City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01133 11/14/2023 Consent Item 4.
Updating a Form of Acquisition Agreement for Use with the Statewide Community Infrastructure Program of the California Statewide Communities Development Authority for Community Facilities Districts and Assessment Districts File ID: 2023-01133
Location: Citywide
Recommendation: 1) Adopt a Resolution approving an updated Form of Acquisition Agreement for use with the Statewide Community Infrastructure Program for community facilities districts and assessment districts.
Contact: Brent Mueller, Development Project Manager, (916) 808-5715, [email protected]; Sheri Smith, Special Districts Manager, (916) 808-7204, [email protected], Department of Finance
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution
3-Exhibit A - Form Acquisition Agreement
Additional Description/Analysis
Issue Detail: On April 18, 2017, Council adopted Resolution No. 2017-0136 to join the Statewide Community Infrastructure Program (SCIP) to provide access for small projects to utilize a pooled tax- exempt bond financing program for development impact fees and public infrastructure improvement costs, such as roads, water, sewer, storm drainage, and parks for commercial, industrial, retail, and multi- and single-family residential developments. When the City initially joined SCIP, the program solely utilized Assessment Districts (ADs) as the financing mechanism in the pooled bond financings.
The program was expanded to also allow Mello-Roos Community Facilities Districts (CFDs), creating more flexibility for developers to utilize the best financing mechanism for their projects. On May 4, 2021, Council adopted Resolution No 2021-0111 to expand City participation in SCIP to include CFDs. Since joining SCIP, 21 projects, with a total of 2,015 housing units and two warehouse buildings, have taken advantage of the pooled financing option and funded approximately $25 million of infrastructure in the City.
File ID: 2023-01133 11/14/2023 Consent Item 4.
SCIP is administered by the California Statewide Communities Development Authority (CSCDA) The CSCDA accepts applications from owners of property within our planning jurisdiction to apply for tax- exempt financing of public capital improvements and development impact fees through SCIP. The prior resolutions authorize CSCDA to form CFDs and ADs within the City’s boundaries, conduct special tax proceedings and levy special taxes against the property of participating owners. The CSCDA has updated its standard form acquisition agreement to be utilized with either CFDs or ADs.
Since joining SCIP, the City has also updated its Guidelines for Special District Acquisition Projects (Guidelines) to provide the terms and conditions under which financing for public capital improvements will be provided and to establish the procedure for disbursement of bond proceeds to pay for completed facilities. The resolution attached to this staff report approves an updated Form of Acquisition Agreement (Agreement), provided by CSCDA and includes updated Guidelines.
Policy Considerations: SCIP supports the City’s goal of implementing initiatives that effectively improve our business climate and encourage further development and investment in Sacramento.
Economic Impacts: The availability of more tax-exempt financing tools can alleviate the impact of overall project costs and stimulate increased development and investment in Sacramento.
Environmental Considerations: This report concerns government activities that do not constitute a “project” as defined by section 15378(b)(4) of the CEQA Guidelines and are not subject to the provisions of CEQA (CEQA Guidelines, §15060(c)(3))
Sustainability: Not applicable
Commission/Committee Action: Not applicable
Rationale for Recommendation: City participation in SCIP provides developers and smaller projects more flexibility and access to a competitive financing mechanism, with minimal staff costs, so that projects with a public benefit can ultimately translate the financing into competitive interest rates and lower costs and an updated form of Acquisition Agreement is expected to facilitate SCIP financing.
Financial Considerations: There is no fiscal impact to the General Fund if Council adopts this resolution. The City has no exposure associated with any debt issued via SCIP. Financing via SCIP will not impact the dollar amount of development impact fees associated with each project. In 2021, Council approved a $5,560 non-refundable administrative-processing fee for each application to recover the cost of staff time to process, review, and verify planning entitlements and impact fees for the project that will participate in SCIP. The City may charge a participating developer a fee based on the City’s reasonable costs of managing the City’s acquisition of any improvements constructed under an Acquisition Agreement; this fee will be included in the engineer’s estimate of the cost of the
File ID: 2023-01133 11/14/2023 Consent Item 4.
improvement and be payable to the City when the City acquires the improvement in accordance with the Acquisition Agreement.
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO. 2023-
Adopted by the Sacramento City Council
November 14, 2023
Approving an Updated Form of Acquisition Agreement for Use with the Statewide Community Infrastructure Program
BACKGROUND
A. The City has previously by its Resolution No. 2017-0136 adopted April 18, 2017, consented to the conduct of special assessment proceedings by the California Statewide Communities Development Authority (“The Authority”) in connection with the Statewide Community Infrastructure Program (“SCIP”) pursuant to the Municipal Improvement Act of 1913 (Streets and Highways Code Sections 10000 and following) and the issuance of Local Obligations under Improvement Bond Act of 1915 (Streets and Highways Code Sections 8500 and following).
B. The City has previously by its Resolution No. 2021-0111 adopted May 4, 2021, consented to expand the conduct of proceedings by the Authority in connection with SCIP pursuant to the “Mello-Roos Community Facilities Act of 1982,” being Chapter 2.5, Part 1, Division 2, Title 5 (beginning with Section 53311) of the Government Code of the State (the “Mello-Roos Act”) to, among other things, finance public improvements necessary to meet the increased demands placed upon local agencies as a result of development.
C. The City has previously by its Resolution No. 2021-0111 adopted May 4, 2021, approved a form of Acquisition Agreement (the “Acquisition Agreement”), provided by The Authority.
D. The Authority has updated it Acquisition Agreement, a copy of which is attached hereto as Exhibit A, to be approved as to form for use with respect to any improvements to be constructed and installed by a participating developer and for which the developer requests acquisition financing as part of its SCIP application.
E. Exhibit C to the Acquisition Agreement has been updated to reflect current City Guidelines for Special District Acquisition Projects.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council finds and determines that the background statements A through E are true and correct.
Section 2. The form of the Acquisition Agreement attached hereto as Exhibit A is hereby approved, and the City Manager or City Manager’s designee (the “Authorized Officer”) is authorized to execute, and deliver to the developer, the Acquisition Agreement on behalf of the City in substantially that form, with such changes as shall be approved by the Authorized Officer after consultation with the City Attorney and the Authority’s bond counsel, such approval to be conclusively evidenced by the execution and delivery thereof.
Section 3. Exhibit A is part of this resolution.
Table of Contents:
Exhibit A – Form Acquisition Agreement
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EXHIBIT A TO THE RESOLUTION
FORM OF ACQUISITION AGREEMENT
_____________________
CALIFORNIA STATEWIDE COMMUNITIES DEVELOPMENT AUTHORITY
STATEWIDE COMMUNITY INFRASTRUCTURE PROGRAM
ACQUISITION AGREEMENT
BY AND BETWEEN
CITY OF SACRAMENTO
AND
[DEVELOPER]
Dated as of _______, 20__
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ACQUISITION AGREEMENT
Recitals
A. The parties to this Acquisition Agreement (the “Agreement”) are the CITY OF SACRAMENTO, (the “Local Agency” or the “City”), and [DEVELOPER], a [ indicate type of legal entity] (the “Developer”).
B. The effective date of this Agreement is ________, 20__.
C. The Developer has applied for the financing of, among other things, certain public capital improvements to be owned by the Local Agency (collectively, the “Acquisition Improvements”) through the California Statewide Communities Development Authority (the “Authority”) and its Statewide Community Infrastructure Program ( “SCIP”). [ For CFDS:] [The Acquisition Improvements are to be owned and operated by the Local Agency, and the financing is to be accomplished through a community facilities district which will be administered by the Authority under and pursuant to the Mello -Roos Community Facilities Act of 1982 – California Government Code Sections 53311 and following (the “Act”). On May 4, 2021, the Local Agency entered into a Joint Community Facilities Agree ment authorizing the Authority to form a community facilities district (the “District”) within the territorial limits of the Local Agency to finance, among other things, the Acquisition Improvements. On [__________], 20[_], the Authority formed the District and, on the same date, a landowner election was conducted in which all of the votes were cast unanimously in favor of conferring the District authority on the Authority Commission.] [For Assessment Districts :] [The Acquisition Improvements are to be own ed and operated by the Local Agency, and the financing is to be accomplished through an assessment district (the “District”) which will be administered by the Authority under and pursuant to Municipal Improvement Act of 1913 (Streets and Highways Code Sections 10000 and following) (the “1913 Act ”) and the issuance of improvement bonds (the “Local Obligations ”) under the Improvement Bond Act of 1915 (Streets and Highways Code Sections 8500 and following) (the “1915 Act” and, together with the “1913 Act” the “Act”).] D. The administration, payment and reimbursement of the capital facilities fees is agreed to be governed by the provisions of the SCIP Manual of Procedures as it may be amended from time to time. The administration, payment and reimbursement of the Acquisition Improvements shall be as provided herein.
E. Under SCIP, the Authority intends to levy [assessments] [special taxes] and issue bonds, in one or more series, to fund, among other things, all or a portion of the costs of the Acquisition Improvements. The portion of the proceeds of the [special taxes and] bonds allocable to the cost of the Acquisition Improvements, together with interest earned thereon, is referred to herein as the “Available Amount”.
F. The Authority will provide financing for the acqu isition by the Local Agency of the Acquisition Improvements and the payment of the Acquisition Price (as defined herein) of the Acquisition Improvements from the Available Amount. Attached hereto as Exhibit A is a description of the Acquisition Improvements, which includes authorized discrete and usable
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portions, if any, of the public capital improvements, [pursuant to Section 53313.51 of the Act,] to be acquired from the Developer.
G. The parties anticipate that, upon completion of the Acquisition Improvements and subject to the terms and conditions of this Agreement, the Local Agency will acquire such completed Acquisition Improvements with the Available Amount.
H. Any and all monetary obligations of the Local Agency arising out of this Agreement are the special and limited obligations of the Local Agency payable only from the Available Amount, and no other funds whatsoever of the Local Agency shall be obligated therefor.
I. Attached to this Agreement are Exhibit A (Acquisition Improvements and the Eligible Portions thereof ), Exhibit B (Form of Requisition ), Exhibit C (Guidelines for Special District Acquisition Projects, City of Sacramento) and Exhibit D (Insurance Requirements), which are incorporated into this Agreement for all purposes.
In consideration of Recitals A through I, inclusive, and the mutual covenants, undertakings and obligations set forth below, the Local Agency and the Developer agree as stated below.
Agreement
ARTICLE I
DEFINITIONS; DISTRICT FORMATION AND FINANCING PLAN
Section 1.01. Definitions. As used herein, the following capitalized terms shall have the meanings ascribed to them below:
“Acceptable Title” means free and clear of all monetary liens, encumbrances, assessments, whether any such item is recorded or unrecorded, and taxes, except those items which are reasonably determined by the Local Agency Engineer not to interfere with the intended use and therefore are not required to be cleared from the title. “Acquisition and Construction Fund ” means the “City of Sacramento Acquisition and Construction Fund” established by the Authority pursuant to Section 1.03 hereof for the purpose of paying the Acquisition Price of the Acquisition Improvements and which fund may be held as a subaccount within a fund established under the Authority Trust Agreement and may be commingled with acquisition and construction fund monies available for other public capital improvements.
“Acquisition Improvement” shall have the meaning assigned to such term in the recitals and are further described in Exhibit A.
“Acquisition Price ” means the total amount eligible to be paid to the Developer upon acquisition of an Acquisition Improv ement as provided in Section 2.03 not to exceed the Actual Cost of the Acquisition Improvement.
“Act” has the meaning ascribed thereto in Recital C.
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“Actual Cost” means the total cost of an Acquisition Improvement, as documented by the Developer to the satisfaction of the Local Agency and as certified by the Local Agency Engineer in an Actual Cost Certificate including, without limitation, (a) the Developer’s cost of constructing such Acquisition Improvement including grading, labor, material and equipment costs, (b ) the Developer’s cost of designing and engineering the Acquisition Improvement, preparing the plans and specifications and bid documents for such Acquisition Improvement, and the costs of inspection, materials testing and construction staking for such Acquisition Improvement, (c ) the Developer’s cost of any performance, payment and maintenance bonds and insurance, including title insurance, required hereby for such Acquisition Improvement, (d) the Developer’s cost of any real property or interest therein that is either necessary for the construction of such Acquisition Improvement (e.g., temporary construction easements, haul roads, etc.), or is required to be conveyed with such Acquisition Improvement in order to convey Acceptable Title thereto to the Local Agency or its designee, (e) the Developer’s cost of environmental evaluation or mitigation required for such Acquisition Improvement, (f ) the amount of any fees actually paid by the Developer to governmental agencies in order to obtain permits, licenses or other necessary governmental approvals and reviews for such Acquisition Improvement, (g) the Developer’s cost for construction and project management, administration and supervision services for such Acquisition Improvement, (h ) the Developer ’s cost for professional services related to such Acquisition Improvement, including engineering, accounting, legal, financial, appraisal and similar professional services, and (i) the costs of construction financing incurred by the Developer with respect to such Acquisition Improvement.
“Actual Cost Certificate ” means a certificate prepared by the Developer detailing the Actual Cost of an Acquisition Improvement, or an Eligible Portion thereof, to be acquired hereunder, as may be revised by the Local Agency Engineer pursuant to Section 2.03. “Agreement” means this Acquisition Agreement, dated as of [_______________], 20[_]. “Authority” means the California Statewide Communities Development Authority. “Authority Trust Agreement” means a Trust Agreement entered into by the Authority and an Authority Trustee in connection with the issuance of bonds. “Authority Trustee” means the financial institution identified as trustee in an Authority Trust Agreement.
“Available Amount” shall have the meaning assigned to the term in Recital E. “Bonds” means bonds or other indebtedness issued by the Authority as tax -exempt or taxable bonds or other indebtedness, in one or more series, that is to be repaid by the District. “Code” means the Streets and Highways Code or the Government Code of the State of California, as applicable.
“Developer” means [Developer], its successors and assigns.
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“Disbursement Request Form ” means a requisition for payment of funds from the Acquisition and Construction Fund for an Acquisition Improvement, or an Eligible Portion thereof in substantially the form contained in Exhibit B hereto. “District” shall have the meaning assigned to the term in Recital C. “Eligible Portion” shall have the meaning ascribed to it in Section 2.03 below. “Guidelines for Special District Acquisition Projects ” means the City of Sacramento construction requirements for acquisition of public facilities as further described in Exhibit C. “Installment Payment” means an amount equal to ninety percent (90%) of the Actual Cost of an Eligible Portion.
“Local Agency” means the City of Sacramento.
“Local Agency Engineer ” means the Engineer of the Local Agency or his/her designee who will be responsible for administering the acquisition of the Acqui sition Improvements hereunder.
“Project” means the Developer’s development of the property in the District, including the design and construction of the Acquisition Improvements and the other public and private improvements to be constructed by the Developer within the District. [“Special Taxes” means annual special taxes, and prepayments thereof, authorized by the District to be levied by the Commission of the Authority.] “Title Documents” means, for each Acquisition Improvement acquired hereunder, a grant deed or similar instrument necessary to transfer title to any real property or interests therein (including easements), or an irrevocable offer of dedication of such real property with interests therein necessary to the operation, maintenance, rehabilitat ion and improvement by the Local Agency of the Acquisition Improvement (including, if necessary, easements for ingress and egress) and a bill of sale or similar instrument evidencing transfer of title to the Acquisition Improvement (other than said real property interests) to the Local Agency, where applicable.
Section 1.02. Participation in SCIP. [For CFDs:] [The Local Agency has entered into a Joint Community Facilities Agreement with the Authority for the purpose of accepting applications from time to time of developers within the Local Agency’s jurisdictional boundaries.] Developer has applied for financing through SCIP of the Acquisition Improvements, and such application has been approved by the Local Agency. Developer and Local Agency agree that until and unless such financing is completed by the Authority and the Available Amount is deposited in the Acquisition Account (as defined in Section 1.03 below), neither the Developer nor the Local Agency shall have any obligations under this Agreement. Developer agrees to cooperate with the Local Agency and the Authority in the completion of SCIP financing for the Acquisition Improvements.
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Section 1.03. Deposit and Use of Available Amount.
(a) Upon completion of the SCIP financing, the Available Amount will be deposited by the Authority in the Acquisition Account.
(b) The Authority will cause the SCIP Trustee to establish and maintain an account ( the “Acquisition Account”) for the purpose of holding all funds for the Acquisition Improvements.
All earnings on amounts in the Acquisition and Construction Fund shall remain in the Acquisition and Construction Fund for use as provided herein and pursuant to the Authority Trust Agreement.
Money in the Acquisition and Construction Fund shall be available to respond to delivery of a Disbursement Request Form and to be paid to the Developer or its designee to pay the Acquisition Price of the Acquisition Improvements, as specified in Article II hereof. Upon completion of all of the Acquisition Improvements and the payment of all costs thereof, any remaining funds in the Acquisition and Construction Fund (less any amount determined by the Local Agency as necessary to reserve for claims against the account) (i ) shall be applied to pay the costs of any additional Acquisition Improvements eligible fo r acquisition with respect to the Project as approved by the Authority and, to the extent not so used, (ii) shall be applied by the Authority [to call Bonds or to reduce Special Taxes as the Authority shall determine] [as provided in Section 10427.1 of the Code to pay a portion of the assessments levied on the Project property in the District].
Section 1.04. No Local Agency Liability; Local Agency Discretion; No Effect on Other Agreements. In no event shall any actual or alleged act by the Local Agency or any actual or alleged omission or failure to act by the Local Agency with respect to SCIP subject the Local Agency to monetary liability therefor. Further, nothing in this Agreement shall be construed as affecting the Developer’s or the Local Agency’s duty to perform their respective obligations under any other agreements, public improvement standards, land use regulations or subdivision requirements related to the Project, which obligations are and shall remain independent of the Developer’s and the Local Agency ’s rights and obligations under this Agreement. In no event shall the Local Agency be liable or responsible to pay the Developer any amounts in excess of the Available Amount under this Agreement.
ARTICLE II
DESIGN, CONSTRUCTION AND ACQUISITION OF ACQUISITION IMPROVEMENTS Section 2.01. Letting and Administering Design Contracts . The parties presently anticipate that the Developer has awarded and administered or will award and administer engineering design contracts for the Acquisition Improvements to be acquired from Developer.
All eligible expenditures of the Developer for design engineering and related costs in connection with the Acquisition Improvements (whether as an advance to the Local Agency or directly to the design consultant) shall be reimbursed at the time of acquisition o f such Acquisition Improvements. The Developer shall be entitled to reimbursement for any design costs of the Acquisition Improvements only out of the Acquisition Price as provided in Section 2.03 and shall not be entitled to any payment for design costs independent of or prior to the acquisition of Acquisition Improvements.
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Section 2.02. Letting and Administration of Construction Contracts ; Indemnification.
State law requires that all Acquisition Improvements not completed prior to the formation of the District shall be constructed as if they were constructed under the direction and supervision, or under the authority, of the Local Agency. In order to assure compliance with those provisions, except for any contracts entered into prior to the date hereof, Developer agrees to comply with the requirements set forth in Exhibit C hereto with respect to the bidding and contracting for the construction of the Acquis ition Improvements. The Developer agrees that all the contracts shall call for payment of prevailing wages as required by the Labor Code of the State of California. The Developer’s indemnification obligation set forth in Section 3.01 of this Agreement shall also apply to any alleged failure to comply with the requirements of this Section, and/or applicable State laws regarding public contracting and prevailing wages.
Section 2.03. Sale of Acquisition Improvements . The Developer agrees to sell to the Local Agency each Acquisition Improvement to be constructed by Developer (including any rights-of-way or other easements necessary for the Acquisition Improvements, to the extent not already publicly owned), when the Acquisition Improvement is has been constructed and is complete to the satisfaction of the Local Agency for an amount not to exceed the lesser of (i ) the Available Amount or (ii ) the Actual Cost of the Acquisition Improvement. Exhibit A, attached hereto and incorporated herein, contains a list of the Acquisitio n Improvements. Portions of an Acquisition Improvement eligible for Installment Payments prior to completion of the entire Acquisition Improvement are described as eligible, discrete and usable portions in Exhibit A (each, an “Eligible Portion”). At the time of completion of each Acquisition Improvement, or Eligible Portion thereof, the Developer shall deliver to the Local Agency Engineer a written request for acquisition, accompanied by an Actual Cost Certificate, and by executed Title Documents for the transfer of the Acquisition Improvement where necessary. In the event that the Local Agency Engineer finds that the supporting paperwork submitted by the Developer fails to demonstrate the required relationship between the subject Actual Cost and eligible work, the Local Agency Engineer shall advise the Developer that the determination of the Actual Cost (or the ineligible portion thereof) has been disallowed and shall request further documentation from the Developer.
If the further documentation is still not adequate, the Local Agency Engineer may revise the Actual Cost Certificate to delete any disallowed items and the determination shall be final and conclusive.
Certain soft costs for the Acquisition Improvements, such as civil engineering, may have been incurred pursuant to single contracts that include work relating also to the private portions of the Project. In those instances, the total costs under such contracts will be allocated to each Acquisition Improvement based on the pro rata share for that Acquisition Improvement of the total contract cost unless an alternative methodology is approved by the Local Agency Engineer. Where a specific contract has been awarded for design or engineering work relating solely to an Acquisition Improvement, one hu ndred percent (100%) of the costs under the contract will be allocated to that Acquisition Improvement. Amounts allocated to an Acquisition Improvement will be further allocated among the Eligible Portions of that Acquisition Improvement, if any, in the same proportion as the amount to be reimbursed for hard costs for each Eligible Portion bears to the amount to be reimbursed for hard costs for the entire Acquisition Improvement. Costs will be allocated to each Acquisition Improvement as approved by the L ocal Agency Engineer. The costs of certain environmental mitigation required to mitigate impacts of the public and private portions of the Project will be allocated to each Acquisition Improvement based on the pro rata share for that Acquisition Improvement of the total contract cost unless an alternative methodology
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is approved by the Local Agency Engineer . In no event shall the pro rata share of the private portions of the Project be allocated to any Acquisition Improvements.
In the event that the Actua l Cost is in excess of the Available Amount, the Local Agency shall withdraw the Available Amount from the Acquisition Account and transfer said amount to the Developer. In the event that the Actual Cost is less than the Available Amount, the Local Agency shall withdraw an amount from the Acquisition Account equal to the Actual Cost, and shall transfer said amount to the Developer. Any amounts then remaining in the Acquisition Account shall be applied as provided in Section 1.03.
In no event shall the Local Agency be required to pay the Developer more than the amount on deposit in the Acquisition Account at the time such payment is requested.
Section 2.04. Conditions Precedent to Payment of Acquisition Price . Payment to the Developer or its designee of the Acquisition Price for an Acquisition Improvement from the Acquisition and Construction Fund shall in every case be conditioned first upon the determination of the Local Agency Engineer, pursuant to Section 2.03, that the Acquisition Improvement satisfies all Local Agency regulations (including any required insurance pursuant to Section 3.02) and ordinances and is otherwise complete and ready for acceptance by the Local Agency, and shall be further conditioned upon satisfaction of the following additional conditions precedent:
(a) The Developer shall have provided the Local Agency with lien releases or other similar documentation satisfactory to the Local Agency Engineer as evidence that none of the property (including any rights-of-way or other easements necessary for the o peration and maintenance of the Acquisition Improvement, to the extent not already publicly owned) comprising the Acquisition Improvement, and the property which is subject to the [assessments/Special Taxes] of the District, is not subject to any prospecti ve mechanics lien claim respecting the Acquisition Improvements.
(b) All due and payable property taxes, and installments of [assessments/Special Taxes] shall be current on property owned by the Developer or under option to the Developer that is subject to the lien of the District.
(c) The Developer shall certify that it is not in default with respect to any loan secured by any interest in the Project.
(d) The Developer shall have provided the Local Agency with Title Documents needed to provide the Local Agency with title to the site, right-of-way, or easement upon which the subject Acquisition Improvements are situated. All such Title Documents shall be in a form acceptable to the Local Agency (or applicable governmental agency) and shall convey Acceptable Title. The Developer shall provide a policy of title insurance as of the date of transfer in a form acceptable to the Local Agency Engineer insuring the Local Agency as to the interests acquired in connection with the acquisition of any interest for which such a pol icy of title insurance is not required by another agreement between the Local Agency and the Developer. Each title insurance policy required hereunder shall be in the amount equal to or greater than the Acquisition Price.
Section 2.05. SCIP Requisition. Upon a determination by the Local Agency Engineer to pay the Acquisition Price of the Acquisition Improvements pursuant to Section 2.04, the Local
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Agency Engineer shall cause a SCIP Requisition to be submitted to the Program Administrator.
The Program Administrator will review the SCIP Requisition and forward it with instructions to the SCIP Trustee and the SCIP Trustee shall make payment directly to the Developer of such amount pursuant to the SCIP Trust Agreement. The Local Agency and the Developer acknowledge and agree that the SCIP Trustee shall make payment strictly in accordance with the SCIP Requisition and shall not be required to determine whether or not the Acquisition Improvements have been completed or what the Actual Costs may be with respect to such Acquisition Improvements. The SCIP Trustee shall be entitled to rely on the SCIP Requisition on its face without any further duty of investigation.
ARTICLE III
MISCELLANEOUS
Section 3.01. Indemnification and Hold Harmless . The Developer shall indemnify, defend and hold harmless the Local Agency, the Authority, and each of its respective officers, directors, employees and agents, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from or alleged to have resulted from the acts or omissions of the Developer or its agents and employees in the performance of this Agreement, or arising out of any contract for the design, engineering and construction of the Acquisition Improvem ents or arising out of any alleged misstatements of fact or alleged omission of a material fact made by the Developer, its officers, directors, employees or agents to the Authority’s underwriter, financial advisor, appraiser, district engineer or bond coun sel or regarding the Developer, its proposed developments, its property ownership and its contractual arrangements contained in the official statement relating to the SCIP financing (provided that the Developer shall have been furnished a copy of such official statement and shall not have objected thereto); and provided, further, that nothing in this Section 3.01 shall limit in any manner the Local Agency’s rights against any of the Developer’s architects, engineers, contractors or other consultants. Excep t as set forth in this Section 3.01, no provision of this Agreement shall in any way limit the extent of the responsibility of the Developer for payment of damages resulting from the operations of the Developer, its agents and employees. Nothing in this Section 3.01 shall be understood or construed to mean that the Developer agrees to indemnify the Local Agency, the Authority or any of its respective officers, directors, employees or agents, for any negligent or wrongful acts or omissions to act of the Loc al Agency, Authority its officers, employees, agents or any consultants or contractors.
Section 3.02. Insurance. Before construction commences on any Acquisition Improvements, Developer must comply with the insurance requirements specified by the City’s Special Distric ts Manager. The types, amounts and rules related to verification of insurance required by the Developer shall be determined by the Special Districts Manager in consultation with the City’s Risk Manager prior to execution of this Agreement and included as the “Insurance Requirements” attached hereto as Exhibit D . The amount of insurance required will be commensurate with nature of the specific Acquisition Improvements associated with this Agreement and will be in accordance with industry standards. The Devel oper may be required to maintain insurance directly or may be allowed to require its contractors and their subcontractors to maintain such insurance. Developer’s contractors may include its engineers and design professionals in addition to its construction contractors. In all instances the Developer will obtain,
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at a minimum, a commercial general liability insurance policy of at least $1,000,000, naming the City as an additional insured. Failure to maintain required insurance may be deemed a basis for the City’s rejection of any Acquisition Improvement.
Section 3.03. Audit. The Local Agency shall have the right, during normal business hours and upon the giving of ten days’ written notice to the Developer, to review all books and records of the Developer pertaining to c osts and expenses incurred by the Developer (for which the Developer seeks reimbursement) in constructing the Acquisition Improvements.
Section 3.04. Cooperation. The Local Agency and the Developer agree to cooperate with respect to the completion of the SCIP financing for the Acquisition Improvements. The Local Agency and the Developer agree to meet in good faith to resolve any differences on future matters which are not specifically covered by this Agreement.
Section 3.05. General Standard of Reasonableness . Any provision of this Agreement which requires the consent, approval or acceptance of either party hereto or any of their respective employees, officers or agents shall be deemed to require that such consent, approval or acceptance not be unreasonably withheld or delayed, unless such provision expressly incorporates a different standard. The foregoing provision shall not apply to provisions in the Agreement which provide for decisions to be in the sole discretion of the party making the decision.
Section 3.06. Third Party Beneficiaries. The Authority and its officers, employees, agents or any consultants or contractors are expressly deemed third party beneficiaries of this Agreement with respect to the provisions of Section 3.01. It is expressly agreed that, except for the Authority with r espect to the provisions of Section 3.01, there are no third party beneficiaries of this Agreement, including without limitation any owners of bonds, any of the Local Agency ’s or the Developer’s contractors for the Acquisition Improvements and any of the L ocal Agency’s, the Authority’s or the Developer’s agents and employees.
Section 3.07. Conflict with Other Agreements . Nothing contained herein shall be construed as releasing the Developer or the Local Agency from any condition of development or requirement imposed by any other agreement between the Local Agency and the Developer, and, in the event of a conflicting provision, such other agreement shall prevail unless such conflicting provision is specifically waived or modified in writing by the Local Agency and the Developer.
Section 3.08. Notices. All invoices for payment, reports, other communication and notices relating to this Agreement shall be mailed to:
If to the Local Agency:
City of Sacramento
Infrastructure Finance Division
915 I Street, NCH Fifth Floor
Sacramento, California 95814
Attention: Special Districts Manager
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City of Sacramento
Community Development Department
300 Richards Boulevard, Third Floor
Sacramento, California 95814
Attention: [Name], [Title]
If to the Developer:
[Developer]
[Address to come]
Either party may change its address by giving notice in writing to the other party.
Section 3.09. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.
Section 3.10. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California.
Section 3.11. Amendments. This Agreement may be amended only by anoth er written agreement signed by all of the parties.
Section 3.12. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Agreement.
Section 3.13. Entire Agreement . This Agreement sets forth the parties ’ entire understanding regarding the matters s et forth and is intended to be their final, complete, and exclusive expression of those matters except for any matters also covered by a development agreement, credit -reimbursement agreement, subdivision -improvement agreement, drainage - improvement agreement, or other improvement agreement entered into before or concurrently with this Agreement.
Section 3.14. Singular and Plural; Gender . As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine.
Section 3.15. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
Section 3.16. Successors and Assigns. This Agreement is binding upon the heirs, assigns and successors -in-interest of the parties hereto. The Developer may not assign its ri ghts or obligations hereunder, except to successors-in-interest to the property within the District, without the prior written consent of the Local Agency.
Section 3.17. Remedies in General . It is acknowledged by the parties that the Local Agency would not have entered into this Agreement if it were to be liable in damages under or
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with respect to this Agreement or the application thereof, other than for the payment to the Developer of any (i ) moneys owing to the Developer hereunder, or (ii ) moneys paid by the Developer pursuant to the provisions hereof which are misappropriated or improperly obtained, withheld or applied by the Local Agency.
In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that the Local Agency shall not be liable in damages to the Developer, or to any assignee or transferee of the Developer other than for the payments to the Developer specified in the preceding paragraph. Subject to the foregoing, the Developer covenants not to sue for or claim any damages for any alleged breach of, or dispute which arises out of, this Agreement.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written above.
City of Sacramento [Developer’s Name]
By: _________________________________ By: ________________________________ [Name] Signature
Director of Finance _______________________________
Date: _____________, 20__ Print Name
_______________________________
Title
Date: , 20__
Attest
Sacramento City Clerk
By: _________________________________
Signature
Approved as to Form
Sacramento City Attorney
By: _________________________________
[Senior Deputy] City Attorney
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Exhibit A to the Acquisition Agreement
DESCRIPTION OF ACQUISITION IMPROVEMENTS AND BUDGETED AMOUNTS [To be completed based on Final Engineer’s Report/developer’s budget and cash flows] Funding includes amounts for incidental costs associated with the capital improvements, including, but not limited to, contingency, design, engineering, and construction management.
ACQUISITION IMPROVEMENTS TOTAL AMOUNT
[_] ............................................................................................................. $[_] [_] ............................................................................................................. $[_]
Estimated. Acquisition Price will be determined based on Actual Cost as further described in this Acquisition Agreement.
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Exhibit B to the Acquisition Agreement
FORM OF SCIP REQUISITION
To: BLX Group LLC
SCIP Program Administrator
355 South Grand Avenue, Suite 2700
Los Angeles, California 90071
Attention: Vo Nguyen
Fax: 213-612-2499
Re: Statewide Community Infrastructure Program
The undersigned, a duly authorized officer of the CITY OF SACRAMENTO hereby requests a withdrawal from the [DEVELOPER] ACQUISITION ACCOUNT, as follows:
Request Date: [Insert Date of Request]
Name of Developer: [Developer]
Withdrawal Amount: [Insert Acquisition Price]
Acquisition Improvements: [Insert Description of Acquisition Improvement(s) from Ex. A]
Payment Instructions: [Insert Wire Instructions or Payment Address for Developer]
The undersigned hereby certifies as follows:
1. The Withdrawal is being made in accordance with a permitted use of such monies pursuant to the Acquisition Agreement, and th e Withdrawal is not being made for the purpose of reinvestment.
2. None of the items for which payment is requested have been reimbursed previously from other sources of funds.
3. If the Withdrawal Amount is greater than the funds held in the Acquisition A ccount, the SCIP Program Administrator is authorized to amend the amount requested to be equal to the amount of such funds.
CITY OF SACRAMENTO
By:
Title:
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Exhibit C to the Acquisition Agreement
GUIDELINES FOR SPECIAL DISTRICT ACQUISITION PROJECTS
CITY OF SACRAMENTO
DEPARTMENTS OF UTILITIES AND PUBLIC WORKS
1. Definitions
1.1 Advertisement. The solicitation that requests bids for the Acquisition Improvements in accordance with these guidelines and applicable law.
1.2 Acquisition Improvement. Each of the Acquisition Improvements that will be constructed by the Developer, as provided in Exhibit A of the Acquisition Agreement.
1.3 Bid Documents. Plans, Specifications, and proposal documents that are prepared by, or under the supervision of, the Design Engineer; conform with policies, rules, regulations, and laws applicable to the City; and are suitable for the solicitation and submittal of bids by contractors for construction of an Acquisition Improvement.
1.4 City Engineer . The Engineering Services Division Manager of the City ’s Department of Public Works or the Engineering Services Division Manager’s designee.
1.5 Construction Security . Performance bonds and labor -and-material payment bonds or other security, provided by the Contractor to the Developer in a form assignable to the City, which guarantee that the Contractor will meet all contractual obligations.
1.6 Contractor. A person or entity that is under contract to construct t he Acquisition Improvement and who possesses the appropriate California contractor’s license or licenses for the work.
1.7 Design Engineer. A California-licensed professional civil engineer the Developer has retained for the purpose of designing, stamping and signing the Plans, and supervising construction of the Acquisition Improvement.
1.8 Developer. The person or entity identified as the “Developer” in the Acquisition Agreement to which these guidelines are attached as an exhibit.
1.9 Engineer’s Estimate. A cost estimate for the Acquisition Improvement prepared by the Design Engineer and approved by the City Engineer.
1.10 Plans. Final construction drawings prepared, stamped, and signed by the Design Engineer and its consultants and approved by the City for con struction of the Acquisition Improvement. Approved City plans require signatures from various City engineers representing specific public facilities.
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1.11 Specifications. Documents prepared by the Design Engineer or its consultants that describe in detail for construction-contract purposes the material and workmanship required to complete an Acquisition Improvement.
2. Pre-Advertisement Procedures
2.1 The Developer shall submit its proposed project schedules to the City Engineer.
2.2 Prior to advertisement of the Bid Doc uments, the Design Engineer shall prepare and submit final Plans and Specifications to the City Engineer for review and approval . The Bid Documents cannot be advertised unless and until the City Engineer approves the Plans and Specifications in writing.
2.3 The Developer shall pay City plan -check fees and inspection fees (normal and specific) in accordance with normal City procedures.
2.4 The Design Engineer shall prepare the Bid Documents for the Acquisition Improvement and shall submit the documents to the City Engineer for review, and the City Engineer shall, in writing, either approve or disapprove the Bid Documents. The Bid Documents must be in conformance with all ordinances, laws, policies, rules, and regulations applicable to the City, including but not limited to the following:
(a) Compliance with all applicable City and State of California requirements for public -works contracts, including but not limited to Sacramento City Code sections 3.60.180 (concerning prevailing wages, hours of work, etc.) and 3.60.190 (concerning apprentices).
(b) Compliance with the City of Sacramento ’s “Standard Specifications for Public Construction.”
2.5 The City Engineer shall review the Bid Documents to determine whether they meet the following requirements:
(a) The Engineer’s Estimate is re asonable and has been approved by the City Engineer.
(b) The bidding procedures are consistent with the requirements of the guidelines in this Exhibit C, and the bid forms clearly describe each bid item. (c) The construction contract includes the following:
(1) Requires the Contractor and its subcontractors to comply with Sacramento City Code sections 3.60.180 (concerning prevailing wages, hours of work, etc.) and 3.60.190 (concerning apprentices).
(2) Requires the Contractor and its subcontractors to maintain insurance pursuant to the requirements of Section 3.02 of the Acquisition Agreement.
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(3) Requires the Contractor to provide Construction Security in the same manner as is provided for normal City public-works projects. (4) Requires that the Contractor submit to the City Engin eer, in a form acceptable to the City, a non-collusion affidavit signed by an officer or manager of the Contractor.
(5) A liquidated-damages clause that is consistent with City policy. (d) The number of allotted working days specified in the contract documents is reasonable for the proposed work.
(e) The Developer’s request for bids must inform bidders that all work must be performed in accordance with the approved Plans and Specifications and any City - approved changes thereto, and in strict conformity with the City’s “Standard Specifications for Public Constructio n,” unless exceptions are approved by the City Engineer. The Developer’s request for bids must further inform bidders that the construction contract will contain the requirements specified in Section 2.5(c) of these guidelines and will require compliance with all other applicable provisions of the Acquisition Agreement.
2.6 The Developer may be excused from complying with some or all of this section 2, other than sections 2.4(a) and 2.5(c)(1) regarding compliance with Sacramento City Code sections 3.60.180 and 3.60.190, if the City Engineer determines that excusing compliance is in the best interests of the City.
3. Advertisement and Bid-Opening Procedures
3.1 After the Plans and Specifications are approved in writing by the City Engineer, the Developer shall solicit and obtain sealed bids to perform the work shown on the approved Plans and Specifications from a minimum of three licensed contractors. The Developer is encouraged to advertise the project in a trade paper or newspaper of general circulation.
3.2 The Developer shall provide the City Engineer with a complete copy of all final Bid Documents, including any addenda, and may advertise the Project only after the City Engineer has approved the Plans and has approved the final Bid Documents in writing.
3.3 The bids must b e sealed, must be submitted on or before the specified date and time, and must be opened at the same time.
3.4 Bidders must be provided a minimum of ten (10) working days to prepare and submit bids, and the City Engineer must be informed (in advance) of the da te and time for each pre-bid meeting (if any) and the opening of the bids by the Developer.
3.5 The Developer may be excused from complying with Section 3, in whole or part, if the City Engineer determines that excusing compliance is in the best interests of the City.
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4. Construction Contract Award
4.1 The Developer shall provide the City Engineer with a copy and summary of all bids and a copy of the lowest bid proposal submitted, together with a written evaluation of the bids and a recommendation for award . The Developer shall provide a certification to the City Engineer with the evaluation and recommendation, stating the following:
(a) That there are no pending disputes over the bidding procedures. (b) That all bidders received the same set of Bid Documents and all of the addenda issued.
(c) That all applicable City approvals required for the work have been obtained. (d) That the bid proposal has not been conditioned in any way. (e) If the Developer is not recommending award to the low bidder, the basis and reasons for the Developer’s recommendation.
(f) The contract amount for the bidder proposed by the Developer.
4.2 Within five working days after receipt of the bid material specified in Section 4.1, the City Engineer shall review the bid summary and a copy of the lowest bid and shall determi ne whether: (a) to concur in the Developer’s recommendation or (b ) to notify the Developer that additional review time will be required, specifying the date by which review will be complete .
The City Engineer will then give the Developer written notification of his or her determination within the time frame specified for review.
4.3 If the lowest bidder is not recommended, if the City Engineer does not concur with the Developer’s recommendation, or if the City Engineer is aware of any irregularities or possible disputes over the bidding procedure, then the Developer or the City Engineer shall notify the Director of the City ’s Department of Public Works . This notice must be in writing and must be submitted within five working days after the City Engineer’s determination required by Section 4.2 has been made. Within ten days after receiving the notice, the Public Works Director shall review the Bid Documents and procedures and advise the Developer of the City’s decision regarding the award of the contract.
4.4 The Developer may reject all bids received and re-advertise for bids in accordance with the guidelines in this Exhibit C or, with the City Engineer’s concurrence, may dispense with further competitive bidding . T he Developer may not reject individual bids with out the City Engineer’s concurrence.
4.5 The Developer must obtain the City Engineer’s formal written concurrence before awarding the construction contract . The Developer may not award the contract unless and until the City Engineer has reviewed the bids, has concurred in the Developer’s recommendation for award, and has provided written approval of the amount of the construction contract to be awarded by the Developer.
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4.6 The Developer shall award the contract, with the City Engineer ’s concurrence, within 60 days after the bid opening and shall authorize the Contractor to complete the Acquisition Improvement.]
4.7 The Developer shall provide the following items to the City Engineer within 30 days after the Developer has authorized the Contractor to proceed:
(a) A copy of the signed contract with the Contractor, specifying the award date.
(b) A written statement : (1) that the contract award amount is within the Engineer’s Estimate; or (2 ) that the contract award amount exceeds the Engineer ’s Estimate and the Developer will pa y all amounts by which the contract exceeds the estimate.
4.8 The Developer may be excused from complying with this Section 4, in whole or part, if the City Engineer determines that excusing compliance is in the best interests of the City.
5. Prevailing Wages and Apprentices
5.1 The Contractor and all subcontractors shall comply with Sacramento City Code sections 3.60.180 (concerning prevailing wages, hours of work, etc.) and 3.60.190 (concerning apprentices) for all work performed on the Project . The Developer shall hire a labor-compliance consultant to certify to the City Engineer, in writing, that all requirements of Sacramento City Code sections 3.60.180 (concerning prevailing wages, hours of work, etc.) and 3.60.190 (concerning apprentices) have been satisfied. The consultant’s certification must be submitted to the City Engineer when the Developer submits a request for reimbursement in accordance with the Acquisition Agreement. Upon request, the Developer shall provide copies of certified payrolls to the City Engineer.
5.2 Consistent with California Labor Code section 1720, subdivision (c)(2), work performed on the Project will be eligible for reimbursement only if all public -improvement work has been performed in compliance with Sacramento City Code sections 3.60.180 and 3.60.19.
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Exhibit D to the Acquisition Agreement
INSURANCE REQUIREMENTS
[Provisions to be added prior to execution as determined by the Special Districts Manager]