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HomeMy WebLinkAboutagenda updatesCITY OF SAN BERNARDINO CITY MANAGER'S OFFICE MEMORANDUM TO: Honorable Mayor and City Council Members FROM: Andrea M. Miller, City Manager Andrea M. Miller, City Manager 290 North "D" Street San Bernardino, CA 92418-0001 (909) 384-5122 SUBJECT: UPDATE - Item #18 Proposed Staffing Level for the Office of the Mayor DATE: January 2, 2019 CC: City Clerk, City Attorney Enclosed you will find an updated staff report and attachments associated with item #18 on the January 2, 2019 Council Agenda pertaining to the proposed staffing level for the Office of the Mayor. The updated staff report and associated attachments include changes in the fiscal impact projections reflecting the costs associated with adding six new positions. January 2, 2019 City of San Bernardino Agenda Item #18 1. Updated Staff Report 2. Attachment 1 — Mayor's Office Staffing Analysis 3. Attachment 2 — 10 -Year Historical Data of Mayor's Office Staffing City of San Bernardino Request for Council Action Date: January 2, 2019 To: Honorable Mayor and City Council Members Staff Report From: Andrea M. Miller, City Manager On Behalf of Mayor John Valdivia Subject: Proposed Staffing Level for the Office of the Mayor Recommendation Review, discuss and consider proposed increases in the staffing level within the Mayor's Office to support the operational needs as identified by the Mayor; and Authorize the Director of Finance or designee to amend the FY 2018/19 Adopted Budget by appropriating up to $254,131 from the General Fund reserve into the various affected salary accounts to establish 6 new positions in the Office of the Mayor. In future years the costs, which are projected to be up to $508,262, would be recommended as part of the annual budget. Background Mayor Valdivia has identified changes in the organizational structure within the Mayor's Office to provide the personnel needed to support the objectives that have been set forth by the Mayor. As such, he requested that I prepare the analysis and necessary adjustments to the annual operating budget to effectuate this change. Discussion The FY 2018119 Adopted Budget for the Mayor's Office includes funding in the amount of $305,692 for three (3) full-time positions. These positions include: ➢ One (1) Chief of Staff (U); ➢ One (1) Assistant to the Mayor II (U); and ➢ One (1) Assistant to the Mayor III (U). In order for Mayor Valdivia to achieve his objectives, he is proposing to fill the three existing positions and add six new positions which would result the following for the Mayor's Office: ➢ One (1) Chief of Staff (U); ➢ One (1) Executive Assistant to the Mayor (U)*; ➢ One (1) Assistant to the Mayor III (U); 1/2/2019 4:08 PM ➢ One (1) Assistant to the Mayor II (U); ➢ Four (4) Assistant to the Mayor I (U); and ➢ One (1) Senior Customer Service Representative (U), to serve as front office receptionist. The Executive Assistant to Mayor (U) position will replace the existing budgeted Assistant to the Mayor 111 (U) position. The proposed position is less than the current budgeted position. Difference between the two positions is approximately $19,300 per year. The proposed six (6) additional positions would be assigned the duties as follows: ➢ Assistant to the Mayor 1(4 positions) This position will serve as liaison between the Mayor and constituents, district organizations, local governments, and state and federal agencies. This classification will monitor pertinent local issues, especially those involving local agencies, and keep the Mayor and staff up to date on pending matters. ➢ Assistant to the Mayor III (U) (1 position) This position will serve as the communications director for the mayor to assist in his role as the chief spokesman for the city. ➢ Senior Customer Service Representative (U) (1 position) This position will serve to greet visitors to the office; answer, screen and transfer telephone calls; refer calls or requests for services to the appropriate departments and agencies; and assist in preparing correspondence and other duties as needed in support of the Mayor's Office. Budgetary Considerations At the December 19, 2018 City Council Meeting, members of the City Council identified the need for investment in a General Plan Update along with additional planning staff, trained Code Enforcement Officers, street repair and improvements, and City property maintenance improvements. As the City Manager, it is my obligation to ensure the Mayor and City Council have the information needed to fully evaluate and contemplate the potential impacts of policy decisions. Approval of the proposed increase in staffing in the Mayor's Office will have an impact on the City's current budget, as well as its long term financial planning. As we look towards the next fiscal year, the preliminary estimate indicates that there is a projected deficit of over $2 Million. There are needs throughout the organization that have been identified that cannot be met at this time due to budgetary constraints. Those that have the most impact at this time include the estimated $2 to $3 million cost related to the update of the General Plan. Additionally, the Community and Economic Development Department is operating in an increasingly complex and litigious regulatory environment. The current staffing level is inadequate to assure basic compliance. As the City builds up, the infill development 1/2/2019 4:08 PM process will be considerably more complex as every new project directly affects existing businesses and the conditions in existing residential neighborhoods. In order to be in a position to move the City in a positive direction there needs to be adequate staff in each division including additional planners, plan check positions, and staff to support in land development and economic development. In addition to the City Prosecutor position, additional Code Enforcement field personnel are needed. The Animal Control program is operating with limited resources, and as the City continues to invest in its infrastructure, increased Public Works staffing is needed to address the maintenance and facility issues. These needs do not include the significant investment that is needed in the Police Department nor the more than $100 Million in deferred maintenance costs identified in last year's budget process. Financial Impact The additional cost of the six (6) new positions in the Mayor's Office would be between $386,853 and $508,262 annually (depending on starting salary placement). Assuming the new positions will be filled as early as January 2019, the additional cost in FY 2018/19 is nearly $254,131 (6 months of top step salary and benefits). The proposed additional cost of the new positions in the Mayor's Office over the next 10 years is estimated to be more than $4.8 million. Additional information related to the impact on the City's 10 -year financial plan and historic staffing levels in the Mayor's Office over the last 10 years will be presented at this evening's meeting. 2018-2019 Goals and Objectives The proposed changes to the Mayor's Office align with Goal No. 3: Create. Maintain and Grow Jobs and Economic Value in the Citv, as the perceptions of the City are directly related to our ability to encourage investment in and attract economic development to the City and Goal No. 7: Pursue City Goals and Objectives by working with other a-gencies such as: Federal, State, and regional governments to ensure San Bernardino receives its fair share of resources by maintaining close working relationships with other governmental agencies. Conclusion It is recommended the City Council review, discuss and consider the requested staffing changes to the Mayor's Office and amend the FY 2018/19 Adopted Budget accordingly. 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The City, East Valley and 7 Valley District are each sometimes referred to herein as a "Party" and are collectively referred 8 to herein as the "Parties." 9 10 Recitals 11 12 A. On March 15, 2016, Valley District certified the Final Environmental Impact Report 13 ("SNRC EIIt") under the provisions of the Califomia Environmental Quality Act 14 ("CEQA' for the Sterling Natural Resource Project ("SNRC Project") and approved 15 the SNRC Project. 16 17 B. On April 14, 2016, the City filed suit (the "CEQA Lawsuit') challenging the validity of 18 Valley District's certification of the SNRC EIR as violating the provisions of CEQA. 19 20 C. On June 1, 2016, the City filed a second lawsuit (the "LAFCo Lawsuit') challenging 21 East Valley's actions in connection with the SNRC Project and alleging such actions 22 violated the Cortese -Knox -Hertzberg Act ("LAFCo Law"). Valley District and East 23 Valley filed a cross-complaint in that action. 24 25 D. On March 7, 2017, SB Water certified the Final Environmental Impact Report ("CWF 26 EIW) under the provisions of CEQA for the Clean Water Factory Project ("CWF 27 Project") and approved the CWF Project. 28 29 E. On June 6, 2017, the Superior Court for the County of San Diego entered judgment in 30 favor of Valley District and East Valley in connection with the CEQA Lawsuit. The City 31 has filed a timely appeal of that decision. 32 33 F. By means of tolling agreements and stipulations the Parties have: (i) tolled the dates for 34 filing the appendix on appeal and briefs in CEQA Lawsuit in the Court of Appeal, (ii) 35 tolled all discovery and the hearing on the City's motion for a writ of mandate in the 36 LAFCo Lawsuit (including discovery undertaken in connection with the cross-complaint 37 filed by Valley District and East Valley), (iii) tolled the deadline for the City to file a 38 motion to tax costs in the CEQA Lawsuit, and (iv) tolled the statute of limitations on 39 potential legal challenges by East Valley and Valley District to the CWF Project. 40 41 G. The Parties now wish to enter into a comprehensive settlement that will accomplish a 42 number of different purposes, all of which are of equal importance. Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 1 of 18 17021973 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 H. 70 71 72 73 1. 74 75 76 77 78 79 80 81 82 1507197.3 Execution Copy ® The Parties wish to enter into arrangements that will allow East Valley and Valley District to construct and operate the SNRC Project and that will allow the City to construct and operate the CWF Project. • The Parties wish to enter into arrangements that will ensure that the SNRC Project and the CWF Project are operated in a manner that is consistent with the recovery of threatened and endangered fish populations in the Santa Ana River that may depend on the discharge of treated wastewater into the Santa Ana River. e The Parties wish to enter into arrangements that will replenish the San Bernardino Basin Area ("SBBAI and thereby enhance water supply reliability for their respective ratepayers. • The Parties wish to enter into arrangements that will allow East Valley to provide wastewater treatment and disposal services to its ratepayers in compliance with the LAFCo Law, and without adversely affecting the ratepayers within the City. c The Parties wish to further enhance water supply reliability (and thereby lessen the demands for the extraction of groundwater from the SBBA) by engaging in a number of water efficient landscape improvements located within the City. • The Parties wish to conclude all of the foregoing litigation on a mutually agreeable basis and move on from the conflict associated with litigation to collaborative efforts that will best serve the interests of their respective ratepayers. The Parties wish to memorialize their mutual agreements and understandings by means of this Agreement. Agreements Construction and Operation of Facilities a. Status of Existing JPA Agreement. At present, the City provides wastewater treatment and disposal services to East Vallcy pursuant to a Joint Powers Authority agreement dated January 7, 1958, as amended most recently in April 1984 (",IiPA Agreement"}. The Parties intend to continue to operate under the terms of the JPA Agreement solely as it pertains to wastewater treatment and disposal services until termination of the JPA Agreement as provided for in subparagraph 1(b) below. Not later than ninety (90) days after the date upon which the San Bernardino Local Agency Formation Commission ("LAFCo") may approve the activation of East Valley's latent authority for wastewater Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 2 of 18 Execution Copy 83 treatment and disposal services, all remaining JPA obligations imposed upon the 84 Parties including, but not limited to, East Valley's obligation to collect connection 85 fees for the benefit of the City and the expansion fees described in section 3 (c) of 86 this Agreement shall terminate. The Parties shall, within one hundred eighty 87 0 80) days of the execution of this Agreement, agree upon amendments to the 88 JPA Agreement to effectuate this Agreement. 89 b. Termination of JPA Agreement. Prior to completion of the SNRC Project, East 90 Valley shall provide notice of anticipated completion to the other Parties and 91 identify a date, at least six (6) months in the future, when East Valley will begin 92 to provide wastewater treatment and disposal services to its customers. Upon 93 SNRC Project completion, East Valley shall provide notice of completion to all 94 Parties. 95 (1) The City shall, within thirty days of the date of East Valley's notice of 96 completion, provide the other Parties with final invoicing, consistent with 97 the City's prior invoicing practices, showing ail charges incurred or that 98 will be incurred for the operation of the City's facilities through the date 99 on which East Valley will provide wastewater treatment services. 100 (2) East Valley shall, within thirty (30) days of receiving the City's final 101 invoicing, either agree with that invoicing or begin the dispute resolution 102 process described in paragraph 6(b) below. Such disputes shall be limited 103 to invoice items that exceed one percent (1%) of the total invoiced 104 amount. 105 (3) The JPA Agreement shall terminate on the date that East Valley begins to 106 provide wastewater treatment services to its customers (the "Service 107 Date") notwithstanding any dispute among the parties relating to the 108 invoicing provided by the City. Such disputes will be addressed through 109 procedures described in paragraph 6(b) below. 110 c. SNRC Profect. The Parties agree to cooperate to enable East Valley and Valley 111 District to construct the SNRC Project and place that project into operation at the 112 earliest possible date, as follows: 113 (1) General Provisions 114 (a) The Parties agree that the SNRC Project will divcrt and treat all 115 wastewater flows that are generated within East Valley's service 116 area, which are currently approximately 6 million gallonstday, that 117 would have been treated by SB Water pursuant to the JPA 118 Agreement. Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 3 of 18 1502197.3 Execution Copy 119 (b) Upon execution of this Agreement, the City and SB Water shall 120 send a letter to the State Water Resources Control Board 121 supporting the use of State Revolving Fund ("SRIF") grant and 122 loan fiords, at the lowest available rate of interest, to fund the 123 SNRC Project. Such letter shall be approved in advance by East 124 Valley. If requested by East Valley and/or Valley District, 125 representatives of the City and/or SB Water shall participate in a 126 teleconference with the State Water Resources Control Board or its 127 staff to state that SRF grant or loan funds be issued to East Valley 128 for the construction of the SNRC Project. 129 (c) After execution of this Agreement and upon request of East Valley 130 and/or Valley District, the City and/or SB Water shall provide 131 similar letter(s) supporting the SNRC Project to local, state or 132 federal administrative or regulatory agencies, private financial 133 institutions, or other entities with oversight or control over the 134 SNRC Project or its financing. 135 (2) East Trunk Sewer Line. The Parties shall negotiate and execute the 136 appropriate legal instruments through which the City and SB Water shall 137 convey by means of grant deed all right, title and interest in a 20,800 138 linear foot portion of the East Trunk Sewer Line as shown on Exhibit A 139 attached hereto, which is incorporated herein by reference, together with 140 any associated appurtenances, easements, operating agreements and the 141 like necessary for the safe operation of that portion of the East Trunk 142 Sewer Line, to East Valley. Such conveyance shall become effective on 143 the date upon which LAFCo may approve activation of East Valley's 144 latent authority to provide wastewater treatment services. This portion of 145 the East Trunk Sewer Line is needed by East Valley so as to allow Hast 146 Valley to collect and transport wastewater flows to the SNRC Project. 147 The City, SB Water and East Valley shall cooperate in drawing up the 148 necessary documentation and obtaining any regulatory permits for such 149 transfer. All costs incurred by any Party associated with the conveyance 150 and transfer of this portion of the East Trunk Sewer Line shall be the sole 151 responsibility of East Valley, and Fast Valley shall reimburse the other 152 Parties for any such costs incurred by them. After the date of the transfer, 153 East Valley shall be responsible for all operation and maintenance costs 154 associated with the portion of the East Trunk Sewer Line that has been 155 transferred to East Valley from the City and SB Water. 156 (3) Commingling/Exchange of Flows. East Valley, the City and SB Water 157 further understand and agree that implementing the transfer of a portion of Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 4 of 18 150MIJ Execution Copy 158 the East Trunk Sewer Line, both while the SNRC Project is being 159 constructed and after the SNRC Project commences operation, will require 160 an exchange/commingling of wastewater flows originating within the 161 service areas of the City/SB Water and East Valley in roughly equal 162 quantities so as to ensure the efficient operation of the regional wastewater 163 system and thereby avoid increasing the cost of wastewater treatment to 164 East Valley's ratepayers. The City/SB Water and East Valley agree that, 165 within one hundred eighty (180) days of the effective date of this 166 Agreement, they will enter into the necessary agreements for such 167 exchange/commingling of wastewater flows, and that they will cooperate 168 fully in obtaining any regulatory approvals needed for the transfer of the 169 portion of the East Trunk Sewer Line to East Valley. To the extent that 170 additional physical facilities are needed to accomplish the transfer, the 171 costs associated with the permitting, construction and operation of those 172 new physical facilities shall be the sole responsibility of East Valley, and 173 East Valley shall reimburse the other Parties for any such costs incurred 174 by them. 175 d. CWF Project. Ilie Parties agree to support the construction and operation of a 176 new recycled water plant project by the City (known as the "CWF Project"). 177 (1) SB Water and Valley District hereby reaffirm their respective 178 commitments pursuant to the February 22, 2011 Memorandum of 179 Understanding ("MOU") that withdrew protests to Wastewater Change 180 Petition No. WWO059 for the CWF Project. 181 (2) After execution of this Agreement and upon request of the City, Valley 182 District and/or East Valley shall appear at public meetings to support the 183 CWF Project and/or take such other actions (including but not limited to 184 resolutions of their respective governing boards) to support the CWF 185 Project. After execution of this Agreement and upon request of the City or 186 SB Water, East Valley and/or Valley District shall provide similar letter(s) 187 supporting the CWF Project to local, state or federal administrative or 188 regulatory agencies, private financial institutions, or other entities with 189 oversight or control over the CWF Project or its financing. 190 (3) The Parties agree that the CWF Project will not be inconsistent with the 191 provisions of the Upper Santa Ana River Habitat Conservation Pian, if 192 such plan is approved by the United States Fish & Wildlife Service 193 ("USFWS,�. 194 (a) The City and Valley District, together with their partners under 195 said MOU, may seek to obtain the regulatory permits necessary for Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 5 of 18 ISMI"i Execution Copy 196 the CWF Project in advance of the completion of the Upper Santa 197 Ana River Habitat Conservation Plan, provided that the provisions 198 associated with the CWF Project are subsequently included in the 199 Upper Santa Ana River Habitat Conservation Plan. 200 (b) If the USFWS does not approve the Upper Santa Ana River 201 Habitat Conservation Plan by January 1, 2020, then the City and 202 Valley District may seek to obtain separate regulatory permits for 203 the CWF Project. 204 (4) After execution of this Agreement, after submittal of any SRF grant/loan 205 application for the CWF Project, and upon request of the City or SB 206 Water, Valley District and East Valley shall send a letter to the State 207 Water Resources Control Board supporting the use of SRF grant and loan 208 funds, at the lowest available rate of interest, to fund the CWF Project. 209 Such letter shall be approved in advance by the City or SB Water. if 210 requested by the City or SB Water, representatives of East Valley and/or 211 Valley District shall participate in a teleconference with the State Water 212 Resources Control Board or its staff to state that SRF grant or loan funds 213 be issued to the City or SB Water for the construction of the CWF Project. 214 C. Treatment and Management of Solids 215 (1) Prior to the Completion of the SNRC Project. Until the completion of the 216 SNRC Project, East Valley and City/SB Water will work cooperatively to 217 enable the City/SB Water to treat solids originating within East Valley's 218 service area in the same manner as at present. The Parties shall also work 219 cooperatively: (i) to develop cost-effective plans and specifications for any 220 additional pipelines or new equipment/facilities that may be necessary to 221 effectuate the solids handling agreement described in paragraph l(e)(2) 222 below; (ii) in the acquisition and construction of such equipmentffacilities; 223 and (iii) in securing any needed regulatory permits or approvals. East 224 Valley shall be responsible for all cost associated with such pipelines or 225 new equipment/facilities as may be determined in the agreement described 226 in paragraph 1(e)(2) below. 227 (2) After Completion of the SNRC Project. Within thirty (30) days of the 228 effective date of this Agreement, East Valley and the City/SB Water will 229 enter into negotiations for the handling of solids after the completion of 230 the SNRC Project, with the goal of entering into a definitive agreement for 231 the cost-effective handling of solids originating within East Valley's 232 service area by the City/SB Water no later than one hundred eighty (180) 233 days from the effective date of this Agreement. Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 6 of 18 1502197,3 Execution Copy 234 (a) The initial term of the solids handing agreement shall be for ten 235 (10) years, with two optional five (5) year renewal periods. The 236 solids handling agreement shall commence on the Service Date. 237 The solids handling agreement shall include an "evergreen" term 238 that provides that the agreement shall be renewed for subsequent 239 terms unless either party provides written notice of termination at 240 least two years before the termination of the then -current term. 241 (b) The solids handling agreement shall provide for a service charge to 242 be paid by East Valley to the City/SB Water, which charge shall be 243 set so as to enable the City/SB Water to recover the actual costs of 244 providing solids handling and treatment of the solids handling 245 process liquid product, together with reasonable overhead not to 246 exceed forty percent (40%) of the actual cost of service, provided 247 that overhead shall not be charged on electricity costs charged by a 248 third party utility provider and associated with the provision of 249 solids handling. 250 (c) In the event that the City/SB Water and East Valley are unable to 251 agree on the design, construction, or installation for the 252 equipment/facilities that would enable SB Water to continue to 253 provide solids handling services to East Valley after the Service 254 Date by one hundred eighty (180) days after the effective date of 255 this Agreement, East Valley shall, not later than thirty (30) days 256 after the Service Date and on the anniversary of the Service Date 257 thereafter for nine (9) years, pay SB Water the sum of seven 258 hundred thousand dollars ($700,000) each year, for a total payment 259 to SB Water of seven million dollars ($7,000,000). In the 260 alternative, and subject to the prior written consent of SB Water 261 and SB Water's concurrence on the value of the replenishment 262 water, East Valley may replenish the SBBA with water that has an 263 equivalent value as the payment to be made in any given year. 264 f. Installation of Water E,ficlent Landscaping. Not later than ninety -(90) days after 265 the date upon which LAFCo may approve the activation of East Valley's latent 266 authority for wastewater treatment and disposal services, East Valley shall pay 267 five hundred thousand dollars ($500,000) and Valley District shall agree to 268 reimburse the City for up to five hundred thousand dollars ($500,000) to SB 269 Water for the purpose of enabling SB Water to install water efficient landscape 270 improvements in areas to be determined by the City and SB Water. During that 271 same period of time, SB Water shall contribute an additional five hundred 272 thousand dollars ($500,000) to that account, to bring the total contributions to the Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 7 of 18 1501197.] Execution Copy 273 account to one million five hundred thousand dollars ($1,500,000). The City and 274 SB Water, after consulting East Valley and Valley District, shall develop a plan 275 for the installation of water efficient landscape improvements using the $1.5 276 million, within one (l) year of the execution of this Agreement. The City and SB 277 Water shall install such water efficient landscape improvements within three (3) 278 years of the date of execution of this Agreement. 279 g. Replenishment of the SM. Beginning in the fiscal year of the Service Date or 280 fiscal year 2021/22, whichever is later, Valley District shall deliver to the City/SB 281 Water a total of thirty thousand (30,000) acre-feet of State Water Project Water, at 282 Valley District's sole cost, for direct diversion and/or groundwater replenishment 283 at the City/SB Water's direction. City/SB Water expects to use and Valley 284 District expects to deliver three thousand (3,000) acre-feet of such water each 285 year, but if Valley District is not able to deliver three thousand (3,000) acre-feet in 286 a given year, it shall use its best efforts to deliver the undelivered water in the 287 following fiscal years, provided that such water is available in any given year 288 pursuant to Valley District's contract with the California Department of Water 289 Resources. The unavailability of such water in any given year does not excuse 290 Valley District's overall obligation under this Agreement to deliver thirty 291 thousand (30,000) acre-feet of such water to the City/SB Water. 292 h. Upper Santa Ana River Habitat Conservation Plan and the CWF Project. Valley 293 District shall use its best efforts to develop, in conjunction with USFWS and 294 California Department of Fish and Wildlife ("C1D1! W ') (collectively, the 295 "Wildlife Agencies") and through the Wildlife Agencies' permitting processes, a 296 habitat conservation plan for the Upper Santa Ana River that provides for take 297 coverage for a new recycled water plant project on the part of the City/SB Water 298 that would reduce the current discharge of treated wastewater into the Santa Ana 299 River by five (5) million gallons/day. 300 (1) In the event that the final habitat conservation plan, or as provided in 301 paragraphs 1(d)(3) and 1(h) above, the Wildlife Agencies' permitting 302 processes, does not authorize the City/SB Water to reduce its discharge of 303 treated wastewater to the Santa Ana River by five (5) million gallons/day, 304 Valley District shall deliver to the City/SB Water up to three thousand 305 (3,000) acre-feet per year of State Water Project Water, at Valley 306 District's sole cost, for direct diversion and/or groundwater replenishment 307 at the City/SB Water's direction. 308 (2) The annual amount of such water delivered by Valley District will be the 309 difference between five (5) million gallons/day and the amount of treated 310 wastewater discharge that SB Water is allowed to reduce from its current 311 discharge amount. Valley District will provide this annual amount until Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 8 of 18 ISM197.a Execution Copy 312 the City/SB Water can reduce its discharge by five (5) million gallons per 313 day from its current discharge amount for its recycled water project, 314 provided that prior to the construction of the City/SB Water's new 315 recycled water plant, the City/SB Water has installed and is properly 316 maintaining automatic back-up power for the RIXES Well 317 Rehabilitation/Santa Ana Sucker Habitat Maintenance/Restoration Project 318 at the City/SB Water's wastewater treatment plant(s). 319 (3) The Parties agree and acknowledge thaf future growth within the service 320 areas of SB Water and East Valley may allow SB Water and East Valley 321 to increase the quantity of recycled water generated from wastewater 322 flows within their respective service areas. The Parties agree that they 323 will support increases in the quantity of recycled water as part of both the 324 SNRC Project and the CWF Project provided that the increase in recycled 325 water for either project is derived from growth within that Party's service 326 area and provided further that such increased use of recycled water does 327 not diminish the quantity of treated wastewater that will be discharged into 328 the Santa Ana River pursuant to the Upper Santa Ana River Habitat 329 Conservation Plan. 330 2. Application to San Bernardino County Local Agency Formation Commission to Activate 331 Wastewater Treatment Authority. Within 60 days of the execution of this Agreement, 332 East Valley shall begin the process to submit to LAFCo an application to activate its 333 latent wastewater treatment and disposal authority. East Valley agrees that it will pursue 334 the application to a final decision by LAFCo, either in favor of the activation of the latent 335 authority or to deny activation of that authority. At least 45 days prior to the submission 336 of the application, East Valley shall provide a draft of the proposed application to the 337 other Parties to this Agreement for review and comment. The provisions of the 338 application shall be consistent with the terms of this Agreement and shall fully comply 339 with all of the applicable requirements of LAFCo Law. No later than five (5) days after 340 the date on which East Valley submits the application to LAFCo, the City/SB Water and 341 Valley District shall submit letters supporting that application to LAFCo. The Parties 342 understand that East Valley will request that LAFCo expedite processing of the 343 application so that East Valley's latent wastewater treatment authority can be activated no 344 later than December 31, 2018. The City/SB Water and Valley District, upon request by 345 East Valley, shall appear at public meetings to support East Valley's application and/or 346 take such other actions (including but not limited to resolutions of their respective 347 governing boards) to support that application. Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 9 of 18 15@197.3 Execution Copy 348 3. Transfers of Property and Other Assets. The Parties will negotiate and execute definitive 349 agreements for the following transfers of property and assets, which will become 350 effective on the date that LAFCo approves the activation of East Valley's latent authority 351 to treat and dispose of wastewater. 352 a. The transfer, in fee title and without encumbrances or liens, from East Valley to 353 the City/SB Water of approximately 22 acres of land located at the intersection of 354 Sterling and 3'd Street (APNs 1192-231-01 and 1192-241-01), save for the 355 existing well portion of the property, as shown on Exhibit B, which is attached 356 hereto and incorporated herein by reference. 357 b. The transfer from the City/SB Water to East Valley of the balance of the East 358 Trunk Sewer Line Replacement Fund, which is currently estimated to be 359 approximately $8 million, which funds have been collected by the City/SB Water 360 from East Valley's ratepayers since 1984 for the purpose of expanding the 361 capacity of the East Trunk Sewer Line to meet the needs of future growth. Not 362 later than ninety (90) days after the date upon which LAFCo may approve the 363 activation of East Valley's latent authority for wastewater treatment and disposal 364 services, the East Trunk Sewer Line funds will no longer be collected by the 365 City/SB Water. East Valley shall use the transferred funds in compliance with all 366 applicable laws, including but not limited to Proposition 218. 367 C. The transfer under subparagraph 3(a) is made by East Valley to the City/SB 368 Water in consideration of the transfer from the City/SB Water to East Valley 369 under subparagraph 3(b). 370 4. Dismissal/Prevention of Litigation. The Parties agree that this Agreement represents a 371 comprehensive settlement of all current litigation between the Parties. Not later than ten 372 (10) days after the execution of this Agreement, the City shall dismiss its appeal in the 373 CEQA Lawsuit with prejudice, and the City, East Valley, and Valley District shall 374 dismiss their respective complaints in the LAFCo Lawsuit with prejudice. Valley District 375 and East Valley shall, also within ten (10) days after the execution of this Agreement, 376 withdraw their pending Bill of Costs filed in the CEQA Lawsuit, and all Parties shall bear 377 their own costs and fees incurred in said litigation. Valley District and East Valley agree 378 that they will not file any administrative or judicial challenges to the CWF Project. Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 10 of 18 150x197., Execution Copy 379 5. Indemnification 380 a. General Indemnification. Each Party shall indemnify, defend and hold harmless 381 each of the other Parties and their respective directors, officers, employees and 382 agents from and against all damages, liabilities, claims, actions, demands, costs 383 and expenses (including, but not limited to, costs of investigations, lawsuits and 384 any other proceedings whether in law or in equity, settlement costs, attorneys' 385 fees and costs), and penalties or violations of any kind, which arise out of result 386 from, or are related to the Party's performance of its obligations under this 387 Agreement. 388 b. Indemnification Procedures. Any Party that is an indemnified party (the 389 "Indemnified Party") that has a claim for indemnification against the other Party 390 (the "Indemnifying Party") under this Agreement, shall promptly notify the 391 Indemnifying Party in writing, provided however, that no delay on the part of the 392 Indemnified Party in notifying the Indemnifying Party shall relieve the 393 Indemnifying Party from any obligation unless (and then solely to the extent) the 394 Indemnifying Party is prejudiced. Further, the Indemnified Party shall promptly 395 notify the Indemnifying Party of the existence of any claim, demand, or other 396 matter to which the indemnification obligations would apply, and shall give the 397 Indemnifying Party a reasonable opportunity to defend the same at its own 398 expense and with counsel of its own selection, provided that the Indemnified 399 Party shall at all times also have the right to fully participate in the disputed 400 matter at its own expense. If the Indemnifying Party, within a reasonable time 401 after notice from the Indemnified Party, fails to defend a claim, demand or other 402 matter to which the indemnification obligations would apply, the Indemnified 403 Party shall have the right, but not the obligation, to undertake the defense of, and 404 to compromise or settle (exercising reasonable business judgment), the claim or 405 other matter, on behalf or for the account, and at the risk, of the Indemnifying 406 Party. If the claim is one that cannot by its nature be defended solely by the 407 Indemnifying Party, then the Indemnified Party shall make available all 408 information and assistance to the Indemnifying Party that the Indemnifying Party 409 may reasonably request. 410 6. Administration ofAgreement 411 a Books and Records Each Party shall have access to and the right to examine any 412 of the other Parties' pertinent books, documents, papers or other records 413 (including, without limitation, records contained on electronic media) relating to 414 the performance of that Party's obligations pursuant to this Agreement. 415 (1) Retention of Records; Preservation of Privilege. Each Party shall retain 416 all such books, documents, papers or other records to facilitate such Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November2017 Page 11 of 18 ISM197.3 Execution Copy 417 review in accordance with that Party's record retention policy. Access to 418 each Party's books and records shall be during normal business hours 419 only. Nothing in this paragraph shall be construed to operate as a waiver 420 of any applicable privileges. 421 (2) Outside Auditors. Any Party may, at any time and at its sole cost, hire an 422 auditor to examine the accounting for work performed pursuant to this 423 Agreement. The Parties may also agree to retain an independent auditor to 424 review the accounting for work performed pursuant to this Agreement. 425 The costs of such an auditor will be shared equally among the Parties. 426 b. Disputes. The Parties recognize that there may be disputes regarding the 427 obligations of the Parties or the interpretation of this Agreement. The Parties 428 agree that they may attempt to resolve disputes as follows: 429 (1) Statement Describing Alleged Violation or Interruption ofAgreement. A 430 Party alleging a violation or interruption of this Agreement (the 431 "Initiating Party") shall provide a written statement describing all facts 432 that it believes constitute a violation or interruption of this Agreement to 433 the Party alleged to have violated or interrupted the terms of this 434 Agreement (the "Responding Party"). 435 (2) Response to Statement of Alleged Violation or Interruption. The 436 Responding Party shall have sixty (60) days from the date of the written 437 statement to prepare a written response to the allegation of a violation or 438 interruption of this Agreement and serve that response on the Initiating 439 Party or to cure the alleged violation or interruption to the ,reasonable 440 satisfaction of the Initiating Party. The Initiating Party and the 441 Responding Party shall then meet within thirty (30) days of the date of the 442 response to attempt to resolve the dispute amicably. 443 (3) Mediation of Dispute. If the Initiating Party and the Responding Party 444 cannot resolve the dispute within ninety (90) days of the date of the 445 written response, they shall engage a mediator, experienced in water - 446 related disputes, to attempt to resolve the dispute. Each Party shall ensure 447 that it is represented at the mediation by a Director. These representatives 448 of the Initiating Party and the Responding Party may consult with staff 4.49 and/or technical consultants during the mediation and such staff and/or 450 technical consultants may be present during the mediation. The costs of 451 the mediator shall be divided evenly between the Initiating Party and the 452 Responding Party or Parties. Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 12 of 18 1502197.3 Execution Copy 453 (4) Prior to Claims Under California Tort Claims Act. The Parties agree that 454 the procedure described in this paragraph 6(b) represents an effort to 455 resolve disputes without the need for a formal claim under the California 456 Tort Claims Act or other applicable law. The period of time for the 457 presentation of a claim by one Party against another shall be tolled for the 458 period from the date on which the Initiating Party files a written statement 459 until the date upon which the mediator renders a decision. 460 (5) Reservation of Rights. Nothing in this paragraph 6(b) shall require a Party 461 to comply with a decision of the mediator and, after the completion of the 462 mediation process described above, each Party shall retain and may 463 exercise at any time all legal and equitable rights and remedies it may 464 have to enforce the terms of this Agreement; provided, that prior to 465 commencing litigation, a Party shall provide at least five (5) calendar 466 days' written notice of its intent to sue to the other Party. 467 7, General Provisions. 468 a. Authority. Each signatory of this Agreement represents that s/he is authorized to 469 execute this Agreement on behalf of the Party for which s/he signs. Each Party 470 represents that it has legal authority to enter into this Agreement and to perform 471 all obligations under this Agreement. 472 b. Amendment. This Agreement may be amended or modified only by a written 473 instrument executed by each of the Parties to this Agreement. 474 C. Jurisdiction and venue. This Agreement shall be governed by and construed in 475 accordance with the laws of the State of California, except for its conflicts of law 476 rules. Any suit, action, or proceeding brought under the scope of this Agreement 477 shall be brought and maintained to the extent allowed by law in the County of San 478 Bernardino, California. 479 d. Headings. The paragraph headings used in this Agreement are intended for 480 convenience only and shall not be used in interpreting this Agreement or in 481 determining any of the rights or obligations of the Parties to this Agreement. 482 e. Construction and Interpretation. This Agreement has been arrived at through 483 negotiations and each Party has had a full and fair opportunity to revise the terms 484 of this Agreement. As a result, the normal rule of construction that any 485 ambiguities are to be resolved against the drafting Party shall not apply in the 486 construction or interpretation of this Agreement. Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page I3 of 18 .5021973 Execution Copy 487 f. Entire Agreement. This Agreement constitutes the entire agreement of the Parties 488 with respect to the subject matter of this Agreement and, save as expressly 489 provided in this Agreement, supersedes any prior oral or written agreement, 490 understanding, or representation relating to the subject matter of this Agreement. 491 g. Partial Invalidity. If, after the date of execution of this Agreement, any provision 492 of this Agreement is held to be illegal, invalid, or unenforceable under present or 493 future laws effective during the term of this Agreement, such provision shall be 494 fully severable. However, in lieu thereof, there shall be added a provision as 495 similar in terms to such illegal, invalid or unenforceable provision as may be 496 possible and be legal, valid and enforceable. 497 h. Successors and Assigns. This Agreement shall be binding on and inure to the 498 benefit of the successors and assigns of the respective Parties to this Agreement. 499 No Party may assign its interests in or obligations under this Agreement without 500 the written consent of the other Parties, which consent shall not be unreasonably 501 withheld or delayed_ 502 i. Waivers. Waiver of any breach or default hereunder shall not constitute a 503 continuing waiver or a waiver of any subsequent breach either of the same or of 504 another provision of this Agreement and forbearance to enforce one or more of 505 the rights or remedies provided in this Agreement shall not be deemed to be a 506 waiver of that right or remedy. 507 j. Attorneys' Fees and Costs. The prevailing Party in any litigation or other action 508 to enforce or interpret this Agreement shall be entitled to reasonable attorneys' 509 fees, expert witnesses' fees, costs of suit, and other and necessary disbursements 510 in addition to any other relief deemed appropriate by a court of competent 511 jurisdiction. 512 k. Necessary Actions. Each Party agrees to execute and deliver additional 513 documents and instruments and to take any additional actions as may be 514 reasonably required to carry out the purposes of this Agreement. 515 1. Compliance with Lary. In performing their respective obligations under this 516 Agreement, the Parties shall comply with and conform to all applicable laws, 517 rules, regulations and ordinances. 518 M. Third Party Beneficiaries. This Agreement shall not create any right or interest in 519 any non -Party or in any member of the public as a third party beneficiary. Settlement Agreement City of San Bernardino, SB Weber, East Valley and Valley District November 2017 Page 14 of 19 1502197.3 Execution Copy 520 n. Counterparts. This Agreement may be executed in one or more counterparts, 521 each of which shall be deemed to be an original, but all of which together shall 522 constitute but one and the same instrument. 523 0. Notices. All notices, requests, demands or other communications required or 524 permitted under this Agreement shall be in writing unless provided otherwise in 525 this Agreement and shall be deemed to have been duly given and received on: (i) 526 the date of service if served personally, served by facsimile transmission, or 527 served via electronic mail on the Party to whom notice is to be given at the 528 address(es) provided below, (ii) on the first day after mailing, if mailed by Federal 529 Express, U.S. Express Mail, or other similar overnight courier service, postage 530 prepaid, and addressed as provided below, or (iii) on the third day after mailing if 531 mailed to the Party to whom notice is to be given by first class mail, registered or 532 certified, postage prepaid, addressed as follows: 533 Notice to San Bernardino Valley Municipal Water District 534 Douglas Headrick, General Manager 535 SAN BERNARDINo VALLEY MUNICIPAL WATER DISTRICT 536 380 East Vanderbilt Way, San Bernardino, CA 92408 537 Phone: (909) 820-3701 538 Email: douLIash@sbvmwd.com 539 540 David R.E. Aladjem 541 DowNEY BRAND LLP 542 621 Capitol Mall, Sacramento, CA 95814 543 Phone: (916) 520-5361 544 Email: daladiemndownevbrand.com 545 Notice to East Valley Water District 546 John Mura, General Manager/CEO 547 EAST VALLEY WATER DISTRICT 548 31111 Greenspot Rd., Highland, CA 92346 549 Phone: 909-889-9501 550 Email: i2bQeaeastvalley.org 551 552 Jean Cihigoyenetche 553 JC LAW FIRM 554 5871 Pine Ave., Suite 200, Chino Hills, CA 91709 555 Phone: 909-941-3382 556 E-mail: ieart6theiclawfirm.com 557 t=197a Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 15 of 18 Execution Copy 559 `odce to the City ofSan Bernardino and. the City QfSan Bernardino Municipal Water 559 Department 560 561 Andrea M. Miller, City Manager 562 CITY OF SAN BERNARDINO 563 290 North "D" Street 564 San Bernardino, CA 92418 565 Phone: (909) 384-51.22 566 E-mail: Idiller an a sb it%.or_ 567 - 568 Gary D. Saenz 569 City Attorney 570 Office of the City Attorney 571 290 North "D" Street, 3rd Floor 572 San Bernardino, CA 92401 573 Phone: (909) 384-5355 574 E-mail: Saenz_Ga@sbcity.org 575 576 Andrew M. Hitchings 577 Somach Simmons & Dunn 578 500 Capitol Mall, Suite 1000 579 Sacramento, CA 95814 580 Phone: (916) 446-7979 581 E-mail: 582 583 584 IN WITNESS HEREOF, the Parties have executed this Agreement on the dates set forth below 585 596 SAN BERNARDINO VALLEY;Vit1NICIPALWATER DISTRICT 587 588 By: Dated 589 Susan Longville 590 President, Board of Directors 591 592 By, 593 Steve Copelan, Secretary 594 1502107 Dated: Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 16 of 18 595 596 597 598 599 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 1502197 3 APPROVED AS TO FORM By: Dated: David R.E. Aladjem Downey Brand, LLP Counsel for San Bernardino Valley Municipal Water District EAST VALLEY WATER DISTRICT By: f! Ronald L. Coats Chairman of the Board By: - - - — John Myra, General N4anager, CEO APPROVED AS TO FORM By: _ .lean Cihigoyenetlie JC Law Firm Counsel for East Valley Water District Execution Copy Dated: //- V- Dated: Dated: Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page 17 of 18 618 CITY OF SAN BERNARDINO 619 r J,�t 620 By: _ 1,2 L- - . 621 622 623 624 625 626 627 628 629 630 631 632 633 3 634 635 636 637 639 639 640 641 642 643 644 645 646 647 !M1973 x R. Carey Dat' is Mai or By: Andrea Miller City Manager CITY OF SAN BERNARDINO MUNICIPAL WATER DEPARTMENT By: I l'on] Call;cotl President APPROVED AS TO FORK By: ' Gary DSaenz, City Attorney 'y �' By, Andrew M. Hitchings Somach Simmons & Dunn Special Counsel for City of San Bernardino Execution Copy Dated: t� lv'�ffi P Dated: Dated: It - � 0 - t 7 Dated: IVZ�' /77 Dated. // a -7 - ILI� Exhibit A: Map: EVWD and San Bernardino Tributary to 3rd Sewer Study Exhibit B: Map: Sterling Properties Settlement Agreement City of San Bernardino, SB Water, East Valley and Valley District November 2017 Page IS of 18 Exhibit A LI Exhibit B io —a&— tall a t sr,