Loading...
10.f1 Clean Water Loan Program Agreement [24947-40716/3675555/1] 1 MEMORANDUM To: Scandia Mayor and City Council From: Amanda Johnson, City Attorney and Kyle Morell, City Administrator Date: September 16, 2025 Re: Clean Water Partnership Loan Draft Agreement For Council’s consideration is the enclosed Draft Agreement with Tii Gavo, articulating the expectations and responsibilities of both parties in applying for and obtaining the Clean Water Partnership Loan. Council Action Item: Staff is looking for Council feedback and a motion of approval for the Agreement. 1 AGREEMENT BETWEEN THE CITY OF SCANDIA AND TII GAVO COMMUNITY ASSOCIATION FOR THE OBLIGATIONS AND RESPONSIBILITIES RELATED TO A CLEAN WATER PARTNERSHIP LOAN This Agreement (this “Agreement”) is made this ___ day of _______________, 2025 by and between the City of Scandia, a Minnesota municipal corporation (“City”), and the Tii Gavo Community Association, a Minnesota non-profit corporation (“Tii Gavo”), also referred to as “Party” or “Parties.” RECITALS WHEREAS, Tii Gavo’s community septic system (“System”) requires significant repairs and upgrades that are required to bring the System into compliance with the Minnesota Pollution Control Agency’s (“MPCA”) regulations; and WHEREAS, Tii Gavo approached the City, requesting assistance to obtain a Clean Water Partnership Loan (“CWPL”) from the Minnesota Pollution Control Agency (“MPCA”) to help fund the work needed to complete the repairs and upgrades to the System (“Project”); and WHEREAS, the City has agreed to assist Tii Gavo in obtaining a CWPL, provided the City taxpayers do not ultimately pay for the costs associated with CWPL and Tii Gavo enters into this Agreement and meets the required terms and conditions. NOW, THEREFORE, for good and valuable consideration, the receipt of which is acknowledged, the undersigned Parties agree as follows: AGREEMENT I. TII GAVO RESPONSIBILITIES. a. Before the City executes the application paperwork, including but not limited to the Sponsorship Resolution for the CWPL, Tii Gavo must complete the following: i. Escrow. Tii Gavo must provide the City with a cash escrow of $55,500 ($1,500 x 37 properties), for the City to use to cover the administrative and legal expenses related to the City’s review and processing of Tii Gavo’s assistance request. Tii Gavo acknowledges and agrees that Tii Gavo is responsible for any and all costs associated with applying for and obtaining the CWPL. b. Before the City executes any loan agreements or related documents with the MPCA, Tii Gavo must complete the following: i. Assessment Waivers. Tii Gavo must provide the City with an executed assessment waiver for all 37 properties identified on Exhibit A. In the event Tii Gavo fails to provide all 37 Assessment Waivers, the City shall have no further obligations to assist Tii Gavo in obtaining the CWPL and shall not enter into any loan agreements with the MPCA on Tii Gavo’s behalf. 2 1. Assessment Waiver content. The City Attorney shall prepare the Assessment Waivers. There shall be no deviation from the document provided by the City Attorney. The Assessment Waiver shall be for a total of the following amounts: a. Proportional share of the loan payment amount; b. 1.5% interest rate, the rate charged by MPCA; c. Any fees charged by the County; and d. An additional flat fee charged by the City to complete the administration of the CWPL, if the remaining Escrow balance is not sufficient to cover said costs. c. Tii Gavo is responsible for the administration of the Project. Tii Gavo has the sole responsibility to obtain the necessary contractors, permits, and approvals to complete the Project. Tii Gavo acknowledges and agrees that the City shall not enter into any contracts or agreements related to the actual construction of the Project, nor shall the City be involved in the actual Project construction. II. CITY RESPONSIBILITIES. a. Upon receipt of an executed copy of this Agreement and the full Escrow amount identified in Paragraph I(a)(i), the City shall: 1. Complete and execute the necessary documents for the CWPL application; 2. Begin work on the assessment waiver template; 3. Order title-work for the Tii Gavo properties; 4. Complete title review; and 5. Provide assessment waivers to Tii Gavo for execution. b. Upon receipt of all 37 executed assessment waivers described in Paragraph I(b)(i), the City shall do the following: 1. Complete and execute the necessary documents for the CWPL; 2. Record the assessment waivers against the properties; 3. Create the necessary accounts and financial tracking to administer the CWPL. c. Upon commencement of the Project, the City shall: 1. Work with Tii Gavo to facilitate the payment of contractor invoices; 2. Make necessary payment requests from the MPCA for the Project; 3. Monitor the CWPL funds during the course of the Project; and 4. Complete necessary annual reporting for the CWPL. III. FAILURE TO SECURE CWPL. The City makes no promises or assurances that Tii Gavo will be able to obtain the CWPL. Tii Gavo acknowledges and agrees that the City has no control over the decisions of the MPCA. In the event that Tii Gavo is unable to obtain CWPL approval from the MPCA, Tii Gavo acknowledges and agrees that they are still required to compensate the City for the work provided by the City in the attempt of obtaining the CWPL. These funds shall come from the Escrow described in Paragraph I(a)(i). Any funds remaining in the Escrow shall be returned to Tii Gavo. 3 IV. OWNERSHIP OF THE COMMUNITY SEPTIC SYSTEM. Tii Gavo acknowledges and agrees that the City does not have any ownership of or obligation to Tii Gavo’s community septic system, the Project, or any subsequent maintenance of the community septic system. The City’s sole role is to be a financial conduit to assist in obtaining the CWPL. Tii Gavo acknowledges and agrees that it is solely responsible for ensuring the Project successfully repairs and improves the community septic system and further acknowledges and agrees that it is solely responsible for the ongoing maintenance and compliance of the community septic system. V. TERMINATION OF AGREEMENT. If Tii Gavo fails to fulfill any of its obligations under this Agreement, the City may suspend or terminate this Agreement upon written notice to Tii Gavo specifying the reason for termination. VI. INDEMNIFICATION. Tii Gavo and its officers, employees, contractors, subcontractors, and agents, shall indemnify, defend, and hold harmless the City and its officials, employees, contractors and agents from any loss, claim, liability, and expense (including reasonable attorneys’ fees and expenses of litigation) arising from, or based in the whole, or in any part, on any negligent or willful act or omissions by Tii Gavo, its officers, contractors, employees, subcontractors, and agents, in the performance of services pursuant to this Agreement. VII. THIRD PARTY RIGHTS. The parties to this Agreement do not intend to confer on any third party any rights under this Agreement. VIII. NOTICES. Any notices given under this Agreement by either party to the other shall be by email or in writing and may be affected by email verification, or by registered or certified mail with postage prepaid and return receipt requested. Notice delivered through email, personally, or by mail will be deemed communicated as of the date of actual receipt. Mailed notices shall be addressed to and sent to the address below: TO CITY: City of Scandia Attn: Kyle Morell 14727 209th Street North Scandia, MN 55073 k.morell@ci.scandia.mn.us TO TII GAVO: Tii Gavo IX. MISCELLANEOUS PROVISIONS. a. Entire Agreement. This Agreement shall constitute the entire agreement between the City and Tii Gavo, and supersedes any other written or oral agreements between the City and Tii Gavo. This Agreement can only be modified in writing signed by the City and Tii Gavo. 4 b. Data Practices Act Compliance. Data provided, produced or obtained under this Agreement shall be administered in accordance with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13. c. Audit. Both Parties agree that their duly authorized agents, and the state auditor or legislative auditor shall have reasonable access to the parties’ respective books, records, documents, and accounting procedures and practices that are pertinent to all services provided under this Agreement and shall retain such records for a minimum of six years from the termination of this Agreement. d. Dispute Resolution. In the event that a dispute arises between the Parties as to the interpretation or performance of this Agreement, then upon written request of either Party, representatives with settlement authority for each Party shall meet and confer in good faith to resolve the dispute. If the Parties are unable to resolve the dispute, they shall make every effort to settle the dispute through mediation or other alternative dispute resolution methods. If the Parties are unable to resolve the dispute through these methods, either Party may commence an action in Washington County District Court e. No Assignment. This Agreement may not be assigned by either party without the written consent of the other party. f. Severability. The provisions of this Agreement are severable. If any portion of this Agreement is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision will not affect the remaining provisions of the Agreement. g. Compliance with Laws. Tii Gavo and its contractors shall exercise due professional care to comply with applicable federal, state and local laws, rules, ordinances and regulations in effect as of the date of the Project. h. Headings. The headings contained in this Agreement have been inserted for convenience of reference only and shall in no way define, limit, or affect the scope and intent of this Agreement. [remainder of page left intentionally blank] 5 IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed by their duly authorized officials, this Agreement as of the date first written above. CITY OF SCANDIA: TII GAVO COMMUNITY ASSOCIATION: By: _____________________________ By: ____________________________ Steve Kronmiller Its: Mayor Its: By: _____________________________ By: ____________________________ Kyle Morell Its: City Administrator Its: 6 EXHIBIT A [ We need Tii Gavo to provide us with a list of the properties in the association]