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HomeMy WebLinkAbout5L - MOA DRAFT: 4/2/07 Reserved For Filing Information MEMORANDUM OF AGREEMENT FOR CONSTRUCTION, USE, OPERATION, AND MAINTENANCE OF THE PRIOR LAKE OUTLET CHANNEL AND OUTLET STRUCTURE Between the Prior Lake-Spring Lake Watershed District, the City of Prior Lake, the City of Shakopee, and the Shakopee Mdewakanton Sioux Community Effective as of October 1, 2006 DRAFT: 4/2/07 TABLE OF CONTENTS ARTICLE I. AGREEMENT AND EFFECTIVE DATE ................................................................ I ARTICLE 2. DEFINITIONS AND RULES OF CONSTRUCTION .............................................. I 2.1 Definitions............................................................................................................................. I 2.2 Rules Of Construction.........................................................................,................................. 8 ARTICLE 3. RECITALS AND STATEMENT OF PURPOSE ...................................................... 9 3.1 Recitals..,............................................................................................................................... 9 3.2 Statement Of Purpose ......................................................................................................... 12 ARTICLE 4. REPRESENTATIONS AND WARRANTIES ........................................................13 4.1 Existence and Authority Of Watershed District.......... ...... ............. ........... ......................... 13 4.2 Existence And Authority Of Prior Lake ............................................................................. 13 4.3 Existence And Authority Of Shakopee................................. ................. .......... ................... 14 4.4 Existence And Authority Of SMSC................. ................... ................................................ 14 4.5 Approval And Approval Date.................................,...............................,........,....,............. 14 ARTICLE 5. OUTLET STRUCTURE REPAIR PROJECT AND OPERATION OF OUTLET STRUCTURE............................................................ 15 5.1 Watershed District To Undertake Outlet Structure Repair Project..................................... 15 5.2 Plans And Specifications For Outlet Structure Repair Project ...........................................16 5.3 Operation And Maintenance Of Outlet Structure ............................................................,.. 16 ARTICLE 6. USES AND DRAINAGE RATES FOR OUTLET CHANNEL.............................. 16 6.1 Permitted Use B y Watershed District........... ................................. ..................................... 16 6.2 Permitted Uses And Drainage Areas For Prior Lake, Shakopee, And SMSC.................... 16 6.3 Maximum Average Discharge Rates .................................................................................. 17 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page ii DRAFT: 4/2/07 6.4 Verifying Watershed District's Maximum Average Discharge Rate ................................. 18 6.5 Verifying Other Tributary Acreages And Maximum Average Discharge Rates. . . . . .. .. . .. .. .. .. . . . .. . . . . . ... ... . . .. . .. . .. .. .. ... . . .. .. .. .. . .. .. ... .. .. .. ... .. . . ... . .. . .. . . . . ... .. . .. . .. .. . .. . .. . . .. .. .. ... .. ... .. 18 6.6 Exceeding Maximum Discharge Rates And Changes To Address Exceedances ........................................................................................................................ 20 ARTICLE 7. CONSTRUCTION OF OUTLET CHANNEL RESTORATION AND ENHANCEMENT PROJECT........................................................................ 22 7.1 Design Flows...................................................................................................................... 22 7.2 Project Schedule.................................................................................................................. 22 7.3 Project Design,..,....................................,.,...................,...................................................... 23 7.4 Project Construction By Watershed District Or Other Project Cooperators....................... 23 7.5 Use Of The Outlet Channel During Construction And Vegetation Establishment................................................................................................................. ..... 25 7.6 Construction Cost Participation.......................................................................................... 25 ARTICLE 8. ACQUISITION AND USE OF OUTLET CHANNEL EASEMENTS.......................,.............................,.....................................................26 8.1 Acquisition By Dedication, Purchase, Or Right-of-Way Grant .........................................26 8.2 Acquisition By Purchase Or Condemnation In Prior Lake Or Shakopee ...........................26 8.3 Acquisition Of Easements Or Rights-Of-Way On Fee Land Or Trust Land...................... 27 8.4 Easement Acquisition Costs............................................................................................... 28 8.5 Additional Authorized Easement Uses .............. ..... ............................................................ 28 ARTICLE 9. OPERATION AND MAINTENANCE OF OUTLET CHANNEL......................... 31 9.1 General....................................................................................................................... ......... 3 I 9.2 Preparation Of Maintenance Plans..................... ....... ............................................... ........... 31 9.3 Operation And Maintenance By Watershed District Or Other Project Cooperators................................................................................................................... ....,. 32 9.4 Emergency Maintenance By Watershed District Or Other Project Cooperators................................................................................................................... ...... 33 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page iii DRAFT: 4/2/07 9.5 Operation and Maintenance Cost Participation ..................................................................34 ARTICLE 10. OUTLET CHANNEL COST SHARING AND FUNDING .................................... 35 10.1 Estimated Costs................................................................................................................... 35 I 0.2 Cost-Share Allocation......................................................................................................... 35 10.3 Revisions To Cost-Share Allocations Due To Changes In Tributary Drainage Areas................................................................................................................... 36 10.4 Creation Of Design And Construction Fund And Payment Of Construction Cost-Share Allocations...............................,...........,......,.................................................... 38 10.5 Creation Of Operation And Maintenance Fund And Payment Of Operation And Maintenance Cost -Share Allocations.......................................................................... 40 10.6 Creation Of Emergency Maintenance Fund And Payment Of Emergency Maintenance Cost-Share Allocations.................................................................................. 41 10.7 General Fund Administration And Recordkeeping ............................................................43 SECTION II. PROJECT COOPERATOR MEETINGS ................................................................43 11.1 General Provisions .............................................................................................................. 43 11.2 Annual Meeting And Failure To Agree On Budgets .................................................. ........ 44 11.3 Initial Meeting..................................................................................................................... 45 11.4 Other Meetings...................................................,.........,...................................................... 45 ARTICLE 12. SECURITY FOR PAYMENT OF SMSC COST-SHARE ALLOCATIONS...................................................................................................... 45 12.1 SMSC To Provide Letters Of Credit................................................................................... 45 12.2 Drawing Against SMSC Cost Share Letters Of Credit.......................................................47 ARTICLE 13. INDEMNIFICATION .............................................................................................. 51 13.1 Watershed District Indemnification Of Prior Lake, Shakopee, And SMSC....................... 51 13.2 Prior Lake Indemnification Of Watershed District, Shakopee, And SMSC....................... 51 13.3 Shakopee Indemnification Of Watershed District, Prior Lake, And SMSC....................... 52 13.4 SMSC Indemnification Of Watershed District, Prior Lake, And Shakopee....................... 53 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Pageiv DRAFT: 4/2/07 13.5 Limitation On Liability Of Project Cooperators................................................................. 54 13.6 Insurance And Evidence Of Coverage... ...................... ....................................... ........... ..... 54 ARTICLE 14. SECURITY FOR SMSC COMPLIANCE AND INDEMNIFICATION.............................................................................................. 56 14.1 SMSC Compliance And Indemnification Letter Of Credit ................................................ 56 14.2 Basis For Compliance Or Indemnification Draws.............................................................. 57 14.3 Letter Of Credit Replacement After Draw.......................................................................... 59 14.4 No Draw During Dispute Resolution..... ......................................... .................................... 59 ARTICLE 15. DISPUTE RESOLUTION........................................................................................ 59 15.1 Policy For Resolving Disputes............. ............................................................................... 59 15.2 Procedure For Resolving Disputes....... ............................................................................... 60 15.3 Enforcement Of Judgment Or Order... ............ ...... .............................................................. 61 15.4 Limited Sovereign Immunity Waiver.. .......... ..................... ......... ....................................... 62 ARTICLE 16. TERM AND TERMINATION ................................................................................. 63 ARTICLE 17. DISTRIBUTION OF PROPERTY UPON TERMINATION ..................................63 17.1 Distribution Of Property Generally ....................................................................................63 17.2 Conveyance Of Title To Easements Outside The Watershed District................................63 ARTICLE 18. GENERAL PROVISIONS ...... ........................................ ........... .............................. 64 18.1 Counterparts........................................................................................................................ 64 18.2 Entire Agreement, Amendment, And Waiver..................................................................... 64 18.3 MONJP A Precedence........................................................................................................ 64 18.4 Notices................................................................................................................................ 64 18.5 No Third Party Beneficiaries .............................................................................................. 65 18.6 Successors And Assigns..................................................................................................... 65 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page v DRAFT: 4/2/07 TABLES Table I: Outlet Channel Tributary Drainage Areas in Acres (downstream of Prior Lake) .......................................................................................................................... 17 Table 2: Maximum Average Discharge Rates to Outlet Channel Segments .................................... 18 Table 3: Outlet Channel Restoration and Enhancement Project Design Flows by Segment.............................................................................................................................. 22 Table 4: Cost-Share Allocation for Outlet Channel Fund Payments ................................................ 35 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page vi DRAFT: 4/2/07 EXHIBITS Exhibit A - Outlet Channel Map............,.............. ..............,............................................................ A-I Exhibit B - Outlet Channel Segment Drainage Areas...................................................................... B-1 Exhibit C - Projected Average Discharge Rate Calculation Formula and Example Calculations.........................................................,...,..,.........,......................................... C-I Exhibit D - Outlet Channel Design, Construction, and Maintenance Schedule ..............................D-l Exhibit E - Nine Year Estimate of Outlet Channel Design, Construction, and Operation And Maintenance Costs.................... ......... ................. ..................... ............. E-l Exhibit F - Calculation Method for Cost-Share Allocation ..............................................................F-I Exhibit H - Drainage Area Change Recalculation Example ............................................................ G-l Exhibit G - 2006 Fund Payments ..................................................................................................... H-I Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page vii DRAFT: 4/2/07 MEMORANDUM OF AGREEMENT FOR CONSTRUCTION, USE, OPERATION, AND MAINTENANCE OF THE PRIOR LAKE OUTLET CHANNEL AND OUTLET STRUCTURE ARTICLE 1. AGREEMENT AND EFFECTIVE DATE The PRIOR LAKE-SPRING LAKE WATERSHED DISTRICT, a Minnesota political subdivision (the "Watershed District"), the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("Prior Lake"), the CITY OF SHAKOPEE, a Minnesota municipal corporation ("Shakopee"), and the SHAKOPEE MDEW AKANTON SIOUX COMMUNITY, a Federally recognized Indian tribe (the "SMSC"), jointly the "Project Cooperators", enter into this Memorandum Of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure (this "MOA," as more fully defined in Section 2.1X.) to be effective as of October I, 2006 (the "Effective Date"). In entering into this MOA, the Project Cooperators mutually acknowledge that this MOA's Provisions constitute sufficient consideration. ARTICLE 2. DEFINITIONS AND RULES OF CONSTRUCTION 2.1 Definitions Unless otherwise expressly provided in this MOA or the context otherwise requires, the following capitalized words have the following defined meanings when used in this MOA. A. Annual Meeting. As defined in Section 11.2. B. Approval Date. As defined in Section 4.5A. C. Best Storm Water Management Practices. Storm water management practices approved or required by the Watershed District. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page I DRAFT: 4/2/07 D. Claims. Any and all actions, causes of action, claims, costs, damages, demands, debts, executions, expenses (including reasonable attorneys' fees and expert and other fees and expenses), fines, judgments, liens, obligations, penalties, or suits. E. Conceptual Design. The Prior Lake Outlet Channel Future Conceptual Plan, a plan for restoring and enhancing the Outlet Channel, that was developed with the input of the Project Cooperators as part of the Prior Lake Outlet Channel and Lake Volume Management Study completed by the Watershed District in 2003. The Conceptual Design is based on the use of ecological principles, bioengineering, and natural stream technology practices to improve channel stability, reduce erosion, and enhance the habitat and aesthetics of the Outlet Channel. F. Construct/Construction. All activities involved in building, creating, improving, or restoring a drainage way, trail, underground utility, or other device, object, or structure including: acquiring land for the work; bidding and contracting for the work; building, managing, inspecting, and approving the work; and remediating contamination or pollution of soil, water, structures, or other media necessary to perform the work. G. Construction Costs. All costs related to Construction including: accountant, architect, appraisal, attorney, Construction management, engineering, and other professional fees and costs; contamination and pollution remediation costs; bidding, budgeting, contracting, office, travel, and other management costs; building or construction costs; easement, right-of-way, and other acquisition costs; erosion control costs; inspection costs; material costs; security costs; and staff costs. H. Design. All activities involved in conceiving, designing, and planning, and in obtaining approval for plans for, a drainage way, trail, underground utility, or other device, object, or structure including: devising, discussing, drawing, and modifying plans and specifications; determining easements, rights-of-way, and other property interests needed; investigating contamination or pollution of soil, water, structures, or other media; preparing remedial action plans and other documents related to contamination and pollution; testing soil and water; asking Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 2 DRAFT: 4/2/07 for, discussing, and getting comments on, or approvals of, plans and specifications from Project Cooperators or others; and asking for, discussing, and getting governmental comments on, or approvals of, licenses, permits, or other approvals for plans and specifications. I. Design And Construction Budget. As defined in Section 11.2A.(7). ]. Design And Construction Fund. The fund defined and established in Section 10.4. K. Design Costs. All costs related to Design including: accountant, architect, appraisal, attorney, engineering, geotechnical, scientific, and other professional fees and costs; bidding, budgeting, contracting, office, travel, and other management costs; investigation and testing costs; meeting and coordination costs; application preparation costs and fees; license, permit, and other governmental approval fees; administrative appeal and contested case fees and costs; and staff costs. L. Design Flows. As defined in Section 7.1. M. DNR. The Minnesota Department of Natural Resources. N. Emergency Maintenance. All activities necessary to achieve immediate compliance with applicable laws and agreements, when immediate compliance is required, and to address conditions that pose an immediate threat to the functioning of a drainage way, trail, underground utility, or other device, object, or structure such as accidental damage, acts of vandalism, bank failure, culvert obstruction, storm damage, structural failure, or a contaminant or pollutant spill including: repairing or rebuilding the device, object, or structure; rebuilding, repairing, or restoring drainage channel banks or beds; removing obstructions; burning, mowing, planting, replanting, spraying, trimming, or otherwise managing vegetation; removing sediment from accumulation zones; cleaning up contaminant or pollutant spills; and protecting wildlife habitat and the aquatic environment. O. Emergency Maintenance Costs. All costs related to Emergency Maintenance including: accountant, appraisal, architect, attorney, Construction management, engineering, geotechnical, scientific, and other professional fees and costs; bank Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 3 DRAFT: 4/2/07 and bed stabilization costs; bidding, budgeting, contracting, office, travel, and other management costs; clean-up costs; contaminant or pollution remediation costs; building or construction costs; erosion control costs; inspection costs; license, permit, and other approval costs; material costs; repair costs; replacement costs; security costs; sediment removal costs; staff costs; vegetation management costs; and wildlife and aquatic environment protection costs. P. Emergency Maintenance Fund. The fund defined and established in Section 10.6. Q. Effective Date. As defined in Article I. R. Fee Land. Land owned in fee now or hereafter by the SMSC. S. JPA. As defined in Section 3.1P. T. Lake Outlet Project. As defined in Section 3.1B. U. LMCIT. As defined in Section 13.6A. V. Maintain/Maintenance. All activities necessary to keep a drainage way, trail, underground utility, or other device, object, or structure in good repair, working efficiently, and in compliance with applicable laws and agreements including: rebuilding, repairing, or restoring the drainage way, device, object, or structure; rebuilding, repairing, or restoring channel banks or beds; removing obstructions; burning, mowing, planting, replanting, spraying, trimming, or otherwise managing vegetation; removing sediment from accumulation zones; cleaning up contaminant or pollutant spills; and protecting wildlife habitat and the aquatic environment. W. Maximum Average Discharge Rate(s). As defined in Section 6.3. X. MOA. This Memorandum Of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure, including the following exhibits that are attached to and are a part of this MOA: Exhibit A - Outlet Channel Map Exhibit B - Outlet Channel Segment Drainage Areas Exhibit C - Proiected Average Discharge Rate Calculation Formula and Example Calculations Exhibit D - Outlet Channel Design, Construction. and Maintenance Schedule Exhibit E - Nine Year Estimate of Outlet Channel Design. Construction. and Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 4 DRAFT: 4/2/07 Operation And Maintenance Costs Exhibit F - Calculation Method for Cost-Share Allocation Exhibit G - Drainage Area Change Recalculation Example Exhibit H - 2006 Fund Payments Y. 100- Year Rainfall Event. The total rainfall from a 24-hour rainfall event with a 100 year frequency of return, assuming a Soil Conservation Service Type II rainfall distribution, as specified in Technical Paper 40, Rainfall Frequency Atlas of the United States for Durations from 30 minutes to 24 Hours and Return Periods from one to 100 Years (NOAA, 1961). Z. Operate/Operation. All activities needed to keep a drainage way, trail, underground utility, or other device, object, or structure working, including; accounting for funds received and expended; adjusting equipment that is part of, and regularly inspecting, the drainage way or other device, object, or structure; bidding and contracting for, or otherwise providing, Maintenance; budgeting the use of funds received; overseeing the use of the drainage way or other device, object, or structure; providing staff for these activities; raising funds to pay for the enterprise; and otherwise managing the enterprise. AA. Operation And Maintenance Budget. As defined in Section 1I.2A.(8). BB. Operation And Maintenance Costs. All costs related to Operation or Maintenance including: accountant, architect, appraisal, attorney, engineering, geotechnical, scientific, and other professional fees and costs; bank and bed stabilization costs; bidding, budgeting, contracting, office, travel, and other management costs; clean-up costs; contamination and pollution remediation costs; building or construction costs; erosion control costs; inspection costs; license, permit, and other approval costs; repair costs; replacement costs; sediment removal costs; security costs; staff costs; vegetation management costs; and wildlife and aquatic environment protection costs. Cc. Operation And Maintenance Fund. The fund defined and established in Section 10.5. DD. Outlet Channel. The seven miles of natural and built drainage courses within the municipal boundaries of Prior Lake and Shakopee that were connected, built, and Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 5 DRAFT: 4/2/07 improved as part of the Lake Outlet Project. See Exhibit A - Outlet Channel Map. The Outlet Channel extends from the Outlet Structure north to the Minnesota River at Blue Lake. The Outlet Channel is divided into the following eight segments: . Segment I: Prior Lake to County Road 42 . Segment 2: County Road 42 to the inlet of Pike Lake . Segment 3: The outlet of Pike Lake to Pike Lake Trail . Segment 4: Pike Lake Trail to County Road 16 . Segment 5: County Road 16 to the inlet of Dean Lake . Segment 6: The outlet of Dean Lake to State Trunk Highway 169 . Segment 7: State Trunk Highway 169 to State Trunk Highway 101 . Segment 8: State Trunk Highway 10 I to the Minnesota River EE. Outlet Channel Restoration And Enhancement Project. As defined in Section 3.11. F F. Outlet Structure Repair Project. As defined in Section 3.1 G. GG. Outlet Structure. The structure and pipe that were installed on Prior Lake by the Watershed District in 1983 as part of the Lake Outlet Project, to provide an outlet for the lake. See Exhibit A. HH. Outlet Operating Plan. The Outlet Control Structure For Prior Lake Management Policy And Operating Procedures (revised October 2004), a plan documenting the management policy and operating procedures for the Outlet Structure, as developed by the Watershed District and approved by the DNR in February 2005. II. Prior Lake. As the context requires, either a Project Cooperator as defined in Article 1 or a lake in the City of Prior Lake. JJ. Project. As defined in Section 3.IJ. KK. Project Cooperators. As defined in Article I. LL. Projected Average Discharge Rate. The expected average storm water discharge rate from development that occurs after the Effective Date, as calculated by a Project Cooperator according to the formula in Exhibit C - Proiected Average Discharge Rate Calculation Formula and Example Calculations, for the entire drainage area within that Project Cooperator's jurisdiction tributary to an Outlet Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 6 DRAFT: 4/2/07 Channel segment. MM. Projected Discharge Rate. The expected storm water discharge rate from a development or redevelopment calculated in cfs for the 100- Year Rainfall Event using storm water discharge specifications for a developed or redeveloped area. NN. Provision. Any agreement, condition, duty, grant, immunity, indemnity, obligation, promise, provision, release, representation, responsibility, right, term, or warranty. 00. Public Service Activity/Activities. As defined in Section 8.5A. PP. Shakopee. A Project Cooperator as defined in Article I. QQ. SMSC. A Project Cooperator as defined in Article I. RR. SMSC Design And Compliance And Indemnification Letter Of Credit. An irrevocable letter of credit from the SMSC with the Watershed District, Prior Lake, and Shakopee as beneficiaries, in a form satisfactory to the Watershed District, from a surety located in the State, and as further provided in Section 14.1. SS. SMSC Construction Letter Of Credit. An irrevocable letter of credit from the SMSC with the Watershed District as the beneficiary, in a form satisfactory to the Watershed District, from a surety located in the State, and as further provided in Section 12.1 A. TT. SMSC Emergency Maintenance Letter Of Credit. An irrevocable letter of credit from the SMSC with the Watershed District as the beneficiary, in a form satisfactory to the Watershed District, from a surety located in the State, and as further provided in Section 12.1 C. VV. SMSC Operation And Maintenance Letter Of Credit. An irrevocable letter of credit from tl1e SMSC with the Watershed District as the beneficiary, in a form satisfactory to the Watershed District, from a surety located in the State, and as further provided in Section 12.1B. VV. State. The State of Minnesota. WW. Trust Land. Land held now and hereafter by the United States, in trust, for the beneficial interest of the SMSC. XX. 2- Year Rainfall Event. The total rainfall from a 24-hour rainfall event with a two Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 7 DRAFT: 4/2/07 year frequency of return, assuming a Soil Conservation Service Type II rainfall distribution, as specified in Technical Paper 40, Rainfall Frequency Atlas of the United States for Durations from 30 minutes to 24 Hours and Return Periods from one to 100 Years (NOAA, 1961). YY. Watershed District. A Project Cooperator as defined in Article I. 2.2 Rules Of Construction In interpreting this MOA, the following rules of construction will be used. A. Captions, Gender, Number, And Language Of Inclusion. The Article and Section headings in this MOA are for convenience of reference only and do not define, limit, or prescribe the scope or intent of any MOA Provision. As used in this MOA, the singular includes the plural and vice versa, and the masculine, feminine, and neuter adjectives include one another. B. Construction. The rule of strict construction does not apply to this MOA. This MOA will not be interpreted in favor of or against any Project Cooperator merely because of their respective efforts in preparing or modifying it. C. Words And Phrases. The following words and phrases have the following meanings in this MOA: (1) applicable law means all applicable federal, State, regional, county, municipal, local, or other constitutions, charters, bylaws, laws, statutes, codes, ordinances, rules, and regulations, including the applicable law of the Project Cooperators. (2) cfs means cubic feet per second. (3) include means include without limitation. (4) including means including but not limited to. (5) incurred by means asserted against, imposed upon, incurred by, paid by, or suffered. (6) parties means two or more of the Project Cooperators as the context of this MOA indicates; (7) party means one or more of the Project Cooperators as the context of this MOA indicates; and (8) subject to approval by means the entity whose approval is necessary may Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 8 DRAFT: 4/2/07 grant or deny approval, but approval cannot be unreasonably conditioned or delayed, and denial must have a reasonable basis and cannot be unreasonably delayed. ARTICLE 3. RECITALS AND STATEMENT OF PURPOSE The following recitals and statement of purpose are incorporated in this MOA. 3.1 Recitals A. The Project Cooperators have the power to enter into this MOA and desire to do so. B. In 1983, the Watershed District completed a project to build an artificial outlet for Prior Lake to drain water from Prior Lake and transport the water to the Minnesota River ("Lake Outlet Project"). The Lake Outlet Project connected and improved a natural drainage system of lakes, streams, and wetlands within the municipal boundaries of Prior Lake and Shakopee to connect Prior Lake and the Minnesota River. The resulting drainage way is known as the Outlet Channel. See Exhibit A. C. The Outlet Channel drains water from land within the jurisdictions of Prior Lake and Shakopee and SMSC Fee Land and Trust Land. The drainage areas tributary to each Outlet Channel segment are shown on Exhibit B - Outlet Channel Segment Drainage Areas. D. Since completion of the Lake Outlet Project, development has occurred in areas of Prior Lake and Shakopee tributary to the Outlet Channel, and the SMSC has acquired land tributary to the Outlet Channel for development. Consequently Prior Lake, Shakopee, and the SMSC use the Outlet Channel to convey storm water from developed areas within their boundaries or ownership to the Minnesota River. E. The approved comprehensive plans of Prior Lake, Shakopee, and Scott County identify substantial additional development that will occur in drainage areas tributary to the Outlet Channel. F. The SMSC plans additional development on both Fee Land and Trust Land in drainage areas tributary to the Outlet Channel. G. The Watershed District plans repairs and modifications to the Outlet Structure to address wear and tear that has occurred since its installation; to improve its efficiency and safety; and to reduce its operating costs ("Outlet Structure Repair Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 9 DRAFT: 4/2/07 Project"). H. The Outlet Structure directly and immediately benefits properties within the City of Prior Lake because it reduces Prior Lake water levels on riparian property within the established flood plain. The Outlet Structure Repair Project will continue these benefits. 1. The Project Cooperators desire to clarify their respective responsibilities and rights regarding implementation of the Outlet Structure Repair Project and the ongoing use, Operation, and Maintenance of the Outlet Structure. ]. The Project Cooperators are planning a project to restore and enhance the Outlet Channel using ecological principles, bioengineering, and natural stream technologies that will restore channel stability, improve water quality, enhance channel habitat and aesthetics, and assure capacity for existing and future storm water flows ("Outlet Channel Restoration And Enhancement Project" or "Project"), all in accord with the Conceptual Design. K. The Outlet Channel Restoration And Enhancement Project directly and immediately benefits the Project Cooperators because: ( 1) The Project conforms to and implements Prior Lake, Shakopee, and the SMSC's overall drainage plan in the Outlet Channel's drainage area; (2) The easements to be acquired within Shakopee and Prior Lake can also be used by those cities for underground public utility and trail purposes; and (3) An operable Outlet Channel with adequate storm water conveyance capacity allows for orderly development by Prior Lake, Shakopee, and the SMSC. L. Prior Lake and Shakopee desire to assist the Watershed District to acquire the easements necessary in their respective cities for Construction of the Outlet Channel Restoration And Enhancement Project. M. The SMSC desires to assist the Watershed District to acquire the easements and rights-of-way necessary on Fee Land and Trust Land that the SMSC might purchase in the future. N. The Project Cooperators desire to clarify their respective responsibilities and rights regarding implementation of the Outlet Channel Restoration And Enhancement Project and the ongoing use, Operation, and Maintenance of the Outlet Channel. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 10 DRAFT: 4/2/07 O. The Project Cooperators have agreed to allocate Design Costs and Construction Costs for the Outlet Channel Restoration And Enhancement Project, and Operation And Maintenance Costs and Emergency Maintenance Costs for the Outlet Channel among the Project Cooperators using the following principles. (1) The cost-share obligation should be allocated among the Project Cooperators based on each Project Cooperator's current and anticipated use of the Outlet Channel for storm water conveyance. a. The Watershed District's cost-share obligation should be based on its maximum release rate through the Outlet Structure of 65 cfs. b. The cost-share obligation for Prior Lake, Shakopee, and the SMSC should be based on each Project Cooperator's tributary drainage area by Outlet Channel segment and its Maximum Average Discharge Rate or Rates as identified by each Project Cooperator and incorporated into this MOA. (2) The contributing drainage area from the SMSC should include Fee Land and Trust Land. (3) A separate cost-share allocation should be determined for each Outlet Channel segment. (4) Each Project Cooperator's cost -share obligation should begin at the point furthest from Blue Lake where storm water from that Project Cooperator's jurisdictional boundaries first flows into the Outlet Channel and extend from that first point of discharge downstream to the point of inlet into Blue Lake. P. To implement the Outlet Channel Restoration And Enhancement Project and provide for ongoing use, Operation, and Maintenance of the Outlet Channel and Outlet Structure, two agreements are being signed - this MOA between the Project Cooperators and the Joint Powers Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure pursuant to Minnesota Statutes Section 471.59 (the "JPA") between the Watershed District, Prior Lake, and Shakopee. For reasons of State law, the SMSC does not have authority to participate in a joint powers agreement for utility and drainage purposes, and can only participate by executing this MOA with the Watershed District, Prior Lake, and Shakopee. This necessitates this MOA. But the MOA Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page II DRAFT: 4/2/07 must be approved by the Secretary of the Interior. If this approval is not forthcoming, or if the MOA is approved and terminates in the future for any reason, the Watershed District, Prior Lake, and Shakopee desire to implement the Project and provide for ongoing use, Operation, and Maintenance of the Outlet Channel and Outlet Structure without the SMSC. This necessitates the JP A. If the MOA is approved by the Secretary of the Interior, the Project Cooperators intend this MOA, and not the JP A, to control their relationship. If this MOA is not approved, or if it is approved and terminates in the future for any reason, the Watershed District, Prior Lake, and Shakopee intend their relationship to continue and be controlled by the JP A, and not by this MOA. 3.2 Statement Of Purpose The general purpose of this MOA is to: A. Establish Provisions under which the Watershed District will improve, use, Operate, and Maintain the Outlet Structure. B. Preserve the Watershed District's discharge capacity rights to the Outlet Channel from consumption by storm water drainage generated from new development and redevelopment in the Outlet Channel drainage area. C. Allocate Outlet Channel drainage capacity above that required for the Watershed District among the other Project Cooperators to promote orderly development within the Outlet Channel drainage area. D. Establish Provisions under which the Project Cooperators will implement the Outlet Channel Restoration And Enhancement Project, including acquisition of the additional easements needed and allocation of Design Costs and Construction Costs among them. E. Establish Provisions under which the Project Cooperators will use, Operate, and Maintain the Outlet Channel, including specification of their respective responsibilities for Operation, Maintenance, and Emergency Maintenance, allocation of Operation And Maintenance Costs and Emergency Maintenance Costs among them, and identification of additional uses that Prior Lake, Shakopee, and the SMSC can make of the easements acquired for the Outlet Channel Restoration And Enhancement Project. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 12 DRAFT: 4/2/07 ARTICLE 4. REPRESENTATIONS AND WARRANTIES Each Project Cooperator represents and warrants to the other Project Cooperators, and each of them, as follows: 4.1 Existence and Authority Of Watershed District The Watershed District represents and warrants that it is a watershed district duly organized and operating under Minnesota Statutes, Chapters 103B and 103D and that it has the corporate power and authority to execute and deliver this MOA, to perform fully its obligations under this MOA, and to consummate the transactions contemplated by this MOA. The execution and delivery by the Watershed District of this MOA, the performance of its obligations under this MOA, and the consummation of the transactions contemplated by this MOA have been duly authorized by all requisite corporate action of the Watershed District, and do not and will not conflict with, result in a violation of, or constitute a default under any State statute its Constitution or bylaws, any other applicable law, any agreement or other instrument binding upon the Watershed District, or any court decree or order applicable to the Watershed District. This MOA is the legal, valid, and binding obligation of the Watershed District, enforceable against the Watershed District in accordance with its Provisions. 4.2 Existence And Authority Of Prior Lake Prior Lake represents and warrants that it is a municipal corporation duly organized and operating under Minnesota Statutes, Chapter 412 and that it has the corporate power and authority to execute and deliver this MOA, to perform fully its obligations under this MOA, and to consummate the transactions contemplated by this MOA. The execution and delivery by Prior Lake of this MOA, the performance of its obligations under this MOA, and the consummation of the transactions contemplated by this MOA have been duly authorized by all requisite corporate action of the Prior Lake City Council, and do not and will not conflict with, result in a violation of, or constitute a default under any State statute, its Code of Ordinances, any other applicable law, any agreement or other instrument binding upon Prior Lake, or any court decree or order applicable to Prior Lake. This MOA is the legal, valid, and binding obligation of Prior Lake, enforceable against Prior Lake in accordance with its Provisions. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 13 DRAFT: 4/2/07 4.3 Existence And Authority Of Shakopee Shakopee represents that it is a municipal corporation duly organized and operating under Minnesota Statutes, Chapter 412 and that it has the corporate power and authority to execute and deliver this MOA, to perform fully its obligations under this MOA, and to consummate the transactions contemplated by this MOA. The execution and delivery by Shakopee of this MOA, the performance of its obligations under this MOA, and the consummation of the transactions contemplated by this MOA have been duly authorized by all requisite corporate action of the Shakopee City Council, and do not and will not conflict with, result in a violation of, or constitute a default under any State statute, its Code of Ordinances, any other applicable law, any agreement or other instrument binding upon Shakopee, or any court decree or order applicable to Shakopee. This MOA is the legal, valid, and binding obligation of Shakopee, enforceable against Shakopee in accordance with its Provisions. 4.4 Existence And Authority Of SMSC The SMSC represents and warrants that it is a federally recognized Indian tribe, duly organized and existing under Section 16 of the Indian Reorganization Act of 1934, as amended (25 U.S.c. ~476), and its Constitution. The SMSC has the full power and authority to enter into this MOA, to perform fully its obligations under this MOA, and to consummate the transactions contemplated by this MOA, subject to the Secretary of the Interior's approval as provided in Section 4.5A. The execution and delivery by the SMSC of this MOA, the performance by the SMSC of its obligations under this MOA, and the consummation of the transactions contemplated by this MOA have been duly authorized by all necessary governmental action of the SMSC, and do not and will not conflict with, result in a violation of, or constitute a default under its Constitution, any other applicable law, any agreement or other instrument binding upon the SMSC, or any court decree or order applicable to the SMSC. This MOA is the legal, valid, and binding obligation of the SMSC, enforceable against the SMSC in accordance with its Provisions. 4.5 Approval And Approval Date A. Secretary Of Interior Approval Required. The Secretary of the Interior's approval is required for the SMSC to participate in this MOA. Whether or not to grant this Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 14 DRAFT: 4/2/07 approval is in the sole and absolute discretion of the Secretary of Interior. The SMSC will seek this approval immediately after signing this MOA and promptly inform the other Project Cooperators if approval is granted or denied. On the date the Secretary of Interior approves this MOA ("Approval Date"), this MOA shall go into force as of the Effective Date. Until the Secretary of the Interior approves this MOA, no draw can be made on the SMSC letters of credit delivered to the Watershed District under Sections 12.1 and 14.1. If the Secretary of the Interior disapproves this MOA, it will not become effective, and the SMSC letters of credit delivered to the Watershed District under Sections 12.1 and 14.1 will be returned immediately to the SMSC without any draw being made. B. Other Consents. Except for the approval of the Secretary of the Interior, the execution, delivery, and performance of the MOA by the SMSC mean either: ( 1) That the SMSC does not need the consent or approval of any other person or entity, including without limitation any regulatory authority or governmental body of the United States or any state thereof, or (2) That if any such consent or approval is needed, it has been obtained. ARTICLE 5. OUTLET STRUCTURE REPAIR PROJECT AND OPERATION OF OUTLET STRUCTURE 5.1 Watershed District To Undertake Outlet Structure Repair Project The Watershed District will Design and implement the Outlet Structure Repair Project. All Design Costs and Construction Costs of the Outlet Structure Repair Project are the sole and exclusive responsibility of the Watershed District. Prior to the commencement of the Outlet Structure Repair Project, the Watershed District will obtain all permits and approvals required by any governmental unit having jurisdiction over the Outlet Structure, including permits and approvals from Prior Lake and the DNR. If any permit or approval requires modification of an Outlet Structure Repair Project plan developed under Section 5,2, the Watershed District can make the required modification. The Watershed District will notify the other Project Cooperators of the change prior to the start of Construction but need not submit the modified plans to Prior Lake for review and comment. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 15 DRAFT: 4/2/07 5.2 Plans And Specifications For Outlet Structure Repair Project The Watershed District will Design the Outlet Structure Repair Project to conform to the findings of the Prior Lake Outlet Channel and Lake Volume Management Study, dated May 2003. To begin, the Watershed District will consult with Prior Lake and prepare plans and specifications that conform to the Prior Lake Outlet Channel and Lake Volume Management Study considering generally acceptable engineering specifications. Next, the Watershed District will furnish Prior Lake with complete copies of the plans and specifications for the Outlet Structure improvements. Prior Lake will comment on the plans and specifications and may request modifications to them within 60 days of receipt. If Prior Lake provides comments or requests modifications, the Watershed District will endeavor to address the comments and incorporate the modifications into the plans and specifications. However, if situations arise where the Watershed District receives comments or modifications that are inconsistent with the Prior Lake Outlet Channel and Lake Volume Management Study, to avoid delays in the Outlet Structure Repair Project, the Watershed District's determination on questions of Design will be conclusive, and Article 15 will not apply. 5.3 Operation And Maintenance Of Outlet Structure The Watershed District will Operate and Maintain the Outlet Structure. In doing so, the Watershed District will release water from the Outlet Structure in accordance with the Outlet Operating Plan and must not exceed the maximum release rate of 65 cfs as specified in the Plan. All Operation And Maintenance Costs and Emergency Maintenance Costs related to the Outlet Structure are the sole and exclusive responsibility of the Watershed District. ARTICLE 6. USES AND DRAINAGE RATES FOR OUTLET CHANNEL 6.1 Permitted Use By Watershed District The Watershed District will use the Outlet Channel to drain water from Prior Lake and for no other purposes. 6.2 Permitted Uses And Drainage Areas For Prior Lake, Shakopee, And SMSC Prior Lake, Shakopee, and the SMSC will use the Outlet Channel to convey storm water from their respective drainage areas tributary to the Outlet Channel as specified in Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 16 DRAFT: 4/2/07 Table I, or Table 1 as subsequently modified in accord with Section 10.3, and for no other purposes. Prior Lake, Shakopee, and the SMSC must not convey storm water to the Outlet Channel from acres not specified in Table 1, or Table 1 as subsequently modified in accord with Section 10.3. Table 1: Outlet Channel Tributary Drainage Areas in Acres (downstream of Prior Lake) Outlet Channel Watershed Prior Lake Shako pee SMSC2 Subtotal Segment Districtl I NA 658 0 28 686 2 NA 261 0 3 264 3 NA 1,147 93 5 1,245 4 NA 805 2,443 1,989 5,237 5 NA 0 748 8 756 6 NA 0 937 250 1,187 7 NA 0 I ,407 0 I ,407 8 NA 0 101 0 101 Total NA 2,871 5,729 2,283 10,883 I The Watershed District's contribution to the Outlet Channel is not dependent on drainage area; it is based on a maximum release rate through the Outlet Structure of 65 cfs as provided in Section 5.3. 2 Includes Fee Land and Trust Land. 6.3 Maximum Average Discharge Rates The Watershed District, Prior Lake, Shakopee, and the SMSC will not discharge storm water to the outlet channel at rates in excess of the maximum average discharge rate or rates set for each in this Section 6.3 ("Maximum Average Discharge Rate(s)"). A. Maximum Average Discharge Rate For Watershed District. The Watershed District's Maximum Average Discharge Rate is its maximum release rate for water through the Outlet Structure to the Outlet Channel as provided in Section 5.3 and as shown in Table 2. B. Maximum Average Discharge Rates For Prior Lake, Shakopee, And SMSC. Prior Lake, Shakopee, and the SMSC will not discharge storm water to any Outlet Channel segment from drainage areas in their respective jurisdictions tributary to that segment at a rate that exceeds their respective Maximum Average Discharge Rates for that segment as specified in Table 2, or Table 2 as modified in accord with Sections 6.6 or 10.3. As stated in Table 2, the Maximum Average Discharge Rates Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 17 DRAFT: 4/2/07 are based on the I 00- Year Rainfall Event. For example in Segment 4: Prior Lake cannot discharge storm water from its 805 acres of tributary drainage area at a rate that exceeds 0.25 cfs per acre; Shakopee cannot discharge storm water from its 2,443 acres of tributary drainage area at a rate that exceeds 0.10 cfs per acre; and the SMSC cannot discharge storm water from its 1,989 acres of tributary drainage area at a rate that exceeds 0.05 cfs per acre. Table 2: Maximum Average Discharge Rates to Outlet Channel Segments Project Cooperator Maximum Average Discharge Rate to Outlet Channel per Acre for tOO-Year Rainfall Event Watershed District 65.00 cfsl Prior Lake 0.25 cfs/acre2 Shakopee: south (upstream) of Dean Lake, except 124.61 acres directly tributary to 0.10 cfs/acre2 Outlet Channel Segment 5 Shakopee: north (downstream) of Dean Lake, plus 124.61 acres directly tributary to Outlet 0.25 cfs/acre2 Channel Segment 5 SMSC 0.05 cfs/acre2 I The Watershed District's Maximum Average Discharge Rate to the Outlet Channel is not an average rate per acre; it is the District's maximum release rate through the Outlet Structure of 65 cfs as provided in Section 6.3A. 2 Each Maximum Average Discharge Rate was provided by the respective Project Cooperator. 6.4 Verifying Watershed District's Maximum Average Discharge Rate On an annual basis, the Watershed District will provide to the other Project Cooperators a summary of the operating records and any monitoring data for the Outlet Structure to show the release rates through the Outlet Structure for the previous calendar year and will certify that its release rates did not exceed the Maximum Average Discharge Rate specified in Section 6.3A. and Table 2. If the Watershed District cannot make this certification, it will describe the reason for the failure to certify and the extent of any exceedance. 6.5 Verifying Other Tributary Acreages And Maximum Average Discharge Rates On an annual basis, Prior Lake, Shakopee, and the SMSC will each verify to the other Project Cooperators that its use of the Outlet Channel conforms to the tributary drainage Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 18 DRAFT: 4/2/07 acreages and Maximum Average Discharge Rates specified in Sections 6.2 and 6.3 as follows. A. Information To Be Provided. Prior Lake, Shakopee, and the SMSC will each provide a summary of the following for tributary drainage areas in their respective jurisdictions. ( 1) The tributary drainage acres developed by Outlet Channel segment before the Effective Date. Acreage in Prior Lake and Shakopee will be considered developed before the Effective Date if the preliminary plat for the development was approved by Prior Lake or Shakopee prior to the Effective Date. SMSC Fee Land or Trust Land Acreage will be considered developed if the SMSC General Councilor Business Council approved the development before the Effective Date. (2) The tributary drainage acres developed by Outlet Channel segment after the Effective Date. ( 3) The tributary drainage acres remaining to be developed by Outlet Channel segment based on each Project Cooperator's current comprehensi ve plan or equivalent. (4) The Projected Discharge Rate by Outlet Channel segment for tributary drainage areas developed after the Effective Date. (5) The Projected Discharge Rate by Outlet Channel segment for any tributary drainage area redeveloped after the Effective Date. (6) An explanation of any discharge rate offsets within an Outlet Channel segment for tributary drainage areas redeveloped at a discharge rate higher than the area's Projected Discharge Rate when first developed, For example, if a low density residential area is redeveloped as a commercial area, the Project Cooperator must show how one or more Projected Discharge Rates will be reduced elsewhere in the tributary drainage area to offset the rate increase associated with commercial development. (7) A calculation of the Projected Average Discharge Rate for each Outlet Channel segment that includes all tributary drainage areas developed after the Effective Date; and Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 19 DRAFT: 4/2/07 (8) An explanation of how future development will be managed within each Outlet Channel segment to ensure conformance with the tributary drainage acreages and Maximum Average Discharge Rates specified in Sections 6.2 and 6.3. (9) The formula that the Project Cooperators will use to calculate the Projected Average Discharge Rates for each Outlet Channel Segment and example calculations are attached as Exhibit C. B. Use Of Monitoring Data. As an alternative to calculating a Projected Average Discharge Rate for any Outlet Channel segment, Prior Lake, Shakopee, or the SMSC may provide the monitored, actual discharge rate for one or more segments using monitoring methods that are consistent with U.S. Geological Survey standards, subject to approval by the Watershed District. C. Certification ( 1) Prior Lake, Shakopee, and the SMSC will each certify the following for tributary drainage areas in their respective jurisdiction: a. The tributary drainage acres by Outlet Channel segment do not exceed those specified in Table I; and b. The Projected Average Discharge Rate or monitored actual discharge rate for each Outlet Channel segment does not exceed the Maximum Average Discharge Rate specified in Section 6.2 for each Outlet Channel segment. (2) If Prior Lake, Shakopee, or the SMSC, cannot make this certification, it will describe the reason for the failure to certify and the extent of any exceedance. 6.6 Exceeding Maximum Discharge Rates And Changes To Address Exceedances A. Options To Address An Excess Discharge Rate. If a Project Cooperator exceeds its tributary drainage acres as specified in Section 6.2 or its Maximum Average Discharge Rate as specified in Section 6.3 for any Outlet Channel segment or wishes to modify either, the Project Cooperator will either: ( 1) Reduce flows elsewhere within its drainage area tributary to the Outlet Channel so its Maximum Average Discharge Rate as specified in Section 6.3 is not exceeded, or (2) Assuming the Project Cooperator obtains all applicable approvals: Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 20 DRAFT: 4/2/07 a. If the Project is still under Construction, revise the Conceptual Design to increase the Outlet Channel Design flow to handle the increased Maximum Average Discharge Rate, and pay all Design Costs, Construction Costs, Operation And Maintenance Costs, and Emergency Maintenance Costs for increasing the Outlet Channel Design flow; or b. If the Project is complete, make all improvements or undertake any Maintenance to the Outlet Channel necessary to handle the increased Maximum Average Discharge Rate and pay all Design Costs, Construction Costs, Operation And Maintenance Costs, and Emergency Maintenance Costs for the increased Maximum Average Discharge Rate. R. MOA To Be Amended (1) For Reduced Flows To Address An Exceedance. If a Project Cooperator decides to reduce flows elsewhere within its drainage area tributary to the Outlet Channel, a. It will sign the necessary amendments to this MOA to implement and require the flow reduction, and b. It will request that the Watershed District incorporate the amendments into this MOA, subject to approval by the other Project Cooperators in the form of signed amendments. (2) For Improvements Or Maintenance To Address An Exceedance. If a Project Cooperator decides to make improvements to, or undertake Maintenance of, the Outlet Channel: a. It will sign the necessary amendments to this MOA to incorporate the increased Maximum Average Discharge Rate and to pay for all Design Costs, Construction Costs, Operation And Maintenance Costs, and Emergency Maintenance Costs for that increased Maximum Average Discharge Rate; and b. It will request that the Watershed District incorporate the amendments into this MOA, subject to approval by the other Project Cooperators in the form of signed amendments. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 21 DRAFT: 4/2/07 ARTICLE 7. CONSTRUCTION OF OUTLET CHANNEL RESTORATION AND ENHANCEMENT PROJECT 7.1 Design Flows The Outlet Channel needs restoration and enhancement to stabilize the channel banks and ensure adequate capacity for existing and future storm water conveyance needs. The final Design for each segment of the Outlet Channel Restoration And Enhancement Project will be consistent with the Conceptual Design and will provide sufficient capacity for the Outlet Channel's expected flows ("Design Flows") specified in Table 3, which are based on the 2- Year Rainfall Event plus 65 cfs of release through the Outlet Structure. Table 3: Outlet Channel Restoration and Enhancement Project Design Flows by Segment Outlet Channel Channel Design Flows Segment (2- Year Rainfall Event plus 65 cfs release through Outlet Structure) 1 11 8 cfs 2 141 cfs 3 112 cfs 4 1 74 cfs 5 269 cfs 6 216 cfs 7 407 cfs 8 400 cfs 7.2 Project Schedule The Design and Construction of the Outlet Channel Restoration And Enhancement Project will occur over five years, beginning in 2005. The anticipated Construction schedule for the Project is described in Exhibit D - Outlet Channel Design, Construction, and Maintenance Schedule. The Watershed District in consultation with the other Project Cooperators may alter the Construction schedule but will not extend Project completion beyond 2009, subject to approval by the other Project Cooperators in writing. To the extent possible as it builds the Project, the Watershed District will schedule Construction activities to coordinate with the subdivision and development of land adjacent to the Outlet Channel. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 22 DRAFT: 4/2/07 7.3 Project Design The Watershed District will lead, coordinate, and if necessary, make final decisions on the Design of the Outlet Channel Restoration And Enhancement Project. To begin, the Watershed District will consult with the Project Cooperators and prepare plans and specifications for each Outlet Channel segment that conform to the Conceptual Design considering both generally acceptable engineering practices for drainage projects and Best Storm Water Management Practices. Next, the Watershed District will furnish the Project Cooperators with complete copies of the plans and specifications for each segment of the Outlet Channel. Then, the Project Cooperators will comment on the plans and specifications and may request modifications to them within 60 days of receipt. If a Project Cooperator provides comments or requests modifications, the Watershed District will endeavor to address the comments and incorporate the modifications into the plans and specifications. However, if situations arise where the Watershed District receives comments or modifications that are inconsistent with the Outlet Channel Design Flows, the Conceptual Design, or with other comments or requested modifications, to avoid delays in the Project, the Watershed District's determination on questions of Design will be conclusive and Article 15 will not apply. 7.4 Project Construction By Watershed District Or Other Project Cooperators A. Construction By Watershed District. The Watershed District will Construct the Outlet Channel Restoration and Enhancement Project in accord with Outlet Channel final segment plans developed under Section 7.3. Also, the Watershed District will Construct the Project in conformance with all applicable laws and will obtain all permits and approvals required for the Construction activities by any governmental unit having jurisdiction over the Outlet Channel, including Prior Lake, Shakopee, the Lower Minnesota Watershed District, the DNR, and the U.S. Army Corps of Engineers. If any permit or approval requires modification of a final segment plan developed under Section 7.3, the Watershed District can make the required modification. The Watershed District will notify the other Project Cooperators of the change prior to the start of Construction but need not submit the modified plans to the other Project Cooperators for review and comment. B. Construction By Other Project Cooperators. A Project Cooperator other than the Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 23 DRAFT: 4/2/07 Watershed District may Construct a segment of the Outlet Channel Restoration And Enhancement Project earlier than specified in Exhibit D as follows. (1) Segment To Be Constructed According To Developed Plan a. If a plan has been developed for that Outlet Channel segment under Section 7.3, the Project Cooperator will Construct the segment in accord with the plan. Any change to the plan will be subject to approval by the Watershed District. b. If no plan has been developed for that Outlet Channel segment under Section 7.3, the Project Cooperator will consult with the Watershed District and prepare plans and specifications for the segment. Next the Project Cooperator will furnish the Watershed District with complete copies of the plans and specifications. The Watershed District will approve the plans and specifications or request modifications to them within 60 days of receipt. If modifications are requested, the Project Cooperator will incorporate them into the plans and specifications and resubmit them to the Watershed District. The Watershed District will approve the resubmitted plans and specifications or request modifications to them within 30 days of receipt. This process will be repeated until the Watershed District approves the plans and specifications or until an impasse is reached. If the Project Cooperator and the Watershed District reach impasse, then to the extent the Watershed District determines the plans and specifications are inconsistent with the Outlet Channel Design Flows or the Conceptual Design, the Watershed District's determination will be conclusive, and Article 15 will not apply. After approval by the Watershed District, the Project Cooperator may build the segment in accord with the approved plans and specifications. c. The Project Cooperator will Construct the segment in conformance with all applicable laws and will obtain all permits and approvals required for the Construction activities by any governmental unit having jurisdiction over the Outlet Channel, including Prior Lake, Shakopee, the Watershed District, the Lower Minnesota Watershed District, the DNR, and the U.S. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 24 DRAFT: 4/2/07 Army Corps of Engineers. If any permit or approval requires modification of a final segment plan developed under Section 7.3, the Project Cooperator will not commence work until the modification has been incorporated into the plan, subject to approval by the Watershed District. (2) Reimbursement To Be Delayed. If a Project Cooperator Designs or Constructs a Project segment earlier than specified in Exhibit D, it will temporarily pay all Design Costs and Construction Costs of that segment because other Project Cooperators are not obligated to provide their cost-share earlier than if the segment had been built according to the schedule in Exhibit D. Design Costs and Construction Costs incurred by a Project Cooperator beyond its cost-share allocation will be paid from the Design And Construction Fund after the other Project Cooperators have paid their cost-share allocations for that segment, subject to approval by the Watershed District after it receives an itemized statement of those costs from the Project Cooperator. 7.5 Use Of The Outlet Channel During Construction And Vegetation Establishment The Outlet Channel will continue to be used by the Project Cooperators for storm water conveyance while the Outlet Channel Restoration And Enhancement Project is under Construction and before vegetation is fully established. During Construction and until vegetation is established, the Watershed District will install and Maintain erosion controls using Best Storm Water Management Practices. Construction efforts will be sequenced to protect downstream resources. Despite these efforts, a situation may arise that results in a downstream impact following a large rainfall or other runoff or weather-related event. In the event of a downstream impact, the Project Cooperators will work together to remediate the impact and will include that work as an element of the overall Outlet Channel Restoration And Enhancement Project, subject to the cost- share allocation in Section 10.2. 7.6 Construction Cost Participation Throughout the entire MOA term, the Project Cooperators will pay all Design Costs and Construction Costs of the Outlet Channel Restoration And Enhancement Project according to the cost-share allocation in Section 10.2 using the Design And Construction Fund established in Section lOA. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 25 DRAFT: 4/2/07 ARTICLE 8. ACQUISITION AND USE OF OUTLET CHANNEL EASEMENTS 8.1 Acquisition By Dedication, Purchase, Or Right-of-Way Grant To the extent possible, the Project Cooperators will obtain the necessary easements for Construction of the Outlet Channel Restoration And Enhancement Project and the ongoing Operation and Maintenance of the Outlet Channel: A. By dedication pursuant to the Prior Lake and Shakopee subdivision ordinances if land containing a portion of the Outlet Channel or needed easements is developed or redeveloped during this MOA's term; B. Through the grant of easements on Fee Land if the SMSC purchases Fee Land that includes a portion of the Outlet Channel or needed easements during this MOA's term; or C. Through the grant of rights-of-way over Trust Land by the United States Government, if the SMSC purchases Trust Land that includes a portion of the Outlet Channel or needed easements during this MOA's term. 8.2 Acquisition By Purchase Or Condemnation In Prior Lake Or Shakopee If the Construction timing for the Outlet Channel Restoration And Enhancement Project requires obtaining easements prior to subdivision, the Watershed District will negotiate for and acquire through purchase or condemnation the necessary Outlet Channel easements within the municipal boundaries of Prior Lake and Shakopee. In acquiring the easements, the Watershed District will comply with Minnesota Statutes Chapters 103D and 117. A. Assistance By Prior Lake. If the Watershed District determines that condemnation proceedings are required to acquire an easement in Prior Lake, the Watershed District will notify Prior Lake, and Prior Lake will assist the Watershed District in pursuing condemnation. In that event, all legal proceedings will be brought in the joint name of the Watershed District and Prior Lake by the Prior Lake City Attorney. Prior Lake will be solely responsible for all legal fees of its City Attorney. B. Assistance By Shakopee (1) Easement Within Watershed District's Legal Boundaries. Ifthe Watershed Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 26 DRAFT: 4/2/07 District determines that condemnation proceedings are required to acquire an easement in Shakopee and the easement is within the Watershed District's legal boundaries, Shakopee will cooperate with and assist the Watershed District in pursuing condemnation. The legal proceedings will be brought in the joint name of the Watershed District and Shakopee by the Shakopee City Attorney. Shakopee will be solely responsible for all legal fees of its City Attorney. (2) Easement Outside Watershed District's Legal Boundaries. If the Watershed District determines that condemnation proceedings are required to acquire an easement in Shakopee and the easement is outside the Watershed District's legal boundaries, Shakopee will undertake the condemnation action, and the Watershed District will cooperate with and assist Shakopee. The legal proceedings will be brought by the Shakopee City Attorney in the joint name of the Watershed District and Shakopee if permissible under applicable law, or in the name of Shakopee for the benefit of the Watershed District and Shakopee. Shakopee will be solely responsible for all legal fees of its City Attorney. C. Uses Of And Title To Easements. Easements acquired by the Watershed District will be for drainage purposes over, under, and across the affected properties. However, the Watershed District, Prior Lake, Shakopee, or the SMSC may acquire an easement for purposes in addition to drainage as provided in Section 8.5. In Prior Lake, title to the easements will be acquired in the joint names of the Watershed District and Prior Lake. In Shakopee, title to the easements will be acquired in the joint names of the Watershed District and Shakopee. 8.3 Acquisition Of Easements Or Rights-Of-Way On Fee Land Or Trust Land The SMSC could acquire Fee Land or Trust Land that includes a portion of the Outlet Channel or needed easements before Construction of the Outlet Channel Restoration And Enhancement Project takes place on that portion of the Outlet Channel. If this happens and if the Watershed District needs an easement or right-of-way to build the Project on the Fee Land or Trust Land, the SMSC will provide an easement over Fee Land or will cooperate with the Watershed District to request a right-of-way grant from Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 27 DRAFT: 4/2/07 the United States Government over Trust Land. If the SMSC grants an easement over Fee Land, title will be held in the joint names of the Watershed District and the SMSC. 8.4 Easement Acquisition Costs Throughout the entire MOA term, the Project Cooperators will pay all easement acquisition costs of the Outlet Channel Restoration And Enhancement Project according to the cost-share allocation in Section 10.2 using the Design And Construction Fund established in Section lOA, However, if Prior Lake or Shakopee acquire an easement for the Outlet Channel by dedication, the Project Cooperator acquiring or granting the easement or approving the grant of right-of-way will receive no cost reimbursement for the value of the easement. If the SMSC grants an easement on Fee Land or if the United States Government grants a right-of-way over Trust Land, the SMSC will receive cost reimbursement based on the SMSC's acquisition cost of that portion of the Fee Land subject to the easement, or Trust Land subject to the right-of-way. 8.5 Additional Authorized Easement Uses A. Project Cooperators May Use Easements. Subject to the limitations of specific Outlet Channel easements, Prior Lake and Shakopee may use Outlet Channel easements in their respective jurisdictions for the Construction, Emergency Maintenance, Operation, Maintenance, repair, reconstruction, and removal of trails and underground utilities (individually, a "Public Service Activity," and collectively "Public Service Activities"), including nature and recreational trails, electricity, natural gas, sanitary sewer, storm sewer, telephone and other communications, and water. In no event will any Public Service Activity interfere with or otherwise restrict the drainage function of the Outlet Channel. If the Watershed District reasonably believes a Public Service Activity will do so, it may refuse to allow a Public Service Activity in a specific easement. Upon completion of any Public Service Activity in an Outlet Channel easement by Prior Lake or Shakopee, it will restore the Outlet Channel to its previous condition, unless some alteration of the Outlet Channel was approved by the Watershed District as part of the Public Service Activity. B. Plan Submission And Approval. Before using an Outlet Channel easement in its jurisdiction for Public Service Activities, Prior Lake or Shakopee will obtain Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 28 DRAFT: 4/2/07 approval from the Watershed District for its proposed use. To begin, Prior Lake or Shakopee will consult with the Watershed District and prepare plans for the Public Service Activities. Next Prior Lake or Shakopee will furnish the Watershed District with complete copies of the plans and specifications for the Public Service Activities. The Watershed District will approve the plans and specifications or request modifications to them within 60 days of receipt. If modifications are requested, Prior Lake or Shakopee will incorporate the modifications into the plans and specifications and resubmit them to the Watershed District. The Watershed District will approve the resubmitted plans and specifications or request modifications to them within 30 days of receipt. This process will be repeated until the Watershed District approves the plans or specifications or until an impasse is reached. If Prior Lake or Shakopee and the Watershed District reach impasse, then to the extent the Watershed District determines the plans and specifications are inconsistent with the Outlet Channel Design Flows or the Conceptual Design, the Watershed District's determination will be conclusive, and Article 15 will not apply. C. Implement Public Service Activities In Accord With Plan. After approval by the Watershed District, Prior Lake or Shakopee may implement the Public Service Activities in accord with the approved plans and specifications. The Project Cooperator will implement the Public Service Activities in conformance with all applicable laws and will obtain all permits and approvals required for the Public Service Activities. If any permit or approval requires modification of the approved plans and specifications, the Project Cooperator will not implement the Public Service Activities until the modification has been incorporated into the plans and specifications, subject to approval by the Watershed District. D. Expanded Size Or Use Of Easements Yet To Be Acquired. If Prior Lake or Shakopee anticipate using an Outlet Channel easement yet to be acquired for Public Service Activities, and if the easement will be larger than required to implement the Conceptual Design or will be acquired for more than drainage purposes, then Prior Lake or Shakopee will inform the Watershed District of the need for the larger easement or broader purpose when the Design process for the affected segment Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 29 DRAFT: 4/2/07 begins under Section 7.3. The Watershed District will then endeavor to incorporate the larger easement or broader purpose in the plans and specifications for the affected segment that are furnished to the Project Cooperators under Section 7.3. The Project Cooperator requesting the larger easement or broader purpose will comment on that portion of the plans and specifications relating to the easement size and purpose and may request modifications to these portions within the time provided in Section 7.3. The Watershed District will endeavor again to address the comments and incorporate the modifications into the plans and specifications. However, if the Watershed District determines that the larger easement or broader purpose is inconsistent with the Outlet Channel Design Flows or the Conceptual Design, or will delay the Project, the Watershed District's determination will be conclusive, and Article 15 will not apply. E. Costs To Be Borne By Those Conducting Public Service Activities. Prior Lake or Shakopee will be solely and exclusively responsible for all costs related to their respective Public Services Activities on Outlet Channel easements, including: ( 1) Costs incurred by Prior Lake or Shakopee to Design, Construct, Operate, and Maintain the Public Service Activities; (2) Outlet Channel Restoration And Enhancement Project acquisition costs, Design Costs, and Construction Costs related to an easement acquired under Section 8.5D. to the extent those costs exceed the estimated acquisition costs, Design Costs, and Construction Costs for an easement that was not larger than required to implement the Conceptual Design and that did not include purposes other than drainage; ( 3 ) Outlet Channel Operation And Maintenance Costs and Emergency Maintenance Costs related to an easement acquired under Section 8.50. to the extent those costs exceed the estimated Operation And Maintenance Costs and Emergency Maintenance Costs for an easement that was not larger than required to implement the Conceptual Design and that did not include purposes other than drainage; (4) Outlet Channel Operation And Maintenance Costs and Emergency Maintenance Costs related to any Public Service Activities; and Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 30 DRAFT: 4/2/07 F. Claims Arising From Public Service Activities. Prior Lake or Shakopee will be solely and exclusively responsible for all Claims arising out of or in connection with their Public Service Activities, or with any trail or underground utility placed in an Outlet Channel easement as a part of their Public Service Activities. ARTICLE 9. OPERATION AND MAINTENANCE OF OUTLET CHANNEL 9.1 General Following the completion of each segment of the Outlet Channel Restoration And Enhancement Project, annual Operation and Maintenance activities will be necessary to monitor the status of the Outlet Channel and ensure the stability and continued performance of the Outlet Channel. In addition, Emergency Maintenance may be required following significant or sustained flows or other events. 9.2 Preparation Of Maintenance Plans The Watershed District will lead, coordinate, and if necessary, make final decisions on plans and specifications for Maintenance of the Outlet Channel. To begin, the Watershed District will consult with the Project Cooperators and prepare plans and specifications for Maintenance of each Outlet Channel segment that preserve the Conceptual Design considering generally acceptable engineering practices for drainage systems and Best Storm Water Management Practices. Next, the Watershed District will furnish the Project Cooperators with complete copies of the plans and specifications for the Maintenance activities. The Project Cooperators will comment on the plans and specifications or request modifications to them within 60 days of receipt. If a Project Cooperator provides comments or requests modifications, the Watershed District will endeavor to address the comments and incorporate the modifications into the plans and specifications. However, if situations arise where the Watershed District receives comments or modifications that are inconsistent with the Outlet Channel Maintenance needs, the Conceptual Design, or with other comments or requested modifications, to avoid delays in Outlet Channel Maintenance, the Watershed District's determination on Maintenance questions will be conclusive, and Article 15 will not apply. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 3 I DRAFT: 4/2/07 9.3 Operation And Maintenance By Watershed District Or Other Project Cooperators A. Watershed District To Operate And Maintain Outlet Channel. The Watershed District will Operate and Maintain the Outlet Channel in accord with the Outlet Channel final segment Maintenance plans developed under Section 9.2. The Watershed District will do so in conformance with all applicable laws and will obtain all permits and approvals required for Operation and Maintenance activities by any governmental unit having jurisdiction over the Outlet Channel, including Prior Lake, Shakopee, the Lower Minnesota Watershed District, the DNR, and the U.S. Army Corps of Engineers. If any permit or approval requires modification of a final segment Maintenance plan developed under Section 9.2, the Watershed District can make the required modification. The Watershed District will notify the other Project Cooperators of the change prior to the start of Maintenance but need not submit the modified plans to the other Project Cooperators for review and comment. B. Annual Inspection. Each year, the Watershed District will inspect the Outlet Channel as required in the Outlet Operating Plan. If an inspection reveals changed conditions in any Outlet Channel segment that warrant changes in that segment's Maintenance plan, the Watershed District will amend the segment Maintenance plan using the procedure in Section 9.2. If an inspection reveals that Emergency Maintenance is required, the Watershed District will undertake Emergency Maintenance as provided in Section 904. C. Operation Or Maintenance By Other Project Cooperators. The Watershed District may contract with or enter into a delegation agreement with other Project Cooperators to Operate or Maintain Outlet Channel segments within that Project Cooperator's jurisdiction. The contract or delegation agreement will specify the method for documenting Operation And Maintenance Costs incurred by the Project Cooperator to the Watershed District and for payment of the Project Cooperator. All Operation or Maintenance undertaken by other Project Cooperators will be in accord with the Outlet Channel segment Maintenance plans developed under Section 9.2. The Project Cooperator will Operate or Maintain Outlet Channel Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 32 DRAFT: 4/2/07 segments in conformance with all applicable laws and will obtain all permits and approvals required for Operation or Maintenance by any governmental unit having jurisdiction over the Outlet Channel, including Prior Lake, Shakopee, the Watershed District, the Lower Minnesota Watershed District, the DNR, and the U.S. Army Corps of Engineers. If any permit or approval requires modification of a final segment Maintenance plan developed under Section 9.2, the Project Cooperator will not commence work until the modification has been incorporated into the Maintenance plan, subject to approval by the Watershed District. The Operation And Maintenance Costs incurred by the Project Cooperator will be paid from the Operation And Maintenance Fund, or be counted as a credit against the Project Cooperator's next Operation And Maintenance Fund payment, subject to approval by the Watershed District after it receives an itemized statement of those costs from the Project Cooperator. 9.4 Emergency Maintenance By Watershed District Or Other Project Cooperators A. Watershed District To Perform Emergency Maintenance. Whenever the need for Emergency Maintenance arises, the Watershed District will respond promptly and perform the necessary work. To the extent possible under the circumstances, Emergency Maintenance will conform to the Maintenance plan for the Outlet Channel segment in which the Emergency Maintenance occurs. The Watershed District will perform the Emergency Maintenance in conformance with all applicable laws and will obtain all permits and approvals required for Emergency Maintenance activities by any governmental unit having jurisdiction over the Outlet Channel, including Prior Lake, Shakopee, the Lower Minnesota Watershed District, the DNR, and the U.S. Army Corps of Engineers. B. Emergency Maintenance By Other Project Cooperators. If a Project Cooperator discovers the need for Emergency Maintenance, it will communicate the emergency to the Watershed District immediately. Ifthe Watershed District is unavailable or unable to complete the Emergency Maintenance, a Project Cooperator may perform the Emergency Maintenance, which will, to the extent possible under the circumstances, conform to the Maintenance plan for the Outlet Channel segment in which the Emergency Maintenance occurs. The Project Cooperator will perform Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 33 DRAFT: 4/2/07 the Emergency Maintenance in conformance with all applicable laws and will obtain all permits and approvals required for Operation or Maintenance by any governmental unit having jurisdiction over the Outlet Channel, including Prior Lake, Shakopee, the Watershed District, the Lower Minnesota Watershed District, the DNR, and the U.S. Army Corps of Engineers. When circumstances allow, the Project Cooperator undertaking the Emergency Maintenance will provide the other Project Cooperators with 24 hours notice of the Emergency Maintenance; however, the Project Cooperator is entitled to move forward with the Emergency Maintenance regardless of response from the other Project Cooperators. The Emergency Maintenance Costs incurred by the Project Cooperator will be paid from the Emergency Maintenance Fund, or be counted as a credit against the Project Cooperator's next Emergency Maintenance Fund payment, subject to approval by the Watershed District after it receives and approves an itemized statement of those costs from the Project Cooperator. 9.5 Operation and Maintenance Cost Participation A. Operation And Maintenance Costs. Throughout the entire MOA term, the Project Cooperators will pay all Operation And Maintenance Costs for the Outlet Channel according to the cost-share allocation in Section 10.2 using the Operation And Maintenance Fund established in Section 10.5. B. Emergency Maintenance Costs. Throughout the entire MOA term, the Project Cooperators will pay all Emergency Maintenance Costs for the Outlet Channel as specified in Article 10 using the Emergency Maintenance Fund established in Section 10.6. But if a discharge exceeding the Maximum Average Discharge Rates in Table 2 causes conditions requiring Emergency Maintenance, then the Project Cooperator whose discharge exceeds its Maximum Average Discharge Rate will pay all related Emergency Maintenance Costs and Claims. If multiple discharges exceeding the Maximum Average Discharge Rates in Table 2 cause conditions requiring Emergency Maintenance, then the Project Cooperators whose discharges exceed their Maximum Average Discharge Rates will pay all related Emergency Maintenance Costs and Claims in amounts proportional to their excess discharges. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 34 DRAFT: 4/2/07 ARTICLE 10. OUTLET CHANNEL COST SHARING AND FUNDING 10.1 Estimated Costs Exhibit E - Nine Year Estimate of Outlet Channel Design, Construction, and Operation And Maintenance Costs presents the estimated cost to each Project Cooperator for Design and Construction of the Outlet Channel Restoration And Enhancement Project and the first ten years of Operation and Maintenance of the Outlet Channel. These estimates will change as the Project Cooperators develop final plans and specifications for the Project and for Operation and Maintenance of the Outlet Channel. 10.2 Cost-Share Allocation A. Design And Construction Cost-Share Allocation. Except as otherwise specifically provided in this MOA, all Design Costs and Construction Costs for the Outlet Channel Restoration And Enhancement Project for a specific Outlet Channel segment will be allocated to the Project Cooperators according to the Outlet Channel segment cost-share allocation in Table 4 for that Outlet Channel Segment, or in Table 4 as modified in accord with Sections 6.6 or 10.3. Table 4. Cost-Share Allocation for Outlet Channel Cost-Share for Each Project Cooperator Outlet Channel by Outlet Segment! Segment Watershed Prior Lake Shakopee SMSC District I 88.4% 11.2% 0.0% 0.4% 2 84.6% 15.0% 0.0% 0.4% 3 69.9% 27.7%2 2.0% 0.4% 4 37.8% 20.9% 29.5% 11.8% 5 34.1% 18.8% 36.4% 10.7% 6 35.7% 19.7% 32.0% 12.6% 7 30.0%3 16.5% 43.0% 10.5% 8 29.6% 16.3% 43.7%4 10.4% Total 49.5% 17.7% 25.1% 7.6% I For all segments, except as noted below, the cost-share percentages were rounded to the nearest tenth by rounding up numbers equal to or greater than x.x5, and by rounding down numbers equal to or less than x.x4. Segments noted below were rounded as indicated, so each segment will total 100%. 2 In Segment 3, the Prior Lake cost-share was rounded from 27.756% to 27.7 %. 3 In Segment 7, the Watershed District cost-share was rounded from 29.946% to 30.0%. 4 In Segment 8, the Shakopee cost-share was rounded from 43.647% to 43.7%. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 35 DRAFT: 4/2/07 B. Operation, Maintenance, And Emergency Maintenance Cost-Share Allocation (1) For Specific Channel Segments. Operation And Maintenance Costs and Emergency Maintenance Costs for a specific Outlet Channel segment will be allocated to the Project Cooperators according to the Outlet Channel segment cost-share allocation in Table 4 for that Outlet Channel Segment, or in Table 4 as modified in accord with Sections 6.6 or 10.3. (2) For Entire Outlet Channel. Operation And Maintenance Costs and Emergency Maintenance Costs for the overall Outlet Channel (for example, annual inspection costs and the annual Emergency Maintenance Fund payments) will be allocated to the Project Cooperators according to the "Total" cost-share allocation in Table 4, or Table 4 as modified in accord with Sections 6.6 or 10.3. C. Cost-Share Allocation Formula. The formula used to calculate the cost-share allocation is more particularly described in Exhibit F - Calculation Method for Cost-Chare Allocation and will be used to recalculate the cost-share allocation when required by other Provisions of this MOA. 10.3 Revisions To Cost-Share Allocations Due To Changes In Tributary Drainage Areas If any Project Cooperator's tributary drainage area changes by more than 40 acres, the Watershed District will recalculate that Project Cooperator's cost-share allocations, arrange for reimbursement of past costs, and amend this MOA as follows: A. Recalculation And Payment Of Future Cost-Share Allocations. As to Outlet Channel Restoration And Enhancement Project Design Costs and Construction Costs and Outlet Channel Operation and Maintenance Costs and Emergency Maintenance Costs incurred subsequent to a change in tributary drainage area, the following Provisions will apply. ( 1) Cost Recalculation a. The Watershed District will recalculate the cost -share allocation according to the method described in Exhibit F to reflect the change in tributary drainage area and to document the change in Maximum Average Discharge Rate associated with change in the tributary drainage area. For Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 36 DRAFT: 4/2/07 any tributary drainage area changing jurisdictions, the Maximum Average Discharge Rate will be the Maximum Average Discharge Rate originally associated with the tributary drainage area. b. In addition, the Watershed District will amend this MOA to incorporate the recalculation including any necessary changes to Tables I, 2, and 4, subject to approval by the other Project Cooperators in the form of signed amendments. (2) Payment Of Cost-Share Allocations. All Design Costs, Construction Costs, Operation And Maintenance Costs, and Emergency Maintenance Costs incurred after the change in tributary drainage area will be borne by the Project Cooperators according to the cost-share allocations recalculated under Section 10. 3A. (1 ), If the change in tributary drainage area results in a discharge to the Outlet Channel in excess of the Maximum Average Discharge Rates specified in Table 2, the Project Cooperator acquiring the additional area will address the excess discharge in accord with Section 6.6. B. Calculation And Reimbursement Of Past Cost-Shares. As to Outlet Channel Restoration And Enhancement Project Design Costs, Construction Costs, and Outlet Channel Operation And Maintenance Costs incurred before a change in tributary drainage area, the following Provisions will apply. ( 1) Cost Calculation. The Watershed District will calculate those Design Costs, Construction Costs, and Operation And Maintenance Costs as follows: a. Calculate the Design Costs, Construction Costs, and Operation And Maintenance Costs incurred before the change in tributary drainage area for the Outlet Channel segment affected by change; and b. Calculate the proportion of the Design Costs, Construction Costs, and Operation And Maintenance Costs attributable to the tributary drainage area that is changing jurisdictions, based on the size of the tributary drainage area change relative to the size of the total segment drainage area based on Table I and the Maximum Average Discharge Rate for the tributary drainage area changing jurisdictions from Table 2 using the Maximum Average Discharge Rate originally associated with the drainage Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 37 DRAFT: 4/2/07 area. (2) Cost Reimbursement. The Project Cooperator acquiring the tributary drainage area will reimburse the Project Cooperator from which the area was acquired for the proportional Construction Costs and Operation And Maintenance Costs calculated under Section 1O.3B.(1). (3) Example. Exhibit G - Drainage Area Recalculation Example provides an example calculation to address a change in tributary drainage area. 10.4 Creation Of Design And Construction Fund And Payment Of Construction Cost- Share Allocations A. Design And Construction Fund Creation. Within ten days after the Approval Date, the Watershed District will establish a fund for the Design Costs and Construction Costs of the Outlet Channel Restoration And Enhancement Project (the "Design And Construction Fund"). Within 30 days after the Approval Date, the Project Cooperators will deposit into the Design And Construction Fund their respective 2006 Design And Construction Fund payments in the amounts shown on Exhibit H - 2006 Fund Payments. The 2006 Design And Construction Fund payments will include Design Costs and Construction Costs incurred for the Outlet Channel Restoration And Enhancement Project from January I, 2004, to the Effective Date in anticipation of this MOA. These costs are shown on Exhibit H. B. Annual Payments To Design And Construction Fund. Beginning in 2007 and in February of each succeeding calendar year until the Design And Construction Fund is closed, each Project Cooperator will pay into the Design And Construction Fund its share of the Design And Construction Budget for that calendar year and any deficiency from the previous year, according to the cost-share allocation in Section 10.2. For example, in February of 2008, each Project Cooperator will pay into the Design And Construction Fund its share of the Design And Construction Budget for 2008 and its share of any deficiency in the Design And Construction Fund at the end of 2007. C. Design And Construction Fund Administration. The Design And Construction Fund will be administered by the Watershed District in accordance with the following Provisions. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 38 DRAFT: 4/2/07 (I) Authorized Payments. The Watershed District may use the Design And Construction Fund at any time to pay Design Costs or Construction Costs for the Outlet Channel Restoration And Enhancement Project, including Design Costs and Construction Costs incurred for the Outlet Channel Restoration And Enhancement Project from January 1,2004, to the Effective Date in anticipation of this MOA, and to pay any Project Cooperator who acts under and complies with Section 7AB. (2) Consistency With Budget. The Design and Construction expenditures will be consistent with the budget developed during the Annual Meeting. Any variation from the budget of more than ten percent is subject to approval by all the Project Cooperators in writing. (3) Year End Reconciliation. Following the end of a calendar year and before January 31 st of the next year, the Watershed District will provide the Project Cooperators with a detailed accounting of the Design And Construction Fund for the previous year. If any funds remain at calendar year end, the Watershed District will allocate the funds as credits to the Project Cooperators according to the cost-share allocation in Section 10.2, The Watershed District will then subtract the credits from the following year's Design Cost and Construction Cost payments owed by the Project Cooperators. If a deficit exists at calendar year end, the Watershed District will allocate the deficit among the Project Cooperators as deficiencies according to the cost share allocation in Section 10.2 and will add the deficiencies to the following year's Design Costs and Construction Cost payments owed by the Project Cooperators. The Project Cooperators will pay the deficiencies as provided in Section lOAB. (4) Interest To Remain In Fund. All interest earned by the Design And Construction Fund will remain in the Fund to pay future Design Costs and Construction Costs. D. Closing The Design And Construction Fund. After Design and Construction of the Outlet Channel Restoration And Enhancement Project and the completion of all Design and Construction contracts and obligations, the Watershed District will prepare and furnish to the Project Cooperators a final accounting report for the Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 39 DRAFT: 4/2/07 Design And Construction Fund and close it as follows. ( 1 ) Distribution Of Excess Funds. If any funds remain, the Watershed District will allocate the funds as a refund to the Project Cooperators according to the cost-share allocation in Section 10.2. The Watershed District will then pay the refunds to the Project Cooperators, or at a Project Cooperator's direction, will apply the refund as a credit against that Project Cooperator's next annual Operation And Maintenance Fund payment. (2) Payment Of Any Deficit. If a deficit exists, the Watershed District will allocate the deficit among the Project Cooperators according to the cost share allocation in Section 10.2 and will invoice each Project Cooperator its share of the deficit. Each Project Cooperator will pay the Watershed District within 120 days after receipt of the invoice. 10.5 Creation Of Operation And Maintenance Fund And Payment Of Operation And Maintenance Cost-Share Allocations A. Operation And Maintenance Fund Creation. Within ten days after the Approval Date, the Watershed District will establish a fund to pay the Operation And Maintenance Costs of the Outlet Channel (the "Operation And Maintenance Fund"). Within 30 days after the Approval Date, the Project Cooperators will pay into the Operation And Maintenance Fund their respective 2006 Operation And Maintenance Fund payments in the amounts shown on Exhibit H. B. Annual Payments To Operation And Maintenance Fund. Beginning in of 2007 and continuing in February of every succeeding calendar year, each Project Cooperator will pay into the Operation And Maintenance Fund its share of the Operation And Maintenance Budget for that calendar year and any deficiency from the previous year, according to the cost-share allocation in Section 10.2. For example, in February of 2008, each Project Cooperator will pay into the Operation And Maintenance Fund its share of the Operation And Maintenance Budget for 2008 and its share of any deficiency in the Operation And Maintenance Fund at the end of 2007. C. Operation And Maintenance Fund Administration. The Operation And Maintenance Fund will be administered by the Watershed District in accordance Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 40 DRAFT: 4/2/07 with the following Provisions. (1) Authorized Payments. The Watershed District may use the Operation And Maintenance Fund at any time to pay Operation And Maintenance Costs of the Outlet Channel and to pay any Project Cooperator who acts under and complies with Section 9.3C. (2) Consistency With Budget. The Operation and Maintenance expenditures will be consistent with the budget developed during the Annual Meeting. Any variation from the budget of more than ten percent is subject to approval by all the Project Cooperators in writing. (3) Year End Reconciliation. Following the end of a calendar year and before January 31st of the next year, the Watershed District will provide the Project Cooperators with a detailed accounting of the Operation And Maintenance Fund for the previous year. If any funds remain at calendar year end, the Watershed District will allocate the funds as credits to the Project Cooperators according to the cost-share allocation in Section 10.2. The Watershed District will then refund the credits, or at a Project Cooperator's direction, will subtract the credit from that Project Cooperator's next annual Operation And Maintenance Fund payment. If a deficit exists at calendar year end, the Watershed District will allocate the deficit among the Project Cooperators as deficiencies according to the cost share allocation in Section 10.2 and will add the deficiencies to the following year's Operation And Maintenance Fund payments for the Project Cooperators. The Project Cooperators will pay the deficiencies as provided in Section 1O.5B. (4) Interest To Remain In Fund. All interest earned by the Operation And Maintenance Fund will remain in the Fund to pay future Operation And Maintenance Costs. 10.6 Creation Of Emergency Maintenance Fund And Payment Of Emergency Maintenance Cost-Share Allocations A. Emergency Maintenance Fund Creation. The Project Cooperators will create a $250,000 fund to provide a stable source for Emergency Maintenance along the Outlet Channel (the "Emergency Maintenance Fund"). Within ten days after the Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 41 DRAFT: 4/2/07 Approval Date, the Watershed District will establish the Emergency Maintenance Fund. Within 30 days after the Approval Date, the Project Cooperators will pay into the Emergency Maintenance Fund their respective 2006 Emergency Maintenance Fund payments in the amounts shown on Exhibit H. B. Annual Payments Through 2010 To Emergency Maintenance Fund. Beginning In of 2007 and in February of each succeeding calendar year through 2010, each Project Cooperator will pay into the Emergency Maintenance Fund its share of the $50,000 annual payment for that calendar year according to the cost- share allocation in Section 10.2. For example, in February of 2008, each Project Cooperator will pay into the Emergency Maintenance Fund its share of the $50,000 annual payment for 2008. C. Emergency Maintenance Fund Administration. The Emergency Maintenance Fund will be administered by the Watershed District in accord with the following Provisions. ( 1) Authorized Payments. The Watershed District may use the Emergency Maintenance Fund at any time to pay Emergency Maintenance Costs of the Outlet Channel and to pay any Project Cooperator who acts under and complies with Section 9AB. (2) Year End Report. Following the end of a calendar year and before January 31 st of the next year, the Watershed District will provide the Project Cooperators with a detailed accounting of the Emergency Maintenance Fund for the previous year. (3) Replenishment Of Fund. When Emergency Maintenance is performed on an Outlet Channel segment, the Watershed District will replenish the Emergency Maintenance Fund by invoicing the Project Cooperators using that segment in an amount equal to the Emergency Maintenance Costs plus an inflation factor equal to the Engineering News Record Construction Cost Index calculated using 2006 as the base year, according to the cost-share allocation in Section 10.2. If Emergency Maintenance occurs on or before December 31, 2010, the Project Cooperators will pay the invoiced amounts within 60 days. If Emergency Maintenance occurs on or after January 1,2011, the Project Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 42 DRAFT: 4/2/07 Cooperators will pay the invoice before the end of the February following receipt of the invoice. (4) Interest To Remain In Fund. All interest earned by the Emergency Maintenance Fund will remain in the Fund to pay future Emergency Maintenance Costs. 10.7 General Fund Administration And Recordkeeping In addition to the specific fund administration requirements in Sections 1004, 10.5, and 10.6, the Watershed District will administer the Design And Construction Fund, Operation And Maintenance Fund, and Emergency Maintenance Fund according to the following Provisions. A. Accounts To Conform To Statutory Requirements. Funds will be retained in accounts that conform to the requirements of Minnesota Statutes Chapter 118A. B. Retention And Inspection Of Records. The Watershed District will retain all financial records for the Funds for a period of six years following the completion of any work. The Project Cooperators may inspect the books and records maintained by the Watershed District for the Outlet Channel during normal business hours. e. Quarterly Reports. The Watershed District will provide quarterly fund balance statements for each Fund to the Project Cooperators. D. Annual Audit. The Watershed District will include the Funds in its annual audit, provide a copy of the audit to the Project Cooperators, and, upon request, will make these financial records available for review or audit by any Project Cooperator. E. Reimbursement Of Watershed District. The Watershed District will be reimbursed from the Operation And Maintenance Fund for the actual staff costs and accounting fees associated with maintaining financial records and reporting to the Project Cooperators and others about the Design And Construction Fund, Operation And Maintenance Fund, and Emergency Maintenance Fund. SECTION 11. PROJECT COOPERATOR MEETINGS 11.1 General Provisions A. Representation At Meetings. Each Project Cooperator will designate an individual and an alternative to serve as representatives and attend Project Cooperator Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 43 DRAFT: 4/2/07 meetings. B. Meetings Open And Noticed. All meetings of the Project Cooperators will be noticed and open to the public in accord with the strictest requirement of applicable law governing any Project Cooperator. C. Quorum. No business may be conducted at a meeting unless representatives of three Project Cooperators are present. D. Voting. Each Project Cooperator will have one vote, and any action requires the vote of three Project Cooperators. E. Conduct Of Meeting. Meetings will be conducted in accord with this MOA's Provisions and the latest edition of Robert's Rules of Order. If a conflict arises between this MOA's Provisions and Robert's Rules of Order, this MOA will control. The Watershed District's representative will serve as chair. 11.2 Annual Meeting And Failure To Agree On Budgets Beginning in of 2007 and in March of each succeeding calendar year, the Watershed District will convene a coordination and planning meeting of the Project Cooperators (the "Annual Meeting"). A. Annual Meeting Activities. At the Annual Meeting, the Project Cooperators will: (1) Review the previous year's activities; (2) Discuss the Design and Construction planned for the Outlet Channel Restoration And Enhancement Project in the next calendar year; (3) Discuss the Operation and Maintenance planned for the Outlet Channel in the next calendar year; (4) Review any completed or requested modifications to the cost-share allocations; (5) Review the status of the Design And Construction Fund, the Operation And Maintenance Fund, and the Emergency Maintenance Fund; (6) Refine the Construction Costs and the Operation And Maintenance Costs based on the most recent data; (7) Approve a budget for Design Costs and Construction Cost for the next calendar year ("Design And Construction Budget"); and (8) Approve a budget for Operation And Maintenance Costs for the next calendar Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 44 DRAFT: 4/2/07 year ("Operation And Maintenance Budget"). B. Failure To Agree On Budgets. (1) Failure To Agree On Construction Budget. If for any reason, the Project Cooperators fail to agree on a Construction budget for the Outlet Channel Restoration And Enhancement Project, the annual estimate from Exhibit E plus an inflation factor equal to the Engineering News Record Construction Cost Index calculated using the year 2006 as the base year will apply to the next year, and the annual contributions of each Project Cooperator will be based on the annual estimate as adjusted. (2) Failure To Agree On Operation And Maintenance Budget. If for any reason, the Project Cooperators fail to agree on an Operation and Maintenance budget for the Outlet Channel, the Operation and Maintenance budget for the prior year plus an inflation factor equal to the Engineering News Record Construction Cost Index calculated using the year 2006 as the base year will apply to the next year, and the annual contributions of each Project Cooperator will be based on the prior year's budget as adjusted. 11.3 Initial Meeting Within 45 days after the Approval Date, the Watershed District will convene a meeting of the Project Cooperators. The meeting purpose will be to adopt the 2007 Design And Construction Budget and the 2007 Operation and Maintenance Budget. If for any reason, the Project Cooperators fail to agree on one or both budgets, the budget or budgets as presented by the Watershed District will be deemed adopted and the 2007 Design And Construction Fund, Operating And Maintenance Fund, and Emergency Maintenance Fund payments of each Project Cooperator will be based on that budget. 11.4 Other Meetings Other Project Cooperator meetings may be called by the Watershed District or by a written request to the Watershed District signed by any two Project Cooperators. ARTICLE 12. SECURITY FOR PAYMENT OF SMSC COST-SHARE ALLOCATIONS 12.1 SMSC To Provide Letters Of Credit As security for the payment of the SMSC's cost-share allocations under Article 10, the Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 45 DRAFT: 4/2/07 SMSC will provide the Watershed District with letters of credit as follows. A. SMSC Construction Letters Of Credit For Design And Construction Fund ( 1) Initial SMSC Design And Construction Letter Of Credit. When the SMSC signs this MOA, it will provide the Watershed District with an initial SMSC Design And Construction Letter Of Credit in the amount of 225% of the SMSC's 2006 Design And Construction Fund payment as shown on Exhibit H. This initial SMSC Design And Construction Letter Of Credit will name the Watershed District as beneficiary, will be issued for a term of 18 months, and will be in addition to the SMSC's 2006 Design And Construction Fund payment as shown on Exhibit H. (2) Annual SMSC Design And Construction Letters Of Credit. Beginning in 2007 and continuing in February of every succeeding calendar year until the Design And Construction Fund is closed, the SMSC will provide the Watershed District with a SMSC Design And Construction Letter Of Credit in the amount of 225% of the SMSC's Design And Construction Fund payment for that calendar year. Each SMSC Design And Construction Letter Of Credit will name the Watershed District as beneficiary, will be issued for a term of 18 months, and will be in addition to the SMSC's payment to the Design And Construction Fund for the calendar year. B. SMSC Operating Letters Of Credit For Operation And Maintenance Fund ( 1) Initial SMSC Operation And Maintenance Letter Of Credit. When the SMSC signs this MOA, it will provide the Watershed District with an initial SMSC Operation And Maintenance Letter Of Credit in the amount of 225% of the SMSC's 2006 Operation And Maintenance Fund payment as shown on Exhibit H. This initial SMSC Operation And Maintenance Letter Of Credit will name the Watershed District as beneficiary, will be issued for a term of 18 months, and will be in addition to the SMSC's 2006 Design And Construction Fund payment as shown on Exhibit H. (2) Annual SMSC Operation And Maintenance Letters Of Credit. Beginning in 2007 and continuing in February of every succeeding calendar year, the SMSC will provide the Watershed District with a SMSC Operation Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 46 DRAFT: 4/2/07 And Maintenance Letter Of Credit in the amount of 225% of the SMSC's Operation And Maintenance Fund payment for that calendar year. Each SMSC Operation And Maintenance Letter Of Credit will name the Watershed District as beneficiary, will be issued for a term of 18 months, and will be in addition to the SMSC's payment to the Operation And Maintenance Fund for the calendar year. (3) SMSC Can Combine Design And Construction And Operating And Maintenance Letters of Credit. With the approval of the Watershed District, the SMSC may combine the initial SMSC Design And Construction Letter of Credit and the SMSC Operation And Maintenance Letter Of Credit, or any subsequent annual set of these letters of credit, into one letter of credit. C. SMSC Emergency Maintenance Letters Of Credit For Emergency Maintenance Fund. When the SMSC signs this MOA, it will provide the Watershed District with a SMSC Emergency Maintenance Letter Of Credit in the amount of $100,000. This SMSC Emergency Maintenance Letter Of Credit will name the Watershed District as beneficiary, will be issued for a term acceptable to the Watershed District, and will either renew automatically or be replaced by the SMSC not less than three months before its expiration. This SMSC Emergency Maintenance Letter Of Credit will be in addition to the SMSC's payments to the Emergency Operation And Maintenance Fund in 2006 through 2010, will be in addition to any payments made to replenish the Emergency Maintenance Fund under Section 1O.6C.(3), and will be provided for as long as this MOA continues in force. 12.2 Drawing Against SMSC Cost Share Letters Of Credit A. Basis For Cost Share Draw And Use Of Draw (1) Failure To Pay Construction Cost Share Allocation. If the SMSC fails to pay any cost share allocation to the Design And Construction Fund when due, the Watershed District may draw on any outstanding SMSC Design And Construction Letter Of Credit for the amount due using the process under Section 12.2B. and will apply the draw to pay the amount due. (2) Failure To Provide SMSC Design And Construction Letter Of Credit, If the SMSC fails to provide a SMSC Design And Construction Letter Of Credit Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 47 DRAFT: 4/2/07 when due, the Watershed District may draw the full amount of any outstanding SMSC Design And Construction Letter of Credit using the process under Section 12.2B. The Watershed District will hold the draw in escrow and use it to pay any SMSC cost share allocation to the Design And Construction Fund if the SMSC fails to pay it when due. (3) Failure To Pay Operating Cost Share Allocation. If the SMSC fails to pay any cost share allocation to the Operation And Maintenance Fund when due, the Watershed District may draw on any outstanding SMSC Operation And Maintenance Letter Of Credit for the amount due using the process under Section 12.28. and will apply the draw to pay the amount due. (4) Failure To Provide SMSC Operation And Maintenance Letter Of Credit. If the SMSC fails to provide a SMSC Operation And Maintenance Letter Of Credit when due, the Watershed District may draw the full amount of any outstanding SMSC Operation And Maintenance Letter of Credit using the process under Section 12.2B. The Watershed District will hold the draw in escrow and use it to pay any SMSC cost share allocation to the Operation And Maintenance Fund if the SMSC fails to pay it when due. (5) Failure To Pay Emergency Maintenance Cost Share Allocation. Ifthe SMSC fails to make a payment to the Emergency Maintenance Fund as provided in Section 1O.6B. or fails to replenish the Emergency Maintenance Fund as provided in Section 1O.6C.(3), the Watershed District may draw on the outstanding SMSC Emergency Maintenance Letter Of Credit for the amount due using the process under Section 12.2B. and will apply the draw to pay the amount due. (6) Failure To Provide SMSC Emergency Maintenance Letter Of Credit. If the SMSC fails to provide a SMSC Emergency Maintenance Letter Of Credit when due, the Watershed District may draw the full amount of the outstanding SMSC Emergency Maintenance Letter of Credit using the process under Section 12.28. The Watershed District will hold the draw in escrow and use it to pay a SMSC annual payment or replenishment payment to the Emergency Maintenance Fund if the SMSC fails to pay it when due. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 48 DRAFT: 4/2/07 (7) SMSC Insolvency or Dissolution a. If the SMSC becomes insolvent or admits in writing its inability to pay debts as they come due, if the SMSC applies for or consents to the appointment of a trustee or receiver, if in the absence of such application or consent, a trustee or receiver is appointed for SMSC, or if any proceeding under any bankruptcy or insolvency law or any dissolution or liquidation proceeding is instituted by or against SMSC, then the Watershed District may immediately draw the full amount of any outstanding SMSC Design And Construction Letter of Credit, SMSC Operation And Maintenance Letter Of Credit, and SMSC Emergency Maintenance Letter Of Credit. The Watershed District will hold the draws in escrow and use them to pay any SMSC cost share allocation to the Design And Construction Fund or the Operation And Maintenance Fund, or annual payment or replenishment payment to the Emergency Maintenance Fund, if the SMSC fails to pay them when due. b. If the SMSC disputes the Watershed's District's draws under this Section 12.2A.(7), the SMSC may invoke the dispute resolution process in Article 15 after the draw has been made. While dispute resolution is ongoing under Article 15, the Watershed District will not disburse any funds received as a result of draws under this Section 12.2A.(7). c. However, as to any funds drawn on an SMSC Emergency Maintenance Letter Of Credit and subject to dispute resolution under this Section 12.2A.(7), the Watershed District may disburse the funds if an Emergency Maintenance activity becomes necessary and if the Emergency Maintenance Fund does not contain sufficient funds to pay for the activity because the SMSC has failed to make any required payment to the Emergency Maintenance Fund. If the dispute resolution process determines the Watershed District should not have drawn on the Emergency Maintenance Letter Of Credit, the Watershed District will repay to the SMSC any funds disbursed under this Section 12.2A.(7)c. B. Cost Share Draw Process. If the Watershed District seeks to draw on any SMSC Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 49 DRAFT: 4/2/07 letter of credit under Section 12.2B.( 1)-(6), the Watershed District will give the SMSC a 30-day notice of its intent to draw specifying the reason for the draw and the letter of credit to be drawn against. However, if the letter of credit has less than 60 days remaining before it expires, the notice period will be one-half the number of days remaining in its term. If the notice period expires without the SMSC paying the amount in default or providing the necessary letter of credit, the Watershed District may draw on the specified letter of credit for the amount noticed. C. Letter Of Credit Replacement After Draw. Within 30 days after a draw occurs on any SMSC letter of credit provided under Section 12.1, the SMSC will replace the letter of credit if drawn in full or, if partially drawn, restore the letter of credit to its full amount, and give notice to the Project Cooperators that it has done so. If after a partial draw the SMSC does not restore a letter of credit to its full amount, the Watershed District may draw on the letter of credit for the full amount remaining using the process under Section 12.2B. The Watershed District will hold the draw in escrow and use it to pay any SMSC cost share allocation to the Design And Construction Fund or the Operation And Maintenance Fund, or annual payment or replenishment payment to the Emergency Maintenance Fund, if the SMSC fails to pay them when due. D. No Draw During Dispute Resolution. If the SMSC disputes the amount in default or tries to prevent the Watershed District from drawing on a SMSC letter of credit, either party may invoke the dispute resolution process in Article 15. While dispute resolution involving the SMSC is ongoing under Article 15, no draw may be made on any SMSC letter of credit securing the disputed payment except as follows. ( 1) Letter Of Credit Expiration. If any SMSC letter of credit securing a disputed payment will expire before resolution of the dispute under Article 15, the SMSC will extend or replace the SMSC letter of credit as required by this MOA. If the SMSC fails to do so, the Watershed District may draw on the SMSC letter of credit as provided in Section 12.2A. using the process in Section 12.2B. The Watershed District will hold the draw in escrow, and in addition to the uses allowed under Section 12.2B., the Watershed District will disburse funds in accord with the outcome of the dispute resolution process. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 50 DRAFT: 4/2/07 (2) SMSC Insolvency Or Dissolution. Ifthe Watershed District determines it has the right to draw on a SMSC letter of credit securing a disputed payment under Section 12.2A.(7), it may do so as provided in that Section. (3) Lack Of Funds In Emergency Maintenance Fund. If Emergency Maintenance becomes necessary and if the Emergency Maintenance Fund does not contain sufficient funds to pay for the activity because the SMSC has failed to make any required payment to the Emergency Maintenance Fund, the Watershed District may draw on an Emergency Maintenance Letter Of Credit and disburse funds to pay for the Emergency Maintenance activity. If the dispute resolution process determines the Watershed District should not have drawn on the Emergency Maintenance Letter Of Credit, the Watershed District will repay to the SMSC any funds disbursed under this Section 12.2D.(3). ARTICLE 13. INDEMNIFICATION 13.1 Watershed District Indemnification Of Prior Lake, Shakopee, And SMSC Subject to the limitations of Minnesota Statutes Chapter 466, the Watershed District will defend, indemnify, and hold Prior Lake, Shakopee, and the SMSC harmless from Claims arising out of or in connection with: any Design or Construction by the Watershed District of the Outlet Structure Repair Project or the Outlet Channel Restoration And Enhancement Project, or any portion of either; any Operation, Maintenance, or Emergency Maintenance by the Watershed District of the Outlet Structure or Outlet Channel; or any failure by the Watershed District to comply with this MOA's Provisions. Under no circumstances, however, will the Watershed District be required to pay any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to anyone Project Cooperator. Claims may not be aggregated to exceed the statutory limits afforded by Minnesota Statutes Chapter 466. 13.2 Prior Lake Indemnification Of Watershed District, Shakopee, And SMSC A. Prior Lake General Indemnity. Subject to the limitations of Minnesota Statutes Chapter 466, Prior Lake will defend, indemnify, and hold the Watershed District, Shakopee, the SMSC, and their respective elected and appointed officials, Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 5 I DRAFT: 4/2/07 employees, and agents harmless from Claims arising out of or in connection with: any Design or Construction by Prior Lake of any portion of the Outlet Channel Restoration And Enhancement Project; any Operation, Maintenance, or Emergency Maintenance by Prior Lake of the Outlet Channel; any Public Service Activity by Prior Lake; or any failure by Prior Lake to comply with this MOA's Provisions. Under no circumstances, however, will Prior Lake be required to pay any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to anyone Project Cooperator. Claims may not be aggregated to exceed the statutory limits afforded by Minnesota Statutes Chapter 466. B. Prior Lake Indemnity For Public Service Activities. Subject to the limitations of Minnesota Statutes Chapter 466 as modified in this Section 13.2B., Prior Lake will defend, indemnify, and hold the Watershed District, Shakopee, the SMSC, and their respective elected and appointed officials, employees, and agents harmless from Claims arising out of or in connection with Prior Lake's Public Service Activities or with any trail or underground utility placed in an Outlet Channel easement as part of Prior Lake's Public Service Activities. Prior Lake understands that under Minnesota Statutes ~ 466.03, subd. 6.e., Prior Lake is not subject to tort liability for Claims arising out of or in connection with any trail placed in an Outlet Channel easement as part of Prior Lake's Public Service Activities or the Public Service Activities necessary to Design, Construct, Operate, and Maintain any trail. Nevertheless, for the purpose of the indemnity provided in this Section 13.2B. only and up to the limits on liability established in Minnesota Statutes Chapter 466 only, Prior Lake waives its sovereign immunity. Under no circumstances, however, will Prior Lake be required to pay any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to anyone Project Cooperator. Claims may not be aggregated to exceed the statutory limits afforded by Minnesota Statutes Chapter 466. 13.3 Shakopee Indemnification Of Watershed District, Prior Lake, And SMSC A. Shakopee General Indemnity. Subject to the limitations of Minnesota Statutes Chapter 466, Shakopee will defend, indemnify, and hold the Watershed District, Prior Lake, the SMSC, and their respective elected and appointed officials, Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structureu Page 52 DRAFT: 4/2/07 employees, and agents harmless from Claims arising out of or in connection with: any Design or Construction by Shakopee of any portion of the Outlet Channel Restoration And Enhancement Project; any Operation, Maintenance, or Emergency Maintenance by Shakopee of the Outlet Channel; any Public Service Activity by Shakopee; or any failure by Shakopee to comply with this MOA's Provisions. Under no circumstances, however, will Shakopee be required to pay any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to anyone Project Cooperator. Claims may not be aggregated to exceed the statutory limits afforded by Minnesota Statutes Chapter 466. B. Shakopee Indemnity For Public Service Activities. Subject to the limitations of Minnesota Statutes Chapter 466 as modified in this Section 13.3B., Shakopee will defend, indemnify, and hold the Watershed District, Prior Lake, the SMSC, and their respective elected and appointed officials, employees, and agents harmless from Claims arising out of or in connection with Shakopee's Public Service Activities or with any trail or underground utility placed in an Outlet Channel easement as part of Shakopee's Public Service Activities. Shakopee understands that under Minnesota Statutes S 466.03, subd. 6.e., Shakopee is not subject to tort liability for Claims arising out of or in connection with any trail placed in an Outlet Channel easement as part of Shakopee's Public Service Activities or the Public Service Activities necessary to Design, Construct, Operate, and Maintain any trail. Nevertheless, for the purpose of the indemnity provided in this Section 13.3B. only and up to the limits on liability established in Minnesota Statutes Chapter 466 only, Shakopee waives its sovereign immunity. Under no circumstances, however, will Shakopee be required to pay any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to anyone Project Cooperator. Claims may not be aggregated to exceed the statutory limits afforded by Minnesota Statutes Chapter 466. 13.4 SMSC Indemnification Of Watershed District, Prior Lake, And Shakopee The SMSC will defend, indemnify, and hold the Watershed District, Shakopee, Prior Lake, and their respective elected and appointed officials, employees, and agents harmless from Claims arising out of or in connection with: any Design or Construction Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 53 DRAFT: 4/2/07 by the SMSC of any portion of the Outlet Channel Restoration And Enhancement Project; any Operation, Maintenance, or Emergency Maintenance by the SMSC of the Outlet Channel; any Public Service Activity by the SMSC; or any failure by the SMSC to comply with this MOA's Provisions. Under no circumstances, however, will the SMSC be required to pay any Claims from which Minnesota municipalities are immune under Minnesota Statutes Chapter 466 or any amounts in excess of the limits on liability for Minnesota municipalities established in Minnesota Statutes Chapter 466 applicable to anyone Project Cooperator. Claims may not be aggregated to exceed the statutory limits afforded by Minnesota Statutes Chapter 466 and this Section 13.4. 13.5 Limitation On Liability Of Project Cooperators Notwithstanding anything to the contrary in this MOA, under no circumstances will a Project Cooperator, including for the avoidance of doubt the SMSC, be required to pay on behalf of itself and the other Project Cooperators any amounts in excess of the limits on liability established in Minnesota Statutes Chapter 466 applicable to anyone Project Cooperator. The limits of liability for some or all of the Project Cooperators may not be added together to aggregate or determine the maximum amount of liability for any Project Cooperator. The intent of this Section 13.5 is to impose a limited duty to defend and indemnify for Claims arising under this MOA subject to the limits of liability under Minnesota Statutes Chapter 466. The purpose of creating this duty to defend and indemnify is to simplify the defense of Claims by eliminating conflicts among defendants, and to permit Claims against multiple defendants from a single occurrence to be defended by a single attorney. 13.6 Insurance And Evidence Of Coverage A. Insurance For Watershed District, Prior Lake, And Shakopee. The Watershed District, Prior Lake, and Shakopee will maintain liability coverage with the League of Minnesota Cities Insurance Trust ("LMCIT") under standard LMCIT liability coverage forms for at least the amount of the maximum limit of liability under Minnesota Statutes Section 466.04 for any number of claims arising out of a single occurrence, as such limit may change during the term of this MOA. For the period from the Effective Date through December 31, 2007, the coverage limit will be at least $1 million per occurrence. Thereafter, the coverage limit shall change to Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 54 DRAFT: 4/2/07 conform to Minnesota Statutes Section 466.04. Each Project Cooperator will name the other three Project Cooperators as additional insureds. If insurance cannot be obtained from the LMCIT, the Watershed District, Prior Lake, or Shakopee will maintain private liability insurance coverage as required for the SMSC in Section 13.6B. B. Insurance For SMSC. The SMSC will maintain the following private liability insurance coverage through an insurance company licensed to do business in the State. ( I) Commercial General Liability Coverage. The SMSC will maintain commercial general liability coverage with a limit of at least the amount of the maximum limit of liability under Minnesota Statutes Section 466.04 for any number of claims arising out of a single occurrence, as such limit may change during the term of this MOA. If this commercial general liability insurance contains a general aggregate limit, the SMSC will maintain a general aggregate limit of not less than twice the amount of coverage for each occurrence. For the period from the Effecti ve Date through December 31, 2007, the coverage limit will be at least $1 million per occurrence. Thereafter, the coverage limit shall change to conform to Minnesota Statutes Section 466.04. The commercial general liability insurance will cover liability arising from premises, operations, independent contractors, products- completed operations, personal injury, advertising injury, and contractually- assumed liability. The SMSC will name the other three Project Cooperators as additional insureds. (2) Public Officials' Errors And Omissions Insurance. The SMSC will maintain public officials' errors and omissions or equivalent coverage, in a form acceptable to the Watershed District, with a limit of at least $1 million per occurrence, and, if this insurance contains an aggregate limit, an aggregate limit of not less than $2 million. The SMSC will name the other three Project Cooperators as additional insureds. C. Evidence Of Coverage And Ongoing Coverage. Each Project Cooperator will provide the Watershed District with a certificate of insurance showing that the Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 55 DRAFT: 4/2/07 required coverages are in effect, and the Watershed District will provide the other Project Cooperators with the same evidence. No Project Cooperator will allow the insurance required by this MOA to lapse, be canceled, be reduced in limits or coverage, not be renewed, be changed materially, or have restrictive modifications added during this MOA's term. In the event any Project Cooperator fails to procure or maintain any insurance coverage required under this MOA, the Watershed District may buy such coverage on an annual basis and add the coverage cost to the next annual Operation And Maintenance Fund payment due from that Project Cooperator. If the Watershed District fails to procure or maintain any insurance coverage required under this MOA, any other Project Cooperator may buy such coverage on an annual basis and deduct the coverage cost from its next annual Operation And Maintenance Fund payment. ARTICLE 14. SECURITY FOR SMSC COMPLIANCE AND INDEMNIFICATION 14.1 SMSC Compliance And Indemnification Letter Of Credit A. Provisions And Term. When the SMSC signs this MOA, it will provide to the Watershed District a SMSC Compliance And Indemnification Letter Of Credit in the amount of $2 million. This SMSC Compliance And Indemnification Letter Of Credit will name the Watershed District, Prior Lake, and Shakopee as beneficiaries, will be issued for a term and other Provisions acceptable to the Watershed District, and will be replaced by the SMSC not less than three months before its expiration. This SMSC Compliance And Indemnification Letter Of Credit will be in addition to providing the other SMSC letters of credit required in Section 12.1, will be in addition to maintaining the insurance coverage required in Section 13.6B, and will be provided for as long as this MOA continues in force. B. Adjusting Amount. Every four years after the Effective Date, the Watershed District will calculate an inflation factor for the SMSC Compliance And Indemnification Letter Of Credit equal to the Engineering News Record Construction Cost Index using 2006 as the base year and sum it with $2 million to determine a new amount for the SMSC Compliance And Indemnification Letter Of Credit. The Watershed District will give the SMSC notice of this new amount and Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 56 DRAFT: 4/2/07 within 30 days after receiving this notice, the SMSC will replace the outstanding SMSC Compliance And Indemnification Letter Of Credit with a new one for the amount specified in the notice. 14.2 Basis For Compliance Or Indemnification Draws A. Draw For SMSC Default. If the S~SC defaults in any of its obligations under this MOA and that default causes damage to the Outlet Channel Restoration And Enhancement Project or another Project Cooperator, the other Project Cooperator may give notice of the damage and demand payment. The other Project Cooperator will include in this notice a detailed statement of the nature of the default, the damage caused, how it was caused, and the amount claimed to be owed. If after 60 days, the SMSC has not paid the amount demanded, the other Project Cooperator may give the SMSC a 30-day notice of its intent to draw against the SMSC Compliance And Indemnification Letter Of Credit. If the 30-day period expires without the SMSC paying the amount demanded in the first notice, the other Project Cooperator may draw on the SMSC Compliance And Indemnification Letter Of Credit for the amount demanded. B. Draw For SMSC Failure To Indemnify. If the SMSC fails to maintain insurance coverage as required in Section 13.6B. and that failure leaves another Project Cooperator without indemnification to which it is entitled under Section 1304, the other Project Cooperator may give notice to the SMSC of the failure to indemnify and demand payment. The other Project Cooperator will include in this notice a detailed statement of the basis and amount of the Claim on which it maintains indemnification is owed. If after 60 days, the SMSC has not paid the amount demanded, the other Project Cooperator may give the SMSC a 30-day notice of its intent to draw against the SMSC Compliance And Indemnification Letter Of Credit. If the 30-day period expires without the SMSC paying the amount demanded in the first notice, the other Project Cooperator may draw on the SMSC Compliance And Indemnification Letter Of Credit for the amount demanded. C. Draw For Failure To Maintain SMSC Compliance And Indemnification Letter Of Credit. If the SMSC fails to provide a replacement SMSC Compliance And Indemnification Letter of Credit when due, the Watershed District may give the Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 57 DRAFT: 4/2/07 SMSC a 30-day notice of its intent to draw against the SMSC Compliance And Indemnification Letter Of Credit. However, if the letter of credit has less than 60 days remaining before it expires, the notice period will be one-half the number of days remaining in its term. If the notice period expires without the SMSC providing the replacement SMSC Compliance And Indemnification Letter Of Credit, the Watershed District may draw the entire amount of the SMSC Compliance And Indemnification Letter Of Credit. The Watershed District will hold the draw in escrow and use it to pay the following: (1) Any SMSC cost-share allocation to the Design And Construction Fund or the Operation And Maintenance Fund or annual payment or replenishment payment to the Emergency Maintenance Fund if the SMSC fails to pay them when due; (2) Any damages to the Project Cooperators arising from a SMSC default in its obligations under this MOA; or (3) Any Claim brought against a Project Cooperator where the SMSC fails to maintain insurance coverage as required in Section 13.6B. and that failure leaves the Project Cooperator without indemnification to which it is entitled under Section 13.4. D. Draw For SMSC Insolvency or Dissolution (1) Basis For Draw And Use. If the SMSC becomes insolvent or admits in writing its inability to pay debts as they come due, if the SMSC applies for or consents to the appointment of a trustee or receiver, if in the absence of such application or consent, a trustee or receiver is appointed for SMSC, or if any proceeding under any bankruptcy or insolvency law or any dissolution or liquidation proceeding is instituted by or against SMSC, then the Watershed District may immediately draw the full amount of the SMSC Compliance And Indemnification Letter of Credit. The Watershed District will hold the draw in escrow and use it to make any payment listed in Section 14.2C. (2) Dispute Over Draw. If the SMSC disputes the Watershed's District's draw under this Section 14.20., the SMSC may invoke the dispute resolution process in Article 15 after the draw has been made. While dispute resolution Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 58 DRAFT: 4/2/07 is ongoing under Article 15, the Watershed District will not disburse any funds received as a result of its draw under this Section 14.2D. 14.3 Letter Of Credit Replacement After Draw Within 30 days after a draw occurs on the SMSC Compliance And Indemnification Letter Of Credit provided under Section 14.1, the SMSC will replace the SMSC Compliance And Indemnification Letter Of Credit if drawn in full or, if partially drawn, restore it to its full amount and give notice to the Project Cooperators that it has done so. If after a partial draw the SMSC does not restore the SMSC Compliance And Indemnification Letter Of Credit to its full amount, the Watershed District may draw on the letter of credit for the full amount remaining using the process under Section 14.2C. The Watershed District will hold the draw in escrow and use it to make any payment listed in Section 14.2C. 14.4 No Draw During Dispute Resolution If the SMSC disputes the information in a notice, the amount demanded, or a Project Cooperator's right to draw under Sections 14.2A., B., or c., either party to the dispute may invoke the dispute resolution process in Article 15. While dispute resolution is occurring under Article 15, no draw may be made on the SMSC Compliance And Indemnification Letter Of Credit except as follows. A. Letter Of Credit Replacement. If the Watershed District determines it has the right to draw on the SMSC Compliance And Indemnification Letter Of Credit under Section 14.2C., it may do so as provided in that Section. B. SMSC Insolvency Or Dissolution. If the Watershed District determines it has the right to draw on the SMSC Compliance And Indemnification Letter Of Credit under Section 14.2D" it may do so as provided in that Section. ARTICLE 15. DISPUTE RESOLUTION 15.1 Policy For Resolving Disputes The Project Cooperators acknowledge that, if disputes arise over the interpretation of this MOA, or over the rights and obligations of the Project Cooperators under this MOA's Provisions, such disputes will, in all likelihood, impinge on substantial rights affecting the health and safety of the persons and property of the citizens residing Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 59 DRAFT: 4/2/07 within their respective jurisdictions. The Project Cooperators also acknowledge that any disputes will further arise under time frames that do not allow for extended investigation or negotiations to resolve the disputes. Therefore the following dispute procedure will apply. 15.2 Procedure For Resolving Disputes All disputes arising out of or in connection with this MOA will be resolved as follows. A. Dispute Notice And Initial Meeting. If a dispute arises between two or more Project Cooperators, any Project Cooperator involved in the dispute may send notice of the dispute to all Project Cooperators specifying the nature of the dispute and the parties to the dispute. Within five days after delivery of notice, a meeting between the parties to the dispute (and any other Project Cooperator that wishes to attend) will be held to attempt in good faith to negotiate a resolution of the dispute. B. Mediation. If the parties to the dispute fail to resolve the dispute after a meeting, or any additional meetings as the parties to the dispute mutually deem necessary, or if the parties to the dispute fail to meet within five days after delivery of the notice, the parties to the dispute will submit the dispute within five days thereafter to mediation in accordance with Rule 114 of the Minnesota General Rules of Practice and bear equally the costs of the mediation. The parties to the dispute will participate in good faith in the mediation for a period of ten days, unless the parties to the dispute mutually extend the mediation period. C. Binding Arbitration. If the parties to the dispute are not successful in resolving the dispute through mediation or if they fail to meet within the ten-day meeting period, then the dispute will be resolved by binding arbitration in accordance with Minnesota Statutes ~~ 572.08 to 572.30 as amended, and the following conditions: (1) Selection Of Arbitrators. The dispute will be heard by a panel of four arbitrators, one of whom will be selected by each Project Cooperator five days after expiration of the ten-day period (or longer period if extended by written agreement of the parties to the dispute) for mediation of the dispute. Each Project Cooperator will select its arbitrator by giving notice of the arbitrator's name to the other Project Cooperators. If any Project Cooperator fails to select an arbitrator within the five-day selection period, the arbitrator will be Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 60 DRAFT: 4/2/07 selected within two days after expiration of the initial selection period by the arbitrators previously appointed by the Project Cooperators. (2) Hearing Timing. The hearing before the arbitrators will be held within ten days after selection of the arbitration panel, unless otherwise mutually agreed by the parties to the dispute. (3) Decision By Majority And Timing. A decision will be made by majority vote of all the arbitrators. The arbitrators' decision will be rendered within 15 days after selection of the arbitration panel, unless otherwise mutually agreed in writing by the parties to the dispute. (4) Governing Law. The law governing interpretation of this MOA in any arbitration will be the laws of the State. (5) Costs. Each Project Cooperator will bear the costs of the arbitrator it selects and will bear equally any other costs of the arbitration. 15.3 Enforcement Of Judgment Or Order A. Money Judgment Involving Watershed District, Prior Lake, Or Shakopee. If the arbitrators' decision under Section 15.2C. involves a money judgment against the Watershed District, Prior Lake, or Shakopee, the respective Project Cooperator will pay the money judgment within 60 days after it is issued by the arbitrators. If the Watershed District, Prior Lake, or Shakopee fails to do so, the money judgment will be enforceable by any other Project Cooperator in the District Court of Scott County, Minnesota. B. Money Judgment Or Order Involving SMSC. If the arbitrators' decision under Section 15.2C. involves a money judgment against the SMSC, the SMSC will pay the money judgment within 60 days after it is issued by the arbitrators. If the SMSC fails to do so, the Project Cooperator in whose favor the money judgment was rendered may satisfy the judgment by drawing immediately upon one or more SMSC letters of credit provided to secure the obligation upon which judgment was rendered for the amount of the judgment. This right to draw is in addition to those specified in Sections 12.2A. and 14.2. C. Non-monetary Judgment Involving Watershed District, Prior Lake, Or Shakopee. If the arbitrator's decision under Section 15.2C. involves a non-monetary judgment Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 61 DRAFT: 4/2/07 against the Watershed District, Prior Lake, or Shakopee or a judgment about how to interpret this MOA, the respective Project Cooperator will immediately conform to the judgment. If the Watershed District, Prior Lake, or Shakopee fails to do so, the judgment will be enforceable by any other Project Cooperator in the District Court of Scott County, Minnesota. D. Non-monetary Judgment Involving SMSC. If the arbitrator's decision under Section 15.2C. involves a judgment about how to interpret this MOA, the SMSC will conform to the judgment. If the SMSC fails to conform to the judgment and this failure causes damage to any other Project Cooperator, the failure will be deemed a default, and the damaged Project Cooperator may proceed as provided in Section l4.2A. 15.4 Limited Sovereign Immunity Waiver The Project Cooperators acknowledge that the SMSC is a federally recognized Indian tribe and that the SMSC possesses sovereign immunity from unconsented suit and other legal proceedings, including arbitration. Despite the U.S. Supreme Court's decision in C&L Enterprises, Inc. v. Citizen Band Potawatomi Tribe, nothing in this Agreement shall be deemed to be an express or implied waiver of the SMSC's sovereign immunity, except as explicitly provided in this Section 1504. A. Limited Waiver of Sovereign Immunity. The SMSC hereby irrevocably waives its sovereign immunity, and all defenses based thereon, for the limited purpose of submitting to binding arbitration as provided in Section 15.2. B. Limitation on Recourse. Notwithstanding any other Provisions herein, any arbitration award against the SMSC may only be for money damages and may only be enforced and collected against one or more SMSC letters of credit provided to secure the obligation upon which judgment was rendered. C. Waiver of Exhaustion. The SMSC expressly waives the application of the doctrines of exhaustion of tribal remedies, abstention, or comity and all other rights of the SMSC that might otherwise require that claims arising from this Agreement be heard in any of the SMSC courts (whether now or hereafter existing) or other SMSC forums (whether now or hereafter existing) prior to the commencement of arbitration. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 62 DRAFT: 4/2/07 ARTICLE 16. TERM AND TERMINATION The term of this MOA is perpetual, or until otherwise expressly terminated by a unanimous vote of the Project Cooperators. Assuming the Outlet Channel Restoration And Enhancement Project is complete, the Watershed District's right to release 65 cfs through the Outlet Structure and the rights of other Project Cooperators to drain areas tributary to the Outlet Channel as described in Table 1 at the Maximum Average Drainage Rates described in Table 2 will survive this MOA's termination. Any termination will be recorded in the office of the Scott County Recorder. ARTICLE 17. DISTRIBUTION OF PROPERTY UPON TERMINATION 17.1 Distribution Of Property Generally Upon this MOA's termination, all personal property acquired as a result of this MOA will be returned to the contributing Project Cooperator. And all monies remaining in the Design And Construction Fund, the Operation And Maintenance Fund, or the Emergency Maintenance Fund will be returned to the Project Cooperators according to the cost-share allocation in Section 10.2. 17.2 Conveyance Of Title To Easements Outside The Watershed District A. Conveyance To Shakopee. Upon this MOA's termination, the Watershed District will convey to Shakopee, all of its right, title, and interest in that portion of the Outlet Channel lying outside of the legal boundaries of the Watershed District, east of Pike Lake Trail or north of Scott County Road 16 within the municipal limits of Shakopee, subject to the rights of the Watershed District and other Project Cooperators in Article 16. B. Conveyance To SMSC. Upon this MOA's termination, the Watershed District will convey to the SMSC, all of its right, title, and interest in that portion of the Outlet Channel lying outside of the legal boundary of the Watershed District, and lying within either Trust Land or Fee Land, subject to the rights of the Watershed District and other Project Cooperators in Article 16. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 63 DRAFT: 4/2/07 ARTICLE 18. GENERAL PROVISIONS 18.1 Counterparts This MOA may be signed in separate counterparts, and the counterparts, taken together, shall constitute a single agreement. 18.2 Entire Agreement, Amendment, And Waiver This MOA and the lP A embody the entire agreement and understanding of the Project Cooperators regarding the subject matter of this MOA and all prior agreements, representations, statements, and understandings, oral and written, are merged in this MOA and the lPA by this Section 18.2. This MOA may not be altered, amended, modified, or supplemented except in a writing signed by the Project Cooperators, which will be effective from and after the date that it is signed by all the Project Cooperators if an effective date is not specified. No MOA Provisions is waived unless done so in writing and signed by the Project Cooperator against whom such waiver is asserted. 18.3 MOA/JPA Precedence If this MOA is approved by the Secretary of the Interior, its Provisions will control the relationship between the Project Cooperators. If this MOA is not approved by the Secretary of the Interior, or if it is approved and terminates in the future for any reason, the lP A's Provisions will control the relationship of the Watershed District, Prior Lake, and Shakopee. If any conflict arises between this MOA's Provisions and the lPA and the MOA has been approved and has not been terminated, this MOA will control. 18.4 Notices A. Written Notice Required. Except as otherwise specifically provided in this MOA, all notices, demands, and communications required or provided to be given under this MOA will be in writing and will be directed as follows: If to Watershed District: Prior Lake-Spring Lake Watershed District Attn: District Administrator 15815 Franklin Trail SE Prior Lake, MN 55372 If to Prior Lake: City of Prior Lake Attn: , MN 55_ Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 64 DRAFT: 4/2/07 If to Shakopee: City of Shakopee Attn: ,MN 55 If to the SMSC: Shakopee Mdewakanton Sioux Community Attn: Chairman 2330 Sioux Trail NW Prior Lake, MN 55372 B. How Notices May Be Delivered. Notices may be: ( 1) Deli vered personally; (2) Sent by nationally recognized overnight courier; or (3) Sent by first class, certified United States Mail, return receipt requested, postage prepaid. C. When Notices Are Effective. Notices are effective: (1) On receipt if delivered personally; (2) On the next business day if sent by overnight courier; or (3) On the date shown on the receipt if mailed, unless delivery is refused or delayed by the addressee, in which event they are deemed delivered on the third business day following deposit in the United States Mail. D. Changes In Notice Address. A Project Cooperator may change the address to which notice will be delivered by notice given to all Project Cooperators. No Project Cooperator may require notice to be delivered to more than two addresses. 18.5 No Third Party Beneficiaries Except as otherwise specifically provided in this MOA, no rights, privileges, or immunities of any Project Cooperator under this MOA will inure to the benefit of any third-party, nor will any third-party be deemed to be a beneficiary of any of this MOA's Provisions. 18.6 Successors And Assigns This MOA binds and inures to the benefit of the legal successors and assigns of the Project Cooperators. SIGNED by the Watershed District, Prior Lake, Shakopee, and the SMSC to go into force on the Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 65 DRAFT: 4/2/07 Approval Date as of the Effective Date. [THE REST OF THIS PAGE LEFT BLANK INTENTIONALLY.] Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 66 DRAFT: 4/2/07 MEMORANDUM OF AGREEMENT SIGNATURE PAGE FOR PRIOR LAKE-SPRING LAKE WATERSHED DISTRICT PRIOR LAKE-SPRING LAKE WATERSHED DISTRICT By: , President By: , Secretary STATE OF MINNESOTA) ) ss COUNTY OF SCOTT ) On this day of , 2007, the foregoing Memorandum of Agreement was acknowledged before me by and , the President and Secretary respectively, of the Prior Lake-Spring Lake Watershed District, a Minnesota political subdivision, on behalf of the District. Notary Public Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 67 DRAFT: 4/2/07 MEMORANDUM OF AGREEMENT SIGNATURE PAGE FOR CITY OF PRIOR LAKE CITY OF PRIOR LAKE By: , Mayor By: , City Manager STATE OF MINNESOTA) ) ss COUNTY OF SCOTT ) On this day of , 2007, the foregoing Memorandum of Agreement was acknowledge before me by and , the Mayor and City Manager respectively, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the City. Notary Public Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 68 DRAFT: 4/2/07 MEMORANDUM OF AGREEMENT SIGNATURE PAGE FOR CITY OF SHAKOPEE CITY OF SHAKOPEE By: , Mayor By: , City Administrator By: , City Clerk STATE OF MINNESOTA) ) ss COUNTY OF SCOTT ) On this day of , 2007, the foregoing Memorandum of Agreement was acknowledged before me by , and the Mayor, City Administrator, and City Clerk respectively, of the City of Shakopee, a Minnesota municipal corporation, on behalf of the City. Notary Public Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 69 DRAFT: 4/2/07 MEMORANDUM OF AGREEMENT SIGNATURE PAGE FOR SHAKOPEE MDEWAKANTON SIOUX COMMUNITY SHAKOPEE MDEW AKANTON SIOUX COMMUNITY By: Stanley R. Crooks, Chairman By: Keith B. Anderson, Secretaryffreasurer STATE OF MINNESOTA) ) ss COUNTY OF SCOTT ) On this day of , 2007, the foregoing Memorandum of Agreement was acknowledge before me by Stanley R. Crooks and Keith B. Anderson, the Chairman and Secretaryffreasurer respectively, of the Shakopee Mdewakanton Sioux Community, a federally recognized Indian tribe, on behalf of the Community. Notary Public Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 70 DRAFT: 4/2/07 UNITED STATES DEPARTMENT OF THE INTERIOR APPROVAL The foregoing document is approved pursuant to 25 U.S.c. 81: UNITED STATES DEPARTMENT OF THE INTERIOR, BUREAU OF INDIAN AFFAIRS: By: , Area Director of the Area Office of the Bureau of Indian Affairs of the Secretary of the Interior and the Commissioner of Indian Affairs, Acting Under Delegated Authority. Date: ,2007 tb.us.1348121.15 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure Page 71 DRAFT 4/2/07 Exhibit A - Outlet Channel Map Cl ....,~~ '" ~ / ~ /~-\~ , ."'( --"===~-:::.::.--- · --=r~~;;~,;,;'-~~). , ~~t \, .._-_----.. a & ~_ L ~ 'J~~ _~~...:_--,t. -.::~~ ~~s.~~ - ("'-. ('I..,.... \ ~ ---- Note that there is no defined channel through Dean Lake, Pike Lake or Jeffers Ponds. The channel centerline through these water bodies is only provided for station ing pu rpo se s. r \ I ~ k \ ',,: -- . -, -r~~~'.,-' - - '1--: -', - . -r~r7-F)',::-_~-~, ~ '- _it- -,': \' j,'J (~S, .,-.,.) ./ ~ ., . ~ i II - t 'J I ~ a -r~ 'L -- ~- I " ~-'j c;i~ 4~,i \ "i -:.::-.-:=r-=--' J ~-:::":'f1i-~-#-i' _-:i ~r"~"Uf~li~ Legend J -', '.J.""', ,_ ,_~~:-~' '~r':-i - Prior Lake Outlet Channel I 'i '-r-,-:-:) <':l .. ~ 1- _ .~--- Roads II:' ,I,'.L'/' '.'V f-L-L-L';" q r~ I ,-.~\., ~ ,F/ l(~L~ke Prior Spring -,.;-~,,(' ~-. ~_,I, '.' /-~_/-:' ~ k ' ~ ,. .; v La e La ke =:*,,:,:-1._ '1--'-- h '\ 'C J., \ \ -- - ~ ' ''JI' ',lti''I ... , 'oJ - ~ ~ ... '\. ,1>...1 1_) I .? (. 7 1 WATEISHeD DISTRICT ~~J. 'j' . { i1 => ~ ,.---, '1~~j _iJ ~- o " '\ ':::-<- c==J PubIc Waters ,-_._', L. _, _,i PLSLWD Boundary OJ Outlet Channel Segment - Segment Boundary 9 05 I ,M1U Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure A-I Exhibit B - Outlet Channel Segment Drainage Areas ~ 11 ll.S 0 I~-- !"'L~"" __ " -~*' t -_....~~ 1:Jo-~-- --...- .m..._.....a_ 'r5;~;;}; m,.,....... 1 ~ ~ tIII::..ft .... m. "_0.3_ ___0..-..... DEe 2006 ExnlllllB Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure B-1 Exhibit C - Projected Average Discharge Rate Calculation Formula and Example Calculations 1. CALCULA TION FORMULA Projected Average Discharge Rate = Area-weighted average of the Projected Discharge Rates of individual new developments = I [(ANDff AND) * Max DND] Where: AND = acres (i.e. size) of an individual new development T AND = total acres of all new development after the MOA effective date Max DND = Projected Discharge Rate for the 100- Year Rainfall Event, in cfs/acre, for each new development 2. EXAMPLE CALCULATIONS 2.1 Scenario: Assume that Outlet Channel Segment 2 has a drainage area of 260 acres, all within Prior Lake. A total of 60 acres was developed prior to the MOA Effective Date, and the remaining 200 acres are developed over a three-year period following the MOA Effective Date, as follows: · Year I: 50 acres of commercial development at a Projected Discharge Rate of 0.5 cfs/acre. · Year 2: 100 acres of low-density residential development at a Projected Discharge Rate of 0.125 cfs/acre; and 25 acres of a development that existed prior to the MOA Effective Date is redeveloped. · Year 3: 50 acres of medium-density residential development at a Projected Discharge Rate of 0.25 cfs/acre. 2.2 Background Information: · Prior Lake Maximum Average Discharge Rate (from MOA Table 2): 0.25 cfs/acre · Projected Discharge Rate of an existing development: 0.64 cfs/acre 2.3 Annual Certification: Given the assumptions and background information presented above, Prior Lake would complete its annual certification for Years 1, 2, and 3 following the MOA Effective Date as follows: Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure C-l A. Year 1: (1) Prior Lake would report acres of land developed before the MOA Effective Date, land developed after the MOA Effective Date, and undeveloped land as follows: Developed area prior to MOA: 60 acres Developed area after MOA: 50 acres Undeveloped area: 150 acres (2) Prior Lake would report that no land was redeveloped in Year 1. (3) Prior Lake would present the Projected Average Discharge Rate for new development as follows: Projected Average Discharge Rate = I [(AND/T AND) * Max DND] = [(50 acres in Year 1/50 acres total) * 0.5 cfs/acre] = 0.5 cfs/acre (4) Prior Lake would show how it plans to manage future development on the remaining 150 acres of undeveloped land in this Outlet Channel segment to meet its Maximum Average Discharge Rate of 0.25 cfs/acre. B. Year 2: (I) Prior Lake would report the acres ofland developed before the MOA Effective Date, land developed after the MOA Effective Date, and undeveloped land as follows: Developed area prior to MOA: 60 acres Developed area after MOA: 150 acres (50 acres in Year I + 100 acres in Year 2) Undeveloped area: 50 acres (2) Prior Lake would note that 25 acres of developed land was redeveloped. Prior Lake would show that the Projected Discharge Rate of the redeveloped land is equal to or less than the Projected Discharge Rate of the developed condition that existed on the MOA Effective Date (that is, 0.64 cfs/acre), or if the Projected Discharge Rate of the redeveloped land exceeded 0.64 cfs/acre, Prior Lake would show how that additional rate was offset by a reduction elsewhere in the Segment 2 tributary drainage area. (3) Prior Lake would present the Projected Average Discharge rate of the new development since the MOA Effective Date as follows: Projected Average Discharge Rate = I [(AND/T AND) * Max DND] = [(50 acres in Year 1/150 acres total) * 0.5 cfs/acre] + [(100 acres in Year 2/150 acres total) * 0.125 cfs/acre] = 0.25 cfs/acre Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure C-2 (4) Prior Lake would show how it plans to manage future development on the remaining 50 acres of undeveloped land in this segment to meet its Maximum A verage Discharge Rate of 0.25 cfs/acre. C. Year 3: (1) Prior Lake would report the acres of land developed before the MOA Effective Date, undeveloped land, and land developed after the MOA Effective Date as follows: Developed area prior to MOA: 60 acres (25 acres redeveloped in Year 2) Developed area after MOA: 200 acres (50 acres Year I + 100 acres in Year 2 + 50 acres in Year 3) Undeveloped area: o acres (2) Prior Lake would report that no land was redeveloped in Year 3. (3) Prior Lake would present the Projected Average Discharge rate of the new development since the MOA Effective Date as follows: Projected Average Discharge Rate = L [(AND/T AND) * Max DND] = [(50 acres in Year 1/200 acres total) * 0.5 cfs/acre] + [(\00 acres in Year 2/200 acres total) * 0.125 cfs/acre] + [(50 acres in Year 3/200 acres total) * 0.25 cfs/acre] = 0.25 cfs/acre (4) Prior Lake would note that no new development will occur in this segment. D. After Year 3: After Year 3, Prior Lake's future annual certifications would consist of reporting on any redevelopment that occurs and demonstrating that the Projected Discharge Rate of the redevelopment is equal to or less then the previous developed condition. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure C-3 Exhibit D - Outlet Channel Design, Construction, and Maintenance Schedule Outlet Channel Segment 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 C I Prior Lake To D (winter Ml Ml Ml MI Ml M2 M2 M2 M2 CR42 05-06) C 2 CR 42 to Pike D (winter MI MI MI MI MI M2 M2 Lake Inlet 07 -08) Pike Lake Inlet C 3 to Pike Lake D (winter MI MI MI MI MI M2 M2 Trail 07 -08 ) C 4 Pike Lake Trail D (winter Ml Ml MI MI MI M2 to CR 16 08-09) C 5 CR 16 to Deans D (winter MI MI MI Ml Ml M2 M2 M2 Lake Outlet 06-07 ) C (fall- 6 Deans Lake D winter MI MI MI Ml MI M2 M2 M2 M2 Outlet to TH 169 05-06) C 7 TH 169 to TH D (winter MI MI MI MI MI M2 M2 101 07 -08) C 8 TH 101 to Blue D (winter MI Ml MI Ml MI M2 Lake Inlet 08-09) Notes: D = Design; C = Construction; M I = 0-5 yrs. Maintenance; M2 = 6+ yrs. Maintenance. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure D-l Exhibit E - Nine Year Estimate of Outlet Channel Design, Construction, and Operation And Maintenance Costs The following tables present the Watershed District's estimate by Project Cooperator of the Outlet Channel Restoration And Enhancement Project Design Costs and Construction Costs from 2007 through 2009, the Outlet Channel Operation And Maintenance Costs from 2007 through 2015, and the annual contributions to establish the Emergency Maintenance Fund. Project Cooperator 2007 2008 2009 2010 2011 D&CI Maiot.2 D&C Maiot. D&C Maiot. D&C Maiot. D&C Maiot. Watershed Dist. $ 306,054 $ 76,948 $ 445,978 $ 97,491 $ 157,197 $ 151,577 u $ 174,034 -- $ 149,270 Shakopee 219,326 $21,875 220,893 43,802 156,985 65,746 u 88,173 -- 75,627 Prior Lake 135,318 $19,901 167,966 31,227 86,805 49,908 u 62,308 -- 53,442 SMSC 61,463 $7,684 59,992 14,130 51,003 19,578 u 26,864 -- 23,041 Total $ 722,160 $ 126,408 $ 894,830 $ 186,650 $ 451,990 $ 286,809 -- $ 351,380 -- $ 301,380 Project Cooperator 2012 2013 2014 2015 Total D&CI Maiot.2 D&C Maiot. D&C Maiot. D&C Maiot. Watershed Dist. -- $ 123,178 u $112,907 u $ 85,863 -- $ 74,635 $ 1,955,132 Shakopee -- 70,963 u 59,999 -- 49,026 u 37,813 1,110,229 Prior Lake u 47,924 -- 42,262 -- 32,921 u 26,721 756,705 SMSC -- 21,110 -- 17 ,888 -- 15,164 u 11,521 329,439 Total .. $ 263,175 -- $ 233,055 -- $ 182,975 -- $ 150,690 $ 4,151.505 I D & C = Design Costs and Construction Costs Maint. = Operation And Maintenance Costs and Emergency Maintenance Fund payments Notes: . Annual costs shown here include estimated capital and Maintenance costs, but not any easement acquisition costs. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure E-l . Construction Cost estimates are based on $150 per linear foot of Outlet Channel, less the estimated cost of the first five years of Maintenance ($10 per linear foot). . Operation And Maintenance Cost estimates are based on $10 per linear foot vegetation management for the first five years after the Outlet Channel Restoration And Enhancement Project and $5 per linear foot thereafter. . For this table, Operation And Maintenance Costs include the establishment of a $250,000 Emergency Maintenance Fund during the first five years of the Project. The Fund will be replenished as it is used. . Costs are based on present dollar values as of March 2006. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure E-2 Exhibit F - Calculation Method for Cost-Share Allocation The Outlet Channel cost-share allocation in MOA Table 4 is calculated for each Outlet Channel segment as follows (see _ below for the column references and calculation results): Step 1: The tributary drainage area for each Project Cooperator in each Outlet Channel segment from MOA Table I (Column A) is multiplied by the Project Cooperator's Maximum Average Discharge Rate from MOA Table 2 (Column B). Step 2: The resulting Peak Segment Discharge Rate (Column C) is added to the Peak Discharge Rate From Upstream (Column D) to determine the Total Peak Discharge Rate To Segment (Column E) from each Project Cooperator in each Outlet Channel segment. Step 3: The Total Peak Discharge Rate to the Outlet Channel for each Project Cooperator in each Outlet Channel segment is then multiplied by the Project Cooperator's Duration Factor in _ below (Column F) to calculate each Project Cooperator's Total Segment Flow for each Outlet Channel segment (Column G). Table F-l: Duration Factors Project Cooperator Duration Factor (Days) Watershed District 10.0 Prior Lake 0.5 Shakopee, south (upstream) of Dean Lake, 2.0 except 124.61 acres directly tributary to Outlet Channel Segment 5 Shakopee, north (downstream) of Dean Lake, 1.0 plus 124.61 acres directly tributary to Outlet Channel Segment 5 SMSC 2.0 Step 4: The Total Segment Flow from each Project Cooperator is then added to determine the Total Segment Flow for each Outlet Channel segment (Column G) Step 5: Finally, each Project Cooperator's relative flow contribution for each Outlet Channel segment is calculated as a percent of the Total Segment Flow for that Outlet Channel segment (Column H). That percent is then identified as the cost-share allocation for the Project Cooperator for that Outlet Channel segment and entered in MOA Table 4. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure F-l Table F -2: Cost-Share Allocation Calculation Table A B C D E F G H Maximum Peak Peak Total Peak Tributary Average Segment Discharge Discharge Total Outlet Drainage Discharge Discharge Rate From Rate To Duration Segment % of Total Channel Project Area Rate Rate Upstream Segment Factor Flow Segment Segment Cooperators (acres)1 (cfs/acre)2 (cfs) (cfs )3 (cfs) (days)4 (cfs-days) FlowS 1 Watt:rsht:d District NA 65.00 65,0 NA 65.0 10.0 650.0 88,4% Prior Lakt: 658 0.25 164.5 NA 164,0 0.5 82,3 11.2% Shakopt:t: 0 0.10 0 NA 0 2.0 0 0.0% SMSC (SMSC) 28 0.05 1,40 NA 1,4 2,0 2,8 0,4% Total 686 735,1 100.Ql;Vc! 2 Watt:rsht:d District NA 0 65.0 65.0 10.0 650,0 84,6% Prior Lakt: 261 0,25 65.3 164,5 229.8 0,5 114.9 15.0% Shakopt:t: 0 0,10 0 0 0 2.0 0 0,0% SMSC 3 0,05 0.20 1.4 1.6 2,0 3.2 0,4% Total 264 768.1 100,0% 3 Watt:rsht:d District NA 0 0 65.0 65,0 10.0 650,0 69.9lJ{ Prior Lakt: 1,147 0.25 286.8 229.8 516,6 0.5 258,3 27,7%6 Shakopt:t: 93 0.10 9,3 0 9.3 2.0 18.6 2,O(/'0 SMSC 5 0,05 0,25 1.6 1.85 2.0 3.7 0,4% Total 1,245 930.6 100,0% 4 Watt:rsht:d District NA 0 0 65.0 65,0 10,0 650,0 37,8% Prior Lakt: 805 0,25 201.3 516,60 717,9 0.5 359,0 20.9% Shakopee 2,443 0.10 244.3 9,3 253,6 2,0 507.2 29.5% SMSC 1,989 0,05 99.5 1.85 101.3 2,0 202,6 11.8% Total 5,237 1,718,8 \00.0% 5 Watt:rsht:d District NA 0 0 65.0 65.0 10,0 650,0 34.1% Prior Lake 0 0,25 0 717.9 717.9 0.5 359.0 18.8% Shakopee 748 0,10/0,257 93.5 253.6 347.1 2,0 694,2 36.4% SMSC 8 0,05 0.4 \01.3 10l.7 2.0 203,4 10.7% Total 756 1,906.6 100.0% Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure F-2 A B C D E F G H Maximum Peak Peak Total Peak Tributary Average Segment Discharge Discharge Total Outlet Drainage Discharge Discharge Rate From Rate To Duration Segment % of Total Channel Project Area Rate Rate Upstream Segment Factor Flow Segment Segment Cooperators (acres)1 (cfs/acre)2 (cfs) (CfS)3 (cfs) (days)4 ( cfs-days) Flows 6 Watershed District NA 0 0 65,0 65,0 10.0 650,0 35,7% Prior Lake 0 0.25 0 717.9 717,9 0.5 359.0 19,7% Shako pee 937 0.25 309,2 581.4 581.4 1.0 581.4 32,0% SMSC 250 0.05 12,5 114.2 114,2 2.0 228.4 12,6% Total 1,187 1,818,8 100,0% 7 Watershed District NA 0 0 65,0 65.0 10,0 650,0 30,0%8 Prior Lake 0 0.25 0 717,9 717.9 0.5 359,0 16.5% Shakopee 1,407 0,25 351.8 581.4 932.2 1.0 932.2 43,0% SMSC 0 0.05 0 114,2 114.2 2,0 228.4 10.5% Total 1,407 2,170,6 100,0% 8 Watershed District NA 0 65 65.0 65,0 10.0 650,0 29.6% Prior Lake 0 0,25 0 717,9 717.9 0.5 359.0 16.3% Shako pee 101 0,25 25.2 933,2 958.4 1.0 958.4 43.7%9 SMSC 0 0,05 0 114.2 114.2 1.0 228.4 10.4% Total 101 2,195.8 100,0% 2 Taken from MOA Table I, Taken from MOA Table 2, The Watershed District's discharge rate is not a maximum average rate but a maximum discharge rate through the Outlet Structure of 65cfs as set in this MOA. Taken from Column E for the segment immediately upstream Taken from MOA, b, Table F-I, The numbers in this column are used in MOA Table 4. Prior Lake's percentage was rounded from 27.756% to 27.7% so the percentages add to 100%, For the Segment 5 Shakopee tributary drainage areas, 623.39 acres have a maximum discharge rate of 0,1 cfs/acre, and 124.61 acres have a maximum discharge rate of 0.25 cfs/acre, The Watershed District percentage was rounded from 29,946% to 30,0% so the percentages add to 100LJ{. Shakopee's percentage was rounded from 43,647% to 43,7% so the percentages add to 100%. 3 4 6 7 8 9 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure F-3 Exhibit G - Drainage Area Change Recalculation Example 1. SCENARIO: The SMSC purchases 80 acres of land in Prior Lake that is tributary to Outlet Channel Segment 4. The purchase occurs after Construction of Segments 5 and 6 of the Outlet Channel Restoration And Enhancement Project. 2. BACKGROUND INFORMATION: Size of Drainage Area Change: 80 acres Segment 5 Tributary Watershed: Segment 5 Construction and Maintenance Costs 8,188 acres (direct plus upstream) $900,000 Segment 6 Tributary Watershed: Segment 6 Construction and Maintenance Costs 9,376 acres (direct plus upstream) $400,000 3. How DRAINAGE AREA CHANGE Is ADDRESSED: Step 1: The Watershed District recalculates the cost -share allocation according to the method described in ~, and applies the new cost-share allocation to all future costs. Step 2: For each Outlet Channel segment that has been constructed prior to the drainage area change, the Watershed District calculates the proportion of the Construction Costs and Operation And Maintenance Costs attributable to the drainage area change based on the size of the drainage area change relative to the size of the total drainage area. Segment 5 costs = $900,000 Proportional costs = (80 acres/8l88 acres) * $900,000 = $8,793 Segment 6 costs = $400,000 Proportional costs = (80 acres/9376 acres) * $400,000 = $3,413 Step 3: The Watershed District calculates the discharge attributable to the drainage area change based on the Maximum Average Discharge Rate from MOA Table 2 for the Project Cooperator with initial jurisdiction over the drainage area and the size of the drainage area. 80 acres * 0.25 cfs/acre = 20 cfs Step 4: The SMSC pays Prior Lake $12,206 ($8,793 + $3,413) to reimburse Prior Lake for the share of the Outlet Channel Restoration And Enhancement Project Construction Costs Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure G-l and Operation And Maintenance Costs Prior Lake has already paid that are attributable to the drainage area that has changed jurisdictions. Step 5: The Watershed District revises MOA Table 1 to reflect the revised tributary areas for each Project Cooperator (i.e. the SMSC's tributary drainage area increases by 80 acres in Segment 4, and Prior Lake's tributary drainage area decreases by 80 acres). The Watershed District also revises MOA Table 2 to note that the SMSC may discharge an additional 16 cfs (total) in Segment 4 as a result of the change in drainage area. This is because the SMSC reimbursed Prior Lake an amount based on Prior Lake's 0.25 cfs/acre Maximum Average Discharge Rate, while the SMSC's Maximum Average Discharge Rate is 0.05 cfs/acre. This gives the SMSC an additional 16 cfs in channel use that they have paid for and can use in the future, as is illustrated below: Prior Lake: SMSC: Difference: 80 acres * 0.25 cfs/acre = 20 cfs 80 acres * 0.05 cfs/acre = 4 cfs 16 cfs capacity that shifts from Prior Lake to SMSC . that is, SMSC may discharge the full 20 cfs originally associated with the 80 acres that has changed jurisdictions. Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure G-2 Exhibit H - 2006 Fund Payments 1. 2006 CONSTRUCTION COSTS The following tables detail the costs incurred or projected for the Construction of the Outlet Channel Restoration and Enhancement Project, by channel segment, from lanuary 1,2004, through December 31, 2006, based on the Construction schedule in I 1.1 Table H-I: Segment 1 Activity Amount D . I $ 70,885 eSlgn Construction2 377,434 Construction observation, contrace 35,821 Construction observation by Watershed 9,400 District staff C' 4 25,000 ontmgency Subtotal $ 518,540 Grants5 71,700 Total $ 446,840 I Costs since January I, 2004. Actual Construction Costs from January I, 2006, through December 3 I , 2006. Does not include bid for work between Fountain Hills Drive and County Road 42, which has been postponed pending the completion of the development plans. 3 Contract Construction observation costs. ~ For Construction change orders. 5 DNR Shoreland grant: $22,000; Met. Council Environmental Partnership Grant: $49,700. 1.2 Table H-2: Segment 5 Activity Amount Design I $ 82,500 Total $ 82,500 I Contracted Design costs. Only the Design of Segment 5 is scheduled as a 2006 cost. Construction is a 2007 cost according to From January 1,2004, through December 31,2006, the Watershed District also incurred Design Costs for planning a portion of Segment 4 amounting to $34,788,64 and Construction Costs for building a portion of Segment 5 amounting to $17,759,22. These costs will be credited to the Watershed District's fund payments in 2008 when Segment 4 is scheduled for Design and in 2007 when Segment 5 is scheduled for Construction, Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure H-I 1.3 Table H-3: Segment 6 Activity Amount Design and Construction Costs' $ 194,245 Bank stabilization2 10,000 Total $ 204,245 Construction Costs provided by Shakopee; a detailed cost report is available from Shakopee or the Watershed District. Design and Construction Costs include planning, permitting, bidding, building work, and Shakopee Construction observation (staff and contract engineer). 2 Estimate for live staking along bank from Dean Lake outlet structure to Highway 169. 2. 2006 OPERATION AND MAINTENANCE COSTS No Maintenance activities are scheduled for 2006 beyond those already included in the Segment 1 construction contract. However, the Watershed District will inspect the Outlet Channel twice in 2006 at a total cost of $800. And the Watershed District estimates a cost of $5,000 to establish the three funds specified in the lPA, administer the lPA, and oversee the Outlet Channel Operations in 2006. Thus the 2006 Operation And Maintenance Fund expenses will total $5,800. 3. 2006 EMERGENCY MAINTENANCE COSTS The 2006 Emergency Maintenance Fund Payments are based on each Project Cooperator's proportional cost of the annual $50,000 total contribution to the Fund. 4. 2006 FUND PAYMENTS BY PROJECT COOPERATOR 4.1 Watershed District: 2006 Design And Construction Fund payment Segment 1 Costs (88.4% of total) Segment 5 Costs (34.1 % of total) Segment 6 Costs (35.7% of total) Less costs already paid (Segments 1 and 5) Total payment 2006 Operation And Maintenance Fund payment (49.5% of total) 2006 Emergency Maintenance Fund payment (49.5% of total) Total of all payments $ 395,007.00 28,132.00 72,915.00 ($ 431,734.42)' $ 64,319.58 $ 2,871.00 $ 24,750.00 $ 91,940.58 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure H-2 Note for the Watershed District: 1. The Watershed District's actual costs for Segments 1 and 5 from January 1,2004, through December 31, 2006, were as follows: Segment 1 (Design, Construction, and Const. mgmt.) Segment 5 (Design) Less grants received for Segment 1 Less cost reimbursement recei ved from Prior Lake Total $ 488,605.27 57,345.43 ($ 71,700.00) ( 42,516.28) $ 431,734.42 The Watershed District's actual costs do not equal the costs in Tables H-I and H-2 because not all contracted segment costs were expended in 2006, This work is ongoing, and some of the costs will be expended in 2007 and applied to the 2007 Project accounting. 4.2 Prior Lake: 2006 Design And Construction Fund payment Segment I Costs (11.2% of total) Segment 5 Costs (18.8% of total) Segment 6 Costs (19.7% of total) Less costs already paid (Segment I) Total payment 2006 Operation And Maintenance Fund payment (17.7% of total) 2006 Emergency Maintenance Fund payment (17.7% of total) Total of all payments 4.3 Shakopee: 2006 Design And Construction Fund payment Segment I Costs (0.0% of total) Segment 5 Costs (36.4% of total) Segment 6 Costs (32.0% of total) Less costs already paid (Segment 6) Total payment 2006 Operation And Maintenance Fund payment (25.1 % of total) 2006 Emergency Maintenance Fund payment (25.1 % of total) Total of all payments $ 50,046.00 15,510.00 40,236.00 ($ 42,516.28) $ 63,275.72 $ 1,027.00 $ 8,850.00 $ 73,152.72 $ 0.00 30,030.00 65,358.00 ($ 194,245.00) ($ 98,857.00) $ 1,456.00 $ 12,550.00 ($ 84,851.00) Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure H-3 4.4 SMSC: 2006 Design And Construction Fund payment Segment 1 Costs (0.4% of total) $ 1,787.00 Segment 5 Costs (10.7% of total) 8,827.00 Segment 6 Costs (12.6% of total) 25,735.00 Less costs already paid ($ 0.00) Subtotal $ 36,349.00 2006 Operation And Maintenance Fund payment (7.6% of total) $ 441. 00 2006 Emergency Maintenance Fund payment (7.6% of total) $ 3,800.00 Total of all payments $ 40,590.00 tb.us,1627842.08 Memorandum of Agreement For Construction, Use, Operation, And Maintenance Of The Prior Lake Outlet Channel And Outlet Structure H-4