Services Agreement
for Mitigation Obligations for the
Path To Transit Project – City of Hercules
Contract #2022-1
This SERVICES AGREEMENT (“Agreement”), is by and between JOHN MUIR LAND TRUST, a California nonprofit public benefit corporation (“JMLT”), whose mailing address for notice purposes is PO Box 31, Martinez, CA 94553, and the CITY OF HERCULES, a local municipal corporation in Contra Costa County (“ CITY ”), whose mailing address for notice purposes is 111 Civic Drive, Hercules, CA 94547. The “Effective Date” shall be the first date that both JMLT and CITY shall have executed this Agreement, as such dates are set forth beside the parties’ signatures below.
RECITALS
A. JMLT is a nonprofit organization dedicated to protecting and enhancing wildlife habitat and connecting Californians to the outdoors.
B. CITY has received the appropriate regulatory approvals for the Path To Transit Project, located adjacent to John Muir Parkway in Hercules (the “Project”), which regulatory approvals require imposition of certain protection, management, stewardship, monitoring, and reporting obligations (collectively, the “Mitigation Obligations”) with respect to the real property consisting of 5.943 acres located in Contra Costa County (“Property”). Exhibit A attached hereto and incorporated herein by reference includes the legal description of the Property (if available) and a map depicting the location and configuration of the Property. CITY has requested JMLT to consider accepting the Mitigation Obligations.
C. The specific Mitigation Obligations under consideration for the Property may include any of the following: (i) the transfer to JMLT of the Refugio Creek Conservation Easement in the Property (the “Property Interests”); (ii) JMLT’s undertaking management, monitoring, and/or reporting obligations for the Property; and (iii) JMLT’s holding, managing, and investing endowment funds to cover the costs to hold, steward, and/or manage the Property Interests and comply with other Mitigation Obligations.
D. Before JMLT can make a final decision on whether to accept the Property Interests and other Mitigation Obligations, JMLT must undertake the following evaluation activities, all of which requires a significant commitment of time, cost, and expense on the part of JMLT: (i) conduct customary due diligence investigations of the proposed Property Interests; and (ii) negotiate the terms, conditions, and required endowment costs and expenses of JMLT’s acceptance of the Mitigation Obligations.
Before undertaking such evaluation process, JMLT requires the agreement by CITY to pay all costs and expenses subject to the limitations in Section 3 infra, including attorneys’ and consultants’ fees and costs, incurred by JMLT in undertaking the evaluation activities.
AGREEMENTS
NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, JMLT and CITY hereby agree as follows:
1. JMLT Project Evaluation Tasks.
(a) During the Evaluation Period (as defined below), JMLT will undertake the evaluation activities respecting the Property Interests and other Mitigation Obligations that are described in Exhibit B attached hereto and incorporated herein by reference (collectively, “Project Evaluation Tasks”). JMLT shall use its good faith reasonable efforts to perform and complete the Project Evaluation Tasks in a timely manner and within the budget established for the project evaluation tasks pursuant to Section 3 below.
(b) The Evaluation Period shall commence on the Effective Date and shall terminate automatically unless extended by mutual agreement on the first to occur of the following: (i) the date the Property Interests are transferred to JMLT with a written conveyance instrument recorded in the Official Records of the county where the Property is located, and endowment funding is transferred to JMLT in accordance with Section 5 below; or (ii) the five-year anniversary of the Effective Date. During the Evaluation Period, CITY will provide regular updates on the status and timing of the Project, and upon request of JMLT, will make appropriate staff and consultants available to meet with JMLT. JMLT’s obligations to undertake the Project Evaluation Tasks in accordance with this Agreement shall automatically terminate upon termination of the Evaluation Period, unless JMLT and CITY agree in writing to extend the Evaluation Period.
(c) The primary contact for JMLT and CITY for all purposes under this Agreement shall be Linus Eukel and City Manager, respectively.
2. CITY’s Obligations and Agreements.
(a) During the Evaluation Period, CITY shall use its good faith reasonable efforts to provide to JMLT in a timely manner all required and requested documents and information, including, without limitation, the documents and information included in Exhibit C. CITY acknowledges that failure to provide such documents and information in a timely manner may result in JMLT’s delay in completing the Project Evaluation Tasks. CITY shall provide JMLT with a reasonable time for JMLT to review any draft documents or materials prepared or provided by CITY in connection with or relating to the Mitigation Obligations and the Project Evaluation Tasks. (b) Within twenty (20) business days of the Effective Date, CITY shall disclose to JMLT in writing all interested individuals and organizations involved in the Project, including, without limitation, all Project investors, and shall provide JMLT with a full description of the Project. (c) During the Evaluation Period, CITY shall not submit drafts of any documents to any public agency that relate to any potential Mitigation Obligations that have not been reviewed and approved by JMLT in advance of such submittal. If and to the extent that CITY has submitted any such draft
documents to any public agency prior to the Effective Date, CITY shall provide copies of such drafts to JMLT within ten (20) business days of the Effective Date for JMLT’s review and approval. JMLT will use its reasonable efforts to review and provide comments on any draft document relating to the Mitigation Obligations that is provided to JMLT by CITY within sixty (60) days of receipt by JMLT in accordance with JMLT bi-monthly board of directors’ meetings --. CITY understands that any delays in public agency approval of, or any comments or revisions required by any public agency to, any documents that relate to any potential Mitigation Obligations, including without limitation to the PAR (as defined below) prepared for the Mitigation Obligations, may require additional modifications to such documents and/or PAR by JMLT.
(d) CITY understands and acknowledges that in connection with JMLT’s exercise of the Project Evaluation Tasks, JMLT may interview, research, consult, and otherwise communicate with interested parties and federal, state and local agencies, as appropriate. (e) CITY understands and acknowledges that any decision or commitment on the part of JMLT to accept any Property Interest or Mitigation Obligations will not be final until JMLT completes the Project Evaluation Tasks and the JMLT Board of Directors approves acceptance of the Property Interests and the Mitigation Obligations, which acceptance will not be unreasonably withheld. (f) CITY agrees to obtain JMLT’s written permission before posting any document prepared by JMLT on an Internet website accessible by the general public. (g) CITY will ensure that JMLT is granted appropriate approvals and/or licenses to perform such physical inspections, surveys, and studies, and review such other matters related to the Property Interests and Mitigation Obligations as JMLT deems necessary or appropriate. In connection therewith, CITY shall ensure that JMLT has the legal right and reasonable ability to enter upon the Property during normal business hours for the purpose of conducting such inspections, surveys, and studies. JMLT will not enter the Property without providing CITY with at least forty-eight (48) hours advance notice unless otherwise agreed by the parties to this Agreement.
(h) CITY hereby acknowledges and agrees that none of the transactions contemplated by this Agreement, including the potential acceptance by JMLT of the Property Interests and Mitigation Obligations, constitute a charitable contribution for which any party shall be entitled to a charitable donation.
3. Reimbursement of Evaluation Costs. CITY will reimburse JMLT for all reasonable costs and expenses incurred by JMLT in an amount not to exceed $50,000 without prior approval of the City Council in exercising the Project Evaluation Tasks (collectively, the “Reimbursable Evaluation Costs”), which costs will include without limitation the following:
(a) JMLT staff time charged at the hourly rates set forth on Exhibit D (“Staff Costs”); (b) JMLT reasonable travel costs;
(c) An overhead fee equal to 5% of Staff Costs, which will cover JMLT’s overhead, materials, and equipment;
(d) JMLT consultants and legal counsel, charged at actual costs to JMLT.
The not to exceed amount specified in this subsection may be increased by mutual written agreement of the parties, and the City Manager representing the City and Executive Director representing JMLT shall have full authority to approve such amendments in order that this agreement may cover every foreseeable situation. If the increase to the not to exceed amount is in excess of the City Manager’s spending authority, then the increase shall be approved by the City Council.
4. Payment of Reimbursable Evaluation Costs.
(a) Within five (5) business days of the parties’ execution of this Agreement and prior to JMLT undertaking any Project Evaluation Tasks, CITY will deliver to JMLT a deposit in the amount equal to $20,000 (“Deposit”). JMLT will bill Reimbursable Evaluation Costs incurred by JMLT against the Deposit (as may be replenished from time to time in accordance Section 4(b) below), and will provide CITY itemized invoices of the Reimbursable Project Costs billed against the Deposit on a monthly basis, for each month during which JMLT incurs Reimbursable Evaluation Costs. (b) If the Deposit is exhausted at any time during the Evaluation Period, JMLT will provide to CITY a written request for additional funds to replenish the Deposit, and CITY will deliver to JMLT such requested additional funds within ten (10) business days of giving of such notice unless such additional funds require City Council approval, in which case CITY shall schedule the matter for City Council consideration at the next available regular City Council meeting. JMLT will not be required to undertake any Project Evaluation Tasks until such additional funds are delivered to JMLT by CITY. (c) All unspent Deposit funds remaining upon termination of the Evaluation Period will be refunded to CITY within sixty days following such termination.
5. JMLT’s Property Analysis Record and Project Endowment Requirements. CITY understands and acknowledges that the following project endowment requirements are typically included in the Property Analysis Record (“PAR”) for any JMLT project, including the Property Interests and Mitigation Obligations should JMLT accept the Mitigation Obligations (“PAR Requirements”):
(a) Initial and Capital Tasks and Costs. The “Initial and Capital Tasks and Costs” will include the total amount necessary to cover costs associated with the transfer of the Property Interests to JMLT (including without limitation, title insurance fees and costs, recording costs, and escrow fees) and JMLT’s holding, stewardship, and management of the Property Interests and compliance with the Mitigation Obligations for the initial three-year period, including, without limitation, the following: (i) a one-time charge of $1,000 to cover JMLT’s costs to set up necessary investment accounts, accounting files, property files, and other compliance documentation; and (ii) a one-time fee of $20,000 per easement. (b) O ngoing Tasks and Costs . The “Ongoing Tasks and Costs” will include the total amount necessary to cover costs associated with JMLT’s holding, stewardship, and management of the Property
Interests and compliance with the Mitigation Obligations in perpetuity following the initial three-year period, including without limitation investment fees.
(c) Legal and Emergency Fund. The “Legal and Emergency Fund” will be an amount equal to at least one percent (1%), and no more than three percent (3%), of the Initial and Capital Tasks and Costs and Ongoing Tasks and Costs, with the final amount to be determined by JMLT based on JMLT’s reasonable determination of the level of risk associated with accepting the Property Interests and Mitigation Obligations.
Project Endowment Fund. I f during the Evaluation Period, JMLT and CITY agree on the terms and conditions for JMLT to accept the Property Interests and the Mitigation Obligations, including without limitation, the total amount of a project endowment that satisfies the PAR Requirements (“Project Endowment”), CITY will deliver the full amount of the Project Endowment to JMLT at the closing of the transfer of the Property Interests to JMLT, through the escrow that is used for such closing.
6. Force Majeure. Neither party hereto shall be liable to the other party for its failure to perform under this Agreement when such failure is caused by strikes, accidents, acts of God, fire, war, flood, government restrictions, or any other cause beyond the control of the party charged with performance (“Force Majeure Event”); provided that the party so unable to perform shall promptly advise the other party of the extent of its inability to perform. Any suspension of performance by reason of this Section 6 shall be limited to the period during which such cause of failure exists. If any Force Majeure Event persists for a period of ninety (90) days or more, either party may terminate this Agreement by delivering written notice of termination to the other party.
7. Assignment. Neither party to this Agreement shall assign, transfer, or delegate any of its rights or obligations under this Agreement to any other party without the written approval of the other party, which approval shall be exercised in such party’s sole and absolute discretion.
8. Binding Effect. This Agreement shall become automatically effective upon execution and delivery by JMLT and CITY, and CITY’s delivery of the Deposit to JMLT. If CITY has not executed this Agreement within sixty (60) days from the date of JMLT’s execution set forth below, JMLT can rescind this Agreement by delivering written notice to CITY, upon which this Agreement shall have no force or effect. The person signing this Agreement on behalf of the CITY is authorized to legally bind CITY to the terms and conditions of this Agreement.
9. Termination.
(a) CITY may terminate this Agreement upon thirty (30) days’ written notice to JMLT if CITY decides not to pursue the Project; provided that JMLT shall be reimbursed for Reimbursable Project Costs incurred by JMLT or committed to by JMLT as of such termination date in accordance with this Agreement.
(b) JMLT may terminate this Agreement upon thirty (30) days’ written notice to CITY if JMLT decides for any reason not to accept the Property Interests or Mitigation Obligations; provided that JMLT shall be reimbursed for Reimbursable Project Costs incurred by JMLT or committed to by JMLT as of such termination date in accordance with this Agreement.
10. Indemnity.
Project Proponent shall indemnify, defend, and hold harmless JMLT, and its officers, directors, employees, agents, and representatives (“JMLT Indemnified Parties”), from any and all claims, costs (including reasonable attorneys’ fees and the costs of investigation, settlement and appeal), liabilities, or losses arising from or connected with JMLT’s performance of its obligations under this Agreement, including without limitation, all Project Evaluation Tasks, unless caused by the willful misconduct or gross negligence of JMLT Indemnified Parties. JMLT shall indemnify, defend, and hold harmless Project Proponent, and its officers, directors, employees, agents, and representatives (“Project Proponent Indemnified Parties”), from any and all claims, costs (including reasonable attorneys' fees and the costs of investigation, settlement and appeal), liabilities, or losses arising from or connected with JMLT willful misconduct or gross negligence, unless caused by the willful misconduct or gross negligence of Project Proponent Indemnified Parties.
11. Governing Law; Venue. This Agreement shall be governed by the laws of the state of California (without regard to any choice of law provisions thereof), and proper venue for any dispute arising out of this Agreement shall be Contra Costa County, California.
12. Ambiguities. In the event any claim is made by CITY or JMLT relating to any conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared or drafted by a particular party or the party's counsel.
13. Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing to the parties’ address listed in the first paragraph of this Agreement and shall be deemed to have been duly given as follows:
(a) on the date of service if served personally on the party to whom notice is to be given; (b) on the business day immediately after mailing by overnight courier; or (c) on the second (2nd) day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and delivered.
14. Prevailing Party. The prevailing party in any suit, action, or counterclaim arising out of this Agreement (including, without limitation, enforcement of any award or judgment obtained with respect to this Agreement) shall be entitled to recover a reasonable allowance for attorneys’ fees and costs.
15. Remedies. No remedy or election hereunder shall be deemed exclusive, but shall, whenever possible, be cumulative with all other remedies at law or in equity.
16. Cooperation. Each party to this Agreement agrees to perform any further acts and execute and deliver any documents that may be reasonably necessary to carry out the intent of this Agreement.
17. Severability. If any provision of this Agreement is held invalid or unenforceable, the other provisions of this Agreement shall remain in full force and effect.
18. Amendment. This Agreement may be amended only in a writing that is signed by JMLT and CITY.
19. Waiver. Any provision of this Agreement may be waived at any time by the party entitled to the benefit thereof, but only by a writing signed by such party. No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision nor shall any waiver constitute a continuing waiver.
20. Insurance. At all times during the Evaluation Period, JMLT shall maintain, at its sole cost and expense, the following insurance coverages covering activities performed by JMLT under, and obligations undertaken by, JMLT in accordance with, this Agreement:
(a) Commercial General Liability insurance with a limit of $1,000,000 per occurrence and $2,000,000 aggregate covering bodily injury (including death), property damage, personal injury, advertising injury, contractual liability, premises or operations liability, and products or completed operations coverage, which limit may be satisfied by a single policy or in combination with an Umbrella Liability policy;
(b) Automobile Liability insurance covering all owned, hired, and non-owned vehicles, in an amount of not less than $1,000,000 per accident, covering bodily injury (including death) and property damage; and
(c) Workers’ Compensation and similar employee benefit insurance for each of JMLT’s employees in the amounts required under the law of the state(s) where the Project Evaluation Tasks will be performed.
The undersigned parties hereby agree to the terms and conditions set forth in this Agreement as of the Effective Date.
CITY OF HERCULES JOHN MUIR LAND TRUST,
a California nonprofit public benefit corporation
By: By:
Dante Hall Linus Eukel
Title: City Manager Executive Director
Date Date
Page A-1 Contract #2022-1
EXHIBIT A
PROPERTY DESCRIPTION AND MAP
Page B-1 Contract #2022-1
EXHIBIT B
PROJECT EVALUATION TASKS
JMLT below includes JMLT attorneys and consultants engaged to undertake Project Evaluation Tasks.
Document and Information Review. To ensure full understanding of the Project, the Property Interests, and the other Mitigation Obligations, JMLT will review documents and collect information, including, without limitation, the biological opinion, bank enabling instrument, permit documentatio n (e.g., incidental take permit or streambed alteration permit), restoration plan, environmental due diligence report (i.e., Phase 1 environmental site assessment), title documents, management plan, grazing plan, maps, studies and other documents.
Conservation Easement. If the Property Interests include a conservation easement interest, JMLT will prepare and/or review the conservation easement to ensure that its terms and conditions achieve its conservation purposes, meet best current practices, and are legally enforceable. The conservation easement is typically based upon a template provided by the permitting agency; JMLT will work with the CITY to negotiate any refinements and modifications specific to the Property with the relevant agencies.
Property Analysis Report (PAR). JMLT will prepare the PAR for those tasks for which JMLT will have responsibility, notably for (1) conservation easement compliance and monitoring, (2) land management and restoration activities, and (3) endowment management. The PAR will include the PAR Requirements described in Section 5 above. If a party other than JMLT will assume responsibility for land management, the PAR may be prepared by another party to the project, but will require JMLT review and approval.
Endowment Agreements. JMLT will prepare and/or review the endowment agreement(s) that address the acceptance, holding, management, investment, and dispersal of funds to cover the costs of the Mitigation Obligations, including the Initial and Capital Tasks and Costs and the Ongoing Tasks and Costs.
Site Visit and Landowner Meeting. JMLT will make one or more property inspections to inform the conservation protections and to prepare the baseline document (see below). JMLT will meet with the landowner or key lessees if different than the CITY.
Baseline Preparation. JMLT will prepare the baseline report that establishes the current conditions of the Property with regard to the conservation easement purposes and terms and against which compliance monitoring occurs.
Land Management Plan. The CITY will typically prepare management and/or monitoring plan(s) for the Property.
If JMLT will be the land manager, JMLT will review and approve all management plans. If JMLT is not the land manager, JMLT will review the management plans and provide comments on any issues JMLT deems relevant the Mitigation Obligations
Page B-2 Contract #2022-1
Consultation. JMLT will participate in meetings and conference calls, exchange emails, and travel to the P roperty or other locations to meet with the CITY, its attorneys, consultants, and other parties (including regulatory agencies) as needed to evaluate the Mitigation Obligations.
Page C-1 Contract #2022-1
EXHIBIT C
DOCUMENT CHECKLIST
We strongly prefer digital files in commonly-used software, such as Adobe Acrobat, Word, Excel, ArcView
Contact information for key persons for coordination purposes
List of Project’s interested parties, including all organizations and individuals holding ownership and/or controlling interests in all organizations
Surveyed Legal Description, surveys, and maps, including specifically shape files for the property and/or easement boundaries derived from a legal survey.
Biological Opinion
All notices, agreements, permits, and approvals associated with the Project and Mitigation Obligations
Bank enabling instrument (if applicable)
Conservation easement (if draft exists)
Long Term Management Plan (if draft exists)
Endowment Agreement (if draft exists)
Current Title Report for the Property, with copies of all recorded documents referenced therein and unrecorded documents relating to the Property
All environmental reports relating to the Property, including a current Phase I Environmental Site Assessment, and any follow-up reports and assessments
Remoteness Opinion (if applicable)
Any Property Analysis Reports (PAR) drafts prepared for the site*
Any special studies associated with the site, e.g., individual species assessment
Other reports, documents, and information that relate to the Property or the Mitigation Obligations.
Page D-1 Contract #2022-1
EXHIBIT D
JMLT BILLABLE HOURLY RATES
Executive Director $300.00/hour
Chief Financial Officer $225.00/hour
Stewardship Director $135.00/hour
Biologists $65.00 to $150.00/hour
Administrative Assistant $45.00/hour
All of the above-referenced hourly rates are subject to modification by JMLT at any time upon 60 days’ advance written notice to CITY.