Draft Participation Agreement for Regional Animal Services — Mayor and City Council, December 6, 2023

ANIMAL CARE SERVICES PARTICIPATION AGREEMENT
This Participation Agreement (the "Agreement"), dated for reference as of [DATE], is by and among the City of San Bernardino (the “City”) and the cities of [Insert Name of Cities] (each, a "Participant," and collectively, the "Participants" and, together with the City, the "Parties").

RECITALS
A. WHEREAS, the City of San Bernardino and each Participant are, or concurrent with the execution of this Agreement, will become, parties to an agreement for animal care services (the "Services Agreements"), pursuant to which the City will provide animal care services ("Services") to the signatory cities; B. WHEREAS, City desires to provide the Services to the Participants through the City’s Animal Services Department (the “Animal Services Department”); C. WHEREAS, City owns, and through the Animal Services Department, operates, an animal care shelter facility located at 333 Chandler Place, San Bernardino, California (the "Existing Shelter");
D. WHEREAS, the Parties agree that, owing to the age and condition of the Existing Shelter, it is now desirable to construct a new facility (the "New Shelter") to provide enhanced shelter and care services which will benefit the citizens of each of the Parties;
E. WHEREAS, the Parties acknowledge that the construction of the New Shelter will impact the operational costs of providing Services pursuant to the Services Agreements, which costs shall be shared among the parties in proportion to their usage of the Services; and
F. WHEREAS, each Participant agrees that the construction of the New Shelter is a benefit and necessary to meet the social needs of each Parties’ respective citizens, and, therefore, the Parties desire to enter into this Agreement to set forth terms governing the construction of the New Shelter and the allocation among the Parties and the method of payment of the costs of Services resulting from the construction of the New Shelter.

NOW, THEREFORE, in consideration of the foregoing recitals of fact, mutual covenants and conditions contained herein, and other consideration, the value and adequacy of which are hereby acknowledged, the Parties agree as follows:

1. Design and Construct.

1.1.City Responsibilities. City shall be responsible for the design, preparation of all studies, analyses, and documents necessary to deliver the New Shelter, including any CEQA environmental documentation, obtaining all permits, administration, and construction of the New Shelter.

1.2.Site. Construction of the New Shelter is sited for [Describe Proposed Location of New Shelter] in San Bernardino, California, as identified in Exhibit A, attached hereto and incorporated herein by reference (the "Site").

1.3.Design Concept. The City has developed the initial design concept of the New Shelter, attached hereto as Exhibit B and incorporated herein by reference. The City shall use best efforts to scale the final design of the New Shelter to a size reasonably appropriate for the total requirements of those Participants that elect to be parties to this Agreement.

1.4.Project Development. The City has or shall retain the services of a licensed design-bid-build contractor ("Contractor") to perform further design and all engineering, planning, preparation of plans and specifications, and complete construction of the New Shelter, including construction management and post- construction activities, pursuant to a written agreement between the City and Contractor, as the same may be amended from time to time (the "Construction Contract").

1.5.Design Advisory Board. The City shall establish a Design Advisory Board (the "Design Advisory Board") to provide input to the City regarding the design of the New Shelter. The City shall, in good faith, reasonably consider the input of the Design Advisory Board in making the City’s determinations regarding the design of the New Shelter. Nevertheless, the City is not bound to follow the recommendations of the Design Advisory Board and the ultimate determination as to the design of the New Shelter rests entirely with the City. The Design Advisory Board shall consist of at least one staff member from each Participant.

The City may select up to two of its own staff members to serve on the Design Advisory Board.

1.6.Use of New Shelter. The completed New Shelter shall be owned by the City and shall be used by the City for the provision of Services for contracting cities and the City, as needed, pursuant to the terms of current and future Services Agreements.

1.7.Use of Existing Shelter. In the interim period preceding the commencement of construction for the New Shelter, Participants shall have the option to engage the City for Services through the Existing Shelter beginning July 1, 2024 upon terms to be mutually agreed upon by each Participant. Participants opting for these Services shall be required to enter into a separate Services Agreement with the City, which shall specify the terms and conditions for such Services and necessary site improvements to the Existing Shelter to address the usage needs of the involved Participants. The allocation of costs for these Services and improvements will be based on the extent of each involved Participant’s usage in a manner comparable to the framework of this Agreement with modifications as appropriate. This arrangement shall remain effective until the New Shelter becomes operational, at which point the terms for transition or discontinuation shall be governed as per the separate Services Agreement and this Agreement, as applicable.

1.8.Contingency. All obligations created by this Agreement are contingent upon receipt of possession of the Site by the City.

2. Construction Costs Allocation.

2.1.Total Costs. Total cost of New Shelter construction shall include: a) all design development costs; b) all costs incurred by the City pursuant to the Construction Contract; c) all site preparation costs; d) all costs of fixtures; and e) any and all other costs incurred by the City for any construction or construction related activity on the Site incurred in connection with the New Shelter (the "Actual Construction Costs"). The maximum amount to be paid hereunder as Actual Construction Costs is set forth on Exhibit C, attached hereto and incorporated herein by reference (the "Maximum Construction Costs"). Upon completion of the New Shelter, the City shall provide Participants with a full accounting of the application of all funds spent on Actual Construction Costs.

2.2.City’s Contribution. The City shall contribute toward the construction of the New Shelter the land upon which the New Shelter shall be constructed and [Cost] dollars ($X,XXX,XXX.XX) to be applied toward Maximum Construction Costs. Any City funds paid by the City toward Actual Construction Costs on or after the execution of this Agreement shall count toward the $X,XXX,XXX.XX to be contributed by the City and will be applied toward costs of construction as necessary to cover any discrepancy between available Participant payment funds and Actual Construction Costs as they become due and payable.

2.3.Participants' Contribution. The remainder of Maximum Construction Costs beyond the [Cost] dollars ($X,XXX,XXX.XX) paid by the City ("Participants’ Share of Maximum Construction Costs") will be divided among the Participants based on the formula set forth in Exhibit C, attached hereto. Each Participant's respective percentage share of Participants’ Share of Maximum Construction Costs, as determined by said formula, is also set forth on Exhibit C. Five (5) years after the full execution of this Agreement, each Participant's respective percentage share of Participants’ Share of Maximum Construction Costs shall be recalculated based on the same formula as set forth in Exhibit C but using then current statistical data.

If any Participant's respective percentage share of Participants’ Share of Maximum Construction Costs is altered by the recalculation by more than five percentage points, then each Participant's total share of Participants’ Share of Maximum Construction Costs shall be recalculated so that the originally calculated percentage shall be applied to one half of Participants’ Share of Maximum Construction Costs and the recalculated percentage shall be applied to the second half of Participants’ Share of Maximum Construction Costs. All future payments owed by each Participant shall be adjusted based on the results of the recalculation of each such Participant's total share of Participants’ Share of Maximum Construction Costs. If said adjustment results in a reduction in the amount owning by any Participant that, as of that time, has already fully paid its share of the Maximum Construction Costs, such reduction shall be credited as an offset against future charges, if any, under such Participant’s Services Agreement.

If said adjustment results in an increase in the amount owning by any Participant that, as of that time, has already fully paid its previously calculated share of the Maximum Construction Costs, the amount of such increase shall be due and payable pursuant to the same payment schedule as those Participants that have not elected to prepay their share of Maximum Construction Costs, subject to the same prepayment option. The City shall, upon request of a Participant, provide the requesting Participant with copies of the data and documents used to calculate each Participant's percentage share of Participants’ Share of Maximum Construction Costs.

2.4.Payment Schedule. Each Participant shall pay its full share of Participants’ Share of Maximum Construction Costs, in addition to costs to be paid in accordance with such Participant’s Services Agreement, in consideration of each such Participant's continuing right to use the New Shelter or the Existing Shelter or any replacement of the New Shelter or the Existing Shelter (together, "Shelters") pursuant to the terms of its Services Agreement. Each Participant's annual obligation to make the payments required hereunder is contingent on the City making available to such Participant, for the respective year, the use of Shelters pursuant to the terms of such Participant’s Services Agreement. At the election of each individual Participant, payment of the amounts owing hereunder may be made in advance of use or may be made over the ten (10) year term of the Services Agreements in accordance with the Payment Schedule, attached hereto as Exhibit D and incorporated herein by reference (the "Payment Schedule"). For Participants electing not to pay in advance of the scheduled payment, the annual amount each such Participant shall owe hereunder shall be increased by the formula shown on the Payment Schedule as the "Additional Funding Cost." The higher payment amount to be paid by Participants not electing to pay in advance represents the cost to the City of the lost value overtime of the money paid by the City toward Actual Construction Costs beyond the $X,XXX,XXX provided for above. The amounts indicated on the Payment Schedule further include costs to be incurred by the relevant Participant for each thirty (30) day period that any payment is overdue. Each Participant acknowledges that the construction and availability of Shelters for use by each Participant over the term of such Participant's Services Agreement is a substantial benefit to such Participant. In the event any Participant refuses to receive Services from the City in violation of the terms of such Participant’s Services Agreement despite being offered such Services by The City, or in the case of a default or failure to pay its cost share in accordance with this Agreement, each Participant remains obligated to pay to the City its outstanding payments hereunder as they become due and payable and the City may take any legal action as appropriate to obtain such payment. Further, the Parties acknowledge that the payments owing hereunder do not reduce or offset amounts owing pursuant to the Services Agreements.

3. Participation of New Cities After Commencement of Construction. After full execution of this Agreement, no city will be added to the City’s Services program for a period of three (3) years from the date first set forth above, to allow for appropriate sizing and establishment of operational protocols for the New Shelter. If a new city elects to participate in the City’s Services program after the three (3) year period indicated above, and City elects to provide Services to such city, such city will be required to pay a pro rata portion of the Maximum Construction Costs based on the formula set forth in Exhibit C. Any new participating cities' contributions pursuant to this section will be applied first toward any necessary expansion of the New Shelter and the remainder will be deposited into a shelter maintenance and repair fund (the "Shelter Maintenance Fund"). City shall establish a separate project fund account for all funds allocable to the Shelter Maintenance Fund and shall not commingle any other funds in said account. It is the intention of the Parties that any funds contained in the Shelter Maintenance Fund be exhausted prior to any additional contributions by the Parties toward post-construction shelter upgrades or capital improvements. Prior to contracting to provide Services to a new city, City shall consult with those Participants then currently contracting with City to receive Services pursuant to a Services Agreement. City shall in good faith consider the input of those cities in making City's determination as to whether to provide Services to the proposed new city.

Nevertheless, City is not bound to follow the recommendations of those cities and the ultimate determination as to whether to provide Services to the proposed city rests entirely with City.

4. New Shelter Account; Deposit of Funds. Upon the execution of this Agreement, the City shall establish a separate capital project fund account for all funds of the Parties which are to be applied toward Actual Construction Costs for the New Shelter (the "New Shelter Account") and shall not commingle any other funds in said account.

Funds payable by any Participant as an additional cost imposed due to late payment, or that are allocable to City to reimburse City for any City funds spent on Actual Construction Costs beyond the $X,XXX,XXX provided for above, or that are to reimburse City for the lost value over time of the money paid by City toward Actual Construction Costs beyond the $X,XXX,XXX provided for above, shall not be paid into the New Shelter Account but shall be paid directly to City for City's sole use.

5. Allocation of Excess Funds. Upon final completion of the New Shelter, issuance of a certificate of occupancy, payment of all Actual Construction Costs, and payment of all amounts due pursuant to this Agreement, any unused funds remaining in the New Shelter Account, but not exceeding an amount equal to the difference between total Actual Construction Costs incurred and Maximum Construction Costs, shall be credited to those Participants then obtaining Services from the City against future charges under each such Participant's Services Agreement based on the same percentages that each such Participant paid of the Participants’ Share of Maximum Construction Costs. Any funds not distributed in accordance with the previous sentence shall be deposited into the Shelter Maintenance Fund.

6. Operational Commitment. Concurrent with the execution of this Agreement, each Participant shall enter into a new, amended Services Agreement with the City in the form attached hereto as Exhibit E and incorporated herein by reference (the "Amended Services Agreement"). The operational cost for Services owing pursuant to the Amended Services Agreements, calculated with respect to each Participant and the City, shall include all annual costs of operation of the Shelters, including salaries and benefits for staff that are expected to be necessary to operate the Shelters. An estimated amount for staff salaries and benefits are depicted in Exhibit F attached hereto and incorporated herein by reference. This estimate is subject to reasonable modification to reflect factors including, but not limited to, the number of cities that elect to procure Services from the City and such cities’ usage needs. All Parties acknowledge that the division of all operational costs among the Parties allows for costs efficiencies and operational savings to each Party and that each Party has entered into this Agreement and its Amended Services Agreement in reliance on such shared costs and resulting savings. Each Participant, to provide assurance of such continued cost efficiencies to each remaining Party, hereby expresses its commitment to procure Services from the City for a period of ten (10) years and acknowledges the financial burden that any breach of this commitment would have on all other Parties.

To that end the Amended Services Agreements shall each provide for a ten (10) year term of service.

6.1.The Parties acknowledge that it would be impractical or extremely difficult to fix the actual damages to the City in the event of a Participant’s breach of this ten year commitment. The Parties agree that a reasonable estimate of such damages is an amount equal to $XX,XXX and in the event of such breach, such amount will be deemed fully agreed liquidated damages. The Parties further acknowledge that nothing herein shall be construed as the City's exclusive remedy for the remediation of breach by a Participant or Participants, and the City reserves the right to pursue any and all available rights and remedies at law or in equity.

7. Defaults and Remedies.

7.1.Defaults. The failure by any Party to perform any of its obligations set forth in this Agreement shall constitute a default of this Agreement. Except as required to protect against further damages, the nondefaulting Party may not institute legal proceedings against the Party in default until the nondefaulting Party has provided the defaulting Party notice of the default and the following applicable cure period has expired: (i) the cure period for any monetary default shall be fifteen (15) calendar days after the defaulting Party's receipt of written notice from the nondefaulting Party that such obligation was not performed; and (ii) the cure period for any other default shall be thirty (30) days after the defaulting Party's receipt of written notice from the nondefaulting Party that such obligation was not performed.

7.2.Remedies Upon Default. Upon the occurrence of any default and after the defaulting Party has received written notice of default and the time period to cure the default has expired, the nondefaulting Party may at its option pursue damages or specific performance or other legal and equitable remedies the injured Party may have against the defaulting Party in accordance with applicable law. Should any Participant fail to pay any payment due by that Participant hereunder, the City may take any action as is appropriate to obtain such payment. Nothing herein shall be construed as the City's exclusive remedy for the remediation of default by a Participant or Participants, and the City reserves the right to pursue any and all available rights and remedies at law or in equity.

7.3.Non-refund of Contributions. The payments made by all Parties pursuant to this Agreement shall be used for completion and maintenance of the New Shelter in the manner described herein and all Parties acknowledge and agree that the completion and maintenance of the New Shelter, as well as the completion of each phase of construction activity and each construction milestone under the Construction Contract, provides an immediate benefit to each Party and that no payments made pursuant to this Agreement shall be refunded for any reason other than pursuant to the last sentence of Section 8.1.1.

8. Results of Nonpayment by Any Participant.

8.1.Adjustment of Payments Upon Nonpayment.

8.1.1. All Parties acknowledge that the failure of any Participant to pay any amount hereunder will result in an increase in the operational costs of sheltering Services to be divided among all other Participants. To that end, in the event any Participant fails to pay, for any other reason, any amount to be paid by that Participant under this Agreement, within fifteen (15) days of when such payment is due, the amount of such nonpayment will be apportioned among the remaining Participants such that the remaining Participants' will be responsible to pay such unpaid amount. The amounts paid by the remaining Participants pursuant to this section will be applied in the following order: first to replenish any the City funds spent on Actual Construction Costs that would have been paid by funds owed by the nonpaying Participant, second to pay any other amounts due to the City by the nonpaying Participant pursuant to this Agreement, and the remainder to pay Actual Construction Costs as they come due. Should the non-paying Participant pay any portion of the amount owing, the increased cost paid pursuant to this subsection by the remaining Participants will be reimbursed to the extent of the amount of such repayment.

This section shall apply to each payment obligation owed and not paid by any Participant as it becomes due and payable and shall not result in any acceleration of the full amount payable by the nonpaying Participant over the term of this Agreement. In the event any Participant should default in its obligations under this Agreement and no longer obtain sheltering Services from the City, City shall consult with all Participants then obtaining Services from the City to discuss methods of cost reduction that may be made available as a result of such reduction in sheltering Services usage.

8.1.2. It is the intention of all Parties that no funds provided by any Party under this Agreement shall be reimbursed for any other reason than that set forth in the last sentence of Section 8.1.1. If, pursuant to judicial action or threat thereof, any funds are reimbursed under this Agreement to any Participant, other than pursuant to the last sentence of the foregoing Section 8.1.1, the remaining Participants' will be responsible to pay to the City the reimbursed amount.

8.1.3. Each Participant's proportional share of any amounts required to be paid by Participants pursuant to this section shall be determined based on the formula set forth on Exhibit C. Each Participant's resulting incremental increase in contribution will be due within thirty (30) days of notification by the City to the participating Participants of the increased amount owing. The obligation of Participants to pay increased amounts under this Section 8 is not intended to be an exclusive remedy. The City reserves the right to take any action as is appropriate to obtain payment from any non-paying Participant. Additionally, each Participant paying increased costs pursuant to this Section 8, shall have and retain the right to take any action at law or equity as is appropriate to obtain reimbursement of such increased payment amounts from the non- paying Participant.

8.2.Impact of Nonpayment upon Services Agreement. In the event any Participant fails to pay, for any reason, any amount to be paid by that Participant under this Agreement, such failure shall constitute a default under the nonpaying Participant's Services Agreement and the City shall have the right to immediately terminate such Services Agreement, at its discretion.

9. Status of City as Independent Contractor. City is, and shall at all times be deemed to be, an independent contractor. Nothing herein contained shall be construed as creating the relationship of employer and employee, or principal and agent, between any Participant and City or any of City's agents or employees. City shall retain all authority for rendition of services, standards of performance, control of personnel, and other matters incident to the performance of services by City pursuant to this Agreement. City, its agents and employees shall not be considered to be Participant employees.

10.Governing Law and Venue. This Agreement has been negotiated and executed in the State of California and shall be governed by and construed under the laws of the State of California. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be a court of competent jurisdiction, located in San Bernardino County, California, and the Parties hereto agree to and hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. Furthermore, the Parties specifically agree to waive any and all rights to request that an action be transferred for trial to another county.

11.Term and Termination. This Agreement shall be effective from the date first set forth above until each Party has made the last payment required under this Agreement.

12.Amendments/Entire Agreement. Amendments to this Agreement must be in writing and approved by the governing body of each Party. This Agreement is the entire agreement among the Parties with respect to the construction of the New Shelter and it supersedes any prior written or oral agreements with respect to the subject. Any and all exhibits that may be referred to in this Agreement are by such references incorporated in this Agreement and made a part hereof.

13.Severability. If any provision of this Agreement, or the application thereof, to any extent, is held by a court of competent jurisdiction to be invalid, void or unenforceable, such provision, to the extent it is valid and enforceable, and all other remaining provisions hereof shall remain in full force and effect, to the fullest extent possible, and shall in no way be affected, impaired or invalidated thereby to the extent such provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement.

14.Attorney's Fees. In any action or proceeding to enforce or interpret any provision of this Agreement, or where any provision hereof is validly asserted as a defense, each Party shall bear its own attorney's fees, costs and expenses.

15.Interpretation. This Agreement has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters dealt with in this Agreement.

In addition, each Party has been represented by experienced and knowledgeable independent legal counsel of its own choosing or has knowingly declined to seek such counsel despite being encouraged and given the opportunity to do so. Each Party further acknowledges that it has not been influenced to any extent whatsoever in executing this Agreement by the other Parties hereto or by any person representing the other Parties, or both. Accordingly, any rule or law (including California Civil Code Section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the Party that has drafted it is not applicable and is waived.

The provisions of this Agreement shall be interpreted in a reasonable manner to affect the purpose of the Parties and this Agreement.

16.Consent to Breach Not Waiver. No term or provision of this Agreement shall be deemed waived and no breach excused, unless such waiver or consent shall be in writing and signed by the Party claimed to have waived or consented. Any consent by any Party to, or waiver of, a breach by the other, whether express or implied, shall not constitute consent to, waiver of, or excuse for any other different or subsequent breach.

17.Authority. The Parties to this Agreement represent and warrant that this Agreement has been duly authorized and executed and constitutes the legally binding obligation of their respective organization or entity, enforceable in accordance with its terms.

18.Hold Harmless. Each Participant shall hold harmless, indemnify, and defend City, its officers, employees, and agents from and against any and all claims, suits, or actions of every kind brought for or on account of injuries to or death of any person or damage to any property of any kind whatsoever and to whomsoever belonging which arise out of such Participant's failure to fulfill any payment obligations of such Participant arising pursuant to this Agreement. City shall hold harmless, indemnify, and defend each Participant, its officers, employees, and agents from and against any and all claims, suits, or actions of every kind brought for or on account of injuries to or death of any person or damage to any property of any kind whatsoever and to whomsoever belonging which arise out of the performance or nonperformance of City's covenants and obligations under this Agreement and which result from the actively negligent or wrongful acts of City or its officers, employees, or agents. This provision requiring City to hold harmless, indemnify, and defend each Participant shall expressly not apply to claims, losses, liabilities, or damages arising from actions or omissions, negligent or otherwise, of any independent contractor providing services pursuant to a contract with the City. In the event of concurrent negligence of the City, its officers, or employees, and any Participant, its officers or employees, then the liability for any and all claims for injuries or damages to persons and/or property or any other loss or cost which arises out of the terms, conditions, covenants or responsibilities of this Agreement shall be apportioned in any dispute or litigation according to the California theory of comparative negligence.

19.Appropriations. During the term of this Agreement, for each fiscal year, each Participant shall make every effort to adopt all necessary budgets and make all necessary appropriations for all payments due hereunder. The covenant contained in this Section 19 shall be deemed to be, and shall be construed to be, contingent upon the continuing offer by City to provide Services and use of Shelters to each individual Participant. To the extent City offers the provision of Services and use of any Shelters to any Participant, the continued responsibility of such Participant to make all payments required hereunder shall be a duty imposed by law and it shall be the duty of each and every public official of each Participant to take such actions and do such things as are required by law in performance of the official duty of such officials to enable the Participant to carry out and perform the covenants contained in this Section

19. All Parties acknowledge that the construction, maintenance and availability of Shelters for the provision of services to all Parties and the division of the costs of constructing and maintaining such Shelters among the Parties allows for costs efficiencies and significant savings to each Party and that each Party has entered into this Agreement and its Services Agreement in reliance on such shared costs and resulting savings. Each Party, to provide assurance of such cost efficiencies to each remaining Party, hereby expresses its commitment to fulfill its stated obligations under this Agreement regardless of the term of the Agreement overlapping more than one fiscal year and acknowledges the financial burden that any breach of the terms of this Agreement will have on all other Parties.

20.Assignability. Except as otherwise expressly provided for herein, no Party shall assign any of its obligations or rights hereunder without the consent of all other Parties.

21.Execution in Counterpart. This Agreement may be executed in counterparts, each of which, when the Parties hereto have signed this Agreement, shall be deemed to be an original, and such counterparts shall constitute one and the same instrument.

22.Notices. Any notices required to be given pursuant to this Agreement shall be given in writing and shall be mailed to all Parties to the Agreement, as follows To Participants: With respect to each Participant, notification shall be provided at the address indicated under each Participant’s signatory block.

To City:

City of San Bernardino
[Applicable Department/Office]
Attn: [City Designee]
[Address]

IN WITNESS WHEREOF, the City Council of the City of San Bernardino has authorized and directed the City Manager to execute this Agreement for and on behalf of the City, and the Participants from the cities of, [Insert Names of Participating Cities] have caused this Agreement to be subscribed by each of their duly authorized officers and attested by their Clerks.

CITY OF SAN BERNARDINO APPROVED AS TO FORM:

By: ___________________________ By: ___________________________ Charles Montoya Sonia R. Carvalho
City Manager City Attorney
Date: ________________________ Date: ________________________ ATTEST:

By: ___________________________
Genoveva Rocha
City Clerk
Date: ________________________
CITY OF [NAME] APPROVED AS TO FORM: