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| | Below is the final agreement for the management of the
Lake Tapps reservoir. This agreement is between the Lake Tapps Community
and Puget Sound Energy. This agreement was signed on 31 March 2004 by the
following groups:
Puget Sound Energy
Save Lake Tapps Coalition
Friends of Lake Tapps
West Tapps Maintenance Company
Inlet Island Homeowners
Church Lake Homeowners
Driftwood Point Maintenance Company
Tacoma Point Improvement Club
Tapps Island Homeowners Association
Snag Island Maintenance Association
Pierce County Executive
Right’s terms and conditions including but not limited to the Reservoir Management
Plan; and
WHEREAS, the Parties agree that the Lake Tapps Community must have an
appropriate and equitable role in and responsibility for the settlement of the issues
surrounding the Project, and accordingly that all stakeholders including the Lake Tapps
Community who receive a direct or indirect benefit from the Project must assume
responsibility for benefits received; and
WHEREAS, to receive the support of the collective Lake Tapps Community, the
resolution of such issues must assure the long-term viability of Lake Tapps. Historically,
PSE has maintained the reservoir at a normal full pool water level of 542 ft msl or
greater, from at least Memorial Day through Labor Day, but differing opinions exist,
between the Lake Tapps Community and PSE, as to PSE’s obligations to maintain a
“normal full pool” during the “annual recreational period” as defined below; and
WHEREAS, management of reservoir levels throughout the year for generation
and water supply purposes has direct bearing on Project economics, but at the same time,
the Lake Tapps Community desires a lake-level fluctuation plan that assures the
recreational and ecological viability of Lake Tapps; and
WHEREAS, members of an assembled group representing all seven long-time
existing neighborhood resident associations, as well as the Friends of Lake Tapps and the
Save Lake Tapps Coalition, worked with representatives of PSE to develop this
Agreement regarding reservoir management, including a rule curve designed to keep the
reservoir at “Normal Full Pool” (as defined below) for extended periods of time, taking
into account recreation, flood control, dock repair and maintenance, water quality
(including but not limited to Eurasian Watermilfoil Control, “milfoil control”),
maintenance of the penstock intake, and drawdown for water supply (the “Rule Curve”
defined below); and
WHEREAS, PSE anticipates that the Water Right will not be modified in a
manner that has a material adverse impact upon its viability;
NOW, THEREFORE, the Parties agree as follows:
1. Rule Curve
1.1 During periods of normal operations, PSE will maintain a "Normal Full Pool"
(defined as a water level between 541.5 msl and 543 msl as, measured at USGS gage
12101000) for the "Annual Recreational Period," defined as the period from April 15
through October 31. Within this time period, operational variances may be required due
to forecasts or available precipitation, the terms and conditions of the Water Right, any
necessary milfoil control, FERC requirements, or the terms and conditions of applicable
law.
1.2 A lake management team (“Team”) will be established to help PSE plan the yearly
operations of the Project and diversions under the Water Right. Membership of the Team
will include PSE, the Lake Tapps Community, and other appropriate persons or entities.
Local governments will be invited to join the Team. The Team will make
recommendations for lake level management consistent with the Reservoir Management
Plan and the Rule Curve.
1.2.1 During the first quarter of each year and additionally on an as-needed basis
to address any potential lake fluctuation, the Team will assess the potential of lake
levels falling below Normal Full Pool (based on factors such as snow pack, actual
and predicted precipitation, predicted stream flows, projected water supply
requirements and any necessary milfoil control).
1.2.2 If the applicable factors indicate that lake levels may fall below Normal Full
Pool, the Team will identify and evaluate options to minimize such fluctuation.
1.2.3 Based on the options identified, the Team will consult with PSE on PSE’s
development and adoption of an operating plan that will, to the extent consistent
with other applicable requirements, minimize lake level fluctuations below
Normal Full Pool.
1.3 From and after the effective date of this Agreement, PSE shall maintain Normal Full
Pool during the Annual Recreational Period in accordance with the terms and conditions
of Section 1.1 above. The Lake Tapps Community and PSE will establish the Team no
later than the Effective Date.
2. In-Kind Services Provided by the Lake Tapps Community: On their own accord,
or in combination with local governments, including appropriate law enforcement
agencies, the Lake Tapps Community will assist PSE through the following efforts:
A) Boat Management Plan. The Lake Tapps Community, in concert with local
governments, will provide a substantially complete draft Boat Management Plan.
The Boat Management Plan will include the following elements:
(a) a description of the public and private boating access;
(b) a description of the types and volume of boating activity;
(c) expected changes in boating use in the foreseeable future;
(d) an assessment of boating overuse and conflicts that address safety and
recreational quality/user satisfaction;
(e) measures for regulating and managing boating access, specifying who would
implement the measures;
(f) recommended guidelines for PSE’s Shoreline Development Policy, as it relates
to boating activities; and
(g) review by PSE and incorporation of any revisions or additional provisions
provided by PSE to ensure there are no Project-related impacts resulting from
boat management.
B) Lake Watch Program. A voluntary “Lake Watch” program will be
established by the Lake Tapps Community to help provide the following
assistance:
(a) communicate with and educate community members regarding lake safety,
Project property and management issues; and monitor and report to PSE or the
appropriate law enforcement officials, any person who is observed interfering
with Project property, such as removing, altering or disturbing dikes and other
Project property;
(b) notify the lake users and appropriate enforcement officials of any observed
hazards on the reservoir (such as debris, logs, partially submerged boats, etc.), and
encourage community members to identify and remove such hazards if feasible;
(c) provide volunteers to work with PSE and local governments in the promotion
of applicable environmental enhancement programs for the Lake Tapps reservoir
that may be required by any FERC license, including fish and wildlife
enhancement programs in and around Lake Tapps in coordination with the
Washington State Department of Fish and Wildlife and any stump removal
programs.
C) Community Communication. The Lake Tapps Community will establish
mechanisms for:
(a) communicating issues from PSE to members of the Lake Tapps Community
through available websites and/or homeowners newsletters;
(b) providing feedback to PSE from the members of the Lake Tapps Community
regarding reservoir management and operations, and
(c) facilitating/coordinating Community-wide meetings as may be required from
time to time.
Such mechanisms shall include, but not be limited to, establishment of a call-in
number for information about lake recreation, safety, Project property and Rule
Curve issues and for reporting related problems;
D) Other Volunteer Enhancements. PSE and the Lake Tapps Community may,
at any time, and by mutual agreement, conduct additional volunteer enhancement
projects that benefit Lake Tapps.
3. Responsibility for Milfoil: PSE shall control milfoil to the extent required by law or
to achieve PSE's own operational goals, and may do so in whatever manner PSE deems
most appropriate, including extended drawdowns if necessary. Any such actions by PSE
will include consultation with the Team, as described in provision 1.2 of this Agreement.
4. Coordination with License: PSE shall include this Agreement as an element of any
license application to be submitted to FERC for purposes of Project licensing, and request
that FERC incorporate the Rule Curve, described in Section 1.1 of this Agreement, with
an alternative time period from Memorial Day to Labor Day into an article of any FERC
license; provided, however, that the limitation on the time period of the Rule Curve for
purposes of incorporation into a license Article shall be without prejudice to the Lake
Tapps Community rights to enforcement of the Rule Curve throughout the Annual
Recreational Period.
5. Term, Transferability and Enforceability: The term of this Agreement will be equal
to the term of any subsequently issued FERC license or the Water Right, whichever is
longer. The rights and obligations of the Parties arising under this Agreement shall inure
to the benefit of and shall be binding upon such Parties' respective successors and
assigns. Any Party may transfer or assign its rights and obligations under this
Agreement, provided, however, in the event of any such transfer or assignment, such
assignee or transferee shall, as evidenced in a written instrument signed by such assignee
or transferee, assume and be bound by all of the terms and conditions of this Agreement
and the Party having so transferred or assigned its rights and obligations under this
Agreement is thereafter fully released and discharged from any further obligations arising
under this Agreement. In the event of any transfer or assignment by PSE of substantially
all of the Project Assets, it shall follow the procedures set forth in Section 8 below, and
all the terms and conditions of this Agreement shall be binding upon any such transferee
or assignee. If PSE proposes to transfer or assign any of the Project Assets, it shall
provide the Lake Tapps Community with a copy of its filing with the Washington Utility
and Transportation Commission for approval of the disposition of assets concurrently.
The Parties intend this Agreement to be certain and enforceable, as well as a mechanism
for ongoing collaboration as to any issues that may arise in connection with
implementation of the Agreement. Except as necessary for compliance with and
enforcement of this Agreement, the parties do not intend this Agreement to modify their
respective property rights.
6. Compliance with All Applicable Law; Modification: All the foregoing shall be
performed in compliance with all applicable law (including, but not limited to, the
Federal Power Act, the Clean Water Act and the Endangered Species Act) and all
necessary consents or approvals of government bodies. In the event that compliance with
applicable law has a material adverse effect upon the viability of the Water Right or upon
any FERC license, or in the event that compliance with applicable law makes it
impossible for a Party to comply with its obligations under this Agreement, the Parties
shall negotiate in good faith to modify the terms and conditions of this Agreement in
order to achieve its purposes to the maximum extent possible.
7. Effectiveness: This Agreement becomes effective on March 15, 2004.
8. Termination:
8.1 The Parties recognize that circumstances may arise whereby it would not be
commercially desirable for PSE to operate the Project or maintain Lake Tapps as a
reservoir. The Parties desire to establish a procedure whereby PSE in such an event may
promptly terminate this Agreement after providing the Lake Tapps Community with the
right to acquire the Project Assets (or such portions thereof as PSE may then own) on
terms and conditions that are fair and reasonable. The Project Assets are more
particularly described on Exhibit B, attached hereto and incorporated herein by this
reference.
8.2 PSE may, at any time from and after the effective date of this Agreement,
terminate this Agreement pursuant to Section 8.4 below if:
8.2.1 PSE shall have determined, in its sole discretion, not to pursue or
accept a FERC license for the Project;
8.2.2 PSE shall have determined, in its sole discretion, that it is unable to
sell, lease or otherwise dispose of substantially all of the Project Assets to a public
entity on satisfactory terms and conditions;
8.2.3 PSE notifies the Lake Tapps Community in accordance with
Section 19 below of its determination that it is unable to dispose of substantially
all of the Project Assets to a public entity in accordance with subsection 8.2.2
above, and either:
8.2.3.1 the Lake Tapps Community shall have submitted to PSE a
bona fide offer to purchase substantially all of the Project Assets (or such
portions thereof as PSE may then own) on or before a date that is ninety
(90) days from and after the date of such notice, and such offer shall have
been rejected by PSE within thirty (30) days of PSE's receipt of such offer,
or
8.2.3.2 the Lake Tapps Community shall have failed to submit such
a bona fide offer to PSE within said ninety (90) day period;
8.2.4 subsequent to the expiration of the ninety (90) day period provided
by subsection 8.2.3 above for entertaining an offer from the Lake Tapps
Community to purchase Project Assets, PSE shall have conducted a competitive
proposal process to sell, lease or otherwise dispose of substantially all of the
Project Assets (or such portions thereof as PSE may then own), and PSE shall
have rejected all proposals; and
8.2.5 within one hundred eighty (180) days from and after the date PSE
notifies the Lake Tapps Community in accordance with Section 19 below of its
rejection of all proposals submitted to PSE in the competitive proposal process
referenced in subsection 8.2.4 above, PSE and the Lake Tapps Community shall
have failed to enter into a binding agreement providing for the sale or other
transfer of substantially all of the Project Assets (or such portions thereof as PSE
may then own) to the Lake Tapps Community on terms and conditions that are fair
and reasonable.
8.3 In connection with any offer made by the Lake Tapps Community to acquire the
Project Assets in accordance with subsections 8.2.3 through 8.2.5 above, the Lake Tapps
Community may affiliate with a public entity provided that such public entity is:
(i) legally able and authorized to acquire Project Assets, and (ii) able to promptly and
reliably finance the acquisition of Project Assets. Further, in connection with any such
effort by the Lake Tapps Community to acquire Project Assets, PSE shall, at the request
of the Lake Tapps Community, cooperate with the Lake Tapps Community in
undertaking due diligence activities by providing the Lake Tapps Community with
reasonable access to relevant documents and other information readily available to PSE.
PSE shall also, if so requested by the Lake Tapps Community, engage in good faith
negotiations over such matters as the Parties may then determine to be relevant to the
fairness and reasonableness of any acquisition of Project Assets contemplated by the
Parties in connection with either subsection 8.2.3 or subsection 8.2.5 above. By way of
example, and not by way of limitation, such matters may include the determination of the
fair market value of the Project Assets, the allocation of liabilities (if any) associated with
the Project Assets, and the ability of the Lake Tapps Community (and/or its affiliate
public entity) to finance and close the transaction in a timely manner.
8.4 If each and all of the conditions precedent to termination set forth in
subsections 8.2.1 through 8.2.5 have occurred, then PSE may terminate this Agreement
by written notice to the Lake Tapps Community in accordance with Section 19 below.
Effective as of the date that is five (5) business days from and after the date of such
notice, this Agreement shall be null and void and of no further force or effect as between
any Party, and no Party shall thereafter be entitled to assert any right or interests arising
under the Agreement.
8.5 The Lake Tapps Community may terminate this Agreement if both of the
following conditions precedent have been satisfied:
8.5.1 PSE shall have given notice to the Lake Tapps Community pursuant to
Section 5 above that it has filed an application with the Washington Utilities and
Transportation Commission (“WUTC”) for approval of the disposition of
substantially all Project assets to a non-municipal entity.
8.5.2 The Lake Tapps Community shall have given PSE notice in accordance
with Section 19 below of their intent to terminate this Agreement within 30 days
of PSE’s notice of such filing. Effective as of the date that is thirty (30) days
from and after the date of such notice, this Agreement shall be null and void and
of no further force or effect as between any Party, and no Party shall thereafter be
entitled to assert any right or interests arising under the Agreement.
8.6 In the event that either Friends of Lake Tapps or the Save Lake Tapps Coalition
wishes to dissolve, such dissolution shall not affect the viability of this Agreement;
provided, however, that the remaining Parties comprising the Lake Tapps Community
provide PSE with adequate assurances of their ability to fully and satisfactorily perform
all obligations of the Lake Tapps Community arising under this Agreement.
8.7 Nothing in subsection 8.2.3 shall prohibit or be construed to prohibit PSE, at any
time during the one-hundred twenty (120) day period established by subsection 8.2.3 for
the submittal and consideration of a bona fide offer from the Lake Tapps Community to
purchase substantially all of the Project Assets, from initiating the competitive proposal
process referenced in subsection 8.2.4; provided, however, should PSE choose to accept
any proposal submitted to PSE in connection with such competitive proposal process,
PSE shall not accept such proposal prior to the expiration of such one-hundred twenty
(120) day period.
8.8 Claims made prior to the termination of this Agreement by a Party pursuant to
Section 10 of this Agreement that may reasonably be interpreted or construed to survive
the termination of this Agreement shall survive the termination of this Agreement.
9. Notice of Breach; Opportunity to Cure: In the event that any Party believes another
Party has materially breached its obligations under this Agreement, the aggrieved Party
shall provide the other Party with notice of said breach and an opportunity to cure the
breach within 30 days. If the aggrieved Party believes that such breach has not been
cured, the aggrieved Party may pursue its remedies pursuant to the dispute resolution
procedures set forth in Section 10 of this Agreement. In the event that the Lake Tapps
Community fails to perform its obligations under this Agreement after notice and an
opportunity to cure, PSE shall have the right (but not the obligation) to undertake the
performance of any and all such obligations and if PSE undertakes performance due to a
material breach by the Lake Tapps Community, PSE may suspend performance of its
obligations under this Agreement after completion of the informal dispute resolution
procedure set forth in Section 10 of this Agreement.
10. Dispute Resolution: In the event that any dispute arises between PSE and one or
more of the other Parties, the aggrieved Party shall give a notice of the dispute to the
other Party. Each Party to the dispute shall, within five days of such notice, nominate a
senior officer of its management to meet at a mutually agreed location, to attempt to
resolve such dispute. Should the Parties be unable to resolve the dispute to their mutual
satisfaction within 10 days after such nomination or, failing such nomination, within 10
days following delivery of such notice of dispute, then either Party may pursue legal
action subject to the limitations set forth in Section 11 below.
11. Specific Performance; Other Remedies:
11.1 Each Party acknowledges that a monetary remedy for a material breach of this
Agreement may be inadequate and will be impracticable and extremely difficult to prove,
and that any such breach would cause the other Parties irreparable harm. In the event of
such a breach, the aggrieved Party shall be entitled to temporary and permanent
injunctive relief, including temporary restraining orders, specific performance,
preliminary injunctions and permanent injunctions, without the necessity of posting a
bond or making any undertaking in connection therewith and without the necessity of
proving actual damages. Each Party hereby waives any such requirement of a bond or
undertaking, and acknowledges that absent such a waiver, the court might require a bond
or undertaking. Except as otherwise provided by subsections 11.2 through 11.4 below,
no remedy conferred by this Agreement is intended to be exclusive of any other remedy,
and each and every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity.
11.2 A Party shall not be liable to another Party for any damages other than direct
damages in connection with any breach, default or other noncompliance with the terms
and conditions of this Agreement. Without limiting the generality of the foregoing, each
and all of the Parties hereby agree that no Party shall be liable for any indirect, incidental,
consequential, special, exemplary or punitive damages (including, but not limited to, loss
of profits, revenues or property values) arising out of such Party's performance or
nonperformance of this Agreement, or such Party's breach of or default under this
Agreement. Except as otherwise provided by subsection 11.3 below, PSE's liability in
connection with any breach, default or other noncompliance with the terms and
conditions of this Agreement shall not exceed One Hundred Thousand and 00/100
Dollars ($100,000.00) per occurrence, and PSE's aggregate and cumulative liability under
this Agreement (for any one or more events of breach, default or noncompliance) is
limited and shall not exceed One Million and 00/100 Dollars ($1,000,000.00).
11.3 In the event of a material breach of Section 1.1 by PSE in connection with the
beneficial use of the Water Right, the foregoing limitations of liability shall not apply if
and to the extent such breach is attributable to the gross negligence or wanton and
reckless misconduct of PSE.
11.4 The aggregate liability of the Parties comprising the Lake Tapps Community in
connection with any breach, default or other noncompliance with the terms and
conditions of this Agreement by one or more such Parties shall not exceed Fifty
Thousand and 00/100 Dollars ($50,000.00) per occurrence, and the cumulative aggregate
liability of such Parties under this Agreement (for any one or more events of breach,
default or noncompliance) is limited and shall not exceed Two Hundred Fifty Thousand
and 00/100 Dollars ($250,000.00). The Parties comprising the Lake Tapps Community
shall be jointly and severally liable for any such breach, default or other noncompliance;
provided, however, that each such Party shall retain any and all rights of contribution it
may have against any other such Party.
12. Non-Waiver: No delay or failure by a Party to exercise any of its rights, powers or
remedies under this Agreement following any breach by another Party shall be construed
to be a waiver of any such breach, or any acquiescence therein, or of or in any similar
breach thereafter occurring, nor shall any waiver of any single breach be deemed a
waiver of any other breach theretofore or thereafter occurring.
13. Severability: In the event that any of the terms of this Agreement are in conflict
with any rule of law or statutory provision or otherwise unenforceable, such terms will be
deemed stricken from this Agreement, but such invalidity or unenforceability will not
invalidate any of the other terms of this Agreement, and this Agreement will continue in
force, unless the invalidity or unenforceability of any such provisions hereof does
substantial violence to, or where the invalid or unenforceable provisions comprise an
integral part of, or are otherwise inseparable from, the remainder of this Agreement.
14. No Third Party Beneficiary: This Agreement is for the sole and exclusive benefit
of the Parties and is not intended to and shall not confer any rights or benefits on any
third party not a signatory hereto.
15. Integrated Agreement; Relationship to Other Documents: Except as otherwise
provided by this Agreement with respect to maintenance of Normal Full Pool during the
Annual Recreational Period (as defined and limited by this Agreement), this Agreement
shall not alter, confirm or affect the rights, benefits, privileges, interests and obligations
of the Parties arising under that certain "Deed" dated June 22nd, 1954, wherein Puget
Sound Power & Light Company is "Grantor" and Lake Tapps Development Co., Inc. is
"Grantee," recorded with the Pierce County Auditor in Vol. 1063, pages 485 through 495,
records of Pierce County Washington. With respect to maintenance of Normal Full Pool
during the Annual Recreational Period (as defined and limited by this Agreement), the
Parties intend this Agreement to be their complete agreement and that this Agreement
supersedes all other negotiations or agreements, whether written or oral, with respect to
the Annual Recreational Period (as defined and limited by this Agreement). In all other
respects, the Parties intend for this Agreement to be interpreted and construed to be
consistent with and complementary to their existing property rights. The Parties expressly
recognize that certain matters that are the subject of this Agreement are also, or may also
be, the subject of the Water Right and any FERC license, and that under certain
circumstances the provisions of the Water Right or any FERC license may take
precedence over this Agreement by operation of law.
16. Amendment: This Agreement only may be amended or supplemented in a writing
signed by the Parties.
17. Signature in Counterpart: This Agreement may be executed in any number of
counterparts and all of those counterparts taken together shall constitute one and the same
instrument.
18. Lake Tapps Community Contact: No later than the Effective Date, the Lake Tapps
Community will designate in writing an individual (“LT Contact Person”) to serve as a
single point of contact for day-to-day implementation of this Agreement and notices,
except a notice of breach or default. The LT Contact Person will be responsible for all
communications between PSE and the Lake Tapps Community related to the In-Kind
Services Provided by the Lake Tapps Community, the Rule Curve or the Team. The
Lake Tapps Community shall notify PSE in writing of any change in the LT Contact
Person following the Effective Date.
19. Notices. All notices, except a notice of termination, breach or default to be given
between PSE and the LT Contact Person, hereunder shall be given in writing (i) by
personal delivery, (ii) by recognized overnight air courier service, (iii) by United States
postal service, postage prepaid, registered or certified mail, return receipt requested, (iv)
EXHIBIT A
Reports of Examination dated June 30, 2003, Surface Water Right Application Nos. S2-
29934 (diversion of water from Lake Tapps), S2-29920 (diversion of water from the
White River), and R2-29935 (storage of water in Lake Tapps).
[Attached]
EXHIBIT B
Project Assets
"Project Assets" means those assets used in the historic operation of the Project and that
are used or useful for purposes of managing the Lake Tapps reservoir. The attached
summary of Project Assets is intended to serve as a general reference to certain real and
personal property in which PSE has (or may assert) an interest as of the date of the
Agreement. The Parties use of and reliance upon this general reference is expressly
restricted and limited to the interpretation and administration of Section 5 and Section 8
of this Agreement.
By way of example and not by way of limitation, this general reference to certain real and
personal property in which PSE has (or may assert) an interest as of the date of the
Agreement is not (nor shall it be construed to be) a warranty or representation of any kind
with respect to any matter or with respect to any item of property (including, but not
limited to, warranties or representations of title, of value, of the condition of any one or
more such item of property, or of the sufficiency, suitability or fitness of any one or more
such item of property for any given purpose).
The Parties have provided in Section 8 of this Agreement for circumstances wherein a
more specific inventory of property generally described herein as the Project Assets can
be established in the context of a subsequent transaction, and in the context of any such
subsequent transaction, the value, quality and kind of property generally described herein
as the Project Assets (including, but not limited to, matters such as warranties and
representations or disclaimers thereof) can be determined through the Parties' course of
dealings.
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