Title
Proposed Settlement and Release Agreement with City of Southgate
Body
Agenda of: February 27, 2019
Item No.: 2019-040
Amount: $22,225.24
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Sue F. McCormick
Chief Executive Officer
Great Lakes Water Authority
DATE: February 19, 2019
RE: Proposed Settlement and Release Agreement with City of Southgate
MOTION
Upon recommendation of Randal Brown, General Counsel, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA) approves the Settlement and Release Agreement with the City of Southgate; and authorizes the Chief Executive Officer to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
The City of Southgate (City) entered into a water service contract with the City of Detroit on March 17, 2009 (Contract), which was subsequently assigned to GLWA on January 1, 2016. The Contract provides that, except to the extent that GLWA is the proximate cause, GLWA shall not be liable for damage to the City's water system. The City alleges that on August 16 and 17, 2018, it experienced a total of 7 water main breaks within its water system, and that from August 19 through 22, 2018, it experienced 5 additional water main breaks.
GLWA has proposed certain terms and conditions related to a settlement of the 12 claims alleged by the City, which terms were approved by the City on January 2, 2019. Under the terms of the settlement, GLWA agrees to provide a credit to the City's wholesale water account in the amount of $22,225.24, which credit resolves in their entirety the City's claims set forth above. In exchange, the City releases and discharges GLWA from any claims related to any water main breaks that may have occurred in the City prior to August 23, 2018.
JUSTIFICATION
Approval of this Settlement and Release Agreement represents a fair and equitable resolution to the City's claims and is in keeping wit...
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