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HomeMy WebLinkAboutResolutions - 1998.09.03 - 25556NG AND BUILLZ40 COMMITTEE September 3, 1998 MISCELLANEOUS RESOLUTION # 98206 BY: Planning and Building Committee, Charles E. Palmer, Chairperson IN RE: THE NORTH ARM RELIEF DRAIN DRAINAGE DISTRICT; APPROVAL OF CLAWSON LITIGATION SETTLEMENT To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS pursuant to Miscellaneous Resolution #98164, the County adopted and authorized the Chairperson to execute and deliver the Interlocal Agreement among the County of Oakland, the North Arm Relief Drain Drainage District, the State of Michigan, the Village of Beverly Hills, and the Cities of Birmingham, Madison Heights, Royal Oak, Southfield and Troy, to effectuate the financing and construction of the North Arm Relief Drain (herein referred to as the Interlocal Agreement); and, WHEREAS said Interlocal Agreement required consent of all parties, including the County in the event the City of Clawson agreed to settle all litigation against the North Arm Relief Drain Drainage District; and WHEREAS the City of Clawson has agreed to settle any and all claims pertaining to the necessity and apportionment for the construction of the North Arm Relief Drain provided the city is able to receive financing for its apportioned share of the project, as a part of the State Revolving Fund (SRF) Program, at the favorable interest rate of 2-1/4% (herein referred to as the Settlement Agreement); and, WHEREAS the Settlement Agreement, which is attached hereto, has been reviewed and approved by the County's Corporation Counsel. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners of the County of Oakland agrees to the terms and conditions of the Settlement Agreement which has been submitted and the final resolution of the Clawson litigation as contemplated therein, which includes the pending lawsuits and any other lawsuits and appeals filed by the City of Clawson in regards to the North Arm Relief Drain Project. BE IT FURTHER RESOLVED that the Chairperson of the Board of Commissioners is authorized to execute said Settlement Agreement and any other document or court order that is necessary in order to implement the Settlement Agreement. Chairperson, on behalf of the Planning and Building Committee, I move adoption of the foregoing resolution. Planning and Building Committee: Motion carried unanimously on a roll call vote with Amos absent. • 97-00093?-AS mow i SETTLEMENT AGREEMENT This Settlement Agreement is made and entered into by the signatory parties hereto as of the date appearing next to their signatures by and between the City of Clawson, a Michigan Municipal Corporation ("Clawson"), the City of Royal Oak ("Royal Oak"), a Michigan Municipal Corporation, the City of Birmingham, a Michigan Municipal Corporation, the City of Troy, a Michigan Municipal. Corporation, the City of Madison Heights, a Michigan Municipal Corporation, the City of Southfield, a Michigan Municipal Corporation, and the Village of Beverly Hills, a Michigan, Village Corporation, the County of Oakland, a Michigan County, the State of Michigan, Department of Transportation ("MDOT") (all of which are hereafter referred to as the "municipalities") and the North Arm Relief Drain Drainage District, a body corporate created pursuant to Act 40 of the Public Acts of Michigan of 1956 as amended ("Drainage District"). WHEREAS, Clawson did initiate certain legal proceedings in the Oakland County Circuit Court (97-000937-AS, 97-543863-AS, "Clawson Litigation"), contesting certain actions of the Drainage District; and WHEREAS, a decision was rendered by the Honorable Gene Schnelz in Case No. 97-543863-AS on December 2, 1997; and WHEREAS, Clawson did appeal that Opinion and Order with the Michigan Court of Appeals, being Case No. 208535 which appeal was dismissed and as to which motions for reconsideration and an application for leave to appeal are presently pending; and WHEREAS, Clawson initiated a second action in the Oakland County Circuit Court (97-000937-AS) in connection with certain actions before the Drainage District that was subsequently assigned to the Honorable Barry L. Howard, Oakland County Cirguit Court; and 1 WHEREAS, Judge Howard did, on or about July 15, 1998, render an Opinion and Order in Case No. 97-543863-AS, relative to that matter from which the City of Clawson is presently contemplating an appeal to the Michigan Court of Appeals; and WHEREAS, it is essential to the public interest that certain improvements known as the North Arm Relief Drain ("Drain") be constructed as determined by the Drainage District; and WHEREAS, because of the Clawson Litigation the Drainage District has not submitted an application for a state loan from the Michigan Municipal Bond Authority (the "State Authority") for a project entitled State Revolving Fund (SRF) Project No. 5153 North Arm Relief Drain of the Twelve Towns Drain (the "SRF Loan"); and WHEREAS, to permit the project to proceed, Royal Oak has taken the necessary action to approve the issuance of its revenue bonds and apply for the SRF Loan in an amount sufficient to construct the project, the proceeds of which will be used to pay to the Drainage District in cash the principal amount of the Drain Assessments due from each of the municipalities, to the Drainage District; and WHEREAS, the SRF Loan is available at an interest rate of 2.25% for which financing the City of Clawson would otherwise qualify by virtue of its being assessed a share by the Drainage District to be one of the participants in the improvements to the Drain; and WHEREAS, if Clawson agrees to: (1) dismiss the Clawson Litigation, (2) pay to Royal Oak the principal and interest due on its share of the SRF Loan and, (3) cause to be entered into the Court record in the Clawson Litigation stipulations to carry out all matters agreed to herein including a provision that the Court shall retain jurisdiction to enforce such stipulations and 2 this Agreement, the City of Royal Oak will include as a part of the revenue bonds the Clawson share of the project and thereby satisfy the initial drain assessment to be made against Clawson by the Drainage District; and WHEREAS, the parties have through a series of discussions negotiated and settled the differences between them to the extent that this Agreement effectuates the terms and conditions of that Agreement. NOW, THEREFORE, THE PARTIES, IN CONSIDERATION AS STATED HEREIN, AGREE TO THE FOLLOWING: 1. Unless otherwise provided, or unless the context clearly requires otherwise, the following terms shall have the following meanings in this Settlement Agreement: A. The term "Agreement" or "Settlement Agreement" shall mean this Agreement. B. The "Record in Support of the Order" shall mean the statements, admissions and this Settlement Agreement to be made in open Court by Clawson, Royal Oak and the Drainage District at a proceeding in the Oakland County Circuit Court in the Clawson Litigation and the forms attached hereto as Appendix A and Appendix B. C. The "Drain Assessment" shall mean the special assessments against the municipalities and other public entities to be adopted by the Drainage Board for the Drainage District to be set forth in a special assessment roll to be adopted by the Drainage board for the Drainage district which is based upon the current estimate of costs as set forth in Appendix 1. 3 D. The "Interlocal Agreement" shall mean the Contract and Interlocal Agreement dated as of June 1, 1998 among the County of Oakland, the Drainage District, and the State of Michigan, and other parties a copy of which is attached hereto as Appendix 2. E. The following terms shall have the same meaning in this Agreement as assigned and attributed to them in Article A of the Interlocal Agreement: "Act 7", "Act 35", "Act 40", "Additional Bonds", "Bonds", "Clawson Drain Assessment", "Clawson Litigation", "Constituent Public Agencies and Corporations", "Drain", "Drain Bonds", "Drainage District", "Drain Assessment or Drain Assessments", "Drain Board", "Drain Construction Agreement", "Estimate of cost", "Extra drain assessment", "Proceeds from the Bonds", "Revised Final Order of Apportionment", "Village"; those definitions are hereby incorporated by reference in this Settlement Agreement as if fully stated and set forth herein. 2. Clawson hereby accepts the Apportionments as set forth in the Revised Final Order of Apportionment and agrees to abide by that apportionment. The Clawson Drain Assessment shall be based upon the application of Clawson's apportioned share thereunder (18.340%) and as applied to the current Estimate of Costs of $16,795,000 is $3,080,203. 3. Clawson agrees to enter an order to dismiss the Court of Appeals action in the form attached hereto as Exhibit A which will be entered as soon as the State Authority notifies Royal Oak and Royal Oak notifies Clawson that the Clawson share of the project will be 4 included in the SRF Loan. Exhibit B, Order Respecting Settlement, shall be entered at the time the Settlement is placed on the record. 4. The Drainage District agrees not to accept the County Advance. 5. Royal Oak agrees to issue and sell its North Arm Relief Drain Revenue Bonds Series 1998 A ("the Bonds") in the amount of not to exceed $1.6,795,000 to the State Authority for the SRF Loan and to pay the proceeds derived from the sale of the Bonds after paying the costs of issuance of the Bonds to the Drainage District in accordance with the provisions of Section 2 of Article IV of the Drain Construction Agreement so that the Bonds equal the full amount of the Estimated Costs of the Drain eligible for the SRF Loan. This payment shall include Clawson's assessment, and shall be made on the same basis as indicated in the Interlocal Agreement. 6. Clawson agrees that it will promptly pay, when due, its share of installments due on the Bonds in accordance with Appendix 3 attached hereto to Royal Oak for the purpose of repaying its share of the Bonds to be issued by Royal Oak to pay the amount of the Clawson Drain Assessment which would otherwise be due in cash as follows: A. Payment shall be made semi-annually, five (5) business days before payments are due on the Bonds. B. Payments shall be equal to the principal of and interest on the Bonds to be issued by Royal Oak on behalf of the City of Clawson to the State Authority which Bonds shall bear interest at the rate of 2.25% per annum. 5 C. This payment shall be made on the same basis as payments made by the parties to the Interlocal Agreement. 7. Clawson agrees to pay in cash to the Drainage District the difference between its share of the Bonds and its share of the Estimate of Costs of the Drain on the date the Bonds are delivered to the State Authority. 8. In the event Clawson and the other municipalities receive an additional or supplemental assessment from the Drainage District, Clawson agrees to pay such additional or supplemental assessment to the Drainage District on the times and in the amounts required by such additional or supplemental assessment. 9. Clawson agrees to be bound by the terms of Article F of the Contract and Interlocal Agreement attached hereto as Appendix 2 as though it were a Constituent Public Agency and Corporation. 10. If the State Authority for any reason determines that it will not . take delivery of the Bonds in the current fiscal year in an amount that includes the share of the Estimate of Costs, based upon the revised Final Order of Apportionment, for Clawson, this Agreement will become null and void and the Orders attached as Exhibits A and B shall not be entered. 11. This Agreement may be executed in counterparts and shall be given equal and binding effect as if signed by all parties. 12. In the event that Clawson fails to make any payment due on the Bond pursuant to the terms of this Agreement; (1) the unpaid amount due shall bear interest at the rate of 6% per annum for the period during which any such payment shall be unpaid, and (2) the City of 6 Royal Oak has the right to declare Clawson's share of the entire unpaid principal amount of the Bonds due and payable. 13. As a consequence of, and in consideration for the execution of this Settlement Agreement, the parties hereto mutually release, surrender and discharge as against one another, any and all claims, demands, suits and causes of action that each may have against the other and-arising out of the proceedings that are the subject of this Settlement Agreement (Clawson Litigation); and/or arising as a result of any demands, claims or suits asserted or deriving from the maintenance, construction, operation of the Drain and/or the North Arm Relief Drair 14. All costs and reasonable attorney fees incurred by the City of Royal Oak to enforce any provision of this Agreement against the City of Clawson shall be paid to the City of Royal Oak by the City of Clawson. 15. Subject to Paragraph 10 above, Clawson agrees to accept this Agreement as full and final resolution of the Clawson Litigation and any and all other claims it may have against the other parties hereto, their agents or employees deriving out of the issuance of the Bonds or the construction of the Drain. 16. The parties and their successors and assigns shall treat and co- operate with one another in good faith and none of the parties shall take any action which is contrary or interferes with the spirit of this Agreement or the Orders attached hereto as Exhibits A and B. 7 o By: It s: Dated: 17. The parties shall execute any and all documents and or enter into such agreements as necessary or convenient to carry out the intent of this Agreement. 18. The parties hereto agree to appear in the Oakland County Circuit Court in the Clawson Litigation on August 19, 1998 or August 20, 1998 to enter this Settlement Agreement into the Record in Support of the Order. 19. By their execution of this Agreement, the parties hereto warrant that they have the authority to execute this Agreement and bind their respective entities to the terms and conditions herein. 20. This Agreement shall 1--t affect the Assessment of any Constituent Public Agencies and Corporations pursuant to the Interlocal Agreement including Appendix 7, and application of the formula in Section 14a of 1951 Public Act 51, as amended, MCL 247.664a; MSA 9.1097(14a). This Agreement is effective as of the date of the execution of the signatory parties appearing below. CITY OF ROYAL OAK Its: trIA 1/40A-- 8 FISCAL NOTE (Misc. #98206) September 3, 1998 BY: FINANCE COMMITTEE, SUE ANN DOUGLAS, CHAIRPERSON IN RE: THE NORTH ARM RELIEF DRAIN DRAINAGE DISTRICT; APPROVAL OF CLAWSON LITIGATION SETTLEMENT TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: Pursuant to Rule XII-F of this Board, the Finance Committee has reviewed the above referenced resolution and finds: 1. The Interlocal Agreement among Oakland County, the North Arm Relief Drain Drainage District, the State of Michigan, and the six local municipalities identified in the Interlocal Agreement have entered into an agreement to permit the immediate construction of the North Arm Relief Drain project. 2. The Interlocal Agreement requires consent of all parties, including Oakland County. 3. The City of Clawson has agreed to settle any and all claims pertaining to the necessity and apportionment for the construction of the North Arm Relief Drain provided the city is able to receive financing for its apportioned share of the project, as part of the State Revolving Fund (SRF) Program, at the favorable interest rate of 2.25%. 4. If the City of Clawson participates in the SRF loan program ($2,973,728) and pays their cash payment ($106,475) for a total of $3,080,203, no loan will be necessary from the Delinquent Tax Revolving Fund, as approved by MR#98164. 5. The total project cost is estimated at $16,795,000 of which 94.076% or $15,800,000 is available to be financed by SRF bonds at 2.25% interest; the remaining 5.924% or $995,000 will be paid by each participating municipality, the State of Michigan, the City of Southfield, and the City of Madison Heights are paying cash for their total apportionment. The County's apportionment is 1.006% or $168,958; with $163,117 coming from the SRF at 2.25% and $5,841 paid from the General Fund. 6. Funds are budgeted in the General Fund Non-Departmental Drain Assessment Account for payment of the County's cash payment and the repayment of the SRF loan (ref. County Executive Recommended Budget for FY 1999 and FY 2000). In the event that Oakland County receives an additional assessment, an additional appropriation may be necessary. FINANCE COMMITTEE FINANCE COMMITTEE VOTE: Motion carried unanimously on a roll call vote. I HEREBY A E FOREGOING RFSnI IT i L. Brooks Pattprion. County Executive affiliftillaVII4111.1n41111111101111110111.1••• Date - D. Allen, County Clerk Resolution #98206 September 3, 1998 Moved by Palmer supported by McCulloch the resolution be adopted. AYES: Jacobs, Jensen, Johnson, Kaczmar, Kingzett, Law, McCulloch, Millard, Moffitt, Obrecht, Palmer, Schmid, Taub, Amos, Coleman, Dingeldey, Douglas, Garfield, Gregory, Hoffman, Holbert, Huntoon. (22) NAYS: None. (0) A sufficient majority having voted therefor, the resolution was adopted. STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on September 3, 1998 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 3rd day of Septemlagr 1998.