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REPAIR AND MAINTENANCE AGREEMENT
This REPAIR AND MAINTENANCE AGREEMENT (“ Agreement”) is made and entered into effective as of this _____ day of ____________, 2022 (the “Effective Date”), by and between the CITY OF ORANGE, a municipal corporation (“ City”) and ORANGE COUNTY WATER DISTRICT, a special governmental district of the State of California (“ District”). The District and City are referred to below collectively as the “Parties.”
RECITALS
A. The District owns approximately __ acres of real property located at the northwest corner of Hewes Street and East Bond Avenue, City of Orange, California, as illustrated in the depiction set forth in Exhibit “1” (the “ District Property ”). District operates a groundwater recharge basin, commonly referenced as Bond Pit, on and adjacent to the District Property.
B. The City owns, operates and/or maintains certain drainage facilities on and/or near the District Property, including, but not limited to, pipes, drains, manholes and municipal separate storm sewer (MS4) drainage systems, as roughly depicted in Exhibit “2” (the “ Drainage Facilities”), and such Drainage Facilities drain across the District Property and into Bond Pit.
C. The soil in portions of the District Property, including portions surrounding the Drainage Facilities, has become saturated and destabilized. This has caused extensive continuing damage to the District Property, including but not limited to increased soil instability and subsidence, settling, sinking, erosion and other movement of land or earth (“ Land Failures”) on the District Property at Bond Pit, necessitating significant repairs.
D. The Parties agree that absent repairs, the Land Failures in and around the District Property, will continue, and the Parties have agreed to settle their dispute regarding the cause of, and responsibility for, the Land Failures by entering into this Agreement.
E. District and City desire to enter into this Agreement, whereby the Parties shall Repair1 the Drainage Facilities and adjacent slopes (the “Project”) and establish responsibility for future slope protection and maintenance of the Drainage Facilities. A detailed description of the Project, and required elements of same, is attached hereto as Exhibit “3”.
AGREEMENT
NOW, THEREFORE, in consideration of mutual promises set forth in this Agreement, the sufficiency of which is hereby acknowledged, and based on the facts stated in the Recitals above, which are incorporated herein as though fully set forth, the Parties agree to the following:
1. Plan Approvals. City shall cooperate with District in developing a plan for the Project (the “Plans”), consistent with Exhibit 3, that is acceptable to District and to City. 1 Repair, as that term is used with regard to the Project, shall include interim ( “Phase I”) and long term (“Phase II”) actions reasonably required to stabilize the Drainage Facilities on the District Property and prevent additional Land Failures or other damage to District Property. 2629/022499-0062
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1.1 Approvals. The Parties shall cooperate to obtain all final, written governmental approvals, entitlements, plans, maps and other rights necessary to develop and construct the Project (the “Approvals”), including any and all approvals, permits and/or entitlements necessary for the Project.
1.2 Cooperation. City agrees to reasonably cooperate with District by executing any documents as may be reasonably required in connection with District’s efforts to perform the work identified in the Plans and obtaining the Approvals, including, without limitation, any documents requested by District or any other governmental agency.
1.3 District agrees that the future design of the Phase II permanent repair shall be engineered to help both the City and District to identify and address potential operational issues and conduct necessary maintenance.
2. City Reimbursement of the Project Costs
2.1 Project Costs. As used herein “Project Costs” means all costs actually incurred by District and its consultants and contractors and all costs actually incurred by City for the planning, design, engineering, financing, construction/installation, inspection and management of the Project, including without limitation the following: (i) all costs incurred to prepare plans, drawings, specifications, and other design and engineering documents relating to the Project; (ii) any permitting, plan checking, processing, and inspection fees paid with respect to the Project; (iii) all costs to purchase equipment, materials, and supplies for the Project; (iv) the compensation paid to District’s contractor for the work performed pursuant to the Plans; (vi) District’s cost to obtain any performance, payment, and warranty bonds, letters of credit, or other securities for the Project; (vii) actual permit, inspection, supervision, and testing costs paid by District, independent third party engineers, architects, or consultants in conjunction with the design and construction of the Project; (viii) insurance costs incurred in connection with the Project; and (ix) costs of environment compliance and mitigation (if any) associated with the Project, including, but not limited to, any costs associated with California Environmental Quality Act (CEQA) compliance.
2.2 The Project Costs Will Occur in Two Phases. The Parties understand that Phase I Project costs will be incurred by District from on or around November 2022 to January 2023 to immediately stabilize the District Property, and to prevent and minimize any further damage to the District Property and the Drainage Facilities. After the District Property is stabilized, the Parties understand that District will incur Phase II Project costs on or about the Fall of 2023 to design and construct a permanent repair to District Property and the Drainage Facilities.
2.3 Phase I Reimbursement Payments by City. The Parties envision that District will contract for and execute the Project and be the lead agency for all purposes related thereto. City agrees to reimburse District for fifty percent (50%) of all of the Project Costs not to exceed $534,200. District shall comply with the following process for requesting a reimbursement payment for the Project Costs (any such payment a “ Reimbursement Payment”). District may seek a Reimbursement Payment from the City by submitting to City a written request for a Reimbursement Payment and invoices or receipts which evidence the work completed and all expenses and labor costs associated therewith (collectively, a “ Payment Request”). City shall review each Payment Request within ten (10) days after receipt and shall immediately provide 2629/022499-0062
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District with written notice of any objection to the invoice. Within thirty (30) days after City’s review of the Payment Request, City shall provide the requested Reimbursement Payment to District for all undisputed amounts.2
2.4 Phase II Reimbursement Payments by City. The Parties agree that Reimbursement Payments for Phase II (permanent) Project Costs shall be made annually over 3 years, in equal installments, commencing upon completion of the Phase II Project.
3. Operation and Maintenance Responsibilities Upon Completion of Repair.
3.1 After completion of the Repair, City, as owner and operator of the Drainage Facilities on the District Property, shall maintain and be responsible for the costs of operating the Drainage Facilities that are located on District Property 3. City agrees to operate its Drainage Facilities on District Property in a reasonably prudent manner, consistent with all federal, state and local laws. Within ninety (90) days of the Effective Date of this Agreement, District shall provide City with a license to access District Property which is of sufficient scope to allow City to operate and maintain the Drainage Facilities located on District Property. City shall notify District prior to any maintenance or repair activity necessitating entry onto District Property.
3.2 After completion of the Repair, District, as owner and operator of the groundwater recharge basin (Bond Pit), shall maintain and be responsible for the costs of operating its groundwater recharge facilities located on District Property. District agrees to operate its facilities in a reasonably prudent manner, consistent with all federal, state and local laws. District shall notify City prior to any maintenance or repair activity in the vicinity of the Drainage Facilities.
3.3 Each Party agrees to immediately notify the other Party if any damage or failure of the Drainage Facilities or slope, or other defective condition of the District Property, is observed, regardless of that Party’s maintenance responsibility.
3.4 After completion of the Repair, City shall not be responsible for maintenance or repair of any part of the slope on District Property except as such maintenance or repair is directly caused or necessitated by the operation of the Drainage Facilities. District shall not be responsible for maintenance or repair of any part of the Drainage Facilities except as such maintenance or repair is directly caused by the failure of District to properly maintain the slope on the District Property.
2 If City disputes any of the charges on the Payment Request from District, it may request additional documentation and details from District. Notwithstanding the disputed amount, City shall pay the undisputed portion of the Payment Request to District. Within fifteen (15) days of receipt of the additional documentation from District, City shall either (i) pay District the remaining portion of the Payment Request or (ii) deposit the amount in controversy in escrow with a reputable third party escrow, which amount shall remain undistributed until final decision by a court of competent jurisdiction or upon agreement of the parties. Any dispute regarding the Payment Request shall be resolved per Section 5.6 herein. 3 City shall be solely responsible for the costs of maintaining Drainage Facilities that exist outside of District Property.
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4. Reciprocal Indemnification.
4.1 City agrees to indemnify, defend, and hold harmless District, its respective officers, employees, agents and attorneys from and against any claims, actions, damages and liabilities arising out of or in any manner connected with any negligent or willful misconduct resulting from the action of City pursuant to this Agreement. No provision of this Agreement shall any way limit the extent of the responsibility of District for payment of damages from its own respective activities, errors or omissions in connection with such party’s duties and obligations under this Agreement.
4.2 District agrees to indemnify, defend, and hold harmless City, its respective officers, employees, agents and attorneys from and against any claims, actions, damages and liabilities arising out of or in any manner connected with any negligent or willful misconduct resulting from the action of District pursuant to this Agreement. No provision of this Agreement shall any way limit the extent of the responsibility of City for payment of damages from its own respective activities, errors or omissions in connection with such party’s duties and obligations under this Agreement.
5. Miscellaneous.
5.1 Notice. In the event that any notice is given under this Agreement, it shall be personally delivered, in which case it shall be effective upon delivery, or may be mailed by certified mail, which notice shall become effective three (3) days after mailing, to the addresses set forth below:
To District: Orange County Water District
18700 Ward St
Fountain Valley, CA 92708 3161
Attn: General Manager
Copy to: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attn: Jeremy Jungreis, Esq.
To City: City of Orange
300 E Chapman Ave
Orange, CA 92866
Attn: Public Works Director
Copy to: City of Orange
300 E Chapman Ave
Orange, CA 92866
Attn: City Attorney
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Either party may change its address for notices by giving notice to the other party in the manner herein provided or may request that not more than two (2) additional copies of any notice be sent to addresses specified in a notice to the other party given pursuant to this Section.
5.2 Required Actions. City and District agree to execute such instruments and documents and to diligently undertake such actions that may be required in order to consummate the agreements contemplated herein.
5.3 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
5.4 Amendment to this Agreement. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the Parties hereto, or their designees.
5.5 Waiver. The waiver or failure to enforce any provisions of this Agreement shall not operate as a waiver of any future breach of any of the provisions or any other provision hereof.
5.6 Disputes and Dispute Resolution. If a dispute arises between the Parties in connection with, or arising out of this Agreement, the Parties shall first attempt to settle their disagreements through good faith negotiation, and then via mediation before a third-party neutral, prior to filing any litigation. Any litigation regarding this Agreement or the obligations of the Parties stated herein, shall be filed in the Superior Court for the County of Orange. In any litigation between the Parties arising out of this Agreement, each Party shall be responsible for their own costs and attorneys’ fees.
5.7 Severability. If any section of this Agreement is found by competent authority to be invalid, illegal or unenforceable in any respect and for any reason, the validity, legality and enforceability of the unaffected remainder of such section in every other respect and the remainder of the Agreement shall continue in effect.
5.8 Entire Agreement. This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof, and all prior and contemporaneous agreements, representations, negotiations and understandings of the Parties, oral or written, are hereby superseded and merged herein or therein.
5.9 Exhibits. All exhibits attached hereto and referred to herein are expressly incorporated herein as though set forth at length.
5.10 No Presumption Against Drafting Party. This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party hereto because said party drafted or caused the party’s legal representative to draft any of its provisions. This Agreement shall be construed without reference to the identity of the party or Parties preparing the same, it being expressly understood and agreed that the Parties hereto participated equally or had equal opportunity to participate in the drafting hereof. The Parties hereto acknowledge that each has read this Agreement; that they each fully understand their respective rights, privileges and duties under said Agreement; and that each enters into said Agreement freely and voluntarily. 2629/022499-0062
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5.11 Warranty of Authority. Each officer of the District and the City affixing his or her signature to this Agreement warrants and represents by such signature that he or she has the full legal authority to bind his or her respective party to all of the terms, conditions and provisions of this Agreement, that his or her respective party has the full legal right, power, capacity and authority to enter into this Agreement and perform all of its provisions and obligations, and that no other approvals or consents are necessary in connection therewith.
5.12 Counterparts. This Agreement may be executed in one or more counterparts, by either an original signature or signature transmitted by facsimile or electronic transmission or other similar process, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
5.13 Force Majeure. Upon written notice by a Party, the respective duties and obligations of the Parties will be suspended for the time period that performance by the Party is prevented or substantially impeded by workforce strikes; riots; fire; flood; federal, state or county regulatory action; pandemics; war; or terrorism.
5.14 No Obligation to Third Parties. The approval, execution and performance of this Agreement does not confer any rights upon any person or entity other than District and City. There are no third-party beneficiaries to this Agreement.
5.15 Nature of Relationship. This Agreement does not create, and will not be construed or deemed to create, any agency, partnership, joint venture, landlord-tenant or other relationship between District and City except as specified in this Agreement.
5.16 Electronic Signatures. Any Party may execute this Agreement using an “electronic signature,” as that term is defined in California Civil Code Section 1633.2, or a “digital signature,” as defined by California Government Code Section 16.5. An electronic or digital signature will have full legal effect and enforceability. Nothing in this Agreement requires any Party to use or accept the submission of any subsequent or related document containing an electronic or digital signature where written notice is otherwise required by this Agreement.
5.17 Term and Termination: The term of this Agreement shall be for a period of thirty (30) years from the Effective Date, unless extended or sooner terminated by the Parties.
Termination prior to thirty years shall only be authorized upon mutual consent of the Parties or by action of the court pursuant to litigation.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Parties hereby duly execute this Reimbursement Agreement as of the date written above.
CITY OF ORANGE, a California municipal
corporation
By:
Mark A. Murphy, Mayor
ATTEST:
Pamela Coleman, City Clerk
APPROVED AS TO FORM:
GARY A. SHEATZ
City Attorney
By:
Gary A. Sheatz, City Attorney
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ORANGE COUNTY WATER DISTRICT
By _________________________________
Stephen Sheldon, Board President
By:
Michael R. Markus, General Manager
APPROVED AS TO FORM:
Jeremy Jungreis
General Counsel
By:
Jeremy Jungreis, General Counsel
EXHIBIT “1”
DEPICTION OF DISTRICT PROPERTY
** IN PROGRESS **
EXHIBIT TO BE INSERTED PRIOR TO EXECUTION
EXHIBIT “2”
DEPICTION OF DRAINAGE FACILITIES
** IN PROGRESS **
EXHIBIT TO BE INSERTED PRIOR TO EXECUTION
EXHIBIT “3”
DESCRIPTION OF PROJECT
** IN PROGRESS **
EXHIBIT TO BE INSERTED PRIOR TO EXECUTION