PROJECT REIMBURSEMENT AGREEMENT
This PROJECT REIMBURSEMENT AGREEMENT ("Agreement") is executed this 25th day of March 2024 ("Effective Date"), by and between the CITY OP RICHMOND, a California municipal corporation ("City"), and CHEVRON PRODUCTS COMPANY, a division of CHEVRON U.S.A. INC. ("Applicant"). City and Applicant may be referred to, individually or collectively, as "Party" or "Parties."
RECITALS
WHEREAS, Applicant operates a petroleum refinery located at 841 Chevron Way in Richmond, California, 94801 ("Refinery").
WHEREAS, Applicant plans to apply to the City to install a wet gas scmbber at the Refinery's fluidized catalytic cracking unit to reduce particulate matter emissions and comply with Bay Area Air Quality Management District ("BAAQMD") Rule 6-5 ("Project"). The Applicant separately plans to apply to BAAQMD for its approval for the Project.
WHEREAS, City must assess the Project pursuant to the California Environmental Quality Act ("CEQA") and comply with any CEQA obligations. City will retain the services of outside consultants due to the nature and scope of the Project for such assessment.
WHEREAS, City has agreed to hire one or more consultants ("Consultants," and individually a "Consultant") to assist in processing applications and plans submitted by Applicant for the Project, which will also include an analysis and approval required under CEQA. City will also utilize its own staff to oversee and coordinate the processing of such applications and plans and will use the City Attorney's office for review and negotiation of documents or agreements related to the Project.
WHEREAS, City is the lead agency under CEQA for purposes of evaluating the Project, and as such, will prepare all CEQA documents released for public review and comment, and will review and approve any and all supporting documents using its independent judgment. The City shall distribute such reports and documents to responsible agencies and others, hold public hearings and consider public comments, and consider approval or certification of such reports and other documents as it deems necessary and appropriate in accordance with CEQA, WHEREAS, accordingly, despite any funding mechanism provided in this Agreement, neither Applicant, nor any of its representatives, agents or other persons acting on behalf of Applicant, shall retain the Environmental Consultant (as defined below) or any City official, employee, or contractor for work on the Project, This shall not prevent Applicant from consulting with Environmental Consultant as permitted by the City in order to progress the Project.
WHEREAS, as of the date of execution of this Agreement, the City has already incurred certain costs and attorney's fees in connection with the Project, and such costs and fees are intended to be included as reimbursable costs pursuant to this Agreement.
WHEREAS, the City and Applicant desire to enter into this Agreement to provide for Applicant to be responsible for certain direct and indirect City costs related to the Project, and for Applicant to deposit funds with City in advance and thereafter supplement such deposits to reimburse City for such costs, and to establish procedures therefor.
NOW, THEREFORE, for the purposes set forth herein, and for good and valuable consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as follows:
TERMS
1. Incorporation of Recitals. The Parties hereby incorporate the Recitals as though fully set forth herein.
2. Applicant Responsibility for City Costs.
2.1 City Costs Included. Applicant shall be responsible for, and shall reimburse City for, all reasonable direct and indirect costs, fees and expenses of City related to: 1) City review, planning, design, and permitting for the Project, including processing and negotiating any permits, entitlements and proposed conditions of approval for the Project; 2) related analysis and approvals under CEQA; and 3) City efforts to facilitate the review and approval of the Project by other agencies, as may be needed (the "City Costs"). City Costs include, but are not limited to: (a) the City's attorney fees, at a rate not to exceed $400.00 per hour as adjusted for inflation, including but not limited to, fees incurred for drafting, negotiating and reviewing this Agreement, contracts with Consultants, contracts with other agencies and public agencies, and any documents that the City deems necessary in connection with undertaking of the planning, design, pemiittmg, and for the processing of the Project approvals, (b) staff time required for drafting, negotiating and reviewing this Agreement, contracts with Consultants, and contracts with other agencies and public agencies, and any documents that the City deems necessaiy in connection with undertaking of the processing, planning, design, and permitting for the Project; and (c) all costs associated with Sections 2.1 (a) and 2.1(b) above, including consultant costs and fees; (d) all costs related to studies, reports and design services for the development of any Project- related infrastructure; (e) all costs related to investigations of the Property or the Project; and (f) any other fees and costs deemed necessary by the City in order to process, review, or act upon or complete the Project. Applicant's obligation to deposit and reimburse City Costs are in addition to Applicant's duty to indemnify, defend, and hold harmless City, as set forth in Section 8, below.
2.2 City Costs Not Included. Notwithstanding the foregoing, this Agreement does not include reimbursement for any building or other pennits subject to the Building Permit Services Contract by and between Chevron Products Company, a division of Chevron U.S.A. Inc. and City of Richmond dated January 1, 2020 ("BPS Contract"). For certainty, City Costs do not include processing of routine building, maintenance, grading, and other permits processed by the City through its Building Division covered by the BPS Contract.
2.3 Deposit. In furtherance of the foregoing. Applicant has or shall, within ten (10) business days of the Effective Date, deposit with City an initial sum of Two Hundred Fifty Thousand ($250,000.00) against which any City Costs will be drawn down ("Deposit"). The Deposit represents City's best estimate of Applicant's ultimate financial obligation to City under this Agreement. Applicant shall make such additional deposit(s) required under Section 2.4, below.
2.4 Additional Deposits by Applicant. Applicant shall make additional deposits to the City within thirty (30) days of City's written request to Applicant. City's written requests for additional deposits shall state what costs have been incurred to date, additional costs anticipated, and how City intends to apply any needed additional Applicant deposits. If deposited sums exceed the costs incurred by City, City shall refund the difference in accordance with Section
2.7. 2.5 City's Right to Cease Work. In the event that Applicant does not promptly pay or reimburse the City Costs upon the City's request for payment or reimbursement, including by failing to deposit amounts incurred or timely pay any additional requested deposits, City may immediately cease all work related to or concerning the Project, and may take such further action as City deems appropriate, including deeming any Applicant application(s) abandoned and any development permit issued by City to Applicant null and void. Applicant shall have no claim against City for such action other than recovery of any excess deposit under Section 2.8 for which City Costs have not been incurred and hereby waives such claims.
2.6 Interest on Deposit. Any amounts deposited by Applicant may be maintained by City in an interest-bearing account of City's choice and may be co-mingled with other City funds in such account. Interest accruing upon any such deposits shall inure to and be created for the benefit of City.
2.7 Accounting. City shall keep an accounting of the City Costs and all deposits made by Applicant for at least twenty-four months after termination of this Agreement. Upon written request, City shall provide statements of these accounts to Applicant, which shall include descriptions of the City Costs, including the date, amount, and the type of activity for which the cost was incurred. Failure of City to provide any accounting shall not excuse Applicant's duty to perform any act, including the duty to make full and timely deposits required under this Section 2.
Applicant may question or challenge any use of funds set forth in the accounting as being inconsistent with the terms of this Agreement and may appeal same to the City Council.
2.8 Unexpended Funds. Upon completion of City's assistance in connection with Applicant's completion of the Project, the granting or issuance of all necessary Project approvals, the expiration of all applicable appeal periods, and if a legal or administrative challenge is made to the approvals, then upon the resolution of such challenge, City shall return any then- unexpended portion of the deposit to Applicant, without interest, less an amount equal to any unpaid City Costs previously incurred by the City. Payment of unexpended funds shall include mutual releases by the Parties.
2.9 Applicant's Right to Terminate Agreement. In the event Applicant determines, in its sole discretion, that it no longer desires to pursue the development of the Project, Applicant shall deliver written notice to the City of its election to terminate this Agreement. Such written notice of termination shall be delivered to City at least 30 days prior to the effective date of termination. Upon receipt of any notice of termination, City shall immediately cease all work under this Agreement except as otherwise agreed upon between the Parties. The City shall refund Applicant any funds previously deposited with the City that are in excess of the costs incurred by the City under this Agreement (such costs incurred by City under this Agreement shall include, without limitation, work carried out by City pursuant to this Section 2.8) within 30 days of receipt of such notice of termination.
3. Additional Taxes, Fee, and Charges. Notwithstanding any provision to the contrary, Applicant shall pay all normal and customary fees and charges applicable to all permits and approvals necessary for the Project, and any taxes, fees, and charges hereafter imposed by City, which are standard and uniformly applied to similar projects in the City.
4. City Release; Expiration. This Agreement shall expire (a) upon mutual agreement by the parties, (b) Applicant termination under Section 2.9, (c) upon abandonment of the Project by Applicant due to inactivity as reasonable determined by City. In such event, expiration only occurs if Applicant's obligations have been satisfied, including the indemnity obligation in Section
8.2. 5. Remedies. In the event of a breach by Applicant, City may, in addition to any other remedies, seek to recover the City Costs plus reasonable attorneys' fees in enforcing this Agreement. In the event Applicant fails to pay any monetary default, it shall bear interest at the lesser of ten percent (10%) or the maximum rate pemiitted by law until payment is actually received by City. This provision will not be interpreted to curtail any of City's remedies at law or equity against Applicant for any violation of its codes, nor shall it be interpreted as a waiver of any defense available to Applicant but while Applicant may recover unexpended and uncommitted funds, it may not recover monetary damages, either general or special.
6. Conflicts of Interest.
6.1 No Financial Relationship. Applicant acknowledges the requirements of Government Code Sections 1090 et seq. (the "1090 Laws") and warrants that it has not entered into any financial or transactional relationships or arrangements that would violate the 1090 Laws, nor shall Applicant solicit, participate in, or facilitate a violation of the 1090 Laws.
6.2 Applicant's Representations and Warranties. Applicant represents and warrants that it is duly authorized to do business in the State of California. Applicant further represents and warrants that, for the 12-month period preceding the Effective Date of this Agreement, it has not entered into any arrangement to pay financial consideration to, and has not made any payment to, any City official, agent or employee that would create a legally cognizable conflict of interest as defined in the Political Reform Act (California Government Code sections 87100 etseq.).
6.3 Conflict of Interest. No director, employee, subsupplier, or agent of either Party shall give to or receive from any director, employee or agent of the other Party or its affiliate any commission, fee, or rebate, or any gift or entertainment of significant cost or value in connection with this Agreement or enter into any business arrangement with any director, employee or agent of the other Party or its affiliate other than as a representative of Applicant or City, as appliable, without prior written notification thereof to the other Party. Either Party shall promptly notify the other Party of any violation of this Section 6.3 (Conflict of Interest) and any consideration received as a result of such violation shall be paid over or credited to the other Party.
Nothing herein alters any obligations that the City has under applicable state or local conflicts of interest statutes.
7. Confidentiality, Publicity, and Data Protection
7.1 Confidentiality. City shall treat as confidential all information provided by Company or generated or obtained in connection with perfbmiance of this Agreement that Company deems propriety or confidential (the "Confidential Information"), to the extent City is permitted to do so by the California Public Records Act. Applicant acknowledges that City is an entity bound by the requirements of the California Public Records Act. If the City receives a request under the Public Records Act concerning the disclosure of Confidential Information, the City shall provide Applicant with notice of such request. If required by law, the City shall disclose such Confidential Information pursuant to applicable law, unless ordered otherwise by a court. If Applicant does not want such Confidential Information to be disclosed, Applicant, at its sole cost and expense, may prosecute or defend any action concerning such Confidential Information and shall indemnify, defend and hold the City harmless from all costs and expenses, including attorneys' fees, in connection with such action.
7.2 Data Protection. Each Party receiving ("Receiving Party") mformation that can be used directly or indirectly, alone or in combination with other information, to identify an individual ("Personal Data") will manage all Personal Data it receives from the other Party ("Disclosing Party") in accordance with all applicable laws and Disclosing Party's reasonable requests with respect to protecting data.
8. Applicant Acknowledgements. Subject to the obligations set forth in this Agreement, Applicant acknowledges and agrees that under case law the preparation of environmental documents and analysis is required to reflect the City's independent judgment, regardless of who initially prepares the documents and analysis, so, with respect to the work concerning the Project:
8.1 City has sole discretion to select which of its employees and consultants are assigned to the work.
8.2 City has sole discretion to direct the work and evaluate the performance of the employees and consultants assigned to the work, and City retains the right to terminate or replace at any time any such person.
8.3 City has sole discretion to determine the amount of compensation paid to employees or consultants assigned to the work.
8.4 City, not Applicant, shall pay employees and consultants assigned to the work from a City account. Channels of communication between Applicant and City employees and consultants shall be established by City.
9. Indemnification and Hold Harmless.
9.1 Agreement Not Liability or Debt of City. The Parties acknowledge that there may be challenges to the legality, validity and adequacy of this Agreement, the Project itself, or other City actions related to the same. If such challenges are successful, such challenges could delay or prevent the performance of this Agreement, the approvals, or implementation of the Project. City shall have no liability whatsoever for the inability of Applicant to obtain approvals or implement the Project, as the result of any judicial determination that some or all of the Project, or any other City action related to any of the same are invalid or inadequate or not in compliance with law. No official, officer, employee, or agent of the City shall be personally liable hereunder to any extent. The Parties further acknowledge and agree that this Agreement is not a debt of the City. The City shall not in any event be liable hereunder other than to return the unexpeaded and uncommitted portions of the deposit as provided in Section
2.8 above, to provide an accounting under Section 2.7 above, and remedies shall be limited as per Section 5 and Applicant may not recover general or special damages against City. The City shall not be obligated to advance any of its own funds for any reason whatsoever.
9.2 Indemnification. Applicant agrees to indenmify, protect, defend, and hold harmless the City and its officials, officers, employees, agents, elected boards, commissions, departments, agencies, and instrumentalities thereof, from any and all actions, suits, claims, demands, writs ofmandamus, liabilities, losses, damages, penalties, obligations, expenses, and any other actions or proceedings (whether legal, equitable, declaratory, administrative, or adjudicatory in nature), and alternative dispute resolution procedures (including, but not limited to, arbitrations, mediations, and other such procedures) asserted by third parties against the City that challenge, or seek to void, set aside, or otherwise modify or annul, the action of, or any approval by, the City for or concerning this Agreement, the Project, or any other City action related to any of the foregoing (including, but not limited to, reasonable attorneys' fees and costs) (herein the "Claims and Liabilities") whether such Claims and Liabilities arise under planning and zoning laws, the Subdivision Map Act, CEQA, Code of Civil Procedure Sections 1085 or 1094.5, or any other federal, state, or local statute, law, ordinance, rule, regulation, or any decision of a competent jurisdiction. In the event any action for any Claims and Liabilities is brought against the City and/or related parties, upon City's notification to Applicant of the pendency of a claim or suit. Applicant shall make an initial deposit sufficient to pay all of Applicant's indemnification obligations, which includes legal costs and fees anticipated to be incurred as reasonably determined by the City, in an amount of $100,000. Applicant shall make deposits ("Indemnity Deposit") required under this section within thirty (30) days of the City's written request.
If Applicant fails to timely pay such funds, the City may abandon the action without liability to Applicant and may withdraw from Indemnity Deposit or recover from Applicant any attorneys' fees and other costs for which the City may be liable as a result of abandonment of the action. It is expressly agreed that the City shall have the right to utilize the City Attorney's office or use other legal counsel of its choosing. Applicant's obligation to pay the defense costs of the City shall extend until fmal judgment, including any appeals. City agrees to fully cooperate with Applicant in the defense of any matter in which Applicant is defending and/or holding the City harmless. The City may make all reasonable decisions with respect to its representation in any legal proceeding, including its inherent right to abandon or to settle any litigation brought against it in its sole and absolute discretion, and City's reasonable decision to settle or abandon a matter, 6 including but not limited to following an adverse judgment or failure to appeal, shall not cause a waiver of the City's indemnification rights. Any decision by the City to settle litigation shall not, without the written consent of Applicant, bind Applicant. City shall discuss litigation strategy with Applicant in good faith but shall retain absolute discretion to make strategy decisions.
9.3 Exception. The obligations of Applicant under this Section shall not apply to any claims, actions, or proceedings arising through the sole negligence or willful misconduct of the City, its members, officers, or employees.
9.4 Period of Indemnification. The obligations for indemnity under Section 8,2 shall begin upon the Effective Date and shall survive termination or expiration of this Agreement.
10. No Obligation to Approve Project. The provisions of this Agreement shall in no way obligate the City to grant any approvals or take any particular action related to an application for any part of the Project, whether in whole or in part. It is expressly understood that both as a Charter City, and under its police power under state law the City has full power to approve all development projects under the authority of its general plan, zoning, and applicable specific plans.
Moreover, the City cannot contract away its authority or obligation to hold due process compliant hearings to consider discretionary projects under the land use authority of City. Nothing herein shall constitute a prejudgment of such matters including, without limitation, under CEQA.
11. Assignment. Applicant may not assign this Agreement to any other entity unless agreed to in writing by City and upon proof of the financial viability of the successor entity to fulfill the Agreement's obligations. City's consent to assignment shall not be unreasonably withheld.
12. Relationship Between the Parties. The Parties agree that this Agreement does not operate to create the relationship of partnership, joint venture, or agency between City and Applicant. Nothing herein shall be deemed to make Applicant an agent of City.
13. Notices. All notices, demands, invoices, and communications shall be in writing and delivered to the following addresses or such other addresses as the Parties may designate by written notice:
To City: City of Richmond
450 Civic Center Plaza
Suite 300
Richmond, CA 94804
Attn; Shasa Curl, City Manager
Email: [email protected]
City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
Attn; Una Velasco, Director of Community Development
Email: [email protected]
7 Copy to: Aleshire & Wynder, LLP
18881 Von Karman Ave. Suite 1700
Irvine,CA 92612
Attn: David J. Aleshire, City Attorney
Email: [email protected]
To Applicant: Chevron Products Company
P.O. box 1272
Richmond, CA 94802
Attn: Kris Battleson, HSE Manager
Email: [email protected]
and
Chevron Products Company
841 Chevron Way
Richmond, CA 94801
Attn: Rachael Justice, Permitting Specialist
Email: [email protected]
Copy To; Chevron Products Company
841 Chevron Way
Richmond, CA 94801
Attn: Refinery counsel
Email: [email protected]
Depending upon the method of transmittal, notice shall be deemed received as follows: by messenger, as of the date delivered; by U.S. Mail first class postage prepaid, as of 72 hours after deposit in the U.S. Mail; and by email, upon the sender's receipt of an email from the recipient acknowledgmg receipt.
14. Cooperation; Further Acts. The Parties shall fully cooperate with one another and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement, provided that no such obligations to cooperate shall waive the City's right to exercise its independent judgment in the use of its police power.
15. Construction; References; Captions. It being agreed the Parties, or their agents and legal counsel have participated in the preparation of this Agreement, the language of this Agreement shall be constmed simply, according to its fair meaning, and not strictly for or against any Party. Unless otherwise specified, any term referencing time, days, or period for performance shall be deemed calendar days and not business days, provided, however that any deadline that falls on a weekend or holiday shall be extended to the next City business day. All references to Applicant include all personnel, employees, agents, and contractors of Applicant, except as otherwise specified in this Agreement. All references to City include its elected officials, appointed boards and commissions, officers, employees, agents, and volunteers. The captions of the various 8 paragraphs are for convenience and ease of reference only, and do not define, lunit, augment, or describe the scope, content, or intent of this Agreement.
16. Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.
17. Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual right by custom, estoppel, or otherwise.
18. Intent. The parties acknowledge and agree that City is restricted in its authority to limit its police power by contract and that the foregoing limitations, reservations, and exceptions are intended to reserve to City all of its police power that cannot be so limited. This Agreement shall be construed, contrary to its stated terms if necessary, to reserve to City all such power and authority that cannot be restricted by contract.
19. Binding Effect. Each and all of the covenants and conditions shall be binding on and shall inure to the benefit of the Parties, and their successors, heirs, personal representatives, or assigns. This section shall not be constmed as an authorization for any Party to assign any right or obligation.
20. No Third-Party Beneficiaries. There are no intended third-party beneficiaries of any right or obligation assumed by the Parties.
21. Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect and shall be constmed so as to effectuate the intent of the Parties.
22. Survival. Despite completion of the Project or expiration or earlier termination of this Agreement for any reason, all provisions in this Agreement containing perpetual licenses, representation, warranties, waiver and/or release made by any Party to this Agreement, defense and/or indemnity obligations, and unless specifically provided to the contrary in this Agreement, all provisions which by their nature contemplate performance after the expiration or earlier termination hereof, including all provisions relating to tax, audit, confidentiality, limitations of liability, retention and inspection of records, dispute resolution and governing law, shall survive indefinitely until, by their respective terms, they are no longer operative or are limited to the contrary by the terms of this Agreement or by an applicable statute of limitations. Expiration or earlier termination of this agreement shall not impair or affect any liability or obligation of Applicant or City that has accrued on or before the date of expiration or earlier termination of this Agreement, including the obligations identified in this provision.
23. Applicable Law and Dispute Resolution.
23.1 Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California.
23.2 Dispute Resolution.
a. In the event a dispute arises with respect to the interpretation or performance of, or the relationship created by, all or any part of this Agreement, the Parties shall attempt in good faith to resolve the dispute. If such efforts prove unsuccessful, each Party agrees to consider the use of mediation, mini-trial, arbitration or other alternative dispute resolution techniques prior to resorting to litigation. If mediation, mini-trial, arbitration or other alternative dispute resolution techniques are utilized by the Parties, each Party agrees that no award or decision resulting therefrom shall include punitive damages.
b. If the Parties are unsuccessful in their good faith attempt to resolve such dispute, the Parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of either (A) Contra Costa County in the State of California, or (B) the federal courts of the Northern District of California, for any actions, suits or proceedings arising out of or relating to this Agreement (and the Parties each agree not to commence any action, suit or proceeding except in such courts).
24. Authority to Execute. The persons executing this Agreement on behalf of each of the Parties hereto warrant that (a) the Party on which behalf it is executing is duly organized and existing, (b) such person is duly authorized to sign and deliver this Agreement on behalf of the Party he or she represents, (c) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement, (d) the entering into of this Agreement does not violate any provision of any other agreement to which such Party is bound and (e) there is no litigation or legal proceeding which would prevent such Party from entering into this Agreement.
25. Time is of the Essence. Time is of the essence with respect to this Agreement.
26. Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original and which collectively shall constitute one instrument.
27. Entire Agreement. This Agreement constitutes the entire agreement between City and Applicant and supersedes any previous negotiations, discussions, communications, oral or written, and agreements between the Parties, and no parol evidence of any prior or other agreement shall be permitted to contradict or vary the terms of this Agreement and the Agreement shall be constmed in accordance with its fair meaning and not strictly for or against either Party. [SIGNATURES OF PARTIES ON NEXT PAGE]
10 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.
ia municipal corporation
Sha^A/City Manager/
APPROVED AS TO FORM:
L—
David J. Xlesliire, City Attorney
APPLICANT:
CHEVRON PRODUCTS COMPANY,
a division of CHEVRON U.S.A. INC.
By:_
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Title: ;<•"
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