Special/Regular Meeting Agenda
City Council
Mark Turner - Mayor
Rene Spring - Mayor Pro Tem
Gino Borgioli - Council Member
Marilyn Librers - Council Member
Yvonne Martínez Beltrán - Council Member
Wednesday, June 21, 2023 5:00 PM
Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037
Morgan Hill City Council meetings are held in person with the option for the public to attend in-person or by teleconference/video conference. Information on how the public may observe and participate in the meeting is located below.
MEETING PARTICIPATION AND PUBLIC COMMENT
City Council meetings will be live-streamed on Channel 17, the City’s website, and the City’s Facebook page.
Those members of the community that would like to participate in the meetings remotely may do so by joining virtually at: https://bit.ly/MHCityCouncilMeeting or by calling (669) 900-9128, then enter the webinar id: 873 3200 8380#. Public comment may be provided in the following ways:
• Provide public comment in-person
• Join the City Council meeting virtually via the link above. When public comment is opened, raise your virtual hand and be called upon to speak for up to 3 minutes (YOU MUST BE RUNNING THE MOST CURRENT VERSION OF
ZOOM TO BE UNMUTED)
• Join virtually by calling the number above, dial *9 to raise your hand, and be called upon to speak for up to 3 minutes
• Public comment in writing may be submitted via email to [email protected] or by mail to the City Clerk at 17575 Peak Avenue, Morgan Hill, CA 95037. Please email your comments to the City Clerk no later than 3:00 p.m. on Tuesday (the day before the City Council meeting) for your comments to be submitted to the members of the City Council with sufficient
June 21, 2023
2 time to review the comments. You may continue to provide written comments up to noon on Wednesday (the day of the meeting) although Council Members may not have sufficient time to review them before the meeting. Public comments submitted to the City Clerk after 12:00 p.m. the day of the meeting will be provided to the City Council as time allows.
• Written comments WILL NOT be read aloud during the City Council Meeting.
Please note that written comments are posted on the City’s website, so do not include any personal information you do not want to be posted on the web.
SPECIAL/REGULAR MEETING
A special meeting of the City Council is called at 5:00 pm for the purpose of conducting a closed session.
SPECIAL MEETING
5:00 pm Closed Session
CALL TO ORDER
ROLL CALL ATTENDANCE
DECLARATION OF POSTING AGENDA
CLOSED SESSION
Conference with Labor Negotiators
Authority: Pursuant Government Code Section 54957.6
City Negotiators: Christina Turner, City Manager; Donald Larkin, City Attorney; Michael Horta, Human Resources Director; Dat Nguyen, Finance Director; Edith Ramirez, Assistant City Manager, Development Services
Employee Organization: Morgan Hill Police Officers Association; AFSCME Local 101 Morgan Hill; Community Service Officers Association; Employees Covered under Management Resolution #21-050
Conference with Legal Counsel – Anticipated Litigation
Significant exposure to litigation pursuant to § 54956.9(b): (One case)
OPPORTUNITY FOR PUBLIC COMMENT
June 21, 2023
3 ADJOURN TO CLOSED SESSION
REGULAR MEETING
6:00 pm
SILENT INVOCATION
PLEDGE OF ALLEGIANCE
PROCLAMATIONS
Proclaiming June 19, 2023 as Juneteenth
Proclaiming the month of July as Parks and Recreation Month
PRESENTATIONS
YAC Presentation
Morgan Hill Library Presentation
CITY COUNCIL REPORTS
Council Member Librers
CITY MANAGER'S REPORT
CITY ATTORNEY'S REPORT
OTHER REPORTS
PUBLIC COMMENT
This opportunity for public comment is for items that are not on the agenda. If you would like to make comments on an item that is on the agenda, please wait until we get to that item to offer your comments. Members of the public are entitled to address the City Council concerning any item within the Morgan Hill City Council’s subject matter jurisdiction. Public comments are limited to no more than three minutes. Except for certain specific exceptions, the City Council is prohibited from discussing or taking action on any item not appearing on the posted agenda. Public comment is intended
June 21, 2023
4 for comments. Questions posed during public comment are not generally answered. If you have questions, please send them to the City Clerk at [email protected] to receive a response. (See additional noticing at the end of this agenda)
Public Comment
ADOPTION OF AGENDA
CONSENT CALENDAR
Items appearing on the Consent Calendar are considered routine and may be approved by one motion. Pursuant to City Council Policies and Procedures (CP 97-01), any member of the Council or public may request to have an item removed from the Consent Calendar for comment and action.
1. ADOPT A RESOLUTION TO AUTHORIZE THE CITY MANAGER TO
EXECUTE AN IMPACT FEE FREEZE AGREEMENT, AND A
SEWER/TRAFFIC IMPACT FEE FINANCING AGREEMENT WITH CUTINA MORGAN HILL LLC FOR A HOTEL DEVELOPMENT ON A 2.21 ACRE
PARCEL IDENTIFIED BY ASSESSOR PARCEL NUMBER (APN) 726-58-006 Recommendation:
Adopt a resolution to authorize the City Manager to execute an Impact Fee Freeze Agreement and a Sewer/Traffic Impact Fee Financing Agreement with Cutina Morgan Hill LLC for a 114-room hotel development on a 2.21 acre parcel identified by assessor parcel number (APN) 726-58-006.
2. APPROVE AN IMPACT FEE FREEZE AGREEMENT WITH MERSHO
INVESTMENTS, LLC AND CLAYTON PLAZA, LLC FOR INDUSTRIAL
DEVELOPMENTS ON 6 PARCELS TOTALING 20.14 ACRES IDENTIFIED BY ASSESSOR PARCEL NUMBERS 726-31-038, APN 726-31-025, APN 726-33- 026, APN 726-33-025, APN 726-25-026 , AND APN 726-32-025 Recommendation:
1. Approve an Impact Fee Freeze Agreement with Mersho Investments, LLC and Clayton Plaza, LLC for the development of six (6) separate industrial/commercial facilities located throughout Morgan Hill Ranch and Madrone Business Park; and
2. Authorize the City Manager to execute the Impact Fee Freeze Agreement.
3. ADOPT A RESOLUTION OF LOCAL SUPPORT AND AUTHORIZE THE FILING OF AN OBAG 3 FUNDING APPLICATION FOR THE MONTEREY
ROAD TRAFFIC, BICYCLE, AND PEDESTRIAN IMPROVEMENTS PROJECT
June 21, 2023
5 Recommendation:
Adopt a Resolution of Local Support and authorize the filing of an application for funding assigned to the Metropolitan Transportation Commission (MTC) and committing any necessary matching funds and stating assurance to complete the project.
4. ADOPT A RESOLUTION APPROVING FISCAL YEAR (FY) 2023-24 LIST OF STREET REHABILITATION PROJECTS FUNDED BY SENATE BILL (SB) 1:
THE ROAD REPAIR AND ACCOUNTABILITY ACT
Recommendation:
Adopt a resolution approving a list of street rehabilitation projects for Fiscal Year 2023-24 funded by SB 1, The Road Repair and Accountability Act of 2017.
5. APPROVE CONSULTANT AGREEMENTS WITH ENGEO, INC. IN THE AMOUNT OF $400,000 AND TWINING, INC. IN THE AMOUNT OF $200,000,
FOR GENERAL COMPACTION TESTING AND SPECIAL INSPECTION
Recommendation:
Approve and authorize the City Manager to execute and administer agreements with contingencies to provide general compaction testing and special inspection for various Capital Improvement Program Projects: Engeo, Inc. in the amount of $400,000 and Twining, Inc. in the amount of $200,000.
6. APPROVE A THREE-YEAR MAINTENANCE SERVICE AGREEMENT WITH
PETERSON POWER SYSTEMS FOR GENERATOR MAINTENANCE AND
REPAIR SERVICES
Recommendation:
Approve and authorize the City Manager to execute and administer a three year agreement with Peterson Power Systems in the not-to-exceed amount of $295,195 for annual and preventive maintenance, repair, emergency repair, and rentals for the City’s 28 standby generators.
7. APPROVE FINAL MAP FOR SAN SEBASTIAN PHASE 4A - TRACT NO. 10600 AND RELATED SUBDIVISION IMPROVEMENTS AGREEMENT
Recommendation:
1. Approve Final Map;
2. Authorize City Manager to execute the Subdivision Improvements Agreement with Toll CA XX, LP; and
3. Authorize the recordation of the Final Map and Subdivision Improvements Agreement.
8. APPROVE FREEWIRE TECHNOLOGIES, INC., AGREEMENT FOR
INSTALLATION AND OPERATION OF ELECTRIC VEHICLE CHARGING
INFRASTRUCTURE
June 21, 2023
6 Recommendation:
Authorize the City Manager to enter into an Own and Operate License Agreement with FreeWire Technologies, Inc.
9. APPROVE LIBRARY, CULTURE AND ARTS COMMISSION WORK PLAN Recommendation:
Approve the proposed Library, Culture and Arts Commission FY 2023-24 Work Plan.
10. APPROVE THE JUNE 7, 2023 CITY COUNCIL MEETING MINUTES Recommendation:
Approve the June 7, 2023 City Council Meeting Minutes.
11. APPROVE THE PURCHASE OF AN OFF-ROAD ALL-TERRAIN VEHICLE AND EQUIPMENT IN THE AMOUNT OF $175,763 FROM ALLTRACK INC.
Recommendation:
Approve and authorize the City Manager to execute a purchase order to Alltrack Inc. in the amount of $175,763 for the purchase of an off-road all-terrain vehicle and equipment, to provide access to utility infrastructure.
12. AUTHORIZE WRITE-OFF OF CERTAIN UNCOLLECTIBLE RECEIVABLES IN
ACCORDANCE WITH THE CITY'S WRITE-OFF POLICY
Recommendation:
Authorize write-off of certain uncollective receivables in the amount of $161,494 in accordance with the City's write-off policy.
13. RATIFY CITY POSITIONS ON PENDING LEGISLATION
Recommendation:
Ratify the City’s position opposing pending legislation, Senate Bill 623 (Laird) Workers' compensation: post-traumatic stress disorder.
14. RECEIVE MONTHLY BUDGET UPDATE AND MAY 2023 FINANCIAL AND
INVESTMENT REPORTS
Recommendation:
Accept and file report.
PUBLIC HEARINGS
15. CERTIFY THE ENVIRONMENTAL IMPACT REPORT, ADOPT FINDINGS OF
SIGNIFICANCE AND STATEMENT OF OVERRIDING CONSIDERATIONS,
APPROVE VESTING TENTATIVE MAP, AND APPROVE DESIGN PERMIT FOR A RESIDENTIAL DEVELOPMENT, COMPRISED OF 269 UNITS. THE PROPERTIES, IDENTIFIED BY ASSESSOR PARCEL NUMBERS 728-30-001, 728-30-002, 728-30-003, AND 728-30-004 ARE LOCATED AT THE
June 21, 2023
7 SOUTHWEST INTERSECTION OF HALF ROAD AND MISSION VIEW DRIVE (THE CROSSWINDS AT MORGAN HILL, LLC, OWNER)
Recommendation:
1. Open/close public hearing;
2. Adopt a Resolution to certify the Environmental Impact Report (EIR), approve the Mitigation Monitoring and Reporting Program prepared for the project, and adopt Findings of Significance and Statement of Overriding Considerations; and
3. Adopt a Resolution approving the Vesting Tentative Map and Design Permit.
16. INTRODUCE ORDINANCE AMENDING SECTION 18.24.020 (LAND USE REGULATIONS) OF 18.24 (COMMERCIAL ZONING DISTRICTS) OF TITLE 18 (ZONING) OF THE MUNICIPAL CODE OF THE CITY OF MORGAN HILL
IMPLEMENTING MINOR AMENDMENTS TO THE ADMINISTRATIVE OFFICE (CO) ZONING DISTRICT TO ALLOW VEHICLE-RELATED USES AND
OTHER COMPATIBLE USES ON MINIMUM ONE-ACRE LOTS
Recommendation:
1. Open/close public hearing;
2. Waive first and second reading of the Ordinance Amendment; and
3. Introduce Ordinance Amendment
FUTURE COUNCIL INITIATED AGENDA ITEMS
Note: in accordance with Government Code Section 54954.2(a), there shall be no discussion, debate and/or action taken on any request other than providing direction to staff to place the matter of business on a future agenda.
ADJOURNMENT
June 21, 2023
8 NOTICE
Any documents produced by the City and distributed to the majority of the City Council less than 72 hours prior to an open meeting, will be made available for public inspection at the City Clerk’s Counter at City Hall located at 17575 Peak Avenue, Morgan Hill, CA, 95037 and at the Morgan Hill Public Library located at 660 West Main Avenue, Morgan Hill, California, 95037 during normal business hours. (Pursuant to Government Code 54957.5)
PUBLIC COMMENT
Members of the Public are entitled to directly address the City Council concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located in the foyer of the Council Chambers and deliver it to the Minutes Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. When you are called, proceed to the podium and the Mayor will recognize you. If you wish to address the City Council on any other item of interest to the public, you may do so during the public comment portion of the meeting following the same procedure described above. Please limit your comments to three (3) minutes or less.
Please submit written correspondence to the Minutes Clerk, who will distribute correspondence to the City Council.
Persons interested in proposing an item for the City Council agenda should contact a member of the City Council who may plan an item on the agenda for a future City Council meeting. Should your comments require Council action, your request may be placed on the next appropriate agenda. Council discussion or action may not be taken until your item appears on an agenda. This procedure is in compliance with the California Public Meeting Law (Brown Act) Government Code §54950.
City Council Policies and Procedures (CP 03-01) outlines the procedure for the conduct of public hearings.
Notice is given, pursuant to Government Code Section 65009, that any challenge of Public Hearing Agenda items in court, may be limited to raising only those issues raised by you or on your behalf at the Public Hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to the Public Hearing on these matters.
The time within which judicial review must be sought of the action by the City Council, which acted upon any matter appearing on this agenda is governed by the provisions of Section 1094.6 of the California Code of Civil Procedure.
For a copy of City Council Policies and Procedures CP 97-01, please contact the City Clerk’s office (408) 779-7259, (408) 779-3117 (fax) or by email [email protected].
AMERICANS WITH DISABILITIES ACT (ADA)
In compliance with the Americans with Disabilities Act, if you are a disabled person and you need a disability-related modification or accommodation to participate in this meeting, please contact the City Clerk's Office at (408)779-7259, (408)779-3117 (fax) or by email [email protected]. Requests must be made as early as possible and at least two-full business days before the start of the meeting.
June 21, 2023
9
READY, SET…READ!
Morgan Hill Steve Tate Library
Heather Geddes
Community Librarian
Americans' Reports of Leisure and Activities:
About how many times in the past year, if any, did you do each of the following?
Activity Average
Go to a library 10.5
Go to a movie at a movie theater 5.3
Attend a live sporting event 4.7
Attend a live music or theatrical event 3.8
Visit a national or historical park 3.7
Visit a museum 2.5
Visit a gambling casino 2.5
Go to an amusement or theme park 1.5
Visit a zoo 0.9
Source: Dec. 2-15, 2019 GALLUP
Visiting the
library is the most
common cultural
activity
for Americans
STAR LIBRARY
Expenditure range: $30,000,000
• Items Borrowed per Year
• 668,118
• Weekly Hours Open
• 55 hours over 7 days
• Yearly Visitors
• 264,000
• Programs Offered
• 953
• Value to our Community
• $11,660,449.00
Morgan Hill by the Numbers
Outside of a dog, a book is a man's best
friend. Inside of a dog it's too dark to read.
Groucho Marx
The more that you READ
The more things you will KNOW
The more that you LEARN
The more places you’ll GO
DR. Seuss
• Reading increases intelligence.
• Reading exercises your brain & boosts your
brainpower.
• Helps you improve your communication & presentation
skills
• It can make you more empathetic.
• Reading can help you relax and reduce stress.
• It may help fight Alzheimer’s disease.
• It may help you live longer.
• Reading before bed helps you sleep.
Benefits of Books
20 mins a day
=
1.8 million
words per year
The frequency of reading to children at a young age has a direct causal effect on their schooling outcomes regardless of their family background and home environment.
Never read to, 4,662 words;
1-2 times per week, 63,570 words;
3-5 times per week, 169,520 words;
daily, 296,660 words; and
five books a day, 1,483,300 words
Children who aren’t reading at grade level by the end of third grade are four times as likely to drop out of high school.
Benefits of Books
At Santa Clara County Library District, YOU:
BELONG. CONNECT. DISCOVER.
• Books
• eBooks
• Audiobooks: downloadable, CD, Playaways
• Movies: DVDs, Blu-Ray, & streaming
• Music: downloadable & CDs
• Video Games: XBOX, PS3/4/5, Nintendo Switch, Wii
• Magazines: print & digital
• Launchpads
• Read With Me Kits
• Children’s books with audio players
What is Available to Borrow
Items for all ages in
English, Spanish, & other languages
Most items can be borrowed
for 3 WEEKS
What is Available to Borrow
MuseumPasses
Rosetta Stone LinkedIn Learning
State Parks Pass
& County Parks Pass
Did You Know?
Headspace Mobile App
Did you know we have?
Did you know we have?
• 458,054 eMaterials
• wifi
• meeting space
• Computers & Scanning
Magazines (Print and Online)
Summer Reading 2023 Earthcapades Circus
Thurs June 15 1pm
STEM with Tech Museum
Fri 6/9 & 6/16 10:00am
Magician Brian Scott
Thursday June 22 1015am
Python Ron
Thursday July 6 10:15am &
11:30am
Where the Forest Meets the Sea
Saturday July 8 10:15am
Afternoon Art Camp
Week of June 27
Afternoon STEAM Camp
Week of July 18
• Read Books
• Receive prizes
• Enjoy special
performances
and activities at
the library
- Free hot meals onsite for children & families
- June 12th – August 4th
- Monday – Friday 12pm-1pm
QUESTIONS?
At Santa Clara County Library District, YOU:
BELONG. CONNECT. DISCOVER.
From: Christina Turner
To: CityClerk
Subject: FW: Public comment 7/21
Date: Friday, June 16, 2023 3:39:52 PM
You can supplement.
From: Christina Turner
Sent: Friday, June 16, 2023 3:39 PM
To: [email protected]
Subject: FW: Public comment 7/21
Hi Nate – thank you for your email and sharing your concerns. The City Council will consider changes to our noise ordinance in September or October. I will share your email with the team that oversees our franchise agreement with Recology so that they can ensure that they are working in accordance with allowable times.
Thank you,
Christina
CITY OF MORGAN HILL
Christina J. Turner, CPA
City Manager
17575 Peak Avenue, Morgan Hill, California, USA 95037
d 408.776.7382 | c 408.839.1705
e [email protected] | www.morganhill.ca.gov Facebook | Twitter
Sent from my iPhone
Begin forwarded message:
From: Nate Mazur <[email protected]>
Date: June 16, 2023 at 8:00:10 AM PDT
To: CC Public Comment <[email protected]> Subject: Public comment 7/21
Please implement changes that reduce noise and gas pollution in the morning for people that live near businesses in Morgan Hill. People who live near businesses in morgan hill suffer every morning listening to loud trash trucks starting at 5:30 am and leaf blowers starting at 6:30.
Quite frankly it’s disgusting that businesses have preferred treatment to get their trash and properties as clean as possible before the actual people that live here at the detriment of our sleep and well being. Santa Clara country and Morgan Hill have shown that they put businesses over people with these decisions and not considering the noise or air pollution. It also creates a two tier system, because we all know that there aren’t the same noise or air pollutants in wealthier neighborhoods in the hills or tucked away in the valleys.
Some changes that I have thought of that would bring parity between businesses and ALL residents.
Start by changing the times at which trash is collected from businesses. Make it the same as collecting from homes, show that businesses aren’t above people by putting collection times AFTER 8 AM.
this should have already been done, but no more gas powered leaf blowers or landscaping equipment. Electric landscaping equipment is quieter, and emits less pollution.
WARNING: This message is from an external user. Confidential information such as social security numbers, credit card numbers, bank routing numbers, gift card numbers, wire transfer information and other personally identifiable information should not be transmitted to this user. For question, please contact the Morgan Hill IT Department by opening a new helpdesk request online or call 408-909-0055.
1 CITY COUNCIL STAFF REPORT
MEETING DATE: June 21, 2023
PREPARED BY:
Matthew Mahood, Economic Development Director
APPROVED BY: City Manager
ADOPT A RESOLUTION TO AUTHORIZE THE CITY MANAGER TO
EXECUTE AN IMPACT FEE FREEZE AGREEMENT, AND A
SEWER/TRAFFIC IMPACT FEE FINANCING AGREEMENT WITH
CUTINA MORGAN HILL LLC FOR A HOTEL DEVELOPMENT ON A 2.21
ACRE PARCEL IDENTIFIED BY ASSESSOR PARCEL NUMBER (APN)
726-58-006
RECOMMENDATION(S)
Adopt a resolution to authorize the City Manager to execute an Impact Fee Freeze Agreement and a Sewer/Traffic Impact Fee Financing Agreement with Cutina Morgan Hill LLC for a 114-room hotel development on a 2.21 acre parcel identified by assessor parcel number (APN) 726-58-006.
COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
Economic Development
Guiding Documents
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:
On June 21, 2017, the City Council adopted a Development Impact Fee Freeze Program. This program locks the impact fee to a specific date for a period of three years, giving the developer increased certainty as to the costs they will incur and creating an incentive to help offset the ever-increasing cost of new development. In return, the developer agrees to develop and apply for building permits within the three-year period.
On October 29, 2018, the City Council entered into a Fee Freeze Agreement with Evergreen Devco, Inc for the Evergreen Villages at the corner of Butterfield and Cochrane. This agreement locked the Impact Fees to the 2016/2017 Impact Fee
1 Schedule. Due to the COVID-19 pandemic and resulting economic conditions, the City has extended the Fee Freeze Agreement on two occasions through June 30, 2023.
To incentivize hotel development, in June 2022, the City Council adopted the Hotel Incentive Policy. Both incentive programs are consistent with the City’s General Plan Update 2035 and the 2017 Economic Development Blueprint as new lodging facilities support the City's goals for tourism, and the viability of the City’s sports and recreation facilities.
Details and Analysis:
In 2021, Cutina Morgan Hill LLC purchased 2.21 acres (APN 726-58-006) within the Evergreen Villages planned development area with the intent of building a new 114- room Holiday Inn Express. This is the same site that was previously entitled to a hotel but was never built due to the Covid-19 pandemic and resulting economic conditions.
Cutina Morgan Hill, LLC has submitted plans to the City and is currently seeking building permits and project financing. Cutina Morgan Hill, LLC has requested that the City Council honor the 2018 Evergreen Devco Fee Financing Agreement with the 2016/2017 Impact Fee Schedule that was in place when they purchased the land and began their hotel project.
While the Cutina hotel project does not qualify for the Hotel Incentive Policy since all of the project’s off-site improvements have already been completed, staff recommends the City Council approve an Impact Fee Freeze Agreement with the 2016/17 Impact Fee Schedule and instead of a three-year agreement, staff recommends an 18-month Fee Freeze Agreement. This will give Cutina LLC increased financial certainty and assist in getting this important project built. If authorized, Cutina will have until December 31, 2024, to apply for, and receive building permits and commence construction in order to benefit from the impact fee freeze extension. The estimated impact fees using the Fee Schedule for FY 2016-17 are $734,879.
Once completed and operational, it is estimated the new 114-room Holiday Inn Express could generate in excess of $30,000 in new property tax annually assuming a consistent land and construction valuation with similar sized projects. Property tax contributes to the City’s General Fund. In addition, once operational, a new 114-room upper midscale hotel could generate in excess of over $400,000 in transient occupancy tax (TOT) annually. The City collects 11% of Transient Occupancy Tax (TOT) on all hotel room revenue, which contributes to approximately 5% of the total General Fund revenue.
If the Developer applies for building permits before June 30, 2024, the estimated benefit received by the developer from the impact freeze is $307,473. If the developer applies for building permits after June 2024 and commences construction, but before December 31, 2024, the estimated benefit of the impact freeze is estimated at $349,167. If the developer applies for building permits after December 31, 2024, the impact fees in effect at that time will be applied so long as no extension is granted. The estimates assume that the City’s Impact Fees will increase at a rate of 4% per year. While the developer receives cost savings for each year the project is deferred, it is very likely that the cost of construction will continue to escalate in the coming years and therefore, continued
1 delays on building permit submittal and delay in construction will likely cost the developer more than the savings received from an impact fee freeze.
Impact fees have been identified as a barrier to development in Morgan Hill, in particular “greenfield” development which requires significant infrastructure investment by the developer. To address this issue and to attract new industrial and commercial development, the City created the Fee Freeze Program, which would provide some amount of certainty to the development community, while still collecting impact fees to support the infrastructure needs of the City. By incentivizing development of these greenfields, the City can generate property taxes, sales taxes and Transient Occupancy Taxes from these vacant properties, supporting the City's fiscal sustainability.
Fee Deferral Program Guidelines
In 2006, the City Council created a Sewer and Traffic Impact Fee Financing Program (also known as the Fee Deferral Program) to facilitate commercial and industrial development and assist with development impact fees. The City Council has provided the City Manager authority to approve fee financing agreements for up to $99,999.
Projects that request financing of $100,000 or more require City Council approval. The Program requires a 20% down payment at the time of permit and allows the remaining 80% balance to be paid over five years in monthly installments. The Sewer and Traffic Impact Fee Financing Program calculates interest at Local Agency Investment Fund (LAIF) + ½ percent, allowing the City to recover the lost interest it would have earned if the payment was made all at one time, plus ½%. The Program has been used by commercial developments/businesses over the years, including Madrone Village and several of the retail center’s commercial tenants, Cochrane Animal Hospital, The Granary, 76 Gas Station at Cochrane Commons, Shoe Palace, Applied Motion, Alara Cellars, and most recently, Giorgio’s Italian Grill and Pizzeria.
The impact fees for traffic and sewer on the 114-room hotel project on APN 726-58-006 total $581,528. The Fee Deferral Program requires 20% to be paid at the time of building permit issuance. A deposit of $116,306 would be required and the remaining $465,222 balance would be repaid via monthly installments over five years at an interest rate calculated using the most recent monthly LAIF + 1/2 percent. With City Council approval of the Resolution authorizing the City Manager to execute the Sewer and Traffic Impact Fee Financing and Security Agreement, the developer will be able to move more quickly and with more financial certainty to complete the project.
Conclusion:
1 Approving a Fee Freeze Agreement and Fee Financing Agreement with Cutina Morgan Hill, LLC is consistent with the Impact Fee Freeze Program, the 2035 General Plan Policy ED-4-9: To support the construction of a full range of new lodging facilities, 2017 Economic Blueprint Tourism Strategy, and the Hotel Incentive Policy (HIP) that was adopted by the City Council in June 2022.
COMMUNITY ENGAGEMENT:
Inform
The table below addresses the requirements set forth in State of California AB 562 (Government Code 53083) for publication of information related to an economic development subsidy and public hearings.
Name/address of the beneficiary of
the subsidy:
Cutina Morgan Hill, LLC
2801 Ocean Park #193
Santa Monica, CA 90405
Start and end dates, schedule for
the subsidy:
The Sewer and Traffic Impact Fee Financing
Agreement to start no later than December 31,
2024. The financing agreement is for a term of
five years for $465,222. The beneficiary will pay
monthly payments over the course of five years.
Describe the subsidy, estimated
total amount of expenditure of
public funds or revenue lost:
The Sewer and Traffic Impact Fee Financing
Agreement allows the beneficiary to make a 20%
down payment on the Sewer and Traffic Impact
fees and finance the balance over five years. The
City charges the beneficiary an interest rate of the
Local Agency Investment Fund (LAIF) + ½
percent. If the Sewer and Traffic Impact fees are
not paid by the beneficiary, the City will collect
pledged collateral to cover the balance of the
sewer and traffic impact fees. In addition, future
building permits will not be issued until all impact
fees are paid. No anticipated expenditure of
public funds or revenue lost as interest will be
collected over the term of the financing
agreement.
State of public purpose: Expand and enhance economic opportunities for businesses in the City, continue to expand the
City’s employment base, enhance tourism and
tourism opportunities, and continue to generate
the hereinafter defined Property Tax, Sales Tax
and Transient Occupany Tax that the City can
utilize to fund general governmental services such
as police, fire, street maintenance, and parks and
recreation programs.
Projected tax revenue: The projected increase in property tax collected from improvements to this site is approximately
$30,000 annually. In addition, a new 114-room
hotel could generate approximately $400,000 in
1 new Transient Occupancy Tax (TOT) annually.
Estimated number of jobs created
by subsidy:
The hotel construction will generate
approximately 100 temporary construction jobs
and approximately 30 new full-time hospitality
related jobs.
ALTERNATIVE ACTIONS:
The City Council could choose not to enter into a Fee Freeze Agreement with Cutina Morgan Hill, LLC. This option could potentially save the City at minimum $307,473 in impact fee revenue, but it also puts the 114-room hotel project at risk of not being completed.
The City of Morgan Hill could choose to use a different fee schedule other than the FY 2016/17 Fee Schedule for the Fee Freeze Agreement with Cutina Morgan Hill, LLC.
The City Council could choose not to approve the Sewer/Traffic Fee Financing Agreement which would require the developer to pay the proposed financing balance of $581,528 immediately in order to receive building permits.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
In February 2006, the City Council created the Fee Financing (Deferral) Program to stimulate commercial/industrial development. The existing program was modified in July 2009 to provide additional enhancements to projects both inside as well as outside the former Redevelopment Project Area
In June 2017, the City Council approved the Citywide Impact Fee Freeze Program establishing FY 2016-17 Development Impact Fees as the basis for the three-year term for any new commercial/industrial development project that enters into a Development Agreement for an Impact Fee Freeze approved by City Council.
In October 2018, the City Council approved a three-year Fee Freeze Agreement with Evergreen Devco on the 20- acre Evergreen Villages commercial center at the corner of Butterfield Blvd and Cochrane Road. Due to the COVID-19 pandemic, the City manager approved two one-year extensions of the Fee Freeze Agreement pursuant to City policy.
In June 2020, City Council reviewed the Impact Fee Freeze Program and established FY 2017-18 Development Impact Fees as the basis for the three-year term for any new commercial/industrial development project that enters into a Development Agreement for an Impact Fee Freeze approved by City Council.
In May 2022, City Council received an update on the Impact Fee Freeze Program. At
1 this time, the City Council established and locked City’s Impact Fees to the Impact Fees at the time of the executed agreement for up to three years for new industrial and commercial development provided the prospective development secures entitlements and submits for building permits within three years of the date of the agreement.
In June 2022, the City Council approved the Hotel Incentive Policy in alignment with Morgan Hill’s 2035 General Plan and 2017 Economic Blueprint which identify Tourism as a targeted industry and defines specific strategies and actions that should be taken to support, nurture, and advance this industry sector.
FISCAL AND RESOURCE IMPACT:
While the potential loss of revenue to the City from entering into this Impact Fee Freeze Agreement is expected to range between $307,473 to $349,167, securing the hotel development will yield multiple benefits for the city. The City expects to receive a onetime construction benefit of construction jobs and ancillary economic impact in the form of sales tax from local spending. Once operational, the City may receive an ongoing annual benefit of approximately $30,000 in Property Tax collections and over $400,000 in Transient Occupancy Tax (TOT) to the City’s General Fund.
CEQA (California Environmental Quality Act):
Not a Project
An Environmental Impact Report (EIR) for the Morgan Hill 2035 Project, which included the General Plan Update, was prepared in accordance with the California Environmental Quality Act (CEQA) and certified by the Morgan Hill City Council on July 27, 2016.
Commercial and industrial development as discussed above is consistent with the general plan policies for which the EIR was certified. There is no substantial evidence that freezing impact fees will have a significant effect on the environment beyond that already analyzed in the certified EIR; therefore, no further environmental analysis is required.
Any project specific development that occurs in the future will undergo an independent analysis pursuant to the requirements of CEQA.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MORGAN
HILL APPROVING AND AUTHORIZING THE CITY MANAGER TO
EXECUTE AN IMPACT FEE FREEZE AGREEMENT WITH CUTINA
MORGAN HILL FREEZING THE IMPACT FEES AT THE LEVEL SET IN 2016-2017 FEE SCHEDULE AND A SEWER/TRAFFIC IMPACT FEE
SECURED FINANCING AGREEMENT WITH CUTINA MORGAN HILL,
LLC IN THE AMOUNT OF $581,528 FOR THE DEVELOPMENT OF AN APPROXIMATELY 64,854 SQUARE FOOT HOTEL LOCATED ON 2.21
ACRES ON APN#726-58-006 IN THE CITY OF MORGAN HILL
WHEREAS, the City of Morgan Hill, a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”), is authorized to enter into contracts and agreements for the benefit of the City; and WHEREAS, the reasons supporting the entrance of the City into that certain agreement described in, and that is the subject of, this Resolution are set forth in detail in that certain City Council Staff Report submitted for the City Council meeting scheduled for June 21, 2023, submitted to the City Council by the City Manager (the “Staff Report”), the contents of which Staff Report are incorporated herein by this reference; and WHEREAS, the consideration by City Council of the adoption of this Resolution has been duly noticed pursuant to applicable laws and has been placed upon the City Council meeting agenda on the date set forth in the Staff Report, or to such date that the City Council may have continued or deferred consideration of this Resolution, and on such date the City Council conducted a public meeting on the adoption of this Resolution at which meeting the City Council provided members of the public an opportunity to comment and be heard and considered any and all testimony and other information provided in connection with the adoption of this Resolution; and
WHEREAS, existing law generally allows local governments to make their own decisions regarding local economic development matters; and
WHEREAS, the loss of redevelopment has left the City, as well as all cities within the State, with a loss of local resources to encourage economic development; and WHEREAS, the City Council has made findings consistent with Section 53083 of the California Government Code Assembly Bill 562 (“AB 562”). AB 562, titled “Economic Development Subsidies: Review by Local Agencies”, which was codified on October 13, 2013 and went into effect on January 1, 2014, require each local agency, as defined, to provide specified information to the public before approving an economic development subsidy or assistance of $100,000 or more, as defined, within its jurisdiction, and to review, hold hearings, and provide reports at specified intervals. Based upon the decision to terminate redevelopment statewide, the Governor and State Legislature recognized the necessity for local governments to encourage
employment and retain jobs and businesses by giving economic assistance to businesses and the importance of facilitating public input; and
WHEREAS, encouraging and developing other businesses in the City that are, or can be, key sources of transient occupancy tax revenue would diversify and increase revenue sources for the City’s general fund, which supports public services provided by the City to its residents and local businesses; and
WHEREAS, the City Council determines that the Sewer and Traffic Impact Fee Financing Agreement is consistent with the City’s Sewer and Traffic Impact Fee Deferral Program adopted in July 2007 to stimulate commercial development and is necessary for the preservation and protection of the public health, safety or welfare of the community, and is in accord with the public purposes and provisions of applicable State and local laws and requirements.
WHEREAS, Cutina Morgan Hill, LLC has obtained approval to construct a 114-room hotel, proposed to be a Holiday Inn Express (“Project”).
WHEREAS, the City Council determines that adoption of this Resolution is in the public interest due to the municipal tax revenue that would be generated by the Project.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOWLLOWS:
Section 1. Recitals. The City Council does hereby find, determine and resolve that all of the foregoing recitals are true and correct.
Section 2. Approval and Authorization. The City Council does further resolve, order and/or direct as follows:
a. That the Impact Fee Freeze Agreement with Cutina Morgan Hill, LLC, a California Limited Liability Corporation which will freeze impact fees at the level set in the FY2016-2017 Fee Schedule for new Commercial/industrial construction substantially in the form attached hereto as Exhibit A and incorporated herein by this reference, is hereby approved. b. That the Sewer/Traffic Impact Fee Secured Financing Agreement dated June 21, 2023 with Cutina Morgan Hill, LLC, a California Limited Liability Corporation, for the development of a new approximately 64,854 square foot hotel, proposed to be a Holiday Inn Express located on 2.21 acres on APN #726- 58-006, Morgan Hill in substantially in the form attached hereto as Exhibit B and incorporated herein by this reference (the “Sewer/Traffic Impact Fee Secured Financing Agreement”), is hereby approved.
c. That the Deed of Trust and Assignment of Rents to be executed by Cutina Morgan Hill, LLC, a California Limited Liability Corporation substantially in the form attached hereto as Exhibit C and incorporated herein by this reference, is hereby approved.
d. That the Secured Promissory Note to be executed by to be executed by Cutina Morgan Hill, LLC, a California Limited Liability Corporation substantially in the form attached hereto as Exhibit D and incorporated herein by this reference, is hereby approved.
e. That the City Manager is hereby delegated authority to and is authorized and directed to do everything necessary and appropriate to execute, if required, the Agreements substantially in the form attached hereto as Exhibits A, B, C and D.
Section 3. This Resolution shall take effect immediately upon adoption.
PASSED AND ADOPTED by the City Council of Morgan Hill at the meeting held on this 21st day of June, 2023 by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
APPROVED: ATTEST:
_____________________________ ________________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
CERTIFICATION
I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Resolution No. xxxxx, adopted by the City Council at a Regular Meeting held on June 21, 2023.
WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.
DATE MICHELLE BIGELOW, City Clerk
IMPACT FEE FREEZE AGREEMENT
BY AND BETWEEN
THE CITY OF MORGAN HILL
AND
CUTINA MORGAN HILL, LLC
IMPACT FEE FREEZE AGREEMENT
BY AND BETWEEN
THE CITY OF MORGAN HILL
AND
CUTINA MORGAN HILL, LLC
This Impact Fee Freeze Agreement (the "Agreement") is entered into as of June 21, 2023, by and between Cutina Morgan Hill, LLC, a California Limited Liability Corporation (the "Developer") and the City of Morgan Hill, a municipal corporation duly organized and existing under the laws of the State of California (the “City”), with reference to the following facts and purposes:
RECITALS
The following recitals are a substantive portion of this Agreement:
A. Pursuant to the authority of Morgan Hill Municipal Code Sections 3.56.095, 12.02.115, and Resolution Number _23-0__, the City has established an Impact Fee Freeze Program (the "Program") to freeze Development Impact Fees to the Fiscal Year 2016-17 Fee Schedule for new commercial/industrial construction.
B. Developer owns or leases certain real property in the City described in the attached Exhibit A (the "Subject Property") upon which improvements are to be made for a new hotel, anticipated to be a Holiday Inn Express (the “Project”).
C. The purpose of this Agreement is to lock in the Development Impact Fees for the Project.
The Project’s Development Impact Fees will be locked in at the rate set in the Fiscal Year 2016- 17 Impact Fee Schedule attached hereto and incorporated herein as Exhibit B.
D. Developer and City have determined that the Project is the type of development for which this Agreement is appropriate. This Agreement will help to eliminate uncertainty in annual changes to Development Impact Fees, provide for the orderly development of the Project consistent with the planning goals, policies, and other provisions of the City’s General Plan and City's Municipal Code, and otherwise achieve the goals and purposes for which the Development Impact Fee Program was adopted.
E. When constructed and open the Project will generate Transient Occupancy Tax (“TOT”) for the City creating a public benefit which is required in order to enter into this Agreement.
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ARTICLE 1
ADMINISTRATION
1.01 Definitions.
(a) The following terms, phrases and words shall have the meanings and be interpreted as set forth in this Section:
(1) “Impact Fees” shall mean those fees imposed so that developments bear a proportionate share of the cost of public facilities and service improvements that are reasonably related to the impacts and burdens of the Project, adopted pursuant to Morgan Hill Municipal Code Chapter 3.56 and California Government Code Section 66001 et seq. (2) "Legal Effect" shall mean the ordinance, resolution, permit, license or other grant of approval has been adopted by City and has not been overturned or otherwise rendered without legal and/or equitable force and effect by a court of competent jurisdiction, and all applicable administrative appeal periods and statutes of limitations have expired. (3) "New City Laws" shall mean any and all City ordinances, resolutions, orders, rules, official policies, standards, specifications and other regulations, whether adopted or enacted by City, its staff or its electorate (through their powers of initiative, referendum, recall or otherwise) that is not a Subsequent Approval, that takes "Legal Effect" after the Effective Date of this Agreement, and that applies City wide. “Effective Date” shall mean the date this Agreement is fully executed by both parties following approval of the Agreement by the City Council.
(4) "Project Approvals" mean, collectively, the Project's Existing Approvals and the Subsequent Approvals.
(5) "Property" shall mean that certain real property consisting of approximately __ acres located within the City, as more particularly described and shown on Exhibit A to this Agreement with APN #726-58-006.
(6) "Subsequent Approvals" and "Subsequent Approval" mean those City permits, entitlements, approvals or other grants of authority (and all text, terms and conditions of approval related thereto), that may be necessary or desirable for the development of the Project, that are sought by Developer, and that are granted by City. (b) To the extent that any defined terms contained in this Agreement are not defined above, then such terms shall have the meaning otherwise ascribed to them elsewhere in this Agreement, or if not in this Agreement, by controlling law.
1.02 Term.
The term ("Term") of this Agreement shall commence on the Effective Date, and then shall continue until December 31, 2024 or the issuance of all building permits and commencement of construction for the Project, whichever occurs first.
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ARTICLE 2
APPLICABLE LAW
2.01 Project Impacts and Costs.
(a) Agreement Subject to Project Mitigation Requirements. Notwithstanding any other express or implied term or condition of this Agreement (or the Approvals) to the contrary, throughout the Term of this Agreement, the full and complete mitigation of all environmental (including any mitigation measure adopted pursuant to CEQA), physical, fiscal and other impacts of the Project and the Property on the community and on the City of Morgan Hill and its services, facilities, operations and maintenance (collectively, "Project Mitigation") shall be borne by and shall be the sole and exclusive responsibility of the Project (and the Developer who is the owner of same). Such Project Mitigation may be conditions of any Applicable Law or Project Approval and may include a mix of different approaches, including without limitation, Developer construction of and/or financing of such services, facilities, operations and maintenance through the payment of impact fees or other fees, taxes, levies, assessments, or other financing mechanisms including without limitation, reimbursement agreements, Landscaping and Lighting Districts, Mello-Roos Districts, Community Facilities Districts, Assessment Districts, Tax-Exempt and Taxable Financing Mechanisms, Maintenance Districts and participation in the Statewide Communities Infrastructure Program (collectively, "Financing Mechanisms"). The necessary scope and extent of such Project Mitigation, and which combination of Financing Mechanisms should be employed relating to such Project Mitigation to assure success of the Project Mitigation, shall be determined by City, in its sole and exclusive discretion, pursuant to appropriate City ordinance, resolution, regulations or procedures, taking into account and guided by the pre-existing rights of others in the existing and future public services and facilities (including their operations and maintenance) that Developer may seek to use.
(b) Impact Fees. As part of the Project's exclusive obligation (and the Developer's as the owner of same) to cover Project Mitigation, Developer shall pay all Impact Fees as described in Exhibit B at the time any such Impact Fees become due and payable as provided for in the City’s Municipal Code, except as otherwise described and reduced by this Agreement. The Project's Impact Fees are frozen at the level set in the Impact Fee Schedule for Fiscal Year 2016-2017 Impact Fee Schedule in the attached Exhibit B, as long as all the building permits are obtained, and construction commenced on or before December 31, 2024 and a hotel project is constructed on the site.
(c) Processing Fees. The Project (including Developer as owner of same) shall be responsible for the costs to City of processing any and all Developer-requested land use approvals, including without limitation, building permits, plan checks, environmental studies required under CEQA and other similar requests for City permits and entitlements, when such costs are incurred by City. City shall impose those funding requirements needed to ensure that the processing costs to the City are fully covered by the Project (including Developer as owner of same). Further, if additional, accelerated, or more frequent inspections are requested by Developer of City than would otherwise take place in City’s ordinary course of business, then City may either hire additional contract inspectors, plan checkers, engineers or planners, or City
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may hire a full or part time employee. If City hires additional contractors, then Developer shall reimburse City, on a monthly basis in arrears, the cost to City of hiring such additional contract inspectors, plus Developer shall pay to City an additional ten percent (10%) of such cost to City on the same payment schedule. City shall use an additional 10% to defray administrative costs.
If City hires a full or part time employee, then Developer shall reimburse City, on a monthly basis, in arrears, for a pro rata share of the total cost to the City of such employee, plus ten percent (10%) for administrative costs, for the period from hire to the end of the Term of this Agreement.
2.02 Construction Codes.
With respect to the development of any or all of the Project or the Property, Developer shall be subject to the California Building Code and all those other State-adopted construction, fire and other codes applicable to improvements, structures, and development, and the applicable version or revision of said codes by local City action (collectively referred to as "Construction Codes") in place at that time that a plan check application for a building, grading or other permit subject to such Construction Codes is submitted to City for approval, provided that such Construction Codes have been adopted by City and are in effect on a City-wide basis.
2.03 Timing of Development.
Developer agrees to secure building permits and to begin construction of the Project in accordance with the time requirements set forth in the Construction Codes, as these exist on the Effective Date. In the event Developer fails to comply with the above permit issuance and commence construction no later than December 31, 2024 this Agreement shall expire. The deadline may be extended at the sole discretion of the City Manager should Developer face unreasonable delays beyond its control.
2.04 New City Laws.
(a) City shall not be precluded from adopting and applying New City Laws to the Project to the extent that such New City Laws are specifically required to be applied by State or Federal laws or regulations, and implemented through the Federal, State, regional and/or local level) , or that such New City Laws are necessitated by or arise from a declaration of City, local, state or federal declaration of a state of emergency.
(b) City shall not be precluded from adopting new Impact or Development Fees that are not included in the Fiscal Year 2016-17 Impact Fee Schedule. These fees include but are not limited to those fees which were adopted or implemented after the 2016-2017 Impact Fee Schedule up to the date of building permit issuance for the Project.
ARTICLE 3
PROCESSING
3.01 Processing.
(a) This Agreement does not provide Developer with any right to the approval of Subsequent Approvals nor to develop or construct the Project beyond that which is authorized
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in the Existing Approvals. For any Subsequent Approvals necessary for the Project, this Agreement simply provides a process by which such Subsequent Approvals may be processed by Developer, if and only if such Subsequent Approvals are compliant with all controlling California law (including proper Planning and Zoning Law and CEQA compliance), have secured approval of the Parties, and are adopted/approved by City, which shall retain all lawful discretion in this regard. Nothing in this Agreement shall be construed to limit the authority or obligation of City to hold necessary public hearings, or to limit the discretion of City or any of its officers or officials with regard to the Project Approvals that legally require the exercise of discretion by City. City's discretion as to the granting of Subsequent Approvals shall be the discretion afforded by the Applicable Law.
3.02 Significant Actions by Third Parties Necessary to Implement the Approvals. (a) At Developer's sole discretion, Developer shall apply for such other permits, grants of authority, agreements, and other approvals from other private and/or public and quasi-public agencies, organizations, associations or other entities ("Other Entity") as may be necessary to the development of, or the provision of services and facilities to, the Project ("Other Permits").
ARTICLE 4
DEFAULT, VALIDITY PROVISIONS, ASSIGNMENT
4.01 Resolution of Disputes.
(a) In the event either Party is in default under the terms of this Agreement, the other Party may elect, in its sole and absolute discretion, to pursue any of the following courses of action: (i) waive such default; (ii) pursue administrative remedies as provided herein; (iii) pursue judicial remedies as provided for herein; and/or (iv) terminate this Agreement. (b) Except as otherwise specifically stated in this Agreement, either Party may, in addition to any other rights or remedies, institute legal action to cure, correct, or remedy any default by another Party to this Agreement, to enforce any covenant or agreement herein, to enjoin any threatened or attempted violation hereunder, or to seek specific performance. It is expressly understood and agreed that the sole legal remedy available to Developer for a breach or violation of this Agreement by City shall be a legal action in mandamus, specific performance, and/or other injunctive or declaratory relief to enforce the provisions of this Agreement, and that Developer shall not be entitled to bring an action for damages including, but not limited to, lost profits, consequential damages or other economic damages. For purposes of instituting a legal action under this Agreement, any City Council determination under this Agreement shall be deemed a final agency action.
(c) The Parties agree to meet and confer regarding any dispute, in an effort to agree on utilizing Judicial Arbitration Mediation Services ("JAMS") for Alternative Dispute Resolution ("ADR"). However, no party shall be required to use JAMS or ADR.
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4.02 Force Majeure Delay, Extension of Times of Performance. (a) Performance by any Party hereunder shall be excused, waived or deemed not to be in default where delays or defaults are due to acts beyond a Party's control such as war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, unexpected acts of governmental entities other than City, including revisions to capacity ratings of the wastewater plant by the Regional Water Quality Control Board, the State Water Resources Board, enactment of conflicting State or Federal laws or regulations, or litigation (including without limitation litigation contesting the validity, or seeking the enforcement or clarification of this Agreement whether instituted by the Developer, City, or any other person or entity) (each a "Force Majeure Event").
(b) Any Party claiming a delay as a result of a Force Majeure Event shall provide the other Party with written notice of such delay and an estimated length of delay. Upon the other Party's receipt of such notice, an extension of time shall be granted in writing for the period of the Force Majeure Event, or longer as may be mutually agreed upon by the Parties, unless the other Party objects in writing within ten (10) days after receiving the notice. In the event of such objection, the Parties shall meet and confer within thirty (30) days after the date of objection to arrive at a mutually acceptable solution to the disagreement regarding the delay. If no mutually acceptable solution is reached, any Party may take action as permitted in this Agreement.
4.03 Third Party Legal Actions.
(a) In the event of any administrative, legal or equitable action or other proceeding instituted by any person, entity or organization (that is not a Party to this Agreement) challenging the validity of this Agreement, any Project Approvals, or the sufficiency of any environmental review under CEQA ("Third Party Challenge"), the Parties shall cooperate with each other in good faith in the defense of any such challenge. Third Party Challenge shall include all City legal fees, costs including but not limited to staff costs should a local initiative which results in blocking or slowing the Project be approved by the voters and City in its reasonable discretion determines that a judicial action should be filed concerning the initiative or City is sued concerning the initiative.
(b) City shall have the option to defend such Third Party Challenge or to tender the complete defense of such Third Party Challenge to the Developer ("Tender"). If City chooses to defend the Third Party Challenge or Developer refuses City's Tender, City shall control all aspects of the defense and Developer shall pay City's attorneys’ fees and costs (including related court costs).
(c) If Developer accepts City's Tender, Developer shall control all aspects of the defense and shall pay its own attorneys’ fees and costs (including related court costs) and shall indemnify and hold harmless City against any and all third-party fees and costs arising out of such Third Party Challenge. If City wishes to assist Developer when Developer has accepted the Tender, Developer shall accept that assistance and City shall pay City's own attorneys’ fees and costs (including related court costs) ("City Costs"), and Developer shall pay its own attorneys’ fees and costs (including related court costs), and shall indemnify and hold harmless City against
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any and all third-party fees and costs arising out of such Third Party Challenge (such third party fees and costs shall not include City Costs).
(d) If any part of this Agreement or any Project Approval is held by a court of competent jurisdiction to be invalid, the City shall: (1) use its best efforts to sustain and/or reenact that part of this Agreement and/or Project Approval; and (2) take all steps possible to cure any inadequacies or deficiencies identified by the court in a manner consistent with the express and implied intent of this Agreement, and then adopting or re-enacting such part of this Agreement and/or Project Approval as necessary or desirable to permit execution of this Agreement and/or Project Approval.
4.04 Estoppel Certificate.
(a) Any Party may, at any time, and from time to time, deliver written notice to any other Party, and/or to the Developer’s lender, requesting such Party to certify in writing that, to the knowledge of the certifying Party:
(1) This Agreement has not been amended or modified either orally or in writing or if so amended, identifying the amendments. (2) The Agreement is in effect and the requesting Party is not known to be in default of the performance of its obligations under this Agreement, or if in default, to describe therein the nature and amount of any such defaults.
(b) This written certification shall be known as an "Estoppel Certificate." A Party receiving a request hereunder shall execute and return such Estoppel Certificate within thirty(30) days following the receipt of the request, unless the Party, in order to determine the appropriateness of the Estoppel Certificate, promptly commences and proceeds to conclude an Annual Review. The Parties acknowledge that an Estoppel Certificate may be relied upon by Assignees and other persons having an interest in the Project, including holders of mortgages and deeds of trust. The City Manager shall be authorized to execute an Estoppel Certificate for City. (c) If a Party fails to deliver an Estoppel Certificate within the thirty (30) day period, as provided for in Section 4.04(b) above, the Party requesting the Estoppel Certificate may deliver a second notice (the "Second Notice") to the other Party stating that the failure to deliver the Estoppel Certificate within ten (10) working days following the receipt of the Second Notice shall constitute conclusive evidence that this Agreement is without modification and there are no unexcused defaults in the performance of the requesting Party. Failure to deliver the requested Estoppel Certificate within the ten (10) working day period shall then constitute conclusive evidence that this Agreement is in full force and effect without modification and there are no unexcused defaults in the performance of the requesting Party.
4.05 Termination.
This Agreement shall terminate upon the expiration of the Term, as set forth in Section 1.02, or at such other time as this Agreement is terminated in accordance with the terms hereof, whichever occurs first.
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ARTICLE 5
GENERAL PROVISIONS
5.01 Miscellaneous.
(a) Preamble, Recitals, Exhibits. References herein to "this Agreement" shall include the Preamble, Recitals and all of the exhibits of this Agreement. (b) Governing Law and Attorneys' Fees. This Agreement shall be construed and enforced in accordance with the laws of the State of California and legal actions commenced under or pursuant to this Agreement shall be brought in Santa Clara Superior Court. Should any legal action be brought by a Party for breach of this Agreement or to enforce any provision herein, the prevailing party of such action shall be entitled to reasonable attorneys' fees, court costs, and such other costs as may be fixed by the court.
(c) Project as a Private Undertaking. No partnership, joint venture, or other association of any kind between Developer, on the one hand, and City on the other hand, is formed by this Agreement. The development of the Property is a separately undertaken private development. The only relationship between City and Developer is that of a governmental entity regulating the development of private property and the owners of such private property. (d) Indemnification. Developer shall hold City, its elective and appointive boards, commissions, officers, agents, and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Developer's contractors, subcontractors', agents' or employees' operations on the Project, whether such operations be by Developer or by any Developer's contractors, subcontractors, or by any one or more persons directly or indirectly employed by, or acting as agent for Developer or any of Developer's contractors or subcontractors. Developer shall indemnify and defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid operations and Developer shall pay all reasonable attorney's fees and costs that the City may incur. City does not, and shall not, waive any rights against Developer which it may have by reason of the aforesaid hold-harmless requirement of Developer because of the acceptance of improvements by City, or the deposit of security with City by Developer. The aforesaid hold-harmless requirement of Developer shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, by reason of any of the aforesaid operations referred to in this subsection, regardless of whether or not City has prepared, supplied or approved of, plans and/or specifications for the Project Notwithstanding anything herein to the contrary, Developer’s indemnification of City shall not apply to the extent that such action, proceedings, demands, claims, damages, injuries or liability is based upon the active negligence of the City. (e) Interpretation/Construction. This Agreement has been reviewed and revised by legal counsel for both Developer and City, and any rule or presumption that ambiguities shall be construed against the drafting Party shall not apply to the interpretation or enforcement of this Agreement. The standard of review of the validity and meaning of this
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Agreement shall be that accorded legislative acts of City. As used in this Agreement, and as the context may require, the singular includes the plural and vice versa, and the masculine gender includes the feminine and neuter and vice versa.
(f) Notices.
(1) All notices, demands, or other communications that this Agreement contemplates or authorizes shall be in writing and shall be personally delivered or mailed to the respective Party as follows:
If to City: City Clerk
17575 Peak Avenue
Morgan Hill, CA 95037
Tel: (408) 779-7259
Fax: (408) 779-3117
With a Copy To: City Attorney
17575 Peak Avenue
Morgan Hill, CA 95037
Tel: (408) 779-7271
Fax: (408) 779-1592
If to Developer: Cutina Morgan Hill LLC
2801 Ocean Park #193
Santa Monica, CA 90405
With a Copy To:
(2) Any Party may change the address stated herein by giving notice in writing to the other Parties, and thereafter notices shall be addressed and transmitted to the new address. Any notice given to the Developer as required by this Agreement shall also be given to any lender which requests that such notice be provided. Any lender requesting receipt of such notice shall furnish in writing its address to the Parties to this Agreement. (g) Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a specific situation, is found to be invalid, void, or unenforceable, the remaining terms and provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect. (h) Jurisdiction. The interpretation, validity, and enforcement of the Agreement shall be governed by and construed under the laws of the State of California. (i) Entire Agreement. This Agreement, including these pages and all the exhibits (set forth below) inclusive, and all documents incorporated by reference herein, constitute the entire understanding and agreement of the Parties.
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(j) Signatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of Developer and City. This Agreement may be executed in multiple originals, each of which is deemed to be an original. (k) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all such counterparts shall together constitute one and the same instrument.
(l) Exhibits. The following exhibits are attached to this Agreement and are hereby incorporated herein by this reference for all purposes as if set forth herein in full:
Exhibit A Legal Description of Lot on Which Project is to be Located.
Exhibit B 2016-17 Impact Fee Schedule
IN WITNESS WHEREOF, City and Developer have executed this Agreement as of the date first hereinabove written.
CITY OF MORGAN HILL: DEVELOPER:
_________________________
s/_______________________________ s/_________________________ ________________________________ __________________________ Christina J. Turner Michelle Della Penna
City Manager Managing Partner
Corporate entities must provide a
Date: ___________________________ second signature:
s/_________________________
Attest:
__________________________
s/______________________________ Cosme Fagundo
Managing Partner
_________
Date: ______________________
________________________________
Deputy City Clerk __________________________
Approved as to Form:
s/________________________________
_________________________________
Donald A. Larkin
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City Attorney
Date: _____________________________
Exhibit A
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY ON WHICH
PROJECT IS BE LOCATED
For conveyancing purposes only: APN 726-58-006
PARCEL ONE: PARCEL 6 AS SHOWN ON THAT CERTAIN MAP ENTITLED AS "PARCEL MAP EVERGREEN VILLAGE" RECORDED ON JULY 17, 2019 IN BOOK 924, PAGES 45-47, SANTA CLARA COUNTY RECORDS.
PARCEL TWO: NON-EXCLUSIVE 60 FOOT WIDE ACCESS EASEMENT AS RETAINED IN THAT CERTAIN GRANT OF RECIPROCAL EASEMENTS, RECORDED JUNE 16, 1989, IN BOOK K988 AT PAGE 1623, OFFICIAL RECORDS, AND AS AMENDED BY THAT
CERTAIN AMENDMENT TO GRANT OF RECIPROCAL EASEMENTS RECORDED DECEMBER 16, 1998 AS INSTRUMENT NO. 14554697, OFFICIAL RECORDS, COUNTY
OF SANTA CLARA, STATE OF CALIFORNIA AND AS AMENDED BY THAT CERTAIN
SECOND AMENDMENT TO GRANT OF RECIPROCAL EASEMENTS RECORDED FEBRUARY 7, 2008 AS INSTRUMENT NO. 19736430, OFFICIAL RECORDS, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA.
PARCEL THREE: NON-EXCLUSIVE EASEMENTS FOR DRAINAGE, ACCESS, INGRESS
AND EGRESS, PARKING, AND UTILITIES, ENCROACHMENTS OF CERTAIN
IMPROVEMENTS, LANDSCAPING AND CONSTRUCTION OF IMPROVEMENTS,
STORM WATER AND DRAINAGE FACILITIES, AND SIGNAGE CONTAINED IN
COMMON OPERATION AND RECIPROCAL EASEMENT AGREEMENT, DATED DECEMBER 5, 2018, RECORDED DECEMBER 5, 2018 AS INSTRUMENT NO. 24076332,
AS AFFECTED BY FIRST AMENDMENT TO COMMON OPERATION AND
RECIPROCAL EASEMENT AGREEMENT, DATED JULY 17, 2019, RECORDED JULY 18, 2019 AS INSTRUMENT NO. 24228167.
For conveyancing purposes only: APN 726-58-006
________________________
version 07.01.16 std
Holiday Inn Express -
CITY OF MORGAN HILL PUBLIC WORKS DEPARTMENT
17575 Peak Avenue Morgan Hill CA 95037 - Office (408)778-6480 Fax (408)779-7236 6/8/2023
CITY, STATE, ZIP CODE
NAME
MAILING ADDRESS
DATE
TRACT / APN
ADDRESS / LOT
726-58-006
18595 Cochrane Road
PER RESOLUTION 5902,
EFFECTIVE JULY 1, 2006
AND PER RESOLUTION 5592,
INCREASED JANUARY 15, 2009
AND PER RESOLUTION 6082,
EFFECTIVE FEBRUARY 5, 2007
**SEE BACK PAGE FOR ADDITIONAL FEE
RESOLUTIONS
FEE SCHEDULE: 07.01.2016
IF BOX ABOVE CHECKED: FEE SCHEDULE IS ONLY FOR ESTIMATE PURPOSES. FEE SCHEDULE CALCULATED BASED ON INFORMATION
PROVIDED TO CITY BY APPLICANT. FINAL FEE SCHEDULE MAY DIFFER BASED UPON CHANGE IN SCOPE OF PROJECT.
CALCULATED BY
CHECKED BY
SEWER IMPACT FEES WITHIN RDA BOUNDARY
1. PRESSURE REGULATORS ARE REQUIRED ON ALL WATER SERVICES.
2. BACKFLOW PREVENTORS ARE REQUIRED ON ALL NON-RESIDENTIAL WATER SERVICES & FIRE SPRINKLER SERVICES. BACKFLOW INSPECTION FEE SHALL BE PAID PRIOR TO INSPECTION.
MA
NOTES:
DRAFT
3. MULTI-FAMILY IS DEFINED AS ANY UNIT WITH TWO BEDROOMS OR LESS.
SINGLE FAMILY IS DEFINED AS ANY UNIT WITH 3 BEDROOMS OR MORE.
Evergreen Village
N/A
BUILDING PERMIT #
(write Initials below)
CHECK APPLICABLE SCENARIO BELOW DATE BLD PERMIT ISSUED
RDA SEWER ALLOCATION
COMPLETED BY:
SEWER IMPACT FOR COMMERCIAL & INDUSTRIAL PROJECTS
TEMPORARILY ADJUSTED TO $0 EFFECTIVE 02/05/07 PER RES# 6082.
SEWER IMPACT FOR SINGLE-FAMILY AND MULTI-FAMILY RESIDENTIAL TEMPORARILY ADJUSTED TO $0 EFFECTIVE 02/05/07.
PROJECT DESCRIPTION FEE SCHEDULE EXPIRATION DATE PHONE NUMBER ** BOTH NORMAL FEES AND ADJUSTED FEES ARE SUBJECT
TO ANNUAL CPI INCREASES.
PRELIMINARY
DRAFT
COMMERCIAL OR INDUSTRIAL WITHIN RDA BOUNDARY RESIDENTIAL PROJECTS WITHIN RDCS DOWNTOWN AREA NOT IN RDA AREA BOUNDARY COMMERCIAL OR INDUSTRIAL SHELL THIS FEE SCHEDULE IS ESTIMATE ONLY Q:\Matt Mahood\Impact Fee Freeze Policy\Cutina Morgan Hill (HIE)\PW FEES 07.01.16 _Holiday Inn Express - Evergreen Village 1
EXHIBIT B
2016-17 Impact Fee Schedule
1″ x 1 = $468 1 Side $66 /LF x 0 LF = $0
1 ½″ x 1 = $1,434 2 Sides $37 /LF x 0 LF = $0
2″ x 1 = $1,619
= $0
x = $0
a) Residential
$3,521 $14,183 /DU x DU = $0
$12,004 /DU x DU = $0
x 3 Each = $186 $48.56 /GPD x GPD = $456,707
$48.56 /GPD x GPD = $0
x = $0
1 Side $66 x 0 LF = $0
2 Sides $37 x 0 LF = $0
$14,183 /DU x DU = $0
$12,004 /DU x DU = $0
a) Residential $48.56 /GPD x GPD = $0
$3,624 /DU x 0 DU = $0 (Commercial & Industrial)
(Single Family)
$3,269 /DU x 0 DU = $0 = $456,707
(Multi Family)
= $456,707
b) Commercial & Industrial
(Includes Landscape Service)
$10,288 /AC x 2.209 AC = $22,726
x = $0
1 Side $108 /LF x 0 LF = $0
= $22,726 2 Sides $53 /LF x 0 LF = $0
= $26,433
$3,847 /DU x DU = $0
(Single Family)
ENGINEERING ESTIMATE: $2,001 /DU x DU = $0
DATE ENGINEERING EST. SUBMITTED: (City estimate) (Multi Family) $41,897 /ACRE x AC = $92,550
13.3% $1 to $100,000 = $1,995 (Commercial & Office)
11.8% $100,001 to $200,000 = $0 $30,505 /ACRE x AC = $0
10.3% $200,001 to $500,000 = $0 (Industrial)
8.8% OVER $500,000 = $0
= $1,995
= $0 x = $0
ASSUMING NO CREDIT IF REFUND PROVIDED TO MASTER DEVELOPER = $1,995 = $92,550
= $92,550
LONG RANGE PLANNING FEE (15% of E&I) = $299
STORM DRAIN FEE TOTALS
(Authority: Res. #5902 approved 05.04.05, Updated 07.01.09) $15,000 0
ENGINEERING FEE
0 STORM CREDITS
0 5A. LONG RANGE PLANNING FEE:
ENGINEERING FEE TOTAL SUBTOTAL
207-37912
DEPOSIT PAID $0
% APPLIES TO ENGINEER'S ESTIMATE
(Minimum $500.00):
5. ENGINEERING & INSPECTION FEE: 206-38734
(Authority: Res. #5658 approved 03.19.03, Updated 07.01.16)
SUBTOTAL
7. SEWER IMPACT FEE:
0 (Authority: Res. #5658 approved 03.19.03, Updated 07.01.16) STORM DRAIN FEES:
$0
SEWER CREDITS
$0 0
0 9. STORM DRAIN IMPACT FEE:
(Auth: Res. #5592 apprv'd 8.21.02, Amdd by Res. 6326 4.28.10, Increased 01.15.16) 651-37648
(Auth: Res. #5592 approved 08.21.02, Increased 01.15.16)
WATER CREDITS
SUBTOTAL
SEWER FEE TOTALS
0 $62
SUBTOTAL =
(Single Family)
b) Commercial & Industrial
0 RDA ASSUMED SEWER OBLIGATION
0 2.209
4. WATER IMPACT FEE:
(Authority: Res. #5658 approved 03.19.03, Updated 07.01.16) $1,434
3" or larger-Time & Material + Meter Cost
650-37672 6. SEWER FRONTAGE CHARGE: 640-37663
(Authority: Res. #5658 approved 03.19.03, Updated 07.01.16) 303-37648
8. STORM DRAIN FRONTAGE CHARGE:
WATER FEES: SEWER FEES:
304-37663
(Auth: Res. #6082 approved 02.05.07 &
Res. #5592 approved 08.21.02, Increased 01.15.16).
0 (Multi Family)
641-37648
METER CREDITS
(Multi Family)
0 (Single Family)
$1,619
9,405
0 (Authority: Res. #5658 approved 03.19.03, Updated 07.01.16) $468
2. BACKFLOW CONST. INSPECTION: 650-37859
3. WATER FRONTAGE CHARGE: 650-37663
1. METER DEPOSIT:
$0 0
WATER FEE TOTALS
Q:\Matt Mahood\Impact Fee Freeze Policy\Cutina Morgan Hill (HIE)\PW FEES 07.01.16 _Holiday Inn Express - Evergreen Village 2
1 Side $681 x 0 LF = $0 PARCEL MAP: = $0
2 Sides $343 x 0 LF = $0 TRACT MAP: = $0
$5,378 /DU x 0 DU = $0 $767 /DU x DU = $0
(Single Family)
$3,910 /DU x 0 DU = $0 $741 /DU x DU = $0
(Multi Family)
$5,181 /DU x 0 DU = $0 $1,666 /ACRE x AC = $3,680
(Commercial)
$3,771 /DU x 0 DU = $0 $2,333 /ACRE x AC = $0
(Industrial)
x = $0
x 0 EA = $0
= $3,680
x = $0
= $0
$118 /DU x DU = $0
(Single Family)
$112 /DU x DU = $0
(Multi Family)
$1,863 /DU x 0 DU = $0 $1,550 /ACRE x AC = $3,424
(Commercial)
$1,155 /DU x 0 DU = $0 $1,550 /ACRE x AC = $0
(Industrial)
$1,863 /PHT x 67 PHT = $124,821
$1,863 /PHT x 0 PHT = $0 x = $0
= $3,424
x = $0
= $124,821
$512 /DU x DU = $0
(Single Family)
$493 /DU x DU = $0
(Multi Family)
$1,974 /DU x 0 DU = $0 $1,128 /ACRE x AC = $2,492
(Commercial)
$1,902 /DU x 0 DU = $0 $1,579 /ACRE x AC = $0
(Industrial)
x = $0 x = $0
= $0 = $2,492
$200 /DU DU = $0 $3,663 /DU x DU = $0
(Single Family)
$1,395 /AC AC = $0 $3,213 /DU x DU = $0
(Multi Family)
x 0 = $0 x = $0
= $0 = $0
$0 0
TRAFFIC CREDITS
(Multi Family)
0 2.209
POLICE CREDITS
FIRE FEE TOTAL
18. PUBLIC FACILITIES IMPACT FEE:
0 FIRE CREDITS
$0 0
0 0
347-37648
$0
PARK CREDITS
$0
0 0
0 2.209
0 PUBLIC FACILITIES CREDITS
$0 0
0 $0
BURROWING OWL CREDITS
$0
BURROWING OWL FEE TOTAL
(Residential)
(Commercial/Industrial)
0 (Auth: Res. #6671 approved 07.17.13, Increased 01.15.16)
PUBLIC FACILITIES CREDITS
TRAFFIC FEE TOTAL
(Authority: Res. #5765 approved 01.21.04, Increased 07.01.16)
PUBLIC FACILITIES FEE TOTAL
14. BURROWING OWL MITIGATION: 232-38145
LIBRARY FEE TOTAL
PUBLIC FACILITIES FEE TOTAL
(Auth: Res. #5837 apprv'd 09.01.04,Amdd by Res. 6326 4.28.10, Increased 01.15.16)
12. TRAFFIC IMPACT FEE:
13. LIBRARY IMPACT FEE: 348-37648
(Single Family)
309-37648
LIBRARY CREDITS
$0 0
(Industrial)
(Multi Family)
(Auth: Res. #15-152 approved 06.17.15 &
Res. #5592 approved 08.21.02, Increased 01.15.16).
(Single Family)
(Commercial)
(Single Family - Sub)
(Single Family - No Sub)
$5,667
(Authority: Res. #5658 approved 03.19.03, Updated 07.01.16) $3,805
(Authority: Res. #5658 approved 03.19.03, Updated 07.01.16) (Auth: Res. #5592 apprv'd 8.21.02, Amdd by Res. 6326 4.28.10, Increased 01.15.16) 0 11a. PARK IMPACT FEE: 301-37648 16. POLICE IMPACT FEE: 311-37648 (Auth: Res. #5592 apprv'd 8.21.02, Amdd by Res. 6326 4.28.10, Increased 01.15.16)
17. FIRE IMPACT FEE:
0 (Multi Family - Sub)
(Multi Family - No Sub)
(Auth: Res. #5686 apprv'd 06.18.03, Amdd by Res. 6326 4.28.10, Increased 01.15.16)
POLICE FEE TOTAL
$0 0
0 2.209
10. UNDERGROUNDING UTILITIES: 350-37649
PARK FEE TOTAL
313-37648
15a. MAP CHECK FEE: 206-38716
11b. PARK MAINTENANCE DEV. FEE: 302-37649
CREDITED UNDER GRADING & SITE PERMIT (GRD2021-0005)
20. COMMNTY/REC CTRS IMPACT FEE: 360-37648
(Auth: Res. #15-152 apprv'd 8.17.15, increased 01.15.16) 0 0
Q:\Matt Mahood\Impact Fee Freeze Policy\Cutina Morgan Hill (HIE)\PW FEES 07.01.16 _Holiday Inn Express - Evergreen Village 3
BMP Initial Set-up = $660 SWRMP Tier 3 Project $9,892
= $792 ESC Type 1 $8,200
= $2,070 Type 1 & 2 Projects: +1 Acre Soil Dist $863
= = $734,879
= $3,522
& COCHRANE LLC (MASTER DEVELOPER/LANDLORD), WHICH WAS AMENDED, AND HAVE BEEN EXTENDED PER CITY COUNCIL RESOLUTION 21-004 THROUGH JUNE 30, 2023.
DEVELOPER/LANDLORD. THE AMOUNT OF APPLICABLE FEE CREDITS WILL BE NOTED IN FINAL FEE SCHEDULE.
NO FRONTAGE FEES APPLY TO THIS PROJECT.
Site (APN): 726-58-006 Site Acreage (per Recorded Evergreen Village Parcel Map): 2.209 AC Traffic:
Total PHT = 0.59 x 114 = 67 PHT
Sewer:
Hotel Sewer Coefficient: 82.5 gpd per room
Sewer fee = 82.5 x 114 = 9,405 gpd
Hotel Traffic Coefficient: 0.59 PHT per room PHT = Peak Hour Trip Notes & Comments:
New 114-room hotel (67,060 sq. ft building).
OTHER:
THIS IS DUE TO THE IMPACT FEE FREEZE AGREEMENT BETWEEN THE CITY AND EVERGREEN-BUTTERFIELD
THE STORM DRAIN IMPACT FEE AND BURROWING OWL FEE WERE PREVIOUSLY PAID BY THE MASTER (ITE 11th Edition - #310 Hotel; Weekday Peak Hour of Adjacent Street Traffic - PM peak) THE IMPACT FEES FOR THIS PROJECT IS LOCKED TO THE FISCAL YEAR 2016-2017 FEE SCHEDULE. 19 TOTAL FEES DUE
Additonal BMPs
SUB-TOTAL OF ABOVE FEES
Stormwater O&M Agreement (139)
Q:\Matt Mahood\Impact Fee Freeze Policy\Cutina Morgan Hill (HIE)\PW FEES 07.01.16 _Holiday Inn Express - Evergreen Village 4
1 RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
City Clerk
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
TO BE RECORDED WITHOUT FEE (SPACE ABOVE LINE FOR RECORDER'S USE) PER GOVERNMENT CODE 27383 and 6103
SEWER/TRAFFIC FEE SECURED FINANCING AGREEMENT
This Sewer/Traffic Fee Secured Financing Agreement (the "Agreement") is entered into as of ______________________, 2023, by and between CUTINA MORGAN HILL, LLC, a California Limited Liability Corporation company (the "Borrower") and the City of Morgan Hill, a municipal corporation duly organized and existing under the laws of the State of California, California, (“City”) with reference to the following facts and purposes:
RECITALS
The following recitals are a substantive portion of this Agreement:
A. The City has established a Sewer/Traffic Fee Financing Program (the "Program") to defer sewer and traffic fees for new and expanding industrial and commercial businesses.
B. Borrower owns certain real property in the City described in the attached Exhibit "1” (the "Subject Property") upon which improvements are to be made for a new hotel, anticipated to be a Holiday Inn Express (the “Project”).
C. The purpose of this Agreement is provide a financing mechanism for the Sewer/Traffic Impact Fees for the Project.
D. On June 21, 2023, the City granted a request of the Borrower to be a Program participant with respect to CUTINA MORGAN HILL, LLC Sewer and Traffic Fees in the aggregate amount of Five Hundred Eighty-One Thousand, Five Hundred Twenty-Eight Dollars and Zero Cents ($581,528.00) (the "Fees"), payable by the Borrower in connection with Improvements on the Property.
E Borrower and City have determined that the Project is the type of development for which this Agreement is appropriate. This Agreement will assist Borrower in developing the Project by providing a financing mechanism for the Sewer/Traffic Impact Fees for the Project consistent with the planning goals, policies, and other provisions of the City’s General Plan and City's Municipal Code, and otherwise achieve the goals and purposes for which the Sewer/Traffic Fee Financing Program was adopted.
F. When constructed and open the Project will generate Transient Occupancy Tax (“TOT”) for the City creating a public benefit which is required in order to enter into this Agreement.
2 G. As a condition of participation in the Program and in consideration of the City's agreement to defer payment of the Fees as specified herein, the Borrower is required to execute this Agreement and the documents specified setting forth the terms and conditions for payment of the Fees by the Borrower to the City and establishing security for such payment.
NOW, THEREFORE, the City and the Borrower agree as follows:
1. Financing of Fee. Upon satisfaction of the conditions set forth in Section 3 below but not later than the date the Borrower is required to pay a minimum of twenty percent (20%) of the Sewer/Traffic Fees for the Improvements on the Property, before December 31, 2024 or the issuance of the first building permit for the Project, whichever is earlier (“Initial Payment Date”), in accordance with applicable City ordinances and regulations, the Borrower shall be granted the right to pay the Fees pursuant to the Program in accordance with the payment terms set forth in Section 2 below. If the conditions set forth in Section 4 below are not satisfied in full, the Borrower shall pay the Fees in their entirety on the Initial Payment Date or on such other date(s) as provided in the applicable City ordinances and regulations, and this Agreement shall terminate and be of no further force and effect.
2. Payment of Fees. The Fees shall be paid as follows:
(a) Twenty percent (20%) of the Sewer and Traffic Impact Fees, One Hundred Sixteen Three Hundred Six Dollars, and Zero Cents ($116,306), shall be paid to the City on the Initial Payment Date as the "Down Payment". Additionally, all other impact fees in the amount of One Hundred Fifty-Three, Three Hundred Fifty-One Dollars and Zero Cents ($153,351.00) shall be paid by the Initial Payment Date, for a total of Two Hundred Sixty-Nine, Six Hundred Fifty-Seven Dollars and Zero Cents ($269,657.00).
(b) The remaining balance of the Fees (total fees minus the Down Payment) of Four Hundred Sixty-Five Thousand, Two Hundred Twenty-Two Dollars and Zero Cents ($465,222.00) (“Financed Fees”) shall be paid in sixty (60) equal monthly installments and shall bear fixed interest at the PMIA Average Monthly Effective Yield as determined by the most recent PMIA/LAIF Performance Report rate plus 0.5% as determined on the Initial Payment Date of XXX and XXX hundredth percent (X.XX%) per annum compounded monthly. The monthly installment shall be $XXX per month which shall commence on the date of the issuance of the Certificate of Occupancy, or no later than December 31, 2025 whichever occurs first continuing on the first day of each month thereafter until full principal amount and all interest thereon has been paid. Maturity date is five years after the first payment is made or December 31, 2030, whichever occurs first.. Borrower may prepay the balance without penalty.
3. Promissory Note and Deed of Trust. In order to secure and perfect Borrowers’ obligation to repay the Financed fees, Borrower agrees to execute a promissory note in the form provided by City (the "Promissory Note") attached hereto and incorporated herein as Exhibit “2”, which shall be secured by a Deed of Trust, attached hereto and incorporated herein as Exhibit “3”. This Agreement, the Promissory Note and the Deed of Trust shall be collectively referred to herein as the "Loan Documents." Borrower agrees to apply for and receive building permits for and commence construction of a hotel on the Subject Property on or before December 31, 2024. City and the Borrower agree that the Loan Documents shall create and perfect the City’s security interest in the real property set forth in Exhibit A as security) for the payment of the Financed Fees.
4. Conditions to Financing of Fees. As conditions to the Borrower's right to finance payment of the Fees in the manner set forth in Sections 1, 2 and 3 the representations set forth in Section 7 must remain true and correct as of the Initial Payment Date, and the following actions must be completed by not later than the Initial Payment Date (unless waived in writing by the City):
(a) Delivery to the City of the Down Payment;
3 (b) Execution by the Borrower and delivery to the City of the appropriate Loan Documents; and
(c) Recordation of the Deed of Trust.
5. Events of Default. Each of the following shall constitute a "Default" by the Borrower under the Agreement and the other Loan Documents:
(a) Failure by the Borrower to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents (including, without limitation, the obligation to repay the Financed Fees as provided in Section 2(b) of this Agreement), if such failure remains uncured fifteen (15) days after written notice of such failure is mailed by the City to the Borrower; provided, however, that if a lesser period or notice requirement is allowed before a Default occurs under any of the following subsections or under any other Loan Document, such lesser requirement shall control in this Agreement.
(b) Any representation or warranty contained in any Loan Document proves to have been incorrect in any material respect when made or on the Initial Payment Date. (c) A court having jurisdiction shall have made or entered any decree or order (1) adjudging the Borrower to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of the Borrower or seeking any arrangement for the Borrower under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of the Borrower in bankruptcy or insolvency or for any of their properties, or (4) directing the winding up or liquidation of the Borrower, if any such decree or order described in clauses (1) to (4), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days unless a lesser time period is permitted for cure under any other lien on the Collateral, in which event such lesser time period will apply under this subsection (c) as well; or the Borrower shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (1) to (4), inclusive. The occurrence of any Default in this subsection shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note. (d) The Borrower shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) days after such event (unless a lesser time period is permitted for cure under any other lien on the Collateral, in which event such lesser time period shall apply under this subsection (d) as well) or prior to sooner sale pursuant to such sequestration, attachment, or execution. The occurrence of any Default in this subsection shall act to accelerate automatically, without the need for any action by the Agency, the indebtedness evidenced by the Note. (e) The Borrower shall have voluntarily suspended its business or, if the Borrower is a partnership, the partnership shall have been dissolved or terminated. (f) The condemnation, seizure, or appropriation of all or, in the opinion of the City, a substantial part of the Collateral, except for a condemnation initiated by the City. (g) There shall not take place any default declared by any lender under any loan document related to any other loans secured by a deed of trust or lien on the Collateral. The occurrence of Default under this subsection (g) shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note. (h) Failure to obtain permits for and diligently construct the Project and open the Project to paying guests and to collect Transient Occupancy Tax as required by City ordinance.
4 6. Remedies. The occurrence of any Default will, either at the option of the City or automatically, where so specified, give the City the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, including but not limited to the following:
(a) The City shall have the right to cause all indebtedness of the Borrower to the City under this Agreement, together with any accrued interest thereon, to become immediately due and payable. The Borrower waives all right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured party under the law.. The Borrower shall be liable to pay the City on demand all expenses, costs and fees (including, without limitation, attorney's fees and expenses) paid or incurred by the City in connection with the collection of the Financed Fees.
(b) The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require the Borrower to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents.
(c) The City shall maintain all rights to foreclose upon the Subject Property for a default under the terms of the Promissory Note or the Deed of Trust.
(d) No right, power, or remedy given to the City by the terms of this Agreement, or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against the Borrower and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.
7 Representations and Warranties. The Borrower hereby represents and warrants to the City as follows:
(a) The Borrower is duly organized, validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted.
(b) The Borrower and the Guarantor, as applicable, have full power and authority to execute and deliver this Agreement and to make and accept the obligations contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
(c) This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of the Borrower and the Guarantor, as applicable, and all actions required under the Borrower's and the Guarantor's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken.
(d) This Agreement and the Loan Documents and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of the Borrower, as applicable, enforceable against them in accordance with their respective terms.
5 (e) The Borrower is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or the Property, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to the Borrower, materially affect the Borrower's ability to meet its obligation or impair the security to be given to the City pursuant hereto. (f) To the best knowledge of the Borrower:
(1) The Property is not and has not been a site for the use, generation, treatment, manufacture, storage, disposal or transportation of any hazardous materials and there are no hazardous materials located in, on or under the Property; (2) The Property is presently in compliance with all hazardous materials laws, including, without limitation, those relating to soil and ground water conditions; (3) There have been no investigations, inquiries, notices, orders, hearings, actions, or other proceedings by or before any governmental agency are pending or threatened against the Borrower and/or the Property pertaining in any way to (A) the use, generation, treatment, manufacture, storage, presence, disposal or transportation of hazardous materials from, under, into or on the Property or any portion thereof and/or (B) the violation or alleged violation of, or the noncompliance or alleged noncompliance with, any hazardous materials law; and (4) No underground storage tanks are presently located, or in the past have been located, in, on or under the Property.
8. Indemnification. Borrower shall hold City, its elective and appointive boards, commissions, officers, agents, and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Borrower’s contractors, subcontractors', agents' or employees' operations on the Project, whether such operations be by Borrower or by any Borrower's contractors, subcontractors, or by any one or more persons directly or indirectly employed by, or acting as agent for Borrower or any of Borrower's contractors or subcontractors. Borrower shall indemnify and defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid operations and Borrower shall pay all reasonable attorney's fees and costs that the City may incur. City does not, and shall not, waive any rights against Borrower which it may have by reason of the aforesaid hold-harmless requirement of Borrower because of the acceptance of improvements by City, or the deposit of security with City by Borrower. The aforesaid holdharmless requirement of Borrower shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, by reason of any of the aforesaid operations referred to in this subsection, regardless of whether or not City has prepared, supplied or approved of, plans and/or specifications for the Project Notwithstanding anything herein to the contrary, Borrower’s indemnification of City shall not apply to the extent that such action, proceedings, demands, claims, damages, injuries or liability is based upon the active negligence of the City.
9. General Provisions.
(a) Time is of the essence in the performance of all obligations under this Agreement and the Other Loan Documents.
(b) Any notice requirement set forth herein shall be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows:
Borrower:
CUTINA MORGAN HILL, LLC
Attn: Michelle Della Penna
6 2801 Ocean Park #193
Santa Monica, CA 90405
City: City of Morgan Hill Copy to: City Clerk
17575 Peak Avenue City of Morgan Hill
Morgan Hill, CA 95037 17575 Peak Avenue
Attention: Finance Director Morgan Hill, CA 95037
Such addresses may be changed by notice to the other party given in the same manner as provided above.
(c) If either party brings an action or proceeding to enforce, protect or establish any right or remedy hereunder or under any of the Loan Documents, the prevailing party shall be entitled to recover from the other party its costs of suit and reasonable attorneys' fees which shall be fixed by the court.
(d) If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired.
(e) This Agreement and the Loan Documents and other instruments given pursuant to this Agreement shall be construed in accordance with and be governed by the laws of the State of California. Any action commenced about thus Agreement or any of the Loan Documents shall be filed in the central branch of the Santa Clara County Superior Court. (f) This Agreement may not be changed orally, but only by agreement in writing signed by the Borrower and the City.
(g) The Loan Documents together embody the agreement between the City and the Borrower for the payment of the Fee. No verbal agreements or conversations with any officer, agent or employee of the City prior to the execution of this Agreement shall affect or modify any of the terms or obligations contained in the Loan Documents. Any such verbal agreement shall be considered unofficial information and in no way binding upon the City. (h) This Agreement and its terms and conditions shall be binding on the successor in interest to Borrower’s Project or the Property.
(i) No official or employee of the City shall be personally liable for any default or liability under this Agreement.
(j) The Borrower covenants there shall be no discrimination based upon race, color, creed, religion, gender, marital status, sexual orientation, age, disability, national origin, or ancestry in any activity pursuant to this Agreement.
(k) The Borrower shall comply with all applicable laws ordinances, codes, and regulations of the federal, state, and local governments.
(l) The Borrower shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.
(m) Whenever any approval, notice, direction, consent, request, waiver of condition or other action by the City is required or permitted under this Agreement, such action may be given, made, or taken by the City Manager, or by any person who shall have been designated in writing to the Borrower by the City Manager, without further approval by the City Council, and any such action shall be in writing.
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(n) The following exhibits are attached to and incorporated by reference in this Agreement:
Exhibit A Real Property
Exhibit B Promissory Note
Exhibit C Deed of Trust
If any term or provision of any Loan Document conflicts with any term or provision of this Agreement, the term or provision of this Agreement shall control to the extent of such conflict.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.
BORROWER: CUTINA MORGAN HILL, LLC a Limited Liability California Corporation CITY: CITY OF MORGAN HILL a municipal corporation
______________________________ ______________________
Michelle Della Penna, Managing Partner Christina Turner, City Manager Date: Date:
Approved as to Form:
____________________________
Cosme Fagundo, Managing Partner
Date: _
Donald A. Larkin, City Attorney
Date:
Attest:
Michelle Bigelow City Clerk
Date: _______________
8 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California )
County of Santa Clara )
On , 2023, before me, , personally appeared
, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY PUBLIC
(ABOVE AREA FOR NOTARY SEAL)
9 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California )
County of Santa Clara )
On , 2023, before me, , personally appeared
, who proved to me on the
basis of satisfactory evidence to be the person whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY PUBLIC
(ABOVE AREA FOR NOTARY SEAL)
10 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California )
County of Santa Clara )
On , 2023, before me, , personally appeared
, who proved to me on the
basis of satisfactory evidence to be the person whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY PUBLIC
(ABOVE AREA FOR NOTARY SEAL)
11 EXHIBIT 1
LEGAL DESCRIPTION OF REAL PROPERTY
For conveyancing purposes only: APN 726-58-006
PARCEL ONE: PARCEL 6 AS SHOWN ON THAT CERTAIN MAP ENTITLED AS "PARCEL MAP EVERGREEN VILLAGE" RECORDED ON JULY 17, 2019 IN BOOK 924, PAGES 45-47, SANTA CLARA COUNTY RECORDS.
PARCEL TWO: NON-EXCLUSIVE 60 FOOT WIDE ACCESS EASEMENT AS RETAINED IN THAT CERTAIN GRANT OF RECIPROCAL EASEMENTS, RECORDED JUNE 16, 1989, IN BOOK K988 AT PAGE 1623, OFFICIAL RECORDS, AND AS AMENDED BY THAT
CERTAIN AMENDMENT TO GRANT OF RECIPROCAL EASEMENTS RECORDED DECEMBER 16, 1998 AS INSTRUMENT NO. 14554697, OFFICIAL RECORDS, COUNTY
OF SANTA CLARA, STATE OF CALIFORNIA AND AS AMENDED BY THAT CERTAIN
SECOND AMENDMENT TO GRANT OF RECIPROCAL EASEMENTS RECORDED FEBRUARY 7, 2008 AS INSTRUMENT NO. 19736430, OFFICIAL RECORDS, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA.
PARCEL THREE: NON-EXCLUSIVE EASEMENTS FOR DRAINAGE, ACCESS, INGRESS
AND EGRESS, PARKING, AND UTILITIES, ENCROACHMENTS OF CERTAIN
IMPROVEMENTS, LANDSCAPING AND CONSTRUCTION OF IMPROVEMENTS,
STORM WATER AND DRAINAGE FACILITIES, AND SIGNAGE CONTAINED IN
COMMON OPERATION AND RECIPROCAL EASEMENT AGREEMENT, DATED DECEMBER 5, 2018, RECORDED DECEMBER 5, 2018 AS INSTRUMENT NO. 24076332,
AS AFFECTED BY FIRST AMENDMENT TO COMMON OPERATION AND
RECIPROCAL EASEMENT AGREEMENT, DATED JULY 17, 2019, RECORDED JULY 18, 2019 AS INSTRUMENT NO. 24228167.
12 EXHIBIT 2
PROMISSORY NOTE
SECURED PROMISSORY NOTE
Cutina Morgan Hill, LLC
Attn: Michelle Della Penna
2801 Ocean Park #193
Santa Monica, CA 90405
$___AMOUNT______$465,222.00
Morgan Hill, CA
____________ __, 2023
1. BORROWER’S PROMISE TO PAY
FOR VALUE RECEIVED, Cutina Morgan Hill, LLC (“BORROWER”) hereby promises to timely pay to the CITY OF MORGAN HILL, a municipal corporation ("CITY" or "NOTE HOLDER") in lawful money of the United States of America, the principal sum of ______________________________________________________________________________ ($ .__) (the “PRINCIPAL”), together with interest on the outstanding PRINCIPAL amount, all in accordance with the terms and conditions set forth in this Secured Promissory Note ("NOTE").
The loan evidenced by this SECURED PROMISSORY NOTE (“NOTE”) is to secure performance by BORROWER for the payment of fees due to the CITY pursuant to the SEWER/TRAFFIC FEE SECURED FINANCING AGREEMENT (the “Agreement”) dated on or about the same date herewith by and between BORROWER and CITY, which is incorporated herein by this reference, and evidences the obligation to repay the Loan. The Sewer/Traffic Fees financed under the Agreement constitute a loan CITY to BORROWER (“LOAN).” The obligations under this NOTE are secured by a Deed of Trust and Assignment of Rents executed by BORROWER and CITY, as Trustor, in favor of that certain Lender identified in said Deed of Trust, as beneficiary (the “DEED OF TRUST”) dated substantially concurrently herewith encumbering real property more particularly described in the DEED OF TRUST (the “PROPERTY”)..
2. INTEREST RATE AND PAYMENT COMMENCEMENT
A. Payment and Interest Rate.
Payments shall be due under this Note as follows: Beginning the first of the month following the issuance of the Certificate of Occupancy or December 31, 2025, whichever shall occur first, Maker shall make sixty (60) equal monthly payments of Four Hundred Sixty-Five, Two Hundred TwentyTwo Dollars and 00/100 Dollars ($465,222.00) which shall bear shall bear fixed interest at the PMIA Average Monthly Effective Yield as determined by the most recent PMIA/LAIF Performance Report rate plus 0.5% as determined on the Initial Payment Date of XXX and XXX hundredth percent (X.XX%), per annum compounded monthly. The monthly installment shall be $XXX per month. The monthly installment payments shall commence on the first of the month following the issuance of the Certificate of Occupancy or December 31, 2025, whichever shall occur first and continuing on the first day of each month thereafter with the remaining balance of
13 principal due and payable on the first day of the sixty first (61st) month following the date of the issuance of the Certificate of Occupancy or December 31, 2025, whichever shall occur first provided, however, that Maker’s obligation to repay this Note may be accelerated in accordance with the Agreement or the terms of this Note. Monthly payments are due on the first day of the month and considered delinquent on the fifth day of the month. BORROWER SHOULD CONSULT WITH BORROWER'S OWN TAX ADVISOR(s) REGARDING ANY TAX EFFECTS ON BORROWER OF THE INTEREST RATE.
B. Acceleration.
Should any sum due hereunder not be paid by the fifth (5th) day after written notice of such default is given by the Holder to the Maker, then all sums of unpaid principal and accrued interest may immediately be deemed due and payable and shall thereafter bear interest at the rate of ten percent (10%) per annum, until paid.
3. MATURITY DATE; PAYMENTS
Maturity date is five years after the first payment is made or December 31, 2030, whichever occurs first.
4. BORROWER’S RIGHT TO HAVE THIS NOTE CANCELED UPON
PERFORMANCE
BORROWER has an absolute right to have this NOTE cancelled and a Full Reconveyance filed by the CITY immediately following full payment of all principal and all interest due under this NOTE and the Agreement.
5. BORROWER’S FAILURE TO PAY AS REQUIRED
A. Late Charge for Overdue Payments.
Subject to NOTE HOLDER’S compliance with California Civil Code Section 2954.5, as amended or restated from time to time, if NOTE HOLDER has not received the full amount of any payment due under within 5 (five) calendar days after the date it is due, NOTE HOLDER may require BORROWER to pay a late charge to NOTE HOLDER. The amount of the charge will be five percent (5%) of the overdue payment of PRINCIPAL and interest, and the late charge must be paid within ten (10) days after written demand therefor.
B. Default.
If there is a failure to comply with the provisions of this NOTE or the DEED OF TRUST securing this NOTE, and such default is not cured within ten (10) days after written notice from NOTE HOLDER (an “Event of Default”), then NOTE HOLDER may demand that BORROWER pay all outstanding PRINCIPAL and accrued interest. Failure to pay accrued interest and outstanding PRINCIPAL on the Maturity Date shall also be an Event of Default. Upon the occurrence of an Event of Default, NOTE HOLDER may exercise its rights and remedies at law and in equity, including, without limitation, non-judicial foreclosure.
14 C. No Waiver By NOTE HOLDER.
Even if, at a time when there is an Event of Default, NOTE HOLDER does not require payment immediately in full as described above, NOTE HOLDER will still have the right to require a full payment at a later time.
D. Payment of NOTE HOLDER’S Costs and Expenses.
If NOTE HOLDER has required payment immediately in full as described above, NOTE HOLDER will have the right to be paid by BORROWER for all of its costs and expenses in enforcing this NOTE to the extent not prohibited by applicable law (i.e., BORROWER shall be responsible for collection costs with respect to collection from BORROWER). Those expenses include, for example, attorneys’ fees actually incurred by NOTE HOLDER in connection with enforcing this NOTE.
E. Venue.
This Note shall be governed by and construed in accordance with the laws of the State of California. Any action brought to enforce this note shall be brought in the Superior Court of Santa Clara County.
F. Successor and Assigns.
Subject to the foregoing, the terms of this Note shall be binding upon and inure to the benefit of the respective heirs, successors in interest and assigns of BORROWER and NOTE HOLDER.
G. Time is of the Essence.
Time is of the essence with respect to each and every provision hereof. If any provision hereof is found to be invalid or unenforceable by a court of competent jurisdiction, the invalidity thereof shall not affect the enforceability of the remaining provisions of this Note.
6. GIVING OF NOTICES
All notices, requests, demands and other communication given or required to be given hereunder shall be in writing and personally delivered, sent by first class certified mail, postage prepaid, return receipt requested, or sent overnight by a nationally recognized courier service such as Federal Express, addressed to the parties as follows:
CITY: City Clerk
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037-4128
BORROWER: Cutina Morgan Hill, LLC
Attn: Michelle Della Penna
2801 Ocean Park #193
Santa Monica, CA 90405
15 Delivery of any notice or other communication hereunder shall be deemed made on the date of actual delivery thereof to the address of the addressee, if personally delivered, and on the date indicated in the return receipt or courier’s records as the date of delivery or as the day after the day of mailing, if sent by first class or certified mail. Any party may change its address for purposes of this Section by giving notice to the other party.
7. SECURED RECOURSE LOAN
Notwithstanding anything to the contrary in this NOTE, the DEED OF TRUST or any other document relating to the LOAN, NOTE HOLDER’S recourse for repayment of the sums owed under this NOTE or under the DEED OF TRUST or any other document relating to the LOAN shall not be limited to the collateral described in the DEED OF TRUST, and BORROWER agrees that NOTE HOLDER may seek or obtain any appropriate relief or remedy, including a deficiency judgment against BORROWER.
8. WAIVERS
BORROWER and any other person who has obligations under this NOTE hereby waive the rights of “presentment” and “notice of dishonor.” “Presentment” means the right to require NOTE HOLDER to demand payment of amounts due. “Notice of dishonor” means the right to require NOTE HOLDER to give notice to other persons that amounts due have not been paid.
BORROWER:
_____________________________________
[Name and Title]
_____________________________________
[Name and Title]
Date: _________________
Date: _________________
CITY:
____________________________________
By: Mark Turner, Mayor
Date: _______________________________
APPROVED AS TO FORM:
____________________________
Donald A. Larkin
City Attorney
Date: _______________________
16 Promissory Note, Secured Cutina Morgan Hill LLC revised 5-23-23 EXHIBIT 3
Deed of Trust
1 RECORDING REQUESTED BY:
AND AFTER RECORDING MAIL TO:
CITY OF MORGAN HILL
CITY CLERK’S OFFICE
17575 Peak Avenue
Morgan Hill, CA 95037
ATTN: City Clerk
TO BE RECORDED WITHOUT FEE SPACE ABOVE THIS LINE FOR RECORDER'S USE AS PER GOVERNMENT CODE 27383
SITUS: [Address] Morgan Hill, CA 95037 APN: [726-58-006]
DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, made this day of _________, 2023, between Cutina Morgan Hill, LLC., a California Limited Liability Corporation, herein called TRUSTOR, whose address is 2801 Ocean Park #193, Santa Monica, CA 90405 and City of Morgan Hill, herein called TRUSTEE, and the City of Morgan Hill, a municipal corporation, herein called BENEFICIARY, Witnessed: That TRUSTOR IRREVOCABLY GRANTS, TRANSFERS, AND ASSIGNS TO TRUSTEE, IN TRUST, WITH POWER OF SALE, that property in the City of Morgan Hill, County of Santa Clara, California, described as: SEE ATTACHED EXHIBIT “A”
In the event Trustor, without the prior consent of the Beneficiary, sells, agrees to sell, transfers or conveys their interest in the real property or any part thereof or any interest therein, Beneficiary may at its option declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require such consent to future or successive transactions. The terms "Trustor" and “Beneficiary" include their successors.
TOGETHER WITH the rents, issues and profits thereof, SUBJECT HOWEVER, to the right, power and authority given to and conferred upon Beneficiary by paragraph (10) of the provisions incorporated herein by reference to collect and enforce the same by any lawful means in the name of any party hereto.
For the purpose of securing: (1) Performance of each agreement of TRUSTOR incorporated by reference or contained herein; (2) Payment of the sum of [$465,222.00] Four Hundred Thousand Sixty-Five, Two Hundred Twenty-Two Dollars and 00/100s) with interest thereon according to the terms of a promissory note or notes of even date herewith made by Trustors, payable to order of Beneficiary, and extensions or renewals thereof; (3) Payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or their successors or assigns, when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.
To Protect the Security of This Deed of Trust, TRUSTOR Agrees: By the execution and delivery of this Deed of Trust and the note secured hereby, that provisions (1) to (14), inclusive, of the fictitious deeds of trust recorded in the office of County Recorders of the Counties of the State of California on October 25, 1973, in the book and at the page of Official Records in the office of the county recorder of the county where said property is located, noted below opposite the name of such county, viz.:
COUNTY Book Page COUNTY Book Page COUNTY Book Page COUNTY Book Page
Alameda 3540 89 Kings 1018 394 Placer 1528 440 Sierra 59 439
Alpine 18 753 Lake 743 552 Plumas 227 443 Siskiyou 697
407
Amador 250 243 Lassen 271 367 Riverside 1973 139405 Solano 1860 581
Butte 1870 678 Los Angeles T8512 751 Sacramento 731025 59 Sonoma 2810 973
Calaveras 368 92 Madera 1176 234 San Benito 386 94 Stanislaus 2587
2 332
Colusa 409 347 Marin 2736 463 San Bernardino 8292 877 Sutter 817 182
Contra Costa 7077 178 Mariposa 143 717 San Francisco B820 585 Tehama 630 522
Del Norte 174 526 Mendocino 942 242 San Joaquin 3813 6 Trinity 161 393
El Dorado 1229 594 Merced 1940 361 San Luis Obispo 1750 491 Tulare 3137 567
Fresno 6227 411 Modoc 225 668 San Mateo 6491 600 Tuolumne 396 309
Glenn 565 290 Mono 160 215 Santa Barbara 2486 1244 Ventura 4182 662
Humboldt 1213 31 Monterey 877 243 Santa Clara 0623 713 Yolo 1081 335
Imperial 1355 801 Napa 922 303 Santa Cruz 2358 744 Yuba 564 163
Inyo 205 660 Nevada 665 303 Shasta 1195 293
Kern 4809 2351 Orange 10961 398 San Diego Series 2 Book 1961, Page 1838 (which provisions, identical in all counties) hereby are adopted and incorporated herein and made a part hereof as fully as though set forth herein at length; that he will observe and perform said provisions; and that the reference to property, obligations, and parties in said provisions shall be construed to refer to the property, obligations, and parties set forth in this Deed of Trust.
To protect the security of this Deed of Trust, TRUSTOR agrees:
CONDITION OF PROPERTY – To keep the property in good condition and repair; not to remove or demolish any building; to complete and restore any building which may be constructed, damaged or destroyed; to comply with all laws affecting the property or requiring any alterations or improvements to be made; not to commit or permit waste; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of the property may be reasonably necessary.
HAZARD INSURANCE – TRUSTOR will continuously maintain hazard insurance against loss by fire, hazards included within the term “extended coverage,” and any other hazards for which BENEFICIARY requires insurance. The insurance will be maintained in the amounts and for the periods BENEFICIARY requires. The insurance carrier providing the insurance will be chosen by TRUSTOR, subject to BENEFICIARY’s approval, which will not be unreasonably withheld.
All insurance policies will be acceptable to BENEFICIARY and contain loss payable clauses acceptable to BENEFICIARY. BENEFICIARY will have the right to hold policies and renewals. In the event of loss, TRUSTOR will give prompt notice to the insurance carrier and BENEFICIARY. BENEFICIARY may make proof of loss if not made promptly by TRUSTOR. BENEFICIARY may place the proceeds in a non-interest bearing account to be used for the cost of reconstruction of the damaged improvements. If TRUSTOR fails to reconstruct, BENEFICIARY may receive and apply the loan proceeds to the principal debt hereby secured, without a showing of impairment.
ATTORNEY FEES – To appear in and defend any action or proceeding purporting to affect the security, or the rights and powers of BENEFICIARY or Trustee; and to pay all costs and expenses, including cost of evidencing title and attorney fees in a reasonable sum, in any such action or proceeding in which BENEFICIARY or Trustee may appear.
TAXES AND SENIOR ENCUMBERANCES – To pay before delinquency: all taxes and assessments affecting the property, including water stock assessments when due, all encumbrances, charges and liens, with interest, on the property which are or appear to be senior to this Deed of Trust; and all expenses of this Deed of Trust. To at its sole expense, retain a tax service and pay property taxes when due for the property. TRUSTOR shall provide BENEFICIARY with proof of payment through the tax service or separately if notice to BENEFICIARY is not provided through the tax service.
ACTS AND ADVANCES TO PROTECT THE SECURITY – If TRUSTOR fails to make any payment or to perform any act provided for in this Deed of Trust, then BENEFICIARY or Trustee may, without obligation to do so, and with or without notice or demand upon TRUSTOR, and without releasing TRUSTOR from any obligation under this Deed of Trust:
a) Make or do the same to the extent either deems necessary to protect the security, BENEFICIARY or Trustee being authorized to enter upon the property to do so;
3 b) Appear in or commence any action or proceeding purporting to affect the security, or the rights or powers of BENEFICIARY or Trustee;
c) Pay, purchase, contest or settle any encumbrance, charge or lien that appears to be senior to this Deed of Trust.
In exercising the power of this provision, BENEFICIARY or Trustee may incur necessary expenses, including reasonable attorney fees. TRUSTOR to immediately pay all sums expended by BENEFICIARY or Trustee provided for in this Deed of Trust, with interest from date of expenditure at the same rate as the principal debt hereby secured.
It is further mutually agreed that:
ASSIGNMENT OF DAMAGES –Any award of damages made in connection with:
a) Condemnation for use of or injury to the property by the public, or conveyance in lieu of condemnation; or b) Injury to the property by any third party; is assigned to BENEFICIARY, who may apply or release the proceeds of such an award in the same manner and with the same effect as above provided for the disposition of hazard insurance proceeds.
WAIVER – By accepting payment of any sum due after its due date, BENEFICIARY does not waive BENEFICIARY’s right to either require prompt payment when due of all other sums or to declare a default for failure to pay. BENEFICIARY may waive a default of any agreement of this Deed of Trust, by consent or acquiescence, without waiving any prior or subsequent default.
DUE-ON-SALE – If TRUSTOR sells, transfer or convey any interest in the property, either voluntarily or by operation of law, then BENEFICIARY may, at BENEFICIARY’s option, declare all sums secured by this Deed of Trust immediately due and payable. A lease of all or part of the real property by TRUSTOR shall not be deemed to be a sale, transfer or conveyance, under this section.
ASSIGNMENT OF RENTS – TRUSTOR hereby assigns and transfers to BENEFICIARY all right, title and interest in rents generated by the property, including rents now due, past due, or to become due under any use of the property, to be applied to the obligations secured by this Deed of Trust. a) Prior to a default on this Deed of Trust by TRUSTOR, TRUSTOR will collect and retain the rents b) On default by TRUSTOR, BENEFICIARY will immediately be entitled to possession of all unpaid rents.
SUBORDINATION – TRUSTOR is prohibited from further encumbering the property and may not subordinate this Deed of Trust to any other Deed of Trust or lien, without the prior written consent of BENEFICIARY.
ACCELERATION – If payment of any indebtedness or performance of any agreement secured by this Deed of Trust is in default, BENEFICIARY may at BENEFICIARY’s option, with or without notice to TRUSTOR, declare all sums secured immediately due and payable by:
a) Commencing suit for their recovery or for foreclosure of this Deed of Trust b) Delivering to Trustee a written notice declaring a default with demand for sale; a written Notice of Default and election to sell to be recorded by Trustee.
TRUSTEE’S SALE – On default of any obligation secured by this Deed of Trust and acceleration of all sums due, BENEFICIARY may instruct Trustee to proceed with a sale of the secured property under the power of sale granted herein, noticed and held in accordance with California Civil Code §2924 et seq.
TRUSTOR’S OFFSET STATEMENT - Within 10 days of TRUSTOR’s receipt of a written request by BENEFICIARY, TRUSTOR will execute a written estoppel affidavit identifying for the benefit of any assignee or successor in interest of BENEFICIARY: the then owner of the secured property; the terms of the secured note, including its remaining principal balance; any taxes or assessments due on the secured property; that the secured note is valid and the TRUSTOR received full and valid consideration for it; and that TRUSTOR understands the note and this Deed of Trust are being assigned.
RECONVEYANCE – Upon written request from BENEFICIARY stating that all sums secured by this Deed of Trust have been paid, surrender of this Deed of Trust and the Promissory Note to Trustee for cancellation, and payment of Trustee’s fees, Trustee will reconvey the property held under this Deed of Trust.
4 SUCCESSORS, ASSIGNS AND PLEDGEES – This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term BENEFICIARY will mean the holders and owner of the secured note, or, if the note has been pledged, the pledgee.
TRUSTEE’S FORECLOSURE NOTICES – The undersigned TRUSTOR(s) requests a copy of any Notice of Default and of any Notice of Sale hereunder be mailed to TRUSTOR at the address herein set forth.
The undersigned TRUSTOR requests that a copy of any Notice of Default and any Notice of Sale hereunder be mailed to TRUSTOR at the address hereinabove set forth, being the address designated for the purpose of receiving such notice.
The undersigned TRUSTOR requests that a copy of any Notice of Default and any Notice of Sale hereunder be mailed to TRUSTOR at the address hereinabove set forth, being the address designated for the purpose of receiving such notice.
Signatures of Trustor(s)
___________________________________ Date: ________________ Cutina Morgan Hill, LLC, a California Limited Liability Corporation By:
Deed of Trust Cutina Morgan Hill, LLC revised 5-24-23
5 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 State of CALIFORNIA )
County of SANTA CLARA )
On , before me, a
Notary Public in and for said County and State, personally appeared ,
proved to me on the basis of satisfactory evidence to be the person/s whose name/s is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity/ies, and that by his/her/their signature/s on the instrument the person/s, or the entity upon behalf of which the person/s acted, executed the instrument.
Place Notary Seal Above
OPTIONAL
Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document: ______________________________________ Document Date: _____________ Number of Pages: ________ Signer(s) Other Than Named Above: _________________________________ ______________________________________________________________________________________ Capacity(ies) Claimed by Signer(s)
Signer’s Name: ______________________________ Signer’s Name: _________________________ Signer Is Representing: Himself/Herself/Themselves Signer Is Representing: Himself/Herself/Themselves Signer/s other than listed above:
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
I certify under PENALTY OF PERJURY under
the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SIGNATURE OF NOTARY PUBLIC
6 EXHIBIT "A"
Legal Description
For APN/Parcel ID(s): [726-58-006]
PARCEL ONE: PARCEL 6 AS SHOWN ON THAT CERTAIN MAP ENTITLED AS "PARCEL MAP EVERGREEN VILLAGE" RECORDED ON JULY 17, 2019 IN BOOK 924, PAGES 45-47, SANTA CLARA COUNTY RECORDS.
PARCEL TWO: NON-EXCLUSIVE 60 FOOT WIDE ACCESS EASEMENT AS RETAINED IN THAT CERTAIN GRANT OF RECIPROCAL EASEMENTS, RECORDED JUNE 16, 1989, IN BOOK K988 AT PAGE 1623, OFFICIAL RECORDS, AND AS AMENDED BY THAT
CERTAIN AMENDMENT TO GRANT OF RECIPROCAL EASEMENTS RECORDED DECEMBER 16, 1998 AS INSTRUMENT NO. 14554697, OFFICIAL RECORDS, COUNTY OF
SANTA CLARA, STATE OF CALIFORNIA AND AS AMENDED BY THAT CERTAIN
SECOND AMENDMENT TO GRANT OF RECIPROCAL EASEMENTS RECORDED FEBRUARY 7, 2008 AS INSTRUMENT NO. 19736430, OFFICIAL RECORDS, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA.
PARCEL THREE: NON-EXCLUSIVE EASEMENTS FOR DRAINAGE, ACCESS, INGRESS
AND EGRESS, PARKING, AND UTILITIES, ENCROACHMENTS OF CERTAIN
IMPROVEMENTS, LANDSCAPING AND CONSTRUCTION OF IMPROVEMENTS, STORM
WATER AND DRAINAGE FACILITIES, AND SIGNAGE CONTAINED IN COMMON OPERATION AND RECIPROCAL EASEMENT AGREEMENT, DATED DECEMBER 5, 2018, RECORDED DECEMBER 5, 2018 AS INSTRUMENT NO. 24076332, AS AFFECTED BY
FIRST AMENDMENT TO COMMON OPERATION AND RECIPROCAL EASEMENT AGREEMENT, DATED JULY 17, 2019, RECORDED JULY 18, 2019 AS INSTRUMENT NO. 24228167.
7
SECURED PROMISSORY NOTE
Cutina Morgan Hill, LLC
2801 Ocean Park #193
Santa Monica, CA 90405
$___AMOUNT______465,222.00
Morgan Hill, CA
____________ __, 2023
1. BORROWER’S PROMISE TO PAY
FOR VALUE RECEIVED, Cutina Morgan Hill, LLC (“BORROWER”) hereby promises to timely pay to the CITY OF MORGAN HILL, a municipal corporation ("CITY" or "NOTE HOLDER") in lawful money of the United States of America, the principal sum of Four Hundred Thousand Sixty-Five Two Hundred Twenty-Two Dollars and 00/100s ($465,222.00) (the “PRINCIPAL”), together with interest on the outstanding PRINCIPAL amount, all in accordance with the terms and conditions set forth in this Secured Promissory Note ("NOTE").
The loan evidenced by this SECURED PROMISSORY NOTE (“NOTE”) is to secure performance by BORROWER for the payment of fees due to the CITY pursuant to the SEWER/TRAFFIC FEE SECURED FINANCING AGREEMENT (the “Agreement”) dated on or about the same date herewith by and between BORROWER and CITY, which is incorporated herein by this reference, and evidences the obligation to repay the Loan. The Sewer/Traffic Fees financed under the Agreement constitute a loan CITY to BORROWER (“LOAN).” The obligations under this NOTE are secured by a Deed of Trust and Assignment of Rents executed by BORROWER and CITY, as Trustor, in favor of that certain Lender identified in said Deed of Trust, as beneficiary (the “DEED OF TRUST”) dated substantially concurrently herewith encumbering real property more particularly described in the DEED OF TRUST (the “PROPERTY”)..
2. INTEREST RATE AND PAYMENT COMMENCEMENT
A. Payment and Interest Rate.
Payments shall be due under this Note as follows: Beginning the first of the month following the issuance of the Certificate of Occupancy or December 31, 2025, whichever shall occur first, Maker shall make sixty (60) equal monthly payments of One Dollars and One 00/100 Dollars ($1.00) which shall bear shall bear fixed interest at the PMIA Average Monthly Effective Yield as determined by the most recent PMIA/LAIF Performance Report rate plus 0.5% as determined on the Initial Payment Date of XXX and XXX hundredth percent (X.XX%), per annum compounded monthly. The monthly installment shall be $XXX per month. The monthly installment payments shall commence on the first of the month following the issuance of the Certificate of Occupancy or December 31, 2025, whichever shall occur first and continuing on the first day of each month thereafter with the remaining balance of principal due and payable on the first day of the sixty first (61st) month following the date of the issuance of the Certificate of Occupancy or December 31, 2025, whichever shall occur first provided, however, that Maker’s obligation to repay this Note may be accelerated in accordance with the Agreement or the terms of this Note. Monthly payments are due on the first day of the month and considered delinquent on the fifth day of the month.
BORROWER SHOULD CONSULT WITH BORROWER'S OWN TAX ADVISOR(s) REGARDING ANY TAX EFFECTS ON BORROWER OF THE INTEREST RATE.
B. Acceleration.
Should any sum due hereunder not be paid by the fifth (5th) day after written notice of such default is given by the Note Holder to the Borrower, then all sums of unpaid principal and accrued interest may immediately be deemed due and payable and shall thereafter bear interest at the rate of ten percent (10%) per annum, until paid.
3. MATURITY DATE; PAYMENTS
Maturity date is five years after the first payment is made or December 31, 2030, whichever occurs first.
4. BORROWER’S RIGHT TO HAVE THIS NOTE CANCELED UPON
PERFORMANCE
BORROWER has an absolute right to have this NOTE cancelled and a Full Reconveyance filed by the CITY immediately following full payment of all principal and all interest due under this NOTE and the Agreement.
5. BORROWER’S FAILURE TO PAY AS REQUIRED
A. Late Charge for Overdue Payments.
Subject to NOTE HOLDER’S compliance with California Civil Code Section 2954.5, as amended or restated from time to time, if NOTE HOLDER has not received the full amount of any payment due under within 5 (five) calendar days after the date it is due, NOTE HOLDER may require BORROWER to pay a late charge to NOTE HOLDER. The amount of the charge will be five percent (5%) of the overdue payment of PRINCIPAL and interest, and the late charge must be paid within ten (10) days after written demand therefor.
B. Default.
If there is a failure to comply with the provisions of this NOTE or the DEED OF TRUST securing this NOTE, and such default is not cured within ten (10) days after written notice from NOTE HOLDER (an “Event of Default”), then NOTE HOLDER may demand that BORROWER pay all outstanding PRINCIPAL and accrued interest. Failure to pay accrued interest and outstanding PRINCIPAL on the Maturity Date shall also be an Event of Default. Upon the occurrence of an Event of Default, NOTE HOLDER may exercise its rights and remedies at law and in equity, including, without limitation, non-judicial foreclosure.
C. No Waiver By NOTE HOLDER.
Even if, at a time when there is an Event of Default, NOTE HOLDER does not require payment
immediately in full as described above, NOTE HOLDER will still have the right to require a full payment at a later time.
D. Payment of NOTE HOLDER’S Costs and Expenses.
If NOTE HOLDER has required payment immediately in full as described above, NOTE HOLDER will have the right to be paid by BORROWER for all of its costs and expenses in enforcing this NOTE to the extent not prohibited by applicable law (i.e., BORROWER shall be responsible for collection costs with respect to collection from BORROWER). Those expenses include, for example, attorneys’ fees actually incurred by NOTE HOLDER in connection with enforcing this NOTE.
E. Venue.
This Note shall be governed by and construed in accordance with the laws of the State of California. Any action brought to enforce this note shall be brought in the Superior Court of Santa Clara County.
F. Successor and Assigns.
Subject to the foregoing, the terms of this Note shall be binding upon and inure to the benefit of the respective heirs, successors in interest and assigns of BORROWER and NOTE HOLDER.
G. Time is of the Essence.
Time is of the essence with respect to each and every provision hereof. If any provision hereof is found to be invalid or unenforceable by a court of competent jurisdiction, the invalidity thereof shall not affect the enforceability of the remaining provisions of this Note.
6. GIVING OF NOTICES
All notices, requests, demands and other communication given or required to be given hereunder shall be in writing and personally delivered, sent by first class certified mail, postage prepaid, return receipt requested, or sent overnight by a nationally recognized courier service such as Federal Express, addressed to the parties as follows:
CITY: City Clerk
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037-4128
BORROWER: Cutina Morgan Hill, LLC
2801 Ocean Park #193
Santa Monica, CA 90405
Delivery of any notice or other communication hereunder shall be deemed made on the date of actual delivery thereof to the address of the addressee, if personally delivered, and on the date indicated in the return receipt or courier’s records as the date of delivery or as the day after the day of mailing, if sent by first class or certified mail. Any party may change its address for purposes of this Section by giving notice to the other party.
7. SECURED RECOURSE LOAN
Notwithstanding anything to the contrary in this NOTE, the DEED OF TRUST or any other document relating to the LOAN, NOTE HOLDER’S recourse for repayment of the sums owed under this NOTE or under the DEED OF TRUST or any other document relating to the LOAN shall not be limited to the collateral described in the DEED OF TRUST, and BORROWER agrees that NOTE HOLDER may seek or obtain any appropriate relief or remedy, including a deficiency judgment against BORROWER.
8. WAIVERS
BORROWER and any other person who has obligations under this NOTE hereby waive the rights of “presentment” and “notice of dishonor.” “Presentment” means the right to require NOTE HOLDER to demand payment of amounts due. “Notice of dishonor” means the right to require NOTE HOLDER to give notice to other persons that amounts due have not been paid.
BORROWER:
_____________________________________
[Name and Title]
_____________________________________
[Name and Title]
Date: _________________
Date: _________________
CITY:
____________________________________
By: Mark Turner, Mayor
Date: _______________________________
APPROVED AS TO FORM:
____________________________
Donald A. Larkin
City Attorney
Date: _______________________
Promissory Note, Secured Cutina Morgan Hill LLC revised 5-23-23
2 CITY COUNCIL STAFF REPORT
MEETING DATE: June 21, 2023
PREPARED BY:
Matthew Mahood, Economic Development Director
APPROVED BY: City Manager
APPROVE AN IMPACT FEE FREEZE AGREEMENT WITH MERSHO
INVESTMENTS, LLC AND CLAYTON PLAZA, LLC FOR INDUSTRIAL
DEVELOPMENTS ON 6 PARCELS TOTALING 20.14 ACRES
IDENTIFIED BY ASSESSOR PARCEL NUMBERS 726-31-038, APN 726- 31-025, APN 726-33-026, APN 726-33-025, APN 726-25-026 , AND APN 726-32-025
RECOMMENDATION(S)
1. Approve an Impact Fee Freeze Agreement with Mersho Investments, LLC and Clayton Plaza, LLC for the development of six (6) separate industrial/commercial facilities located throughout Morgan Hill Ranch and Madrone Business Park; and
2. Authorize the City Manager to execute the Impact Fee Freeze Agreement.
COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
Economic Development
Guiding Documents
Economic Blueprint
REPORT NARRATIVE:
On June 21, 2017, the City Council adopted a Development Impact Fee Freeze Program. This program locks the impact fee to a specific date for a period of three years, giving the developer increased certainty as to the costs they will incur and creating an incentive to help offset the ever-increasing cost of new development. In return, the developer agrees to develop and apply for building permits within the threeyear period.
Most recently, in May 2022, City Council received an update on the Impact Fee Freeze Program. At this time, the City Council established and locked City’s Impact Fees to the
2 Impact Fees at the time of the executed agreement for up to three years for new commercial and industrial development provided the prospective development secures entitlements and submits for building permits within three years of the date of the agreement.
Details and Analysis:
Mersho Investments LLC and Clayton Plaza LLC, (the Developer) whose principals are the founding family of Shoe Palace and have made other significant investments in our community, are proposing to develop approximately 407,323 square feet of new speculative commercial/industrial facilities across six (6) parcels totaling 22.54 acres located throughout the Morgan Hill Ranch and Madrone Business Parks. The specific locations and detail are:
The Mersho family has submitted plans to the City and is currently seeking entitlements to the above-mentioned projects with the anticipation that they will submit building plans once their sites have been approved. The proposed Impact Fee Agreement will utilize the most recent development impact fee schedule, updated May 15, 2023 (Attachment 2). The developer will have until June 30, 2026, to apply for, and receive building permits, to benefit from the impact fee freeze. The estimated impact fees using the most recent Fee Schedule are $5,420,249.
Once completed and operational, it is estimated the new 407,323 square feet of commercial/industrial space could generate in excess of $81,000 in new property tax, assuming a Santa Clara County assessment rate of approximately $200 per square foot. In addition, depending upon the buildings’ specific end users, sales tax revenue may be generated as well. Both sales tax and property tax contribute to the City’s General Fund. If the Developer applies for building permits before July 2024, the estimated benefit received to the developer from the impact freeze is $216,810. If the developer applies for building permits after July 2024, but before July 2025, the estimated benefit of the impact freeze is estimated at $442,292. If the developer applies for building permits after July 2025, but before July 2026, the estimated benefit of the impact freeze is estimated at $676,794. The estimates assume that the City’s Impact Fees will increase at a rate of 4% per year. While the developer receives cost savings for each year the project is deferred, it is very likely that the cost of construction will
2 continue to escalate in the coming years and therefore continued delays on building permit submittal will likely cost the developer more than the savings received from an impact fee freeze.
Conclusion
Approving a Fee Freeze Agreement with Mersho Investments, LLC is consistent with the Impact Fee Freeze Program and aligns with the Economic Blueprint Strategy #3 “Attract New Development,” Action #5, “Explore Incentive Programs to Attract Industry Specific Development.”
COMMUNITY ENGAGEMENT:
Inform
The table below addresses the requirements set forth in State of California AB 562 (Government Code 53083) for publication of information related to an economic development subsidy and public hearings.
Name/address of the beneficiary of
the subsidy:
Mersho Investments, LLC
Clayton Plaza, LLC
5752 Country Club Pkwy
San Jose, CA 95138
Start and end dates, schedule for
the subsidy:
The Fee Freeze Agreement is for a period of
three years, starting June 30, 2023 and ending
June 30, 2026.
Describe the subsidy, estimated
total amount of expenditure of
public funds or revenue lost:
The Impact Fee Freeze Agreement allows the
beneficiary to lock-down the project impact fees at
the current year's Impact Fee Schedule for a
period of up to three years. Impact Fees must be
paid by the beneficiary prior to receiving building
permits. The potential revenue lost ranges from
$216,810 in year 1, $442,292 in year 2 and
$676,794 in year three.
State of public purpose: Expand and enhance economic opportunities for businesses in the City, continue to expand the
City’s employment base, and continue to
generate the hereinafter defined Property Tax and
Sales Tax that the City can utilize to fund general
governmental services such as police, fire, street
maintenance, and parks and recreation programs.
Projected tax revenue: The projected increase in property tax collected
2 from improvements to these sites is
approximately $81,000 annually.
Estimated number of jobs created
by subsidy:
The construction of these six projects will
generate approximately 200 temporary
construction jobs. When the projects are
completed and occupied, they could generate
hundreds of new full-time jobs of varying skills
levels and educational requirements.
ALTERNATIVE ACTIONS:
The City of Morgan Hill could choose not to enter into a Fee Freeze Agreement with Mersho Investments and Clayton Plaza to freeze impact fees. This option potentially saves the City at minimum $216,810 in impact fee revenue, but it also puts the project at risk of not being completed.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
In June 2017, City Council approved the Citywide Impact Fee Freeze Program establishing FY 2016-17 Development Impact Fees as the basis for the three-year term for any new commercial/industrial development project that enters into a Development Agreement for an Impact Fee Freeze approved by City Council.
In June 2020, City Council reviewed the Impact Fee Freeze Program and established FY 2017-18 Development Impact Fees as the basis for the three-year term for any new commercial/industrial development project that enters into a Development Agreement for an Impact Fee Freeze approved by City Council.
In May 2022, City Council received an update on the Impact Fee Freeze Program. At this time, the City Council established and locked City’s Impact Fees to the Impact Fees at the time of the executed agreement for up to three years for new commercial and industrial development provided the prospective development secures entitlements and submits for building permits within three years of the date of the agreement.
FISCAL AND RESOURCE IMPACT:
The potential loss of revenue to the City from entering into this Impact Fee Freeze Agreement is expected to range between $216,810 to $676,794. On the other hand, the City expects to receive one-time construction benefit of construction jobs and ancillary economic impact in the form of sales tax from local spending. Once operational, the City could receive an ongoing additional property tax revenue of approximately $81,000 per year to the City’s General Fund.
CEQA (California Environmental Quality Act):
Not a Project
An Environmental Impact Report (EIR) for the Morgan Hill 2035 Project, which included the General Plan Update, was prepared in accordance with the California
2 Environmental Quality Act (CEQA) and certified by the Morgan Hill City Council on July 27, 2016. Commercial and industrial development as discussed above is consistent with the general plan policies for which the EIR was certified. There is no substantial evidence that freezing impact fees will have a significant effect on the environment beyond that already analyzed in the certified EIR; therefore, no further environmental analysis is required.
Any project specific development that occurs in the future will undergo an independent analysis pursuant to the requirements of CEQA.
IMPACT FEE FREEZE AGREEMENT
BY AND BETWEEN
THE CITY OF MORGAN HILL
AND
MERSHO INVESTMENTS LLC, AND
CLAYTON PLAZA LLC
IMPACT FEE FREEZE AGREEMENT
BY AND BETWEEN
THE CITY OF MORGAN HILL
AND
MERSHO INVESTMENTS LLC, AND
CLAYTON PLAZA, LLC
This Impact Fee Freeze Agreement (the "Agreement") is entered into as of June 21, 2023, by and between Mersho Investments LLC, a California Limited Liability Corporation and Clayton Plaza LLC, a California Limited Liability Corporation (the "Developer") and the City of Morgan Hill, a municipal corporation duly organized and existing under the laws of the State of California (the “City”), with reference to the following facts and purposes:
RECITALS
The following recitals are a substantive portion of this Agreement:
A. Pursuant to the authority of Morgan Hill Municipal Code Sections 3.56.095, 12.02.115, and Resolution Numbers 17-052 and 18-013, and as amended by City Council action on May 18, 2022, the City has established an Impact Fee Freeze Program (the "Program") to freeze Development Impact Fees to the time of the executed agreement for up to three years for new commercial/industrial construction.
B. Developer owns or leases certain real property in the City described in the attached Exhibit A (the "Subject Property") upon which improvements are to be made for new industrial/commercial projects (the “Projects”).
C. The purpose of this Agreement is to lock in the Development Impact Fees for the Project.
The Project’s Development Impact Fees will be locked in at the rate set in the Fiscal Year 2022- 23 Impact Fee Schedule (dated 05-15-2023) attached hereto and incorporated herein as Exhibit B.
D. Developer and City have determined that the Project is the type of development for which this Agreement is appropriate. This Agreement will help to eliminate uncertainty in annual changes to Development Impact Fees, provide for the orderly development of the Projects consistent with the planning goals, policies, and other provisions of the City’s General Plan and City's Municipal Code, and otherwise achieve the goals and purposes for which the Development Impact Fee Program was adopted.
E. When constructed and open the Projects will generate Property Tax and Sales Tax for the City creating a public benefit which is required in order to enter into this Agreement.
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ARTICLE 1
ADMINISTRATION
1.01 Definitions.
(a) The following terms, phrases and words shall have the meanings and be interpreted as set forth in this Section:
(1) “Impact Fees” shall mean those fees imposed so that developments bear a proportionate share of the cost of public facilities and service improvements that are reasonably related to the impacts and burdens of the Project, adopted pursuant to Morgan Hill Municipal Code Chapter 3.56 and California Government Code Section 66001 et seq. (2) "Legal Effect" shall mean the ordinance, resolution, permit, license or other grant of approval has been adopted by City and has not been overturned or otherwise rendered without legal and/or equitable force and effect by a court of competent jurisdiction, and all applicable administrative appeal periods and statutes of limitations have expired. (3) "New City Laws" shall mean any and all City ordinances, resolutions, orders, rules, official policies, standards, specifications and other regulations, whether adopted or enacted by City, its staff or its electorate (through their powers of initiative, referendum, recall or otherwise) that is not a Subsequent Approval, that takes "Legal Effect" after the Effective Date of this Agreement, and that applies City wide. “Effective Date” shall mean the date this Agreement is fully executed by both parties following approval of the Agreement by the City Council.
(4) "Project Approvals" mean, collectively, the Project's Existing Approvals and the Subsequent Approvals.
(5) "Property" shall mean that certain real property consisting of approximately 22.54 acres located within the City, as more particularly described and shown on Exhibit A to this Agreement with Assessor Parcel Numbers (APN) 72631038, APN 72631025, APN 72633026, APN 72633025, APN 72625026, and APN 72632025. (6) "Subsequent Approvals" and "Subsequent Approval" mean those City permits, entitlements, approvals or other grants of authority (and all text, terms and conditions of approval related thereto), that may be necessary or desirable for the development of the Project, that are sought by Developer, and that are granted by City. (b) To the extent that any defined terms contained in this Agreement are not defined above, then such terms shall have the meaning otherwise ascribed to them elsewhere in this Agreement, or if not in this Agreement, by controlling law.
-3-
1.02 Term.
The term ("Term") of this Agreement shall commence on the Effective Date, and then shall continue until June 30, 2026, or the issuance of all building permits and commencement of construction for the Project, whichever occurs first.
ARTICLE 2
APPLICABLE LAW
2.01 Project Impacts and Costs.
(a) Agreement Subject to Project Mitigation Requirements. Notwithstanding any other express or implied term or condition of this Agreement (or the Approvals) to the contrary, throughout the Term of this Agreement, the full and complete mitigation of all environmental (including any mitigation measure adopted pursuant to CEQA), physical, fiscal and other impacts of the Project and the Property on the community and on the City of Morgan Hill and its services, facilities, operations and maintenance (collectively, "Project Mitigation") shall be borne by and shall be the sole and exclusive responsibility of the Project (and the Developer who is the owner of same). Such Project Mitigation may be conditions of any Applicable Law or Project Approval and may include a mix of different approaches, including without limitation, Developer construction of and/or financing of such services, facilities, operations and maintenance through the payment of impact fees or other fees, taxes, levies, assessments, or other financing mechanisms including without limitation, reimbursement agreements, Landscaping and Lighting Districts, Mello-Roos Districts, Community Facilities Districts, Assessment Districts, Tax-Exempt and Taxable Financing Mechanisms, Maintenance Districts and participation in the Statewide Communities Infrastructure Program (collectively, "Financing Mechanisms"). The necessary scope and extent of such Project Mitigation, and which combination of Financing Mechanisms should be employed relating to such Project Mitigation to assure success of the Project Mitigation, shall be determined by City, in its sole and exclusive discretion, pursuant to appropriate City ordinance, resolution, regulations or procedures, taking into account and guided by the pre-existing rights of others in the existing and future public services and facilities (including their operations and maintenance) that Developer may seek to use.
(b) Impact Fees. As part of the Project's exclusive obligation (and the Developer's as the owner of same) to cover Project Mitigation, Developer shall pay all Impact Fees as described in Exhibit B at the time any such Impact Fees become due and payable as provided for in the City’s Municipal Code, except as otherwise described and reduced by this Agreement. The Project's Impact Fees are frozen at the level set in the Impact Fee Schedule for Fiscal Year 2022-23 (dated 05-15-2023) Impact Fee Schedule in the attached Exhibit B, as long as all the building permits are obtained, and construction commenced on or before June 30, 2026 on each of the proposed sites.
(c) Processing Fees. The Project (including Developer as owner of same) shall be responsible for the costs to City of processing any and all Developer-requested land use approvals, including without limitation, building permits, plan checks, environmental studies
-4-
required under CEQA and other similar requests for City permits and entitlements, when such costs are incurred by City. City shall impose those funding requirements needed to ensure that the processing costs to the City are fully covered by the Project (including Developer as owner of same). Further, if additional, accelerated, or more frequent inspections are requested by Developer of City than would otherwise take place in City’s ordinary course of business, then City may either hire additional contract inspectors, plan checkers, engineers or planners, or City may hire a full or part time employee. If City hires additional contractors, then Developer shall reimburse City, on a monthly basis in arrears, the cost to City of hiring such additional contract inspectors, plus Developer shall pay to City an additional ten percent (10%) of such cost to City on the same payment schedule. City shall use an additional 10% to defray administrative costs.
If City hires a full or part time employee, then Developer shall reimburse City, on a monthly basis, in arrears, for a pro rata share of the total cost to the City of such employee, plus ten percent (10%) for administrative costs, for the period from hire to the end of the Term of this Agreement.
2.02 Construction Codes.
With respect to the development of any or all of the Project or the Property, Developer shall be subject to the California Building Code and all those other State-adopted construction, fire and other codes applicable to improvements, structures, and development, and the applicable version or revision of said codes by local City action (collectively referred to as "Construction Codes") in place at that time that a plan check application for a building, grading or other permit subject to such Construction Codes is submitted to City for approval, provided that such Construction Codes have been adopted by City and are in effect on a City-wide basis.
2.03 Timing of Development.
Developer agrees to secure building permits and to begin construction of the Project in accordance with the time requirements set forth in the Construction Codes, as these exist on the Effective Date. In the event Developer fails to comply with the above permit issuance and commence construction no later than June 30, 2026 this Agreement shall expire. The deadline may be extended at the sole discretion of the City Manager should Developer face unreasonable delays beyond its control.
2.04 New City Laws.
(a) City shall not be precluded from adopting and applying New City Laws to the Project to the extent that such New City Laws are specifically required to be applied by State or Federal laws or regulations, and implemented through the Federal, State, regional and/or local level) , or that such New City Laws are necessitated by or arise from a declaration of City, local, state or federal declaration of a state of emergency.
(b) City shall not be precluded from adopting new Impact or Development Fees that are not included in the Fiscal Year 2022-23 Impact Fee Schedule. These fees include but are not limited to those fees which were adopted or implemented after the 2022-23 Impact Fee Schedule up to the date of building permit issuance for the Project.
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ARTICLE 3
PROCESSING
3.01 Processing.
(a) This Agreement does not provide Developer with any right to the approval of Subsequent Approvals nor to develop or construct the Project beyond that which is authorized in the Existing Approvals. For any Subsequent Approvals necessary for the Project, this Agreement simply provides a process by which such Subsequent Approvals may be processed by Developer, if and only if such Subsequent Approvals are compliant with all controlling California law (including proper Planning and Zoning Law and CEQA compliance), have secured approval of the Parties, and are adopted/approved by City, which shall retain all lawful discretion in this regard. Nothing in this Agreement shall be construed to limit the authority or obligation of City to hold necessary public hearings, or to limit the discretion of City or any of its officers or officials with regard to the Project Approvals that legally require the exercise of discretion by City. City's discretion as to the granting of Subsequent Approvals shall be the discretion afforded by the Applicable Law.
3.02 Significant Actions by Third Parties Necessary to Implement the Approvals. (a) At Developer's sole discretion, Developer shall apply for such other permits, grants of authority, agreements, and other approvals from other private and/or public and quasi-public agencies, organizations, associations or other entities ("Other Entity") as may be necessary to the development of, or the provision of services and facilities to, the Project ("Other Permits").
ARTICLE 4
DEFAULT, VALIDITY PROVISIONS, ASSIGNMENT
4.01 Resolution of Disputes.
(a) In the event either Party is in default under the terms of this Agreement, the other Party may elect, in its sole and absolute discretion, to pursue any of the following courses of action: (i) waive such default; (ii) pursue administrative remedies as provided herein; (iii) pursue judicial remedies as provided for herein; and/or (iv) terminate this Agreement. (b) Except as otherwise specifically stated in this Agreement, either Party may, in addition to any other rights or remedies, institute legal action to cure, correct, or remedy any default by another Party to this Agreement, to enforce any covenant or agreement herein, to enjoin any threatened or attempted violation hereunder, or to seek specific performance. It is expressly understood and agreed that the sole legal remedy available to Developer for a breach or violation of this Agreement by City shall be a legal action in mandamus, specific performance, and/or other injunctive or declaratory relief to enforce the provisions of this Agreement, and that Developer shall not be entitled to bring an action for damages including, but not limited to, lost profits, consequential damages or other economic damages. For purposes of instituting a legal action
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under this Agreement, any City Council determination under this Agreement shall be deemed a final agency action.
(c) The Parties agree to meet and confer regarding any dispute, in an effort to agree on utilizing Judicial Arbitration Mediation Services ("JAMS") for Alternative Dispute Resolution ("ADR"). However, no party shall be required to use JAMS or ADR.
4.02 Force Majeure Delay, Extension of Times of Performance. (a) Performance by any Party hereunder shall be excused, waived or deemed not to be in default where delays or defaults are due to acts beyond a Party's control such as war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires, casualties, acts of God, unexpected acts of governmental entities other than City, including revisions to capacity ratings of the wastewater plant by the Regional Water Quality Control Board, the State Water Resources Board, enactment of conflicting State or Federal laws or regulations, or litigation (including without limitation litigation contesting the validity, or seeking the enforcement or clarification of this Agreement whether instituted by the Developer, City, or any other person or entity) (each a "Force Majeure Event").
(b) Any Party claiming a delay as a result of a Force Majeure Event shall provide the other Party with written notice of such delay and an estimated length of delay. Upon the other Party's receipt of such notice, an extension of time shall be granted in writing for the period of the Force Majeure Event, or longer as may be mutually agreed upon by the Parties, unless the other Party objects in writing within ten (10) days after receiving the notice. In the event of such objection, the Parties shall meet and confer within thirty (30) days after the date of objection to arrive at a mutually acceptable solution to the disagreement regarding the delay. If no mutually acceptable solution is reached, any Party may take action as permitted in this Agreement.
4.03 Third Party Legal Actions.
(a) In the event of any administrative, legal or equitable action or other proceeding instituted by any person, entity or organization (that is not a Party to this Agreement) challenging the validity of this Agreement, any Project Approvals, or the sufficiency of any environmental review under CEQA ("Third Party Challenge"), the Parties shall cooperate with each other in good faith in the defense of any such challenge. Third Party Challenge shall include all City legal fees, costs including but not limited to staff costs should a local initiative which results in blocking or slowing the Project be approved by the voters and City in its reasonable discretion determines that a judicial action should be filed concerning the initiative or City is sued concerning the initiative.
(b) City shall have the option to defend such Third Party Challenge or to tender the complete defense of such Third Party Challenge to the Developer ("Tender"). If City chooses to defend the Third Party Challenge or Developer refuses City's Tender, City shall control all aspects of the defense and Developer shall pay City's attorneys’ fees and costs (including related court costs).
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(c) If Developer accepts City's Tender, Developer shall control all aspects of the defense and shall pay its own attorneys’ fees and costs (including related court costs) and shall indemnify and hold harmless City against any and all third-party fees and costs arising out of such Third Party Challenge. If City wishes to assist Developer when Developer has accepted the Tender, Developer shall accept that assistance and City shall pay City's own attorneys’ fees and costs (including related court costs) ("City Costs"), and Developer shall pay its own attorneys’ fees and costs (including related court costs), and shall indemnify and hold harmless City against any and all third-party fees and costs arising out of such Third Party Challenge (such third party fees and costs shall not include City Costs).
(d) If any part of this Agreement or any Project Approval is held by a court of competent jurisdiction to be invalid, the City shall: (1) use its best efforts to sustain and/or reenact that part of this Agreement and/or Project Approval; and (2) take all steps possible to cure any inadequacies or deficiencies identified by the court in a manner consistent with the express and implied intent of this Agreement, and then adopting or re-enacting such part of this Agreement and/or Project Approval as necessary or desirable to permit execution of this Agreement and/or Project Approval.
4.04 Estoppel Certificate.
(a) Any Party may, at any time, and from time to time, deliver written notice to any other Party, and/or to the Developer’s lender, requesting such Party to certify in writing that, to the knowledge of the certifying Party:
(1) This Agreement has not been amended or modified either orally or in writing or if so amended, identifying the amendments. (2) The Agreement is in effect and the requesting Party is not known to be in default of the performance of its obligations under this Agreement, or if in default, to describe therein the nature and amount of any such defaults.
(b) This written certification shall be known as an "Estoppel Certificate." A Party receiving a request hereunder shall execute and return such Estoppel Certificate within thirty(30) days following the receipt of the request, unless the Party, in order to determine the appropriateness of the Estoppel Certificate, promptly commences and proceeds to conclude an Annual Review. The Parties acknowledge that an Estoppel Certificate may be relied upon by Assignees and other persons having an interest in the Project, including holders of mortgages and deeds of trust. The City Manager shall be authorized to execute an Estoppel Certificate for City. (c) If a Party fails to deliver an Estoppel Certificate within the thirty (30) day period, as provided for in Section 4.04(b) above, the Party requesting the Estoppel Certificate may deliver a second notice (the "Second Notice") to the other Party stating that the failure to deliver the Estoppel Certificate within ten (10) working days following the receipt of the Second Notice shall constitute conclusive evidence that this Agreement is without modification and there are no unexcused defaults in the performance of the requesting Party. Failure to deliver the requested Estoppel Certificate within the ten (10) working day period shall then constitute
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conclusive evidence that this Agreement is in full force and effect without modification and there are no unexcused defaults in the performance of the requesting Party.
4.05 Termination.
This Agreement shall terminate upon the expiration of the Term, as set forth in Section 1.02, or at such other time as this Agreement is terminated in accordance with the terms hereof, whichever occurs first.
ARTICLE 5
GENERAL PROVISIONS
5.01 Miscellaneous.
(a) Preamble, Recitals, Exhibits. References herein to "this Agreement" shall include the Preamble, Recitals and all of the exhibits of this Agreement. (b) Governing Law and Attorneys' Fees. This Agreement shall be construed and enforced in accordance with the laws of the State of California and legal actions commenced under or pursuant to this Agreement shall be brought in Santa Clara Superior Court. Should any legal action be brought by a Party for breach of this Agreement or to enforce any provision herein, the prevailing party of such action shall be entitled to reasonable attorneys' fees, court costs, and such other costs as may be fixed by the court.
(c) Project as a Private Undertaking. No partnership, joint venture, or other association of any kind between Developer, on the one hand, and City on the other hand, is formed by this Agreement. The development of the Property is a separately undertaken private development. The only relationship between City and Developer is that of a governmental entity regulating the development of private property and the owners of such private property. (d) Indemnification. Developer shall hold City, its elective and appointive boards, commissions, officers, agents, and employees, harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Developer's contractors, subcontractors', agents' or employees' operations on the Project, whether such operations be by Developer or by any Developer's contractors, subcontractors, or by any one or more persons directly or indirectly employed by, or acting as agent for Developer or any of Developer's contractors or subcontractors. Developer shall indemnify and defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damages caused, or alleged to have been caused, by reason of any of the aforesaid operations and Developer shall pay all reasonable attorney's fees and costs that the City may incur. City does not, and shall not, waive any rights against Developer which it may have by reason of the aforesaid hold-harmless requirement of Developer because of the acceptance of improvements by City, or the deposit of security with City by Developer. The aforesaid hold-harmless requirement of Developer shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered, by reason of any of the aforesaid operations referred to in this subsection, regardless of
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whether or not City has prepared, supplied or approved of, plans and/or specifications for the Project Notwithstanding anything herein to the contrary, Developer’s indemnification of City shall not apply to the extent that such action, proceedings, demands, claims, damages, injuries or liability is based upon the active negligence of the City. (e) Interpretation/Construction. This Agreement has been reviewed and revised by legal counsel for both Developer and City, and any rule or presumption that ambiguities shall be construed against the drafting Party shall not apply to the interpretation or enforcement of this Agreement. The standard of review of the validity and meaning of this Agreement shall be that accorded legislative acts of City. As used in this Agreement, and as the context may require, the singular includes the plural and vice versa, and the masculine gender includes the feminine and neuter and vice versa.
(f) Notices.
(1) All notices, demands, or other communications that this Agreement contemplates or authorizes shall be in writing and shall be personally delivered or mailed to the respective Party as follows:
If to City: City Clerk
17575 Peak Avenue
Morgan Hill, CA 95037
Tel: (408) 779-7259
Fax: (408) 779-3117
With a Copy To: City Attorney
17575 Peak Avenue
Morgan Hill, CA 95037
Tel: (408) 779-7271
Fax: (408) 779-1592
If to Developer: Mersho Investments LLC
5752 Country Club Pkwy
San Jose, CA 95138
Clayton Plaza LLC
5752 Country Club Pkwy
San Jose, CA 95138
With a Copy To:
(2) Any Party may change the address stated herein by giving notice in writing to the other Parties, and thereafter notices shall be addressed and transmitted to the new address. Any notice given to the Developer as required by this Agreement shall also be given to any lender which requests that such notice be provided. Any lender requesting receipt of such notice shall furnish in writing its address to the Parties to this Agreement.
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(g) Severability. If any term or provision of this Agreement, or the application of any term or provision of this Agreement to a specific situation, is found to be invalid, void, or unenforceable, the remaining terms and provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect. (h) Jurisdiction. The interpretation, validity, and enforcement of the Agreement shall be governed by and construed under the laws of the State of California. (i) Entire Agreement. This Agreement, including these pages and all the exhibits (set forth below) inclusive, and all documents incorporated by reference herein, constitute the entire understanding and agreement of the Parties. (j) Signatures. The individuals executing this Agreement represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Agreement on behalf of the respective legal entities of Developer and City. This Agreement may be executed in multiple originals, each of which is deemed to be an original. (k) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all such counterparts shall together constitute one and the same instrument.
(l) Exhibits. The following exhibits are attached to this Agreement and are hereby incorporated herein by this reference for all purposes as if set forth herein in full:
Exhibit A Legal Description of Lots on Which Projects are to be Located.
Exhibit B 2022-23 Impact Fee Schedule (dated 05-15-2023) IN WITNESS WHEREOF, City and Developer have executed this Agreement as of the date first hereinabove written.
CITY OF MORGAN HILL: DEVELOPER:
s/_______________________________ s/_________________________ Christina J. Turner George Mersho
City Manager Managing Member
Corporate entities must provide a
Date: ___________________________ second signature:
s/_________________________
Attest: Ralph Mersho
Managing Member
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s/______________________________
Date: ______________________
________________________________
Deputy City Clerk
Approved as to Form:
s/________________________________
_________________________________
Donald A. Larkin
City Attorney
Date: _____________________________
Exhibit A
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY ON WHICH
PROJECT IS BE LOCATED
APN: 726-31-038
Real property in the City of Morgan Hill, County of Santa Clara, State of California, described as follows:
PARCEL ONE:.
PARCEL 2 AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF
THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON JULY 29, 1997, IN BOOK 691 OF MAPS, PAGE 46 AND 47.
PARCEL TWO:
RECIPROCAL RIGHTS OF INGRESS AND EGRESS, AS AN APPURTENANCE TO PARCEL ONE ABOVE, OVER THOSE PORTIONS OF PARCEL 3 AS SHOWN ON THAT CERTAIN PARCEL MAP FILED JULY 29, 1997, IN BOOK 691 OF MAPS, PAGES 46 AND 47, SHOWN AS "30' PRIVATE ACCESS ESMT".
APN: 726-31-025
Real property in the City of Morgan Hill, County of Santa Clara, State of California, described as follows:
PARCEL 2, AS SHOWN ON THAT CERTAIN PARCEL MAP FILED FOR RECORD IN
THE OFFICE OF THE COUNTY RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON FEBRUARY 7, 1997, IN BOOK 686 OF MAPS AT PAGES 1 AND 2.
APN: 726-33-026
Real property in the City of Morgan Hill, County of Santa Clara, State of California, described as follows:
PARCEL O, AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF
THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA RECORDED ON OCTOBER 13, 2000, IN BOOK 733 OF MAPS PAGES 11 AND 12.
Exhibit A
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APN: 726-33-025
Real property in the City of Morgan Hill, County of Santa Clara, State of California, described as follows:
PARCEL N, AS SHOWN ON THAT CERTAIN PARCEL MAP ENTITLED, "PARCEL MAP", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON OCTOBER 13, 2000 IN BOOK 733 OF MAPS, AT PAGES 11 AND 12.
APN: 726-25-026
Real property in the City of Morgan Hill, County of Santa Clara, State of California, described as follows:
PARCEL 3 AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF
THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON APRIL 3, 1998, IN BOOK 700 OF MAPS, PAGES 30, 31 AND 32.
APN: 726-32-025
Real property in the City of Morgan Hill, County of Santa Clara, State of California, described as follows:
PARCEL ONE: PARCEL 2 AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE
OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON MAY 4, 1998, IN BOOK 701 OF MAPS, PAGE(S) 39 AND 40.
PARCEL TWO:
A NON-EXCLUSIVE EASEMENT, APPURTENANT TO PARCEL ONE ABOVE, FOR
VEHICULAR AND PEDESTRIAN ACCESS, INGRESS AND EGRESS OVER THE DRIVEWAY PORTION OF SAID LAND BEING THE SOUTHEASTERLY 17 FEET OF PARCEL 1, AS SHOWN ON THAT CERTAIN MAP ENTITLED, "PARCEL MAP BEING A SUBDIVISION OF PARCEL 3-A AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN BOOK 584 OF MAPS, PAGES 5 AND 6, SANTA CLARA COUNTY RECORDS,"
WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON MAY 4, 1998 IN BOOK 701 OF MAPS, PAGES 39 AND 40, AS GRANTED IN THAT CERTAIN INSTRUMENT ENTITLED "RECIPROCAL EASEMENT AND OPERATION AGREEMENT RECORDED MAY 15, 1998 UNDER SERIES NO. 14185906, OFFICIAL RECORDS.
DATE PREPARED:
TRACT # / APN:
EXPIRATION DATE:
ADDRESS / LOT:
CALCULATED BY:
PROJECT DESC:
CHECKED BY:
APPLICANT NAME: BUILDING PERMIT #:
MAILING ADDRESS: BLD PERMIT DATE:
CITY, STATE, ZIP:
PHONE NUMBER:
1. METER DEPOSIT (149): Subtotal:
1″ x 0 = $0
1 ½″ x 0 = $0
2″ x 0 = $0
=
* 4" x 0 = $0
* 6" x 0 = $0
* 8" x 0 = $0
*
** 5/8" -$277 x 0 = $0
** 3/4" -$322 x 0 = $0
**
2. BACKFLOW CONST. INSPECTION (154): Subtotal:
x 0 Each = $0
3a. WATER FRONTAGE CHARGE (146): Subtotal:
1 Side $82 x 0 LF = $0
2 Sides $45 x 0 LF = $0
3b. SEWER FRONTAGE CHARGE (146): Subtotal:
1 Side $82 x 0 LF = $0
2 Sides $45 x 0 LF = $0
3c. STORM FRONTAGE CHARGE (135): 304-37663 Subtotal:
1 Side $134 x 0 LF = $0
2 Sides $65 x 0 LF = $0
3d. UNDERGROUNDING UTILITIES (145): 350-37649 Subtotal:
1 Side $845 x 0 LF = $0
2 Sides $427 x 0 LF = $0
CITY OF MORGAN HILL PUBLIC WORKS DEPARTMENT
17575 Peak Avenue Morgan Hill CA 95037 - Office (408) 778-6480 Fax (408) 779-7236 FEE SCHEDULE: 05.15.2023
PROJECT INFO
APPLICANT INFO
MULTI-FAMILY IS DEFINED AS ANY UNIT WITH TWO BEDROOMS OR LESS.
SINGLE FAMILY IS DEFINED AS ANY UNIT WITH 3 BEDROOMS OR MORE. $2,010
650-37859 $0
For meters 3" and greater, arangements shall be made for the meters to be picked up at the City Corporation Yard located at 100 Edes Court. 650-37672 $0
$573
$1,782
$3,999
$12,218
$18,163
Credit for 5/8" and 3/4" existing meter (if applicable) 650-37663 $0
640-37663 $0
$76
$0
$0
THIS FEE SCHEDULE IS ESTIMATE ONLY
\\mhpw\everyone\SHARED\WPDATA\COMFORMS\FEE SCHEDULES\2023\05.15.23\01 PW FEES 05.15.2023 1
EXHIBIT B
2022-23 (05-15-2023) Impact Fee Schedule
4. WATER CAPACITY FEE: Subtotal:
x 0 = $0
x 0 = $0
x 0 = $0
x 0 = $0
x 0 = $0
x 0 = $0
x 0 = $0
WATER CREDITS $0 / x 0 / = $0
5. SEWER IMPACT FEE: Subtotal:
Single Family $19,206 /DU x 0 DU = $0
Multi Family $16,255 /DU x 0 DU = $0
Senior/Downtown $16,255 /DU x 0 DU = $0
Commercial $63.25 /GPD x 0 GPD = $0
Industrial $63.25 /GPD x 0 GPD = $0
Office $63.25 /GPD x 0 GPD = $0
Auto Dealership $63.25 /GPD x 0 GPD = $0
Hotel $63.25 /GPD x 0 GPD = $0
Secondary DU TBD /DU x 0 DU = $0
SEWER CREDITS $0 / x 0 / = $0
6. STORM DRAIN IMPACT FEE: 303-37648 Subtotal:
Single Family $2,434 /DU x 0 DU = $0
>1,200 SF Multi Family $1,386 /DU x 0 DU = $0
< 1,200 SF Multi Family $645 /DU x 0 DU = $0
>1,200 SF Senior/Downtown $1,386 /DU x 0 DU = $0
< 1,200 SF Senior/Downtown $645 /DU x 0 DU = $0
Commercial $26,359 /ACRE x 0 AC = $0
Industrial $19,407 /ACRE x 0 AC = $0
Office $26,359 /ACRE x 0 AC = $0
Auto Dealership $26,359 /ACRE x 0 AC = $0
Hotel $390 /ROOM x 0 RM = $0
Secondary DU TBD /DU x 0 DU = $0
STORM CREDITS $0 / x 0 / = $0
7. TRAFFIC IMPACT FEE: Subtotal:
Single Family $4,230 /DU x 0 DU = $0
>1,200 SF Multi Family $2,621 /DU x 0 DU = $0
< 1,200 SF Multi Family $1,650 /DU x 0 DU = $0
>1,200 SF Senior/Downtown $2,621 /DU x 0 DU = $0
< 1,200 SF Senior/Downtown $1,650 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
Commercial $4,230 /PHT x 0 PHT = $0
Industrial $4,230 /PHT x 0 PHT = $0
Office $4,230 /PHT x 0 PHT = $0
Auto Dealership $4,230 /PHT x 0 PHT = $0
Hotel $4,230 /PHT x 0 PHT = $0
TRAFFIC CREDITS $0 /PHT x 0 PHT = $0
8a. PARK IMPACT FEE: Subtotal:
Subdivision: Single Family $7,283 /DU x 0 DU = $0
Multi Family $7,017 /DU x 0 DU = $0
Senior/Downtown $4,806 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
No Subdivision Single Family $5,295 /DU x 0 DU = $0
Multi Family $5,107 /DU x 0 DU = $0
Senior/Downtown $3,495 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
PARK CREDITS $0 / x 0 / = $0
8b. QUIMBY / PARKLAND IN-LIEU FEE Subtotal:
$0 / x 0 EA = $0
8c. PARK MAINTENANCE DEV. FEE: Subtotal:
$0 / x 0 EAC = $0
$23,385
$37,415
$74,830
$116,923
$233,845
$374,152
5/8-1 inch meter
1.5-inch meter
2-inch meter
3-inch meter
4-inch meter
6-inch meter
8-inch meter
302-37649 $0
$0
309-37648 $0.00
301-37648 $0
375-37648
$11,692
651-37648 $0
641-37648 $0.00
$0.00
\\mhpw\everyone\SHARED\WPDATA\COMFORMS\FEE SCHEDULES\2023\05.15.23\01 PW FEES 05.15.2023 2
9. PUBLIC FACILITIES IMPACT FEE: Subtotal:
Single Family $693 /DU x 0 DU = $0
Multi Family $667 /DU x 0 DU = $0
Senior/Downtown $458 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
Commercial $1,527 /ACRE x 0 AC = $0
Industrial $2,138 /ACRE x 0 AC = $0
Office $1,815 /ACRE x 0 AC = $0
Auto Dealership $612 /ACRE x 0 AC = $0
Hotel $18 /ROOM x 0 RM = $0
PUBLIC FACILITIES CREDITS $0 / x 0 / = $0
10. LIBRARY IMPACT FEE: Subtotal:
Single Family $2,674 /DU x 0 DU = $0
Multi Family $2,576 /DU x 0 DU = $0
Senior/Downtown/SDU $1,764 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
LIBRARY CREDITS $0 / x 0 / = $0
11. COMMNTY/REC CNTRS IMPACT FEE: Subtotal:
Single Family $4,960 /DU x 0 DU = $0
Multi Family $4,352 /DU x 0 DU = $0
Senior/Downtown $3,284 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
COMMNTY/REC CNTRS CREDITS $0 / x 0 / = $0
12. PUBLIC SAFETY FACILITIES IMPACT FEE: Subtotal:
Single Family $2,434 /DU x 0 DU = $0
>1,200 SF Multi Family $2,152 /DU x 0 DU = $0
< 1,200 SF Multi Family $1,612 /DU x 0 DU = $0
>1,200 SF Senior/Downtown $2,152 /DU x 0 DU = $0
< 1,200 SF Senior/Downtown $1,612 /DU x 0 DU = $0
Secondary DU TBD /DU x 0 DU = $0
Commercial $13,602 /ACRE x 0 AC = $0
Industrial $16,326 /ACRE x 0 AC = $0
Office $16,307 /ACRE x 0 AC = $0
Auto Dealership $6,524 /ACRE x 0 AC = $0
Hotel $75 /ROOM x 0 RM = $0
PUBLIC SAFETY FACILITIES CREDITS $0 / x 0 / = $0
13. ENGINEERING & INSPECTION FEE (112): Subtotal:
ENGR ESTIMATE: $0 35.29% $1 to $100,000 = $0
ENGR EST. DATE: 18.16% $100,001 to $200,000 = $0
13.74% $200,001 to $500,000 = $0
11.56% $500,001 to $1,000,000 = $0
1.98% $1,000,001 to $5,000,000 $0
4.63% over $5,000,000 $0
DEPOSIT PAID = $0
14. LONG RANGE PLANNING FEE (127): Subtotal:
LONG RANGE PLANNING FEE (15% of E&I) = $0
15. GIS/TECHNOLOGY FEE (128): Subtotal:
GIS/TECHNOLOGY FEE (5% of E&I) = $0
16. MAP CHECKING FEE (101): Subtotal:
PARCEL MAP: = $0
TRACT/SUBD. MAP: = $0
348-37648 $0
207-37912 $0
315-37648 $0
206-37913 $0
206-38716 $0
360-37648 $0
$8,725
$10,309
206-38734 $0
347-37648 $0
\\mhpw\everyone\SHARED\WPDATA\COMFORMS\FEE SCHEDULES\2023\05.15.23\01 PW FEES 05.15.2023 3
17. OTHER FEES: Subtotal:
Cert. of Compliance - LLA /Merger (94) $ 6,875 206-38712 = $0 Parcel Map - LLA /Merger (100) $ 7,396 206-38712 = $0
Additional Plan Review (105) $ 230 /hr 206-38734 = $0
- 4th submittal and up, at $230/hr with 2-hour min. charge, OT at $265/hr Plan Revisions (114) $ 230 /hr 206-38719 = $0
- Revision after approval of public improvement plans, at $230/hr with 2-hour min. charge, OT at $265/hr Engineering Services:
- Consultation (102) $ 230 /hr 206-38719 = $0
* Consultation at fully burdened rate at $230/hr, OT at $265/hr - Preliminary Review (103) $ 2,300 206-38719 = $0
- Preliminary Fee Estimate (104) $ 345 206-38719 = $0
- Complexity Fee (106) $ 2,760 206-38719 = $0
- Re-inspection Fee (107) $ 230 /hr 206-38734 = $0
* Re-inspection fee at $230/hr with 4-hour min. charge, OT at $265/hr Public Easement Review (113) $ 3,106 206-38737 = $0
Street Vacation Review (115) $ 8,972 206-38737 = $0
Easement Abandonment (116) $ 8,972 206-38737 = $0
Reimbursement Agreement (119) $ 4,946 206-38741 = $0
FEMA Compliance (110)
New Structure Application $ 965 206-38725 = $0
New Acc. Struct. or ADU Application $ 735 206-38725 = $0 Improvement of Existing Structure
Non-substantial Imp w/o detailed revie $ 549 /structure 206-38725 = $0 Non-substantial Imp w/ detailed review $ 779 /structure 206-38725 = $0 Substantial Imp (except Acc. Struct.) $ 1,252 /structure 206-38725 = $0 Substantial Imp of Acc. Struct. $ 850 /structure 206-38725 = $0 FEMA Elevation Certificate Review $ 633 /structure 206-38725 = $0 FEMA Flood Field Inspection $ 575 206-38725 = $0
FEMA Flood Study Valley Water Coord. $ 1,495 206-38725 = $0 Review of CLOMR/F, LOMR/F $ 920 206-38725 = $0
FEMA Pub. Outreach LOMR/F $ 1,380 206-38725 = $0
BFE Determination (Zone A w/o BFE or Zone D) $ 460 206-38725 = $0 Stormwater Runoff Management Plan (SWRMP) Review (111)
Tier 1 Project $ 2,645 206-38734 = $0
Tier 2 Project $ 6,901 206-38734 = $0
Tier 3 Project $ 9,892 206-38734 = $0
Tier 4 Project $ 11,962 206-38734 = $0
Erosion & Sediment Control/SWPPP Document Review (129)
Type 1 & 2 Projects: <1 Acre Soil Dist $ 518 206-37687 = $0 Type 1 & 2 Projects: >1 Acre Soil Dist $ 863 206-37687 = $0 Type 3 Projects $ 403 206-37687 = $0
Type 4 Projects $ 288 206-37687 = $0
Stormwater Construction Inspections (130)
Type 1 & 2 Projects: <1 Acre Soil Dist $ 9,179 206-37688 = $0 Type 1 & 2 Projects: >1 Acre Soil Dist $ 16,367 206-37688 = $0 Type 3 & 4 Projects $ 93 206-37688 = $0
Stormwater Post-Construction BMP Initial Setup (140)
Base Fee & 1st BMP $ 660 206-38734 = $0
Each Additional BMP $ 132 /BMP 206-38734 = $0
Assessment District Reapportionment (137) see separate appl. with fee 206-38719 = $0 Private Sanitary Agreement (138) $ 2,645 206-38719 = $0 Stormwater O&M Agreement (139) $ 2,070 206-38719 = $0
Agreement Extensions/Amendments (143)
With City Manager Approval $ 2,876 206-38719 = $0
With City Council Approval $ 4,371 206-38719 = $0
RDCS School Pedestrian Safety $ 355-37655 = $0
RDCS Public Facilities $ 346-37649 = $0
RDCS Park Development $ 302-37649 = $0
RDCS Public Facilities Circulation $ 346-37649 = $0
RDCS LED Streetlight Fund $ 010-37722 = $0
TOTAL FEES DUE:
$0
$0.00
TOTAL FEES DUE:
(with 2% Credit Card Fee) $0.00
\\mhpw\everyone\SHARED\WPDATA\COMFORMS\FEE SCHEDULES\2023\05.15.23\01 PW FEES 05.15.2023 4
3 CITY COUNCIL STAFF REPORT
MEETING DATE: June 21, 2023
PREPARED BY:
Lynette Kong, Associate Engineer
APPROVED BY: City Manager
ADOPT A RESOLUTION OF LOCAL SUPPORT AND AUTHORIZE THE
FILING OF AN OBAG 3 FUNDING APPLICATION FOR THE MONTEREY
ROAD TRAFFIC, BICYCLE, AND PEDESTRIAN IMPROVEMENTS
PROJECT
RECOMMENDATION(S)
Adopt a Resolution of Local Support and authorize the filing of an application for funding assigned to the Metropolitan Transportation Commission (MTC) and committing any necessary matching funds and stating assurance to complete the project.
COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
Transportation
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Morgan Hill 2035 General Plan
Vision Zero
REPORT NARRATIVE:
The Metropolitan Transportation Commission (MTC) created the One Bay Area Grant program (OBAG) in May 2012 to incorporate the region's discretionary transportation funding from the Federal Highway Administration (FHWA) with Plan Bay Area 2050 goals. There have been two previous OBAG program cycles where the City received grant funding from both cycles for the following projects: Monterey Road Preservation (OBAG Cycle 1) and East Dunne Avenue Rehabilitation Project (OBAG Cycle 2). MTC adopted the program's third round of funding (OBAG 3) in January 2022 and includes over $750 million in federal funding for projects to be funded from 2023 through 2026.
The OBAG 3 program is divided into a Regional Program, managed by MTC, and a County and Local Program, managed by MTC in partnership with the nine Bay Area County Transportation Agencies (CTAs). The Santa Clara Valley Transportation
3 Authority (VTA) is the CTA for Santa Clara County. The City's current funding application filing request is for the County and Local Program.
MTC adopted the final OBAG 3 program guidelines for the County and Local Program on March 23, 2022 with program changes from previous program cycles. One significant change is that MTC will no longer provide guaranteed fund amounts for each county, but MTC will provide fund targets for the OBAG 3 County and Local Programs.
The fund target for Santa Clara County is $91 million. Another significant change is that MTC will no longer allow guaranteed funding amounts for the local streets and roads rehabilitation program and all project types will have to compete on both the local and regional levels for funding.
In 2022, staff submitted an OBAG 3 competitive grant funding application for $3,921,000 for the construction phase of the Monterey Road Traffic, Bicycle, and Pedestrian Improvements Project. The project's location is on Monterey Road from Cochrane Road to East Middle Avenue and will consist of the following improvements:
slurry sealing; buffered bicycle lane treatments; green colored bicycle lane striping enhancements for bicycle facilities at intersections, conflict points, and their approaches; sidewalk gap closures; replace portions of striped center medians with raised concrete medians at specific locations; new and/or upgraded curb ramp improvements; and bicycle and pedestrian signage improvements.
The City's project was adopted into MTC's OBAG 3 grant programming through a twostep competitive grant application process:
1. Staff submitted the grant application to VTA on July 25, 2022 for review and scoring for VTA's prioritized project list. The City's project application scored well and was included on VTA's prioritized project list, which was adopted by VTA's Board on October 6, 2022.
2. MTC reviewed VTA's prioritized project list for Santa Clara County and MTC's Board adopted the final selection of projects on January 25, 2023.
In order to receive the OBAG 3 funding, the City must adopt a Resolution of Local Support and authorize the filing of this OBAG 3 funding application for the Monterey Road Traffic, Bicycle, and Pedestrian Improvements Project. The proposed Resolution (Attachment 1), that is based on a resolution template received from MTC, includes provisions stating the fixed grant amount of $3,921,000 (which will cover a maximum of
88.53% of project costs), the City's commitment to provide the minimum 11.47% ($508,007) local match for the project's costs, and timely delivery of the project in accordance with MTC's Regional Project Funding Delivery Policy.
Upon adoption of this resolution, staff will submit a copy of this resolution to MTC as part of the funding requirements. The estimated project schedule consists of the design phase to start this fall 2023; processing of the federal project authorization during summer/fall 2024; and commencement of construction in summer 2025.
3 COMMUNITY ENGAGEMENT:
Inform
Affected businesses and/or property owners will be notified of the roadway improvement work that is funded with this grant money prior to the start of construction activities.
ALTERNATIVE ACTIONS:
Not applicable.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
On September 13, 2013, City Council adopted a Resolution of Local Support for MTC Discretionary Funding Program (OBAG Cycle 1).
FISCAL AND RESOURCE IMPACT:
The OBAG 3 grant funding of $3,921,000 will be included as a revenue source for Fund 308 (Street CIP) in the City's Capital Improvement Program under the Pavement Rehabilitation Program (Project No. 519000) as part of the FY 2025-26 project budget to fund the construction phase of the Monterey Road Traffic, Bicycle, and Pedestrian Improvements Project. The minimum required local match of 11.47% or $508,007 will be funded by Fund 308.
The OBAG 3 grant funding will be reimbursed to the City by Caltrans (Fund Administrator) upon incurring project construction expenditures.
CEQA (California Environmental Quality Act):
Categorical Exemption
The execution of this funding agreement will fund pavement project activities which are categorically exempt under CEQA, specifically pursuant to Section 15301 of the CEQA Guidelines (Existing Facilities), as the subject work involves the repair, maintenance, or minor alteration of existing City facilities involving negligible or no expansion of use of those facilities.
RESOLUTION NO. 23-XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF MORGAN HILL PROVIDING LOCAL SUPPORT AND
AUTHORIZING THE FILING OF AN APPLICATION FOR
FUNDING ASSIGNED TO THE METROPOLITAN
TRANSPORTATION COMMISSION AND COMMITTING
ANY NECESSARY MATCHING FUNDS AND STATING
ASSURANCE TO COMPLETE THE PROJECT
WHEREAS, City of Morgan Hill (herein referred to as APPLICANT) is submitting an application to the Metropolitan Transportation Commission (MTC) for Three Million Nine Hundred Twenty-One Thousand Dollars ($3,921,000) in funding assigned to MTC for programming discretion, which includes federal funding administered by the Federal Highway Administration (FHWA) and federal or state funding administered by the California Transportation Commission (CTC) such as Surface Transportation Block Grant Program (STP) funding, Congestion Mitigation and Air Quality Improvement Program (CMAQ) funding, Transportation Alternatives (TA) set-aside/Active Transportation Program (ATP) funding, and Regional Transportation Improvement Program (RTIP) funding (herein collectively referred to as REGIONAL DISCRETIONARY FUNDING) for the Monterey Road Traffic, Bicycle, and Pedestrian Improvements Project (herein referred to as PROJECT) for the One Bay Area Grant Program Cycle 3 (OBAG 3) (herein referred to as PROGRAM); and WHEREAS, the United States Congress from time to time enacts and amends legislation to provide funding for various transportation needs and programs, (collectively, the FEDERAL TRANSPORTATION ACT) including, but not limited to the Surface Transportation Block Grant Program (STP) (23 U.S.C. § 133), the Congestion Mitigation and Air Quality Improvement Program (CMAQ) (23 U.S.C. § 149) and the Transportation Alternatives (TA) set-aside (23 U.S.C. § 133); and
WHEREAS, state statutes, including California Streets and Highways Code §182.6, §182.7, and §2381(a)(1), and California Government Code §14527, provide various funding programs for the programming discretion of the Metropolitan Planning Organization (MPO) and the Regional Transportation Planning Agency (RTPA); and WHEREAS, pursuant to the FEDERAL TRANSPORTATION ACT, and any regulations promulgated thereunder, eligible project sponsors wishing to receive federal or state funds for a regionally-significant project shall submit an application first with the appropriate MPO, or RTPA, as applicable, for review and inclusion in the federal Transportation Improvement Program (TIP); and
WHEREAS, MTC is the MPO and RTPA for the nine counties of the San Francisco Bay region; and
WHEREAS, MTC has adopted a Regional Project Funding Delivery Policy (MTC Resolution No. 3606, revised) that sets out procedures governing the application and use of REGIONAL DISCRETIONARY FUNDING; and
WHEREAS, APPLICANT is an eligible sponsor for REGIONAL DISCRETIONARY
City of Morgan Hill
Resolution No. 23-xxx
FUNDING; and
WHEREAS, as part of the application for REGIONAL DISCRETIONARY FUNDING, MTC requires a resolution adopted by the responsible implementing agency stating the following:
• the commitment of any required matching funds; and
• that the sponsor understands that the REGIONAL DISCRETIONARY FUNDING is fixed at the programmed amount, and therefore any cost increase cannot be expected to be funded with additional REGIONAL DISCRETIONARY FUNDING; and • that the PROJECT will comply with the procedures, delivery milestones and funding deadlines specified in the Regional Project Funding Delivery Policy (MTC Resolution No. 3606, revised); and
• the assurance of the sponsor to complete the PROJECT as described in the application, subject to environmental clearance, and if approved, as included in MTC's federal Transportation Improvement Program (TIP); and
• that the PROJECT will have adequate staffing resources to deliver and complete the PROJECT within the schedule submitted with the project application; and • that the PROJECT will comply with all project-specific requirements as set forth in the PROGRAM; and
• that APPLICANT has assigned, and will maintain a single point of contact for all FHWA- and CTC-funded transportation projects to coordinate within the agency and with the respective Congestion Management Agency (CMA), MTC, Caltrans, FHWA, and CTC on all communications, inquires or issues that may arise during the federal programming and delivery process for all FHWA- and CTC-funded transportation and transit projects implemented by APPLICANT; and
• in the case of a transit project, the PROJECT will comply with MTC Resolution No. 3866, revised, which sets forth the requirements of MTC’s Transit Coordination Implementation Plan to more efficiently deliver transit projects in the region; and • in the case of a highway project, the PROJECT will comply with MTC Resolution No. 4104, which sets forth MTC’s Traffic Operations System (TOS) Policy to install and activate TOS elements on new major freeway projects; and • in the case of an RTIP project, state law requires PROJECT be included in a local congestion management plan, or be consistent with the capital improvement program adopted pursuant to MTC’s funding agreement with the countywide transportation agency; and
WHEREAS, that APPLICANT is authorized to submit an application for REGIONAL DISCRETIONARY FUNDING for the PROJECT; and
WHEREAS, there is no legal impediment to APPLICANT making applications for the funds; and
WHEREAS, there is no pending or threatened litigation that might in any way adversely affect the proposed PROJECT, or the ability of APPLICANT to deliver such PROJECT; and WHEREAS, APPLICANT authorizes its Executive Director, General Manager, or designee to execute and file an application with MTC for REGIONAL DISCRETIONARY FUNDING for the PROJECT as referenced in this resolution; and
City of Morgan Hill
Resolution No. 23-xxx
WHEREAS, MTC requires that a copy of this resolution be transmitted to the MTC in conjunction with the filing of the application.
NOW, THEREFORE, BE IT RESOLVED that the APPLICANT is authorized to execute and file an application for funding for the PROJECT for REGIONAL DISCRETIONARY FUNDING under the FEDERAL TRANSPORTATION ACT or continued funding; and be it further
RESOLVED that APPLICANT will provide any required matching funds; and be it further
RESOLVED that APPLICANT understands that the REGIONAL DISCRETIONARY FUNDING for the project is fixed at the MTC approved programmed amount, and that any cost increases must be funded by the APPLICANT from other funds, and that APPLICANT does not expect any cost increases to be funded with additional REGIONAL DISCRETIONARY FUNDING; and be it further
RESOLVED that APPLICANT understands the funding deadlines associated with these funds and will comply with the provisions and requirements of the Regional Project Funding Delivery Policy (MTC Resolution No. 3606, revised) and APPLICANT has, and will retain the expertise, knowledge and resources necessary to deliver federally-funded transportation and transit projects, and has assigned, and will maintain a single point of contact for all FHWA- and CTCfunded transportation projects to coordinate within the agency and with the respective Congestion Management Agency (CMA), MTC, Caltrans, FHWA, and CTC on all communications, inquires or issues that may arise during the federal programming and delivery process for all FHWA- and CTC-funded transportation and transit projects implemented by APPLICANT; and be it further RESOLVED that PROJECT will be implemented as described in the complete application and in this resolution, subject to environmental clearance, and, if approved, for the amount approved by MTC and programmed in the federal TIP; and be it further RESOLVED that APPLICANT has reviewed the PROJECT and has adequate staffing resources to deliver and complete the PROJECT within the schedule submitted with the project application; and be it further
RESOLVED that PROJECT will comply with the requirements as set forth in MTC programming guidelines and project selection procedures for the PROGRAM; and be it further RESOLVED that, in the case of a transit project, APPLICANT agrees to comply with the requirements of MTC’s Transit Coordination Implementation Plan as set forth in MTC Resolution No. 3866, revised; and be it further
RESOLVED that, in the case of a highway project, APPLICANT agrees to comply with the requirements of MTC’s Traffic Operations System (TOS) Policy as set forth in MTC Resolution No. 4104; and be it further
RESOLVED that, in the case of an RTIP project, PROJECT is included in a local
City of Morgan Hill
Resolution No. 23-xxx
congestion management plan, or is consistent with the capital improvement program adopted pursuant to MTC’s funding agreement with the countywide transportation agency; and be it further RESOLVED that APPLICANT is an eligible sponsor of REGIONAL DISCRETIONARY FUNDING funded projects; and be it further
RESOLVED that APPLICANT is authorized to submit an application for REGIONAL DISCRETIONARY FUNDING for the PROJECT; and be it further RESOLVED that there is no legal impediment to APPLICANT making applications for the funds; and be it further
RESOLVED that there is no pending or threatened litigation that might in any way adversely affect the proposed PROJECT, or the ability of APPLICANT to deliver such PROJECT; and be it further
RESOLVED that APPLICANT authorizes its Executive Director, General Manager, City Manager, or designee to execute and file an application with MTC for REGIONAL DISCRETIONARY FUNDING for the PROJECT as referenced in this resolution; and be it further RESOLVED that a copy of this resolution will be transmitted to the MTC in conjunction with the filing of the application; and be it further
RESOLVED that the MTC is requested to support the application for the PROJECT described in the resolution, and if approved, to include the PROJECT in MTC's federal TIP upon submittal by the project sponsor for TIP programming.
PASSED AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 21st day of June, 2023 by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
APPROVED: ATTEST:
MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
City of Morgan Hill
Resolution No. 23-xxx
CERTIFICATION
I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Resolution No. 23-XXX, adopted by the City Council at a Regular Meeting held on June 21, 2023.
WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.
DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk
4 CITY COUNCIL STAFF REPORT
MEETING DATE: June 21, 2023
PREPARED BY:
Lynette Kong, Associate Engineer
APPROVED BY: City Manager
ADOPT A RESOLUTION APPROVING FISCAL YEAR (FY) 2023-24 LIST
OF STREET REHABILITATION PROJECTS FUNDED BY SENATE BILL (SB) 1: THE ROAD REPAIR AND ACCOUNTABILITY ACT
RECOMMENDATION(S)
Adopt a resolution approving a list of street rehabilitation projects for Fiscal Year 2023- 24 funded by SB 1, The Road Repair and Accountability Act of 2017.
COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Fiscal Sustainability
Transportation
REPORT NARRATIVE:
The 2023 Pavement Rehabilitation Project construction contract was awarded by the City Council on June 7th to McKim Corporation in the amount of $3,948,023. The project is scheduled to begin work in July and will involve the pavement rehabilitation of the following city streets:
• La Crosse Drive
• La Rena Court
• La Roda Court
• La Mirada Court
• La Porte Court
• La Prenda Court
• La Escuela Court
• Descansa Court
• El Pajaro Court
• La Mesa Court
• La Sierra Court
4 • La Honda Court
• La Jolla Court
• La Mar Court
• La Bella Court
• East Middle Avenue between Monterey Road and Union Pacific Railroad Tracks • East Main Avenue between Monterey Road and Butterfield Boulevard • Oak View Circle
• Oak View Court
This is the seventh year in a row that the City has received SB 1 funding allocation for the rehabilitation of the City's roadway system. The funds have primarily been used for the repair and maintenance of the City's arterial and collector streets. However, this year the majority of the funds will be used to repair a number of residential streets that are in poor condition.
SB 1, which is known as the Road Repair and Accountability Act of 2017, established a tax that formed the Road Maintenance and Rehabilitation Account (RMRA). The RMRA is intended to fund basic road maintenance and rehabilitation needs on the local streets and roadway systems within the state. Prior to receiving RMRA funds for the FY 2023- 24, the City must submit a list of projects proposed to be funded with RMRA funds, adopted by resolution, to the California Transportation Commission (CTC) by July 1, 2023. The list of projects proposed to be funded must include a description and the location of each proposed project, a proposed project schedule, and the estimated useful life of the improvement (Streets and Highways Code Section 2034(a)).
To ensure that the City is eligible for FY 2023-24 SB 1 RMRA funding, the proposed resolution (Attachment 1) identifies the City street locations proposed to be funded by FY 2023-24 SB 1 RMRA funds. These streets include all of the project streets for the 2023 Pavement Rehabilitation Project to ensure full utilization of the FY 2023-24 funding. The proposed resolution is expected to fulfill the CTC’s requirement that the City Council adopt, by resolution, a list of projects proposed for the next fiscal year’s SB 1 RMRA funds and meets the intention of prioritizing these funds for basic road maintenance and rehabilitation projects, and on critical safety projects.
COMMUNITY ENGAGEMENT:
Inform
City staff are working on a significant communication planning effort to be implemented ahead of the pavement work, which is planned to occur during the summer months.
ALTERNATIVE ACTIONS:
The City Council could direct staff to submit a funding request for an alternative project.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
4 • On June 7, 2023, City Council awarded the 2023 Pavement Rehabiliation Project to McKim Corporation.
• On April 19, 2023, City Council received an update regarding pavement rehabilitation planning for calendar years 2021 through 2027. • On June 15, 2022, City Council adopted the FY 2022-23 through 2027-28 Capital Improvement Budget.
• On April 20, 2022, City Council passed Resolution No. 22-022 adopting a list of street rehabilitation projects for FY 2022-23 funded by SB 1.
FISCAL AND RESOURCE IMPACT:
The FY 2023-24 SB 1 RMRA projected revenue of $1,125,581 will be included as a revenue source for Fund 308 (Street CIP) in the City's CIP under the Pavement Rehabilitation Program (Project No. 519000) as part of the FY 2023-24 project budget.
CEQA (California Environmental Quality Act):
Categorical Exemption
The activities described in this Staff Report are categorically exempt under CEQA, specifically pursuant to Section 15301 of the CEQA Guidelines (Existing Facilities), as the subject work involves the repair, maintenance, or minor alteration of existing City facilities involving negligible or no expansion of use of those facilities.
RESOLUTION NO. 23-XXX
RESOLUTION ADOPTING A LIST OF PROJECTS FOR
FISCAL YEAR 2023-24 FUNDED BY SB 1: THE ROAD
REPAIR AND ACCOUNTABILITY ACT OF 2017
WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of our City are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and
WHEREAS, the City must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and WHEREAS, the City, will receive an estimated $1,125,581 in RMRA funding in Fiscal Year 2023-24 from SB 1; and
WHEREAS, this is the seventh year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and WHEREAS, the City has undergone a robust public process to ensure public input into our community’s transportation priorities/the project list; and WHEREAS, the City used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the communities priorities for transportation investment; and WHEREAS, the funding from SB 1 will help the City maintain and rehabilitate portions of East Main Avenue, one of the City’s arterial streets; La Crosse Drive and East Middle Avenue, two of the City’s collector streets; and La Rena Court, La Roda Court, La Mirada Court, La Porte Court, La Prenda Court, La Escuela Court, Descansa Court, El Pajaro Court, La Mesa Court, La Sierra Court, La Honda Court, La Jolla Court, La Mar Court, La Bella Court, Oak View Circle,
City of Morgan Hill
Resolution No. 23-xxx
and Oak View Court, multiple residential/local streets throughout the City this year and multiple similar projects into the future; and
WHEREAS, the 2018 California Statewide Local Streets and Roads Needs Assessment found that the City’s streets and roads are in an “at-risk” condition and this revenue will help us increase the overall quality of our road system and over the next decade will bring our streets and roads into a “good” condition; and
WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide.
NOW, THEREFORE IT IS HEREBY RESOLVED, ORDERED AND FOUND BY THE
CITY COUNCIL OF THE CITY OF MORGAN HILL, STATE OF CALIFORNIA, AS FOLLOWS:
1. The foregoing recitals are true and correct.
2. The following list of newly proposed projects will be funded in-part or solely with Fiscal Year 2023-24 Road Maintenance and Rehabilitation Account revenues:
1) Project Title: 2023 Pavement Rehabilitation Project
Project Description: Pavement Milling and Filling, Full Depth Asphalt Concrete Pavement Repairs, Crack Sealing, Detector Loops, Replacement of all Existing Traffic Delineation and Markings, Utility Adjustments, and all related work on various streets within the City Limits.
Project Locations: 1) La Crosse Drive; 2) La Rena Court; 3) La Roda Court; 4) La Mirada Court; 5) La Porte Court; 6) La Prenda Court; 7) La Escuela Court; 8) Descansa Court; 9) El Pajaro Court; 10) La Mesa Court; 11) La Sierra Court; 12) La Honda Court; 13) La Jolla Court; 14) La Mar Court; 15) La Bella Court; 16) East Middle Avenue between Monterey Road to Union Pacific Railroad (UPRR) tracks; 17) East Main Avenue between Monterey Road to Butterfield Boulevard; 18) Oak View Circle; and 19) Oak View Court.
Estimated Project Schedule: Start (July 2023)– Completion (October 2023) based on the component being funded with RMRA funds
Estimated Project Useful Life: The City’s Pavement Management System calculates a new useful life of 20 years for these roadways.
City of Morgan Hill
Resolution No. 23-xxx
PASSED AND ADOPTED by the City Council of the City of Morgan Hill, State of California this 21st day of June, 2023, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
APPROVED: ATTEST:
_____________________________ ________________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
CERTIFICATION
I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Resolution No. 23-xxx, adopted by the City Council at a Regular Meeting held on June 21, 2023.
WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.
DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk
5 CITY COUNCIL STAFF REPORT
MEETING DATE: June 21, 2023
PREPARED BY:
Yat Cho, Senior Project Manager
APPROVED BY: City Manager
APPROVE CONSULTANT AGREEMENTS WITH ENGEO, INC. IN THE
AMOUNT OF $400,000 AND TWINING, INC. IN THE AMOUNT OF
$200,000, FOR GENERAL COMPACTION TESTING AND SPECIAL
INSPECTION
RECOMMENDATION(S)
Approve and authorize the City Manager to execute and administer agreements with contingencies to provide general compaction testing and special inspection for various Capital Improvement Program Projects: Engeo, Inc. in the amount of $400,000 and Twining, Inc. in the amount of $200,000.
COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
Transportation
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Economic Blueprint
Morgan Hill 2035 General Plan
Storm Drain Master Plan
Water System Master Plan
Wastewater System Master Plan
REPORT NARRATIVE:
On June 15, 2022, the City Council adopted the FY 2022-23 through 2027-28 Capital Improvement Program (CIP). Many of these CIP projects require on-call compaction testing and/or special inspection to ensure construction standards are met and the proper oversight is provided throughout the course of a project.
On March 23, 2023, staff sent out a Request for Proposal to provide compaction testing services and special inspection on an as-needed basis for the City's CIP Projects. Five
5 proposals were received by May 3, 2023. The proposals were evaluated by a twomember selection committee using three evaluation criteria: qualifications, ability to perform tasks, and familiarity and understanding of the City's needs.
While all five proposals showed qualifications in this field, two of the proposals stood out and demonstrated the expertise in the field of compaction testing and special inspection to handle this work, especially for work previously performed within the City of Morgan Hill. Staff recommends the approval of a City Services agreement with Engeo, Inc. in the amount of $400,000, and Twining, Inc. in the amount of $200,000. The scores for all proposals are listed in the table below.
Engeo,
Inc.
Twining,
Inc.
Quality
Assurance
Engineering,
Inc.
Ninyo
&
Moore
Apex Testing
Laboratories,
Inc.
Qualification
and
Experience
(40
Maximum
Points)
36.5 36.5 32.5 32 30
Ability to
Perform
Tasks
(30
Maximum
Points)
30 28 28 27 28
Familarity
with City
(30
Maximum
Points)
30 28 26.5 26 26
(Total - 100
Maximum
Points)
96.5 92.5 87 85 84
Engeo, Inc. has provided quality services previously to the City of Morgan Hill. Staff is recommending entering into an agreement with a second company, Twining, Inc. to provide an alternative option for redundancy in service during times of heavy needs and a backup if one company is unable to provide immediate service.
COMMUNITY ENGAGEMENT:
Compaction testing and special inspections are necessary components of the City's Capital Improvement Program. While there have been no specific engagement activities
5 that were conducted during the RFQ process, individual CIP projects that affects residents and businesses will be notified through media, social media, and city website.
ALTERNATIVE ACTIONS:
City Council may limit the approval of the agreement for general compaction testing and special inspection to one consultant only or may direct staff to perform another RFQ for this service.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
On June 15, 2022, the City Council adopted the FY2022-23 through 2027-28 Capital Improvement Program Budget.
FISCAL AND RESOURCE IMPACT:
Funding for these agreements will be from various capital improvement projects as included in the adopted Capital Improvement Program Budget.
CEQA (California Environmental Quality Act):
Not a Project
The agreements are not considered as projects and any individual projects in the Capital Improvement Program shall be reviewed under CEQA.
1 Updated May 2023
CONSULTANT AGREEMENT FOR DESIGN PROFESSIONALS
ENGEO INCORPORATED
THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and ENGEO, INC. a California corporation ("CONSULTANT") hereinafter referred to collectively as “Parties.” In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:
1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on _____________, ____, 20___.
2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until June 30, 2025 at which time CONSULTANT’S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum period of one year. Any such extension shall be in writing and signed by both Parties to this Agreement.
3. Scope of Service. The services to be performed by CONSULTANT shall be compaction testing and special inspections as further described in Exhibit A.
4. Compensation. CONSULTANT shall be compensated as follows:
4.1. Amount. $400,000.00. Total compensation to CONSULTANT under this Agreement during its initial term set forth in Section 2 above shall not exceed Four Hundred Thousand Dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to CONSULTANT, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement, and provided further that in no event shall such maximum compensation allowed for the term exceed the City Manager's authority pursuant to Chapter 3.04 of the Morgan Hill Municipal Code, unless otherwise authorized by City Council.
4.2. Billing. CONSULTANT shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by CONSULTANT on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 13 Notices. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY’S judgment were necessary and reasonable. Services for work performed and expenses incurred in excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.
5. Termination. CITY or CONSULTANT shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent circumstances. Upon such termination, CONSULTANT shall submit to CITY an itemized statement of services performed for which Document Ref: XJQPH-H3KJD-F3MS4-KW3PL Page 1 of 16 Page 119 of 469 2 Updated May 2023
compensation has not been paid. CITY may require CONSULTANT to complete certain work product or documents and CONSULTANT shall deliver to CITY all documents in its possession without additional compensation to CONSULTANT. The City Manager of CITY is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.
5.1. Non-Appropriations. Notwithstanding anything contained in this Agreement to the contrary, if insufficient funds are appropriated, or funds are otherwise unavailable in the budget for CITY for any reason whatsoever in any fiscal year, for payments due under this Agreement, CITY will immediately notify CONSULTANT of such occurrence, and this Agreement shall terminate after the last day during the fiscal year for which appropriations shall have been budgeted for CITY or are otherwise available for payments.
6. Performance of Work. CONSULTANT represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by CONSULTANT in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of the CONSULTANT’S profession. By delivery of completed work, CONSULTANT certifies that the work conforms to the requirements of this Agreement and all applicable federal, state, and local laws. CONSULTANT shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of Performance," attached hereto and incorporated herein by this reference. CITY'S City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement. If CONSULTANT desires to leave or store any of CONSULTANT’S equipment at a CITY site while CONSULTANT is performing work or service pursuant to this Agreement, CONSULTANT will first obtain the consent of CITY'S City Manager, or his/her delegate, to do so, and any such storage shall occur only in the manner and location allowed by such CITY official and entirely at CONSULTANT’S sole risk.
7. Insurance Requirements. CONSULTANT shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of CONSULTANT, including its subcontractors, employees, and agents, relating to, or arising from, the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. CONSULTANT further understands that the CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to CONSULTANT, at any time as deemed necessary to protect the interests of the CITY.
7.1. Insurance Types and Amounts.
7.1.1. Commercial General Liability (CGL). CONSULTANT shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
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7.1.2. Automobile Liability. CONSULTANT shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if CONSULTANT does not own automobiles, then CONSULTANT shall maintain Hired/Non-owned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.1.3. Workers’ Compensation Insurance and Employer’s Liability. CONSULTANT shall maintain Workers Compensation coverage, as required by law, in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. If CONSULTANT is selfinsured, CONSULTANT shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.
7.1.4. Pollution (Environmental) Liability. If the performance of CONSULTANT’S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, CONSULTANT shall procure and maintain Pollution Liability covering the CONSULTANT’S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement.
Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.1.5. Professional Liability.
7.1.5.1. If the performance of CONSULTANT’S work or service under this Agreement involves professional and/or technical services (examples include, but are not limited to, architects, engineers, land surveyors, and appraisers), CONSULTANT shall procure and maintain either a claims made or occurrence Errors and Omission liability insurance in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. Further, if CONSULTANT maintains a claims-made policy, CONSULTANT shall provide written evidence of such insurance to the CITY for at least five (5) years after the completion of work performed under this Agreement.
7.1.5.2. If the performance of CONSULTANT’S work or service under this Agreement relates to Information Technology or related services (examples include, but are not limited to computer programmers, software designers, Document Ref: XJQPH-H3KJD-F3MS4-KW3PL Page 3 of 16 Page 121 of 469 4 Updated May 2023
hardware engineers, or other systems consultants), CONSULTANT shall procure and maintain a claims made Errors and Omission liability insurance, including Cyber Liability and Data Breach, in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.1.6. Sexual Abuse/Molestation Liability (SML): If the performance of CONSULTANT’S work or service under this Agreement involves contact with minors, CONSULTANT shall procure and maintain Sexual Abuse and Molestation insurance in the minimum amount of: (i) two hundred thousand dollars ($200,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.2. Endorsements. CONSULTANT shall provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:
7.2.1. General Liability and pollution liability (when pollution liability applies).
7.2.1.1. “Additionally Insured” - The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds on a form at least as broad as ISO Form CG 20 10 for ongoing operations.
7.2.1.2. “Waiver of Rights of Subrogation” - The insurer waives the right of subrogation against the City of Morgan Hill and CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers; and
7.2.1.3. “Primary and Non-Contributing” - Insurance shall be endorsed to be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as ISO Form CG 20
01. 7.2.2. Workers Compensation.
If the performance of CONSULTANT’S work or service under this Agreement involves access to or activity on any property or premises owned or occupied by the CITY, including, but not limited to, CONSULTANT’S presence during site visits and meetings, then insurer waives the right of subrogation against the City of Morgan Hill and the CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers.
7.3. Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each insurer must have a current A.M.
Best's financial strength rating of “A” or better and a financial size rating of “VII” or better.
7.4. Certificates. CONSULTANT shall furnish CITY of Morgan Hill with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, CONSULTANT shall promptly furnish CITY of Morgan Hill with copies of all policies outlined herein. No policy subject to the CONSULTANT’S Document Ref: XJQPH-H3KJD-F3MS4-KW3PL Page 4 of 16 Page 122 of 469 5 Updated May 2023
agreement with the CITY shall be canceled or materially changed except after thirty (30) days' notice by the insurer to CITY. A "material change" is a change that results in noncompliance with any insurance requirements in this section 7. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein.
Certificate Holder address:
City of Morgan Hill
Attn: Risk Management
17575 Peak Avenue
Morgan Hill, CA 95037
8. Non-Liability of Officials and Employees of the CITY. No official or employee of CITY shall be personally liable for any default or liability under this Agreement.
9. Compliance with Law.
9.1. CONSULTANT and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement. CONSULTANT and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon any basis prohibited by State or Federal law, including but not limited to, race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.
9.2. Compliance with Wage and Hour Laws: Consultant, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable federal, state, and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act and the California Labor Code.
Final Judgments, Decisions, and Orders: For purposes of this Section, a “final judgment, decision, or order” refers to one for which all appeals have been exhausted or the time to appeal has expired. Relevant investigatory government agencies include: the federal Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.
Prior Judgments against CONSULTANT and/or its Subcontractors: BY SIGNING THIS
AGREEMENT, CONSULTANT AFFIRMS THAT IT HAS DISCLOSED ANY FINAL
JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR INVESTIGATORY GOVERNMENT AGENCY FINDING – IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT – THAT CONSULTANT OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONSULTANT FURTHER
AFFIRMS THAT IT OR ITS SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH – OR HAS REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY – ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.
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Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that CONSULTANT or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or CONSULTANT learns of such a judgment, decision, or order that was not previously disclosed, CONSULTANT shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision, or order.
CONSULTANT and its subcontractors shall promptly satisfy and comply with any such judgment, decision, or order, and shall provide the City Attorney with documentary evidence of compliance with the final judgment, decision, or order within five (5) days of satisfying the final judgment, decision, or order. The City reserves the right to require CONSULTANT to enter into an agreement with the City regarding the manner in which any such final judgment, decision, or order will be satisfied.
City’s Right to Withhold Payment: Where CONSULTANT or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or government agency, the City reserves the right to withhold payment to CONSULTANT until such judgment, decision or order has been satisfied in full.
Material Breach: Failure to comply with any part of this Section constitutes a material breach of this Agreement. Such breach may serve as a basis for immediate termination of this Agreement and/or any other remedies available under this Agreement and/or law.
Notice to City Related to Wage Theft Prevention: Notice provided to the City Attorney as required under this Section shall be addressed to: City Attorney, City of Morgan Hill, 17575 Peak Avenue, Morgan Hill, CA 95037. The Notice provisions of this Section are separate from any other notice provisions in this Agreement and, accordingly, only notice provided to the above address satisfies the notice requirements in this Section.
10. Independent Contractor. CONSULTANT is an independent contractor and not an agent or employee of CITY.
11. Confidentiality. All data, documents, or other information received by CONSULTANT from CITY or prepared in connection with CONSULTANT’S services under this Agreement are deemed confidential and shall not be disclosed to any third party by CONSULTANT without prior written consent by CITY.
12. Conflict of Interest and Reporting. CONSULTANT shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.
13. Notices. All notices shall be personally delivered or mailed, via first class mail to the below listed address. These addresses shall be used for delivery of service of process. Notices shall be effective five (5) days after date of mailing, or upon date of personal delivery.
Address of CONSULTANT is as follows:
Engeo Incorporated
6399 San Ignacio Avenue Suite 150
San Jose, CA
95119
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Address of CITY is as follows:
Yat Cho
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
with a copy to:
City Clerk
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
14. Licenses, Permits and Fees. CONSULTANT shall obtain a City of Morgan Hill Business License, all permits and licenses to the extent required by ordinances, codes, and regulations of the federal, state, and local government.
15. Consultant's Proposal. If applicable, this Agreement shall include CONSULTANT'S proposal or bid which is incorporated herein. In the event of any inconsistency between the terms of the proposal and this Agreement, this Agreement shall govern.
16. Maintenance of Records.
16.1. Maintenance. CONSULTANT shall prepare, maintain, and preserve all reports and records that may be required by federal, state, and CITY rules and ordinances related to services provided under this Agreement. CONSULTANT shall maintain records for a period of at least 3 years after receipt of final payment under this Agreement. If any litigation, claim, negotiation, audit exception, or other action relating to this Agreement is pending at the end of the 3-year period, then CONSULTANT shall retain said records until such action is resolved.
16.2. Access to and Audit of Records. The CITY shall have the right to examine, monitor and audit all records, documents, conditions, and activities of the CONSULTANT and its subcontractors related to services under this Agreement. Pursuant to Government Code Section 8546.7, if this Agreement involves the expenditure of public funds in excess of $10,000, the Parties to this Agreement may be subject, at the request of the CITY or as part of any audit of the CITY, to the examination and audit of the State Auditor pertaining to matters connected with the performance of this Agreement for a period of three years after final payment under the Agreement.
16.3. Ownership of Work Product. All documents or other information developed or received by CONSULTANT for work performed under this Agreement shall be the property of CITY. CONSULTANT shall provide CITY with copies of these items upon demand or upon termination of this Agreement.
17. Familiarity with Work. By executing this Agreement, CONSULTANT represents that: (1) it has investigated the work to be performed; (2) it has investigated the site of the work and is aware of all conditions there; and (3) it understands the difficulties and restrictions of the work under this Agreement.
Should CONSULTANT discover any conditions materially differing from those inherent in the work or as represented by CITY, it shall immediately inform CITY and shall not proceed, except at CONSULTANT'S risk, until written instructions are received from CITY.
18. Time of Essence. Time is of the essence in the performance of this Agreement.
19. No Assignment. Neither this Agreement nor any portion shall be assigned by CONSULTANT, without prior written consent of CITY. Any attempted assignment not first approved by CITY shall be Document Ref: XJQPH-H3KJD-F3MS4-KW3PL Page 7 of 16 Page 125 of 469 8 Updated May 2023
void and, at CITY'S option, shall terminate this Agreement effective as of the date of such attempted assignment.
20. Attorney Fees. In any legal action, dispute or arbitration arising out of or relating to this Agreement, the prevailing party shall be entitled to an award of its reasonable attorney fees, costs and expenses incurred.
21. Defense and Indemnification.
21.1. Defense and Indemnification for Design Professional Services. Consistent with California Civil Code Section 2782.8, for design professional services to be performed under this agreement by a design professional, as that term is defined under said Section 2782.8, CONSULTANT shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers (“INDEMNITEES”) from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, and/or its agents, officers, employees, subcontractors, or independent contractors in performance of work hereunder or its failure to comply with any of its obligations contained in this Agreement (“CLAIM”) to the extent of CONSULTANT’S proportionate percentage of fault.
21.2. Defense and Indemnification for Non-Design Professional Services. For all services performed under this agreement not covered by Section 21.1 above, CONSULTANT shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers (“INDEMNITEES”) from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by CONSULTANT, and/or its agents, officers, employees, subcontractors, or independent contractors (“CLAIM”).
21.3. Exceptions. CONSULTANT is not required to indemnify INDEMNITEES against liability for bodily injury, property damage or personal injury, or any other loss, damage or expense arising from the sole negligence, active negligence, or willful misconduct of the CITY.
21.4. Not limited by insurance. The indemnity, defense and hold harmless provisions of this Agreement apply to all CLAIMS alleged against an INDEMNITEE, regardless of whether any insurance policies are applicable. Policy limits do not act as a limitation upon the amount of indemnification or defense to be provided by CONSULTANT.
21.5. Right to Offset. CITY shall have the right to offset against any compensation due CONSULTANT under this Agreement any amount due CITY from CONSULTANT as a result of CONSULTANT’S failure to pay CITY promptly any indemnification arising under this Section (21) and any amount due CITY from CONSULTANT arising from CONSULTANT’S failure either to (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers' compensation laws.
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21.6. Interpretation. This Section shall constitute an agreement or contract of indemnity, incorporating the interpretations under California Civil Code Section 2778. It is expressly understood and agreed that the obligation of the CONSULTANT to indemnify the INDEMNITEE shall be as broad and inclusive as permitted by the laws of the State of California and shall survive termination of this Agreement.
22. Entire Agreement; Modification; Conflicting Provisions. This Agreement constitutes the entire Agreement between the Parties and supersedes any previous agreements, oral or written. This Agreement may be modified, or provisions waived, only by a subsequent mutual written agreement executed by CITY and CONSULTANT. If the provisions contained in the main body of this Agreement conflict with any provision contained in an exhibit to this Agreement, the provisions of the main body of this Agreement shall govern and control over any provision contained in an exhibit to this Agreement.
23. Governing Law and Venue. This Agreement shall be construed in accordance with the laws of the State of California. This Agreement was entered into and is to be performed in the County of Santa Clara. Any action or dispute arising out of this Agreement shall only be brought in Santa Clara County.
24. Interpretation. This Agreement is a negotiated document and shall be deemed to have been drafted jointly by the Parties, and no rule of construction or interpretation shall apply against any particular Party based on a contention that the Agreement was drafted by one of the Parties including, but not limited to, California Civil Code § 1654, the provisions of which are hereby waived. This Agreement shall be construed and interpreted in a neutral manner.
25. Preservation of Agreement. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the rest of the Agreement shall remain in full force and effect and shall in no way be affected or invalidated.
26. Binding Agreement. Notwithstanding the provisions of Section 19 above, this Agreement shall bind any and all successors in interest, legal representatives and/or other permitted assignees or transferees of CONSULTANT in the same manner as if those successors in interest, legal representatives or other permitted assignees or transferees had entered into this Agreement originally.
27. ☐ Data Sharing. This Agreement requires access by CONSULTANT to CITY’S Geographic Information System (GIS) DATA for CONSULTANT to perform the work. CITY agrees to provide the GIS DATA to CONSULTANT solely for the purpose of performance of contracted work with the CITY upon the terms and conditions specified in Exhibit D, incorporated herein by this reference.
28. Electronic Signatures. Unless otherwise prohibited by law or CITY policy, the Parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term “electronic copy of a signed contract” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the CITY.
[Signatures on Next Page]
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29. Authority to Execute. Those individuals who are signing this Agreement on behalf of entities represent and warrant that they are, respectively, duly authorized to sign on behalf of the entities and to bind the entities fully to each and all of the obligations set forth in this Agreement.
IN WITNESS THEREOF, these Parties have executed this Agreement on the day and year shown below.
AS SET FORTH IN CA. CORP. CODE § 313, TWO SIGNATURES ARE REQUIRED FOR CALIFORNIA CORPORATIONS:
(1) CHAIRPERSON OF THE BOARD, PRESIDENT, OR VICE PRESIDENT; AND (2) SECRETARY, ASSISTANT SECRETARY, CHIEF FINANCIAL OFFICER OR ASSISTANT TREASURER.
ATTEST: CITY OF MORGAN HILL
City Clerk/Deputy City Clerk City Manager
Michelle Bigelow Christina J. Turner
Print Name Print Name
Date: Date:
APPROVED AS TO FORM: ENGEO INCORPORATED
City Attorney By:
Donald A. Larkin
Print Name
Date:
Print Name and Title of Signer.
If Corporate: Chairman, President or Vice
President
Date:
By:
Date:
Print Name and Title of Signer.
If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
U:\Legal Forms\Consultant Agreements\City Services Agreement For Design Professionals.Docx Theodore P. Bayham,on behalf of Chairman of the
Board
Macy Tong, Assistant Treasurer
05 / 30 / 2023
06 / 01 / 2023
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CERTIFIED CORPORATE RESOLUTION
Effective January 1, 2023, officers of ENGEO Incorporated Uri Eliahu, President, Paul Guerin, Chief Financial Officer and Brian Flaherty, Corporate Secretary hereby acknowledge that Theodore Bayham, Neel Neelakantan, Steve Harris, Mark Gilbert, Shawn Munger, and Jeffrey Fippin are authorized to co-execute client agreements and change orders on behalf of the Chairman of the Board of ENGEO Incorporated and Macy Tong, Robert Boeche, Julia Moriarty and Valerie Davis are authorized to co-execute client agreements and change orders as Assistant Treasurers of ENGEO Incorporated.
Dated: January 1, 2023
Uri Eliahu
Dated: January 1, 2023
Paul Guerin
Dated: January 1, 2023
Brian Flaherty
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EXHIBIT A
SCOPE OF SERVICES
The consultant shall provide construction testing services on an on-call basis in support of the construction of municipal infrastructure in the public right-of-way at various locations in the City of Morgan Hill. Typical municipal infrastructure includes trenching, backfill, asphalt and concrete paving, water lines and services, sanitary storm and sewer lines, manholes.
Curb, gutter, sidewalks, landscaping, streetlights, underground conduits and vaults. Typical testing services including soils testing, field compaction testing asphalt and concrete quality control and performance testing.
The consultant shall perform the following tasks in carrying out these services:
TASK – CONSTRUCTION TESTING SERVICES
The Consultant shall provide, develop, and implement a construction testing system which will ensure that the contractor complies with construction documents.
A. Response Time and Job Presence:
The consultant shall provide construction testing services within 48 hours of request by the City Project Manager or designated representatives. Technicians will be expected to remain at the jobsite for as long as needed to perform the testing or as directed by City Project Manager.
B. List of Tasks and Special Inspection Services:
All services shown below for the Contract Inspector shall provide fully typed reports (2 copies min) verifying and detailing results of inspections and/or tests.
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EXHIBIT B
SCHEDULE OF COMPENSATION RATES
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GEOTECHNICAL
ENVIRONMENTAL
WATER RESOURCES
CONSTRUCTION SERVICES
COASTAL/MARINE GEOTECHNICS
February 1, 2023 www.engeo.com
PREFERRED CLIENT FEE SCHEDULE
PROFESSIONAL SERVICES
Effective February 2023
President......................................................................................................................................$465.00 per hour Principal .......................................................................................................................................$365.00 per hour Associate .....................................................................................................................................$305.00 per hour Subject Matter Expert..................................................................................................................$400.00 per hour Senior...........................................................................................................................................$265.00 per hour Project..........................................................................................................................................$235.00 per hour Staff..............................................................................................................................................$205.00 per hour Assistant ......................................................................................................................................$165.00 per hour Construction Services Manager II...............................................................................................$210.00 per hour* Construction Services Manager I................................................................................................$200.00 per hour* Senior Field Representative II.....................................................................................................$176.00 per hour*/** Senior Field Representative I......................................................................................................$157.00 per hour*/** Field Representative....................................................................................................................$145.00 per hour*/** Senior Laboratory Technician .....................................................................................................$180.00 per hour Laboratory Technician.................................................................................................................$160.00 per hour Senior GIS Developer..................................................................................................................$190.00 per hour Senior GIS Analyst ......................................................................................................................$185.00 per hour GIS Analyst..................................................................................................................................$175.00 per hour Senior CAD Specialist .................................................................................................................$175.00 per hour CAD Specialist.............................................................................................................................$160.00 per hour Network Administrator.................................................................................................................$250.00 per hour Project Assistant..........................................................................................................................$145.00 per hour * Two-hour minimum portal to portal and cancellations within 24 hours. * OVERTIME RATES: Rates increased by factor of 1.5 for all hours worked in excess of eight (8) Monday through Friday, and the first eight (8) hours worked on Saturday. Rates increased by factor of 2.0 for all hours worked in excess of twelve (12) Monday through Friday, all hours worked in excess of eight (8) on Saturday and all hours worked on Sunday and holidays. ** For Prevailing Wage projects, increase the hourly rate by $19. ** Rates increased by factor of 1.25 for night shift hours (hours commencing after 4:00 p.m. or before 4:00 a.m.); rates increased by factor of 1.875 (an additional factor of 1.5) for all night shift hours in excess of eight (8); rates increased by factor 2.5 for all night shift hours worked in excess of twelve (12).
ADDITIONAL SERVICES OFFERED
In addition to our core services of geotechnical, hydrologic and environmental engineering, including construction-phase testing and observation, ENGEO provides clients with services for establishment and management of Geologic Hazard Abatement Districts (GHAD) and for Entitlement and Permitting Support (EPS). For more information about these services and associated pricing, please contact ENGEO at (925) 866-9000.
OTHER FEES
• Equipment and materials will be charged in addition to the above hourly rates. • Outside Consultants, Subcontracted Services and Equipment Rental ..................................................................................................Cost plus 25% • Expert Witness, Deposition, Mediation, Arbitration, or Court Appearance (Minimum Charge).....................$2,400.00 half day, $4,800.00 full day TERMS
Invoices will be submitted at completion of work or at approximately four week intervals and are due and payable upon receipt. Statements will be issued at monthly intervals. Charges not paid within 30 days of invoice date will accrue a late charge at a rate of 1.5 percent per month. In the event it becomes necessary to commence suit to collect amount due, Client agrees to pay attorney's fees and costs, as the court may deem reasonable until amount is paid. Fees will be applicable for one year from the effective date above; thereafter, fees will be adjusted annually. Our fees will be billed using an invoice format produced by a standardized accounting software package. A more customized itemization of charges and backup data will be provided upon Client’s requests, but at additional fees. Final reports may be withheld until outstanding invoices are paid in full.
Many risks potentially affect ENGEO by virtue of entering into this agreement to perform services on behalf of client. A principal risk is the potential for human error by ENGEO. For client to obtain the benefit of a fee that includes a nominal allowance for dealing with our liability, client agree to limit ENGEO’s liability to Client and all other parties for claims arising out of our performance of the services described in the agreement. The aggregate liability will not exceed $50,000 (or ENGEO’s fee, whichever is greater, but not more than $1,000,000) for professional acts, errors, or omissions, including attorney’s fees and costs that may be awarded to the prevailing party and client agrees to indemnify and hold harmless ENGEO from and against all liabilities in excess of the monetary limit established above.
Document Ref: XJQPH-H3KJD-F3MS4-KW3PL Page 14 of 16 Page 132 of 469
EQUIPMENT AND MATERIALS CHARGES
February 1, 2023 www.engeo.com
DESCRIPTION COST PER UNIT ($) UNIT
Air Content Meter 7.00 hour
Bailers (Disposable) 10.00 each
Coatings Thickness Kit (eg. Fireproofing, Protective Paint) 30.00 hour Concrete Crack Monitor 20.00 each
Coring Machine 30.00 hour
Double-Ring Infiltrometer 50.00 hour
Electronic Water Level Indicator 5.00 hour
Engineering Analysis Software 45.00 hour
Equipment Transport(er) 100.00 hour
Exploration Equipment (Electric Auger) 50.00 hour
Floor Flatness/Floor Level Equipment 40.00 hour
Generator 15.00 hour
GIS Website Portal Subscriptions 50.00 month
GPS Handheld Device 10.00 hour
Drone Equipment 210.00 hour
Hand Auger and Soil Sampler 15.00 hour
Hydraulic Pull-Test Equipment 25.00 hour
Interface Probe 2.00 hour
Magnetic Particle Test Equipment 25.00 hour
Moisture Content Test Equipment 6.00 hour
Multi-Parameter Water Meter 15.00 hour
pH Meter/Turbidity Meter 10.00 hour
Photo Ionization Detector 20.00 hour
Reinforcing Bar Locator 100.00 hour
Sampling Tubes 10.00 each
Sand Cone Equipment and Material 5.00 hour
Schmidt Hammer 20.00 hour
Seisometer 50.00 hour
Skidmore Wilhelm Bolt Tension Calib. 40.00 hour
Slope Inclinometer/Settlement Indicator/VW Readout 50.00 hour Torque Wrench 15.00 hour
Transfer Pump 3.00 hour
Ultrasonic Equipment 50.00 hour
Vapor Emission Test Kit 40.00 kit
Vector Conversion 60.00 conversion
Vehicle, nuclear gauge, equipment, wireless communication. *Add $5.00/hr. for RTK enabled autotesting equipment. 33.00* hour Vehicle, equipment, wireless communication 23.00 hour
Vibration Monitor 1800.00 month
Water Sampling Pumps 20.00 hour
Bridge Toll actual actual
Mileage .98 mile
Parking actual actual
AutoCAD, Civil 3D, GIS, Drone Data Processing 29.00 hour Photocopies Black & White 0.25 each
Photocopies Color 11 x 17 1.50 each
Photocopies Color 8½ x 11 1.00 each
Plot - Black & White 3.00 square foot
Plot - Color 4.00 square foot
Postage actual actual
Scan - Black & White 1.50 each
Scan - Color 3.75 each
Telephone 0.50 minute
Document Ref: XJQPH-H3KJD-F3MS4-KW3PL Page 15 of 16 Page 133 of 469 13 Updated May 2023
EXHIBIT C
SCHEDULE OF PERFORMANCE
Performance schedules for work to be performed will be determined on a project by project basis and approved by the City Manager's designated project manager prior to work on each specific project
commencing
Document Ref: XJQPH-H3KJD-F3MS4-KW3PL Page 16 of 16 Page 134 of 469 Signature Certificate
Reference number: XJQPH-H3KJD-F3MS4-KW3PL
Document completed by all parties on:
01 Jun 2023 21:14:46 UTC
Signer Timestamp Signature
Macy Tong
Email: [email protected]
Recipient Verification:
Sent: 30 May 2023 22:41:26 UTC
Viewed: 30 May 2023 22:55:10 UTC
Signed: 30 May 2023 22:55:34 UTC
✔Email verified 30 May 2023 22:55:10 UTC
IP address: 66.7.228.252
Location: San Ramon, United States
Ted Bayham
Email: [email protected]
Recipient Verification:
Sent: 30 May 2023 22:41:26 UTC
Viewed: 01 Jun 2023 20:59:36 UTC
Signed: 01 Jun 2023 21:14:46 UTC
✔Email verified 01 Jun 2023 20:59:36 UTC
IP address: 66.7.228.252
Location: San Ramon, United States
Signed with PandaDoc
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1 Updated May 2023
CONSULTANT AGREEMENT FOR DESIGN PROFESSIONALS
TWINING, INC.
THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and TWINING, INC. a California corporation ("CONSULTANT") hereinafter referred to collectively as “Parties.” In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:
1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on _____________, ____, 20___.
2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until June 30, 2025 at which time CONSULTANT’S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum period of one year. Any such extension shall be in writing and signed by both Parties to this Agreement.
3. Scope of Service. The services to be performed by CONSULTANT shall be compaction testing and special inspections as further described in Exhibit A.
4. Compensation. CONSULTANT shall be compensated as follows:
4.1. Amount. $200,000.00. Total compensation to CONSULTANT under this Agreement during its initial term set forth in Section 2 above shall not exceed Two Hundred Thousand Dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to CONSULTANT, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement, and provided further that in no event shall such maximum compensation allowed for the term exceed the City Manager's authority pursuant to Chapter 3.04 of the Morgan Hill Municipal Code, unless otherwise authorized by City Council.
4.2. Billing. CONSULTANT shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by CONSULTANT on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 13 Notices. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY’S judgment were necessary and reasonable. Services for work performed and expenses incurred in excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.
5. Termination. CITY or CONSULTANT shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent circumstances. Upon such termination, CONSULTANT shall submit to CITY an itemized statement of services performed for which
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compensation has not been paid. CITY may require CONSULTANT to complete certain work product or documents and CONSULTANT shall deliver to CITY all documents in its possession without additional compensation to CONSULTANT. The City Manager of CITY is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.
5.1. Non-Appropriations. Notwithstanding anything contained in this Agreement to the contrary, if insufficient funds are appropriated, or funds are otherwise unavailable in the budget for CITY for any reason whatsoever in any fiscal year, for payments due under this Agreement, CITY will immediately notify CONSULTANT of such occurrence, and this Agreement shall terminate after the last day during the fiscal year for which appropriations shall have been budgeted for CITY or are otherwise available for payments.
6. Performance of Work. CONSULTANT represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by CONSULTANT in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of the CONSULTANT’S profession. By delivery of completed work, CONSULTANT certifies that the work conforms to the requirements of this Agreement and all applicable federal, state, and local laws. CONSULTANT shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of Performance," attached hereto and incorporated herein by this reference. CITY'S City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement. If CONSULTANT desires to leave or store any of CONSULTANT’S equipment at a CITY site while CONSULTANT is performing work or service pursuant to this Agreement, CONSULTANT will first obtain the consent of CITY'S City Manager, or his/her delegate, to do so, and any such storage shall occur only in the manner and location allowed by such CITY official and entirely at CONSULTANT’S sole risk.
7. Insurance Requirements. CONSULTANT shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of CONSULTANT, including its subcontractors, employees, and agents, relating to, or arising from, the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. CONSULTANT further understands that the CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to CONSULTANT, at any time as deemed necessary to protect the interests of the CITY.
7.1. Insurance Types and Amounts.
7.1.1. Commercial General Liability (CGL). CONSULTANT shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
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7.1.2. Automobile Liability. CONSULTANT shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if CONSULTANT does not own automobiles, then CONSULTANT shall maintain Hired/Non-owned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.1.3. Workers’ Compensation Insurance and Employer’s Liability. CONSULTANT shall maintain Workers Compensation coverage, as required by law, in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. If CONSULTANT is selfinsured, CONSULTANT shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.
7.1.4. Pollution (Environmental) Liability. If the performance of CONSULTANT’S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, CONSULTANT shall procure and maintain Pollution Liability covering the CONSULTANT’S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement.
Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.1.5. Professional Liability.
7.1.5.1. If the performance of CONSULTANT’S work or service under this Agreement involves professional and/or technical services (examples include, but are not limited to, architects, engineers, land surveyors, and appraisers), CONSULTANT shall procure and maintain either a claims made or occurrence Errors and Omission liability insurance in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. Further, if CONSULTANT maintains a claims-made policy, CONSULTANT shall provide written evidence of such insurance to the CITY for at least five (5) years after the completion of work performed under this Agreement.
7.1.5.2. If the performance of CONSULTANT’S work or service under this Agreement relates to Information Technology or related services (examples include, but are not limited to computer programmers, software designers,
4 Updated May 2023
hardware engineers, or other systems consultants), CONSULTANT shall procure and maintain a claims made Errors and Omission liability insurance, including Cyber Liability and Data Breach, in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.1.6. Sexual Abuse/Molestation Liability (SML): If the performance of CONSULTANT’S work or service under this Agreement involves contact with minors, CONSULTANT shall procure and maintain Sexual Abuse and Molestation insurance in the minimum amount of: (i) two hundred thousand dollars ($200,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSULTANT’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
7.2. Endorsements. CONSULTANT shall provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:
7.2.1. General Liability and pollution liability (when pollution liability applies).
7.2.1.1. “Additionally Insured” - The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds on a form at least as broad as ISO Form CG 20 10 for ongoing operations.
7.2.1.2. “Waiver of Rights of Subrogation” - The insurer waives the right of subrogation against the City of Morgan Hill and CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers; and
7.2.1.3. “Primary and Non-Contributing” - Insurance shall be endorsed to be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as ISO Form CG 20
01. 7.2.2. Workers Compensation.
If the performance of CONSULTANT’S work or service under this Agreement involves access to or activity on any property or premises owned or occupied by the CITY, including, but not limited to, CONSULTANT’S presence during site visits and meetings, then insurer waives the right of subrogation against the City of Morgan Hill and the CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers.
7.3. Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each insurer must have a current A.M.
Best's financial strength rating of “A” or better and a financial size rating of “VII” or better.
7.4. Certificates. CONSULTANT shall furnish CITY of Morgan Hill with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, CONSULTANT shall promptly furnish CITY of Morgan Hill with copies of all policies outlined herein. No policy subject to the CONSULTANT’S
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agreement with the CITY shall be canceled or materially changed except after thirty (30) days' notice by the insurer to CITY. A "material change" is a change that results in noncompliance with any insurance requirements in this section 7. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein.
Certificate Holder address:
City of Morgan Hill
Attn: Risk Management
17575 Peak Avenue
Morgan Hill, CA 95037
8. Non-Liability of Officials and Employees of the CITY. No official or employee of CITY shall be personally liable for any default or liability under this Agreement.
9. Compliance with Law.
9.1. CONSULTANT and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement. CONSULTANT and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon any basis prohibited by State or Federal law, including but not limited to, race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.
9.2. Compliance with Wage and Hour Laws: Consultant, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable federal, state, and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act and the California Labor Code.
Final Judgments, Decisions, and Orders: For purposes of this Section, a “final judgment, decision, or order” refers to one for which all appeals have been exhausted or the time to appeal has expired. Relevant investigatory government agencies include: the federal Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.
Prior Judgments against CONSULTANT and/or its Subcontractors: BY SIGNING THIS
AGREEMENT, CONSULTANT AFFIRMS THAT IT HAS DISCLOSED ANY FINAL
JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR INVESTIGATORY GOVERNMENT AGENCY FINDING – IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT – THAT CONSULTANT OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONSULTANT FURTHER
AFFIRMS THAT IT OR ITS SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH – OR HAS REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY – ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.
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Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that CONSULTANT or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or CONSULTANT learns of such a judgment, decision, or order that was not previously disclosed, CONSULTANT shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision, or order.
CONSULTANT and its subcontractors shall promptly satisfy and comply with any such judgment, decision, or order, and shall provide the City Attorney with documentary evidence of compliance with the final judgment, decision, or order within five (5) days of satisfying the final judgment, decision, or order. The City reserves the right to require CONSULTANT to enter into an agreement with the City regarding the manner in which any such final judgment, decision, or order will be satisfied.
City’s Right to Withhold Payment: Where CONSULTANT or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or government agency, the City reserves the right to withhold payment to CONSULTANT until such judgment, decision or order has been satisfied in full.
Material Breach: Failure to comply with any part of this Section constitutes a material breach of this Agreement. Such breach may serve as a basis for immediate termination of this Agreement and/or any other remedies available under this Agreement and/or law.
Notice to City Related to Wage Theft Prevention: Notice provided to the City Attorney as required under this Section shall be addressed to: City Attorney, City of Morgan Hill, 17575 Peak Avenue, Morgan Hill, CA 95037. The Notice provisions of this Section are separate from any other notice provisions in this Agreement and, accordingly, only notice provided to the above address satisfies the notice requirements in this Section.
10. Independent Contractor. CONSULTANT is an independent contractor and not an agent or employee of CITY.
11. Confidentiality. All data, documents, or other information received by CONSULTANT from CITY or prepared in connection with CONSULTANT’S services under this Agreement are deemed confidential and shall not be disclosed to any third party by CONSULTANT without prior written consent by CITY.
12. Conflict of Interest and Reporting. CONSULTANT shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.
13. Notices. All notices shall be personally delivered or mailed, via first class mail to the below listed address. These addresses shall be used for delivery of service of process. Notices shall be effective five (5) days after date of mailing, or upon date of personal delivery.
Address of CONSULTANT is as follows:
Twining, Inc.
5027 Commercial Circle, Suite G
Concord, CA
94520