HomeMy WebLinkAbout03 13 2017 Joint Water Treatment Agreement with SMSC Report
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4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL WORK SESSION REPORT
MEETING DATE: MARCH 13, 2017
AGENDA #: B
PREPARED BY: SARAH SCHWARZHOFF, CITY ATTORNEY
PRESENTED BY: FRANK BOYLES, CITY MANAGER
SARAH SCHWARZHOFF, CITY ATTORNEY
DON URAM, FINANCE DIRECTOR
AGENDA ITEM: JOINT WATER TREATMENT PLANT WITH SMSC
DISCUSSION: Introduction
The purpose of this agenda item is to update the City Council on the
status of the agreement with the Shakopee Mdewakanton Sioux
Community (SMSC) relating to the joint water treatment plant and to
identify the legal and practical advantages and disadvantages.
History
In previous summers, the City has seen water usage of as much as 7
million gallons per day which is as much as the city water system can
provide in a day. To provide greater capacity, the City entered a water
agreement with the SMSC to provide water from its north wells. This has
provided the City with additional capacity against the maximum summer
day uses. As the City continues to grow at 1 % each year, additional
water capacity will be needed to serve the tracts of infill development
within the City as well as the annexation area.
The water the City uses for domestic purposes is laden with large
amounts of manganese and iron. Years ago, before the advent of the
city water treatment plant, brown water was a weekly complaint from
users often requiring the City to provide a brown out product to
customers to save their clothing.
Every bit as important is the water pip es were becoming clogged with
both substances. From 5/8 inch and ½ inch pipes in the homes, to ¾
supply lines and including the city pipes of all sizes, the system was
loading up with this debris further undermining our ability to supply
required water. The treatment plant stopped this accumulation. A new
treatment plant must do the same or the water customers will be
wasting their money because the pipes will lose capacity as they load
up with such sediment.
The City has been planning long range water sup ply needs that include
the need for additional water source (wells), treatment and storage. In a
report presented to the Council on June 27, 2016, it was determined
that a joint City/SMSC facility would be more cost effective for the City in
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the amount of $6.2 million and for the SMSC in the amount of $3.4
million The Council adopted a resolution on July 11, 2016 indicating
support for a new joint facility agreement and directing the staff to work
with the SMSC staff to prepare an agreement for consideration.
Since then, City and SMSC staff have been working to craft an
agreement to address the construction, operation and maintenance of a
joint facility. At the January 23, 2017 Council workshop, we updated the
Council on the history of the project and the major issues that remain.
We would like to do the same thing once again tonight as progress has
been made.
Current Circumstances
We now have a draft agreement that is very close to final. It has not
been approved by the SMSC however it has been reviewed by members
of the general council as well as the tribal council. Attached is a copy of
the draft agreement. There are a couple of issues that are still under
discussion which we will highlight for you. The major advantages and
disadvantages of the agreement will also be presented.
•Construction – the SMSC will be the lead agency in regards to
design and construction. The City does have review and
approval authority. However, once the design process begins
and even more so, once construction begins it will be difficult if
not impossible to withdraw.
•Cost – the cost is still an estimate. We will not know the final total
cost until construction is complete. This is true regardless of
whether we proceed with a joint facility or with our own facility.
With a joint facility, at least those costs are divided between the
City and the SMSC.
•Payment structure
o Fixed payments – the City will make fixed payments to
pay for its right to treatment and allocation. The total
amount will be the “City’s Share” of the cost of design and
construction which is currently estimated at just under $10
million. The payments will be amortized over 25 years at
3% interest rate.
o Purchase payments- the City will pay to purchase water
and treatment from the facility. The payments will cover
operation, maintenance and repair of the facility. The City
and SMSC will establish water and treatment rates to
reflect the actual costs of treating and providing water.
Historically these costs have been very close to the city’s
wholesale water production costs.
o Improvement – the City and SMSC will work cooperatively
to plan and budget for improvement, renovation and
expansion over the many years that this agreement is
expected to be in place.
•Insurance – the SMSC will own the facility and will maintain
insurance on it. If the facility is destroyed the SMSC has said
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they will rebuild. City staff contends that if the SMSC does not
rebuild the City should receive a proportionate amount of the
insurance proceeds as the City has made fixed payments. In
comparison, if the City were working with another entity the City
would own a portion of the facility and could insure it. As this is
on tribal land the City cannot own or insure it. This item is still
under discussion.
• Annexation area – the SMSC has been asked to “pay”
development fees in the annexation area by crediting the City’s
fixed payments. If the SMSC buys 100 acres or more in the
annexation area they will pay all fees for the 100 acres as well as
for any additional acres purchased. If they buy less than 100
acres they will not pay such fees. The City and SMSC are still
negotiating how such credits will affect the City’s allocation of
water. This topic is still under discussion.
• Term – the SMSC proposed a termination based on a certain
amount of notice and a payment. City staff believes that the
agreement should be terminated only if both parties agree. By
entering this agreement, the City is taking a significant risk as it
will not have its own facility. If the SMSC can terminate the
agreement the City will be in a position of needing to construct a
new facility which will likely have a higher price and be more
difficult to find a site for. This item is still under discussion.
Remedies
The biggest risk for the City in entering this agreement is a lack of
available remedies. The SMSC is providing a limited waiver of sovereign
immunity. However, this waiver is limited to tribal court and to specific
enforcement (no money damages). In addition, we have compromised in
law and jurisdiction agreeing to use Minnesota Law but to proceed in
tribal court. This means that if there is a dispute we will be required to
proceed in tribal court which may require hiring someone familiar with
tribal court procedures. Even if the City were to prevail in tribal court, the
most that the City could receive is an order requiring the SMSC to
comply. The City cannot obtain money damages. Nor does the City
have any mechanism to force the SMSC to comply with a court order.
The City Council needs to consider the consequences of entering an
agreement with the SMSC considering the limited remedies. If the City
Council approves the agreement it will need to do so acknowledging that
if anything were to go wrong, such as the SMSC refusing to provide
water, the City’s options are limited.
ISSUES Most of the major issues above have been negotiated and staff is
comfortable with the result. The lack of remedy when working with the
SMSC is the main risk. However, there are significant benefits to
working with the SMSC as well including the cost savings and favorable
financing terms. Any time the City works with the SMSC these types of
risk are present and the City Council needs to weigh the risk of
something going wrong with the benefits of a joint facility.
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Timing – The general council and the tribal council must approve the
agreement. The mayor is going to be talking to the tribal chair in hopes of
addressing the areas still in question. The general council meets on
March 14 and this is on the agenda. The tribal council will address the
matter at their next meeting and we will place it on the City Council
agenda for the March27 meeting.
CONCLUSION The purpose of the work session is to apprise the City Council about the
agreement and respond to questions which may arise. Mayor Briggs has
spoken with Chairman Vig in hopes that progress might be made on the
remaining issues. Hence the mayor may have an update to offer to the
city council.
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COOPERATIVE AGREEMENT BETWEEN
THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY
AND THE CITY OF PRIOR LAKE
THIS COOPERATIVE AGREEMENT (“Agreement”) is made and entered into this
________ day of ___________________, 2017, by and between the SHAKOPEE
MDEWAKANTON SIOUX COMMUNITY, a sovereign, federally-recognized Indian Tribe
(“SMSC”) and the CITY OF PRIOR LAKE, a Minnesota municipal corporation (“City”).
RECITALS
A. The parties recognize that ground water is a natural resource of limited supply that
must be preserved for future generations, and that ground water is critical to the public health and the
parties’ respective economies and members/residents.
B. Due to the importance and limited supply of ground water the parties desire to work
cooperatively to protect the ground water from overuse and pollution. The Minnesota Department of
Natural Resources, the Minnesota Department of Health, the Environmental Protection Agency and
the Metropolitan Council all encourage collaboration between parties in order to better protect ground
water.
C. The parties have worked cooperatively for a number of years in the treatment of
ground water including entering into the “Water Purchase Agreement between the City of Prior Lake
and the Shakopee Mdewakanton Sioux Community” dated May 21, 2014 relating to the SMSC North
Water Treatment Facility.
D. The parties both need additional treatment facilities in order to continue treating
ground water for public use and consumption. If the parties cooperate to construct a joint treatment
facility it will better ensure the sustainability of ground water as a water source.
E. In addition, construction of a joint facility will result in economies of scale, saving the
SMSC approximately $3.4 million and the City approximately $6.2 million in construction costs.
F. This Agreement is intended to be responsive to the parties’ water usage dependent
upon changes to the jurisdictional land base of each.
G. In order to work toward a fair and equitable sharing of the water resources, to provide
the water treatment needed by both parties, to employ economies of scale and to ensure sustainability
of ground water as a water source, the SMSC and the City have agreed to cooperate in the funding,
construction, operation and maintenance of a new joint South Water Treatment Facility
(“Facility”).
H. The parties desire to enter into this Agreement to establish their respective duties and
obligations for the funding, operation, and maintenance of the Facility, as well as to set forth the City’s
right to perpetual use of the Facility and the City’s obligation to repay the SMSC for the City’s share
of the costs.
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I. The SMSC is authorized to enter into this Agreement by General Council
Resolution ____________. The City is authorized to enter into this Agreement pursuant to
Minnesota Statutes § 471.59 and by Resolution ______.
NOW THEREFORE, in consideration of their mutual covenants the parties agree as
follows:
1. DESIGN AND CONSTRUCTION OF THE FACILITY. The SMSC shall be solely
responsible for preparing plans and specifications and for construction administration of the
Facility subject to the following:
a. The Facility shall be designed to provide for iron and manganese removal at a
capacity of 2.64 million gallons per day for the SMSC and 2.1 million gallons per
day for the City and to provide 200,000 gallons of clear well storage each for the
SMSC and the City. In addition, the Facility shall be designed to provide reverse
osmosis for the SMSC. Construction of the Facility shall include the following
components: aerators; detention tank; gravity filters; RO-backwash feed/water
systems feed clearwells; RO units; RO feed pumps; backwash pumps; high service
pumps; chemical feed; backwash reclaim tanks; electrical, including a generator
and controls, and other components agreed upon by the parties. The SMSC shall
provide treated water in the allocation provided below to the City by December 1,
2019.
b. The SMSC shall have plans and specifications prepared for the Facility, which shall
be submitted to the City for review and approval. The City’s approval or denial of
the plans and specifications shall be in writing and shall be provided to the SMSC
within 30 days of the City’s receipt of the plans and specifications. If denied by
the City, the SMSC may resubmit revised plans and specifications for City review
and approval or denial in the same manner as for the original submission. If the
City does not provide written approval or denial within 30 days of receipt the plans
and specifications will be deemed approved.
c. The plans and specifications shall also be reviewed and approved by the federal
Environmental Protection Agency and the Minnesota Department of Health.
d. The SMSC shall provide to the City the total project cost based upon the final bid
or proposed contract for City approval prior to execution of a contract for
construction. The City’s approval or denial of the project cost shall be in writing
and shall be provided to the SMSC within 30 days of the City’s receipt of the project
cost. If denied by the City, the SMSC may resubmit revised project costs for City
review and approval or denial in the same manner as for the original submission. If
the City does not provide written approval or denial within 30 days of receipt the
project cost will be deemed approved.
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e. If the approvals for plans and specifications and project cost, including approval of
the Environmental Protection Agency or Minnesota Department of Health, are not
obtained by ________________, the City may terminate this Agreement by 14 days
written notice to the SMSC. Upon such termination, the parties shall divide all
design costs actually incurred between the parties based on the allocations set forth
in attached Exhibit A and neither the SMSC nor the City shall have any further
obligations under this Agreement.
f. The SMSC shall provide to the City for review and approval prior to execution all
change orders under the contract where the City’s portion of the change order is in
excess of $5,000. For change orders where the City’s portion of the change order
is between $5,000 and $20,000 the City’s approval or denial shall be in writing and
shall be provided to the SMSC within 14 days of the City’s receipt of the change
order. For change orders where the City’s portion of the change order is in excess
of $20,000 the City’s approval or denial shall be in writing and shall be provided
to the SMSC within 30 days of the City’s receipt of the change order. If denied by
the City, the SMSC may resubmit revised change orders for City review and
approval or denial in the same manner as for the original submission. If the City
does not provide written approval or denial within 14 or 30 days of receipt, as
provided above, the change order will be deemed approved.
2. WELLS. The parties shall work cooperatively to site and build wells to minimize well
interference and to optimize well production and protection of the ground water.
3. COST OF THE FACILITY. The SMSC shall pay all costs and expenses related to
construction of the Facility, including those related to design. The City shall pay the SMSC for its
share of the cost (“City’s Share”) through the City’s fixed payments (“Fixed Payments”). The total
project cost for the Facility is estimated to be $22,425,000. The City’s Share is estimated to be
$9,968,000. Upon completion of construction of the Facility, the SMSC and the City will mutually
agree on the final amount of the City’s Share based on the allocations set forth in attached Exhibit
A, with the City’s share of design costs proportional to the City’s share of the total project cost for
the Facility.
4. CITY’S FIXED PAYMENTS. The City’s Fixed Payments to the SMSC shall be in the
total amount of the City’s Share amortized over 25 years at an annual simple interest rate of 3%.
The City shall make the Fixed Payments annually by October 31 of each year beginning on October
31, 2018. If the final amount of the City’s Share has not been determined as of October 31, 2018,
the City shall make its annual payments based upon the estimated City’s Share. Upon
determination of the final amount of the City’s Share the SMSC and the City shall increase or
reduce the future Fixed Payments due by the City to account for any overpayment or underpayment
made by the City based upon the estimate. The City may prepay all or any portion of the Fixed
Payments at any time without penalty. The parties shall mutually agree as to whether prepayments
shall be applied to the next payment due, to shorten the repayment period, or otherwise.
5. RIGHT TO TREATMENT AND ALLOCATION. In exchange for the Fixed Payments
and with the right beginning the date the Facility comes online, the City shall receive the perpetual
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right to use the Facility including the right to have 2.1 million gallons of water treated and
withdrawn from the Facility each day, subject to a water emergency declared by either party.
During any such water emergency the City shall be entitled to 44% of any water available from
the Facility and the full right to draw water shall be restored as quickly as possible after the
emergency.
6. OPERATION, MAINTENANCE AND REPAIR. The SMSC shall operate, maintain
and repair the Facility in a manner consistent with all applicable Tribal, Federal, State of
Minnesota, and City laws, rules and regulations. The SMSC shall operate and maintain the Facility
in a manner that ensures the City is supplied with treated water from the Facility as set forth above.
The SMSC shall also ensure the water delivered to the City under this Agreement complies with
the Safe Drinking Water Act, 42 U.S.C. §§ 300f – 300j, as may be amended. The parties shall
enter into an operation and maintenance agreement for all three water treatment facilities upon
mutually agreeable terms by the date the Facility comes online. The operation and maintenance
agreement shall provide that the water treatment plants, the Prior Lake Water Treatment Facility
Number 1, the SMSC Northern Water Treatment Facility and this Facility, are operated in a
manner that optimizes the efficiency of all three plants.
7. PURCHASE OF WATER. In addition to all other payments set forth herein, the parties
may purchase water, treatment or both from the Facility as set forth in this paragraph. All water
and treatment shall be purchased in 1,000 gallon units (“Unit”). The Unit rates set forth below
shall be in effect upon completion of the Facility. The rates set forth below shall increase by 3%
each year beginning on January 1, 2018 until a new Unit rate is established as set forth below.
a. Treatment. The City may purchase treatment for water owned by the City at a rate
of $______ per Unit. The Unit rate was calculated as shown on Exhibit B.
b. Raw Water. Each party may purchase raw water from the other party, if raw water
is available as determined in the sole discretion of the party selling the water, at a
rate of $________ per Unit. The Unit rate was calculated as shown on Exhibit B.
Before June 1, 2023 the parties shall review the actual costs of the Facility and shall mutually
adjust the Unit rates to reflect the actual cost of providing, treating and drawing water. The new
Unit rates shall take effect on January 1, 2024 and shall remain in effect for the subsequent 12
months. Thereafter, in June of each subsequent year, the parties shall review the actual costs of
the Facility and shall mutually adjust the Unit rates to reflect the actual cost of providing, treating
and drawing water. Each new Unit rate shall take effect January 1 of the following year and shall
remain in effect for the subsequent 12 months.
The City’s contribution toward the operation, maintenance and repair of the Facility shall be
deemed paid through the Purchase of Water as set forth above. Therefore, the SMSC shall be
responsible for paying all costs related to operation, maintenance and repair of the Facility.
Whether work on the Facility is considered operation, maintenance or repair under this paragraph
or an improvement, renovation or expansion under the following paragraph shall be determined as
set forth in Exhibit C.
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8. IMPROVEMENT, RENOVATION AND EXPANSION. The parties shall work
cooperatively to establish a plan and funding for improvement, renovation, and expansion of the
Facility. The parties shall initially meet to establish the plan by September 1, 2023 and shall
subsequently meet at least annually to review and update the plan as mutually agreed upon. The
parties shall include agreed upon capital expenditures in their respective capital improvement plans
as deemed appropriate by the respective party.
9. ACCESS TO THE FACILITY. The City shall have the right to access the Facility in
order to conduct inspections to ensure water quality and in order to maintain the City’s property,
including but not limited to the City’s SCADA system, the water main serving the City, and the
fiber serving the City. The City shall provide the SMSC with at least 24 hours’ written notice prior
to any such access, provided, however that in an emergency the City shall not be required to
provide 24 hours’ written notice, but must provide as much notice as reasonably possible. At a
minimum, in an emergency, the City shall call the two telephone numbers supplied by the SMSC
to provide notice of emergency access.
10. DAMAGE, DESTRUCTION AND INSURANCE. The SMSC shall maintain insurance
coverage for the Facility in amounts deemed appropriate by the SMSC, but in no event less than
the replacement cost of the Facility. The SMSC shall have the City named as an additional insured
on such insurance. If all or any part of the Facility is damaged or destroyed by fire, casualty, the
elements, or any other cause, the SMSC shall immediately notify the City of such fact, and the
SMSC shall immediately commence and diligently pursue repair to return the Facility to its
condition prior to such damage or destruction. All payments due by the City to the SMSC during
any such damage to the Facility shall be suspended to the extent that treated water is not provided
to the City. If the SMSC fails to diligently pursue repair of the Facility the City’s obligation to
make such suspended payments and future payments shall cease and the City shall be entitled to
44% of any insurance proceeds received by the SMSC relating to the Facility. The City may use
such funds in any manner it deems appropriate.
The SMSC shall ensure that all contractors performing work on the Facility maintain insurance
coverage for such work and that the City is named as an additional insured on such insurance.
11. CITY DEFAULT AND SMSC REMEDIES. If the City fails to make the required
payments, terminates or frustrates the purpose of this Agreement in any manner other than as
specifically provided for herein, or materially breaches the terms and conditions contained in this
Agreement (collectively a “City Breach”), the SMSC may cease providing water from the Facility
to the City upon thirty days’ written notice to City of the City Breach. If the City cures the City
Breach and makes all required past due and current payments, the SMSC shall immediately resume
providing the City with water from the Facility. In addition to ceasing to provide water, the
SMSC’s sole remaining remedy and right of recourse is to bring an action against the City in the
Tribal Court of the Shakopee Mdewakanton Sioux Community. The SMSC may not recover
money damages from the City, except that if the City has ceased making Fixed Payments as due
and there is no SMSC Breach, the SMSC may seek money damages in an amount not to exceed
the City’s Share less any Fixed Payments that have already been made. Each party shall bear its
own costs and expenses, including attorney’s fees, incurred in any such proceeding.
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12. SMSC DEFAULT AND CITY REMEDIES. If the SMSC fails to operate or maintain
the Facility as required by this Agreement, fails to provide the required water or maintain the
required water quality, terminates or frustrates the purpose of this Agreement in any manner other
than as specifically provided for herein, or materially breaches the terms and conditions contained
in this Agreement (collectively an “SMSC Breach”), the City may cease making all payments
required under this Agreement upon thirty days’ written notice to the SMSC of the SMSC Breach.
In addition to ceasing payments, the City’s sole remaining remedy and right of recourse is to bring
an action against the SMSC in the Tribal Court of the Shakopee Mdewakanton Sioux Community.
Each party shall bear its own costs and expenses, including attorney’s fees, incurred in any such
proceeding.
13. LIMITED WAIVER OF SOVEREIGN IMMUNITY. In the sole event of an SMSC
Breach, the SMSC does hereby provide a limited waiver of its sovereign immunity from suit to
the City to pursue such claims. This limited waiver shall only be for suits brought in the Tribal
Court of the Shakopee Mdewakanton Sioux Community, and the waiver of immunity is strictly
limited to enforcement of the provisions of this Agreement through a claim for injunctive or
declaratory relief. This limited waiver of immunity specifically does not allow for recovery of
attorney’s fees, and does not extend to actions for money damages. In the case of an inconsistency
between the terms of this provision and any other provision of this Agreement, the terms of this
provision shall control and prevail.
14. GOVERNING LAW. This Agreement shall be governed by and interpreted pursuant to
the laws of the State of Minnesota, without regard to conflict of law provisions, and shall be subject
to all applicable Federal acts.
15. NON-IMPAIRMENT. The Business Council of the SMSC represents and warrants that
it will not initiate enactment of any law, ordinance, rule or regulation or initiate any action to
impair this Agreement, including an action to rescind this Agreement or any waiver contained in
this Agreement that would impair the obligations of the SMSC under this Agreement. This
provision shall not impair the right of the SMSC to terminate this Agreement as specifically
provided for herein. The City Council of the City of Prior Lake represents and warrants that it will
not initiate enactment of any law, ordinance, rule or regulation or initiate any action to impair this
Agreement, including an action to rescind this Agreement or any waiver contained in this
Agreement that would impair the obligations of the City under this Agreement. This provision
shall not impair the right of the City to terminate this Agreement as specifically provided for
herein.
16. CITY PAYMENTS. The City represents that it will make all Fixed Payments from
revenues received by the City from its public water system. The City agrees to impose charges in
amounts necessary to ensure that the City can make the required Fixed Payments.
17. CREDIT FOR DEVELOPMENT FEES/DECREASE TO ALLOCATION. The City’s
ability to meet the monetary obligations imposed under this Agreement is dependent upon
development of the annexation area identified on attached Exhibit D (“Annexation Area”).
Therefore, the SMSC agrees that if it purchases cumulatively more than 100 acres total within the
Annexation Area it shall credit the City’s Fixed Payments in the amount of the development and
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connection fees for all 100 acres purchased as determined at the time the SMSC purchases the
100th acre. In addition, for all acres purchased by the SMSC after the 100th acre, the SMSC shall
credit the City’s Fixed Payments in the amount of the development and connection fees for each
acre purchased as determined at the time the SMSC purchases each acre. The City’s development
and connection fees shall include all fees that would be imposed on a private developer to develop
the acres. The parties shall work cooperatively to update the Annexation Area as appropriate based
on future development.
Geographic service area –
City first right of service for any property in this area
With fee payment
If PL can’t serve then they can - if we serves
Pay rates – agreed upon – credit against fixed payment
Delay in payment until development – within 10 years which ooccurs first
When we get close enough they opay
City right to cross parcel with pipe
18. AUTHORIZATION. This Agreement and all of its terms have been authorized and
approved by SMSC Business Council Resolution No. ____________, adopted on the ____ day of
_______, 201_, a copy of which is attached hereto as Exhibit E. This Agreement and all of its
terms have been authorized and approved by the City Council of the City of Prior Lake by
Resolution adopted the __ day of ______, 201_, a copy of which is attached as Exhibit F.
19. TAXES, FEES, AND PERMITS. The SMSC shall not impose any taxes or fees on the
City in connection with this Agreement. In addition, the City is not required to obtain any permit
from the SMSC to purchase treatment or water under this Agreement. If either party places any
infrastructure in the other party’s rights of way, it shall be placed by permit and subject to all
normal requirements and limitations for such placement.
20. EMPLOYEE STATUS. Any and all persons engaged in the work to be performed by the
SMSC related to this Agreement or the Facility shall not be considered employees of the City for
any purpose, including Worker’s Compensation or any and all claims that may or might arise out
of said employment context on behalf of said employees while so engaged. Any and all claims
made by any third party as a consequence of any act or omission on the part of said SMSC
employees while so engaged on any of the work contemplated herein shall not be the obligation
or responsibility of the City. Any and all persons engaged in the work to be performed by the City
related to this Agreement or the Facility shall not be considered employees of the SMSC for any
purpose, including Worker’s Compensation or any and all claims that may or might arise out of
said employment context on behalf of said employees while so engaged. Any and all claims made
by any third party as a consequence of any act or omission on the part of said City employees while
so engaged on any of the work contemplated herein shall not be the obligation or responsibility of
the SMSC.
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21. INDEMNIFICATION. Each party is responsible for its own acts and omissions and the
results thereof to the extent authorized by law. Each party shall indemnify the other party and hold
it harmless from and against any and all judgments, claims, damages, costs and expenses, including
a reasonable amount as and for its attorney’s fees paid, incurred, or for which it may be liable,
resulting from the party’s negligent or intentional acts or omissions, or the negligent or intentional
acts or omissions of the party’s subcontractors, employees, or agents. The City’s liability is subject
to the limits applicable to a municipality as set forth in Minn. Stat. Ch. 466. The SMSC’s tort
liability is subject to the limits set forth in and subject to the SMSC Tort Claims Ordinance.
22. AUDITS. Any books, records, documents, and accounting procedures and practices of a
party related to this Agreement are subject to examination by the other party and either the
Legislative Auditor or the State Auditor, as appropriate. The parties agree to maintain these records
for a period of six years from the date of performance of all services covered under this Agreement.
23. DATA PRACTICES. All data created, collected, received, maintained or disseminated by
the City for any purpose in the course of this Agreement is governed by the Minnesota Government
Data Practices Act, Minn. Stat. Chap. 13, and any other applicable state statute and any state rules
adopted to implement the act, as well as federal regulations on privacy.
24. DISCRIMINATION. In performance of this Agreement, neither party shall discriminate
on the grounds of or because of race, color, creed, religion, national origin, sex, marital status,
status with regards to public assistance, disability, sexual orientation, or age against any employee,
subcontractor, or any applicant for employment. Both parties shall include a similar provision in
all contracts with subcontractors to this Agreement. Both parties further agree to comply with all
aspects of the Minnesota Human Rights Act, Minn. Stat. Section 363.01, et seq., Title VI of the
Civil Rights Act of 1964, and the Americans with Disabilities Act of 1990 as each may be amended
from time to time. The parties understand and agree that pursuant to 42 U.S.C. Subchapter VI, the
SMSC’s qualifying Indian preference laws, policies, and practices do not constitute discrimination.
25. CONFLICTS. No salaried officer or employee of the City shall have a financial interest,
direct or indirect, in this Agreement. The violation of this provision renders the Agreement void.
26. LIMITATION OF REMEDIES. In the event of a breach of this Agreement neither party
shall be entitled to recover punitive, special or consequential damages, damages for loss of
business, or attorney’s fees.
27. ASSIGNMENT. Neither party may assign this Agreement, or any interest arising herein,
without the prior written consent of the other party.
28. SEVERABILITY. Except for paragraph 5 the provisions of this Agreement are severable
and if any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary
to law, such decision shall not affect the remaining provisions of the Agreement. If paragraph 5
is, for any reason, held by a court of competent jurisdiction to be contrary to law, the Fixed
Payments due by the City to the SMSC shall be suspended until the parties can amend the
Agreement to restore the City’s right to treated water.
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29. WAIVER. No action or failure to act by the SMSC or the City shall constitute a waiver of
any right or duty afforded any of them under the Agreement, nor shall any such action or failure
to act constitute an approval or acquiescence in any breach thereunder, except as may be
specifically agreed in writing.
30. DISPUTE RESOLUTION. The parties agree to use their best efforts to negotiate an
amicable resolution of any dispute arising from this Agreement. If the parties are unable to
negotiate an amicable resolution of a dispute within fourteen (14) days from the date written notice
of the dispute is provided to the other party, or such other period as the parties agree to in writing,
the parties may enter into mediation. Upon service of a written notice requesting mediation, the
parties shall have ten (10) days to jointly select one person to act as mediator. If the parties are
unable to agree upon a mediator, the parties shall ask the Chief Justice of the Scott County District
Court and the Tribal Court of the Shakopee Mdewakanton Sioux Community to each select a
mediator. The two selected mediators shall then mutually select a third mediator. The third
mediator shall conduct the mediation. The mediation shall be conducted pursuant to the
procedures of the American Arbitration Association. Each party shall bear its own costs of the
mediation process. The parties shall share equally the fees and expenses of the mediator. The
parties acknowledge that mediation is a voluntary process, and that the mediator does not have the
authority to bind either party absent the party’s consent.
31. NOTICES. Any notice required to be given to the City or the SMSC pursuant to this
Agreement shall be made in writing and shall be deemed duly given: (i) on the date of personal
delivery; (ii) on the date and time of confirmation if sent via facsimile (with verification of receipt);
(iii) one business day following dispatch by Federal Express or equivalent; or (iv) three business
days after mailing certified or registered mail, postage prepaid, return receipt requested, all to the
respective addresses of the parties set forth below:
SMSC: With copies to:
Shakopee Mdewakanton Sioux Community Shakopee Mdewakanton Sioux Community
Attn: Chairman Attn: Tribal Administrator
2330 Sioux Trail NW 2330 Sioux Trail NW
Prior Lake, MN 55372 Prior Lake, MN 55372
FAX: 952-445-8906 FAX: 952-445-8906
Shakopee Mdewakanton Sioux Community
Attn: General Legal Counsel
2330 Sioux Trail NW
Prior Lake, MN 55372
FAX: 952-445-8906
CITY OF PRIOR LAKE: With copies to:
City of Prior Lake City of Prior Lake
Attn: Public Works Director Attn: City Manager
4646 Dakota Street SE 4646 Dakota Street SE
Prior Lake, Minnesota 55372 Prior Lake, Minnesota 55372
Fax: 952-447-4245 Fax: 952-447-4245
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Gregerson, Rosow, Johnson & Nilan
Attn: Sarah Schwarzhoff
100 Washington Ave S, Suite 1550
Minneapolis, MN 55401
Fax: 612-349-6718
32. SIGNING OF AGREEMENT. This Agreement may be signed in counterparts and on
different dates by each party without affecting the validity hereof.
33. TERM. The term of this Agreement shall commence with its execution and shall continue
until terminated as provided herein.
34. TERMINATION. This Agreement may be terminated only by mutual agreement of both
parties.
35. INTEGRATION. The entire and integrated agreement of the parties contained in this
Agreement shall supersede all prior negotiations, representations, or agreements between the
parties regarding the subject matter hereof, whether written or oral.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first
above written.
[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]
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CITY OF PRIOR LAKE
BY: _______________________
Kirt Briggs, Mayor
BY: _______________________
Frank Boyles, City Manager
STATE OF MINNESOTA )
(ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this ____ day of _______, 201_,
by Kirt Briggs and Frank Boyles, the Mayor and City Manager, respectively, of the City of Prior
Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the
authority granted by its City Council.
_______________________
Notary Public
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Page 12 of 12
SHAKOPEE MDEWAKANTON SIOUX COMMUNITY
BY: _______________________
Charles R. Vig, Chairman
STATE OF MINNESOTA )
(ss.
COUNTY OF SCOTT )
The foregoing instrument was acknowledged before me this ____ day of _______, 201_,
by Charles R. Vig, the Chairman of the Shakopee Mdewakanton Sioux Community, a federally-
recognized Indian tribe, on behalf of the Tribe and pursuant to the authority granted by its General
Council.
_______________________
Notary Public