HomeMy WebLinkAbout22-098 - Highline Water District - Settlement Agreement22-098
Council Approval N/A
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is entered into as of August 19 2022 (the "Effective Date")
between Highline Water District, a Washington municipal corporation ("Highline") and the City of
Tukwila, a Washington municipal corporation ("Tukwila") (collectively the "Parties," and each a "Party")
to settle the matter related to unintended water delivery through the intertie further described herein,
including all claims that were asserted or that could have been asserted among the Parties in this
matter.
RECITALS
1. WHEREAS, on or about July 2013, the Seattle Public Utilities Department ("Seattle" or "SPU")
and Cascade executed the rd Amended and Restated Declining Block Water Suml Agreement
between The City of Seattle and Cascade Water Alliance ("Block Contract"), which provides that
Seattle shall sell to Cascade and Cascade shall purchase from Seattle, according to the terms of
the Agreement, a wholesale supply of water for resale to Cascade members and prohibits
Cascade or its members ("Cascade Members") from selling water supplied under the Block
Contract within Seattle's Service Area Boundary unless Cascade obtains Seattle's prior written
consent and an equivalent amount of Base Block will be converted to Supplemental Block; and
2. WHEREAS, in accordance with the Block Contract, SPU delivers the water ("Block Water")
directly to Cascade Members at the Points of Delivery listed in Exhibit 11 of the Block Contract
(May 11, 2020 version). The Cascade Members then deliver the water for retail service within
their respective service areas; and
3. WHEREAS, Tukwila is a Cascade Member; and
4. WHEREAS, Tukwila and Highline have an intertie connection of their water systems located at or
in the vicinity of South 180th Street and Andover Park West in Tukwila, Washington ("Intertie");
and
5. WHEREAS, the Intertie is the subject of an Agreement for Emergency Sale of Water between the
District and the City dated March 31, 2000 ("intertie Agreement"); and
6. WHEREAS, in 2017, SPU contacted Tukwila and asked that Tukwila make arrangement for
alternative points of delivery during a planned shutdown while SPU performed repairs for the
periods of July 21 to 22, 2017 and September 26 to October 10, 2017; and
7. WHEREAS, Tukwila did make alternative arrangements. To accommodate SPU's need, Tukwila
arranged for Highline to supply the Block Water to Tukwila during those periods through the
Intertie at South 180`" Street and Andover Park West; and
8. WHEREAS, a malfunction occurred, and the Intertie remained open after October 10, 2017,
resulting in 187,586 CCF of Block Water unintentionally delivered to Tukwila from Highline in
2017 to mid -2018 ("Unintentionally Delivered Water"); and
9. WHEREAS, Cascade paid Seattle for Block Water purchase consistent with the terms of the Block
Contract, which amount was not altered by the decreased volume associated with the
Unintentionally Delivered Water because the minimum Block Water purchase commitment was
not reached; and
10. WHEREAS, Highline paid Seattle for its metered consumption pursuant to its Partial
Requirements Contract with Seattle at rates then in effect, and then Highline submitted an
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invoice to Tukwila for payment for the Unintentionally Delivered Water pursuant to the terms of
the Intertie Agreement; and
11. WHEREAS, Tukwila disputed the invoice, and Highline filed a pre -litigation claim and Public
Records Act request against Tukwila; and
12. WHEREAS, the Parties wish to resolve all claims amongst Cascade, Tukwila, Highline, and SPU
related to the Unintentionally Delivered Water, including all issues identified in the October 12,
2021 Cascade letter to SPU, Highline's invoices to Tukwila, Cascade's payments to SPU under the
Block Contract, and any claims arising from these events (the "Potential Litigation"), and avoid
litigating these matters; and
13. WHEREAS, Highline and SPU have entered into a settlement agreement, Cascade and SPU have
entered into a settlement agreement, and Highline and Tukwila have entered into a settlement
agreement, each to resolve all claims regarding the Potential Litigation; and
14. WHEREAS, the Parties do not admit any issue of law, fact, or liability.
NOW THEREFORE, in consideration of the covenants, agreement, and representations set forth in this
Agreement, the Parties agree as follows:
AGREEMENT
1. Recitals. The Recitals above are restated and incorporated as part of this Agreement.
2. Return of Water. Parties agree that Tukwila shall return the equivalent of the Unintentionally
Delivered Water to Highline through the Intertie. The Parties acknowledge and agree that the
return of the Unintentionally Delivered Water may occur over one or more years. Parties further
agree that Cascade may allow Tukwila to participate in a water pump test resulting in a de
minimis exchange of water between Tukwila and Highline.
In the event Tukwila is unable for any reason to return the full amount of the Unintentionally
Delivered Water to Highline, then this Agreement shall be null and void and Highline shall have
the right to seek payment or other legal consideration from Tukwila for the remaining amount
of the Unintentionally Delivered Water. In such case, Highline and Tukwila agree to engage in
good faith negotiations with each other to arrive at a mutually agreeable alternative pursuant to
which Highline is compensated for the remaining amount of the Unintentionally Delivered
Water. Highline's claim against Tukwila relating to the Unintentionally Delivered Water shall be
preserved and tolled for a period of one (1) year following the determination that Tukwila is
unable to return the Unintentionally Delivered Water to Highline as originally contemplated
under the terms this Agreement.
3. Reporting. Tukwila, or Cascade on Tukwila's behalf, shall provide occasional courtesy updates
to SPU regarding the volume of water returned to Highline under Section 2 of this Agreement.
Upon SPU's request, Tukwila, or Cascade on Tukwila's behalf shall provide meter data and any
other detailed information documenting the volume of water returned to Highline under
Section 2 of this Agreement. After Tukwila returns the total amount of Unintentionally Delivered
Water to Highline, Tukwila, or Cascade on Tukwila's behalf shall promptly notify SPU that the
intertie has been positively closed and restored to normal standby operation consistent with the
terms of the Intertie Agreement approved by Seattle.
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4. Non -Waiver of Block Contract Provisions. The Parties acknowledge and agree that (a) this
settlement is a compromise of the Potential Litigation, (b) other than the return of the
equivalent of the Unintentionally Delivered Water, the provision of water from Tukwila to
Highline through the lntertie for non -emergency reasons is inconsistent with the terms of the
Block Contract, (c) this Agreement does not obviate, waive, or invalidate Tukwila's obligations
set forth in the Block Contract or Highline's obligations under the Partial Requirements Contract,
and (d) the Parties' acceptance of this Agreement shall not be deemed a waiver of any
preceding or succeeding breach or default of the same or any other provision, term, or condition
of the Block Contract or Partial Requirements Contract, as'applicable.
5. Release. in consideration for the return of water to Highline under Section 2 of this
Agreement, and in consideration for the mutual promises herein, the Parties, on their own
behalves and on behalf of their respective member agencies, insurers, subsidiaries, principals,
affiliates, employees, directors, officers, elected officials, agencies, agents, predecessors,
successors, assigns and attorneys hereby mutually and fully release each other and their
respective partners, member agencies, insurers, subsidiaries, joint venture members,
principals, affiliates, shareholders, employees, directors, officers, elected officials, agencies,
agents, predecessors, successors, assigns and attorneys from any and all claims, proofs of
claim, liens, indebtedness, grievances, charges, causes of action, obligations, demands or
liabilities, whether now known or unknown, asserted or unasserted, accrued or unaccrued,
fixed or contingent, and whether sounding in contract, tort, statute or otherwise, that arise
from or relate to the Potential Litigation, including, without limitation any and all claims for
defense costs, indemnity payments, settlement payments, damages, reimbursement,
allocation or reallocation of payments, equitable relief, fines or other relief based upon any
allegation of or actual breach of contract, any other claim or cause of action, or any act or
failure to act in connection with, or arising out of the Potential Litigation, subject to the
limitations provided in Section 2 relating to the potential that Tukwila may not be able to
return the Unintentionally Delivered Water to Highline.
In giving this release, each Party acknowledges that facts, circumstances or claims that arise
from or relate to the Potential Litigation may exist that they do not presently know of or
suspect to exist and that they have taken that possibility into account. Each of the Parties
nevertheless intends this release to be a full, final and complete mutual release of each other
Party, and each of their respective partners, member companies, subsidiaries, shareholders,
joint venture members, insurers, members, officers, principals, affiliates, employees, officers,
directors, elected officials, agencies, predecessors, successors, assigns and attorneys and agree
that the release given herein will be and remain in effect notwithstanding the discovery or
existence of any additional or different facts, circumstances or claims.
5. Admissibility. The Parties agree that this Agreement and any acts done in the performance
of this Agreement shall not be admissible, discoverable, or relevant in any case or
proceeding as evidence of the rights, duties, or obligations of the Parties; provided,
however, that nothing contained in this Paragraph 6 shall be interpreted to restrict the.
right of any Party to use this Agreement as evidence of the rights, duties or obligations
created by this Agreement. This Agreement shall not be used as a standard by which other
matters may be judged.
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7. Effectuation. The Parties agree to cooperate with each other in the execution of the terms of
this Agreement and to do all things and take all additional actions as may be reasonably
necessary to effectuate the transactions contemplated in this Agreement.
8. Attorneys' fees and costs. Each Party will bear its own attorneys' fees and costs related to or
incurred in the negotiation of this Agreement.
9. No Admission, This Agreement is a compromise of disputed claims. Accordingly; the
payments and considerations provided for herein are not intended to and shall not be
construed as an admission or acknowledgement by any of the Parties of liability or of the
merits or validity of any other Party's claims.
10. Representations. The Parties each represent and warrant that they have each read and
understand this Agreement, that they have each had the opportunity to consult with counsel
of their own choosing before executing it and that none of them is relying on any
representations by any other Party or other Party's counsel as to the legal effect of this
Agreement. .
11. Authority. Each signatory of the Agreement represents and warrants that he/she has full
power and authority to enter into and deliver this Agreement on whose behalf he/she signs
and that the Party on whose behalf he/she signs has not sold, assigned, transferred,
conveyed or otherwise disposed of any claim, demand or right surrendered by virtue of this
Agreement.
12. Binding Effect. This Agreement is binding on and shall inure to the benefit of each of the
Parties hereto and to their respective present and future member companies, subsidiaries,
principals, affiliates, successors, assigns, trustees, administrators, insurers, officers, directors,
elected officials, attorneys, agents, predecessors, successors, assigns, and employees.
13. Amendments. This Agreement may not be amended, changed, modified, released or
discharged except by a writing signed by duly authorized representatives of each of the
Parties hereto.
14. Entire A:,reement. This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all prior oral and written agreements with
respect to the matters provided for herein. It is understood and agreed, however, that this
Agreement is not intended, nor shall it be construed to supersede, amend, alter, modify or
change, in whole or in part, any of the terms or conditions of the Block Contract or the Parties'
respective rights and obligations under said contract and any other contracts. Each of the
Parties covenants that it has not entered into this Agreement as a result of any representation,
warranty, agreement, promise or inducement other than as may be specifically provided
herein.
15. Effective Date. Counters. arts, This Agreement is effective only upon the occurrence of (1) the
date of signatures of both the Parties and (2) effective date of the settlement agreement
between Highline and SPU and (3) the settlement agreement between Cascade Water Alliance
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and SPU, each regarding the Potential Litigation. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. Facsimile and electronic copies of the
Parties' signatures shall be treated as if they are originals.
16. Law. Jurisdiction, and Venue. This Agreement shall be governed, construed and enforced in
accordance with the laws of the State of Washington, The venue of any action brought
hereunder shall be in the Superior Court of King County.
17. Captions. Captions and titles are for convenience only and shall have no effect on the
construction or interpretation of any part hereof.
CITY OF TUKWILA HIGHUNE WATER DISTRICT
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By
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Allan Ekberg, Mayor
Dated: 08/19/2022
ATTEST
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Christy O'Flaherty, City Clerk
APPROVED AS TO FORM
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Kari L. Sand, City Attorney
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1640174.1 - 356659 -0226
By
y DelMar, General Manager
Dated: ,,,
APPROVED AS TO FORM
Eric Frimodt, District legal counsel