REIMBURSEMENT AGREEMENT FOR COSTS RELATED TO THE
INSTALLATION OF OTAY WATER DISTRICT FACILITIES
BY AND BETWEEN OTAY WATER DISTRICT
AND THE CITY OF CHULA VISTA, CALIFORNIA
(HERITAGE ROAD BRIDGE REPLACEMENT)
THIS REIMBURSEMENT AGREEMENT FOR COSTS RELATED TO THE
INSTALLATION OF OTAY WATER DISTRICT FACILITIES ("Agreement"), dated 2024, is entered into by and between OTAY WATER DISTRICT ("District") a joint powers agency formed pursuant to Government Code Section 6500 et seq. and the City of Chula Vista, a chartered municipal corporation ("City") to establish terms and conditions pursuant to which City will bid and cause the installation of certain District Facilities, defined herein below, to be installed and District will reimburse the City for all expenses related thereto. District and the City may be referred to herein individually as "Party" and collectively as the "Parties."
RECITALS
WHEREAS, City will be constructing improvements to replace Heritage Road Bridge; such improvements include, but are not limited to, replace an existing 4-lane timber deck bridge with 450-foot long bridge with 6 through-lanes, 2 left-turn lanes, 2 shoulder/bike lanes, 2 sidewalks, railings and a median (the "Project"); and WHEREAS, District will approve and pay for the installation of its water facilities and appurtenances as a part of the above-described Project; and WHEREAS, the construction of District Facilities (as defined below), in conjunction with the construction of the City Improvements (as defined below), would be a substantial benefit to District and the City, which benefits include, but are not limited to, reductions or savings in terms of time and costs; and
WHEREAS, in order to achieve such benefits, the District desires that City incorporate the construction and installation of District Facilities into the City's bid and contract documents for City Improvements; and
WHEREAS, City is willing to do so, provided District reviews and approves the design of the District Facilities and District agrees to reimburse City for the District Costs in strict accordance with the terms and conditions of this Agreement; and WHEREAS, District is authorized, pursuant to applicable laws, to contract and to pay for the installation and related services for the District Facilities or other improvements.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, it is agreed by and between the Parties hereto, as follows:
ARTICLE I. DEFINITIONS
1.1 Definitions. Unless the context otherwise requires, the terms defined in this Section 1 shall, for all purposes of this Agreement and of any amendment hereto, and of any certificate, opinion, estimate or other document herein mentioned, have the meanings herein specified.
"District" means Otay Water District, a joint powers agency formed pursuant to Government Code sec. 6500 et seq. as set forth in the California Water Code. "City" means the City of Chula Vista, California, a chartered municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of California.
"City Improvements" means, collectively, the construction to replace an existing 4-lane timber deck bridge with 450-foot long bridge with 6 through-lanes, 2 left-turn lanes, 2 shoulder/bike lanes, 2 sidewalks and a median, in accordance with the Contract Documents and Construction Agreement.
"District Costs" means: (a) one hundred-percent (100%) of the dollar amount of any and all costs in any way associated with or related to the construction, installation, and inspection of the District Facilities, including, but not limited to, costs of materials, labor, oversight, bidding, permits, change orders; and (b) one hundred percent (100%) of the Pre-Construction Costs (as defined below).
"District Facilities" means, collectively, the installation of new potable water facilities and related appurtenances and facilities as shown in Exhibit A hereto, as the same may be amended from time to time via change order or otherwise. "Project" means, collectively, the construction and installation of District Facilities, installation of other utilities owned by various other utility companies and City Improvements, as the same may be amended from time to time via change order or otherwise.
"Project Contingency" means, an amount not to exceed five (5) percent of the total contract amount of District Facilities.
ARTICLE II. PRE-CONSTRUCTION
2.1 Design and Specifications. Prior to advertisement of the construction and installation of Project, an authorized representative of the District shall review and approve all designs and all associated plans and specifications (collectively "Construction Documents") for the District Facilities and such approval shall not be unreasonably withheld. District shall be solely responsible for review and approval of the Construction Documents for the District Facilities. District shall provide approved Construction Documents for the District Facilities by no later than twenty (20) working days after the same has been requested by the City for advertisement purposes.
2.1.1 Pre-construction Costs. All costs associated with the design of District Facilities and the preparation of Construction Documents, including but not limited to incorporating technical specs, bid sheet, conformed plans and specs, reparation of agreements, therefor ("Preconstruction Costs") shall be borne by he District. After award of the Construction Agreement, the Preconstructio Costs shall be calculated proportionately in the same manner and to the same extent as the construction costs for the District Facilities pursuant to the Construction Agreement. The City shall submit an invoice to the District for its Preconstruction Costs and District will reimburse City for those costs by no later than thirty (30) calendar days after receipt of the invoice.
2.1.2 Bidding and Award. City shall bid and award of a contract for the construction and installation of the Project ("Construction Agreement").
2.1.2.1 Bid Package. City shall prepare and circulate the bid package, provided that City will not be responsible for approving design or Construction Documents for any of the District Facilities.
2.1.2.2 Meetings. City shall organize all pre-bid meetings and shall inform the District of the time and date of such meetings, so that a representative of the District may be present to clarify any issues related to the design of and Construction Documents for the District Facilities and prepare addenda (as needed) for the construction of the District Facilities.
Additional Costs. Any additional costs associated with the failure of District to attend meetings, clarify issues related to the design of the District Facilities or the Construction Documents for the District Facilities, or submit addenda to City related to the construction or installation of the District Facilities shall be the sole obligation of the District.
2.1.2.3 Selection of Lowest Responsive and Responsible Bidder. City shall determine the lowest responsible bidder and such determination shall be binding on the District. For purposes of the Agreement, the entity awarded a contract for the Project shall be referred to herein as the "Contractor".
2.1.2.4 Execution of Construction Agreement. City shall execute the Construction Agreement on behalf of itself and ensure that the District is identified as a third-party beneficiary of such Construction Agreement.
ARTICLE III. CONSTRUCTION
3.1 Compliance with Specifications. City will include provisions in the Construction Agreement that require that all District Facilities furnished, constructed, and installed by Contractor shall be in strict compliance with the Otay Water District Standard Specifications for Construction of Water Facilities provided by District, that all materials furnished by Contractor must conform to District's approved material list, and that any and all deviations from said specifications must be approved by the District, in writing, prior to being incorporated into the work.
3.2 The Buy America requirements are further specified in the Moving Ahead for Progress in the 21st Century (MAP-21), section 1518.
3.3 Project Completion and Warranty. District and City anticipate that the Project will be completed on or about November 2026. Project, however, will not be deemed completed or accepted until both City and District have accepted their respective facilities or improvements; provide that such acceptance shall not be unreasonably withheld. The City shall require the Construction Agreement to provide that Contractor shall warrant all work for a period of no less than one (1) year from the date of acceptance. Acceptance will be evidenced by the filing of a Notice of Completion by the City with the County of San Diego Recorder.
3.4 As-Builts. The District shall provide signed "As-Built" plans of the District Facilities to the City for its files.
ARTICLE IV. REIMBURSEMENT OF COSTS
4.1 Deposit Account. Within thirty (30) calendar days of the Construction Agreement award, District shall deposit with the City an amount equal to one hundred percent (100%) percent of the bid amount attributable to the construction and installation of District Facilities, $2,823,022.00, plus a five (5) percent contingency, $141,151.10, for a total of $2,964,173.10 ("District Deposit") for the purpose of reimbursing the City for progress payments made by City to Contractor for the installation of District Facilities.
4.2 Invoice. City shall invoice the District for District Costs ("City Invoice") following the receipt of an invoice from a consultant or the Contractor on which such District Costs appear. The City Invoice shall:
4.2.1 Include a copy of the consultant's invoice or the Contractor's invoice.
4.2.2 Identify the District's Costs.
4.2.3 Identify all other costs attributable to the District's Facilities.
4.2.4 Provide a net total charge payable by District.
4.3 District Approval. District shall review and approve the City Invoice twenty (20) calendar days of its receipt ("Review Period"). If District determines that all relevant documents have not been submitted, District shall inform the City of the need for additional information and specify the documents/information necessary to permit review and approval.
Failure to Approve. If District fails to approve the City Invoice or request additional information within the Review Period, the charges on the City's Invoice shall be deemed approved.
4.4 Reimbursement. Following District approval of a City Invoice, City shall deduct the invoice amount from the District Deposit for the purpose of reimbursing the City for District Costs invoiced by and paid to Contractor. District approval of a City Invoice shall be deemed District's authorization for such reimbursement in the amount of the City Invoice.
Withholding/Retention. From each payment to the Contractor, City shall withhold a minimum of five (5%) percent of the amount of the Contractor's invoice. Payment thereof shall not be made until final approval and acceptance.
A similar retention shall be withheld from the reimbursement to the City from the District Deposit.
4.5 Use of Project Contingency. The Project Contingency may be used for unforeseen circumstances or changes in the work; however, it shall not be used for: (i) work required due to Contractor's failure to perform work or services according to the terms of the Construction Agreement and/or in compliance with the Construction Documents; or (ii) uninsured losses resulting from the negligence of Contractor. Any accrued interest earnings from the original deposit may be used to offset the District's additional Contingency contribution.
ARTICLE V. CHANGE ORDERS
5.1 Written Approval Required. With the exception of Emergencies (defined in section 5.2 below), prior to the approval of a construction change or change order concerning affecting District Facilities, including any changes to City Improvements that might affect District Facilities in any way, City shall obtain the prior written consent of the District, and District shall not unreasonably withhold such written consent.
Approval of Change Orders. District shall respond to a change order request within five (5) working days of the date on which the construction change or change order request is received by District. If District fails to timely approve such change order request, such request shall be deemed approved.
5.1.2 Additional Costs. District will bear any increased costs due to an District delay in approving a properly submitted construction change and/or change order request.
5.2 Changes in Emergencies. City may authorize the Project contractor to proceed with any proposed construction changes and/or change orders, without consulting with District or obtaining the District's prior written approval, if failure to act immediately would pose a danger to the public safety or improvements, as determined in the sole discretion of the City, or result in delays and cost overruns (collectively "Emergency"); however, the City shall use best efforts to immediately, or as soon as reasonably possible, inform the District of the changes. The District shall be responsible for any increased costs of the District Facilities due to an Emergency.
5.3 Errors and Omissions. City shall not make payment to Contractor or charge District for any costs or expenses of a change order resulting from an error or omission for which the Contractor is solely responsible.
ARTICLE VI. INSPECTION
6.1 Inspection Team. District shall appoint an individual or team responsible for inspections and approving installation of District Facilities.
6.2 Inspection Stages and Obligations. District shall have the right to conduct inspections of the District Facilities and construction methods pertaining thereto as deemed necessary by District. District shall provide copies of all District inspections to City within twenty-five (25) working days of an inspection. District shall be responsible for verifying that all work on District Facilities is completed in accordance with the approved plans and specifications. It is specifically understood that District's inspectors shall have the District to enforce District's plans and specifications for District Facilities, which District shall include the District to require that any and all unacceptable materials, workmanship, and/or installation be replaced, repaired, or corrected by Contractor without cost to District and/or City.
6.3 Inspection Costs. All inspection costs incurred by District will be apportioned by the parties as provided above.
6.4 Notification. The Parties agree to develop mutually acceptable procedures for notification of inspections required or deemed necessary by either Party.
ARTICLE VII. BONDS, PREVAILAING WAGE AND INSURANCE
7.1 Contractor's Insurance. City shall require in the Contract Documents that its Contractor e required to provide evidence of faithful performance and labor and material bonding omply with prevailing wage payments, and provide insurance coverage, as require by City and the District for the entire construction and, if applicable, warranty period The Parties shall be named as co-obligees on all bonds required for the Project, including but not limited to the payment and performance bonds for the Project. The District shall be included as a beneficiary of all guarantees, warrantees, and maintenance obligations, required under the City's construction Contract Documents.
The City shall ensure that the District and its directors, officers, employees, and agents are listed as additional insureds under all insurance policies required by contractor for the Project. Such insurance shall, at a minimum, include a comprehensive general liability policy in an amount sufficient to cover all contractual obligations of the contractor under the Construction Agreement, and no less than $2,000,000. The policy of insurance shall require a waiver of subrogation and be primary insurance.
Furthermore, City shall obtain evidence that the Contractor maintains worker's compensation insurance in accordance with applicable requirements of law.
7.2 Parties' Insurance. District and City shall maintain insurance as customary in connection with their respective facilities.
ARTICLE VIII. INDEMNITY
8.1 Indemnity. Each Party hereto agrees to defend, indemnify, protect, and hold harmless ("Indemnitor") the other Party, its agents, officers, and employees ("Indemnitees") from and against any and all claims asserted or liability established for damages or injuries to any property or person, including death or dismemberment, which arise from or are caused by the negligent acts or omissions or willful misconduct of the Indemnitor's agents, officers, or employees, in performing the work or services herein and all expenses of investigation and defending against same; provided, however, that each Party's duty to defend, indemnify, and hold harmless the other shall not include any claims or liability arising from the sole negligence or willful misconduct of the other Indemnitee, its agents, officers or employees. District and City agree that in the event of any joint or concurrent negligence, they will apportion any established or agreed upon liability proportionate to their respective degree of fault. For the purposes of this provision, the Contractor and all subcontractors for the Project shall not be considered an agent of the City or District. Claims related to the actions or omissions of the Contractor or any subcontractors for the Project shall be addressed through provisions in the Construction Agreement, which provisions shall include indemnity, defense, and hold harmless provisions from the Contractor in favor of both the City and District and shall include a provision acknowledging that a portion of the work to be performed under the Construction Agreement is on behalf of the District and a provision acknowledging that the District is an intended beneficiary under the provisions of the Construction Agreement.
8.2. Enforcement Costs. Each Party agrees that it shall pay the costs the other Party incurs in enforcing the indemnity and defense provisions set forth in this Article VIII in the event the enforcing Party is successful.
8.3 Insurance Proceeds. Indemnitor's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the Indemnitee, its directors, officials, officers, employees, agents, and/or volunteers.
8.4. Survival. The Parties' obligations under Article VIII shall survive the termination of this Agreement.
ARTICLE IX. RECORDS
9.1 Retention of Records. City shall require Contractor to maintain data and records related to the Construction Agreement for a period of not less than three (3) years following receipt of final payment.
9.2 Audit of Records. City shall make available and shall require that the Construction with respect to all matters covered by this Agreement and the Construction Agreement City and Contractor will permit the District to make audits of all invoices, materials, payrolls, records of personnel, and other data and media relating to all matters covered by this Agreement and the Construction Agreement.
ARTICLE X. NOTICES
10.1 Writing. Any demand upon or notice required or permitted to be given by one Party to the other Party shall be in writing.
Effective Date. Except as otherwise provided by law, any demand upon or notice required or permitted to be given by one Party to the other Party shall be effective: (i) on personal delivery, (i) on the second business day after mailing by certified or registered U.S. Mail, return receipt requested, (iii) on the succeeding business day after mailing by Express Mail or after deposit with a private delivery service of general use (e.g., Federal Express) postage or fee prepaid as appropriate, or (iv) upon successful transmission of facsimile.
10.3 Recipients. All demands or notices required or permitted to be given shall be sent to all of the following:
District:
Otay Water District
2554 Sweetwater Springs Blvd
Spring Valley, CA 91978
Phone: (619) 670-2282
Attention: District Project Manager
City:
City of Chula Vista, -Engineering & Capital Projects
276 Fourth Avenue
Chula Vista, CA 91910
Fax: (619) 691-5171
Attention: City Project Manager and Director of Engineering & Capital Projects.
10.4 Change of Address(es). Notice of change of address shall be given in the manner set forth in this Article.
ARTICLE XI. MISCELLANEOUS
11.1 Headings. All article headings are for convenience only and shall not affect the interpretation of this Agreement.
11.2 Gender and Number. Whenever the context requires, the use herein of (i) the neuter gender includes the masculine and the feminine genders and (ii) the singular number includes the plural number.
11.3 Reference to Paragraphs. Each reference in this Agreement to a section refers, unless otherwise stated, to a section of this Agreement.
11.4 Incorporation of Recitals. All recitals herein are incorporated into this Agreement and are made a part hereof.
11.5 Covenants and Conditions. All provisions of this Agreement expressed as either covenants or conditions on the part of the City or the District, shall be deemed to be both covenants and conditions.
Integration. This Agreement and the Exhibits and references incorporated into this Agreement fully express all understandings of the Parties concerning the matters covered in this Agreement. No change, alteration, or modification of the terms or conditions of this Agreement, and no verbal understanding of the Parties, their officers, agents, or employees shall be valid unless made in the form of a written change agreed to in writing by both Parties or an amendment to this Agreement agreed to by both Parties. All prior negotiations and agreements are merged into this Agreement.
11.7 Severability. The unenforceability, invalidity, or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid, or illegal.
11.8 Drafting Ambiguities. The Parties agree that they are aware that they have the right to be advised by counsel with respect to the negotiations, terms and conditions of this Agreement, and the decision of whether or not to seek advice of counsel with respect to this Agreement is a decision that is the sole responsibility of each Party. This Agreement shall not be construed in favor of or against either Party by reason of the extent to which each Party participated in the drafting of the Agreement.
Conflicts Between Terms. If an apparent conflict or inconsistency exists between the main body of this Agreement and the Exhibits, the main body of this Agreement shall control. If a conflict exists between an applicable federal, state, or local law, rule, regulation, order, or code and this Agreement, the law, rule, regulation, order, or code shall control. Varying degrees of stringency among the main body of this Agreement, the Exhibits, and laws, rules, regulations, orders, or codes are not deemed conflicts, and the most stringent requirement shall control. Each Party shall notify the other immediately upon the identification of any apparent conflict or inconsistency concerning this Agreement.
11.10 Prompt Performance. Time is of the essence of each covenant and condition set forth in this Agreement.
11.11 Good Faith Performance. The Parties shall cooperate with each other in good faith, and assist each other in the performance of the provisions of this Agreement.
11.12 Further Assurances. City and District each agree to execute and deliver such additional documents as may be required to effectuate the purposes of this Agreement.
11.13 Exhibits. Each of the following Exhibits is attached hereto and incorporated herein by this reference:
Exhibit "A" - One-Quarter size City Plans of Heritage Road Bridge Replacement"
11.14 Controlling Law. The laws of the State of California shall govern and control the terms and conditions of this Agreement.
11.15 Jurisdiction, and Venue. The venue for any suit or proceeding concerning this Agreement, the interpretation or application of any of its terms, or any related disputes shall be in the County of San Diego, State of California.
Agency/Municipal Powers. Nothing contained in this Agreement shall be construed as a limitation upon the powers of the District or the City as a chartered city of the State of California.
11.17 Third Party Relationships. Nothing in this Agreement shall create a contractual relationship between City or District and any third party; however, the City shall ensure that the District is an intended third party beneficiary of the Construction Agreement.
11.18 Limitation on District Remedies and Waiver of Claims. District understands that the sole purpose of this Agreement is to establish a method to reimburse the City for obligations of the District for payment of the costs of the installation and construction of District Facilities, which costs would otherwise be due directly to the Contractor. In accordance with such purpose, the District agrees that its sole remedy for construction defects, breach by City contractor, damage to property or persons, including death, to District personnel or any third parties, or other claims arising out of or related to the work performed to install and/or construct District Facilities shall be against the Contractor or its subcontractors and agents, and, hereby, waives any and all claims it may hereafter have against the City, arising out of the same, except for those claims arising out of the sole negligence or sole willful misconduct of the City. The City agrees to cooperate with the District on any claims the District may have against the Contractor, including but not limited to granting the District an assignment of rights under the City's contract with the Contractor.
District, hereby, expressly waives all claims against the City identified to District in Section 11.18:
Included in this release, the District hereby waives the provisions of section 1542 of the California Civil Code, which states:
"A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." DISTRICT REPRESENTATIVE Kevin Cameron, Enginering Menager
NAME, TITLE
DATE: 9119/24
11.19 Non-Assignment. Except as relates to the Construction Agreement, the City shall not assign the obligations under this Agreement.
Successors in Interest. This Agreement and all rights and obligations created by this Agreement shall be in force and effect whether or not any Parties to the Agreement have been succeeded by another entity, and all rights and obligations created, by this Agreement shall be vested and binding on any Party's successor in interest.
No Waiver. No failure of either the City or the District to insist upon the strict performance by the other of any covenant, term or condition of this Agreement, nor any failure to exercise any right or remedy consequent upon a breach of any covenant, term, or condition of this Agreement, shall constitute a waiver of any such breach of such covenant, term or condition. No waiver of any breach shall affect or alter this Agreement, and each and every covenant, condition, and term hereof shall continue in full force and effect to any existing or subsequent breach.
11.22 Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement, against the City unless a claim has first been presented in writing and filed with the City and acted upon by the City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may from time to time be amended, the provisions of which are incorporated by this reference as if fully set forth herein, and such policies and procedures used by the City in the implementation of same. Upon request by City, District shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. The City will meet and confer with the District in good faith before filing a suit or arbitration action against the District.
11.23 Dispute Resolution. If a dispute arises out of or relates to this Agreement, or the breach thereof, the Parties, following the procedures required by Section 11.22, agree to engage in good faith negotiations to attempt to resolve the dispute. In the event of any action at law or in equity, including an action for declaratory relief, between the Parties arising out of or relating to this Agreement, then the prevailing Party in such action will be entitled to recover from the other Party a reasonable sum as attorneys' fees and costs.
The prevailing Party will be determined in accordance with Civil Code Section I717 (b)(1) or any successor statute. The prevailing Party will also be entitled to its reasonable attorneys' fees and costs in any post-judgment proceedings to collect or enforce the judgment. This provision is separate and will survive the merger of this Agreement into any judgment on this Agreement.
Administration of Contract. City hereby designates Rosina C. Flores, Principal Civil Engineer, as City Project Manager for the construction of Project and as the primary contact for all matters relating to this Agreement, including the processing, documenting, and approval of City Invoices.
District hereby designates Kevin Cameron, Engineering Manager, as District Project Manager for District Facilities and as the primary contact for all matters relating to this Agreement, including the submittal of City Invoices for reimbursement.
11.25 Signing District. The representative for each Party signing on behalf of such Party hereby declares that District has been obtained to sign on behalf of the City and/or District, as applicable and agrees to hold the other Party or Parties hereto harmless it it is later determined that such District does not exist.
IN WITNESS WHEREOF, City and District have executed this Agreement thereby indicating that they have read and understood same, and indicate their full and complete consent to its terms:
City of Chula Vista Otay Water District
Dated: Dated:_ 4/19/2024
By:_ By:
John McCann, Mayor Jose Martinez, General Manager
Attest:
City Clerk
Approved as to form: Approved as to form:
Durels Shingh
Marco Verdugo
City Attorney Aleneral colese for District
Dated: Dated: _ 9/19/24