HomeMy WebLinkAboutR-2004-132 Yakima Valley Canal Company ContractRESOLUTION NO. R-2004%132
A RESOLUTION authorizing and directing the City Manager of the City of Yakima to execute
a "Long -Term Water Supply Contract" between the City and the Yakima
Valley Canal Company.
WHEREAS, the City is a shareholder of long standing in the Yakima Valley Canal
Company ("Company"); and
WHEREAS, as a shareholder, the City receives water from and pays assessments to the
Company in proportion to the City's shareholdings; and
WHEREAS, the City delivers that water to lands within the City and to customers of the
City's Irrigation Utility; and
WHEREAS, the City's continued delivery of Company water to those lands and
irrigation customers is consistent with the City's obligations to its customers; and
WHEREAS, the City believes that it is authorized to own shares in the Company, but
recognizes that the City's share ownership might be subject to challenge; and
WHEREAS, regardless of any challenge to the City's share ownership, the Company's
continued supply of water to the City and the City's continued delivery of that water to the City's
irrigation customers is in the best interests of the City and the City's customers; and
WHEREAS, the Long -Term Water Supply Contract between the City and the Company
effectively continues the existing relationship between the City and the Company, under which
the City has received water from, and paid assessments to the Company for decades; and
WHEREAS, the additional stability in water supply provided by the Long -Term Water
Supply Contract is in support of the City's anticipated issuance of Irrigation System Revenue
Bonds for rehabilitation of the City irrigation system; and
WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to
authorize and direct execution of the attached Long -Term Water Supply Contract between the
City and the Yakima Valley Canal Company, 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 and incorporated "Long -Term Water Supply Contract" between the City and the
Yakima Valley Canal Company.
ADOP IED BY THE CITY COUNCIL this 17th day of August, 2004.
ATTEST: ` ' Paul P. George, Mayor
City Clerk
LONG-TERM WATER SUPPLY CONTRACT
BETWEEN
THE CITY OF YAKIMA, WASHINGTON
AND
YAKIMA VALLEY CANAL COMPANY
THIS AGREEMENT is entered into between the City of Yakima ("City"), a
municipal corporation of the State of Washington, and Yakima Valley
Canal Company ("Irrigation Company"), a Washington Non -Profit
Miscellaneous and Mutual Corporation, to ensure the continued supply
of water from the Irrigation Company to the City.
RECITALS
WHEREAS, the Irrigation Company holds certain water rights, confirmed
in the Yakima River General Adjudication and subject to the conditions
set forth in Conditional Final Order on Claim No. 1510 dated December
12, 1996;
WHEREAS, the Irrigation Company operates as a nonprofit corporation
under Chapter 24.06 RCW;
WHEREAS, the City is a shareholder in the Irrigation Company of long
standing;
WHEREAS, the City, as of the date of execution of this agreement, holds
1,009.82 shares [mdwl]in the Irrigation Company out of 4,150.28 total
shares issued and assessed;
WHEREAS, the City receives water from and pays assessments to the
Irrigation Company in proportion to the City's shareholdings;
WHEREAS, the assessments for all shareholders, including the City, are
set by the Irrigation Company's Board of Trustees;
WHEREAS, the City delivers that water to lands and irrigation customers
within the Irrigation Company's designated place of use;
WHEREAS, the City's continued delivery of Irrigation Company water to
those lands and irrigation customers is consistent with the Irrigation
Company's purposes and with the City's obligations to its customers;
WHEREAS, the City's continued payment of assessments is important to
the continued operation and financial stability of the Irrigation Company;
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Yakima Valley Canal Company - 1
WHEREAS, the City and the Irrigation Company (collectively, the
"Parties") believe that the City is authorized to own shares in the
Irrigation Company but the Parties recognize that the City's ownership of
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WHEREAS, regardless of any challenge to the City's ownership of shares
in the Irrigation Company, the continued delivery of water to the City, the
City's payment of assessments, and the City's delivery of water to its
customers are in the best interests of the Irrigation Company, the
Irrigation Company's customers, the City and landowners.
NOW, THEREFORE, in consideration of the mutual covenants herein, the
Parties agree as follows:
I. DEFINITIONS
For the purposes of this Agreement, the following terms have been
defined as:
"Assessment" - The amount of money due to the Irrigation Company
from the City for delivery of the City's Percentage of Available Water.
Assessments are determined by the Board of Trustees of the Irrigation
Company and are proportional to the number of shares in the Irrigation
Company held by the City at the time of the determination. If the City's
status as a shareholder in the Irrigation Company is invalidated,
Assessments shall be proportional to the number of shares the City held
in the irrigation Company immediately prior to the invalidation.
"Available Water" - The total quantity of the Irrigation Company's
confirmed water rights that are available in any given year.
"City's Percentage" - The percentage of the Irrigation Company's
Available Water deliverable to the City. The City's Percentage is
determined by dividing the number of shares the City holds at the time of
the determination by the total number of issued and assessed shares of
the irrigation Company. If the City's status as a shareholder is
invalidated, the City's Percentage shall be calculated by dividing the
number of shares the City held immediately prior to the invalidation by
the total number of issued and assessed shares of the Irrigation
Company.
"Place of Delivery" - The City turn outs and facilities where the City takes
delivery of water from the Irrigation Company's canal.
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Yakima Valley Canal Company - 2
"Place of Use" - The place of use confirmed in the Yakima River General
Adjudication for the water right(s) under which the Irrigation Company
delivers water to the City.
"Yakima River General Adjudication" - The legal proceeding captioned
The State of Washington, Department of Ecology v. Acquavella, et al., in
the Superior Court for Yakima County, Washington, Case No. 77-2-
01484-5.
II. TERMS OF AGREEMENT
II.A. Duration of Agreement
1. Term of Agreement. This Agreement shall become effective as of
the date of its complete execution by both Parties. The Agreement
shall remain in effect for fifty (50) years from the date it becomes
effective unless it is terminated earlier pursuant to Section IV.2
below.
2. Automatic Renewal. At the end of the term of this Agreement, it
shall automatically be renewed for successive fifty (50) year terms
unless either Party provides five years' advance written notice to
the other Party of its intention to cancel the Agreement.
II.B. Irrigation Company Obligations
1. Supply of Water to Yakima. The Irrigation Company shall deliver
water, up to an amount equal to the City's Percentage of Available
Water, to the City at the Place of Delivery.
II.C. City Obligations
1. Payment. The City shall pay Assessments to the Irrigation
Company at the same time and in the same manner as all other
shareholders in the Irrigation Company.
2. Compliance with State Water Law. The City shall deliver water
from the Irrigation Company to lands and customers within the
Place of Use.
III. DEFAULT
III.A. Conditions Resulting in Default
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Yakima Valley Canal Company - 3
1. Irrigation Company Default. In the event that the Irrigation
Company fails to deliver the City's Percentage of Available Water as
required in this Agreement, the Irrigation Company shall be in
default, and the City shall not, be obligated to pay any outstanding
portion of its Assessments.
2. City Default. The City's failure to pay Assessments when due shall
constitute an event of default and the irrigation Company shall
have no further obligation to deliver water to the City until the City
has paid all past -due Assessments.
3. Insolvency. In the event that the Irrigation Company becomes
insolvent, it shall be considered in default.
III.B. Default Procedures
In the event a default condition, as defined in Section III.A above,
exists, the non -defaulting Party shall issue written notice to the
other Party setting forth the nature of the default. if the default is
other
for monetary payments due under this Agreement, the defaulting
Party shall have thirty (30) days to cure the condition of default. If
the default arises out of other conditions, the defaulting Party shall
use its best efforts to cure the default within thirty (30) days. If the
default condition cannot be reasonably cured within such thirty
(30) day period, the defaulting Party may submit a written request
to the non -defaulting party prior to the expiration of the thirty (30)
day period for an additional thirty (30) days to cure the default
condition, the approval of which should not be unreasonably
withheld.
IV. REMEDIES
1. Specific Performance. In the event that either Party fails to act in
accordance with its obligations, the aggrieved Party may seek
specific performance.
2. Termination. In the event that either Party remains in default after
notice and an opportunity to cure as set forth above, either Party
may terminate this Agreement upon 30 days' notice to the other
Party.
V. INDEMNITY
Each Party shall indemnify, defend against and hold harmless the
other Party from any and all claims for liability to the extent arising
Long-term Water Supply Contract
Yakima Valley Canal Company - 4
from the first Party's failure to meet its obligations under this
Agreement.
VI. TERMINATION
This Agreement shall remain in effect for the duration of its term.
The Agreement may be terminated only with the approval of a
majority of both the Board of Trustees of the Irrigation Company
and the City of Yakima City Council, or upon default as set forth in
Section IV.2 above.
VII. JURISDICTION AND VENUE
In the event of litigation between the Parties relating to the terms of
this Agreement, venue and jurisdiction shall lie with the Yakima
County Superior Court in the State of Washington.
VIII. ASSIGNMENT
This Agreement shall inure to the benefit of and be binding upon
the Parties and their successors and assigns. No Party shall
assign its rights or obligations under this Agreement without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld.
IX. SURVIVAL
This Agreement and the terms and obligations herein shall survive
in the event that, for any reason, the City's ownership of shares in
the Irrigation Company is challenged or invalidated.
X. MISCELLANEOUS
X.A. Representations and Warranties
1. The Irrigation Company represents and warrants that it has the
legal authority to divert and deliver to the City the quantity of
Available Water required under this Agreement and that it has the
authority to enter into this Agreement.
2. The City represents and warrants that it has the legal authority to
deliver water to its customers in the Irrigation Company's Place of
Use and that it has the authority to enter into this Agreement.
X.B. Non -waiver
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Yakima Valley Canal Company - 5
No delay or failure by a Party to exercise any of its rights, powers
or remedies under this Agreement following any default by another
Pa ty shall be construed to be a waiver of any such default, or any
acquiescence therein, or of or in any similar default thereafter
occurring.
X.C. No Third Party Beneficiary; No Joint Venture
This is not an agreement of joint -venture or partnership, and no
provision of this Agreement shall be construed so as to make the
Irrigation Company a partner or joint venturer with the City.
Neither party is an agent of the other. Neither the Irrigation
Company nor the City shall be liable for the acts of the other in
any representative capacity whatsoever. Parties not party to this
agreement shall not be construed as beneficiaries of this
agreement.
Z.D. Entire Agreement
This Agreement, together with the Articles of Incorporation and
Bylaws of the Irrigation Company (collectively "Charter
Documents"), represents the entire agreement between the Parties
hereto concerning the subject matter hereof. To the extent of any
inconsistency between this Agreement and the Charter
Documents, this Agreement shall control.
X.E. Amendment
The Parties to this Agreement may amend this Agreement only in a
written document, signed by authorized representatives of the
parties, that has been approved by a majority of both the Board of
Trustees of the irrigation Company and the City of Yakima City
Council.
X.F. Force Majeure
The time periods for each party's performance under any
provisions of this Agreement shall be extended for a reasonable
period of time during which either party's performance is
prevented, in good faith, due to fire, flood, earthquake, lockouts,
strikes, embargoes, acts of God, war and civil disobedience. If this
provision is invoked, the invoking party agrees to immediately take
all reasonable steps to alleviate, cure, minimize or avoid the cause
of preventing such performance, at its sole expense.
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Yakima valley Canal Company - 6
X.G. Notifications
Whenever written notification is required by this Agreement, that
notice shall be given to the following representatives by actual
delivery or by the United States Mail (registered or certified with
return receipt requested) addressed to the respective party at the
following addresses or to a different address if designated in
writing by the parties:
City of Yakima:
Water/Irrigation Manager
Water/Irrigation Division
2301 Fruitvale Blvd.
Yakima, WA 98902
With a copy to:
City Attorney
200 South 3rd Street
Yakima, WA 98901-2830
Yakima Valley Canal Company
Mr. Gene R. Woodin, President
P.O. Box 2725
Yakima, WA 98907
The date of giving notice shall be the postmarked date of the
mailing.
(The remainder of this page has been intentionally left blank.)
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Yakima Valley Canal Company - 7
IN WITNESS WHEREOF, the Parties hereby execute this Agreement.
YAKIMA VALLE
BY:
TITLE:
ANAL CO PANY
Patd.cseett-,--1
DATE: F -/;2 -Cy
THE CITY OF
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BY: Richard A. Zais Jr.
TITLE: City Manager
DATE: f -/t-2 S!
AUTHORIZED BY RESOLUTION 2004-R-
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Long-term Water Supply Contract
Yakima Valley Canal Company - 8
CITY CONTRAC f NO' p�9219
RESOLUTION NO: /5 G7oQfi2
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.' 13
For Meeting of 8/17/2004
ITEM TITLE: Consideration of four resolutions authorizing and directing the City
Manager of the City of Yakima to execute Long -Term Water Supply
Contracts between the City and: the Naches and Cowiche Canal Company;
New Schanno Ditch Company; Old Union Irrigation Company; and
Yakima Valley Canal Company.
SUBMITTED BY: Dave Brown, Water/Irrigation Manager, 575-6204
Matthew Wells, Attorney (Preston Gates & Ellis LLP), (206) 370-7651
CONTACT PERSON/TELEPHONE: Dave Brown, Water/Irrigation Manager, 575-6204
SUMMARY EXPLANATION: This resolution authorizes and directs the City Manager of the City of
Yakima to execute Long -Term Water Supply Contracts between the City and the four private irrigation
companies that supply water to the City's Irrigation Utility. The Contracts provide for the continued
supply of water to the City in the unlikely event that the City's ownership of shares in the irrigation
companies were successfully challenged. The Contracts effectively continue the existing relationships
between the City and the irrigation companies, under which the City has received water from, and paid
annual assessments to the irrigation companies for over 50 years. Execution of the Contracts is in support
of the City's anticipated issuance of Irrigation System Revenue Bonds for rehabilitation of the City's
Irrigation System. Attached are the four contracts as executed by the irrigation companies.
Resolution X Ordinance Other (Specify)
Contract X Mail to (name and address): Naches Cowiche contract to James Davis, Talbott.,
Simpson, Gibson & Davis PS, 308 North 2nd Street, Yakima, WA 98901 (509.575.7501); New
Schanno and Old Union contracts to Joe Falk, Jr., Finney, Falk, Lawrence-Berrey & Naught
PLLP, 117 North 3rd Street, Yakima, WA 98901 (509.575.5604); and Yakima Valley contract to
Paul Dempsey, Halverson & Applegate, 311 North 4th Street, Yakima, WA 98901 (509.575.6611)
Funding Source: 479 Irrigation CIP
APPROVED FOR SUBMITTAL: Q—, J City Manager
STAFF RECOMMENDATION: Adopt Resolution.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolutions adopted
R-2004-129 -130, -131, -132