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Resolution No. 6780 1 RESOLUTION NO. 6780 2 3 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A SETTLEMENT AGREEMENT RELATING TO LOS ANGELES SUPERIOR COURT CASE NO. BC 104302 BY AND BETWEEN THE CITY OF ANAHEIM AND THE CITY OF VERNON 4 5 6 7 WHEREAS, on May 6, 1994, the cities of Anaheim, Colton, 8 Riverside, Azusa and Banning 'filed an action against the City of 9 Vernon in the Los Angeles Superior Court, Case No. BC 104302, alleging a right to reimbursement on certain contracts concerning 10 11 12 the California-Oregon Transmission Project; and WHEREAS, the City of Vernon has been negotiating with the 13 individual cities in an attempt to compromise each of their respective claims in the litigation; and 14 15 16 17 18 WHEREAS, the City of Vernon and the City of Anaheim wish to enter into a full settlement of each of their respective claims in the above-referenced litigation; and WHEREAS, said settlement is not an admission or a 19 determination by the City of Vernon as to the merits of any claims or allegations raised by the cities in said litigation. 20 21 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: 22 23 SECTION 1: The City Council of the City of Vernon does hereby find and determine that the recitals contained,hereinabove 24 25 26 are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Settlement Agreement by and between the City of 27 28 Anaheim and the City of Vernon, the original Agreement has been - ' 1 presented to the City Council concurrently with this resolution, and the City Council hereby orders said Agreement to be received 2 3 and filed by the City Clerk. 4 SECTION 3: The City Council of the City of Vernon hereby 5 6 authorizes the Mayor and the City Clerk to execute said Agreement for, and on behalf of, the City of Vernon. 7 SECTION 4: The City Clerk of the City of Vernon shall certify to the passage of this resolution and thereupon and 8 9 thereafter the same shall be in full force and effect. 10 11 APPROVED AND ADOPTED this 16th day of April, 1996. ~~~~~. ATTE~..~ // y~ A~~~ BRUCE V. MALKENHORST, City Clerk 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- .',.. j . 1 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) 2 3 _,t 4 I, BRUCE V. MALKENHORST, city Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 6780, was duly adopted by the City Council of the City of Vernon at a regular meeting of the city Council duly held on Tuesday, April 16. 1996, and thereafter was duly signed by the 5 6 7 8 9 Mayor of the City of Vernon. 10 11 12 (SEAL) 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- A--4 ........- ~~ \ .. , . . ~ . ~71t) 6'7c?~' 1 2 3 4 5 6 7 EXECUTION COPY 8 SETTLEMENT AGREEMENT BETWEEN 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 THE CITY OF ANAHEIM AND THE CITY OF VERNON RELATING TO LOS ANGELES SUPERIOR COURT CASE NO. BC 104302 ... 1 2 3 4 1.0 5 2.0 6 3.0 7 4.0 8 9 5.0 10 6.0 11 7.0 12 8.0 13 14 9.0 15 10.0 16 11.0 17 12.0 18 13.0 19 14.0 20 15.0 21 16.0 22 17.0 23 18.0 24 19.0 25 20.0 26 21. 0 27 28 TABLE OF CONTENTS PARTIES . . . . . . RECITALS . . . . . . . . . . . . . TERM OF AGREEMENT . . . . . . AGREEMENT ................. 4.1 Non-firm Transmission Service 4.2 Dismissal of Action . . . . . . . . . . BILLING AND PAYMENT . . . . . . . . . . . . . AUTHORIZED REPRESENTATIVES . . . . . . . . . . . . LIABILITY AND INDEMNITY . . . . . . . . . Paqe 1 1 2 2 2 5 6 7 7 NONPRECEDENT AND RESERVATION OF RIGHTS . . . . . . 9 8.1 Nonprecedent .......... . . .. 9 8.2 Non-Admission Bv Vernon . . . . . . . .. 10 8.3 Non-Oooosition to Other Settlement Aareements 10 PREVIOUS COMMUNICATIONS ....... . . .'. NONSEVERABILITY ........... . . . . . . NONWAIVER OF CONTRACTUAL RIGHTS . . . . . . . . . UNCONTROLLABLE FORCE . . . . ~ . . . . NONDEDICATION OF FACILITIES . . . . . NOTICES . . . . . . . . . . . . . . . . . RELATIONSHIP OF PARTIES . . . . . . . . . NO THIRD PARTY RIGHTS . . . ASSIGNMENT . . . . . . GOVERNING LAW AND REGULATIONS . . . CONSTRUCTION OF AGREEMENT . . . . . . . . . . . . CAPTIONS AND HEADINGS . . . . . . . . . . . SIGNATURE CLAUSE . . . . . . . . . . . . . (i) 10 10 10 10 11 11 12 12 12 13 13 13 14 ... 1 SETTLEMENT AGREEMENT BETWEEN THE CITY OF ANAHEIM AND THE CITY OF VERNON RELATING TO LOS ANGELES SUPERIOR COURT CASE NO. BC 104302 2 3 4 5 6 7 1.0 PARTIES 8 The parties to this settlement agreement ("Agreement") are 9 the City of Anaheim, a municipal corporation of the state of 10 California ("Anaheim"), and the City of Vernon, a municipal 11 corporation of the state of California ("Vernon"). Each signatory 12 is a Party and collectively are the Parties. 13 2.0 RECITALS 14 This Agreement is made with reference to the following facts, 15 among others: 16 2.1 The Parties are engaged in the generation, transmission, 17 and/or distribution of electric power and energy in the 18 southwestern United states. 19 2.2 Vernon has the right to use and sell transmission 20 capacity on the Pacific DC intertie between Nevada-Oregon border 21 ("NOB") and Sylmar Substation ("Sylmar") and between Midway 22 Substation ("Midway") and Sylmar ("Transmission Paths"). 23 2.3 The cities of Anaheim, Riverside, Colton, Azusa and 24 Banning filed an action in the Superior Court of the State of 25 California, County of Los Angeles, Case No. BC 104302, ("the 26 Action"), on May 6, 1994, alleging a right to reimbursement on 27 certain contracts pertaining to the California-oregon Transmission 28 Project. Vernon denies the existence of such a right. -1- . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2.4 In order to limit the time and expense of lengthy and complex litigation, Vernon has been negotiating with the plaintiffs in the Action collectively and individually, and Anaheim is willing to individually compromise its claims in the Action as set forth herein and to file a dismissal in the Action with prejudice as to Anaheim. 2.5 This Agreement is entered into by the Parties in good faith and in full settlement of each such respective claim in the Action and with the stipulation that this Agreement is not a determination or admission as to the merits of any claims or allegations set forth in the Action and shall not be admitted in evidence in any proceeding other than to prove the terms and conditions of this Agreement. 3.0 TERM OF AGREEMENT This Agreement shall become effective on the date last herein mentioned when signed by the Parties hereto and shall remain in effect until completion of performance, including payment of all bills for service, or shall terminate in any event on July 1, 1999, and the Parties' rights shall expire on said termination date. 4.0 AGREEMENT In consideration of the mutual covenants contained herein, the Parties agree as stated herein. 4.1 Non-firm Transmission Service. Vernon hereby grants to Anaheim the right to schedule non-firm transmission service on each Transmission Path at any time during the period May 1, 1996 through April 30, 1999, as follows: III -2- , . 1 2 Between HOB and Sylmar: up to 15 MWh per hour July 1, 1996 through April 30, 1997; and 3 July 1, 1997 through April 30, 1998; and July 1, 1998 through April 30, 1999. 4 Between Midway and Sylmar: 5 up to 30 MWh per hour May 1, 1996 through October 31, 1996; and 6 May 1, 1997 through October 31, 1997; and May 1, 1998 throuqh October 31, 1998. 7 up to 15 MWh per hour November 1, 1996 through April 30, 1997; and November 1, 1997 through April 30, 1998; and 8 November 1, 1998 through April 30, 1999. 9 10 The first 6,800 MWh of such transmission service scheduled and 11 used by Anaheim on each path for each month during said period 12 shall be provided at no charge except that Anaheim shall be 13 responsible for all losses and costs provided for in Section 14 4.1.6. Anaheim shall pay Vernon for transmission service 15 16 17 scheduled and used by Anaheim above 6,800 MWh during each month as follows: 18 NOB-Sylmar Midway-Sylmar $1. ?O/MWh $0.75/MWh 19 4.1.1 Anaheim shall submit its hourly preschedules to 20 Vernon by 1030 hours. Preschedules shall be completed on each 21 Workday ("Workday" means each day which Anaheim and Vernon both 22 observe as a regular day of work). preschedules shall be for each 23 hour of the following day or days through the next Workday. The 24 Parties shall endeavor to avoid requesting changes in schedules. 25 Requests for changes in prescheduled amounts by Anaheim for any 26 hour shall be only as mutually agreed. Normally such requested 27 changes shall be submitted no later than 30 minutes before the 28 hour for which the change is to be effective. -3- ~ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4.1.2 Vernon's first 60MW of capacity and firm energy schedules using Vernon's rights to transmission service on the Pacific DC Intertie and on the Midway-Sylmar path shall have priority over any non-firm transmission service scheduled or unscheduled by Anaheim pursuant to this Agreement. 4.1.3 Subject to the provisions of section 4.1.4, transmission service may be interrupted during the next scheduled hour by Vernon or immediately interrupted if Vernon receives notification, or is interrupted without notification, for a system emergency or an unscheduled reduction in Vernon's transmission capability on the affected transmission path. 4.1.4 Anaheim, other third parties who have purchased non-firm transmission service from Vernon through settlement agreements in the Action, and Vernon, shall have priority service over other non-firm preschedules and schedules and shall share such capacity on a pro rata basis except as provided in section 4.1.2 above. 4.1.5 If preschedules cannot be established as requested by Anaheim because of Vernon'~ lack of transmission capacity or if Anaheim's existing schedule is reduced during real time, then by the next Workday Anaheim may request Vernon to pay, and Vernon shall pay Anaheim fifty cents per megawatt hour ($0.50jMWh) for the amount of transmission service not made available on a prescheduled basis or curtailed by Vernon's dispatchers if such service would have been necessary to schedule any portion of the 6,800 MWh on each path for each month. If Anaheim requests the payment of fifty cents per megawatt hour ($0.50jMWh) for such service, then Vernon's obligation to provide -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 such non-firm transmission service at no charge pursuant to section 4.1 in such month, shall be reduced by a like amount. 4.1.6 Anaheim shall be responsible for transmission losses associated with its schedule of such service and shall reimburse Vernon for any other charges Vernon incurs which are directly related to its schedule of such service (e.g., Edison dispatching and scheduling fees). Anaheim shall either (i) return energy to Vernon at the sylmar Substation pursuant to Edison's standard procedures for payment for transmission losses, or (ii) agree with Vernon to pay monetary compensation at a mutually acceptable rate in lieu of scheduling such energy to Vernon, or (iii) upon securing Vernon and Edison's approval, deliver energy directly to Edison as payment for losses. 4.1.7 The Parties recognize that the transmission service provided by Vernon under this Agreement may be interrupted or curtailed by Vernon in accordance with the provisions of Sections 4.1.2-4.1.5. Such an interruption shall not be considered a willful Action as defined in Section 7, if it is implemented in accordance with this Section 4. 4.2 Dismissal of Action. Anaheim shall within sixty (60) days after execution of this Agreement file a dismissal with prejudice of the Action as to Anaheim. Upon failure to file a dismissal, Anaheim stipulates that Vernon may file this Agreement with the Court as a stipulation for dismissal with prejudice of the Action. III III III -5- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5.0 BILLING AND PAYMENT 5.1 Billing and payment with respect to Non~Firm Transmission Service hereunder shall be based upon the following: 5.1.1 Vernon shall bill Anaheim for the amount of Non- Firm Transmission Service scheduled and used pursuant to Section 4.1 above and all other charges associated with such service provided for in this Agreement. 5.1.2 Vernon shall credit Anaheim as requested pursuant to 4.1.5 above. 5.1.3 Billing shall be based on the records of the respective power schedulers or dispatchers in the form directed by the Authorized Representatives, except as the Authorized Representatives may arrange otherwise for particular situations. 5.2 A bill for Non-Firm Transmission Service provided under this Agreement shall be rendered monthly by Vernon on or before the 20th of the month following the month in which such Transmission Service is received. Bills received shall be due by the fifteenth (15) calendar day from the date of such receipt. Amounts not paid on or before the due date shall be payable with interest at the rate of one percent (1%) per month from the due date to date of payment. 5.3 In case a bill or any portion thereof is in dispute, the full amount shall be paid when due. If the disputed amount is determined to be incorrect, such amount shall be refunded promptly upon determination, with interest accrued at the rate of one percent (1%) per month computed from the original due date to the date the adjustment is made. III -6- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5.4 Notices and demands shall be addressed to the respective Parties as set forth in section 14.0. 6.0 AUTHORIZED REPRESENTATIVES 6.1 Each Party shall designate an Authorized Representative. Such Authorized Representative shall be authorized to act on behalf of such Party in carrying out the provisions of this Agreement and to provide liaison between the Parties. Each Party shall notify each other Party within thirty (30) calendar days after execution of this Agreement of the designation of its Authorized Representative and shall promptly notify each other Party of any subsequent changes in such designation. 6.2 The Authorized Representatives shall have no authority to modify any of the provisions of this Agreement unless specifically set forth herein. 6.3 Disputes on any matter relating to this Agreement shall be discussed and resolved by the Authorized Representatives, who shall use their best efforts to amicably and promptly resolve the d~spute. If the Authorized Representatives are unable to resolve the dispute, the matter shall be referred to the chief executive officers of each Party's utility department for resolution. 7.0 LIABILITY AND INDEMNITY 7.1 Except for willful Action, each Party shall indemnify and save each other Party harmless from liability, loss, damage, claim, costs, and expenses (inclUding attorney fees) on account of injury to persons (including death), or damage or destruction of property, occasioned by the sole negligence, whether active or passive, of the indemnifying Party's officers, directors, employees, or contractors; provided, however, that: -7- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7.1.1 Each Party shall be solely responsible for the claims or any payments to any employee or agent for injuries occurring in connection with their employment or arising out of any Workers' Compensation law. 7.1.2 No Party shall be liable for any loss of earnings, revenues, indirect or consequential damages, or injury which may occur to the other as a result of outages in delivery of energy or service hereunder by reason of any cause, including negligence, but excluding willful Action. 7.2 Each Party shall indemnify and save each other Party harmless for any liability, loss, claim, cost (including attorney fees) for any claims made by the indemnifying Party's electric service customers as a result of any failure of a Party to provide electric power or energy contemplated by this Agreement for any reason or any cause, including the negligence of each other Party, but excluding Willful Action. 7.3 For the purpose of this section 7, willful Action shall be defined, except as otherwise provided in section 4.1. 7 hereof, as follows: 7.3.1 Action taken or not taken by a Party at the direction of its directors or members of its governing bodies, officers, or employees having management responsibility affecting its performance under this Agreement,' as follows: 7.3.1.1 Action which is knowingly or intentionally taken or not taken with conscious indifference to the consequences thereof or with intent that injury or damage would result or is likely to result therefrom. III -8- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7.3.1.2 Action which has been determined by final arbitration award or final judgment or judicial decree to be a material default under this Agreement and which occurs or continues beyond the time specified in such arbitration award or judgment or judicial decree for curing such default or, if no time to cure is specified therein, occurs or continues thereafter beyond a reasonable time to cure such default. 7.3.1.3 Action which is knowingly or intentionally taken or not taken with the knowledge that such action taken or not taken is a material default under this Agreement. 7.3.2 willful Action does' not include any act or failure to act which is merely involuntary, accidental, or negligent. 7.3.3 The phrase "employees having management responsibility", as used in this Section 7.3, means the employees of a Party who are responsible for one or more of the executive functions of planning, organizing, coordinating, directing, controlling, and supervising'such Party's performance under this Agreement with responsibility for results. 7.4 The provisions of this Section 7 shall be binding upon the Parties to the full extent permitted by law. 8.0 NONPRECEDENT AND RESERVATION OF RIGHTS 8.1 Nonprecedent. None of the principles or the methodologies underlying this Agreement shall be deemed by any Party as binding precedent in any proceeding or litigation except to the extent specifically stated herein. III -9- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8.2 Non-Admission Bv Vernon. By its execution of this Agreement, Vernon does not admit to and hereby denies any allegations relating to any of the activities raised by the Plaintiffs in the Action. 8.3 Non-Opposition to Other Settlement Aqreements. Anaheim agrees not to oppose or otherwise challenge any settlement agreement between Vernon and any other party to the Action. 9.0 PREVIOUS COMMUNICATIONS This Agreement contains the entire agreement and understanding between the Parties as to the subject matter herein, and supersedes all prior agreements, commitments, representations, and discussions between the Parties., 10.0 NONSEVERABILITY This Agreement is subject to each and every condition set forth herein, and each term of this Agreement is in consideration and support of every other term. 11.0 NONWAIVER OF CONTRACTUAL RIGHTS The failure of any Party to insist promptly in anyone or more instances upon strict performance of any provision of this Agreement, or to enforce any of its rights, shall not be construed as a waiver of any such provision or the relinquishment of any such rights. 12.0 UNCONTROLLABLE FORCE No Party shall be considered to be in default in the performance of any of its obligations hereunder other than the obligation of a Party to make payment, when a failure of performance shall be due to an uncontrollable force. The term "uncontrollable force" shall mean any cause beyond the control of -10- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Party unable to perform such obligation, including, but not limited to, failure of or threat of failure of facilities, flood, earthquake, storm, fire, ~ightning, and other natural catastrophes; epidemic, war, riot, civil disturbance or disobedience, strike, labor dispute, labor or material shortage, sabotage, government priorities, and restraint by court order or public authority, and action or nonaction by or failure to obtain the necessary authorizations or approvals from any governmental agency or authority, which by exercise of due diligence such Party could not reasonably have been expected to avoid and which by exercise due diligence it shall be unable to overcome. Nothing contained herein shall be construed as to require a Party to settle any strike or labor dispute in which it may be involved. 13.0 NONDEDICATION OF FACILITIES No undertaking by one Party to another under any provision of this Agreement shall constitute the dedication of the electric system or any portion thereof of such Party to the public or to the other Party, and it is understood and agreed that any such undertaking by any Party shall cease upon the termination by such Party of its obligations hereunder. 14.0 NOTICES 14.1 Any formal notice, demand or request provided for in this Agreement, or served, given or made in this Agreement, or . served, given or made in connection with it, shall be in writing and shall be deemed properly served, given or made if delivered in person or sent by united states mail, postage prepaid, to the person specified below: III -11- 1 2 3 City Clerk 200 South Anaheim Boulevard Anaheim, California 92805 with copy to: Public utilities General Manager 201 South Anaheim Boulevard, suite 1101 Anaheim, California 92805 To Anaheim: 4 5 6 7 Attention: Chief Executive Officer of Light and Power Light and Power Department 4305 Santa Fe Avenue Vernon, CA 90058-0805 14.2 Either Party may at any time and from time to time, by To Vernon: 8 9 10 11 12 notice to each other Party, change the designation or address of the person so specified as the one to receive notices pursuant to this Agreement. 15.0 RELATIONSHIP OF PARTIES 13 14 15 16 17 The covenants, obligations and liabilities of the Parties are intended to be several and not joint or collective. Nothing contained in the Agreement shall be construed to create an association, joint venture, trust, agency, or partnership. Each Party shall be individually responsible for its own covenants, 18 19 obligations and liabilities as provided in this Agreement. No 'party shall be under the control of or shall be deemed to control 20 21 No Party shall be the agent of or have a right or another Party. power to bind another Party without such other Party's express 22 written consent. 23 16.0 NO THIRD PARTY RIGHTS 24 The Parties do not intend to create rights in, or to grant 25 26 remedies to, any third party as a beneficiary of this Agreement or 27 of any duty, covenant, obligation or undertaking established herein. 28 III -12- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17.0 ASSIGNMENT No Party shall assign or otherwise transfer this Agreement, or its right or interest or any part thereof to any third party, without the prior written consent of each other Party except as set forth herein. Such consent shall not be unreasonably withheld. No assignment of this Agreement shall relieve the assigning party of its obligations until such obligations have been assumed in writing by the assignee. 18.0 GOVERNING LAW AND REGULATIONS This Agreement shall be interpreted, governed, and construed under the laws of the State of California as if to be performed wholly within the State of California. 19.0 CONSTRUCTION OF AGREEMENT Ambiguities or uncertainties in the wording of this Agreement shall not be construed for or against the Parties, but shall be construed in a manner that most accurately reflects the intent of the Parties, as expressed when this Agreement was executed and as is consistent with the nature of the rights and obligations of the Parties with respect to the matter being construed. 20.0 CAPTIONS AND HEADINGS All captions and headings appearing in this Agreement are inserted to facilitate reference and shall not govern the interpretations hereof. III III III III -13- .. 1 21.0 SIGNATURE CLAUSE 2 The signatories hereto represent that they have been 3 appropriately authorized to enter into this "Settlement Agreement 4 Between the City of Anaheim and the City of Vernon, Relating to 5 Superior Court Case No. BC 104302" on behalf of the Party for 6 which each signs. This Agreement is entered into on this ?1rn 7 day of 8 April , 1996. CITY " 9 10 BY: TITLE: lities General Manager 11 ATTEST: ~.. C' ~ /J 12. BY: ~~ ~ 13 Seal: 14 15 16 TITLE: City Clerk APPROVED AS TO FORM: JACK L WHIiE. CITY ATTORNEY 8~ ~j1'U;1tQ- (Yff.CA. 4JI'1J '1 (0 APPROVED AS TO FORM: 17 BY: 18 TITLE: 19 20 21 22 23 24 25 26 27 28 -14- ; = 1 2 3 4 5 6 ::E<5~Y~ BRUCE V. MALKENHORST 7 TITLE: city Clerk 8 9 10 11 12 13 APPROVED AS TO FORM: BY: D~ \)( l)~ DAVID B. BREARLEY' TITLE: city Attorney Seal: 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CITY OF VERNON BY;.~~~) I TITL ... Mayor -15-