HomeMy WebLinkAboutR-2001-131 Letter of Agreement for the repayment of Safety of Dams Modification Costs (Keechelus Dam)RESOLUTION NO. R-2001- 131
A RESOLUTION Ratifying the City Manager's signature on the Letter of Agreement
between the City of Yakima and the US Bureau of Reclamation for
the repayment of Safety of Dams Modification Costs, Keechelus Dam,
Yakima Project, Washington.
WHEREAS, the United States acting through the Bureau of Reclamation is
responsible for Keechelus Dams safety under Reclamation Safety of Dams Act of 1978,
Public Law 95-578, as amended by the Reclamation Safety of Dams Amendments of
1984, Public Law 98-404; and
WHEREAS, the City of Yakima is obligated to participate in operation,
maintenance and rebuild costs by Contract #123r-629, dated December 22, 1952, and
as supplemented and or amended; and
WHEREAS, the City of Yakima by the cited legislation and Reclamation policy is
responsible for repayment of its proportionate share of the 15% total contractor
obligation for Safety of Dams modification costs; and
WHEREAS, the City Council deems it to be in the best interest of the City to
maintain it's contract with the United States Bureau of Reclamation in good standing,
now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager's signature on the attached Letter of Agreement with the
United States Bureau of Reclamation is hereby authorized, ratified and approved.
ADOPTED BY THE CITY COUNCIL this 18th day of September , 2001.
Place, Mayor
ATTEST:
Karen Roberts, City Clerk
IN REPEY
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BUREAU OF RECLAMATION !;
Pacific Northwest Region
1150 North CUrt,s Road, Suite 100 -
Boise, Idaho 83706-1234 _..._ ..,
Mr. Richard A. Zais, Jr.
City Manager
129 N 2nd Street
Yakima WA 98901
Subject: Letter of Agreement For Repayment of Safety of Dams Modification Costs,
Keechelus Dam, Yakima Project, Washington
Dear Mr. Zais:
In a December 2000 letter, this office informed the 22 Yakima Project Storage Division
contractors of upcoming Safety of Dams (SOD) modifications to Keechelus Dam and the need to
secure repayment of reimbursable costs through the use of Letter Agreements. The use of Letter
Agreements rather than repayment contracts was selected for several reasons, including savings
in chargeable SOD cost and time.
This Letter of Agreement between the United States of America, acting through the Bureau of
Reclamation (Reclamation), and the City of Yakima (City) is for the repayment of the City's
share of the cost to modify Keechelus Dam under the Reclamation Safety of Dams Act of 1978,
Public Law 95-578, as amended by the Reclamation Safety of Dams Act Amendments of 1984,
Public Law 98-404.
Under the contract of December 22, 1952 (Contract No. 123r-629), as such contract may have
been supplemented and amended, the City receives water supplies from facilities of the Yakima
Project, including Keechelus Reservoir.
As provided in the above-cited legislation and Reclamation policy, water users ark responsible
for repaying 15 percent of the SOD modification costs. Each Yakima Project contractor is
responsible for repaying its respective share of the fifteen percent (.15) of the total SOD
modification costs, which is known as the Repayment Obligation.
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The cost of the SOD modification is currently estimated at $32 million. Accordingly, the
reimbursable amount is estimated at $4.8 million ($32 million x.15). Consequently, based on
the amount of contracted Yakima Project Storage Division water provided pursuant to the above -
referenced contract, the City's share is 0.41999 percent, with the Repayment Obligation
estimated at $20,159, subject to the actual final SOD modification costs. The actual amount
which the City will be responsible for could be more or less than the above estimate.
Reclamation will furnish an accounting of the SOD modification costs when the work is declared
substantially complete.
This Letter of Agreement is not a bill. We intend to bill for SOD modifications twice a year as
work progresses, with an initial billing that will be due December 31, 2001, and an anticipated
final billing due December 2004. The City may prepay the entire estimated Repayment
Obligation in a lump -sum payment at the time of the first billing. For those contracting entities
whose total SOD Repayment Obligation is $100 or less, Reclamation reserves the right to bill for
the entire obligation at the initial billing.
By signing this Letter of Agreement, and in consideration of the SOD modifications to be
performed by Reclamation, the City hereby agrees to pay the Repayment Obligation within the
prescribed schedule. This agreement is supplemental to existing contracts between the City and
the United States for Yakima Project water supplies.
The SOD modification work is contingent on appropriation and allotment of funds to
Reclamation. No responsibility for completion of the SOD modifications will accrue to the
United States in case sufficient funds are not made available to Reclamation.
The delivery of irrigation water or the use of Federal facilities pursuant to this agreement is
subject to Reclamation Law, as amended and supplemented, including, but not limited to, the
Reclamation Reform Act of 1982 (Public Law 97-293); provided, however, that the Reclamation
Safety of Dams Act Amendments of 1984, under which this Letter of Agreement is written,
provide that a contract (agreement) entered into pursuant to this Act shall not be deemed a new or
amended contract for the purposes of section 203(a) of the Reclamation Reform Act of 1982.
If the City is prepared to enter into this Letter of Agreement, please sign, date, attest, and return it
to this office in the stamped, self-addressed envelope. The signed agreement needs to be
received prior to initiation of construction. Therefore the signed agreement, alonk with those of
other contractors, needs to be returned to this office no later than September 17, 2001.
If the signed letter of agreement is not received, Reclamation reserves the right to assess and bill
for the full appropriate share of the SOD modification costs or take other appropriate action.
If you have any questions, please call Al Reiners at (208) 378-5344 or Ryan Patterson at
(208) 378-5340 in Boise or Tina Gorman in Yakima at (509) 575-5848.
Enclosure
Accepted:
Richard A. Zais, Jr., City Manager
Attest:
Karen Roberts, City Clerk
CITY CONTRACT NO. Poo" 1 3
Sincerely,
v �• �T
J. William McDonald
Regional Director
Date
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Date
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT w
item No.
For Meeting of Sept. 18, 2001
ITEM TITLE: Consideration of a Resolution Ratifying the City Manager's signature on the Letter of
Agreement between the City of Yakima and the US Bureau of Reclamation for the
repayment of Safety of Dams Modification Costs, Keechelus Dam, Yakima Project,
Washington.
SUBMITTED BY: Dueane Calvin, Water/Irrigation Manager
CONTACT PERSON/TELEPHONE: Dueane Calvin 576-6154
SUMMARY EXPLANATION: At the end of 2000 we received notice from the Bureau of
Reclamation (BOR) that there are major safety of dams issues with Keechelus Dam and that
repairs would be required in the immediate future. In the intervening months there has been
another issue raised, specifically whether or not a fish passage ladder should be built concurrent
with the BOR's safety of dams response or can that action be deferred to a later date. The
divergence of opinion over the appropriateness of either course of action has delayed the safety of
dams program, and continues to delay it.
However, the BOR continues to work at completing arrangements with all of the Contractors for
repayment of the dam's repair costs. The contractors are responsible for 15% of the safety of dams
repair cost, any additional cost associated with the construction of a fish ladder, now or later, will
have to come from a completely different source(s).
(continued)
Resolution X Ordinance Other (Specify)
Contract Mail to (name and address):
Phone:
Funding Source Domestic WatprA Irrigation Capital Funds 2001 Budget
APPROVED FOR SUBMITTAL: Ci Manager
STAFF RECOMMENDATION: That the City Manager's signature on the attached
Letter of Agreement with the United States Bureau of Reclamation is hereby
authorized, ratified and approved
BOARD/ COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2001-131
The original letter of agreement sent to the City was inappropriately written and was sent back for
corrections, and thereby considerably condensed the time available to respond by the stipulated
date. Had we missed the stipulated date we would have been required to pay our entire share in
one lump sum, not a huge amount, but still a strain on our budget.
To meet the stipulated deadline it was necessary for Mr. Zais to sign and return the agreement
prior to Council be able to deliberate the matter.
The letter of agreement is consistent with documents you had previously reviewed and we believe
signing of the agreement was a matter of necessity, and are therefore requesting that Council ratify
action taken by the City Manager with respect to signing this letter of agreement. The City's share
of the cost for Keechelus Dam modifications is $20,159 and is funded from the Domestic Water
and Irrigation Capital Funds 2001 Budget.
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Mr. Richard A. Zais, Jr. F, _ . - H.. �' a e`'. r.. ,i
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City Manager
129 N 2nd Street
Yakima WA 98901
Subject: Supplement No. 1 to Letter of Agreement dated May 8, 2001, Safety of Dams
Modifications, Keechelus Dam, Yakima Project, Washington
Dear Mr. Zais:
In May of 2001 this office transmitted a Letter of Agreement, for signature and return to the
Bureau of Reclamation (Reclamation), to all contractors in the Storage Division of the Yakima
Project. Included in that Letter of Agreement was the notification that the first installment would
be due December 31, 2001. This Supplement serves as notice that the first installment for Safety
of Dams (SOD) modifications will be due in June of 2002 rather than December of 2001. Any
further delays in the repayment schedule due to unforeseen circumstances shall be announced in
writing by the Contracting Officer.
Reclamation has made considerable progress on the various steps necessary so that actual
construction can begin. In addition, approval of SOD modifications on Keechelus Dam is
required by the Office of Management and Budget (OMB) and Congress. We now anticipate
approval by OMB and Congress in the spring of 2002. Once those steps are completed, the
process for awarding a construction contract can begin.
The change in the first installment due date from December 2001 to June 2002 does not diminish
or otherwise reduce the obligation of the Storage Division contractors. Reclamation has already
expended considerable funds on geologic, engineering, economic, and environmental
investigations; engineering design; and various other necessary requirements. As you know, the
Storage Division contractors are responsible for 15 percent of total SOD costs, including the
aforementioned costs.
Rather than loading the reimbursable share (15 percent) for costs spent to date on the installment
due in June of 2002, our intention is to spread these costs over the 3 years of SOD construction
(six installments). We anticipate the final billing will be due in December of 2004. However, the
construction schedule, and subsequent repayment, is subject to change due to weather, funding,
and for engineering reasons. We cannot extend the repayment period past the construction period.
2
This Supplement requires your concurrence. Please have the appropriate representatives sign,
date, attest, and return it to this office in the stamped, self - addressed envelope. Please return the
signed Supplement to this office no later than December 31, 2001.
If you have any questions, please call Al Reiners at (208) 378 -5344 or Ryan Patterson at
(208) 378 -5340 in Boise or Tina Gorman in Yakima at (509) 575 -5848.
Sincerely,
J. William McDonald
NC:c vs' Regional Director
Enclosure
Accepted:
Richard A. Zais, Jr., City Manager Date
Attest:
-,�.- 430/01
Karen Roberts, City Clerk Date