HomeMy WebLinkAboutItem KAGENDA STAFF REPORT
DATE: December 11, 2017
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Steve Myrter, P.E., Director of Public Works
SUBJECT: FINANCING OF THE OC -35 WATERLINE
CONNECTION WITH THE WEST ORANGE COUNTY
WATER BOARD
SUMMARY OF REQUEST:
That the City Council adopt Resolution No. 6780 authorizing the Mayor to
execute the Financial Participation Agreement (FPA) between the City of Seal
Beach and the West Orange County Water Board.
BACKGROUND AND ANALYSIS:
The Orange County Transportation Authority (OCTA) is moving forward with the
1-405 Freeway Widening Project ("Project"). OCTA is working with all impacted
agencies in relocating utility lines that conflict with the Project. One utility line in
need of relocation is the West Orange County Water Board (WOCWB) OC -35
waterline that is jointly owned by the cities of Huntington Beach, Westminster,
Garden Grove and Seal Beach. The WOCWB is a Joint Powers Authority (JPA)
of Huntington Beach, Westminster, Garden Grove and Seal Beach that owns and
operates potable water transmission lines that provide imported water to the JPA
members.
The below table is a breakdown of each agency's Fiscal Responsibility with the
JPA:
WOCWB Member Cites_
--en ------Grroveove------
Fiscal_Responsibili
Gard
4.2%
Huntington Beach56.1%
Seal Beach ---... ........................14.3%------
— .......
Westminster
-
25.4% ----
Agenda Item K
During the utility investigation phase of the 1-405 Freeway Widening Project,
OCTA identified the WOCWB's 33 -inch OC -35 pipeline that crosses beneath the
freeway that is parallel to, and on the south side of the Westminster Boulevard
bridge in the City of Westminster. This pipeline was constructed 54 years ago
during the early phases of the construction of the freeway. Refer to Attachment
E for a location map.
OCTA provided the WOCWB staff with information on the proposed bridge
improvements and also informed the WOCWB staff that the WOCWB would have
to prove to OCTA and Caltrans that the WOCWB pipeline has occupancy rights
dating back to 1952 (64 years ago), when the freeway alignment was approved
by the State of California. The WOCWB could not prove that the 33 -inch line had
"prior rights", meaning any costs related to protecting, relocating or abandoning
the line would have to be paid for by the WOCWB. Extensive review of the
bridge widening plans and the construction plans for the 33 -inch steel pipeline
led to the conclusion that the pipeline should be relocated.
The new alignment will require the installation of approximately 2,400 feet of new
33 -inch cement mortar lined and coated pipe. The 280 feet of the 33 -inch line
that will be under the freeway will be protected within a 45 -inch steel casing pipe
that will be installed utilizing micro -tunneling techniques.
In assisting the WOCWB, OCTA has offered a loan to the WOCWB for financial
assistance. The OCTA loan would include the following terms:
• The term would be for a period not to exceed 10 years
• Interest would be charged at the rate of earnings equal to the State of
California Surplus Money Investment Fund (SMIF) which stands at
1.069%. See Attachment C. The loan rate will continue to climb as the
Federal Government increases their interest rate.
• The variable interest rate is adjusted quarterly
• Payments would be made on a quarterly basis
• There is no prepayment penalty
• The loan will include a 22% mark-up for project contingency, project
management, inspection and other activities (currently included in the
$4.7 million estimate).
The OCTA loan can only be made available to the WOCWB. Individual cities are
not eligible to obtain the OCTA loan on their own. Terms and conditions of the
loan are subject to change based on review by the OCTA Board. For budgeting
purposes, an estimate of the quarterly loan payments for the first two years of the
loan is in Attachment D. As interest rates vary, the payments are subject to
change. See Attachment C for historic SMIF rates.
The WOCWB has prepared a Financial Participation Agreement (FPA) between
each member City and the WOCWB (See Attachment B). This agreement will
allow the City of Seal Beach to make quarterly payments directly to the WOCWB
as required.
On October 31, 2017, six bids were received by WOCWB OC -35 waterline with
the low bid of $5,129,705 submitted by CCL Constructors. According to the
WOCWB staff, no errors were found on CCUs bid submittal or bid package and
reference checks have been completed. No bid protests have been received
from the other contractors who submitted bids. At this point the WOCWB legal
counsel is reviewing the contract, insurance and the bid and performance
bonds. As of this time, the WOCWB Staff is unaware of any reason(s) to not find
CCL to be the responsible low bidder.
The below table shows total projected Project cost and how the OCTA loan
amounts were derived:
ITEM COST
—_ --------------- - __--
Project Low Bid $5,129,705
220% Project Management, Inspection, Testing & Change Order Contingency $1,128,535
Total Projected Project Cost $6,258,240
Less City of Garden Grove Cash Payment at 4.2% of Projected Project Cost$262,846
Remaining Member Agencies Projected Project Costs (OCTA Loan Amount) $5,995,394
NOTE 1 - Garden Grove will make a cash payment of approximately $262,846 at the beginning of
the project
The below table shows the breakdown of the OCTA project loan amount by
member agency:
The City of Seal Beach's fiscal responsibility is $894,928.
ENVIRONMENTAL IMPACT:
An Initial Study/Mitigated Negative Declaration with Mitigation Monitoring
Reporting Program (MMRP) was previously completed for certain water
infrastructure capital improvement projects, including but not limited to, the
relocation of the OC -35 waterline. The Initial Study/Mitigated Negative
Declaration found that there is no substantial evidence that the relocation of the
OC -35 waterline or any of the other water infrastructure projects would have
significant effects on the environment through adherence to the mitigation
measures set forth in the Mitigated Negative Declaration and MMRP. On
May 22, 2017, the City Council approved Resolution No. 6736, adopting the
Initial Study/Mitigated Negative Declaration and MMRP for these water
infrastructure capital improvement projects, including but not limited to, this
Project.
LEGAL ANALYSIS:
The City Attorney has reviewed and approved as to form.
FINANCIAL IMPACT:
$675,000 has been allocated for the City s share of the OC -35 waterline
relocation cost in the approved 2017-18 Budget, which will be released from the
2017-18 Capital Improvement Project Budget and transferred to the operations
and maintenance budget. As interest rates increase, the payments may
increase. Based on the terms of the FPA, a one-time Reserve Fund payment of
approximately $25,128 is due on January 1, 2018. Below is an estimate of the
quarterly loan payments for the first two years of the loan. See attachment D for
the full Projected Amortization Schedule.
That the City Council adopt Resolution No. 6780 authorizing the Mayor to
execute the Financial Participation Agreement (FPA) between the City of Seal
Beach and the West Orange County Water Board (WOCWB).
SUBMITTED,BY: NOTED AND APPROVED:
Steve Myrt6r, P.E."' J". F. Ingram, City Mafter
Director of Public Works
Data Payment Due To WOCWB / Estimated Effective Interest Rate For The Previous Quarter
Member
Fiscal
Estimated
City
Responsibility
Loan
1/1/18
4/1/18
7/1118
10/1/18
1/1/19
411/19
7/1/19
10/1/19
Amount
1.10%
1.20%
1.30%
1.40%
1.50%
1.60%
1.70%
1.80%
seal
14.9%
$894,928
$24,881.46
$24,955.01
$25,128.73
$25,294.35
$25,418.42
$25,462.55
$25,597.28
$25,722.94
Beach
That the City Council adopt Resolution No. 6780 authorizing the Mayor to
execute the Financial Participation Agreement (FPA) between the City of Seal
Beach and the West Orange County Water Board (WOCWB).
SUBMITTED,BY: NOTED AND APPROVED:
Steve Myrt6r, P.E."' J". F. Ingram, City Mafter
Director of Public Works
Prepared By: Michael Ho, P.E., Dep. Dir. PW/City Engineer
Attachments:
A. Resolution No. 6780
B. Financial Participation Agreement Between the City of Seal Beach and
WOCWB
C. SMIF Rate
D. Estimated Quarterly Loan Payments
E. Location Map
Attachment "A"
RESOLUTION NUMBER 6780
A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
AUTHORIZING THE MAYOR TO EXECUTE THE FINANCIAL
PARTICIPATION AGREEMENT BETWEEN THE CITY OF SEAL
BEACH AND THE WEST ORANGE COUNTY WATER BOARD
THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE
SECTION 1. The Orange County Transportation Authority (OCTA), in
conjunction with its 1-405 Freeway Widening Project (1-405 Project), has
determined that certain utility lines must be relocated due to conflict with the 1-
405 Project, including the OC -35 waterline owned by the West Orange County
Water Board (WOCWB). The OC -35 waterline is located in the City of
Westminster and crosses beneath the freeway that is parallel to, and on the
south side of the Westminster Boulevard Bridge. The OCTA and WOCWB have
determined that the costs of the waterline relocation are the responsibility of the
WOCWB.
SECTION 2. In order to facilitate the relocation of the OC -35 waterline, OCTA
has offered a loan to the WOCWB, subject to agreement by each member city of
the WOCWB, including the City of Seal Beach, to participate financially in
payment of a specified proportionate share of the OCTA loan.
SECTION 3. An Initial Study/Mitigated Negative Declaration with Mitigation
Monitoring Reporting Program (MMRP) was completed by the City of Seal Beach
for certain water infrastructure capital improvement projects, including but not
limited to, the relocation of the OC -35 waterline. The Initial Study/Mitigated
Negative Declaration found that there is no substantial evidence that the
relocation of the OC -35 waterline or any of the other water infrastructure capital
improvement projects would have significant effects on the environment through
adherence to the mitigation measures set forth in the Mitigated Negative
Declaration and MMRP. On May 22, 2017, the City Council approved Resolution
No. 6736, adopting the Initial Study/Mitigated Negative Declaration and MMRP
for these water infrastructure capital improvement projects. The City Council has
independently reviewed and considered the Mitigated Negative Declaration and
MMRP prior to adopting this resolution.
SECTION 4. The City Council hereby approves the Financial Participation
Agreement (FAP) between the City of Seal Beach and the West Orange County
Water Board.
SECTION 5. The City Council hereby authorizes and directs the Mayor to
execute the attached FAP on behalf of the City.
Resolution Number 6780
SECTION 6. The City Council further directs the City Manager to take all other
actions necessary to implement the FAP in accordance with this Resolution.
PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a
regular meeting held on the 11th day of December , 2017 by the following vote:
AYES:
Council Members:
NOES:
Council Members:
ABSENT:
Council Members:
ABSTAIN:
Council Members:
Sandra Massa-Lavitt, Mayor
ATTEST:
Robin L. Roberts, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Robin L. Roberts, City Clerk of the City of Seal Beach, do hereby certify that
the foregoing resolution is the original copy of Resolution Number 6780 on file in
the office of the City Clerk, passed, approved, and adopted by the City Council at
a regular meeting held on the 11th day of December , 2017.
Robin L. Roberts, City Clerk
Attachment "B"
FINANCIAL PARTICIPATION AGREEMENT —
CITY OF SEAL BEACH FACILITIES RELOCATION COSTS
(405 Freeway Facilities Relocation)
This FINANCIAL PARTICIPATION AGREEMENT — City of Seal Beach
FACILITIES RELOCATION COSTS ("Agreement") is made and entered into and effective
as of this _ day of , 2017, by and between the WEST ORANGE COUNTY
WATER BOARD, a joint powers agency (hereinafter referred to as "WOCWB") and the CITY
OF SEAL BEACH, a California charter city, organized and existing pursuant to the
Constitution and laws of the State of California (hereinafter referred to as "City", each agency to
this Agreement may in certain cases be referred to herein as a "Party" and collectively, herein as
the "Parries'.
RECITALS
1. Pursuant to the WOCWB Joint Powers Agreement (as defined herein), October
25, 1967, WOCWB and its Member Agencies (as defined in the Joint Powers Agreement) own,
operate and maintain certain potable water transmission and distribution lines all located within
the boundaries of the County of Orange ("County'% State of California ("State").
2. Certain WOCWB facilities extending over and across the Interstate 405 Freeway
("I-405") are located within, and subject to, various encroachment permits and related documents
currently managed by the Orange County Transportation Authority ("OCTA") and are further
described herein as the "Relocation Facilities".
3. OCTA, by and through a cooperative agreement with the California Department
of Transportation, is constructing improvements on Interstate 405 (1-405) Freeway between State
Route 73 (SR -73) and Interstate 605 (I-605). The improvements include one general purpose
lane in each direction from Euclid Street to I-605, and an additional lane in each direction that
would combine with the existing high -occupancy vehicle lane to provide dual express lanes in
each direction of I-405 from SR -73 to I-605 ("405 Project").
4. As a result of the construction for the 405 Project, it is necessary for WOCWB to
relocate its existing thirty-three (33) inch waterline located in Westminster Boulevard where it
crosses Interstate 405 from east of Willow Lane to Springdale Street (the "Relocation Project")
in conflict with the 405 Project.
5. In accordance with 405 Project requirements, Utility Agreement No. UK 151087
("UK 151087") has been entered into between OCTA and WOCWB. UK 151087 specifies the
facilities relocation work to be performed, performance of work responsibility, and that the cost
liability of such relocation based on existing rights of the respective Member Agencies in the
facilities to be relocated (all as set out in Exhibit "A"). Under the terms of UK 151087, one-
hundred (100) percent cost responsibility for the relocation work is assigned to WOCWB
including, but not limited to, all services, final design and construction cost (hereafter, the
"WOCWB Relocation Work"). UK 151087 also allows for the advancement of funds for the
relocation work by OCTA upon determination of a hardship in accordance with Section 706 of
the Streets and Highways Code.
6. WOCWB has entered into the OCTA Reimbursement Agreement (as defined
herein) with OCTA to provide a portion of the funding necessary to provide for the WOCWB
Relocation Work on the Relocated Facilities.
7. In order to provide adequate funds for WOCWB to repay the Financial
Participation Payments which will come due under the OCTA Reimbursement Agreement,
WOCWB is entering into this Agreement with City to provide for Financial Participation
Payments to be made to WOCWB by City upon the terms and conditions set forth herein.
ARTICLE I
INTENTION: DEFINITIONS: ACTIONS BY WOCWB CONTRACT MANAGER
1.1 Intention. It is the intention of the Parties to provide for Financial Participation
Payments to be made by City to WOCWB to allow WOCWB to make the OCTA Contract
Payments, as specified in the OCTA Reimbursement Agreement in a timely manner. City
acknowledges that WOCWB does not have financial reserves sufficient to pay the OCTA
Contract Payments due from City and other involved Member Agencies of WOCWB.
1.2 Definitions. In addition to the definitions heretofore included in the Recitals, and
unless the context otherwise requires, the following terms shall have the following meanings:
"Allocated Ownership" means the allocated ownership, and corresponding cost
responsibility, for the Relocated Facilities as set out in Exhibit "A" attached hereto and
incorporated herein by this reference. In the case of City the allocated ownership is 14.3%.
"CHB" means the City of Huntington Beach, a California charter city organized and
operating pursuant to the laws of the State.
"City" means City of Seal Beach, a California charter city, organized and operating
pursuant to the provisions of the California Constitution and State law.
"Contract Manager" means CHB when operating or acting in its capacity as Contract
Manager for WOCWB.
"Default Rate" means an interest rate equal to the variable State Surplus Money
Investment Fund (SMIF) interest rate, which may be adjusted on a periodic basis.
"Due Date(s)" means the date(s) set out in Exhibit "C".
"Event of Default" means an Event of Default as set forth in Section 4.1 of this
Agreement.
"Financial Participation Payments" means those certain payments made by City to
WOCWB, through CHB, pursuant to the provisions of Article III of this Agreement.
"General Manager" means the duly appointed and acting General Manager of
WOCWB.
"Letter(s) of Credit" means that certain irrevocable, standby letter(s) of credit issued or
provided pursuant to Section 3.6 hereof by a Letter of Credit Bank(s), or any reissuance or
extension thereof, which Letter(s) of Credit shall be in the applicable Stated Amount and shall be
for an initial tern of no less than one year.
"Letter of Credit Bank(s)" means the issuer from time to time of a Letter(s) of Credit
and the respective successors and assigns of the issuer thereof and any surviving, resulting or
transferee banking association or corporation with which, or into which, it may be consolidated
or merged or to which it may transfer all of its banking business, provided that such entity shall
have a minimum rating, at all times during the term of the Letter(s) of Credit, of one of the
following: (1) Moody's long -tern rating of "A" and short-term rating of "P-1'; or, (2) S&P long -
tern rating of "A" and short-term rating of "A-1'; or, (3) Fitch long-term rating of "A+" and
short-term rating of "Fl"; with any of the foregoing ratings to be evidenced by proof provided by
the Letter of Credit Bank(s) to the Contract Manager in writing.
"Member Agencies" means the Member Agencies of WOCWB as set forth in the
WOCWB Joint Powers Agreement.
"OCTA Reimbursement Agreement" means that certain Reimbursement Agreement
No. U-2017-151087 between the Orange County Transportation Authority and WOCWB dated
as of 12017.
"Relocation Facilities" means those facilities of WOCWB which are required to be
removed, abandoned and/or relocated as a result of the 405 Project which Relocation Facilities
are described in Exhibit "B," attached hereto and incorporated herein by this reference.
"Reserve Fund" means the fund or account (regardless of actual designation) established
and maintained by the Contract Manager pursuant to the provisions and requirements of Section
3.4 hereof The Reserve Fund shall be discreet for each Member Agency using a unique object
account for payment tracking.
"Reserve Requirement" means an amount equal to the average of one periodic
Reimbursement Payment, as scheduled in Exhibit "C"
"State" means the State of California.
"WOCWB" means West Orange County Water Board, a joint powers agency organized
pursuant to the provisions of the WOCWB Joint Powers Agreement.
"WOCWB Joint Powers Agreement" means that certain Joint Powers Agreement,
dated as of October 25, 1967, as subsequently amended, and as such may be further amended or
supplemented in the future from time to time.
1.3 Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall
include the plural, and vice versa and the use of the neuter, masculine, or feminine gender is for
convenience only and shall be deemed to mean and include the neuter, masculine or feminine
gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely
for convenience of reference, do not constitute a part hereof and shall not affect the meaning,
construction or effect hereof.
(c) All references herein to "Articles," "Sections" and other subdivisions are to be
corresponding Articles or subdivisions of this Agreement; the words "herein," "hereof,"
"hereby," "hereunder" and other words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or subdivision thereof.
1.4 Actions of WOCWB's Contract Manaeer. Pursuant to an existing agreement
WOCWB has retained CHB to act as its Contract Manager for all operational and financial
purposes. For purposes of this Agreement references to WOCWB shall include the Contract
Manager. All actions to be undertaken by WOCWB shall, unless otherwise expressly stated
herein, be undertaken or performed on behalf of WOCWB by the Contract Manager. The
Contract Manager acts through the General Manager.
1.5 WOCWB Actions to Complete Relocation of Relocation Facilities. Through
the Contract Manager and pursuant to the requirements of OCTA and the terms of the OCTA
Reimbursement Agreement, WOCWB shall undertake to contract for, and complete, the
relocation of the Relocation Facilities. WOCWB shall provide the Member Agencies with
periodic updates on the progress and status of such relocation work.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations by WOCWB. WOCWB makes the following representations:
(a) WOCWB is a joint powers agency duly organized and existing under and
pursuant to the laws of the State.
(b) WOCWB has full legal right, power and authority to enter into this Agreement
and carry out its obligations hereunder, to carry out and consummate all other transactions
contemplated by this Agreement, and WOCWB has complied with the provisions of applicable
State law in all matters relating to such transactions.
(c) By proper action, WOCWB has duly authorized the execution, delivery and due
performance of this Agreement.
2.2 Representations by City. City makes the following representations:
(a) City is a charter city duly organized and existing under and pursuant to the laws
of the State.
(b) City has full legal right, power and authority to enter into this Agreement and
carry out its obligations hereunder, to carry out and consummate all other transactions
contemplated by this Agreement, and City has complied with the provisions of applicable State
law in all matters relating to such transactions.
(c) By proper action, City has duly authorized the execution, delivery and due
performance of this Agreement.
ARTICLE III
PAYMENT OF FINANCIAL PARTICIPATION PAYMENTS TO WOCWB
3.1 Payments of Financiai Participation Payments.
(a) City shall pay to WOCWB the Financial Participation Payments allocated to City
based upon City's Allocated Ownershiptfmancial responsibility portion of the Relocation
Facilities based upon the payment schedules set forth in Exhibit "C," attached hereto and
incorporated herein by this reference, as such may be revised pursuant to Section 3.3. Subject to
Section 3.2, each such Financial Participation Payment shall be made by City to WOCWB not
later than the corresponding Due Date as shown in Exhibit "C."
(b) Unless otherwise agreed to by and between City and the Contract Manager, such
Financial Participation Payments shall be made by wire transfer consistent with the wire
instructions to be provided by WOCWB. In the event of a change in such wire directions, the
Contract Manager shall inform City of such change in writing.
(c) Each Financial Participation Payment shall be paid to WOCWB in lawful money
of the United States of America. In the event that City fails to make any of the payments
required to be made by it under this Section, such payment shall continue as an obligation of City
until such amount shall have been fully paid and City agrees to pay the same with interest
accruing thereon at the Default Rate from and after the applicable Due Date for payment.
(d) City shall have the option to prepay all or a portion of its total allocated Financial
Participation Payment at any time. Any such prepayments shall be made and applied as set out
in Section 3.2 hereof.
(e) The obligation of City to make the Financial Participation Payments is absolute
and unconditional and until such time as all Financial Participation Payments shall have been
paid in full (or provisions for the payment thereof shall have otherwise been made by mutual
agreement of the Parties) City will not discontinue or suspend any of the Financial Participation
Payments required to be made by it under this Section when due. The obligation to make
Financial Participation Payments as set forth in this Section shall not be conditioned on the
performance or non-performance by any Party of any agreement, delays resulting in the
completion of the work on the Relocation Facilities by WOCWB or by any other cause
whatsoever; unless the obligation to make Financial Participation Payments is otherwise
discharged by mutual agreement of the Parties in the event of changed circumstances.
3.2 Initial Deposits as Aeainst Financial Participation Pavments; Application of
Deposit(s); Reconciliation.
(a) City in lieu of periodic Financial Participation Payments may choose to make one
or more deposits with CHB as the Financial Agent and Treasurer of WOCWB which deposit(s)
shall be used as a credit against Financial Participation Payments as such shall become due.
(b) CHB shall establish and, through a federally insured banking institution maintain,
a separate fund or account for receipt of such City deposits (hereinafter referred to as the
"Deposit Account" regardless of actual designation). The Deposit Account shall be used to
receive deposits from City for payment or prepayment of its allocated Financial Participation
Payments pursuant to the terms of this Agreement. Fonds held in the Deposit Account shall be
expended by CHB, on behalf of WOCWB, subject to the terms of this Agreement for payment or
prepayment of City's Financial Participation Payments coming due thereafter under the terms of
this Agreement.
(c) CHB shall provide City with periodic statements concerning the amount of funds
held in the Deposit Account and charges made to the Deposit Account for payment or
prepayment of Financial Participation Payments pursuant to the terms hereof on a monthly basis.
Records of all deposits and charges against the Deposit Account shall be maintained at CHB's
business offices and open for review by City (or its agents) during normal business hours should
City wish to review such.
(d) Following the completion of the design, construction, installation and expiration
of the notice of completion period for the Relocation Facilities CHB, as the financial agent and
treasurer of WOCWB, shall provide City with a final accounting of all of the total project costs
as allocated to City pursuant to the terms hereof. In the event that funds remain in the Deposit
Account which have not been, and are not required to be, expended pursuant to the terms of this
Agreement, such funds shall be returned to City by check, or other payment means acceptable to
CHB and City within thirty (30) business days following completion of the above -referenced
accounting report. In the event that final accounting shows a balance due to WOCWB from City
and there are no funds remaining in the Deposit Account to cover such, City shall provide final
payment to CHB as Treasurer of WOCWB for the City allocated costs within thirty (30) business
days of such final accounting.
3.3 Adjustment of Financial Particioation Payments. The schedule of allocated
Financial Participation Payments set forth in Exhibit "C" to this Agreement shall be subject to
modification or amendment (i) as a result of change orders resulting from WOCWB's
construction contract for the completion of the work on the Relocation Facilities and/or (ii) as a
result of changes in interest rates as imposed pursuant to the terns of UK 151087. In the event
of such change order(s) being approved pursuant to the WOCWB Relocation Facilities contract
documents, WOCWB, through its Contract Manager, shall provide to City a modified schedule
of allocated Financial Participation Payments which shall supersede Exhibit "C" upon the
finalization thereof and provision to City pursuant to the provisions of Article IV, hereof.
3.4 Application of Financial Participation Payments. WOCWB, through CHB,
agrees to retain all Financial Participation Payments made by City pursuant to the provision of
this Agreement and apply such to the payment of construction contract costs resulting from the
OCTA Reimbursement Agreement, subject to the provisions of Sections 3.2 and 3.3, hereof.
3.5 Reserve Fund and Reserve Fund Deposit.
(a) As additional security for the payment of the Reimbursement Payments, CHB, as
the Contract Manager shall open and maintain a Reserve Fund (regardless of actual designation).
The Reserve Fund shall be utilized solely for the retention and application of Reserve Fund
deposits and usage as set forth in this Section 3.5.
(b) Not later than January 1, 2018, City shall deposit with the Contract Manager an
amount equal to the Reserve Requirement for deposit into the Reserve Fund.
(c) Moneys in the Reserve Fund shall be used solely for the purpose of satisfying
payments of the Reimbursement Payments to the extent that they are not made by City in a
timely manner. In the event that the payment of a Reimbursement Payment is not made by City
by the corresponding Due Date, the Contract Manager shall withdraw from the Reserve Fund for
satisfaction of the Reimbursement Payment. The Contract Manager will, promptly thereafter,
notify City in writing of the amount needed to replenish the Reserve Fund to the Reserve
Requirement. City shall replenish the Reserve Fund to the Reserve Requirement within thirty
(30) Business Days following such notice. Failure to replenish the Reserve Fund to the Reserve
Requirement as set forth above shall constitute an event of default for purposes of Section 4.1
hereof.
(d) Draws upon the moneys in the Reserve Fund shall not preclude a Party from
pursuing other applicable remedies under the provisions of Article IV hereof.
(e) Moneys in the Reserve Fund shall be invested by the Contract Manager in
investments authorized in the City of Huntington Beach's investment policy and the local agency
investment guidelines issued by the California Debt and Investment Advisory Commission
("CDIAC"). The Contract Manager shall provide City with periodic statements of the balance
held in the Reserve Fund. Any moneys in the Reserve Fund in excess of the Reserve
Requirement shall be: (i) returned to City upon written request therefore (which request(s) shall
be no more often that once per quarter); or (ii) applied to City's next occurring Reimbursement
Payment, as City shall direct in writing.
(f) Upon completion of the payment of all Reimbursement Payments by City, and
satisfaction of all contractual obligations of City, all moneys then held in the Reserve Fund, if
any, shall be returned to City. Alternatively, monies held in the Reserve Fund, if any, may be
applied to the final Reimbursement Payment due from the City.
(g) The Contract Manager may establish additional accounts of the Reserve Fund as
the Contract Manager shall deem necessary and prudent in furtherance of its duties pursuant to
this Agreement upon written notification to City.
3.6 Satisfaction of Reserve Requirement by Way of a Letter of Credit.
(a) In lieu of a cash deposit to the Reserve Fund as set out in Section 3.5, City may
deposit with the Contract Manager one or more Letters of Credit in an amount equal to all or a
portion of the Reserve Requirement.
(b) The form of such Letter of Credit shall be provided by WOCWB general legal
counsel not later than January 1, 2018.
(c) Any such Letter of Credit shall be used to satisfy any draws on the Reserve Fund
in the same manner as set out in Section 3.5(c), above.
(d) The Contract Manager shall notify City, in writing, promptly following the
draw(s) on any Letter of Credit then on deposit in the Reserve Fund, which notification shall
include the amount(s) drawn on such Letter of Credit.
(e) Any such Letter of Credit shall be renewed, replaced or replaced with a cash
deposit, in the amount of the Reserve Requirement, not later than 15 days prior to the expiration
of the then -current Letter of Credit. Failure to comply with this subsection shall constitute an
event of default for purposes of Section 4.1 hereof.
(f) In the event any Letter of Credit Bank(s) wrongfully refuses to honor any drawing
made on any Letter(s) of Credit, WOCWB, through the Contract Manager may immediately
bring an action and pursue any remedy available at law or in equity for the purpose of
compelling the corresponding Letter of Credit Bank(s) to honor such drawing and to enforce the
provisions of the corresponding Letter(s) of Credit. In such event, the Contract Manager shall
promptly notify City, in writing, of such event.
(g) Upon completion of the payment of all Reimbursement Payments by City, and
satisfaction of all contractual obligations of City, all Letter(s) of Credit then held in the Reserve
Fund, if any, shall be returned to City.
ARTICLE IV
EVENT OF DEFAULT — REMEDIES
4.1 Events of Default Defined. The following shall be "events of default' under this
Agreement and the terms "events of default' and "default' shall mean, whenever they are used in
this Agreement, any one or more of the following events:
(a) An event of default by the City shall have occurred under Section 3.1 hereof.
(b) Failure by the WOCWB or City to observe and perform any covenant, condition
or agreement on its pan to be observed or performed under this Agreement, other than such
failure as may constitute an event of default under clause (a) of this Section, for a period of 30
days after written notice specifying such failure and requesting that it be remedied has been
given to WOCWB, or City, as applicable; provided, however, that if the failure stated in the
notice cannot be corrected within such period, then the applicable Party shall not unreasonably
withhold its consent to an extension of such time if corrective action is instituted by the
defaulting Party within such period and diligently pursued until the default is corrected.
4.2 Remedies on Default.
(a) In the event of a breach of this Agreement, all legal and equitable remedies may
be employed to enforce the terms herein, subject to the terms hereof.
(b) WOCWB, through its Contract Manager, take any appropriate action to cause
City to pay any Financial Participation Payment not paid when due.
(c) Notwithstanding the provisions of Section 4.2(a) and (b), it is the intent of the
parties to try and resolve any differences arising from this Agreement through mediation prior to
the initiation of litigation. In the event of any disagreement over the meaning or application of
this Agreement, the parties shall fust attempt to resolve the matter informally. Should that prove
unsuccessful, any party may ask for mediation. A neutral mediator from the State Mediation and
Conciliation Service or the Judicial Arbitration and Mediation Service ("JAMS") shall be
appointed to hear each side in an informal setting, and to render an advisory recommendation.
Any such mediation costs shall be equally shared by the parties.
4.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to
WOCWB is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement, or now or hereafter existing at law
or in equity. No delay or omission to exercise any right or power aceming upon any default shall
be construed to be a waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle WOCWB to exercise any
remedy reserved to it, it shall not be necessary to give any notice other than such notice as may
be required in this Article or by law.
4.4 No Additional Waiver Implied by One Waiver. In the event any provision
contained in this Agreement should be breached by a Party and thereafter waived by another
Party, such waiver shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder.
4.5 Application of Funds. All moneys received by WOCWB pursuant to any right
given or action taken under the provisions of this Article IV shall be deposited into the
Reimbursement Fund and shall be applied by WOCWB in the following order:
First. Costs and Expenses: to the payment of the fees, costs and expenses of
WOCWB in pursuing such event(s) of default including reasonable compensation
to its agents, attorneys and counsel; and
Second. Payments Due Under OCTA Agreement: to the payment of payments
due under the terms of the OCTA Agreement including any penalties, interest or
costs due thereunder as a result of such event(s) of default.
ARTICLE V
GENERAL PROVISIONS
5.1 Record Keeping. WOCWB shall keep records and accounts of Financial
Participation Payments, and other amounts due hereunder, collected and paid by City. Such
records shall be maintained by WOCWB, through its Contract Manager, and shall be available
for inspection by the Parties hereto upon reasonable prior notice.
5.2 Interpretation. WOCWB and City represent that they have read this Agreement
and that they are fully aware of its contents and of its legal effect. The Parties have jointly
cooperated in the drafting and preparation of this Agreement. Hence, in any construction to be
made of this Agreement, the same shall not be construed in favor or against either WOCWB or
City. The terms and provisions of this Agreement shall be construed in accordance with the laws
of the State.
5.3 Entire Agreement. This Agreement constitutes a single, integrated written
contract which contains the sole and entire agreement and understanding of WOCWB and City
with respect to the subject matter of the reimbursements set forth herein (subject to the terms of
the Settlement Agreement), and contains all covenants and agreements between the WOCWB
and City with respect to such matter. No covenants, agreements, representations, or warranties
of any kind whatsoever, whether express or implied in fact, have been made by any party to this
Agreement, except as specifically set forth in this Agreement. All prior and contemporaneous
discussions, negotiations and agreements as to such matters have been and are merged and
integrated into, and are expressly superseded by, this Agreement.
5.4 Successor Is Deemed Included in All References to Predecessor. Whenever in
this Agreement either the WOCWB or City is named or referred to, such reference shall be
10
deemed to include the successors or assigns thereof, and all the covenants and agreements in this
Agreement contained by or on behalf of the WOCWB or City shall bind and inure to the benefit
of the respective successors and assigns thereof whether so expressed or not.
5.5 Assignment. This Agreement, and the rights and obligations hereof, shall not be
assigned without the prior written consent of the other Party hereto.
5.6 Severability of Invalid Provisions. If any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in
any respect, then such provision or provisions shall be deemed severable from the remaining
provisions contained in this Agreement and such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement, and this Agreement shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein. The
WOCWB hereby declares that it would have entered into this Agreement and each and every
other Section, subsection, paragraph, sentence, clause or phrase hereof irrespective of the fact
that any one or more Sections, subsections, paragraphs, sentences, clauses or phrases of this
Agreement may be held illegal, invalid or unenforceable.
5.7 Amendments. No modification, amendment or waiver of any of the provisions
contained in this Agreement, or any future representations, promise, or condition in connection
with the subject matter of this Agreement shall be binding upon any party to this Agreement
unless made in writing and signed by such party or by a duly authorized officer or agent of such
pang
5.8 Waiver. The failure of any party hereto to insist on compliance within any of the
terms, covenants or conditions of this Agreement by any other party hereto, shall not be deemed
a waiver of such terms, covenants or conditions of this Agreement by such other party, nor shall
any waiver constitute a relinquishment of any other right or power for all or any other times.
5.9 Waiver of Personal Liability. No member, officer, agent or employee of
WOCWB or City shall be individually or personally liable for any payment(s) due hereunder or
be subject to any personal liability or accountability by reason of the execution and delivery
thereof, but nothing herein contained shall relieve any such officer, agent or employee from the
performance of any official duty provided by law or by this Agreement.
5.10 Cooperation and Execution of Documents. The parties hereto agree to
complete and execute any further or additional documents which may be necessary to complete
or further the terms of this Agreement.
5.11 California Law. This Agreement shall be construed and governed in accordance
with the laws of the State of California, applicable to contracts made and performed in the State.
5.12 Exhibits. The following exhibits attached hereto are incorporated into this
Agreement by reference.
11
Exhibit Description
"A" Description of Allocated Ownership/Financial
Responsibility for Relocated Facilities
"B" Description of Relocation Facilities
"C" Schedule of Allocated Financial Participation Payments
5.13 Notices. Any notice, demand request, consent, approval or communication that
any party desires or is required to give to any other party hereunder shall be in writing, postage
prepaid and addressed to each other party at the following addresses or at such other address as
may have been specified by notifying the other parties of the change of address:
To WOCWB: WOCWB
Attention: General Manager
2000 Main Street
Huntington Beach, CA 92648
To City: City of Seal Beach
Attention: City Manager
211 8'" Street
Seal Beach, CA 90740
5.14 Execution in Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original.
[Remainder of this page intentionally blank]
12
BAWn9 21
I9 M21
IN WITNESS WHEREOF, the Parties to this Agreement have executed this Agreement
by their duly Authorized Officers as of the date first set forth above.
WEST ORANGE COUNTY WATER BOARD
By:
Chairperson
By:
General Manager
CrfY
By:
Title:
ATTEST:
By:
Title:
Signature Page -
EXHIBIT "A"
DESCRIPTION OF ALLOCATED OWNERSHD'/FINANCIAL RESPONSIBILITY
FOR RELOCATED FACILITIES
WEST ORANGE COUNTY WATER BOARD
I-405 FREEWAY PIPELINE RELOCATION PROJECT
ALLOCATION OF ESTIMATED COSTS BY AGENCY
AGENCY
PERCENT
OWNERSHIP
ESTIMATED
COSTS
Huntington Beach
56.1
$3,510,873
Garden Grove
4.2
$262,846
Seal Beach
14.3
$894,928
Westminster
25.4
$1,589,593
Totals
100
$6458,240
Note: The estimated costs listed above are subject to changes upon the receipt of the final
contract bid and as set forth in Section 3.3 herein.
A-1
EXIIIBIT `B"
DESCRIPTION OF RELOCATION FACILITIES
The Orange County Transportation Authority's 1-405 Freeway Widening Project requires the
WOCWB to relocate approximately 2,400 feet of its 33 -inch OC -35 transmission pipeline where
it traverses beneath the freeway immediately to the south of the Westminster Boulevard bridge
between the intersections of Willow Lane and Westminster Blvd. and the intersection of
Springdale Street and Westminster Blvd.
The new pipeline will extend south from Westminster Boulevard along Willow Lane to the cul-
de-sac at the end of Willow Lane on the northeast side of the I-405 Freeway. The pipeline will
then cross beneath the freeway in a steel casing pipe to the intersection of Willow Lane and
Mahogany Avenue on the southwest side of the freeway. From that point the pipe will then
extend to the intersection of Mahogany Avenue and Springdale Street where it will connect to
the OC -35 pipeline.
!3i
EXHIBIT "C"
SCHEDULE OF ALLOCATED FINANCIAL PARTICIPATION PAYMENTS
Payment Number
Payment Due Date
1
March 1, 2018
2
June 1, 2018
3
Se tembu 1, 2018
4
December 1, 2018
5
March 1, 2019
6
June 1, 2019
7
September I, 2019
8
December 1, 2019
9
March 1, 2020
10
Jme 1, 2020
11
September 1, 2020
12
Duembu 1, 2020
13
Mamh 1, 2021
14
June 1, 2021
15
September 1, 2021
16
December 1, 2021
17
Mamh 1, 2022
18
June I, 2022
19
September 1, 2022
20
December 1, 2022
21
March 1, 2023
22
June 1, 2023
23
September 1, 2023
24
December 1, 2023
25
March 1, 2024
26
June 1, 2024
27
September 1, 2024
28
December I, 2021
29
March I, 2025
30
June I, 2025
31
September 1, 2025
32
December 1, 2025
33
March 1, 2026
34
June 1, 2026
35
September 1, 2026
36
December 1, 2026
37
March 1, 2027
I'
June 1, 2027
39
September 1, 2027
40
December 1, 2027
C-1
Notes:
1.) The proposed quarterly Payment schedule assumes a loan date of December 15, 2017.
This quarterly payment schedule shall be adjusted based on the actual date of loan,
however payment shall be provided no later than the first day of the month for each
quarter for the preceding payment period.
2.) For each quarterly payment, quarterly loan Interest, quarterly loan principal, and any late
fees for previous billing shall be included for the anticipated 40 payment (10 year) loan.
3.) The proposed quarterly Payment schedule will be updated with the quarterly Payment
amounts when the contract bid has been finalized and accepted by the WOCWB and
OCTA.
4.) The proposed quarterly Payment schedule and Payment amounts are subject to changes
as set forth in Section 3.3 herein.
C-2
Attachment "C"
STATE CONTROLLER'S OFFICE
Division of Accounting and Reporting
Surplus Money Investment Fund
Apportionment Yield Rate
Period Endin
Rate
Period Ending Rate
Period Ending
Rate Period Ending
Rale
12/31/1964
3.777%
12/31/1981 12.188%
12/31/1998
5.553% 12/3112009
0.594%
6/30/1965
3.968%
6/30/1982 11.931%
6/30/1999
5.134% 3/31/2010
0.551%
12/31/1965
4.184%
12/31/1982 11.262%
12/31/1999
5.341% 6/30/2010
0.559%
6/30/1966
4.538%
6/30/1983 9.849%
6/30/2000
5.986% 9/30/2010
0.503%
12/31/1966
5.057%
12/31/1983 10.120%
12/31/2000
6.493% 12/31/2010
0.456%
6/30/1967
4.815%
6/30/1984 10.605%
6/30/2001
5.731% 3/31/2011
0.508%
12/31/1967
4.744%
12/31/1984 11.475%
12/31/2001
3.993% 6/30/2011
0.480%
6/30/1968
5.333%
6/30/1985 10.191%
6/30/2002
2.853% 9/30/2011
0.377%
12/31/1968
5.540%
12131/1985 9.497%
12131/2002
2.468% 12/31/2011
0.378%
6/30/1969
6.520%
6/30/1986 8.701%
613012003
1.859% 3/31/2012
0.374%
12131/1969
6.389%
12/31/1986 7.655%
12/31/2003
1.590% 6/30/2012
0.361%
6/30/1970
7.072%
6/3011987 7.220%
3/31/2004
1.467% 9/30/2012
0.349%
12/31/1970
7.696%
12131/1987 7.772%
6/30/2004
1.441% 12/31/2012
0.316%
6/30/1971
5.154%
6/3011988 7.946%
9/30/2004
1.665% 3/31/2013
0.275%
1213111971
5.580%
12/31/1988 8.336%
12/31/2004
1.995% 6/30/2013
0.246%
6/30/1972
4.477%
6/30/1989 8.956%
3/31/2005
2.373% 9/30/2013
0.249%
12131/1972
4.977%
12/31/1989 8.784%
6/30/2005
2.851% 12/31/2013
0.248%
6/30/1973
6.023%
6/30/1990 8.520%
9/30/2005
3.178% 3/31/2014
0.222%
1213111973
8.717%
12/31/1990 8.339%
12/31/2005
3.626% 6/30/2014
0.228%
6/30/1974
9.222%
6/30/1991 7.674%
3/31/2006
4.032% 9/30/2014
0.234%
12131/1974
10.315%
12/31/1991 6.761%
6/30/2006
4.529% 12/31/2014
0.249%
6/30/1975
7.089%
6/3011992 5.649%
9/30/2006
4.926% 3/31/2015
0.254%
12/3111975
6.791%
12/31/1992 4.821%
12/31/2006
5.106% 6/30/2015
0.283%
6/30/1976
6.048%
6/30/1993 4.605%
3/31/2007
5.172% 9/3012015
0.316%
12/31/1976
6.021%
12/31/1993 4.390%
6/30/2007
5.235% 12/31/2015
0.364%
6/3011977
5.788%
6/30/1994 4.354%
9/30/2007
5.236% 3/31/2016
0.460%
12/31/1977
6.182%
12/31/1994 5.153%
12/31/2007
4.955% 6/30/2016
0.543%
6/30/1978
7.174%
6130/1995 5.871%
3/31/2008
4.174% 9/30/2016
0.599%
12131/1978
8.096%
12/31/1995 5.827%
6/30/2008
3.108% 12131/2016
0.672%
6/30/1979
8.979%
6130/1996 5.560%
9/30/2008
2.769% 3/31/2017
0.769%
12/31/1979
9.671%
12/31/1996 5.572%
12/31/2008
2.533% 6/30/2017
0.922%
6/30/1980
11.376%
6130/1997 5.594%
3/3112009
1.903% 9/30/2017
1.069%
12/31/1980
10.257%
1213111997 5.690%
6/30/2009
1.512%
6/30/1981
11.488%
6/30/1998 5.674%
9/30/2009
0.889%
Attachment "D"
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Attachment "E"
CC 1523 West Orange County Water Board Relocation of OC -35
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OC -35 RELOCATION
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