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Settlement Agreement SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release ("Agreement") is entered into by and between the Board of County Commissioners, Saline County, Kansas ("County") and the City of Salina, Kansas ("City") effective as of the 1st day of January, 2014 ("Effective Date"). Recitals A. In 1955 the City and County created the joint Salina-Saline County board of health ("Board of Health"). Since then the public health programs of the Board of Health have been conducted by the city-county health department ("Health Department"). B. In 1992, the County acquired title to the real estate and building located at 235- 240 North Seventh Street, City of Salina, Saline County, Kansas, legally described as: Lots Fifty-one (51), Fifty-three (53), Fifty-five (55), Fifty-seven (57), and Fifty-nine (59) on Seventh 7`h Street, Original Town (now City of Salina), Saline County, Kansas for the purpose of housing the operations of the Health Department (the `Building"). C. The City and County entered into a certain Memorandum of Understanding dated February 3, 1993 concerning their respective roles in relation to the Building (the "Memorandum of Understanding"). D. In May 2012, the Building was determined to be unsafe for occupancy due to the condition of the roof truss system and Health Department operations were temporarily relocated. E. The County asserts that repair of the roof truss system necessary to restore the Building to a safe condition for occupancy is the City's responsibility under the terms of the Memorandum of Understanding. F. The City asserts that repair of the roof truss system necessary to restore the Building to a safe condition for occupancy is not the City's responsibility under the terms of the Memorandum of Understanding. G. In response to the County's assertion, the City engaged Richard R. Pikul, P.E., Eng.D., of Wamego, Kansas ("Dr. Pikul") to provide expert analysis of the cause of the unsafe condition of the roof truss system. H. Dr. Pikul subsequently developed a preliminary design for the repair of the roof truss system sufficient to provide the basis for obtaining an estimate of the cost of the repairs. I. The County has determined that it desires to proceed with repair of the roof truss system, to engage a licensed engineer to complete a fully engineered design of the repair, and to reserve the ability to engage Dr. Pikul to perform that work. J. As a compromise and settlement of any and all claims by the County and its affiliated parties against the City and its affiliated parties relating to the Building, and to avoid the cost to the primarily common constituents of the City and County of litigating the dispute between the City and the County, the City and the County desire to enter into the settlement set forth in this Agreement. THE PARTIES, therefore agree and covenant: 1. Definitions. The following terms shall be defined for purposes of this Agreement, as follows: 1.1. "County and Affiliates" refers to the County and past, present or future county commissioners, officers, administrators, employees, insurers, agents, successors and assigns. 1.2. "City and Affiliates" refers to the City and past, present or future city commissioners, officers, administrators, employees, insurers, agents, successors and assigns. 1.3. "Health Department-Reserve Funds" refers to those funds held on account by the Board of Health/Health Department in excess of those funds approved for expenditure in the course of performing its 2013 program of public health services pursuant to its 2013 Budget as approved by the City and the County. 1.4. "Released Claims" refers to all claims, causes of action, or interests described in Section 6 of this Agreement arising out of the Building, the Memorandum of Understanding or the opinions or work of Dr. Pikul. 2. City Contribution. Conditioned upon the agreements and the release of the City and Affiliates by the County and Affiliates set forth below, the City agrees: (a) To pay to the County the sum of$500,000, within five (5) working days of the Effective Date of the this Agreement, to be applied toward the cost of repairs to the roof truss system determined necessary to restore the Building to a safe condition for occupancy; (b) To concur in the County's use of Health Department Reserve Funds in the amount of$250,000 for the purposes of paying costs of repairs to the roof truss,system, remodeling, or other costs associated with re-establishing the Health Department operations in the Building, at the sole discretion of the County, after application of the $1,000,000 combined contribution of the County ($500,000) and the City ($500,000) toward the cost of repairs to the roof truss system determined necessary to restore the Building to a safe condition for occupancy; and (c) That all personal property and fixtures will remain with the Building and become the property of the County. 2 (d) To permit the County, at its discretion, to contract with Dr. Pikul, at his discretion, for engineering design services relating to the Building without waiving any privilege that attached to Dr. Pikul's engagement by the City and related work product prepared on behalf of the City. [(a), (b), (c), and (d) collectively referred to as the "City Contribution."] 3. County's Agreement. The County agrees that: (a) The sum of$500,000 to be paid by the City to the County pursuant to this Agreement shall be applied exclusively to the cost of repairs to the roof truss system determined to be necessary to restore the Building to a safe condition for occupancy; (b) The Memorandum of Understanding and all obligations of the City there under are terminated as of the Effective Date of this Agreement, including without limitation the City's obligation to insure the Building; and (c) If the County engages Dr. Pikul to complete a fully engineered design of the repair of the roof truss system, the County acknowledges that the City's consent to the County's engagement of Dr. Pikul has been given without waiving any privilege that attached to Dr. Pikul's engagement by the City and related work product prepared on behalf of the City. 4. City's Building Code Enforcement Role. The parties acknowledge that the City has and will continue to serve in a separate and distinct building code enforcement role in relation to the County's work in restoring the Building to a safe condition for occupancy. This Agreement shall not be construed to relate to or affect the City's code enforcement role in relation to the Building. All communications from the City relating to its code enforcement role shall be directed to the County as the owner of the Building by the City's building official or his designee. 5. Release by County and Affiliates. 5.1. The County, on behalf of the County and Affiliates, forever releases the City and Affiliates from all claims and causes of action, which may ever be asserted by the County and Affiliates, whether such claims or causes of action are presently known or unknown, asserted or unasserted, present or future, direct or indirect, which in any way arise out of the Building, the Memorandum of Understanding, or the opinions or work of Dr. Pikul, including but not limited to any private or other cause of action that arises under contract, tort, common law, statute, or any federal or state law, as currently in effect or hereinafter amended. 5.2. This release is intended to cover any and all damages, including future damages, injuries or losses, whether known or unknown to the parties to this Agreement, but which may later develop, or be discovered in connection with the Building, the Memorandum of Understanding, or the opinions or work of Dr. Pikul, including but not limited to contractual damages, loss of business by the Health Department, damage to property claims, personal injury claims, or wrongful death claims, and shall be binding on the County and Affiliates. 3 5.3. The County, on behalf of the County and Affiliates, acknowledges that the above- referenced consideration is being accepted as full compensation for any and all damages, expenses, injuries, and losses (past, present and future, known or unknown, asserted or unasserted, direct or indirect), which were or ever could be claimed in connection with the Building, the Memorandum of Understanding, or the opinions or work of Dr. Pikul, including but not limited to any future repair, remodel or rehabilitation of the Building or any costs associated with a new building for the Health Department. 5.4. The County, on behalf of the County and Affiliates, further waives any claim that this Agreement was not fairly and knowingly made, and acknowledges the potential uncertainty concerning the full extent of the County's damages, claims, or causes of action, or the extent of the repairs needed to the Building or a future building needs for the Health Department either in the Building or in a new location. The County, on behalf of the County and Affiliates, warrants that no promise or inducement has been offered except as herein set forth and that this release is executed without reliance upon any statement or representation by the City and Affiliates or their representatives concerning the nature and extent of damages, claims against amounts paid under this Agreement, and/or future costs or needs, if any, and/or legal liability therefore. 5.5. The County, on behalf of the County and Affiliates, acknowledges and agrees that except as expressly provided in this Agreement, the City and Affiliates have no and shall have no liability for nor shall the City and Affiliates undertake to contribute towards any cost, expense, damage, or responsibility for any repair, remodel, relocation, re-design or design of or in any way concerning the Health Department Building or the Health Department's location. The County, on behalf of the County and Affiliates, acknowledges that although the City is permitting the County, at the County's discretion, to retain or hire or engage Dr. Pikul to provide professional engineering services to the County in connection with the Health Department Building, Dr. Pikul remains free to decline such engagement and no work or future work or alleged negligence or breach of any duty or contract by Dr. Pikul shall in any way bind the City and Affiliates. The County, on behalf of County and Affiliates, acknowledges that Dr. Pikul is a retained, consulted expert and independent contractor of the City and is not and has never been a City employee. 5.6. The County has completely read this Agreement and fully understands and voluntarily accepts it on behalf of the County and Affiliates for the purpose of final resolution and settlement of any and all claims, disputed or otherwise, for the express purpose of precluding forever any claims arising out of or in any way connected with the Building, the Memorandum of Understanding, or opinions or work of Dr. Pikul, including without limitation any and all damages, costs, expenses, injuries, or claims related thereto. 5.7. The County recognizes that the future course of the Building or other damages cannot be predicted with certainty. The County, on behalf of the County and Affiliates, assumes the risk that the asserted damages may worsen in the future and new damages may develop. The County, on behalf of the County and Affiliates, expressly waives any claim that this release is not fairly and knowingly made. 4 6. Indemnification and Hold Harmless. 6.1. The County, on behalf of the County and Affiliates, expressly acknowledges it has an independent legal obligation to satisfy any valid lien, claim, or interest that any third party may have in proceeds of this settlement, which the County agrees is the sole and separate obligation of the County. Further, the County, on behalf of the County and Affiliates, agrees: (1) to assume all responsibility to timely satisfy any lien, claim, or interest that any third party may have in proceeds of this settlement; and (2) that they will forthwith satisfy any such lien, claim, or interest without further action from the City and Affiliates. 6.2. The County, on behalf of the County and Affiliates, further hereby covenants to defend, indemnify and hold harmless the City and Affiliates from and against all lien or subrogation claims, and against any other rights, claims, or interests of third parties claiming to assert rights through the County, including all costs and attorney's fees incurred in the defense of such claims. The City and Affiliates retain the right to monitor the defense of any such claim or action, or to request proof of satisfaction and discharge of all rights, claims, or interests of third parties. 7. Warranty of Capacity to Execute Agreement. The County, on behalf of the County and Affiliates, warrants that no other person or entity has or has had any interest in the claims or causes of action referred to in this Agreement and that the Board of County Commissioners has the sole right and exclusive authority to execute this Agreement and receive the sums specified in it. The County shall defend and indemnify the City and Affiliates should any other person claim to have an interest in the claims described in this Agreement. 8. Governing Law. This Agreement shall be construed and interpreted according to the laws of the State of Kansas. The parties agree that venue and personal and subject matter jurisdiction for any court action arising out of this Agreement shall lie solely in the District Court of Saline County, Kansas. 9. Denial of Liability. This Agreement expresses a compromise of disputed claims and constitutes a full and complete settlement of the Released Claims. Liability and responsibility for the Released Claims is expressly denied by the City and Affiliates. Regardless of the adequacy of the above consideration, the acceptance or existence of this Agreement shall not operate as an admission of any wrongdoing or liability on the part of the City and Affiliates. 5 1� 10. Entire Agreement. This Agreement contains the entire agreement by the undersigned related to the Released Claims and there are no other understandings, either written or oral, which affect the terms hereof. This Agreement shall be binding on any actual or any possible heirs, executors, administrators, successors and assigns of the parties. This Agreement may not be modified unless mutually agreed upon in writing between the parties. IN WITNESS WHEREOF, the parties have caused this Contract to be signed by its duly authorized officers on the day and year first above written. BOARD OF COUNTY COMMISSIONERS SALINE COUNTY, ; • • By: -A '�andy E. I • c.0, Chairman A • / /1 ,,,,,,,,,,,,,,,,, By: .i W �'�1E, DU,�;'•,,, J' ,ile, Commissioner co� COUNTY • / s 's - By: CLERK •lm Price, Commissioner ATTEST: ,,,�q •OF•KP By: tki &.i1 __l e ald ' . Merrim. , County Clerk CITY OF SA • , KANSAS By: i `:'bara V. Shirley, Mayor ATTEST: i By: - Lieu Ann Elsey, CMC,'ity Clerk 6 i I