thence North 41' 58' West along the South- westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning, PARCEL II A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, is the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at the point of intersection of the Southeesterly right of way line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railway Company by James R. O'HaT.a and Mary C. O'Hara, his wife, by deed dated Jaminty 4, 1907, and recorded Yebruary 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the west line of the William Graham Donation Land Claim 'Ia. 39, said point being monumented by an iron Dina; thouce South 43' 00' Kest along said wuat donation land claim line a dietanca of 354.3 feet, more or lees, to the center of County Road No. 997; thence North 45' 04' 30" West along the center line of County Road No. 997, a distance of 241.44 fest; thence North 43' 00' Mat a distance of 367.75 feet, more or less, to a point on the Page 2 EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCSIPTION - Continued Southwesterly right of uay line of that cortin 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by Rudolph Runziker and S. C. Runziker, his wife, by deed dated Deceulw r 13, 1906 and recorded February 16, 1907, on Page 39 of Book 75, Deed Records of Waohington County, Oregou, thence South 41' SO' East a distance of 7.42.25 feet, more or less, along said South— westerly right of way line to the point of beginning. PARCEL III .. A tract of land in Section 2, Township 2 South, Rauge I {lest of the Willamette Meridian, in the City of Tigard, County of 'Washington and State of Oregon, described as follows; Beginning at a point in the center of County Road North 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, uaid beginning point being also the mot westerly corner of that certain tract of Land conveyed to W. J. Knrry by deed T.ecorded in Book 146, Page 1.05, Deed Records; thence North 42' 19' Pest along the northwesterly line of said Kerry tract, 367.7 feet to the i&sterly right of way of Oregon Electric Railway Company; thence Northwesterly along said right of way line 60 feet to a point; thence South 42' 19' West 374.23 feet, more or less, to center line of County Hoed and the easterly line of said Burnham tract; thence South 45' 46' East 60 feet, more or less, to the place of begiunning. TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT, ("Owner"), collectively known as the INTERGOVERNMENTAL WATER BOARD (IWB), and hereinafter referred to as the "Owners". WHEREAS, the ownership of the Canterbury Property was vested in the Tigard Water District (TWD) as a single entity; and is now owned by the City of Tigard, City of King City, City of Durham, and the Tigard Water District as Tenants In Common; and WHEREAS, the IWB and its member jurisdictions desires to provide for the management and control of the Property; and WHEREAS, on April 11, 2007, the IWB adopted Resolution 07-02, recommending to the Tigard City Council that a portion of the Canterbury property be declared surplus; and WHEREAS, the City of Tigard has expressed an interest in purchasing the surplus property for use as a public park; and WHEREAS, the Owners of the Canterbury Property have determined that the preferred disposition of the surplus Canterbury Property is that it should be sold under the conditions set forth in IWB Resolution 07-02. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE CANTERBURY PROPERTY, located at 10310 SW Canterbury Lane, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference (the "Property"). 2. Co-Tenancy. The Property has been improved with two (2) reservoirs and a storage building. The intent of the Owners is to enter into a sale agreement with CITY OF TIGARD to purchase a portion of the Property ("Park Property") for use as a public park and to continue in ownership of the balance of the Property as Co-Tenants. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. Page 1 of 6 —Canterbury Property Tenancy In Common Agreement 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership, joint venture, or any other form of business entity. 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four (24) months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. Until the sale of the surplus portion of the Property, the expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common Agreement, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty (30) days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property, each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property. The Owners shall determine whether to assess the cotenants for the amount required for said improvements, or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. Page 2 of 6—Canterbury Property Tenancy In Common Agreement 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement, the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property, or from the condemnation or destruction of the Property, to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property, and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD ("Tigard") to manage the Property under terms and conditions contained in the Intergovernmental Agreement. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as set forth in the Intergovernmental Agreement. None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. Page 3 of 6—Canterbury Property Tenancy In Common Agreement 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property, including but not limited to, any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws, and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing, the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may, within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owner's cash, a corporate surety bond, or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit, the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of Section 18 herein, and the Intergovernmental Agreement. Upon the withdrawal of an Owner from the IWB, the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner or Owners. 18.2 Price. The selling price of the Property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser, except the Page 4 of 6—Canterbury Property Tenancy In Common Agreement value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section I1, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Sale of the Park Property. The Owners may sell the Park Property upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above and the Intergovernmental Agreement. 20. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Canterbury Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold, Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 21. Required Vote for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise, an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 22. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However, the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 23. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 24. Effect on Obli ations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 25. Notices. All notices will be in writing and delivered by mail or in person to each Owner. Page 5 of 6—Canterbury Property Tenancy In Common Agreement 26. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 27. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners, their respective heirs, executors, administrators, legal representatives, successors and assigns. 28. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 21 and 22 of this Agreement. 29. Integration. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co- tenancy. Except as fully set forth herein, there are no presentations, agreements, or understandings, oral or written, among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 30. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 31. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6—Canterbury Property Tenancy In Common Agreement EXHIBIT A CANTERBURY PROPERTY TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY Begi,nidng •&t..#2ra,; q,I?tt p9t carc}er of'Lot �., .�.�4�dv ale �ie�ghte a subdivision of record 1n. Sao.k3.on 17..To yhobip 2 P.09 Range 1 �Ye3 oi��t}irs'l ' :a�jvtt.e kferidian, ir1 wasldneton G:Qsir4n.-Or.Q gqp-- > }?? : 1 q s trll:t 4;.. 9,1.,.}yQaO eat° 'eth9 Bast lira of said In ther}&�.. nit. pG�F. fie A°p„�. Q�r,. .Lot 5,; 2 deet} thai000 North and paral3o].�trith the'1'�eet lino of said lqt 16$ feet to the', north line;thareofi 'thence-*Wast 264 feet to the p]xee of beginninal Together with an eaaa�gent avpr t Q fol]:6wing desoribed tract of jw4t _ 8egi AtnQNRS@ast oorner of the abova•4at9oribed property; thence En3t•!,..11Pn1 i ardvi)1e .Heigh . .' to the ca�tar;.gf }Axu dock Avenop, th.oncn. Sou hall,'I,oiig..sa�dr+ael�ta '"3 ie,A-dis nba of' '.f0'ptj"thenO 'V10t and p4rille9.•-xitfi'---the' North4line of'lot 5,.to_the_,East line or the'--a"60v,b dpperibad tract of 3a.ui thence North a:distano; of 12 feat to the' place' of beginninj;.=- AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common" with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Water Building and legally described as, See Attached"Exhibit A: Property Description' Subject to any easements,rights of way, and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signed, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) Page 1-BARGAIN AND SALE DEED GAMUNATIGARUREAL ESTATRIWB DOCUMENTSTlNAL W BBSDEED.D0Q8/99) STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: Page 2-BARGAIN AND SALE DEED G:IMUNATIGAMREAL ESTATHIWB DOCUMENTSIF(NAL W BBSDEED.DOQ8/99) EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCRL I A %tact of land in Section 2, Township 2 South, Range l Vest of the: Willamette Xeridiau, in the City of Tigard, County of Washington sad State of Oregon, described no follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Hara and Mary C. O'Hara, his Wife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of�Wachingtoo County, Oregon, and the best line of the William Graham Donation Izad Claim No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the vest Donation Land Claim line a distance of 354.3 feet, more or leas, to the center line of County Road No. 977; thence Soutb 45' 04' Bast along the center line of said County Road; a distance of 95.75 feet; thence South 0' 21' Uest a distance of 132.33 feet to a point, said point being monuiuented by an iron pipe; thence South 89' 41' East, a distance of 368.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' Bast along the center line of County Road No. 221 to a point an the Southwesterly right of way .line of the Oregon Electric Railway Company, as aforesaid; thence North 41' 58' West along the South— westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL I1 A tract of land in Section 2, Township 2 South, Range 1 West of the Willamette Meridian, is the City of Tigard, County of Washington and State of Oregon, dcecribed as follows: Beginning at the point of intersection of the Eouthtesterly right of way line of tbat certain 50 foot strip of right of way conveyed to Oregon Electric Railvay Company by James R. O'Hara and Nary C. O'Hara, his Wife, by deed dated Ja nary 4, 1907, and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the West line of the William Graham Donation Land Claim;Io. 39, said point being monumanted by an iron pips; thoace South 43' 00' West along said wet donation land claim line a distance of 354.3 feet, more or lase, to the center of County Road No. 997; thence North 45' 04' 30" West along the canter line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' Past a distance of 367.75 feet, more or less, to a point on the Page 2 EXHIBIT A WATER BUILDING DEED LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southwesterly right of way line of that cart in 50 foot strip of right of way con Qyed to the Oragon Electric Railway Company by Rudolph Runtiker and S, C, Eainziker, his wife, by deed dated DecePlw r 13, 19D6 and recorded Pabruarq 16, 1907, on Page 39 of Book 75, Deed Records of Washington County, Oregon, thence South 41' 53' East a distance of 242,25 feet, more or less, along said South- westerly right of way line to the point of beginning. PARCEL III ,. A tract of land in Section 2, Townebip 2 South, Ranga 1 Hae-, of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning et a point in the center of County Road North 45' 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, said beginning point being also the most westerly corner of that certain tract of land conveyed to W. J. Rory by deed recordad in Book 146, Page 105, Deed Records; thence North 42' 19' Past along the northwesterly line of said Kerry tract, 367.7 feet to the westerly right of way of Oregon Electric Railway Company; thence Northwesterly along Bold right of vay line 60 feet to a point; thence South 42' 19' West 374.23 feat, more or less, to center line of County Road and the easterly line of said Burnham tract; thence South 45' 46' Flat 60 feet, more or Less, to the place of begianuing. AFTER RECORDING, RETURN TO: Attn: Timothy V. Ramis Ramis Crew Corrigan, LLP 1727 NW Hoyt Street Portland, OR 97209 BARGAIN AND SALE DEED TIGARD WATER DISTRICT, ("Grantor") conveys to the TIGARD WATER DISTRICT, CITY OF TIGARD, CITY OF DURHAM AND CITY OF KING CITY, as "Tenants In Common"with the following undivided interests: City of Tigard 70% Tigard Water District 22% City of Durham 2.5% City of King City 5.5% the following real property known as the Canterbury Property and legally described as, See Attached "Exhibit A: Property Description" Subject to any easements,rights of way, and reservations as the same may exist or appear of record. The true consideration for this conveyance is Zero Dollars ($0.00). THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930. Dated this day of , GRANTOR: Signature, Tigard Water District Print Name and Title of Signing Official (Notarial Certificate on following page) BARGAIN AND SALE DEED STATE OF OREGON ) ss COUNTY OF ) This instrument was acknowledged before me on by Notary Public My Commission expires: I EXHIBIT A CANTERBURY PROPERTY DEED LEGAL DESCRIPTION OF PROPERTY Baginr ng .fit..the;.Aq,?t,13�(pflt goner of'T,ot 5��. `ignrdp�lle I{a�,ghts a subdivision of rocoed in. Seatson 7.1.'�orn�blp -2 84co Range ti tiYe3t oi'�'the'1` aippttQ Lleridian, in Washington ..q_ �, '�+8?Fi •?'tiiru�. i ►rc9 ,a�� in ' Q 9A,1Yaat�a o. s 1h e Best line of .said q+!W n Tort to.:. @ .Sept=::6.�tsnax, .t�.5.,.tn �.. .a?14T�a 5. •�:t,apt.w. :?�oZ, .q:: 2 loot; umme North endpara13.o11tlino rith the no of said lot 1615 feat to iha; North ]iite:thoreoTj thetics lYeSt 261 foot to the pL►ce of beg3nninel Together with an enament over the follomying•described tract of lwAr _ Regiit@ '+tom=•NA3 ?#flast corner of the abaVa sleauribad. property, thence rnatr�long tf a tA. k� � :Tigardvilla-Heigl.1��s.p'' to the comer;of ).lurdbck Avenge, th.opco_ Soij $,aoiag..said*dent "31riia.� dis#�nce of 7*2°Ssat `�thence V.61t and parallel rritti: .ha' North41ine of 'Let 5,.-to-the.East ].ane of the tiomb ,ipperibed tract of larad_, thence North a.distame of 22 feot_ to the• place of beginning.-. COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: , 2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating, Ventilation and Air Conditioning (HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board,the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building,the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property (the "Premises")on the terms and conditions stated below: Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street, Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018,unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on , 2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence, Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a)the rental during the preceding term or(b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew, the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment,the appraiser shall return his [her] decision, which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased "As Is". Tenant agrees to accept the Premises in the current "as is" condition. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B, describing rental costs and credits as agreed upon between Landlord and Tenant. At the commencement of the Lease term and as set forth in said Exhibit B, Tenant will owe the Landlord $22, 252.77 annually, to be accounted for as a credit to the Tenant as reimbursement for the building system costs referenced above in the Paragraph 2.of Recitals, until its cost has been fully amortized. 2.2 Additional Rent. All taxes, insurance costs, utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use,but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty,would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked, disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use,handling, and storage of Hazardous Substances and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting),bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss, neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building any. Tenant shall pay as due all real property taxes and special assessments if any, levied against the Premises. As used herein, real property taxes includes any fee or charge relating to the ownership, use, or rental of the Premises, other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable, Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall have no obligation to pay any income, profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including(but not limited to)charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning, telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply, the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50% of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 20 days following the date of damage. In such event all rights and obligations of the Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable,except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible, Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10 % per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay,as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall,within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant, from any claim, loss, or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned, mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease(other than the payment of rent or other charges)within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period, this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building business entities, the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs, the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter,take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises, but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease,upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup, refurbishing,removal of Tenant's property and fixtures, costs incurred under Section 15.5, or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs,broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet, and continuing Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10 % per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option, become the property of Landlord. If Landlord so elects, Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within 30 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove,Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal, transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by Landlord. Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3, the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than ? days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease, the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease, to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of the term of this lease,to place and maintain upon the Premises notices for leasing or selling the Premises. Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due, bear interest at the rate of TEN (10 %) per annum (but not in any event at a rate grater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods,then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300) the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts,their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated, or as to any other question involving apportionment or valuation, either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties,but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Water Building Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER ATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building EXHIBIT A TO LEASE. LEASED BUILDING AND PARKING PREMISES x+<r, �x«c ✓iq r. . y K( m.� r c ` NI CSO rt} {Q�I Y+V �V MSL •A! I"Rf' Parking (not to scale) EXHIBIT B TO LEASE CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 COT Rent Credit for 70% Ownership 0.7 Total COT Ownership Credit $51,923.12 Total annual COT Credit for Owner improvements, annualized $14,190.32 Total Annual Rent from COT after Credits $8,062.45 Rent data is from D. Koeltermeier 3/12/07 Office Building Asset Evaluation:Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 Amount Annualized to Fully Amortize Improvement Costs $14,190.32 July 1, 2007, until Dec 31, 2018 Agenda Item No.: 4— IWB Meeting Date: (o- /3-4 TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT, ("Owner"), collectively known as the INTERGOVERNMENTAL WATER BOARD(IWB),and hereinafter referred to as the"Owners".The Owners agree as follows: WHEREAS, the ownership of the Water Building and associated real property (Water Building Property) was vested in the Tigard Water District (TWD) as a single entity and is now owned by City of Tigard,City of King City,City of Durham and Tigard Water District as Tenants In Common; and WHEREAS,the IWB and its member jurisdictions desire to provide for the management and control of the Property; and WHEREAS,the Water Building Property is suitable and has been used for water operations,City of Tigard offices, and IWB and TWD meetings; and WHEREAS, the Owners of the Water Building Property have determined that the preferred disposition of the Water Building Property is to lease it to the City of Tigard for use in water operations, as city offices and other related activities. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE WATER BUILDING, located at 8777 SW Burnham Street, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference(the "Property"). 2. Co-Tenancy. The Property has been improved as the Water Building,a building suitable for water operations,city offices and related activities.The intent of the Owners is to enter into a Lease with the CITY OF TIGARD and to manage and control the Property as Co-Tenants through this Agreement. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of this Tenancy In Common Agreement shall be construed as establishing a partnership,joint venture,or any other form of business entity. Page 1 of 6—Water Building Tenancy In Common Agreement June 13,2007 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four(24)months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. The expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty(30)days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property,each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property, except as may otherwise be provided for in the Lease. The Owners shall determine whether to assess the cotenants for the amount required for said improvements,or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement,the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. Page 2 of 6—Water Building Tenancy In Common Agreement June 13, 2007 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property,or from the condemnation or destruction of the Property,to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property,and to disburse the remaining balance ofproceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD("Tigard")to manage the property under terms and conditions contained in the Intergovernmental Agreement and the Water Building Lease. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as specified in the Water Building Lease. None of the Owners, their agents or representatives,shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners,and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Property. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property,including but not limited to,any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit,any lien arising under federal or state bankruptcy or insolvency laws,and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement,shall be discharged by said Owner,and the undivided interest released,within ten(10)days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be immediately due and payable without further demand and notice. In addition to the foregoing,the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right,but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive Page 3 of 6—Water Building Tenancy In Common Agreement June 13, 2007 reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bonding of Liens. An Owner whose interest in the Property is subject to a lien may,within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owners cash, a corporate surety bond,or other security satisfactory to the remaining Owners,in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit,the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of this Section 18,the Intergovernmental Agreement,and the Water Building Lease(granting Right of First Refusal to the City of Tigard). Upon the withdrawal of an Owner from the IWB,the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner. 18.2 Price. The selling price of the Water Building property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser, except the value of the improvements on the Property,which shall be valued according to the System Assets and Liabilities Final Report(Section II,Utility Plant in Service)prepared by Economic and Engineering Services, Inc. dated November 1994. 19. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein and in the Water Building Lease to the City of Tigard. In the event that three(3)out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property,the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord,the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services,Inc. dated November 1994,and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 20. Vote on Sale of Water Building. Subject to the provisions of the Water Building Lease and of this Tenants in Common Agreement Section 18.1 Right of First Refusal,the Owners may sell the Water Building upon an affirmative vote of three (3) out of four(4) of the representative Owner Page 4 of 6—Water Building Tenancy In Common Agreement June 13, 2007 jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above. 21. Votes of the Owners. Each Owner shall have a vote equal to the Owner's percentage of undivided interest in the Property.The entire undivided interest of an Owner shall be voted as one unit. 22. Percentage Required for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise, an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken,any determinations to be made,or any authorizations to be given by the Owners under the terms of this Agreement. 23. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However,the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 24. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 25. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 26. Notices. All notices will be in writing and delivered by mail or in person to each Owner. 27. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement,including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit,action or arbitration and in any appeal or review therefrom. 28. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners,their respective heirs,executors,administrators,legal representatives,successors and assigns. 29. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 23 and 24 of this Agreement. 30. Integration.tion. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co-tenancy. Except as fully set forth herein,there are no presentations,agreements,or understandings,oral or written,among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 31. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Page 5 of 6—Water Building Tenancy In Common Agreement June 13,2007 32. Governing Law. This Agreement shall be subject to,and governed by,the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6—Water Building Tenancy In Common Agreement June 13, 2007 i i EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION PARCEL I A tract of land in Section 2, Towusbip 2 SA h, Range 1'Went of the: Willamette !'.eridiau, in the City of Tigard, County of Washington and State of Oregon, described no follows: Beginning at a point of intersection of the Southwesterly right of way line of that certain 50 foot strip of right of way conveyed to the Oregon Electric Railway Company by James R. O'Hara and Hary C. O'Hara, his wife, by deed dated January 4, 1907 and recorded February 16, 1907, on Page 40 of Book. 75, Deed Records of Washington County, Oregon, and the in at line of the William Graham Donation Land Claim No. 39, said point being monumented by an iron pipe; thence South 43' 00' West along the vest Donation Land Claim line a distance of 354.3 feet, more or leas, to the center line of County Road No. 977; thence South 45' 04' East along the center line of said County Road; a distance of 95.75 feet; thence South 0' 21' Hest a distance of 132.33 feet to a point, said point being monumented by an iron pipe; thence South 89' 41' East, a distance of 366.55 feet to a point in the center line of County Road No. 227; thence North 0' 19' East along the center line of County Road No. 227 to a point on the Southwesterly right of way line of the Oregon Electric Railway Company, as aforesaid; thence North 41' 56' West along the South— westerly right of way line as aforesaid, a distance of 291.63 feet to the point of beginning. PARCEL II A tract of land in Section 2, Township Z South, Range 1 West of the Willamette Meridian, is the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning at the point of intersection of the Southweaterly right of way line of that certain 50 foot strip of right of way conveyed to Oregon Electric Railway Company by James R. O'Hara and Mary C. O'Hara, his wife, by deed dated Jawmry 4, 1907, and recorded February 16, 1907, on Page 40 of Book 75, Deed Records of Washington County, Oregon, and the vast line of the William Graham Donation land Claim;lo. 39, said point being monumented by an iron pipe; tha nce South 43' 00' West along said west donation laud claim line a distance of 354.3 feet, more or lees, to the center of County Road No. 997; thence North 45' 04' 30" West along the center line of County Road No. 997, a distance of 241.44 feet; thence North 43' 00' East a distance of 367.15 feat, more o: less, to a point on the Page 2 EXHIBIT A WATER BUILDING TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY DESCRIPTION - Continued Southwesterly right of: vay line of that cortin 50 foot strip of right of way con-royed to the Oregon Electric Railway Company by Rudolph 11inziker and S, C. Nunziker, his wife, by deed dated Deceu!k r 13, 1906 and recorded February 16, 1907, on Pago 39 of Book 75, Deed Records of Washington County, Oregon, thepce South 41' 59' East a distance of 2.42,25 feet, more or less, &long Raid South- westerly right of way line to the point of beginning. PARCEL III y A tract of land in Section 2, Township 2 South, Mango 1 Wen",, of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: Beginning nt a point in the center of County Road tlorth 45° 46' West 241.44 feet of the most easterly corner of that certain tract of land conveyed to Charles Burnham by deed recorded in Book W, Page 162, Deed Records of Washington County, Oregon, said beginning point being also the oast veoterly corner of that certain tract of land conveyed to W. J, Kerry by deed recorded in Book 146, Page 1.05, Deed Records; thence North 42' 19' Past along the northweuterly line of said Kerry tract, 367.7 feet to the westerly right of xray of Oregon Electric Railway Company; thence Northwuoterly along Raid right of way line 60 feat to a point; thencz South 42' 19' Went 374.23 feet, more or less, to center line of Couaty Road and the easterly line of said Burnham tract; thence Smith 45' 46' East 60 feet, more or leas, to the place of begiunning, Agenda Item No.: IWB Meeting Date: TENANCY IN COMMON AGREEMENT THIS AGREEMENT is made and effective the day of , by CITY OF TIGARD ("Owner"), CITY OF DURHAM ("Owner"), CITY OF KING CITY, ("Owner"), and TIGARD WATER DISTRICT, ("Owner"), collectively known as the INTERGOVERNMENTAL WATER BOARD (IWB), and hereinafter referred to as the "Owners". WHEREAS, the ownership of the Canterbury Property was vested in the Tigard Water District (TWD) as a single entity; and is now owned by the City of Tigard, City of King City, City of Durham, and the Tigard Water District as Tenants In Common; and WHEREAS, the IWB and its member jurisdictions desires to provide for the management and control of the Property; and WHEREAS, on April 11, 2007, the IWB adopted Resolution 07-02, recommending to the Tigard City Council that a portion of the Canterbury property be declared surplus; and WHEREAS, the City of Tigard has expressed an interest in purchasing the surplus property for use as a public park; and WHEREAS, the Owners of the Canterbury Property have determined that the preferred disposition of the surplus Canterbury Property is that it should be sold under the conditions set forth in IWB Resolution 07-02. The Owners agree as follows: 1. Acquisition of Property. The Owners have acquired certain real and personal property commonly known as THE CANTERBURY PROPERTY, located at 10310 SW Canterbury Lane, Tigard, Oregon, and more particularly described as Exhibit A attached hereto and incorporated by this reference(the "Property"). 2. Co-Tenancy. The Property has been improved with two (2) reservoirs and a storage building. The intent of the Owners is to enter into a sale agreement with CITY OF TIGARD to purchase a portion of the Property ("Park Property") for use as a public park and to continue in ownership of the balance of the Property as Co-Tenants. 3. Business Name. The business of the co-tenancy shall be conducted under the name "INTERGOVERNMENTAL WATER BOARD (IWB)". An application for registration of a fictitious business name shall be filed and published as provided by law. 4. Declaration of Ownership. The owners as described intend that their relationship with respect to the Property shall be a tenancy in common. The Owners intend that no provision of Page 1 of 6—Canterbury Property Tenancy In Common Agreement June 13, 2007 this Tenancy In Common Agreement shall be construed as establishing a partnership, joint venture, or any other form of business entity. 5. Ownership Interest. The names of the Owners and their percentage of undivided interests in the Property are currently as follows: Name Percentage Ownership City of Tigard 70% Tigard Water District 22% City of King City 5.5% City of Durham 2.5% The Property has been acquired by the co-tenancy. The Owners shall be responsible for payment of all financial obligations of the co-tenancy in the proportion of their ownership interests. Every twenty-four (24) months the ownership proportions shall be adjusted to reflect population changes as a result of annexation, and Owners will execute a new deed to reflect the changes. 6. Expenses. Until the sale of the surplus portion of the Property, the expenses incurred with respect to the Property shall be the obligation of the Owners. Anticipated expenses include, but are not limited to: cost of repairs, maintenance, debt service, taxes, assessments, insurance and property management, and as provided for in the Intergovernmental Agreements. In the event of a conflict between or among the agreements with respect to this Tenancy In Common Agreement, this Agreement will prevail. Periodically, the Owners shall determine the extent, if any, of additional funds necessary to provide for the payment of expenses. Each Owner shall pay a portion of the amount necessary to pay expenses equal to the Owner's undivided interests in the Property. Payment shall be made within thirty (30) days for receipt by the Owner of notice of the amount due. 7. Improvements. In the event the Owners shall further improve the Property, each Owner shall be obligated for the costs of such improvements in an amount proportionate to the Owner's undivided interest in the Property. The Owners shall determine whether to assess the cotenants for the amount required for said improvements, or to finance said amount as a joint debt of the cotenants. In the event an assessment is made, payment shall be made within thirty (30) days of receipt by the Owner of notice of the amount due. 8. Default. In the event an Owner shall fail to pay his or her obligations within the time prescribed above in the amount due under the terms of this Agreement, the undivided interest of the nonpaying Owner shall be subject to a lien in the amount of the deficiency. The provisions of Section 18 of this Agreement relating to liens shall be applicable to an unpaid obligation of an Owner. Page 2 of 6—Canterbury Property Tenancy In Common Agreement June 13, 2007 9. Revenue, Expenses and Deductions. Subject to Section 12, the revenues, expenses and deductions from the operation and any sale of the Property shall be shared by the Owners in proportion to their respective undivided interest in the Property. 10. Disbursements. The Owner shall determine if funds are available for disbursement from the operations of the Property and shall direct the Manager hereinafter described to pay said amounts to the Owners in proportion to their respective undivided interests in the Property, subject to the provisions of the Lease and the Intergovernmental Agreement. 11. Proceeds from Sale or Refinance. Proceeds received from any sale or refinancing of the Property, or from the condemnation or destruction of the Property, to the extent that the proceeds are not needed for debt service, anticipated expenses, and reasonable reserves for contingencies as determined by the Owners, shall be disbursed to the Owners in proportion to their respective, undivided interests in the Property. Notwithstanding the foregoing, the Owners may determine to use part or all of said proceeds to reduce or repay any mortgage indebtedness, contract, or other liability incurred in connection with the Property, and to disburse the remaining balance of proceeds, subject to the provisions of the Lease and Intergovernmental Agreement. 12. Management. The Owners have each engaged the CITY OF TIGARD ("Tigard") to manage the Property under terms and conditions contained in the Intergovernmental Agreement. The Owners agree that Tigard may enter into a separate off-site management agreement with a management company of Tigard's choice as it may approve, for management of the Property. 13. Duties of Property Manager. The City of Tigard shall be responsible for performance of all services and duties as set forth in the Intergovernmental Agreement. None of the Owners, their agents or representatives, shall be entitled to any compensation for management or other services rendered to or for the Property unless such compensation is expressly authorized by the Owners, and subject to the Lease, and Intergovernmental Agreement. 14. Allocation of Purchase Price on Sale or Other Distribution of Pro_pertX. The allocation of the purchase price received for any sale of the Property as between real property, improvements and personal property, shall be determined by the IVWB and the accountant for the co-tenancy, in consultation with the Owners, who shall be bound by said determination. 15. Liens and Encumbrances. Any lien or encumbrance on an Owner's undivided interest in the Property, including but not limited to, any judicial attachment, any judgment lien, any lien arising out of the order or judgment of any court, any lien in connection with taxes claim due any governmental unit, any lien arising under federal or state bankruptcy or insolvency laws, and any lien arising from non-payment by an Owner of amounts pursuant to the terms of this Agreement, shall be discharged by said Owner, and the undivided interest released, within ten (10) days after the lien is filed or otherwise becomes effective. Failure to discharge the lien and obtain release of the undivided interest within the stated time shall constitute a default of this Agreement. During the term of the default, interest shall accrue on any unpaid balance due the co-tenancy at the rate of ten percent (10%) per annum. All amounts due, plus interest thereon, shall be Page 3 of 6—Canterbury Property Tenancy In Common Agreement June 13, 2007 immediately due and payable without further demand and notice. In addition to the foregoing, the remaining Owners may agree to revoke the right of the defaulting Owner to vote and manage the affairs of the co-tenancy. Any cash distributions which may become payable to a defaulting Owner shall be reduced by the outstanding amounts due plus interest thereon. The remaining Owners shall have the right, but not the obligation, to pay the deficient amount and to obtain release of the lien and to receive reimbursement for the amount of the deficiency plus interest as provided above, from any cash distributions which may become payable to the defaulting Owner. 16. Bondinp, of Liens. An Owner whose interest in the Property is subject to a lien may, within thirty (30) days after the lien is filed or otherwise becomes effective, deposit with the remaining Owner's cash, a corporate surety bond, or other security satisfactory to the remaining Owners, in an amount sufficient to discharge the lien and all costs, attorney's fees and other charges which could accrue as a result of a foreclosure or sale under the lien. Upon making said deposit, the Owner shall not be considered in default of this Agreement. 17. Waiver of Right of Partition. Each Owner irrevocably waives the right to directly or indirectly maintain an action or petition in any court for a partition of the Property. 18. Restrictions on Sale of the Owner's Interest. An Owner may sell, convey or transfer the Owner's undivided interest in the Property only in compliance with the terms of Section 18 herein, and the Intergovernmental Agreement. Upon the withdrawal of an Owner from the IWB, the remaining Owners shall have authority to act on behalf of the withdrawn Owner with respect to the Property. Any sale of a portion of the interest of an IWB member jurisdiction must be to another member jurisdiction or to the IWB as a group. 18.1 Sale. An Owner may sell, convey or transfer its interest only to another Owner or Owners. 18.2 Price. The selling price of the Property shall be established through an appraisal performed by an appraisal company highly experienced in valuation of properties similar to the Canterbury Property and selected by the mutual agreement of Seller and Purchaser, except the value of the improvements on the Property, which shall be valued according to the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services,Inc. dated November 1994. 19. Sale of the Park PropertX. The Owners may sell the Property upon an affirmative vote of three (3) out of four (4) of the representative Owner jurisdictions and the net proceeds distributed to the Owners under the terms of Section 11 above and the Intergovernmental Agreement. 20. Right of First Refusal. No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein. In the event that three (3) out of four (4) of the representative jurisdiction Owners vote to sell the Canterbury Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification Page 4 of 6—Canterbury Property Tenancy In Common Agreement June 13, 2007 to Tenant that the Property will be sold, Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Canterbury Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service) prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. 21. Votes of the Owners. Each Owner shall have a vote equal to the Owner's percentage of undivided interest in the Property as provided for in the Intergovernmental Agreement. The entire undivided interest of an Owner shall be voted as one unit. 22. Percentage Required for Determinations. All determinations to be made by the Owners under the terms of this Agreement shall be by a vote of the Owners. Unless specifically provided otherwise, an affirmative vote of three or more of the jurisdiction Owners shall be required for any action to be taken, any determinations to be made, or any authorizations to be given by the Owners under the terms of this Agreement. 23. Manner of Voting. All determinations to be made by the Owners shall be made at meetings or by telephone conferences. However, the Owners may make determinations without a meeting or telephone conference by obtaining the signed, written vote of each Owner. 24. Events of Termination. The co-tenancy Agreement shall continue until terminated by the occurrence of one of the following events: the sale of the Property, the majority agreement of the Owners to terminate this Agreement, or the majority Agreement of the Owners to divide and separate the Property among themselves. 25. Effect on Obligations. Termination shall not affect the rights or obligations of the Owners which arise prior to the termination. 26. Notices. All notices will be in writing and delivered by mail or in person to each Owner. 27. Attorney Fees. In the event of suit, action or arbitration to interpret or enforce any of the terms of this Agreement, including any action under the Bankruptcy laws of the United States, the prevailing party or parties shall be awarded such sum as the court or arbitrator may adjudge reasonable as attorney fees in such suit, action or arbitration and in any appeal or review therefrom. 28. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of each of the Owners, their respective heirs, executors, administrators, legal representatives, successors and assigns. 29. Amendment. This Agreement may be amended at any time by the Owners in the same manner as they make any other determination under Sections 23 and 24 of this Agreement. Page 5 of 6— Canterbury Property Tenancy In Common Agreement June 13, 2007 30. Inte agr tion. This Agreement contains the entire Agreement of the Owners and supercedes all prior and contemporaneous agreements between them with respect to the co- tenancy. Except as fully set forth herein, there are no presentations, agreements, or understandings, oral or written, among the Owners relating to the co-tenancy, except for the Intergovernmental Agreements, and the Lease. 31. Severability. If any term or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term or provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 32. Governing Law. This Agreement shall be subject to, and governed by, the laws of the State of Oregon. The parties have executed this agreement as of the date first written above. By: By: IWB Representative for the IWB Representative for the City of Tigard Tigard Water District By: By: IWB Representative for the IWB Representative for the City of King City City of Durham Page 6 of 6—Canterbury Property Tenancy In Common Agreement June 13, 2007 EXHIBIT A CANTERBURY PROPERTY TENANTS IN COMMON AGREEMENT LEGAL DESCRIPTION OF PROPERTY I I I Begihabg .at., hxleet a.orner ol'Lat � :TfgnzXty .Ile HeXNht's a subdivision of record p. in. $udI.on �11..j!',,mviQbip a4..p�.j Range 1, lye� Meridian, in Wasl4mton G::01 y:; �gGri 4i ru► !?r Q9a�Sp, h Q�.aq;).,:5reat:a o .the Wast ].ne of said u3Wja�e•L,on 6 :fppt to.:. he Soutl +H6t::.�Ra ax 9t .o-ton Y}e,P.m th 7inoFU� 2 feet] thence North endparaliol,�irith thaTeet lino of said lot 165 fast to the North jibe:thereof; 'thenca'�Yeet 264 feet to the place of beli.nningj Together vd.th an easement .over the follorring described tract of lwui► _ Begi corner of the above-4aa0ribed. property; thane Ea t:!g1png tilQ �' +' :: o� a�l��i: '�`lgardville .Haigbt.s- to the cet.ter.at ?.Iurdock Avon{�e, thQ co: South ?efig-ieaidNoaAtoi 3�e�p•-.distenize oB .ts.pti°thence:�7aet and ptirkll'dl-with'•the Northaline of 'Lot 5,.to_tho_..East line o$-the eU`ms ctegcribed tract of larxi_, thence North a.distame of 12 .fest -to the' place of begitnina-'- Agenda Item No.: I IWB Meeting Date: & -/.3-/07- COMMERCIAL /3-/07-COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: ,2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating, Ventilation and Air Conditioning(HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board, the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building, the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property (the"Premises") on the terms and conditions stated below: Page 1 of 13 AVB/City of Tigard Commercial Lease for the Water Building The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street,Tigard, Oregon,97223. The Premises are as shown on Exhibit A. Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018,unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on , 2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence,Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a)the rental during the preceding term or(b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew, the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment,the appraiser shall return his [her] decision, which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased "As Is". Tenant agrees to accept the Premises in the current "as is" condition. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B, describing rental costs and credits as agreed upon between Landlord and Tenant. At the commencement of the Lease term and as set forth in said Exhibit B, Tenant will owe the Landlord $22, 252.77 annually,to be accounted for as a credit to the Tenant as reimbursement for the building system costs referenced above in the Paragraph 2.of Recitals,until its cost has been fully amortized. 2.2 Additional Rent. All taxes, insurance costs,utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises, Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use,but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty, would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies, unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked, disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use,handling, and storage of Hazardous Substances and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting),bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to snake under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss,neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building any.Tenant shall pay as due all real property taxes and special assessments if any, levied against the Premises. As used herein, real property taxes includes any fee or charge relating to the ownership, use,or rental of the Premises, other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable, Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law, Tenant shall pay such charge or fee. Tenant, however, shall have no obligation to pay any income,profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including(but not limited to) charges for fuel, water, gas, electricity, sewage disposal, power,refrigeration, air conditioning, telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply, the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50%of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 20 days following the date of damage. In such event all rights and obligations of the Page 6 of 13 1"/City of Tigard Commercial Lease for the Water Building parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term,Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible,Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10 % per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay, as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall, within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs, attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant, from any claim, loss,or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss, or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenants right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned, mortgaged, or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease(other than the payment of rent or other charges) within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period,this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building business entities, the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs,the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter, take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises,but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup,refurbishing, removal of Tenant's property and fixtures, costs incurred under Section 15.5, or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs, broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet, and continuing Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10%per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option,become the property of Landlord. If Landlord so elects,Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or,by notice in writing given to Tenant within 30 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal, transportation to storage, and storage,with interest at the legal rate on all such expenses from the date of expenditure by Landlord. Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal,to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3, the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than? days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease, the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest,this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease, to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of the term of this lease,to place and maintain upon the Premises notices for leasing or selling the Premises. Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due, bear interest at the rate of TEN (10 %) per annum(but not in any event at a rate grater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300) the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts, their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated, or as to any other question involving apportionment or valuation, either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator, then either party may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties, but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three(3) out of four(4)of the representative jurisdiction Owners vote to sell the Water Building Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold, Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building i i EXHIBIT A TO LEASE LEASED BUILDING AND PARKING PREMISES •w ' wyr x.rr rru • vr� 'YAF I VWf:�-Al r4l Parkin not to scale \`\ CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $1789891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 COT Rent Credit for 70%Ownership 0.7 Total COT Ownership Credit $51,923.12 Total annual COT Credit for Owner improvements, annualized $14,190.32 Total Annual Rent from COT after Credits $8,062.45 Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation:Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 Amount Annualized to Fully Amortize Improvement Costs $14,190.32 July 1, 2007, until Dec 31, 2018 M C3" bd COMMERCIAL LEASE BETWEEN THE INTERGOVERNMENTAL WATER BOARD AND THE CITY OF TIGARD FOR THE WATER BUILDING Date: , 2007 Between: INTERGOVERNMENTAL WATER BOARD ("Landlord") 8777 SW BURNHAM STREET TIGARD, OR 97223 And: CITY OF TIGARD ("Tenant") 13125 SW HALL BLVD. TIGARD, OR 97223 RECITALS 1. The City of Tigard is leasing the Water Building property from the other entities in the IWB and during the period of the lease will pay rents and also assume responsibility for the maintenance of the property. 2. The Water Building has new Heating, Ventilation and Air Conditioning(HVAC), along with electrical, fire protection, and plumbing improvements. These improvements were paid for by the City of Tigard, although such expenses are most often the responsibility of the property owner. 3. The City of Tigard's expense for the above mentioned systems necessitates and justifies a long term lease in order for the City to recover those expenditures. 4. In further consideration of the City of Tigard's contributions to the Intergovernmental Water Board, the Intergovernmental Agreement, and their investment in the entire cost of the abovementioned systems in the Water Building, the City of Tigard shall retain the First Right of Refusal if the Water Building property is designated as surplus and for sale by the IWB. AGREEMENT Landlord leases to Tenant and Tenant leases from Landlord the following described property(the"Premises") on the terms and conditions stated below: Page 1 of 13 IWB/City of Tigard Commercial Lease for the Water Building The leased Premises property includes the entire building and common areas including parking and all other improvements located at 8777 SW Burnham Street, Tigard, Oregon, 97223. The Premises are as shown on Exhibit A. Section 1. Occupancy 1.1 Original Term. The term of this lease shall commence 2007, and continue through December 31, 2018, unless sooner terminated or renewed as hereinafter provided. 1.2 Possession. Tenant's right to possession and obligations under the lease shall commence on , 2 1.3 Renewal Option. If the lease is not in default at the time each option is exercised or at the time the renewal term is to commence, Tenant shall have the option to renew this lease for 2 successive terms of 5 years each, as follows: (1) Each of the renewal terms shall commence on the day following expiration of the preceding term. (2) The option may be exercised by written notice to Landlord given not less than 120 days prior to the last day of the expiring term. The giving of such notice shall be sufficient to make the lease binding for the renewal term without further act of the parties. Landlord and Tenant shall then be bound to take the steps required in connection with the determination of rent as specified below. (3) The terms and conditions of the lease for each renewal term shall be identical with the original term except for rent and except that Tenant will no longer have any option to renew this lease that has been exercised. Rent for a renewal term shall be the greater of (a) the rental during the preceding term or(b) a reasonable market rent. (4) If the parties do not agree on the rent within 90 days after notice of election to renew, the rent shall be determined by a qualified, independent real property appraiser familiar with comparable commercial rental values in the area. The appraiser shall be chosen by Tenant from a list of not fewer than five such individuals submitted by Landlord. If Tenant does not make the choice within five days after submission of the list, Landlord may do so. If Landlord does not submit such a list within 10 days after written request from Tenant to do so, Tenant may name as an arbitrator any individual with such qualifications. Within 30 days after his [her] appointment,the appraiser shall return his [her] decision,which shall be final and binding upon both parties. The cost of the appraisal shall be borne equally by both parties. 1.4 Premises Leased "As Is". Tenant agrees to accept the Premises in the current"as is" condition. Page 2 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 2. Rent 2.1 Base Rent. Rent will be calculated as set forth in attached Exhibit B, describing rental costs and credits as agreed upon between Landlord and Tenant. At the commencement of the Lease term and as set forth in said Exhibit B,Tenant will owe the Landlord $22, 252.77 annually, to be accounted for as a credit to the Tenant as reimbursement for the building system costs referenced above in the Paragraph 2.of Recitals,until its cost has been fully amortized. 2.2 Additional Rent. All taxes, insurance costs,utility charges that Tenant is required to pay by this lease, and any other sum that Tenant is required to pay to Landlord or third parties shall be additional rent. Section 3. Use of the Premises 3.1 Permitted Use. The Premises shall be used for municipal government public works offices and related activities, and for no other purpose without the consent of Landlord, which consent shall not be withheld unreasonably. 3.2 Restrictions on Use. In connection with the use of the Premises,Tenant shall: (1) Conform to all applicable laws and regulations of any public authority affecting the premises and the use, and correct at Tenant's own expense any failure of compliance created through Tenant's fault or by reason of Tenant's use,but Tenant shall not be required to make any structural changes to effect such compliance. (2) Refrain from any activity that would make it impossible to insure the Premises against casualty, would increase the insurance rate, or would prevent Landlord from taking advantage of any ruling of the Oregon Insurance Rating Bureau, or its successor, allowing Landlord to obtain reduced premium rates for long-term fire insurance policies,unless Tenant pays the additional cost of the insurance. (3) Refrain from any use that would be reasonably offensive to other tenants or owners or users of neighboring premises or that would tend to create a nuisance or damage the reputation of the premises. (4) Refrain from loading the electrical system or floors beyond the point considered safe by a competent engineer or architect selected by Landlord. 3.3 Hazardous Substances. Tenant shall not cause or permit any Hazardous Substance to be spilled, leaked,disposed of, or otherwise released on or under the Premises. Tenant may use or otherwise handle on the Premises only those Hazardous Substances typically used or sold in the prudent and safe operation of the business specified in Section 4.1. Tenant may store such Hazardous Substances on the Premises only in quantities necessary to satisfy Tenant's reasonably anticipated needs. Tenant shall comply with all Environmental Laws and exercise the highest degree of care in the use, handling, and storage of Hazardous Substances and Page 3 of 13 IWB/City of Tigard Commercial Lease for the Water Building shall take all practicable measures to minimize the quality and toxicity of Hazardous Substances used, handled, or stored on the Premises. Upon the expiration or termination of this Lease, Tenant shall remove all Hazardous Substances from the Premises. The term Environmental Law shall mean any federal, state, or local statute, regulation, or ordinance or any judicial or other governmental order pertaining to the protection of health, safety or the environment. The term Hazardous Substance shall mean any hazardous, toxic, infectious or radioactive substance, waste, and material as defined or listed by any Environmental Law and shall include, without limitation, petroleum oil and its fractions. Section 4. Repairs and Maintenance 4.1 Landlord's Obligations. The following shall be the responsibility of Landlord: (1) Repairs and maintenance of the roof and gutters, exterior walls (including painting),bearing walls, structural members, floor slaps, and foundation. (2) Repair of sidewalks, driveways, curbs, parking areas, and areas used in common by Tenant and Landlord or tenants of other portions of the same building. (3) Repair and maintenance of exterior water, sewage, gas, and electrical services up to the point of entry to the leased Premises. (4) Repair of the heating and air conditioning system other than ordinary maintenance. 4.2 Tenant's Obligations. The following shall be the responsibility of Tenant: (1) Repair of interior walls, ceilings, doors, windows, and related hardware, light fixtures, switches, and wiring and plumbing from the point of entry to the Premises. (2) Any repairs necessitated by the negligence of Tenant, its agents, employees, and invitees, except as provided in Section 7.2 dealing with waiver of subrogation, but including repairs that would otherwise be the responsibility of Landlord under Section 5.1. (3) Ordinary maintenance of the heating and air conditioning system and any repairs necessary because of improper maintenance. (4) Any repairs or alterations required under Tenant's obligation to comply with laws and regulations as set forth in Section 4.2(1). (5) All other repairs to the premises which Landlord is not required to make under Section 5.1. 4.3 Landlord's Interference with Tenant. In performing any repairs, replacements, alterations, or other work performed on or around the Premises, Landlord shall not cause unreasonable interference with use of the Premises by Tenant. Tenant shall have not right to an Page 4 of 13 IWB/City of Tigard Commercial Lease for the Water Building abatement of rent nor any claim against Landlord for any inconvenience or disturbance resulting for Landlord's activities performed in conformance with the requirement of this provision. 4.4 Reimbursement for Repairs Assumed. If either party fails or refuses to make repairs that are required by this Section 5, the other party may make the repairs and charge the actual cost of repairs to the first party. Such expenditures by Landlord shall be reimbursed by Tenant on demand together with interest at the rate of TEN (10%) per annum from the date of expenditure by Landlord. Such expenditures by Tenant may be deducted from rent and other payments subsequently becoming due or, at Tenant's election, collected directly from Landlord. Except in an emergency creating an immediate risk of personal injury or property damage, neither party may perform repairs which are the obligation of the other party and charge the other party for the resulting expense unless at least 20 days before work is commenced, and the defaulting party is given notice in writing outlining with reasonable particularity the repairs required, and such party fails within that time to initiate such repairs in good faith. 4.5 Inspection of Premises. Landlord shall have the right to inspect the Premises at any reasonable time or times to determine the necessity of repair. Whether or not such inspection is made, the duty of Landlord to make repairs shall not mature until a reasonable time after Landlord has received from Tenant written notice of the repairs that as required. Section 5. Alterations 5.1 Alterations Prohibited. Tenant shall make no improvements or alterations on the Premises of any kind without first obtaining Landlord's written consent. All alterations shall be made in a good and workmanlike manner, and in compliance with applicable laws and building codes. Section 6. Insurance 6.1 Insurance Required. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. 6.2 Waiver of Subrogation. Neither party shall be liable to the other(or to the other's successors or assigns) for any loss or damage caused by fire or any of the risks enumerated in a standard fire insurance policy with an extended coverage endorsement, and in the event of insured loss, neither party's insurance company shall have a subrogated claim against the other. This waiver shall be valid only if the insurance policy in question expressly permits waiver of subrogation or if the insurance company agrees in writing that such a waiver will not affect coverage under the policies. Each party agrees to use best efforts to obtain such an agreement from its insurer if the policy does not expressly permit a waiver of subrogation. Section 8. Taxes; Utilities 8.1 Property Taxes. Tenant is a municipal government and statutorily exempt from property taxes, except as may be assessed by appropriate special districts and collected by the county assessor. Tenant shall pay as due all taxes on its personal property located on the Premises, if Page 5 of 13 IWB/City of Tigard Commercial Lease for the Water Building any. Tenant shall pay as due all real property taxes and special assessments if any, levied against the Premises. As used herein,real property taxes includes any fee or charge relating to the ownership,use, or rental of the Premises,other than taxes on the net income of Landlord or Tenant. 8.2 Special Assessments. If an assessment for a public improvement is made against the Premises, Landlord may elect to cause such assessment to be paid in installments, in which case all of the installments payable with respect to the lease term shall be treated the same as general real property taxes for purposes of Section 8.1. 8.3 Contest of Taxes. Tenant shall be permitted to contest the amount of any tax or assessment as long as such contest is conducted in a manner that does not cause any risk that Landlord's interest in the Premises will be foreclosed for nonpayment. Landlord shall cooperate in any reasonable manner with such contest by Tenant. 8.4 Proration of Taxes. If applicable,Tenant's share of real property taxes and assessments for the years in which this lease commences or terminates shall be prorated based on the portion of the tax year that this lease is in effect. 8.5 New Charges or Fees. If a new charge or fee relating to the ownership or use of the Premises or the receipt of rental therefrom or in lieu of property taxes is assessed or imposed, then, to the extent permitted by law,Tenant shall pay such charge or fee. Tenant,however, shall have no obligation to pay any income,profits, or franchise tax levied on the net income derived by Landlord from this lease. 8.6 Payment of Utilities Charges. Tenant shall pay when due all charges for services and utilities incurred in connection with the use, occupancy, operation, and maintenance of the Premises, including(but not limited to) charges for fuel, water, gas, electricity, sewage disposal, power, refrigeration, air conditioning,telephone, and janitorial services. If any utility services are provided by or through Landlord, charges to Tenant shall be comparable with prevailing rates for comparable services. If the charges are not separately metered or stated, Landlord shall apportion the charges on an equitable basis, and Tenant shall pay its apportioned share on demand. Section 9. Damage and Destruction 9.1 Partial Damage. If the Premises are partly damaged and Section 9.2 does not apply,the Premises shall be repaired by Landlord at Landlord's expense. Repairs shall be accomplished with all reasonable dispatch subject to interruptions and delays from labor disputes and matters beyond the control of Landlord and shall be performed in accordance with the provisions of Section 5.3. 9.2 Destruction. If the Premises are destroyed or damaged such that the cost of repair exceeds 50%of the value of the structure before the damage, either party may elect to terminate the lease as of the date of the damage or destruction by notice given to the other in writing not more than 20 days following the date of damage. In such event all rights and obligations of the Page 6 of 13 IWB/City of Tigard Commercial Lease for the Water Building parties shall cease as of the date of termination, and Tenant shall be entitled to the reimbursement of any prepaid amounts paid by Tenant and attributable to the anticipated term. If neither party elects to terminate, Landlord shall proceed to restore the Premises to substantially the same form as prior to the damage or destruction. Work shall be commenced as soon as reasonably possible and thereafter shall proceed without interruption except for work stoppages on account of labor disputes and matters beyond Landlord's reasonable control. 9.3 Rent Abatement. Rent shall be abated during the repair of any damage to the extent the premises are untenantable, except that there shall be no rent abatement where the damage occurred as the result of the fault of Tenant]. 9.4 Damage Late in Term. If damage or destruction to which Section 9.2 would apply occurs within one year before the end of the then-current term, Tenant may elect to terminate the lease by written notice to Landlord given within 30 days after the date of the damage. Such termination shall have the same effect as termination by Landlord under Section 9.2. Section 11. Liability and Indemnity 11.1 Liens. (1) Except with respect to activities for which Landlord is responsible,Tenant shall pay as due all claims for work done on and for services rendered or material furnished to the Premises, and shall keep the Premises free from any liens. If Tenant fails to pay any such claims or to discharge any lien, Landlord may do so and collect the cost as additional rent. Any amount so added shall bear interest at the rate of 10 % per annum from the date expended by Landlord and shall be payable on demand. Such action by Landlord shall not constitute a waiver of any right or remedy which Landlord may have on account of Tenant's default. (2) Tenant may withhold payment of any claim in connection with a good- faith dispute over the obligation to pay, as long as Landlord's property interests are not jeopardized. If a lien is filed as a result of nonpayment, Tenant shall, within 10 days after knowledge of the filing, secure the discharge of the lien or deposit with Landlord cash or sufficient corporate surety bond or other surety satisfactory to Landlord in an amount sufficient to discharge the lien plus any costs,attorney fees, and other charges that could accrue as a result of a foreclosure or sale under the lien. 11.2 Indemnification. Tenant shall indemnify and defend Landlord, and Landlord shall indemnify Tenant, from any claim, loss,or liability arising out of or related to any [negligent] activity of Tenant on the Premises or any condition of the Premises in the possession or under the control of Tenant including any such claim, loss,or liability that may be caused or contributed to in whole or in part by Landlord's own negligence or failure to effect any repair or maintenance required by this lease. Landlord shall have no liability to Tenant for any injury, loss, or damage caused by third parties, or by any condition of the Premises. 11.3 Liability Insurance. The Tenant as the managing partner of the Landlord will provide insurance as set forth in the December 1993 Intergovernmental Agreement. Page 7 of 13 IWB/City of Tigard Commercial Lease for the Water Building Section 12. Quiet Enjoyment; Mortgage Priority 12.1. Landlord's Warranty. Landlord warrants that it is the owner of the Premises and has the right to lease them free of all encumbrances. Landlord will defend Tenant's right to quiet enjoyment of the Premises from the lawful claims of all persons during the lease term. 12.3 Estoppel Certificate. Either party will, within 30 days after notice from the other, execute and deliver to the other party a certificate stating whether or not this lease has been modified and is in full force and effect and specifying any modifications or alleged breaches by the other party. The certificate shall also state the amount of monthly base rent, the dates to which rent has been paid in advance, and the amount of any security deposit or prepaid rent. Failure to deliver the certificate within the specified time shall be conclusive upon the party from whom the certificate was required that the lease is in full force and effect and has not been modified except as represented in the notice requesting the certificate. Section 13. Assignment and Subletting No part of the Premises may be assigned, mortgaged,or subleased, nor may a right of use of any portion of the property be conferred on any third person by any other means, without the prior written consent of Landlord. This provision shall apply to all transfers by operation of law. Landlord may in its sole and arbitrary discretion not unreasonably withhold or condition such consent. Section 14. Default The following shall be events of default: 14.1 Default in Rent. Failure of Tenant to pay any rent or other charges within 10 days after written notice that it is due. 14.2 Default in Other Covenants. Failure of Tenant to comply with any term or condition or fulfill any obligation of the lease(other than the payment of rent or other charges) within 15 days after written notice by Landlord specifying the nature of the default with reasonable particularity. If the default is of such a nature that it cannot be completely remedied within the FIFTEEN (15) day period,this provision shall be complied with if Tenant begins correction of the default within the 15 day period and thereafter proceeds with reasonable diligence and in good faith to effect the remedy as soon as practicable. 14.3 Insolvency. Insolvency of Tenant; an assignment by Tenant for the benefit of creditors; the filing by Tenant of a voluntary petition in bankruptcy; an adjudication that Tenant is bankrupt or the appointment of a receiver of the properties of Tenant; the filing of any involuntary petition of bankruptcy and failure of Tenant to secure a dismissal of the petition within 30 days after filing; attachment of or the levying of execution on the leasehold interest and failure of Tenant to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default. If Tenant consists of two or more individuals or Page 8 of 13 IWB/City of Tigard Commercial Lease for the Water Building business entities, the events of default specified in this Section 14.3 shall apply to each individual unless within 10 days after an event of default occurs, the remaining individuals produce evidence satisfactory to Landlord that they have unconditionally acquired the interest of the one causing the default. If the lease has been assigned, the events of default so specified shall apply only with respect to the one then exercising the rights of Tenant under the lease. 14.4 Abandonment. Failure of Tenant for 30 days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this lease. Section 15. Remedies for Default 15.1 Termination. In the event of a default the lease may be terminated at the option of Landlord by written notice to Tenant. Whether or not the lease is terminated by the election of Landlord or otherwise, Landlord shall be entitled to recover damages from Tenant of the default, and Landlord may reenter,take possession of the premises, and remove any persons or property by legal action or by self-help with the use of reasonable force and without liability for damages and without having accepted a surrender. 15.2 Reletting. Following reentry or abandonment, Landlord may relet the Premises and in that connection may make any suitable alterations or refurbish the Premises, or both, or change the character or use of the Premises,but Landlord shall not be required to relet for any use or purpose other than that specified in the lease or which Landlord may reasonably consider injurious to the Premises, or to any tenant that Landlord may reasonably consider objectionable. Landlord may relet all or part of the Premises, alone or in conjunction with other properties, for a term longer or shorter than the term of this lease, upon any reasonable terms and conditions, including the granting of some rent-free occupancy or other rent concession. 15.3 Damages. In the event of termination or retaking of possession following default, Landlord shall be entitled to recover immediately, without waiting until the due date of any future rent or until the date fixed for expiration of the lease term, the following amounts as damages: (1) The loss of rental from the date of default until a new tenant is, or with the exercise of reasonable efforts could have been, secured and paying out. (2) The reasonable costs of reentry and reletting including without limitation the cost of any cleanup, refurbishing, removal of Tenant's property and fixtures, costs incurred under Section 15.5, or any other expense occasioned by Tenant's default including but not limited to, any remodeling or repair costs, attorney fees, court costs,broker commissions, and advertising costs. (3) Any excess of the value of the rent and all of Tenant's other obligations under this lease over the reasonable expected return from the premises for the period commencing on the earlier of the date of trial or the date the premises are relet, and continuing Page 9 of 13 IWB/City of Tigard Commercial Lease for the Water Building through the end of the term. The present value of future amounts will be computed using a discount rate equal to the prime loan rate of major Oregon banks in effect on the date of trial. 15.4 Right to Sue More Than Once. Landlord may sue periodically to recover damages during the period corresponding to the remainder of the lease term, and no action for damages shall bar a later action for damages subsequently accruing. 15.5 Landlord's Right to Cure Defaults. If Tenant fails to perform any obligation under this lease, Landlord shall have the option to do so after 30 days written notice to Tenant. All of Landlord's expenditures to correct the default shall be reimbursed by Tenant on demand with interest at the rate of 10 %per annum from the date of expenditure by Landlord. Such action by Landlord shall not waive any other remedies available to Landlord because of the default. 15.6 Remedies Cumulative. The foregoing remedies shall be in addition to and shall not exclude any other remedy available to Landlord under applicable law. Section 16. Surrender at Expiration 16.1 Condition of Premises. Upon expiration of the lease term or earlier termination on account of default, Tenant shall deliver all keys to Landlord and surrender the Premises in first- class condition and broom clean. Alterations constructed by Tenant with permission from Landlord shall not be removed or restored to the original condition unless the terms of permission for the alteration so require. Depreciation and wear from ordinary use for the purpose for which the Premises are leased shall be excepted but repairs for which Tenant is responsible shall be completed to the latest practical date prior to such surrender. Tenant's obligations under this section shall be subordinate to the provisions of Section 9 relating to destruction. 16.2 Fixtures (1) All fixtures placed upon the Premises during the term, other than Tenant's trade fixtures, shall, at Landlord's option, become the property of Landlord. If Landlord so elects, Tenant shall remove any or all fixtures that would otherwise remain the property of Landlord, and shall repair any physical damage resulting from the removal. If Tenant fails to remove such fixtures, Landlord may do so and charge the cost to Tenant with interest at the legal rate from the date of expenditure. (2) Prior to expiration or other termination of the lease term Tenant shall remove all furnishings, furniture, and trade fixtures that remain its property. If Tenant fails to do so, this shall be an abandonment of the property, and Landlord may retain the property and all rights of Tenant with respect to it shall cease or, by notice in writing given to Tenant within 30 days after removal was required, Landlord may elect to hold Tenant to its obligation of removal. If Landlord elects to require Tenant to remove, Landlord may effect a removal and place the property in pubic storage for Tenant's account. Tenant shall be liable to Landlord for the cost of removal, transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by Landlord. Page 10 of 13 IWB/City of Tigard Commercial Lease for the Water Building 16.3 Holdover (1) If Tenant does not vacate the Premises at the time required, Landlord shall have the option to treat Tenant as a tenant from month to month, subject to all of the provisions of this lease except the provisions for term and renewal, to eject Tenant from the Premises and recover damages caused by wrongful holdover. Failure of Tenant to remove fixtures, furniture, furnishings, or trade fixtures that Tenant is required to remove under this lease shall constitute a failure to vacate to which this section shall apply if the property not removed will substantially interfere with occupancy of the Premises by another tenant or with occupancy by Landlord for any purpose including preparation for a new tenant. (2) If a month-to-month tenancy results from a holdover by Tenant under this Section 16.3, the tenancy shall be terminable at the end of any monthly rental period on written notice from Landlord given not less than? days prior to the termination date which shall be specified in the notice. Tenant waives any notice that would otherwise be provided by law with respect to a month-to-month tenancy. Section 17. Miscellaneous 17.1 Nonwaiver. Waiver by either party of strict performance of any provision of this lease shall not be a waiver of or prejudice the party's right to require strict performance of the same provision in the future or of any other provision. 17.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out of this lease, the prevailing party shall be entitled to recover in addition to costs such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, and on appeal. 17.3 Notices. Any notice required or permitted under this lease shall be given when actually delivered or 48 hours after deposited in United States mail as certified mail addressed to the address first given in this lease or to such other address as may be specified from time to time by either of the parties in writing. 17.4 Succession Subject to the above-stated limitations on transfer of Tenant's interest, this lease shall be binding on and inure to the benefit of the parties and their respective successors and assigns. 17.5 Recordation. This lease shall not be recorded without the written consent of Landlord. 17.6 Entry for Inspection. With at least 24 hours prior notice to Tenant, Landlord shall have the right to enter upon the Premises to determine Tenant's compliance with this lease,to make necessary repairs to the building or to the Premises, or to show the Premises to any prospective tenant or purchaser, and in addition shall have the right, at any time during the last two months of the term of this lease, to place and maintain upon the Premises notices for leasing or selling the Premises. Page 11 of 13 IWB/City of Tigard Commercial Lease for the Water Building 17.7 Interest on Rent and Other Charges. Any rent or other payment required of Tenant by this lease shall, if not paid within 20 days after it is due, bear interest at the rate of TEN (10 %) per annum (but not in any event at a rate grater than the maximum rate of interest permitted by law) from the due date until paid. In addition, if Tenant fails to make any rent or other payment required by this lease to be paid to Landlord within 20 days after it is due, Landlord may elect to impose a late charge of$25.00 payment to reimburse Landlord for the costs of collecting the overdue payment. Tenant shall pay the late charge upon demand by Landlord. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge shall not waive the breach caused by the late payment. 17.8 Proration of Rent. In the event of commencement or termination of this lease at a time other than the beginning or end of one of the specified rental periods, then the rent shall be prorated as of the date of commencement or termination and in the event of termination for reasons other than default, all prepaid rent shall be refunded to Tenant or paid on its account. 17.9 Time of Essence. Time is of the essence of the performance of each of Tenants obligations under this lease. 17.10 Oregon Tort Claims Act. Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, (ORS 30.260 to 30.300)the Intergovernmental Water Board members shall hold harmless and indemnify each other and their Councilors, employees, agents and volunteers against all claims, damages, losses and expenses (including all attorney fees and costs) arising out of or resulting from the District's performance of this agreement when the loss or claim is attributable to the acts or omissions of the Districts, their Commissioners, employees, agents and volunteers. Section 18. Arbitration 18.1 Disputes to Be Arbitrated. If any dispute arises between the parties as to a matter which this lease says should be arbitrated, or as to any other question involving apportionment or valuation, either party may request arbitration and appointment as an arbitrator an independent real estate appraiser having knowledge of valuation of rental properties comparable to the premises. The other party shall also choose an arbitrator with such qualifications, and the two arbitrators shall choose a third. If the choice of the second or third arbitrator is not made within 10 days of choosing the prior arbitrator,then either parry may apply to the presiding judge of the judicial district where the premises are located to appoint the required arbitrator. 18.2 Procedure for Arbitration. The arbitrator shall proceed according to the Oregon statutes governing arbitration, and the award of the arbitrators shall have the effect therein provided. The arbitration shall take place in the county where the leased premises are located. Costs of the arbitration shall be shared equally by the parties, but each party shall pay its own attorney fees incurred in connection with the arbitration. Page 12 of 13 IVB/City of Tigard Commercial Lease for the Water Building Section 19. Right of First Refusal No Owner/Landlord of the Property shall sell or transfer the Owner's/Landlords undivided interest in the Property except as set forth herein in this Water Building Lease. In the event that three (3) out of four(4) of the representative jurisdiction Owners vote to sell the Water Building Property, the City of Tigard shall have the Right of First Refusal. Within 30 days of notification to Tenant that the Property will be sold,Tenant shall notify Owner of the intent to exercise the right to purchase the Property. Within 30 days of Tenant's notification to Landlord, the City of Tigard shall determine the Water Building Property improvement value as set forth in the System Assets and Liabilities Final Report (Section II, Utility Plant in Service)prepared by Economic and Engineering Services, Inc. dated November 1994, and order an appraisal of the land to be performed by an appraisal company highly experienced in valuation of land similar to the Property and agreed upon by seller and purchaser. Within 30 days of receiving the determination of value of the Property, the sale shall be closed. LANDLORD: Intergovernmental Water Board Member Jurisdictions CITY OF TIGARD CITY OF DURHAM CITY OF KING CITY TIGARD WATER DISTRICT TENANT: CITY OF TIGARD Page 13 of 13 IWB/City of Tigard Commercial Lease for the Water Building EXHIBIT A TO LEASE LEASED BUILDING AND PARKING PREMISES a vrs rye F.YI. •r�:� ,fAF w.� \ = Parking (not to scale) CITY OF TIGARD WATER BUILDING LEASE: RENTAL STRUCTURE Estimated Annual Rent Revenues and Credits Total Rent From City of Tigard (COT) $178,891.20 Water Services Rent Portion $104,715.31 COT Rent Other Than Water Services $74,175.89 COT Rent Credit for 70% Ownership 0.7 Total COT Ownership Credit $51,923.12 Total annual COT Credit for Owner improvements, annualized $14,190.32 Total Annual Rent from COT after Credits $8,062.45 Rent data is from D. Koellermeier 3/12/07 Office Building Asset Evaluation:Future Use Allocation City of Tigard Cost and Rental Credits For Renovation of HVAC, Fire,Plumbing and Electrical Systems COT Cost to be Reimbursed by IWB for HVAC, Fire, Electrical and Plumbing Renovation/Upgrade $177,379.00 Amount Annualized to Fully Amortize Improvement Costs $14,190.32 July 1, 2007, until Dec 31, 2018 Submitted at the IWB Meeting By: bl iG t Date: Agenda Item NO.:CmnM1nT� Clean Water Services budget includes upgrades As demand for clean water and sewer services continues to expand, the agency offers a $171.2 million budget Wednesday, May 04, 2005 RICHARD COLBY The Oregonian HILLSBORO -- In a county where the population grows by several hundred people a month, the need for expanding sewage treatment plants never ends. Washington County Clean Water Services plans to spend $17.7 million just to begin expanding its Durham Wastewater Treatment Plant in Tigard. The expansion, included in the district's 2005-06 budget, is aimed at keeping up with demand and meeting increasingly stringent state and federal water regulations. Another $1.8 million is earmarked for improvements at the agency's Rock Creek Treatment Plant in Hillsboro. Together, the plants serve about 90 percent of the county's urban population, turning sewage flows into water cleaner than the Tualatin River it gets sent to. The agency's budget committee will hold its first public review of the $171.2 million budget document on Thursday. Of that amount, the agency proposes spending of$129.8 million, compared with $114.3 million in 2004-05, a 13.6 percent increase. The increase is largely driven by construction spending. Because the agency's staff proposes to draw on previously issued bond proceeds for much of its construction costs, the agency's projected $171.2 million bottom line, including reserves, is nearly 20 percent less than 2004-05. Construction spending will go up 26 percent, to $58.5 million. At the Durham plant near Southwest Durham Road and Hall Boulevard, the $17.7 million will cover the start of the latest construction phase. Because Clean Water Services plans construction spending up to 2010, it's already earmarked another$14 million for 2006-07 and $700,000 more to complete the phase in 2007-08. But that, agency spokesman Mark Jockers says, won't complete the Durham plant. Another $1 million item in the 2005-06 proposed budget is marked for planning on the next phase, due to start in 2008. Also tucked into the coming year is a $1 .4 million outlay for new odor controls to be installed soon. "We always have to stay ahead of the curve," Jockers says. "It never stops." The Durham plant serves about 220,000 people living on the east side of Clean Water Services' territory. That's county land within the urban growth boundary, plus parts of Portland, Lake Oswego and unincorporated Multnomah County that drain into the Tualatin Basin. The proposed budget includes a 3.5 percent sewer rate increase for homes and businesses, part of the commissioners' long-standing policy of increasing charges modestly each year to avoid larger jumps in the future. The rate change would add 94 cents a month to the average residential customer's bill. The agency's systems development charge, levied on new homes and buildings, would rise $100 to $2,600 for every new sewer connection, while a surface water management fee covering storm runoff facilities would remain unchanged at $4 a month. Another systems development charge of $500 a connection for surface water controls also would stay the same. The agency's budget committee is made up of the county's Board of Commissioners and five appointed people. Richard Colby: 503-294-5961 ; dickcolby@news.oregonian.com ©2005 The Oregonian © 2005 OregonLive.com All Rights Reserved. "THE GREEN SPRINGS PROJECT" submitted by Marland Henderson, 5/5/05 1. THE GREAT IDEA'S LIST OF THE GREAT IDEA'S 1. MIXED USE/URBAN VILLAGE 2. HEART/PLACE 3. GREEN LINKAGE 4. NEW TRANSPORTATION SYSTEM 5. EVOLUTION OF MAIN STREET 6.TRANSIT OPTIONS WHAT ALL GREAT IDEAS HAVE IN COMMON THEY ALL NEED WATER LOTS OF WATER PERCEIVED PROBLEM NO WATER IN OUR FUTURE AS OF YET 2007 CONTRACTS RUN OUT NEW RESOURCES ARE YEARS OUT CREATION OF HIGH COSTS POSSIBLE SUMMER WATER RATIONING BUILDING MORATORIUMS FOR COMM./RESI. 2. PARTIAL ANSWER FOR WATER SHORTAGE A RECLAIMED WATER SUPPLY SYSTEM WHAT IS IT? IT IS THE EFFLUENT FROM SEWAGE TREATMENT FACILITY CLEANED TO NEAR DRINKING WATER STANDARD IT IS A TWO PIPE SYSTEM SUPPLYING A; 1 GREEN WATER SUPPLY IRRIGATION (LAWN AND GARDEN) TOILET FLUSHING CAR WASHING STREET CLEANING FIRE CONTROL 2 AND A BLUE WATER SUPPLY POTABLE WATER FOR DRINKING ALL OTHER USES WHO THOUGHT OF THIS? JIM NICOLI PAST MAYOR WORKING ON WATER SUPPLY 1 OF3 6/12/2007 11:19:3 8 AM HAS THIS BEEN DONE HERE BEFORE? COMMERCIAL APPLICATION TIGARD HIGH COOK PARK CLEAN WATER SERVICE WHAT RESIDENTIAL USES ARE THERE? IRRIGATION TOILET FLUSHING WHY THIS NEW IDEA SHOULD BE ADDED? TOO MUCH GREEN IN OUR DOWNTOWN DESIGN THE GREEN WATERWAY WITH FOUNTAINS CREEKS LANDSCAPE REPLENISH LOSS OF WATER SUPPLY IN 2007 BULL RUN SUPPLY IFFY WILLAMETTE RIVER ENVIRON.PROBLEMS HAGG LAKE TOO FAR AWAY ANTICIPATE SEASONAL RAINFALL PROBLEMS SOME YEARS OK BUT LATELY NOT STABLE TIGARD AREA MICRO CLIMATE 3. WHAT MAKES SENSE COST OF WATER CONTINUES TO RISE UNCERTAINTY OF SUPPLY HIGHER USE IN THE FUTURE POPULATION GROWTH OF 40% WATER SUPPLY DOUBLES POPULATION GROWTH FOR TIGARD RESIDENCES MORE USE FOR DOWNTOWN TIGARD BUSINESS TIGARD IS LANDLOCKED LAST COMMUNITY TO SECURE SUPPLY DEPENDS ON OTHERS ALL BECOMES EASIER TO SELL WITH GREEN CONCEPT ASH AVENUE AND FANNO CREEK WILL LIKE IT RIVER KEEPERS WILL LIKE IT MORE BIRD AND FISH ENVIRONMENTAL PROBLEMS TIGARD BECOMES UNIQUE 2 0173 6/12/2007 11:19:38 AM NO OTHER COMMUNITY LIKE IT TIGARD BECOMES DESIRABLE 4. A JOINT PROJECT CLEAN WATER SERVICES HELPS MAINTAIN STREAM FLOWS WATER DEPARTMENT ASSIST IN NEW WATER RESOURCES CITY OF TIGARD CHANGE THE PLUMBING CODE TO REQUIRE USE RIVER KEEPERS PRESERVES ECOLOGY 5. COSTS IN DOLLARS RESOURCES OF COSTS MONEY FROM CLEAN WATER SERVICES MONEY FROM NEW WATER SUPPLY OFFSET COSTS FROM PARKS BUDGET MONEY FROM URBAN RENEWAL BOND MEASURE GRANT G. TIMELINES CLEAN WATER SERVICES TIMELINES JUNE DEADLINE FOR CONCEPTS JANUARY SELECTION THE DOWNTOWN PLAN TIMELINES JUNE FOR THE PLANS COMPLETION JULY ACCEPTANCE BY THE CITY COUNCIL IMMEDIATE IMPLEMENTATION PLANS URBAN RENEWAL TIMELINE FORMATION OF THE AGENCY MAY 2006 BALLOT MEASURE 3 OF3 6/12/2007 11:19:38 AM CLEAN WATER SERVICES OF WASHINGTON COUNTY,OREGON (A Component Unit of Washington County, Oregon) Comprehensive Annual Financial Report For the fiscal year ended June 30,2006 Water Quality Requirements The Environmental Quality Commission(EQC)has adopted Total Maximum Daily Loads(TMDLs) for phosphorus and ammonia-nitrogen in the Tualatin River to protect water quality and restore impaired beneficial uses of the river. The TMDLs define the quality of effluent that the District's treatment plants VI Transmittal Letter To Board of Directors,Ratepayers and Interested Parties:(Continued) may discharge to the Tualatin River. Limits are the most restrictive during the summer season (May 1 st through November 15th). The TMDL structure targets in-stream concentration for phosphorus and maintaining adequate dissolved oxygen in the river. Hydraulic loading and mass limits affect compliance during peak wintertime flows. Limits set on the Durham and Rock Creek Wastewater Treatment Plants' effluent are some of the most stringent in the United States for phosphorus and ammonia-nitrogen. As a result,the District currently provides a higher level of wastewater treatment than 98 percent of the treatment facilities in the nation. User Charges Clean Water Services' Board of Directors is authorized by state law to set fees and charges for connection to,and use of,the public sewer system and connection to, andor use of,the public facilities and public services related to surface water management, including storm water drainage. The District is 100 percent fee and charge supported. The District bills for all residential and non-industrial commercial customers in the unincorporated areas and in the smaller"franchise"cities of North Plains, Banks, Gaston, Durham,and King City. The cities of Beaverton,Tigard, Hillsboro, Tualatin, Forest Grove, Cornelius and Shenvood bill for services to residential and non-industrial commercial customers within their respective corporate limits. The cities of Portland and Lake Oswego bill residential and non-industrial customers within the District's service area and remit fees to the District by agreement. The District directly bills all industrial permit holders. Clean Water Services establishes a basic schedule of rates and charges annually, and the Cities of Beaverton, Tigard,Hillsboro,Tualatin, Forest Grove, Cornelius and Shenvood bill according to District developed schedules. These seven largest cities may also approve additional supplemental charges, and three of the cities have exercised this option. The Cities of Portland and Lake Oswego may bill at different rates but remit funds for District customers based on District rates. The monthly billing rate for residential and commercial sewer customers is calculated by adding a consumption component to a base rate component. a)The base rate component is a function of the number of plumbing fixtures in an average residence or equivalent dwelling unit(EDU). Single family residences are considered one EDU. Each EDU is billed at the rate of$18.46 per month, which represents about 65% of the typical total sewer charge per EDU. b)The consumption component is equal to the average domestic water consumption in the preceding"winter"period(November through April)multiplied by a"use"rate of$1.27 per hundred cubic feet(CCF) of water consumed. The use rate represents about 35% of the total sewer charge per EDU(or 8.0 CCF for the average residential customer). The District's residential, commercial and industrial sewer rates for fiscal year 2006 increased 3.5% from fiscal year 2005. Industrial customers are billed for domestic wastewater flows in a manner that is essentially identical to the process outlined above for residential and other non-industrial customers. Industrial and commercial customers with high-waste flows and high-strength wastes are monitored for permit compliance (including onsite pretreatment)and billed based on four components: volume, biochemical oxygen demand, suspended solids, and customer service. VIl Transmittal Letter To Board of Directors,Ratepayers and Interested Parties:(Continued) Surface Water Management(SWM) fees are based on measured impervious surface areas,including roofs, paved areas such as parking lots and roads, and charged against an average residential measurement(2,640 square feet)or equivalent service unit(ESU). The rate charged for SWM services is $4.00 per month per ESU. Some weighted values have been developed for graveled areas, greenhouses, and other improvements. Residences are typically charged a flat 1 .O ESU rate. AWARDS Clean Water Services received national recognition for financial,public participation and operational achievements over the past year. Durham Advanced Wastewater Treatment Facility Wins First Place National EPA Award Clean Water Services' Durham Advanced Wastewater Treatment Facility won top honors from the U.S. Environmental Protection Agency(EPA), achieving the 2005 National Clean Water Act Recognition Award in the Operations and Maintenance category for large facilities with advanced treatment. The Durham Facility cleans more than 20 million gallons of wastewater every day from eastern Washington County including King City, Shenvood,Tigard,Durham, Tualatin and parts of Beaverton and Lake Oswego. While most of the cleaned water is returned to the Tualatin River and improves river flow, habitat and water quality, some is used to irrigate local golf courses,parks and athletic fields. The Durham Facility meets nearly 1,000 strict water quality limits every year,and has repeatedly won the prestigious perfect compliance Gold Award of the National Association of Clean Water Agencies. The District has also garnered EPA excellence awards multiple times in previous years. International Public Participation Award Clean Water Services earned the International Association for Public Participation's 2005 Organization of the Year award, in recognition of the District's outstanding work engaging District stakeholders. The District's Board of Directors, Citizen Advisory Commission, Leadership Team and staff are committed to truly involving District stakeholders in significant ways, such as updating regulatory plans and design standards,expanding a treatment facility, constructing sanitary or storm sewers, enhancing streams, or planning for long-term watershed health. Government Finance Officers Association Awards The Government Finance Officers Association of the United States and Canada(GFOA)awarded a Certificate of Achievement for Excellence in Financial Reporting to Clean Water Services for its comprehensive annual financial report for the fiscal year ended June 30, 2005. This was the Igth consecutive year that the District has achieved this prestigious award. In order to be awarded a Certificate of Achievement,a government must publish an easily readable and efficiently organized comprehensive annual financial report. The report must satisf r both generally accepted accounting principles and applicable legal requirements. In addition,the District has also received the GFOA Distinguished Budget Presentation Award from the Government Finance Officers Association of the United States and Canada for the If Ithco nsecutive year. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. VIl l Transmittal Letter To Board of Directors,Ratepayers and Interested Parties:(Continued) ACKNOWLEDGMENTS Clean Water Services appreciates the efforts of all staff that played a part during the year in maintaining the District's records in a manner so that this report's production was made efficient. In particular, the District thanks Business Operations Department and other District staff who are participants in meeting the District's fiduciary obligations. The District closes with a word of thanks for the continuing support of the Board of Directors in providing District staff with the tools necessary to assist in the careful stewardship of public resources. Respectfully submitted, Bill Gaffi Generalxanag er Bruce Griswold Business Services Director MEMORANDUM TO: Tigard Water District Commissioners-Elect -10 FROM: Public Works Director Dennis Koellermeier PAO* RE: Intergovernmental Water Board Meeting Materials DATE: June 11, 2007 Since the actions of the Intergovernmental Water Board M) are often of interest to the Tigard Water District (TWD),it has been our practice to send TWD Commissioners a copy of the IWB's meeting materials. Although you are not officially a TWD Commissioner until you take office in July, we are sending you the June 13 IWB meeting materials as a courtesy and help you get up- to-speed on the various issues facing the IWB. You will continue to receive these packets prior to each IWB meeting. City of Tigard 13125 SW Hall Blvd. 77gard, OR 97223 0i Phone: 503-639-4171 FAX TRANSM=AL Date June 11, 2007 Number of pages including cover sheet 4 To: A/The City of King City(Fax No. 503-639-3771) The City of Durham(Fax No. 503-598-8595) From: Greer Gaston Co: Ci,T of Tigard Fax #: 503.684.8840 Ph #: 503.718.2592 SUBJECT: Intergovernmental Water Board Meeting Notice and Agenda MESSAGE: Please post the attached notice and agenda for the upcoming meeting of the Intergovernmental Water Board. Thank you. 1AENGTAX.DOT Intergovernmental Water Board Serving Tigard, King Ciry. Durham and Unincorporated Area MEETING NOTICE Wednesday, June 13 , 2007 5 :30 p.m. Tigard Public Library 2nd Floor Conference Room 13 5 00 SW Hall Blvd., Tigard, Oregon Intergovernmental Water Board Meeting Serving Tigard, King City, Durham and the Unincorporated Area AGENDA Wednesday, June 13, 2007 Tigard Public Library 5:30 p.m. 2nd Floor Conference Room 13500 SW Hall Blvd. Tigard, OR 97223 1. Call to Order, Roll Call and Introductions Call the meeting to order, staff to take roll call. 2. Approval of Minutes—May 9, 2007 Motion from the Board to approve the minutes. 3. Public Comments Call for any comments from the public. 4. Novelo Credit for Leak Request-Amanda Bewersdorff- (5 minutes) 5. Novelo Appeal of Leak Credit-Amanda Bewersdorff- (5 minutes) 6. Discussion of Tenancy in Common Agreements, Amendments to the 1993 Intergovernmental Agreements, and Bargain and Sale Deeds, and a Commercial Lease of the Water Building -Attorney Ramis - (20 minutes) 7. Consider a Tenancy in Common Agreement for the Water Building-Attorney Ramis - (10 minutes) S. Consider a Tenancy in Common Agreement for the Canterbury Property-Attorney Ramis - (10 minutes) 9. Consider a Commercial Lease with the City of Tigard for the Water Building- Attorney Ramis - (10 minutes) 10. Water Supply Options -Dennis Koellermeier(5 minutes) 11. Informational Items-Dennis Koellermeier 12. Non-Agenda Items Call for non-agenda items from Board. 13. Next Meetings- ■ June 19, 2007, 6:30 p.m. Joint Meeting with the Tigard City Council Tigard City Hall, 13125 SW Hall Blvd., Tigard Oregon ■ July 11, 2007, 5:30 pm Location to be announced 14. Adjournment Motion for adjournment. Continued Executive Session: The Intergovernmental Water Board 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. hp officejet 4200 series 4215 Personal Printer/Fax/Copier/Scanner Log for City of Tigard PW 5036848840 6/ 11 /2007 9 : 35RM Last Transaction Date Time Type Identification Duration Pages Result 06/ 11 09: 33a Fax Sent 5036393771 1 : 17 4 OK hp officejet 4200 series 4215 Personal Printer/Fax/Copier/Scanner Log for City of Tigard PW 5036848840 6/ 11/2007 9: 38RM Last Transaction Date Time Type Identification Duration Pages Result 06! 11 09: 36a Fax Sent 5035988595 2 : 17 4 OK Intergovernmental Water Board Scr„zng Tigard, King City, Durham and Unincorporated Area MEETING NOTICE 7, Wednesday, June 13 , 2007 5:30 p.m. Tigard Public Library 2nd Floor Conference Room 13500 SW Hall Blvd. Tigard, Oregon