HomeMy WebLinkAbout2003-064 2003 Water & Sewer Revenue Bonds CITY OF YAKIMA, WASHINGTON
WATER AND SEWER REVENUE BONDS, 2003
ORDINANCE NO. 2003 -64
AN ORDINANCE of the City of Yakima, Washington, authorizing the
issuance and sale of water and sewer revenue bonds of the City in the
principal amount of not to exceed $17,700,000 in one or more serves to
finance the settlement costs of the odor litigation and certain capital
improvements to the City's water and sewer system, and fixing the terms
and covenants of such bonds.
Passed On October 7, 2003
Prepared by
PRESTON GATES & ELLIS LLP
925 Fourth Avenue, Suite 2900
Seattle, Washington 98104 -1158
y
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
Section 1 1 Definitions 2
ARTICLE II FINDINGS
Section 2 1 Approval of Plan and System. 11
Section 2.2 Parity Conditions 11
ARTICLE III ISSUANCE OF 2003 BONDS
Section 3 1 Issuance of the 2003 Bonds 13
Section 3.2 Registration, Exchange and Payments 13
Section 3.3 Execution and Authentication of Bonds 18
Section 3 4 Lost or Destroyed Bonds 19
Section 3 5 Form of 2003 Bonds 19
ARTICLE IV REDEMPTION OF 2003 BONDS
Section 4 1 Redemption Prior to Maturity 19
Section 4.2 Notice of Redemption 19
Section 4.3 Effect of Redemption 20
Section 4 4 Amendment of Notice Provisions 21
Section 4 5 Purchase of 2003 Bonds 21
ARTICLE V FUNDS AND ACCOUNTS, DEFEASANCE
Section 5 1 Revenue Fund, Pnonty of Payments 21
Section 5.2 Bond Fund. 22
Section 5.3 Defeasance 29
ARTICLE VI PARTICULAR COVENANTS OF THE CITY
Section 6 1 Rate Covenant 29
Section 6.2 Maintenance and Operation 30
Section 6 3 Sale or Disposition of the System 31
Section 6 4 Liens or Encumbrances 32
Section 6 5 Insurance 32
Section 6 6 Books and Accounts 33
Section 6 7 Additions and Improvements 33
Section 6 8 Tax Covenants 34
-1- P:\DG \DG02E 03/10/10
ARTICLE VII ADDITIONAL BONDS
Section 7 1 Additional Bonds 34
Section 7.2 Pledge Effected by Ordinance 37
ARTICLE VIII DEFAULTS AND REMEDIES
Section 8 1 Events of Default 39
Section 8.2 Formation of Bondowners Committee 40
Section 8 3 Books of City Open to Inspection 41
Section 8 4 Suits at Law or in Equity 42
Section 8 5 Direction of Actions of Bondowners Committee by Majority Owners 43
Section 8 6 Suits by Individual Bondowners 44
Section 8 7 Waivers of Default 45
Section 8 8 Remedies Granted in Ordinance Not Exclusive 45
ARTICLE IX BONDOWNERS MEETINGS
Section 9 1 Call of Bondowners Meetings 45
Section 9.2 Notice to Bondowners 46
Section 9.3 Proxies, Proof of Ownership of Parity Bonds 47
Section 9 4 Execution of Instruments by Bondowners 47
Section 9 5 Appointment of Officers at Bondowners Meetings 48
Section 9 6 Quorum at Bondowners Meetings 48
ARTICLE X AMENDMENTS TO ORDINANCE
Section 10 1 Amendments 49
Section 10.2 Obtaining Approval of Amendments at Bondowners Meeting. 51
Section 10.3 Alternate Method of Obtaining Approval of Amendments 52
Section 10 4 Amendment of Ordinance m Any Respect by Approval of All Bondowners 53
Section 10 5 Exclusion of Bonds Owned by City 54
Section 10 6 Endorsement of Amendment on Bonds 54
ARTICLE XI MISCELLANEOUS
Section 11 1 Undertaking to Provide Ongomg Disclosure 54
Section 11.2 Severability 58
Section 11.3 General Authorization 58
Section 11 4 Prior Acts 59
Section 11 5 Effective Date 59
Exhibit A Description of Project
Exhibit B Form of 2003 Bonds
-11- P: \DG \DGO2E 03/10/10
ORDINANCE NO 2003 - 64
AN ORDINANCE of the City of Yakima, Washington, authonzing the
issuance and sale of water and sewer revenue bonds of the City in the
pnncipal amount of not to exceed $17,700,000 in one or more series to
finance the settlement costs of the odor litigation and certain capital
improvements to the City's water and sewer system, and fixing the terms
and covenants of such bonds.
WHEREAS, the City of Yakima, Washington (the "City ") now owns, operates and
maintains a water supply and distribution system and a sewerage collection and disposal system,
which water and sewerage systems have been combined for purposes of financing in the manner
provided by law (the "System "), and
WHEREAS, it is in the best interest of the City to finance the settlement of the odor
htigation and to undertake certain capital improvements to the System (as further described
herein, the "Project"), and
WHEREAS, the City Council hereby finds that it is m the best interests of the City that
the Bonds be offered in one or more series as further provided in a resolution of the City; and
WHEREAS, the City has issued its Water and Sewer Revenue Refunding Bonds, 1996
(the "1996 Bonds ") and its Water and Sewer Revenue and Refunding Bonds, 1998 (the "1998
Bonds ") (collectively, the "Panty Bonds "), and
WHEREAS, each of the ordinances authorizing the Outstanding Parity Bonds provides
that bonds may be issued on a panty with the hen on Gross Revenues of the System of such
Parity Bonds, and
WHEREAS, to finance the odor litigation settlement and pay costs of the Project, it is
deemed necessary and advisable that the City issue its Water and Sewer Revenue Bonds, 2003, in
the aggregate principal amount of not to exceed $17,700,000,
NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, as
follows
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this ordinance
"Accreted Value" means with respect to any Capital Appreciation Bonds (A) as of any
Valuation Date, the amount set forth for such date in any ordinance authonzing such Capital
Appreciation Bonds and (B) as of any date other than a Valuation Date, the sum of (1) the
Accreted Value on the preceding Valuation Date and (2) the product of (a) a fraction, the
numerator of which is the number of days having elapsed from the preceding Valuation Date and
the denominator of which is the number of days from such preceding Valuation Date to the next
succeeding Valuation Date, calculated based on the assumption that Accreted Value accrues
during any semiannual period in equal daily amounts on the basis of a year of 12 30 -day months,
times (b) the difference between the Accreted Values for such Valuation Dates
"Additional Bonds" means any revenue bonds, revenue warrants or other revenue
obligations that may be issued in the future on a parity of hen with the 1996 Bonds, the 1998
Bonds, the 2003 Bonds and any other Panty Bonds
"Annual Debt Service" means for any specified Fiscal Year
(1) with respect to any Outstanding Parity Bonds, the amounts required to be
deposited during that penod in the Bond Fund (excluding the Reserve Fund therein),
-2- P: \DG \DG02E 03/10/10
(2) with respect to any Outstanding Capital Appreciation Bonds, the principal amount
thereof shall be equal to the Accreted Value thereof maturing or scheduled for payment in such
period, and no other mterest shall be included,
(3) with respect to any Outstanding Fixed Rate Bonds, an amount equal to (A) the
principal amount of such Fixed Rate Bonds due or subject to mandatory redemption during such
period and for which no sinking fund installments have been established, (B) the amount of any
payments required to be made during such period into any sinking fund established for the
payment of any such Fixed Rate Bonds, plus (C) all interest payable durmg such period on any
such Fixed Rate Bonds Outstanding and with respect to Fixed Rate Bonds with mandatory
sinking fund requirements, calculated on the assumption that mandatory sinking fund
installments will be applied to the redemption or retirement of such Fixed Rate Bonds on the date
specified in the ordinance authorizing such Fixed Rate Bonds, and
(4) with respect to Outstanding Variable Rate Bonds, the principal for any penod and
interest on such Variable Rate Bonds during such period computed on the assumption that the
amount of Variable Rate Bonds Outstanding as of the date of such computation would be
amortized (i) in accordance with the mandatory redemption provisions, if any, set forth m the
ordinance authorizing the issuance of such Vanable Rate Bonds, or if mandatory redemption
provisions are not provided, during a penod commencing on the date of computation and ending
on the date 30 years after the date of issuance (ii) at an interest rate equal to the yield to matunty
set forth in the Revenue Bond Index (40 -year Bond) pubhshed in the edition of The Bond Buyer
(or comparable publication or such other similar index selected by the City in good faith)
selected by the City and published within ten days prior to the date of calculation or (iii) to
provide for essentially level annual debt service of principal and interest over such period, and
-3- P \DG \DG02E 03/10/10
for the purpose of calculating the principal and interest on Variable Rate Bonds in any Fiscal
Year, such Variable Rate Bonds shall be assumed to mature on the stated maturity date or
mandatory redemption date thereof.
"Assessment Income" means the principal of and interest on special assessments levied m
any local improvement district or utility local improvement district which are pledged to be paid
into the Bond Fund. In the case of assessments payable in installments, Assessment Income shall
be allocated to the years in which it would be received if the unpaid balance of each assessment
roll were paid in the remaining number of installments with interest on the declining balance at
the times and at the rate provided in the ordinance confirming the assessment roll.
"Assessments" means any special assessments which may be levied in any local
improvement district or utility local improvement district of the City created for the acquisition,
construction or installation of additions and improvements to or extensions of the System,
including any installment of assessments and any interest or penalties which may be due thereon,
if such assessments are pledged to be paid into the Bond Fund. The word "Assessments" shall
include any installments of assessments and any interest or penalties which may be due thereon.
"Average Annual Debt Service" means the amount determined by dividing (a) the sum of
all interest and principal to be paid on outstanding Bonds from the date of determination to the
last maturity date of such Bonds, by (b) the number of Fiscal Years or calendar years from and
including the Fiscal Year or calendar year m which the determination is made to the last Fiscal
Year or calendar year in which the sum of (i) the principal amount of Serial Bonds maturing in
such Fiscal Year plus (ii) the Sinking Fund Requirement for such Fiscal Year, exceeds 4% of the
principal amount of Bonds outstanding as of the date of determination.
-4- P' \DG \DGO2E 03/10/10
"Bond Fund" means the Water and Sewer Revenue Bond Fund created by Ordinance
No 3380
"Bond Registrar" means the fiscal agency of the State of Washington in New York, New
York, for the purposes of registering and authenticating the Bonds, maintaining the Bond
Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the
Bonds.
"Capital Appreciation Bonds" means any Panty Bonds hereafter issued as to which
interest is payable only at the maturity or pnor redemption of such Bonds For the purposes of
(i) receiving payment of the redemption price, if any, of a Capital
Appreciation Bond that is redeemed prior to matunty, or
(ii) computing the principal amount of Panty Bonds held by the owner of a
Capital Appreciation Bond in giving to the City or the Bond Registrar any notice, consent,
request, or demand for any purpose whatsoever, the principal amount of a Capital Appreciation
Bond shall be deemed to be its Accreted Value
"City" means the City of Yakima, Washington, a municipal corporation duly organized
and existing under and by virtue of the laws of the State of Washington.
"Code" means the Internal Revenue Code of 1986, as amended, as the same may be
amended from time to time, and the regulations promulgated thereunder
"Commission" means the Securities and Exchange Commission.
"Costs of Maintenance and Operation" means all normal operating expenses, current
maintenance expenses, expenses of reasonable upkeep and repairs, insurance and administrative
expenses and reasonable pro -rata budget charges for services provided to the System by City
departments, but excluding depreciation, payments for debt service or into reserve accounts,
-5- P:1DG \DG02E 03/10/10
costs of capital additions to or replacements of the System, municipal taxes, or payments to the
City in lieu of taxes
"Council" means the legislative body of the City as the same shall be duly and regularly
constituted from time to time
"Coverage Requirement" means (a) for any period during which Assessments may be
paid without becoming delinquent, the sum of (i) the product of Average Annual Debt Service on
all Panty Bonds then outstanding times a fraction, the numerator of which is the aggregate
principal amount of nondehnquent Assessments which remain to be paid into the Bond Fund
plus the principal amount of Assessments previously paid into and then on hand in the Bond
Fund, and the denominator of which is the aggregate principal amount of Parity Bonds then
Outstanding, plus (ii) 1.25 times the product of Average Annual Debt Service on all Panty Bonds
then Outstanding times the difference of one minus the fraction calculated pursuant to (i) above,
or (b) for any other period, the product of 1.25 times Average Annual Debt Service on all Parity
Bonds then Outstanding.
"DTC" means The Depository Trust Company, New York, New York.
"Fiscal Year" means the Fiscal Year used by the City at any time. At the time of the
adoption of this ordinance, the Fiscal Year is the 12 -month penod beginning January 1 of each
year
"Fixed Rate Bonds" means those Panty Bonds other than Capital Appreciation Bonds
issued under an ordinance 111 which the rate of interest on such Fixed Rate Bonds is fixed and
determinable through their final maturity or for a specified period of time. If so provided in the
ordinance authorizing their issuance, Fixed Rate Bonds may bear a fixed and determinable
interest rate for only a portion of their term.
-6- P• \DG \DG02E 03/10/10
"Government Obligations" has the meaning given in RCW 39 53 as now or hereafter
amended.
"Gross Revenues" means all earnings, revenue and moneys received by the City from or
on account of the operations of the System from any source whatsoever
"Interest Commencement Date" means, with respect to any Capital Appreciation Bonds,
the date specified in any ordinance authorizing such Capital Appreciation Bonds (which date
must be pnor to the maturity date for such Capital Appreciation Bonds) after which interest
accruing on such Capital Appreciation Bonds shall be payable semiannually, with the first such
payment date being the applicable interest payment date immediately succeeding such Interest
Commencement Date
"Letter of Representations" means the Blanket Issuer Letter of Representations from the
City to DTC
"Maximum Interest Rate" means, with respect to any particular Vanable Rate Bond, a
numencal rate of interest, which shall be set forth m any ordinance authorizing such Bond, that
shall be the maximum rate of interest such Bond may at any time bear
"MSRB" means the Municipal Securities Rulemaking Board or any successors to its
functions.
"Net Revenues" means the Gross Revenues of the System less the Costs of Maintenance
and Operation.
"NRMSIR" means a nationally recognized municipal secunties information repository
"1996 Bonds" means the City's Water and Sewer Revenue Refunding Bonds, 1996,
issued pursuant to Ordinance No 96 -40 and Outstanding in the pnncipal amount of $1,860,000
-7- P 1DGlDG02E 03/10/10
"1998 Bonds" means the City's Water and Sewer Revenue and Refunding Bonds, 1998,
issued pursuant to Ordinance No 98 -31 and currently Outstanding in the principal amount of
$6,260,000
"Outstanding" means, in connection with any Panty Bonds, as of the time in question, all
such bonds issued except bonds theretofore paid and cancelled or having matured or been called
for redemption, payment has been provided therefor, or bonds that have been defeased in
accordance with their authorizing ordinance and state law
"Parity Bonds" means any Outstanding revenue bonds, revenue warrants or other revenue
obligations issued by the City that have a hen upon the Gross Revenues of the System to pay and
secure the payment of the principal thereof and interest thereon equal to the hen created upon the
Gross Revenues of the System to pay and secure payment of the principal of and interest on the
2003 Bonds Panty Bonds includes the 1996 Bonds, the 1998 Bonds and the 2003 Bonds
"Permitted Investments" means any legal investments for funds of the City
"Professional Utility Consultant" means the independent person(s) or firm(s) selected by
the City having a favorable reputation for skill and experience with facilities of comparable size
and character to the System in such of the following as are relevant to the purposes for which
they are retained. (a) engineering and operations and (b) the design of rates.
"Project" means the capital improvements to the System described in Exhibit A, attached
hereto, together with all costs incurred in the issuance of the 2003 Bonds, and all other costs
incurred in connection with the Project.
"Qualified Insurance" means any noncancellable municipal bond insurance policy or
surety bond issued by any insurance company licensed to conduct an insurance business in any
state of the United States (or by a service corporation acting on behalf of one or more such
-8- P' \DG \DG02E 03/10/10
insurance companies), which insurance company or companies, as of the time of issuance of such
policy or surety bond, are currently rated in the highest rating category by Moody's Investors
Service, Inc or Standard & Poor's Ratings Service or their comparably recognized business
successors
"Rate Stabilization Account" means the account authorized to be created by Section 5 1
"Rating Agency" means, as of any date, Moody's Investors Service, Inc , Standard &
Poor's Ratings Service or any other nationally recognized securities rating agency
"Reserve Fund" means the Reserve Fund created for the parity bonds
"Reserve Fund Requirement" means the lesser of (i) the maximum Annual Debt Service
during, any Fiscal Year on a series of Parity Bonds, (ii) 125% of the Average Annual Debt
Service on all Outstanding Panty Bonds of such series, or (iii) 10% of the stated principal
amount of such series of Panty Bonds In the case of Variable Rate Bonds, the interest rate
thereon shall be calculated on the assumption that such Variable Rate Bonds will bear interest at
a rate equal to the higher of (a) the rate most recently reported by The Bond Buyer as The Bond
Buyer's Index for long -term revenue bonds or (b) a rate equal to x +y where x represents the
average rate of interest borne by such Variable Rate Bonds in the twelve months preceding the
date of calculation or in the case of newly issued Variable Rate Bonds the initial rate of interest
borne by such Bonds and y represents one -half the difference between the Maximum Interest
Rate applicable to such Variable Rate Bonds and x, provided that in no event shall such assumed
Variable Rate exceed the Maximum Interest Rate and provided further that if on such date of
calculation the interest rate on such Bonds shall then be fixed to maturity, the interest rate used
for such specified period for the purpose of the foregoing calculation shall be such actual interest
rate.
-9- P' \DG \DG02E 03/10/10
"Revenue Fund" means the Water and Sewer Operating Funds of the City heretofore
established.
"Rule" means the Commission's Rule 15c2 -12 under the Securities and Exchange Act of
1934, as the same may be amended from time to time
"Sale Resolution" means the resolution or resolutions to be adopted by the Council
setting the final terms of the 2003 Bonds.
"Serial Bonds" means Parity Bonds other than Term Bonds
"SID" means a state information depository for the State of Washington (if one is
created)
"Sinking Fund Requirement" means, for any Fiscal Year, the pnncipal amount and
premium, if any, of Term Bonds required to be purchased, redeemed or paid at maturity for such
Fiscal Year as established by the ordinance or resolution authonzmg the issuance of such Term
Bonds.
"System" means the combined water and sewerage system of the City as it now exists,
and as it may be later added to, extended and improved for as long as any Parity Bonds remain
Outstanding.
"2003 Bonds" means the City's Water and Sewer Revenue Bonds, 2003, in one or more
series m the aggregate pnncipal amount of not to exceed $17,700,000 authorized by this
ordinance
"Term Bonds" means Panty Bonds of any principal matunty that are subject to
mandatory redemption or for which mandatory sinking fund payments are required.
-10- P• \DG \DG02E 03/10/10
"Valuation Date" means with respect to any Capital Appreciation Bonds the date or dates
set forth in any ordinance authorizing such Capital Appreciation Bonds on which specific
Accreted Values are assigned to the Capital Appreciation Bonds.
"Variable Interest Rate" means a variable interest rate or rates to be borne by Parity
Bonds or any one or more maturities within an issue of Parity Bonds. The method of computing
such variable interest rate shall be specified in the ordinance authorizing such Panty Bonds
Such vanable interest rate shall be subject to a Maximum Interest Rate and there may be an
initial rate specified, in each case as provided m such ordinance, or a stated interest rate that may
be changed from time to time as provided in such ordinance Such ordinance shall also specify
either (i) the particular period or penods of time or manner of determining such period or periods
of time for which each value of such Variable Interest Rate shall remain in effect or (ii) the time
or times upon which any change in such Variable Interest Rate shall become effective.
"Variable Rate Bonds" for any penod of time means Panty Bonds which dunng such
period bear a Variable Interest Rate, provided that Panty Bonds the interest rate on which shall
have been fixed for the remainder of the term thereof shall no longer be Vanable Rate Bonds
ARTICLE II
FINDINGS
Section 2.1 Approval of Plan and System. The public interest and necessity require
that the City finance (a) the settlement of the odor litigation in the amount of $7,000,000 and
(b) certain improvements to the System described in Exhibit A (the "Project ")
Section 2.2 Parity Conditions The Council hereby finds as required by Section 7 1 of
Ordinance No 96 -40 and Section 7 1 of Ordinance No 98 -31 as follows
-11- P \DG \DG02E 03/10/10
(a) The 2003 Bonds will be issued for the purpose of acquiring, constructing
and installing additions and improvements to and extensions of, acquiring necessary equipment
for or making necessary repairs, replacements or other capital improvements and financing a
settlement of litigation related to capital improvements to the System.
(b) At the times of the issuance of the 2003 Bonds there will be no deficiency
in the Bond Fund.
(c) The City will have on deposit in the Reserve Fund an amount equal to the
Reserve Fund Requirement.
(d) At the time of the issuance of the 2003 Bonds, the City will have on file a
certificate from an outside Professional Utility Consultant showing that the Net Revenue
received durmg any consecutive 12 -month penod for which financial statements are available
within the 24 months preceding the date of delivery of the 2003 Bonds equals the Coverage
Requirement in each calendar year or Fiscal Year thereafter on the then - Outstanding Panty
Bonds and the 2003 Bonds, and that the Adjusted Net Revenues to be received each calendar
year or Fiscal Year thereafter, will equal at least 1.25 times the Average Annual Debt Service
each such calendar year or Fiscal Year, on the Outstanding Panty Bonds and the 2003 Bonds.
-12- P: \DG \DG02E 03/10/10
ARTICLE III
ISSUANCE OF 2003 BONDS
Section 3.1 Issuance of the 2003 Bonds The City shall issue the 2003 Bonds in the
aggregate principal amount of not to exceed $17,700,000 in one or more series for the purpose of
providing the funds necessary to finance the odor litigation settlement, to repay a interfund loan
that was made to improve the spray field which was the source of the odor litigation, to pay costs
of the Project, to satisfy the Reserve Requirement, to capitalize interest, and to pay the expenses
incidental to the issuance of the 2003 Bonds
The 2003 Bonds shall be designated the "City of Yakima Water and Sewer Revenue
Bonds, 2003," may be issued in one or more series, shall be in fully registered form, shall be in
the denomination of $5,000 each, or any integral multiple thereof, provided that no Bond shall
represent more than one maturity, shall be dated such date, bear interest at the rates per annum,
and be payable in the amounts and dates as shall be determined by a Sale Resolution.
The 2003 Bonds shall be obligations only of the Bond Fund and shall be payable and
secured as provided herein. The 2003 Bonds shall not be general obligations of the City
The Director of Finance and Budget of the City is hereby authonzed to obtain insurance
and a Reserve Fund surety for the payment of principal of and interest on the 2003 Bonds, if she
should determine that it is in the best interests of the City to do so
Section 3.2 Registration, Exchange and Payments
(a) Registrar/Bond Register The City hereby adopts the system of
registration approved by the Washington State Finance Committee, which utilizes the fiscal
agencies of the State of Washington in New York, New York, as registrar, authenticating agent,
paying agent and transfer agent (collectively, the "Bond Registrar ") The Bond Registrar shall
-13- P \DG \DG02E 03/10/10
keep, or cause to be kept, at its principal corporate trust office, sufficient records for the
registration and transfer of the 2003 Bonds (the "Bond Register "), which shall be open to
inspection by the City The Bond Registrar is authorized, on behalf of the City, to authenticate
and deliver 2003 Bonds transferred or exchanged in accordance with the provisions of such 2003
Bonds and this ordinance and to carry out all of the Bond Registrar's powers and duties under
this ordinance. The Bond Registrar shall be responsible for its representations contained in the
Certificate of Authentication on the 2003 Bonds
(b) Registered Ownership The City and the Bond Registrar may deem and
treat the Registered Owner of each 2003 Bond as the absolute owner for all purposes, and neither
the City nor the Bond Registrar shall be affected by any notice to the contrary Payment of any
such 2003 Bond shall be made only as described in Section 3(h) hereof, but such registration may
be transferred as herein provided. All such payments made as described in Section 3(h) shall be
valid and shall satisfy the liability of the City upon such 2003 Bond to the extent of the amount
or amounts so paid.
(c) DTC Acceptance/Letter of Representations. The 2003 Bonds shall
initially be held in fully immobilized form by DTC acting as depository To induce DTC to
accept the 2003 Bonds as eligible for deposit at DTC, the City has heretofore executed and
delivered to DTC a Blanket Issuer Letter of Representations (the "Letter of Representations ")
Neither the City nor the Bond Registrar will have any responsibility or obligation to DTC
participants or the persons for whom they act as nominees with respect to the 2003 Bonds for the
accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any
DTC participant of any amount in respect of the principal of or interest on 2003 Bonds, any
notice that is permitted or required to be given to Registered Owners under this ordinance (except
-14- P \DG \DG02E 03/10/10
such notices as shall be required to be given by the City to the Bond Registrar or to DTC), the
selection by DTC or any DTC participant of any person to receive payment m the event of a
partial redemption of the 2003 Bonds, or any consent given or other action taken by DTC as the
Registered Owner For so long as any 2003 Bonds are held in fully immobilized form hereunder,
DTC or its successor depository shall be deemed to be the Registered Owner for all purposes,
and all references in this ordinance to the Registered Owners shall mean DTC or its nominee and
shall not mean the owners of any beneficial interest in any 2003 Bonds.
(d) Use of Depository
(i) The 2003 Bonds shall be registered initially in the name of
CEDE & Co , as nominee of DTC, with a single 2003 Bond for each maturity in a denomination
equal to the total principal amount of such maturity Registered ownership of such immobilized
2003 Bonds, or any portions thereof, may not thereafter be transferred except (A) to any
successor of DTC or its nominee, provided that any such successor shall be qualified under any
applicable laws to provide the service proposed to be provided by it; (B) to any substitute
depository appointed by the City pursuant to subsection (ii) below or such substitute depository's
successor; or (C) to any person as provided in subsection (iv) below
(ii) Upon the resignation of DTC or its successor (or any substitute
depository or its successor) from its functions as depository or a determination by the City to
discontinue the system of book entry transfers through DTC or its successor (or any substitute
depository or its successor), the City may appoint a substitute depository Any such substitute
depository shall be qualified under any applicable laws to provide the services proposed to be
provided by it.
-15- P:1DG \DG02E 03/10/10
(iii) In the case of any transfer pursuant to clause (A) or (B) of
subsection (i) above, the Bond Registrar shall, upon receipt of all outstanding 2003 Bonds,
together with a wntten request on behalf of the City, issue a single new 2003 Bond for each
maturity then outstanding, registered in the name of such successor or substitute depository, or its
nominee, all as specified in such wntten request of the City
(iv) In the event that (A) DTC or its successor (or substitute depository
or its successor) resigns from its functions as depository, and no substitute depository can be
obtained, or (B) the City determines that it is in the best interest of the beneficial owners of the
2003 Bonds that the 2003 Bonds be provided in certificated form, the ownership of such 2003
Bonds may then be transferred to any person or entity as herein provided, and shall no longer be
held in fully immobilized form. The City shall deliver a written request to the Bond Registrar,
together with a supply of definitive 2003 Bonds in certificated form, to issue 2003 Bonds in any
authonzed denomination. Upon receipt by the Bond Registrar of all then outstanding 2003
Bonds together with a wntten request on behalf of the City to the Bond Registrar, new 2003
Bonds shall be issued m the appropriate denominations and registered m the names of such
persons as are provided in such written request.
(e) Transfer or Exchange of Registered Ownership, Change in
Denominations The registered ownership of any 2003 Bond may be transferred or exchanged,
but no transfer of any 2003 Bond shall be valid unless it is surrendered to the Bond Registrar
with the assignment form appearing on such 2003 Bond duly executed by the Registered Owner
or such Registered Owner's duly authorized agent m a manner satisfactory to the Bond Registrar
Upon such surrender, the Bond Registrar shall cancel the surrendered 2003 Bond and shall
authenticate and deliver, without charge to the Registered Owner or transferee, a new 2003 Bond
-16- P' \DG \DGO2E 03/10/10
(or 2003 Bonds at the option of the new Registered Owner) of the same date, maturity and
interest rate and for the same aggregate principal amount in any authorized denomination,
naming as Registered Owner the person or persons fisted as the assignee on the assignment form
appearing on the surrendered 2003 Bond, in exchange for such surrendered and canceled 2003
Bond. Any 2003 Bond may be surrendered to the Bond Registrar and exchanged, without
charge, for an equal aggregate principal amount of 2003 Bonds of the same date, maturity and
interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to
transfer or exchange any 2003 Bond during a period beginning at the opening of business on the
15th day of the month next preceding any interest payment date and ending at the close of
business on such interest payment date, or, m the case of any proposed redemption of the 2003
Bonds, after the mailing of notice of the call of such 2003 Bonds for redemption.
(f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become
the Registered Owner of any 2003 Bond with the same nghts it would have if it were not the
Bond Registrar, and to the extent permitted by law, may act as depository for and permit any of
its officers or directors to act as member of, or in any other capacity with respect to, any
committee formed to protect the rights of the Registered Owners of the 2003 Bonds
(g) Registration Covenant. The City covenants that, until all 2003 Bonds have
been surrendered and canceled, it will maintain a system for recording the ownership of each
2003 Bond that complies with the provisions of Section 149 of the Code The ownership of each
2003 Bond shall initially be recorded with DTC pursuant to this Section 3.2
(h) Place and Medium of Payment. Both principal of and interest on the 2003
Bonds shall be payable in lawful money of the United States of America. For so long as all 2003
Bonds are in fully immobilized form, payments of principal and interest shall be made as
-17- P \DG \DG02E 03/10/10
provided in accordance with the operational arrangements of DTC referred to in the Letter of
Representations In the event that the 2003 Bonds are no longer in fully immobilized form,
interest on the 2003 Bonds shall be paid by check or draft mailed to the Registered Owners at the
addresses for such Registered Owners appearing on the Bond Register on the 15th day of the
month preceding the interest payment date, and principal of the 2003 Bonds shall be payable
upon presentation and surrender of such 2003 Bonds by the Registered Owners at the pnncipal
office of the Bond Registrar; provided, however, that if so requested in writing by the Registered
Owner of at least $1,000,000 pnncipal amount of 2003 Bonds, interest will be paid by wire
transfer on the date due to an account with a bank located within the United States
Section 3.3 Execution and Authentication of Bonds. The 2003 Bonds shall be signed
on behalf of the City with the manual or facsimile signature of the Mayor, shall be attested by the
manual or facsimile signature of the City Clerk and shall have the corporate seal of the City
impressed or a facsimile thereof imprinted thereon.
Only such 2003 Bonds as shall bear thereon a Certificate of Authentication in the form
hereinbefore recited and manually executed by the Bond Registrar shall be valid or obligatory for
any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication shall
be conclusive evidence that the 2003 Bonds so authenticated have been duly executed,
authenticated and delivered hereunder and are entitled to the benefits of this ordinance.
In case either of the officers who shall have executed the 2003 Bonds shall cease to be
such officer or officers of the City before the 2003 Bonds so signed shall have been authenticated
or delivered by the Bond Registrar, or issued by the City, such 2003 Bonds may nevertheless be
authenticated, delivered and issued and upon such authentication, delivery and issuance, shall be
as binding upon the City as though those who signed the same had continued to be such officers
18- P• \DG \DGO2E 03/10/10
of the City Any 2003 Bond may also be signed and attested on behalf of the City by such
persons as at the actual date of execution of such 2003 Bond shall be the proper officers of the
City although at the original date of such Bond any such person shall not have been such officer
of the City
Section 3.4 Lost or Destroyed Bonds In case any of the 2003 Bonds shall be lost,
stolen or destroyed, the Bond Registrar may authenticate and deliver a new bond or bonds of like
amount, date, tenor and effect to the registered owner or nominee thereof upon payment to the
City for the expenses and charges in connection therewith and upon his or her filing with the
Bond Registrar evidence satisfactory to said Bond Registrar that such 2003 Bond or 2003 Bonds
were actually lost, stolen or destroyed and of his ownership thereof, and upon furnishing the City
with indemnity satisfactory to them both.
Section 3.5 Form of 2003 Bonds The 2003 Bonds shall be substantially in the form
of Exhibit B hereto
ARTICLE IV
REDEMPTION OF 2003 BONDS
Section 4.1 Redemption Prior to Maturity The 2003 Bonds may be subject to
redemption m advance of their scheduled maturities as provided in a Sale Resolution to be
adopted by the Council.
Section 4.2 Notice of Redemption. Written notice of any redemption of 2003 Bonds
shall be given by the Bond Registrar on behalf of the City by first class mail, postage prepaid, not
less than 30 days nor more than 60 days before the redemption date to the registered owners of
2003 Bonds that are to be redeemed at their last addresses shown on the Bond Register So long
as the 2003 Bonds are in book -entry form, notice of redemption shall be given as provided in the
-19- P: \DG \DG02E 03/10/10
Letter of Representations The Bond Registrar shall provide additional notice of redemption (at
least 30 days) to each NRMSIR and SID, if any, in accordance with Section 11 1
The requirements of this section shall be deemed complied with when notice is mailed,
whether or not it is actually received by the owner
Each notice of redemption shall contain the following information (1) the redemption
date, (2) the redemption price, (3) if less than all outstanding 2003 Bonds are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of the 2003 Bonds to
be redeemed, (4) that on the redemption date the redemption price will become due and payable
upon each 2003 Bond or portion called for redemption, and that interest shall cease to accrue
from the redemption date, (5) that the 2003 Bonds are to be surrendered for payment at the
principal office of the Bond Registrar, (6) the CUSIP numbers of all 2003 Bonds being
redeemed, (7) the dated date of the 2003 Bonds, (8) the rate of interest for each 2003 Bond being
redeemed, (9) the date of the notice, and (10) any other information needed to identify the 2003
Bonds being redeemed.
Upon the payment of the redemption price of 2003 Bonds being redeemed, each check or
other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue
and maturity, the 2003 Bonds being redeemed with the proceeds of such check or other transfer
Section 4.3 Effect of Redemption. Unless the City has revoked a notice of
redemption, the City shall transfer to the Bond Registrar amounts that, in addition to other
money, if any, held by the Bond Registrar, will be sufficient to redeem, on the redemption date,
all the 2003 Bonds to be redeemed. From the redemption date interest on each 2003 Bond to be
redeemed shall cease to accrue
-20- P: \DG \DGO2E 03/10/10
Section 4.4 Amendment of Notice Provisions The foregoing notice provisions of this
section, including but not limited to the information to be included in redemption notices and the
persons designated to receive notices, may be amended by additions, deletions and changes in
order to maintain compliance with duly promulgated regulations and recommendations regarding
notices of redemption of municipal securities.
Section 4.5 Purchase of 2003 Bonds. The City reserves the right to use at any time
any surplus Gross Revenues of the System available after providing for the payments required by
paragraphs First through Sixth inclusive of Section 5 1 of this ordinance, or other available
funds, to purchase any of the 2003 Bonds m the open market for retirement.
ARTICLE V
FUNDS AND ACCOUNTS, DEFEASANCE
Section 5.1 Revenue Fund, Priority of Payments The City hereby obligates and binds
itself to set aside and pay into the Water and Sewer Operating Funds (the "Revenue Fund ") as
collected the Gross Revenues of the System. The Gross Revenues of the System shall be held in
the Revenue Fund separate and apart from all other funds and accounts of the City and used only
for the following purposes and in the following order of priority
First, to pay the Costs of Mamtenance and Operation of the System,
Second, to make all required payments into the Bond Fund,
Third, to pay the interest on the Panty Bonds,
Fourth, to pay the principal of and any sinking fund payments for the Parity Bonds,
Fifth, to make all payments required to be made into the Reserve Fund,
Sixth, to make all payments required to be made into any other revenue bond redemption
fund or debt service account or reserve account created to pay and secure the payment of the
-21- P:10G \DG02E 03/10/10
principal of and interest on any revenue bonds of the City having a hen upon the Gross Revenues
of the System junior and inferior to the hen thereon for the payment of the principal of and
interest on the Parity Bonds,
Seventh, to retire by redemption or purchase in the open market any outstanding revenue
bonds of the City, to make necessary additions, improvements and repairs to or extensions and
replacements of the System, or for any other lawful City purposes
The City may create a Rate Stabilization Account in the Revenue Fund. To the extent
that surplus Gross Revenues remain after the payments so required to be made out of the
Revenue Fund, the City may credit up to the full amount of such surplus to the Rate Stabilization
Account. Any credits from the Revenue Fund to the Rate Stabilization Account and any credits
to the Revenue Fund from the Rate Stabilization Account made pursuant to Section 6 1 hereof,
shall be made prior to closing the books and accounts of the City for each Fiscal Year Money m
the Rate Stabilization Account may be used for any lawful purpose Money in the Rate
Stabilization Account may be used from time to time to make up any deficiencies in the Bond
Fund, and such money in the Rate Stabilization Account may be pledged as additional payments
to the Bond Fund to the extent required for any such deficiencies The City may, at any time,
deposit Gross Revenues of the System in and withdraw Gross Revenues of the System from the
Rate Stabilization Account.
Nothing contained in this Section 5 1 shall be construed to require the deposit mto the
Revenue Fund of any of the revenues, income, receipts or other moneys of the City derived
through the ownership or operation of any separate utility system hereafter created or established
from funds other than the proceeds of Bonds
Section 5.2 Bond Fund.
-22- P: \DG \DGO2E 03/10/10
(a) There has been created a special fund of the City designated the Water and Sewer
Revenue Bond Fund (the "Bond Fund "), which shall be used solely for the purpose of paying the
principal, premium, if any, and interest on the Parity Bonds, of retiring the Parity Bonds prior to
matunty in the manner herein provided, and of paying any reimbursement obligation with respect
to a letter of credit or other credit enhancement device providing additional security for any
Variable Rate Bonds. Each month (or in the case of Variable Rate Bonds, at the times provided
in subsection (i) of this Section 5.2(a)), after applying amounts as required in Section 5 1, the
City shall withdraw from the Revenue Fund and (to the extent not otherwise provided) transfer to
the Bond Fund, amounts as follows and m the following order of pnonty first, into the Interest
Account; second, into the Serial Bond Principal Account and Term Bond Principal Account; and
third, into the Reserve Fund.
(i) Interest Account. The City has created a separate account in the Bond
Fund, to be known as the "Interest Account" to provide for the payment of interest on the Parity
Bonds as the same becomes due and payable. Upon the issuance of the 2003 Bonds, all accrued
interest on the 2003 Bonds shall be paid into the Interest Account.
In the case of all Panty Bonds other than Variable Rate Bonds, the City shall transfer to
the Interest Account amounts sufficient to pay when due the installment of interest next falling
due on all Panty Bonds. In the case of Variable Rate Bonds, not later than on the last day of the
month immediately succeeding the month of closing of such bonds and on or before the last day
of each succeeding month, the City shall transfer to the Interest Account an amount equal to the
interest on such Vanable Rate Bonds estimated to become due and payable on the due date If on
any date on which an installment of interest on Vanable Rate Bonds falls due there are
insufficient amounts in the Interest Account to make such interest payment, the City shall
-23- P: \DG \DGO2E 03/10/10
withdraw from the Revenue Fund and transfer to the Interest Account an amount that when
added to other money therein will equal the amount of interest falling due and payable on such
interest payment date. In making the credits required by this subsection (a) (i), any amounts
credited to the Interest Account representing accrued interest received on the sale of 2003 Bonds
or other Panty Bonds, interest capitalized from the proceeds of any Panty Bonds and any other
transfers and credits otherwise made or required to be made to the Interest Account shall be taken
into consideration and allowance made with respect to the full amount of such transfers and
credits
(ii) Senal Bond Pnncipal Account. The City has created a separate account in
the Bond Fund known as the "Serial Bond Pnncipal Account" to provide for the payment of the
principal of Serial Bonds as the same shall mature and become due and payable The City shall
transfer to the Serial Bond Principal Account amounts sufficient to pay when due the installment
of principal next falling due on the Senal Bonds.
(iii) Term Bond Principal Account.
(A) The City shall create and establish a separate account in the Bond
Fund to be known as the "Term Bond Principal Account" m order to meet the specified Sinking
Fund Requirements of Term Bonds and to otherwise retire 2003 Bonds, if any, and other Parity
Bonds prior to maturity The City shall transfer to the Term Bond Principal Account amounts
sufficient to pay when due the Sinking Fund Requirement next falling due on all Term Bonds.
(B) The City shall apply the money paid into the Bond Fund for credit
to the Term Bond Pnncipal Account to the redemption of Term Bonds on the next ensuing
Sinking Fund Requirement due date (or may so apply such money prior to such Sinking Fund
Requirement due date), pursuant to the terms of the ordinance authorizing the issuance thereof.
-24- P' \DG \DGO2E 03/10/10
The City may also apply the money paid into the Bond Fund for credit to the Term Bond
Principal Account for the purpose of retiring Term Bonds by the purchase of such Term Bonds at
a purchase pnce (including any brokerage charge) not in excess of the principal amount thereof.
The City shall apply such money to the redemption or purchase of Term Bonds in an
amount such that the aggregate principal amount of Term Bonds so purchased or redeemed is at
least equal to such next ensuing Sinking Fund Requirement. Any such purchase of Term Bonds
by the City may be made with or without tenders of Term Bonds in such manner as the City
shall, in its discretion, deem to be in its best interest.
(iv) Reserve Fund.
(A) The City has created a separate fund to be known as the "Reserve
Fund" to provide a reserve for the payment of the principal, premium, if any, and interest on the
Panty Bonds The City hereby covenants and agrees that on the date of issuance of the 2003
Bonds the City will have on deposit in the Reserve Fund an amount equal to the Reserve Fund
Requirement. Each ordinance providing for the issuance of Additional Bonds shall provide for
payments into the Reserve Fund from any other money lawfully available therefor (in which
event, in providing for deposits and credits required by the foregoing provisions of this paragraph
(A), allowance shall be made for any such amounts so paid into such fund) in amounts that
within not less than five years of equal monthly payments will provide for deposit of the Reserve
Fund Requirement or may provide for the City to obtain Qualified Insurance or a Qualified Letter
of Credit for specific amounts required pursuant to this Section to be paid into the Reserve Fund,
such amounts so covered by Qualified Insurance or a Qualified Letter of Credit shall be credited
against the amounts required to be maintained in the Reserve Fund by this Section to the extent
that such payments and credits to be made are insured by an insurance company, or guaranteed
-25- P \DG \DGO2E 03/10/10
by a letter of credit from a bank. Such Qualified Letter of Credit or Qualified Insurance shall not
be cancelable on less than five years notice In the event of any cancellation, the Reserve Fund
shall be funded in accordance with this paragraph, as if the Panty Bonds which remain
Outstanding had been issued on the date of such notice of cancellation.
(B) Money in the Bond Fund and Reserve Fund may, at the option of
the City, be invested and reinvested as permitted by law in Permitted Investments maturing, or
which are retirable at the option of the owner, prior to the date needed or prior to the maturity
date of the final installment of principal of the Parity Bonds payable out of the Bond Fund and
Reserve Fund. Earnings on investments in the Bond Fund and Reserve Fund shall be transferred
to the Revenue Fund, except that earnings on investments in the Reserve Fund shall first be
applied to remedy any deficiency in such account.
(C) For the purpose of determining the amount credited to the Reserve
Fund, obligations m which money in the Reserve Fund shall have been invested shall be valued
at the market value thereof. The term "market value" shall mean, in the case of securities that are
not then currently redeemable at the option of the owner, the current bid quotation for such
securities, as reported in any nationally circulated financial journal, and the current redemption
value in the case of securities that are then redeemable at the option of the owner For
obligations that mature within six months, the market value shall be the par value thereof. The
valuation shall include accrued interest thereon. The valuation of the amount in the Reserve
Fund shall be made by the City as of the close of business on each December 31 (or on the next
preceding business day if December 31 does not fall on a business day) and after any withdrawal
and may be made on each June 30 (or on the next preceding business day if June 30 does not fall
on a business day)
-26- P• \DG \DG02E 03/10/10
(D) If the amount in the Reserve Fund shall be less than the Reserve
Fund Requirement, the City shall transfer from the Revenue Fund, for credit to the Reserve Fund
no later than the 25th day of the sixth succeeding calendar month the amount necessary to restore
the Reserve Fund to the Reserve Fund Requirement. Prior to such time, such transfer shall come
from money in the Revenue Fund first available after making the current specified payments into
the Interest Account and Pnncipal Accounts. If the amount in the Reserve Fund shall be greater
than the Reserve Fund Requirement, then and only then may the City withdraw at any time prior
to the next date of valuation from the Reserve Fund the difference between the amount m the
Reserve Fund and the Reserve Fund Requirement and deposit such difference in the Revenue
Fund.
(b) Money in the Interest Account, the Serial Bond Principal Account and the Term
Bond Pnncipal Account shall be transmitted to the Bond Registrar in amounts sufficient to meet
the next maturing installments of principal, interest and premium, if any, at or prior to the time
upon which any interest, principal or premium, if any, is to become due In the event there shall
be a deficiency in the Interest Account, the Serial Bond Principal Account or the Term Bond
Principal Account for such purpose, the City shall make up any such deficiency from the Reserve
Fund by the withdrawal of cash therefrom for that purpose, and, if necessary, by sale or
redemption of any authorized investments in such amount as will provide cash in said Reserve
Fund sufficient to make up any such deficiency If a deficiency still exists immediately prior to
an interest payment date and after the withdrawal of cash, the City shall then draw from any
Qualified Letter of Credit or Qualified Insurance Such draw shall be made at such times and
under such conditions as the agreement for such Reserve Fund credit facility shall provide
-27- - P: \DG \DGO2E 03/10110
(c) Whenever and so long as amounts on deposit in the Bond Fund, including the
Reserve Fund, are sufficient to provide money to pay the Parity Bonds then Outstanding,
including such interest as may thereafter become due thereon and any premiums upon
redemption, no payments need be made into the Bond Fund pursuant to this ordinance
(d) Money transferred from the Bond Fund to the Bond Registrar for the Panty Bonds
and the interest thereon shall be held in trust for the owners of such Parity Bonds Until so set
aside for the retirement of principal, payment of sinking fund installments, payment of interest
and premium, if any, as aforesaid, moneys in the Bond Fund shall be held in trust for the benefit
of the owners of the Panty Bonds then Outstanding and payable equally and ratably and without
preference or distinction as between different installments or maturities.
(e) The amounts so pledged to be paid into the Bond Fund and the Reserve Fund are
hereby declared to be a prior hen and charge upon the Gross Revenues of the System superior to
all other charges of any kind or nature whatsoever (including any transfer of money to other
funds of the City and taxes or payments in heu of taxes) except the Costs of Maintenance and
Operation, and is equal in pnonty to the hen and charge which may hereafter be made to pay and
secure the payment of the principal of and interest on any Additional Bonds
(f) The Council hereby finds and declares that in fixing the amounts to be paid into
the Bond Fund and the Reserve Fund out of the Gross Revenues of the System, it has exercised
due regard for the Costs of Maintenance and Operation and for the amounts required to pay and
secure the payment of the principal of and interest on the currently Outstanding Parity Bonds, and
has not obligated the City to set aside and pay into such Fund and Account a greater amount of
such Gross Revenues than in its judgment will be available over and above the Costs of
-28- P• \DG \DG02E 03/10/10
Maintenance and Operation and the principal of and interest on the currently Outstanding Parity
Bonds.
Section 5.3 Defeasance. In the event that money and /or Government Obhgations
matunng or having guaranteed redemption prices at the option of the holder at such time or times
and bearing interest to be earned thereon in amounts (together with such money, if any) sufficient
to redeem and retire part or all of the 2003 Bonds in accordance with their terms are irrevocably
set aside in a special account and pledged to effect such redemption and retirement, then no
further payments need be made into the Bond Fund for the payment of the principal of and
interest on the 2003 Bonds so provided for, and such 2003 Bonds shall then cease to be entitled
to any lien, benefit or secunty of this ordinance, except the right to receive the funds so set aside
and pledged, and such 2003 Bonds shall no longer be deemed to be outstanding hereunder
Within 30 days of any defeasance of such 2003 Bonds, the City shall provide notice of
defeasance of such 2003 Bonds to registered owners and to each NRMSIR and SID, if any, m
accordance with Section 11 1
ARTICLE VI
PARTICULAR COVENANTS OF THE CITY
So long as any Panty Bonds remain Outstanding, the City covenants and agrees with the
owners of all Parity Bonds as follows
Section 6.1 Rate Covenant. The City shall establish, maintain and collect rates and
charges for the use of the services and facilities of and all commodities sold, furnished or
supplied by the System, which shall be fair and nondiscnminatory and shall adjust such rates and
charges from time to time so that:
-29- P• \DG \DG02E 03/10/10
(a) The Gross Revenues collected (together with Assessments collected) will at all
times be sufficient (a) to pay the Costs of Maintenance and Operation of the System, (b) to pay
the principal of, premium, if any, and interest on the Parity Bonds, as and when the same shall
become due and payable, (c) to make adequate provision for the payment of any Term Bonds,
(d) to make when due all payments which the City is obligated to make into the Reserve Fund
and all other payments which the City is obligated to make pursuant to this ordinance, and (e) to
pay all taxes, assessments or other governmental charges lawfully imposed on the System or the
revenue therefrom or payments in lieu thereof and any and all other amounts which the City may
now or hereafter become obligated to pay from the Gross Revenues by law or contract; and
(b) The Net Revenues in each Fiscal Year will be at least equal to the Coverage
Requirement calculated as of December 31 of the preceding calendar year For the purpose of
meeting this requirement if the City creates a Rate Stabilization Account pursuant to Section 5 1,
(i) there may be added to Net Revenues for any Fiscal Year such amount, not greater than the
Annual Debt Service for such Fiscal Year, withdrawn from the Rate Stabilization Account and
deposited in the Revenue Fund, and (ii) there must be subtracted from Net Revenues for any
Fiscal Year such amounts as are withdrawn from the Revenue Fund and deposited into the Rate
Stabihzation Account for such Fiscal Year
Section 6.2 Maintenance and Operation. The City shall at all times maintain, preserve
and keep the properties of the System in good repair, working order and condition and will from
time to time make all necessary and proper repairs, renewals, replacements, extensions and
betterments thereto, so that at all times the business carried on in connection therewith will be
properly and advantageously conducted, and the City will at all times operate or cause to be
-30- P \DG \DG02E 03/10/10
operated the properties of the System and the business in connection therewith m an efficient
manner and at a reasonable cost.
Section 6.3 Sale or Disposition of the System. The City will not sell or otherwise
dispose of the System in its entirety unless simultaneously with such sale or other disposition,
provision is made for the payment into the Bond Fund of cash or "Government Obligations," as
now or hereafter defined in chapter 39 53 RCW, as amended, or its successor statute, if any,
sufficient together with interest to be earned thereon to pay the pnncipal of and interest on the
then Outstanding Panty Bonds, nor will it sell or otherwise dispose of any part of the useful
operating properties of the System unless such facilities are replaced or provision is made for
payment into the Bond Fund of the greater of:
(a) An amount which will be in the same proportion to the net amount of Parity
Bonds then Outstanding (defined as the total amount of the Parity Bonds less the amount of cash
and investments m the Bond Fund and accounts therein) that the Net Revenues from the portion
of the System sold or disposed of for the preceding year bears to the total Net Revenues for such
period, or
(b) An amount which will be m the same proportion to the net principal amount of
Panty Bonds then Outstanding that the book value of the part of the System sold or disposed of
bears to the book value of the entire System immediately pnor to such sale or disposition.
The proceeds of any such sale or disposition of a portion of the properties of the System
(to the extent required above) shall be paid into the Bond Fund.
Notwithstanding any other provision of this subsection, the City may sell or otherwise
dispose of any of the works, plant, properties and facilities of the System or any real or personal
property comprising a part of the same which shall have become unserviceable, inadequate,
_31- P: \DG \DGO2E 03/10/10
obsolete or unfit to be used in the operation of the System, or no longer necessary, material to or
useful in such operation, without making any deposit into the Bond Fund.
Section 6.4 Liens or Encumbrances. The City will not at any time create or permit to
accrue or to exist any hen or other encumbrance or indebtedness upon the System or the Gross
Revenues or any part thereof, prior or superior to the hen thereon for the payment of the Parity
Bonds, and will pay and discharge, or cause to be paid and discharged, any and all lawful claims
for labor, materials or supplies which, if unpaid, might become a lien or charge upon the
Revenues of the System, or any part thereof, or upon any funds in the hands of the City, prior to
or superior to the hen of the Parity Bonds, or which might impair the secunty of the Parity
Bonds.
Section 6.5 Insurance The City shall, to the extent insurance coverage is available at
reasonable cost with responsible insurers, keep, or cause to be kept, the System and the operation
thereof insured, with policies payable to the City, against the risks of direct physical loss, damage
to or destruction of the System, or any part thereof, and against accidents, casualties or
neghgence, including liability insurance and employer's liability, at least to the extent that similar
insurance is usually carved by utilities operating like properties as determined by the City
Manager A program of self insurance against certain nsks or as to part of the potential liability
for certain risks may be included as part of the City's insurance coverage plan.
In the event of any loss or damage to the properties of the System covered by insurance,
the City will (a) with respect to each such loss, promptly repair and reconstruct to the extent
necessary to the proper conduct of the operations of the System the lost or damage portion
thereof and shall apply the proceeds of any insurance policy or policies covering such loss or
damage for that purpose to the extent required therefor, unless m the case of loss or damage
-32- P\DG \DGO2E 03/10/10
involving an amount less than or equal to 2% of the value of net utility plant of the System or
more, such repair and reconstruction shall not be recommended by the City Manager, and
(b) if the City shall not use the entire proceeds of such insurance to repair or
reconstruct such lost or damaged property, such insurance proceeds thereof not so used shall be
paid into the Revenue Fund, and if greater than 2% of the value of the net utility plant of the
System for any one loss or damage, shall be used to purchase or redeem bonds or to acquire or
construct extensions, betterments and improvements to the System.
Section 6.6 Books and Accounts. The City shall keep proper books of account in
accordance with any applicable rules and regulations prescribed by the State of Washington. The
City shall prepare, and any owner or holder of Parity Bonds may, upon written request, obtain
copies of, balance sheets and profit and loss statements showing in reasonable detail the financial
condition of the System as of the close of each year, and the income and expenses of such year,
including the amounts paid into the Revenue Fund, the Bond Fund, and into any special funds or
accounts created pursuant to the provisions of this ordinance, and the amounts expended for
maintenance, renewals, replacements, and capital additions to the System.
Section 6.7 Additions and Improvements The City will not expend any of the
revenues denved by it from the operation of the System or the proceeds of any indebtedness
payable from the Revenues of the System for any extensions, betterments or improvements to the
System which are not legally required or economically sound, and which will not properly and
advantageously contribute to the conduct of the business of the System in an efficient manner;
provided, that to the extent permitted by law, the City may provide commodities, services or
facilities free of charge or at a reduced charge in order to carry out a plan adopted by the Council
for conservation of water or to benefit elderly, handicapped or poor persons
-33- P\DG \DGO2E 03/10/10
Section 6.8 Tax Covenants. The City hereby covenants to undertake all actions
required to maintain the tax - exempt status of interest on the 2003 Bonds under Section 103,
Sections 141 through 149 inclusive, and Section 265 of the Code as set forth in the Arbitrage and
Tax Certification that will be executed at the closing of the 2003 Bonds.
ARTICLE VII
ADDITIONAL BONDS
Section 7.1 Additional Bonds Panty Bonds may be issued payable from the Bond
Fund on a panty with the 1996 Bonds, 1998 Bonds, and 2003 Bonds, and secured by an equal
charge and hen on the Gross Revenues pledged to the Bond Fund.
First, for the purpose of acquiring, constructing and installing additions and
improvements to and extensions of, acquiring necessary equipment for or making necessary
repairs, replacements or other capital improvements to the System and other lawful purposes
related to the System, or
Second, for the purpose of refunding, or purchasing and retiring prior to their maturity,
any outstanding Bonds or other revenue obligations of the System.
(a) The City may issue such Additional Bonds upon compliance with the following
conditions
(i) At the time of the issuance of such Additional Bonds, there shall be no
deficiency in the Bond Fund.
(ii) In each ordinance authorizing such Additional Bonds, provision shall be
made for payments into the Reserve Fund in accordance with Section 5.2(a) (iv) of this
ordinance
-34- P\DG \DG02E 03/10/10
(iii) At the time of the issuance of such Additional Bonds, the City shall have
on file a certificate from a Professional Utility Consultant, not then employed by the City except
for the purpose of giving such certificate, showing that the Net Revenue received during any
consecutive 12 -month period for which financial statements are available within the 24 months
preceding the date of delivery of such Additional Bonds equals the Coverage Requirement in
each calendar year or Fiscal Year thereafter on the then - Outstanding Parity Bonds and the
Additional Bonds to be issued, and that the Adjusted Net Revenues to be received each calendar
year or Fiscal Year thereafter, will equal at least 1.25 times the Average Annual Debt Service
each such calendar year or Fiscal Year, on the Outstanding Panty Bonds and the Additional
Bonds to be issued.
The Adjusted Net Revenues shall be the Net Revenues for a penod of any 12 consecutive
months out of the 24 months immediately preceding the date of delivery of such proposed
Additional Bonds, as adjusted to take into consideration changes m Net Revenues estimated to
occur under one or more of the following conditions for each year after such delivery for so long
as any Bonds, including the Additional Bonds proposed to be issued, shall be outstanding
(A) Any increase or decrease m Net Revenues that would result if any
change in rates and charges adopted by the Council pnor to the date of such certificate and
subsequent to the beginning of such 12 -month period, had been in force during the full 12 -month
penod,
(B) The additional Net Revenues from any rate increases that have
been approved by ordinance of the Council but that are not then in effect;
(C) Any increase or decrease in Net Revenues estimated by such
Professional Utility Consultant to result from any additions, betterments and improvements to
-35- P• \DG \DG02E 03/10/10
and extensions of any facilities of the System that (i) became fully operational during such 12-
month period, (ii) were under construction at the time of such certificate, or (iii) will be
constructed from the proceeds of the Additional Bonds to be issued,
(D) The additional Net Revenues that would have been received if any
customers added to the System during such 12 -month period were customers for the entire
period.
(E) The additional Net Revenues that may be derived by the City from
any users of the System with whom the City has entered into a contract for utility services to be
furnished, which revenues have not otherwise been included in Net Revenues.
Such Professional Utility Consultant shall base his certification upon, and his certificate
shall have attached thereto, financial statements of the System audited by the State Examiner
(unless such an audit is not available for a 12 -month penod within the preceding 24 months) and
certified by the chief financial officer of the City, showing income and expenses for the penod
upon which the same is based.
The certificate of such Professional Utility Consultant shall be conclusive and the only
evidence required to show compliance with the provisions and requirements of this subsection.
Notwithstanding the foregoing, if Additional Bonds are to be issued for the purpose of
refunding at or pnor to their maturity any part or all of the then Outstanding Bonds and the
issuance of such refunding Additional Bonds results in a debt service savings and does not
require an increase of more than $5,000 in any year for principal and interest on such refunding
Additional Bonds, the certificate required by subsection (a) (3) of this section need not be
obtained.
-36- P' \DG \DG02E 03/10/10
Once the 1996 and 1998 Bonds are no longer outstanding, in lieu of a certificate from a
Professional Utility Consultant, the Director of Finance and Budget or other financial officer of
the City may certify that the Net Revenues of the System for any 12 consecutive months of the
24 months pnor to the date of issuance of such Additional Bonds are at least 125% of the
Average Annual Debt Service due in any fiscal or calendar year thereafter, including in such
calculation debt service on such Additional Bonds.
(b) Nothing herein contained shall prevent the City from issuing revenue bonds or
other obligations which are a charge upon the Gross Revenues of the System junior or mfenor to
the payments required by this ordinance to be made out of such Gross Revenues into the Bond
Fund and accounts therein to pay and secure the payment of any Outstanding Bonds
(c) Nothing herein contained shall prevent the City from issuing revenue bonds to
refund matunng Bonds for the payment of which money is not otherwise available
(d) Notwithstanding any other provision of this ordinance, for so long as the 2003
Bonds are Outstanding, no bonds may be issued subsequent to the issuance of the 2003 Bonds
with a hen and charge on the Gross Revenues superior to the hen and charge of the 2003 Bonds
Section 7.2 Pledge Effected by Ordinance.
(a) The 2003 Bonds are special limited obligations of the City payable from and
secured solely by Gross Revenues, subject to the prior payment of Costs of Maintenance and
Operation of the System and other money and assets specifically pledged hereunder for the
payment thereof. There are hereby pledged as security for the payment of the principal,
premium, if any, and interest on the 2003 Bonds in accordance with their terms of this ordinance,
subject only to the provisions of this ordinance restricting or permitting the application thereof
for the purposes and on the terms and conditions set forth in this ordinance, (i) the proceeds of
-37- P: \DG \DG02E 03/10/10
the sale of the 2003 Bonds to the extent held in the funds established by this ordinance, (ii) the
Gross Revenues, and (iii) the money and assets, if any, credited to the Revenue Fund, the Bond
Fund and the Reserve Fund, and the income therefrom. The Gross Revenues and other money
and assets hereby pledged shall immediately be subject to the hen of this pledge without any
physical delivery thereof or further act, and the hen of this pledge shall be valid and binding as
against all parties having claims of any kind in tort, contract or otherwise against the City
regardless of whether such parties have notice thereof.
(b) The 1996 Bonds, the 1998 Bonds, the 2003 Bonds and any Additional Bonds shall
be equally and ratably payable and secured hereunder without priority by reason of date of
adoption of the ordinance providing for their issuance or by reason of their senes, number or date
of sale, issuance, execution or delivery, and by the hens, pledges, charges, trusts, assignments
and covenants made herein, except as otherwise expressly provided or permitted in this
ordinance and except as to insurance that may be obtained by the City to insure the repayment of
one or more senes or maturities within a series
(c) The 1996 Bonds, the 1998 Bonds, the 2003 Bonds and any Additional Bonds shall
not in any manner or to any extent constitute general obligations of the City or of the State of
Washington, or of any political subdivision of the State of Washington, or a charge upon any
general fund or upon any money or other property of the City or of the State of Washington, or of
any political subdivision of the State of Washington, not specifically pledged thereto by this
ordinance, nor shall the full faith and credit of the City or of the State of Washmgton, or of any
political subdivision of the State of Washington, be pledged to the payment of principal,
premium, if any, or interest thereon.
-38- P:1DG \DGO2E 03/10/10
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1 Events of Default. This ordinance and each ordinance adopted pursuant to
Article X are hereinafter in this Article VIII and in Article IX referred to collectively as "the
Ordinance."
The City hereby covenants and agrees with the purchasers and owners from time to time
of any Panty Bonds, in order to protect and safeguard the covenants and obligations undertaken
by the City secunng any Parity Bonds, that the following shall constitute "Events of Default"
(a) If the City shall default in the performance of any obligation with respect
to payments into the Bond Fund and such default is not remedied within a penod of 30 days,
(b) If default shall be made in the due and punctual payments of the principal
of and premium, if any, on any of the Panty Bonds when the same shall become due and payable,
either at maturity or by proceedings for redemption or otherwise,
(c) If default shall be made in the due and punctual payment of any
installment of interest on any Panty Bonds,
(d) If the City shall default in the observance and performance of any other of
the covenants, conditions and agreements on the part of the City contained in the Ordinance and
such default or defaults shall have continued for a period of 90 days after the City shall have
received from the Bondowners Committee or from the owners of not less than 20% in principal
amount of the Panty Bonds outstanding, a written notice specifying, and demanding the cure of,
such default;
(e) If the City shall (except as herein permitted) sell, transfer, assign or convey
any properties constituting the System or interests therein, or any part or parts thereof, or shall
-3 P• \DG \DG02E 03/10/10
make any agreement for such sale or transfer (except as expressly authonzed by Section 6 3
hereof),
(f) If an order, judgment or decree shall be entered by a court of competent
jurisdiction (a) appointing a receiver, trustee or liquidator for the whole or any substantial part of
the System, (b) approving a petition filed against the City seeking the bankruptcy, arrangement or
reorganization of the City under any applicable law of the United States or the State of
Washington, or (c) assuming custody or control of the whole or any substantial part of the
System under the provisions of any other law for the relief or aid of debtors and such order,
judgment or decree shall not be vacated or set aside or stayed (or, in case custody or control is
assumed by such order, such custody or control shall not be otherwise terminated), within 60
days from the date of entry of such order, judgment or decree,
(g) If the City shall (a) admit m wasting its inability to pay the debts of the
System generally as they become due, (b) file a petition in bankruptcy or seeking a composition
of indebtedness under any state or federal bankruptcy or insolvency law, (c) make an assignment
for the benefit of its creditors, (d) consent to the appointment of a receiver of the whole or any
substantial part of the System, or (e) consent to the assumption by any court of competent
jurisdiction under the provisions of any other law for the relief or aid of debtors of custody or
control of the whole or any substantial part of the System.
Section 8.2 Formation of Bondowners Committee During the continuance of an
Event of Default, the owners of Parity Bonds representing 20% in principal amount of the Parity
Bonds then Outstanding may call a bondholders meeting for the purpose of electing a committee
(the "Bondowners Committee ") to act on behalf of all Parity Bondowners (the `Bondowners ")
-40- P: \DG \DG02E 03/10/10
Such meeting shall be called and the proceedings thereof shall be conducted in the manner
provided in Article IX hereof.
At such meeting the Bondowners present in person or by proxy may, by a majority of the
votes cast, elect one or more persons, who may or may not be Bondowners, to the Bondowners
Committee, which shall act as trustee for all registered owners of Parity Bonds outstanding, and
the Bondowners Committee as such trustee may have and exercise all the rights and powers
provided for in this ordinance to be exercised by the Bondowners Committee. The Bondowners
present in person or by proxy at said meeting, or at any adjourned meeting thereof, shall prescribe
the manner m which the successors of the persons elected to the Bondowners Committee at such
Bondowners meeting shall be elected or appointed, and may prescribe rules and regulations
governing the exercise by the Bondowners Committee of the powers conferred upon it herein,
and may provide for the termination of the existence of the Bondowners Committee. The
members of the Bondowners Committee elected by the Bondowners in the manner herein
provided, and their successors, as a committee are hereby declared to be trustees for the owners
of all the Parity Bonds then Outstanding, and are empowered to exercise in the name of the
Bondowners Committee as trustee, all the rights and powers hereinafter conferred on the
Bondowners Committee
Section 8.3 Books of City Open to Inspection. The City covenants that if an Event of
Default shall have happened and shall not have been remedied, the books of record and account
of the City and all other records relating to the System shall at all times during regular business
hours be subject to the inspection and use of the Bondowners Committee and any person holding
at least 20% of the principal amount of Parity Bonds Outstanding and of their respective agents
and attorneys
-41- P' \DG \DGO2E 03/10/10
The City covenants that if an Event of Default shall happen and shall not have been
remedied, the City will continue to account, as a trustee of an express trust, for all Gross
Revenues and other money, secunties and funds pledged under this ordinance
Section 8.4 Suits at Law or in Equity If an Event of Default shall happen and shall
not have been remedied, then and in every such case, the Bondowners Committee by its agents
and attorneys, shall be entitled and empowered to proceed forthwith to take such needful steps
and institute such suits, actions and proceedings at law or in equity for the collection of all sums
in connection with the Parity Bonds and to protect and enforce the rights of Bondowners under
this ordinance for the specific performance of any covenant herein contained or in aid of the
execution of any power herein granted, or for an accounting against the City as trustee of an
express trust, or in the enforcement of any other legal or equitable nght as the Bondowners
Committee being advised by counsel, shall deem most effectual to enforce any of the rights of the
owners of the Panty Bonds
Any action, suit or other proceedings instituted by the Bondowners Committee hereunder
shall be brought in its name as trustee for the Bondowners and all such nghts of action upon or
under any of the Panty Bonds or the provisions of this ordinance may be enforced by the
Bondowners Committee without the possession of any of the Panty Bonds, and without the
production of the same at any trial or proceedings relative thereto except where otherwise
required by law, and the respective owners of said Parity Bonds, by taking and holding the same,
shall be conclusively deemed irrevocably to appoint the Bondowners Committee the true and
lawful trustee for the respective owners of said bonds, with authority to institute any such action,
suit or proceeding; to receive as trustee and deposit in trust any sums becoming distributable for
the receipt of such money, and to do all acts with respect thereto that the Bondowner might have
-42- P: \DG \DGO2E 03/10/10
done in person, provided, however, that nothing herein contained shall be deemed to authorize or
empower the Bondowners Committee to consent to, accept or adopt, on behalf of any
Bondowner, any plan of reorganization or adjustment affecting the Parity Bonds or the City or
any right of any owner thereof, or to authorize or empower the Bondowners Committee to vote
the claims of the owners thereof in any receivership, insolvency, liquidation, bankruptcy,
reorganization or other proceeding to which the City shall be a party, and provided further,
however, that any Bondowner or Bondowners may by mutual agreement transfer title to the
Panty Bonds held by him or them to the Bondowners Committee, or may by agreement with
other Bondowners create or organize a separate trustee or bondowners committee and may confer
or organize a separate trustee or bondowners committee and may confer upon the Bondowners
Committee or such separate trustee or bondholders committee and may confer or organize a
separate trustee or bondowners committee and may confer upon the Bondowners Committee or
such separate trustee or bondholders committee, such powers and duties and such agreement or
agreements shall provide, and the provisions of this ordinance shall not be construed as a
limitation on the powers and duties which consenting Bondowners may by agreement confer on
the Bondowners Committee or such separate trustee or bondholders committee The
Bondowners Committee shall have full powers of substitution and delegation in respect to any of
the powers hereby granted.
Section 8.5 Direction of Actions of Bondowners Committee by Majority Owners The
owners of not less than a majority in pnncipal amount of the Panty Bonds at the time
Outstanding, may direct the time, method and place of conducting any proceeding for any remedy
available to the Bondowners Committee, or exercising any trust or power conferred upon the
Bondowners Committee, provided that the Bondowners Committee shall be provided with
-43- P: \DG \DG02E 03/10/10
reasonable scrutiny and indemnity and shall have the right to decline to follow any such direction
only (i) if the Bondowners Committee shall be advised by counsel that the action or proceeding
so directed may not lawfully be taken, or (ii) if the Bondowners Committee m good faith shall
determine that the action or proceeding so directed would involve the Bondowners Committee in
personal hability or that the action or proceeding so directed would be unjustly prejudicial to the
owners of Panty Bonds not parties to such direction.
Section 8.6 Suits by Individual Bondowners No owner of any one or more of the
Panty Bonds shall have any nght to institute any action, suit or proceeding at law or in equity for
the enforcement of any provision of the Ordinance or the execution of any trust under the
Ordinance or for any remedy under the Ordinance, unless an Event of Default shall have
happened and be continuing, and unless no Bondowners Committee has been created as herein
provided, but any remedy herein authorized to be exercised by the Bondowners Committee, may
be exercised individually by any Bondowner, in his own name and on his own behalf or for the
benefit of all Bondowners, in the event no Bondowners Committee has been created, or with the
consent of the Bondowners Committee, if such Bondowners Committee has been created,
provided, however, that nothing in the Ordinance or in the Parity Bonds shall affect or impair the
obligation of the City, which is absolute and unconditional, to pay at the respective dates of
maturity and places therein expressed the principal of and premium, if any, and interest on the
Panty Bonds to the respective owners thereof, or affect or impair the nghts of action, which are
also absolute and unconditional, of any owner to enforce the payment of his Parity Bonds, or to
reduce to judgment his claim against the City for the payment of the principal and mterest on his
Parity Bonds, without reference to, or consent of, the Bondowners Committee or any other owner
of the Parity Bonds
-44- P• \DG \DGO2E 03/10/10
Section 8.7 Waivers of Default. No delay or omission of the Bondowners Committee
or of any Bondowner to exercise any nght or power arising upon the happening of an Event of
Default shall impair any right or power or shall be construed to be a waiver of any such Event of
Default or to be an acquiescence therein, and every power and remedy given by this Article to the
Bondowners Committee or to the Bondowners may be exercised from time to time and as often
as may be deemed expedient by the Bondowners Committee or by such owners
The Bondowners Committee or the owners of not less than 50% in principal amount of
the Parity Bonds at the time Outstanding, or their attorneys -in -fact duly authorized, may on
behalf of the owners of all of the Parity Bonds waive any past default under the Ordinance and its
consequences, except a default in the payment of the principal of and premium, if any, and
interest on any of the Panty Bonds. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 8.8 Remedies Granted in Ordinance Not Exclusive No remedy by the terms
of the Ordinance conferred upon or reserved to the Bondowners Committee or the Bondowners is
intended to be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under the Ordinance or existing
at law or in equity or by statute on or after the date of adoption of the Ordinance.
ARTICLE IX
BOND OWNERS MEETINGS
Section 9.1 Call of Bondowners Meetings The City, the Bondowners Committee or
the owners of not less than 20% m principal amount of the Parity Bonds then outstanding may at
any time call a meeting of the owners of the Panty Bonds. Every such meeting shall be held at
such place in the City of Yakima, State of Washington, or in the City of Seattle, State of
-45- P' ‘DG \DGO2E 03/10/10
Washington, as may be specified in the notice calling such meeting. Written notice of such
meeting, stating the place and time of the meeting and in general terms the business to be
transacted, shall be mailed to the Bondowners by the City, the Bondowners Committee or the
Bondowners calling such meeting not less than 30 nor more than 60 days before such meeting,
and shall be published at least once a week for four successive calendar weeks on any day of the
week, the date of first publication to be not less than 30 or more than 60 days preceding the
meeting; provided, however, that the mailing of such notice shall in no case be a condition
precedent to the validity of any action taken at any such meeting. The expenses of publication of
such notice shall be paid or reimbursed by the City Any meeting of Bondowners shall, however,
be valid without notice if the owners of all Panty Bonds then Outstanding are present in person
or by proxy or if notice is waived before or within 30 days after the meeting by those not so
present.
Section 9.2 Notice to Bondowners Except as otherwise provided in the Ordinance,
any provision in this ordinance for the mailing of a notice or other paper to Bondowners shall be
fully complied with if it is mailed postage prepaid to each registered owner of any of the Panty
Bonds then outstanding at his/her address, if any, appearing upon the Bond Register, and any
provision in this ordinance contained for publication of a notice or other matter shall require the
publication thereof in The Bond Buyer in the City of New York, State of New York (or in lieu of
publication in The Bond Buyer, in a daily newspaper printed in the English language and
customanly published on each business day and of general circulation in the Borough of
Manhattan, the City of New York, State of New York), and also in a daily newspaper printed in
the English language and customarily published on each business day and of general circulation
in the City of Seattle, State of Washington.
-46- P \DG \DG02E 03/10/10
Section 9.3 Proxies, Proof of Ownership of Panty Bonds Attendance and voting by
Bondowners at such meetings may be in person or by proxy Owners of Panty Bonds, by an
instrument in writing under their hands, may appoint any person or persons, with full power of
substitution, as their proxy to vote at any meeting for them.
Any registered owner of Panty Bonds shall be entitled in person or by proxy to attend and
vote at such meeting as owner of the Panty Bonds registered or certified in his/her name without
producing such Panty Bonds, and such persons and their proxies shall, if required, produce such
proof of personal identity as shall be satisfactory to the secretary of the meeting. All proxies
presented at such meeting shall be delivered to the inspectors of votes and filed with the secretary
of the meeting. All other persons seeking to attend or vote in such meeting must produce the
Panty Bonds claimed to be owned or represented at such meeting.
The vote at any such meeting of the owner of any Parity Bond entitled to vote thereat
shall be binding upon such owner and upon every such subsequent owner of such Parity Bond
(whether or not such subsequent owner has notice thereof)
Section 9.4 Execution of Instruments by Bondowners Any request, direction, consent
or other instrument in writing required or permitted by this ordinance to be signed or executed by
Bondowners may be m any number of concurrent instruments of similar tenor, and may be signed
or executed by such Bondowners in person or by agent appointed by an instrument m wntmg.
Proof of the execution of any such instrument shall be sufficient for any purpose of this
ordinance if the fact and date of the execution by any person of any such instrument may be
proved by either (a) an acknowledgment executed by a notary public or other officer empowered
to take acknowledgments of deeds to be recorded in the particular jurisdiction, or (b) an affidavit
of a witness to such execution sworn to before such a notary public or other officer Where such
-47- P 03/10/10
execution is by an officer of a corporation or association or a member of a partnership on behalf
of such corporation, association or partnership, such acknowledgment or affidavit shall also
constitute sufficient proof of his /her authority
The foregoing shall not be construed as limiting the City to such proof, it being intended
that the City may accept any other evidence of the matters herein stated which it may deem
sufficient. Any request or consent of any Bondowner shall bind every future owner of the same
Parity Bond in respect of anything done by the City in pursuance of such request, direction or
consent.
The right of a proxy for a Bondowner to act may be approved (subject to the City's nght
to require additional proof) by a written proxy executed by such Bondowner as aforesaid.
Section 9.5 Appointment of Officers at Bondowners Meetings Persons named by the
City or elected by the owners of a majority in principal amount of the Parity Bonds represented at
the meeting in person or by proxy in the event the City is not represented at such meeting, shall
act as temporary chairperson and temporary secretary of any meeting of Bondowners A
permanent chairperson and a permanent secretary of such meeting shall be elected by the owners
of a majority in principal amount of the Panty Bonds represented at such meeting in person or by
proxy The permanent Chairperson of the meeting shall appoint two inspectors of votes who
shall count all votes cast at such meeting, except votes on the election of chairperson and
secretary as aforesaid, and who shall make and file with the secretary of the meeting and with the
City their verified report of all such votes cast at the meeting.
Section 9.6 Quorum at Bondowners Meetings The owners of not less than the
principal amount of the Parity Bonds required for any action to be taken at such meeting must be
present at such meeting in person or by proxy in order to constitute a quorum for the transaction
-48- P•1DG \DG02E 03/10/10
of business, less than a quorum, however, having power to adjourn from time to time without any
other notice than the announcement thereof at the meeting; provided, however, that, if such
meeting is adjourned by less than a quorum for more than ten days, notice thereof shall be
published by the City at least five days prior to the adjourned date of the meeting.
ARTICLE X
AMENDMENTS TO ORDINANCE
Section 10.1 Amendments
(a) The Council from time to time and at any time may pass an ordinance or
ordinances amending this ordinance, which ordinance or ordinances thereafter shall become a
part of this ordinance, for any one or more or all of the following purposes
(1) To add to the covenants and agreements of the City in this ordinance, other
covenants and agreements thereafter to be observed, which shall not adversely affect the interests
of the owners of any Parity Bonds, or to surrender any right or power herein reserved.
(2) To make such provisions for the purpose of curing any ambiguities or of
curing, correcting or supplementing any defective provision contained in this ordinance or any
ordinance authorizing Additional Bonds in regard to matters or questions arising under such
ordinances as the Council may deem necessary or desirable and not inconsistent with such
ordinances and which shall not adversely affect, in any material respect, the interest of the
owners of Parity Bonds
Any such amending ordinance may be adopted without the consent of the owners of any
Panty Bonds outstanding, notwithstanding subsection (b) of this section.
(b) With the consent of the owners of not less than 65% in aggregate principal
amount of the Parity Bond at the time Outstanding, the Council may pass an ordinance or
-49- P \DG \DG02E 03/10/10
ordinances supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this ordinance or of any amending ordinance,
provided, however, that no such amending ordinance shall
(1) Extend the fixed maturity of any Parity Bonds, or reduce the rate of
interest thereon, or extend the time of payment of interest from their due date, or reduce the
amount of the principal thereof, or reduce any premium payable on the redemption thereof,
without the consent of the owner of each bond so affected, or
(2) Reduce the aforesaid percentage of Bondowners required to approve any
such amending ordinance, without the consent of the owners of all of the Parity Bonds then
Outstanding.
It shall not be necessary for the consent of Bondowners under this subsection (b) to
approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if
such consent shall approve the substance thereof
(c) Upon the adoption of any ordinance pursuant to the provisions of this Section, this
ordinance shall be deemed to be modified and amended in accordance therewith, and the
respective rights, duties and obligations of the City under this ordinance and all owners of Parity
Bonds outstanding hereunder shall thereafter be determined, exercised and enforced thereunder,
subject in all respects to such modification and amendments, and all terms and conditions of any
such supplemental ordinance shall be deemed to be part of the terms and conditions of this
ordinance for any and all purposes.
(d) Parity Bonds executed and delivered after the execution of any amending
ordinance passed pursuant to the provisions of this section may have a notation as to any matter
provided for in such amending ordinance, and if such supplemental ordinance shall so provide,
-50- P: \DG \DG02E 03/10/10
new bonds so modified as to conform, in the opinion of the Council, to any modification of this
ordinance contained in any such supplemental ordinance, may be prepared and delivered without
cost to the owners of any affected Parity Bonds then outstanding, upon surrender for cancellation
of such bonds with all unmatured coupons and all matured coupons not fully paid, m equal
aggregate principal amounts
Section 10.2 Obtaining Approval of Amendments at Bondowners Meeting. The City
may at any time adopt an ordinance amending the provisions of this ordinance to the extent that
such amendment is permitted by the provisions of this Article X, to take effect when and as
provided in this Section. At any time thereafter such ordinance may be submitted by the City for
approval to a meeting of the bondowner duly convened and held in accordance with the
provisions of this ordinance. A record in duplicate of the proceedings of each meeting of the
Bondowners shall be prepared by the permanent secretary of the meeting and shall have attached
thereto the original reports of the inspectors of votes and affidavits by a person or persons having
knowledge of the facts, showing a copy of the notice of the meeting and setting forth the facts
with respect to the mailing and publication thereof under the provisions of this ordinance. Such a
record shall be signed and verified by the affidavits of the permanent chairperson and the
permanent secretary of the meeting, and one duplicate thereof shall be delivered to the City Any
record so signed and verified shall be proof of the matter therein stated. If the ordinance of the
City making such amendment shall be approved by a resolution duly adopted at such meeting of
bondowners by the affirmative vote of the owners of the required percentages of Parity Bonds, a
notice stating that a resolution approving such amendment has been so adopted shall be mailed
by the City to each bondholder who has requested such notice (but failure so to mail copies of
such notice shall not affect the validity of such resolution) and shall be published at lest once m
-5 1 - P: \DG \DG02E 03/10/10
the manner provided in Section 9.2 hereof. Proof of such mailing and publication by the
affidavit or affidavits of a person or persons having knowledge of the facts shall be filed with the
City Such ordinance of the City making such amendment shall be deemed conclusively to be
binding upon the City, the paying agents, and the owners of all Parity Bonds at the expiration of
30 days after the publication of the notice provided for in this Section, except in the event of a
final decree of a court of competent jurisdiction setting aside such ordinance or annulling the
action taken thereby in a legal action or equitable proceeding for such purpose commenced
within such period, provided that the City and any paying agents during such 30 day period and
any such further period during which such action or proceeding may be pending shall be entitled
m their absolute discretion to take such action, or to refrain from taking such action, with respect
to such ordinance as they may deem expedient. Nothing in this ordinance contained shall be
deemed or construed to authorize or permit, by reason of any call of a meeting of Bondowners or
of any right conferred hereunder to make such a call, any hindrance or delay in the exercise of
any nghts conferred upon or reserved to the paying agents or the Bondowners under any of the
provisions of this ordinance
Section 10.3 Alternate Method of Obtaining Approval of Amendments. The City may
at any time adopt an ordinance amending the provisions of this ordinance, or of any Parity
Bonds, to the extent that such amendment is permitted by the provisions of this Article, to take
effect when and as provided in this Section. Upon adoption of such ordinance, a request that
Bondowners consent thereto shall be mailed by the City to the Bondowners and notice that the
City is requesting Bondowners to consent to such amendment shall be published at least once in
the manner provided in Section 9.2 hereof. Such ordinance shall not be effective unless and until
there shall have been filed with the City the written consents of the percentages of owners of
-52- P \DG \DG02E 03/10/10
outstanding Bonds specified herein and a notice shall have been published as hereinafter m this
Section provided. Each such consent shall be effective only if accompanied by proof of
ownership of the Parity Bond for which such consent is given. A certificate or certificates of the
Clerk of the City that he /she has examined such proof and that such proof is sufficient shall be
conclusive that the consents have been given by the owners of the Parity Bonds described in such
certificate or certificates Any such consent shall be binding upon the owner of the Parity Bonds
giving such consent and on every subsequent owner of such Panty Bonds (whether or not such
subsequent owner has notice thereof). A notice stating that the ordinance has been consented to
by the owners of the required percentages of Bonds and will be effective as provided in this
Section, may be given to the Bondowners by mailing such notice to the bondholders, and shall be
given by publishing the same at least once in the manner provided m Section 9.2 hereof. A
record, consisting of the papers required by this Section to be filed with the City shall be proof of
the matters therein stated, and this ordinance shall be deemed conclusively to be binding upon
the City and the owners of all Parity Bonds at the expiration of 30 days after the notice last
provided for in this Section, except in the event of a final decree of a court of competent
jurisdiction setting aide such consent or annulling the action taken thereby in a legal action or
equitable proceeding for such purpose commenced within such period.
Section 10.4 Amendment of Ordinance in Any Respect by Approval of All
Bondowners Notwithstanding anything contained in the foregoing provisions of this Article, the
rights and obligations of the City and of the owners of the Panty Bonds, and the terms and
provisions of the Parity Bonds and of this ordinance, may be amended in any respect with the
consent of the City, by the affirmative vote of the owners of all said Bonds then Outstanding at a
meeting of Bondowners called and held as heremabove provided, or upon the adoption of an
-53- P' \DG \DG02E 03/10/10
ordinance by the City and the consent of the owners of all the Parity Bonds then Outstanding,
such consent to be given as provided in Section 10.3 except that no notice to bondowners either
by mailing or publication shall be required, and the amendment shall be effective immediately
upon such unanimous vote or written consent of all of the Bondowners.
Section 10.5 Exclusion of Bonds Owned by City Parity Bonds owned or held by or for
the account of the City shall not be deemed Outstanding for the purpose of any vote or consent or
other action or any calculation of Outstanding Bonds in this ordinance provided for, and shall not
be entitled to vote or consent or take any other action in this ordinance provided for
Section 10.6 Endorsement of Amendment on Bonds. Parity Bonds delivered after the
effective date of any action amending this ordinance may bear a notation by endorsement or
otherwise as to such action, and in that case upon demand of the owner of any Parity Bond
Outstanding at such effective date and presentation of his/her Parity Bond for that purpose at the
principal office of the paying agents, suitable notation shall be made on such Panty Bond by the
paying agent as to any such action. If the City shall so determine, new Panty Bonds so modified
as m the opinion of the City and its counsel to conform to such action shall be prepared,
delivered and upon demand of the owner of any Parity Bond then outstanding shall be exchanged
without cost to such Bondowner for Parity Bonds then outstanding hereunder, upon surrender of
such Bonds with any unmatured coupons pertaining thereto
ARTICLE XI
MIS CELLANEOUS
Section 11.1 Undertaking to Provide Ongoing Disclosure.
(a) Contract/Undertaking. This section constitutes the City's written undertaking for
the benefit of the owners of the 2003 Bonds as required by Section (b)(5) of the Rule
-54- P: \DG \DG02E 03/10/10
(b) Financial Statements /Operating Data. The City agrees to provide or cause to be
provided to each NRMSIR and to the SID, if any, in each case as designated by the Commission
in accordance with the Rule, the following annual financial information and operating data for
the pnor fiscal year (commencing in 2004 for the fiscal year ended December 31, 2003)
(1) Annual financial statements showing ending retained earnings for the
System prepared in accordance with the Budget Accounting and Reporting System prescribed by
the Washington State Auditor pursuant to RCW 43 09.200 (or any successor statute) and
generally of the type included m the official statement for the 2003 Bonds under the heading
"Water and Sewer Operating Statement ",
(2) Principal amount of Bonds of the System,
(3) Debt service coverage for Outstanding Bonds,
(4) Rates for the System, and
(5) Number of customers of the System.
Such annual information and operating data described above shall be provided on or
before nine months after the end of the City's Fiscal Year The City's current Fiscal Year ends
December 31 The City may adjust such Fiscal Year by providing written notice of the change of
Fiscal Year to each then existing NRMSIR and the SID, if any In lieu of providing such annual
financial information and operating data, the City may cross - reference to other documents
provided to the NRMSIR, the SID or to the Commission and, if such document is a final official
statement within the meaning of the Rule, available from the MSRB
If not provided as part of the annual financial information discussed above, the City shall
provide the City's audited annual financial statement for the System prepared m accordance with
the Budget Accounting and Reporting System prescribed by the Washington State Auditor
-55- P' \DG \DG02E 03/10/10
pursuant to RCW 43 09.200 (or any successor statute) when and if available to each then existing
NRMSIR and the SID, if any
(c) Material Events The City agrees to provide or cause to be provided, in a timely
manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the occurrence of any
of the following events with respect to the 2003 Bonds, if material
(1) Principal and interest payment delinquencies,
(2) Non - payment related defaults,
(3) Unscheduled draws on debt service reserves reflectmg financial
difficulties,
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties,
(5) Substitution of credit or liquidity providers, or their failure to perform,
(6) Adverse tax opinions or events affecting the tax - exempt status of the 2003
Bonds,
(7) Modifications to the rights of 2003 Bond owners,
(8) Bond calls (optional, contingent or unscheduled Bond calls other than
scheduled sinking fund redemptions for which notice is given pursuant to the Commission's
Exchange Act Release 34- 23856),
(9) Defeasances,
(10) Release, substitution or sale of property securing repayment of the 2003
Bonds, and
(11) Rating changes
-56- P1DG \DGO2E 03/10/10
Solely for purposes of disclosure and not intending to modify this undertaking, the City
advises that no property secures repayment of the 2003 Bonds
(d) Notification Upon Failure to Provide Financial Data. The City agrees to provide
or cause to be provided, in a timely manner, to each NRMSIR or to the MSRB and to the SID, if
any, notice of its failure to provide the annual financial information described in Subsection (b)
above on or prior to the date set forth in Subsection (b) above
(e) Termmation/Modification. The City's obligations to provide annual financial
information and notices of material events shall terminate upon the legal defeasance, prior
redemption or payment in full of all of the 2003 Bonds This section, or any provision hereof,
shall be null and void if the City (1) obtains an opinion of nationally recognized bond counsel to
the effect that those portions of the Rule which require this section, or any such provision, are
invalid, have been repealed retroactively or otherwise do not apply to the 2003 Bonds, and
(2) notifies each then existing NRMSIR and the SID, if any, of such opinion and the cancellation
of this section.
Notwithstanding any other provision of this motion, the City may amend this
Section 11 1, and any provision of this Section 11 1 may be waived, with an approving opinion
of nationally recognized bond counsel in accordance with the Rule In the event of any
amendment or waiver of a provision of this Section 11 1, the City shall describe such amendment
in the next annual report, and shall include, as applicable, a narrative explanation of the reason
for the amendment or waiver and its impact on the type (or in the case of a change of accounting
principles, on the presentation) of financial information or operating data being presented by the
City In addition, if the amendment relates to the accounting pnnciples to be followed in
preparing financial statements, (i) notice of such change shall be given in the same manner as for
-57- P: \DG \DG02E 03/10/10
a material event under subsection (c), and (u) the annual report for the year in which the change
is made should present a comparison (in narrative form and also, if feasible, in quantitative form)
between the financial statements as prepared on the basis of the new accounting principles and
those prepared on the basis of the former accounting principles
(f) Bond Owner's Remedies Under This Section. The right of any Bond Owner or
Beneficial Owner of 2003 Bonds to enforce the provisions of this section shall be limited to a
nght to obtain specific enforcement of the City's obligations hereunder, and any failure by the
City to comply with the provisions of this undertaking shall not be an event of default with
respect to the 2003 Bonds hereunder For purposes of this section, `Beneficial Owner" means
any person who has the power, directly or indirectly, to vote or consent with respect to, or to
dispose of ownership of, any 2003 Bonds, including persons holding 2003 Bonds through
nominees or depositories
Section 11.2 Severabihty If any one or more of the covenants or agreements provided
in this ordinance to be performed on the part of the City shall be declared by any court of
competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or
agreements, shall be null and void and shall be deemed separable from the remaining covenants
and agreements in this ordinance and shall in no way affect the validity of the other provisions of
this ordinance or of any Parity Bonds
Section 11.3 General Authorization. The Mayor and Director of Finance and Budget,
and each of the other appropriate officers, agents and representatives of the City are each hereby
authorized and directed to take such steps, to do such other acts and things, and to execute such
letters, certificates, agreements, papers, financing statements, assignments or instruments as in
-58- P:\DG \DG02E 03/10/10
their judgment may be necessary, appropriate or desirable in order to carry out the terms and
provisions of, and complete the transactions contemplated by this ordinance
Section 11.4 Pnor Acts. All acts taken pursuant to the authority of this ordinance but
prior to its effective date are hereby ratified and confirmed.
Section 11.5 Effective Date. This ordinance shall be effective 30 days after its passage,
approval and publication as provided by law
PASSED by the Council of the City of Yakima at a regular meeting thereof, held
this 7 th day of October, 2003
CITY OF YAKIMA, WASHINGTON
By `&
Mayor
ATTEST
KetA
2
City Clerk
APPROVED AS TO FORM.
N IA
City Attorney
Publication Date 10 - 10 - 2003
Effective Date 11 - - 2003
-59- P \DG \DG02E 03/10/10
EXHIBIT A
DESCRIPTION OF PROJECT
The Project includes the following improvements to the City's treatment plant:
City of Yakima
Wastewater Treatment plant improvements
To provide redundancy to several operations of the treatment plant. Redundancy is required to meet the Washington
Department of Ecology (WDOE) criteria to provide backup operations to major processes of the plant to assure
compliance with the City's NPDES Permit and associated rules and regulations.
Sohds dewatering — only one of two centrifuges is functional any longer for dewatering Biosolids and it requires
extensive maintenance to continue operating. A new centrifuge or alternate source of dewatering
the biosolids is required to maintam compliance when the older centrifuge is out of service
Solids thickening - the waste activated sludge (WAS) thickening process reduces the volume of solids sent to the
dewatering processes. There is currently only one dissolved air flotation thickener (DAFT) to
thicken secondary sludge. A second thickening unit is needed to meet Ecology redundancy
criteria.
Secondary clarification — the secondary clarifiers are the final sedimentation process prior to discharge to the
Yakima River Reliability standards for WDOE require that 75% of the design flow for this
final process should be handled with one unit off line. Based on this the two existing secondary
clarifiers are at or near hydraulic capacity and an additional secondary clarifier is required to
meet Ecology redundancy criteria.
New RAS/WAS Pump Station — the RAS/WAS pump station is used to transport Return Activated Sludge (RAS)
from the secondary clarifiers back to the aeration basin flow control system through two constant
speed open screw pumps. Waste activated sludge is pumped from the two existing secondary
clarifiers through two pumpmg systems. With the addition of a new secondary clarifier or future
new aeration basins a new RAS/WAS pumping station would be required. With a new
RAS/WAS pumping station current problems with the control of the RAS pumping flow split
would be resolved as well as having sufficient capacity to handle peak hour flow conditions.
Emergency Power —the emergency power system supplies a second source of power to assure minimum treatment is
provided under utility power failures. The existing generator set was installed in 1972 and at a
minimum requires a complete inspection/overhaul. Another generator set is required to operate
the minimum treatment processes at present.
Replacement of Blower VFDs — the VFDs that operate the four 400 horsepower blowers are far less efficient and
generate more harmonic distortion on the electrical power system than newer technology They
are at the end of their useful life and are hard to find parts for All four need to be replaced.
$ 245,000
The total cost for these improvements is estimated to be $ 9,142,800
A-' P: \DG \DGO2E 03/10/10
EXHIBIT B
UNITED STATES OF AMERICA
NO $
STATE OF WASHINGTON
CITY OF YAKIMA
WATER AND SEWER REVENUE BOND, 2003
INTEREST RATE % MATURITY DATE CUSIP NO
REGISTERED OWNER.
PRINCIPAL AMOUNT
The City of Yakima, Washington (the "City"), hereby acknowledges itself to owe and for
value received promises to pay to the Registered Owner identified above, or registered assigns,
on the Maturity Date identified above, the Pnncipal Amount indicated above and to pay interest
from , 2003, until payment of this bond at the Interest Rate set forth above, payable
on 1, 2004, and semiannually thereafter on the first days of each succeeding
and Both principal of and interest on this bond are payable in lawful money of the
United States of America. For so long as the bonds of this issue are held in fully immobilized
form, payments of pnncipal and interest thereon shall be made as provided in accordance with
the operational arrangements of DTC referred to in the Blanket Issuer Letter of Representations
from the City to The Depository Trust Company In the event that the bonds of this issue are no
longer held in fully immobilized form, interest on this bond shall be paid by check or draft
mailed to the Registered Owner at the address appearing on the Bond Register on the 15 day of
the month preceding the interest payment date, and principal of this bond shall be payable upon
presentation and surrender of this bond by the Registered Owner at the principal office at the
pnncipal office of the fiscal agency of the State of Washington in New York, New York (the
"Bond Registrar "), provided, however, that if so requested m writing by the Registered Owner of
at least $1,000,000 pnncipal amount of bonds, interest will be paid by we transfer on the date
due to an account with a bank located within the United States
This bond is one of an authonzed issue of bonds of like date and tenor, except as to
number, amount, rate of interest and date of maturity, in the aggregate principal amount of
$ (the "Bonds "), and is issued pursuant to Ordinance No 2003 -, passed by the
City Council on October 7 _, 2003, and Resolution No of the City Council adopted on
_, 2003 (collectively, the "Bond Ordinance "), to finance certain improvements to the
City's water and sewer system and pay costs of settling a lawsuit. Capitalized terms used in this
bond and not otherwise defined shall have the meanings given them in the Bond Ordinance.
B - 1 P: \DG \DG02E 03/10/10
The Bonds are subject to optional [and mandatory] redemption as set forth in the Bond
Ordinance
The Bonds are payable solely from the special fund of the City known as the Water and
Sewer Revenue Bond Fund" (the "Bond Fund ") The City has irrevocably obligated and bound
itself to pay into the Bond Fund out of Revenue of the System or from such other money as may
be provided for such purpose certain amounts necessary to pay and secure the payment of the
pnncipal and interest on such bonds.
The City has pledged to set aside from the Revenue Fund out of the Revenue of the
System and to pay into the Bond Fund the various amounts required by the Bond Ordinance to be
paid into and maintained in such Fund within the times provided by the Bond Ordinance
To the extent more particularly provided by the Bond Ordinance, the amounts so pledged
to be paid from the Revenue Fund out of Gross Revenues into the Bond Fund shall be a hen and
charge thereon equal m rank to the hen and charge upon Gross Revenues of the amounts required
to pay and secure the payment of the City's Outstanding Parity Bonds, and any Additional Bonds
hereafter issued and superior to all other hens and charges of any kind or nature, except the Costs
of Maintenance and Operation of the System.
The City has further bound itself to maintain the System in good repair, working order
and condition, to operate the same m an efficient manner and at a reasonable cost, and to
establish, maintain and collect rates and charges in each calendar year that will make available,
for the payment of the pnncipal of and interest on Outstanding Bonds, Net Revenue in an amount
that will be equal to the Coverage Requirement.
The pledge of Gross Revenues and other obligations of the City under the Bond
Ordinance may be discharged at or pnor to the maturity or redemption of the bonds of this issue
upon the making of provision for the payment thereof on the terms and conditions set forth in the
Bond Ordinance
This Bond is a special limited obligation of the City and is not an obligation of the State
of Washington or any political subdivision thereof other than the City, and neither the full faith
and credit nor the taxing power of the City or the State of Washington is pledged to the payment
of this Bond.
This Bond shall not be valid or become obligatory for any purpose or be entitled to any
secunty or benefit under the Bond Ordinance until the Certificate of Authentication has been
manually signed by the Bond Registrar
This Bond is transferable only on the records maintained by the Bond Registrar for that
purpose upon the surrender of this Bond by the Registered Owner or his/her duly authorized
agent and only if endorsed in the manner provided hereon, and a new fully registered Bond of
like principal amount, matunty and interest rate shall be issued to the transferee in exchange
Such exchange or transfer shall be without cost to the Registered Owner or transferee The City
B-2 P: \DG \DG02E 03/10/10
and Bond Registrar may deem the person in whose name this Bond is registered to be the
absolute owner for the purpose of receiving payment of the principal of and interest on this Bond
and for all other purposes.
The Bond Registrar is not required to issue, register, transfer or exchange any Bonds
during a period beginning at the opening of business on the 15th day of the month next preceding
any interest payment date and ending at the close of business on the mterest payment date, or, in
the case of any proposed redemption of the Bonds, after the mailing of notice of the call of such
Bonds for redemption.
It is hereby certified that all acts, conditions and things required by the Constitution and
statutes of the State of Washington and the Charter and ordinances of the City to exist, to have
happened, been done and performed precedent to and in the issuance of this Bond have
happened, been done and performed and that the issuance of this bond and the bonds of this
senes does not violate any constitutional, statutory or other limitation upon the amount of bonded
indebtedness that the City may incur
The City has caused this Bond to be executed by the manual or facsimile signature of the
Mayor and to be attested by the manual or facsimile signature of the Clerk, and has caused the
seal of the City to be impressed or impnnted on this bond, as of this day of , 2003
CITY OF YAKIMA, WASHINGTON
By /s/ manual or facsimile signature
Mayor
ATTEST
/s/ manual or facsimile signature
Clerk
The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially
the following form
B-3 P: \DG \DG02E 03/10/10
CERTIFICATE OF AUTHENTICATION
This is one of the Water and Sewer Revenue Bonds, 2003, of the City of Yakima,
Washington, dated 1, 2003, described in the Bond Ordinance
WASHINGTON STATE FISCAL AGENCY, as
Bond Registrar
By
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER OF
TRANSFEREE
(Please print or typewrite name and address, including zip code, of transferee)
the within bond and does hereby irrevocably constitute and appoint
as attorney -in -fact to transfer
said bond on the books kept for registration thereof with full power of substitution in the
premises
DATED
SIGNATURE GUARANTEED
NOTICE Signature(s) must be
guaranteed pursuant to law
NOTE The signature on this Assignment must
correspond with the name of the Registered Owner
as it appears upon the face of the within bond in
every particular, without alteration or enlargement
or any change whatever
B-4 P: \DG \DGO2E 03/10/10
BOND DEBT SERVICE
DRAFT City of Yakima
.,Water & Sewer Revenue Bonds, 2003 Series A & B
Penod Annual
Ending Principal Coupon Interest Debt Service Debt Service
11/17/2003
05/01/2004 351,417.39 351,417.39
11/01/2004 560,000 1.800% 381,055 00 941,055 00 1,292,472.39
05/01/2005 376,015 00 376,015 00
11/01/2005 600,000 2.i00% 3.76,015 00 976,015 00 1,352,030.00
05/01/2006 369,715 00 369,715 00
11/01/2006 610,000 2.500% 369,715 00 979,715 00 1,349,430.00
05/01/2007 362,090.00 362,090 00
11/01/2007 625,000 2.950% 362,090.00 987,090 00 1,349,180.00
05/01/2008 352,871.25 352,871.25
11/01/2008 645,000 3.300% 352,871.25 997,871.25 1,350,742.50
05/01/2009 342,228.75 342,228.75 '
11/01/2009 665,000 3 650% 342,228.75 1,007,228.75 1,349,457.50
05/01 /2010 330,092.50 330,092.50
11 /01 /2010 690,000 4 000% 330,092.50 1,020,092.50 1,350,185.00
05/01/2011 316,292.50 316,292.50
11/01/2011 720,000 4.250% 316,292.50 1,036,292.50 1,352,585 00
05/01/2012 300,992.50 300,992.50
11/01/2012 750,000 4 450% 300,992.50 1,050,992.50 1,351,985.00
05/01/2013 284,305 00 284,305 00
11/01/2013 780,000 4 600% 284,305 00 1,064,305 00 1,348,610 00
05/01/2014 266,365 00 266,365 00
11/01/2014 820,000 4 700% 266,365 00 1,086,365 00 1,352,730 00
05/01/2015 247,095 00 247,095 00
11/01/2015 855,000 4 800% 247,095 00 1,102,095 00 1,349,190 00
05/01/2016 226,575 00 226,575 00
11/01/2016 895,000 4 900% 226,575 00 1,121,575 00 1,348,150 00
05/01/2017 204,647.50 204,647.50
11/01/2017 940,000 5 000% 204,647 50 1,144,647.50 1,349,295 00
05/01/2018 181,147.50 181,147.50
11/01/2018 990,000 5 100% 181,147.50 1,171,147.50 1,352,295 00
05/01/2019 155,902.50 155,902.50
11/01/2019 1,040,000 5.200% 155,902.50 1,195,902.50 1,351,805 00
05/01/2020 128,862.50 128,862.50
11/01/2020 1,095,000 5.300% 128,862.50 1,223,862.50 1,352,725 00
05/01/2021 99,845 00 99,845 00
11/01/2021 1 150,000 5 400% 99,845 00 1,249,845 00 1,349,690.00
05/01/2022 68,795 00 68,795 00
11/01/2022 1,210,000 5.500% 68,795 00 1,278,795 00 1,347,590 00
05/01/2023 35,520.00 35,520 00
11/01/2023 1,280,000 5 550% 35,520 00 1,315,520 00 1,351,040 00
16,920,000 10 031,187.39 26,951 187.39 26,951,187.39
Sep 10 2003 4.57 pm Prepared by MAW - Seattle - Northwest Secunties (Finance 5 001 1' akima:03WSREV) Page 4
•
Section A
Settlement Agreement
•
III
RESOLUTION NO R -2003- 130
A RESOLUTION authorizing and directing the City Manager of the City of Yakima to
execute a Settlement Agreement for the wastewater odor litigation.
WHEREAS, in 1998, approximately 220 residents of the cities of Union
Gap and Yakima filed administrative claims with the City of Yakima for $75,000
damages each, totaling $16.5 million, and
WHEREAS, the 220 residents subsequently filed a lawsuit in Yakima
County Superior Court, which was eventually expanded into a complex, class action
case involving approximately 3,700 former and current residential property owners
seeking $39 million in damages, and
WHEREAS, after extensive mediation efforts, a settlement has been
reached that will conclude all outstandmg claims by the 3,700 member class against the
City arising from the perceived odors from the City's wastewater treatment plant,
which were alleged to have been a nuisance; and
WHEREAS, the City Council of the City of Yakima deems it to be m the
best interests of the citizens of the City of Yakima to execute the attached Settlement
Agreement to conclude this class action litigation, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA.
The City Manager of the City of Yakima is hereby authorized and directed to
execute the attached Settlement Agreement for the wastewater odor litigation
settlement.
ADOPTED BY THE CITY COUNCIL this 7th day of October, 2003
ATTEST Mary Place, Mayor
City Clerk
(lk)res /wastewater odor settlement ID-03.rp
SETTLEMENT AGREEMENT
WHEREAS, Representative Plaintiffs Martin Cuevas, Karen Cuevas, Daniel
Martinez, Karen Murphy, Willie Murphy, Darlene Ryan, and Verla Row have brought suit,
individually and on behalf of the residential class certified by the Court against the City of
Yakima in the action presently pending in the Supenor Court of Washington, Yakima County,
styled Murphy, et al. v City of Yakima, et al., Cause No 99 -2- 00611 -8 (the "Action "), alleging
injury and damage to Representative Plaintiffs and members of the class of persons and
residential property owners in the vicinity of the City of Yakima's Wastewater Treatment Plant
and adjacent Industnal Sprayfield ( "WWTP "), and
WHEREAS, in April 1999, Representative Plaintiffs and Class Members on behalf of
themselves and others similarly situated, filed a class action complaint against defendant City of
Yakima (the "City") and Del Monte Corporation, a Delaware"k corporation ( "Del Monte
Corporation ") asserting causes of action for negligence, nuisance, trespass, and inverse
condemnation as a result of the odors ongmating from the WWTP Representative Plaintiffs and
Class Members asserted, among other things that, as a result of negligent operation of the
WWTP, including the collection, transportation and storage of biosolids, odors emanating from
the WWTP afflicted the entire Class Area and occurred with such frequency and were of such
intensity and duration as to interfere with the Representative Plaintiffs' and Class Members' use
and enjoyment of their property, adversely impacting property values and causing personal
discomfort, anxiety, stress, headaches, nausea and other adverse health effects, and
WHEREAS, on December 14, 2000, Representative Plaintiffs and Class Members filed a
motion to certify the class against the City and Del Monte Corporation. On Apnl 19, 2001, the
Court granted Plaintiffs' Motion for class certification, and
WHEREAS, on June 15, 2001, the Representative Plaintiffs mailed and published a
notice of pendency of class actions to members of the certified class, and
WHEREAS, the City and Del Monte Corporation deny the allegations made against it in
the Action, and
WHEREAS, the Parties recognize the existence of disputed issues of law and fact
regarding the allegations in the Action, and
WHEREAS, the Parties wish to avoid the expense and nsk involved in continued
litigation over the matters alleged in the Action, and instead wish to compromise and settle the
vanous disputes ansmg in connection therewith.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the Parties agree as follows
}
DEFINITIONS
}
"Action" means Murphy, et al. v City of Yakima, et al., Yakima County Supenor Court
Cause No 99 -2- 00611 -8
"Administrative Expenses" means expenses incurred in the administration of this
Settlement as provided herein or as otherwise allowed by the Court.
"Claim(s)" means any administrative or tort claim or any lawsuit filed with or against the
City or Del Monte Corporation with regard to actions or failures to act relating to, arising out of,
concerning or caused by the WWTP up through and including the date of Final Approval.
"Claim(s)" includes, but is not limited to, the City's alleged acts and omissions of negligence and
failure, in the construction, operation, maintenance, and repair of the WWTP up through and
including the date of Final Approval, to comply with the applicable standard of care for the
design, construction and operation of a waste water treatment plant, including but not limited to
the collection, transportation and storage of biosohds, or any other common law, statutory or
regulatory cause of action.
"Class Area" means the area shown on the map attached hereto as Exhibit A, as legally
described on Exhibit B attached hereto Class Area does not include any property that was
neither zoned for nor used as residential property at any time between June 30, 1990 and October
10, 2003. The foregoing legal description is intended to be a full and complete legal description
of the property shown on Exhibit A attached to this Settlement Agreement. In the event of any
discrepancy between the real property described in the foregoing legal description and the real
property shown on Exhibit A, the descnption shown on Exhibit A shall control.
"Class Members" means all persons and entities, including minors, who (a) reside in or
own residential property, or who have resided in and/or owned residential property within the
Class Area at any time between June 30, 1990 and the date of Preliminary Approval of this
Settlement and who have not previously opted out of the class (the "Class ")
"Common Fund" means the fund established pursuant to paragraph 2 of this Agreement.
"Plaintiffs' Counsel" means Albert R. Malanca, Kenneth G Kieffer, John C. Guadnola,
Bradley B Jones, Timothy L. Ashcraft, Joan C Foley, and the law firm of Gordon, Thomas,
Honeywell, Malanca, Peterson & Daheim LLP
"Court" means the Superior Court of Washington, Yakima County, or other Court
properly acquinng junsdiction over the Action.
"Odors" shall be given the broadest possible interpretation, including without limitation,
any and all airborne odors of any kind to humans, animals, plants, or the environment, and any
effects of odors including any kind of annoyance, discomfort, or adverse effects on body, mind,
spint, health, property, air, quality of life, enjoyment of life, or other interests, relating to, arising
out of, concerning or caused by the WWTP pnor to Final Approval regardless of whether such
Odors are tangible or intangible
"Final Approval" means the date by which all of the following have occurred. (1) the
Court has entered an Order finally approving this Settlement in a form to be agreed upon by the
Parties, and (2) the applicable time period for filing appeals or requests for review of said Order
has passed without any appeals or requests for review being filed, or if appeals or requests for
review are filed, the entry of orders affirming said Order or denying review after exhaustion of
all appellate remedies.
"Parties" mean the Representative Plaintiffs, the Class Members, and the City of Yakima.
"Preliminary Approval" of this Settlement means the Court's entry of an order
prehmmanly approving this Settlement and authonzing notice to the Class. The Parties shall use
good faith efforts to agree upon the form of the order and of the notice. In the event the Parties
cannot agree, they shall both submit their proposed orders and notices to the Court and the Court
shall decide the form of the order and notice.
"Released Parties" shall mean the City of Yakima and Del Monte Corporation, each and
every one of their departments, divisions, agencies, commissions, boards, subdivisions, owners,
officers, directors, employees, attorneys, elected officials, predecessors, heirs, successors and
assigns. It is the intention of the Parties that this term be given the broadest possible
interpretation.
"Representative Plaintiffs" means Martin Cuevas, Karen Cuevas, Daniel Martmez, Karen
Murphy, Willie Murphy, Darlene Ryan, and Verla Row
"WWTP" means the Yakima Regional Wastewater Treatment Plant, its collection and
transportation facilities, and the former operation of the adjacent Industrial Sprayfields,
composting facility, and outdoor biosolids storage area.
TERMS AND CONDITIONS OF SETTLEMENT
1 Purpose. This Settlement and Settlement Agreement are intended solely for the
purpose of compromising disputed claims and potential claims and avoiding the nsk and expense
of continued litigation. This Settlement and Settlement Agreement are not, and shall not be
construed or characterized as, an admission of wrongdoing of any kind on the part of any Party,
nor does any Party admit or concede the validity of any claim or defense asserted by any other
party in the Action.
2 Settlement Amount. The City agrees and stipulates to the entry following Final
Approval of ajudgment in the amount of Thirteen Million and No /100 Dollars ($13,000,000)
in favor of Representative Plaintiffs and the Class Members. A copy of the judgment is attached
as Exhibit C The City shall arrange for payment to the trust account of Gordon, Thomas,
Honeywell, Malanca, Peterson & Daheim, LLP, the sum of Seven Million and No /100 Dollars
($7,000,000) in trust for the Class Members ( "The Common Fund "), which, together with the
judgment referenced above and Plaintiffs pursuit of claims against policies of insurance
referenced below, shall constitute full and final Settlement of the Action. These funds shall be
paid on the latter of Final Approval or December 15, 2003, provided, however, that if Final
Approval occurs before December 15, 2003 and the City, using its best efforts, has not
completed financing its payment obligation hereunder, it may extend its payment date an
additional two weeks to December 29, 2003 The Representative Plaintiffs and Class covenant
not to execute against the Released Parties for any amounts of the judgment in excess of Seven
Million and No /100 Dollars ($7,000,000) except against those insurers who issued policies of
insurance to Yakima between 1997 and 2001
3 No Assignment of Policies, Continued Prosecution of Insurance Litigation. By
this Settlement, the City is not assigning its insurance policies to the Class and the City may
continue to pursue its claims against its insurers Plaintiffs and the City shall maintain their
current lawsuits against the City's insurance carvers. The City shall retain full authonty and
responsibility for its pending appeal of its lawsuit against its insurers throughout the appellate
process including but not limited to any motions for reconsideration, rehearing en bane and
otherwise. If and only if the City's pending appeal is successful and results in a remand to the
distnct court for further proceedings, Plaintiffs agree that Plaintiffs' Counsel may elect to assume
responsibility for further prosecution of the action. If Plaintiffs' Counsel so elect, they will
manage both the remanded federal court action and at their sole discretion, the declaratory
judgment action in Yakima County Supenor Court; provided, however, that the City may
associate as co- counsel with Plaintiffs' Counsel in the lawsuits and may, at its election, prosecute
the lawsuits at the City's sole cost and expense should Plaintiffs' Counsel decline to do so
4 Allocation of Insurance Recovenes. Plaintiffs and the City agree that they
will share any proceeds recovered from the City's insurance carvers by settlement, judgment or
otherwise. The proceeds from a resolution of either or both insurance lawsuits will be
collectively allocated as follows
(a) With respect to the recovery of any "net proceeds" at or under
$1,000,000, the City shall be entitled to the first $500,000 of the net proceeds, which shall be
considered as partial recovery to the City for amounts paid to Plaintiffs in settlement and/or costs
and fees previously incurred, as will all other monies allocated to the City under this paragraph.
The Plaintiffs shall be entitled to the next $500,000 in partial satisfaction of their judgment.
Thereafter, with respect to any recovery of net proceeds between $1,000,000 and $3,000,000, the
Plaintiffs shall recover 80% of the net proceeds and the City shall recover 20 %, provided,
however, Plaintiffs' Counsel shall not receive any attorney fees from the City's 20% recovery
With respect to the recovery of any net proceeds above $3,000,000 the Parties shall split the
recovery equally Plaintiffs' Counsel shall be entitled to recover attorney fees from any recovery
of net proceeds above $3,000,000 as follows (1) a 1/3 contingent fee from the City's share, and
(2) whatever fee is approved and set by the Court regarding the Class Plaintiffs' share. "Net
proceeds" is defined as gross proceeds less reasonable costs and expenses actually incurred after
the date the Final Settlement Documents are executed (but not legal fees)
(b) Neither the City nor the Plaintiffs shall settle and compromise their
respective lawsuits without the other's consent unless the settlement exceeds $900,000 As to
any settlement in excess of $900,000, either the City or Plaintiffs may accept the settlement and
bind both Parties, with the settlement proceeds being dispersed as provided in this Agreement.
For settlement proposals by the insurers at or in excess of $1,000,000, either Party shall have the
option to buy out the Party wishing to settle by paying that Party's share of the proposed
settlement amount and may thereafter continue the prosecution of the respective insurance carver
lawsuit.
5 Administration. All costs or expenses incurred in admmistenng this Settlement,
including without limitation the cost of providing notice to the Class and any expenses incurred
in connection with the division and distribution of the Common Fund, shall be paid from the
Common Fund. The City shall have no obligation whatsoever to pay any sum for such
administrative costs and expenses, except that each party shall be responsible for its own
attorneys' fees, costs, and expenses incurred in defending the Action, negotiating this
Agreement, and performing any obligations as set forth in this Agreement unless expressly
provided otherwise in this Agreement. Representative Plaintiffs, Class Members, and Plaintiffs'
Counsel shall be solely responsible for complying with any tax laws or other laws relating to
admimstration or distribution of the Common Fund.
6 Court Approval of Settlement. The Parties shall take all reasonable measures
necessary to secure Final Approval of this Settlement as required by CR 23 or other applicable
legal authority including but not limited to RCW 4.22 et seq Plaintiffs' Counsel shall promptly
file with the Court a Motion for Preliminary Approval and any necessary supporting papers,
asking the Court to enter an order, following approval by the City Council, in a form to be agreed
upon by the Parties. The Parties shall use their best efforts to agree on a form of the Motion for
Preliminary Approval. The City may file with the Court such additional papers in support of the
Motion for Preliminary Approval as it deems necessary or appropnate, in its sole discretion. If
the Parties cannot agree on the form of a Motion for Preliminary Approval, each party may
submit its own version to the Court. Plaintiffs' Counsel shall, at the appropnate time following
Preliminary Approval, prepare and file with the Court a Motion for Final Approval, and any
necessary supporting papers, asking the Court to enter an Order finally approving the Settlement
( "Settlement Order ") and Order of Dismissal in a form to be agreed upon by the Parties. The
Parties shall use their best efforts to agree on a form of the Motion for Final Approval. The City
may file with the Court such additional papers in support of the Motion for Final Approval as it
deems necessary or appropnate, in its sole discretion, subject to the provisions set forth above. If
the Parties cannot agree on the form of a Motion for Final Approval, each party may submit its
own version to the Court. In the event Final Approval is not obtained, the Parties shall make all
reasonable efforts to negotiate a new settlement agreement that will meet with approval of the
Court. In the event this Settlement is not approved and the Parties are not able to negotiate a new
one, the Parties shall so notify the Court and proceed with the Action. Any pleadings submitted
or statements made pursuant to this paragraph are settlement communications subject to
Evidence Rule 408 In the event Final Approval is not achieved, the Parties agree that nothing
contained in this Settlement Agreement, Plaintiffs' Counsel's or The City's pleadings or oral
statements submitted pursuant to this paragraph may be used, quoted, referenced, or admitted in
the Action or any other litigation.
7 Fees and Costs of Plaintiffs' Counsel. Plaintiffs' Counsel shall apply to the Court
for an award of fees, expenses and costs, which shall be paid from the Common Fund established
under Paragraph 2 above Aside from their obligations to pay into the Common Fund the
Settlement Amount referenced in paragraph 2 and pay attorneys' fees as provided in paragraphs
4 and 19, the City shall not have any obligation whatsoever to pay any sum for attorneys' fees,
expenses or costs claimed by Representative Plaintiffs, Class Members and /or Plaintiffs' Counsel
in connection with the Action including but not limited to any costs incurred by Representative
Plaintiffs or Plaintiffs' Counsel. The City shall not oppose the application for award of
reasonable fees, expenses or costs, and any future apphcation for reasonable fees, expenses, or
costs, provided, however, that this agreement not to oppose such an award does not apply to an
application for fees, expenses or costs sought by any of the Parties for an alleged breach of this
Settlement Agreement.
8 Dismissal of Action. In consideration of the confession of judgment and a
of the above amount, Representative Plaintiffs and Class Members shall dismiss the Released ent
Parties with prejudice and without costs to any Party Plaintiffs' Counsel shall execute the
Stipulation and Order of Dismissal attached hereto as Exhibit D within fifteen (15) days after
Final Approval.
9 Release of All Claims by Representative Plaintiffs and Class Members. Effective
upon Final Approval of this Settlement Agreement, the Representative Plaintiffs, Class Members
and each of them hereby release, discharge, and forever acquit the Released Parties from any and
all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever,
as alleged or as could have been alleged in the Action, whether in law or equity, ansing out of or
relating in any way to (1) Odors, or (2) the allegation that Representative Plaintiffs and/or Class
Members have been damaged by operation of the WWTP as a result of residing or owning
residential property in the Class Area pnor to Final Approval, or (3) operation of the WWTP
pnor to Final Approval, including, without limiting the generality of the foregoing, any and all
claims for nuisance, negligence, inverse condemnation, strict liability, contribution, indemnity,
trespass, property damages, loss of use and enjoyment, and/or diminution of property values,
attorney fees, costs under any statutory or regulatory authonty relating to Odors, penalties or
other relief resulting from violations of permits or failure to comply with applicable laws,
regardless of whether any such matters are claimed under theories of nuisance, trespass,
negligence, stnct liability, inverse condemnation, contribution, mdemmty, or any other common
law, statutory or regulatory cause of action, and regardless of whether defined as a continuing
tort or otherwise. This full and final release is intended to provide the broadest protection
possible from claims and damages as a result of acts, omissions or occurrences relating to the
WWTP on or before the date of Final Approval, including all causes of action therefore against
the Released Parties This release is specifically intended to cover and include, without
limitation, any and all claims, civil or otherwise, past or present, which can or may ever be
asserted by the Representative Plaintiffs, each and every Class Member, and by their respective
agents, estates, mantal communities, dependents, successors, assigns (including, but not limited
to subsequent purchasers, lessees and renters of property owned by Class Members within the
Class Area), hen holders, or other entities, against the Released Parties arising out of or relating
in any way to the matters described above that are based on acts, omissions or occurrences on or
before the date of Final Approval that resulted or are alleged to have resulted in Odors or effects
of Odors. By this settlement, Representative Plaintiffs and each and every Class Member are
also releasing, on behalf of themselves, and their respective agents, estates, mantal communities,
dependents, successors, assigns (including, but not limited to subsequent purchasers, lessees and
renters of property owned by Class Members within the Class Area) hen holders and other
entities, any inverse condemnation or "takings" claims concerning diminished property values
within the Class Area ansing out of the construction, operation, maintenance, and repair of the
WWTP prior to Final Approval and any alleged actions or failures to act by the City concerning
the WWTP pnor to Final Approval. No subsequent claim for inverse condemnation or takings of
any interest in property located within the Class Area, may be made by any of the Representative
Plaintiffs, any Class Member and any of their respective agents, estates, mantal communities,
dependents, successors, assigns (including, but not limited to subsequent purchasers, lessees and
renters of property owned by Class Members within the Class Area) hen holders and other
entities, concerning the operation of the WWTP unless there is additional governmental action
by the City relating to the WWTP causing Odor impacts and emissions exceeding the degree and
level existing from October 3, 2000 to the date of Final Approval (including normal operational
events such as intermittent upset conditions), which also results in a measurable and provable
decline in market value separate and apart from any measurable or provable decline m market
value that has occurred through the date of Final Approval. Representative Plaintiffs and each
Class Member acknowledge and agree that this Settlement Agreement will be recorded with the
Yakima County Auditor's Office
10 Cooperation. As partial consideration for this Settlement, the Parties agree to
cooperate in the following manner
(a) The City will support the Representative Plaintiffs and Class Members'
Motions for Prehminary Approval and Final Approval of this Settlement. The City may file with
the Court such pleadings and papers in support of said Motions as it deems necessary or
appropriate, in its sole discretion. All pleadings submitted and statements made by the City with
regard to this provision shall be subject to the terms of paragraph 6
(b) The City will cooperate with Representative Plaintiffs, Class Members and
Plaintiffs' Counsel in their pursuit of insurance proceeds from various policies of insurance
issued to the City between 1997 and 2001 The City and its employees and Counsel agree to
make themselves reasonably available for discovery proceedings and trial in the prosecution by
Representative Plaintiffs and Class Members of any and all causes of action concerning the
insurance policies whether in Class Members' own lawsuit or upon Plaintiffs' Counsel's
acceptance of the prosecution of the City's pending lawsuit as described in paragraph 3 The
City will also make available to Class Counsel all relevant and nonpnvileged documents relating
to the pursuit of insurance claims against the City's policies.
(c) The City shall cooperate with Plaintiffs' Counsel in regard to Plaintiffs'
Counsel establishing, creating, updating or amending a database of Yakima County or City
records for the purpose of mailing notice to the Class and implementing a plan of distribution to
all Representative Plaintiffs and Class Members provided that such cooperation does not result in
significant use of the City's financial resources or personnel.
11 Effect on Claims.
(a) Effective upon Final Approval, every Claim of each Representative
Plaintiff and Class Member against the Released Parties shall be conclusively compromised,
settled and released and each such Representative Plaintiff and Class Member shall be barred
from initiating, asserting or prosecuting any Claim against the Released Parties, except to the
extent permitted by this Settlement Agreement and the Stipulation and Order of Dismissal
attached as Exhibit D
(b) Any checks issued to the Plaintiffs, Representative Plaintiffs and Class
Members must contain language, approved by the Parties, to the effect that negotiation,
endorsement or deposit of the check constitutes a release.
(c) The Parties agree that the Notice of Settlement and the Final Approval will
contain language, to be agreed on by the Parties, to the effect that the Final Approval of the
Settlement will be binding upon all Class Members and will extinguish and release all Claims, as
set forth in paragraph 9 herein. The Notice shall also include language addressing disclosure
obligations under Washington law The language shall inform Class Members of their duty to
disclose information matenal to a buyer's decision to purchase property and encourage class
members to disclose that their property is within the Class Area and that compensation was paid
for alleged property damages and nuisance from Odors caused by the WWTP
12 Reporting Obligations. The Representative Plaintiffs, Class Members and
Plaintiffs' Counsel shall provide to the City copies of a final disbursement statement identifying
the names, addresses, and amounts disbursed to each Representative Plaintiff and Class Member
13 Use of Settlement Agreement.
(a) The parties to this Settlement Agreement, including Representative
Plaintiffs or any Class Member, shall not seek to introduce and/or offer the terms of the
Settlement Agreement, any statement, transaction or proceeding in connection with the
negotiation, execution or implementation of this Settlement Agreement, any statements in
the documents appended to this Settlement Agreement, stipulations, agreements,
admissions made or entered into in connection with any fairness heanng or any finding of
fact or conclusion of law made by the Superior Court or otherwise rely on the terms of
this Settlement Agreement, in any judicial or administrative proceeding, except as
provided in paragraphs 3, 4 and 10(b) or insofar as it is necessary to enforce the terms of
this Settlement Agreement.
(b) Neither this Settlement Agreement nor any exhibit hereto nor any
statement, transaction or proceeding in connection with the negotiation, execution or
implementation of this Settlement Agreement is intended to be or shall be construed as or
deemed to be evidence of an admission or concession by the Released Parties of any
liability or wrongdoing, or of the truth of any allegations asserted by any Representative
Plaintiff or any Class Member against them, or as an admission by the Representative
Plaintiffs or any Class Member of any lack of merit in their claims and no such statement,
} transaction or proceeding shall be admissible in evidence for any purpose, except for
purposes of obtaining approval of this Settlement Agreement in this proceeding or pursuit
of claims against the City's insurers as provided in paragraphs 3, 4 and 10(b)
14 Parties Bound. This Settlement Agreement shall be binding on the Parties hereto
and each of their heirs, legal representatives, successors, and assigns, and inures to the benefit of
the Parties and Released Parties and their heirs, legal representatives, successors and assigns.
The Representative Plaintiffs, by approval of this Settlement Agreement by the Court, have full
authority to enter into this Settlement Agreement on their behalf and behalf of each Class
Member and to take steps reasonably necessary to achieve Final Approval, as fully to all intents
and purposes as each Class Member might or could do if personally present and a party to this
Settlement Agreement, and the acts of the Representative Plaintiffs on behalf of the Class
Members are, upon approval by the Court of this Agreement, ratified and confirmed by each
Class Member
15 No Third Party Beneficiary No provision of this Settlement Agreement or any
exhibit thereto is intended to create any third -party beneficiary to this Settlement Agreement.
16 Integration. This wntten agreement contains the entire understanding among the
Parties in connection with its subject matter, and supersedes and replaces all prior negotiations,
agreements, or representations by or among the parties, whether oral or written. Each Party
acknowledges that no other Party, or any agent or attorney of any Party, has made any promise,
representation, or warranty whatsoever, express or implied, other than those expressly stated
herein, concerning the subject matter hereof to induce the other Party or Parties to execute this
document. Each Party acknowledges that in executing this document he, she, or it is not relying
on any promise, representation or warranty other than those expressly stated herein.
17 Choice of Law The interpretation and enforcement of this Settlement Agreement
shall be governed by the laws of the State of Washington.
18 Construction of Settlement Agreement. This Settlement Agreement has been
drafted by mutual negotiations among the parties. It shall be construed according to the fair
intent of the language as a whole, and not for or against any party The headings of the sections
and paragraphs of this Agreement are included for convenience only and shall not be deemed to
constitute part of this Agreement or to affect its construction.
19 Attorneys' Fees. In the event any party hereto, or his, her, or its authonzed
representative, successor, or assign, shall institute suit to enforce this Settlement Agreement or
for any breach thereof, the substantially prevailing party in such suit or proceeding shall be
entitled to an award of his, her, or its reasonable costs, expenses and attorneys' fees incurred,
both at the tnal and appellate court levels, before and after judgment.
20 Counterparts. This Settlement Agreement may be executed in any number of
counterparts, each of which shall be deemed an ongmal, but all of which together shall constitute
one and the same instrument.
21 Mediation and Arbitration. The Parties agree that Thomas V Harris shall mediate
disputes arising from the Memorandum of Understanding and this Settlement Agreement. If
r
mediation fails, the Parties reserve the right to use other alternative dispute resolution processes
or seek court intervention.
DATED this day of 2003
Martin Cuevas, Representative Plaintiff Karen Cuevas, Representative Plaintiff
Damel Martinez, Representative Plaintiff Karen Murphy, Representative Plaintiff
1
'
Willie Murphy, Representative Plaintiff Darlene Ryan, Representative Plaintiff
Verla Row, Representative Plaintiff
Add Acknowledgements for the signatures of
the Plaintiff Representatives
GORDON, THOMAS, HONEYWELL,
MALANCA, PETERSON & DAHEIM LLP
By
Albert R. Malanca
Attorneys for Plaintiffs
CITY OF YAKIMA PRESTON GATES & ELLIS, LLP
By By
Richard Zais Thomas H. Wolfendale
City Manager Attorneys for City of Yakima
By
Raymond Paolella
Yakima City Attorney
DEL MONTE CORPORATION DANIELSON HARRIGAN LEYH &
TOLLEFSON, LLP
By
Scott Rickman, Assistant Secretary By
Timothy G Leyh
Attorneys for City of Yakima
BROWN REAVIS & MANNING, PLLC
By
Stephen J Tan
Attorneys for Del Monte Corporation
K: \25739 \00038 \TH W\THW_A21 FQ
EXHIBIT A
E.Nob_HilI 8 e
0 L ___ .� E -. - 111111
=i_'�'__= JJUN
t -a - a 7i■1�
_ ■1 ■ ��' =... 1■ ■191,
1111 1111: 011111111111
_ '( 41111111
_ It■l11
• =a 1.4 - 1 .4�1� 1
iiii i ,
I E i l l k Ilsl':iiiu
o I11== IC�41EI®Il��w '
E `gE =� =1 i milli . 11U
E.. i l l
wit
/ ` I!
1 I'
• 1 ' I
• ....
..
ti.
C J.X4 ., i
vai D Mal 1 n d
I�I R T -4 � 1
IL
1 = a ~ = ' ` = a ' '
■ = - .L �e 1
'� - Ir + I . 'pi i} Il EE Tin
.I n� �'p`n a�
,{� ,' sw
. 111 J
ia.
Area 1 Q �� 'r,
® � �� . ...
l: �a: ael
:area 2 MERU] 1lf
ED Area ii:
I. I Class Parcels l '`1! ' 1 ■' _
Mil; n r.
0 0.2 0.4 Miles d1 `1 9 1 .i,..,„0 T � �
■ _
F : . n illif; /I /t1111 C N
..M `'t1�ljjt■Iti:1/t111S
Mundy Associates LLC (9!2003) . 1 I I eI fism tOtt = A
98 -1203 i. Iii i �� z + ''' 1� ° 1t1 = i
• S11� �1 7!n.lo.1e.
x
• EXHIBIT B
CLASS AREA LEGAL DESCRIPTION
That portion of the City of Yakima and the City of Union Gap, Washington, described as
follows
The East half of the Southwest quarter of Section 29 and the East half of
the West half of Section 32, Township 13 North, Range 19 East, W.M.,
AND that portion of the Southwest quarter of the Southwest quarter of
Section 32, Township 13 North, Range 19 East, W.M., lying Easterly of
Pnmary State Highway No 3 (now South First Street).
AND that portion of the Southeast quarter of said Section 29 and the East
half of said Section 32 lying Westerly of Interstate 82,
AND that portion of Section 5, Township 12 North, Range 19 East, W.M. lying
Westerly of Interstate 82,
AND that portion of the Northeast quarter of Section 6, Township 12 North,
4110 Range 19 East. W.M. lying East of the following described line
Beginning at a point on the North line of said Section 6 being 500 09 feet
West of the Northeast corner thereof; thence Southerly to the Northwest
corner of Tract "D of the amended PLAT OF REBECCA LANE. as recorded in
Volume "Y" of Plats, page 14, records of Yakima County, Washington, thence
Southerly along the Westerly line of said Plat to the Northwest corner of
Lot 6 of the PLAT OF NORTHWEST GARDENS, as recorded in Volume "W" of Plats,
page 13, records of Yakima County, Washington, thence Southerly along the
West line thereof and the Westerly line extended to the Northwest corner of
Block 40 of the PLAT OF S LAUBER'S ADDITION to Yakima City W T as recorded
in Volume "A" of Plats, page 1, and recorded in Volume "C" of Plats, page
47, records of Yakima County, Washington, thence South along the West line
thereof to the South line of said Northeast quarter and the terminus of the
line herein described,
AND that portion of the Southeast quarter of Section 6, Township 12 North,
Range 19 East, W M., lying Easterly of the following described line
Beginning at a point 1100 feet West of the Northeast corner of said
Subdivision, thence South parallel with the East line of said Subdivision to
the Easterly nght of way line of the Northern Pacific Railroad, thence
Southerly along said nght of way line to the South line of said Section 6
and the terminus of the line herein described,
AND that portion of the Northeast quarter of Section 7, Township 12 North,
Range 19 East, W.M., lying Easterly of the Northern Pacific Railroad nght
of way line.
AND all that portion of Section 8, Township 12 North, Range 19 East, W.M.,
lying Easterly of the Easterly nght of way line for the Northern Pacific
Railroad and Westerly of the Interstate 82 and Northerly of the following
described line•
Beginning at the Southwest comer of Block "K" of the PLAT OF MCNEELY
TRACTS, as recorded m Volume "H" of Plats, page 24, records of Yakima
County, Washington, thence Easterly along said Block "K" and said Block "K"
extended to the Easterly nght of way line of Main Street; thence Southerly
along said right of way line to a point 449 4 feet South of the South line
of the Northwest quarter of the Northwest quarter of said Section 8, as
shown on the PLAT OF MCNEELY TRACTS, thence Easterly parallel to the said
South line to the centerline of Spring Branch Creek; thence Northerly along
said Spring Branch Creek to a point on the North line of the Westerly
extension thereof, of Lot 25, of the PLAT OF HOLIDAY MOBILE TOWN PARK NO
2, according to the official plat thereof, as recorded m Volume "Y" of Plats,
page 6, under Auditor's File No 2412924, thence Easterly along said North
line of said Lot 25 to a point situate 100 feet Westerly of the Northeast
corner thereof; thence South 320 feet to the Southwest corner of Lot 2, of
Short Plat recorded under Auditor's File No. 7188680; thence Easterly along
the South line of said Lot 2 and the South most line of the PLAT OF HOLIDAY
MOBILE TOWN PARK NO 3, as recorded in Volume "DD" of Plats, page 6, records
of Yakima County, Washington and the South line extended to the Easterly
nght of way line of Freeway Avenue; thence North 30 feet to the Southwest
corner of Lot 12 of said PLAT OF HOLIDAY MOBILE TOWN PARK NO 3, thence
Easterly along the South line of said Lot 12 to the Westerly nght of way
line of Interstate 82, and the terminus of the line herein described.
•
0
Section B
Wastewater Rate Increase
41)
•
ORDINANCE NO 2003 -
AN ORDINANCE relating to wastewater rates, fees, and
charges, adjusting various wastewater rates, fees, and
charges, amending Sections 7.60.020, 7.60.025, 7.60.035,
and 7 60.105 and adding section 7.60.115 of the Yakima
Municipal Code; and providing for related matters.
WHEREAS, the City of Yakima (the "City ") is authorized by Title 35 RCW to acquire,
construct, own, operate, and provide financing for waterworks and systems of sewerage, and to
establish rates, fees, and charges therefore, and
WHEREAS, the City Council determines that it is in the best interests of the citizens of the
City that ordinances related to such systems of sewerage, wastewater rates, fees, charges, and related
matters be amended as set forth in this Ordinance; and
WHEREAS, the City Council determines that the rates, fees, and charges contained in this
Ordinance are fair, just, and reasonable,
NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF YAKIMA
Section 1, Section 7 60.005 of the Municipal Code reads as follows:
7.60.005 Definitions.
1 "Biochemical oxygen demand" (BOD) shall have the same meaning as in Chapter
7.65
2. "Industrial discharger" shall have the same meaning as in Chapter 7.65
3 "Industrial wastewater" shall have the same meaning as in Chapter 7.65
4 "Minor industrial user" (MIU) shall have the same meaning as in Chapter 7.65
5 "Sewer" shall have the same meaning as in Chapter 7.65
6. "Significant industrial user" (SIU) shall have the same meaning as in Chapter 7.65
7 "Suspended solids" (SS) shall have the same meaning as in Chapter 7 65
8. "Total suspended solids (TSS) shall have the same meaning as suspended solids.
1
OCTOBER 2003 RATE ORDINANCES
9 "Wastewater" shall have the same meamng as in Chapter 7.65
10. "Wastewater system" shall have the same meaning as "POTW" or "publicly owned
treatment works" in Chapter 7.65 The term includes all sewers and 'wastewater
treatment plants.
11 "Wastewater treatment plant" shall have the same meaning as in Chapter 7.65
Section 2. Section 7 60.010 of the Municipal Code reads as follows:
7.60.010 City to fix and collect wastewater rates and charges.
A. The pubhc health, safety and welfare require that the city of Yakima fix and collect
wastewater rates and charges upon, and measured by either the quantity of water supplied to the
premises or, if metered, the quantity of wastewater discharged into the wastewater sewer system m
the city of Yakima and in areas outside the corporate limits of the city, for the carrying and
discharge of all wastewater into the wastewater system of the city of Yakima as presently maintained
and operated, together with additions and betterments thereto and extensions thereof, which rates
and charges are fixed by this chapter; provided, that the specifying of service rates and charges by
this chapter shall not affect the financing of construction of sewers and trunk sewers pursuant to the
local improvement distnct process, the imposition of a wastewater connection charge, or other
alternate means of financing such construction, provided further, the adoption of rates for service to
property outside the corporate limits of the city does not constitute an undertaking by the city to
serve any or all such property without compliance with other laws, regulations and policies of the
city pertaining to the furnishing of city sewer service outside city corporate limits.
B Biennial Review In accordance with federally mandated Environmental Protection
Agency requirements and to satisfy bond covenants, the city shall review not less often than every
two years the wastewater contribution of users and user classes, the total cost of operation and
maintenance of the wastewater system and the user charge system. The charges for users or classes
of users shall be revised as required.
Section 3. Section 7 60 020 of the Municipal Code is hereby amended to read as
follows:
7.60.020 Owner (inside city) retail wastewater service charge.
A. Wastewater Service Charge. There shall be charged to and collected from all
premises within the city served by the city wastewater system a wastewater service charge composed
of a ready -to -serve charge and a volume charge based on either the quantity of water supplied to the
premises or, if metered, the quantity of wastewater discharged into the wastewater sewer system,
PROVIDED that in no event shall the total wastewater service charge be less than the minimum
charge indicated below
2
OCTOBER 2003 RATE ORDINANCES
� J
Minimum charge effective
July 1Nov 10, 2003
$12.0513.01 /month
(1) Wastewater Service Charge -- Schedules. The wastewater service charge shall
be calculated and charged according to the following schedules:
(a) Ready -to -Serve Charges. For all customers other than multiple -unit
residential customers:
Charges effective
July 1 Nov 10, 2003
Water Meter Size Bimonthly charge
(Inches) Monthly charge
3/4 $12.0513.01 $244026.02
1 15. 3016.52 30:6033.04
1-1/2 4 39.5242.68
2 31.8134.35 63.6268.70
3 420.50130.10 241.00260.20
4 153.10165.62 306-80331.24
6 23046248.49 160.32496.98
8 317.61342.94 633728685.88
10 633728685.89 4 371.78
For multiple -unit residential customers, the monthly ready -to -serve charge shall be based on the
number of accounts plus the number of dwelling units, according to the following:
Ready -to -serve charge effective
Joly4Nov 10, 2003
(6 §,7_7 /account) + ($5:78/6.24dwelling unit)
`) Volume Charge. For all customers, the volume charge shall be
determined by the following:
3
OCTOBER 2003 RATE ORDINANCES
Volume charge effective
-Nov 10, 2003
$2.28 per 100 cubic ft of water consumption
or, if metered, quantity discharged
B Strong Waste Surcharge. For customers located inside the city discharging
wastewater which contains more than three hundred parts per million of biochemical oxygen
demand (BOD) and/or total suspended solids (TSS), there shall be a surcharge, in addition to the
ready -to -serve charge and the volume charge, which shall be calculated utilizing the national average
values of BOD and TSS concentrations typical to each classification under the Standard Industrial
Code or by actual concentrations verified by the city If the customer chooses, at its expense, to
install a sampling station, the strong waste charge shall be calculated based upon actual
concentrations. Any testing done by the city may be charged at the rates set forth in section
7 60.105 of this title. The following formula shall be utilized to calculate the strong waste charge:
Monthly surcharge = (unit costs per pound of BOD or TSS) times (weight of one
gallon of water) times (customer's monthly volume in one hundred cubic feet divided by one
thousand three hundred thirty - seven) times (customer's concentration of BOD or TSS in
parts per million per [the national average values] or [verified concentrations] minus three
hundred).
In the foregoing formula, the applicable values are as follows.
Effective Effective Effective Effective
July 1Nov January 1, January 1, January 1, I
10, 2003 2004 2005 2006
Unit cost per pound for BOD $0-.47-20.294 $072090.312 $073080.332 $0:3080.332 1
Unit cost per pound for TSS $04330.241 $0:2 $0440.339 $0:3440.339
Weight of one gallon of water 8.34 8.34 8.34 8.34
pounds pounds pounds pounds
Section 4, Section 7 60 025 of the Municipal Code is hereby amended to read as
follows:
7.60.025 Non -owner (outside city) retail wastewater service charge.
4 I
OCTOBER 2003 RATE ORDINANCES
A. Wastewater Service Charge. There shall be charged to and collected from all
premises outside the city served by the city wastewater system a wastewater service charge
composed of a ready -to -serve charge and a volume charge based on domestic water consumption,
provided that in no event shall the total wastewater service charge -be less than the minimum charge
indicated below
Minimum charge effective
July 1 Nov 10, 2003
$18.8219.78/month
(1) Wastewater Service Charge -- Schedules. The wastewater service charge shall be
calculated and charged according to the following schedules:
(a) Ready -to -Serve Charge. For all customers other than multiple -unit
residential customers.
Charges effective
July INov 10, 2003
Water Meter Size Bimonthly charge
(Inches) Monthly charge
3/4 $18.8219.78 $37.6139,56
1 23- 9025.12 47.8050.24
1 -1/2 4078632.44 61.7264.88
2 19.6852.22 9(A-36104.44
3 188.20197.80 376.40395.60
4 239.58251.80 179.1 6503.60
6 3 59.46377.80 718.92755.60
8 49671. 0521.40 992.201.042.80
10 9927191,042.80 1,981381085.60
5
OCTOBER 2003 RATE ORDINANCES
For multiple -unit residential customers, the monthly ready -to -serve charge shall be based on the
number of accounts plus the number of dwelling units, according to the following:
Ready -to -serve charge effective
July 1Nov 10, 2003
($97910.29 /account) + ($9.039.49 /dwelling unit)
(b) Volume Charge. For all customers, the volume charge shall be
determined by the following:
Volume charge effective
Jul-y4Nov 10, 2003
$3.53 per 100 cubic ft. of water
consumption or, if metered, quantity discharged
B. Strong Waste Surcharge. For customers located outside the city discharging wastewater
which contains more than three hundred parts per million of biochemical oxygen demand (BOD)
and/or total suspended solids (TSS), there shall be a surcharge, in addition to the ready -to -serve
charge and the volume charge, which shall be calculated utilizing the national average values of
BOD and TSS concentrations typical to each classification under the Standard Industrial Code or
by actual concentrations verified by the city If the customer chooses at its expense to install a
sampling station, the strong waste charge shall be calculated based upon actual concentrations. Any
testing done by the city may be charged at the rates set forth in section 7 60.105 of this title. The
following formula shall be utilized to calculate the strong waste charge:
Monthly surcharge = (unit costs per pound of BOD or TSS) times (weight of one gallon of
water) times (customer's monthly volume in one hundred cubic feet divided by one thousand three
hundred thirty- seven) times (customer's concentration of BOD or TSS in parts per million per [the
national average values] or [verified concentrations] minus three hundred).
In the foregoing formula, the applicable values are as follows.
Effective
July 1 Nov 10, 2003
Unit cost per pound for BOD $0.5150.537
Unit cost per pound for TSS $975040.522 I
6
OCTOBER 2003 RATE ORDINANCES
1 Weight of one gallon of water 1 8.34 pounds
Section 5. Section 7 60.030 of the Municipal Code reads as follows.
7.60.030 Wastewater charge added to and payable with water bill.
The wastewater service charge provided for in this chapter shall be payable at the office of the
treasurer of the city, and shall be billed for and payable at the same time as the water bill for the
premises is payable, and payment for water service shall not be accepted unless payment of the
wastewater service charge is made at the same time. The same shall be payable bimonthly and shall
be added to city water bills as a separate charge thereon.
Section 6. Section 7 60.035 of the Municipal Code is hereby amended to read as
follows:
7.60.035 Septage and exceptional wastewater disposal charges.
A. Septage Wastewater Disposal Charge. For septage wastewater disposed
pursuant to Chapter 7.63, the following charge shall apply
Charge effective
kilt -1 Nov 10, 2003
$0 3240.337/gal. I
13 Exceptional Wastewater Disposal Charge. For exceptional wastewater disposed pursuant to
Chapter 7.63, the charge shall be calculated by reference to the following formula.
Exceptional wastewater Charge = (Treatment Costs) + (Receiving Costs) + (Testing Costs)
(1) Treatment costs. Treatment costs shall be determined by reference to the
following formula:
Treatment costs = 1 (U BOD /TSS) x (WW) x (V/1,337) x (CBOD/TSS)I + L(UV) x
(V)] where:
V = Volume discharged (in one hundred cubic feet),
CBOD/TSS = Concentration of BOD or TSS (in parts per million); and
7
OCTOBER 2003 RATE ORDINANCES
the remaining values are as follows.
Value Effective
Abbreviation Meaning May 21, 2001Nov 10, 2003
UBOD/TSS $9.5150.537 (BOD)
Unit cost per pound of BOD or TSS $93940.522 (TSS)
WW
Weight of one gallon of water 8.34 pounds
UV Unit cost per one hundred cubic feet
of volume $0.2580.271
(2) Receiving Costs. Receiving costs shall be calculated by the wastewater
manager and based on actual or estimated staff time, materials, and related costs
incurred in connection with receiving the particular waste at issue.
(3) Testing Cost. The costs of any testing are set forth in Section 7 60 105
The wastewater manager shall have final authority over what tests shall be required
for any discharge.
C. The amount of the disposal fee, at the rate specified in subsections A or B of this
section, shall be based upon the actual quantity measured and discharged. Measurement shall be
through methods and instruments as determined by the city
Section 7. Section 7.60 050 of the Municipal Code reads as follows:
7.60.050 Meters required -- Penalty for violations - -Rates for metered and
unmetered premises.
A. Meters Required -- Penalty Commencing September 1, 1977, all premises thereafter
newly connected or reconnected to the wastewater system shall have a meter, approved by the city
water /irrigation manager, installed to measure either the quantity of water supplied to the premises
or the quantity of wastewater discharged into the wastewater system; and it shall be unlawful for
any person, firm or corporation to thereafter connect any premises so as to be served by the
wastewater system without Installing a meter as required by this subsection.
Any person, firm or corporation who connects any premises so as to be served by the wastewater
system in violation of this subsection shall upon conviction thereof be subject to a fee not exceeding
two hundred fifty dollars or subject to imprisonment in the city jail facility for a term not exceeding
ninety days.
8
OCTOBER 2003 RATE ORDINANCES
B Rates for Metered Premises. All premises served by either city domestic water
service or by some other source of domestic water, and which have meters to measure all water
supplies which are ultimately discharged into the city wastewater system shall pay wastewater
service charges according to the rates specified in Section 7 60.020 or 7 60.025 of this chapter, and
all premises which have meters to measure the quantity of wastewater discharged into the
wastewater system shall likewise pay wastewater service charges according to the rates specified in
Section 7 60 020 or 7 60.025 of this chapter
C. Rates for Unmetered Premises. Premises with existing connections to the city
wastewater system, but which have no meter to measure either the domestic water supplied to the
premises or the wastewater discharged therefrom, shall be charged a wastewater service charge
according to rates specified in Section 7 60.020 or 7 60 025 of this chapter in an amount
determined by the wastewater manager to be the average charge for wastewater service to similar
premises.
Section 8. Section 7 60.055 of the Municipal Code reads as follows:
7.60.055 Each premises an individual consumer
For purposes of computing the wastewater service charge imposed by Sections - 7.60 020 or
7.60 025, and Section 7 60 050 of this chapter, each one - family dwelling umt and each dwelling
unit in a two- family dwelling or in a multiple dwelling, as all those terms are defined in Title 12,
Zoning, of the city of Yakima Mumcipal Code, shall constitute one individual consumer Further,
for purposes.cf those sections, each separate mobile home site within a mobile home court, park or
other mobile°home complex shall constitute one individual consumer; provided, an automobile
trailer court as defined in Title 12, Zoning, of the city of Yakima Mumcipal Code, rather than each
separate trailer site therein, shall constitute an individual consumer for purposes of those sections.
Each such consumer constitutes a premises to which the minimum wastewater service rate is
applicable, and there shall be no deductions for vacant premises.
Section 9. Section 7 60.060 of the Municipal Code reads as follows:
7.60.060 Water not used or lost -- Minimum charge not to be reduced.
Where the use of water is such that a portion of all water used is lost by evaporation, imgation,
spnnkling or other cause, or is used in manufactured goods and commodities, and the person in
control provides proof of this fact and installs a meter or other measuring device approved by the
city water /irrigation manager to enable measurement of the amount of water so used or lost, no
charge shall be made for wastewater because of water so used or lost, except that m no case will the
minimum charge be adjusted or reduced. Direct discharge of wastewater to fresh water or to points
other than the city sewer system shall not be cause for adjustment or reduction of the wastewater
service charge.
9
OCTOBER 2003 RATE ORDINANCES
Section 10. Section 7 60.070 of the Municipal Code reads as follows.
7.60.070 Water used for irrigation not to be charged as wastewater.
It is the intent of this chapter that the portion of water used exclusively for irrigation be not
charged correspondingly for wastewater Upon application, where it can be shown to the
satisfaction of the city wastewater manager that the higher charges for wastewater dunng the
summer months are due to water used for irrigation, the wastewater charge for summer penod may
be adjusted to the winter months' charges.
Section 11. Section 7 60 080 of the Municipal Code reads as follows:
7.60.080 Home Kidney Dialysis
Home Kidney Dialysis. A residential customer who undergoes kidney dialysis at his or her
home, or whose home is also the home of a different person who undergoes home kidney dialysis,
shall not be required to pay utility charges for domestic water service or sewer service for the
quantity of water that is necessary for the home dialysis. In order to be excused from utility charges
under this subsection, the residential customer must present to the customer services division
written documentation from a recognized kidney dialysis center certifying that the person requires
dialysis and the quantity of water needed for that person's dialysis.
Section 12. Section 7 60.090 of the Municipal Code reads as follows.
7.60.090 Procedure for paying wastewater service charges-- Delinquency --
Imposition of priority lien.
All charges for wastewater service shall be due and payable at the office of the city treasurer on
or before the fourteenth day after the bill therefore is rendered, and if unpaid shall become
delinquent twenty -one days after the due date. Any wastewater service charge which becomes
delinquent shall immediately become a hen upon the premises, and if unpaid for sixty days after the
date payment was due, shall bear interest at the rate of eight percent per annum from the date
payment was due, and such lien may be foreclosed by the city as provided by state law The lien
shall be superior to all other hens and encumbrances except general taxes and local and special
assessments.
Section 13. Section 7 60.100 of the Municipal Code reads as follows.
7.60.100 Additional collection method- -Water service suspension -- Notice and
hearing procedure.
A. As an additional and concurrent method of collection of any such delinquent
wastewater rate or charge, the customer service manager may suspend the water service or supply
10
OCTOBER 2003 RATE ORDINANCES
from the premises to which such charge for wastewater has attached until such rates and charges are
paid.
B No water service shall be suspended until a wntten notice has been served upon or
mailed to the customer at least seven days prior to suspending service. Such notice shall state the
date on which service is to be suspended, the amount of delinquent wastewater charges, and that a
customer may request in writing a hearing before the customer service manager or his designee to
contest the suspension, provided such request is received by the customer service manager or his
designee before the date service is to be suspended.
C. Upon timely receipt of a request for hearing, the customer service manager or his
designee shall conduct a hearing, and the customer requesting the hearing shall be notified in
writing by the customer service manager or his designee of the time, date and place of such hearing.
Pending the outcome of a hearing, no service shall be suspended.
D When water service has been suspended for nonpayment of a wastewater charge,
water service shall not be resumed until all delinquent service charges have been paid, together with
an additional fifteen - dollar reconnection charge.
E. In the event the occupant of a premises is someone other than the customer, the
occupant or, in the case of a multiple dwelling, the manager or person in charge shall be notified in
writing of the date of the suspension of service and the amount of delinquency at the same time
such customer is so notified.
Section 14. Section 7 60 105 of the Municipal Code is hereby amended to read as
follows:
7.60.105 Rates, charges and fees for pretreatment program.
A. It is the purpose of this section to provide for the payment of rates, charges, and fees
for certain discharges to the wastewater system, to compensate the city for the cost of administration
of the pretreatment program established in Chapter 7.65 Connection charges for dischargers
subject to Chapter 7.65 are as set forth in Chapter 7.58 of this Code.
B Rates, Charges and Fees to be Published. The wastewater manager shall maintain a
schedule of current rates, charges and fees, shall post such schedule conspicuously, and shall make
copies available to interested persons. Upon request, the wastewater manager shall prepare an
estimate of annual rates, charges and fees for a significant industrial user
C. Base Rate for Minor Industrial Users. Commencing on the effective date of the
ordinance codified in this section and manager until amended pursuant to subsection E of this
section, minor industrial users (as defined in Chapter 7.65) shall pay a base rate for pretreatment
service of 5 0068.04 /month.
11
OCTOBER 2003 RATE ORDINANCES
Significant industrial users shall not be subject to a base rate.
D Charges and Fees for Related Services. Commencing on the effective date of the
ordinance codified in this section and until amended pursuant to subsection E below, significant
industnal users shall pay the sampling and laboratory testing charges and fees provided below for
those specific services described or listed below All customers shall also be subject to the
sampling, laboratory testing, and flat rate charges and fees provided below, in addition to any base
rate provided for in subsection C, but only for those services requested by the customer or provided
as part of a required compliance inspection.
(1) Sampling Charge. The sampling charge includes sampler set -up, pick -up, and
statistical analysis, as well as billing program charges from the customer service
manager The sampling charge is based on the length of the sampling period,
pursuant to the following schedule.
Sampling Period Charge Charge Charge Charge
effective effective effective effective
July 1Nov January 1 January 1, January 1, I
10, 2003 2004 2005 2006
First day $ $ $ $
240.83 24845 4-5-5.38 263.16 I
260.10 267.90 275.94 284.22 I
Each subsequent day in the
same sampling period. $ $ $ $
93.25 96.05 98.930
1
100.71 103.73 106.84 110.05
(2) Laboratory Testing Fees. A laboratory testing fee is assessed for each type of
test conducted on each sample. Fees are assessed pursuant to the following
schedule.
Charge Charge Charge Charge
Effective Effective Effective Effective
Test July 1Nov January 1, January 1, Januaryl,
10, 2003 2004 2005 2006
BOD- Biochemical Oxygen
Demand $ $ $ $
36.58 3.68 38.81 39.97
39.51 40.70 41.92 43.17
12
OCTOBER 2003 RATE ORDINANCES
TSS -Total Suspended
Solids $ $ $ $
39.51 40.70 41.92 43.17
36.58 37.68 38.81 39.97
pH
+8729 +&84 49.40 +999
19.75 20.34 20.95 21.58
BOD Soluble
54.87 56.52 58.21 59796
59.26 61.04 62.87 64.76
COD
39.51 40.70 41.92 43.17
3C.58 37.68 38.81 39794
COD Soluble
59.26 61.04 62.87 64.76
3+86 5C.51 38.20 59.95
TDS
$ $ $ $
39.51 40.70 41.92 43.17
36.58 37.68 3S.8}° 39.97
Alkalinity (Carbonate)
19.75 20.34 20.95 21.58
4849 18.: ' 49740 49799
Ammonia (Ion Selective
Probe)
19.75 20.34 20.95 21.58
4-849 48784 4940 +9799
Chlorine Residual
(Colorimetric)
19.75 20.34 , 20.95 21.58
48.29 18.84 4 -9.40 49799
Dissolved Oxygen (Azide)
19.75 20.34 20.95 21.58
4-8729 18.84 4.9.40 4-9799
Dissolved Oxygen
(Membrane)
19.75 20.34 20.95 21.58
48.9 18.84 49.40 4
13 I
OCTOBER 2003 RATE ORDINANCES
Fecal Coliform
59.26 61.04 62.87 64.76
34786 56.51 3839 59.95
FOG -Fats. Oils & Grease
73.15 75.34 736O 79.93
79.01 81.38 83.82 86.34
MPN
365.76 3-76.73 388.03 399.6E
395.06 406.91 419.12 431.69
Nitrate
39.51 40.70 41.92 43.17
36.58 37.68 38.81 39.94
Nitrite
39.51 40.70 41.92 43.17
36.58 37.68 3878+ 39.97
Organic/Volatile Acids
19.75 20.34 20.95 21.58
+849 X84 49..40 49799
Total Volatile Solids
$ $ $
39.51 40.70 41.92 43.17
3649 37.68 38.81 39794
BNA (b) Market Market cost Market Market
Semivolatiles cost (a) (a) cost (a) cost (a)
BTEX (b)
214 66 221 10 227.73 234.56
231.83 238.78 245.95 253.33
Metals
268.32 276.37 284.66 293.20
289.79 298.48 307.44 316.66
Metals Graphite Furnace
375.65 386.92 398.53 410.48
405.71 417.88 430.42 443.33
Pesticides /PCB's
39939 608.01 .626.25 645.04
637.54 656.67 676.37 696.66
Market Market cost Market Market
TPH (b) cost (a) (a) cost (a) cost (a)
14
OCTOBER 2003 RATE ORDINANCES
Volatile Organics
231.83 238.78 245.95 253.33
214.66 42440 227.73 234.56
Notes.
(a) This testing is conducted by an outside laboratory The actual fee
will be based on the actual cost of the test performed, plus any related costs
and taxes incurred.
(b)Glossary
BNA. Base Neutral Acids (Semivolatile Organic compounds)
BT XE .Benzene, Toluene, Ethylbenzene, and Zylene- Highly volatile
hydrocarbons.
TPH. Total Petroleum Hydrocarbons (includes oils, gasoline, diesel, and
other fuels).
(3) Other related services are assessed on each of certain transactions or
services, pursuant to the following schedule:
Charge Charge Charge Charge
Transaction or Service Effective Effective Effective Effective
July 1 Nov January January 1, January 1,
10, 2003 1, 2005 2006
2004
Discharge Authorization LS $ $ $ $
(a) 432-69 445758 458.95 492:74
467.21 481.23 495.66 510.53
Compliance Inspection HR
147.58 1 52.01 156.57 161.26
159.39 164.17 169.10 174.17
Dye testing HR
159.39 164.17 169.10 174.17
147.58 152.01 156.57 161.26
Smoke testing HR
34.08 6670 57.37 39:09
58.41 60.16 61.97 63.83
TV (new construction) LF
4-741.87 -1- x$1.93 +841.98 1492.04
TVing (location) HR
28449 289.63 298.31 307.26
303.69 _ 312.80 _ 322.1. _ 331.85
15
OCTOBER 2003 RATE ORDINANCES
Notes.
( a) Includes only the first 50,000 gallons of flow See Chapter 7 65
E. Amendment of Base Rates, Charges and Fees.
1 The base rate or rates ( "rates" for purposes of this subsection) set forth in
subsection C of this section may be amended from time to time by ordinance of the
city council. Any such amendment shall be based upon changes in the city's cost of
providing wastewater pretreatment service as reflected in the city's annual budget.
The base rates set forth in subsection C of this section are to be billed at 75% for
customers located within the city limits. Other customers will be billed at 100% of
base rates. These percentages may be amended by ordinance of the city council.
2. The charges and fees set forth in subsection D of this section may be
amended from time to time by ordinance of the city council upon recommendation
of the wastewater manager. Such amendments shall be based on changes in the
costs of providing sampling, laboratory and miscellaneous wastewater pretreatment
services. In determining whether there has been a change in the costs of providing
service, the city council may consider the city's expenses associated with obtaining
services from private laboratones and other third persons, and the city's own
administrative and other costs. The charges and fees set forth in subsection D of
this section are to be billed at 75% for customers located within the city limits.
Other customers will be billed at 100% of the charges and fees set forth in
subsection D These percentages may be amended by ordinance of the city council
F Money to be Credited to Wastewater Operating Fund. All moneys collected
pursuant to this part shall be paid into and credited to the wastewater operating fund as provided in
Chapter 3 101
Section 15. Section 7.60.115 of the Municipal Code is added and reads as follows;
7.60.115 Sunset Clause.
Effective January 1. 2024. Wastewater Rates for all retail customers shall be reduced by the
percentage established by dividing $886.666 by the total gross revenue received from all retail
customers dunng the previous fiscal year.
16
OCTOBER 2003 RATE ORDINANCES
Section 4 16. Section 7 60 120 of the Municipal Code reads as follows.
7.60.120 Severability.
If any section, clause, or phrase of this ordinance is declared unconstitutional or invalid for any
reason, such decision will not affect the validity of the remaining portions of this ordinance, which
shall continue in full force and effect.
Section 4.617 This ordinance shall be in full force and effect (30) calendar days after its
passage, approval and publication as provided by law and by the City Charter.
PASSED BY THE CITY COUNCIL, signed and approved this 7th day of
October, 2003
Mary Place, Mayor
ATTEST
City Clerk
Publication Date. 10 - 10 - 2003
Effective Date, 11 -9 -2003
17
OCTOBER 2003 RATE ORDINANCES
•
Section C
Bond Ordinance
0
•
0
Section D
Budget Appropriation
•
0
ORDINANCE NO. 2003 -
AN ORDINANCE amendmg the 2003 budget for the City of Yakima, and making
appropriations to provide for settlement costs of the odor
litigation and certain capital improvements to the City s
wastewater system from Unappropriated Fund Balances within
vanous Funds for expenditure during 2003
WHEREAS, the various funds mdicated on the attached Schedule I contain
Unappropnated Fund Balances available for appropnation and expenditures during 2003
m vanous amounts and for the purposes mentioned in the attached Schedule. and
WHEREAS, at the time of the adoption of the 2003 budget it could not
reasonably have been foreseen that the appropnation provided for by this ordmance would
be required, and the City Council declares that an emergency exists of the type
contemplated by RCW 35.33 091 and that it is in the best mterests of the City to make the
appropriation herein provided, now, therefore,
BE IT ORDAINED BY THE CITY OF YAKIMA.
Section 1. Appropriations are hereby made, for expenditure during 2003, from
Unappropriated Fund Balances m the various Funds to the various accounts and m the
various amounts, and for the various specific purposes, all as specified m the Schedule
attached hereto and mcorporated herein.
Section 2. This ordmance is one making an appropnation and shall take effect
immediately upon its passage, approval and pubhcation as provided by law and by the City
Charter
PASSED BY THE CITY COUNCIL, signed and approved this _ day of
, 2003
MARY PLACE, MAYOR
ATTEST:
CITY CLERK
First Reading
Pubhcation Date
Effective Date
Cje 10/02/03 wwater bond approp ord 03
APPROP ORDINANCE PAGE 1
4 1)
SCHEDULE I
Wastewater Facility Project
RESOURCES:
Bond Proceeds - Series A
478- 478 -238- 1854 - 39110 -BND $7,000,000.00
Bond Proceeds - Series B
478 - 478 - 238 - 2055 - 39110 -BND $8,000,000 00
TOTAL RESOURCES $15,000,000.00
APPROPRIATIONS.
Damage Claims
478 - 478 - 238 - 1854 - 59435 -499 $7,000,000.00
Interfund Loan Payment - Principal
478- 478 - 238 - 1942 - 58235 -790 $1,420,000 00
4110
Interfund Loan Payment - Interest
478 - 478 - 238 - 1942 -59235 -790 $94,178.00
2004 Facilities Improvement
478 - 478 - 238 - 2055 - 59435 -650 $70,000.00
Blower Variable Frequency Drive
478 - 478 - 238 - 2056 - 59435 -650 $120,000 00
TOTAL APPROPRIATIONS $8,704,178 00
2003 Sewer Revenue Bond Reserve
RESOURCES:
Bond Proceeds - Series A
494 - 494 - 238 - 1854 - 39110 -BND $792,000 00
Bond Proceeds - Series B
494 - 494 - 238 - 2055- 39110 -BND $900,000 00
TOTAL RESOURCES $1,692,000 00
erp 10/1/2003 2:04 PM appropriation misc
•
Appendix
Plaintiff Documents filed with the Court
•
•
4
LAW OFFICES
GORDON THOMAS. HONEYWELL, MALANCA. PETERSON b DAHEIM LLP
TACOMA OFFICE SEATTLE OFFICE
201 PACIFIC AVENUE SUITE 2200 ONE UNION SQUARE
POST OFFICE BOX 1157 600 UNIVERSITY SUITE S IOO
TACOMA WASHINGTON 9840) 1157 SEATTLE WASHINGTON 98101 - 4185
1253 620 -6500 (206) 676 7500
FACSIMILE 12531 620 -6565 FACSIMILE 1206) 676 -7575
REPLY TO TACOMA OFFICE
JOHN C. GUADNOLA
ATTORNEY AT LAW
DIRECT 12531 620 -6410
12061 676.6410
E MAIL tguaonolaagth -law corn P te-, FiVED
October 1, 2003
A r Y 2003
Kim M. Eaton, County Clerk Ph/ LOpL
Yakima County Superior Court
128 North Second Street
Yakima, WA 98901
Re Murphy, et al. v. City of Yakima, et al.
Yakima County Superior Court Cause No. 99 -2- 00611 -8
411 Dear Ms. Eaton.
Enclosed for filmg is the original Plaintiffs' Motion for Preliminary Approval of
Settlement and Plan of Distribution for Approval of Class Notice; Memorandum m Support of
Plaintiffs' Motion for Prelimmary Approval of Settlement; Declaration of John C Guadnola m
Support of Motion for Preliminary Approval, Published Notice of Proposed Final Settlement and
Plan of Distribution, Notice of Proposed Final Settlement and Plan of Distribution, Note for
Motion Calendar and Certificate of Service. Please conform the extra copies of the first page of
each pleading and return them to me m the enclosed self - addressed stamped envelope.
Under separate cover, I am sending a bench copy of the above - mentioned documents to
Judge Hahn.
Thanking you m advance for your cooperation.
Very truly yours,
o )
Gina A. Mitchell, Secretary for
John C Guadnola
JCG gam
Enclosure
• cc All Counsel
[1242372 v01.doc]
LAW OFFICES
GORDON THOMAS. HONEYWELL. MALANCA. PETERSON 8 DAHEIM LLP
TACOMA OFFICE SEATTLE OFFICE •
,20 PACIFIC AvENL_ SUITE 2200 ONE UNION SOUARE
POST OFFICE E 1157 600 UNIVERSITY SUITE :100
TA :DMA WASMINGTZ 98401 1 1 5 7 SEATTLE WASHINGTON 90 101 - 1 8 5
(253/620 c-00 1206) 676 -7500
FACSIMILE (253■ 620 -6565 FACSIMILE 1 206) 676 -7575
REPLY TO TACOMA OFFICE
JOHN C. GUADNOLA
ATTORNEY AT LAW
DIRECT 1253 620 -6410
12061 6 -6410
E - MAIL IguatlrIOla®gth -law COT
October 1, 2003
' FIVED
The Honorable Susan Hahn OCT 0 2 2003
Yakima County Supenor Court
County Courthouse
128 North 2nd Street (111 1 LEGAL DEPT.
Yakima, WA 98901
RE Murphy, et al vs. City of Yakuna
Yakima Supenor Court Cause No 99 2 00611 8
Dear Judge Hahn. •
Enclosed with this letter are the bench copies of Plaintiffs' Motion for Prelnninary
Approval of the settlement with Yakima and the supporting documents filed with the motion.
Exhibit B to the Settlement Agreement, a legal descnption of the class area, has not been
completed. We will ask counsel for the City to submit it to you as soon as it is ready
We have noted the motion for Fnday, October 10, 2003 It is our understanding that the
Yakima City Council will consider the settlement at its meeting on October 7, 2003 Unless the
Council rejects the settlement, which we believe to be unlikely, everything will be in place for
preliminary approval on the 10
In preparing our motion and accompanying documents, which include forms of notice to
be mailed to class members and published in local papers, we have taken the liberty of assuming
the Court will consider final approval of the settlement on November 21, 2003 We have
confirmed with Maria that this date is available.
We believe November 21 provides ample time for the approval process. We have
retained Rust Consulting to administer claims. This company handled distribution of the first
notice in this case and has assisted us in several other cases, consistently doing an excellent job
If preliminary approval is granted on October 10 notices should be mailed to class members on
Monday, October 13 or at the latest by Wednesday, October 15 We are asking the Court to set
Friday, November 14, as the deadline for mailing objections to the settlement or mailing "opt -
out" notices from people who moved into or acquired residential property in the class area after 0
[1242111 v4 doe)
CORDON THOMAS HONEYWELL
MALANCA. PETERSON 8 DAHEIM LLP
October 1, 2003
Page 2
the last notice was mailed and published. This means class members will have approximately 30
days to respond to the notice if they choose to do so Objections or "opt -out" notices mailed on
November 14 will be available for review by the Court and counsel during the week before the
heanng on November 21
In addition, we have scheduled two "town hall" meetings for the 5 and 6 of November
Plaintiffs' Counsel will attend both meetings, to answer questions and to provide assistance in
filling out claim forms, if asked to do so We will have Spanish language translators available at
the meeting on November 6 This means class members will have some 20 days to prepare for
the meeting, and at least a week after the meeting to prepare any objection or "opt -out" notice
they choose to file And, of course, class members who choose to do so will have 30 days to fill
out and submit claim forms that will allow them to participate in the proceeds of the Settlement.
The enclosed matenals include a color -coded map of the class area. The map shows the
precise boundaries of the class area and the boundanes of three Zones in the class area which
will be treated differently under the Plan of Distribution. We are in the process of preparing
• Spanish language translations of the two forms of notice. We will deliver the translations to the
Court prior to the October 10 heanng.
If you have any questions, or would like to discuss any aspect of this in advance of the
October 10 hearing' please do not hesitate to contact us and we will schedule a conference call
with defense counsel. Otherwise, we will be prepared to address the motion and any questions
the Court may have at the heanng.
Very truly yours,
41
John C Guadnola
JCG gam
cc Thomas Wolfendale (w /encl )
Timothy G Leyh (w /encl.)
Ray Paolella (w /encl.)
Stephen J Tan (w /encl.)
Phil Lamb (w /encl )
Bradley Jones (w /o encl )
Timothy Ashcraft (w /o encl )
Kenneth Kieffer (w /o encl )
[ 1242111 v4 doc]
DC, UE�
til Y LEGAL DEPT.
SUPERIOR COURT OF WASHINGTON - COUNTY OF YAKIMA
WILFRED and KAREN MURPHY, et al.,
Plaintiffs, CASE NO 99 -2- 00611 -8
V NOTE FOR MOTION DOCKET
CITY OF YAKIMA, a Washington municipal THE HONORABLE SUSAN L.
corporation, et al., HAHN
Defendants.
TO THE CLERK OF THE SUPERIOR COURT AND TO:
Name: Thomas Wolfendale, WSBA No. 03776
Preston Gates & Ellis
925 Fourth Avenue, Suite 2900
Seattle, WA 98104 -1158
Phone: 206 -623 -7580
Attorneys for Defendant and Third Party Plaintiffs City of Yakima
Please take notice that the undersigned will bang on for hearmg a motion for PLAINTIFFS' MOTION FOR
PRELIMINARY APPROVAL OF SETTLEMENT AND APPROVAL OF CLASS NOTICE
(Type of Motion)
The hearing is requested to be held during the regular motion calendar on:
DATE OF HEARING/MOTION
Friday, October 10. 2003 from 9 a.m. to 11 a.m.
Nature of Case: Hazardous Waste ) 1�
Dated: October 1, 2003 Signed. , �} '-/ , �
Name: John C. Guadnola/Kenneth G. Kieffer WSBA 1�o: 08636/10850
Address: 1201 Pacific Avenue, Suite 2100 Att ey for Plaintiffs
Tacoma, WA 98402 one (253) 620 -6485
THE ABOVE INFORMATION MUST BE COMPLETED AND SIGNED
FOR CLERK'S USE ONLY
Assigned to Date By
(1211966 v7.doc) •
0
TO. ADDITIONAL ATTORNEYS
Name Timothy G Leyh. WSBA No. 14853
Daniel Harrigan & Tollefson LLP
999 Third Avenue 44 Floor
Seattle, WA 98104
Phone 206 - 623 -1700
Attorneys for Defendants and Third Party Plaintiffs City of Yakuna
Name: Stephen J Tan, WSBA No 22756
Brown Reavis & Manning PLLC
1201 Third Avenue, Suite 320
Seattle, WA 98101
Phone 206 - 292 -6300
Attorneys for Defendant Del Monte
Name Ray Paolella
Yakima City Attorney'
200 South 3r Street
Yakima, WA 98901
Name Philip A. Lamb
City Attorney
102 West Ahtanum
Union Gap, WA 98903
• [1211966 v7 aoc]
2 , r FRIED
3 OC T 3 2003
4 CITY LEGAL DEPT.
5
6
7 COURT OF THE STATE OF WASHINGTON
FOR YAKIMA COUNTY
8
9 WILFRED AND KAREN MURPHY husband
and wife, et al., NO 99 -2- 00611 -8
10 Plaintiffs, PLAINTIFFS' MOTION FOR
11 PRELIMINARY APPROVAL OF
SETTLEMENT AND PLAN OF
12 vs ' DISTRIBUTION, AND FOR
13
CITY OF YAKIMA, a Washington municipal APPROVAL OF CLASS NOTICE
corporation, et al, ASSIGNED TO THE HONORABLE
14 SUSAN L. HAHN
Defendants.
15 I HEARING DATE. October 10, 2003
16
17
Plaintiffs respectfully move the Court, pursuant to CR 23, for entry of an Order
18
prehminanly approving the settlement between Plaintiffs and the City of Yakima,
19
preliminarily approving the plan of distribution proposed by Plaintiffs, and approving the
20
Class Notices to be sent to class members and published.
21
This motion is based upon the supporting memorandum filed simultaneously herewith,
22
upon the declaration of John C Guadnola and the exhibits attached to that declaration, also
23
24
25
26
PL. MOT FOR PRELIM. APPROVAL - 1 of 2
7
(99 -2- 00611 -8) LAW OFFICES
[1241271 v5.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 7200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 68401-1157
(253) 620.6200 FACSIMILE (253) 9204666
0 ; submitted simultaneously with the motion, and upon all other pleadings and filings m this
2
case.
3 Dated this j s day of October, 2003
4
GORDON, THOMAS, HONEYWELL, MALANCA,
5 PETERSON & DAHEIM LLP
i
6 j B dat _ . —�
Albert . Malanca, 'BA No 01226
7 1 John Guadnola, WSBA No 08636
eth G Kieffer, WSBA No 10850
8 I Bradley B Jones, WSBA No 17197
9 Timothy L. Ashcroft, WSBA No 26196
Attorneys for Plaintiffs
10
11
12
9 1
15
I
16
17
18
19
20
21
22
23
24
25
26
• PL. MOT FOR PRELIM APPROVAL - 2 of 2
(99-2-00611-8) LAW OFFICES
H241271 v5 doc] GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98101 -1157
(253) 620-6500 FACSIMILE (253) 5265585
1
1
2 PF Cr ie 7IVED
3
OCT 0 ' zo o3
4
s CITY l.�tIL. el.
6
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
FOR YAKIMA COUNTY
8
WILFRED AND KAREN MURPHY, husband
9 NO 99 -2- 00611 -8
and wife, et al.,
10 MEMORANDUM IN SUPPORT OF
Plaintiffs'
11 PLAINTIFFS' MOTION FOR
PRELIMINARY APPROVAL OF
12 vs ' SETTLEMENT
13 CITY OF YAK ni
IMA a Washington municipal 13 TO THE HONORABLE
corporation, et al, SUSAN L. HAHN
14
Defendants HEARING DATE October 10, 2003
15
16 Plaintiffs respectfully submit this memorandum in support of their motion for
17 preliminary approval of their settlement with the City of Yakima, for preliminary approval of
18 the plan of distribution being proposed by Plaintiffs, and for approval of Class Notices to be
19 sent to the class members and published.
20 I. THE SETTLEMENT
21 After some five and one -half years of intense, hard - fought litigation, Plaintiffs and the
22 City of Yakima have reached an agreement that will finally and completely dispose of all
23 claims remaining in this case. A copy of the Settlement Agreement is being submitted to the
24 Court as Exhibit 1 to the Guadnola Declaration. The Settlement Agreement has been
25 approved by all of the named Plaintiffs, individually and in their capacity as Class
26 Representatives, and by the representatives of the City who participated in the mediation.
MEMORANDUM IN SUPPORT OF APPROVAL - 1 of 15
(99 -2- 00611 -8) LAW OFFICES
I [1241352 v6.doc] GORDON, THOMAS. HONEYWELL. MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 96401-1157
(253) 920-6500 FACSIMILE (253) 620 -6565
0 Plaintiffs anticipate that the Yakima City Council will approve the settlement at its regularly -
2
scheduled hearing on October 7, 2003
3
The settlement calls for entry of a judgment against the City of Yakima in the amount
4
of $13 million. The City will pay $7 million, in cash, into a trust account maintained by
5
Plaintiffs' Counsel. Upon such payment, the City will receive a partial satisfaction of
6
judgment and the Court will be asked to enter a stipulated order of dismissal which releases
7
the City from all further liability to the Class but does not affect the validity of the judgment.
8 Plaintiffs will then pursue the City's insurers to enforce the $6 million unsatisfied portion of
9
the judgment.
10
II. THE SETTLEMENT IS FAIR AND REASONABLE
11
Plaintiffs submit that the Court should approve the settlement with the City of Yakima
12
because it is reasonable and is fair to all Class Members. As the Court well knows, this case
fp is nfe with issues of fact and issues of law that have been hotly contested by both sides.
Although Plaintiffs are confident they would ultimately prevail if the matter were teed, they
15 1
recognize that the City has many legitimate arguments it could advance at a trial. Neither
16
Plaintiffs nor the City could predict a favorable outcome from a tnal with any degree of
17
certainty, and both sides• would expend vast amounts of time and money taking this case
18
through a trial and the inevitable appeals.
19
Against this backdrop, a settlement guaranteeing the Class gross receipts of
20
$7 million, with a potential for additional millions recovered from the insurance companies, is
21
clearly reasonable Plaintiffs' Counsel anticipate that, if this matter were to go to trial, they
22
would ask the jury for a total damage award of S20 million, of which approximately $6
23
million would be property damages and S14 million would be personal nuisance damages.
24
The guaranteed recovery of $7 million represents 35% of Plaintiffs' best case claim In a case
25
of this magnitude, with such uncertainty as to factual and legal issues, that in and of itself is a
26
0 MEMORANDUM IN SUPPORT OF APPROVAL - 2 of 15
(99- 2- 00611 -8) LAW OFFICES
[1241352 v6.doc] GORDON THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 96{01 -1157
(253) 620.6500 FACSIMILE (253) 620 -6565
1
reasonable result. In this case, however, the Plaintiffs have the opportunity to recover several
2
million additional dollars from the insurers.
3
Thus, the gross settlement amount is fair and reasonable, and should be approved by
4
the Court.
5 III. THE PROPOSED PLAN OF DISTRIBUTION
6
Plaintiffs are proposing a Plan of Distribution that will distribute the settlement
7
proceeds in a manner that is fair and equitable to all members of the Class. The plan of
8
distribution is outlined m the Class Notice attached as Exhibit 2 to the Guadnola Declaration.
9
As the Court knows, the Class that the Court certified m this case comprises all
10
persons who lived in the class area, or owned residential property in the class area, between
11
June 30, 1990 and the date Final Approval of the Settlement is granted, which is expected to
12
be late November 2003 As the Court also knows, however, the evidence amassed during the
13
discovery indicates that the impacts vaned widely from year to year and within different
14
portions of the Class area. The plan of distribution takes those vanations into account.
15
A. Compensation To Class Representatives And Original Plaintiff.
16
Plaintiffs first propose that the individuals who participated most actively m the
17
prosecution of this case be compensated for their effort. Some 140 individuals were named
18
plaintiffs in the ongmal lawsuit and answered mterrogatones propounded by the Defendants;
19
they should be paid $1,000 each as compensation for their efforts. Of these individuals, 20
20
were deposed pnor to class certification, they should be given an additional $1,500 as
21
compensation for their time and services, for a total of $2,500 each. Finally, the eight Class
22
Representatives should each receive an additional $7,500, for a total of $10,000, as
23 -
compensation for their time and services. These Class Representatives spent a tremendous
24
amount of time on this case. In addition to answenng interrogatones and being deposed pnor
25
to class certification, they all had their depositions taken after the Class was certified. In
26
MEMORANDUM IN SUPPORT OF APPROVAL - 3 of 15
(99 -2- 00611 -8) LAW OFFICES
[ 1241352 v6.doc] GORDON,
ET AR _ S. & N EYW LLP A �
1201 PACIFIC AVENUE. SLATE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98101.1157
(253) 820-0500 FACSIMILE (253) 820-6565
ilo addition, they have participated in numerous meetings to discuss strategy and tactics, they
2
provided extensive assistance to Plaintiffs' Counsel m the gathering of facts, and they
3
participated in three different mediations.
4
B. Creation Of A Personal Nuisance Damages Fund And A Property Damages
5 Fund.
6 Plaintiffs propose that, after deduction of the above - described payments to individual
7 Class Members who contributed directly to the prosecution of this lawsuit and after deduction
8 of whatever attorneys' fees and costs the Court awards to Plaintiffs' Counsel, the balance of
9 the settlement proceeds be divided into two distinct funds. One fund, contauung 70% of the
10 net proceeds, will be designated the Personal Nuisance Damages Fund and will be used to
11 compensate individuals for damages suffered while actually living m the class area. The
12 remaining 30% of the net settlement proceeds will be placed into the Property Damages Fund
0 and used to compensate property owners for the negative impact that the odors from the
14 wastewater treatment plant had on property values in the class area.
15 Dividing the net settlement proceeds on a 70/30 basis is entirely consistent with the
16 damage evidence Plaintiffs' Counsel intended to offer at trial and with the arguments they
17 intended to advance to the jury Plaintiffs' Counsel believe the most telling evidence of
18 property damage comes from their real estate expert, Dr Mundy His calculations, which are
19 included in Exhibit 4 to the Guadnola Declaration, show cumulative property damages
20 ranging from $4 5 million of loss if value in 2002 was the sole element considered to $13
21 million if loss of use and interest on loss of use were also considered. Plaintiffs' Counsel
22 would have argued that this analysis supported a reasonable award of $6 million for property
23 damages Plaintiffs' Counsel also intended to argue to the jury that total damages for the
24 Class should be in the vicinity of S20 million. Thus, Plaintiffs anticipated arguing at tnal that
25 70% of total damages would be attributed to personal nuisance injury and 30% to loss in
2
MEMORANDUM 1T SUPPORT OF APPROVAL - 4 of 15
(99 -2- 00611 -8) LAW oFFICEs
[1241352 v6.doc] GORDON. THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 66401.1157
(253) 620-6500 FACSIMILE (253) 620-6565
1 property value Accordingly, that is an appropriate basis for allocatmg the net settlement
2
proceeds between the two types of damages.
3
C. The "Time/Impact" Adjustment.
4 Payments from the Property Damages Fund will go to entities or individuals who
5
owned property m the class area during the class penod. Payments from the Personal
6
Nuisance Damages Fund will go to mdividuals who lived m the class area during the class
7
penod. Plaintiffs are proposing that, m both cases, adjustments be made to assure that the
8
individual payments are equitably distributed. The first adjustment takes mto account both
9
the length of time covered by a particular claim and the relative impact of odors from the
10
treatment plant in the specific years included in the claim. Each month dunng the penod from
11
June, 1990 through May, 1995 will be given a value of 1 Each month for the period from
12
June, 1995 through October, 2000 will be given a value of 3, and each month from November
13
2000 through the date of Final Approval will be given a value of 1 This "tune /impact"
14
adjustment produces a "time /impact" value for each claim that is consistent with the evidence
15
developed dunng discovery and with the rulings of the Court on several legal issues.
16
The Court has ruled that inverse condemnation claims extend back to the beginning of
17
the class penod, in June of 1990 There is substantial anecdotal evidence indicating that the
18
odor problems were quite significant between June 1990 and June 1995 However, it is well -
19
established law that, in a case such as this, inverse condemnation damages are measured at the
20
time of tnal. The evidence adduced by Plaintiffs' experts indicated that the impact on
21
property damages was relatively constant prior to 1995 and that it abated to a significant
22
degree by 2003 1 Therefore, it seems inappropnate to give the early months of the inverse
23 -
condemnation damage penod any heavier weighting despite the seventy of the odors at that
24
time.
25
26 ) See Mundy Report attached as Exhibit 4 to Guadnola Declaration.
MEMORANDUM IN SUPPORT OF APPROVAL - 5 of 15
(99 -2- 00611 -8) LAW OFFICES
[1241352 v6.doc) GORDON.. THOMAS. HONEYWELL, NEY E LLP �
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOA 1157
TACOMA. WASHINGTON 08401 -115T
(253) 820-8500 FACSIMILE (253) 820.8585
The Court has also ruled that the statute of limitations cuts off any claim for personal
2 nuisance damages pnor to June of 1995 2 Therefore, no matter how severe the odors were
3
between 1990 and June of 1995, no class member has a claim for personal nuisance damages
4
m those years. This, too, makes it inappropnate to attach any weight to those earlier months.
5 The period from June 1995 through October 2000 is given substantially greater
6
"tune /impact" value in computing damages. Tlus weighting is based on the Court's statute of
7
limitations rulings, as indicated above. It is also based on the substantial body of anecdotal
8
evidence indicating that odors were particularly severe during this time penod. The ill -fated
9
composting project that triggered an uproar in the class area and ultimately led directly to this
10
lawsuit took place in the sununer of 1995 Biosolids stored on the ground at the wastewater
11
treatment plant were a constant source of odor, and that storage continued until the fall of
12
1998 The sprayfields were another constant source of odor, and their use was not
discontinued until October 2000 Therefore, Plaintiffs believe the evidence they would
present at trial establishes that the people who lived in the class area between June 1995 and
15
October 2000 suffered the most intense odors that could be proven. This clearly justifies a
16
"time /impact" adjustment that gives extra weight to the months dunng that penod for
17
purposes of allocating personal nuisance damages.
18
It also is appropnate to weight those months for purposes of allocating property
19
damages. Anyone who sold property in the class area dunng that time would undoubtedly
20
have received substantially less for his or her property than would have been the case m the
21
absence of the odors. In addition, Plaintiffs' real estate expert concluded that owners of real
22
property in the class area suffered significant damages as a result of loss of use of their
23
property 3 This component of property damage is cumulative, calculated on a year -by -year
24
25
2 Order entered February 14 2003
26 3 See Mundy Report attached as Exhibit 4 to Guadnola Declaration.
MEMORANDUM IN SUPPORT OF APPROVAL - 6 of 15
(99-2-00611-8) LAW OFFICES
[1241352 v6.docl GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LIP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA WASHINGTON 68401.1157
(253) 620 FACSIMILE (253) 8206565
1
basis. The people who owned property in the class area dunng the penod 1995 through
2
October 2000 incurred significantly greater loss of use damages than did people who owned
3
property after that tune penod.
4
The "time/impact" adjustment is implemented by multiplying the number of months a
5
claimant lived m or owned property in the class area by the "tune/impact" value of 1 or 3
6
attributed to those specific months. Everything else being equal, an mdividual who, for
7
example, owned a specific parcel of property for two years m the penod between June 1995
8
and October 2000 would receive three times as large an award of property damages as would
9
an individual who owned the same piece of property for two years pnor to June 1995 or after
10
October 2000 Similarly, everything else being equal an individual who, for example, lived at
11
a specific address for two years dunng the penod from April 1995 to October of 2000 would
12
receive an award of personal nuisance damages three times greater than would be given to an
13
individual who lived at the same address for two years pnor to June 1995 or after October
14
2000
15
D The "Proximity" Adjustment.
16
Plaintiffs are also proposing a "proxuruty" adjustment, whereby claims are weighted
17
in accordance with the proximity of the specific property involved to the wastewater treatment
18
plant. Plaintiffs propose that the class area be divided into three Zones. The Zones are
19
consistent with the computer modeling done by Plaintiffs' odor dispersion expert, Palo
20
Zannetti, when he estimated the impact of odors from the treatment plant. Dr Zannetti
21
created isopleths, which are computer - generated maps. One isopleth shows the peak
22
concentrations in the class area for odors from the treatment plant; a second isopleth shows
23
peak concentrations of odors from the sprayfields. Copies of these two isopleths are attached
24
as Exhibit 5 to the Guadnola Declaration.
25
26
MEMORANDUM IN SUPPORT OF APPROVAL - 7 of 15
(99-2-00611-8) LAW OFFICES
[1241352 v6.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. surrt 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 95401.1157
(253) 520.5500 FACSIMILE (253) 5206555
Dr Zannetti's modeling shows that the most severe odor impacts fell on the portion of
2
the class area immediately west of the treatment plant and sprayfields. That area has been
3
designated Zone 1 by the Plaintiffs. According to Dr Zannetti's modeling the next most
4
severe impacts were felt m the northwest corner of the class area and in that portion of the
5
class area south of Zone 1 to the Valley Mall Boulevard. That area has been designated Zone
6
2 by the Plaintiffs. Finally, the least significant odor impacts would have been felt in that
7
portion of th e class area south of Valley Mall Boulevard, which has been designated Zone 3
8
by the Plaintiffs. All three Zones are shown on the map attached as Exhibit 6 to the Guadnola
9
Declaration.
10
In addition to distinguishing the three Zones, it is necessary to determine what relative
11
value should be assigned to the three Zones. Reference to Dr Zannetti's modeling is helpful
12
on this portion of the analysis as well. His analysis consistently shows that if a particular
release of odors from the wastewater treatment plant is rated at an intensity of 5 in Zone 1 it
would be rated at an intensity of 2 in Zone 2 and at an intensity of 1 in Zone 3 4 Therefore,
15
Plaintiffs' proposed plan of distribution allocates damages among the three Zones in that same
16
ratio In other words, assuming everything else is equal claimants in the different Zones
17
would receive awards which bore the same relationship as is shown in Dr Zannetti's study
18
For every $500 awarded to a claimant in Zone 1, an identically situated claimant in Zone 2
19
would receive $200 and an identically situated claimant in Zone 3 would receive $100 Stated
20
differently, every $800 in settlement proceeds distributed would go $500 (62 5 %, or 5/8) to
21
claimants in Zone 1, $200 (25 %, or 2/8) to claimants in Zone 2, and $100 (12 5% or 1/8) to
22
claimants in Zone 3
23
24
25
26 4 See Zannetti isopleths, Ex. 5 to Guadnola Declaration.
411 MEMORANDUM 1N SUPPORT OF APPROVAL - 8 of 15
(99-2-00611-8) LAW OFFICES
[124052 v6.doc] GORDON, THOMAS HONEYWELL. MALANCA.
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98401-1157
(253) 820 -6500 FACSIMILE (253)620-85M
1 E. Computing Individual Awards.
2
Once all of the above adjustments have been made, and all claim forms. have been
3 submitted and processed, determming the specific award for any particular claimant is a
4 matter of relatively straightforward anthmetic. Each claim is given a "tune /impact" value that
5 reflects the specific months covered by the claim and the weight given to those months. For
6 property damage calculations, this "time /impact" value would be multiplied by the assessed
7 value of the specific piece of property m the most recent Yakima County records, and the
8 result would m turn be multiplied by the percentage applicable to the Zone in which the
g property fell. All of the property damage claims would be added together, and each claim
10 would be converted to a percentage of the aggregate amount.
11 In other words, if the total of all of the claims computed with the formula
12 [ "time /impact" value x "assessed" value x "proximity" percentage] equaled 500 and the same
13 calculations applied to a specific property equaled 5, that property would be awarded 1% of
14 the total Property Damages fund.
15 A substantially identical calculation would be done for each personal nuisance claim,
16 the only differences being that the time penod would not extend pnor to Apnl of 1995 and
17 there would be no adjustment for assessed value. Each Personal Nuisance Damages claim's
18 relative value would be determined by calculating the "time /impact" value of the claim and
19 multiplying it by the appropnate "proximity" percentage. Again, the results of all these
20 calculations would be added up and each individual claim value would be converted to a
21 percentage of the total value. As was true in the case of property damage awards, if the total
22 of all Personal Nuisance Damages calculations equaled 1,000 and the value attached to an
23 individual claim was 20, that claimant would be awarded 2% of the Personal Nuisance
24 Damages Fund.
25 Plaintiffs believe the Court should approve this plan of dis-- ution because it will
26 fairly and equitably distribute settlement proceeds among claimants. :ecting the nature of
MEMORANDUM IN SUPPORT OF APPROVAL - 9 of 15 LAw OFFICES
(99-2-00611-8) GORDON. THOMAS, HONEYWELL. MALANCA,
[1241352 41352 v6. dococl PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. 5151! 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 96401 -1157
(253) 6266500 FACSIMILE (253) 620 -0.565
41 damages each claimant suffered, the penod of time during which those damages were
incurred, and the intensity of the damages as measured by proximity to the wastewater
3
treatment plan.
4
IV. UNION GAP SETTLEMENT
5
As the Court will recall, Plaintiffs settled with the City of Union Gap for a total of
6
$200,000 in a settlement approved February 14, 2003 As part of that settlement, Plaintiffs
7
agreed that the net proceeds of the settlement would be distributed entirely to individuals
8
living south of Valley Mali Boulevard, the area now designated by Plaintiffs in the Plan of
9
Distribution as Zone 3 Plaintiffs' proposed Plan of Distribution implements that agreement.
10
Plaintiffs propose that the $200,000 settlement fund received from the City of Umon
11
Gap be treated identically to the $7 million settlement fund received from the City of Yakuna.
12
Plaintiffs' Counsel will request fees and costs, and whatever amount the Court awards will be
computed as a percentage of the aggregate $7.2 million in settlement funds. Both funds will
then be reduced by the same percentage, to assure that the class members in the north do not
15
carry a disproportionate share of the costs of the litigation. Once the net value of the Uruon
16
Gap settlement has been determined, the funds will be distributed among claimants living or
17
owning property in Zone 3 The calculations will be identical to the calculations used for
18
distributing the City of Yakima's settlement, except that each claim will be valued as a
19
percentage of the total of Zone 3 claims instead of as a percentage of the total of claims from
20
all three Zones.
21
V. RELEASE OF CLAIMS
22
The proposed settlement, if approved by the Court, will provide fair and reasonable
23
compensation to class members It will also provide the finality that the City of Yakima and
24
Del Monte Corporation need. The settlement agreement will extinguish all claims of all class
25
members relating to odors emitted from the wastewater treatment plant at any time up to the
26
0 MEMORANDUM rN SUPPORT OF APPROVAL - 10 of 15
(99 -2- 00611 -8)
LAW OFFICES
[1241352 v6.doc] GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE BOX 1157
TACOMA WASHINGTON 98401.1157
(253) 820.4500 FACSIMILE (253) 8206585
I
I
1
date of Final Approval. It will also bar class members and future owners of property m the
2 class area from asserting any claim for inverse condemnation as a result of odors emitted from
3
the wastewater treatment plant in the future, unless the odors result from specific additional
4
acts or omissions in the City's operation of the treatment plant and exceed the level of odors
5
that occurred dunng the three years preceding the settlement. This gives the City assurance
6
that it can continue to run the plant, with all the operational improvements implemented up
7
through October 2000 when the sprayfields were taken out of commission, without concern
8
about ongoing liability
9
The Settlement Agreement also releases all claims against Del Monte Corporation. As
10
the Court knows, Del Monte entered into a settlement agreement with the City of Yakima
11
some three years ago Under the terms of that agreement, Del Monte paid Yakima $500,000
12
and Yakima agreed to indemnify Del Monte from any additional exposure to Plaintiffs m the
13
underlying litigation. Although Del Monte is not contributing directly to the present
14
settlement, it is clear that the $500,000 payment has had the effect of freeing up additional
15
monies for the City of Yakima to contribute to the settlement which otherwise would not have
16
been available. Therefore, Plaintiffs submit that the Settlement Agreement includes sufficient
17
consideration to release Del Monte.
18
VI. ATTORNEYS' FEES AND COSTS
19
Plaintiffs' Counsel are not asking for a specific award of fees and costs at this time.
20
However, they expect to ask for such an award at about the same time as they ask for final
21
approval of the Settlement Agreement. Counsel will ask for reimbursement of all of their out -
22
of- pocket expenses, which currently exceed $1 million and will ultimately include the costs of
23 -
administenng the claims process. Counsel will also ask for a fee equal to one -third of the net
24
settlement proceeds after payment of compensation to the onginal Plaintiffs and Class
25
Representatives, reimbursement of costs, and payment of claim administration costs. Counsel
26
MEMORANDUM IN SUPPORT OF APPROVAL - 11 of 15
(99 -2- 00611 -8) LAW OFFICES
[ 1241352 v6.doc] GORDON, THOMAS. HONEYWELL. MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE SOX 1157
TACOMA. WASHINGTON 46401 -1157
(253) 8204500 FACSIMILE (257) 6204565
III will submit a detailed petition wluch is expected to show that the hours spent on this case, if
2
billed at the attorneys' normal hourly rates, would have produced a fee equal to or greater
3
than the percentage fee requested.
4
VII. CLASS NOTICE
5
Finally, Plaintiffs are moving the Court for approval of two forms of notice to class
6
members. These forms are attached as Exhibits 2 and 3 to the Guadnola Declaration. The
7 j
short form, Exhibit 3, is intended for publication m the Yakima Herald Republic and in La
8 1
Voz The long form will be mailed to all current owners of residential real property m the
9
class area, all known residents of the class area, and all known former owners of residential
10
property in the class area. Plaintiffs are working with their real estate expert, Dr Mundy,
11
with defense counsel and with the Yakima County Assessor's Office to generate the mailing
12
list for the notice. Plaintiffs have also arranged for translation of both forms of notice, so that
they can be published and mailed m both English and Spanish. Copies of the translated
14
� notices are attached as Exhibit 7 to the Guadnola Declaration.
15
Plaintiffs submit that the forms of notice should be approved by the Court. They have
16 1
been reviewed and approved by defense counsel and the City of Yakima. The proposed
17
notices fairly and accurately appnse class members of the terms of the settlement, of their
18
nghts under the Settlement Agreement, of the anticipated request for attorneys' fees and costs,
19
of the proposed Plan of Distribution, and of the fact that an additional hearing will be held to
20
consider any objections that may be made. The notices also advise class members that there
21
will be two "town hall" meetings conducted by Plaintiffs' Counsel to answer questions about
22
the settlement and provide assistance in completing claims forms Interpreters will be present
23
at the meetings to assist Spanish - speaking claimants
24
25
Ili MEMORANDUM TN SUPPORT OF APPROVAL - 12 of 15
(99 -2- 00611 -8) LAW OFFICES
[1241352 v6.doc] GORDON, THOMAS HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98401.1157
(253) 620 -6500 FACSIMILE (253) 620.8565
1 VIII. ARGUMENT •
2 This motion requests that the Court preliminarily approve the proposed class
3 settlement and Plan of Distribution and establish the procedure to be utilized m the Court's
4 determination of whether the proposed settlement and Plan of Distribution should receive
5 final approval from the Court.
6 Approval of class action settlements involves a two -step
process. First, counsel submit the proposed terms of settlement
7 and the court makes a preliminary fairness evaluation..
8 If the preliminary evaluation of the proposed settlement does
9 not disclose grounds to doubt its fairness or other obvious
deficiencies the court should direct that notice under Rule
10 23(e) be given to the class members of a formal fairness
heanng, at which arguments and evidence may be presented in
11 support of and in opposition to the settlement.
12 MANUAL FOR COMPLEX LITIGATION § 30 41 at 236 - 237 (3 Ed. 1995)
13 Thus, the present motion before the Court focuses on two basic questions. The first
14 question is Does the settlement appear fair? "In evaluating the settlement, the judge should
15 keep in mind the unique ability of class and defense counsel to assess the potential nsks and
16 rewards of litigation, a presumption of fairness, adequacy and reasonableness may attach to a
17 class settlement reached in arms- length negotiations between expenenced, capable counsel
18 after meaningful discovery " Id § 30 42 at 240 There is a "strong judicial policy that favors
19 settlements, particularly where complex class action litigation is concerned." Class Plaintiffs
20 v Seattle, 955 F.2d 1268, 1276 (9th Cir 1992), cert. denied, 506 U S 953, 121 L. Ed. 2d 333,
21 113 S Ct. 408 (1992). Here, the parties have had extensive involvement in this litigation for
22 some five years. The evidentiary record, both documentary and testimonial, is massive.
23 Plaintiffs and the settling defendants are well aware of the facts, legal theones, and defenses
24 asserted by each party
25
26
MEMORANDUM IN SUPPORT OF APPROVAL - 13 of 15
(99 -2- 00611 -8) LAW OFFICES
[1241352 v6.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SLATE 7200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 68401-1157
(253) 820-6500 FACSIMILE (253) 620-8585
1
The Class will receive a Notice of Proposed Final Settlement and Plan of Distribution.
2
Class members will have the opportunity to submit wntten objections to the proposed
3
settlement and to appear at the Fairness Hearing m order to voice their opuuon concerning the
4
fairness and reasonableness of the proposed settlement.
5
Consistent with the requirements of the law, the proposed settlement is fair and
6
1 reasonable, the class members will be fully informed of the settlement, and they will be given
7
I an opportunity to object. The class representatives fought hard to obtain the maximum
8 I
possible recovery for the class members and, in so doing, received a valuable settlement. This
9
compromise between the Plaintiffs and the City of Yakima is reasonable and the Court should
10
preliminanly approve the proposed settlement.
11
The second question is whether the proposed Class Notice adequately informs
12
I
prospective class members of the settlement and its ramifications. Boggess v Hogan, 410 F
Supp 433, 442 (N.D Ill. 1975) Every known class member will receive a Notice of
40.
Proposed Final Settlement and Plan of Distribution. The Notice will reasonably appnse class
15 i members of the settlement, of their options, and of the consequences of their choices. A
16 j summary of that Notice will also be published in local newspapers The proposed Notice
17
fully and accurately advises class members of the terms of the proposed settlement, the Plan
18
of Distribution, their nght to object to or comment upon the settlement and Plan of
19 1
Distribution, and the legal consequences of the settlement.
20
This Court has broad discretion with respect to the procedure for the notice in class
21
action litigation. CR 23(e) In exercising this discretion, the Court must ensure that class
22
members are provided with all essential information concerning the litigation. The proposed
23
Notices expressly accomplish that goal
24
25
26
0 MEMORANDUM IN SUPPORT OF APPROVAL - 14 of 15
(99-2-00611-8) LAW OFFICES
11241352 v6 dm] GORDON, H OM E & NEY ELL, MALANCA.
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 68101 -1157
(2531 820-6500 FACSIMILE (253) 820565
1 IX. CONCLUSION
2 The proposed settlement, if approved by the Court, will bnng an end to more than five
3 years of mtense and costly litigation. It is a fair and reasonable compromise of the claims of
4 the class members, providing class members with reasonable compensation and providing the
5 City of Yakima and Del Monte with finality The proposed Plan of Distribution is carefully
6 constructed to make sure that settlement proceeds are distributed equitably among class
7 members. The proposed Class Notices are clear and unambiguous m the information and
8 instructions given to prospective class members. For all of these reasons, Plaintiffs
g respectfully urge the Court to prelinunarily approve the Settlement Agreement and the
10 proposed Plan of Distribution, to approve the proposed forms of Class Notice, and to set a
11 heanng for Final Approval of the Settlement Agreement more than 30 days after entry of the
12 Order granting preliminary approval.
13 RESPECTFULLY SUBMITTED this / — day of October; 2003
14 GORDON, THOMAS, HONEYWELL, MALANCA,
•
PETERSON & DAHEIM LLP
15
16 By Mir t om.
17 • lbe ' . Malanca, WSBA No 01226
Jo C. Guadnola, WSBA No 08636
18 enneth G Kieffer, WSBA No 10850
Bradley B Jones, WSBA No 17197
19 Timothy L. Ashcraft, WSBA No 26196
20 Attorneys for Plaintiffs
21
22
23
24
25
26
MEMORANDUM IN SUPPORT OF APPROVAL - 15 of 15
(99 -2- 00611 -8)
LAW OFFICES
[1241352 v7 dm] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 06401.1157
(253) 6204500 FACSIMILE (253) 6204565
0
3
4 Or C' : ? Z003
5 L 6T v LcUAL DEPT.
6
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
8 FOR YAKIMA COUNTY
g WILFRED AND KAREN MURPHY, husband NO 99 -2- 00611 -8
and wife, et al.,
10
Plaintiffs, DECLARATION OF JOHN C
11 GUADNOLA IN SUPPORT OF
MOTION FOR PRELIMINARY
12 vs' APPROVAL
•
CITY OF YAKIMA, a Washington municipal ASSIGNED TO THE HONORABLE
corporation, et al, SUSAN L. HAHN
Defendants. HEARING DATE October 10, 2003
15
16 I, John C Guadnola, declare under penalty of penury under the laws of the State of
17 Washington as follows
18 1 I am a partner in the firm of Gordon, Thomas, Honeywell, Malanca, Peterson
19 & Daheim, LLP and am one of the attorneys pnncipally responsible for representing Plaintiffs
20 in the above - captioned litigation. I make this Declaration of my personal knowledge
21 2 Attached to this Declaration as Exhibit 1 is a true and correct copy of the
22 Settlement Agreement between Plaintiffs and the City of Yakima. The Settlement Agreement
23 has been approved by all Class Members, by all attorneys involved in the matter, and by
24 certain officials of the City of Yakima. It is anticipated that the full City Council will approve
25 the settlement at its regularly- scheduled meeting on October 7, 2003
26
0 GUADNOLA DECLARATION - 1 of 2
(99-2-00611-8) LAW OFFICES
[1241418 v5.docj GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA WASHINGTON 96401 -1157
1257) 620 -6500 FACSIMILE (253) 620-0565
1 3 Attached to this Declaration as Exhibit 2 is a true and correct copy of the
2
proposed form of Class Notice to be mailed to Class members.
3 4 Attached to this Declaration as Exhibit 3 is a true and correct copy of the
4
proposed published Class Notice to be published in the Yakima Herald Republic the La Voz or
5
other newspapers of general circulation the Court deems appropnate.
6
5 Attached to this Declaration as Exhibit 4 are excerpts from the expert report of
7
Dr William Mundy, Plaintiffs' real estate expert.
8
6 Attached to this Declaration as Exhibit 5 are true and correct copies of two
9
computer - generated maps, known as isopleths, created by Dr Palo Zannetti. These isopleths
10
were Figure 20 and Figure 21 in Dr Zannetti's final report. They show the relative strengths
11
of odors in the different portions of the class area, as computed by Dr Zannetti. These
12
isopleths, along with the balance of Dr Zannetti's work, are the basis for Plaintiffs'
13
recommendation that the class area be divided into Zones 1, 2 and 3 for purposes of allocating
14
settlement proceeds.
15
7 Attached to this Declaration as Exhibit 6 is a true and correct copy of a map of
16
the class area showing proposed Zones 1, 2 and 3
17 I declare under penalty of perjury under the laws of the State of Washington that the
18
foregoing is true and correct.
19 S�
Dated this / ` day of October, 2003 at Tacoma, Washington.
20
21 / JOHN C GUADNOLA
22
23
24
25
26
GUADNOLA DECLARATION - 2 of 2
(99 -2- 00611 -8) LAW OFFICES
[1241418 v5.doc] GORDON THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98401.1157
(253) 6204500 FACSIMILE (253) 62046555
SETTLEMENT AGREEMENT
WHEREAS, Representative Plaintiffs Martin Cuevas, Karen Cuevas, Daniel
Martinez, Karen Murphy, Willie Murphy, Darlene Ryan, and Verla Row have brought suit,
individually and on behalf of the residential class certified by the Court against the City of
Yakima m the action presently pending m the Supenor Court of Washington, Yakima County,
styled Murphy, et al. v City of Yakima, et al., Cause No. 99 -2- 00611 -8 (the "Action "), allegmg
injury and damage to Representative Plaintiffs and members of the class of persons and
residential property owners in the vicinity of the City of Yakuna's Wastewater Treatment Plant
and adjacent Industnal Sprayfield ( "WWTP "); and
WHEREAS, in Apnl 1999, Representative Plaintiffs and Class Members on behalf of
themselves and others similarly situated, filed a class action complaint against defendant City of
Yakima (the "City") and Del Monte Corporation, a New York corporation ( "Del Monte
Corporation ") asserting causes of action for negligence, nuisance, trespass, and mverse
condemnation as a result of the odors ongmating from the WWTP Representative Plaintiffs and
Class Members asserted, among other things that, as a result of negligent operation of the
WWTP, including the collection, transportation and storage of biosolids, odors emanating from
the WWTP afflicted the entire Class Area and occurred with such frequency and were of such
intensity and duration as to interfere with the Representative Plaintiffs' and Class Members' use
and enjoyment of their property, adversely impacting property values and causing personal
discomfort, anxiety, stress, headaches, nausea and other adverse health effects, and
WHEREAS, on December 14, 2000, Representative Plaintiffs and Class Members filed a
motion to certify the class against the City and Del Monte Corporation. On Apnl 19, 2001, the
Court granted Plaintiffs' Motion for class certification, and
WHEREAS, on June 15, 2001, the Representative Plaintiffs mailed and published a
notice of pendency of class actions to members of the certified class, and
WHEREAS, the City and Del Monte Corporation deny the allegations made against it in
the Action, and
WHEREAS, the Parties recognize the existence of disputed issues of law and fact
regarding the allegations in the Action, and
WHEREAS, the Parties wish to avoid the expense and nsk involved in continued
litigation over the matters alleged in the Action, and instead wish to compromise and settle the
various disputes ansing in connection therewith.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the Parties agree as follows
•
DEFINITIONS
"Action" means Murphy, et al. v City of Yakima, et al., Yakima County Supenor Court
Cause No. 99 -2- 00611 -8
"Administrative Expenses" means expenses incurred m the adnumstration of this
Settlement as provided herem or as otherwise allowed by the Court.
"Claun(s)" means any administrative or tort claim or any lawsuit filed with or against the
City or Del Monte Corporation with regard to actions or failures to act relatmg to, ansmg out of,
concerning or caused by the WWTP up through and mcludmg the date of Final Approval.
"Claim(s)" includes, but is not limited to, the City's alleged acts and omissions of negligence and
failure, in the construction, operation, maintenance, and repair of the WWTP up through and
mcludmg the date of Final Approval, to comply with the applicable standard of care for the
design, construction and operation of a waste water treatment plant, mcludmg but not hmited to
the collection, transportation and storage of biosolids; or any other common law, statutory or
regulatory cause of action.
"Class Area" means the area shown on the map attached hereto as Exhibit A, as legally
described on Exhibit B attached hereto
"Class Members" means all persons and entities, mcludmg minors, who (a) reside in or
own residential property, or who have resided in and/or owned residential property within the
Class Area at any time between June 30, 1990 and the date of Preliminary Approval of this
Settlement and who have not previously opted out of the class (the "Class ")
"Common Fund" means the fund established pursuant to paragraph 2 of this Agreement.
"Plaintiffs' Counsel" means Albert R. Malanca, Kenneth G Kieffer, John C. Guadnola,
Bradley B Jones, Timothy L. Ashcraft, Joan C Foley, and the law firm of Gordon, Thomas,
Honeywell, Malanca, Peterson & Daheim LLP
"Court" means the Supenor Court of Washington, Yakima County, or other Court
properly acquiring jurisdiction over the Action.
"Odors" shall be given the broadest possible interpretation, including without limitation,
any and all airborne odors of any kind to humans, animals, plants, or the environment, and any
effects of odors including any kind of annoyance, discomfort, or adverse effects on body, mind,
spirit, health, property, air, quality of life, enjoyment of life, or other interests, relating to, ansing
out of, concerning or caused by the WWTP pnor to Final Approval regardless of whether such
Odors are tangible or intangible.
"Final Approval" means the date by which all of the following have occurred. (1) the
Court has entered an Order finally approving this Settlement in a form to be agreed upon by the
Parties, and (2) the applicable time penod for filing appeals or requests for review of said Order
has passed without any appeals or requests for review being filed, or if appeals or requests for
review are filed, the entry of orders affirming said Order or denying review after exhaustion of
all appellate remedies.
• "Parties" mean the Representative Plaintiffs, the Class Members, and the City of Yakima.
"Preliminary Approval" of this Settlement means the Court's entry of an order
prehminanly approving this Settlement and authonzmg notice to the Class. The Parties shall use
good faith efforts to agree upon the form of the order and of the notice. In the event the Parties
cannot agree, they shall both submit their proposed orders and notices to the Court and the Court
shall decide the form of the order and notice.
"Released Parties" shall mean the City of Yakima and Del Monte Corporation, each and
every one of their departments, divisions, agencies, commissions, boards, subdivisions, owners,
officers, directors, employees, attorneys, elected officials, predecessors, heirs, successors and
assigns. It is the intention of the Parties that this term be given the broadest possible
interpretation.
"Representative Plaintiffs" means Martin Cuevas, Karen Cuevas, Daniel Martinez, Karen
Murphy, Willie Murphy, Darlene Ryan, and Verla Row
"WWTP" means the Yakima Regional Wastewater Treatment Plant, its collection and
transportation facilities, and the former operation of the adjacent Industnal Sprayfields,
composting facility, and outdoor biosolids storage area.
TERMS AND CONDITIONS OF SETTLEMENT
1 Purpose. This Settlement and Settlement Agreement are intended solely for the
purpose of compromising disputed claims and potential claims and avoiding the risk and expense
of continued litigation. This Settlement and Settlement Agreement are not, and shall not be
construed or charactenzed as, an admission of wrongdoing of any kind on the part of any Party,
nor does any Party admit or concede the validity of any claim or defense asserted by any other
party in the Action.
2 Settlement Amount. The City agrees and stipulates to the entry following Final
Approval of a judgment in the amount of Thirteen Million and No /100 Dollars ($13,000,000)
in favor of Representative Plaintiffs and the Class Members. A copy of the judgment is attached
as Exhibit C The City shall arrange for payment to the trust account of Gordon, Thomas,
Honeywell, Malanca, Peterson & Daheim, LLP, the sum of Seven Million and No /100 Dollars
($7,000,000) in trust for the Class Members ( "The Common Fund "), which, together with the
judgment referenced above and Plaintiffs pursuit of claims against policies of insurance
referenced below, shall constitute full and final Settlement of the Action. These funds shall be
paid on the latter of Final Approval or December 15, 2003, provided, however, that if Final
Approval occurs before December 15, 2003 and the City, using its best efforts, has not
completed financing its payment obligation hereunder, it may extend its payment date an
additional two weeks to December 29, 2003 The Representative Plaintiffs and Class covenant
not to execute against the Released Parties for any amounts of the judgment in excess of Seven
Million and No /100 Dollars ($7,000,000) except against those insurers who issued policies of
insurance to Yakima between 1997 and 2001
1110 3 No Assignment of Policies. Continued Prosecution of Insurance Litigation. By
this Settlement, the City is not assigning its insurance policies to the Class and the City may
•
continue to pursue its c ..ms against its insurers. Plaintiffs and the City shall maintain their
current lawsuits against the City's insurance Garners. The City shall retam full authonty and
responsibility for its pendmg appeal of its lawsuit against its msurers throughout the appellate
process including but not limited to any motions for reconsideration, rehearing en bans and
otherwise. If and only if the City's pending appeal is successful and results m a remand to the
district court for further proceedings, Plaintiffs agree that Plaintiffs' Counsel may elect to assume
responsibility for further prosecution of the action. If Plaintiffs' Counsel so elect, they will
manage both the remanded federal court action and at their sole discretion, the declaratory
judgment action in Yakima County Supenor Court; provided, however, that the City may
associate as co- counsel with Plaintiffs' Counsel m the lawsuits and may, at its election, prosecute
the lawsuits at the City's sole cost and expense should Plaintiffs' Counsel decline to do so.
4 Allocation of Insurance Recovenes. Plaintiffs and the City agree that they
will share any proceeds recovered from the City's insurance carvers by settlement, judgment or
otherwise. The proceeds from a resolution of either or both insurance lawsuits will be
collectively allocated as follows
(a) With respect to the recovery of any "net proceeds" at or under
$1,000,000, the City shall be entitled to the first $500,000 of the net proceeds, which shall be
considered as partial recovery to the City for amounts paid to Plaintiffs in settlement and/or costs
and fees previously incurred, as will all other monies allocated to the City under this paragraph.
The Plaintiffs shall be entitled to the next $500,000 m partial satisfaction of their judgment.
Thereafter, with respect to any recovery of net proceeds between $1,000,000 and $3,000,000, the
Plaintiffs shall recover 80% of the net proceeds and the City shall recover 20%, provided,
however, Plaintiffs' Counsel shall not receive any attorney fees from the City's 20% recovery
With respect to the recovery of any net proceeds above $3,000,000 the Parties shall split the
recovery equally Plaintiffs' Counsel shall be entitled to recover attorney fees from any recovery
of net proceeds above $3,000,000 as follows (1) a 1/3 contingent fee from the City's share, and
(2) whatever fee is approved and set by the Court regarding the Class Plamtiffs' share. "Net
proceeds" is defined as gross proceeds less reasonable costs and expenses actually incurred after
the date the Final Settlement Documents are executed (but not legal fees)
(b) Neither the City nor the Plaintiffs shall settle and compromise their
respective lawsuits without the other's consent unless the settlement exceeds $900,000 As to
any settlement in excess of $900,000, either the City or Plaintiffs may accept the settlement and
bind both Parties, with the settlement proceeds being dispersed as provided in this Agreement.
For settlement proposals by the insurers at or m excess of $1,000,000, either Party shall have the
option to buy out the Party wishing to settle by paying that Party's share of the proposed
settlement amount and may thereafter continue the prosecution of the respective insurance camer
lawsuit.
5 Administration. All costs or expenses incurred in admimstenng this Settlement,
including without limitation the cost of providing notice to the Class and any expenses incurred
in connection with the division and distribution of the Common Fund, shall be paid from the
Common Fund. The City shall have no obligation whatsoever to pay any sum for such
administrative costs and expenses, except that each party shall be responsible for its own
attorneys' fees, costs, and expenses incurred in defending the Action, negotiating this
Agreement. and performing any obligations as set forth m this Agreement unless expressly
provided otherwise in this Agreement. Representative Plaintiffs, Class Members, and Plaintiffs'
Counsel shall be solely responsible for complying with any tax laws or other laws relating to
administration or distribution of the Common Fund.
6 Court Approval of Settlement. The Parties shall take all reasonable measures
necessary to secure Final Approval of this Settlement as required by CR 23 or other applicable
legal authonty including but not limited to RCW 4.22 et seq Plaintiffs' Counsel shall promptly
file with the Court a Motion for Preliminary Approval and any necessary supporting papers,
asking the Court to enter an order, following approval by the City Council, m a form to be agreed
upon by the Parties The Parties shall use their best efforts to agree on a form of the Motion for
Preliminary Approval. The City may file with the Court such additional papers in support of the
Motion for Preliminary Approval as it deems necessary or appropnate, in its sole discretion. If
the Parties cannot agree on the form of a Motion for Preliminary Approval, each party may
submit its own version to the Court. Plaintiffs' Counsel shall, at the appropriate time following
Preliminary Approval, prepare and file with the Court a Motion for Final Approval, and any
necessary supporting papers, asking the Court to enter an Order finally approving the Settlement
( "Settlement Order ") and Order of Dismissal m a form to be agreed upon by the Parties. The
Parties shall use their best efforts to agree on a form of the Motion for Final Approval. The City
may file with the Court such additional papers m support of the Motion for Final Approval as it
deems necessary or appropnate, in its sole discretion, subject to the provisions set forth above. If
the Parties cannot agree on the form of a Motion for Final Approval, each party may submit its
own version to the Court. In the event Final Approval is not obtained, the Parties shall make all
reasonable efforts to negotiate a new settlement agreement that will meet with approval of the
Court. In the event this Settlement is not approved and the Parties are not able to negotiate a new
one, the Parties shall so notify the Court and proceed with the Action. Any pleadings submitted
or statements made pursuant to this paragraph are settlement communications subject to
Evidence Rule 408 In the event Final Approval is not achieved, the Parties agree that nothing
contained in this Settlement Agreement, Plaintiffs' Counsel's or The City's pleadings or oral
statements submitted pursuant to this paragraph may be used, quoted, referenced, or admitted in
the Action or any other litigation.
7 Fees and Costs of Plaintiffs' Counsel. Plaintiffs' Counsel shall apply to the Court
for an award of fees, expenses and costs, which shall be paid from the Common Fund established
under Paragraph 2 above. Aside from their obligations to pay into the Common Fund the
Settlement Amount referenced in paragraph 2 and pay attorneys' fees as provided m paragraphs
4 and 19, the City shall not have any obligation whatsoever to pay any sum for attorneys' fees,
expenses or costs claimed by Representative Plaintiffs, Class Members and/or Plaintiffs' Counsel
in connection with the Action including but not limited to any costs incurred by Representative
Plaintiffs or Plaintiffs' Counsel The City shall not oppose the application for award of
reasonable fees, expenses or costs, and any future application for reasonable fees, expenses, or
costs, provided, however, that this agreement not to oppose such an award does not apply to an
application for fees, expenses or costs sought by any of the Parties for an alleged breach of this
Settlement Agreement.
1111 8 Dismissal of Action. In consideration of the confession of Judgment and payment
of the above amount, Representative Plaintiffs and Class Members shall dismiss the Released
Parries with prejudice and without costs to any Party Plamtiffs' Counsel shall execute the
Stipulation and Order of Dismissal attached hereto as Exhibit D within fifteen (15) days after •
Final Approval.
9 Release of All Claims by Representative Plaintiffs and Class Members. Effective
upon Final Approval of this Settlement Agreement, the Representative Plaintiffs, Class Members
and each of them hereby release, discharge, and forever acquit the Released Parties from any and
all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever,
as alleged or as could have been alleged m the Action, whether in law or equity, ansmg out of or
relatmg in any way to (1) Odors; or (2) the allegation that Representative Plaintiffs and/or Class
Members have been damaged by operation of the WWTP as a result of residing or owning
residential property m the Class Area pnor to Final Approval, or (3) operation of the WWTP
pnor to Final Approval, mcludmg, without luruting the generality of the foregoing, any and all
claims for nuisance, negligence, inverse condemnation, stnct liabihty, contribution, indemnity,
trespass, property damages, loss of use and enjoyment, and/or diminution of property values,
attorney fees, costs under any statutory or regulatory authonty relating to Odors; penalties or
other rehef resulting from violations of pennits or failure to comply with applicable laws,
regardless of whether any such matters are claimed under theones of nuisance, trespass,
negligence, stnct liability, inverse condemnation, contribution, mdemruty, or any other common
law, statutory or regulatory cause of action, and regardless of whether defined as a continuing
tort or otherwise. This full and final release is intended to provide the broadest protection
possible from claims and damages as a result of acts, omissions or occurrences relatmg to the
WWTP on or before the date of Final Approval, including all causes of action therefore against
the Released Parties. Tlus release is specifically intended to cover and include, without
limitation, any and all claims, civil or otherwise, past or present, wluch can or may ever be
asserted by the Representative Plaintiffs, each and every Class Member, and by their respective
agents, estates, mantal communities, dependents, successors, assigns (includmg, but not lunited
to subsequent purchasers, lessees and renters of property owned by Class Members within the
Class Area), hen holders, or other entities, against the Released Parties ansmg out of or relating
m any way to the matters described above that are based on acts, omissions or occurrences on or
before the date of Final Approval that resulted or are alleged to have resulted m Odors or effects
of Odors. By this settlement, Representative Plaintiffs and each and every Class Member are
also releasing, on behalf of themselves, and their respective agents, estates, marital communities,
dependents, successors, assigns (including, but not limited to subsequent purchasers, lessees and
renters of property owned by Class Members witlun the Class Area) hen holders and other
entities, any inverse condemnation or "takings" claims concenning diminished property values
within the Class Area ansmg out of the construction, operation, maintenance, and repair of the
WWTP pnor to Final Approval and any alleged actions or failures to act by the City concerning
the WWTP pnor to Final Approval. No subsequent claim for inverse condemnation or takings of
any interest in property located within the Class Area, may be made by any of the Representative
Plaintiffs, any Class Member and any of their respective agents, estates, marital communities,
dependents, successors, assigns (including, but not limited to subsequent purchasers, lessees and
renters of property owned by Class Members within the Class Area) hen holders and other
entities, concerning the operation of the WWTP unless there is additional govemmental action
by the City relating to the WWTP causing Odor impacts and emissions exceeding the degree and
level existing from October 3, 2000 to the date of Final Approval (including normal operational
events such as intermittent upset conditions), which also results in a measurable and provable
0 decline m market value separate and apart from any measurable or provable declme m market
value that has occurred through the date of Final Approval. Representative Plaintiffs and each
Class Member acknowledge and agree that this Settlement Agreement will be recorded with the
Yakima County Auditor's Office.
10 Cooperation. As partial consideration for this Settlement, the Parties agree to
cooperate m the following manner
(a) The City will support the Representative Plaintiffs and Class Members'
Motions for Prelumnary Approval and Final Approval of this Settlement. The City may file with
the Court such pleadings and papers m support of said Motions as it deems necessary or
appropnate, in its sole discretion. All pleadings submitted and statements made by the City with
regard to this provision shall be subject to the terms of paragraph 6
(b) The City will cooperate with Representative Plaintiffs, Class Members and
Plaintiffs' Counsel m their purswt of insurance proceeds from vanous policies of msurance
issued to the City between 1997 and 2001 The City and its employees and Counsel agree to
make themselves reasonably available for discovery proceedings and teal m the prosecution by
Representative Plaintiffs and Class Members of any and all causes of action concenung the
insurance policies whether in Class Members' own lawsuit or upon Plaintiffs' Counsel's
acceptance of the prosecution of the City's pending lawsuit as described m paragraph 3 The
0 City will also make available to Class Counsel all relevant and nonpnvileged documents relating
to the pursuit of insurance claims against the City's policies.
(c) The City shall cooperate with Plaintiffs' Counsel in regard to Plaintiffs'
Counsel establishing, creating, updating or amending a database of Yakima County or City
records for the purpose of mailing notice to the Class and implementing a plan of distribution to
all Representative Plaintiffs and Class Members provided that such cooperation does not result m
significant use of the City's financial resources or personnel.
11 Effect on Claims.
(a) Effective upon Final Approval, every Claim of each Representative
Plaintiff and Class Member against the Released Parties shall be conclusively compromised,
settled and released and each such Representative Plaintiff and Class Member shall be barred
from uutiating, asserting or prosecuting any Claim against the Released Parties, except to the
extent permitted by this Settlement Agreement and the Stipulation and Order of Dismissal
attached as Exhibit D
(b) Any checks issued to the Plaintiffs, Representative Plaintiffs and Class
Members must contain language, approved by the Parties, to the effect that negotiation,
endorsement or deposit of the check constitutes a release
(c) The Parties agree that the Notice of Settlement and the Final Approval will
contain language, to be agreed on by the Parties, to the effect that the Final Approval of the
0 Settlement will be binding upon all Class Members and will extinguish and release all Claims, as
set forth in paragraph 9 herein. The Notice shall also include language addressing disclosure
obligations under Washington law The language shall inform Class Members of their duty to
disclose information matenal to a buyer's decision to purchase property and encourage class
members to disclose that their property is within the Class Area and that compensation was paid
for alleged property damages and nuisance from Odors caused by the WWTP
12. Reporting Obhganons. The Representative Plaintiffs, Class Members and
Plaintiffs' Counsel shall provide to the City copies of a final disbursement statement identifying
the names, addresses, and amounts disbursed to each Representative Plaintiff and Class Member
13 Use of Settlement Agreement.
(a) The parties to this Settlement Agreement, including Representative
Plaintiffs or any Class Member, shall not seek to introduce and/or offer the terms of the
Settlement Agreement, any statement, transaction or proceeding m connection with the
negotiation, execution or implementation of this Settlement Agreement, any statements m
the documents appended to this Settlement Agreement, stipulations, agreements,
admissions made or entered into m connection with any fairness hearing or any finding of
fact or conclusion of law made by the Superior Court or otherwise rely on the terms of
this Settlement Agreement, m any judicial or admuustrative proceeding, except as
provided m paragraphs 3, 4 and 10(b) or insofar as it is necessary to enforce the terms of
this Settlement Agreement.
(b) Neither this Settlement Agreement nor any exhibit hereto nor any
statement, transaction or proceeding in connection with the negotiation, execution or
implementation of this Settlement Agreement is mtended to be or shall be construed as or
deemed to be evidence of an admission or concession by the Released Parties of any
liability or wrongdoing, or of the truth of any allegations asserted by any Representative
Plaintiff or any Class Member against them, or as an admission by the Representative
Plaintiffs or any Class Member of any lack of ment in their claims and no such statement,
transaction or proceeding shall be admissible m evidence for any purpose, except for
purposes of obtaining approval of this Settlement Agreement in this proceedmg or pursuit
of claims against the City's insurers as provided in paragraphs 3, 4 and 10(b)
14 Parties Bound. This Settlement Agreement shall be binding on the Parties hereto
and each of their heirs, legal representatives, successors, and assigns, and inures to the benefit of
the Parties and Released Parties and their heirs, legal representatives, successors and assigns.
The Representative Plaintiffs, by approval of this Settlement Agreement by the Court, have full
authonty to enter into this Settlement Agreement on their behalf and behalf of each Class
Member and to take steps reasonably necessary to achieve Final Approval, as fully to all intents
and purposes as each Class Member might or could do of personally present and a party to this
Settlement Agreement, and the acts ofthe Representative Plaintiffs on behalf of the Class
Members are, upon approval by the Court of this Agreement, ratified and confirmed by each
Class Member
15 No Third Party Beneficiary No provision of this Settlement Agreement or any
exhibit thereto is intended to create any third -party beneficiary to this Settlement Agreement.
III 16 Integration. This wntten agreement contams the entire understanding among the
P arties in connection with its subject matter, and supersedes and replaces all pnor negotiations,
agreements, or representations by or among the parties, whether oral or wntten. Each Party
acknowledges that no other Party, or any agent or attorney of any Party, has made any promise,
representation, or warranty whatsoever, express or implied, other than those expressly stated
herein, concerning the subject matter hereof to induce the other Party or Parties to execute this
document. Each Party acknowledges that m executing this document he, she, or it is not relying
on any promise, representation or warranty other than those expressly stated herein.
17 Choice of Law The interpretation and enforcement of this Settlement Agreement
shall be governed by the laws of the State of Washington.
18 Construction of Settlement Agreement. This Settlement Agreement has been
drafted by mutual negotiations among the parties. It shall be construed according to the fair
intent of the language as a whole, and not for or against any party The headings of the sections
and paragraphs of thus Agreement are included for convenience only and shall not be deemed to
constitute part of this Agreement or to affect its construction.
19 Attorneys' Fees. In the event any party hereto, or his, her, or its authonzed
representative, successor, or assign, shall institute suit to enforce this Settlement Agreement or
for any breach thereof, the substantially prevailing party in such suit or proceeding shall be
• entitled to an award of his, her, or its reasonable costs, expenses and attorneys' fees incurred,
both at the tnal and appellate court levels, before and after judgment.
20 Counterparts. This Settlement Agreement may be executed in any number of
counterparts, each of which shall be deemed an onginal, but all of which together shall constitute
one and the same instrument.
21 Mediation and Arbitration. The Parties agree that Thomas V Hams shall mediate
disputes arising from the Memorandum of Understanding and this Settlement Agreement. If
mediation fails, the Parties reserve the nght to use other alternative dispute resolution processes
or seek court intervention.
DATED this day of , 2003
Martin Cuevas, Representative Plaintiff Karen Cuevas, Representative Plaintiff
Daniel Martinez, Representative Plaintiff Karen Murphy, Representative Plaintiff
40
Willie Murphy, Representative Plaintiff Darlene Ryan, Representative. Plaintiff
Verla Row, Representative Plaintiff
Add Acknowledgements for the signatures of
the Plaintiff Representatives
GORDON, THOMAS, HONEYWELL,
MALANCA, PETERSON & DAHEIM LLP
•
B /rid _
Albe • R. Malanca »a rL-�
• eys for Plaintiffs
CITY OF YAKIMA PRESTON GATES & ELLIS, LLP
By By
Richard Zais Thomas H. Wolfendale
City Manager Attorneys for City of Yakima
By
Raymond Paolella
Yakima City Attorney
•
DEL MONTE CORPORATION DANIELSON HARRIGAN LEYH &
TOLLEFSON, LLP
By
Scott Rickman, Assistant Secretary By
Timothy G Leyh
Attorneys for City of Yakima
BROWN REAVIS & MANNING, PLLC
By
Stephen J Tan
Attorneys for Del Monte Corporation
K\25739\00038 \TH W\THW_A2 1 FQ
1
e . 1.kill: Lii
1: NoI) ill .. kJ
•ir,.. e - -■
rell St
NEWIFIIIIIIIIIIII ■i\-----7---------____Thai
wi
1 .
Iler L11
Yakima Class
Area . I •
1 NI ..1,i 'kw I• , Mond kw
.7
_:_- • i
Ross La
./. McNair A%
E Pierce St ;ikeuta A ■ e i
f - q '''''''f4 Lilac lit f
■ ...i., .7. •' : .:3 ...1-1...4-,
1 - . i..'
- -- -.,- ;('. - .- -r.,
- •iii0V'q.':sar. - -
- 4 A .. 3 , ,i' . •-•^' . =
."
_
. . u a ■ - ./
' C
t
OC
-...■ -'' ...—
.., c...
7 , ,;:•,..,. -
...,.. •
- _
. -
''' -e- v Neill d i
• !Fi
l , at St Ill
ornIti
IIIIIIIIII
EMIR A l i n
wig IN t
..
.....,-
, akuna C'lass A.rea • Ipit
Zone 1 i 11111!N
Zone 2 11111111111111 i.
!,
Zone 3 WIMP
OREM _
0 02 04 Miles • S
I PPM
v , low Park A 'c zi
•
Mundy Associates LLC (9/2003) - IIIE I
98 1203 .
, 1 . .....g . 4. - .... / N
A
II
0
2
3
4
5
6
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
8 FOR YAKIMA COUNTY
g WILFRED and KAREN MURPHY, et al., -
NO 99 -2- 00611 -8
10 Plaintiffs,
JUDGMENT AGAINST THE CITY OF
11 v YAKIMA
12 CITY OF YAKIMA, a Washington municipal ASSIGNED TO THE HONORABLE
corporation, and WASTEWATER DIVISION SUSAN L. HAHN
111 OF THE DEPARTMENT OF ENGINEERING
14 AND UTILITIES, a discrete governmental
agency or unit of the City of Yakima, and DEL
15 MONTE CORPORATION, a New York
16 corporation,
17 Defendants.
18 JUDGMENT SUMMARY
19 Judgment Creditor Representative Plaintiffs and Class Members, as defined
20 in the Court Order entered in this action on April _,
2001
21
Attorneys for Judgment Creditor Gordon, Thomas, Honeywell, Malanca, Peterson &
22 Daheim LLP
Albert R. Malanca
23 John C Guadnola
24 Kenneth G Kieffer
Bradley B Jones
25 Timothy L. Ashcraft
Judgment Debtor
6 r City of Yakima
JUDGMENT - 1 of 3
(NO 99- 2- 00611 -8) LAW OFFICES
[1240135 v3] GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2100
POST OFFICE BOX 1157
TACOMA. WASHINGTON 68401.1157
(253) 820 -6500 FACSIMILE (253) 6208565
1
Amount of Judgment: $13,000,000 00
2
Interest Owed To Date -0-
3
4 Taxable Costs And Fees -0-
5 This matter came before the Court pursuant to and m accordance with that certain
6 Settlement Agreement given final approval by the Court on , 2003 The Court
7 having presided over this matter since its filing, having reviewed and approved the Settlement
8
Agreement, and being fully advised m the premises, it is hereby
9
ORDERED that the Plaintiffs and Class Members be and the same hereby are granted
10
JUDGMENT in the amount of $13,000,000 00 (Thirteen Million Dollars) against the City of
11
12 Yakima.
13 DONE IN OPEN COURT this day of , 2003
14
15 The Honorable Susan L. Hahn, Supenor Court Judge
16
17
Presented By
18
19 GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
20 Bradley B Jones, WSBA 17197
John C. Guadnola, WSBA No 08636
21
By
22 Attorneys for Plaintiffs and Class Members
23
24
25
26
JUDGMENT - 2 of 3
i (NO 99- 2- 00611 -8) LAW OFFICES
[1240135 v3] GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUIT£ 2100
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98101•1157
(253) 620-6500 FACSIMILE, (253) 6208565
•
PRESTON GATES & ELLIS
Thomas H. Wolfendale, WSBA 03776
2 and
DANIELSON HARRIGAN & TOLLEFSON
3 Timothy Leyh, WSBA 14853
4
5 By
Attorneys for the City of Yakuna
6
BROWN REAVIS & MANNING
7 Stephen J Tan, WSBA 22756
8
9 By
Attorneys for Del Monte Corporation
10
11
12
14
15
16
17
18
19
20
21
22
23
24
25
JUDGMENT -3of3
(NO 99-2-00611-8) LAW OFFICES
[1240135 v31 GORDON. THOMAS, & DARE M L, MALANCA.
1201 PACIFIC AVENUE, SUITE 2100
POST OFFICE BOX 1157
TACOMA, WASHINGTON 66401 -1157
(253) 620-6500 FACSIMILE (253) 620$565
1 •
2
3
4
5
6
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
FOR YAKIMA COUNTY
8
9 WILFRED and KAREN MURPHY, et al.,
NO 99 -2- 00611 -8
10 Plaintiffs, STIPULATION AND ORDER OF
11 DISMISSAL
v
12 ASSIGNED TO THE HONORABLE
CITY OF YAKIMA, a Washington municipal SUSAN L. HAHN
13 corporation, and WASTEWATER DIVISION
OF THE DEPARTMENT OF ENGINEERING HEARING DATE October 10, 2003
14 AND UTILITIES, a discrete governmental
agency or unit of the City of Yakima, and DEL
15 MONTE CORPORATION, a New York
16 corporation,
17 Defendants.
18 Pursuant to the stipulation of the parties to the above - captioned action, as evidenced
19 by the signatures of their respective counsel below, and in accordance with the Settlement
20
Agreement given final approval by this Court on , 2003, it is hereby
21
ORDERED, ADJUDGED AND DECREED as follows
22
1 Except to the extent - necessary to permit the Court to exercise the continuing
23
24 junsdiction described below, and without impacting the validity or enforceability of the
25 Judgment entered against the City of Yakima in this matter or the ab lity of Representative
26
STIPULATION AND ORDER OF DISMISSAL - 1 of 4
(NO 99- 2- 00611 -8) LAW OFFICES
[1240129 v6] GORDON, THOMAS, HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SU(TE 2100
POST OFFICE BOX 1157
TACOMA, WASHINGTON 98101.1157
(253) 820 -6500 FACSIMILE (253) 8208585
.
• Plamnffs and Class Members to recover on unsatisfied portions of the Judgment above and
2 beyond that subject to execution against the City of Yakima and Del Monte Corporation, a
3 New York corporation, all "claims" of Plaintiffs and Class Members (as "claims" is defined in
4
the Settlement Agreement) shall be and the same hereby are DISMISSED WITH
5
PREJUDICE and without costs.
6
7 2 Notwithstanding the foregoing dismissal of claims against the City and Del
8 Monte Corporation, this Court retains Jurisdiction over this matter for the following purposes.
9 (a) determining the reasonable fees and costs to be awarded to Plaintiffs'
10 counsel,
11 (b) approving a method of allocating net settlement proceeds among class
12
members and a procedure for administering claims submitted by class
0 members,
15 (c) overseeing the administration of claims submitted by class members and,
16 to the extent permitted or required by the approved procedure, resolving
17 disputes about the allowance, disallowance or amount of any such claims ,
18 and
19 (d) overseeing the distribution of settlement funds to class members.
20
3 This Court's retained junsdiction shall extend to any and all monies recovered
21
on behalf of the Class whether by way of settlement or enforcement of a judgment, from any
22
23 of the City's insurers
24 4 The Judgment entered in this matter pursuant to and in accordance with the
25 Settlement Agreement given final approval by the Court on , 2003, is and
do STIPULATION AND ORDER OF DISMISSAL - 2 of 4
( \O 99 -2- 00611 -3) LAW OFFICEs
[1240129 v6] GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2100
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98401 -1157
(253) 820-6500 FACSIMILE (253) 620-6565
1 shall remain m full force and effect m accordance with its terms, provided, however, that the
2 City of Yakima shall not be subject to execution of judgment m excess of Seven Million
3 Dollars ($7,000,000 00) as set forth in the Settlement Agreement. Neither the dismissal with
4 prejudice of claims against the City of Yakima and Del Monte Corporation nor any other
5
provision of this Order shall have any impact of any nature whatsoever on such Judgment.
6
5 This Order shall not limit, prejudice or m any way affect any action brought or
7
8 to be brought by the City of Yakima or by Representative Plaintiffs or Class Members for the
9 purpose of recovenrig proceeds of insurance policies issued m favor of the City of Yakima.
10 The City shall remain a party to tlus action to the extent necessary to prevent any such
11 limitation, prejudice or other effect but the City's status as a party shall not m any way affect
12
the dismissal with prejudice of all claims the Plaintiffs and Class Members brought or could
13
have brought against it in this action.
14
15 DONE 1N OPEN COURT this day of , 2003
16
17
The Honorable Susan L. Hahn, Supenor Court Judge
18
19
20
21
22
23
24
25
26
STIPULATION AND ORDER OF DISMISSAL - 3 of 4
(ISO 99-2-00611-8) LAW OFFICES
[1240129 v6] GORDON.. THOMAS, R ON & DAHEIM HONEYWELL.
LLP �
1201 PACIFIC AVENUE. SUITE 2100
POST OFFICE BOX 1157
TACOMA. WASHINGTON 68401 -1157
(253) 820 -6500 FACSIMILE (253) 820.6565
410 2 The parties to the above - captioned action, by and through their respective attorneys of
2 record, hereby stipulate and agree to entry of the foregoing Order of Dismissal.
3 GORDON, THOMAS, HONEYWELL, PRESTON GATES & ELLIS
4 MALANCA, PETERSON & DAHEIM LLP Thomas H Wolfendale, WSBA 03776
Albert R. Malanca, WSBA 01226
5 John C Guadnola, WSBA 08636 and
Kenneth G Kieffer, WSBA 10850
6 Bradley B Jones, WSBA 17197 DANIELSON HARRIGAN &
7 Timothy L. Ashcraft, WSBA 26196 TOLLEFSON
Timothy Leyh, WSBA 14853
8
By
9 Attorneys for Plaintiffs and Class Members By
Attorneys for the City of Yakima
10 Dated , 2003
Dated. , 2003
11
12
0 BROWN REAVIS & MANNING
Stephen J Tan, WSBA 22756
14
15
By
16 Attorneys for Del Monte Corporation
17 Dated. , 2003
18
19
20
21
22
23
24
25
26
• STIPULATIOIN AND ORDER OF DISMISSAL - 4 of 4
(NO 99 -2- 00611 -S)
LAw OFFICES
[1240129 v6] GORDON, THOMAS, HONEYWELL, MALANCA,
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2100
POST OFFICE BOX 1157
TACOMA, WASHINGTON 98401.1157
(253) 620 -8500 FACSIMILE (253) 620-6565
i
qo,
3
4
5
i
6
7 i SUPERIOR COURT OF THE STATE OF WASHINGTON
8 FOR YAKIMA COUNTY
9 ! WILFRED and KAREN MURPHY husband and
wife, et al., NO 99 -2- 00611 -8
10
Plaintiffs, NOTICE OF PROPOSED FINAL
11 SETTLEMENT AND PLAN OF
DISTRIBUTION
12
ASSIGNED TO THE HONORABLE
0 CITY OF YAKIMA, a Washington municipal SUSAN L. HAHN
corporation, et al.,
Defendants /Third Party Plaintiffs,
15
v
16
17 CITY OF UNION GAP, a Washington municipal
corporation, et al.,
18
Third Party Defendant.
19
20 IMPORTANT LEGAL NOTICE
21
This Notice may affect your legal rights. Please read carefully.
22
23 I. YOU MAY BE ELIGIBLE TO RECEIVE A SHARE OF CASH BENEFITS
24 FROM A PROPOSED SETTLEMENT
25 You may have been previously notified that you may be a member of the certified
26 class described below in a lawsuit against the City of \ akima and Del Monte Corporation
11 NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 1 of 18
(99- 2- 00611 -8) uwOFF S
[ 1241104 v8.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 06401.1157
(253) 620-6 FACSIMILE (253) 620-0685
1
concerning odors from the Yakima Regional Wastewater Treatment Plant and adjacent
•
2
Industrial Sprayfields (collectively the "Treatment Plant ") THIS NOTICE IS A
3 SUPPLEMENT TO THAT EARLIER NOTICE, AND MAY AFFECT YOUR RIGHTS.
4
A. Summary of Class Membership.
5
The Court has previously ruled that the following people and entities are class
6
members.
7
DEFINITION OF THE CLASS
8
ALL PERSONS, INCLUDING MINORS AND BUSINESS ENTITIES, WHO,
9 AT ANY TIME SINCE JUNE 30, 1990 HAVE RESIDED IN AND /OR-OWNED
10 RESIDENTIAL REAL PROPERTY IN THE AREA DEPICTED ON THE MAP
ATTACHED AS EXHIBIT A.
11
B. Purpose of the Notice.
12
The purpose of this Notice is to inform you of:
13
• The status of the lawsuit;
14
• The essential terms of a proposed settlement with the City of Yakima, owner and
15
operator of the Treatment Plant. The settlement will also resolve claims against
16
Del Monte Corporation,
17 • The essential terms of a Plan of Distribution, which will govern payment to class
18 j members of the net proceeds of all settlements;
19 t • The requirement that you file a Proof of Claim Form m order to share in the
20
proposed Settlement Funds,
21
• The time and place of two meetings Class Counsel will hold for class members to
22
answer questions about the settlement and proposed Plan of Distribution and to
23
assist in completing Proof of Claim Forms;
24
• The hearing to be held by the Court to consider final approval of the proposed
25
settlement and Plan of Distribution,
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 2 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS. HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 66401 -1157
(253) 620.6500 FACSIMILE (253) 620-0655
40 • Your nghts and obligations as a result of this lawsuit and the settlement, and steps
2 you may take m relation to the settlement and this class action litigation.
3
C. Summary of Options and Deadlines.
4
As a class member, you may choose to
5
• Receive a portion of cash benefits of the proposed settlement. (To share m the
6
benefits of the proposed settlement, you must mail a Proof of Claim form by
7
December 15, 2003 For more on filing a claim, read Section IV),
8
• Object to the proposed settlement or plan of distribution. (To object, you must
9
mail a wntten objection by November 14, 2003 For more on objectmg, read
10
Section IV)
11
• Do Nothing. (If you do nothing, you will be bound by the terms of the settlement,
12 % including releasing any and all claims you may currently have against the City of
411) Yakima and Del Monte concerning the Treatment Plant, but will receive no cash
benefits).
15
By pnor Notice, if you owned property or resided m the class area pnor to July 2001
16
you were given an opportunity to exclude yourself from the class, therefore, you may no
17
longer exclude yourself and you will be bound by the settlement if it is approved by the Court.
18
However, those who are class members solely because they acquired property or moved into
19 i
the Class Area between July 2001 and October 10, 2003 ( "New Class Members ") may choose
20
to exclude themselves from the lawsuit. To do so, a New Class Member must file a request
21
for exclusion, in which case he or she will not be eligible to receive a share of the cash
22
benefits and will not be bound by the terms of the settlement. (New Class Members may
23
exclude themselves from the lawsuit by requesting an exclusion form in wnting by
24
November 1, 2003 and mailing it to Class Counsel by November 14, 2003 For more detail,
25
read Section IV)
26
40 NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 3 of 18
(99 -2- 006] 1 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL. MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 08401.1157
(250) 820.0500 FACSIMOIE (257) 6206585
1 II. STATUS OF THE LAWSUIT
2 The claims m the lawsuit against the City of Yakima and Del Monte were described m
3 the first Notice you received. If you want to receive another copy of that original Notice,
4 please refer to Section VI of this Notice. If you did not already file a timely exclusion from
5 the class and you fall within the definition of the class, you are a class member
6 On April 19, 2001, the Court ruled that the claims against the City and Del Monte
7 ; would be certified as a class action. The parties proceeded to engage in lengthy discovery
8 involving hundreds of thousands of pages of documents, depositions of dozens of factual
9 witnesses, and the work of nearly a dozen expert witnesses. The parties also filed, and the
10 Court ruled upon, dozens of motions directed at a vanety of issues.
11 Pnor to class certification the City of Yakima and Del Monte entered into their own
12 settlement agreement. In return for Del Monte paying Yakima $500,000 and agreeing to
13 other expenses and activities designed to close down the Industrial Sprayfields and reduce
14 odors, Yakima agreed to assume any liability Del Monte had to the Class Members m this
15 lawsuit.
16 In October of 2001 the City of Yakima sued the City of Umon Gap, claiming that
17 sewer collection and transportation facihties owned by Union Gap contributed to the alleged
18 odors Class Members claimed to expenence. The plaintiff class never sued Umon Gap
19 j directly Nonetheless, the City of Union Gap agreed to settle with the class for $200,000 in
20 order to avoid the expense and uncertainty of being a party to the lawsuit. The settlement
21 with the City of Union Gap provides that the net proceeds of that settlement will be
22 distributed only to class members living or owmng residential property south of Valley Mall
23 Boulevard.
24 In August of 2001 the City of Yakima sued four (4) insurance companies, clauning the
25 policies the companies issued to Yakima covered the claims made in this lawsuit by the class.
26 mak
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 4 of 18
(99 -2- 00611 -8)
LAW OFFICES
[1241104 v8.doc] GORDON. THOMAS, HONEYWELL, MAUNICA,
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SURE 7400
POST OFFICE BOX 1157
TACOMA, WASHINGTON 08401-1157
(257) 620.8500 FACSIMILE (253/620-0505
0 A federal judge ruled m favor of the msurance companies and dismissed Yakuna's lawsuit.
2
That decision is currently on appeal to the Ninth Circuit Court of Appeals
3
In April of 2003 , Class Counsel filed a separate lawsuit on behalf of the class against
4
the same insurance companies. In that lawsuit the class seeks an order that the claims for
5 damages caused by the Treatment Plant are covered by the terms of the policies. That lawsuit
6 will be heard m Yakima County Supenor Court. No trial date has been set.
7 Tnal in this lawsuit was scheduled to begin on March 3, 2003 However, on
8
February 15, 2003, the Court certified an issue for appeal. The Court of Appeals accepted the
9
appeal m May 2003 This delayed the trial mdefimtely In the absence of a settlement, it is
10
unlikely the teal would occur sooner than the late fall of 2004
11
In September 2003, the named class representatives and attorneys for the class reached
12
a settlement agreement with the City of Yakima, described below
On October 10, 2003, Judge Susan L. Hahn, who has presided over this case for more
than four years, prelimmanly approved the proposed settlement with the City of Yakima and
15
the proposed release of claims against Yakima and Del Monte
16 1
The Court will hold a hearing (the "Fairness Hearing ") in the Courtroom of Judge
1 Susan L. Hahn, Supenor Court of Yakima County, at 128 North Second Street, Yakima,
18
Washington at 9 00 a.m. on November 21, 2003, to determine whether, as recommended by
19
both Class Counsel and the class representatives, the Court should finally approve the
20
proposed settlement with the City of Yakima. At that same heanng, the Court will consider
21
final approval of the Plan of Distribution for all the settlement proceeds (see Section V below)
22
and may consider Class Counsel's request for reimbursement of costs and an award of
23
attorneys' fees
24 TO RECEIVE A SHARE OF THE SETTLEMENT BENEFITS, YOU MUST
25 MAIL THE ATTACHED PROOF OF CLAIM FORM, POSTMARKED ON OR
26
• NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 5 of 18
(99-2-00611-8) LAW oFFIGEs
[1241104 v8.doc] GORDON THOMAS, HONEYWELL, MALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 96401.1157
(253) 6208500 FACSIMILE (253) 620 -6565
1
BEFORE DECEMBER 15, 2003, TO CLASS COUNSEL (SEE SECTION IV FOR
2
MORE DETAILS).
3
III. THE SETTLEMENT
4
A settlement has been reached m the litigation between plaintiffs and defendant the
5
City of Yakima. The settlement will end all claims in the lawsuit against both the City of
6
Yakima and Del Monte. That settlement is embodied m a Settlement Agreement which is on
7
file with the Court. Class Counsel believe that this settlement is fair, adequate, reasonable,
8
and m the best interest of the class. The Court has prelmunarily approved the settlement. The
9
terms of the settlement are summanzed below You may obtain a copy of the Settlement
10
Agreement from Class Counsel at the address provided m Section VI, below, and are
11
encouraged to do so if you have any questions about the exact terms of the settlement.
12
A. Establishment of Common Fund.
13
Plaintiffs and defendant City of Yakima have entered mto a proposed settlement.
14
Under the terms of the settlement, the City of Yakima agrees to the entry of a judgment
15
against it for $13,000,000 Following Final Approval of the settlement the City will pay
16
$7,000,000 into the trust account of Class Counsel, and will have no further financial
17
obligation to the Class Members.
18
Amounts between $7 million and $13 million can only be collected from Yakima's
19
insurance comparues The City of Yakima will continue its appeal of the dismissal of its
20
claims against its insurers and the class will continue its separate lawsuit against the same
21
insurers in Yakima County Superior Court. The City of Yakima and the class agree to
22
cooperate in their suits against the insurers, and have agreed on a formula for distributing any
23
money the City or the class receive from any settlement with or judgment against the insurers.
24
Under that formula the City of Yakima receives the first $500,000, the class receives the next
25
$500,000, the class receives 80% and Yakima 20% of any amounts between $1 and $3
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 6 of 18
(99-2-00611-8)
uw OFFICES
[1241104 v8.doc] GORDON. THOMAS. HONEYWELL MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 1200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 55401.1157
(253) 520 -6500 FACSIMILE (243) 520
01 million, and the class and the City share equally m any amounts over S3 million.
Ultimate recovery of any amount above $7 million depends upon Class Counsels' and
3
the City of Yakuna's success in pursuing such claims. At this point, it is uncertain what
4
amounts, if any, Class Counsel or the City will obtain from these insurance companies for the
5
benefit of the class
6 1
B. Release of Claims Against the City of Yakima and Del Monte.
7
Upon Court approval of the settlement and entry of the final court order dismissing
8
claims against the City of Yakima and Del Monte, you and all other class members will be
9
releasing all claims you may have for acts or omissions of the City of Yakima and Del Monte
10
concerning the Treatment Plant pnor to the date of final approval of the settlement. In
11
addition, the settlement limits a future type of property damage claim, called inverse
12
condemnation or "takings," to situations where there is additional activity by the City of
0. Yakima that causes an increase in odors over the level that has existed for the last three years
The limit on future inverse condemnation or "takings" claims will bar current and
15
future property owners and residents from pursuing claims for such damages incurred pnor to
16
November 21, 2003 The City of Yakima intends to file a copy of the Settlement Agreement
17
with the Yakima County Assessor's Office A reference to the Settlement Agreement may
18
appear on property records.
19
Class members are advised that Washington law imposes a duty on sellers of
20
residential property to inform buyers of any important information that may affect a buyer's
21 1
decision to purchase the property The fact that this odor lawsuit occurred and the basic terms
22
of the settlement may be the type of information the law would require a seller to disclose.
23
Class members are encouraged to either disclose the fact of the lawsuit and settlement at the
24
time they sell their property or consult with a lawyer regarding any disclosure obligations.
25
26
10 NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 7 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2260
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98401 -1157
(253 ) 620.6500 FACSIMILE (253) 0266565
1 C. Attorneys' Fees and Costs.
2 ;
Class Counsel intend to seek reimbursement from the Common Fund for costs
3 I advanced dung the litigation on behalf of the class and for the costs of administering the
4 settlement. Class Counsel will also seek one -third of the net settlement (the total settlement
5 amount minus htigation and administration costs) as payment of legal fees. To date, Class
6 Counsel have spent some five years working on behalf of the class and have received no
7 j payment for their services. To date, Class Counsel have spent more than $1 million on
8 i litigation costs (deposition transcnpts, copying costs, etc.) without being reimbursed for any
g of those payments. The fee requested by Class Counsel would compensate them for their
10 efforts in achievmg a settlement fund for the benefit of the class, and for their nsk m
11 undertaking this representation on a contingency basis for the last five years. If approved by
12 the Court, the fee request would be within the range of fees awarded to plaintiffs' counsel
13 under similar circumstances m litigation of this type. The actual amount awarded Class
14 Counsel for fees and costs will be determined by the Court. No funds will be distributed to
15 i Class Counsel at this time.
16 D Conditions of the Settlement.
17 This settlement is conditioned upon the Court's Final Approval of the settlement,
18 which will be determined at the Fairness Hearing on November 21, 2003 If the Court does
19 not grant Final Approval of the Settlement, the Settlement Agreement might be terminated,
20 and, if terminated, will become null and void, and the parties to the Settlement Agreement
21 will be restored to the respective positions they held before the Settlement Agreement was
22 signed.
IV OPTIONS FOR CLASS MEMBERS
23
A. Option # 1- Agree to Proposed Settlement.
24
IN ORDER TO RECEIVE A SHARE OF THE CASH BENEFITS OF THE
25
SETTLEMENT, YOU MUST COMPLETE AND DELIVER TO CLASS COUNSEL A
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 8 of 18
(99-2-00611-8) LAW OFFICES
[1241104 v8.doc] GORDON. THOMAS, HONEYWELL, MALANCA,
PETERSON 8, DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 1200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 96401.1157
(253) 5266500 FACSIMILE (253)5265555
40 PROOF OF CLAIM FORM ON OR BEFORE DECEMBER 15, 2003. (A blank Proof
of Claim Form is attached to this Notice for your use.) ANY CLASS MEMBER WHO
3 FAILS TO PROPERLY COMPLETE A PROOF OF CLAIM FORM AND DELIVER
4 IT TO CLASS COUNSEL BY THE DEADLINE WILL NOT RECEIVE ANY SHARE
1
5 1 OF THE CASH BENEFITS OF THIS SETTLEMENT BUT WILL STILL BE BOUND
6 1 BY THE SETTLEMENT AGREEMENT.
7 Class members who support the proposed City of Yakima settlement and the proposed
8 Plan of Distribution do not need to appear at the Court's Fairness Hearing but may submit
9 wntten statements of support to the Court by November 14, 2003
10
B. Option # 2• Object to Proposed Settlement.
11
Objections by class members to the proposed settlement and/or the Plan of
12
Distribution will be considered by the Court, but only if the person raising such objections
0 i mails to Class Counsel, no later than November 14, 2003, at the address set forth in Section
VI, below, a written statement of his or her objections and the legal and/or factual bases for
15
those objections. The wntten statement of objections must. (1) bear the case name and cause
16
number (Murphy, et al. v City of Yakima, et al., Civil Action Number 99 -2- 00611 -8), (2) be
17
identified as an "OBJEC.TION TO PROPOSED SETTLEMENT" or "OBJECTION TO THE
18
PLAN OF DISTRIBUTION," and (3) contain the name, address, and telephone number of the
19
� objecting party and his or her attorney, if any Any person who properly delivers a wntten
20
statement of objection as specified herein may appear at the Fairness Hearing in person or.
21
through counsel to show cause why the proposed settlement with the City of Yakima, and/or
22
the Plan of Distribution, should not be approved as fair, adequate and within the realm of
23
reasonableness. As long as an objection is properly delivered as set forth above, the Court
24
will consider it even if the objecting party is not present at the heanng.
25
26
S NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 9 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL, MALANCr ,
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASMINGTON 66401.1157
(253) 620-8500 FACSIMILE (253) 620 -6565
1 No objection, and no pleadings or papers relating to any objection, shall be heard
2
or considered by the Court unless the objecting party has fully complied with e
3
requirements of the paragraph above. Any member of the plaintiff class who does not
4
• properly deliver a written statement of objections in the manner specified herein shall
5
be deemed to have waived any and all objections for all purposes. Attendance at the
6 hearing is not necessary; however, class members wishing to be heard orally m opposition to
the Proposed Settlement and/or the Plan of Distribution should mdicate m their written
7
p
8
objection their intention to appear at the hearing.
9
C. Persons or Entities Who are Class Members Solely Because They Moved into or
10 Acquired Property in the Class Area After July 2001, Have the Option to Remain
a Class Member or Opt Out of the Proposed Settlement.
11
If you are a class member solely because you moved into the class area between July
12
2001 and October 10, 2003 and had not previously lived in the class area smce June 30, 1990
13
and/or because you acquired property within the class area between July 2001 and October
14
10, 2003 and had not previously owned property m the class area smce June 30, 1990, then
15
you are a "New Class Member" and have an opportunity to exclude yourself from the Class.
16
New Class Members may obtain a request for exclusion form by mailing a written request for
17
the form to Class Counsel at the address below, postmarked on or before November 1, 2003
18
Yakima Treatment Plant Class Action Lawsuit
19 Office of the Claims Administrator
20 P O Box 1653
Tacoma, WA 98401 -1653
21
In order to exclude yourself, you must return the completed exclusion form by mail,
22
postmarked no later than November 14, 2003 If you do not file an exclusion form, you will
23
24 be a Class Member and will be bound by the terms of the Settlement Agreement.
25
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 10 of 18 41)
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc) GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 7100
POST OFFICE BOX 1157
TACOMA. WASHINGTON 06401 -1157
(253) 6204500 FACSIMILE (253) 6204565
• If you are a New Class Member and choose to exclude yourself, you will have no
2 nghts under the Settlement, you will not share m the distribution of any Settlement Fund and
3 you will not be bound by any settlement or judgment concerning the City of Yakima or Del
4
Monte m this action. You will be free to pursue whatever legal nghts you may have, if any,
5
against the City of Yakima or Del Monte at your own expense and on your own behalf.
6
V. PROPOSED PLAN OF DISTRIBUTION
7
8 The proposed Plan of Distribution for the settlement with the City of Yakima and Del
9 Monte provides that the net settlement funds (the total amount of funds received from the City
10 of Yakima, Union Gap, and any of Yakima's insurers after deduction of Court- approved
11 litigation costs and attorneys' fees) will be distributed as follows.
12
A. Class Representative and Original Plaintiff Payments.
The lawsuit was initially filed in the names of almost 200 mdividuals. Approximately
140 submitted answers to written questions (the "Onginal Plaintiffs ") As compensation for
15
16 their time and services Class Counsel recommend that each Onginal Plaintiff receive $1,000
17 Approximately twenty of the Onginal Plaintiffs were also interviewed or deposed by
18 lawyers for the City of Yakima or Del Monte (the "Deposed Plaintiffs ") Class Counsel
19 recommend that Deposed Plaintiffs receive an additional $1,500 as compensation for their
20
additional time and services, for a total compensation of $2,500
21
Once the case was certified as a class action in Apnl 2001, this lawsuit was led by the
22
23 efforts of eight individuals (the "Class Representatives ") The Class Representatives pursued
24 the lawsuit in their individual names, on behalf of themselves and the entire class they
25 represent. They were deposed multiple times, attended numerous meetings and court
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 11 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.docj GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98101.1157
(253) 820. 500 FACSIMILE (257) 0203565
hearings, and participated in three separate mediations. Class Counsel recommend that each •
2 Class Representative receive an additional $7,500 as compensation for their additional tune
3 and services, for a total compensation of $10,000
4
B. Creation of Personal Nuisance Fund and Property Damage Fund.
5
As described m more detail below, the remaining net settlement funds will be
6
allocated seventy percent (70 %) to personal nuisance damages (the "Personal Nuisance
7
Fund "), and thirty percent (30 %) to property damages (the "Property Damage Fund ").
8
I The Personal Nuisance Fund will be distributed pro rata to those class members who
9
10 submit valid Proof of Claim forms (or who are identified on such forms) showing that they
11 resided in the class area between June 1995 and October 10, 2003 (the "Personal Nuisance
12 Class Period ") The Personal Nuisance Class Penod is shorter than the Property Damages
13
Class Penod because the time penods applicable to legal claims for personal nuisance -type
14
damages are shorter than time penods for property damages. Allocations of the Personal
15 1
Nuisance Damages Fund will be based on the length of residency, subject to adjustments
16
17
discussed below that reflect the years of greatest Treatment Plant odors and proxinnty to the
18 Treatment Plant.
19 The Property Damages Fund will be distributed to class members who submit valid
20
Proof of Claim forms showing that they owned property within the class area between June
21
30, 1990 and October 10, 2003 (the "Property Damages Class Penod") The formula for
22
allocating these funds among the various claimants uses the 2003 Yakima County Assessor's
23
24 Office assessed value of each claimant's property
25
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 12 of 18
(99 -2- 00611 -8) L'' 0fi•ms
[1241104 v8.doc] GORDON, THOMAS. HONEYWELL, MALANCA.
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 08101.1157
(257) 620.8500 FACSIMILE (257) 6204585
9
The allocation formula for property damages looks at the length of time dunng the
2 Property Damages Class Penod that a claimant owned a specific piece of property m relation
3 to the assessed values and penods of ownership of all other properties of all other claimants.
4
If two or more claimants owned a single property during the Property Damages Penod, the
5
funds allocable to that property shall be divided between the claimants based on the penods m
6
which they each owned the property As discussed below, allocations of the Property
7
8 I
Damages Fund, like allocations of the Personal Nuisance Damages Fund, will be adjusted to
9 I reflect the time period during which a claimant owned a particular piece of property and the
10 proximity of that property to the Treatment Plant.
11 In the case of properties on which homes were constructed during the Property
12 j Damages Period, Yakima County Assessor records will be used to determine assessed value
before and after the construction. Claimants who owned such properties will receive a
distribution based on the value of the unimproved land until the year in which the new home
15
16 was constructed. From the year in which the Yakima County Assessor's Office's data reflects
17 that the home was completed, distribution from the Property Damages Fund will be calculated
18 on the total assessed value of the property and improvements.
19
C. Treatment Plant Impacts Multiplier.
20
In determining the amounts to be distributed from both the Personal Nuisance and
21
Property Damage Funds for each year, a weighting approach will be used to account for the
22
penods when the Treatment Plant caused the greatest relative impacts Information obtained
23
24 in preparation for tnal and from the work of plaintiffs' real estate, economic and odor experts
25 indicate that the Treatment Plant had the most severe odor impact on the Class Area during
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 13 of 18
(99-2-00611-8) LAW OFFICES
[1241104 v8.doc) GORDON, THOMAS, & HONEYWELL L MALANCA.
1201 PACIFIC AVENUE. SUITE 7100
POST OFFICE BOX 1157
TACOMA. WASHINGTON 98401 -1157
/253)820-6500 FACSIMILE (253) 8208595
1 the period from June 1995 through October 2000 Therefore, each month during those years
2 will be given a `lime /impact adjustment" the June 30 value of 3 Each month in penods 30, 1990
3 through May 1995 and November 2000 through October 2003 will be given a "time/impact
4
adjustment" value of 1 This means, for example, that a person owning property for two years
5
between June 1990 and June 1995 would receive from the Property Damages Fund one -third
6
(1/3) of the amount that a person owning that same property for two years between June 1995
7
8 and June 2000 would receive.
9 An identical weighting approach will be used for computing allocations of the
10 Personal Nuisance Damages Fund. Each month from June 1995 to October 2000 will be
11 given a "time /impact adjustment" value of 3 Each month m the period from November 2000
12
through October 2003 will be given a "time impact adjustment" value of 1 Again, everything
13
else being equal this means a person who, for example, lived in the class area for two years
14
between 1995 and 2000 will receive an award from the Personal Nuisance Damages Fund
15
16 three times greater than a person who lived there for two years after November 2000
17 I The final calculation and precise allocation of the Property Damages Fund and the
18
Personal Nuisance Damages Fund can only be calculated after Proof of Claim forms have
19 I been received and verified. Those final calculations will depend on the total number of valid
20
claimants, the assessed values of their properties, the penods in which they resided m or
21
owned properties in the class area, and the proximity of their various properties to the
22
23 Treatment Plant.
24
25
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 14 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, PETER S,H MALANCA.
LLP
1201 PAGFIC AVENUE, SURE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 66401.1157
(253) 620-0500 FACSIMILE (253)1320-M5
D. Proximity Impact Allocation
2 In addition to causing greater impacts during certain years, the Treatment Plant also
3 caused relatively greater impacts to those properties and residents m closer proximity to the
4 Treatment Plant. To account for the proximity impact, the proposed Plan of Distribution
5
divides the class area mto three geographic Zones. The boundaries of each Zone are based on
6
the results of computenzed modelmg of wmd patterns done by plaintiffs' experts and on the
7
8 other work of the experts. The Zones are designed to correspond to the varying degrees of
g odor impacts caused by the Treatment Plant m different parts of the class area. The portion of
10 the class area closest to the Treatment Plant and subject to the most severe odor impacts is
11 identified as Zone 1 on the attached map Zone 2 includes the northwest corner of the class
12 area and an area from Valley Mall Boulevard north to the boundary of Zone 1 The portion of
00 the class area south of Valley Mall Boulevard is identified as Zone 3
The computer modeling and expert analysis used to determine the boundaries of the
15 j
Zones are also used to determine the relative adjustments appropnate to each Zone. The
16
17 expert concluded that a release of odors from the Treatment Plant that was rated as having an
.
18 intensity of 5 m Zone 1 would have an intensity of 2 m Zone 2 and an intensity of 1 m Zone
19
The Proximity Adjustment will maintain this relative ratio between individuals and properties
20
in the three Areas (5/8 in Area 1, 2/8` in Area 2, and 118 in Area 3) regardless of the rate at
21
which individuals return Proof of Claim Forms from each Area. In summary, and all things
22
being equal, if a person in Zone 1 receives $500, a similarly situated person in Zone 2 will
23
24 receive $200 and a similarly situated person in Zone 3 will receive $100
25
26
ill NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 15 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE 80X 1157
TACOMA. WASHINGTON 08401.1157
(253) 820 -8500 FACSIMILE (253) 8204555
1 E. Money From Union Gap Settlement.
Court awards 0
2 Plaintiffs' Counsel will request fees and costs, and whatever amount the C
3 will be computed as a percentage of the aggregate $7.2 million in settlement funds. Both
4 1 funds will then be reduced by the same percentage, to assure that the class members m the
5 north do not carry a disproportionate share of the costs of the litigation. Once the net value of
6 !, the Umon Gap settlement has been determined, the funds will be distributed among claimants
7 living or owmng property m Zone 3 The calculations will be identical to the calculations
8 j used for distributing the City of Yakuna's settlement, except that each claim will be valued as
9 a percentage of the total of Zone 3 claims mstead of as a percentage of the total of claims
10 from all three Zones. VI. ADDITIONAL INFORMATION
i
12 Class Counsel will also hold two meetings for Class Members concerning the
13 proposed settlement. At those meetings, Class Counsel will answer questions about the
14 Settlement Agreement and proposed
Plan of Distribution and also offer assistance in III
15 completing Proof of Claim Forms. The meeting for Class Members are scheduled to
16 occur as follows.
17 j Wednesday, November 5, 2003 at 7:00 p.m.
St. Josephs Bingo Hall
18
19 Thursday, November 6, 2003 at 7:00 p.m.
St. Joseph's Bingo Hall
20
Spanish translators will be present at the second, (November 6) meeting.
21
Any questions you have concerning the matters contained in this notice (and any
22
corrections or changes of name or address) should NOT be directed to the Court but
23 -
should be directed to Class Counsel at the following address and /or telephone number:
24
Yakima Treatment Plant Class Action Lawsuit
25 P 0 Box 1653
Tacoma, WA 98401 -1653
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 16 of 18 OFFICES
(99-2-00611-8) LAW [1241104 v8.doc] GORDON, 8 N E L. A ��
P
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 9401 -1157
(253) 6248500 FACSIMILE (253) 620 -6595
I 1- 877 - 347 -4780
2 The pleadings, the Settlement Agreement, and other records in this litigation may be
3 examined and copied at any time during regular office hours at the office of the Clerk,
4 Supenor Court, Yakima County Supenor Court, 128 North Second Street, Yakima,
5 Washington. You may also obtain these documents from Class Counsel at the address listed
6 above.
7 VII. REMINDER AS TO TIME DEADLINES
8 1 In order to participate m the settlement, you must complete and send a Proof of
9 Claim Form to Class Counsel at the address set forth in Section V, by mail postmarked on or
10 before December 15, 2003
11 If you wish to object to the proposed settlement and/or the proposed Plan of
12 Distribution, you must send an objection to Class Counsel in the manner described m Section
II III.B above, by mail postmarked on or before November 14, 2003
2. If you are a New Class Member, you can exclude yourself from this lawsuit by
15 sending your request for and returning an exclusion form to Class Counsel as described m
16 1 Section III C above, by mail postmarked on or before November 14, 2003
17 3 The Court will hold a Fairness Hearing m the Courtroom of Judge Susan L.
18 i Hahn, Supenor Court of Yakima County, at Yakima County Courthouse, 128 North Second
19 i Street, Yakima, Washington at 9 a.m. on November 21, 2003, to determine whether, as
20
21
22
23
24
25
26
111) NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 17 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
I PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 98401-1157
(253) 620-6500 FACSIMILE (253) 620 -8585
1 • recommended by both Class Counsel and the class representatives, it should finally approve
2
the proposed settlement and the Plan of Distribution.
3 DATED this day of October, 2003
4
5 SUPERIOR COURT OF THE STATE OF
WASHINGTON FOR YAKIMA COUNTY
6
By
7 Clerk of the Court
Yakima County Supenor Court
8 128 North Second Street
9 Yakima, Washington
10
Enclosure Map of Class Area
11 Proof of Claim Form
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 18 of 18
•
(99 -2- 00611 -8) LAW OFFICES
[ 1241104 v8.doc] GORDON, THOMAS, HONEYWELL, AAALANCA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 1200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 80401 -1157
(253) 0209500 FACSIMILE (253) 6204565
\\ La 1, ,
`
\1,L,n, I u E _ N
_ v _
I f ✓' J IJj 11
. I 'Via 1
A \ V , .) —______
y , uLu
I rnn.nit 1.11 }
IIt. r I.n 1
Yakima Class lind> u, -, li
Area i r - r
1\h1 .-- NIL.1,1 \ \ L. 1
j I. t ,11-,:,:„ \, �!
\ }a � t Ko�� 1.11 \k \MI . \,t
I hl.tL Ltd q
t:1i I 1 U
\\
r_
cn
,:
I /
--,-'. •=ih,
.....
,_...
v Malt , d
la rill
I
ut St
., . Ilhip
\\ ••11m . Al • 1 i n l
. 111111
1 al (Iasi: a
n (Iasi:
\ .��
Zone 1 \ 1 MIM
Zone \1111. I,
Zone 3 . v late .
,
0 0 : 04 S111111111 Able: '111111 s
, ,11111 Mundy Associates LLC (9/2003)
A
98 1203 '
Zi 1,
x =
2
3
4
5
6
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
FOR YAKIMA COUNTY
8
9 WILFRED and KAREN MURPHY, husband and NO 99 -2- 00611 -8
wife, et al.,
10 PUBLISHED NOTICE OF PROPOSED
Plaintiffs, FINAL SETTLEMENT AND PLAN OF
11 DISTRIBUTION
v
12
ASSIGNED TO THE HONORABLE
0 1 CITY OF YAKIMA, a Washington municipal SUSAN L. HAHN
! corporation, et al.,
HEARING DATE October 10, 2003
Defendants/Tlurd Party Plaintiffs,
15
v
16
17
CITY OF UNION GAP, a Washington municipal
corporation, et al.,
18
Third P. Defendants.
19
THIS NOTICE MAY AFFECT YOUR RIGHTS
20 PLEASE READ CAREFULLY
21
TO
22
23 I ALL PERSONS, INCLUDING MINORS AND BUSINESS ENTITIES, WHO
24 SINCE JUNE 30, 1990 HAVE RESIDED IN AND /OR OWNED RESIDENTIAL
25 PROPERTY IN THE AREA DEPICTED ON THE MAP BELOW ( "CLASS MEMBERS ")
26
0 PUBLISHED NOTICE RE SETTLEMENT & DISTRIBUTION - 1 of 3
(99-2-00611-8) uw oFFICEs
[ 1241286 v7.doc] GORDON,, THOM AON & DANE M LLP L �
PETERSON
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 96401-1151
(253) 6206500 FACSIMILE (253) 6206665
1
PLEASE NOTE THAT IF YOU ARE A CLASS MEMBER, YOU MAY BE 0
2 ENTITLED TO SHARE IN THE PROCEEDS OF THE SETTLEMENTS DESCRIBED IN
3 THIS NOTICE.
4 A pnor pubhshed notice informed you that the above - captioned lawsuit has been
5 certified as a class action. Plaintiffs allege that odors onginatmg from the Yakima Regional
6 Wastewater Treatment Plant and adjacent Industrial Sprayfields have injured the named
7
plaintiffs and all other Class Members.
8 The Court has given prelmunary approval to a settlement with defendant City of
9
Yakima that will end the lawsuit against the City of Yakima and Del Monte Corporation. In
10
addition, a Plan of Distribution for the net proceeds of all settlements has been proposed.
11
A heanng will be held m the courtroom of Judge Susan L. Hahn, Superior Court of
12 Yakima County, at 128 North Second Street, Yakima, Washington, at 9 a.m. on
13
November 21, 2003, to determine whether the proposed settlement should be approved by the
14 Court as fair, reasonable and adequate, and whether the Court should approve the Plan of
15 Distribution. Even if the Court approves the settlement, no distribution of any funds will be
16 made until a later date.
17
To share m the cash benefits of the proposed settlement you must be a class member
18
and you must complete a Proof of Claim Form that can be obtained from Class Counsel, by
19
writing or calling:
20 1
Yakima Treatment Plant Class Action Lawsuit
21 Claims Admuustrator
P 0 Box 1653
22 Tacoma, WA 98401 -1653
23 1 (877) 347 -4780
24 Class Members who owned property or resided in the class area pnor to July, 2001
25 were given an opportunity to exclude themselves from the classes, and may no longer do so
26 They will be bound by the settlement if it is approved by the Court. Those who are class
PUBLISHED NOTICE RE SETTLEMENT & DISTRIBUTION - 2 of 3
(99 -2- 00611 -8) um OFFICES
[1241286 v7.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2203
POST OFFICE 802 1157
TACOMA. WASHINGTON OM01.1157
(253) 0200500 FACSIMILE (253) 620.0555
, .
i
ilo members solely because they acquired property or moved into the class area between July
2 2001 and October 10, 2003, may exclude themselves from the lawsuit. Those Class Members
3
may obtain a request for exclusion form by wntten request to Class Counsel at the address
4
above.
5 IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR
6
RIGHTS WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE
7
SETTLEMENT FUNDS If you believe you are or may be a member of the class and you
8
have not yet received m the mail the full Notice of Proposed Final Settlement and Plan of
9
Distribution, y ou may P obtain copies of these documents by wntmg to or calling the Claims
10
Administrator at the address or phone number specified above and identifying yourself as a
11 potential member of the Class.
12 Lawyers for the class will hold two meetings for class members to explain the terms of
I
I
the settlement in detail, describe the proposed plan for distributing net settlement proceeds to
Class Members, assist in completing claim forms and answer any questions. The meetings for
15
Class Members will occur
16 j
Wednesday, November 5, 2003 at 7 p.m. at St. Joseph's Church bingo hall.
17 j and
18
Thursday, November 6, 2003 at 7 p.m. at St. Joseph's Church bingo hall.
19
Spanish translators will be present at the second (November 6) meeting.
20 PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE FOR
21
INFORMATION
22 SUPERIOR COURT OF THE STATE OF
23 WASHINGTON FOR YAKIMA COUNTY
24 Clerk of the Court
Yakima County Supenor Court
25 128 North Second Street
26 Yakima, Washington
ill PUBLISHED NOTICE RE SETTLEMENT & DISTRIBUTION - 3 of 3
(99 -2- 00611 -8) LAW OFFICES
[1241286 v7.doc] GORDON THOMAS HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1291 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 96401 -5157
(2571 820 -5500 FACSIMILE (253) 0206565
a
\\ LI 1112,...1,
L kiltoti I. ii
N lb H .:I‘d
_ . , .,,„, 4,- - , .-... . t \ 7i •
I
Ti i ` •
; rch St
•
.r -
Sa u : d t:�i ,
I ��nnanl I n q • I,n ; �y
ller l-n
Yakima Class l u ill .
Area r I -
I- \I .:1,1 \,e — F MIrn,9 !\'e
f ci-
Care% AI
kitigSt 7 RmLu
J v McNair MI.
E !Jerre St akeata A%e
f ; ' 'r;.:4-`;'' Lilac hi
�
l }y �. i ,s.� .
tx
C/)
- . F
CC
' '/ 41111
V . • iinll : d
illaulSt \
■ai
��m ? Al a . n . 1
NM .. ,
. W n..
\ akttna Class area .11.
zone 1 - 1 .II!
Zolle 2 Inn= I r.
Zone 3 .rill!
0 0: 04 Miles N ® S
...... - - Park A •c
% � • �41f1111� �=
Mundy Ass ociates LLC (9/2003)
98 -1203
AL
zi _ +
•
•
•
■
APPRAISAL OF
1,054 Single Family Residences
in Yakima and Union Gap
Yakima County, Washington
as of
September 13, 2002
LT1T ■ Rd -11- ■ •
ir:,iii�Fa��iit� �• i rz• t
I ..... ■.l1 1 Inn - Bir�hfie • Rd \ vow �- 1 TatliBin ..111T1 H ill : L .. l�
z!lt31i
1 � • • rwanonarni amennargrz mu rt. mf3
i =� �= 1 lips!
Alp
' /� " rat■ann j , E.' ea
14 =ia ' R a
�1 /I�:i t1 U i { i _,
...
co P
ai l
1 •
pk
A�l'. M r
Mg: / I . .. i
. Yak 910 la. 11111
LAM'
Prepared for
Brad Jones and Kenneth Kiefer, Attorneys
Gordon Thomas Honeywell Malanca Peterson &
Daheim
Report Date: November 26, 2002
by
Mundy Associates LLC
EXHIBIT 4
MUNDY ASSOCIATES LLC
ECONOMIC, MARKET VALUATION
N ANALYSTS
1825 0 EN ANNE
SEATTLE, WASHINGTON 98109
(206) 623 -2935 FAX (206) 623-2985
November 26, 2002
Mr Kenneth Kieffer
Mr Bradley B. Jones
Gordon Thomas Honeywell Malanca Peterson & Daheun
1201 Pacific Ave. Suite 2200
Tacoma, WA 98401
Dear Sirs
Transmitted with this letter is our summary appraisal report of 1,054 residential and Union
properties located within a designated "class arem the cities of the loss of use and en)oyment of
Gap, Yakima County Washington. This report examines a
these properties from 1990 through 2001 n Treatment Plant its
emanating from the city of Yakima 's Regional associated composting and Industrial Spray field activities.
The valuation and all work performed m conjunction with it has been made in
conformance with standards The appraisers r mvoked the departure Pr is a vision of the
report of a mass appraisal. T pP and have not conducted an
Uniform Standards of Professional Practice (USPAP),
independent analysis of the highest and best use of the subject properties. The highest and
best use of those properties is assumed to e be their
obtained and analyzed drawing our homes. The report contains a summary of
conclusions. All supporting documentation is retained in our files, available to you upon
request.
This report documents the result of analysis conducted to date. Our work is still in
progress and may be supplemented additional Plant are subject d to change as a Estimates
damages due to the Wastewater Treatment result of
ongoing research.
There are vanous assumptions and for conditions
dtion stated. in the front of this report
that serve as an important foundation our valuation
Based upon the information and analyses presented herein, it is my opinion that the
damages to the combined 1,054 properties, as of September 13, 2002, resulting from the
loss of use and enjoyment over time totals without
damag s for 2002 are
and enjoyment, $ 13.22 million with mterest. The before-after
estimated at $4 45 million. The damages to each individual property are summarized •
within the body of this report.
•
It has been a pleasure preparing
this analysis for you. If you have any questions regarding
it, please do not hesitate to call upon us.
Sincerely,
MUNDY ASSOCIATES LLC
Bill Mundy, Ph.D., CRE, MAI, CEO
•
•
MUNDY ASSOCIATES LLC
SEATTLE, WASHINGTON
TABLE OF CONTENTS
ti •
GENERAL ASSUMPTIONS 11
GENERAL LIMITING CONDITIONS tit
SUMMARY OF PERTINENT INFORMATION 1
INTRODUCTION 1
Identification of the Subject Properties 1
Legal Descnptlon 1
Ownership of the Class Properties 1
Purpose of the Appraisal
Intended Use of the Appraisal 1 1
Client 6
Compliance 6
Competency of the Appraiser 6
Property Interest Appraised 6
Definition of Market Value 7
Research Participants and Property Inspection 7
Date of Valuation 7
Date of the Report
Scope of the Appraisal 7 7 8
Report Type 8
REGIONAL DESCRIPTION
Access 8 8
9 0
Higher Education 10
Health Care 10
Population 11
Labor Market
Financial Statistics 12
1
Taxes
Imgation and Agriculture 13
1 3
Military Presence in Yakima County 15
CLASS AREA DESCRIPTION
THE NATURE OF THE CONTAMINATION PROBLEM 18 18 20
Chronology of Events 21
Record of Compliants
HIGHEST AND BEST USE ANALYSIS 22
2
VALUATION ANALYSIS
Approaches To Value 23
2
Impairment and Value — An Overview of the Literature
Effects of Impairment on Property Values 25 25
Affects of Odor on Property Values 30 Lenders 32
33 2
National Lenders Survey 37
Yakima Lenders Attitudes 37
Case Studies 38
Bremerton \l' aste\\ ater Facility
•
98 -1203 Yakima
November 22 2002
;c
• Cedar Hills /Cedar Grove
Spokane Colbert Landfill 3 40
0
41
Case Studies Summary 46
Stigma ,. 47 Toxicology a 4 �
I
Stigma and Property ainrient Model 48
Impaired Yakima red Class ue of Subject i Properties
m
Unimpaired Value of Subject Properties 49 � 1
Comparison of Class Area and Control Area 1
Macro - Statistical Analysis of Class and Control Area Sales 55
Matched Pairs Analysis 63 Hedonic Analysis of Class 5
act on Class Area Properly Value 70
Summary of Annual Imp 70
Calculation of Unimpaired Value
Amount. 71
Calculation of Annual Damage oe Amounts 72
Rates Used to Calculate Dam to Class area Properties 120
Calculation of Total Damages
CERTIFICATION
11111 3
LIST
OF FIGURES /
Fiure 1 Regional Location 4
Figure 2 Subject Area Location 5
and Figure ? Subject Class Area of Class Aea Treatment Plant 16
Figure 4 Aerial Photograph � 3 5
Figure 5 Class Area Land Use 46
Figure 6 Levels of Concern 50
Figure 7 Stigma Summary 52
Figure 8, Selling s andiControlsAreas�7alue Ratio 53
Figure 9 C1 58
Figure 10, Control Area Land Use Map 59
Figure 11, Median Sales Pnce Square Foot 60
Figure 12 Median Sales Price per Sq 61
Figure 13 Median Days on the Market 62
Figure 14 Selling Price to Listing Pnce
Figure 15 Turno\ er Rate ■
LIST OF T .BLES
10 11
Table 2 Labor ;
�-
Table 1 Population Comparison 1980 - 2000
Market Statistics for > akima Count 1
Table E
Table 3 Retail Sales in 1 akima Count\ 13
4 ftecti\e Buying_ Income in 1 akima Count and the State of \t ashincrton 1 -
Table R Median Household Effective BU \in` Income ll rt =i
in 1 akima Count\ and the State of 14
• Table n l akin,' lrri'lation Drc!ect Statistics
9F 1 203 l akima
n Lfl , / , e ,. 2_ 2001
Table 7, Socio- Economic Charactenstic
and Yakima the
17
Cities of Union G
Class Area and the 49
Table 8, Department of Revenue 'I q
akima County Ratios 1992 — 2001 4 4
Table 9, Comparison of Class Area and Control Area Characteristics
Table 10, Average Housing Sales Data 56 56
Table 11, Median Housing Sales Data 67
Table 12, Turnover Rates for 2000 and 2001 Yakima MLS Areas 64
Table 13, Adjustment Factors Utilized in Matched Pairs Analysis
Table 14, Summary of Matched Pairs 64
68 Table 15, Summary of Annual 'nce Discounts 71
Table 16, Pnme Rate and Treasury Bill Rates 1990 -2000 71
Table 17, Sample Page of Value impairment Model 75
Table 18A, Opportunity Cost of Annual Loss of Use and Enjoyment
to Subject Properties 97
Table 18B, Present Value of Compounded Annual Loss of Use and Enjoyment
LIST OF APPENDICES
A -1
Appendix A. Subject Property List -1
Appendix B, Paired Sales B B - C ip,
Appendix C, Case Studies D -
Appendix D Pace\ Economic Analysis E -
Appendix E, Carlson Report F -
Appendix F, 2002 Lenders Survery Report G -
, kppendix G Damage Calculations G - of Odor-Causing
Chemicals Appendix H A micals and Odor ProblensEat'theiYakima WA, Wastewater
Treatment Plant
1
Appendix I, Professional Qualifications
411
9F - }akcmu
icon ember 22 200'
65
0 In total 58 sets ot matched pairs \\ ere completed averaging nearly five pairs for each of
the twelve years `' The sale price tor class area properties is compared with the adjusted
price for each correspondln_ control area property in Table 14 (Summary of Matched
Pairs) along with the average and median price difference for each year Overall, class
area properties ha\ e general)\ sold for between 2 12 °,o and 15 81 % less than comparable
properties located in the control area `' The mean and median difference indicated by the
58 pairings is —8 45 °o and -- 1 ;oo respective)\ However there is considerable variation
in these price differences when examined on a year- by -vear basis The greatest price
differences between the class and control area properties are evident in the early half of
the decade \■ hen Llass area properties were generally selling at a 9% to 16% discount
when compared to control area sales The average pnce dispanty between the two areas
appears to have steadil\ declined trom 1992 through 2001 with the exception of 1997 and
2000 \',. hen price discounts in the class area averaged over 9.2% and 11 0% respectively
Hedonic Analvsis of Class & Control Area Sales
The rims of Pace\ EC011ornicS Group from Boulder Colorado was contracted by the
clients to conduct an independent econometric analysis to investigate the change in sales
prices withal the class area \ is -a -\ is the changes in sales prices of comparable home
outside this area
ill The results ot their stud\ have been incorporated into our valuation analysis as an
additional method tor estimating the impact of the odor pollution on the class area
propertics Through the use of econometnc modeling, the Pacey Economic Group
reported trio Llass area properties ha\ e sold on average for 11 6% less than the non - class
area properties o\ cr the 1992 — 2002 time penod with the exception of 1993, 1995 .and
1996 The complete te\t ot the Pacev report is included in Appendix D of this report
Summar\ of Annual impact on Class Area Property Value
The impact ot the odor pollution on the values of residential properties over time within
the class area has been examined through three independent methods of analysis Each of
these methods demonstrates that class area property values are generally lower than
comparable properties located outside the influence of odor problems and /or have
appreciated at slower rates than those experienced in otherwise comparable
neighborhoods Table 15 (Summary of Annual Price Discounts) summanzes the results
ot the three methods and the appraisers determination of an annual pnce discount based
on tills con puled e‘ idence for the \ears 1990 — 2001
ii ,it,!' i airs _ (lop c - (la and IOQ' du: is the limited number ot class area sales
• 1_ 1 .., itki be :.1k.)`eI 171 IILIIL 1
-
i 1C I rlbullon Mc - el - R- e cludniL the seen hleheq and Icy\ +e.t
96-1203 ) nkinia
'\'ol emoc•r 2.2 2001
Table 15
Pacey Econometric Model Results
Summary of Annual Price Discounts
Matched Pairs Case Studies
Pacey Econometric
1 ear Sewage Compost Sprayfield Average I Median Model Bremerton Cedar hills Spokane Lit Review Conclusion
See Table 14
19c)1) X — x - 1 0 08% -7 84% 1 1 7% 11% 7 7% 5% - 17% 5% - 12% I 1
Some 100%
1991 \ -- — x I 1 32% 13 20% 1 17% I I% 7 7% 5% - 17% 5% - 12% 11
Some 100%
199 ,: — — x -15 64% -16 13% 11 7% 11"/0 7 7% 5 %- 17% 5% 12% 13
Some 100%
199 ,) ____ _ - x 897% 1061% None 11% 7 7% 5% 17% 5 "/0 - 12 "/ 12 —
Some 100%
_
I c)i)1 _ - x 9 22 "/0 6. 117% 1 I'% 7 7% 5% 17 "/0 5% 12% 12
Some 100%
199 h 0 x 7 92% -6 42% None 1 I% 7 7% 5% - 17% 5% - 12% 12
Some 100%
-4 36% -5 19% 11 7% 1 I% 7 7 "/0 5% 17% 5 "/0 12% 11
Some 100%
—
' 1997 X x x -9 86% -12 01 % 11 7% 11% 7 7% 5 %- 17% 5 %- 12% 12
Some 100%
II 9 8 l 2O.i n
Nove mber 22 2W)2
• • •
"1 able 15 (continued)
- -- - - - -- ---
--- — -- - - - -- - -- —
, Some 10O "-"
-- --- - --- -- -- -- - - --
-- -�
1 9 ) ■ \ \ 1 45 45°,0 159 ";, 117 % 11% 7 7% 5' '/ �� 17 ,,
Some. IOI1';,
-- - - - - -- -- - - - -- --
— - — 7 7 "' 5 °Su 17" 5� 5'%, 1 2
'Olio v \ ` 1 1.Ofi' %, 1 26',„ - -- 117 "�� I I ".�
Some 1(10"/„
- - - -- -
)001 \ 5 774'%.
I I 7% 11% 7 7 "/0 5"/„ 17"A, 5",'„ I - a
--
Some 100' %,
-- -- -- - — - - 1 1 7 11°0 7 7°0 5' /0 - 17% 5 °/, 12'%, .6
Some 1(0"A
S'init« Alun,l,rn Isw, rur( 11 C .
98 12(1 Y(1l mr,r
Nvremhry 7 ) )0(1)
70
There are considerable differences and independence between the various value
indicators First, the macro-statistical an l ssho�� enral in
c pattern of market overall
market activity Four of the five analyses
activity The turnover rate analysis clearly shows that the subject area housing market it
depressed. Second, the case study analysis shows several things
1 Odor does have an adverse affect on the value of residential property
2 There is considerable range in value affects as reflected by settlements
3 If a taking is a proxy for damage, properties located near a facility emitting
noxious odors have a total loss in value as they were acquired for full market
value by the acquiring agency — that is, residents received 100% compensation.
Third, the literature review indicates that odor adversely affects the value of residential
property Finally, the paired sales analysis and the Pacey analysis provides an indication
of the adverse value impacts that fall within the value impact ranges from the literature
and the case studies
Based on the information and analyses presented above, the historic and current market
values within the class area reflect a diminution of between 6% and 13% per year
resulting from the odor pollution and other externalities affecting the class area
neighborhoods
Calculation of Unimpaired Value •
The factors specified above are applied to the unpaired market values of each of the dlass
area properties dunng each of the thirteen years to yield the value of the property as if
unimpaired by the odor pollution. For example, to estimate the unimpaired value of a
property which has an impaired market value of S50 000 in 1993, you would divide the
impaired value by 89 (1 00- 11) This results in an unimpaired value in 1998 of $56,180
This process has been done for all the 1 054 properties for the years 1990 through 2002
Calculation of Annual Damage Amount
Subtracting the impaired value from the unimpaired value denves the annual damage
amount In the example cited above, the damage to the property is S6,180, which
represents the loss of use and enjoyment of the property dunng the year 1998 Damage
amounts were accordingly calculated for all 1 054 properties for the years 1990 through
2002 6
6 ac:ordmg to assessor s records four of the properties ' ttnnrn ed subsequent to 1990 in these
case damage amounts were onl\ calculated for the years dunng which the house actually existed. For
other parcels assessed values were not inciuded throughout tu; I seat time names \k e have assumed
that these properties were Improved during the ttrst ;.,1r t h Ji asses values were provided, and
damage calculated accordtngl\ from that ,ear forward ThL A ` t _ c
_ i eo aes dohci this
not ` nfonp complete
mionnatton on the 'ear Built for other 1 U clans area properties
•
\\as not ui_iuded we ha'e also assumed that the house was built prior to 1990
98 -1203 Yakima
fwn ember 22, 2002
71
• Rates Used to Calculate Damage Amounts
Two rates are used in estimating damage amounts The first is what appraisers commonly
call the capitalization rate. In economics, it represents an opportunit) cost rate or the
annual utility obtained from a good or service.
The second rate is an interest rate, which represents the typical return on an in estment
with minimal risk. for example, the pnme rate.
Rates are commonly used to convert a stream of future income (utility) provided b‘ a
particular asset into a single indication of value. In this situation, the capitalization rate is
used to convert the damage amounts accruing on an annual basis from 1990 through 2001
to the cumulative loss of use and enjoyment over this time frame.
In order to arrive at appropnate rates for the subject properties, a vanet)& of sources were
reviewed, to include current and histonc treasury bill rates, "convenience yields" on
home ownership, and prevailing capitalization rates for rental housing in the Yakima area
over time
Table 16, (Prime Rate and Treasury Bill Rates 1990 -2000) summarizes the annual
average Pnrne Rate and Treasury Bill rates for the years 1990 — 2001 The pnme rate
vaned from a lov, of 6 00% in 1993 to a high of 10 01% in 1990 It generally stayed
between 6 00% and 8 00% throughout the period The annual average 1 year treasury bill
vaned from 3 43% to 7 89 %. though generally stayed between five and six percent for
most of the time frame
Table 16
Prime Rate and Treasury Bill Rates 1990 -2000
' ear Prime Rate Treasur , Bill
(Average Annual) (Average Annual)
1990 10 01% 7 89%
1991 8 46% 5 86%
1992 6 25% 3 89%
1993 6 00% 3 43%
1994 7 15°io 5 3,00
1995 S S3°0 5 94
1996 8 27°•o : _ 2° o
1997 S 44 °0 5 63 °
1995 S 3; °° 5 05 °0
1999 S 00°0
08
2000 9 23° 6 11 °0
2001 6 9 I n o 3 49° o
• J rc°usiii tic -11c rug(' Ammo' I ) cu roll
120 l ukmul
n rmnc r 22 2002
72
Calculation of Total Damages to Class Area Properties
The above - specified elements have been combined in a model to estimate the total
damages to each of the 1,054 class area properties. A sample page, which illustrates the
inputs and calculations described above, is shown in Table 17, (Sample Page of Value
Impairment Model) The full model and the property specific year -by -year damage
amounts are included in Appendix F The net present value of the annual damage
amounts from 1990 to 2001 are summanzed by parcel in Table 18A (Opportunity Cost of
Annual Loss of Use and Enjoyment to Subject Properties) Table 18B (Present Value of
Compounded Annual Loss of Use and Enjoyment) calculates the interest on these
opportunity costs at a rate of 7 %.
There are two components to the overall value diminution of class area properties due to
odor emissions from the Wastewater Treatment Plant. The first component is the
difference between the current (2002) unimpaired and impaired market values.
Commonly referred to as the Before and After approach, it is prospective because it
quantifies the present value (as of 2002) of the loss of future benefits. 8 Damages to the
1,054 class properties resulting from this diminution component is
Unimpaired Value: (All Properties) $ 74 1 million
Impaired Value (All Properties) $ -69 6 million
Total Damage. (All Properties) $ 4.5 million
The second component of the overall damages is the net present value of the loss of use
and enjoyment, accruing from 1990 — 2001, as measured in the above described model
and summarized in Tables 18A and 18B
Damages to the combined 1,054 class area properties totals $ 8 34 million without
interest, and $ 13.22 million with interest.
The value analysis above is based on average damage amounts for the class area. The
paired sales analysis, case studies, literature review and Pacey econometric analysis did
not differentiate between damages to property close to or farther away from the
Wastewater Treatment Plant. The damage amount we have estimated is for the entire
class area. As the Zanetti analysis, literature and Mundy Associates LLC analysis for
other communities shows property values increase with distance from the contamination
source The differential affect is a damage distribution issue that we have not addressed
in this analysis
EIS 4: was noted previously, the contamination of a propert\ can be considered as a 'taking The Before
and After Rule is often referred to as the Federal Rule %k Inch i. n three - ien rule and which states. The
value of the propert■ before the taking less the remainder propert\ alter the takinu leaves the difference
which is iust compensation. or in the case of contamination dainaues F_aton..1 D Real Est Value in
e,rncurrori 2 Ed The Appraisal Institute. pg. 24
95 -1201 l akima
Non ember 22 2002
e 0 0
m
, I ■ ()oil 5158000 '059000 5160000 5161000 5162000 (-)
O ...
I , _
, • - .
... 1.■ IID O .s.n
, ..,7.2 ,,, . :,-, , lz .,,.. i , .. 4 2. •••'•; ' .• - ill " --nis•
\ ..s r ; 7 ,'" • . 4' ' . . 4.1 l ir ' ' ' ''.... 1r 1 ' 0
, .2.<.:11, - .. ., 1111 ■ 41 / ..g4 r • , .„•'‘. • , • '. _.... , ,,I, .• si , . , .,
■ r .1_ '-••1'4,,!• 14 ... ''.. ''' ''' k '' ' W' ' • jV A: F e , ' tt '‘i ' ,. I. ' - , II I" - ' . J._ 4. .... • ,..I a 1
r . 7 • - '-' - - t:t-. . ,v11 - ri , t- . l'.4..".,.. .. • ., :•.:' ‘.....
. , - • :W.:" • •'*•,'• 111 E* !'", '•-•, k r - TN' - - "' t 1 . 1 4 . ..7 .' ""' .1?-•• 441' ". • W ' -'1';' , I'. 1 ' ' '
0
., ' , 7 - ' - * 4 J ". -7,..-t•- 1 ^171t t : e .1 ', • 17111. r4,..;,... i ' l'. " 4. . i ' 4 . ' ",, -. *t* I •J
1 1 ( --) • ' '''. ., r '• ' ' • 0 A3 1. , , • i kli, V t , f ■,
, .. . , ' ' • , SZ ,•'' • P t '..". I. Ca I 1 •• Itil • 'S • " ' l ' 1.
_ (_, ,'*-,,,, „ ...., ".. t .4,.. r ., . 444 • . , , •
.._.
„•,;,,,,..,, .*...., .4 , •)• fig- ,. , • . .•;... ,, . .. .11 0 • • . • 4, ' •
••• . A . • • •'''',' '`' j;,'-gi 1 . :•4; .5 b
...." 1 ,_ f• tride ' . ' ...te,„,,t„' , 4 . ••,‘• ••■• . "•' ' +. ; A:1 ' . • d *., .9 ..,... •,... ,..,, -..,- .1 .i..-' l' L ' .. "" r .\' - I 1 ..)
1 1, )... . 4 .' 1 ‘ 1411' ''' • ' ' l ' '. •` ' '' ...' • l er* ,. ' i ••• r t3 '' . +4.4. • '''- T ar* ' ft JIM LA 4 . 1 - • ,.... . • : Ai. ) • ' . . :, •' ,1 ' • ' ' ,', ,
-: - ,'"1,,i14, .,'• 04i.- ' . -- r . -• • • • - ', ' , •• . ' -- ''■ 41 q; -04114 ..• - i" , ,O l o! • ,; s yl."9-..■ , ': '1 .*•1 • • ' - ' . 1 .,...' t . .
)
' 7. ' ' '". ‘ .34 't. 4, b 11. • . Ill 1.
' ..., rtx.7;a _r,
0 i t'"'"'" yeti i ' • ' . •• ••• • 14 • • : I fl, '•
•• % IP% ..."" ' b• d 'i , ' - • •• •••• • .3, - 0 k 5 • • • , i I ... , . Rill t PIT, •%,„ „• - • 0
. - 0 ., „
(3) , 're' :I., 7 ■ 4 r y•: ' ''. ''' 4 • ' . • ;4% p -, , . 1 .1 4 ..1JA , : i. .. : . 1 . .. 1 .. 4 * .... °NV ' 7 1 %,.
- -
' " 1 , ).:e. - , , . f.',! .., t..„4. 1 ,a ...., r • . ' &744f,,,.., i".e,.. ',A.': ..J..;',.....,- . on 4 • : '.... , - 1 '‘-t., I. :li ;)...,v
...'-' 7 cc) t ' f • • - • r .,.,,. ,,,,,,.,i .,... .....:1 ,:.; ... ...! . i I t• ri,4, • *. • ...4 as; d ..:: .
7'',11, ...,. t,, ... 0 „v..... oi4'.' ,,.. • ..• +
, _ / -) ■ 7 i '. -- , '-' .: .. r;;?- ,- - !r .. ..- ,-,,-4. ... , _, i , ... ,... fit ,, . 4 ....74
(T) ? • • ' -4 ":144 Iree7:1: . . r' ' i
• .- • , I 4 ' • ... W " tail
- .... ‘1 ' ..' • $ ', .i," ' ...'•'... . . , ,. ,. Ft4,...1. •1 ••••I'ik, '•r,"•' , • •, .; .„ ... ..^. , •• • k , • I
-• _ ' I r ''''' • " r•• '"•' 1 * . tij{f i t 1,, .' ! • , ../■„:•T ' •• ••'•" 1". • • 4.: . •'. ' . -... '' • • ' • . ' t.--;,...-7- •
,
_ ' '1 v3" .i • -; - 1 ` ... 1 . , , • ,A , e .,11' to4 ........„L , , „, , ,,,, , .) - la . - .•-4r I.., . ' 4 , • . , - , • ' , .' • , ■• . • ,,,,,I. ,, .....
, ,,,,,, t ■ _. . •-••+-- -- ,T. 1 .4 ,4 4 4,..-;* ..., ''' •• ) . i lil fi 1..71r • rik: IA ; '..' • • • 1• ' .....
is . io . 1 - . .. ,i,,... . -.voi,-,..1, ,ii ' '.., •
• g • ,l' :` • " - r ;
_ . _, 3 ..1...... -- ;* " • ilf C , WI ' f , :illit:1 7 , P Ali' i ' / .... • ; * *;•••% ••• - • .**. • ,,•"' .:•
I 1 . • WO #. -• -, • . " • . .`. - --• •". ' '''; \.. • '
-.• _ •11. 1.0
0. i . 1 ..• . a ' ' ' '' '"'". ' • •,:r",.,,f7,4, ,:::::•:'''',..•:: .... i ...", • '• • '
". ' 1) l a
so , *
ii. ,L , '.1 ' 7 ,„..• „Acta ri '
, •:/•• ; • • .. 1 • """It IP • • , , „ i
• , 14' 1p• * , ,. , , , '!.
....
-2 • . 146111 - ''' I
.': ' . ' ' ''' • . ; 'I A '• ' ' NNW .
-,.. r- ( - ) ',v.. I •• • tdo ..4.. ,,,, ye st .■,'r (
.:•• .1 , 11 Ilirtu '- • 1:. 4 ' '. 7 ' 4 1 , . ' •s , , ti ,;' ,, . A.,/ .1./.1 ■ . .
..:, ' .!:.,t • ,,,- .411..,i,J7' !AO ' W" iP•.' .,.. .• ' **‘• ..c.o. '
.... ' - 4..'A •••,, •••••• : i .
: 7 -• • .". • :i '''' ' •, - "C : b •LI • • • ,. f • , .• ' ' 4. 4t .. . 1 • 1)• ••• ' lifd •P ' ' • /1
I' • • „. e 1 •'; •Ci ' ''•••••), t gi g 'A '7111 ••• , 0. '' ji % . • '' .1...' - I ••••1 '‘NS:er.file
o j i lik i... d ie, je ak1 111 , 11111 4111r' dipy .L . ,.-
so - ; • ' -;._ ".'1",r1,4' . - .- , % . ' rAer„, ;.,...!. - . •
,,..,..... i c•- ...--, • ... -.,.; -., . ....„ . . _ .
-- t --- -t- „-. , .. -0 , , „,,.. ..1.... • '• -J , .. ' • '
_ 'i. _ . r !, . c t.,:: ..., "No. . :.I , ..i.:% . 7 . „ . .;.(!..' '' ''' ....,, , i . ••, r, ,, .,. 41134. T •••• * ..,. , . ..., , • „ • , 1 ( 1;•••1 ... , A , , . . ,• ,
..: •v . N'' , l'
)
t ' • .41.--
' - . ' . ..,-,,, , . : ,I., t . .....• -}';',W .
•.' 'It , 4•• :.- ;if; . , 0..„ • . i 011.,‘ , . i , o.
...I.:1 ..,... I if ‘, V41. h'ilitt .1 14 6 .•.• ••• i ' A - " 1 k -0.• i . 41
LII ' A. - ..' I ,,, ■ c:i W . .4 e ' a k :* , 4 4 . I ■ , I lePi I t . .1 .1Kre;e 1 .11 ' , ' ''' . • • . ,..... ‘, ' ./ .. 1 6.' 1 f ''. • 1 ' t, 11: le
..-
,J. ,,, 1. . ■ it, ; •-11.101, . ■ / 0 . ,..
ill s ' .•1 '4 li ' ' " Mr,,,, 1 ••• '.: •• ' .? ', ...L., L . •■••••,, ,1 ''. .i SI .,. f , " ' :;•,k I '''.. :',ri. ' '
)
t . ■ . . ,,, .
'. ....f .. 1' •■• , ' it; r ■ . ' li .. .. )-..e..." .s. , 'Mb ..' • ' ,VS. ? , ...' .1
■ . i * - - ''''S ' 1 '' 4i '. ';', .E:"'. 4,:p 4;0,4\N.4' ,.. -,
(1 1 ,f , r
,.."_.4.4.: 41 ' 1 :1 . ' - 4 11 . 1*
. • "''''"•r"I'''"' I 1, ''.'•'4, ..,.. t ' . ;;;;.00 us ,' • I . . ". • . . ' 'J
_ 4' . ' I.'Wi - •-- -4 % ., • .r... ; '" 1 44'.' '. '1 ,, I " , , '''''', ' ' 7. T __..,,":„, : ". , • . % i •*.e•
11 I 3 .1 I
...
, , : 17 , - 7. 4
ln ,-m,Ns.:-.. ., i •., . .."..., -,' ,;."'''
:: • -. ' . , • .1 ' '''.;•,. •1, •
:.-- t ( '. '11 43 • , •, • .'• I • '2 :4 '451 , -..- t‘ t ;S. : ilk` .0' f ..7"---1"%.: ., .,-,-, -,1 i - ''.N.,.' ' .: • .... ' , 4 :
1' - 1 4;‘ !', 37,; t I ' • I'! .1.. *di..
,,,. i•rlat -1. ..:. ; 'il • ' ,„ •,.. .. .....„ ,.. ..r... . ..- . ,,,.....• ., ' it.- .. - "..../... -:-/,
-
- . .,...,. 4 ' ; .1 I ,: , i ,,,.: , 1 , .- ' • " ' .,rb...' . , „......, .....,1•, • - 7 ...-N, -;,,..;,,,-- -, --. ..... - -
. ,
•-..
- --,
1 ., ...- 1 :,, :',,„i ' 4 . ..,,,,. 7 , •••':' ' 1 . .4 1.
' Aitt! i
- . 1
, i,. .. , ....1_,;. .. .-.. , .., J. • 4 . •-• ,
. ‘' ' - 0 4 .1 0c1I -- i ,, 'rol - 'ti .... - . , , ,t..--. . . : • ........., -- - ---11 t ps ,
r.,, . ...., tt-,wreN
,: , dr L • : ,
•
{ tall • . .
, .
/1
I
EC -01 -004 -- 02-11-25
'... ' ;- is :,�: 'r •
tit ": a mss:. _ . a 1 . ri :
le
.. A . - ^.' _ .r -• _ .! -k--- •
til
�. P- S. 7 i t 4. : 1 — ; '. 1 - -
�� ) � . - � .. -. �; +-°: tip• :: ' tt ':�.�. '-
-ep-a r: Ta -1� Z - i - ' L' , ! 1 r-- ` � 1 -�" ^, i • '± -' i -1 s . • 4
.z..-
_:bl !, .i `�A� -,..� ,' i K' : ?• •.= 1 _ X 5;1 - '
t � p J44 I .
s.
. J i -7 .• . - ? :--", '. - I . liti I . i' ,. ; -, -- ( : , i . t. 0
- ... - $.;?'.. 'It. fi,,- "Cot :a`,.. i- .-.• ; 11 - • . ••• -z- C l i th- :•-• F. - 1 Atl ii .
. =' -w a :i da, • .' f. �� F • : ". i ' : + y - I., fr;.,
iZ = Y , f • 1F -`'?V• ? i . i • , . - ' - -- - _1 i. T i:^ r ;, •1 . ...,..",...14/...„ y A --'..1.:1111—'.--'2--•`t"-'_47- ; 7'. r � � f
!IL •V- I r. - -1 • : '-l' : - /4 ft - -.. I ...:'.. 1 '. VILUs-Tr -. -. • ' -' " 1-.1 k.:
• - AI' - 1"- y t - - - • - • . k - : 5 7g• i' • i 7,.. - ii - . 1
• �i t + ( 1 � . . . � � '. . 're a .4 t * �_•�a 0.'1' 14 -- 1 .. t ipt
... fqqf ,„ �. v •
i '
_ , ":y . f r , 1 " - •_' + o •. ' t Y 4 . _- : t r 1 1 14 • 4 ~•w` 1're • 1
. i tea c '% T i...- • , ` • .` • r • r - ,. ^ ` r
I' Vii. L s: i 1, � ; ' ,, . s r
:...,.„ t. ' I — I)oNstt•It. sct n.trto fir the highest short -ter peal, ndur concentrations
0
t [, ; •ttnul.tted h\ Is•C.? for the spras field emissions
\tturnex -( lient /\lurk Product - Pr:' ili_f,l Page -I;
\\ i • 1 I D311011 Ln
` N_____,____________,...,_., LMoh ■ Il .:1“1 : , . rch St `
11.111HINEMEIni ________
I•
� � t
Yakima class ,
Area
I -til‘ _� IIIII
F.i t Ross Lu
V' - McNair A%
E Pierce St akcata Ave
f 4't :N _ - Lilac Ln
'.171
_ i 2':
1 lull .1 a'
'. r+
OC
r 1
f
• -.-- Is
V: - `Mall : d
j ct S
Al AI.I n
I® t ..
w .....
"Yakima Class -krea IPDL
Zone 1 ' . %�r
Zone 2 \ Milli I 1'
Zone ; 111111111 IMRE ,
0 0 2 0.4 Miles 11111 S
Iark c
7
•.
.1
IMP ' =' 0. M undy Associates LLC (92003)
98 -1203 '� N
I ,,.. .o
•x =
1 r 4 F VED
2 OCT 0 2 Z003
3
4 PITY LmgAL DEPT.
5
6
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
8 FOR YAKIMA COUNTY
g WILFRED and KAREN MURPHY, husband and
wife, et al., NO 99 -2- 00611 -8
10
Plaintiffs, NOTICE OF PROPOSED FINAL
11 SETTLEMENT AND PLAN OF
12
DISTRIBUTION
13 CITY OF YAKJMA, a Washington municipal ASSIGNED TO THE HONORABLE
corporation, et al., SUSAN L. HAHN
14
Defendants/Third Party Plaintiffs,
15
16
v
17 CITY OF UNION GAP, a Washington municipal
corporation, et al.,
18
Thurd P • Defendant.
19
20
IMPORTANT LEGAL NOTICE
21
This Notice may affect your legal rights. Please read carefully.
22
23
I. YOU MAY BE ELIGIBLE TO RECEIVE A SHARE OF CASH BENEFITS
24 FROM A PROPOSED SETTLEMENT
25 You may have been previously notified that you may be a member of the certified
26 i class described below in a lawsuit against the City of Yakima and Del Monte Corporation
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 1 of 18
(99-2-00611-8) LAWOFFICES 410
[ 1241104 v8.doc] GORDON. THOMAS. HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PAGFIC AVENUE SUITE 2200
POST OFFICE 60x 1157
TACOMA, WASHINGTON 0e$01 -1157
(2571 620-0600 FACSHCLE (253)6206656
concerning odors from the Yakima Regional Wastewater Treatment Plant and adjacent
2
Industrial Sprayfields (collectively the "Treatment Plant "). THIS NOTICE IS A
3 SUPPLEMENT TO THAT EARLIER NOTICE, AND MAY AFFECT YOUR RIGHTS
4
A. Summary of Class Membership.
5
The Court has previously ruled that the following people and entities are class
6
members
7
DEFINITION OF THE CLASS
8
ALL PERSONS, INCLUDING MINORS AND BUSINESS ENTITIES, WHO,
9 AT ANY TIME SINCE JUNE 30, 1990 HAVE RESIDED IN AND /OR OWNED
10 RESIDENTIAL REAL PROPERTY IN THE AREA DEPICTED ON THE MAP
ATTACHED AS EXHIBIT A.
11
B. Purpose of the Notice.
12
The purpose of this Notice is to inform you of
403
• The status of the lawsuit;
4
• The essential terms of a proposed settlement with the City of Yakima, owner and
15
operator of the Treatment Plant. The settlement will also resolve claims against
16
Del Monte Corporation,
17
• The essential, terms of a Plan of Distribution, which will govern payment to class
18
members of the net proceeds of all settlements,
19
• The requirement that you file a Proof of Claim Form in order to share to the
20
proposed Settlement Funds,
21
• The time and place of two meetings Class Counsel will hold for class members to
22
answer questions about the settlement and proposed Plan of Distribution and to
23
assist in completing Proof of Claim Forms,
24
• The heanng to be held by the Court to consider final approval of the proposed
25
settlement and Plan of Distribution,
26
• NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 2 of 18
(99-2-00611-8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL. MALANC,..
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUM 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 95401.1151
(253) 5206500 FACSIMILE (253) 620-0506
1
• Your nghts and obligations as a result of this lawsuit and the settlement, and steps
2
you may take m relation to the settlement and this class action litigation.
3
C. Summary of Options and Deadlines.
4
As a class member, you may choose to
5
• Receive a portion of cash benefits of the proposed settlement. (To share in the
6
benefits of the proposed settlement, you must mail a Proof of Clain form by
7
December 15, 2003 For more on filing a claim, read Section IV),
8
• Object to the proposed settlement or plan of distribution. (To object, you must
9
mail a written objection by November 14, 2003 For more on objecting, read
10
Section IV).
11 �
• Do Nothing. (If you do nothing, you will be bound by the terms of the settlement,
12
including releasing any and all claims you may currently have against the City of
13
Yakuna and Del Monte concenung the Treatment Plant, but will receive no cash
14
benefits)
15
By pnor Notice, if you owned property or resided in the class area prior to July 2001
16
you were given an opportunity to exclude yourself from the class, therefore, you may no
17
longer exclude yourself and you will be bound by the settlement if it is approved by the Court.
18 1
However, those who are class members solely because they acquired property or moved into
19
the Class Area between July 2001 and October 10, 2003 ( "New Class Members ") may choose
20
to exclude themselves from the lawsuit. To do so, a New Class Member must file a request
21
for exclusion, in which case he or she will not be eligible to receive a share of the cash
22
benefits and will not be bound by the terms of the settlement. (New Class Members may
23
exclude themselves from the lawsuit by requesting an exclusion form in wnting by
24
November 1, 2003 and mailing it to Class Counsel by November 14, 2003 For more detail,
25
read Section IV)
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 3 of 18
(99 -2- 00611 -8)
LAW OFFICES
[1241104 v8.doc] GORDON. THOMAS. HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1301 PAGPIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 0401.1157
(253) 620.5500 FACSIMILE (253) 830.0505
II. STATUS OF THE LAWSUIT
2 The claims m the lawsuit against the City of Yakima and Del Monte were described in
3 the first Notice you received. If you want to receive another copy of that ongmal Notice,
4 please refer to Section VI of this Notice. If you did not already file a timely exclusion from
5 the class and you fall within the definition of the class, you are a class member
6 On April 19, 2001, the Court ruled that the claims against the City and Del Monte
7 would be certified as a class action. The parties proceeded to engage in lengthy discovery
8 involving hundreds of thousands of pages of documents, depositions of dozens of factual
9 witnesses, and the work of nearly a dozen expert witnesses. The parties also filed, and the
10 1 1 Court ruled upon, dozens of motions directed at a vanety of issues.
11 ! Pnor to class certification the City of Yakima and Del Monte entered into their own
12 settlement agreement. In return for Del Monte paying Yakima $500,000 and agreeing to
3 other expenses and activities designed to close down the Industnal Sprayfields and reduce
4 i odors, Yakima agreed to assume any liability Del Monte had to the Class Members in this
15 lawsuit.
16 In October of 2001 the City of Yakima sued the City of Union Gap, claiming that
17 sewer collection and transportation facilities owned by Union Gap contributed to the alleged
18 odors Class Members claimed to expenence. The plaintiff class never sued Union Gap
19 directly Nonetheless, the City of Union Gap agreed to settle with the class for $200,000 in
20 j order to avoid the expense and uncertainty of being a party to the lawsuit. The settlement
21 with the City of Union Gap provides that the net proceeds of that settlement will be
22 distributed only to class members living or owning residential property south of Valley Mall
23 Boulevard.
24 In August of 2001 the City of Yakima sued four (4) insurance companies, claiming the
25 ! policies the companies issued to Yakima covered the claims made in this lawsuit by the class.
26 1
S NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 4 of 18
(99-2-00611-8) LAW OFFICES
[1241104 v8.doc] GORDON. THOMAS. HONEYWEL MALANCA.
PETERSON & DAHEIM LLP
1201 PAC6IC AMAX. SUITE 7200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 90401.1157
(253) 929.9600 FACSIMILE (233) 520.0696
1
A federal judge ruled in favor of the insurance companies and dismissed Yakuna's lawsuit.
2
That decision is currently on appeal to the Ninth Circuit Court of Appeals.
3
In Apnl of 2003, Class Counsel filed a separate lawsuit on behalf of the class against
4
the same insurance companies. In that lawsuit the class seeks an order that the claims for
5
damages caused by the Treatment Plant are covered by the terms of the policies. That lawsuit
6
will be heard in Yakima County Superior Court. No trial date has been set.
7
Tnal m this lawsuit was scheduled to begin on March 3, 2003 However, on
8
February 15, 2003, the Court certified an issue for appeal. The Court of Appeals accepted the
9
appeal in May 2003 This delayed the trial indefinitely In the absence of a settlement, it is
10
unlikely the trial would occur sooner than the late fall of 2004
11
In September 2003, the named class representatives and attorneys for the class reached
12
a settlement agreement with the City of Yakima, described below
13
On October 10, 2003, Judge Susan L. Hahn, who has presided over this case for more
14
than four years, preliminarily approved the proposed settlement with :he City of Yakima and
15 � the proposed release of claims against Yakima and Del Monte.
16 The Court will hold a heanng (the "Fairness Heanng") in the Courtroom of Judge
17
Susan L. Hahn, Supenor Court of Yakima County, at 128 North Second Street, Yakima,
18
Washington at 9 a.m. on November 21, 2003, to determine whether, as recommended by
19
both Class Counsel and the class representatives, the Court should finally approve the
20
proposed settlement with the City of Yakima. At that same heanng, the Court will consider
21 1
final approval of the Plan of Distribution for all the settlement proceeds (see Section V below)
22
and may consider Class Counsel's request for reimbursement of costs and an award of
23
attorneys' fees.
24
TO RECEIVE A SHARE OF THE SETTLEMENT BENEFITS, YOU MUST
25
MAIL THE ATTACHED PROOF OF CLAIM FORM, POSTMARKED ON OR
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 5 of 18
(99-2-00611-8)
v8.doc] 00611-8) GORDON, THOMAS, HONEYWELL, MALANGA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE SUITE 2200
POST OFFICE SOX 1157
TACOMA. WASHINGTON 06101.1157
(2531 0204502 FACSIMILE =0204606
� BEFORE DECEMBER 15, 2003, TO CLASS COUNSEL (SEE SECTION IV FOR
2 MORE DETAILS).
3
III. THE SETTLEMENT
4
A settlement has been reached in the litigation between plaintiffs and defendant the
5
City of Yakima. The settlement will end all claims in the lawsuit against both the City of
6
Yakima and Del Monte. That settlement is embodied m a Settlement Agreement which is on
7
file with the Court. Class Counsel believe that this settlement is fair, adequate, reasonable,
8
and in the best interest of the class. The Court has preliminarily approved the settlement. The
9
terms of the settlement are summanzed below You may obtain a copy of the Settlement
10
Agreement from Class Counsel at the address provided m Section VI, below, and are
11
encouraged to do so if you have any questions about the exact terms of the settlement.
12
A. Establishment of Common Fund.
3
Plaintiffs and defendant City of Yakima have entered into a proposed settlement.
14
Under the terms of the settlement, the City of Yakima agrees to the entry of a judgment
15
against it for S13,000,000 Following Final Approval of the settlement the City will pay
16
S7,000,000 into the trust account of Class Counsel, and will have no further financial
17
obligation to the Class Members.
18
Amounts between $7 million and S13 million can only be collected from Yakima's
19
insurance companies. The City of Yakima will continue its appeal of the dismissal of its
20
claims against its insurers and the class will continue its separate lawsuit against the same
21
insurers in Yakima County Supenor Court. The City of Yakima and the class agree to
22
cooperate in their suits against the insurers, and have agreed on a formula for distributing any
23
money the City or the class receive from any settlement with or judgment against the insurers.
24
Under that formula the City of Yakima receives the first $500,000, the class receives the next
25
$500,000, the class receives 80% and Yakima 20% of any amounts between $1 and $3
26
•
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 6 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc) GORDON. THOMAS. HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SLATE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 06401.1151
(253) 5206500 FACSIMILE (253) 6204665
1
million, and the class and the City share equally in any amounts over $3 milhon.
2
Ultimate recovery of any amount above $7 million depends upon Class Counsels' and
3
the City of Yakima's success m pursuing such claims. At this pomt, it is uncertain what
4
amounts, if any, Class Counsel or the City will obtain from these insurance companies for the
5
benefit of the class.
6
B. Release of Claims Against the City of Yakima and Del Monte.
7
Upon Court approval of the settlement and entry of the final court order dismissing
8
claims agamst the City of Yakima and Del Monte, you and all other class members will be
9
releasing all claims you may have for acts or omissions of the City of Yakima and Del Monte
10
concermng the Treatment Plant pnor to the date of final approval of the settlement. In
11
addition, the settlement limits a future type of property damage claim, called mverse
12 condemnation or "takings," to situations where there is additional activity by the City of
13
Yakima that causes an increase m odors over the level that has existed for the last three years.
14 I
The limit on future inverse condemnation or "takings" claims will bar current and
15
future p'- perty owners and residents from pursuing claims for such damages incurred pnor to
16
November 21, 2003 The City of Yakima intends to file a copy of the Settlement Agreement
17
with the Yakima County Assessor's Office. A reference to the Settlement Agreement may
18
appear on property records.
19
Class members are advised that Washington law imposes a duty on sellers of
20
residential property to inform buyers of any important information that may affect a buyer's
21
decision to purchase the property The fact that this odor lawsuit occurred and the basic terms
22
of the settlement may be the type of information the law would require a seller to disclose.
23 I -
Class members are encouraged to either disclose the fact of the lawsuit and settlement at the
24
time they sell their property or consult with a lawyer regarding any disclosure obligations.
25
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 7 of 18
(99-2-00611-8) LAW comas
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 2200
POST OFFICE 90% 1157
TACOMA, WASHINGTON 00401 -1157
(257) 6206500 FACSIMILE (257) 020450;
110 C. Attorneys' Fees and Costs.
2 Class Counsel intend to seek reunbursement from the Common Fund for costs
3 advanced dunng the litigation on behalf of the class and for the costs of admuustenng the
4 settlement. Class Counsel will also seek one -third of the net settlement (the total settlement
5 amount minus litigation and administration costs) as payment of legal fees. To date, Class
6 Counsel have spent some five years working on behalf of the class and have received no
7 payment for their services. To date, Class Counsel have spent more than $1 million on
8 litigation costs (deposition transcripts, copying costs, etc.) without being reimbursed for any
9 of those payments. The fee requested by Class Counsel would compdnsate them for their
10 efforts in achieving a settlement fund for the benefit of the class, and for their nsk m
11 undertaking this representation on a contingency basis for the last five years. If approved by
12 the Court, the fee request would be within the range of fees awarded to plaintiffs' counsel
13 under similar circumstances in litigation of this type. The actual amount awarded Class
14 Counsel for fees and costs will be determined by the Court. No funds will be distributed to
15 Class Counsel at this time.
16 D Conditions of the Settlement.
17 This settlement is conditioned upon the Court's Final Approval of the settlement,
18 which will be determined at the Fairness Heanng on November 21, 2003 If the Court does
19 not grant Final Approval of the Settlement, the Settlement Agreement might be terminated,
20 and, if terminated, will become null and void, and the parties to the Settlement Agreement
21 will be restored to the respective positions they held before the Settlement Agreement was
22 signed.
IV. OPTIONS FOR CLASS MEMBERS
23
A. Option # 1 Agree to Proposed Settlement.
24
IN ORDER TO RECEIVE A SHARE OF THE CASH BENEFITS OF THE
25
SETTLEMENT, YOU MUST COMPLETE AND DELIVER TO CLASS COUNSEL A
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 8 of 18
(99 -2- 00611 -8) LAW FENCES
[1241104 v8.doc] GORDON. THOMAS, HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SATE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 05401.1157
(25315206500 FACSIMILE (253)5204555
1 PROOF OF CLAIM FORM ON OR BEFORE DECEMBER 15, 2003. (A blank Proof •
2
of Claim Form is attached to this Notice for your use.) ANY CLASS MEMBER WHO
3 FAILS TO PROPERLY COMPLETE A PROOF OF CLAIM FORM AND DELIVER
4 IT TO CLASS COUNSEL BY THE DEADLINE WILL NOT RECEIVE ANY SHARE
5 OF THE CASH BENEFITS OF THIS SETTLEMENT BUT WILL STILL BE BOUND
6
BY THE SETTLEMENT AGREEMENT.
Class members who support the proposed City of Yakima settlement and the proposed
8 Plan of Distribution do not need to appear at the Court's Fairness Hearing but may submit
9 wntten statements of support to the Court by November 14, 2003
10
B. Option # 2• Object to Proposed Settlement.
11
Objections by class members to the proposed settlement and/or the Plan of
12
Distribution will be considered by the Court, but only if the person raising such objections
13
mails to Class Counsel, no later than November 14, 2003, at the address set forth m Section
14
VI, below, a wntten statement of his or her objections and the legal and/or factual bases for
15
those objections. The wntten statement of objections must. (1) bear the case name and cause
16
number (Murphy, et al. v City of Yakima, et al., Civil Action Number 99 -2- 00611 -8); (2) be
17
identified as an "OBJECTION TO PROPOSED SETTLEMENT" or "OBJECTION TO THE
18
PLAN OF DISTRIBUTION," and (3) contain the name, address, and telephone number of the
19
objecting party and his or her attorney, if any Any person who properly delivers a written
20
statement of objection as specified herein may appear at the Fairness Hearing in person or
21
through counsel to show cause why the proposed settlement with the City of Yakima, and/or
22
the Plan of Distribution, should not be approved as fair, adequate and within the realm of
23
reasonableness. As long as an objection is properly delivered as set forth above, the Court
24
will consider it even if the objecting party is not present at the heanng.
25
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 9 of 18
(99 -2- 00611 -8) LAW OFFICES
(1241104 v8.doc) GORDON. THOMAS. HONEYWELL, MAUWCA.
PETERSON & DAHEIM LLP
I' 1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 06101 -1157
1233) 6206500 FACSIMILE (253) 6204606
No objection, and no pleadings or papers relating to any objection, shall be heard
2
or considered by the Court unless the objecting party has fully complied with the
3
requirements of the paragraph above. Any member of the plaintiff class who does not
4
j properly deliver a written statement of objections in the manner specified herein shall
5
be deemed to have waived any and all objections for all purposes. Attendance at the
6
hearing is not necessary; however, class members wishing to be heard orally m opposition to
the Proposed Settlement and/or the Plan of Distribution should indicate in their written
7 8
objection their intention to appear at the hearmg.
9
C. Persons or Entities Who are Class Members Solely Because They Moved into or
10 Acquired Property in the Class Area After July 2001, Have the Option to Remain
a Class Member or Opt Out of the Proposed Settlement.
11
If you are a class member solely because you moved into the class area between July
12
2001 and October 10, 2003 and had not previously lived in the class area since June 30, 1990
and/or because you acquired property within the class area between July 2001 and October
41Ik
10, 2003 and had not previously owned property in the class area since June 30, 1990, then
15
you are a "New Class Member" and have an opportunity to exclude yourself from the Class.
16
New Class Members may obtain a request for exclusion form by mailing a wntten request for
17
the form to Class Counsel at the address below, postmarked on or before November 1, 2003
18 i
Yakima Treatment Plant Class Action Lawsuit
19 I Office of the Claims Administrator
20 I P O Box 1653
Tacoma, WA 98401 - 1653
21
In order to exclude yourself, you must return the completed exclusion form by mail,
22
23 postmarked no later than November 14, 2003 If you do not file an exclusion form, you will
24
be a Class Member and will be bound by the terms of the Settlement Agreement.
25
26
S NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 10 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL. MALMI(C,I.
PETERSON & DAHEIM LLP
1201 PACFIC AVENUE SURE 2200
POST OFFICE sox 1157
TACOMA. WASHINGTON 91401.1157
(253) 0208500 FACSIMILE (253) 6204505
1 If you are a New Class Member and choose to exclude yourself, you will have no
2 ngh.s under the Settlement, you will not share m the distribution of any Settlement Fund and
3
you will not be bound by any settlement or judgment concerning the City of Yakima or Del
4
Monte in this action. You will be free to pursue whatever legal nghts you may have, if any,
5
against the City of Yakima or Del Monte at your own expense and on your own behalf.
6
V. PROPOSED PLAN OF DISTRIBUTION
7
8 The proposed Plan of Distribution for the settlement with the City of Yakima and Del
9 Monte provides that the net settlement funds (the total amount of funds received from the City
10 of Yakima, Union Gap, and any of Yakuna's msurers after deduction of Court- approved
11
litigation costs and attorneys' fees) will be distributed as follows.
12
A. Class Representative and Original Plaintiff Payments.
13
The lawsuit was initially filed in the names of almost 200 mdividuals. Approximately
14
15 140 submitted answers to written questions (the "Onginal Plaintiffs ") As compensation for
16 their time and services Class Counsel recommend that each Ongmal Plamtiffreceive $1,000
17 Approximately twenty of the Ongmal Plaintiffs were also mternewed or deposed by
18 lawyers for the City of Yakima or Del Monte (the "Deposed Plaintiffs "). Class Counsel
19
recommend that Deposed Plaintiffs receive an additional $1,500 as compensation for their
20
additional time and services, for a total compensation of $2,500
21
Once the case was certified as a class action in Apnl 2001, this lawsuit was led by the
22
23 efforts of eight individuals (the "Class Representatives ") The Class Representatives pursued
24 the lawsuit in their individual names, on behalf of themselves and the entire class they
25 represent. They were deposed multiple times, attended numerous meetings and court
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 11 of 18
(99- 2- 00611 -8) LAW aFP,ces
[1241104 v8.doc] GORDON. THOMAS. HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE SURE 1200
POST OFFICE Sox RISK
TACOMA, WASHINGTON 06401 -1157
(25716202600 FACSIMILE (253) 6106565
• heanngs, and participated m three separate mediations. Class Counsel recommend that each
2 Class Representative receive an additional $7,500 as compensation for their additional time
3 and services, for a total compensation of $10,000
4
B. Creation of Personal Nuisance Fund and Property Damage Fund.
5
As described in more detail below, the remaining net settlement funds will be
6
allocated seventy percent (70 %) to personal nuisance damages (the "Personal Nuisance
7
8 Fund "), and thirty percent (30 %) to property damages (the "Property Damage Fund ").
g The Personal Nuisance Fund will be distributed pro rata to thosd class members who
10 submit valid Proof of Claim forms (or who are identified on such forms) showing that they
11 resided in the class area between June 1995 and October 10, 2003 (the "Personal Nuisance
12
Class Period"). The Personal Nuisance Class Penod is shorter than the Property Damages
3
Class Penod because the time penods applicable to legal claims for personal nuisance -type
1 4
damages are shorter than time penods for property damages. Allocations of the Personal
15
16 Nuisance Damages Fund will be based on the length of residency, subject to adjustments
17 discussed below that reflect the years of greatest Treatment Plant odors and proximity to the
18 Treatment Plant.
19 The Property Damages Fund will be distributed to class members who submit valid
20
Proof of Claim forms showing that they owned property within the class area between June
21
30, 1990 and October 10, 2003 (the "Property Damages Class Penod ") The formula for
22
23 allocating these funds among the vanous claimants uses the 2003 Yakima County Assessor's
24 Office assessed value of each claimant's property
25
26
• NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 12 of 18
(99- 2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON. THOMAS. HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1151
TACQAA. WASHINGTON 91401.1157
(257) 6204500 FACSIIALE (257) 620.6566
1 The allocation formula for property damages looks at the length of time during the
411
2 Property Damages Class Penod that a claimant owned a specific piece of property in relation
3 to the assessed values and periods of ownership of all other properties of all other claimants.
4
If two or more claimants owned a smgle property dunng the Property Damages Penod, the
5
funds allocable to that property shall be divided between the claimants based on the periods m
6
7
which they each owned the property As discussed below, allocations of the Property
8 Damages Fund, like allocations of the Personal Nuisance Damages Fund, will be adjusted to
9 reflect the time penod during which a claunant owned a particular piece of property and the
10 proximity of that property to the Treatment Plant.
11 j In the case of properties on which homes were constructed during the Property
12
Damages Penod, Yakima County Assessor records will be used to determine assessed value
13
before and after the construction. Claimants who owned such properties will receive a
14
15 distribution based on the value of the unimproved land until the year in which the new home
16 was constructed. From the year in which the Yakima County Assessor's Office's data reflects
17 that the home was completed, distribution from the Property Damages Fund will be calculated
18 on the total assessed value of the property and improvements.
19
C. Treatment Plant Impacts Multiplier.
20
In determining the amounts to be distributed from both the Personal Nuisance and
21
Property Damage Funds for each year, a weighting approach will be used to account for the
22
23 penods when the Treatment Plant caused the greatest relative impacts. Information obtained
24 in preparation for trial and from the work of plaintiffs' real estate, economic and odor experts
25 indicate that the Treatment Plant had the most severe odor impact on the Class Area during
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 13 of 18
(99 -2- 00611 -8)
LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL. MALANGA,
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA WASHINGTON 95401.1157
(253) 9204500 FACSIMILE (20.3) 9209665
i
the penod from June 1995 through October 2000 Therefore, each month dung those years
0
2 I will be given a "time /impact adjustment" value of 3 Each month in the penods June 30, 1990
3 through May 1995 and November 2000 through October 2003 will be given a "time/impact
4
1 adjustment" value of 1 This means, for example, that a person owning property for two years
5
between June 1990 and June 1995 would receive from the Property Damages Fund one -third
6
(1/3) of the amount that a person owning that same property for two years between June 1995
8 and June 2000 would receive.
9 An identical weighting approach will be used for computing allocations of the
10 Personal Nuisance Damages Fund. Each month from June 1995 to October 2000 will be
11 given a "time /impact adjustment" value of 3 Each month in the penod from November 2000
12
through October 2003 will be given a "time impact adjustment" value of 1 Agam, everything
4103
else being equal this means a person who, for example, lived in the class area for two years
14
15 between 1995 and 2000 will receive an award from the Personal Nuisance Damages Fund
16 three times greater than a person who lived there for two years after November 2000
17 The final calculation and precise allocation of the Property Damages Fund and the
18 Personal Nuisance Damages Fund can only be calculated after Proof of Claim forms have
19
been received and venfied. Those final calculations will depend on the total number of valid
20
claimants, the assessed values of their properties, the penods in which they resided m or
21
owned properties in the class area, and the proximity of their vanous properties to the
22
23 Treatment Plant.
24
25
26
0 NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 14 of 18
(99 -2- 00611 -8) LAN OFFICES
[ 1241104 v8.doc] GORDON, THOMAS. HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SURE 7200
POST OFFICE BOX 1157
TACO.4.. WASNINGTON YB101.1157
(203) 620 -1600 FACSIMILE (233) 0204505
i
1 D. Proximity Impact Allocation
0
2 In addition to causing greater impacts during certain years, the Treatment Plant also 1
3 caused relatively greater impacts to those properties and residents in closer proximity to the
4 Treatment Plant. To account for the proximity impact, the proposed Plan of Distribution
5
divides the class area into three geographic Zones. The boundaries of each Zone are based on
6
the results of computenzed modeling of wind patterns done by plaintiffs' experts and on the
7
8
other work of the experts. The Zones are designed to correspond to the varying degrees of
9 odor impacts caused by the Treatment Plant m different parts of the class The portion of
10 the class area closest to the Treatment Plant and subject to the most severe odor impacts is
11 identified as Zone 1 on the attached map Zone 2 includes the northwest corner of the class
12
area and an area from Valley Mall Boulevard north to the boundary of Zone 1 The portion of
13 I
the class area south of Valley Mall Boulevard is identified as Zone 3
14
The computer modeling and expert analysis used to determine the boundanes of the
15
16 Zones are also used to determine the relative adjustments appropnate to each Zone. The
17 expert concluded that a release of odors from the Treatment Plant that was rated as having an
18 intensity of 5 in Zone 1 would have an intensity of 2 in Zone 2 and an intensity of 1 in Zone 3
19 The Proximity Adjustment will maintain this relative ratio between individuals and properties
20
in the three Areas (5/8 in Area 1, 218 in Area 2, and 118 in Area 3) regardless of the rate at
21
which individuals return Proof of Claim Forms from each Area. In summary, and all things
22
23 being equal, if a person in Zone 1 receives $500, a similarly situated person in Zone 2 will
24 receive $200 and a similarly situated person in Zone 3 will receive $100
25
26 j
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 15 of 18
(99 -2- 00611 -8) L A W O � S
I [ 1241104 vS.doc] GORDON,, THOMAS, & NA M LL ALOE``
1201 PACJFIC AVENUE. SUITE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 05401.1157
(253) 620-5500 FACSIMILE (253) 620.565
• E. Money From Union Gap Settlement.
2 Plaintiffs' Counsel will request fees and costs, and whatever amount the Court awards
3 will be computed as a percentage of the aggregate $7.2 mullion m settlement funds. Both
4 funds will then be reduced by the same percentage, to assure that the class members in the
5 north do not carry a disproportionate share of the costs of the litigation. Once the net value of
6 the Union Gap settlement has been determined, the funds will be distributed among claimants
7 ■ living or owning property m Zone 3 The calculations will be identical to the calculations
8 used for distributing the City of Yakima's settlement, except that each claim will be valued as
9 a percentage of the total of Zone 3 claims mstead of as a percentage of the total of claims
10 from all three Zones.
11 ; VI. ADDITIONAL INFORMATION
12 Class Counsel will also hold two meetings for Class Members concerning the
3 I proposed settlement. At those meetings, Class Counsel will answer questions about the
4 I Settlement Agreement and proposed Plan of Distribution and also offer assistance in
15 completing Proof of Claim Forms. The meeting for Class Members are scheduled to
16 i occur as follows:
17 Wednesday, November 5, 2003 at 7:00 p.m.
18 St. Joseph's Bingo Hall
19 Thursday, November 6, 2003 at 7:00 p.m.
St. Joseph's Bingo Hall
20
Spanish translators will be present at the second, (November 6) meeting.
21
Any questions you have concerning the matters contained in this notice (and any
22
corrections or changes of name or address) should NOT be directed to the Court but
23
should be directed to Class Counsel at the following address and/or telephone number:
24
Yakima Treatment Plant Class Action Lawsuit
25 P O Box 1653
Tacoma, WA 98401 -1653
26
110 NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 16 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON, THOMAS, HONEYWELL, MALANGA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE. SUITE 3200
POST OFFICE 60X 1157
TACOMA. WASHINGTON 00401.1157
(253) 6204600 FACSIMILE (253) 6204665
1 1- 877 - 347 -4780
2 ! The pleadings, the Settlement Agreement, and other records m this htigation may be
3 examined and copied at any time during regular office hours at the c - _ice of the Clerk,
4 Supenor Court, Yakima County Supenor Court, 128 North Second Street, Yakima,
5 Washington. You may also obtain these documents from Class Counsel at the address listed
6 above.
7 VII. REMINDER AS TO TIME DEADLINES
8 1 In order to participate m the settlement, you must complete and send a Proof of
9 Claim Form to Class Counsel at the address set forth in Section V, by mail postmarked on or
10 before December 15, 2003
11 If you wish to object to the proposed settlement and/or the proposed Plan of
12 Distribution, you must send an objection to Class Counsel in the manner described in Section
13 III.B above, by mail postmarked on or before November 14, 2003
14 2 If you are a New Class Member, you can exclude yourself from this lawsuit by
15 sending your request for and returning an exclusion form to Class Counsel as described in
16 Section III C above, by mail postmarked on or before November 14, 2003
17 3 The Court will hold a Fairness Heanng in the Courtroom of Judge Susan L.
18 Hahn, Supenor Court of Yakima County, at Yakima County Courthouse, 128 North Second
19 Street, Yakima, Washington at 9 a.m. on November 21, 2003, to determine whether, as
20
21
22
23
24
25
26
NOTICE OF FINAL _ LMNT/PLAN OF DISTRIBUTION - 17 of 18
(99 -2- 00611 -8) LAW OFFICES
[1241104 v8.doc] GORDON. THOMAS. HONEYWELL. MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 90401.1157
(253) 6204500 FACSIMILE (253) 6204565
recommended by both Class Counsel and the class representatives, it should finally approve
2
the proposed settlement and the Plan of Distribution.
3
DATED this day of October, 2003
4
5 SUPERIOR COURT OF THE STATE OF
WASHINGTON FOR YAKIMA COUNTY
6
By
7 Clerk of the Court
8 Yakima County Supenor Court
128 North Second Street
g Yakima, Washington
10
Enclosure Map of Class Area
11 Proof of Claim Form
12
4
15
16
17
18
19
20
21
22
23
24
25
26
NOTICE OF FINAL STLMNT/PLAN OF DISTRIBUTION - 18 of 18
(99 -2- 00611 -8) LAW OFFICES
[ 1241104 v8.doc] GORDON. THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE 005 1157
TACOMA, WASHINGTON 96401.1157
(257) 6206500 FACSIMILE (253) 6204605
■
\\. La •IM MIt
EN., , 1 , :i d
Y� less .
;.t. it:
4.!
' l-!'&1 : rch St
;.1 0
I �
1 nnnnt 1 n
Yakima Class
Area
i-. \I • , momilill
II ki t- toss Lt
McNair Av
P' S to Ave
1 _ r -' Lilac Ln
r -.;. :
4 . .k.
u 1.1 a 4'
- .. '_Fjj: Tn--
/. - -i '' ? :t',
' J
r � - t
•
V ' Mall : d
� _ i
Ik : st \
■E® �
��� AI , n At
Mill t
. wan
. imimis-
\ akiina Class -fen .n.
Zone 1 ' sing•
Zone ' 11 111.. 1
Zone ; 1!!!
0 0 2 0 4 j‘ files S
• i Park A •c
Mundy Associates LLC (9/2003) 1
98-1203 ' + •r . r
Zil .ice
•
fa
2 I 5 '', AVED
3 UC T V Z003
4
5 toi i r LEGAL DEPT.
6
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
8 FOR YAKIMA COUNTY
g WILFRED and KAREN MURPHY, husband and
wife, et al., NO 99 -2- 00611 -8
10
Plaintiffs, PUBLISHED NOTICE OF PROPOSED
11 FINAL SETTLEMENT AND PLAN OF
DISTRIBUTION
12
13 CITY OF YAKIMA, a Washington mumcipal ASSIGNED TO THE HONORABLE
corporation, et al.,
IP
SUSAN L. HAHN
Defendants/'I'hird Party Plaintiffs,
HEARING DATE October 10, 2003
15
16 v
17 CITY OF UNION GAP, a Washington municipal
corporation, et al.,
18
Third P. Defendants.
19
20 THIS NOTICE MAY AFFECT YOUR RIGHTS
PLEASE READ CAREFULLY
21
TO
22
23 ALL PERSONS, INCLUDING MINORS AND BUSINESS ENTITIES, WHO
24 SINCE JUNE 30, 1990 HAVE RESIDED IN AND /OR OWNED RESIDENTIAL
25 PROPERTY IN THE AREA DEPICTED ON THE MAP BELOW ( "CLASS MEMBERS ")
26
• PUBLISHED NOTICE RE SETTLEMENT & DISTRIBUTION - 1 of 3
( 9 1 1 -8 LAW OFFICES
[1241286 9 -2- 00 v7 )
GORDON. THOMAS. HONEYWELL. MALANCA.
PETERSON 8 DAHEIM LLP
1201 PACIFIC AVENUE. SURE 2200
POST OFFICE BOX 1157
TACOMA, WASHINGTON 08401.1157
!7571 8706500 FACSIMILE (253) 020.1616
1 PLEASE NOTE THAT IF YOU ARE A CLASS MEMBER, YOU MAY BE
2 ENTITLED TO SHARE IN THE PROCEEDS OF THE SETTLEMENTS DESCRIBED IN
3
THIS NOTICE.
4
A pnor published notice informed you that the above - captioned lawsuit has been
5
certified as a class action. Plaintiffs allege that odors onginating from the Yakima Regional
6
Wastewater Treatment Plant and adjacent Industrial Sprayfields have injured the named
7
plaintiffs and all other Class Members.
8 I
The Court has given preliminary approval to a settlement with defendant City of
9
Yakima that will end the lawsuit against the City of Yakima and Del Monte Corporation. In
10
addition, a Plan of Distribution for the net proceeds of all settlements has been proposed.
11
A heanng will be held m the courtroom of Judge Susan L. Hahn, Superior Court of
12
Yakima County, at 128 North Second Street, Yakima, Washington, at 9 a.m. on
13
November 21, 2003, to determine whether the proposed settlement should be approved by the
14
Court as fair, reasonable and adequate, and whether the Court should approve the Plan of
15
Distribution. Even if the Court approves the settlement, no distribution of any funds will be
16
made until a later date.
17
To share in the cash benefits of the proposed settlement you must be a class member
18
and you must complete a Proof of Claim Form that can be obtained from Class Counsel, by
19
wnting or calling:
20
Yakima Treatment Plant Class Action Lawsuit
21 Claims Administrator
P 0 Box 1653
22 Tacoma, WA 98401 -1653
23 1 (877) 347 -4780
24 Class Members who owned property or resided in the class area pnor to July, 2001
25 were given an opportunity to exclude themselves from the classes, and may no longer do so
26 They will be bound by the settlement if it is approved by the Court. Those who are class
PUBLISHED NOTICE RE SETTLEMENT & DISTRIBUTION - 2 of 3
(99-2-00611-8) LAW OFFICES
[1241286 v7.doc] GORDON, THOMAS. HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE SLATE 7200
POST OFFICE BOX 1157
TACOMA. WASHINGTON 90401.1157
(253) 620-0500 FACSIMILE (253) 6204666
members solely because they acquired property or moved mto the class area between July
2
2001 and October 10, 2003, may exclude themselves from the lawsuit. Those Class Members
3
may obtain a request for exclusion form by wntten request to Class Counsel at the address
4
above.
5
IF YOU ARE A MEMBER OF THE CLASS DESCRIBED ABOVE, YOUR
6
RIGHTS WILL BE AFFECTED AND YOU MAY BE ENTITLED TO SHARE IN THE
7
SETTLEMENT FUNDS If you believe you are or may be a member of the class and you
8
have not yet received m the mail the full Notice of Proposed Final Settlement and Plan of
9
Distribution, you may obtain copies of these documents by writing to or callmg the Claims
10
Administrator at the address or phone number specified above and identifying yourself as a
11
potential member of the Class.
12
Lawyers for the class will hold two meetings for class members to explain the terms of
,. 13
• the settlement m detail, describe the proposed plan for distributing net settlement proceeds to
4 �
Class Members, assist in completing claim forms and answer any questions. The meetings for
15
Class Members will occur
16
Wednesday, November 5, 2003 at 7 p.m. at St. Joseph's Church bingo hall.
17
and
18
Thursday, November 6, 2003 at 7 p.m. at St. Joseph's Church bingo hall.
19
Spanish translators will be present at the second (November 6) meeting.
20
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE FOR
21
INFORMATION.
22
SUPERIOR COURT OF THE STATE OF
23 WASHINGTON FOR YAKIMA COUNTY
24 Clerk of the Court
Yakima County Supenor Court
25 128 North Second Street
26 Yakima, Washington
PUBLISHED NOTICE RE SETTLEMENT & DISTRIBUTION - 3 of 3
(99 -2- 00611 -8) LAW OFFICES [1241286 v7.doc] GORDON, THOMAS, HONEYWELL MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE, SUITE 2200
POST OFFICE 0OX 1157
TACOSM. WASHINGTON 06401.1157
(253) 5205500 FACSIMILE (253) 5204505
L)•1I1011 I I1 \
L No . I .:1 %(1 1
_
I t•11111111 ► ❑
Yakima Class t , 1 11
Area
L %t Mil
t '7-2
; oss IA
v McNair Av
E Mere- St • ; to Ave
>; : W :ha.; • Lilac Lit
rat a:.:.:
'% ':.z' Y4` i :iceC . c
•
icy j�..�f�T {� '� 't•
4I
V V Ma n : d
‘'\
• tv . � ut St
TONE ' Al n t
, \Ai Illitt
...
Yakima ma Class - sea .0.
Zone 1 1 .II!
Zone 2 ‘ Y1
s
Zone 3 III st
1!!lllll1111I
0 0= 1 Miles ,!SRN S s
. Pa rk A e
Mundy Associates LLC (9!2003)
98 -1203 1 : ... g . "111:�
vilE v
23 1:: \ A
•
2
4
Our '' c
5 20O;j
6 CITY LEGAL DEp
7 SUPERIOR COURT OF THE STATE OF WASHINGTON
8 FOR YAKIMA COUNTY
9 WILFRED and KAREN MURPHY, husband
and wife, et al., NO 99 -2- 0061108
10
Plaintiffs, CERTIFICATE OF SERVICE
11
ASSIGNED TO THE HONORABLE
12 CITY OF YAKIMA, a Washington municipal SUSAN L. HAHN
13 corporation, et al.,
4 Defendants.
15 I certify that on the _ day of October, 2003, true and correct copies of:
16
1 Plaintiffs' Motion for Preliminary Approval of Settlement and Plan of
17 Distribution and for Approval of Class Notice;
18 2 Memorandum in Support of Plaintiffs' Motion for Preliminary Approval of
Settlement;
19
3 Declaration of John C. Guadnola in Support of Motion for Preliminary
20 Approval,
21 4 Published Notice of Proposed Final Settlement and Plan of Distribution,
22
5 Notice of Proposed Final Settlement and Plan of Distribution
23
6 Note for Motion Calendar and
24
7 Certificate of Service
25
26
CERTIFICATE OF SERVICE - 1 of 2
• [1212814 v2.doc
LAW OFFICES
GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACIFIC AVENUE SURE 7300
POST OFFICE SOX 1157
TACOMA, WASHINGTON 00401.1157
(2571 020.8500 FACSIMILE (2531620•!665
1 were delivered via facsimile by ABC Legal Messengers to counsel for the defendants as
2 follows.
3 Thomas H. Wolfendale Stephen J Tan
4 Preston Gates & Ellis Brown Reavis & Manning
701 Fifth Avenue Suite 5000 1201 Third Avenue Suite 320
5 Seattle, WA 98104 -7078 Seattle WA 98101
6 i Timothy Leyh
7 Danielson Hamgan & Tollefson
999 Third Avenue Suite 4400
8 Seattle WA 98104
g and sent delivered by Federal Express to
1 0 Ray Paolella
Yakima City Attorney
11 200 South 3 Street
12
Yakima, WA 98901
13 Philip A. Lamb
City Attorney
14 102 West Ahtanum
Union Gap WA 98903
15 Fax No 509 -576 -8918
16
17 I declare under penalty and penury under the laws of the State of Washington that the
18 foregoing is true and correct.
19
20 Gina A. Mitchell
21
22
23
24
25
26
CERTIFICATE OF SERVICE - 2 of 2
[1212814 v2.doc]
LAW OFFICES
GORDON, THOMAS, HONEYWELL, MALANCA.
PETERSON & DAHEIM LLP
1201 PACWFIC AVENUE. SURE 3200
PO5T OFFICE BOX 1157
TACOMA, WASHINGTON 06401.1157
(233)02045W FACSIMLE (253) 620.0665
I �
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
III AGENDA STATEMENT /1/4 Item No
For Meeting Of i0/07/2003
ITEM TITLE. Legislation to implement the Settlement Agreement for the Wastewater Odor
Litigation and to Provide Funding for Capital Improvements to the
Wastewater System.
SUBMITTED BY Dick Za is, ' Man Ray Paolella, City Attorney;
Rita Ans it i ance Director; Doug Mayo, Wastewater Utility Manager;
Cindy Epperson, Financial Services Manager; and Tim r ,easury
Services Officer
CONTACT PERSON/TELEPHONE. Ray Paolella, City Attorney; #575 -6030
Doug Mayo, Wastewater Utility Manager; #575 - 60772.1
Tim Jensen, Treas ices Officer; #575 -6070
SUMMARY EXPLANATION
Attached to this agenda statement are the following items of legislation to implement the
ttlement Agreement for the wastewater odor litigation and to provide funding for capital
provements to the wastewater system.
A. Resolution authorizing the execution of the Settlement Agreement
B Ordinance amending wastewater rates
C. Bond Ordinance, and
D Budget Appropriation Ordinance
Continued
Resolution X Ordinance XXX Other (Specify)
Contract Mail to (name and address) Phone
Funding Source All Wa ter Utility Customers
APPROVED FOR SUBMITTAL. `-S j ,
City Manager
STAFF RECOMMENDATION
(A)Adopt Resolution authorizing Settlement Agreement;
(B) Pass Ordinance authorizing Wastewater Rate Increase,
(C) Pass Ordinance authorizing Bond Sale, and
(D) Appropriation Ordinance. Read Ordinance by title only at the October 7, 2003 meeting and
Pass Ordinance at the October 21, 2003 meeting
) ARD /COMMISSION RECOMMENDATION
UNCIL ACTION (A) Resolution adopted. RESOLUTION NO. R - 2003 - 130
(B) Ordmance passed. ORDINANCE NO. 2003 -63
(C) Ordinance passed ORDINANCE NO. 2003 -64
(D) First readmg of ordinance, second reading scheduled for 10 -21 -2003
Hard Disk :10- 04- 03AgendaStmt- Wastewat.doc
Last printed 10/02/03
Page 2 of 5
Overview
The enclosed package of legislation will implement the settlement and release of all outstandi
claims by the 3,700 member class against the City arising from the perceived odors from th
City's wastewater treatment plant. The settlement must be presented to Yakima County Superior
Court Judge Susan Hahn, and must ultimately be approved by the Court to take ettect.
Staff proposes to issue water /wastewater utility revenue bonds, the proceeds from which will be
used to provide the funding for the odor litigation settlement costs and certain wastewater utility
capital projects. The enclosed ordinance amending wastewater utility rates will provide the
necessary funding, in conjunction with existing operating revenues, to pay the debt service on
these bonds.
In order to process the litigation settlement payment, receive the proceeds from the bonds, if
these actions are authorized by Council, and record the proceeds in the appropriate funds and
accounts, the 2003 budget must be amended. The budget appropriation necessary to account for
the bond proceeds and uses contemplated to occur prior to year -end is enclosed.
A. Litigation Settlement: Copies of the September 16, 2003 Press Release regarding the
Wastewater Odor Litigation Settlement Agreement and the actual Settlement Agreement are
enclosed for your information and review The Resolution authorizing the Settlement
Agreement is enclosed for your consideration and action at the October 7, 2003 Coun
meeting Also enclosed, as an Appendix, you will find other documents related to th
settlement, which were filed by the plaintiffs with the court.
B Wastewater Utility Rate Increase: The need for the wastewater rate increase is two -fold.
1) In September 2003, the City of Yakima and the Plaintiffs in the action styled Murphy, et al.
v City of Yakima, et al. reached a Settlement Agreement. This Settlement Agreement calls
for the payment from the City to the Plaintiffs of $7,000,000
2) In March 2002, Council adopted the 2000 Wastewater Facilities Plan, which identified the
need for over $20 million of system investment during the next few years (2000 -2006)
This investment was scheduled to be financed with a combination of cash and new debt.
To assist financing this cash and increased debt service, Council also enacted, by ordinance
2002 -10, the 2001 Wastewater Cost of Service recommendations. Unfortunately, litigation
expenses prior to settlement expended all new revenue and reserves continue to be
depleted to unacceptable levels The capital needs of the system to serve the community
regarding mandates, safety, replacement, or added capacity were all put on hold, as no
funding was available
Hard Disk: 10- 04- 03AgendaStmt- Wastewat.doc
Page 3 of 5
te
• Staff has prepared and herein presents an additional adjusted rate schedule to retail
customers This adjusted rate schedule increases rates to Owner (inside city) customers
approximately 5% for litigation settlement and 3% for capital improvements for a total of 8%
Based upon the City's rate policies of utilizing a Utility Rate basis to calculate rates for Non -
owner customers, rates to Non -owner (outside city) customers were increased the same
monetary amount.
This proposal is estimated to increase revenues to the Wastewater Division annually by
approximately $920,500 This proposed rate increase addresses litigation settlement expenses
and previously anticipated construction, or rehabilitation costs The Ordinance amending the
Wastewater Utility Rates is enclosed for your consideration and action at the October 7, 2003
Council meeting
Rate Adjustment Summary:
Owner (inside City) Retail Customers.
• Ready -to -Serve Charge increased 8 %, ($0 96) per month for a 3/4" water meter
• Volume Charge increased 8 %, ($0 17) per Unit of Consumption (100 cubic feet)
III Biochemical Oxygen Demand (BOD) increased 8%, ($0 022) per pound.
• Suspended Solids (SS) increased 8%, ($0 018) per pound.
• Rates for Pretreatment were also increased 8%
• Monthly increase to average household from 5% Litigation Settlement increase -
$1 66
• Monthly increase to average household from 3% Capital Project increase - $1 00
Non -owner (outside City) Retail Customers.
• Ready -to -Serve Charge increased $0 96 (5 1%) per month for a 3/4" water meter
• Volume Charge increased $0 17 (5 1 %) per Unit of Consumption (100 cubic feet)
• Biochemical Oxygen Demand (BOD) increased $0 022 (43%) per pound
• Suspended Solids (SS) increased $0 018 (3 6 %) per pound
• Rates for Septage, Exceptional Waste, and Diverted Flow were also increased
approximately 4%
Sunset Provision. The enclosed ordinance establishes that the dollar amount of the pro -
rata share of the annual debt obligation related to the settlement agreement be removed
from wastewater rates at the end of the 20 year bond payback period, ie: the portion of the
O debt service payments tied to the litigation will sunset upon maturity of these bonds.
Hard Disk: 10- 04- 03AgendaStmt- Wastewat.doc
Page 4 of 5
C. Bond Sale Proposal. •
At this time, staff proposes the issuance of a 20 -year water /wastewater utility revenue bond
in an amount not to exceed $17 7 million. These revenues would be used as follows: (a) $7
million Settlement Payment; (b) up to $8 7 million Capital Projects, and (c) approximately
$2,000,000 for bond reserve, insurance, and bond issuance costs (Total interest cost is
currently estimated at 51 % )
(Note: the actual amounts of (b) and (c) above are estimates and are dependent on the bond
market and other factors, thus the exact amount proceeds available for capital projects and
the bond issuance costs will not be known until the bond sale date. Until the actual date of
the sale, bond pricing and related costs can only be estimated, therefore, staff has requested
bond authorization for approximately $700,000 more than the existing estimates to allow for
market fluctuations between now and date of sale; thus, these numbers may be slightly
different than those previously discussed with Council. Any additional bond proceeds
received would be used for capital improvements.)
The annual debt obligation from this bond sale is anticipated to be approximately $1,900,000;
consisting of $1,350,000 in annual debt payment and $540,000 in annual debt coverage. (The
total par amount of bonds issued will be constrained by this debt service amount.) A copy of
the estimated debt service payment schedule is enclosed. The City intends to meet this debt
service obligation with a combination of a new 5% across the board general rate increase f
Litigation, a new 3% across the board general rate increase for Capital improvements, the 5
rate increase enacted in 1999, the 5% rate increase enacted in May of 2003, and revenue from
other prior rate adjustments (Note: Per 7 64.020 B 1 YMC, the City Utility Tax shall not be applied
against that portion of the total gross revenue of the wastewater operating fund which is collected as
debt coverage for the wastewater debt.)
Pursuant to Council authorization of the issuance of these bonds, the Next Steps in carrying
out this directive include:
1 Preparation of the Prelirrunary Official Statement (POS) and distribution to potential
investors
2. Hold Rating Agency Interview
3 Attain Utility Consultant Certification as to revenue available for coverage
4. Pricing and Sale of Bonds, Purchase of Insurance, etc.
5 Preparation of the final Official Statement (OS)
6 Ratification by Council of the Bond Purchase Offer and the Final Official Statement
7 Distribution of all required Disclosures upon Settlement of the Bond Sale and Receipt
of Proceeds
•
Hard Disk: 10- 04- 03Agendas!mt- Wastewat.doc
Page 5 of 5
Budget Appropriation (Amendment).
The City's 2003 budget needs to be amended m order to implement the settlement agreement
and the bond ordinance, if authorized by Council. Since staff anticipates selling bonds in
2003, a budget appropriation is attached which will account for the bond proceeds and uses
contemplated before the end of the year (Note. The Wastewater Utility 2003 operating
budget is not affected by these transactions, as any revenue from the requested rate
adjustment will not be collected /spent until 2004.)
Note: as you read this section and compare the numbers presented herein to the bond ordinance information
presented above, keep in mind that the revenue estimates made in this appropriation are based on conservative
market conditions. Since the estimates in the bond ordinance (above) are written to allow for market
fluctuations and to provide the City with the opportunity to take advantage of any improvements in the interest
rates, the numbers in the bond ordinance (noted above) will be higher than that included in this budget
appropriation. However, any change in bond proceeds will not affect the 2003 expenditure estimates presented
in this appropriation.
Of the total estimated bond proceeds (note: the actual amount of bond proceeds will not be known
until bond sale date), $15 million is anticipated to be deposited m the Wastewater Facility
capital fund (478), Anticipated expenditures m this fund total $8,704,178 and include:
Odor litigation settlement costs ($7 million)
Interfund loan a ment for costs related to s ra field modification Y p y dlflcahon ($1,514,178)
Bond issuance /Other Project start -up costs ($190,000)
The Bond Ordinance also requires the establishment of 2 new funds to account for debt
service A portion of the bond proceeds (estimated to be $1,692,000) will need to be deposited
in a revenue bond reserve fund (new fund 494) This transaction is also included in the
attached ordinance. Note. Since there will not be a debt service payment in 2003, an
appropriation will not be needed m the new debt service fund numbered 493 This fund will
be included in the 2004 budget.
Enclosed.
• List of Proposed Capital Improvements to Wastewater Plant
• Settlement Agreement Press Release
• Section A Settlement Agreement Legislation and related information
• Section B Wastewater Rate Increase Legislation
• Section C. Bond Ordinance Legislation and Debt Service Schedule
• Section D. Budget Appropriation Legislation
• Appendix Plaintiffs Documents filed with the Court
•
Hard Disk. 10- 04- 03AgendaStmt- Wastewat.doc
City of Yakima
Wastewater Treatment Plant Capital Improvements
In the City of Yakima's approved Wastewater Facilities Plan the Wastewater Division has identified
several pnonties that need to be unplemented at the Wastewater Treatment Plant to comply with new and
existing environmental rules and regulations. Comphance is required to meet the Washington Department
of Ecology (WDOE) criteria to provide adequate capacity and backup operations to major processes of the
plant as identified in the City's NPDES Permit and associated rules and regulations. The following areas
have been identified and prioritized as the Yakima Wastewater Treatment Plants most important operations
to be implemented.
Solids dewatenng — only one of two centrifuges is functional any longer for dewatenng
Biosolids and it requires extensive maintenance to continue operating. A new
centrifuge or altemate source of dewatering the biosolids is required to maintain
compliance when the older centrifuge is out of service.
Solids thickening - the waste activated sludge (WAS) thickening process reduces the
volume of solids sent to the dewatering processes. There is
currently only one dissolved air flotation thickener (DAFT) to
thicken secondary sludge. A second thickening unit is needed to meet Ecology
criteria.
Secondary clanfication — the secondary clarifiers are the final sedimentation process prior
to discharge to the Yakima River Reliability standards for WDOE
require that 75% of the design flow for this final process should be
handled with one unit off line. Based on this the two existing
secondary clanfiers are at or near hydraulic capacity and an additional
secondary clarifier is required to meet Ecology critena.
New RAS/WAS Pump Station — the RAS/WAS pump station is used to transport Return
Activated Sludge (RAS) from the secondary clarifiers back to the
aeration basin flow control system through two constant speed open
screw pumps. Waste activated sludge is pumped from the two
existing secondary clarifiers through two pumping systems. With the
addition of a new secondary clarifier or future new aeration basins a
new RAS/WAS pumping station would be required. With a new
RAS/WAS pumping station current problems with the control of the
RAS pumping flow split would be resolved as well as having sufficient
capacity to handle peak hour flow conditions.
Emergency Power — the emergency power system supplies a second source of power to assure minimum
treatment is provided under utility power failures. The existing generator set was
installed in 1972 and at a minimum requires a complete inspection/overhaul. Another
generator set is required to operate the minimum treatment processes at present.
Replacement of Blower VFDs — the VFDs that operate the four 400 horsepower blowers are far less
efficient and generate more harmonic distortion on the electrical power system than
newer technology They are at the end of their useful life and are hard to find parts for
All four need to be replaced.
If additional funds are available after completing the prioritized projects above, there are several other
improvements and upgrades identified in the approved facilities plan that need to be completed. These
projects are required to comply with current and future regulatory requirements and mandates also. The
costs for the mandated improvements to the wastewater treatment plant and collection system identified in
the approved facilities plan have been estimated at over 20 million dollars.
•
OFFICE OF THE CITY MANAGER
1 lc • ' 3 129 North Second Street • G� E CITY HALL, Yakima, Washington 98901
�
: : Phone (509) 575 -6040
, V,ATEV
PRESS RELEASE
Dick Zais September 16 2003
City Manager
SUBJECT Tentative Wastewater Odor Litigation Settlement Agreement
A tentative settlement agreement has been reached subject to final Yakima City Council and
Court approval, that will conclude the five -year long 3,700- member class action lawsuit alleging
significant damages against the City of Yakima's Wastewater Treatment Plant for perceived
odors and diminished property values
In 1998, approximately 220 residents of the Cities of Union Gap and Yakima filed administrative
claims with the City of Yakima for S75 000 damages each totaling S16 5 Million The 220
residents subsequently filed a lawsuit in Yakima County Superior Court. which was eventually
expanded into a complex, class action case involving approximately 3,700 former and current
residential property owners seeking $39 million in damages
ii•
The settlement will conclude all outstanding claims by the 3,700- member class against the City
arising from the perceived odors from the City's Wastewater Treatment Plant, which were
alleged to have been a nuisance and responsible for reducing property values The class
consists of former and current residential property owners
The settlement achieves a release of all claims against the City of any kind arising from the
perceived odors, the alleged diminished property values, and the alleged claims of negligence in
the operation of the wastewater treatment plant. The release is provided from former and
present residential property owners and, in addition, bars subsequent claims for property
damages resulting from odors at the plant. The plaintiffs also agree that the settlement and
release language will be recorded against the property
The class action lawsuit will be dismissed in exchange for the City paying the class members $7
million and agreeing to the entry of a judgment with the Court for $13 million The settlement
provides that the $6 million difference between the City s payment and the judgment will not be
collected from the City, but instead the Plaintiffs may seek to recover the difference from the
City's insurance carriers Also the settlement leaves open the potential that the City may also
recover from the insurance carriers some, if not all, of its defense costs and possibly some of
the $7 million that it will pay to the Plaintiffs
The settlement provides that the City may continue to operate the Wastewater Treatment
Facility within normal, operational conditions that have been in existence since October 2000,
when the City terminated the use of the sprayfield and Del Monte s fruit processing waste was
transferred to the Plant for treatment.
III
Yakima
w.m.iooa
(over) 1 1II'r
1994
Press Release
City of Yakima
September 16, 2003
Page - 2
The City s $7 million settlement will be paid for through a revenue bond A utility rate increase
of 5% will be enacted to help pay a portion of the debt service expense of the bond together
with using existing resources from previous rate adjustments enacted for litigation costs
The City will also issue another $8 million in revenue bonds to begin making essential capital
improvements to the Wastewater Treatment Facility, which have been deferred for the past five
years as a result of the ongoing litigation and its costs, which have depleted the City's
wastewater utility reserves
At the end of the twenty -year revenue bond, the increase in utility rate revenues needed for the
litigation settlement will end
Over the past fifteen years, the City of Yakima has spent over $17 million in capital
improvements to control and limit odor emissions from the Plant, and additional odor control
projects are planned in the future for the Plant.
The City has operated the Plant within the terms and conditions of its Wastewater Discharge
Permit from the Department of Ecology, and has always been committed to serving the regional
sewer needs of the community in an environmentally responsible, cost effective and efficient
manner
For the past five years however, the City has been forced to vigorously defend itself against the
extraordinary damage claims asserted by the Plaintiffs in this case The City has, at this time,
decided, as a business decision, to settle this case through mediation
The City prepared a strong defense of this case However, given the operational history of the
Plant, the case law on nuisance claims and rulings of the trial court, we have reached a
settlement to avoid expensive, ongoing litigation costs, to limit our exposure and the risk of
incurring unknown and potentially significant damages, through an adverse jury verdict.
The settlement enables the City to obtain certainty in this matter, sets a finite limit on its financial
exposure in this class action case, and secures a protective release from future claims The
City also preserved the right to pursue a potential recovery of insurance coverage for a portion
of its costs to date and the settlement amount.
This tentative settlement and final enabling legislation for the bond sale and sewer rate
adjustment will still require formal open, public action by the City Council to approve and ratify
the terms and conditions of the settlement. This legislation will be presented at the Council
meeting on Octobe 7, 2003
The settlement must be presented to Yakima County Superior Court Judge Susan Hahn, who
has presided over the case If approved by Judge Hahn, written notices concerning the final
settlement will be mailed to area residents
•