Exhibit B: Draft Project Partnership Agreement
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PROJECT PARTNERSHIP AGREEMENT
BETWEEN
THE DEPARTMENT OF THE ARMY
AND
THE STATE OF CALIFORNIA
DEPARTMENT OF PARKS AND RECREATION,
DIVISION OF BOATING AND WATERWAYS
FOR
STAGE 13 PERIODIC NOURISHMENT
OF THE
ORANGE COUNTY BEACH EROSION CONTROL PROJECT
FROM
SAN GABRIEL RIVER TO NEWPORT BAY
ORANGE COUNTY, CALIFORNIA
THIS AGREEMENT is entered into this ___ day of ______________, _____, by and between the Department of the Army (hereinafter the “Government”), represented by the U.S.
Army Engineer, Los Angeles District (hereinafter the “District Commander”), and the State of California, Department of Parks and Recreation, Division of Boating and Waterways (hereinafter the “Non-Federal Sponsor”), represented by its Deputy Director.
WITNESSETH, THAT:
WHEREAS, construction of the Orange County Beach Erosion Control Project (hereinafter the “Project”, as defined in Article I.A. of this Agreement) was authorized by
Section 101 of the Rivers and Harbors Act of 1954 (Public Law 83-780) under the title “Anaheim Bay Harbor, California,” as amended by Section 101 of the Rivers and Harbors Act of 1962 (Public Law 87-874) under the title “Orange County, California,” and where the plans of improvements are described in House Document 349, Eighty-third Congress (1954), and House Document 602, Eighty-seventh Congress (1962), respectively;
WHEREAS, Section 101 of the Rivers and Harbors Act of 1962 states the Federal share for the Project is 67 percent of the first costs and costs of periodic nourishment of the sand placement features and maintenance of the breakwaters, in accordance with the plans in House Document 602;
WHEREAS, Section 551 of the Water Resources Development Act of 2000 (Public Law 106-541) directed the Secretary to treat the Surfside/Sunset and Newport Beach element of the project for beach erosion, Orange County, California authorized by Section 101 of the Rivers and Harbors Act of 1962 as continuing construction;
WHEREAS, the Agreement between the United States of America and the State of California, Department of Water Resources executed on September 20, 1963, and subsequent agreements through September 19, 2008, have set forth the terms for initial construction and
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periodic nourishment in the area known as the Surfside-Sunset Beach, and initial construction of rock groins and protective beach at west Newport Beach, within the Project reach, in Orange County, California (hereinafter the “Stages 1 – 12”);
WHEREAS, the initial construction of the shore protection measures in Seal Beach were completed in 1958, and the initial construction of the protective and feeder beach at Surfside- Sunset was completed in 1964, and the initial construction of the groin field and protective beach at west Newport Beach was completed in 1973;
WHEREAS, the State has control over and has provided all real property interests, constructed all placement area improvements, and performed all relocations that the Government has determined to be required or to be necessary for Stages 1 – 12, except for real property interests owned by the Government;
WHEREAS, the Government and the Non-Federal Sponsor desire to enter into this Agreement for the upcoming iteration of periodic nourishment (hereinafter the “Stage 13” as defined in Article I.B. of this Agreement); and
WHEREAS, the Government and the Non-Federal Sponsor have the full authority and capability to perform in accordance with the terms of this Agreement and acknowledge that Section 221 of the Flood Control Act of 1970, as amended (42 U.S.C. 1962d-5b), provides that this Agreement shall be enforceable in the appropriate district court of the United States.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I - DEFINITIONS
A. The term “Project” means
the protective measures on the beaches extending from the San Gabriel River to Newport Bay, California, including a groin and beach fill, as generally described in the House Document 349, Eighty-third Congress (1954); and a protective beach at Surfside-Sunset completed in 1964 and a groin field and beach fill at west Newport Beach as generally described in House Document 602, Eighty-seventh Congress (1962) .
B. The term “Stage 13” of the Project means placement of up to approximately 1,750,000 cubic yards of sand from an offshore borrow site on the beach in the vicinity of Surfside, California and placement of approximately 100,000 cubic yards of sand at Newport Beach, California, as generally described in the report of the Chief of Engineers dated August 8, 1962, as modified by the Chief of Engineers on September 13, 1963 (hereinafter the “Decision Document”).
C. The term “HTRW” means hazardous, toxic, and radioactive wastes, which includes any material listed as a “hazardous substance” (42 U.S.C. 9601(14)) regulated under the Comprehensive Environmental Response, Compensation, and Liability Act (hereinafter “CERCLA”) (42 U.S.C. 9601-9675) and any other regulated material in accordance with applicable laws and regulations.
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D. The term “construction costs of Stage 13” means all costs incurred by the Government and Non-Federal Sponsor in accordance with the terms of this Agreement that are directly related to design and construction of the Stage 13 and cost shared. The term includes the Government’s costs and the Non-Federal Sponsor’s creditable contributions pursuant to the terms of the Design Agreement executed on June 27, 2016; the Government’s engineering, design, and construction, including monitoring, costs; the Government’s supervision and administration costs; the Non-Federal Sponsor’s creditable costs for providing real property interests, placement area improvements, and relocations and for providing in-kind contributions, if any; costs for mitigation, including monitoring and adaptive management, if applicable; and the costs of historic preservation activities except for data recovery for historic properties. The term does not include any costs for operation, maintenance, repair, rehabilitation, or replacement; HTRW cleanup and response; dispute resolution; participation by the Government and the Non- Federal Sponsor in the Project Coordination Team to discuss significant issues and actions; audits; betterments; or the Non-Federal Sponsor’s cost to negotiate this Agreement.
E. The term “real property interests” means lands, easements, and rights-of-way, including those required for relocations and borrow and dredged material placement areas.
Acquisition of real property interests may require the performance of relocations.
F. The term “relocation” means the provision of a functionally equivalent facility to the owner of a utility, cemetery, highway, railroad, or public facility when such action is required by applicable legal principles of just compensation. Providing a functionally equivalent facility may include the alteration, lowering, raising, or replacement and attendant demolition of the affected facility or part thereof.
G. The term “placement area improvements” means the improvements required on real property interests to enable the ancillary placement of material that has been dredged or excavated during construction, operation, and maintenance of the Stage 13, including, but not limited to, retaining dikes, wasteweirs, bulkheads, embankments, monitoring features, stilling basins, and dewatering pumps and pipes.
H. The term “functional portion thereof” means a portion of the Stage 13 that has been completed and that can function independently, as determined in writing by the District Commander for Los Angeles District (hereinafter the “District Commander”), although the remainder of the Stage 13 is not yet complete.
I. The term “in-kind contributions” means those materials or services provided by the Non-Federal Sponsor that are identified as being integral to Stage 13 by the Division Commander for South Pacific Division (hereinafter the “Division Commander”). To be integral to Stage 13, the material or service must be part of the work that the Government would otherwise have undertaken for design and construction of Stage 13. The in-kind contributions also include any initial investigations performed by the Non-Federal Sponsor to identify the existence and extent of any HTRW that may exist in, on, or under real property interests required for Stage 13; however, it does not include HTRW cleanup and response.
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J. The term “betterment” means a difference in construction of an element of Stage 13 that results from the application of standards that the Government determines exceed those that the Government would otherwise apply to construction of that element.
K. The term “fiscal year” means one year beginning on October 1st and ending on September 30th of the following year.
L. The term “Maximum Cost Limit” means the statutory limitation, as applicable, on the total cost of Stage 13, as determined by the Government in accordance with Section 902 of WRDA 1986, as amended (33 U.S.C. 2280) and Government regulations issued thereto.
ARTICLE II - OBLIGATIONS OF THE PARTIES
A. In accordance with Federal laws, regulations, and policies, the Government shall undertake construction of Stage 13 using funds appropriated by the Congress and funds provided by the Non-Federal Sponsor. In carrying out its obligations under this Agreement, the Non- Federal Sponsor shall comply with all requirements of applicable Federal laws and implementing regulations, including but not limited to, if applicable, Section 601 of the Civil Rights Act of 1964, as amended (42 U.S.C. 2000d), and Department of Defense Directive 5500.11 issued pursuant thereto; the Age Discrimination Act of 1975 (42 U.S.C. 6102); and the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), and Army Regulation 600-7 issued pursuant thereto.
B. The Non-Federal Sponsor shall contribute 33 percent of total construction costs of Stage 13, as follows:
1. In accordance with Article III, the Non-Federal Sponsor shall provide the real property interests, placement area improvements, and relocations required for construction, operation, and maintenance of Stage 13. If the Government determines that the Non-Federal Sponsor’s estimated credits for real property interests, placement area improvements, and relocations will exceed 33 percent of construction costs of Stage 13, the Government, in its sole discretion, may acquire any of the remaining real property interests, construct any of the remaining placement area improvements, or perform any of the remaining relocations with the cost of such work included as a part of the Government’s cost of construction. Nothing in this provision affects the Non-Federal Sponsor’s responsibility under Article IV for the performance and costs of any HTRW cleanup and response related thereto.
2. If providing in-kind contributions as a part of its 33 percent cost share, the Non-Federal Sponsor shall obtain all applicable licenses and permits necessary for such work.
As functional portions of the work are completed, the Non-Federal Sponsor shall begin operation and maintenance of such work. Upon completion of the work, the Non-Federal Sponsor shall so notify the Government within 30 calendar days and provide the Government with a copy of as- built drawings for the work.
3. For construction costs of Stage 13, after considering the contributions provided pursuant to the Design Agreement and the estimated amount of credit that will be afforded to the
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Non-Federal Sponsor pursuant to paragraphs B.1. and B.2., above, the Government shall determine the estimated amount of funds required from the Non-Federal Sponsor to meet its cost share for the then-current fiscal year. No later than 60 calendar days after receipt of notification from the Government, the Non-Federal Sponsor shall provide the full amount of such funds to the Government in accordance with Article VI.C.
4. No later than August 1
st prior to each subsequent fiscal year, the Government shall provide the Non-Federal Sponsor with a written estimate of the amount of funds required from the Non-Federal Sponsor during that fiscal year to meet its cost share. No later than September 1st prior to that fiscal year, the Non-Federal Sponsor shall provide the full amount of such required funds to the Government in accordance with Articles VI.C. and VI.F., as applicable.
C. To the extent practicable and in accordance with Federal law, regulations, and policies, the Government shall afford the Non-Federal Sponsor the opportunity to review and comment on contract solicitations, including relevant plans and specifications, prior to the Government’s issuance of such solicitations; proposed contract modifications, including change orders; and contract claims prior to resolution thereof. Ultimately, the contents of solicitations, award of contracts, execution of contract modifications, and resolution of contract claims shall be exclusively within the control of the Government.
D. The Government, as it determines necessary, shall undertake actions associated with historic preservation, including the identification and treatment of historic properties as those properties are defined in the National Historic Preservation Act of 1966, as amended (54 U.S.C. 300101-307108). All costs incurred by the Government for such work (including the mitigation of adverse effects other than data recovery) shall be included in construction costs of Stage 13 and shared in accordance with the provisions of this Agreement. If historic properties are discovered during construction and the effect(s) of construction are determined to be adverse, strategies shall be developed to avoid, minimize, or mitigate these adverse effects. In accordance with 54 U.S.C. 312507, up to 1 percent of the total amount authorized to be appropriated for Stage 13 may be applied toward data recovery of historic properties and such costs shall be borne entirely by the Government. In the event that costs associated with data recovery of historic properties exceed 1 percent of the total amount authorized to be appropriated for Stage 13, in accordance with 54 U.S.C. 312508, the Government will seek a waiver from the 1 percent limitation under 54 U.S.C. 312507 and upon receiving the waiver, will proceed with data recovery at full Federal expense. Nothing in this Agreement shall limit or otherwise prevent the Non-Federal Sponsor from voluntarily contributing costs associated with data recovery that exceed 1 percent.
E. When the District Commander determines that construction of Stage 13, or a functional portion thereof, is complete, the District Commander shall so notify the Non-Federal Sponsor in writing within 30 calendar days of such determination, and the Non-Federal Sponsor, at no cost to the Government, shall operate, maintain, repair, rehabilitate, and replace Stage 13, or such functional portion thereof. Such activities will generally consist of flood operation, coordination, inspection for the Project. The Government shall furnish the Non-Federal Sponsor with an Operation, Maintenance, Repair, Rehabilitation, and Replacement Manual
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(hereinafter the “OMRR&R Manual”) and copies of all as-built drawings for the completed work.
1. The Non-Federal Sponsor shall conduct its operation, maintenance, repair, rehabilitation, and replacement responsibilities in a manner consistent with Stage 13’s authorized purpose and in accordance with applicable Federal laws and regulations, and the Government’s specific directions in the OMRR&R Manual. The Government and the Non-Federal Sponsor shall consult on any subsequent updates or amendments to the OMRR&R Manual.
2. The Government may enter, at reasonable times and in a reasonable manner, upon real property interests that the Non-Federal Sponsor now or hereafter owns or controls to inspect Stage 13, and, if necessary, to undertake any work necessary to the functioning of Stage 13 for its authorized purpose. If the Government determines that the Non-Federal Sponsor is failing to perform its obligations under this Agreement and the Non-Federal Sponsor does not correct such failures within a reasonable time after notification by the Government, the Government, at its sole discretion, may undertake any operation, maintenance, repair, rehabilitation, or replacement of Stage 13. No operation, maintenance, repair, rehabilitation, or replacement by the Government shall relieve the Non-Federal Sponsor of its obligations under this Agreement or preclude the Government from pursuing any other remedy at law or equity to ensure faithful performance of this Agreement.
F. At least annually and after storm events, the Non-Federal Sponsor, at no cost to the Government, shall monitor and perform surveillance of the Project to determine losses of material and provide results of such surveillance to the Government.
G. Not less than once each year, the Non-Federal Sponsor shall inform affected interests of the extent of risk reduction afforded by the Project.
H. The Non-Federal Sponsor shall ensure participation in and compliance with applicable Federal floodplain management and flood insurance programs. The Non-Federal Sponsor may execute agreements with other non-Federal entities to ensure such participation and compliance.
I. The Non-Federal Sponsor shall ensure publication of floodplain information in the area concerned and shall provide this information to zoning and other regulatory agencies for their use in adopting regulations, or taking other actions, to prevent unwise future development and to ensure compatibility with the Project. The Non-Federal Sponsor may execute agreements with other non-Federal entities to ensure such publication and provision.
J. The Non-Federal Sponsor shall prevent obstructions or encroachments on the Project (including prescribing and enforcing regulations to prevent such obstructions or encroachments) that might reduce the level of coastal storm risk reduction the Project affords, hinder operation and maintenance of the Project, or interfere with the Project’s proper function.
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K. For shores, other than Federal shores, protected pursuant to this Agreement using Federal funds, the Non-Federal Sponsor shall ensure the public use of, and access to, such shores by all on equal terms in a manner compatible with the authorized purpose of the Project.
L. The Non-Federal Sponsor shall provide and maintain necessary access roads, parking areas, and other associated public use facilities, open and available to all on equal terms, as described in the Decision Document.
M. The Non-Federal Sponsor shall not use Federal program funds to meet any of its obligations under this Agreement unless the Federal agency providing the funds verifies in writing that the funds are authorized to be used for Stage 13. Federal program funds are those funds provided by a Federal agency, plus any non-Federal contribution required as a matching share therefor.
N. In addition to the ongoing, regular discussions between the parties regarding Stage 13 delivery, the Government and the Non-Federal Sponsor may establish a Project Coordination Team to discuss significant issues or actions. The Government’s costs for participation on the Project Coordination Team shall not be included in construction costs that are cost shared but shall be included in calculating the Maximum Cost Limit. The Non-Federal Sponsor’s costs for participation on the Project Coordination Team shall not be included in construction costs that are cost shared and shall be paid solely by the Non-Federal Sponsor without reimbursement or credit by the Government.
O. The Non-Federal Sponsor may request in writing that the Government perform betterments on the Non-Federal Sponsor’s behalf. Each request shall be subject to review and written approval by the Division Commander. If the Government agrees to such request, the Non-Federal Sponsor, in accordance with Article VI.F., must provide funds sufficient to cover the costs of such work in advance of the Government performing the work. In addition, the Non- Federal Sponsor is responsible for providing, at no cost to the Government, any additional real property interests, relocations, and placement area improvements determined by the Government to be required for construction, operation, and maintenance of such work.
ARTICLE III - REAL PROPERTY INTERESTS, PLACEMENT AREA IMPROVEMENTS,
AND RELOCATIONS
A. The Government, after consultation with the Non-Federal Sponsor, shall determine the real property interests required for construction, operation, and maintenance of Stage 13.
The Government shall provide the Non-Federal Sponsor with general written descriptions, including maps as appropriate, of the real property interests that the Government determines the Non-Federal Sponsor must provide for construction, operation, and maintenance of Stage 13, and shall provide the Non-Federal Sponsor with a written notice to proceed with acquisition. Prior to initiating acquisition and in accordance with Article IV.A., the Non-Federal Sponsor shall investigate to verify that HTRW does not exist in, on, or under the real property interests required for construction, operation, and maintenance of Stage 13. Subject to the requirements in Article IV.B., the Non-Federal Sponsor shall acquire the real property interests and shall
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provide the Government with authorization for entry thereto according to the Government’s construction schedule for Stage 13. The Non-Federal Sponsor shall ensure that real property interests provided for the Project are retained in public ownership for uses compatible with the authorized purposes of the Project.
B. The Government, after consultation with the Non-Federal Sponsor, shall determine the placement area improvements required for construction, operation, and maintenance of Stage 13, provide the Non-Federal Sponsor with general written descriptions, including maps as appropriate, of such improvements, and provide the Non-Federal Sponsor with a written notice to proceed with such improvements. The Non-Federal Sponsor shall construct the improvements in accordance with the Government’s construction schedule for Stage 13.
C. The Government, after consultation with the Non-Federal Sponsor, shall determine the relocations required for construction, operation, and maintenance of Stage 13, provide the Non-Federal Sponsor with general written descriptions, including maps as appropriate, of such relocations, and provide the Non-Federal Sponsor with a written notice to proceed with such relocations. The Non-Federal Sponsor shall perform or ensure the performance of these relocations in accordance with the Government’s construction schedule for Stage 13.
D. To the maximum extent practicable, no later than 30 calendar days after the Government provides the Non-Federal Sponsor with written descriptions and maps of the real property interests, placement area improvements, and relocations required for construction, operation, and maintenance of Stage 13, the Non-Federal Sponsor may request in writing that the Government acquire all or specified portions of such real property interests, construct placement area improvements, or perform the necessary relocations. If the Government agrees to such a request, the Non-Federal Sponsor, in accordance with Article VI.F., must provide funds sufficient to cover the costs of the acquisitions, placement area improvements, or relocations in advance of the Government performing the work. The Government shall acquire the real property interests, construct the placement area improvements, and perform the relocations, applying Federal laws, policies, and procedures. The Government shall acquire real property interests in the name of the Non-Federal Sponsor except, if acquired by eminent domain, the Government shall convey all of its right, title and interest to the Non-Federal Sponsor by quitclaim deed or deeds. The Non-Federal Sponsor shall accept delivery of such deed or deeds.
The Government’s provision of real property interests, placement area improvements, or performing relocations on the Non-Federal Sponsor’s behalf does not alter the Non-Federal Sponsor’s responsibility under Article IV for the performance and costs of any HTRW cleanup and response related thereto.
E. In acquiring the real property interests for Stage 13, the Non-Federal Sponsor assures the Government that it will comply with the following:
(1) fair and reasonable relocation payments and assistance shall be provided to or for displaced persons, as are required to be provided by a Federal agency under 42 U.S.C. 4622, 4623 and 4624;
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(2) relocation assistance programs offering the services described in 42 U.S.C. 4625 shall be provided to such displaced persons;
(3) within a reasonable period of time prior to displacement, comparable replacement dwellings will be available to displaced persons in accordance with 42 U.S.C. 4625(c)(3);
(4) in acquiring real property, the Non-Federal Sponsor will be guided, to the greatest extent practicable under State law, by the land acquisition policies in 42 U.S.C. 4651 and the provisions of 42 U.S.C. 4652; and
(5) property owners will be paid or reimbursed for necessary expenses as specified in 42 U.S.C. 4653 and 4654.
F. The Government, after consultation w ith the Non-Federal Sponsor, has determined that for the Stages 1 –12 conducted prior to the effective date of this Agreement, the Non-Federal Sponsor has provided all real property interests, constructed all placement area improvements, and performed all relocations necessary for such work. Further, as of the effective date of this Agreement, the Government projects that no additional real property interests, placement area improvements, or relocations will be required for Stage 13. However, if the Government, after consultation with the Non-Federal Sponsor, does determine that additional real property interests, placement area improvements, or relocations will be required for Stage 13, the Government and the Non-Federal Sponsor shall proceed in accordance with the provisions of this Article.
ARTICLE IV - HTRW
A. The Non-Federal Sponsor shall be responsible for undertaking any investigations to identify the existence and extent of any HTRW regulated under applicable law that may exist in, on, or under real property interests required for construction, operation, and maintenance of Stage 13.
B. In the event it is discovered that HTRW exists in, on, or under any of the real property interests needed for construction, operation, and maintenance of Stage 13, the Non-Federal Sponsor and the Government shall provide written notice to each other within 15 calendar days of such discovery, in addition to providing any other notice required by applicable law. If HTRW is discovered prior to acquisition, the Non-Federal Sponsor shall not proceed with the acquisition of such real property interests until the parties agree that the Non-Federal Sponsor should proceed. If HTRW is discovered after acquisition of the real property interests, no further Stage 13 activities within the contaminated area shall proceed until the parties agree on an appropriate course of action.
C. If HTRW is found to exist in, on, or under any required real property interests, the parties shall consider any liability that might arise under applicable law and determine whether to initiate construction, or if already initiated, whether to continue, suspend, or terminate construction.
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1. Should the parties initiate or continue construction, the Non-Federal Sponsor shall be solely responsible, as between the Government and the Non-Federal Sponsor, for the performance and costs of HTRW cleanup and response, including the costs of any studies and investigations necessary to determine an appropriate response to the contamination. The Non- Federal Sponsor shall pay such costs without reimbursement or credit by the Government. In no event will the Government proceed with that construction before the Non-Federal Sponsor has completed the required cleanup and response actions.
2. In the event the parties cannot reach agreement on how to proceed or the Non- Federal Sponsor fails to discharge its responsibilities under this Article upon direction by the Government, the Government may suspend or terminate construction. Additionally, the Government may undertake any actions it determines necessary to avoid a release of such HTRW with the Non-Federal Sponsor responsible for such costs without credit or reimbursement by the Government.
D. In the event of a HTRW discovery, the Non-Federal Sponsor and the Government shall initiate consultation with each other within 15 calendar days in an effort to ensure that responsible parties bear any necessary cleanup and response costs as required by applicable law.
Any decision made pursuant to this Article shall not relieve any third party from any HTRW liability that may arise under applicable law.
E. To the maximum extent practicable, the Government and Non-Federal Sponsor shall perform their responsibilities under this Agreement in a manner that will not cause HTRW liability to arise under applicable law.
F. As between the Government and the Non-Federal Sponsor, the Non-Federal Sponsor shall be considered the owner and operator of Stage 13 for purposes of CERCLA liability or other applicable law.
ARTICLE V - CREDIT FOR REAL PROPERTY INTERESTS, PLACEMENT AREA
IMPROVEMENTS, RELOCATIONS, AND IN-KIND CONTRIBUTIONS
A. The Government shall include in construction costs of Stage 13, and credit towards the Non-Federal Sponsor’s share of such costs, the value of Non-Federal Sponsor provided real property interests (except interests in lands subject to shore erosion that are publicly owned on the effective date of this Agreement or, if required for in-kind contributions covered by an In- Kind Memorandum of Understanding between the Government and Non-Federal Sponsor (hereinafter the “In-Kind MOU”), that were publicly owned on the effective date of the In-Kind MOU), placement area improvements, and relocations, and the costs of in-kind contributions determined by the Government to be required for Stage 13.
B. To the maximum extent practicable, no later than 3 months after it provides the Government with authorization for entry onto a real property interest or pays compensation to the owner, whichever occurs later, the Non-Federal Sponsor shall provide the Government with
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documents sufficient to determine the amount of credit to be provided for the real property interests in accordance with paragraph C.1. of this Article. To the maximum extent practicable, no less frequently than on a quarterly basis, the Non-Federal Sponsor shall provide the Government with documentation sufficient for the Government to determine the amount of credit to be provided for other creditable items in accordance with paragraph C. of this Article.
C. The Government and the Non-Federal Sponsor agree that the amount of costs eligible for credit that are allocated by the Government to construction costs of Stage 13 shall be determined and credited in accordance with the following procedures, requirements, and conditions and subject to audit in accordance with Article X.B. to determine reasonableness, allocability, and allowability of costs.
1. Real Property Interests.
a. General Procedure. For each real property interest (except interests in lands subject to shore erosion that are publicly owned on the effective date of this Agreement), the Non-Federal Sponsor shall obtain an appraisal of the fair market value of such interest that is prepared by a qualified appraiser who is acceptable to the parties. Subject to valid jurisdictional exceptions, the appraisal shall conform to the Uniform Standards of Professional Appraisal Practice. The appraisal must be prepared in accordance with the applicable rules of just compensation, as specified by the Government. For crediting purposes, appraisals of interests in lands subject to shore erosion acquired from private parties after the effective date of this Agreement must consider special benefits in accordance with the Uniform Appraisal Standards for Federal Land Acquisition (2016) (hereinafter “Uniform Appraisal Standards”).
(1) Date of Valuation. For any real property interests (other than interests in lands subject to shore erosion) owned by the Non-Federal Sponsor on the effective date of this Agreement and required for construction performed after the effective date of this Agreement, the date the Non-Federal Sponsor provides the Government with authorization for entry thereto shall be used to determine the fair market value. For any real property interests required for in-kind contributions covered by an In-Kind MOU (other than interests in lands subject to shore erosion that were publicly owned on the effective date of the In-Kind MOU), the date of initiation of construction shall be used to determine fair market value. The fair market value of real property interests acquired by the Non-Federal Sponsor after the effective date of this Agreement shall be the fair market value of such real property interests at the time the interests are acquired.
(2) Except for real property interests acquired through eminent domain proceedings instituted after the effective date of this Agreement, the Non-Federal Sponsor shall submit an appraisal for each real property interest to the Government for review and approval no later than, to the maximum extent practicable, 60 calendar days after the Non- Federal Sponsor provides the Government with an authorization for entry for such interest or concludes the acquisition of the interest through negotiation or eminent domain proceedings, whichever occurs later. If, after coordination and consultation with the Government, the Non- Federal Sponsor is unable to provide an appraisal that is acceptable to the Government, the
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Government shall obtain an appraisal to determine the fair market value of the real property interest for crediting purposes.
(3) The Government shall credit the Non-Federal Sponsor the appraised amount approved by the Government. Where the amount paid or proposed to be paid by the Non-Federal Sponsor exceeds the approved appraised amount, the Government, at the Non-Federal Sponsor’s request, shall consider all factors relevant to determining fair market value and, in its sole discretion, after consultation with the Non-Federal Sponsor, may approve in writing an amount greater than the appraised amount for crediting purposes.
b. Eminent Domain Procedure. For real property interests acquired by eminent domain proceedings instituted after the effective date of this Agreement, the Non- Federal Sponsor shall notify the Government in writing of its intent to institute such proceedings and submit the appraisals of the specific real property interests to be acquired for review and approval by the Government. If the Government provides written approval of the appraisals, the Non-Federal Sponsor shall use the amount set forth in such appraisals as the estimate of just compensation for the purpose of instituting the eminent domain proceeding.
(1) If the Government provides written disapproval of the appraisals, the Government and the Non-Federal Sponsor shall consult to promptly resolve the issues that are identified in the Government’s written disapproval. In the event that the issues cannot be resolved, the Non-Federal Sponsor may use the amount set forth in its appraisal as the estimate of just compensation for the purpose of instituting the eminent domain proceeding.
Except as provided in paragraph C.1.b.(2) below, the fair market value for crediting purposes shall be either the amount of the court award for the real property interests taken or the amount of any stipulated settlement or portion thereof that the Government approves in writing.
(2) For interests in lands subject to shore erosion, the Government will credit the amount of the court award or stipulated settlement only to the extent that the court award or stipulated settlement considered special benefits in accordance with the Uniform Appraisal Standards. If the court award or stipulated settlement did not consider special benefits, fair market value for crediting purposes shall be the limited to the amount determined by an appraisal that considers special benefits.
c. Waiver of Appraisal. Except as required by paragraph C.1.b. of this Article, the Government may waive the requirement for an appraisal pursuant to this paragraph if, in accordance with 49 C.F.R. Section 24.102(c)(2):
(1) the owner is donating the real property interest to the Non- Federal Sponsor and releases the Non-Federal Sponsor in writing from its obligation to appraise the real property interest, and the Non-Federal Sponsor submits to the Government a copy of the owner’s written release; or
(2) the Non-Federal Sponsor determines that an appraisal is unnecessary because the valuation problem is uncomplicated and the anticipated value of the real property interest proposed for acquisition is estimated at $25,000 or less, based on a review of
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available data. When the Non-Federal Sponsor determines that an appraisal is unnecessary, the Non-Federal Sponsor shall prepare the written waiver valuation required by 49 C.F.R. Section
24.102(c)(2) and submit a copy thereof to the Government for approval. When the anticipated value of the real property interest exceeds $10,000, up to a maximum of $25,000, the Non- Federal Sponsor must offer the owner the option of having the Non-Federal Sponsor appraise the real property interest.
d. Incidental Costs. The Government shall include in construction costs and credit towards the Non-Federal Sponsor’s share of such costs, the incidental costs the Non- Federal Sponsor incurred in acquiring any real property interests required pursuant to Article III for Stage 13 within a five-year period preceding the effective date of this Agreement, or at any time after the effective date of this Agreement, that are documented to the satisfaction of the Government. Such incidental costs shall include closing and title costs, appraisal costs, survey costs, attorney’s fees, plat maps, mapping costs, actual amounts expended for payment of any relocation assistance benefits provided in accordance with Article III.E., and other payments by the Non-Federal Sponsor for items that are generally recognized as compensable, and required to be paid, by applicable state law due to the acquisition of a real property interest pursuant to Article III.
2. Placement Area Improvements. The Government shall include in construction costs and credit towards the Non-Federal Sponsor’s share of such costs, the value of placement area improvements required for Stage 13. Only placement area improvements constructed after the effective date of this Agreement are eligible for credit, unless such placement area improvements were required for in-kind contributions covered by an In-Kind MOU. The value shall be equivalent to the costs, documented to the satisfaction of the Government, that the Non- Federal Sponsor incurred to provide any placement area improvements required for Stage 13.
Such costs include actual costs of constructing the improvements; planning, engineering, and design costs; and supervision and administration costs, but shall not include any costs associated with betterments, as determined by the Government.
3. Relocations. The Government shall include in construction costs and credit towards the Non-Federal Sponsor’s share of such costs, the value of any relocations performed by the Non-Federal Sponsor that are directly related to construction, operation, and maintenance of Stage 13. Only relocations performed after the effective date of this Agreement are eligible for credit, unless such relocations were required for in-kind contributions covered by an In-Kind MOU.
a. For a relocation other than a highway, the value shall be only that portion of relocation costs that the Government determines is necessary to provide a functionally equivalent facility, reduced by depreciation, as applicable, and the salvage value of any removed items.
b. For a relocation of a highway, which is any highway, roadway, or street, including any bridge thereof, that is owned by a public entity, the value shall be only that portion of relocation costs that would be necessary to accomplish the relocation in accordance
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with the design standard that the State of California would apply under similar conditions of geography and traffic load, reduced by the salvage value of any removed items.
c. Relocation costs, as determined by the Government, include actual costs of performing the relocation; planning, engineering, and design costs; and supervision and administration costs. Relocation costs do not include any costs associated with betterments, as determined by the Government, nor any additional cost of using new material when suitable used material is available.
4. In-Kind Contributions. The Government shall include in construction costs and credit towards the Non-Federal Sponsor’s share of such costs, the value of in-kind contributions that are integral to Stage 13.
a. The value shall be equivalent to the costs, documented to the satisfaction of the Government, that the Non-Federal Sponsor incurred to provide the in-kind contributions, which may include engineering and design; construction; and supervision and administration, but shall not include any costs associated with betterments, as determined by the Government. Appropriate documentation includes invoices and certification of specific payments to contractors, suppliers, and the Non-Federal Sponsor’s employees.
b. No credit shall be afforded for the following: interest charges, or any adjustment to reflect changes in price levels between the time the in-kind contributions are completed and credit is afforded; the value of in-kind contributions obtained at no cost to the Non-Federal Sponsor; any in-kind contributions performed prior to the effective date of this Agreement unless covered by an In-Kind MOU; or costs that exceed the Government’s estimate of the cost for such in-kind contributions.
5. Compliance with Federal Labor Laws. Any credit afforded under the terms of this Agreement is subject to satisfactory compliance with applicable Federal labor laws covering non-Federal construction, including, but not limited to, 40 U.S.C. 3141-3148 and 40 U.S.C. 3701-3708 (labor standards originally enacted as the Davis-Bacon Act, the Contract Work Hours and Safety Standards Act, and the Copeland Anti-Kickback Act), and credit may be withheld, in whole or in part, as a result of the Non-Federal Sponsor’s failure to comply with its obligations under these laws.
D. Notwithstanding any other provision of this Agreement, the Non-Federal Sponsor shall not be entitled to credit or reimbursement for real property interests that were previously provided as an item of local cooperation for another Federal project, previously provided for the Project including Stages 1-12, or that are required for beach improvements with exclusively private benefits.
ARTICLE VI – PAYMENT OF FUNDS
A. As of the effective date of this Agreement, total construction costs of Stage 13 are projected to be $ 23,130,000, with the Government’s share of such costs projected to be $
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15,500,000 and the Non-Federal Sponsor’s share of such costs projected to be $ 7,630,000 which includes creditable real property interests, relocations, and placement area improvements projected to be $ 0, creditable in-kind contributions projected to be $ 0, and the amount of funds required to meet its cost share projected to be $ 7,630,000. These amounts are estimates only that are subject to adjustment by the Government and are not to be construed as the total financial responsibilities of the Government and the Non-Federal Sponsor.
B. The Government shall provide the Non-Federal Sponsor with monthly reports setting forth the estimated construction costs of Stage 13 and the Government’s and Non-Federal Sponsor’s estimated shares of such costs; costs incurred by the Government, using both Federal and Non-Federal Sponsor funds, to date; the amount of funds provided by the Non-Federal Sponsor to date; the estimated amount of any creditable real property interests, placement area improvements, and relocations; the estimated amount of any creditable in-kind contributions; and the estimated amount of funds required from the Non-Federal Sponsor during the upcoming fiscal year.
C. The Non-Federal Sponsor shall provide the funds required to meet its share of construction costs of Stage 13 by delivering a check payable to “FAO, USAED, Los Angeles (L1)” to the District Commander, or verifying to the satisfaction of the Government that the Non-Federal Sponsor has deposited such required funds in an escrow or other account acceptable to the Government, with interest accruing to the Non-Federal Sponsor, or by providing an Electronic Funds Transfer of such required funds in accordance with procedures established by the Government.
D. The Government shall draw from the funds provided by the Non-Federal Sponsor to cover the non-Federal share of construction costs of Stage 13 as those costs are incurred. If the Government determines at any time that additional funds are needed from the Non-Federal Sponsor to cover the Non-Federal Sponsor’s required share of such construction costs, the Government shall provide the Non-Federal Sponsor with written notice of the amount of additional funds required. Within 60 calendar days from receipt of such notice, the Non-Federal Sponsor shall provide the Government with the full amount of such additional required funds.
E. Upon completion of construction and resolution of all relevant claims and appeals and eminent domain proceedings, the Government shall conduct a final accounting and furnish the Non-Federal Sponsor with the written results of such final accounting. Should the final accounting determine that additional funds are required from the Non-Federal Sponsor, the Non- Federal Sponsor, within 60 calendar days of receipt of written notice from the Government, shall provide the Government with the full amount of such additional required funds by delivering a check payable to “FAO, USAED, Los Angeles (L1)” to the District Commander, or by providing an Electronic Funds Transfer of such funds in accordance with procedures established by the Government. Such final accounting does not limit the Non-Federal Sponsor's responsibility to pay its share of construction costs of Stage 13, including contract claims or any other liability that may become known after the final accounting. If the final accounting determines that funds provided by the Non-Federal Sponsor exceed the amount of funds required to meet its share of construction costs of Stage 13, the Government shall refund such excess amount, subject to the availability of funds for the refund.
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F. If there are beach improvements with exclusively private benefits, , or real property interests, placement area improvements, relocations, or betterments on the Non-Federal Sponsor’s behalf, the Government shall provide written notice to the Non-Federal Sponsor of the amount of funds required to cover such costs. No later than 60 calendar days of receipt of such written notice, the Non-Federal Sponsor shall make the full amount of such required funds available to the Government through either payment method specified in Article VI.E. If at any time the Government determines that additional funds are required to cover such costs, the Non- Federal Sponsor shall provide those funds within 30 calendar days from receipt of written notice from the Government. If the Government determines that funds provided by the Non-Federal Sponsor exceed the amount that was required for the Government to complete such work, the Government shall refund any remaining unobligated amount.
ARTICLE VII - TERMINATION OR SUSPENSION
A. If at any time the Non-Federal Sponsor fails to fulfill its obligations under this Agreement, the Government may suspend or terminate construction of Stage 13 unless the Assistant Secretary of the Army (Civil Works) determines that continuation of such work is in the interest of the United States or is necessary in order to satisfy agreements with other non-Federal interests.
B. If the Government determines at any time that the Federal funds made available for construction of Stage 13 are not sufficient to complete such work, the Government shall so notify the Non-Federal Sponsor in writing within 30 calendar days, and upon exhaustion of such funds, the Government shall suspend construction until there are sufficient funds appropriated by the Congress and funds provided by the Non-Federal Sponsor to allow construction to resume. In addition, the Government may suspend construction if the Maximum Cost Limit is exceeded.
C. If HTRW is found to exist in, on, or under any required real property interests, the parties shall follow the procedures set forth in Article IV.
D. In the event of termination, the parties shall conclude their activities relating to construction of Stage 13. To provide for this eventuality, the Government may reserve a percentage of available funds as a contingency to pay the costs of termination, including any costs of resolution of real property acquisition, resolution of contract claims, and resolution of contract modifications.
E. Any suspension or termination shall not relieve the parties of liability for any obligation incurred. Any delinquent payment owed by the Non-Federal Sponsor pursuant to this Agreement shall be charged interest at a rate, to be determined by the Secretary of the Treasury, equal to 150 per centum of the average bond equivalent rate of the 13 week Treasury bills auctioned immediately prior to the date on which such payment became delinquent, or auctioned immediately prior to the beginning of each additional 3 month period if the period of delinquency exceeds 3 months.
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ARTICLE VIII - HOLD AND SAVE
The Non-Federal Sponsor shall hold and save the Government free from all damages arising from design, construction, operation, maintenance, repair, rehabilitation, and replacement of Stage 13, except for damages due to the fault or negligence of the Government or its contractors..
ARTICLE IX - DISPUTE RESOLUTION
As a condition precedent to a party bringing any suit for breach of this Agreement, that party must first notify the other party in writing of the nature of the purported breach and seek in good faith to resolve the dispute through negotiation. If the parties cannot resolve the dispute through negotiation, they may agree to a mutually acceptable method of non-binding alternative dispute resolution with a qualified third party acceptable to the parties. Each party shall pay an equal share of any costs for the services provided by such a third party as such costs are incurred.
The existence of a dispute shall not excuse the parties from performance pursuant to this Agreement.
ARTICLE X - MAINTENANCE OF RECORDS AND AUDITS
A. The parties shall develop procedures for the maintenance by the Non-Federal Sponsor of books, records, documents, or other evidence pertaining to costs and expenses for a minimum of three years after the final accounting. The Non-Federal Sponsor shall assure that such materials are reasonably available for examination, audit, or reproduction by the Government.
B. The Government may conduct, or arrange for the conduct of, audits of Stage 13.
Government audits shall be conducted in accordance with applicable Government cost principles and regulations. The Government’s costs of audits shall not be included in construction costs of Stage 13, but shall be included in calculating the Maximum Cost Limit.
C. To the extent permitted under applicable Federal laws and regulations, the Government shall allow the Non-Federal Sponsor to inspect books, records, documents, or other evidence pertaining to costs and expenses maintained by the Government, or at the Non-Federal Sponsor’s request, provide to the Non-Federal Sponsor or independent auditors any such information necessary to enable an audit of the Non-Federal Sponsor’s activities under this Agreement. The Non-Federal Sponsor shall pay the costs of non-Federal audits without reimbursement or credit by the Government.
ARTICLE XI - RELATIONSHIP OF PARTIES
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In the exercise of their respective rights and obligations under this Agreement, the Government and the Non-Federal Sponsor each act in an independent capacity, and neither is to be considered the officer, agent, or employee of the other. Neither party shall provide, without the consent of the other party, any contractor with a release that waives or purports to waive any rights a party may have to seek relief or redress against that contractor.
ARTICLE XII - NOTICES
A. Any notice, request, demand, or other communication required or permitted to be given under this Agreement shall be deemed to have been duly given if in writing and delivered personally or mailed by registered or certified mail, with return receipt, as follows:
If to the Non-Federal Sponsor:
Project Manager
California Department of Parks and Recreation
Division of Boating and Waterways
715 P Street
Sacramento, California 95814
If to the Government:
District Commander
U.S. Army Corps of Engineers, Los Angeles District
915 Wilshire Blvd., Suite 1109
Los Angeles, California 90017
B. A party may change the recipient or address to which such communications are to be directed by giving written notice to the other party in the manner provided in this Article.
ARTICLE XIII - CONFIDENTIALITY
To the extent permitted by the laws governing each party, the parties agree to maintain the confidentiality of exchanged information when requested to do so by the providing party.
ARTICLE XIV - THIRD PARTY RIGHTS, BENEFITS, OR LIABILITIES
Nothing in this Agreement is intended, nor may be construed, to create any rights, confer any benefits, or relieve any liability, of any kind whatsoever in any third person not a party to this Agreement.
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ARTICLE XV - OBLIGATIONS OF FUTURE APPROPRIATIONS
The Non-Federal Sponsor intends to fulfill fully its obligations under this Agreement.
Nothing herein shall constitute, nor be deemed to constitute, an obligation of future appropriations by the legislature of the State of California, where creating such an obligation would be inconsistent with the California Constitution, Article XVI, Section 6. If the Non- Federal Sponsor is unable to, or does not, fulfill its obligations under this Agreement, the Government may exercise any legal rights it has to protect the Government’s interests.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which shall become effective upon the date it is signed by the District Commander.
DEPARTMENT OF THE ARMY DEPART MENT OF PARKS AND RECREATION,
DIVISION OF BOATING AND WATERWAYS
BY: ____________________________ BY: ____________________________ Julie A. Balten Ramona Fernandez
Colonel, U.S. Army Deputy Director
District Commander
DATE: _________________________ DATE: ___________________________