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ORD 15-795 ORDINANCE NO. 15-795 AN ORDINANCE of the City Council of the City of Federal Way, Washington, granting Lakehaven Utility District, a Municipal Corporation, an extension to 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. WHEREAS, Ordinance 10-654 granted Lakehaven Utility District("Franchisee")a franchise to operate a water and sewer system within the City of Federal way; and WHEREAS,the franchise will expire on May 24, 2015; and WHEREAS,Section 4 of the franchise established in Ordinance 10-654 allows the parties to extend the term of the franchise by mutual written agreement; and WHEREAS, the City and Franchisee are currently negotiating a new franchise and have agreed to extend the expiration of the current franchise until December 31,2015 in order to give the parties additional time to negotiate the new franchise; NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. The term of the franchise established in Ordinance 10-654,which is attached and incorporated by this reference as Exhibit A, is hereby extended until December 31, 2015. Section 2. Acceptance by Franchisee. Franchisee shall have no rights nor shall Franchisee be bound by the terms and conditions of this ordinance unless,prior to May 24,2015,Franchisee files with the City its written acceptance of the terms and conditions of this ordinance. Ordinance No. 15-795 Page 1 of 5 Section 3. Corrections. The City Clerk and the codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener/clerical errors, references, ordinance numbering, section/subsection numbers and any references thereto. Section 4. Ratification. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and affirmed. Section 5. Effective Date. By unanimous consent,the Council finds that this ordinance is needed for the immediate support of city government and is not subject to initiative or referendum. This ordinance shall take effect and be in force five(5) days from the time of its final passage, as provided by law. PASSED by the City Council of the City of Federal Way this 19th day of May, 2015. CITY OF DERAL WAY • 41rM FERRELL ATTEST: 411 ( LERK, STEPHANIE Cll.TNEY, CMC APPROVED AS TO FORM:ana iv CITY AT EY, AMY JO PEARSALL FILED WITH THE CITY CLERK: 05/01/2015 PASSED BY THE CITY COUNCIL: 05/19/2015 Ordinance No. 15-795 Page 2 of 5 PUBLISHED: 05/22/2015 EFFECTIVE DATE: 05/24/2015 ORDINANCE NO.: 15-795 Ordinance No. 15-795 Page 3 of 5 ACCEPTANCE: The undersigned hereby accepts all the rights and privileges of the above granted License and acknowledges that such rights and privileges are subject to and limited by all of the terms,conditions and obligations contained therein. --yy 5� DATED this G I day of 4 ,2015. LAKEHAVEN UTILITY DISTRICT BY: TITLE: Ordinance No. 15- Page 4 of 5 Rev 1/15 LU EXHIBIT A LAKEHAVEN FRANCHISE ORDINANCE 10-654 Ordinance No. 15-795 of 5 Page 5 o 8 • • ORDINANCE NO. 10-654 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,WASHINGTON,GRANTING LAKEHAVEN UTILITY DISTRICT,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 maintain 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 general 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. 15-795 Page 6 of 33 • I 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 jurisdiction 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 structures,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. 15-795 Page 7 of 33 • • 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. Grant/Acceptance 2.1 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) Lay, construct, extend,repair,renew, and replace Facilities in the Franchise Area; and (b) To charge and collect tolls,rates and compensation for such utility service and such uses. 2.2 Acceptance by Franchisee. Franchisee shall have no rights under this Franchise,nor shall Franchisee be bound by the terms and conditions of this Franchise, unless Franchisee shall, 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. Conditions of Use 3.1 Non-Franchise Area City Property. 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, Ordinance No. 15-795 Page 8 of 33 • • across or otherwise use any City owned or leased property within the Franchise Area other than public roads,streets,avenues,alleys,and highways of the City. The Franchisee shall place Facilities within the Franchise Area,but not on any other public 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 Operation costs. To the extent permitted by law and as otherwise expressed in this agreement, Franchisee shall be solely responsible for the operation, maintenance, repair 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 shall 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 Ordinance No. 15-795 Page 9 of 33 • • • Section shall survive the expiration, revocation or termination of this Franchise. 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. Hydrant 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 and/or sewer service jurisdiction of Ordinance No. 15-795 Page 10 of 33 • • 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 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 thereof) 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 Markings. 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 Ordinance No. 15-795 Page 11 of 33 • • 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 shall provide all other reasonable cooperation and assistance to the City. 6.4 No Warranty 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 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 all 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 Ordinance No. 15-795 Page 12 of 33 • • 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 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 (MUTCD). The Franchisee shall indicate on the right-of-way use permit 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 of the emergency; and (2) such permit is obtained by Franchisee as soon as practicable thereafter. Ordinance No. 15-795 Page 13 of 33 • • 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. 8.4 Notice of Entry. At least forty-eight(48)hours prior to 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 shall be completed Ordinance No. 15-795 Page 14 of 33 • • 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. 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-built" 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. Ordinance No. 15-795 Page 15 of 33 • Section 10. Survey 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 In the event of any conflict notes for monuments,markers,and other shall filed with the City. I t ther ties sha be ty y 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. Notification to Fire District If it is necessary to shut down or diminish the water pressure so that fire hydrants may be affected, the Franchisee shall notify the appropriate fire district by telephone followed by faxed transmittal or written notification,that water pressure or fire flow conditions have been affected. In case of a planned shutdown or diminished water flow,at least forty-eight(48)hour prior notification Ordinance No. 15-795 Page 16 of 33 • • 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 City 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 shall 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 City to Complete 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 regarding 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 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 by City Ordinance No. 15-795 Page 17 of • • 15.1 City Reservation of Rights. 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 (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 Ordinance No. 15-795 Page 18 of 33 • • 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 Exclusivity. 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. Damage 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 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 Ordinance No. 15-795 Page 19 of 33 • • 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. Emergency Operations 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. 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. Ordinance No. 15-795 Page 20 of 33 • • 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 due diligence within such sixty (60) 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. 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 Ordinance No. 15-795 Page 21 of 33 • • 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. Charge 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 approval of permits or 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. Ordinance No. 15-795 Page 22 of 33 • • Section 26. Indemnification 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 shall 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. Section 27. Insurance Ordinance No. 15-795 Page 23 of 33 • • 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 Mandatory 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 O Y 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. 15-795 Page 24 of 33 • • (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 Coverage. Franchisee shall furnish 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 Agreement. 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. Ordinance No. 15-795 Page 25 of 33 • • 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, 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,shall 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 Governing Law. This Franchise shall be made in and shall be governed by and interpreted in accordance with the laws of the State of Washington. Ordinance No. 15-795 Page 26 of 33 • • 28.7 Authority. 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. 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 1st Ave South P.O. Box 4249 Federal Way, WA 98063 City: City of Federal Way Attn: City Attorney 33325 8th 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 Captions. 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 Cumulative. 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 Ordinance No. 15-795 Page 27 of 33 • • 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 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. Severability 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 Ordinance No. 15-795 Page 28 of 33 PASSED by the City Council of the City of Federal Way this 20th day of April, 2010. CITY OF FEDERAL WAY 404 4._. .1 MAYOR,LINDA KOC It • ATTEST: CITY CLERK, C OL M 9, ILLY APPROVED AS TO FORM: CITY ATTORNEY,PATRICIA A.RICHARDSON FILED WITH THE CITY CLERK: 3/30/2010 COUNCIL BILL NUMBER 533 PASSED BY THE CITY COUNCIL: 4/20/2010 PUBLISHED: 4/24/2010 EFFECTIVE DATE: 5/24/2010 ORDINANCE NO.: 10-654 • Ordinance No. 15-795 Page 29 of 33 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 of the terms,conditions and obligations contained therein. DATED this 1 day of Ma , 2010. LAKEHAVEN UTILITY DISTRICT By: ■• ,„- Its:6cne.—J / 41et qc r— Ordinance No. 15-795 Page 30 of 33 • EXHIBIT A Location of Facilities within Franchise Area Ordinance No. 15-795 Page 31 of 33 • 0 City of Water Service Federal Way Franchise Area Exhibit A-1 Kent Des Moines II rr e-7\ prk. 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'r I J 7 — 1 ' _ i ■ i ' i 1—J r I -J I '%_\ALIhIIrfl o r I .x J i t' E r Ali' L ti 'i I,\ IJr) } 5� ii , 5 ((J I i Tacoma rr _ �✓ J L ,r ' i ,132 . r : \ I _ L..., tli .rr w t \ - ij ,7-;' \-- I' i I*. ' V NvLi Legend \` 1-7 '-'r r 1 Franchise Area J Milton 11-21 Sewer Service Area Fife Edgewood Federal Way City Limits CITY or This map is intended for use . as a graphical representation.0.5 1 ,� Federal Way riles The City of Federal Way makes N no warranty as to its accuracy. R ieresetPW'SVee14.1.roect'v;g eementYLU OYdads'∎LUDSe we'K•11.c / Ordinance No. 15-795 Page 33 of 33