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12-14-1994 DEAN, MEAD MINTON ATTORNEYS AND COUNSELORS AT LAW 1903 SOUTH 25TH STREET (407) 464 7700 P. 0. BOX 2757 SUITE 200 (407) 562 FORT PIERCE, FLORIDA 34954 2757 FORT PIERCE, FLORIDA 34947 FAX (407) 464 -7877 December 14, 1994 John Drago, City Administrator City of Okeechobee 55 SE Third Avenue Okeechobee, FL 34974 Re: Okeechobee Utility Authority /Operational Agreement Dear John: I see that the County has selected its representatives to the Authority Board. Even though I understand you prefer to wait until after the SFWMD approves the new Agreement with the OUA, I recommend that the City follow the County's lead and at least name its representatives and alternates of the Authority Board as soon as possible. As we discussed, one of the first steps of the Authority Board, once all the positions are filled, will be to enter into Operational Agreements with the City and Okeechobee Beach Water Association, Inc. "OBWA I enclose for your reference a draft of the Operational Agreement we have prepared between the Okeechobee Utility Authority and the City of Okeechobee. A similar Agreement for OBWA is being forwarded to the County and OBWA. The enclosed Agreement, wherever possible, utilizes the same definitions and terms as that found in the Interlocal Agreement. By copy of this letter, I am forwarding a draft of this Agreement to Jack Coker for further circulation among the other members of the Okeechobee Utility Authority once they have been named. We will also be forwarding shortly, draft bylaws which are designed to further flesh out the organizational matters related to the Okeechobee Utility Authority. If you have any questions, please feel free to contact me. With best regards, I remain, Sinc-•'- o a, Michael D. Minton MDM /dj Enclosure cc: Jack Coker (w /enclosure) John Abney (w /enclosure) Kim Love (w /enclosure) c: \mdm \20121dj.39 IN ORLANDO DEAN DEAN, MEAD, SPIELVOGEL, IN BREVARD COUNTY 6 DEAN, MEAD, EGERTON, BLOODWORTH, GOLDMAN BOYD CAPOUANO 6 BOZARTH, P. A. MEAD (407) 453-2333•(407) 259 8900 (407) 725-6373 (407) 841-1200 ii i OPERATIONAL AGREEMENT DATE /2 4 1,*( BETWEEN OKEECHOBEE UTILITY AUTHORITY AND THE CITY OF OKEECHOBEE, FLORIDA THIS AGREEMENT, made and entered into this day of 1994, by and between the OKEECHOBEE UTILITY AUTHORITY, hereinafter referred to as "Authority," and the CITY COUNCIL OF THE CITY OF OKEECHOBEE, FLORIDA, a municipal corporation existing under the laws of the State of Florida, hereinafter referred to as "City." W I T N E S S E T H WHEREAS, on November 10, 1994, the Board of County Commission- ers of Okeechobee County, Florida "County and the City entered into an Interlocal Agreement creating the Okeechobee Utility Authority "Interlocal Agreement and WHEREAS, the Authority was created for the purpose of acquiring, owning, operating, and maintaining a regional water and wastewater system to ensure an adequate future water supply and wastewater services for the citizens, residents and utility consumers located within all of the designated service areas of the Authority; and WHEREAS, the Authority constitutes a separate legal entity, which has those powers, duties, and responsibilities set forth in the Interlocal Agreement; and WHEREAS, pursuant to Article X of the Interlocal Agreement, the parties hereto recognize and acknowledge that a Master Transfer 12/14/94 3:42pm r Agreement for further implementation of the Authority is intended to be prepared and executed prior to Closing, as hereinafter defined; and WHEREAS, the Master Transfer Agreement shall provide that no transfer of assets from the County, City, or Okeechobee Beach Water Association, Inc. "OBWA shall occur prior to Closing, and that the transfer of assets from the County, City and OBWA to the Authority shall occur simultaneously at Closing, which shall occur on or before October 1, 1995; and WHEREAS, the Master Transfer Agreement shall also set forth the terms and conditions of the transfer to the Authority at Closing of all of the assets which comprise the utilities systems now operated by the City "City Utilities within its designated Service Areas; and WHEREAS, pursuant to Article XI of the Interlocal Agreement, the County or City may withdraw from the Authority, at any time prior to Closing, under the terms specified thereunder; and WHEREAS, the Authority and the City desire to enter into an interlocal agreement, pursuant to the provisions of Chapter 163, Florida Statutes, to provide for the continued operation of the City Utilities within its designated Service Areas until Closing, as specified under Article V of the Interlocal Agreement. NOW, THEREFORE, for and in consideration of the premises and the mutual agreements hereinafter set forth, the Authority and the City hereby agree as follows: 12/14/94 3:42pm 2 l ARTICLE I CERTAIN DEFINITIONS 1.1. The following terms shall have the following meanings when used herein: Agreement: "Agreement" shall mean this Agreement, together with all the exhibits attached hereto, as amended from time to time. Authority: "Authority" shall mean the Okeechobee Utility Authority, a separate legal entity. Authority Board: "Authority Board" shall mean the governing body of the Authority, acting for and on behalf of the Authority. Authority Service Areas: "Authority Service Areas" shall mean those areas to be served by the Authority as delineated under the Interlocal Agreement. City: "City" shall mean the City of Okeechobee, Florida, a municipal corporation existing under the laws of the State of Florida. City Utilities: "City Utilities" shall mean the Water System and Wastewater System now operated by the City within its designated Service Areas. Closing: "Closing" shall mean the consummation of the transaction contemplated by the Interlocal Agreement, as herein- after defined, to be effectuated under the Master Transfer Agreement, as more particularly set forth in Article X of said Interlocal Agreement. 12/14/94 3:42pm 3 L County: "County" shall mean Okeechobee County, Florida, a political subdivision of the State of Florida. District: "District" shall mean the area within all of the Authority Service Areas, as those areas may be expanded or contracted in accordance with the provisions of the Interlocal Agreement and the laws of the State of Florida. Environmental Permits: "Environmental Permits" shall mean all licenses, permits, and other approvals from any government or governmental agency, whether federal, state or local, necessary for the acquisition, construction or operation of the City Utilities. Interlocal Agreement: "Interlocal Agreement" shall mean the Interlocal Agreement between the County and the City dated November 10, 1994, recorded in Official Records Book 360, Page 1684, Public Records of Okeechobee County, by which the Authority was created. Master Transfer Agreement: "Master Transfer Agreement" shall mean that agreement between the County and the City concerning further implementation of the Authority, as more particularly set forth in Article X of the Interlocal Agreement. OBWA: "OBWA" shall mean the Okeechobee Beach Water Associa- tion, Inc., a Florida not for profit corporation organized for the purpose of, and currently engaged in, constructing, maintaining and operating a Water System for the supplying of water for domestic, commercial, agricultural, industrial and other purposes to its members, within a specified service area. 12/14/94 4:05pm 4 OBWA Utility,: "OBWA Utility" shall mean the utility system now being operated by OBWA within its specified service area. Service Areas: "Service Areas" shall mean those areas served, or which may be served, by the City Utilities, during the term of this Agreement, as delineated on Exhibit "A," attached hereto and incorporated herein by this reference. Wastewater System: "Wastewater System" shall mean and shall include any plant, system, facility or property, and additions, extensions and improvements thereto, constructed or under construc- tion, or at any future time constructed, which are useful or necessary or having a present capacity for future use in connection with the collection, treatment, purification and disposal of sewage of any nature or originating from any source, and shall include, but not be limited to, transmission and distribution facilities, treatment plants, wastewater and sanitary sewer collection, transmission, pumping, reuse and disposal facilities of every kind and description whatsoever, including without limitation, all trade fixtures, leasehold improvements, storage tanks, lift stations, force mains pumps, pump stations, generators, controls, collection and transmission pipes or facilities, valves, meters, service connections, and all necessary appurtenances and equipment, all wastewater mains and laterals, and shall include all real and personal property and any interest therein, rights, easements, and franchises of any nature whatsoever relating to any such system and necessary or convenient for the operation thereof. 12/14/94 3:42pm 5 Water System: "Water System" shall mean and include any plant, system, facility or property, and additions, extensions and improvements thereto constructed, under construction, or at any future time constructed, or acquired as part thereof, useful or necessary or having the present capacity for future use in connection with the development of sources, treatment or purifica- tion, and distribution of water, and, without limiting the generality of the foregoing, shall include wellfields, dams, reservoirs, storage tanks, mains, lines, valves, pumping stations, laterals and pipes used for the purpose of carrying water to property connected with such system, and shall include all real and personal property and any interest therein, rights, easements and franchises of any nature whatsoever relating to any such system and necessary or convenient for the operation thereof. ARTICLE II EXHIBITS 2.1. There are attached to this Agreement as Exhibits "A" through "C," certain lists and documents which contain information, representations, and covenants of the Authority or City which are integral and essential parts of the transaction described in this Agreement, and are listed as follows: Exhibit "A Depiction of current City Utilities Service Areas. Exhibit "B Schedule of City Utilities rates, fees or other charges, during the term of this Agreement. 12/14/94 3:42pm 6 Exhibit "C Budget of the City Utilities for the term of this Agreement. ARTICLE III INTERIM OPERATION OF CITY UTILITIES 3.1. The City is hereby authorized by the Authority to continue the operation of the City Utilities within its respective Service Areas, as described and shown on Exhibit "A," until Closing, pursuant to the terms and conditions of this Agreement. ARTICLE IV OPERATION PENDING CLOSING 4.1. Until Closing, the City shall continue to operate the City Utilities within its designated Service Areas under the provisions of Chapter 18, Water and Sewer Reaulations, Code of the City of Okeechobee, Florida. 4.2. The City shall not amend, prior to Closing, any of the terms or provisions of Chapter 18, or other rules or regulations concerning the operation of the City Utilities without prior notice of said amendments being provided to the Authority, for its review and input. 4.3. The City shall properly maintain all assets and facilities of the City Utilities within the custom and usage of the industry through the date of Closing. 4.4. The City shall bear all of the risk of loss for all of the assets and facilities of the City Utilities until Closing. 12/14/94 3:42pm 7 4.5. The City shall reasonably cooperate with the Authority by providing access to records and facilities, and providing technical assistance in acquainting the Authority with the operation of the City Utilities pending the date of Closing. 4.6. The Authority Board shall have final authority to resolve any disputes that may arise during the term of this Agreement between the City and OBWA concerning the location of line extensions, and other related matters, pursuant to the provisions of Article V of the Interlocal Agreement. 4.7. The City shall undertake to amend all existing Environ- mental Permits it holds in connection with operation of the City Utilities in order to reflect the Authority as a co- permit holder. Any new, renewed or amended Environmental Permits shall be sought for and held jointly by the parties. The City acknowledges the Authority's legal standing as a real party in interest to partici- pate in all administrative and judicial proceedings in connection with obtaining amendments to existing Environmental Permits and in connection with obtaining new, renewed, or amended Environmental Permits. ARTICLE V RATES, FEES AND CHARGES 5.1. The schedule of rates, fees, and other charges described and shown on Exhibit "B" shall remain in effect for services provided by the City within its respective Service Areas, as 12/14/94 3:42pm 8 described and shown on Exhibit "A," from the effective date of this Agreement through the date of Closing. 5.2. Any proposed adjustments to the City's rates, fees, and other charges for the provision of services by the City Utilities shall be submitted to the Authority for prior review. The Authority shall have the ability to provide information to the City, but the Authority shall not disapprove, modify, or amend the City's rates, fees, and other charges, pending Closing. 5.3. After Closing, the Authority Board may revise the schedule of rates, fees, or other charges, from time to time, based upon the criteria set forth in Article VI of the Interlocal Agreement. ARTICLE VI BUDGET AND FUNDING 6.1. The budget for continued operation of the City Utilities covering the period from the effective date of this Agreement through September 30, 1995, shall be as set forth in Exhibit "C." 6.2. In the event it becomes necessary for the City to amend the above described budget prior to September 30, 1995, the City shall provide prior notice to the Authority of any proposed amend- ments to said budget, for its review and input. 6.3. The City shall maintain its respective City Utilities operation and maintenance accounts for purposes of paying its obligations and liabilities, through the date of Closing. At all times during the term of this Agreement, the rights of the 12/14/94 3:42pm 9 creditors and obligees of the City who are to be paid from the operation and maintenance accounts of the City Utilities shall be prior and superior to the rights of any other creditors and obligees of the City who are to be paid from the fees, rates, and other charges of said City Utilities. 6.4. Except to the extent currently authorized as of the date of this Agreement, the City shall not pledge any payments, income or revenues derived from the provision of services by the City Utilities during the term of this Agreement, without prior written approval by the Authority. The Authority shall not unreasonably withhold such approval. ARTICLE VII DEFAULT 7.1. Either party to this Agreement, in the event of or act of default by the other, shall have all remedies available to it under the laws of the State of Florida, including, but not limited to, injunction to prevent default or specific performance to enforce this Agreement, subject to state law. The rights of the parties shall be considered cumulative and shall not be waived now or in the future by the exercise of any rights and remedies provided under the terms of this Agreement and authorized by law. 7.2. In the event there is a breach of this Agreement and it becomes necessary for either party to employ the services of an attorney, either to enforce the Agreement or pursue other remedies, such as litigation or adversarial administrative proceedings, the 12/14/94 3:42pm 10 prevailing party shall be entitled to be paid by the other party its reasonable attorneys' fees and costs incurred in enforcing the Agreement or pursuing other remedies. ARTICLE VIII INDEMNIFICATION 8.1. Neither party hereto waives sovereign immunity, except that consistent with all applicable state law, including, but not limited to Chapter 768, Florida Statutes, the parties agree to hold each other harmless for the negligent acts of itself, its officers, agents, and employees, but only to the extent permitted by law. 8.2. If service provided hereunder is discontinued to a customer due to failure of the customer to pay for services provided, the party responsible for discontinuing service shall hold the other party harmless as to any and all claims or suits regarding such action. 8.3. The parties hereto specifically acknowledge that the Authority has not assumed any liability for the City's actions in operating the City Utilities, and will not assume any such liability until Closing. ARTICLE IX AMENDMENTS TO AGREEMENT 9.1. This Agreement may only be amended by the proper execution of an amendment hereto by the official action of the City Council of the City of Okeechobee and the Authority Board, during 12/14/94 3:42pm 11 such time as they remain subject to the terms and provisions hereof. ARTICLE X EXECUTE IN COUNTERPARTS 10.1. This Agreement may be executed in counterparts, and each fully executed counterpart shall be deemed an original. ARTICLE XI SEVERABILITY 11.1. Any determination by a court of competent jurisdiction that any provision of this Agreement is illegal, void, or un- enforceable, shall not adversely affect the enforceability of any other provision of this Agreement, unless the provision determined to be illegal, void or unenforceable, is a provision relating to a significant item of consideration for the benefit of a party hereto. ARTICLE XII LAWS GOVERNING INTERPRETATION 12.1. This Agreement shall be controlled and interpreted according to the laws, rules and regulations of the State of Florida. ARTICLE XIII BINDING AGREEMENT AND ASSIGNMENT 13.1. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective assigns and successors by merger, consolidation, conveyance, or otherwise. 12/14/94 3:42pm 12 ARTICLE XIV ENTIRE AGREEMENT 14.1. This Agreement supersedes any and all previous agreements or representations, either verbal or written, heretofore in effect between the parties, made with respect to the matters herein contained. ARTICLE XV DISCLAIMER OF THIRD PARTY BENEFICIARIES 15.1. This Agreement is solely for the benefit of the formal parties herein, and no right or cause of action shall accrue upon or by reason hereof to or for the benefit of any third party not a formal party hereto. ARTICLE XVI NOTICES 16.1. Any notice required or allowed to be delivered hereunder shall be in writing and shall be deemed to be delivered when either (1) hand delivered to the official hereinafter designated, or (2) when deposited in the United States Mail, postage prepaid, certified mail, return receipt requested, addressed to a party at the address set forth below, or at such other address as the party shall have specified by written notice to the other party delivered in accordance herewith: 12/14/94 3:42pm 13 City: City of Okeechobee Office of City Administrator 55 S.E. Third Avenue Okeechobee, Florida 34974 Authority: Okeechobee Utility Authority ARTICLE XVII AFFIRMATION 17.1. The City hereby affirms that, at a duly constituted meeting of the City Council of the City of Okeechobee, Florida, on the day of 1994, it approved the terms of this Agreement and the execution thereof by the City. 17.2. The Authority hereby affirms that, at a duly constituted meeting of its Authority Board on the day of 1994, it approved the terms of this Agreement and the execution thereof by the Authority. ARTICLE XVIII FILING 18.1. Upon execution of this Agreement, and any subsequent amendments thereto, this Agreement and such subsequent amendments shall be filed with the Clerk of the Circuit Court of Okeechobee County, Florida. 12/14/94 3:42pm 14 ARTICLE XIX EFFECTIVE DATE 19.1. This Agreement shall be deemed effective immediately upon its execution by all parties, and filing pursuant to law. IN WITNESS WHEREOF, the Authority and City have executed this Agreement on the day and year first above written. ATTEST: OKEECHOBEE UTILITY AUTHORITY By By B w ,\Af Secretary Chairman APPROVED AS TO FO GAL SUFFICIENCY 4 Authority Attorney ATTEST: CITY COUNCIL OF CITY OF OKEECHOBEE, FLORIDA By By \U City Clerk Mayor APPROVED AS TO 'iv, '►P LEGAL SUFFICIENCY Okeechobee City Attorney c: \mdm \20121dj.oa 12/14/94 3 :42pm 15