Agenda packet, closed session — Escondido City Council, May 15, 2024 (part 2 of 2)

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3. Applicable taxes.

B. CONTRACTOR costs included in the Contract Sum include, but are not limited to;

1. Arrangement of product(s) shipping and handling at site, including unl oading, uncrating, and storage.

2. Protection of products from the elements and from damage.

3. Labor for installation, adjustments and finishing products.

4. Product warranties.

5. Scheduling ch anges and updates.

6. Other expenses required to complete installation.

7. CONTRACTOR and Subcontractor(s) overhead and profit.

C. The adjustments in costs will be made if the net cost is more or less than the specified amount of the allowance. The net cost of the adjustment shall be the amount of the difference between the specified allowance and the actual cost of the material, with the exception of a not-to-exceed fifteen percent (15%) mark-up for overhead and profit. The Contract Sum will be adjusted by Change Order.

1. Submit any c laims for anticipated additional costs, or other expens es caused by the selection of the allowance, prior to execution of the Work.

2. Submit documentation for actual additional costs, or other expenses caused by the selection the allowance, prior to execution of the Work.

3. Failure to submit claims within the designated time will constitute a waiver of claims for additional costs.

D. City may separately bid the materials, subject to the specified allowances. The successful bidder will be assigned to CONTRACTOR, and shall be considered a Subcontractor to the CONTRACTOR. Upon assignment, the CONTRACTOR shall all make the necessary submittals, prepare necessary shop drawings and coordinate all related Work.

CONTRACTOR shall make all nece ssary adjustments and revisions to the Project Schedule for such allowances and Subcontractor assignments.

14.5 WAIVER, CONDITIONAL RELEASE, RELEASE OF CLAIMS

A. Co mmensurate with the statutes of Public Contract Code section 7100 et seq., provisions in public works contracts with public entities which provide that acceptance of a payment otherwise due a CONTRACTOR is a waiver of all claims against the public entity arising out of the Work performed under the contract or which condition the right to payment upon submission of a release by the CONTRACTOR of all claims against the public entity arising out of performance of the public Work are against public policy and null and void.

This section shall not prohibit a public entity from placing in a public works contract and enforcing a contract provision which provides that payment of undisputed contract amounts is contingent upon the CONTRACTOR furnishing the pub lic entity with a release of all claims against the public entity arising by virtue of the public works contract related to those amounts. The CONTRACTOR from the operation of the release may specifically exclude disputed contract claims in stated amounts.

B. Neither the City nor original CONTRACTOR by any term of their contract, or otherwise, shall waive, affect, or i mpair the claims and liens of other persons whether with or without notice except by their written consent, and any term of the contract to that effect Resolution 2024-57
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shall be null and void. Any written consent given by any claimant pursuant to this subdivision shall be null, void, and une nforceable unless and until the claimant executes and delivers a w aiver a nd release. Such a waiver and release shall be binding and effective to release the City, construction lender, and surety on a payment bond from claims and liens only if the waiver and release follows substantially one of the forms set forth in this section and is signed by the claimant or his or her authorized agent, and, in the case of a conditional release, there is evidence of payment to the claimant. Evidence of payment may be by the claimant's endorsement on a single or joint payee ch eck that has been paid by the bank upon which it was drawn or by written acknowledgment of payment given by the claimant.

C. No oral or w ritten statement purporting to waive, release, impair or otherwise adversely affect a claim is enforceable or creates any estoppel or impairment of a claim unless:

1. It is pursuant to a waiver and release prescribed herein, or

2. The claimant had actually received payment in full for the claim.

D. This section does not affect the enforceability of either an accord and satisfaction regarding a bona fide dispute or any agreement made in settlement of an action pending in any court provided the accord and satisfaction or agreement and settlement make specific reference to the, stop notice, or bond claims.

E. The waiver and release given by any claimant hereunder shall be null, void, and unenforceable unless it follows substantially the following forms in the following circumstances. Each waiver in this provision shall contain the following language, in at least as large a type as the largest type otherwise on the document:

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1. Where the claimant is required to execute a waiver and release in exchange for, or in order to induce the payment of, a progress payment and the claimant is not, in fact, paid in exchange for the waiver and release or a single payee check or joint payee check is given in exchange for the waiver and release, the waiver and release shall follow substantially the form:

CONDITIONAL WAIVER AND RELEASE UPON "PROGRESS PAYMENT"

Upon receipt by the undersigned of a check from:
(Maker of Check)
in the sum of $ payable to: (Amount of Check)
(Payee or Payees of Check)

and when the check has been properly endorsed and has been paid by the bank upon which it is drawn, this document shall become effective to release any me chanic's lien, stop notice, or bond right the undersigned has on the job of

located at:
(CITY) (Job Description)

to the following extent. This release covers a progress payment for labor, services, equipment, or material furnished to

through:
(Your Customer) (Date)

only and does not cover any retention's retained before or after the release date; extras furnished before the release date for which payment has not been received; extras or items furnished after the release date.

Rights based upon Work performed or items furnished under a written change order which has been fully executed by the parties prior to the release date are covered by this release unless specifically reserved by the claimant in this release. This release of any mechanic's lien, stop notice, or bond right shall not otherwise affect the contract rights, including ri ghts between parties to the contract based upon a rescission, abandonment, or breach of the contract, or the right of the undersigned to recover compensation for furnished labor, services, equipment, or material covered by this release if that furnished labor, services, equipment, or material was not compensated by the progress payment. Before any recipient of the document relies on it, said party should verify evidence of payment to the undersigned.

(Company Name) (Date)

By:
(Title)

Exclusions: Listing of Claims, of which Notice has been given:

1. Claim for: In the amount of: $

2. Claim for: In the amount of: $

3. Claim for: In the amount of: $

4. Claim for: In the amount of: $

5. Claim for: In the amount of: $
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2. Where the claimant is required to execute a waiver and release in exchange for, or in order to induce payment of, a progress payment and the claimant asserts in the waiver it has, in fact, been paid the progress payment, the waiver and release shall follow substantially the following form:

UNCONDITIONAL WAIVER AND RELEASE UPON "PROGRESS PAYMENT"

The undersigned has been paid and has received a progress payment in the sum of $ labor, services, equipment, or material furnished to
for

(Your Customer)

on the job of: located at:
(CITY) (Job Description)

and does hereby release any me chanic's lien, stop notice, or bond right that the undersigned has on the above referenced job to the following extent. This release covers a progress payment for labor, services, equipment, or materials furnished to

through:
(Your Customer) (Date)

(Company Name) (Date)

By:
(Title)

Exclusions: Listing of Claims, of which Notice has been given:

1. Claim for: In the amount of: $

2. Claim for: In the amount of: $

3. Claim for: In the amount of: $

4. Claim for: In the amount of: $

5. Claim for: In the amount of: $

"NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. T HIS DOCUMENT

IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BE EN P AID, USE A CONDITIONAL RE LEASE FORM."
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3. Where the claimant is required to execute a waiver and release in exchange for, or in order to induce the payment of, a fi nal payment and the claimant is not, in fact, paid in exchange for the waiver and release or a single payee check or joint payee check is given in exchange for the waiver and release, the waiver and release shall follow substantially the form:

CONDITIONAL WAIVER AND RELEASE UPON "FINAL PAYMENT"

Upon receipt by the undersigned of a check from

in the sum of $ payable to:

located at:
(CITY) (Job Description)

This release covers the final payment to the undersigned for all labor, services, equipment, or material furnished on the job, except for disputed claims for additional Work in the amount of $
Before any recipient of this document relies on it, the party should verify evidence of payment to the undersigned.

(Company Name) (Date)

By:
(Title)

Exclusions: Listing of Claims, of which Notice has been given:

1. Claim for: In the amount of: $

2. Claim for: In the amount of: $

3. Claim for: In the amount of: $

4. Claim for: In the amount of: $

5. Claim for: In the amount of: $
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4. Where the claimant is required to execute a waiver and release in exchange for, or in order to induce payment of, a final payment and the claimant asserts in the waiver it has, in fact, been paid the final paym ent, the waiver and release shall follow substantially the form:

UNCONDITIONAL WAIVER AND RELEASE UPON "FINAL PAYMENT"

The undersigned has been paid in full for all labor, services, equipment or material furnished to:
(Your Customer)

on the job of: located at:
(CITY) (Job Description)

and does hereby waive and release any right to a mechanic's lien, stop notice, or any right against a labor and m aterial bond on the job, except for disputed claims for extra Work in the amount of $ _.

(Company Name) (Date)

By:
(Title)

Exclusions: Listing of Claims, of which Notice has been given:

1. Claim for: In the amount of: $

2. Claim for: In the amount of: $

3. Claim for: In the amount of: $

4. Claim for: In the amount of: $

5. Claim for: In the amount of: $

"NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. T HIS DOCUMENT

IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BE EN P AID, USE A CONDITIONAL RE LEASE FORM."
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14.6 RETENTION. The City shall retain 5% percent of the estimated value of the Work done as part security for the fulfillment of the CONTRACT by the CONTRACTOR.

14.7 SUBSTITUTION OF SECURITIES, ESCROW ACCOUNT

A. Pursuant to the requirements of Public Contract Code Section 22300, upon CONTRACTOR's request, the City will make payment to CONTRACTOR of any earned retention funds withheld from payments under th is Agreement if CONTRACTOR deposits with the City or in escrow with a California or federally chartered bank acceptable to the City, securities eligible for the investment pursuant to Government Code Section 16430 or bank or savings and loan certificates of deposit, upon the following conditions:

1. CONTRACTOR shall be the beneficial owner of any securities substituted fo r monies withheld and shall receive any interest thereon.

2. All expenses relating to the substitution of securities under Section 22300 and under this Article, including, but not limited to the City's overhead and administrative expenses, and expenses of the escrow agent shall be the responsibility of the CONTRACTOR.

3. If CONTRACTOR shall choose to enter into an escrow agreement, such agreement form shall be provided by the City upon request, and which shall allow for the conversion to cash to provide funds to meet defaults by the CONTRACTOR includ ing, but not limited to, termination of the CONTRACTOR's control over the Work, stop notices filed pursuant to la w, assessment of liquidated damages or amounts to be kept or retained under the provisions of the Project Documents.

4. Securities, if any, shall be returned to CONTRACTOR only upon satisfactory completion of the Agreement.

B. To m inimize the expense caused by such substitution of securities, CONTRACTOR shall, prior to or at the time CONTRACTOR requests to substitute security, deposit sufficient security to cover the entire amount to be then withheld and to be withheld under the Ge neral Conditions of this Agreement. Should the value of such substituted security at any time f all below the amount for which it was substituted, or any other amount which the City determines to withhold, CONTRACTOR shall immediately and at CONTRACTOR's expense deposit additional security qualifying under Section 22300 until the total security deposited is no less than equivalent to the amount subject to withholding under the Agreement.

C. In the alternative, under Section 22300, the CONTRACTOR may request City to make payment of earned retentions directly to the escrow agent at the expense of the CONTRACTOR. Also at the CONTRACTOR's expense, the CONTRACTOR may direct investment of the payments in securities, and the C ONTRACTOR shall receive interest earned on such investment upon the same conditions as provided for securities deposited by CONTRACTOR. Upon satisfactory completion of the contract, CONTRACTOR shall receive from the escrow agent all securities, interest and paymen ts received by escrow agent from the City pursuant to the terms of Section 22300. If CONTRACTOR elects to receive interest on monies withheld in retention by the City, CONTRACTOR shall, at the request of any subcontractor, make that option available to the subcontractor regarding any monies withheld in retention by the CONTRACTOR from the subcontractor. If th e CONTRACTOR elects to receive any interest on any monies withheld in retention by the City, then the subcontractor shall receive the identical rate of in t erest re ceived by the Resolution 2024-57
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Contractor on any retention monies withheld from the subcontractor by the CONTRACTOR, less any actual pro rata costs associated with administering and calculating that interest. In the event the interest rate is a fluctuating rate, the rate for the subcontractor shall be determined by calculating the interest rate paid during the time that retentions were withheld from the subcontractor. If the CONTRACTOR elects to substitute securities in lieu of retention, then, by mutual consent of the CONTRACTOR and subcontractor, the subcontractor may subs titute securities in exchange for the release of monies held in retention by CONTRACTOR. This shall apply only to those subcontractors performing more than five percent (5%) of the CONTRACTOR's total bid. The CONTRACTOR shall not require any subcontractor to waive any provision of this section.

D. If any provi sion of this Article shall be found to be illegal or unenforceable, then, notwithstanding, the remainder of this Article shall remain in full force and effect, and only such provision shall be deemed stricken.

14.8 CONTRACTOR'S WARRANTY OF TITLE, ASSIGNMENT OF ANTITRUST ACTIONS.

A. Public Contra ct Code Section 7103.5 provides:

1. In entering into a public works contract or a subcontract to suppl y goods, services, or materials pursuant to a public works contract, the CONTRACTOR or Subcontractor offers and agrees to assign to the awarding body (the City) all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Section 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of P art 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services, or materials pursuant to the public works contract or the subcontract. This assignment shall be made and become effective at the time the awarding body tenders final paym ent to the CONTRACTOR, without further acknowledgment by the parties.

2. CONTRACTOR, for itself and all Subcontractors, agrees to assign to the City all rights, title, and interest in and to all such causes of action CONTRACTOR and all Subcontractors may have under the Agreement. This assignment shall become effective at the time the City tenders final payment to the CONTRACTOR, and CONTRACTOR shall require assignments from all Subcontractors to comply herewith.

14.9 RE VIEW OF APPLICATIONS FOR PROGRESS PAYMENT

A. The City's designee will, within 7 days after receipt of each Application for Payment, either indicate approval by count er-signature on the application for progress payment, or return the application to the CONTRACTOR indicating in writing the City's reasons for refusing to recommend payment. In the l atter case, the CONTRACTOR may make the necessary corrections and resubmit the application. 30 days after presentation of the Application for Payment with the City's recommendation, the amount recommended will become due and when due, will be paid by the City to the CONTRACTOR.

B. The City may withhold a sufficient amount or amounts of any payment or paym ents otherwise due to CONTRACTOR, as in its judgment may be necessary to cover:

1. Payments which m ay be past due and payable for just claims against CONTRACTOR or any Subcontractors, or against and about the performance of Work on the Project.

2. The cost of defective or incomplete or damaged Work which CONTRACTOR has not remedied.

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3. Liquidated da mages assessed against CONTRACTOR.

4. Penalties for violation of labor laws.

5. The cost of materials ordered by the City pursuant to Article 13.

6. The cost of completion of this Agreement if there exists a reasonable doubt that this Agreement can be completed for the balance then unpaid to CONTRACTOR.

7. Damage caused by CONTRACTOR to another contractor.

8. Site clean-up provided by the City (or others on contract to the city) on behalf of the CONTRACTOR for failure of the CONTRACTOR to provide timely and adequate clean up as required by the Project Documents, in the opinion of the City.

9. Payments to indemnify, defend, or hold harmless the City.

10. Any payments due to the City including but not limited to payments for failed tests, utilities or imperfections.

11. Extra services for the Engineer, including but not limited to, services rendered in the evaluation of CONTRACTOR substitution requests, Requests For Information (RFI's), Change Order Requests (COR's) and Claims.

12. Extra services for the IN SPECTOR including but not limited to re-inspection required due to CONTRACTOR's failed tests or installation of unapproved or defective materials and CONTRACTOR's r equests for inspection and CONTRACTOR's failure to attend the inspection, and Work performed after regular Work hours, or during weekend and/or holidays.

13. Stop Notices/Liens have been filed in connection with the Work and the City has exercised its discretion to not accept a specific Bond intended to discharge of such Liens.

14. Claims by third party entities and/or individuals.

15. Persistent failure to comply with directions given to perform.

16. Costs and/or damages resulting from delay, termination and/or other causes which increase or which m ay increa se the City's costs in administering the contract.

17. There are other items entitling the City to a set-off against the amount recommended.

The City mu st give the C ONTRACTOR written notice stating the reasons for such action and pay the CONTRACTOR in the n ext application for progress payment, the amount so withheld, or any adjustment thereto agreed to by the City and CONTRACTOR, wh en CONTRACTOR corrects to the City's satisfaction the reason for such action.

C. If the above grounds are in the op inion of the City removed by or at the expense of CONTRACTOR, payment shall be made for amounts withheld because of them.

D. PAYMENTS WITHHELD. The City may apply such withheld amount or amounts to payment of such claims or obligations at its discretion. In so doing, the City shall make such payments on behalf of CONTRACTOR. If any payment is so made by the City, then such amount shall be considered as a payment made under contract by the City to CONTRACTOR and the City shall not be liable to CONTRACTOR for such payments Resolution 2024-57
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made in good faith. Such payments may be made without prior judicial determination of claim or obligations. The City will render CONTRACTOR an accounting of such funds disbursed on behalf of CONTRACTOR. To minimize/avoid claims of interference and/or that proposed payment was improper, the City shall endeavor to communicate to CONTRACTOR as to the CONTRACTOR's opinion regarding any proposed payment to a third party individual/entity, prior to City making the same. If CONTRACTOR fails to respond in w riting detailing the reason(s) for m aking any such payment within two (2) working days, City shall have the right, but not the duty, to make any such payment without concern that CONTRACTOR will later claim such payment was improper and/or interfered with CONTRACTOR's relationship and /or prospective economic advantage. In such event, all such claims by CONTRACTOR shall be deemed waived.

E. As an alternative to payment of such claims or obligations, the City, in its sole discretion, may reduce the total contract price as provided in the Article 13.

14.10 PARTIAL OCCUPATION /UTILIZATION

A. The City reserves the right to occupy buildings and/or portions of the site at any time before completion, and such occupancy shall not constitute final acceptance of any part of Work cov ered by this Agreement, nor shall such occupancy extend the date specified for completion of the Work, nor shall any such occupancy affect any liquidated damages.

The City shall have the right to utilize or place into service any item of equi pment or other usable portion of the Work prior to completion of the Work. Whenever the City plans to exer cise said right, the CONT RACTOR wi ll be notified in writing by the City, identifying the specific portion or portions of the Work to be so utilized or otherwise placed into service.

B. It shall be understood by the CONTRACTOR that until such written notification is issued, all responsibility for care and maintenance of all of the Work shall be borne by the CONTRACTOR. Upon issuance of said written notice of Partial Utilization, the City will accept responsibility for the protection and maintenance of all such items or portions of the Work described in the written notice.

C. The CONTRACTOR shall retain full respons ibility for satisfactory completion of the Work, regardless of whether a portion thereof has been partially utilized by the City, and the CONTRACTOR's 1 year correction period shall co mmence only after the date of Project Completion for the entire Work.

14.11 PROJECT COMPLETION

A. The City shall accept co mpletion of the Agreement and have the Notice of Completion recorded when the entire Work including CONTRACTOR's Punch List(s) and City's final review co mments shall h ave been completed to the satisfaction of the City. The Work may only be accepted as complete by action of the Escondido City Council. Completion means final completion, and the concept of substantial completion shall not apply to this Agreement.

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B. However, the City, at its sole option, may accept completion of the Agreement and have the Notice of Completion recorded when the entire Work including individual portions of the Work shall have been completed to the satisfaction of the City, except for minor corrective items, as distinguished from incomplete items.

C. A final walk through of the Project to de termine completion of the Agreement and to record the Notice of Completion shall occur only upon a valid claim by CONTRACTOR that the Project is complete except for minor corrective items. Any erroneous claims of completion by CONTRACTOR resul ting in a premature walk through shall be at CONTRACTOR's sole cost and expense and the City shall ma ke adjustments to the Contract Price by reducing the amount thereof to pay for any costs incurred by the City due to the erroneous claims by the CONTRACTOR that the Proj ect is complete. Minor corrective items shall be identified in the final walk through of the Project.

D. If the CONTRACTOR fails to complete the minor corrective items prior to the expiration of the 35 day period immediately following recording of the Notice of Completion, the City shall withhold from the final payment an amount equal to twice the estimated cost, as determined by the City, of each i tem until such time as the item i s completed. At the end of such 35 day period, if there are items remaining to be corrected, the City may elect to proceed as provided in the Article 13.

14.12 FINAL APPLICATION FOR PAYM ENT. After the CONTRACTOR has completed all of the Work, the punch-list, and delivered all maintenance and operating instructions, schedules, guarantees, Bonds, certificates of inspection, marked-up as-built record documents and other documents, all as required by the Project Docume nts, and after the Engineer and the City have indicated that the Work i s acceptable, the CONTRACTOR may make application for final payment following the procedure for progress payments. The final Application for Payment shall be accompanied by all documentation called for in the Contract Documents, together with complete and leg ally effective unconditional wa iver re leases (Reference Ar ticle 14.5) by CONTRACTOR an d all SUBCONTRACTORS/suppliers that filed preliminary notices of all previous progress payments, conditional waiver and release upon "final payment", and waivers or releases of all Liens arising out of or filed in connection with the Work.

14.13 FINAL PAYMENT AND ACCEPTANCE

A. If, on the ba sis of the City's observation of the Work during construction and final inspection, and the City's review of the final Application for Payment and accompanying documentation, all as required by the Contract Documents, the City is satisfied that the Work has been completed and the CONTRACTOR's other obligations under the Contract Documents have been fulfilled, the City designee will recommend payment of the final application for progress payment.

B. After acceptance of the Work by the E scondido City Council, the City will make final disposition to the CONTRACTOR of the amount remaining after deducting all prior payments and all amounts to be kept or re tained under the provisions of the Contract Documents, including the following items:

1. Liquidated damages, as applicable; and

2. Amounts withheld by the City under Article 14.9.B. which have not been released.

C. As a condition of fi nal payment, the CONTRACTOR shall be required to execute a release releasing the C ity from any and all claims of liability for payment on the Project except for such amounts as may be specifically described and excluded from the release.

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14.14 RELEASE OF RETENTION AND OTHER DEDUCTIONS. After recording the Notice of Completion with the San Diego County Recorder's Office to initiate the Lien period, and not more than 55 calendar days thereafter, the City will release to the CONTRACTOR the retention funds withheld pursuant to the Agreement, less any deductions to cover pending claims against the City.

ARTICLE 15 – SUSPENSION OF WORK AND TERMINATION

15.1 CITY'S RIGHT TO TERMINATE AGREEMENT

A. If the CONTRACTOR refuses or fails to complete the Work or any separable part thereof with such diligence as will ensure its completion within the time specified or any extension thereof, or fails to complete said Work within such time, or if the CONTRACTOR should file a petition for relief as a debtor, or should relief be ordered against CONTRACTOR as a debtor under Title 11 of the United States Code, or if CONTRACTOR should make a general assignment for the benefit of its creditors, or if a receiver should be appointed on account of its insolvency, or if it should refuse or should fail to supply enough properly skilled workers or proper materials to complete the Work in the time specified, or if CONTRACTOR should fail to make prompt payment to Subcontractors for materials or labor, or disregard laws or ordinances or instructions of the City, or if CONTRACTOR or its Subcontractors should otherwise violate any provision of this Agreement, including, but not limited to, the performance of defective Work, disregard or violate the Laws or Regulations of any public body ha ving jurisdiction; disregard or violate provisions of the Contract Documents or City's instructions; fail to prosecute the Work according to the approved progress schedule; fail to provide a qualified superintendent, competent workmen, or materials or equipment meeting the requirements of the Contract Documents; or disregard the authority of the City, then the City may, without prejudice to any other right or remedy, serve written notice upon CONTRACTOR and its surety of City's intention to terminate this agreement. Such notice shall contain the reasons for such intention to terminate. Unless within seven (7) days after the service of such notice such condition shall cease or such violation shall cease and arrangements satisfactory to the City for the correction thereof have been made, this Agreement shall cease and terminate.

In such case, CONTRACTOR shall not be entitled to receive any further payment until the Work is finished to the City's satisfaction.

B. In the event of any such termination, the City shall immediately serve written notice thereof upon surety and CONTRACTOR, and surety shall have the duty to take over and perform this Agreement, provided, however, that if surety within 7 days after service upon it of notice of termination does not give the City written notice of its intention to unqualified by honor its duty to take ov er and perform this Agreement, or does not commence actual, on site performance thereof within 15 days after service of the notice of t ermination by the City on surety, the City may take over the Work and pr osecute it to completion by Agreement or by any other method it may deem advisable for the account and at the expense of CONTRACTOR, and CONTRACTOR and its surety shall be liable to the City for any excess cost or other damages, including the added time devised by City personnel and/or consultants, including attorneys, occasioned by the City thereby. Time is of the essence in this Agreement. If the City takes ove r the Work as h erein above provided, the City may, without liability for so doing, take possession of and utilize in completing the Work such materials, supplies, equipment and other property belonging to the CONTRACTOR as may be on the site of the Work and necessary therefore.

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C. If the expense of finishing the Work, including compensation for additional engineering, architectural, managerial, legal, consulting, personnel, and administrative services, shall exceed the unpaid balance of the Agreement, CONTRACTOR and/or its surety shall pay the difference to the City. Expense incurred by the City as herein provided, and damage incurred through CONTRACTOR's default, shall be certified to City by the En gineer, or ARCHITECT if applicable. If the unpaid ba lance under the Agreement shall exceed the expense of finishing the Work, including compensation for additional architectural, managerial, legal, consulting, personnel, and administrative services, such excess shall be paid to CONTRACTOR or its creditor(s).

D. If the CONTRACTOR fails to remedy the conditions constituting default within the time allowed, the City may then issue the notice of termination.

E. In the event that sufficient funds are not appropriated to complete the Project or the City determines that sufficient funds are not available to complete the Project, the City may terminate or suspend the completion of the Project at any time by giving written notice to the CONTRACTOR. In the event that the City exercises this option, the City shall pay for any and all Work and materials completed or delivered onto the site, and the value of any and all Work then in progress and orders actually placed which cannot be canceled up to the date of notice of termination. The value of Work and materials paid for shall include a factor of fifteen percent (15%) for the CONTRACTOR's overhead and profit and there shall be no other costs or expenses p aid to CONTRACTOR. All Work, materials and orders paid for pursuant to this provision shall become the property of the City. The City may, without cause, order CONTRACTOR in writing to suspend, delay or interrupt the Project in whole or in part for such period of time as the City may determine. Adjustment sh all be made for increases in the cost of performance of the Agreement caused by suspense, delay or interruption.

F. The foregoing provisions are in addition to a nd not in limitation of any ot her rights or remedies available to the City.

15.2 TERMINATION OF AGREEMENT BY THE CITY FOR CONVENIENCE

A. Upon 7 days written notice to the CONTRACTOR the City may, without cause and without prejudice to any ot her right or remedy of the City, elect to terminate the Agreement. In such case, the CONTRACTOR shall be paid (without dupl ication of any items):

1. For comp leted and accept able Work e xecuted in a ccordance with the Contract Documents, prior to the effective date of termination, including fair and reasonable sums for overhead and profit of such Work;

2. For expenses susta ined prior to the effe ctive date of termination in performing services and furnishing labor, materials, or equipment as required by the Contract Documents in connection with uncompleted Work, plus fair and reasonable sums for overhead and profit on such expenses;

3. For all reasonab le claims, costs, l osses, and damages incur red in se ttlement of terminated contracts with Subcontractors, Suppliers, and others; and

4. For reasonable expenses directly attributable to termination.

B. CONTRACTOR shall not be paid on account of loss of anticipated profits or revenue or other economic loss arising out of or resulting from such termination.

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ARTICLE 16 – CONSTRUCTION CLAIMS, W AIVER AND RE LEASE F ORMS, DISPUT ES, FALSE CLAIMS ACT.

16.1 CONTRACTOR CLAIMS

A. NOTICE. If the CONTRACTOR shall claim compensation for any damage sustained by reason of the acts of the City or its agents, or if the CONTRACTOR disagrees with the City's or Engineer's/ Architect's decisions regarding a CONTRACTOR's Change Order Request (COR), the CONTRACTOR shall provide written "Notice" to the City within 5 days after sustaining of such damage, or being notified of an adverse decision, and provide within 14 days of the event the factual basis supporting the claim (unless otherwise specified). The written "Notice" shall state the summary points for which the factual bases will support the claim and cite in detail the Project Documents (including plans and specifications) upon which the claim is to be based. CONTRACTOR's failure to notify the City within such a period shall be deem ed a waiver and relinquishment of such a claim. If such notice is given within the specified time, the procedure for its consideration shall be as stated above in these General Conditions.

B. WAIVER AND RELEASE FORMS. In addition, on or before the end of the month for which the claim has be en filed, the CONTRACTOR shall also file with the City the WAIVER AND RELEASE FORMS, for which the claim and the amount of the claim is identified. If the claim is not indicated on the WAIVER AND RELEASE FORMS, CONTRACTOR's claim shall be forfeited and invalidated and it shall not be en titled to consideration for time or payment on account of any such claim.

C. REQUIRED DOCUMENTATION FOR CLAIMS FOR TIME: Fragnet – Sometimes known as a "Sub-network". A Fragnet will be required for time impact analysis and time extensions. CONTRACTOR's failure to provide a "Notice of Delay" within 24 hours, and submit a Fragnet for time impact analysis and time extension(s) on or within 14 days of the delaying event, shall forfeit and invalidate all considerations for time and/or payment.

The costs to prepare Fragnets and schedule updates resulting from approved Fragnets are part of the Work, regardless of number and difficulty. The City will provide a response to the Fragnet on or within 14 days from the completed submission.

D. Exce
pt for tort claims, all claims by the CONTRACTOR for a time extension, payment of money or damages arising from Work done by, or on behalf of, the CONTRACTOR pursuant to the Agreement and payment of which is not otherwise expressly provided for or the claimant is not otherwise entitled to, or as to the amount of payment which is disputed by the City of $375,000 of less, is subject to the settlement and arbitration provisions procedures set forth in Public Contract Code Section 20104, et seq. The text of those provisions are provided in full in Article 17.

E. All of the following claims by the CONTRACTOR are subject to the claim resolution procedures set forth in Public Contract Code Section 9204. The text of that section is provided in full in Article 17.

1. A time extension;

2. Payment of money or damages arising from Work done by, or on behalf of, the CONTRACTOR pursuant to the Agreement and payment of which is not otherwise expressly provided for, or CONTRACTOR is not otherwise entitled to; and

3. Payment of an amount that is disputed by the City.

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F. Any claim must be a separate demand sent by registered mail or certified mail with return receipt requested. The CONTRACTOR shall furnish reasonable documentation to support the claim, which shall include all of the materials described in Section 16.1.

G. The City shall conduct a reasonable review of the claim within 45 days and shall provide the CONTRACTOR a written statement identifying what portion of the claim is disputed and what portion is undisputed. The City and the CONTRACTOR may, by mutual agreement, extend the time period for response. Any payment due on an undisputed portion of the claim shall be processed and made within 60 days after the City issues its written statement.

H. If a subcontractor or a lower tier subcontractor lacks legal standing to assert a claim because of privity of contract does not exist, the CONTRACTOR may present a claim to the City on behalf of a subcontractor or lower tier subcontractor. A subcontractor may request in writing that t he CONTRACTOR present a claim for work which was performed by the subcontractor or by a lower tier subcontractor on behalf of the subcontractor. The subcontractor requesting that the claim be presented to the City shall furnish reasonable documentation to support the claim, which shall include all of the materials described in Section 16.1. Within 45 days of receipt of this written request, the CONTRACTOR shall notify the subcontractor in writing as to whether the CONTRACTOR presented the claim to the City. If the CONTRACTOR did not present the claim, the CONTRACTOR must provide the subcontractor with a statement of the reasons for not presenting the claim to the City.

16.2 DISPUTES –THE CITY'S AND ENGINEER'S DECISIONS

A. If the CONTRACTOR disputes the City’s written response to the claim, or if the City does not respond to the claim within the time prescribed, the CONTRACTOR may demand in writing an informal conference to meet and confer for settlement of the issues in dispute.

The CONTRACTOR must send the demand by registered mail or certified mail, return receipt requested. Upon receipt, the City shall schedule a meet and confer conference within 30 days for settlement of the dispute.

B. If any portion of the claim remai ns in dispute after the meet and confer conference, the City shall provide the CONTRACTOR a written statement identifying the potion of the claim that remains in dispute and the portion that is undisputed within 10 business days following the conclusion of the conference. Any payment due on an undisputed portion of the claim shall be processed and made within 60 days after the City issues its written statement. Any disputed portion of the claim, as identified by the CONTRACTOR in writing, shall be submitted to nonbinding mediation. The City shall conduct a reasonable review of the claim within 45 days and shall provide the CONTRACTOR a written statement identifying what portion of the claim is disputed and what portion is undisputed. The City and the CONTRACTOR may, by mutual agreement, extend the time period for response. Any payment due on an undisputed portion of the claim shall be processed and made within 60 days after the City issues its written statement.

C. The City and CONTRACTOR shall mutually agree to a mediator within 10 business days after the disputed potion of the claim has been identified in writing. The City and the CONTRACTOR shall share the associated costs of mediation equally. If the parties cannot agree upon a mediator, each party shall select a mediator and those mediators shall select a qualified neutral third party to mediate with regard to the disputed portion of the claim. Each party shall bear the fees and costs charged by its respective mediator in connection with the selection of the neutral mediator. If mediation is unsuccessful, the parts of the claim remaining in dispute shall be subject to applicable procedures outside Section 9204. The mediation Resolution 2024-57
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conducted shall excuse any further obligation under Section 20104.4 to mediate afte r litigation has been commenced.

D. Failure by the City to respond to a claim from the CONTRACTOR within the time periods described above or to otherwise meet the time requirements described above shall result in the claim being deemed rejected in its entirety.

E. Amounts not paid in a timely manner as outlined above will bear interest at 7% per year.

16.3 FALSE CLAIMS ACT CERTIFICATION. All claims submitted by the CONTRACTOR shall be accompanied by a notarized certificate containing the following language:

Under penalty perjury and with specif ic reference to the Calif ornia False Claims Act, Government Code Section 12650 et. seq., the undersigned,

(name)
of
(title)
(company)
hereby certifies that the claim for the additional compensation and time, if any, made herein for the Work on this Contract is a true statement of the actual costs incurred or estimated future costs, and time sought, and is fully documented and supported under the Agreement.

Dated

/s/

Subscribed and sworn before me this day

Notary Public
My Commission Expires

Failure to submit the notarized certificate will be sufficient cause for denying the claim.

ARTICLE 17 – MISCELLANEOUS

17.1 GIV ING NOTICE

A. Any notice from one party to the other or otherwise under the Agreement shall be in writing and shall be dated and signed by party giving such notice or by a duly authorized representative of such pa rty. Any such notice shall not be effective for any purpose whatsoever unless served in one of the following manners, and copied to the City:

1. If notice is given to the City, by pers onal delivery thereof to the City or by deposit in the United States mail, enclosed in a sealed envelope addressed to the City, and sent by registered or certified mail with postage prepaid;

2. If notice is given to CONTRACTOR, by personal delivery thereof to said CONTRACTOR or to CONTRACTOR's superintendent at the site of the Project, Resolution 2024-57
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or by deposit in the United States mail, enclosed in a sealed envelope addressed to said CONTRACTOR at its regular place of business or at such address as may have been established for the conduct of Work under this Agreement, and sent by registered or certified mail with postage prepaid;

3. If notice is given to the surety or other persons, by personal delivery to such surety or other person or by deposit in the United States m ail, enclosed in a sealed envelope, addressed to such surety or person at the address of such surety or person last comm unicated by the surety or ot her person to the party giving notice, and sent by registered or certified mail with postage prepaid.

17.2 TITLE TO MATERIALS FOUND ON THE WORK. The City reserves the right to retain title to all soils, stone, sand, gravel, and other materials developed and obtained from excavations and other operations connected with the Work. Unless otherwise specified in the Contract Documents, neither the CONTRACTOR nor any Subcontractor shall have any right, title, or interest in or to any such materials. The CONTRACTOR will be permitted to use in the Work, without charge, any such materials which meet the requirements of the Contract Documents.

17.3 RIGH T T O AUDIT. I f the CO NTRACTOR submits a clai m t o the City for additional compensation, the City shall have the right, as a condition to considering the claim, and as a basis for ev aluation of the claim, and until the cla im has been settled, to audit the CONTRACTOR's Documents and books to the extent they are relevant. This right shall include the right to examine books, records, documents, and other evidence and accounting procedures and practices, sufficient to discover and verify all direct and indirect costs of whatever nature claimed to have been incurred or anticipated to be incurred and for whi ch the claim has been submitted. The right to audit shall include the ri ght to inspect the CONTRACTOR's plant, or such pa rts thereof, as may be or have been engaged in the performance of the Work. The CONTRACTOR further agrees that the right to audit encompasses all subcontracts and is binding upon Subcontractors. The rights to examine and inspect herein provided for shall be exercisable through such representatives as the City deems desirable during the CONTRACTOR's normal business hours at the office of the CONTRACTOR.

The CONTRACTOR shall make available to the City for auditing, all relevant accounting records and documents, and othe r financial data, and upon request, shall submit true copies of requested records to the City.

17.4 SURVIVAL OF O BLIGATIONS. All representations, indemnifications, warranties, and guaranties made in, required by or given in accordance with the Contract Documents, as well as all continuing obligations indicated in the Contract Documents, will survive final payment, comp letion and acceptance of the Work or termination or completion of the Agreement.

17.5 CONTROLLING LAW. This Agreement is to be governed by the law of the state of California, in which the Project is located, with venue in North San Diego County.

17.6 SEVERABILITY. If any term or provision of this Agreement is declared invalid or unenforceable by any court of lawful jurisdiction, the remaining terms and provisions of the Agreement shall not be affected thereby and shall remain in full force and effect.

17.7 WAIVER. The waiver by the City of any breach or violation of any term, covenant or condition of this Agreement or of any Agreement provision, ordinance, or law sh all not be deemed to be a waiver of any other term, c ovenant, condition, ordinance, or law or of any sub sequent breach or violation of the same or of any other term, covenant, condition, ordinance, or law. The subsequent payment of any monies or fee by the City which may become due hereunder shall not be deemed to be a waiver of any preceding breach or violation by CONTRACTOR or any term, covenant, condition of this Agreement or of any applicable law or ordin an ce.

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17.8 PROHIBITED INTERESTS. No official of the City who is authorized in such capacity and on behalf of the City to negotiate, make, accept, or approve, or to take part in negotiating, ma king, accepting or approving any architectural, engineering, inspection, construction or mat erial supply contract or any subcontract in connection with construction of the Project, shall become directly or indirectly interested financially in this Project or in any part thereof. No officer, empl oyee, Engineer, attorney, architect or inspector of or for City who is authorized in such capacity and on behalf of the City to exercise any executive, supervisory or other similar functions in connection with construction of Project shall become directly or indirectly interested financially in this Project or in any part thereof. CONTRACTOR shall receive no compensation and shall repay the City for any compensation received by or from CONTRACTOR he reunder, should CONTRACTOR aid, abet or knowingly participate in violation of this Article.

17.9 California Public Contract Code § 9204. Legislative findings and declarations regarding timely and complete payment of contractors for public works projects; claims process.

(a) The Legislature finds and declares that it is in the best interests of the state and its citizens to ensure that all construction business performed on a public works project in the state that is complete and not in dispute is paid in full and in a timely manner.

(b) Notwithstanding any other law, including, but not limited to, Article 7.1 (commencing with Section 10240) of Chapter 1 of Part 2, Chapter 10 (commencing with Section 19100) of Part 2, and Article 1.5 (commencing with Section 20104) of Chapter 1 of Part 3, this section shall apply to any claim by a contractor in connection with a public works project.

(1) “C
laim” means a separate demand by a contractor sent by registered mail or certified mail with return receipt requested, for one or more of the following:

A. A time extension, including, without limitation, for relief from damages or penalties for delay assessed by a public entity under a contract for a public works project.

B. Payment by the public entity of money or damages arising from work done by, or on behalf of, the contractor pursuant to the contract for a public works project and payment for which is not otherwise expressly provided or to which the claimant is not otherwise entitled.

C. Payment of an amount that is disputed by the public entity. (2) “Contractor” means any type of contractor within the meaning of Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code who has entered into a direct contract with a public entity for a public works project. (3) A . “Public entity” means, without limitation, except as provided in subparagraph B., a state agency, department, office, division, bureau, board, or commission, the California State University, the University of California, a city, including a charter city, county, including a charter county, city and county, including a charter city and county, district, special district, public authority, political subdivision, public corporation, or nonprofit transit corporation wholly owned by a public agency and formed to carry out the purposes of the public agency.

B. “Public entity” shall not include the following:
(i) The Department of Water Resources as to any project under the jurisdiction of that department.
(ii) The Department of Transportation as to any project under the jurisdiction of that department.
(iii) The Department of Parks and Recreation as to any project under the jurisdiction of that department.

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(iv) The Department of Corrections and Rehabilitation with respect to any project under its jurisdiction pursuant to Chapter 11 (commencing with Section 7000) of Title 7 of Part 3 of the Penal Code.
(v) The Military Department as to any project under the jurisdiction of that department.
(vi) The Department of General Services as to all other projects. (vii) The High-Speed Rail Authority.

(4) “Public works project” means the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind.
(5) “Subcontractor” means any type of contractor within the meaning of Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code who either is in direct contract with a contractor or is a lower tier subcontractor. (d) (1) (A) Upon receipt of a claim pursuant to this section, the public entity to which the claim applies shall conduct a reasonable review of the claim and, within a period not to exceed 45 days, shall provide the claimant a written statement identifying what portion of the claim is disputed and what portion is undisputed. Upon receipt of a claim, a public entity and a contractor may, by mutual agreement, extend the time period provided in this subdivision.
(B) The claimant shall furnish reasonable documentation to support the claim. (C) If the public entity needs approval from its governing body to provide the claimant a written statement identifying the disputed portion and the undisputed portion of the claim, and the governing body does not meet within the 45 days or within the mutually agreed to extension of time following receipt of a claim sent by registered mail or certified mail, return receipt requested, the public entity shall have up to three days foll owing the next duly publicly noticed meeting of the governing body after the 45-day period, or extension, expires to provide the claimant a written statement identifying the disputed portion and the undisputed portion.
(D) Any payment due on an undisputed portion of the claim shall be processed and made within 60 days after the public entity issues its written statement. If the public entity fails to issue a written statement, paragraph (3) shall apply. (2) (A) If the claimant disputes the public entity's written response, or if the public entity fails to respond to a claim issued pursuant to this section within the time prescribed, the claimant may demand in writing an informal conference to meet and confer for settlement of the issues in dispute. Upon receipt of a demand in writing sent by registered mail or certified mail, return receipt requested, the public entity shall schedule a meet and confer conference within 30 days for settlement of the dispute.
(B) Within 10 business days following the conclusion of the meet and confer conference, if the claim or any portion of the claim remains in dispute, the public entity shall provide the claimant a written statement identifying the portion of the claim that remains in dispute and the portion that is undisputed. Any payment due on an undisputed portion of the claim shall be processed and made within 60 days after the public entity issues its written statement. Any disputed portion of the claim, as identified by the contractor in writing, shall be submitted to nonbinding mediation, with the public entity and the claimant sharing the associated costs equally. The public entity and claimant shall mutually agree to a mediator within 10 business days after the disputed portion of the claim has been identified in writing. If the parties cannot agree upon a mediator, each party shall select a mediator and those mediators shall select a qualified neutral third party to mediate with regard to the disputed portion of the claim. Each party shall bear the fees and costs charged by its respective mediator in connection Resolution 2024-57
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with the selection of the neutral mediator. If mediation is unsuccessful, the parts of the claim remaining in dispute shall be subject to applicable procedures outside this section.
(C) For purposes of this section, mediation includes any nonbinding process, including, but not limited to, neutral evaluation or a dispute review board, in which an independent third party or board assists the parties in dispute resolution through negotiation or by issuance of an evaluation. Any mediation utilized shall conform to the timeframes in this section.
(D) Unless otherwise agreed to by the public entity and the contractor in writing, the mediation conducted pursuant to this section shall excuse any further obligation under Section 20104.4 to mediate after litigation has been commenced. (E) This section does not preclude a public entity from requiring arbitration of disputes under private arbitration or the Public Works Contract Arbitration Program, if mediation under this section does not resolve the parties' dispute. (3) Failure by the public entity to respond to a claim from a contractor within the time periods described in this subdivision or to otherwise meet the time requirements of this section shall result in the claim being deemed rejected in its entirety. A claim that is denied by reason of the public entity's failure to have responded to a claim, or its failure to otherwise meet the time requirements of this section, shall not constitute an adverse finding with regard to the merits of the claim or the responsibility or qualifications of the claimant.
(4) Amounts not paid in a timely manner as required by this section shall bear interest at 7 percent per annum.
(5) If a subcontractor or a lower tier subcontra ctor lacks legal standing to assert a claim against a public entity because privity of contract does not exist, the contractor may present to the public entity a claim on behalf of a subcontractor or lower tier subcontractor. A subcontractor may request in writing, either on his or her own behalf or on behalf of a lower tier subcontractor, that the contractor present a claim for work which was performed by the subcontractor or by a lower tier subcontractor on behalf of the subcontractor. The subcontractor requesting that the claim be presented to the public entity shall furnish reasonable documentation to support the claim. Within 45 days of receipt of this written request, the contractor shall notify the subcontractor in writing as to whether the contractor presented the claim to the public entity and, if the original contractor did not present the claim, provide the subcontractor with a statement of the reasons for not having done so.
(e) The text of this section or a summary of it shall be set forth in th e plans or specifications for any public works project that may give rise to a claim under this section. (f) A waiver of the rights granted by this section is void and contrary to public policy, provided, however, that (1) upon receipt of a claim, the parties may mutually agree to waive, in writing, mediation and proceed directly to the commencement of a civil action or binding arbitration, as applicable; and (2) a public entity may prescribe reasonable change order, claim, and dispute resolution procedures and requirements in addition to the provisions of this section, so long as the contractual provisions do not conflict with or otherwise impair the timeframes and procedures set forth in this section.
(g) This section applies to contracts entered into on or after January 1, 2017. (h) Nothing in this section shall impose liability upon a public entity that makes loans or grants available through a competitive application process, for the failure of an awardee to meet its contractual obligations.
(i) This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.

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17.10 California Public Contract Code § 20104. Application of article; provisions included in plans and specifications.

(a) (1) This article applies to all public works claims of three hundred seventy-five thousand dollars ($375,000) or less which arise between a contractor and a local agency. (2) This article shall not apply to any claims resulting from a contract between a contractor and a public agency when the public agency has elected to resolve any disputes pursuant to Article 7.1 (commencing with Section 10240) of Chapter 1 of Part 2. (b) (1) “Public work” means “public works contract” as defined in Section 1101 but does not include any work or improvement contracted for by the state or the Regents of the University of California.
(2) “Claim” means a separate demand by the contractor for (A) a time extension, (B) payment of money or damages arising from work done by, or on behalf of, the contractor pursuant to the contract for a public work and payment of which is not otherwise expressly provided for or the claimant is not otherwise entitled to, or (C) an amount the payment of which is disputed by the local agency.
(c) The provisions of this article or a summary thereof shall be set forth in the plans or specifications for any work which may give rise to a claim under this article. (d) This article applies only to contracts entered into on or after January 1, 1991.

17.11 California Public Contract Code § 20104.2. Claims; requirements; tort claims excluded.

For any claim subject to this article, the following requirements apply:
(a) The claim shall be in writing and include the documents necessary to substantiate the claim.

Claims must be filed on or before the date of final payment. Nothing in this subdivision is intended to extend the time limit or supersede notice requirements otherwise provided by contract for the filing of claims.
(b) (1) For claims of less than fifty thousand dollars ($50,000), the local agency shall respond in writing to any written claim within 45 days of receipt of the claim, or may request, in writing, within 30 days of receipt of the claim, any additional documentation supporting the claim or relating to defenses to the claim the local agency may have against the claimant.
(2) If additional information is thereafter required, it shall be requested and provided pursuant to this subdivision, upon mutual agreement of the local agency and the claimant.
(3) The local agency’s written response to the claim, as further documented, shall be submitted to the claimant within 15 days after rec eipt of the further documentation or within a period of time no greater than that taken by the claimant in producing the additional information, whichever is greater.
(c) (1) For claims of over fifty thousand dollars ($50,000) and less than or equal to three hundred seventy-five thousand dollars ($375,000), the local agency shall respond in writing to all written claims within 60 days of receipt of the claim, or may request, in writing, within 30 days of receipt of the claim, any additional documentation supporting the claim or relating to defenses to the claim the local agency may have against the claimant. (2) If additional information is thereafter required, it shall be requested and provided pursuant to this subdivision, upon mutual agreement of the local agency and the claimant.
(3) The local agency’s written response to the claim, as further documented, shall be submitted to the claimant within 30 days after receipt of the further documentation, or within a period of time no greater than that taken by the claimant in producing the additional information or requested documentation, whichever is greater. (d) If the claimant disputes the local agency’s written response, or the local agency fails to respond within the time prescribed, the claimant may so notify the local agency, in writing, either within 15 days of receipt of the local agency’s response or within 15 days of the local Resolution 2024-57
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agency’s failure to respond within the time prescribed, respectively, and demand an informal conference to meet and confer for settlement of the issues in dispute. Upon a demand, the local agency shall schedule a meet and confer conference within 30 days for settlement of the dispute.
(e) Following the meet and confer conference, if the claim or any portion remains in dispute, the claimant may file a claim as provided in Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of Division 3.6 of Title 1 of the Government Code. For purposes of those provisions, the running of the period of time within which a claim must be filed shall be tolled from the time the claimant submits his or her written claim pursuant to subdivision (a) until the time that claim is denied as a result of the meet and confer process, including any period of time utilized by the meet and confer process. (f) This article does not apply to tort claims and nothing in this article is intended nor shall be construed to change the time periods for filing tort claims or actions specified by Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of Division 3.6 of Title 1 of the Government Code.

17.12 California Public Contract Code § 20104.4. Civil action procedures; mediation and arbitration; trial de novo; witnesses.

The following procedures are established for all civil actions filed to resolve claims subject to this article:
(a) Within 60 days, but no earlier than 30 days, following the filing or responsive pleadings, the court shall submit the matter to nonbinding mediation unless waived by mutual stipulation of both parties. The mediation process shall provide for the selection within 15 days by both parties of a disinterested third person as mediator, shall be commenced within 30 days of the submittal, and shall be concluded within 15 days from the commencement of the mediation unless a time requirement is extended upon a good cause showing to the court or by stipulation of both parties. If the parties fail to select a mediator within the 15-day period, any party may petition the court to appoint the mediator.
(b) (1) If the matter remains in dispute, the case shall be submitted to judicial arbitration pursuant to Chapter 2.5 (commencing with Section 1141.10) of Title 3 of Part 3 of the Code of Civil Procedure, notwithstanding Section 1141.11 of that code. The Civil Discovery Act (Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure) shall apply to any proceeding brought under this subdivision consistent with the rules pertaining to judicial arbitration.
(2) Notwithstanding any other provision of law, upon stipulation of the parties, arbitrators appointed for purposes of this article shall be experienced in construction law, and, upon stipulation of the parties, mediators and arbitrators shall be paid necessary and reasonable hourly rates of pay not to exceed their customary rate, and such fees and expenses shall be paid equally by the parties, except in the case of arbitration where the arbitrator, for good cause, determines a different division. In no event shall these fees or expenses be paid by state or county funds.
(3) In addition to Chapter 2.5 (commencing with Section 1141.10) of Title 3 of Part 3 of the Code of Civil Procedure, any party who after receiving an arbitration award requests a trial de novo but does not obtain a more favorable judgment shall, in addition to payment of costs and fees under that chapter, pay the attorney’s fees of the other party arising out of the trial de novo.
(c) The court may, upon request by any party, order any witnesses to participate in the mediation or arbitration process.

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17.13 California Public Contract Code § 20104.6. Payment on undisputed portion of claim; interest on arbitration awards or judgments.
(a) No local agency shall fail to pay money as to any portion of a claim which is undisputed except as otherwise provided in the contract.
(b) In any suit filed under Section 20104.4, the local agency shall pay interest at the legal rate on any arbitration award or judgment. The interest shall begin to accrue on the date the suit is filed in a court of law.

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STAFF REPORT

March 15, 2024
File Number 0600-10; A-3504

SUBJECT

RANCHITO DRIVE SEWER REPAYMENT AGREEMENT

DEPARTMENT
Development Services Department, Engineering Division

STAFF RECOMMENDATION
It is requested that the City Council adopt Resolution No. 2024-55 approving the Sewer Repayment Agreement for Ranchito Drive and authorizing the Mayor to execute the agreement on behalf of the City of Escondido (“City”).

Staff Recommendation - Approval (Deputy City Manager - Chris McKinney) Presenter: Owen Tunnell, Interim City Engineer

ESSENTIAL SERVICE – Yes, Land Use/Development; Sewer
COUNCIL PRIORITY – Encourage Housing Development

FISCAL ANALYSIS
In accordance with the adopted fee schedule, the City’s cost of administering sewer repayment agreements is paid through a 5 percent fee on each sewer repayment collected. In addition, in accordance with the Policy Statement for Repayment Agreements, adop ted as Resolution No. 84-124, the applicant is responsible for the cost of public noticing.

BACKGROUND
The property owner of 640 Ranchito Drive (“Property Owner”) extended a public sewer main within Ranchito Drive by 300-feet from its existing terminus . The construction of these improvements makes service available to the other three other parcels of land shown on Exhibit B of Resolution No. 2024-55 Exhibit “A”. The Property Owner has requested that a repayment agreement be executed so that as other property owners connect to this sewer in the future, the Property Owner is reimbursed for the fair share cost from each benefiting parcel.

Article 18D, Section 6-465.9 of the Municipal Code allows the City “to enter into a repayment agreement with a developer when said developer has constructed local drainage or sanitary sewer facilities.” The code states that the amount of the repayment is limited to the actual cost of of the facility at the time it is constructed.
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An Agreement for Repayment of Public Utility Improvement Costs has been prepared in accordance with the Policy Statement for Repayment Agreements, adopted as Resolution No. 84-124. The Agreement requires that before a building permit requiring sewer capacity may be issued or a connection to the public sewer main made, the benefited parcel will pay its fair share costs as outlined in the repayment schedule below.

The sewer main beneifts four properties, including the Property Owner that paid for its installation. The property owner has provided documentation of the total cost of the sewer main extension of $229,799.85 inclusive of City fees. This cost has been allocated to each other property owner based on lot acreage.

Benefited
Parcel #
Assessor’s Parcel
Number
Lot Acreage % of Total Area Assessed Cost
1 239-051-10 1.01 20% $46,419.57
2 239-050-13 1.19 24% $54,692.36
3 239-051-11 1.85 37% $85,025.94
4 239-050-11 0,95 19% $43,661.97

ENVIRONMENTAL REVIEW
The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.

CONCLUSION
On April 16 2024, the Engineering Division sent a letter to each benefited parcel owner informing them of the proposed public hearing and provid ing a copy of the proposed agreement. The Engineering Division was contacted by one affected property owner who did not express objection to the propsed agreement.

In addition, notice of the public hearing was made on May 2, 2024 in the Times Advocate. Staff recommends that a public hearing be held and that Resolution No. 2024 -55 be adopted approving the Sewer Repayment Agreement for Ranchito Drive.

RESOLUTIONS
A. Resolution No. 2024-55

B. Resolution No. 2024 -55, Exhibit “A” Agreement for Repayment of Public Utility Improvement Costs

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RESOLUTION NO. 2024-55

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, APPROVING RANCHITO

DRIVE SEWER REPAYMENT AGREEEMENT

WHEREAS, Laurinda Suzan Barnes Trust (“Property Owner”), is the owner of that certain real property located at 640 Ranchito Drive, the City of Escondido, County of San Diego, State of California, having assessor’s parcel number 239-050-11-00 (“Property”); and WHEREAS, Property Owner has constructed public utility improvements in the manner shown on City approved drawings numbered S22-0003 for the purpose of serving the Property; and WHEREAS, Property Owner has signed an agreement drawn for the purpose of spreading the cost of constructing the public sewer main to the adjoining benefited parcels; and WHEREAS, the City Council desires at this time and deems it to be in the best public interest to approve a Repayment Agreement for Public Utility Improvement Costs with the Property Owner.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Escondido, California , as follows:

1. That the above recitations are true.

2. That the Property Owner has signed an agreement drawn for the purpose of spreading the cost of constructing the public sewer main to the adjoining benefited parcels.

3. That the City Council approves and authorizes a Repayment Agreement for Public Utility Improvement Costs. That the Mayor is hereby authorized to execute, on behalf of the City, an agreement with Laurinda Suzan Barnes Trust, owner of 640 Ranchito Drive . A copy of the agreement is attached as Exhibit “A” and incorporated by this reference.
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