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HomeMy WebLinkAboutUkiah Valley Sanitation District 2007-11-28UVSD Agreement No. 07-05 Authorized 11/28/07 AGREEMENT REGARDING REAL PROPERTY ACQUISITION This Agreement is entered on November 28, 2007 ("Effective Date"), between the City of Ukiah ("City") and the Ukiah Valley Sanitation District ("District"). RECITALS: 1. Under a Participation Agreement, dated July 19, 1995, the City operates and maintains as a unified system the trunk sewer and collection system located in the City and the District and the wastewater treatment plant ("WWTP") located in the City. The City also bills and collects sewer fees for the District. All monthly sewer fees in the City and the District are deposited in the City/District Sewer Fund which is assigned Fund No. 612. The combined expenses of the unified sewer system are paid from this account. City and District connections fees are deposited into the City Sewer Capital Improvement Fund No. 620 and the District Capital Improvement Fund No. 650 respectively. 2. Pursuant to Section 1 of the Participation Agreement, the City and the Distri ct share the costs of operating the system based on the ratio of sewer service units in the City and the District. In 2006, the City and the District revised their sewer rates so that the rates are based on the sewer service units used by each customer and are the same rates in the City and the District. Funds deposited to Fund No. 612 and expenses paid from the Fund No. 612 are automatically shared between the City and the District based on the ratio of sewer service units in the City and the District. 3. The City owns and operates the WWTP. On December 15, 2004, the City and the District entered Amendment No. 2 to the Participation Agreement which determines how the parties share the costs and benefits of a major upgrade and expansion of the WWTP. The 2004 Negative Declaration under the California Environmental Quality Act for this project identified the upgrade and expansion project currently under construction as Phase I and also described a Phase II project which requires the acquisition of real property adjacent to the northern boundary of the WWTP property. The Phase II project was projected to take place within 10 years. 4. On December 20, 2006, in settlement of litigation between the City and Richard and Donna Mattern, the City agreed to purchase the Mattems' 14 acre vineyard (the "Mattern Property" or the "Property"), which is one of the two properties needed for the Phase II project. The City agreed to a purchase price of $550,000, payment of one- half of the $5,000 mediation fee which resulted in the settlement of the law suit, and the closing costs. The City's total share of mediation fees and closing costs were $5,697.64. The City has also agreed to lease the Mattern property to the Matterns for the continued operation of their vineyard in exchange for a share of the net profits from the sale of grapes from the vineyard. The lease is a year-to-year lease, which the City may terminate on 180 days advance notice to the Matterns, if it needs the property for the Phase II project. After five years, the City may terminate the lease for any reason. 5. Under Amendment No. 1 to the Participation Agreement, the City and the District must enter a separate written agreement for any sewer system expense which is a capital expenditure of more than $100,000 that was not included in an approved budget prior to the 1997/1998 fiscal year, other than for repair or replacement of existing facilities or equipment. 6. On terms and conditions as further stated herein, this agreement provides for the expenditure from Fund No. 612 of the $555,697.64 for purchase price, and the City's share of mediation fees and closing costs for the Mattern property. AGREEMENT: Wherefore, in consideration of and reliance upon the above recitals and the terms and conditions as further stated herein, the parties hereby agree as follows. 1. Use of Fund No. 612 for Purchase of Mattern Property. The City may withdraw $555,697.64 from Fund 612 to reimburse itself for the purchase of the Mattern property. 2. Deposit of Proceeds in the Event of Disposition of All or Part of Mattern Property During Term of Participation Agreement. In the event the City disposes of all or part of the Mattern property, whether by sale, lease or any other means, it shall make a payment calculated in accordance with paragraph 4. In the event the City makes any use of all or part of the Mattern Property other than for the operation, improvement or expansion of the WWTP ("unrelated use"), it shall pay for that use in accordance with paragraph 4. All such payments shall be deposited in Fund No. 612. The District must give prior approval for any such disposition or unrelated use. (Collectively, "a triggering event.") 3. Payment for Mattern Property Upon Termination of Participation Agreement. In the event that the Participation Agreement terminates for any reason, and as a result of such termination, the District no longer uses the WWTP to treat sewage from the District's collection system, the City shall pay directly to the District one-half (1/2) the fair market value of the Mattern Property still being used by the WWTP in accordance with paragraph 4.a and for the depreciated value of improvements in accordance with paragraph 4.b. If the City elects to sell the Property upon such termination of the Participation Agreement, the sale must comply with paragraph 4.c, and the City shall pay % of the sale proceeds directly to the District. 4. Fair Market Value Determination. a. Unless the parties agree to another method of determining fair market value, fair market value shall be based on the value of the Property in an unimproved condition determined within six months of a triggering event. The appraisal shall be made by an appraiser approved by the City and the District. Funds from Fund No. 612 shall be used to pay the appraisal fee. In the event the parties cannot agree on a single appraiser, they may each retain an appraiser at their own expense. If the appraised fair market values determined by the two appraisals are within 10% of each other, the fair market 2 value shall be the average of the two appraisals. Otherwise, the two appraisers shall select a third appraiser to review both appraisals and decide which is the more accurate. The party whose appraisal is found less accurate shall pay the fee of the third appraiser. b. The City shall pay for the depreciated value of improvements constructed on the Property prior to a triggering event. The depreciated value shall be determined by assigning a useful life to the improvements when they are completed and depreciating them, based on the construction cost, using the straight line method of depreciation. If the payment is made pursuant to paragraph 3, the City shall make its payment directly to the District, the amount of which shall be determined by multiplying the depreciated value of the improvements by a contribution percentage. "Contribution percentage" means a percentage determined by dividing the number of sewer service units in the District by the total number of sewer service units in the City and the District. This calculation shall be based on the number of sewer service units as of the date that the improvements were completed. c. If all or part of the Property is offered for sale on the open market in an arms length transaction, the City may not accept an offer that is less than 90% of the appraised value of the Property as determined herein, except that the appraisal shall be based on the Property in its improved condition, and the City shall not be liable for the depreciated value of the improvements or a contribution percentage as provided in paragraph 4.b. The proceeds of the sale permitted under this subparagraph (not the appraised fair market value) must be deposited in Fund No. 612 or paid to the District, depending on whether the sale occurs under paragraph 2 or 3. 5. Income Produced by the Property to be Deposited in Fund No. 612. All proceeds from the vineyard lease with the Matterns or any other income to the City produced by the Property shall be deposited in Fund No. 612. 6. Management of Property. The City shall manage the Property pursuant to the Participation Agreement and all expenses of owning the property shall be paid from Fund No. 612 Account. 7. Notice. Whenever written notice is required or permitted by this Agreement, it shall be deemed given when actually received, if delivered by personal delivery, fax, registered or certified mail or overnight courier, or 48 hours after deposit in the United States Mail with proper first class postage affixed thereto, when addressed or sent as follows: CITY OF UKIAH DISTRICT Attention: City Manager Ukiah Civic Center 300 Seminary Avenue Ukiah, CA. 95482 FAX: 463-6204 UKIAH VALLEY SANITATION Attention: Chairman County of Mendocino County Administration Center 501 Low Gap Road Ukiah, CA. 95482 FAX: 463-4245 3 8. Integration. This Agreement together with the Participation Agreement, and Amendment Nos. 1 and 2, thereto, contain the entire agreement between the City and the District concerning the wastewater treatment plant and the City's operation of the sewer systems in the City and the District. Together, these agreements supercede and replace any other statements, agreements, or understandings between the Parties concerning the subject matter of this agreement. 9. Duplicate Originals. Two or more copies of this agreement may be executed by the Parties. Each such copy, bearing the original signatures of the Parties, shall be considered an original agreement, admissible in any administrative or judicial proceedings as evidence of the agreement between the Parties. 10. No Third Party Beneficiaries. The Parties intend this agreement for the sole benefit of the Parties and do not intend to confer any rights under the Agreements or any right to enforce the Agreements on any person or entity who is not a Party. WHEREFORE, the Parties have entered this Agreement on the Effective Date. CITY OF UKIAH By Linda rown, - City Clerk Approved as to form: Dav' J. R-apport,/Cit'y Attorney 4 UKLAH VALLEY SANITATION DISTRICT R. WATTENBURGER, Ch man Ukiah Valley Sanitation District ATTEST: KRISTI FURMAN By: Clerk of Said Board Secretary, Ukiah Valley Sanitation District l hereby rtifyy that accordirg to ft provisions of Government Code Section 25103, delivery of this document has been made. KRiSTI FURS` CIO* of the BOCTd y: It r 5