ORD 10-654ORDINANCE NO. 10-654
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FEDERAL
WAY, WASHINGTON, GRANTING LAKEHAVEN UTILITY D�STRICT, A
MUNICIPAL CORPORATION, A NONEXCLUSIVE FRANCHISE TO
OCCUPY THE RIGHTS-OF-WAY OF THE CITY OF FEDERAL WAY,
WASHINGTON, THROUGH THE FRANCHISE AREA FOR THE
PURPOSES OF CONSTRUCTING, MAINTAINING, REPAIRING,
RENEWING AND OPERATING A WATER AND SEWER SYSTEM WITHIN
AND THROUGH THE CITY OF FEDERAL WAY AND ADDRESSING
HYDRANT COSTS WITHIN CITY BOUNDARIES.
WHEREAS, Lakehaven Utility District and the City of Federal Way have determined that it
is in the best interests of the public and both parties that Lakehaven Utility District be granted a
franchise from the City of Federal Way, in order to specify the rights and duties of Lakehaven to
install, operate and mainta.in a water and sewer system including all related appurtenances located in
certain rights-of-way as depicted in Exhibit A; and
WHEREAS, RCW 35A.47.040 permits the City of Federal Way to grant nonexclusive
franchises for the use of public streets, bridges or other public ways for, inter alia, poles, conduits,
tunnels, towers and structures, pipes and wires and appurtenances thereof for water, sewer, and other
private and publicly owned and operated facilities for public service; and
WHEREAS, in granting such a nonexclusive franchise, the City of Federal Way reserves
such other powers and authorities granted to Washington code cities by general law;
WHEREAS, the parties acknowledge the Washington State Supreme Court's ruling in Lane
v. Seattle that the cost of hydrants is a gerieral government responsibility; and
WHEREAS, Franchisee recognizes a benefit to its rate payers in not having its jurisdiction
assumed by the City or having the City impose a utility tax on Franchisee, and
Ordinance No 1 D-654 Page 1 of 27
WHEREAS, Franchisee is willing to accept the burden of any hydrant costs the City may be
liable for in exchange for the City waiving its rights during the period of the Franchise to: (1)
undertake an assumption of Franchisee's sewer and water service juri.sdiction and (2) levy a utility
tax on Franchisee, and
WHEREAS, the parties believe that it would be in their mutual best interest to study and
evaluate ways in which they may work more cooperatively, including whether merger of their
operations would be beneficial.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. Definitions
Where used in this Franchise the following terms shall be defined as follows:
1.1 "City" means the City of Federal Way, Washington, a municipal corporation of the
State of Washington, and its respective successors and assigns.
1.2 "Council" means the City of Federal Way Council acting in its official capacity.
1.3 "Director" means the Public Works Director, or designee, of the City of Federal Way
Public Works Department.
1.4 "Facilities" means all shuctures, antennas, equipment, pipes, mains, hydrants, valves,
meters, service lines in right of way, manholes, clean outs, and all other related appurtenances
owned or used by Franchisee and necessary for the distribution of water and collection of
wastewater.
1.5 "FWRC" means the Federal Way Revised Code.
Ordinance No 10-654 Page 2 of 27
1.6 "Franchise Area" means rights-of-way for public roads, streets, avenues, alleys, and
highways of the City as set forth in Exhibit A. Exhibit A may be updated by the City upon the City's
acquisition or vacation of rights of way and upon any annexation of area that is within the
Franchisee's service area.
1.7 "Franchisee" means Lakehaven Utility District, a municipal corporation, and public
utility, and its respective successors and assigns.
Section 2.
2.1
Grant/Acceptance
Grant of Franchise. The City does hereby grant to Franchisee, subject to the terms of
this Franchise, the right, privilege, authority and franchise to:
(a)
Area; and
�)
such uses.
Lay, construct, extend, repair, renew, and replace Facilities in the Franchise
To charge and collect tolls, rates and compensation for such utility service and
2.2 Acceptance bv Franchisee. Franchisee shall have no rights under this Franchise, nor
shall Franchisee be bound by the terms and conditions of this Franchise, unless Franchisee sha11,
within sixty (60) days after the effective date of this Franchise, file with the City its written
acceptance of this Franchise and all of its terms and conditions.
Section 3.
3.1
Conditions of Use
Non-Franchise Area City Propert� This Franchise does not and shall not convey any
right to Franchisee to install its Facilities on, under, over, across, or to otherwise use City-owned or
leased properties of any kind outside the Franchise Area, or to install Facilities on, under, over,
across or otherwise use any City owned or leased property within the Franchise Area other than
Ordinance No 10-654 Page 3 of 27
public roads, streets, avenues, alleys, and highways of the City. The Franchisee shall place Facilities
within the Franchise Area, but not on any other puhlic property owned, in whole or in part, leased, or
otherwise occupied by the City unless an easement is granted.
3.2 Termination of Easements. Franchisee agrees that it shall be responsible to abandon
its easements in property that is to become right of way under City projects pursuant to, and in
accordance with, the September 2009 agreement between the parties, the terms of which are hereby
incorporated by reference.
3.3 O�eration costs. To the extent permitted by law and as otherwise expressed in this
agreement, Franchisee shall be solely responsible for the operation, maintenance, repa.ir and
construction of its Facilities.
3.4 Facilities Abandonment. Franchisee will notify the City when a Facility has been
deemed obsolete and its use discontinued. The Facility sha11 be removed by Franchisee, at is
expense, within one hundred (180) days of the date the Facility's use is discontinued. The City may
deem a Franchisee's facility obsolete if the Facility ceases to be operational for more than ninety (90)
days and the Franchisee has not initiated repair or removal. If Franchisee fails to begin repair or
remove the Facility, the City or its agent may cause the Facility to be removed pursuant to Section 14
of the Franchise. However, with the express written consent of the City, Franchisee may leave such
Facilities in place. The City's consent shall not relieve Franchisee of the obligation and/or costs to
subsequently remove or relocate such Facilities at the City's request, in which case Franchisee shall
perform such work at no cost to the City in accordance with Section 14. The provisions of this
Section shall survive the expiration, revocation or termination of this Franchise.
Ordinance No 1 D-654 Page 4 of 27
Section 4. Term.
4.1 Initial Term. Subject to Franchisee filing its acceptance pursuant to Subsection 2.2,
the term of this Franchise shall be for a period of five (5) years commencing on the effective date of
this Franchise, unless terminated earlier pursuant to the terms of this Franchise or other applicable
law. This Franchise may be extended by mutual written agreement of the parties
Section 5. Hvdrant costs.
The parties agree that during the term of the Franchise, Lakehaven shall be responsible to
operate and maintain all portions of the water system, including the fire hydrants and those
components of the water system that provide fire suppression benefits within City boundaries.
Lakehaven shall, during the term of this Franchise, indemnify and hold the City harmless from
any costs associated with the maintenance of the water system, including the cost of maintaining
the fire hydrants and those portions of the system that provide fire suppression benefits within
City boundaries. As consideration for Lakehaven solely bearing responsibility for maintenance
of the fire hydrant and those portions of the water system that provide fire suppression benefits
within City boundaries, the City agrees to forego, during the term of the Franchise; (1) the
levying of any utility tax on revenues of the water and sewer systems and the (2) initiation of any
proceedings under RCW Chapter 35.13A to assume the water andlor sewer service jurisdiction of
Lakehaven. In the event that it is determined in a court of competent jurisdiction that the terms
and provisions herein do not legally transfer the City's obligation to bear the cost of maintenance
of the hydrants, or other portions of the system that provide fire suppression benefits within City
boundaries, the parties agree to meet to discuss the amendment of this Agreement to retain the
Ordinance No 10-654 Page S of 27
essential purposes of this section. If no agreement can be reached, this section may be stricken
from the Agreement.
Section 6. Location of Facilities
6.1 Location. The location of existing Facilities, their depths below the surface of ground
or grade of a right-of-way (if available), shall be submitted to the City in the form of a map showing
the approximate location of Franchisee's existing water and sewer systems within the Franchise
Area. Upon written request of the City, Franchisee shall update such map to reflect actual or
anticipated improvements to the Franchisee's water and sewer systems within the Franchise Area.
Any such map (or update thereo fl so submitted shall be for City informational purposes only and
shall not obligate Franchisee to undertake any specific improvements, nor shall such map be
construed as a proposal to undertake any specific improvements.
6.2 GIS Data. The Franchisee shall provide, at such time as Franchisee develops and
employs Geographic Information System ("GIS") technology for its water and sewer system maps
and records throughout its service area, information required in section 6.1 in digital GIS format for
its Facilities within the Franchise Area.
6.3 Design Markin�s. In the event the City desires to design new streets or intersections,
renovate existing streets, or make any other public improvements, Franchisee shall at the City's
reasonable request, provide the location of Franchisee's underground Facilities within the Franchise
Area by either field markings or by locating the Facilities on the City' s design drawings, and sha11
provide all other reasonable cooperation and assistance to the City.
6.4 No Warrantv or Waiver. Nothing herein is intended to expand, or relieve the parties
of, their respective obligations arising under Chapter 19.122 RCW or other applicable law with
Ordinance No 10-654 Page 6 of 27
respect to determining the location of utility facilities prior to construction. Further, neither the
provisions of this Franchise nor the absence of any specific provision in this Franchise is intended to
limit, detract from or render ineffective any disclaimer (including, without limitation, any disclaimer
as to accuracy or completeness) placed by Franchisee on any map furnished to the City pursuant to
Section 6.1 and 6.2 of this Franchise.
Section 7. Noninterference of Facilities
Franchisee agrees to maintain its Facilities and perform all work within the Franchise Area:
(1) so as not to unreasonably interfere with the free passage of traffic, (2) in accordance with the laws
of the State of Washington and City ordinances, regulations, resolutions and rules, and (3) as
required by the Director.
Section 8. Requirement to Obtain Permits
8.1 Permits. Franchisee shall, at its expense, obtain a11 permits (including rights-of-way
permits) and pay all fees required by applicable City ordinances, regulations, resolutions and rules
prior to commencing any work within the Franchise Area, excluding blanket permits for water and
sewer routine maintenance work. Permit applications shall: (1) show the position and location of the
Facilities to be constructed, laid, installed, or erected at that time; (2) show their relative position to
existing rights-of-way or property lines upon prints drawn to scale, unless otherwise approved by the
Director; (3) designate rights-of-way by their names and; (4) show improvements as required by the
Director, such as, but not limited to, sidewalks, curbs, gutters, shoulders of roadway, ditches, paved
roadways, roadways to property lines, turnouts, parking strips, telephone or electric distribution
poles, and pipes existing on the ground to be occupied. The Franchisee shall specify the class and
type of materials to be used, equipment to be used, and mode of safeguarding and facilitating the
Ordinance No 10-654 Page 7 of 27
public traffic during construction. The manner of excavation, construction, installation, backfill,
and temporary structures such as, but not limited to, traffic turnouts and road obstructions shall meet
the standards of the FWRC and be satisfactory to the Director. All traffic control shall be in
accordance with the right-of-way permit, and shall be in accordance with the Manual on Uniform
Traffic Control Devices (M(JTCD). The Franchisee shall indicate on the right-of-way use pernut
application the time needed to complete the work. The time needed to complete the work is subject
to approval by the City as a condition of the issuance of the right-of-way permit.
8.2 Exception to Permit Requirement. In the event of an emergency in which
Franchisee's Facilities within the Franchise Area are in a condition as to immediately endanger the
safety or health of life, property or the environment, Franchisee may take action immediately to
correct the dangerous condition without first obtaining any required permit so long as (1) Franchise
informs the City of the nature and extent of the emergency and the work to be performed prior to or
at the commencement of the work, if reasonably possible, or immediately following cessation ofthe
emergency; and (2) such permit is obtained by Franchisee as soon as practicable thereafter.
8.3 Routine Maintenance. Franchisee shall have the right to conduct routine maintenance
to repair, modify, supplement, replace or upgrade the Franchisee's Facilities, provided that the
Franchisee shall obtain any necessary Right-of-Way Use Permit and any other permits or
authorizations required by all applicable federal, state, and local laws, rules and regulations prior to
the performance of any said routine maintenance. The following non-emergency related activities
such as water main flushing, valve exercising, sanitary sewer line cleaning/inspection, and other
activities as approved shall be allowed to occur under an annual maintenance blanket permit.
Ordinance No 10-654 Page 8 of 27
8.4 Notice of Entry. At least forty-eight (48) hours priorto entering right-of-way adjacent
to private property to perform the installation, maintenance, repair, reconstruction, or removal of
facilities, except those emergency activities exempted from permit requirements, a written notice
describing the nature and location of the work to be performed shall be communicated to the private
property occupant to be impacted by Franchisee's work. Examples of acceptable notice include but
are not limited to a pre-printed door hanger, mailed letter, and/or sandwich boards.
Section 9. Standard of Performance
The Franchisee shall not excavate for a distance of more than one hundred feet (100') without
immediately backfilling and compacting to surface grade and permit requirements. Backfilled trench
areas within a driving lane must be patched, either temporarily or permanently, or plated, before the
end of the workday in which they have been opened. Trench areas within the right-of-way, but not
within a driving lane, must also be plated, patched backfilled, and/or patched within the time limits
specified by the City on the right-of-way use permit. Final surface restoration sha11 be completed
within thirty (30) days and shall be equal to or better than the surface condition prior to permit
issuance.
Any asphalt overlay completed within the Franchise Area during a five (5) year period
immediately prior to the date of permit application shall not be open cut by Franchisee unless
required by an emergency or as approved by the Director. In the event of this emergency cut in new
pavement, Franchisee shall install new asphalt overlay on the street that is open cut, for a minimum
of 250 feet in both directions from the open cut, or pay a mitigation fee, or as determined otherwise
by the Director.
Ordinance No 10-654 Page 9 of 27
Franchisee shall, in carrying out any authorized activities within the Franchise Area, comply
with all applicable laws, ordinances, codes and standards, as now existing or hereafter adopted or
amended, and shall comply with the terms of this Franchise, whether or not the work is performed by
the Franchisee, its agents, employees, subcontractors, or other third parties at Franchisee's direction.
Upon completion of any installation of Franchisee's Facilities within the Franchise Area, Franchisee
shall submit to the Director plans, stamped by a Professional Engineer licensed by the State of
Washington (if required in the permit), showing the "as-builY' location of the Facilities. Nothing
herein is intended to relieve the parties of their respective obligations arising under applicable law
with respect to determining the location of utility facilities.
Section 10. Survev Markers and Monuments
Franchisee shall, using a licensed surveyor, immediately replace all markers or monuments
disturbed during any work by Franchisee within the Franchise Area. Franchisee shall pay all costs
associated with such lost, destroyed or disturbed monuments or markers.
Section 11. Surface Markings/Stakes
Prior to Franchisee commencing any excavation work within the Franchise Area that disturbs
any monument or marker, Franchisee shall, using a licensed surveyor, reference all monuments and
markers relating to subdivisions, plats, highway, and other surveys. The reference points shall be
located so that they shall not be disturbed during the Franchisee' s operations under this Franchise.
The method referencing these monuments or other points shall be approved by the City before
placement. The construction shall be made as expeditiously as conditions permit, and as directed by
the City. The cost of monuments or other markers lost, destroyed, or disturbed, and the expense of
replacement of the monuments, shall be borne solely by the Franchisee. A complete set of reference
Ordinance No 10-654 Page 10 of 27
notes for monuments, markers, and other ties shall be filed with the City. In the event of any conflict
or inconsistency between this Section 10 and Chapter 19.122 RCW, as now existing or hereafter
amended, Chapter 19.122 RCW will control.
Section 12. Noti�cation to Fire District
If it is necessary to shut down or diminish the water pre�ssure so that fire hydrants may be
affected, the Franchisee shall notify the appropriate fire distri� by telephone followed by faxed
transmittal or written notification, that water pressure or fire flo� conditions have been affected. In
case of a planned shutdown or diminished water flow, at least fo�:y-eight (48) hour prior norification
to the fire district is required. If more than one fire hydrant is affected, Franchisee must provide a
map of the affected area to the fire district.
Section 13. Right to Citv of Undertake Maintenance Work
The laying, construction, maintenance, and operation of Franchisee' s system of water and
sewer pipes, and appurtenances granted under this Franchise sha11 not preclude the City, its
accredited agents or its contractors from doing necessary maintenance work contiguous to the
Facilities, provided that the Franchisee shall have sufficient notice of blasting, regrading, or
excavating in order that Franchisee may protect its lines or pipe or property.
Section 14. Right to Citv to Comnlete Work
In the event Franchisee fails to comply with any applicable federal, state or City laws,
ordinances, rules, regulations or standards or with any of the terms of this Franchise, and such
noncompliance continues for a period of fourteen (14) days after Franchisee receives written notice
from the City regazding the noncompliance, the City may, but in no event is the City obligated to,
order any work completed, including without limitation Franchisee's obligation to repair pursuant to
Ordinance No 10-654 Page 11 of 27
Section 13 herein and Franchisee's obligation to remove facilities pursuant to Section 15 herein. If
the City causes such work to be done by its own employees or by any person or entity other �than
Franchisee, the City will notify the state Department of Health or Department of Ecology, as
appropriate, prior to such work. The Franchisee shall, upon the City's written request, immediately
reimburse the City for all reasonable costs and expenses incurred by the City in having such work
performed, which costs may include the City's reasonable overhead expenses and attorneys fees.
Section 15. Notice to Franchisee of Work bv City
15.1 Citv Reservation of Ri ts. The City reserves the right to use, occupy and enjoy the
Franchise Area for any purpose that is not inconsistent with the terms and conditions of this
Franchise. The Rights reserved herein include, without limitation, the construction of any City
owned electrical, water, sewer or storm drainage line, installation of traffic signals, street lights,
trees, landscaping, bicycle paths and lanes, equestrian trails, sidewalks, other pedestrian amenities,
and other public street improvement projects. This Franchise is not an exclusive franchise. Without
limiting Franchisee's rights under this Franchise, this Franchise shall not in any manner prohibit the
City from granting other and further franchises in, under, over, upon and along the Franchise Area.
15.2 City's Duties. In the event the City undertakes any work, including necessary
maintenance within a right-of-way in which Franchisee's Facilities are located, and such work
necessitates the relocation of Franchisee's then existing Facilities within the Franchise Area, the City
shall:
(a) Provide written notice to Franchisee requesting such relocation within a
reasonable time prior to the commencement of such City work; and
Ordinance No 1 D-654 Page 12 of 27
(b) Provide Franchisee with copies of pertinent portions of the City's plans and
specifications for such City work so that Franchisee may relocate its Facilities to
accommodate such City work.
(c) Coordinate to minimize conflicts between existing Facilities and Franchise
Area improvements where possible.
15.3 Franchisee's Duties. After receipt of the City notice requesting the relocation of the
Facilities pursuant to Subsection 15.2 (a) and receipt of the plans and specifications pursuant to
Subsection 15.2(b), Franchisee shall, within such reasonable time as approved by the Director, raise,
lower, or move such Facilities within the Franchise Area at its sole cost and expense so as to
conform to such new grades as may be established, and place the pipe in a location or position
causing the least interference with the improvement, repair, or alteration contemplated by the City.
15.4 Exclusivitv. This Section 15 shall govern all relocations of Franchisee's Facilities
required in accordance with this Franchise. Nothing in this Section 15 shall require Franchisee to
bear any cost or expense in connection with the location or relocation of any Facilities existing under
benefit of easement on property owned by a person or entity other than the City.
Section 16. Dama�e Repair
In case of damage by the Franchisee or by the Facilities of the Franchisee to rights-of-way, or
to public and private improvements to rights-of-way, the Franchisee agrees to repair the damage at its
own cost and expense. The Franchisee shall, upon discovery of such damage, immediately notify the
City. The City will inspect the damage, and set a time limit for completion of the repair. If the City
discovers damage caused by the Franchisee to rights-of-way, or to public and private improvements
Ordinance No 10-654 Page 13 of 27
to rights-of-way, the City shall give the Franchisee notice of the damage and set a time limit so the
Franchisee may repair the damage. In the event the Franchisee does not repair a right-of-way or an
improvement to a right-of-way as required in this section, the City may repair the damage pursuant to
Section 14 of this Agreement
Section 17. General Maintenance of Facilities
Franchisee will maintain Facilities located within the Franchisee Area in good operating
condition and repair in a manner consistent with applicable law and prudent utility practice, and will
comply with the following procedures:
(a) Franchisee will provide the City, on an annual basis upon the City's written
request, a proposed schedule of its routine Facility replacement or repair activities within the
Franchisee Area.
(b) Franchisee will meet, at least annually upon the City's written request, with a
City representative to discuss the City's concerns regarding the timing, scope, nature or
method of such repair or replacement activities within the Franchisee Area.
Section 18. Emergencv Ouerations
Prior to the beginning of each winter storm season, Franchisee will, at the request of the City,
attend an annual coordination meeting with the City to discuss Franchisee's Emergency Response
Plan. At the request of the City, a copy of those portions of Franchisee's Emergency Response Plan
that Franchisee makes generally publicly available will be provided to the City at the coordination
meeting, along with appropriate telephone number and pager numbers during each emergency.
Ordinance No 10-654 Page 14 of 27
Section 19. Default
19.1 Notice of Default. If Franchisee shall fail to comply with any of the provisions of this
Franchise, the City may serve a written notice to Franchisee ordering such compliance and
Franchisee shall have sixty (60) days from the receipt of such notice in which to comply.
19.2 Revocation of Franchise. If Franchisee is not in compliance with this Franchise after
the expiration of the sixty (60) day period, the City may, by ordinance, declare an immediate
forfeiture of this Franchise; provided, however, if any failure to comply with this Franchise by
Franchisee cannot reasonably be corrected with dt�e diligence within such sixty (64) day period
(Franchisee's obligation to comply and to proceed with due diligence being subject to unavoidable
delays and events beyond its control), then the time within which Franchisee may so comply shall be
extended, upon notice to the Director, for such time as may be reasonably necessary and so long as
Franchisee commences promptly and diligently to effect such compliance.
Section 20. Limited Rights
This Franchise is intended to convey only a limited right and interest to Franchisee in the
Franchise Area. This Franchise is not a warranty of title or conveyance of any ownership interest in
or to the Franchise Area to Franchisee.
Section 21. Eminent Domain
The existence of this Franchise shall not preclude the City from acquiring by condemnation,
in accordance with applicable law, all or a portion of Franchisee' s Facilities within the Franchise
Area for the fair market value thereof. In determining the value of such Facilities, no value shall be
attributed to the right to occupy the Franchise Area conferred by this Franchise.
Ordinance No 10-654 Page 1 S of 27
Section 22. Vacation
If at any time the City, by ordinance, vacates all or any portion of public streets, roads and/or
rights-of-way within the Franchise Area, the City will not be liable for any damages or loss to the
Franchisee by reason of such vacation. The City agrees to exert reasonable good faith efforts to
reserve an easement for Franchisee's existing or proposed Facilities when a street, public way, or
area is vacated. The City may, after thirty (30) days written notice to Franchisee, terminate this
Franchise with respect to any such vacated area.
Section 23. Compliance with Laws
Franchisee shall comply with all applicable federal, state and City laws, ordinances,
resolutions, regulations, standards and procedures, as now existing or hereafter amended or adopted,
including without limitation the State Environmental Protection Act; the Federal Occupational Safety
and Health Act of 1970 (OSHA), and the Washington Safety .and Health Act of 1973 (WISHA)
provided, however, that if any term or condition of this Franchise and any term or condition of any
City law, code, ordinance, resolution, regulation, standard, procedure, permit, or approval are in
conflict, the term or condition of this Franchise will control.
Section 24. Guarantee
Franchisee shall guarantee work completed by the Franchisee after the date of this franchise
for a period of twenty (20) years from completion against settlement or conditions requiring repair..
Section 25. CharEe for Administrative Costs
Franchisee shall reimburse the City for the actual reasonable administrative expenses
incurred by the City that are directly related to receiving and approving this Franchise. Nothing
herein shall preclude the City from recovering any administrative costs incurred by the City in the
Ordinance No 10-654 Page 16 of 27
approval of permits ar in the supervision, inspection or examination of all work by Franchisee in the
Franchise Area as prescribed in accordance with applicable provisions of the City's code.
Section 26. Indemni�cation
Franchisee agrees to indemnify and hold harmless and defend the City, its elected officials,
officers, employees, agents, and volunteers from any and all claims, demands, losses, actions and
liabilities (including costs and all attorney fees) to or by any and all persons or entities, including,
without limitation, their respective agents, licensees, or representatives, arising from, resulting from,
or connected with this Franchise to the extent caused in part or in whole by the acts, errors or
omissions of the Franchisee, its officers, partners, shareholders, agents, employees, or by the
Franchisee's breach of this Franchise. This section shall not be construed to require Franchisee to
indemnify, hold harmless or defend the City against claims or damages arising from the negligence
of the City, its agents or employees. In the event any claim, demand, suit or action is commenced
against the City that constitutes an obligation of Franchisee pursuant to this Section 26, the City sha11
promptly notify Franchisee thereof, and Franchisee shall defend any such claim, demand, suit or
action. Franchisee shall not settle or compromise any such suit or action except with prior written
consent of the City, which shall not be unreasonably withheld. The City shall have the right at all
times to participate through its own attorney in any suit or action which arises pursuant to this
Franchise when the City determines that such participation is required to protect the interest of the
City or the public. In the event it is determined that RCW 4.24.115 applies to this Franchise,
Franchisee agrees to defend, hold harmless and indemnify the City to the maximum extent permitted
thereunder, to the full extent of Franchisee's negligence.
Ordinance No 10-654 Page 17 of 27
Section 27. Insurance
27.1 Minimum Limits. The Franchisee agrees to carry as a minimum, the following
insurance, in such forms and with such carriers as are satisfactory to the City.
(a) Workers compensation and employer's liability insurance in amounts
sufficient pursuant to the laws of the State of Washington;
(b) Commercial general liability insurance with limits of liability not less than
$5,000,000 each occurrence and $5,000,000 aggregate for bodily injury, including personal
injury or death, products liability, contractual coverage, operations, explosion, collapse,
underground and property damage; and
(c) Automobile Liability insurance with limits of liability not less than
$5,000,000 each accident for bodily injury, or death and property damage.
27.2 Mandatorv Insurance Provisions. The commercial general liability insurance and
automobile liability insurance policies shall be endorsed to contain the following provisions:
(a) The City, its officers, elected officials, employees, and volunteers are to be
named as additional insured;
(b) Coverage shall apply separately to each insured against whom claim is made
or suit is brought, except with respect to the limits of the insurer's liability;
(c) Coverage shall not be suspended, canceled, modified or reduced except after
thirty (30) days prior written notice to the City delivered by certified mail, return receipt
requested; and
Ordinance No 10-654 Page 18 of 27
(d) Coverage shall be primary as to the City, its officers, officials, employees and
volunteers. Any insurance or self-insurance by the City, its officers, officials, employees or
volunteers shall be in excess of Franchisee's required insurance.
27.3 Verification of Covera�e. Franchisee shall fiirnish the City with certificates of
insurance and original endorsements evidencing the coverages required by this Section. The
certificates and endorsements shall be signed by a person authorized by the insurer to bind coverage
on its behalf and must be received and approved by the City annually. At the City's request,
Franchisee shall deliver certified copies of all required insurance policies.
27.4 Self-Insurance. In satisfying the insurance requirements set forth in this Section,
Franchisee may self-insure against such risks in such amounts as are consistent with good utility
practices. Franchisee shall provide the City with sufficient written evidence, upon request, that such
insurance (or self-insurance) is being so maintained by Franchisee. Such written evidence shall
include, to the extent available from Franchisee's insurance carrier, a written certificate of insurance
with respect to any insurance maintained by Franchisee in compliance with this Section.
Section 28. General Provisions
28.1 Entire A�reement. This Franchise contains all of the agreements of the Parties with
respect to any matter covered or mentioned in this Franchise and no prior agreements or
understandings pertaining to any such matters shall be effective for any purpose.
28.2 Modification. No provision of this Franchise may be amended or added to except by
agreement in writing signed by both of the Parties.
28.3 Assignment. Franchisee shall not have the right to transfer or assign, in whole or in
part, any or all of its obligations and rights hereunder without the prior written consent of the City,
Ordinance No 10-654 Page 19 of 27
which consent will not be unreasonably withheld. Any assignee shall, within thirty (30) days of the
date of any approved assignment, file written notice of the assignment with the City together with its
written acceptance of.all terms and conditions of this Franchise. Notwithstanding the foregoing,
Franchisee shall have the right, without such notice or such written consent, to mortgage its rights,
benefits and privileges in and under this Franchise to the Trustee for its bondholders.
28.4 Attorney Fees. In the event the City or the Franchisee defaults on the performance of
any terms in this Franchise, and the Franchisee or the City places the enforcement of the Franchise or
any part thereof or the collection of any monies due, or to become due hereunder, in the hands of an
attorney, or files suit upon the same, the prevailing party shall be entitled to an award of all
reasonable attorneys' fees, costs and expenses. The venue for any dispute related to this Franchise
shall be King County, Washington.
28.5 No Waiver. Failure of either party to declare any breach or default by the other party
immediately upon the occurrence thereof, or delay in taking any action in connection therewith, sha11
not waive such breach or default, but such party shall have the right to declare any such breach or
default at any time. Failure of either party to declare one breach or default does not act as a waiver
of such party's right to declare another breach or default.
28.6 Governin� Law. This Franchise shall be made in and shall be governed by and
interpreted in accordance with the laws of the State of Washington.
28.7 Authori . Each individual executing this Franchise on behalf of the City and
Franchisee represents and warrants that such individual is duly authorized to execute and deliver this
Franchise on behalf of the Franchisee or the City.
Ordinance No 10-654 Page 20 of 27
28.8 Notices. Any notices required to be given by the City to Franchisee or by Franchisee
to the City shall be delivered to the parties at the following addresses:
Franchisee: Lakehaven Utility District
Attn: General Manager
31627 1 st Ave South
P.O. Box 4249
Federal Way, WA 98063
City: City of Federal Way
Attn: City Attorney
33325 8�' Avenue South
P.O. Box 9718
Federal Way, WA 98063
Any notices may be delivered personally to the addressee of the notice or may be deposited in
the United States mail, postage prepaid, to the address set forth herein. Any notice so posted in the
United States mail shall be deemed received three (3) days after the date of mailing.
28.9 Ca�tions. The respective captions of the sections of this Franchise are inserted for
convenience of reference only and shall not be deemed to modify or otherwise affect in any respect
any of the provisions of this Franchise.
28.10 Remedies Cuxnulative. Any remedies provided for under the terms of this Franchise
are not intended to be exclusive but shall be cumulative with all other remedies available to the City
at law, in equity or by statute.
Section 29. Cooperation/Merger Discussion
The parties agree to participate in a joint discussion to review the benefits of expanding the
cooperative relationship developed between them to better serve the public interest. The discussion
shall address whether, and to what extent, it would be beneficial to the interests of City residents and
Lakehaven ratepayers to merge the water and sewer utilities into City government. The discussion
Ordinance No 1 D-654 Page 21 of 27
shall be implemented in good faith and shall focus on ways that governmental cooperation would
make the provision of public services more efficient and cost effective. The discussion will evaluate
the possible existence of operational efficiencies associated with merger and non-merger scenarios.
The discussion shall occur no later than two years after the effective date of this Franchise. The
parties retain the authority to determine whether merger is in their respective best interests and shall
be free to advocate for, or against, merger in any proceedings that might be undertaken under RCW
Chapter 35.13A.
Section 30. Severabilitv
Should any section, subsection, paragraph, sentence, clause, or phrase of this Franchise, or its
application to any person or situation, be declared unconstitutional or invalid for any reason, such
decision shall not affect the validity of the remaining portions of this Franchise or its application to
any other person or situation. The City Council of the City of Federal Way hereby declares that it
would have adopted this Franchise and each section, subsection, sentence, clauses, phrase, or portion
thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses,
phrases, or portions be declared invalid or unconstitutional
Section 31. Ratification
Any act consistent with the authority and prior to the effective date of this Franchise is hereby
ratified and affirmed.
Section 32. Effective Date
This Franchise shall take effect and be in full force thirty (30) days after its passage and
publication, according to law (see Effective Date below).
Ordinance No 10-654 Page 22 of 27
PASSED by the City Council of the City of Federal Way this 20th day of April, 2010.
CITY OF FEDERAL WAY
ATTEST:
MAYOR, LINDA KOC AR
��.1..� � �l .��, � � �_
� ��• S �i
APPROVED AS TO FORM:
CITY ATTORNEY, PATRICIA A. RICHARDSON
FILED WITH THE CITY CLERK:
COUNCIL BILL NUMBER
PASSED BY THE CITY COUNCIL:
PUBLISHED:
EFFECTIVE DATE:
ORDINANCE NO.:
3/30/2010
533
4/20/2010
4/24/2010
5/24/2010
10-654
Ordinance No 10-654 Page 23 of 27
�
ACCEPTANCE:
The undersigned hereby accepts all the rights and privileges of the above granted Franchise and
acknowledges that such rights and privileges are subject to and limited by all ofthe terms, conditions
and obligations contained therein.
DATED this �7 day of , 2010.
LAKEHAVEN UTILTTY DISTRICT
�
By:
Its: Gtcne.��/ /�ir.r�a�a� r-
Ordinance No 10-654 Page 24 of 27
EXHIBIT A
Location of Facilities within Franchise Area
Ordinance No 1 D-654 Page 25 of 27
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Ordinance No 10-654 Page 26 of 27
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Ordinance No 10-6�4 Page 27 of�27