ITEM 4.3 updated attachmentASSET TRANSFER AGREEMENT
THIS ASSET TRANSFER AGREEMENT ("Agreement") effective this — day
of ' 20�___, between Elk River Municipal Utilities, a Minnesota municipal
utility, with principal offices located at 13069 Orono Parkway, Elk River, Minnesota 55330
C'ERMU"), and the City of Otsego, a Minnesota municipal corporation, with its principal offices
located at 13400 90th Street NE, Otsego, Minnesota 55230 ("City").
BACKGROUND
ERMU provides electric service to a portion of the City, including three (3) commercial
developments known as Otsego Waterfront, Otsego Waterfront East and Great River Center
(collectively referred to hereafter as the "Transfer Areas"). Within the Transfer Areas there are
currently one hundred one (101) street lights which are owned and maintained by the City and
seven (7) missing street lights. ERMU currently owns, services and maintains seventy-eight (78)
street lights in the City, as well as over one thousand three hundred (1,300) in the City of Elk
River.
The City and ERMU have agreed that it would be more efficient and cost effective for
their joint taxpayers/rate payers within the Transfer Areas if ERMU took ownership of the
existing 101 street lights and the missing 7 street lights in these areas, and took responsibility
going forward for providing street lighting in the Transfer Areas, including replacing and
supplementing, as necessary, the existing 101 street lights and servicing and maintaining these
street lights and all additional and replacement street lights in the Transfer Areas.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufft6iency
of which are hereby acknowledged by the parties hereto, it is hereby agreed as follows:
ARTICLE I
ASSET TRANSFER
Section 1.1. Attached to this Agreement as Exhibits A, B, C and D, are aerial photos of
the Transfer Areas showing the existing street lights and related infrastructure within the
Transfer Areas, City hereby transfers to ERMU, and ERMU hereby accepts, as of the effective
date of this Agreement, ownership of the 101 existing fixtures and 7 bases for missing fixtures
shown in Exhibits A -D, along with all underground wiring, control cabinets and all electrical
infrastructure related to these street lights.
Section 1.2. ERMU hereby accepts ownership of the street lights and related
infrastructure shown on Exhibits A -D, and agrees to service, maintain, repair and replace the
street lights and related infrastructure, as determined necessary by ERMU, beginning on the
effective date of this Agreement.
ARTICLE 2
FEES
Section 2.1. In consideration of EPd\4U's agreement to accept ownership of and
responsibility for the street lights and related infrastructure within the Transfer Areas, City
agrees to pay ERMU a one-time transfer fee of Thirty -Five Thousand Dollars ($35,000), payable
on or before the effective date of this Agreement. The transfer fee has been calculated based on
the 2017 ERMU Fee Schedule, attached hereto as Exhibit E.
Section 2.2. In addition to the transfer fee, City will pay, for each existing, replacement
or additional street light within the Transfer Areas, beginning on the effective date of this
Agreement, all monthly fees due pursuant to the then effective ERMU Street/Security Light
Service Tariff ("Tariff") for street lights within ERMU's electric service territory. Pursuant to
the Tariff, attached as Exhibit F hereto, fifty-two (52) of the existing street light locations within
the Transfer Areas will be subject to a Fifteen Dollar ($15) per month fee, and fifty-six (56)
street lights/lo'cations within the Transfer Areas will be subject to a Nine Dollar ($9) per month
fee. Monthly street lighting fees shall be billed by ERMU and paid by City pursuant to all
ERMU billing procedures and requirements in effect and as subsequently modified or amended.
ARTICLE 3
MAINTENANCE AND REPLACEMENT
Section 3.1. ERMU shall be responsible for servicing, maintaining, repairing, replacing
and supplementing the street lights and related infrastructure within the Transfer Areas and shall
do so pursuant to the same policies, requirements and procedures applicable to the existing
ERMU street lights in Otsego, as hereafter modified or amended.
Section 3.2. In order to make it cost effective for ERMU to service and maintain street
lights in the Cily, it is important that the existing street lights in the Transfer Areas be replaced
and/or relocated pursuant to ERMU's scheduling requirements and with equipment that matches
ERMU's standardized street lights and related infrastructure. Therefore. ERMU shall have
exclusive authority to determine the street light fixture slyles for all street lights in the Transfer
Areas that are replaced or added, and the schedule pursuant to which street lights will be
replaced or relocated.in order- to make it eest -effeetive for ERAW to sen4ee and maifAaia st
lights in the City, it is important that the existing street ligh4s ift the Transfer- Areas be r-eplaeed to
mateh ERMU's standardized street lights and related in4astmeture. Thefefofe, exeept a -s
pr-evided in Seetion 3.3 below, ERAW shall have the exehisiN,e authefity to detefmine the sti
light fixtur-e styles fef all street ligl#s within the Transfer- Afeas that are r-eplaeed or- added.
Section 3.3. (i). The Cily of Elk River is currently contemplating replacing the street
lights within downtown Elk River with decorative street lights. If Elk River proceeds with such
an upgrade, Cily may desire to have some or all of the street lights within the Transfer Areas
upgraded to match the Elk River decorative street lights. Whether and when such an upgrade
could occur would depend on a number of factors. including the costs for such an upgrade,
ERMU's schedule for replacing the existing street lights in the Transfer Areas. and ERMU's
work load at the time. (ii). If decorative street lights are installed in downtown Elk River,
ERMU will, prior to replacing any more street lights in the Transfer Areas, advise City whether
2
there will be an opportunity to replace any of the street lights in the Transfer Areas with
decorative street lights and, if so, the cost per street li2ht to do so. If City gives ERMU written
notice within 30 days that it would like ERMU to proceed with the decorative street lights and is
prepared to pay the costs identified by ERMU to do so. ERMU will be authorized to proceed
with the upgrade. However. ERMU will have the exclusive authority to make a final decision
whether to proceed with an upgrade to decorative lights. The-Qty�
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1. ERMU represents and warrants that it is a municipal utility duly organized
and validly existing under the laws of the State of Minnesota and has all requisite power and
authority to enter into, execute and deliver this Agreement and to perform all of its obligations,
undertakings and agreements to be observed and performed by it hereunder. ERMU further
represents and warrants that execution, delivery and performance of this Agreement has been
duly authorized by the ERMU Board of Commissioners and that this Agreement constitutes a
valid and binding agreement of ERMU in accordance with its terms.
Section 4.2. City represents and warrants that it is a Nflmesota municipal corporation
duly organized and validly existing under the laws of the State of Minnesota and has all requisite
power and authority to enter into, execute and deliver this Agreement and to perform all of its
obligations, undertakings and agreements to be observed and performed by it hereunder. City
finther represents and warrants that execution, delivery and performance of this Agreement has
been duly authorized by the City Council and that this Agreement constitutes a valid and binding
agreement of City in accordance with its terms.
ARTICLE 5
TERMINATION
Section 5.1. This Agreement will only take effect if approved and executed by both
parties hereto prior to the effective date, and may only be terminated by written agreement of
both parties.
ARTICLE 6
GENERAL PROVISIONS
Section 6.1. Preparation of Agreement. The parties have participated jointly in the
negotiation and drafting of this Agreement. Each party accepts the terms and conditions of this
...... . ......
r. WA
".91NIMMM-Ts
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1. ERMU represents and warrants that it is a municipal utility duly organized
and validly existing under the laws of the State of Minnesota and has all requisite power and
authority to enter into, execute and deliver this Agreement and to perform all of its obligations,
undertakings and agreements to be observed and performed by it hereunder. ERMU further
represents and warrants that execution, delivery and performance of this Agreement has been
duly authorized by the ERMU Board of Commissioners and that this Agreement constitutes a
valid and binding agreement of ERMU in accordance with its terms.
Section 4.2. City represents and warrants that it is a Nflmesota municipal corporation
duly organized and validly existing under the laws of the State of Minnesota and has all requisite
power and authority to enter into, execute and deliver this Agreement and to perform all of its
obligations, undertakings and agreements to be observed and performed by it hereunder. City
finther represents and warrants that execution, delivery and performance of this Agreement has
been duly authorized by the City Council and that this Agreement constitutes a valid and binding
agreement of City in accordance with its terms.
ARTICLE 5
TERMINATION
Section 5.1. This Agreement will only take effect if approved and executed by both
parties hereto prior to the effective date, and may only be terminated by written agreement of
both parties.
ARTICLE 6
GENERAL PROVISIONS
Section 6.1. Preparation of Agreement. The parties have participated jointly in the
negotiation and drafting of this Agreement. Each party accepts the terms and conditions of this
Agreement, having the right to be represented by legal counsel and other advisors of their
choosing, and each party enters into this Agreement intending to be legally bound hereunder.
Section 6.2. Entire Agreement; Assignm . This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereto. None of the rights or
obligations of either party may be assigned without the prior written consent of the other.
Section 6.3. Notices. Notices, demands and other communications required or permitted
to be given under this Agreement shall be in writing and shall be given by hand delivery,
certified or registered mail, return receipt requested, to the parties at the addresses set forth on
the first page of this Agreement. Either party may designate a different address to which notices
required or permitted to be given shall thereafter be transmitted by giving notice to that effect in
accordance with this Section.
Section 6.4. Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Minnesota. Subject to the requirements for
alternative dispute resolution set forth in Section 6.5, venue and exclusive jurisdiction for
enforcement of an arbitration decision shall be in the Minnesota State Courts located in
Sherburne County, Minnesota. The parties hereto waive any right to jury trial in the event any
party files an action related to this Agreement or to the transactions or obligations contemplated
by this Agreement.
Section 6.5. Arbitration. Disputes pursuant to this Agreement shall be subject to
arbitration and be resolved by binding arbitration by a single arbitrator in Elk River, Minnesota.
The selection of arbitrator and all arbitration rules and procedures shall be determined pursuant
to the Uniform Arbitration Act, Minnesota Statutes, Sections 57213.01 through 572B.31, or any
successor provisions.
IN WITNESS WIIEREOF, this Agreement has been duly executed by the parties hereto
on the day and year first above written.
ERMU:
ELK RIVER MUNICIPAL UTILITIES
By:
Its: President
IN
Its: General Manager
CITY:
[H
CITY OF OTSEGO
By:
Its: Mayor
By:
Its: City Administrator