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HomeMy WebLinkAbout08/18/2015 11 Drainage Improvement Districts Transfer from Yakima County'1111111 1, nun 11,1:1141r10 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 11. For Meeting of: August 18, 2015 ITEM TITLE: Council consideration of Yakima County request that the City accept transfer of seven Local Improvement District Drainage Improvement Districts located entirely within the City limits. SUBMITTED BY: Jeff Cutter, City Attorney SUMMARY EXPLANATION: Yakima County has requested that the City consider accepting the transfer of seven Drainage Improvement Districts located entirely within the Yakima City limits under the terms and conditions stated in the proposed Interlocal Agreement included in the Agenda item. The City Partnership Committee has met with County representatives to discuss this proposed transfer, as well as to discuss the County's alternative plan to dissolve the DIDs in the event the City did not agree to accept the transfer in accordance with the Interlocal Agreement. The recent efforts to discuss the possible transfer, the legal issues raised regarding a transfer or dissolution of the DIDs and other related issues is discussed in the Memorandum attached to this Agenda Item. At this point the City Council must reach a decision regarding the County's request that the City receive the DIDs through an agreed transfer or decline the transfer and await the County's dissolution of the DIDs by their unilateral action. Resolution: Ordinance: Other (Specify): Memorandum Contract: X Contract Term: Start Date: End Date: Item Budgeted: Amount: Funding Source/Fiscal Impact: Strategic Priority: Partnership Development Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: RECOMMENDATION: City Manager The Partnership Committee has referred this matte to the City Council for final determination. ATTACHMENTS: Description Upload Date D IDIIID-County Action to Abandon or Dissollve-8 2015 8/3/2015 Untertocall-D11111County "Transfer' to City -County IFlinaki 2015 8/3/2015 Type Omer Memo Contract CITY OF YAKIMA LEGAL DEPARTMENT 200 South Third Street, 2nd Fl. 1 Yakima, WA 98901 P: 509.575.6030 1 F: 509.575.6160 MEMORANDUM August 3, 2015 TO: Honorable Mayor Cawley and Members of the City Council Tony O'Rourke, City Manager FROM: Jeff Cutter, City Attorney SUBJECT: DID Transfer / Dissolution by Yakima County This Memorandum is a restatement of previous information and material provided to the City Council concerning Yakima County efforts to either transfer or dissolve the DID systems located entirely within the City of Yakima. Recently there have been meetings with the Council Partnerships Committee members and with Yakima County representatives to discuss the alternatives available to the City with regard to dealing with the DI Ds located within the City. At this point the Partnership Committee has expressed significant reservations about agreeing to the terms of the Interlocal Agreement proposed by the County to affect DID transfer to the City, a copy of which is attached hereto. This matter is now before the City Council for consideration. To refresh each of you regarding how we arrived at this point I have included the following information for your consideration. Over the past several years the Yakima County Commissioners have approached the City with proposals to resolve the disposition of significant Drainage Improvement District (DID) infrastructure and systems now located within the City limits that were constructed during the time when the land upon which the systems were constructed was within the County and outside of the City limits. Over the years the land and infrastructure that is the subject of present City -County discussion has been gradually annexed to the City and is now City property. The County has determined that it no longer desires to operate, assess and maintain the DID infrastructure that is within the City boundaries and has proposed several alternatives to the City for consideration in an effort to accomplish the County goal of transferring or abandoning the infrastructure systems. The DID systems that lie within the City remain functional, are still assessed by the County and continue to convey considerable flows of water resultant of excess irrigation, groundwater and surface runoff sources. As a result of assessing the properties the County remains responsible to operate and maintain the DID systems to the present day and has provided the City with a recent revenue summary for the DID systems. The systems within the City are made up of long runs of underground conduit, varying in size but primarily ranging from six to thirty inches, with manholes at intervals throughout the system. Some of this conduit has been determined to be located under developed property and structures as well as along numerous street right-of- ways within the City. Memorandum to Honorable Mayor and Members of the City Council & Tony O'Rourke, City Manager August 3, 2015 Page 2 Withdrawal of DID by County to City At one point the County proposed withdrawing the DID infrastructure located within the City from the County DID system and transferring those systems to the City to operate, assess and maintain. Such a transfer could take place through application of RCW 85.38.213, which provides: A special district may withdraw area from its boundaries that is located within the boundaries of a city or town, or area that includes area both within and adjacent to the boundaries of any city or town, under this section. (1) The withdrawal of area is authorized upon the following conditions being met: (a) Adoption of a resolution by the special district requesting withdrawal of the area from the district; (b) adoption of a resolution by the city or town council approving the withdrawal of the special district from the area; (c) assumption by the city or town of full responsibility for the maintenance, improvements, and collection of payment for the operation of the system previously operated by the special district in the area; (d) transfer by the special district of all rights-of-way or easements in the area to the city or town by quit claim or deed; and (e) adoption of an interlocal agreement between the special district and the city or town that reimburses the special district for lost assessment revenue from the withdrawn area, that transfers any facilities or improvements owned by the special district to the city or town as agreed between the parties, and that requires the city or town to maintain existing water run-off and water quality levels in the area. (2) Property in the territory withdrawn from the boundaries of a special district under this section shall remain liable for any special assessments of the special district from which it was withdrawn, if the special assessments are associated with bonds or notes used to finance facilities serving the property, to the same extent as if the withdrawal of property had not occurred. (Emphasis added). Therefore, in order for the County to withdraw the portions of the DID infrastructure that are located within the City from County DID control and transfer them to the City, the City must take affirmative action to accept them and to become responsible for the operation and maintenance of the districts and all liabilities associated with them. To date, the City has not been willing to accept the responsibility for the districts for several fundamental reasons, not the lease of which include, but are not limited to 1) lack of information regarding the structural stability of the ancient conduit systems, 2) lack of information about the environmental contamination associated with the systems as a result of the conveyance of agricultural irrigation runoff for many years, 3) uncertainty that the DID systems are all located in legal easements and right-of- ways within the City (some of which appear to be located under developed property) and 4) a desire to avoid becoming legally responsible for the ancient infrastructure for which the City had no responsibility for constructing. Memorandum to Honorable Mayor and Members of the City Council & Tony O'Rourke, City Manager August 3, 2015 Page 3 County Abandonment or Suspension of DID Primarily due to the City's past disinterest in agreeing to become the operator and responsible party for the DIDs located within the City, the County Commissioners have now suggested that they plan to dissolve the DIDs under authority of statute, on the basis that the DIDs are "inactive". The County relies upon RCW 36.96.010(3) to argue that the DID special purpose districts are "inactive"; the statute provides, in relevant part: (3) "Inactive" means that a special purpose district, other than a public utility district, is characterized by either of the following criteria: (a) Has not carried out any of the special purposes or functions for which it was formed within the preceding consecutive five-year period; or (b) No election has been held for the purpose of electing a member of the governing body within the preceding consecutive seven-year period or, in those instances where members of the governing body are appointed and not elected, where no member of the governing body has been appointed within the preceding seven-year period. (Emphasis added.) The County has asserted that there has not been an election for a governing member of the DID s within the City in seven years or more, and therefore the DIDs have become "inactive" as defined by statute. On this basis, the County has indicated that it plans to employ RCW 36.96.030(1) to hold public hearings concerning the dissolution of the DID special purpose districts lying within the City. Following the public hearings the County legislative authority must prepare written findings on whether the DID special purpose districts meet the requirements of being declared "inactive" and also must adopt an ordinance dissolving the DIDs found to be "inactive" if it also makes additional written findings detailing why it is in the public interest that the DID be dissolved. RCW 36.96.040. RCW 36.96.040 further provides that upon taking the above stated actions, "except for the purpose of winding up its affairs as provided by this chapter, a special purpose district that is so dissolved shall cease to exist and the authority and obligation to carry out the purposes for which it was created shall cease thirty-one days after adoption of the dissolution ordinance. The dissolution of a DID special purpose district shall be final and conclusive unless, within thirty days of the adoption of the dissolution ordinance, an interested party makes application to a court of competent jurisdiction for a writ of prohibition or a writ of mandamus seeking to bar the action taken to dissolve the districts. RCW 36.96.050. The applicant for said writ bears the burden of demonstrating that 1) the DID special purpose district in not "inactive" or 2) it is not in the public interest that the special purpose district be dissolved. Presumably the City could make such an argument on the basis of the several reasons stated above for not wanting to be the recipient of a transfer, as well as other potential reasons. The City faces a significant challenge in any effort taken to confront a County action to dissolve the DIDs within the City because, other than two specific statutory references to City involvement in transfer of the DIDs, the statutes pertaining to dissolution of the special purpose Memorandum to Honorable Mayor and Members of the City Council & Tony O'Rourke, City Manager August 3, 2015 Page 4 districts appear to assume that the districts lie wholly within a County. Therefore, there is no mention, within statutes controlling dissolution, of specific arguments available to a City to dispute the dissolution action or to address the outcome faced by a City forced to "inherit" these systems following dissolution. There is, however, some helpful analogy represented in statutes addressing the dissolution process that concern DIDs located within two different Counties when one of them chooses to dissolve the district. RCW 36.96.070 provides guidance for this situation with regard to the disposition of property following a dissolution of such a multi -County DID / special purpose district. That statute provides: Any moneys or funds of the dissolved special purpose district and any moneys or funds received by the board of trustees from the sale or other disposition of any property of the dissolved special purpose district shall be used, to the extent necessary, for the payment or settlement of any outstanding obligations of the dissolved special purpose district. Any remaining moneys or funds shall be used to pay the county legislative authority for all costs and expenses incurred in the dissolution and liquidation of the dissolved special purpose district. Thereafter, any remaining moneys, funds, or property shall become that of the county in which the dissolved special purpose district was located. However, if the territory of the dissolved special purpose district was located within more than one county, the remaining moneys, funds, and personal property shall be apportioned and distributed to each county in the proportion that the geographical area of the dissolved special purpose district within the county bears to the total geographical area of the dissolved special purpose district, and any remaining real property or improvements to real property shall be transferred to the county within whose boundaries it lies. A county to which real property or improvements to real property are transferred under this section does not have an obligation to use the property or improvements for the purposes for which the dissolved special purpose district used the property or improvements and the county does not assume the obligations or liabilities of the dissolved special purpose district as a result of the transfer. (Emphasis added). By analogy, it certainly seems reasonable to expect that if the County does indeed dissolve the DIDs that are nearly entirely within the City, the same outcome as is set forth above should be applicable to the City. This would seem to speak for itself as a fair outcome of such unilateral action taken by the County. Perhaps the most important part of the above cited statute concerns the lack of liability or obligation on the part of the non-moving government entity in the inherited infrastructure. The difficulty in applying this provision to the City's situation is that while this may provide a fair and equitable approach for the City and County to follow, it is not specifically stated; the statute as written applies to two contiguous counties, not a city within a county. Herein lies the frustration with attempting to find redress for what appears to be a complete lack of consideration for the City's concerns regarding the liabilities associated with the DIDs that Memorandum to Honorable Mayor and Members of the City Council & Tony O'Rourke, City Manager August 3, 2015 Page 5 are now located within the City. If the County can unilaterally choose to abandon the systems, who then bears the liability for conduits that fail, cave in, cause damage to persons or property or contain environmental contamination that at times may be flushed from them and deposited in waterways? While it seems quite evident that these systems provide multiple inherent liabilities, the statutes don't provide a recognition of that fact and indeed are substantially deficient in addressing any of them, particularly from the view of a City that appears to be forced into dealing with them. Finally, it is also interesting to observe that as far as I have been able to determine, the statutes addressing the dissolution of DID special purpose districts do not state that the entity acting to dissolve the districts is immune from liabilities associated with the infrastructure. Therefore, there appears to be a significant void in statutory direction for the consideration of many potential future problems that seem imminent as time passes and the conduit system continues to deteriorate once the County dissolves the districts and walks away. Commissioners' Authority to Operate DID System One final issue that may be useful in considering the status of the DID systems as they now exist within the City concerns the County's apparent intent to declare the districts "inactive" on the basis that no Board of Commissioners has been elected to any of the districts in many years. As previously indicated, RCW 36.96.010 provides that if no such elections have occurred in the previous seven years the districts meet the definition of being "inactive". This determination is necessary to support the dissolution effort. Interestingly, during this time the County has taken on the roll of the Board of Commissioners, setting the assessment values, operating the DID systems and maintaining the infrastructure. By outward appearance the County Commissioners have become the acting DID Board of Commissioners. Whether they are legally permitted to do so is questionable. RCW 36.96.060 describes the role of the County Commissioners in dissolving an "inactive" special purpose district. That statute states: For the sole and exclusive purpose of winding up the affairs of a dissolved special purpose district, the county legislative authority, acting as a board of trustees, shall have the same powers and duties as the governing authority of the dissolved special purpose district including the following: (1) To exchange, sell, or otherwise dispose of all property, real and personal, of the dissolved special purpose district; and (2) To settle all obligations of such special purpose district. Such powers and duties shall commence upon the effective date of dissolution and shall continue thereafter until such time as the affairs of the dissolved special purpose district have been completely wound up. The statute would lead one to understand that the County Commissioners may only act in the capacity of the DID Board of Commissioners for the sole and exclusive purpose of winding up the business of the dissolved district. Yet they have been operating the districts within the City for many years. This potential argument is somewhat of a two-edged sword, insofar as on one Memorandum to Honorable Mayor and Members of the City Council & Tony O'Rourke, City Manager August 3, 2015 Page 6 hand, we could argue that in fact the County has taken on the role of responsibility for the districts, continuing to establish and collect assessments, maintain the infrastructure and bring benefit to the assessed properties. If that is the case, then in fact the DIDs are not "inactive", as the County Commissioners have been operating them for quite some time, and do so now. The problem with the argument is that I can find no statute that authorizes them to do so and therefore would expect a court hearing this argument would simply find that the County has been operating the DIDs without authority to do so and are not now permitted to continue to perform that function. Conclusion The City is in a difficult position as it considers how to respond to the County's stated intent to dissolve the DIDs. There is insufficient information to know what the status of the infrastructure is presently. We don't know what environmental issues exist within the system. We don't have a clear picture of what liabilities the County will continue to be responsible for regarding problems that will arise over time as the infrastructure continues to age. We do know that unless we affirmatively agree to accept the responsibility for operating and maintaining the DIDs through a transfer they cannot be forced upon the City against its wishes in an operational capacity. However, if the County is successful in dissolving the districts there is a troubling lack of specific direction in the state statutes to determine who will hold the ultimate responsibility for issues arising as a result of the presence of this infrastructure in the future. INTERLOCAL AGREEMENT PROVIDING FOR THE TRANSFER OF ALL REAL PROPERTY AND ASSETS OF DRAINAGE IMPROVEMENT DISTRICTS Nos. 4, 13, 29, 38, 39, 40, and 48 LOCATED IN TI -IE CITY OF YAKIMA THIS AGREEMENT is made and entered into between the governing authorities of Yakima County and the City of Yakima pursuant to the authority granted at Title 39, Chapter 34 of the Revised Code of Washington (RCW 39.34 The Interlocal Cooperation Act) for the purpose of perfouning the orderly transfer of administration and management of the property and assets of seven districts that were established and operated as Drainage Improvement Districts (DIDs) within the jurisdiction of Yakima County but that have been annexed into the jurisdiction of the City of Yakima. These seven special purpose districts have been determined by the Yakima County Auditor to be 'inactive' as defined at RCW 36.96.010 because there has not been any elections for individual district governing boards in over 5 years and they have not operated as independently governed districts in over 7 years; but instead, the DID's operations have been overseen by Yakima County's public services department. The Parties agree as follows: I. Introduction. 1.1. The seven DIDs designated numerically as Districts 4, 13, 29, 38, 39, 40 and 48 were formed in the first half of the 20th Century under RCW 85.08 by legislative action of Yakima County. DIDs are designated as independent, self-governing Special Districts (RCW 85.08.015, referencing to RCW 85.38 et seq.) and also as Special Purpose Districts (RCW 36.96 et seq.). Each district is intended to be governed by independently elected three-person boards tasked with establishing, constructing, maintaining and acquiring property to provide a system of drains and drainage to assist with agricultural practices and to protect the health and well-being of the citizens in the districts served. Revenues and taxes are levied and collected by the DIDs, with assistance by the County Treasurer, to fund ongoing DID operations. 1.2. For over 7 years DIDs 4, 13, 29. 38, 39, 40 and 48 have neither held elections for independent DID commissioners or supervisors nor have they been independently governed. Thus they have been deemed inactive by declaration of the County Auditor pursuant to RCW 36.96.010 (3) (b) [Attachment No. 11. In recent years, in the absence of an independent PEM 6/24/2015 10:12 AM governing body, the inactive DID's operations have been have been overseen by the Yakima County public services division. 1.3. The City of Yakima has annexed into its municipal boundaries all the properties served by the seven DIDs subject to this Agreement; and the drainage services now provided by the DID's facilities benefit only these properties, streets and facilities located within the City. 1.4 A DID can withdraw its territory that is within or contiguous to a municipality's borders (RCW 85.38.213). Any portion of a drainage district or drainage improvement district located within the borders of a first-class city operating a storm drain utility may be removed from the drainage district or drainage improvement district by ordinance of the city. Further, RCW 36.96.040 requires that whenever a special purpose district has been found to meet the criteria of being inactive, the county legislative authority shall adopt an ordinance dissolving the special purpose district and providing written findings detailing why it is in the public interest that the special purpose district be dissolved. 1.5 The City and County are in agreement that any real property interests, infrastructure, assets, benefits and obligations held by the subject DID's located entirely within both the DID boundaries and the City's municipal boundary should be transferred to the municipality whose citizens are both benefited and are served by those facilities. The Parties further agree that all related documentation, including resolutions, maps, deeds and records of meetings that are in the possession of Yakima County and that are related to the drainage facilities and real property interests associated with the DIDs located entirely within the City, will be transferred to the City. 2. Purpose. The purpose of this Agreement is to define the Parties legal and specific responsibilities, obligations, liabilities and duties associated with the transfer of the DIDs that are located within the City; including but not limited to: (a) Adoption of a resolution by the County legislative body acting on the behalf of the inactive DIDs advising the City of the dissolution of the DID and the withdrawal of any DID responsibility for drainage services to the service areas located within the City; (b) adoption of a resolution by the City Council acknowledging the withdrawal of the dissolved inactive DID districts from its territory; (d) transfer by the DIDs of all rights-of-way or easements in the area to the City by quit claim or deed; and (e) the arrangement between the PEM 6/24/2015 10:12 AM County, acting on behalf of the inactive DIDs, and the City that transfers any facilities or improvements owned by the DIDs to the city or town as agreed between the parties. 3. Parties Responsibilities and Obligations. 3.1 The City of Yakima shall accept all real and personal property interests of the DID located within its municipal boundaries. 3.2 The Parties to this agreement hereby agree that, subject to the provisions of Section 5 of this agreement, all obligations, liabilities and responsibilities for the known DIDs located entirely within the municipal boundaries of the City related to the operation and maintenance of the drainage facilities from the date of transfer forward shall be assigned to the City. The Parties further agree that any liabilities associated with latent and future defects within the DID systems based on operations prior to annexation of its territory by the City shall remain the sole responsibilities of each respective DID. 3.2.1 Each DID shall be responsible for cleanup operations required to remediate identified points of contamination and shall seek full mitigation from the purveyors of said contaminations that are confirmed to result from activities prior to annexation of its territory into the City. Areas of the DID infrastructure and outfalls that are determined to present points of contamination requiring environmental remediation shall be addressed by the City or its utilities in compliance with Department of Ecology guidelines. 3.2.2 The Parties agree that with respect to any unidentified or structurally unstable portions of the DIDs subject to transfer under this agreement, each DID shall be responsible to resolve all claims, including but not limited to environmental contamination, structural instability, personal injury, property damage and trespass resulting from activities occurring prior to annexation by the City or resulting from identifiable DID repairs or actions undertaken at any time and directly attributable to the DID's negligence. 3.3 The following terms shall govern the transfer of the drainage facilities and real property interests held by the DIDs currently overseen by the County that are located entirely within the City: PEM 6/24/2015 10:12 AM 3.3.1 Attachrnent No. 2is a map of the DID boundaries annexed into the City of Yakima. 3.3.2 Attachment No. 3 provides a map of known DID facilities located within the municipal boundary of Yakima, Attachment No. 3 is not, nor is it intended to be, a comprehensive inventory of the DID facilities located within the boundary of Yakima but is based on the information readily available to the County. 3.3.3 Attachment No. 4represents the form of the quitclaim deeds whereby the DID and will transfer to the City any DID real property interests located entirely within the City's municipal boundary. 3.3.4. Attachment No. 5 is a map and any supporting documentation regarding the existence and scope of any DID easements located within the City for the benefit of Yakima County and/or the DIDs. 3.4. Upon the execution of this Agreement, all facilities owned by the inactive DIDs that are located entirely within the municipal boundary of the City of Yakima, shall be transferred to the City of Yakima subject to the teinis and conditions set forth in this Agreement. Within ninety (90) days after the execution of this Agreement, any deeds transferring title to the real property interests owned by the DIDs, including the real property interests shall be delivered to the City of Yakima in the form of quit claim deeds. 3.5 Within ninety (90) days after the execution of this Agreement by the Parties, all remaining DID operating funds that are the subject of this Agreement and/or are currently held by the County on the DIDs behalf shall be disbursed to the City as follows: 3.5.1 Any outstanding DID expenses, invoices and claims, including any currently outstanding costs of maintenance incurred by Yakima County for maintenance performed on DID facilities located entirely within the City prior to the date of transfer, shall be paid out first to Yakima County from DID operating funds. 3.5.2 Upon execution of this Agreement, Yakima County shall transfer ownership of any stormwater drainage real property interests and related facilities located entirely PEM 6/24/2015 10:12 AM within both the boundaries of the DIDs and the City's municipal boundary that are currently owned by Yakima County to the City of Yakima. 3.5.3 Upon the execution of this Agreement, Yakima County shall deliver to the City deeds, in the form of quitclaim deeds, to the DID real property interests and facilities, including the real property interests identified in Attachment 5 (Easements) pertaining to the DIDs subject to transfer under this Agreement. 3.5.4 Prior to the execution of this Agreement, Yakima County Public Services shall provide to Yakima copies of any documentation in its control regarding ongoing operations and maintenance of drainage facilities and drainage related real property interests that are subject to this Agreement and are located entirely within Yakima's municipal boundary. 3.6 No term or condition herein shall require the City of Yakima to continue to operate or maintain any particular DID infrastructure or facility acquired pursuant to the Agreement. Once a facility has been transferred to the City pursuant to this agreement, the City shall have complete discretion with regard to the management and continued operation of such facility. 4. Miscellaneous Terms. 4.1. This Agreement shall become effective upon signature by the last party hereto. 4.2. This Agreement may be amended, altered, clarified, or extended only by the written agreement of the Parties hereto. 4.3 This Agreement is not assignable by any Party, either in whole or n part. 4.4 This Agreement is the complete expression of the terms hereto and any oral or written representations or understandings not incorporated herein are excluded. The Parties recognize that time is of the essence in the performance of the provisions of this Agreement. Waiver of any default shall not be deemed to be waiver of any subsequent default. Waiver of breach of any provision of this Agreement shall not be deemed to be a waiver of any other or subsequent breach and shall not be construed to be a modification of the terms of the Agreement unless PEM 6/24/2015 10:12 AM stated to be such through written approval by the Parties which shall be attached to the original Agreement. 4.5. Nothing herein shall be construed as obligating the Parties to expend money in excess of appropriations authorized by law and administratively allocated for this work. 5. Indemnification and Hold Harmless. 5.1 As among the parties, Yakima County shall not have any liability arising out of Yakima County's oversight of any DID property interests and related facilities located entirely within both the boundaries of the transferred DIDs and the City's municipal boundaries that arise from acts and/or omissions occurring after the recording of the quitclaim deeds to be delivered to the City. This provision shall be consistent with and specifically subject to the terms and conditions set forth in Section 3, above, with respect to DID liabilities accruing prior to the date of transfer. 5.2 As among the parties, the City shall not have any liability arising out of the DIDs, and/or Yakima County's ownership or management of any of the DIDs drainage property interests and related facilities subject to this agreement and located within both the boundary of the DIDs and the City's municipal boundaries that are determined to result from the acts, inactions and/or omissions of the DID or County occurring before the recording of the quitclaim deeds to be delivered to the municipalities. 5.3 Each of the Parties shall protect, defend, indemnify, and save harmless the other Parties and each of them, their officers, elected officials, employees, and agents, while acting within the scope of their employment as such, from any and all costs, claims, judgments, and/or awards of damages, arising out of, or in any way resulting from, each of the Partiesown negligent acts or omissions. Each of the Parties agrees that its obligations under this subparagraph extend to any claim, demand, and/or cause of action brought by, or on behalf of, any of its employees or agents. 5.4 In the event that any of the Parties incurs any judgment, award, and/or cost arising therefrom, including attorneys' fees, to enforce the provisions of this Article, all such fees, expenses, and costs shall be recoverable from the responsible Party to the extent of that Party's fault. PEM 6/24/2015 10:12 AM 5.5 This Agreement shall be construed in accord with the law in Washington. Any action taken to enforce the terms and conditions of this Agreement shall lie in a court of competent jurisdiction in Yakima County, Washington. IN WITNESS WHEREOF, the Parties hereto have executed this agreement effective as of the date of the last signature below. DONE this day of 2015 [ADD OFFICIAL SIGNATUREBLOCK] PEM 6/24/2015 10:12 AM