-1-
DRAINAGE ACCEPTANCE AND MAINTENANCE COVENANT AND
AGREEMENT
This Drainage Acceptance and Maintenance Covenant and Agreement (“Agreement”) is made and entered into as of _____, 2026 by and between the City of Fontana, a California municipal corporation referred to herein as the “City,” (Jack M. Chen and Shirley S. Chen, as trustees of the Chen Family Trust dated December 21, 2021; Annie Charyu Chen, a married woman, as her sole and separate property; James Hanwei Chen, a single man; and Kimberly Tingwei Chen, a single woman, all as tenants in common; BCT Fontana Phase I, LLC, a Delaware limited liability company; BCT Fontana Phase II, LLC, a Delaware limited liability company), collectively referred to herein as the “Owners” or each individually as “Owner,” and BCT Development referred to herein as the “Developer”.
RECITALS
WHEREAS, Owners are the owners of certain real property located in the City of Fontana, County of San Bernardino, State of California, more particularly described in Exhibit “A,” attached hereto and incorporated herein (“Property”); and WHEREAS, the property consists of multiple ownership interest, including Developer, and Developer is developing a portion of the Property pursuant to applicable development entitlements; and
WHEREAS, Developer proposes to develop its portion of the Property and construct improvements, including a privately owned storm drain system serving Developer’s portion of the Property (“Developer’s Private Storm Drain System”), in accordance with approved or conditionally approved development entitlements; and
WHEREAS, as a part of the development of its portion of the Property, Developer will construct certain primary storm drain infrastructure intended to provide the primary drainage connection and conveyance infrastructure for portions of the Property, as generally depicted in Exhibit “B” attached hereto and incorporated herein by this reference (“Backbone System”); and WHEREAS, the Backbone System is intended to serve Developer’s development and provide for future connections by the other owners to serve their respective portions of the Property, subject to the applicable Owner obtaining all required City approvals and constructing its respective private storm drain system in accordance with applicable City requirements; and WHEREAS, Developer’s Private Storm Drain System includes the complete private storm drain system serving Developer’s portion of the Property, including portions of the system to be constructed by Developer in connection with its development, and as generally depicted in Exhibit “B”; and
WHEREAS, the City maintains a public storm drain system that conveys storm water flows from Edward Avenue and surrounding public rights-of-way; and -2-
WHEREAS, it is necessary and appropriate for public storm water flows originating from Edward Avenue to be discharged into and conveyed through the Private Storm Drain System to the public storm drain system; and
WHEREAS, the Owners desires to collect, retain, and manage storm water flows originating from Edward Avenue within the Private Storm Drain System; and WHEREAS, this Agreement ensures long-term operation, maintenance, and performance of drainage facilities; and
WHEREAS, the parties intend that the obligations herein shall run with the land and bind all successors and assigns.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Recitals
The recitals set forth above are true, correct and are hereby incorporated into this Agreement by this reference as if full set forth herein.
2. Parties and Definitions
For purposes of this Agreement, “Owner” or “Owners” shall mean Jack M. Chen and Shirley S. Chen, as trustees of the Chen Family Trust dated December 21, 2021; Annie Charyu Chen, a married woman, as her sole and separate property; James Hanwei Chen, a single man; and Kimberly Tingwei Chen, a single woman, all as tenants in common; BCT Fontana Phase I, LLC, a Delaware limited liability company; BCT Fontana Phase II, LLC, a Delaware limited liability company, together with their respective successors and assigns, as the fee owners of the Property described in Exhibit “A.”
“Developer” shall mean BCT Development, which is also an Owner of the Property and is developing a portion of the Property. Developer, in its capacity as an Owner, shall be subject to all obligations, covenants, conditions, restrictions, and requirements applicable to an Owner under this Agreement, in addition to any obligations specifically applicable to Developer in connection with the development, design, construction, installation, or completion of the Backbone System and Developer’s Private Storm Drain System. Unless otherwise expressly provided herein, all references to “Owner” or “Owners” shall include Developer. “Backbone System” shall mean the primary storm drain infrastructure constructed by Developer within portions of the Property as a part of the development of Developer’s portion of the Property and intended to provide primary drainage infrastructure for Developer’s development and potential future connections by the other Owners, subject to City approval. The general location of the Backbone System is depicted in Exhibit “B.” -3-
“Developer’s Private Storm Drain System” shall mean the complete private storm drain system constructed by Developer to serve Developer’s portion of the Property, including the Backbone System, to the extent depicted or identified in Exhibit “B.” “Owner’s Private Storm Drain System” shall mean any private storm drain system and related drainage facilities subsequently designed and constructed by an Owner other than Developer to serve that Owner’s respective portion of the Property. “Private Storm Drain System” shall mean, collectively, the Backbone System, Developer’s Private Storm Drain System, and any Owner’s Private Storm Drain System, as applicable.
3. Acceptance of Drainage Flows
Owners acknowledge, agree and authorize City to discharge public storm water flows from Edward Avenue and the surrounding public rights-of-way into the Private Storm Drain System located on the Property, and Owners hereby expressly accepts and consents to the receipt and conveyance of such flows through the Private Storm Drain System. Owners further agree that such flows shall be conveyed through the Private Storm Drain System and discharged into the public storm drain system in accordance with approved plans and applicable City requirements.
Developer shall be responsible for the acceptance, conveyance, operation, maintenance, repair, and replacement of the portions of the Developer’s Private Storm Drain System, including the Backbone System.
Each owner other than Developer shall, upon construction of such Owner’s Private Storm Drain System, be responsible for the acceptance, conveyance, operation, maintenance, repair, and replacement of such Owner’s Private Storm Drain System, including the respective Backbone System, in accordance with this Agreement and applicable City requirements.
4. Easement and Access
Owners hereby grant to City a perpetual, non-exclusive easement in, on, over, under, upon, and across the Property, for the purposes of inspecting, monitoring, discharging, conveying, operating, maintaining, repairing, replacing, and otherwise accessing public storm water flows within the Private Storm Drain System, together with the right of reasonable ingress and egress over the Property for City personnel, agents, contractors, and equipment as may be reasonably necessary to exercise such rights.
5. Design, Capacity, and Standard of Care
The Private Storm Drain System shall be designed, constructed, operated, and maintained in accordance with City standards, approved plans, and all applicable federal, state, and local laws, regulations, and requirements, including, without limitation, to generally accepted engineering, construction, operation, and maintenance standards for comparable storm drainage facilities. Developer shall comply with all such requirements with respect to the Backbone System and Developer’s Private Storm Drain System. Each Owner other than Developer shall -4-
comply with all such requirements with respect to its Owner’s Private Storm Drain System.
Owners shall at all times maintain the Private Storm Drain System in a safe, functional, and effective condition consistent with such standards and requirements. City approval, inspection, or review does not guarantee system performance and shall not be relied upon by Owner as a representation of adequacy or compliance.
6. Maintenance Obligations
Developer shall, at their sole cost and expense, be responsible for the operation, maintenance, repair, and replacement of the Backbone System and Developer’s Private Storm Drain System, and keeping it in in a safe, clean, and fully functional condition in accordance with this Agreement, including: conducting quarterly inspections; debris and sediment removal; annual cleaning; conducting post-storm inspections following significant rainfall events; and performing structural repair and capacity maintenance.
Each Owner other than Developer shall, at their sole cost and expense, be responsible for the operation, maintenance, repair, and replacement of the respective part of the Backbone System and its Owner’s Private Storm Drain System once constructed, and keeping it in in a safe, clean, and fully functional condition in accordance with this Agreement, including:
conducting quarterly inspections; debris and sediment removal; annual cleaning; conducting post-storm inspections following significant rainfall events; and performing structural repair and capacity maintenance.
If Owners fail to properly maintain, repair, or replace the Private Storm Drain System, and such failure results in a condition that threatens public health, safety, welfare, or the integrity of the public storm drain system, City shall have the right, but not the obligation, to enter the Property and perform such work as is reasonably necessary. Owners shall reimburse City for all costs incurred within thirty (30) days of written demand. Any unpaid amounts may become a lien against the Property or be collected in any manner permitted by law. City has no obligation to maintain or repair the Private Storm Drain System.
7. Right of Entry Upon Owner Default of Maintenance Obligations Prior to entering the Property to perform any work pursuant to this Agreement, City shall provide the Owner responsible for the applicable Private Storm Drain System with written notice identifying the nature of the deficiency and the corrective actions required, and shall provide such Owner a reasonable period to cure such deficiency. If such Owner fails to timely commence and diligently pursue such corrective actions, City may, upon not less than 30 days’ prior written notice, enter the Property to perform the necessary work. Notwithstanding the foregoing, in the event City determines that an emergency condition exists that poses an immediate threat to public health, safety, welfare, or the integrity of the public storm drain system, City may enter the Property without prior notice, or with such notice as is practicable under the circumstances.
City shall use reasonable efforts to minimize damage and disruption to the Property. Following completion of the work, City shall provide such Owner with an itemized statement of costs in accordance with the reimbursement provisions set forth herein.
8. Inspection
-5-
City shall have the right, upon reasonable prior written notice to the applicable Owner, to enter and inspect the Private Storm Drain System at reasonable times to verify compliance with this Agreement, City-approved plans and specifications, and applicable laws, and to assess the condition, operation, and maintenance of the system. Owners shall provide City and its agents, employees, and contractors with reasonable access, ingress, and egress as necessary to exercise these rights.
9. Modification Restrictions
No modification affecting system capacity, hydraulics, or function shall be made without prior written approval of the City.
No Owner shall modify, relocate, connect to, or otherwise alter the Backbone System without prior written approval of the City and compliance with all applicable City requirements.
10. Impact on Public Storm Drain System; Emergency Response In the event of a System Failure, or any other condition affecting the Private Storm Drain System that adversely impacts the public storm drain system or public health, safety, or welfare, City may provide written notice to the Owner responsible for the affected Private Storm Drain System requiring corrective action. Upon receipt of such notice, the responsible Owner shall immediately commence corrective action to the applicable Private Storm Drain System and/or the public storm drain system and diligently proceed to cure the condition without delay. The responsible Owner shall fully correct and cure the condition within 24 hours, or such shorter period as may be required by the City in the case of an emergency.
The responsible Owner shall implement all corrective measures required or directed by the City, including interim, temporary, or permanent repairs, operational adjustments, or other actions necessary to restore proper function and protect public facilities.
If the responsible Owner fails to timely commence or complete corrective action, City may, but shall not be obligated to, enter the Property and perform or cause to be performed such work as is reasonably necessary to correct the condition. The responsible Owner shall reimburse City for all costs incurred by City in exercising its rights under this section within thirty (30) days of written demand. Any unpaid amounts shall constitute a debt owed to City and may be collected by any lawful means, including placement of a lien against the Property. “System Failure” herein shall mean any condition or event in which the Private Storm Drain System does not perform as designed or intended, including, without limitation, overflow, backup, blockage, structural failure, capacity exceedance, or unintended discharge, and shall be deemed to exist whenever such condition adversely impacts the public storm drain system, public infrastructure, or public health, safety, or welfare.
11. Transfer and Disclosure
Each Owner shall provide written notice to City of any sale, transfer, assignment, or conveyance of any interest in the Property by such Owner within thirty (30) days of such transfer, and shall obtain the prior written approval of the City before completing such transfer. -6-
Each Owner shall disclose the existence of this Agreement in writing to all prospective transferees prior to any transfer of the Owner’s interest in the Property and shall provide a copy of this Agreement to such transferee. No transfer shall relieve Owner of any obligations arising prior to the receipt of City written approval and prior to the effective date of such transfer. Each Owner shall require, as a condition of any transfer, that the transferee expressly assume in writing all obligations under this Agreement, and such Owner shall remain jointly and severally liable for performance of all obligations arising prior to such transfer unless and until City provides written release.
12. Insurance
Each Owner shall procure and maintain for the duration of the Agreement, and for 5 years thereafter, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Owner, his agents, representatives, employees, or subcontractors. a. Coverage shall be at least as broad as:
1. Commercial General Liability (CGL): Insurance Services Office (ISO) Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $5,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.
2. Automobile Liability: Insurance Services Office Form CA 0001 covering Code 1 (any auto), with limits no less than $5,000,000 per accident for bodily injury and property damage.
3. Workers’ Compensation insurance as required by the State of California, with Statutory Limits, and Employers’ Liability insurance with a limit of no less than
$1,000,000 per accident for bodily injury or disease.
4. Builder’s Risk (Course of Construction) insurance utilizing an “All Risk” (Special Perils) coverage form, with limits equal to the completed value of the project and no coinsurance penalty provisions.
5. Surety Bonds as described below.
6. Professional Liability (if Design/Build), with limits no less than $2,000,000 per occurrence or claim, and $2,000,000 policy aggregate.
7. Owners’ Pollution Legal Liability and/or Asbestos Legal Liability and/or Errors and Omissions (if project involves environmental hazards) with limits no less than
$1,000,000 per occurrence or claim, and $2,000,000 policy aggregate. -7-
If the Owner maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Owner. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. b. Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:
1. The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Owner including materials, parts, or equipment furnished in connection with such work or operations and automobiles owned, leased, hired, or borrowed by or on behalf of the Owner. General liability coverage can be provided in the form of an endorsement to the Owner’s insurance (at least as broad as ISO Form CG 20 10, CG 11 85 or both CG 20 10, CG 20 26, CG
20 33, or CG 20 38; and CG 20 37 forms if later revisions used).
2. For any claims related to this project, the Owner’s insurance coverage shall be primary and non-contributory insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Owner’s insurance and shall not contribute with it. This requirement shall also apply to any Excess or Umbrella liability policies.
3. Each insurance policy required by this clause shall provide that coverage shall not be canceled, except with notice to the City.
c. Builder’s Risk (Course of Construction) Insurance
The Owner may submit evidence of Builder’s Risk insurance in the form of Course of Construction coverage. Such coverage shall name the City as a loss payee as their interest may appear.
If the project does not involve new or major reconstruction, at the option of the City, an Installation Floater may be acceptable. For such projects, a Property Installation Floater shall be obtained that provides for the improvement, remodel, modification, alteration, conversion or adjustment to existing buildings, structures, processes, machinery and equipment. The Property Installation Floater shall provide property damage coverage for any building, structure, machinery, or equipment damaged, impaired, broken, or destroyed during the performance of the Work, including during transit, installation, and testing at the City’s site.
d. Umbrella or Excess Policies
-8-
The Owner may use Umbrella or Excess Policies to provide the liability limits as required in this Agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Owner’s primary and excess liability policies are exhausted.
e. Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best rating of no less than A: VII, unless otherwise acceptable to the City. f. Waiver of Subrogation
Owner hereby agrees to waive rights of subrogation which any insurer of Owner may acquire from Owner by virtue of the payment of any loss under such insurance. Owner agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation and provide a copy to the City. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City for all work performed by the Owner, its employees, agents and subcontractors. This provision applies regardless of whether or not an endorsement has been issued.
g. Verification of Coverage
Owner shall furnish the City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause and a copy of the Declarations and Endorsements Pages of the CGL and any Excess policies listing all policy endorsements. All certificates and endorsements and copies of the Declarations & Endorsements pages are to be received and approved by the City before work commences.
However, failure to obtain the required documents prior to the work beginning shall not waive the Owner’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.
h. Subcontractors
Owner shall require and verify that all subcontractors maintain insurance meeting all requirements stated herein, and Owner shall ensure that City is an additional insured on insurance required from subcontractors. For CGL coverage, subcontractors shall provide coverage with a form at least as broad as CG 20 38 04 13. -9-
i. Duration of Coverage
CGL & Excess liability policies for any construction related work, including, but not limited to, maintenance, service, or repair work, shall continue coverage for a minimum of 5 years for Completed Operations liability coverage. Such Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.
j. Surety Bonds
Owner shall provide the following Surety Bonds:
1. Bid Bond
2. Performance Bond
3. Payment Bond
4. Maintenance Bond
The Payment Bond and the Performance Bond shall be in a sum equal to the contract price. If the Performance Bond provides for a one-year warranty a separate Maintenance Bond is not necessary. If the warranty period specified in the contract is for longer than one year a Maintenance Bond equal to 10% of the contract price is required. Bonds shall be duly executed by a responsible corporate surety, authorized to issue such bonds in the State of California and secured through an authorized agent with an office in California. k. Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other circumstances.
13. Indemnification
Owner shall defend (with counsel reasonably acceptable to City), indemnify, protect, and hold harmless City and its elected and appointed officials, officers, employees, agents, and contractors, (collectively, “Indemnitees”) from and against any and all claims, demands, actions, causes of action, damages, losses, liabilities, costs, and expenses of every kind and nature whatsoever, including, without limitation, attorneys’ fees and costs of defense, arising out of, related to, or in any way connected with the Private Storm Drain System, including, without limitation, its design, construction, installation, use, operation, maintenance, repair, replacement, malfunction, or failure, or any condition of the system that causes or contributes to flooding, surcharge, blockage, backup, overflow, or damage to the public storm drain system or any public or private property, regardless of whether such claims are alleged to be caused in whole or in part by the negligence (active or passive) of any Indemnitee, except only to the extent finally determined by a court of competent jurisdiction to have been caused by the City’s sole negligence or willful misconduct.
14. Notice
-10-
All notices shall be in writing and delivered by personal service, certified mail, or overnight courier to the following parties:
City: City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attn: City Engineer
cc : City of Fontana City Attorney
2855 E. Guasti Road, Suite 400
Ontario, CA 91761
Developer:
BCT Development
1400 Newport Center Dr., Suite 200
Newport Beach, CA 92660
Owner:
Jack M. Chen and Shirley S. Chen, as trustees of the Chen Family Trust dated December 21, 2021; Annie Charyu Chen, a married woman, as her sole and separate property; James Hanwei Chen, a single man; and Kimberly Tingwei Chen, a single woman, all as tenants in common
1036 Trevecca Place
Claremont, CA 91711
Attention: Jack Chen
BCT Fontana Phase I, LLC, a Delaware limited liability company 1400 Newport Center Dr., Suite 200
Newport Beach, CA 92660
BCT Fontana Phase II, LLC, a Delaware limited liability company 1400 Newport Center Dr., Suite 200
Newport Beach, CA 92660
14. Non-Exclusivity of Remedies
All rights, powers, remedies, and privileges of City under this Agreement, at law, or in equity shall be cumulative and non-exclusive. No remedy or election by City shall preclude the exercise of any other remedy available under this Agreement or applicable law. City’s failure to enforce any provision of this Agreement shall not constitute a waiver of such provision or of City’s right thereafter to enforce the same or any other provision. All remedies shall be deemed -11-
to be in addition to, and not in limitation of, any other rights or remedies available to City.
Nothing herein waives any governmental immunity or defense available to City.
15. Independent Contractor and No Agency Relationship
Owner is and shall remain an independent entity and is not, and shall not be deemed to be, an employee, agent, partner, joint venturer, or contractor of the City for any purpose whatsoever. Nothing in this Agreement shall be construed to create any employment, agency, or contractual relationship between City and Owner other than as expressly set forth herein. Owner shall have no authority to bind City in any manner.
16. Amendments.
This Agreement may be amended, modified, or supplemented only by a written instrument executed by both Parties. No oral modifications or course of conduct shall be deemed to amend this Agreement, and any attempted amendment not in writing and signed by both Parties shall be null and void and of no force or effect.
17. Attorneys’ Fees
In any action or proceeding to enforce or interpret this Agreement, each party shall bear its own attorneys’ fees and costs.
18. No Third-Party Beneficiaries
This Agreement creates no rights in any third party.
19. Severability
If any provision is held invalid, the remaining provisions shall remain in full force and effect.
20. Governing Law; Venue
This Agreement shall be governed by California law. Venue shall lie exclusively in the County of San Bernardino.
21. Covenants Running with the Land
All obligations herein run with the land and bind successors and assigns. This Agreement shall be recorded in the Official Records of the County of San Bernardino within thirty (30) days of execution by the City and Owners.
22. No Dedication
Nothing herein constitutes dedication of the Private Storm Drain System to City unless formally accepted in writing.
23. Counterparts
-12-
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
24. Exhibits.
All exhibits referenced in or attached to this Agreement are hereby incorporated into this Agreement by this reference as if fully set forth herein.
Signatures on the following page
-13-
OWNER:
The Chen Family Trust dated December 21, 2021
Jack M. Chen, Trustee
_________________ ______________________________
Date By:
Its:
Shirley S. Chen, Trustee
_________________ ______________________________
Date By:
Its:
OWNER:
Annie Charyu Chen, a married woman, as her sole and separate property ________________________________________ Date: __________ OWNER:
James Hanwei Chen, a single man
________________________________________ Date: __________ OWNER:
Kimberly Tingwei Chen, a single woman
________________________________________ Date: __________ -14-
OWNER:
BCT Fontana Phase I, LLC, a Delaware limited liability company _________________ ______________________________
Date By:
Its:
OWNER:
BCT Fontana Phase II, LLC, a Delaware limited liability company _________________ ______________________________
Date By:
Its:
DEVELOPER
BCT Fontana Phase II, LLC, a Delaware limited liability company _________________ ______________________________
Date By:
Its:
CITY
Date By: Matthew Ballantyne
Its: City Manager
-15-
APPROVED AS TO FORM
Date Ruben Duran, City Attorney
ATTEST
Date Germaine Key, City Clerk
-16-
EXHIBIT "A"
268 38 46
-17-
EXHIBIT "B"
268
38 46 268 38 46