Stradling Yocca Carlson & Rauth
Draft dated March 24, 2022
ACQUISITION AGREEMENT
by and between
CITY OF RIVERSIDE
and
FRIENDS OF THE AIRPORT, LLC
Dated as of April 1, 2022
Relating to:
CITY OF RIVERSIDE
COMMUNITY FACILITIES DISTRICT NO. 2015-2
(POMELO) OF THE CITY OF RIVERSIDE
4887-2902-8108/022025-0077
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS. ....1
Section 1.1 Definitions 1
ARTICLE II RECITALS
Section 2.1 The District......
Section 2.2 The Development....
Section 2.3 The Facilities
Section 2.4 The Financing..
Section 2.5 The Bonds.
Section 2.6 No Advantage to City Construction
Section 2.7 Agreements. ...4
ARTICLE III FUNDING
Section 3.1 City Proceeding
Section 3.2 Levy of Special Taxes.
Section 3.3 Bonds.
Section 3.4 Bond Proceeds..
Section 3.5 Disclosure of Special Tax
Section 3.6 City Policies
ARTICLE IV CONSTRUCTION OF FACILITIES.
Section 4.1 Plans.
Section 4.2 Duty of Developer to Construct.
Section 4.3 Relationship to Public Works...
Section 4.4 Independent Contractor
Section 4.5 Performance and Payment Bonds.
Section 4.6 Contracts and Change Orders.
Section 4.7 Time for Completion...
ARTICLE V ACQUISITION AND PAYMENT.
Section 5.1 Inspection..
Section 5.2 Agreement to Sell and Acquire Facilities. ..9 Section 5.3 Payment Requests.. .10
Section 5.4 Processing Payment Requests.. ..10
Section 5.5 Payment... 11
Section 5.6 Restrictions on Payments...... 11
Section 5.7 Defective or Nonconforming Work... .13
Section 5.8 Modification of Discrete Components.... .13 Section 5.9 Payments of Purchase Price of Facilities or Discrete Components in Installments. ..14
ARTICLE VI OWNERSHIP AND TRANSFER OF FACILITIES.. ..14
Section 6.1 Facilities to be Owned by the City-Conveyance of Land and Easements to City.. .14
Section 6.2 Facilities to be Owned by the City-Title Evidence.. ..15 4887-2902-8108/022025-0077
Page
Section 6.3 Facilities Constructed on Private Lands.... ...15 Section 6.4 Facilities Constructed on City Land .15
Section 6.5 Facilities to be Acquired by Other Public Agencies.. ..16 Section 6.6 Maintenance and Warranties.. ...16
ARTICLE VII INSURANCE..... ...16
Section 7.1 Insurance Requirements ...16
Section 7.2 Standards Applicable... 17
Section 7.3 Evidence of Insurance: ...18
ARTICLE VIII DIFS ..18
Section 8.1 Funding of DIFs.. ..18
ARTICLE IX REPRESENTATIONS, WARRANTIES AND COVENANTS .18 Section 9.1 Representations, Covenants and Warranties of the Developer 18 Section 9.2 Indemnification and Hold Harmless. .20
ARTICLE X TERMINATION..... .20
Section 10.1 Mutual Consent. 20
Section 10.2 City Election for Cause.. 20
Section 10.3 Force Majeure. ...21
ARTICLE XI MISCELLANEOUS . 22
Section 11.1 Limited Liability of City .22
Section 11.2 Excess Costs... .22
Section 11.3 Audit 22
Section 11.4 Attorney's Fees... ....22
Section 11.5 Notices.. 22
Section 11.6 Severability. ...23
Section 11.7 Successors and Assigns. ...23
Section 11.8 Other Agreements.. ...23
Section 11.9 Waiver.. 23
Section 11.10 Merger... .23
Section 11.11 Parties in Interest . 24
Section 11.12 Amendment. .24
Section 11.13 California Law ..24
Section 11.14 Counterparts. ..24
List of Exhibits
Exhibit A: Description of Authorized Facilities Eligible for Acquisition from the Developer Exhibit B: Discrete Components of Facilities and Fees
Exhibit C: Additional Facilities
Exhibit D: Form of Payment Request
Exhibit E: Bidding and Contract Requirements for Public Improvements ii
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THIS ACQUISITION AGREEMENT (the "Acquisition Agreement"), dated as of April 1, 2022, is by and between the CITY OF RIVERSIDE, a charter city and municipal organization organized and operating under the laws of the State of California (the "City"), acting for and on behalf of itself and Community Facilities District No. 2015-2 (Pomelo) of the City of Riverside (the "District"), and Friends of the Airport, LLC, a California limited liability company ("Developer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
The following terms shall have the meanings ascribed to them in this Section 1.1 for purposes of this Acquisition Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the Indenture (as hereinafter defined). "Acceptable Title" means title to land or interest therein, in form acceptable to the Director, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, but subject to any exceptions determined by the Director as not interfering with the actual or intended use of the land or interest therein. Notwithstanding the foregoing, an irrevocable offer of dedication may constitute land with an "Acceptable Title" if: (i) such offer is necessary to satisfy a condition to a tentative or final parcel map, (i) such offer is in a form acceptable to the Director, (iii) the Director has no reason to believe that such offer of dedication will not be accepted by the applicable public agency, and (iv) the Developer commits in writing not to allow any liens to be imposed on such property prior to its acceptance.
"Acceptance Date" means the date the City Council (or other public entity which is to own a Facility) takes final action to accept dedication of or transfer of title to a Facility. "Acquisition Agreement" means this Acquisition Agreement, together with any Supplement hereto.
"Acquisition and Construction Fund" means (a) prior to the issuance of Bonds, the special fund established pursuant to Section 3.2 below, and (b) following the issuance of Bonds, the Acquisition and Acquisition and Construction Fund established pursuant to the Indenture. "Act" means the Mello-Roos Community Facilities Act of 1982, Section 53311 et seq. of the California Government Code, as amended.
"Actual Cost" means the substantiated cost of a Facility or a Discrete Component, which costs may include: (i) the costs incurred by the Developer for the construction of such Facility or Discrete Component, (ii) the costs incurred by the Developer in preparing the Plans for such Facility or Discrete Component and the related costs of environmental evaluations of the Facility or Discrete Component, (ili) the fees paid to governmental agencies or utilities for obtaining permits, licenses or other governmental approvals for such Facility or Discrete Component, (iv) professional costs incurred by the Developer or the City associated with such Facility or Discrete Component, such as engineering, legal, accounting, inspection, construction staking, materials testing, public bid administration, and similar professional services; (v) a project administration fee not to exceed 5% of the cost of constructing such Facility or Discrete Component, as determined pursuant to clause (i) of this definition; and (vi) the costs directly related to the construction and/or acquisition of a Facility or 4887-2902-8108/022025-0077
Discrete Component, such as costs of payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder). "Affiliate" means any entity with respect to which fifty percent (50%) or more of the ownership or voting power is held individually or collectively by any of the Developer and any other entity owned, controlled or under common ownership or control by or with, as applicable, the Developer, and includes all general partners of any entity which is a partnership. Control shall mean ownership of fifly percent (50%) or more of the voting power of or ownership interest in the respective entity.
"Bidding Requirements" means the City's bidding and contract requirements for public improvements set forth in Exhibit E.
"Bonds" means the bonds designated "Community Facilities District No. 2015-2 (Pomelo) of the City of Riverside Special Tax Bonds", to be issued by the District pursuant to the Act in one or more series.
"Budgeted Cost" means the estimated cost of a Facility or Discrete Component as shown on Exhibit B hereto.
"City" means the City of Riverside, a charter city and municipal organization organized and operating under the laws of the State.
"County" means the County of Riverside, California.
"Developer" means Friends of the Airport, LLC, a California limited liability company, and its successors and assigns to the extent permitted under Section 11.7 hereof. "DIFs" means those development impact fees imposed on development within the District, as specified in Exhibit B hereto.
"Director" means the Director of Public Works of the City, or his written designee acting as such under this Acquisition Agreement.
"Discrete Component" means a component of a Facility that the Director has agreed can be separately identified, inspected and completed, and be the subject of a Payment Request hereunder.
The Discrete Components are shown on Exhibit B hereto.
"District" means the Community Facilities District No. 2015-2 (Pomelo) of the City of Riverside, created by the City under the Act.
"Facilities" means the public and other facilities described in Exhibit A hereto which are to be acquired with the proceeds of the Bonds.
"Indenture" means the agreement by that name between the City and the Trustee, providing for, among other matters, the issuance of the Bonds and the establishment of the Acquisition and Construction Fund, as it may be amended from time to time. 2 4887-2902-8108/022025-0077
"Local Goals and Policies" means the City of Riverside Statement of Policies and Procedures for Special Assessment and Community Facilities District Debt Financing Programs, dated February 2003, as may be amended from time to time.
"Payment Request" means a document, substantially in the form attached as Exhibit D hereto, to be used by the Developer in requesting payment of a Purchase Price. "Plans" means the plans, specifications, schedules and related construction contracts for the Facilities and/or any Discrete Components thereof which shall be submitted to and approved by the City pursuant to the applicable standards of the City or other entity that will own, operate or maintain the Facilities when completed and acquired.
"Purchase Price" means the amount paid by the City for a Facility and/or any Discrete Components thereof determined in accordance with Article V hereof, being an amount equal to the Actual Cost of such Facility or Discrete Component, but subject to the limitations and reductions provided for in Article V.
"Rate and Method" means the Rate and Method of Apportionment for Community Facilities District No. 2015-2 (Pomelo) of the City of Riverside attached as Exhibit A to City Resolution No. 23635. (Capitalized terms used herein that are not otherwise defined shall have the meaning ascribed to them in the Rate and Method.)
"Special Taxes" means the Assigned Annual Special Tax A and Annual Special Tax B levied on and collected from Assessor's Parcels classified as Developed Property pursuant to the Rate and Method, including any prepayments of Special Tax A that are allocated for the payment of improvements pursuant to the Rate and Method.
"Supplement" means a written document amending, supplementing or otherwise modifying this Acquisition Agreement and any exhibit hereto, including any amendments to the list of Discrete Components in Exhibit B, and/or the addition to Exhibit A or Exhibit B of additional Facilities (and Discrete Components) to be financed with the proceeds of the Bonds deposited in the Acquisition and Construction Fund eligible to be financed by the District. "Trustee" means a financial institution in its capacity as trustee under the Indenture, or any successor thereto acting as trustee under the Indenture.
ARTICLE II
RECITALS
Section 2.1 The District.
The City Council of the City has established the District under the Act for the financing of, among other things, the acquisition, construction and installation of public facilities identified in the proceedings to form the District, which include the Facilities listed in Exhibit A hereto and the facilities authorized to be financed with the DIFs.
Section 2.2 The Development.
The property within the District is expected to be developed with 108 single family detached units pursuant to Tract Map No. 28987.
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Section 2.3 The Facilities.
The Facilities are within or in the vicinity of the District, and the City and the Developer will benefit from a coordinated plan of design, engineering and construction of the Facilities and the development of the land. The Developer acknowledges that the inclusion of Facilities in Exhibit A hereto in no way, in itself, obligates the City to issue any Bonds to acquire the Facilities from the Developer or implies that the City has in any way engaged the Developer to construct the Facilities.
The facilities which are eligible for acquisition by the City from the Developer under this Acquisition Agreement are only the Facilities listed in Exhibit A hereto and the Discrete Components listed in Exhibit B hereto, as such Exhibits may be amended and/or supplemented by any Supplement.
Section 2.4 The Financing.
The Developer and the City wish to finance the DIFs and the acquisition of the Facilities and the payment therefor by entering into this Acquisition Agreement for the acquisition of the Facilities and payment for Discrete Components thereof as shown in Exhibit B hereto (as it may be amended and supplemented by any Supplement) with the proceeds of the Special Taxes and Bonds on deposit in the Acquisition and Construction Fund.
Section 2.5 The Bonds.
The City may proceed with the authorization and issuance of the Bonds in one or more series under the Act and the Indenture, the proceeds of which Bonds shall be used, in part, to finance the DIFs and acquisition of all or a portion of the Facilities. The execution by the City of this Acquisition Agreement in no way obligates the City to issue any Bonds, or to acquire any Facilities or finance any fees with proceeds of any Bonds issued, except the Facilities and DIFs listed in Exhibit A and Exhibit B hereto which are to be acquired or financed subject to the terms and conditions set forth in this Acquisition Agreement.
Section 2.6 No Advantage to City Construction.
The City, by its approval of this Acquisition Agreement, has determined that it will obtain no provisions of this Acquisition Agreement require that the Facilities be constructed by the Developer character of the Facilities.
Section 2.7 Agreements.
In consideration of the mutual promises and covenants set forth herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Developer agree that the foregoing recitals, as applicable to each, are true and correct and further make the agreements set forth herein.
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ARTICLE III
FUNDING
Section 3.1 City Proceeding.
Upon the written request of the Developer, the Developer and the City staff shall meet regarding the amount, timing and other material aspects of each series of the Bonds. The legal proceedings for the issuance of the Bonds and the series, principal amounts, rates, terms, conditions and timing of the sale of the Bonds shall be in all respects be solely determined by the City Council of the City, acting as the governing body of the District, in its sole discretion; provided that, subject to satistaction of the applicable City financing policies, including the Local Goals and Policies, sound municipal financing practices and the requirements of this Acquisition Agreement, the City shall use reasonable efforts to issue and sell the Bonds in one or more series in an amount sufficient to fund the Facilities and DIFs in accordance with this Acquisition Agreement and the Developer's schedule for development of its property within the District. The maximum authorized aggregate principal amount of the Bonds is $7,000,000.
Section 3.2 Levy of Special Taxes.
City and Developer agree that in each fiscal year prior to the issuance of Bonds the Special Taxes shall be levied at the rate specified in Table 1 and Table 2 of the Rate and Method on each Assessor's Parcel classified as Developed Property. Such Special Taxes received by the City that are not required to fund Administrative Expenses shall be deposited in a discrete, special fund of the City and shall be disbursed to fund Facilities and DIFs in accordance with this Acquisition Agreement.
Any portion of prepayment amounts received pursuant to Section G and Section H of the Rate and Method that are not needed for bond redemption or Administrative Expenses shall be available for funding Facilities and DIFs.
Section 3.3 Bonds.
The City, in connection with this Acquisition Agreement, shall proceed with the issuance and delivery of the Bonds for the District. The City shall not be obligated to finance any DIFs or pay the Purchase Price of the Facilities or any Discrete Components thereof except from amounts on deposit in the Acquisition and Construction Fund on or after the formation of the District. The City makes no warranty, express or implied, that the proceeds of the Special Taxes and Bonds deposited and held in the Acquisition and Construction Fund, including any investment earnings thereon deposited to the Acquisition and Construction Fund, will be sufficient for payment of the DIFs or the Purchase Price of all of the Facilities.
Section 3.4 Bond Proceeds.
The proceeds of the Bonds shall be deposited, held, invested, reinvested and disbursed as provided in the Indenture. A portion of the proceeds of the Bonds will be set aside under the Indenture in the Acquisition and Construction Fund. Moneys in the Acquisition and Construction Fund shall be withdrawn therefrom in accordance with the provisions of the Indenture and the applicable provisions hereof for payment of all or a portion of the DIFs and the costs of construction and/or acquisition of the Facilities (including payment of the Purchase Price of Discrete Components thereof), all as herein provided.
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The Developer acknowledges that any lack of availability of amounts in the Acquisition and Construction Fund to pay the Purchase Price of Facilities or any Discrete Components thereof and/or the DIFs shall in no way diminish any obligation of the Developer with respect to the construction of or contributions for public facilities and mitigation measures required by this Acquisition Agreement or any subdivision, development or other agreement to which the Developer is a party, or any governmental approval to which the Developer or any land within the District is subject. In addition, the funding of the Purchase Price of a Facility shall not preclude the issuance of a credit against any applicable DIF.
Section 3.5 Disclosure of Special Tax.
Copies of the executed "Notices of Special Tax" required by California Government Code Section 53341.5 provided to the purchaser of real property within the District shall be provided to the Finance Director upon request for such Notices of Special Tax. The Finance Director's receipt of such "Notices of Special Tax" shall not be construed as City or District approval of the form of Notice of Special Tax or in any way make the City or District liable for deficiencies in such "Notice of Special Tax."
Prior to the Bonds being issued, the Developer will be required to provide all information regarding the development of its property, including the financing plan for such development, which is necessary to ensure that the official statement for such Bonds complies with the requirements of all applicable federal and state securities laws, including without limitation Rule 15c2-12 and Rule 10(b)-5 of the Securities and Exchange Commission (the "Commission"). Developer shall be required to obtain counsel to review such official statement and render an opinion in connection with the Bond issue in a form reasonably acceptable to the City. Moreover, each property owner which is responsible for twenty percent (20%) or more of the maximum special tax within the District at the time the Bonds are issued (each a "Major Landowner") will be required to enter into a continuing disclosure agreement to provide such continuing disclosure pertaining to the development of the land owned by such Major Landowner in the District if necessary to assist the underwriter of the Bonds in complying with the continuing disclosure requirements of Rule 15c2-12 of the Commission, or prudent given market conditions for the Bonds in the reasonable opinion of the underwriter or disclosure counsel.
Section 3.6 City Policies.
Pursuant to the City's policies, including the Financing District Policy, with regard to the issuance and sale of bonds of community facilities districts, the total annual amount of special taxes to be levied on any parcel of property within a community facilities district and all other assessments and taxes which will be collected with respect to such property, must not exceed two percent (2%) of the fair market value of the property as determined by the County Assessor of Riverside County; provided that initially such fair market value will be based upon the estimated sales prices for residences and commercial property. Also, the ratio of the appraised market value of all parcels of property within a community facilities district to the total amount of the assessment and special tax obligation thereof after the issuance and sale of bonds for the district (the "Value-to-Lien Ratio") may not be less than four-to-one (4/1). Pursuant to the City's policies, the fair market value of the property within a community facilities district for purposes of determining such ratio will be determined based upon an appraisal made by an appraiser selected by the City. 6 4887-2902-8108/022025-0077
ARTICLE IV
CONSTRUCTION OF FACILITIES
Section 4.1 Plans.
To the extent that it has not already done so, the Developer shall cause Plans to be prepared or the Facilities. The Developer shall obtain the City's written approval of the Plans in accordanc vith applicable ordinances and regulations of the City and/or the public entity that will own an operate the Facilities. Copies of all Plans shall be provided by the Developer to the Director upor request therefor, and, in any event, a written assignment of the Plans for any Facility shall be provided to the City prior to its acceptance of the Facility and as built drawings shall be provided to the City within 60 calendar days of such acceptance.
Section 4.2 Duty of Developer to Construct.
All Facilities and Discrete Components thereof to be acquired hereunder specified in Exhibit B hereto, as amended from time to time, shall be constructed at the direction of the Developer in accordance with the approved Plans following the solicitation of competitive bids as provided in Section 4.3 hereof. The Developer shall employ at all times adequate staff or consultants with the requisite experience necessary to bid, administer and coordinate all work related to the design, enginecring, acquisition, construction and installation of the Facilities to be acquired by the City from the Developer hereunder.
The Developer shall be obligated: (i) to cause the construction and cause conveyance to the City (or other applicable governmental agency) of all Facilities and Discrete Components thereof listed in Exhibit B hereto, and (i) to use its own funds to pay all costs thereof in excess of the Purchase Prices thereof to be paid hereunder, if any.
Except as set forth in the following paragraph, the Developer shall not be relieved of its obligation to cause the construction of each Facility and Discrete Component thereof listed in Exhibit B hereto and convey each such Facility and Discrete Component to the City in accordance with the terms, hereof, even it, (i) because of the limitations imposed by Section 5.6 hereof, the Purchase Price for such Discrete Component or Facility is less than the Actual Cost, or cost to the Developer, of such Discrete Component or Facility, or (ii) there are no funds or insufficient funds in the Acquisition and Construction Fund to pay the Purchase Prices thereof, and, in any event, this Acquisition Agreement shall not affect any obligation of any owner of land in the District under any agreement or any governmental approval to which any land within the District is subject, with respect to the public improvements required in connection with the development of the land within the District.
Section 4.3 Relationship to Public Works.
This Acquisition Agreement is for the acquisition by the City of the Facilities and payment for Discrete Components thereof listed in Exhibit B hereto from moneys in the Acquisition and Construction Fund and is not intended to be a public works contract. The Developer acknowledges and agrees that the Facilities shall be constructed as if the Facilities had been constructed under the direction and supervision, or under the authority of, the City by adhering to the provisions of this Acquisition Agreement, and the Developer shall adhere to the Bidding Requirements set forth in Exhibit E hereto for all Facilities.
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The Developer shall competitively bid and award all contracts for construction of the Facilities listed in Exhibit B hereto, as amended from time to time, in conforming with the Bidding Requirements. The Developer shall establish a list of written criteria acceptable to the Director (including experience, ability to perform on schedule and financial ability) to determine qualified contractors for any contract. Formal bids need be requested from only those entities on the list of qualified contractors determined by such criteria; and if no such list is established for any specific Facility or Discrete Component thereof, the Developer shall endeavor to obtain at least three bids for such Facility or Discrete Component thereof by means of a bidding process acceptable to the Director. Bids for each Discrete Component shall be submitted in sealed envelopes to the Developer prior to the time and date prescribed for bid opening. Developer shall make arrangements with City to schedule the bid opening, which shall be held at City offices, conducted by Developer and witnessed by City staff. Upon written request of the Director, the Developer shall provide an analysis of bids for construction for the Facilities, constructed or to be constructed by or under the supervision of the Developer. The Developer shall award each bid to the lowest responsible bidder. If the Director disapproves of any such contractor, the Developer shall select the next lowest responsible bidder from the competitive bids received who is acceptable to the Director.
From time to time at the request of the Director, the Developer shall meet and confer with City staff, consultants and contractors regarding matters arising hereunder with respect to the Facilities, Discrete Components and the progress in constructing and acquiring the same, and as to any other matter related to the Facilities or this Acquisition Agreement. The Developer shall advise the Director in advance of any coordination and scheduling meetings to be held with contractors relating to the Facilities, in the ordinary course of performance of an individual contract. The Director or the Director's designated representative shall have the right to be present at such meetings, and to meet and confer with individual contractors if deemed advisable by the Director to resolve disputes and/or ensure the proper completion of the Facilities.
This Section 4.3 applies to all direct contracts to be entered into by the Developer under this Section 4. This Section 4.3 does not apply to the purchase of materials by the Developer or any contractor or for professional services associated with the construction of Facilities.
Notwithstanding the foregoing provisions, contract letting procedures that differ from the procedures in this Section 4.3 shall be deemed to satisfy this Acquisition Agreement if the Developer and the Director agree in writing on such other contract letting procedures.
Section 4.4 Independent Contractor.
In performing this Acquisition Agreement, the Developer is an independent contractor and not the agent or employee of the City. The City shall not be responsible for making any payments to any contractor, subcontractor, agent, consultant, employee or supplier of the Developer.
Section 4.5 Performance and Payment Bonds.
The Developer agrees to comply with all applicable performance and mechanics and materialmen bonding requirements of the City (and other applicable public entities and/or public utilities) with respect to the construction of the Facilities, as requested by the City. 8 4887-2902-8108/022025-0077
Section 4.6 Contracts and Change Orders.
The Developer shall be responsible for entering into all contracts and any supplemental agreements (commonly referred to as "change orders") required for the construction of the Facilities listed in Exhibit A hereto, as amended from time to time, and all such contracts and change orders shall be submitted to the Director. Prior approval of change orders by the Director shall only be required for such change orders which in any way materially alter the quality or character of the subject Facilities, or which involve an amount equal to the greater of ten percent (10%) of the amount of the bid for the Facility involved or $25,000. The City expects that such change orders needing prior approval by the Director will be approved or denied (any such denial to be in writing stating the reasons for denial and the actions, if any, that can be taken to obtain later approval) within ten (10) business days of receipt by the Director thereof.
Section 4.7 Time for Completion.
The Developer agrees that this Acquisition Agreement is for the benefit of the City and the Developer and, therefore, the Developer represents that it expects to complete the Facilities and to have requested payment for the Facilities under this Acquisition Agreement within three years from the date of the closing of Bonds issued to finance such facilities. Any failure to complete the Facilities within said time period shall not, however, in itself, constitute a breach by the Developer of the terms of this Acquisition Agreement.
The Developer agrees to use its good faith efforts to complete all Facilities within three years from the date of closing of Bonds issued to finance such facilities.
ARTICLE V
ACQUISITION AND PAYMENT
Section 5.1 Inspection.
No payment hereunder shall be made by the City to the Developer for a Facility or Discrete Component thereof until the Facility or Discrete Component thereof has been inspected and found to be completed in accordance with the approved Plans by the City or other applicable public entity or utility. The City shall make or cause to be made periodic site inspections of the Facilities to be acquired hereunder on a timely basis; provided that in no event shall the City incur any liability for any delay in the inspection of any Facilities or Discrete Components. For Facilities to be acquired by other public entities or utilities, the Developer shall be responsible for obtaining such inspections and providing written evidence thereof to the Director. The Developer agrees to pay all inspection, permit and other similar fees of the City applicable to construction of the Facilities.
Section 5.2 Agreement to Sell and Acquire Facilities.
The Developer hereby agrees to sell the Facilities and Discrete Component listed in Exhibit B hereto to the City (or other applicable public agency that will own such Facility and Discrete Component), and the City hereby agrees to use amounts in the Acquisition and Construction Fund to pay the Purchase Prices thereof to the Developer, subject to the terms and conditions hereof. The City shall not be obligated to acquire any Facility or Discrete Component until the Facility or Discrete Component is completed and the Acceptance Date for such Facility has occurred; provided that the City has agreed hereunder to make payments to the Developer prior to the Acceptance Date 9 4887-2902-8108/022025-0077
for certain Discrete Components of Facilities as shown in Exhibit B hereto, as it may be supplemented by any Supplement. The Developer acknowledges that the Discrete Components have been identified for payment purposes only, and that the City (or other applicable public agency that will own a Facility) shall not accept a Facility of which a Discrete Component is a part until the entire Facility has been completed. The City acknowledges that the Discrete Components do not have to be accepted by the City (or other applicable public agency that will own a Facility) as a condition precedent to the payment of the Purchase Price therefor, but any such payment shall not be made until the Discrete Component has been completed in accordance with the Plans therefor, as determined by the Director. In any event, the City shall not be obligated to pay the Purchase Price for any Facility or Discrete Component except from the moneys in the Acquisition and Construction Section 5.3 Payment Requests.
In order to receive the Purchase Price for a completed Facility or Discrete Component, inspection thereof under Section 5.1 shall have been made and the Developer shall deliver to the Director: (i) a Payment Request in the form of Exhibit D hereto for such Facility or Discrete Component, together with all attachments and exhibits required by Exhibit D and this Section 5.3 to be included therewith (including, but not limited to Attachments 1 and 2 to Exhibit D), and (ii) if payment is requested for a completed Facility, (a) if the property on which the Facility is located is not owned by the City (or other applicable public agency that will own the Facility) at the time of the request, a copy of the recorded documents conveying to the City (or other applicable public agency that will own the Facility) Acceptable Title to the real property on, in or over which such Facility is located, as described in Section 6.1 hereof, (b) a copy of the recorded notice of completion of such Facility (if applicable), (c) to the extent paid for with the proceeds of the Bonds, an assignment to the District of any reimbursements that may be payable with respect to the Facility, such as public or private utility reimbursements, and (d) an assignment of warranties and guaranties for such Facility, as described in Section 6.5 hereof, in a form acceptable to the City.
Section 5.4 Processing Payment Requests.
Upon receipt of a Payment Request (and all accompanying documentation), the Director shall conduct a review in order to confirm that such request is complete, that such Discrete Component or Facility identified therein was constructed in accordance with the Plans therefor, and to verify and approve the Actual Cost of such Discrete Component or Facility specified in such Payment Request.
The Director shall also conduct such review as is required in his discretion to confirm the matters certified in the Payment Request. The Developer agrees to cooperate with the Director in conducting each such review and to provide the Director with such additional information and documentation as is reasonably necessary for the Director to conclude each such review. For any Facilities to be acquired by another public entity or utility, the Developer shall provide evidence acceptable to the Director that such Facilities are acceptable to such entity or utility. Within thirty (30) calendar days of receipt of any Payment Request, the Director expects to review the request for completeness and notify the Developer whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the Director expects to provide a written approval or denial (specifying the reason for any denial) of the request within thirty (30) calendar days of its submittal. If a Payment Request seeking reimbursement for more than one Facility or Discrete Component is denied, the Director shall state whether the Payment Request is nevertheless approved and complete for any one or more Facilities or Discrete Components and any such Facilities or Discrete Components shall be processed for payment under Section 5.5 10 4887-2902-8108/022025-0077
shall be reimbursed from the amount set aside therefor from the proceeds of the Bonds or from the Costs associated with the acquisition of Facilities and processing of Payment Requests shall be reimbursed from the Acquisition and Construction Fund, or from amounts advanced by the Developers to the extent insufficient funds are on deposit in the Acquisition and Construction Fund, which advances may be later reimbursed to the Developers out of the Acquisition and Construction Fund.
Section 5.5 Payment.
Upon approval of the Payment Request by the Director, the Director shall sign the Payment Request and forward the same to the Finance Director of the City. Upon receipt of the reviewed and fully signed Payment Request, the Finance Director of the City shall, within the then current City financial accounting payment cycle but in any event within thirty (30) calendar days of receipt of the approved Payment Request, cause the same to be paid (i) by the City from the Acquisition and Construction Fund, if prior to Bond issue, and (i) by the Trustee under the applicable provisions of the Indenture, to the extent of funds then on deposit in the Acquisition and Construction Fund. Any approved Payment Request not paid due to an insufficiency of funds in the Acquisition and Construction Fund, shall be paid promptly following the deposit into the Acquisition and Construction Fund of additional funds, if any.
The Purchase Price paid hereunder for any Facility or Discrete Component shall constitute payment in full for such Facility or Discrete Component, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of such Facility or Discrete Component, as specified in the Plans.
Section 5.6 Restrictions on Payments.
Notwithstanding any other provisions of this Acquisition Agreement, the following restrictions shall apply to any payments made to the Developer under Sections 5.2 and 5.5 hereof:
(a) Amounts of Payments.
Subject to the following paragraphs of this Section 5.6, payments for each Discrete Component or Facility will be made only in the amount of the Purchase Price for the respective Discrete Component or Facility whether or not the Actual Cost exceeds the Budgeted Cost therefor (it being understood that the Budgeted Costs are only estimates and not limitations on the amount of the Purchase Price).
Nothing herein shall require the City in any event (i) to pay more than the Actual Cost of a Facility or Discrete Component, or (ii) to make any payment beyond the available funds in the Acquisition and Construction Fund. The parties hereto acknowledge and agree that all payments to the Developer for the Purchase Prices of Facilities or Discrete Components are intended to be reimbursements to the Developer for monies already expended or for immediate payment by the Developer (or directly by the City) to third parties in respect of such Facilities and/or Discrete Components.
11 4887-2902-8108/022025-0077
(b) Joint or Third Party Payments.
The City may make any payment jointly to the Developer and any mortgagee or trust deed beneficiary, contractor or supplier of materials, as their interests may appear, or solely to any such third party, if the Developer requests the same in writing. (c) Withholding Payments.
The City shall be entitled, but shall not be required, to withhold any payment hereunder for a Discrete Component or a Facility if the Developer or any Affiliate is delinquent in the payment of ad valorem real property taxes, special assessments or taxes, or special taxes levied in the District. In the event of any such delinquency, the City shall only make payments hereunder, should any be made at the City's sole discretion, directly to contractors or other third parties employed in connection with the construction of the Facilities or to any assignee of the Developer's interests in this Acquisitior Agreement (and not to the Developer or any Affiliate), until such time as the Developer provides the Director with evidence that all such delinquent taxes and assessments have been paid The City shall withhold payment for the final Discrete Component of a Facility constructed on land, until Acceptable Title to such land is conveyed to the City or other public entity that will own the respective Facility, as described in Article VI hereof.
The City shall be entitled to withhold any payment hereunder for a Discrete Component that is the subject of a Payment Request until it is satisfied that any and all claims for labor and materials have been paid by the Developer for the Discrete Component that is the subject of a Payment Request, or conditional fien releases have been provided by the Developer for such Discrete Component. The City, in its discretion, may waive this limitation upon the provision by the Developer of sureties, undertakings, securities and/or bonds of the Developer or appropriate contractors or subcontractors and deemed satisfactory by the Director to assure payment of such claims.
The City shall be entitled to withhold payment for any Facility or the final Discrete Component of a Facility hereunder to be owned by the City until: (i) the Director determines that the Facility is ready for its intended use, (ii) the Acceptance Date for the Facility has occurred and the requirements of Section 6.1, if applicable to such Facility, have been satisfied, and (iii) a Notice of Completion executed by the Developer, in a form acceptable to the Director, has been recorded for the Facility and general lien releases conditioned solely upon payment from the proceeds of the Bonds to be used to acquire such Facility (or final Discrete Component) have been submitted to the Director for the Facility. The City hereby agrees that the Developer shall have the right to post or cause the appropriate contractor or subcontractor to post a bond with the City to indemnify it for any losses sustained by the City because of any liens that may exist at the time of acceptance of such a Facility, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director. The City shall be entitled to withhold payment for any Facility (or the final Discrete Component of any such Facility) to be owned by other governmental entities, until the Developer provides the Director with evidence that the governmental entity has accepted dedication of and/or title to the Facility. If the Director determines that a Facility is not ready for intended use under (i) above, the Director shall so notify the Developer as soon as reasonably practicable in writing specifying the reason(s) therefor.
12 4887-2902-8108/022025-0077
Nothing in this Acquisition Agreement shall be deemed to prohibit the Developer from contesting in good faith the validity or amount of any mechanics or materialman's lien nor limit the remedies available to the Developer with respect thereto so long as such delay in performance shall not subject the Facilities or any Discrete Component thereof to foreclosure, forfeiture or sale. In the event that any such lien is contested, the Developer shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director.
(d) Retention.
The City shall withhold in the Acquisition and Construction Fund an amount equal to ten percent (10%) of the Purchase Price of each Discrete Component to be paid hereunder. Any such retention will be released to the Developer upon final completion and acceptance of the related Facility.
Notwithstanding the foregoing, the Developer shall be entitled to payment of any such retention upon the completion and acceptance of a Discrete Component, it securities meeting the requirements of the California Public Contracts Code are deposited in lieu thereof in accordance with Section 6.5 hereof. Payment of any retention shall also be contingent upon the availability of monies in the Acquisition and Construction Fund therefore. No retention shall apply if the Developer proves to the Director's satisfaction that the Developer's contracts for the Discrete Components provide for the same retention as herein provided, so that the Purchase Price paid for the Discrete Component is at all times net of the required retention.
(e) Frequency.
Unless otherwise agreed to by the Director, no more than one Payment Request shall be submitted by the Developer in any calendar month.
Section 5.7 Defective or Nonconforming Work.
If any of the work done or materials furnished for a Facility or Discrete Component are found by the Director to be defective or not in accordance with the applicable Plans: (i) and such finding is made prior to payment for the Purchase Price of such Facility or Discrete Component hereunder, the City may withhold payment therefor until such defect or nonconformance is corrected to the satisfaction of the Director, or (ii) and such finding is made after payment of the Purchase Price of such Facility or Discrete Component, the City and the Developer shall act in accordance with the City's standard specification for public works construction.
Section 5.8 Modification of Discrete Components.
The Developer may submit to the Director a revised Exhibit B for the purpose of updating the Budgeted Costs for one or more Discrete Components and Facilities or identifying other DIFs that are eligible to be financed and such revised Exhibit B shall replace the original Exhibit B in its entirety. In addition, upon written request of the Developer, the Director shall consider modification of the description of any Discrete Component or the addition of a new Facility or Discrete Component. Any such modification shall be subject to the written approval of the Director, and shall not diminish the overall facilities to be provided by the Developer hereunder (in a material way such 13 4887-2902-8108/022025-0077
that the change invalidates any of the assumptions used in the appraisal conducted to sell the Bonds).
It is expected that any such modification will be solely for purposes of dividing up the work included in any Discrete Component for purposes of acceptance and payment, for example: (i) separation of irrigation and landscaping from other components of a Discrete Component, or (ii) modifications to allow for payment for roadway improvements prior to completion of the top course of paving. In most instances, the Director will only approve modification for payment purposes when there will be an unusual period of time between the completion and acceptance of such divided work or to better implement the phasing of the overall construction of the Facilities; but no such circumstances shall in any way obligate the Director to approve such modification. Supplements to modify this Acquisition Agreement in accordance with this Section 5.8 may be approved by the Director without further City Council action.
Section 5.9 Payments of Purchase Price of Facilities or Discrete Components in Installments.
The City understands and agrees that (i) Developer will be constructing Facilities or Discrete Components prior to the availability of funds in the Acquisition and Construction Fund that will be used to pay for such Facilities or Discrete Components, (ii) the City may be inspecting such Facilities or Discrete Components and processing and completing payment requests for the payment on such Facilities or Discrete Components with knowledge that there may be insufficient funds in the Acquisition and Construction Fund available at such time, (iii) the Facilities or Discrete Components may be conveyed to and accepted by the City when there are insufficient funds in the Acquisition and Construction Fund to pay the Purchase Prices of such Facilities or Discrete Components, and (iv) in any such case, the payment of any approved payment requests for the Purchase Prices of such Facilities or Discrete Components will be deferred until there are sufficient funds in the Acquisition and Construction Fund available to pay the Purchase Prices of such Facilities or Discrete Components (if ever, subject to the terms and conditions set forth in this Acquisition Agreement), at which time the City will make such payments in accordance with this Acquisition Agreement, subject to the limitations set forth in this Acquisition Agreement. At all times, Developer will be constructing such Facilities or Discrete Components with the expectation that the Purchase Prices for such Facilities or Discrete Components will be paid solely from and limited to the funds on deposit in the Acquisition and Construction Fund. The conveyance of Facilities or Discrete Components to the City prior to receipt of the Purchase Prices for such Facilities or Discrete Components shall not be construed as a dedication or gift, or a waiver of the payment of the Purchase Prices, or any part thereof, for such Facilities or Discrete Components. The Purchase Price paid hereunder for any Facility or Discrete Component thereof may be paid in any number of installments as funds in the Acquisition and Construction Fund become available.
ARTICLE VI
OWNERSHIP AND TRANSFER OF FACILITIES
Section 6.1 Facilities to be Owned by the City-Conveyance of Land and Easements to City.
Acceptable Title to all property on, in or over which each Facility to be acquired by the City will be located, shall be deeded over to the City by way of grant deed, or dedication of such property. or easement thereon, if such conveyance of interest is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Facility located therein, thereon or thereover, and to permit the Developer to perform its obligations as set forth in this Acquisition Agreement. The Developer agrees to assist the City in obtaining such documents as are required to obtain Acceptable Title. Completion of the transfer of title to land shall be accomplished 14 4887-2902-8108/022025-0077
prior to the payment of the Purchase Price for a Facility (or the last Discrete Component thereof) and shall be evidenced by recordation of the acceptance thereof by the City Council or the designee thereof.
Section 6.2 Facilities to be Owned by the City-Title Evidence.
Upon the request of the City, the Developer shall furnish to the City a preliminary title report for land with respect to Facilities to be acquired by the City and not previously dedicated or otherwise conveyed to the City, for review and approval at least thirty (30) calendar days prior to the transfer of the Acceptable Title to a Facility to the City. The City shall approve the preliminary title report unless it reveals a matter which, in the judgment of the City, could materially affect the City's use and enjoyment of any part of the property or casement covered by the preliminary title report. In the event the City does not approve the preliminary title report, the City shall not be obligated to accept title to such Facility or pay the Purchase Price for such Facility (or the last Discrete Component thereof) until the Developer has cured such objections to title to the reasonable satisfaction of the City. In the event the Developer cannot cure such objections to title, City agrees to consider the use of eminent domain pursuant to Section 6.3 hereof for such purpose.
Section 6.3 Facilities Constructed on Private Lands.
If any Facilities to be acquired are located on privately-owned land, the owner thereof shall retain title to the land and the completed Facilities until acquisition of the Facilities under Article V hereof. Pending the completion of such transfer, the Developer shall not be entitled to receive any payment for any such Facility or the last Discrete Component thereof. The Developer shall, however, be entitled to receive payment for Discrete Components (other than the last Discrete Component) upon making an irrevocable offer of dedication of such land in form and substance acceptable to the Director. Notwithstanding the foregoing, upon written request of the City before payment for any Discrete Component of such a Facility, the Developer shall convey or cause to be conveyed Acceptable Title thereto in the manner described in Sections 6.1 and 6.2 hereof.
It shall be the responsibility of the Developer to acquire all property rights on property which is not owned by the City or the Developer which is necessary for the construction of any of the Facilities. In the event, despite its exercise of best efforts to do so, the Developer is unable to acquire such property rights, the City shall in good faith consider the undertaking of proceedings to acquire such prings i ace thin i be tie responsibility o the Det der and shal honoris fario. the Purchase Price of the related Facility.
Section 6.4 Facilities Constructed on City Land
If the Facilities to be acquired are on land owned by the City, including land as to which the City has acquired sufficient property rights in the manner described in Section 6.3 or otherwise, the City hereby grants to the Developer a license to enter upon such land for purposes related to the construction (and maintenance pending acquisition) of the Facilities. The provisions for inspection and acceptance of such Facilities otherwise provided herein shall apply. 15 4887-2902-8108/022025-0077
Section 6.5 Facilities to be Acquired by Other Public Agencies.
With respect to any Facility to be acquired by a public entity other than the City, the Developer shall comply with such entities rules and regulations regarding title and conveyance of property, and provide the Director with evidence of such compliance, prior to the payment of the Purchase Price for any such Facility (or the last Discrete Component thereof).
Section 6.6 Maintenance and Warranties.
The Developer shall maintain or cause to be maintained each Discrete Component in good and safe condition until the Acceptance Date of the Facility of which such Discrete Component is a part. Prior to the Acceptance Date, the Developer shall be responsible for performing any required maintenance on any completed Discrete Component or Facility. On or before the Acceptance Date of the Facility, the Developer shall assign to the City all of the Developer's rights in any warranties. guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such Facility. For each Facility to be owned by the City, the Developer shall provide a warranty bond reasonably acceptable in form and substance to the Director to remain in effect for a period of one year from the date of acceptance of each Facility. The City shall be responsible for maintenance of each Facility from and after the Acceptance Date thereof, except that with respect to landscaping improvements, the Developer shall maintain or cause to be maintained such landscape improvements for a period of one year following the Acceptance Date thereof or shall provide a bond reasonably acceptable in form and substance to the Director for such period and for such purpose (for landscaping improvements only, and for the posting of a warranty bond to remain in effect for one year as to other Facilities), to insure that detects, which appear within said period will be repaired, replaced, or corrected by the Developer, at its own cost and expense, to the satisfaction of the Director. The Developer shall commence to repair, replace or correct any such defects within thirty (30) calendar days after written notice thereof by the City to the Developer, and shall complete such repairs, replacement or correction as soon as practicable. Any warranties, guarantees or other evidences of contingent obligations of third persons with respect to the Facilities to be acquired by the City shall be delivered to the Director as part of the transfer of title.
For purposes of this Section 6.6, after the Acceptance Date for a Facility, the terms "maintain" and "maintenance" mean the repair, replacement, or correction of any defects in the Facility, and shall not mean the day-to-day upkeep or correction of normal wear and tear of the Facility (such as watering or weeding for landscape improvements, painting, graffiti removal, etc.).
ARTICLE VII
INSURANCE
Section 7.1 Insurance Requirements.
The Developer shall, at all times prior to the final Acceptance Date of all Facilities, maintain and deliver to the City evidence of and keep in full force and effect, not less than the following coverage and limits of insurance, which shall be maintained with insurers and under forms of policies satisfactory to the Director: (i) Workers Compensation and Employer's Liability - Workers' Compensation - coverage as required by law; Employer's Liability - limits of at least $100,000.00 per occurrence; (ii) Comprehensive General Liability - Combined Single Limit - $1,000,000.00; (ill) Automobile Liability - Combined Single Limit - $1,000,000.00, (the automobile and general comprehensive liability policies shall be accompanied by an umbrella policy with a combined limit 16 4887-2902-8108/022025-0077
of $5,000,000.00); and (iv) Errors and Omissions Insurance - Combined Single Limit - $1,000,000.00.
All of the Developer's insurance policies shall contain an endorsement providing that written notice shall be given to the City at least 30 calendar days prior to termination or cancellation of coverage of the policy.
The Comprehensive General Liability and Bodily Injury and Property Damage Liability policies shall contain the following:
(a) An endorsement extending coverage to the City and its agents as an additional insured, as respects liabilities arising out of the performance of any work related to the Facilities. Which insurance shall be primary insurance as respects the interest of the City, and any other insurance maintained by the City shall be excess and not contributing insurance with the insurance required hereunder.
(b) Severability of interest clause.
(c) Provision or endorsement stating that such insurance, subject to all of its other terms and conditions, applies to contractual liability assumed by the Developer.
Promptly on execution of this Acquisition Agreement by the Developer, the Developer shall deliver to the Director copies of all required certificates of insurance and endorsements thereto on forms which are acceptable to the Director and the City Attorney.
The Developer shall require and verify similar insurance on the part of its contractors and subcontractors.
The foregoing requirements as to the types, limits and City approval of insurance coverage to be maintained by the Developer are not intended to and shall not in any manner limit or qualify the liabilities and obligations assumed by the Developer under this Acquisition Agreement.
Any policy or policies of insurance that the Developer or its contractors or subcontractors elect to carry as insurance (i) against loss or damage to their construction equipment and tools or other personal property used in fulfillment of this Acquisition Agreement or a contract related to the Facilities shall include a provision waiving the insurer's right of subrogation against the City, and (i) in fulfillment of this Acquisition Agreement involving a dual obligee bond may contain a clause to the effect that: "provided that Principal and Surety shall not be liable to the Obligees or any of them unless the Obligees or any of them have performed the obligations to the Principal in accordance with the terms of said contract; and provided, further, that Principal and Surety shall not be liable to all Obligees in the aggregate in excess of the penal sum above stated." Section 7.2 Standards Applicable.
The Developer may effect such coverage under blanket insurance policies, provided, however, that (i) such policies are written on a per occurrence basis, (i) such policies comply in all other respects with the provisions of Section 7.1, and (iii) the protection afforded the City under any such policy shall be no less than that which would be available under a separate, policy relating only to this Acquisition Agreement. All policies of insurance shall be with companies licensed or approved by the State of California Insurance Commissioner and rated (i) A12 or better with respect 17 4887-2902-8108/022025-0077
to primary levels of coverage, and (it) B+12 or better with respect to excess levels of coverage, in the most recent edition of Best's Insurance Guide and shall be issued and delivered in accordance with State law and regulations.
Section 7.3 Evidence of Insurance.
The Developer shall furnish to the City, from time to time upon request of the Director, a certificate of insurance regarding each insurance policy required to be maintained by the Developer hereunder.
ARTICLE VIII
DIFS
Section 8.1 Funding of DIFs.
The Developer may submit to the City from time to time a Payment Request in the form attached hereto as Exhibit D-1 for reimbursement of any DIFs previously paid to the City in an amount not to exceed the amount on deposit in the Acquisition and Construction Fund. In the event that the amount in the Acquisition and Construction Fund is less than the total amount of DIFs previously paid to the City and requested for reimbursement in a Payment Request, the unpaid amount shall be reimbursed to the Developer when additional funds are subsequently deposited in the Acquisition and Construction Fund in an amount equal to or such unpaid amount of the Payment Request. If Developer constructs a DIF facility, Developer shall only be entitled to reimbursement pursuant to the terms of this Acquisition Agreement for the Developer's DIF obligation that was not satisfied through the construction of such DIF facilities.
The Developer may pay DIFs prior to the availability of funds in the Acquisition and Construction Fund to reimburse the Developer for the payment of such DIFs. Any DIFs paid by the Developer shall be made with the understanding that the payment of such DIFs may be reimbursed to the Developer from the funds on deposit in the Acquisition and Construction Fund if such funds become available therefor. The payment of DIFs prior to the availability of such funds shall not be construed as a dedication or gift of the DIFs, or a waiver of the reimbursement for such DIFs, it being the intention that the DIFs will be reimbursed from funds on deposit in the Acquisition and Construction Fund if such funds become available therefor. The reimbursement for DIFs may be paid in any number of installments as funds become available therefor in the Acquisition and Construction Fund.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 9.1 Representations, Covenants and Warranties of the Developer.
The Developer represents and warrants for the benefit of the City, as follows:
(a) Organization.
The Developer is a California limited liability company duly organized and validly existing under the laws of the State, and is in compliance with all applicable laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being 18 4887-2902-8108/022025-0077
(b) Authority.
The Developer has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been duly and validly executed and delivered by the Developer. (c) Binding Obligation.
This Acquisition Agreement is a legal, valid and binding obligation of the Developer, enforceable against the Developer in accordance with its terms, subject to bankruptcy and other equitable principles.
(d) Compliance with Laws.
The Developer shall not with knowledge commit, suffer or permit any act to be done in, upon or to the lands of the Developer in the District or the Facilities in violation of any law ordinance, rule, regulation or order of any governmental authority or any covenant, condition o restriction now or hereafter affecting the lands in the District or the Facilities. (e) Requests for Payment.
The Developer represents and warrants that (i) it will not request payment from the City for the acquisition of any improvements that are not part of the Facilities, and (i) it will diligently follow all procedures set forth in this Acquisition Agreement with respect to the Payment Requests.
(f) Financial Records.
Until the final acceptance of the Facilities, the Developer covenants to maintain proper books of record and account for the construction of the Facilities and all costs related thereto.
Which accounting books shall be maintained in accordance with generally accepted accounting principles, and shall be available for inspection by the City or its agent at any reasonable time during regular business hours on reasonable notice.
(g) Prevailing Wages.
The Developer covenants that, with respect to any contracts or subcontracts for the construction of the Facilities to be acquired from the Developer hereunder, it will assure complete compliance with any applicable law or regulation for the payment of prevailing wages for such construction.
(h) Plans.
The Developer represents that it has obtained or will obtain approval of the Plans for the Facilities to be acquired from the Developer hereunder from all appropriate departments of the City and from any other public entity or public utility from which such approval must be obtained.
The Developer further agrees that the Facilities to be acquired from the Developer hereunder have been or will be constructed in full compliance with such approved plans and specifications and any supplemental agreements (change orders) thereto, as approved in the same manner. 19 4887-2902-8108/022025-0077
Section 9.2 Indemnification and Hold Harmless.
The Developer shall assume the defense of, indemnify and save harmless the City, members of the City Council, their officers, officials, employees and agents and each of them, from and against all actions, damages, claims, losses or expense of every type and description to which they may be subjected or put, by reason of, or resulting from the breach of any provision of this Acquisition Agreement by the Developer, the Developer's or any other entity's negligent design, engineering and/or construction of any of the Facilities acquired from the Developer hereunder, the Developer's non-payment under contracts between the Developer and its consultants, engineer's, advisors, contractors, subcontractors and suppliers in the provision of the Facilities, or any claims of persons employed by the Developer or its agents to construct the Facilities. Notwithstanding the foregoing, no indemnification is given hereunder for any action, damage, claim, loss or expense directly attributable to the intentional acts or active negligence of the City, or its officers, directors, employees or agents hereunder.
No provision of this Acquisition Agreement shall in any way limit the Developer's responsibility for payment of damages resulting from the operations of the Developer, its agents, employees or its contractors.
ARTICLE X
TERMINATION
Section 10.1 Mutual Consent.
This Acquisition Agreement may be terminated by the mutual, written consent of the City and the Developer, in which event the City may let contracts for any remaining work related to the Facilities not theretofore acquired from the Developer hereunder, and use all or any portion of the monies in the Acquisition and Construction Fund to pay for same, and the Developer shall have no claim or right to any further payments for the DIFs or the Purchase Price of Facilities or Discrete Components hereunder, except as otherwise may be provided in such written consent.
Section 10.2 City Election for Cause.
The following events shall constitute grounds for the City, at its option and in its sole discretion, to terminate this Acquisition Agreement, without the consent of the Developer:
(a) The Developer shall voluntarily file for reorganization or other relief under any Federal or State bankruptcy or insolvency law.
(b) The Developer shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of Developer, or shall suffer an attachment or levy of execution to be made against the property it owns within the District unless, in any of such cases, such circumstance shall have been terminated or released within ninety (90) days thereafter. (c) The Developer shall abandon construction of the Facilities. Failure for a period of three hundred sixty-five (365) days to undertake substantial work related to the construction of the Facilities, other than for a reason specified in Section 10.3 hereof, shall constitute 20 4887-2902-8108/022025-0077
such abandonment, it being understood that delays or stoppages approved by the City and Developer shall not constitute abandonment.
(d) The Developer shall breach any material covenant or default in the performance of any material obligation hereunder.
(e) The Developer shall transfer any of its rights or obligations under this Acquisition Agreement in violation of Section 11.7 herein. (t) The Developer shall have made any intentional material misrepresentation or omission of any written materials furnished in connection with any preliminary official statement, official statement or bond purchase contract used in connection with the sale of any series of the Bonds.
If any such event occurs, the City shall give written notice of its knowledge thereof to the Developer, and the Developer agrees to meet and confer with the Director and other appropriate City staff and consultants as to options available to assure timely completion of the Facilities. Such options may include, but not be limited to the termination of this Acquisition Agreement by the City.
If the City elects to terminate this Acquisition Agreement, the City shall first notify the Developer (and any mortgagee or trust deed beneficiary specified in writing by the Developer to the City to receive such notice) of the grounds for such termination and allow the Developer a reasonable period (minimum of thirty (30) days) to eliminate or mitigate to the satisfaction of the Director the grounds for such termination. Such period may be extended, at the sole discretion of the City, if the Developer, to the satisfaction of the City, is proceeding with diligence to eliminate or mitigate such grounds for termination. If at the end of such period (and any extension thereof, as determined solely by the City, the Developer has not eliminated or completely mitigated such grounds, to the satisfaction of the City, the City may then terminate this Acquisition Agreement.
Notwithstanding the foregoing, so long as any event listed in any of clauses (a) through and including (f) above has occurred, notice of which has been given by the City to the Developer, and such event has not been cured or otherwise eliminated by the Developer, the City may in its sole discretion cease making payments for the Purchase Price of Facilities or Discrete Components under Article V hereof.
Section 10.3 Force Majeure.
and take all necessary measures in good faith to perform, but if completion of performance is delayed by reasons of floods, earthquakes, inclement weather or other acts of God, war, civil commotion, 21 4887-2902-8108/022025-0077
ARTICLE XI
MISCELLANEOUS
Section 11.1 Limited Liability of City.
The Developer agrees that any and all obligations of the City arising out of or related to this Icquisition Agreement are special and limited obligations of the City and the City's obligations to nake any payments hereunder are restricted entirely to the moneys, if any, in the Acquisition and Construction Fund and from no other source. No member of the City. Council, or City staff member, employee or agent shall incur any liability hereunder to the Developer or any other party in their individual capacities by reason of their actions hereunder or execution hereof.
Section 11.2 Excess Costs.
The Developer agrees to pay all costs of the Facilities that it is obligated to construct pursuant to Section 4.2 in excess of the moneys available therefor in the Acquisition and Construction Fund.
Section 11.3 Audit.
The Director and/or the Finance Director or other finance officer of the City shall have the right, during normal business hours and upon the giving of two (2) business days prior written notice to the Developer, to review all books and records of the Developer pertaining to the Actual Cost incurred by the Developer in to any of the Facilities, and any bids taken or received for the construction thereof or materials therefor.
Section 11.4 Attorney's Fees.
In the event that any action or suit is instituted by either party against the other arising out of this Acquisition Agreement, the party in whose favor final judgment shall be entered shall be entitled to recover from the other party all costs and expenses of suit, including reasonable attorneys' fees.
Section 11.5 Notices.
Any notice, payment or instrument required or permitted by this Acquisition Agreement to be given or delivered to either party shall be deemed to have been received when personally delivered. or transmitted by telecopy or facsimile transmission (which shall be immediately confirmed by telephone and shall be followed by overnight delivery an original of the same within twenty-four City: City of Riverside
3900 Main Street
Riverside, California 92522
Attention: Heidi Schrader, Debt and Treasury Manager
Email: [email protected]
Developer: Friends of Riverside Airport, LLC
P.O. Box 3617
Jurupa Valley, California 92519
Attention: Bob Beers
Email: [email protected]
22 4887-2902-8108/022025-0077
Each party may change its address or addresses for delivery of notice by delivering written notice of such change of address to the other party.
Section 11.6 Severability.
If any part of this Acquisition Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Acquisition Agreement shall be given effect to the fullest extent possible.
Section 11.7 Successors and Assigns.
This Acquisition Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. This Acquisition Agreement shall not be assigned by the Developer, except in whole to an Affiliate, or to any other entity of which the Developer and/or its members o artners will be managing members or general partners (which transfer is expressly authorize hereunder, without further act of the City), without the prior written consent of the City, which consent shall not be unreasonably withheld or delayed. In connection with any such consent of the City, the City may condition its consent upon the acceptability of the financial condition of the proposed assignee, the assignee's express assumption of all obligations of the Developer hereunder, and/or upon any other factor which the City deems relevant in the circumstances. In any event, any such assignment shall be in writing, shall clearly identify the scope of the rights and/or obligations assigned, and shall not be effective until approved by the City. Without the City's consent, no assignment shall release the Developer from its obligations and liabilities under this Acquisition Agreement.
Section 11.8 Other Agreements.
The obligations of the Developer hereunder shall be those of a party hereto and not as an owner of property in the District. Nothing herein shall be construed as affecting the City's or the Developer's rights, or duties to perform their respective obligations, under other agreements, if any, use regulations or subdivision requirements relating to the development of the lands in the District.
This Acquisition Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to which they are a party.
Section 11.9 Waiver.
Failure by a party to insist upon the strict performance of any of the provisions of this cquisition Agreement by the other party, or the failure by a party to exercise its rights upon th lefault of the other party, shall not constitute a waiver of such party's right to insist and deman strict compliance by the other party with the terms of this Acquisition Agreement thereafter.
Section 11.10 Merger.
No other agreement, statement or promise made by any party or any employee, officer or agent of any party with respect to any matters covered hereby that is not in writing and signed by all the parties to this Acquisition Agreement shall be binding. 23 4887-2902-8108/022025-0077
Section 11.11 Parties in Interest.
Nothing in this Acquisition Agreement, expressed or implied, is intended to or shall be construed to confer upon or to give to any person or entity other than the City and the Developer any rights, remedies or claims under or by reason of this Acquisition Agreement or any covenants, conditions or stipulations hereof; and all covenants, conditions, promises, and agreements in this Acquisition Agreement contained by or on behalf of the City or the Developer shall be for the sole and exclusive benefit of the City and the Developer.
Section 11.12 Amendment.
This Acquisition Agreement may be amended, from time to time, by written Supplement hereto and executed by both the City and the Developer.
Section 11.13 California Law.
This Acquisition Agreement shall be governed by the laws of the State of California.
Section 11.14 Counterparts.
This Acquisition Agreement may be executed in counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties have executed this Acquisition Agreement as of the day and year first-above written.
CITY OF RIVERSIDE, for itself and on behalf
of Community Facilities District No. 2015-2
(Pomelo) of the City of Riverside
By:_
Name:
Its:
FRIENDS OF THE AIRPORT, LLC, a
California limited liability company
By:
Name:
Title:
poraved asteror
By:.
Senior Deputy City Attorney
S-1
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ACQUISITION AGREEMENT
EXHIBIT A
DESCRIPTION OF AUTHORIZED FACILITIES ELIGIBLE FOR
ACQUISITION FROM THE OWNER
A. TYPES OF FACILITIES
The types of Facilities that are eligible to be financed by CRD No. 2015-2 with the proceeds of special taxes and/or bonds issued by CFD No. 2015-2 consist of the following:
(1) Public storm drain improvements;
(2) Street Improvements;
(3) Water Improvements;
(4) Sewer Improvements; and
(5) Landscaping/Street Lighting.
Incidental expenses of relating to the Facilities may include professional design fees (which include final engineering, field engineering and field services, soils engineering, field observation and reports, dry utility design and coordination, landscape design and field services), staking, environmental reports, plan check, and inspection.
B. SUBSTITUTION FACILITIES
The description of Facilities is general in nature. The final nature and location of the Facilities will be determined upon preparation of final plans and specifications.
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ACQUISITION AGREEMENT
EXHIBIT B
BUDGETED COSTS OF FACILITIES AND ELIGIBLE DIFS
Preliminary List of Authorized Fees and Facilities
City of Riverside Fees Per Unit No, Units Total
Regional/Reserve Parks Fee $ 1,545 108 166,823
Local Park Fee (Taxable) 4,646 108 S01,768
Trail Fee 15 108 1,620
Triot to taped Cly of Riveride reas 525 56,700
$ 6.731 726.211
City of Riverside Facilities
Completed Before Formation
Sure fierce lie Creat A ve and Ruard Ave, Comet Cutb Cute- $ 13,330 108 $ 1,439,640 Suitotal Street forry Ave (per 2003 Development Agmt Sect 5.2) 12,983 108 _ (322,162 5 10,34 108 § 1.117.47
Water Improvements
Water Mains - Jurupa Avenue $ 4,588 108 $ 495,469
Rutland Avenue Waterline relocation 278 108 30,000
City Reimbursement (1,184) 108 (127,840)
Subtotal Water Improvements $ 3.682 108 - 397.629
Sewer Improvements
Sewer Main Lines (along Jurupa Ave.) $ 4,152 108 $ 448,465 Subtotal Sewer Improvements $ 4,152 108 448.465
Storin Drain Improvements
Jarupa Ave. Crossing System $ 6.263 108 $ 752,058
Subtotal Storm Drain Improvements $ 6.963 108 752,058
Landscaping/Street Lighting
Block Wall along Jurupa Avenue $ 1,490 108 $ 160,874
Monumentation 838 108 90,450
Landscape and Irrigation 2,414 108 260,712
Street Lighting 1.595 108 172,272
Subtotal Landscaping/Street Lighting § 6,336 108 S 684,308 Completed After Formation
Sewer Improvements
Sewer Lift Station $. 6,569 108 $ 709.442
Subtotal Sewer Improvements $ 6.569 108 709,442
Soft Costs
Civil Engineering - Design $ 120,000
Civil Engineering - Construction Staking 25,000
Soils Engineer - Testing & Reporting 20,000
Landscape Architec 5,500
Subtotal Soft Cost: $ 170,500
Subtotal CRD Eligible City of Riverside Facilities $ 39,622 108 $ 4,279,880 GRAND TOTAL CFD ELIGIBLE CITY OF RIVERSIDE FEES & FACILITIES $ 46,359 108 $. 5,006,791 B-1
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ACQUISITION AGREEMENT
EXHIBIT C
ADDITIONAL FACILITIES
[Intentionally Omitted]
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ACQUISITION AGREEMENT
EXHIBIT D
FORM OF PAYMENT REQUEST
PAYMENT REQUEST NO. _
The undersigned (the "Developer"), hereby requests payment to the Payees listed on Attachment 2 in the total amount of $
Agreement, dated as of April 1, 2022 between the City of Riverside (the "City"), with respect to the City of Riverside Community Facilities District No. 2015-2 (Pomelo) of the City of Riverside and the Developer), or Discrete Components thereof (as described in Exhibit B to that Acquisition Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City as follows:
1. He (she) is a duly authorized officer of the Developer, qualified to execute this Payment Request for payment on behalf of the Developer and is knowledgeable as to the matters set forth herein.
2. To the extent that this payment request is with respect to a completed Facility, the Developer has submitted or submits herewith to the City as-built drawings or similar plans and specifications for the items to be paid for as listed in Attachment 1 hereto with respect to any such completed Facility, and such drawings or plans and specifications, as applicable, are true, correct and complete. To the extent that this payment request is for a Discrete Component, the Developer has in his construction office a marked set of drawings or similar plans and specifications for the Discrete Components to be acquired as listed in Attachment 1 hereto, which drawings or plans and specifications, as, applicable, are current and show all changes or modifications which have been made to date.
3. All costs of the Facilities or Discrete Components thereof for which payment is requested hereby are Actual Costs (as defined in the Acquisition Agreement referenced above) and have not been inflated or misrepresented in any respect. The items for which payment is requested have not been the subject of any prior payment request submitted to the City.
4. Supporting documentation (such as third party invoices) is attached with respect to each cost for which payment is requested.
5. There has been full compliance with applicable laws relating to prevailing wages for the work to construct the Facilities or Discrete Components thereof for which payment is requested.
6. The Facilities or Discrete Components thereof for which payment is requested were constructed in accordance with all applicable City or other governmental standards, and in accordance with the as-built drawings or plans and specifications, as applicable, referenced in paragraph 2 above.
7. The Developer is in compliance with the terms and provisions of the Acquisition Agreement, including the award of contracts under which the construction for which this payment is requested.
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8. The Purchase Price for each Facility or Discrete Component (a detailed calculation of which is shown in Attachment 2 hereto for each such Facility or Discrete Component), has been calculated in conformance with the terms of Section 5.6 of the Acquisition Agreement.
Neither the Developer nor any Affiliate (as defined in the Acquisition Agreement) is in default in the payment of ad valorem real property taxes or assessments or special assessments levied in the District (as defined in the Acquisition Agreement), except as follows:
I hereby declare under penalty of perjury that the above representations and warranties are true and correct.
Dated:_ Friends of the Airport, LLC, a California limited liability company
By:
Name:
Title:
Dated: CITY:
Payment Request Approved for Submission to.
Finance Director
By:
Director of Public Works
D-2
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.......
ACQUISITION AGREEMENT
ATTACHMENT 1
EXHIBIT D
[List here all Facilities or Discrete Components thereafter which payment is requested, and attach support documentation.]
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ACQUISITION AGREEMENT
ATTACHMENT 2
EXHIBIT D
CALCULATION OF PURCHASE PRICE
[Use a separate sheet for each Facility or Discrete Component for which payment is being requested]
Description (by reference to Exhibit B to the Acquisition Agreement) of the Facility or Discrete Component $
Actual Cost (list here total of supporting invoices and/or other documentation supporting determination of Actual Cost): $ Subtractions from Purchase Price: $
A. Holdback for Lien releases (see Section 5.6(C) of the Acquisition Agreement) $
B. Retention (see Section 5.6(D) of the Acquisition Agreement) $ Total disbursement requested (Amount listed in 2, less amounts, if any, listed in 3) $
Payment shall be directed to following payee(s):
D-4
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ACQUISITION AGREEMENT
EXHIBIT D-1
FORM OF PAYMENT REQUEST (DIFs)
The undersigned (the "Developer") hereby requests reimbursement from the City in the amount of $_ _ ("Requested Amount"), which amount is on deposit in the Acquisition and Construction Fund, or any applicable account of subaccount thereof, established by CFD No. 2015-2 for the DIFs (as defined in the Acquisition Agreement, dated as of April 1, 2022 relating to CFD No. 2015-2) specified below:
No. and Description
of Lots/DUs for
which Fees
Fee Category Date Paid Amount Requested Requested
2. The Requested Amount has been paid to City and has not formed the basis of any prior request or disbursement.
The Developer is in compliance with the terms and provisions of the Acquisition Agreement.
4. Neither the Developer not any Affiliate (as defined in the Acquisition Agreement) is in default in the payment of ad valorem real property taxes or assessments of special assessments or taxes levied in the District (as defined in the Acquisition Agreement).
EXHIBIT D-1-1
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I hereby declare under penalty of perjury that the above representations and . warranties are true and correct.
OWNER:
Dated: By:_
Name:
Title:_
By:_
Name:_
Title:_
CITY:
Payment Request Approved for Submission to
Finance Director
Dated: By:
Director of Public Works
EXHIBIT D-1-2
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ACQUISITION AGREEMENT
EXHIBIT E
BIDDING AND CONTRACT REQUIREMENTS FOR
PUBLIC IMPROVEMENTS
these Policies.
POLICIES
When contracting for the construction of public improvements that will receive reimbursements or credits from the City, the developer is standing in place of the City and effectively spending the City's money. Therefore, the developer shall comply with all laws governing the expenditures of public funds on public works projects, whether or not explicitly stated in these • Division 2, Part 3, Chapter 1, Article 4 of the California Government Code (commencing with Section 20160), regarding the bidding and award of public works contracts; • Division 2, Part 7, Chapter 1 of the California Labor Code (commencing with Section 1720), regarding labor and prevailing wage laws for public works projects; and • Division 4, Part 6, Title 3 of the California Civil Code (commencing with Section 9000), regarding notices of completion, stop payment notices, and labor bonds for public works projects.
In the event of any conflict between these Policies and state laws applicable to the City, developers shall comply with state law applicable to the City.
BIDDING PHASE
Bidding Documents. Unless otherwise noted, the bidding documents shall conform to the ollowing minimum requirements and shall be submitted to City for its prior written approvi efore release for bid. City shall review and approve, conditionally approve, or disapprov the bidding documents within fifteen (15) days after receipt.
The first publication or posting of the Notice Inviting Bids shall be at least 10 days before the date of opening the bids. Notice shall be published at least twice, not less than five days apart, in a newspaper of general circulation, printed and published in the city (at minimum).
Unless impractical due to the nature of the public improvements, the bid proposal shall be unit-priced rather than lump sum or time and materials.
EXHIBIT E-1
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The bidding documents shall require the successful bidder to provide evidence of comprehensive general liability insurance in the amount of at least $2,000,000 prior to the award of the contract, which names the City of Riverside as an additional insured.
4. The bidding documents shall provide for monthly progress payments to the contractor (with respect to the public improvements).
5. The contractor shall be required to pay prevailing wages, and comply with all state labor and wage laws applicable to cities, as listed above.
6. The bidding documents must clearly state the time, date, and place where bids are to be submitted and opened.
The bidding documents shall clearly state the amount of time to complete the work.
The time allowed must be reasonable for the amount of work. Accelerated construction time allowances must be supplementally bid, and are not eligible for reimbursement unless previously approved by the City Engineer.
Conditioned bids, unless the bid proposal lists them for all to bid on, shall not be accepted.
B. Prequalification. Developer may pre-qualify bidders in accordance with Public Contract Code Section 20101, by requiring all persons interested in bidding on any portion of the public improvements to submit current financial statements and a pre-qualification questionnaire in a form approved by City, and by scoring each submission based on reasonable, objective criteria reasonably acceptable to City. Developer must implement an appeals procedure for responding to disputes in compliance with Public Contract Code Section 20101(d). If developer elects to pre-qualify bidders, only those bidders who have submitted complete pre-qualification packets and obtained the minimum required score based on the objective rating system adopted by developer (and approved by City shall be permitted to bid on any portion of the construction work for the public improvements.
C. Addenda. Addenda shall be mailed by first class mail (or submitted by confirmed electronic transmission) to all bidding document holders and the City's Debt & Treasury Manager at the same time. The last addendum shall be issued no later than three (3) business days prior to the date of opening bids.
D. Receipt and Opening of Bids.
Submitted bids shall be in sealed envelopes.
Bids shall not be accepted after the stated time for submission.
Bid opening shall be conducted by developer at developer's place of business or other site acceptable to developer.
Sealed bids shall be opened and read aloud immediately following the submission time. The project engineer shall be invited to attend the bid opening.
EXHIBIT E-2
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Contract Review and Award.
1. All bids received shall be provided to the City's Debt & Treasury Manager. The City Engineer may, in his or her reasonable discretion, reject any and all bids that he or she determines to be nonresponsive.
The arithmetic of the lowest bid proposals received shall immediately be checked for errors.
Contracts shall be awarded to the lowest responsive and responsible bidder as defined by state law.
4. Award shall be made within 5 business days after the bid opening, unless more time is needed to determine if the lowest bidder is responsive and responsible.
PRECONSTRUCTION AND NOTICE TO PROCEED
A. Preconstruction Meeting. A preconstruction meeting shall be held with the contractor prior to beginning the work. The City's Construction Inspector shall be invited to attend the meeting.
B. Notice of Proceed. The Notice to Proceed shall be issued within a reasonable period of time following the contract execution.
CONSTRUCTION PHASE
A. Schedule and Status Meetings.
1. The City's Construction Inspector shall be provided a copy of the construction schedule.
Developer shall require the contractor to conduct weekly construction status meetings to which the City's Construction Inspector shall be invited.
B. Extra Costs.
Developer may approve change orders up to a combined total of 10% of the original cost of construction without prior City approval. Any change orders resulting in combined change to the original contract amount of more than 10% must be approved by the City Engineer.
Additional costs incurred solely for the benefit of developer, such as accelerating the construction schedule, regardless of the amount of such costs, shall not be eligible for reimbursement unless previously approved by the City Engineer or his/her designee.
Any additional construction costs incurred due solely to unexcused delays caused by developer shall not be eligible for reimbursement.
Records. All contracts and construction related records shall be submitted to the Management Analyst throughput the duration of the project for the final determination of eligible costs for reimbursement.
EXHIBIT E-3
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D. Payment, Stop Payment Notices, Notice of Completion. ...
Developer shall make prompt payment to all contractors and subcontractors.
Developer must comply with all applicable laws applicable to cities regarding stop payment notices, as listed above.
Developer must file a Notice of Completion within 15 days of City's approval of the public improvements (determining substantial completion), and shall submit a copy of the Notice of Completion to the Debt & Treasury Manager.
E. Inspection and Acceptance by City.
All public improvements constructed by developer are subject to inspection by or on behalf of the City Engineer: Construction shall be scheduled to allow for periodic inspection by the City Engineer or his/her designee. The developer's contractor will e required to provide adequate quality assurance and quality control measures t nsure all public improvements are constructed in accordance with the Standar Specifications for Public Works Construction or Caltrans Standard Specifications, as appropriate for the work to be constructed.
City may require any work to be redone or fixed, at no additional cost to City, if the City Engineer determines, in his or reasonable discretion, that the work does not conform to the plans and specifications approved by the City and/or the requirements of state and federal law.
EXHIBIT E-4
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