HomeMy WebLinkAbout43-City Attorney
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eM OF SAN BERNARD.:JO - REQu....:BT FOR COUNCIL AWlON
From: Ralph H. Prince
Subject:
Resolution Authorizing and
Ratifying Purchase of 700
sewer capacity rights
Dept: City Attorney
Da~: November 22, 1985
Synopsis of Previous Council action:
8/9/84 Adopted Resolution No. 84-325 authorizing agreement for
purchase of 800 sewer capacity rights.
10/22/84 Authorized preparation of agreement for purchase of 700
additional sewer capacity rights.
Recommended motion:
Adopt resolution.
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Contact person: William Sabourin Phone: 5055
Supoorting rlata attached: Yes Ward: N/A
FUNDING REQUIREMENTS: Amount: $861,000.00 Source: Letter of Credit
Finance: IJ.. t:? ~ --t
Council Notes:
75-0262
Agenda Item No ~c::3,
CI,o OF SAN BERNARDIU - REQUUT FOR COUNCIL AC'.JoN
STAFF REPORT
Craig Graves, City Treasurer, advises that although the Water
Department holds a fully signed and executed agreement
between the City of San Bernardino and its Water Department,
neither the Treasurer nor the Water Department has been able
to track down any resolution of the City by which the
agreement was authorized. On october 19, 1984, the Council
directed preparation of an agreement authorizing the City to
purchase 700 additional sewer capacity rights. Thereafter
the agreement was prepared and executed by the City and by
the Water Department.
In order for the City Treasurer to procure the letter of
credit which is needed to carry out the purchase of the
rights from the Water Department, it is necessary that formal
action of the Mayor and Common Council be taken by way of
adopting a resolution authorizing and ratifying the agreement
previously executed by the parties.
75-0264
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RESOLUTION NO.
2 RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING AND
RATIFYING THE PURCHASE OF SEVEN HUNDRED (700) SEWER CAPACITY
3 RIGHTS FROM THE MUNICIPAL WATER DEPARTMENT: APPROVING AND
RATIFYING THE EXECUTION OF AN AGREEMENT THEREFOR: AND AUTHORIZING
4 OBTAINING OF A LETTER OF CREDIT THEREFOR.
5
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
6 SAN BERNARDINO AS FOLLOWS:
7
SECTION 1.
The Mayor and Common Council of the City of San
8 Bernardino hereby approve and ratify the purchase of seven hundred
9 (700) sewer capacity rights from the Municipal Water Department.
10 SECTION 2. The action of the Mayor of the City of San
11 Bernardino in executing an agreement on behalf of said City with
12 the Board of Water Commissioners of the City of San Bernardino
13 relating to the purchase of an additional seven hundred sewer
14 capacity rights to be held by the City of San Bernardino for such
15 use as the Mayor and Common Council may hereafter direct, is
16 hereby ratified. A copy of the agreement is attached hereto,
17 marked Exhibit "A" and incorporated herein by reference as though
18 fully set forth at length.
19 SECTION 3. The City Treasurer is hereby authorized to
20 obtain, and the Mayor, City Clerk, City Treasurer and any other
21 official whose action is required, are authorized to execute such
22 documents as may be necessary for the issuance of, a letter of
23 credit to finance the purchase of such sewer capacity rights.
24 I HEREBY CERTIFY that the foregoing resolution was duly
25 adopted by the Mayor and Common Council of the City of San
26 Bernardino at a
meeting thereof, held on
27 the
day of
, 1985, by the following vote,
28 to wit:
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AYES:
Council Members
NAYS:
ABSENT:
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City Clerk
The foregoing resolution is hereby approved this
, 1985.
8 of
day
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PURCHASE AGREEMENT
FOR
WASTEWATER TREATMENT PLANT CAPACITY RIGHTS
This Purchase Agreement is entered into as of z. -.:JI-f5"
Between:
BOARD OF WATER COMMISSIONERS
OF THE CITY OF SAN BERNARDINO
("BOARD" )
And:
THE CITY OF SAN BERNARDINO
("CITY")
(700 Additional EDU Sewer Capacity Rights)
RECITALS
A. The Board owns and operates the Wastewater
Treatment Plant situated in the City of San Bernardino, 299 Blood
Bank Road, San Bernardino, California, 92408; and
B. The Plant has reached the daily treatment capacity
of 22 mgd; and
C. The Board is in the process of inviting and
receiving bids for the construction of improvements necessary for
24.5 mgd or greater capacity at the Plant, and is prepared
thereafter to award a contract for such construction; and
D. The City has expressed a willingness to participate
in such expansion in cooperation with other public and private
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purchasers of Capacity Rights and the Board through its own
financing method.
EXHIBIT A
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DEFINITIONS
For the purpose of this Purchase Agreement and any
attachments, the following terms shall have the meanings
indicated:
(a) "Capacity Rights" shall mean the number of
cOnnections (measured by Equivalent Dwelling Units) to Board's
Plant being acquired by Agency pursuant to this Purchase
Agreement.
(b) "Equivalent Dwelling Unit" (EDU) shall mean the
standard measurement as calculated by the Board at the time of
actual connection to the Plant consumed by the average single
family resident.
(One EDU is currently calculated to be 28l gallons per
day of effluent. This standard measurement may be modified from
time to time by the Board to reflect actual sewage discharge.)
For the purposes of this Purchase Agreement, all multi-
family dwelling units, defined as four or more units on the same
property under one ownership, shall be deemed to require .75 EDUs
per dwelling unit. All commercial, industrial and other uses
shall require that number of EDUs equal to or greater than the
estimated sewer discharge of such as determined by the Board.
(c) "mgd" shall mean million gallons per day.
(d) "Plant" shall mean the City's Wastewater Treatment
Plant located at 299 Blood Bank Road, San Bernardino, California,
92408.
(e) "Plant Service Boundaries (City of San
Bernardino)" shall mean the geographic area of City's limits.
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(f) "Project" means the construction of the
improvements necessary for a 24.5 mgd or greater capacity at the
Plant.
(g) "Purchase Agreement" shall mean this Purchase
Agreement together with all attachments, appendices and exhibits
as well as any written amendments.
(h) "Purchase Price" shall mean the amount of money
set forth in Section 2 hereof.
(i) "Purchaser" means any private person who is the
purchaser of Capacity Rights.
(j) "Qualified Financial Institution" shall mean any
banking or financial institution organized and existing under the
laws of the State of California or the United States of America.
(k) "Restricted Account" shall mean one or more
accounts established by the Board for the sole purpose of
receiving deposits and making disbursements of cash and letters
of credit pursuant to this Purchase Agreement.
NOW, THEREFORE, the Board and City agree as follows:
l. Acceptance of~~lications. Board has accepted
Applications from private persons <the "Purchasers") for purchase
of Capacity Rights totaling in excess of 6,900 EDUs (not counting
Capacity Rights reserved by the City of San Bernardino, purchased
by the City hereunder, purchased by the Redevelopment Agency of
the City of San Bernardino, purchased by the City of Loma Linda
and the Community Redevelopment Agency of the City of Loma Linda
and agreed to be purchased by the East Valley Water District) .
Applications from private persons have been considered on a
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first-come, first-serve basis. Applications from Purchasers may
be rejected in whole or in part upon a determination that such
purchase would be detrimental to the public health, safety or
welfare of the citizens of San Bernardino. The Board reserves
the right to extend the date of acceptance of Applications, if
required.
2. Purchase of Capacity Ri9hts. In consideration of
the payment by the City to the Board of the total amount of
$86l,000 (the "Purchase Price"), the Board agrees, subject to the
provisions of paragraph 3, to guarantee the City 700 Capacity
Rights (measured by Equi~alent Dwelling units) to the Plant in
excess of the 800 initially purchased by City. The City or any
successor in interest to the City as to a particular Capacity
Right or particular Capacity Rights, shall be responsible for any
other charges including those for off-site facilities, and
installation charges, and all other fees related to sewer
connection permits imposed by the City of San Bernardino or the
East Valley Water District, as appropriate, in effect at the time
of actual connection. The City, or any successor in interest to
the City as to a particular Capacity Right or Particular Capacity
Rights, shall not be relieved of any other obligations for on-
site or off-site improvements imposed as conditions of any
approval of any kind.
3. LimitatiQD-Qn_Capacity. Notwithstanding any other
provision of this Purchase Agreement to the contrary, the
Capacity Rights sold hereunder shall only be used within the
Plant Service Boundaries (City of San Bernardino), to wit:
within the geographical boundaries of the City of San Bernardino;
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and the sale, offering for sale, purchase or other acquisition of
Capacity Rights shall not obligate the Board to provide sewer
utilities, service or connections to any property outside of the
Plant Service Boundaries (City of San Bernardino), unless the
Mayor and Common Council of the City of San Bernardino so direct
by Resolution.
4. Procedure for Purchase.
(i) Deposit
The Board and the City shall execute this Purchase
Agreement, and, on or before December 3l, 1984, the City shall
deposit the total amount due under this Purchase Agreement in the
form of a letter of credit (as hereinafter provided), which shall
be received by the Board. Funds received from any partial or
complete drawing on the letter of credit shall be deposited into
a Restricted Account. Any interest accrued shall inure to the
benefit of the Restricted Account, provided, however, that, in
the event Board does not proceed with the Project, all deposits
plus interest accrued on the City's deposit, if any, less a pro
rata share of any costs of administration incurred by the Board,
shall be returned to the City.
(ii) Letter of Credit
An irrevocable letter of credit from a Qualified
Financial Institution securing any unpaid balance due must be
deposited with the Board within the time specified in this
Purchase Agreement. The letter of credit shall be substantially
in the form attached to this Purchase Agreement as "Exhibit A".
Pre-printed forms issued by banks may be used; provided, however,
that, except as provided in the next sentence, no letter of
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credit shall be accepted which has an expiration date of less
than two (2) years. A one (1) year letter of credit will be
accepted if the Qualified Financial Institution issuing the same
guarantees a one (l) year renewal. No letter of credit shall be
accepted which requires presentation of the original letter for
draws thereon. Letters of credit must provide for partial
drawings made at the discretion of the Board, or otherwise as
provided in the Purchase Agreement. The proceeds of any partial
or complete drawing on the letter of credit shall be deposited by
the Board into the Restricted Account.
(iii) Further Actions by the Board
The Board reserves the right to return all sums
collected pursuant to this Purchase Agreement, if the aggregate
of all amounts collected is insufficient for the Project to
proceed as scheduled. If the Board decides not to proceed with
the Project, all amounts collected shall be returned by December
3l, 1984.
5. Restricted Account. The Board has established a
Restricted Account within the Sewer Fund and shall deposit into
that Account the proceeds of any partial or complete drawing On
the letter of credit obtained by the City and all deposit and
other monies paid by the City. Instructions for the Restricted
Account shall limit use of the funds and letters of credit
obtained from the Purchasers and/or the other public agencies
involved in the financing of the Project for the exclusive
purpose of the Project. In no event shall any of the funds or
letters of credit be used for any other purpose. Any interest
paid on the principal in the Restricted Account shall inure to
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the benefit of the Restricted Account. No exceptions to this
policy shall be made.
Any and all drawings upon the City's letter of credit
shall be directly proportional to drawings under other letters of
credit involved. When the costs of construction and the total
sources of paymentl are known, the parties hereto shall execute
an operating memorandum containing further details as to drawings
upon the City's letter of credit.
6. Vesting of Rights. Capacity Rights acquired under
this Purchase Agreement shall vest when the Purchase Agreement is
executed by the parties hereto and the letter of credit has been
accepted on behalf of the Board.
7. Use of Capacity. If the City fulfills all
conditions of this Purchase Agreement, the Capacity Rights
guaranteed to the City shall be held by the Board for the benefit
of the City for a period of five (5) years, commencing upon the
execution of this Purchase Agreement.
Capacity Rights may be used after the completion of the
Project; provided, however, the City may designate one or more
public agencies or private persons to use all or any portion of
said Capacity Rights prior to said completion based on
availability of capacity and subject to any allocation or
conservation established by the Board or Mayor and Common Council
of the City.
If Board is prohibited for any period in excess of six
1 Available monies then on hand, monies to be received
from State and Federal grants and monies available from the
acquisition of Capacity Rights.
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(6) months from allowing the City to use one or more Capacity
Rights by State or Federal law or by Court order, the Board shall
refund an appropriate amount per usable C~pacity Rights.
8. ae~~r Conservati~Eolicies. Notwithstanding any
other provision of this Purchase Agreement to the contrary, the
Board, in conjuntion with the Mayor and Common Council of the
City, reserve the right to allocate its sewer treatment resources
in any fair and equitable manner, and to establish any
allocation, conservation or emergency policy which will benefit
the public at large.
9. Assianment of Capacity Ri9hts. The City may assign
all or any portion of the Capacity Rights purchased under this
Purchase Agreement at any time:
(a) with or without consideration, in its sole
discretion, to any assignee for use on real property within the
Plant Service Boundaries (City of San Bernardino); provided,
however, that (i) the Capacity Rights so assigned must be used
such assignee only for the real property so designated, (ii) the
Board shall be notified of the assignment, and (iii) such
assignment shall be approved by the Board, under such rules and
regulations as the Board may reasonably prescribe, in sufficient
time so that the assignee will have obtained the Capacity Rights
involved; or
(b) to any Qualified Financial Institution which
provides any or all of the financing (e.g., the letter of credit)
for the purpose of Capacity Rights under this Purchase Agreement;
provided, however, that (i) should the Qualified Financial
Institution acquire any Capacity Rights, the same must be
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transferred or sold only through the Board and not directly to
any other Purchaser. Such Capacity Rights must be returned to
the Board for resale, provided, however, (i) no Capacity Rights
may be returned for resale prior to July 1, 1985, and (ii) the
Board shall then sell the returned Capacity Rights on a "first-
come, first-served" basis and remit to the Qualified Financial
Institution the amount set forth on the following schedule:
RETURNS FOR AMOUNT REMITTED PER
RESALES ON OR BEFORE CAPACITY RIGHT
January l, 1985 $l,4l0
January l, 1986 l,620
January l, 1987 l,860
January l, 1988 2,050
January l, 1989 2,260
NOTE: The undrawn upon portion of the letter of credit
shall be drawn upon. Returns for resale made after July l, 1989
shall not be eligible for any additional increases; remittances
after that date shall be in the amount of $2,260 per sewer
capacity.
lO. Default. If the Qualified Financial Institution
issuing the letter of credit fails to honor the letter of credit,
and if the City fails to make the required payments, the Board
shall terminate this Purchase Agreement immediately and any
monies paid by the City as well as all right, title and interest
in the Capacity Rights(s) shall be retained by Board as
liquidated damages to defray costs and expenses incurred by Board
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due to the default. It is further understood and agreed that, if
the Board is obligated to pay any sum greater than the amount
retained, the Board shall use its best efforts to mitigate
damages, but the City shall reimburse the Board for any remaining
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amount.
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ll. Place of Agreement and Choice of Law. This
Purchase Agreement is acknowledged to have been made in, and
shall be construed according to the laws of the State of
California.
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l2. Time of the Essence. Time is of the essence of
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this Purchase Agreement.
l3. Entire Agreement. This Purchase Agreement
constitutes the entire agreement between the parties with respect
to the subject matter and may be amended only by subsequent
written agreement signed by both parties.
l4. Notice. Any notice required or permitted under
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this Purchase Agreement shall be considered effective when
received by the party to who it was sent addressed as follows:
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BOARD,
City of San Bernardino
Municipal Water Department
300 North "D" Street
San Bernardino, CA 92418
Attention, Herbert B. Wessel
General Manager
PURCHASER:
City of San Bernardino
300 North "D" Street
San Bernardino, CA 92418
Attention: Shauna Clark
City Clerk
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This Purchase Agreement is executed as of the date
hereinabove set forth.
Date of Signing: .:z-.2/-.r~
ATTEST:
~A'?/~W
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Clty Clerk
Approved as to form:
$&.l,e ~.'-
. City Attorney
Date of Signing: Y - ,./ - IfS
Approved at to form:
Counsel, Board of Water
Commissioners of the City
of San Bernardino
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[SEAL]
BOARD OF WATER
COMMISSIONERS OF THE
CITY OF SAN BERNARDINO
_ o&:47~4~-(/
General Manager
City of San Bernardino
Municipal Water
Department
(PLEASE NOTE:
Agreement will
is execu ted. )
The date on the first page of this Purchase
be filled in by Board when this Purchase Agreement
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IRREVOCABLE LETTER OF CREDIT
Issued By:
(Name of Bank)
(Address)
Amount:
Payable in u.s. Dollars
Date of Issue:
Expiration Date:
Purchaser:
City of San Bernardino
300 North aD" Street
San Bernardino, CA 92418
Beneficiary:
Board of Water Commissioners
City of San Bernardino
300 North "D" Street
San Bernardino, CA 92418
This irrevocable Letter of Credit is issued in
accordance with J.C.C. Publication No. 290. Uniform Customs~Dd
Practice for Doc~ntary Credits. Demand 'for partial or full
payment hereunder may be made at any time by beneficiary or its
designated agent for collection by presentation of a draft drawn
on the issuing Bank named above accompanied by a statement signed
by beneficiary or its designated agent that the funds are
required for the expansion of the Board of Water Commissioners,
City of San Bernardino, Wastewater Treatment Plant or as
otherwise provided in the Purchase Agreement between the
Purchaser and the Beneficiary. Contractor's invoices or the
original of this Letter of Credit shall not be required in
addition to the above-named documents when demands for payment
are made.
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This Letter of Credit provides security for all or a
portion of the balance due from the ~urchaser of Capacity Rights
in the City of San Bernardino Wastewater Treatment Plant
identified above.
Payment under this Letter of Credit is not restricted
or conditioned in any way by any agreement between Purchaser and
Bank regarding additional security required by Bank or direct
payments made by Purchaser in lieu of draws under this Letter of
Credit.
This is an irrevocable commitment of funds by Bank and
is not subject to recall or offset by Bank. Board shall have no
obligation to repay Bank or Purchaser for funds disbursed or
released in accordance with this Letter of Credit and the
Purchase Agreement.
This Letter of Credit sets forth in full the terms of
Bank's undertaking and, except for the Purchase Agreement between
the Purchaser and the Beneficiary, such undertaking shall not in
any way be modified, amended or amplified by reference to any
document, instrument, or agreement referred to herein or in which
this Letter of Credit relates; and any such reference shall not
be deemed to incorporate herein by reference any document,
instrument or agreement.
This Letter of Credit shall remain valid for a period
of at least two (2) years from the date of issue, or any extended
date, it being a condition of this Irrevocable Letter of Credit
that it shall be automatically extended for additional periods of
one year from the present or any future expiration date unless
sixty (60) days prior to such date, Bank notifies in writing, by
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registered mail at the above address, that Bank elects not to
renew this Letter of Credit for such additional period. Upon
receipt of such notice by Board, Board may draw on Bank hereunder
by means of a sight draft for the full amount remaining on this
Letter of Credit, accompanied by a written certified statement
that the proceeds will be applied to the amount due from the City
for the expansion of the City of San Bernardino Wastewater
Treatment Plant.
Demands for payment under this Letter of Credit shall
be made directly to
(Name of person responsible for receipt and processing of
demands.)
I, , hereby certify that:
(l) I am an officer of the financial institution
referred to in this Letter as Bank; and
(2) I am authorized by Bank to make this irrevocable
commitment of funds as described above.
NAME
TITLE
DATE
NAME OF BANK
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I am or represent the party referred to in this Letter
as Purchaser, and I agree to all the terms and conditions of this
Letter of Credit.
NAME
TITLE
DATE
COMPANY
ACCEPTED IN BEHALF OF BOARD
By __________,_
NAME
APPROVED AS TO FORM:
TITLE
p..44J.~~~~ DATE
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