Loading...
HomeMy WebLinkAboutUkiah Valley Sanitation District 2016-04-21DUNCAN M. JAMES DONALD J. MCMULLEN CHRISTOPHER L. BROOKE K. J. FLAVETTA DOUGLAS L. LOSAK GINEVRA K. CHANDLER David J. Rapport City of Ukiah Attorney 405 W. Perkins Street Ukiah, CA 95482 LAW OFFICE OF DUNCAN M. JAMES LAMBS INN P. O. BOX 1381 445 NORTH STATE STREET UKIAH, CALIFORNIA 95482 (707) 468-9271 April 22, 2016 RE: Ukiah Valley Sanitation District v. City of Ukiah Dear Mr. Rapport: S ANNF�.D FAX (707) 468-0453 lawoffice@duncanjames.com RECEIVED APR 22 2016 Dv, 17-9 14Arckcieti By ravinai•firtif .rg••• Attached is a fully executed original Agreement regarding the Preliminary Injunction. Also attached is a copy of a letter we are sending to the Sonoma County Superior Court, along with a Request to Withdraw Motion for Preliminary Injunction (CCP Section 527) or in the Alternative Appointment of a Receiver Pursuant to CCP Section 564(b)(9) Without Prejudice. The letter and Request will be placed in today's mail and it is anticipated the Request will be filed with the Court on Monday, April 26, 2016. Section 2 of the Agreement between the District and the City regarding the Districts Motion for a Preliminary Injunction states that "[w]ithin ten (10) days after the District has filed its withdrawal of its motion, City shall, in accordance with written instructions from the District, wire transfer One Million Five Hundred thousand Dollars ($1,500,000) to a District Account, as designated by the District with the County Treasurer." Therefore, the City is required to transfer the funds described above to the District no later than Friday May 6, 2016. Our office will provide the designated account information shortly. If you have any questions or would like to discuss this matter, please contact me. Sincerely, DOUG S L. LOSAK / kab Encl. itr(6- ANO/57&-2.h AGREEMENT This Agreement is made and entered in Ukiah, California, on April 21, 2016 ("Effective Date"), between the City of Ukiah ("City"), a general law municipal corporation, and the Ukiah Valley Sanitation District, a county sanitation district ("District") in connection with the pending proceeding entitled: Ukiah Valley Sanitation District v. City of Ukiah, Sonoma County Superior Court, Case No. SCV 256737 ("the Action"). RECITALS: 1. On November 25, 2015, District filed in the Action a motion for a preliminary injunction ("the Motion") seeking an order to compel the City to transfer approximately $7.2 Million from District accounts with the City to a District account with Mendocino County, or, in the alternative, for the appointment of a receiver pursuant to Code Civ. Proc. §564(b)(9). 2. The motion is currently scheduled to be heard by the Court on May 11, 2016. 3. The City disputes that the District is entitled to a preliminary injunction or the appointment of a receiver. 4. The City contends that under Section 2 of the Financing Agreement between the City and the District, effective March 2, 2006, all revenue from rates and connection fees charged by the District for services and facilities furnished by the District's portion of the Wastewater System must be collected by the City in accordance with the Participation Agreement, and the City must apply such revenues to pay the District's share of the debt service on bonds issued in 2006 to upgrade and expand the Wastewater Treatment Plant that serves the City and the District("WWTP Bonds"). The City contends that the District has collected fees directly from District ratepayers or from the County Tax Collector which it has not remitted to the City. The District contends that Section 2 of the Financing Agreement does not include revenue collected by the District from accounts the City has referred to the District for collection as part of county property taxes or which City has otherwise failed to collect. 5. District contends that: (1) the City writes off and closes delinquent accounts, refers them to collections and then opens a new account for that customer, and continues service; (2) the collection agency, in turn, charges a percentage of the amount collected as a collection fee; (3) in early 2010, the District Board elected to collect delinquent accounts via the tax roll as permitted by State of California Health and Safety Code and pursuant to the District's Ordinance No. 13. 6. District, in its motion for preliminary injunction, contends that: (1) City has approximately 7.2 million dollars belonging to District. (The total amount District is claiming City owes the District is much larger, and District is not limiting its ability to prove greater amounts at trial on the merits of its complaint); (2) the City refuses to deposit the money into Districts account with the County of Mendocino, which prevents District from accessing and using said funds for lawful purposes; (3) the City's conduct also makes it impossible for District to pay necessary expenses, including those not shared between the parties. City disputes these contentions. 1 7. The parties have reached agreement on terms under which the District will withdraw its motion for a preliminary injunction and request cancellation of the May 11 hearing thereon. 8. The District Board of Directors and the City Council have approved this Agreement and have authorized the undersigned City Manager of the City and General Manager of the District to sign this agreement on their behalf. AGREEMENT: 1. By no later than April 25, 2016, the District shall file in the action a notice that it is withdrawing its motion for a preliminary injunction. It may state in the notice that the withdrawal is without prejudice. 2. Within ten (10) days after the District has filed its withdrawal of its motion, City shall, in accordance with written instructions from the District, wire transfer One Million Five Hundred thousand Dollars ($1,500,000) to a District Account, as designated by the District with the County Treasurer from City Account Number 940, the District's Operating Account. 3. Within thirty (30) days after the transfer of District funds pursuant to Section 2 above, the District shall provide to the City's Finance Department information related to any money District collected, on or after July 1, 2012, on delinquent accounts not collected by the City, which will include, the name and address of the ratepayer, the ratepayer's account number, if known, the amount of each payment and the date each payment was received. Thereafter, until July 1, 2021 (absent further agreement or court order), the District, within fifteen (15) days of the end of each quarter (March 31st, June 30th, September 30th, and December 31st), shall provide to the City Manager's designee a copy of any receipt (or other documentation indicating receipt or deposit) as long as the receipt or other documentation contains the ratepayer name, service address and account number, if known, for money received directly from any rate payer or the County Tax Collector for delinquent accounts not collected by the City, 4. This Agreement does not constitute an admission, agreement, or concession by either party concerning the merits of the disputes described in Recital Numbers 1- 6, above, nor any issues raised in Plaintiffs Second Amended Complaint, nor the amount District claims is due from City in any respect, and both parties reserve their right to assert those positions in the Action or another action or proceeding and to seek any or all remedies available at law or in equity. 5. Attorney Fees and Costs. Each party shall bear all attorneys' fees and cost arising from the Party's own counsel arising from Plaintiffs motion for Preliminary Injunction/Appointment of Receiver. WHEREFORE, the parties have entered this Agreement on the Effective Date. [Signatures on next page] 2 UKIAH VALLEY SANITATION DISTRICT: Dated: April , 2016 UKIAH VALLEY SANITATION DISTRICT 1.4datf By: FRANK McMICHAEL District Manager Approved as to Form Dated: April , 2016 LAW OFFICE OF DUNCAN M. JAMES CITY OF UKIAH: Dated: April.::, 2016 Approved as to Form Dated: April ZV, 2016 B� MES Attorney or f UKIAH VALLEY SANITATION DISTRICT CITY OF UKIAH ,Y 1 By: -:'A S 7GiAcomo U iah City/ anager RAPPORT AND MARSTO .I By: DAA J. ' • 'PORT Attorney for Defendant CITY OF UKIAH 3