FOR THE COUNCIL MEETING OF OCTOBER 4, 2022
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Director of Public Works/City Engineer
SUBJECT: AMENDMENT: SCHOOL MILL INVESTORS, LLC., REIMBURSEMENT
AGREEMENT
RECOMMENDATION:
That the City Council adopt a Resolution approving an amendment to the reimbursement agreement with School Mill Investors, LLC, for the construction upgrade of sanitary sewer segment D-13.
BACKGROUND:
On December 15, 2020, the City Council approved a reimbursement agreement between the City and School Mill Investors, LLC., to improve a sanitary sewer system identified in the Growth Mitigation Capital Improvement Program.
The applicant seeks the consideration of the City Council for the ability to process progress payments in lieu of one payment at the completion of the project.
DISCUSSION:
The sanitary sewer improvement project has begun construction and is approximately 65 percent complete. However, funding issues were encountered during construction and the project is presently on hold. The applicant desires to complete the project but seeks the consideration of the Council for an opportunity for progress payments. The applicant seeks a progress payment of half the total contract cost following City Council approval in a joint check payable to the applicant and its subcontractor. A field review of the construction estimates the project to be approximately 65 percent complete. Upon completion of the project, the applicant would receive payment of the remaining half. Following approval of the City Council for the agreement amendment, the developer proposes to complete the project within 150 days. Failure to complete the project will result in forfeiture of the remaining funds of the agreement.
Sufficient funds for this project have been budgeted from the Sewer Line West Mill Street and Chapel Street UCSD-13 accounts. Funding sources are from the Growth Mitigation and Wastewater Utilities Funds.
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Impact to the Community
The upgrade of the sanitary sewer line D-13 will increase the capacity of sanitary sewer flow for development in the Fesler Basin and enhance development opportunities for future growth.
Fiscal Considerations
The developer will construct sanitary sewer improvement segment D-13 with reimbursement from Growth Mitigation and Wastewater funds.
DAVID BEAS, P.E.
Principal Civil ineer
BR TT FULGONI
Interim Director of Public Works
Attachment A: Reimbursement Agreement Amendment
AMENDMENT TO REIMBURSEMENT AGREEMENT
(Construction of Master Planned Sanitary Sewer Facilities) This Amendment to Reimbursement Agreement (this "Amendment") is entered into this 4th day of October, 2022 ("Effective Date"), by and between the City of Santa • Maria, a California charter city and municipal corporation (the "City") and School Mill Investors, LLC, a Delaware LLC (the "Developer").
RECITALS
A. On October 6, 2020. the parties entered into a Reimbursement Agreement wherein Developer will construct certain Master Planned Sanitary Sewer Facilities (the "Sanitary Sewer Facilities") for the benefit of the City and other property owners and the City will reimburse Developer for such construction up to a maximum reimbursement amount of $442,000 upon completion of the Sanitary Sewer Facilities; and
B. Developer has completed more than half of the construction of the Sanitary Sewer Facilities and wishes to receive a partial reimbursement prior to the full completion of the Sanitary Sewer Facilities; and
C. The parties desire to amend the Agreement to allow Developer to seek a partial reimbursement prior to the full completion of the Sanitary Sewer Facilities.
NOW, THEREFORE, in consideration of the above recitals and other good and valuable consideration, the parties hereby agree as set forth below.
1. The above recitals are true and correct and incorporated herein.
2. Sections 4.1 and 4.2 of the Reimbursement Agreement are amended in their entirety to read as follows:
"4.1 Amount of Reimbursement. The Developer and City currently estimate the cost of constructing the Sanitary Sewer Facilities to be Four Hundred Forty - Two Thousand Dollars ($442,000). The maximum amount allowed for reimbursement under this Agreement is Four Hundred Forty -Two Thousand Dollars ($442,000). Upon completion of the first half of the construction of the Sanitary Sewer Facilities as determined by the City, Developer shall submit to the City a written request for reimbursement of an amount not to exceed Two Hundred Twenty -One Thousand Dollars ($221,000). Payment shall be issued as a joint check to the Developer and the Subcontractor Mainline Engineering Construction, Inc. Upon full completion of the construction of the Sanitary Sewer Facilities as defined and in accordance with Section 4.2 below, Developer shall submit to the City a written request for reimbursement in an amount not to exceed the remainder of the maximum reimbursement amount. Both requests for 1 reimbursement shall be accompanied by an itemized list of costs for which the Developer seeks reimbursement. The written requests for reimbursement submitted by the Developer pursuant to this Section shall be accompanied by supporting documentary evidence (which may include, but is not necessarily limited to, receipts, invoices and/or other similar documents). The City shall review the written requests for reimbursement submitted by the Developer. If the Developer has provided sufficient detail and the work is approved by the City, the City will provide reimbursement, up to and not exceeding the maximum reimbursement amount. Payment shall be issued as a joint check to the Developer and the Subcontractor Mainline Engineering Construction, Inc. The City reserves the right to seek additional information as necessary to approve the work.
4.2 Forfeiture of Reimbursement. Developer shall complete the construction of the Sanitary Sewer Facilities and receive confirmation from the Citythat the construction has been deemed complete and constructed to City standards ("Full Completion") within one hundred and fifty (150) days of the Effective Date ("Completion Deadline") of this Amendment. Should Developer fail to achieve Full Completionof the Sanitary Sewer Facilities by the Completion Deadline, Developer shall forfeit the second reimbursement installment in the sum of Two Hundred Twenty -One Thousand Dollars ($221,000) and the City shall have no obligation to pay Developer the remainder of the reimbursement amount.
3. All other terms and conditions of the Agreement remain in full force and effect.
IN WITNESS WHEREON, the undersigned execute this Amendment on behalf of the parties,
City of Santa Maria School Mill Investors, LLC
By: By:
Alice M. Patino Robert Stem
Mayor Manager
ATTEST:
City Clerk
Rhonda M. White, CMC
2 APPROVED AS JO -F9 M:
Cit
omaslT. Watson
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA
MARIA, CALIFORNIA, APPROVING AN AMENDMENT TO A
REIMBURSEMENT AGREEMENT WITH SCHOOL MILL INVESTORS,
LLC., FOR THE CONSTRUCTION UPGRADE OF SANITARY SEWER
SEGMENT D-13
WHEREAS, the 2012 Utilities Capacity Study identifies segments of City's sanitary sewer system that will require upgrades; and
WHEREAS, the sanitary sewer segment between West Mill Street and West Chapel Street, identified as D-13, is proposed to be upgraded; and WHEREAS, the Growth Mitigation Capital Improvement Program Wastewater Section identifies D-13 as a required future upgrade; and WHEREAS, it is in the best interest of the City of Santa Maria to amend reimbursement agreements if deemed appropriate with developers for the construction of City infrastructure; and
WHEREAS, Section 8-15.08 of the City of Santa Maria Municipal Code provides guidance for establishing reimbursement agreements.
NOW, THEREFORE, IT IS HEREBY RESOLVED that pursuant to Section 8-15.08 of the Santa Maria Municipal Code, a reimbursement agreement established with School Mill Investors, LLC., and the City of Santa Maria and approved by the City Council of the City of Santa Maria, California, shall be amended as follows:
1. The Mayor, or designee, is hereby authorized and directed to execute for and on behalf of the City of Santa Maria, an amendment to the reimbursement agreement with School Mill Investors, LLC; and
2. The Chief Deputy City Clerk is hereby authorized to make minor changes herein to address clerical errors, so long as substantial conformance of the intent of this document is maintained. In doing so, the Chief Deputy City Clerk shall consult with the City Manager and City Attorney concerning any changes deemed necessary.
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PASSED AND ADOPTED at a regular meeting of the City Council of the City of Santa Maria held this 4th day of October 2022.
Mayor
ATTEST:
Chief Deputy City Clerk
APPR
City Attorney
APPROVED AS TO CONTENT:
Department Director
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