Fairview Lake Agreement

FAIRVIEW LAKE AGREEMENT

Between: Multnomah County Drainage District #1 (“District”)
And: City of Fairview, Oregon (“City”)
And: Fairview Lake Property Owners Association (“Association”)

RECITALS

A. Multnomah County Drainage District #1 is an Oregon special district authorized and operating pursuant to ORS Chapter 547.
B. The City of Fairview is an Oregon municipal corporation operating under a home rule charter, the Oregon Constitution, and other applicable laws.
C. The Fairview Lake Property Owners Association is an Oregon private nonprofit corporation authorized by ORS Chapter 65. The members of the Association are littoral owners of property around Fairview Lake.
D. As between the District and the City, this Agreement is an intergovernmental agreement authorized by ORS 190.010. All provisions required by ORS 190.020 are addressed herein or are intentionally omitted as inapplicable.
E. The District has the authority under ORS Chapter 547 to provide drainage and flood control services and facilities within its boundaries. Pursuant to that authority, the District is the holder of two permits (the “Permits”) issued to the District by the Oregon Water Resources Department (“WRD”), which Permits are attached as Exhibits A and B. Those permits authorize the impoundment of certain waters of the state identified as Fairview Lake and maintenance of an earthen dam to impound those waters. The lake water level is regulated by use of a lake control structure located within the dam. The structure is depicted on the map attached hereto as Exhibit C.
F. The District has the authority under ORS 547.470 to levy assessments for lake maintenance and drainage in addition to its drainage assessment authority under ORS 547.455 et seq. Pursuant to the terms of this Agreement, the District intends to exercise that additional assessment authority for the management of Fairview Lake. Also, the District has the authority to collect and enforce the District’s assessments pursuant to ORS 547.455 et seq., and has alternative authority pursuant to ORS 547.492 to perform collection under the provisions of ORS 548.482, 545.484 and 545.494 to 545.508 (hereinafter “Alternative Collection Process”). Pursuant to the terms of this Agreement, the District intends to exercise the Alternative Collection Process to collect assessments for lake management.
G. The parties intend by this Agreement that the District’s operation of the control structure and management of the lake water level of the lake be phased out, and that suchoperational control and management be delegated to and assumed by the City and/or the Association, and managed by them pursuant to a separate agreement. NOW, THEREFORE, in consideration of the mutual promises in this Agreement, the adequacy of which are acknowledged, the parties mutually agree as follows:
1. Permits.
1.1 On or before October 1, 2002, the District and the City shall take all necessary actions to request and obtain approval from the WRD for transfer of the Permits from the District to the City. District shall take all necessary steps to complete the water rights process and obtain right certificates at its sole expense prior to City’s acceptance of the permits. The City shall accept transfer of the Permits upon such approval by WRD and the District will be removed as a named permittee, subject to District’s performance of its obligations hereunder. Upon transfer, the City shall accept all obligations of the Permits, and the District shall be relieved of such obligations except as provided in this Agreement.
1.2 Until the effective date of transfer of Permits, but not later than December 31, 2003, the District shall continue all maintenance and operational responsibilities required by the Permits at its sole expense.
2. Lake Control Structure
2.1 On or before December 1, 2003, the District shall perform and complete repair of the lake control structure pursuant to the Scope of Work attached hereto as Exhibit D.
2.2 Upon transfer of the Permits as provided in Section 1 of this Agreement, the District shall convey to the City, by appropriate instrument acceptable to the City, all of the District’s right, title and interest in the control structure, and shall assign to the City a nonexclusive right of access or otherwise grant the necessary access. City will accept ownership of the control structure and the easement subject to completion by the District of the repair project consistent with Exhibit D.
2.3 The District shall retain responsibility for the lake control structure until its acceptance by the City as provided herein. The District shall retain its access easement to the lake control structure, in order that the District can perform its obligations hereunder.
3. Water Rights. The water rights for the water impoundment at the lake have not been perfected. The District will contract with a person or firm qualified by the WRD to perform the technical analysis and report necessary to perfect such rights. District will require as part of such contract that the report will be prepared and submitted to WRD for approval on or before October 1, 2002. Completion of said report and perfection of the water rights at District’s sole expense and as District’s sole obligation are conditions precedent to the City’s obligation to accept the permits.
4. Control of Lake Elevation.
4.1 Notwithstanding the Permit transfer provided in Section 1 of this Agreement, the parties acknowledge the continuing rights and responsibilities of the District under ORS Chapter 547 to control the flow and elevation of drainage ways in the District. The request to WRD for transfer of the Permits to the City may contain conditions specifying the annual lake elevation management regime required by the District.
4.2 The annual lake elevation management regime referenced above shall be as follows:
4.2.1 The lake will be drawn down to elevation 8.5’ NGVD no later than October 15 of each year. The draw down will normally be accomplished over a one-week period, but will be accomplished in such time as is prudent under all of the circumstances each year. Should weather conditions or other conditions resulting in flooding potential dictate, the District may impose an earlier draw down at its discretion.
4.2.2 The lake will be raised to elevation 12.2’ NGVD before Memorial Day weekend each year. In a normal year, the gradual raising of the lake elevation will generally occur over a two-week period. The District may, at its discretion, delay raising the lake elevation if it determines that flood protection requires such delay. Also, the lake may take longer to reach elevation 12.2,’ or not reach that elevation at all, if rainfall is insufficient.
4.2.3 The Association will issue a notice to landowners and other interested parties in advance of annual changes in lake elevation. The Association and the District will coordinate regarding the timing and contents of this notice.
4.2.4 The alteration to the lake control structure to effect these seasonal lake elevation changes may be made by either the District or the Association as coordinated by them in each case.
4.2.5 Pursuant to the District’s statutory role as flood protection agency, all lake elevation changes initiated by the Association will be coordinated with and approved by the District. The District will have access and keys to the lake control structure lock at all times, and neither the City nor the Association will alter the lock device without first obtaining District consent. The District retains the right to change the lake elevation or lake elevation management regime at any time that conditions warrant. The District will provide notice of such changes to the Association and City as soon as practical.
5. Future Repair and/or Modification to Lake Control Structure and Hydraulic Characteristics.
5.1 After transfer of the Permits and lake control structure to the City, the Association and/or City may, from time to time, effect repairs and/or modifications to the structure, the lake inlet, the shoreline, or other hydraulic characteristics of the lake. Each such project will require prior approval by appropriate regulatory agencies as required by law.
5.2 The development and design of any such project will be coordinated in advance with the District. Project design and construction will be subject to approval by the District regarding hydraulic characteristics affecting flood protection. Any changes required bythe District for flood protection purposes will be made by the sponsors of the project at their expense. (approval is only for flood control.)
6. Revenues and Expenditures for Lake Management.
6.1 Lake Management Plan. The Association will prepare and periodically update a Lake Management Plan. Such Plan shall be approved as provided in the Association’s articles of incorporation or bylaws, as applicable. A copy shall be provided to the City and District upon adoption and following any update. Initial adoption shall occur no later than
January 1, 2003.
6.2 Budgeting. To provide funding for operations under this Agreement, and to implement the Lake Management Plan described above, and for operation and maintenance of the control structure, the Association will develop an annual budget, beginning with Fiscal Year 2003, and a table of landowner assessments that fairly allocates a portion of the budget to each littoral tax lot/landowner of Fairview Lake. The budget shall comply with the criteria listed in ORS 545.484(1). The Association will forward the budget and table of tax lot/landowner assessments to the District and the City at least 90 days prior to the commencement of the District’s fiscal year covered by the proposed budget or the date funds will be needed to conduct the Association’s lake management activities.
6.3 Assessment. Subject to the District’s approval of the Association’s budget, the District will assess landowners, receive and hold assessment revenues and distribute such funds to the Association for expenditure consistent with the Association’s budget. The District will conduct this process under its statutory assessment authority and its internal funds management policies, and in accordance with the following procedures:
6.3.1 An assessment notice will be sent by the District to each tax lot landowner according to the table of landowner assessments provided by the Association. The assessment will be on District letterhead in a separate mailing (i.e., not part of the regular District assessment which appears on the property tax statement for each tax lot).
6.3.2 The District’s notice will explain that the assessment is pursuant to District statutory authority, that funds collected will support the Association’s lake management
responsibilities under this Agreement, and that this billing service will be provided by the District for up to five years in order to help the Association assume management of the lake. The District will receive funds and disburse them as requested by the Association to meet expenses in the approved Association budget. The explanation will further note that the District does not hold the state water permits for operation of the lake control structure nor for impoundment of waters, and that the Association is the manager of the lake.
6.3.3 The assessment notice will also include a letter from the Association, under its letterhead, which shall include a copy of its budget and a narrative explanation of the Association’s plan for lake management during the upcoming fiscal year.
6.3.4 Assessment notices shall direct that payments be made to the District, and shall advise lot owners that funds received by the District will be disbursed for lake management.
6.4 Collection of Assessments. Collection of assessments levied by the District shall be as follows:
6.4.1 Assessment funds received by the District shall be accounted for separately and shall be held by the District until disbursement pursuant to this section. All assessment funds described in this section shall be paid to the District.
6.4.2 Assessment accounts shall be deemed delinquent after thirty (30) days from the date of assessment notice. The District shall promptly notify the City and the Association of all delinquent accounts.
6.4.3 The District may delegate to the Association, as an independent contractor to the District, the authority to administer the collection activities described in ORS 545.494 et seq. on the District’s behalf. Such delegation shall be made, if at all, by separate agreement. The District shall be entitled to collect from assessments a reasonable administrative fee to cover its costs in establishing the special ratepayer class and in providing annual billing of the assessments.
6.5 Disbursement of Funds. The District shall account for and disburse to the Association assessment funds received under this Agreement as follows:
6.5.1 For expenses authorized in the Association budget, an “Authorization to Disburse Funds” will be prepared by the Association, countersigned by the Association Treasurer and President, and submitted to the District together with documentation to support the disbursement
6.5.2 Upon receipt of the “Authorization to Distribute Funds,” the District will process payment and mail a check directly to the contractor or supplier.
6.5.3 All funds will be managed as stated above and in conformance with District internal fiscal policies. Funds will be audited annually by the District auditor.
7. Term of Agreement and Transition.
7.1 Term. The term of this Agreement shall be from the date of execution by all parties, through and including December 31, 2007. The City or the Association may terminate this Agreement at the end of any fiscal year by 90 days’ notice to the District of assumption of contract responsibilities as provided in this section. The parties acknowledge that the District shall manage the lake and pay all costs thereof for the balance of 2002.
7.2 Transition. The Association shall, with due diligence and as soon as practicable, but not later than December 31, 2007, establish and implement a funding source and lake management system, thereby relieving the District from all assessment and management responsibilities related to Fairview Lake, except drainage and flood control. Upon such establishment, the Association shall so notify the District and the City as provided in subsection
7.1 above. This Agreement shall then terminate at the end of the fiscal year in which notice was given. Alternatively, the City may assume the District’s responsibilities under this Agreement at any time prior to expiration by notifying the parties at least 90 days before the end of the then current fiscal year. This Agreement shall then terminate at the end of the fiscal year in which notice is given. After termination provided in this section, the District shall have no assessment or lake management responsibility under this Agreement except as the District is authorized or required to perform drainage and flood control activities pursuant to ORS Chapter 547, or as the District agrees to in writing in a successor agreement.
8. Association Responsibilities.
8.1 The Association will amend its articles of incorporation and bylaws as necessary to authorize all activities and obligations contained in this Agreement, prior to January 1, 2003. In that amendment, there shall be established a voting position on the Board of Directors for a representative of the City as a littoral property owner.
8.2 The Association will contract with a responsible entity to have the lake control structure maintained, in the event the City and the Association agree in writing that the Association should participate in maintenance of the structure. The entity selected shall be subject to prior written approval by the City, such approval not to be unreasonably withheld.
8.3 The Association shall enter into an Agreement with the City to establish each such party’s obligations with respect to lake management and control structure maintenance and operation following transition of responsibility from the District to the City and Association.
9. Indemnity and Insurance. In addition to any other indemnity provisions of this Agreement:
9.1 To the extent permitted by Oregon law, each party shall defend, indemnify and hold each other party harmless from any claims, suits or actions arising from or relating to the acts of any such indemnitor party including all costs, expenses and attorney fees incurred as a result of such claims, suits or actions.
9.2 To the extent permitted by Oregon law and from and after the effective date of transfer of the Permits, the City will defend, indemnify and hold the District harmless from any claims, suits or actions arising from the City’s operation of the control structure or from other activities associated with the Permits; provided, however, that such indemnity shall not apply to negligent or intentional acts of the District.
9.3 To the extent permitted by Oregon law, the District agrees to hold harmless, indemnify, and defend the City from and against any and all claims of any nature whatsoever arising from activities and events relating to Fairview Lake and the water rights permits prior to the effective date of this Agreement, except for claims arising from negligent or intentional acts of the City.
9.4 In the event of suit or action against the District challenging the legality of adoption, levy or collection of any assessment under this Agreement, the Association shall defend, indemnify and hold harmless from such suit or action including all costs and attorney fees associated therewith. Each party shall carry adequate liability insurance, in amounts and with insurance carriers reasonably acceptable to each other party, which insurance policies shall name each other party as additional insureds.
10. Dispute Resolution. In the event of any dispute between any of the parties hereto, such dispute shall, prior to litigation or arbitration, be submitted to mediation by a mediator selected and paid equally by the parties to the dispute. In the event that mediation is unsuccessful after at least one mediation session, the dispute shall be submitted to binding arbitration pursuant to ORS Chapter 36. The arbitrator shall be selected and paid equally by the parties to the dispute. If the parties cannot agree on an arbitrator, one will be selected by the presiding judge of the Multnomah County Circuit Court. This section shall not preclude a party from seeking injunctive relief for breach of this Agreement. Each party shall pay its own costs and attorney fees.
11. General Conditions.
11.1 Amendment. This Agreement may be amended or terminated by mutual written consent of all parties. Any termination of this Agreement shall not prejudice any rights or obligations accrued to the parties prior to termination.
11.2 Non-Waiver. The failure of either party to enforce any provision of this Agreement shall not constitute a waiver of that or any other provision.
11.3 Venue and Construction. This Agreement shall be construed consistent with the laws of the State of Oregon. Venue for any legal proceeding shall reside in Multnomah County, Oregon.
12. Severability. The provisions of this Agreement are not severable. If any provision of this Agreement is found to be unlawful or invalid by a court of competent jurisdiction, the parties shall meet and confer in good faith to amend the Agreement in order to achieve its purposes. If such amendment is not agreed to within 30 days of the court ruling, any party may terminate the Agreement.
13. Assignability. This Agreement and the obligations undertaken hereunder are not transferable or assignable.

IN WITNESS WHEREOF, the parties hereto have set their hands and affixed their seals as of the day and year hereinafter written. By their signatures below, the signing parties represent that they have the lawfully delegated power and authority to enter into this Agreement.

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