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Home My WebLink AboutCOW 2003-12-08 Item 4E - Water Purveyor - Relinquishment Letter to City of Seattle & Contingent Liability LetterCAS Number: 03-161 Original Sponsor: Timeline: Sponsor's Summary: .ma 1 Meeting Date 1 12/08/03 Meeting Date 12/08/03 COUNCIL AGENDA SYNOPSIS Initials Meeting Date Prepared, ¢jt, 1 Mayor's review 1 Council review 12/08/03 PB %1`t 1 I _Let e. 1 1 1 1 1 MINFO WAIT Q; 03- 6 I Original Agenda Date: December 8, 2003 Agenda Item Title: Cascade Water Alliance Relinquishment Letter and Contingent Liability Letter Council Admin. Public Works The Cascade Water Alliance (CWA) contract to purchase a wholesale block of water from the City of Seattle has been approved. The next step is to relinquish our contract rights with the City of Seattle directly and verify Tukwila's membership with the CWA. Seattle has also requested an additional letter that Tukwila acknowledge and accept any contingent liability to pay its proportionate share in the event that CWA does not meet their payment obligations. Recommendations: Sponsor: Forward to Committee of the Whole, then Regular and authorize Mayor to sign both letters. Committee: Same as sponsor. Administration: Cost Impact (if known): Fund Source (if known): 401 Water Fund ENDICE�4,.�hs x„ Attachments Information Memo dated November 25, 2003 Purveyor Contract Relinquishment Letter Default Liability Letter Utilities Committee Meeting Minutes from December 2, 2003 ITEMNO. 4. e To: From: u blic Works Directo Date: November 25, 2003 ISSUE Mayor Mullet INFORMATION MEMO Subject: Cascade Water Alliance Relinnuishment Letter and Contingent Liability Letter The Cascade Water Alliance (CWA) is now at the point at which the old purveyor contracts can be relinquished. All member agencies have essentially approved the contract which was awaiting Seattle's blessing. One additional item is the Contingent Liability letter that Seattle requested as well (draft attached). BACKGROUND Over the last three years, CWA and Seattle have been negotiating a "Water Supply Agreement" to meet the needs of Cascade members while accommodating Seattle's concerns regarding a wholesale block of water. This process has now been completed and the cost summaries have been presented to the Tukwila City Council this year. Seattle has given their fmal blessing on the Block Contract with some revisions to the appendices. The updated appendices are being provided to the CWA representatives and will be made available to the members of the Utilities Committee upon request. This has been a very lengthy process and the CWA staff has done a commendable job along with many of the staff representatives of the member agencies who contributed during the contract negotiations. These letters will trigger the process to relinquish the old contract. Costs will again be compared as wholesale prices to the City of Tukwila will be less under the new block contract than it would have been in the old "Version B" purveyor contract. RECOMMENDATION Approve and forward to Council. PB:ad attachments c£ Jim Haggerton (P:theMCWA UC 120203 Relinquishment) Mr. Chuck Clarke, Director Seattle Public Utilities Key Tower Building 700 5 Avenue, Suite 4900 Seattle, WA 98104 -5004 Subject: Relinquishment of Contract Rights Dear Mr. Clarke: This letter will serve to verify that the City of Tukwila is a Member of the Cascade Water Alliance. As such, the City will be receiving water service from the Cascade Water Alliance as of January 1, 2004, pursuant to the 50 -Year Declining Block Water Supply Agreement between the City of Seattle and the Cascade Water Alliance (the Block Contract). Section 9.11 of the Block Contract provides that each Existing Purveyor Member of Cascade listed in Exhibit III will relinquish its then existing contract rights with Seattle. The City of Tukwila by this letter confums that as of January 1, 2004, Tukwila relinquishes all rights under its current Water Purveyor Contract Version B that would otherwise have been in effect through December 31, 2011, provided that the Cascade Water Alliance and the City of Seattle have executed the Block Contract and the Block Contract is effective on January 1, 2004. Accordingly, as of January 1, 2004, the current Water Purveyor Contract between the City of Tukwila and City of Seattle shall have no further force and effect. Sincerely, Steven M. Mullet Mayor Purveyor Contract Relinquishment Draft November 11, 2003 cc: Grant Degginger, Chair, Cascade Water Alliance Michael A. Gagliardo, General Manager, Cascade Water Alliance Mr. Chuck Clarke, Director Seattle Public Utilities Key Tower Building 700 5t Avenue, Suite 4900 Seattle, WA 98104 -5004 Default Liability Draft November 11, 2003 Subject: Acknowledgement and Acceptance of Contingent Liability for Payment in the Event of Default Dear Mr. Clarke: This letter will serve to verify that the City of Tukwila is a Member of the Cascade Water Alliance. As such, the City will be receiving water service from the Cascade Water Alliance as of January 1, 2004, pursuant to the 50 -Year Declining Block Water Supply Agreement between the City of Seattle and the Cascade Water Alliance (the Block Contract). Section 9.10 of the Block Contract provides that all Cascade Members receiving water from Cascade must acknowledge and accept a contingent, individual liability for payment, should Cascade default on payment to Seattle. This letter shall serve to confirm that, provided that Cascade Water Alliance and the City of Seattle have executed the Block Contract and the Block Contract is effective on January 1, 2004, the City of Tukwila acknowledges and accepts the contingent liability to pay its proportionate share of any Cascade default, pursuant to the provisions of Section 9.10 of the Block Contract. Sincerely, Steven M. Mullet Mayor cc: Grant Degginger, Chair, Cascade Water Alliance Michael A. Gagliardo, General Manager, Cascade Water Alliance Utilities Committee December 2, 2003 Present: Pam Linder, Chair; Joan Hernandez, Richard Simpson Jim Morrow, Frank Iriarte, Bob Giberson, Gail Labanara, Pat Brodin, Lucy Lauterbach 1. Miscellaneous In response to challenging comments from a citizen, Jim Morrow passed out a response to Cascade View Surface Water questions. The response addressed the number of properties and people affected by the proposed improvements, the proposed rate increase in surface water rates, project scope and community information, as well as the role of sidewalks and street improvements in surface water projects. Joan asked about the person in McMicken who wanted to dig a culvert under his driveway and the required permits to do so. Jim M said the City would be liable if the citizen did something that caused public danger, and not requiring the permits could have large and negative implications. He cited the bond required of the Hillsides Apartments that they were trying to get a waiver from. The owners there have gone bankrupt twice already and have a hard time getting is bond. Treva Gomez has had a long term problem with drainage in her driveway, and she spoke to Pam L about that. Pat said he and John Howat had been to her house to see what the issues were, but -did not see problems. They and Pam will visit Treva this week. Information. '2.2004 Cable Consultant Services Agreement 3 -H Cable and Lon Hurd have looked after the City's cable issues for many years. They audit Comeast's books, and intercede on behalf of customers when citizens have cable problems. Comcast rates are going up between 8 -20% for various services they provide. He makes sure seniors also get the reduced rate they're eligible for. The contract for $11,782 includes a 1.8% CPI adjustment for the year. One of the items Frank will work with Lon on is to have TCI pay part of the audio visual improvements needed in the Council chambers instead of having the Council on cable TV. Recommend issue to consent agenda of a Regular Meeting. 3. Cascade Water Alliance Pat said the City will be taking a very big step by breaking off our contract with Seattle Water, and moving to Cascade Water Alliance (CWA) for our water source. He thought Tukwila would win from moving to CWA, as Seattle has said it would raise `old water" rates very high in the next two years, as there are very few districts like Tukwila left that have old water. We will pay less by getting CWA water. Pat said the process has been very long working with Seattle and trying to get a water supply agreement. They require cities to acknowledge that they have liability for paying if CWA defaults on its payments to Seattle. Recommend CWA issues and acknowledgement letter to COW and Regular Meetings. ll J V Committee chair approval