FOR THE COUNCIL MEETING OF APRIL 4, 2023
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Director of Public Works
SUBJECT: PACIFIC WEST COMMUNITIES, INC., REIMBURSEMENT AGREEMENT RECOMMENDATION:
That the City Council adopt a Resolution approving a reimbursement agreement with Pacific West Communities, Inc. for the construction upgrade of sanitary sewer Segment D-9.
BACKGROUND:
On February 24, 2021, the Santa Maria Studios project, SP21-0003, received ministerial approval for Pacific West Communities, Inc., to construct 378 senior housing efficiency units at 2712 Santa Maria Way. As a condition of approval, the developer was required to improve the sanitary sewer system immediately adjacent to the development.
Additionally, the developer proposed to construct downstream improvements identified in the Growth Mitigation Capital Improvement Program. The downstream improvements proposed by the developer, identified as Segment D-9 per the 2012 Utilities Capacity Study, is reimbursable per the Growth Mitigation Fee Program Reimbursement Agreements of the City of Santa Maria Municipal Code (CSMMC).
DISCUSSION:
Section 8-15.08 of the CSMMC states the following, in order to qualify for any reimbursement, an applicant must construct infrastructure improvements that meet two criteria: 1) the improvements must be on the Adopted Growth Mitigation Capital Improvement List; and 2) the improvements must be of a size greater than that required to mitigate the impact of the development. The proposed upgrade of Segment D-9 was a condition of approval for SP2021-0003 and therefore meets both requirements for eligibility.
Per the 2017 Growth Mitigation Capital Improvement Program, the project cost identified for sanitary sewer segment D-9 is $909,000. The project is eligible for a 50% reimbursement totaling $454,500. The funding source is the Growth Mitigation Program.
Environmental Determination
The City of Santa Maria determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CCR, Title 14, Chapter 3 (CEQA Guidelines), Article 20, Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the
environment. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.
Impact to the Community
The upgrade of the sanitary sewer Segment D-9 will increase the capacity of sanitary sewer flow for orderly development and enhance development opportunities for future growth.
Fiscal Considerations
The developer will construct the sanitary sewer improvement segment D-9 with the reimbursement received from the Growth Mitigation Program. aC u Gg GL. P p,ela'
LUIS A MAGALLcN, P.E.
Civil Engineer III
BRETT FULGONI
Director of Public Works
Attachment A: Reimbursement Agreement
REIMBURSEMENT AGREEMENT
(Construction of Master Planned Sanitary Sewer Facilities) This Reimbursement Agreement (this "Amendment") is entered into this 4t" day of April, 2023 ("Effective Date"), by and between the City of Santa Maria, a Califomia charter city and municipal corporation (the "City") and Pacific West Communities, Inc., (the "Developer").
RECITALS
A. The purpose of this Agreement is to set forth the terms and conditions upon which the 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 terms and conditions upon which the City will reimburse the Developer for such construction; and
B. City has adopted a policy (the "Reimbursement Policy") that governs reimbursement to developers for the construction of Sanitary Sewer Facilities; and C. Developer's project, SP2021-0003, has been conditioned by the City to construct 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. Incorporation of Recitals and Reimbursement Policy. The foregoing Recitals are hereby incorporated into and are a fully operative and effective part of this Agreement. The Reimbursement Policy, (Reimbursement Agreements, Section 8-
15.08 of the Santa Maria Municipal Code) as may be amended from time to time, is hereby incorporated into and is a fully operative and effective part of this Agreement. In the event of a conflict between the terms and conditions of the Reimbursement Policy and this Agreement, the terms and conditions of the Reimbursement Policy shall control.
2. Developer's Obligation to Construct the Sanitary Sewer Facilities. Developer shall construct all segments and portions of Segment D-9 of the Sanitary Sewer Facilities located within the Master Sanitary Sewer Benefit Area ("Area"), which Area is the Sanitary Sewer drainage shed defined as follows: Santa Maria Trunk, D-9.
3. Issuance of Sanitary Sewer Contract. Developer, at its discretion, shall select all companies necessary to perform direct and indirect construction services and determine the amounts payable for these services. Developer shall present the contract it has selected to the City for review and approval. The scope of work to 1 be constructed and bid on shall be the work shown on the Public Improvement Plans (the "Plan") prepared by Praxis Engineering, dated 3/24/22, which has been approved by the City and is attached hereto as Exhibit "A" and incorporated herein by reference.
4. City's Reimbursement Obligation. The City shall reimburse the Developer the actual direct costs of constructing the Sanitary Sewer Facilities (which shall include, but shall not necessarily be limited to, design engineering, utility relocation, surveying, and geotechnical services), subject to the terms and conditions set forth in this Agreement and the maximum reimbursement allowable as set forth below.
4.1. Amount of Reimbursement. The Developer and City currently estimate the cost of constructing the Sanitary Sewer Facilities to be Nine -Hundred Nine Thousand Dollars ($909,000). The maximum amount allowed for reimbursement under this Agreement is Four -Hundred and Fifty -Four Thousand, Five -Hundred Dollars ($454,500). Upon completing construction of the Sanitary Sewer Facilities, the Developer shall submit to the City a written request for reimbursement, which request shall be accompanied by an itemized list of costs for which the Developer seeks reimbursement. The written request 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 request 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. The City reserves the right to seek additional information as necessary to approve the work.
4.2. Reimbursement Payments. The City shall make reimbursement payments to the Developer as provided in this Section; provided, however, that the City shall have no obligation to make any reimbursement payment until and unless the Developer submits to the City a written request for reimbursement and the City has approved such written request and has determined the actual amount of reimbursement.
4.2.1. Initial Reimbursement Payments - Refund of Developer's Sanitary Sewer Impact Fees. The initial source of payment by the City to the Developer shall be a refund of the actual Sanitary Sewer Impact Fee paid by the Developer and collected by the City for any lot located within Permit SP2021-0003.
5. Assignment by Developer. Except as provided below, the Developer shall be entitled to assign its rights under this Agreement with the City's written consent, which consent shall not be unreasonably withheld. City hereby consents to the 2 assignment of Developer's rights hereunder (a) to a general or limited partnership to be formed, or a limited liability corporation, that is created to handle this construction project, or (b) to an entity that has purchased Developer's entitlements under Permit SP2021-0003.
6. Conformity with State Labor and Work Safety Laws. The Developer shall carry on the design and construction of the improvements in a timely manner and in conformity with all applicable laws, including but not limited to all applicable state labor and work safety laws and regulations, including the provisions of Labor Code Sections 1770, et seq. relating to prevailing wages, to the extent applicable to the improvements, as to which the City makes no representations. The Developer agrees to hold the City harmless and to indemnify and defend the City from all claims arising under the provisions of Labor Code §§ 1720, et. seq., including, but not limited to the provisions of Labor Code Section 1726 and 1781.
7. Entire Agreement. This Agreement contains the entire agreement and understanding concerning reimbursement for the Developer's construction of the Sanitary Sewer Facilities, and this Agreement supersedes and replaces all prior negotiations and proposed agreements, written or oral, except as they are included in this Agreement. The Developer and City acknowledge that neither the other party not its agents nor attorneys have made any promise, representation, or warranty whatsoever, express or implied, not contained herein to induce the execution of this Agreement and acknowledge that this Agreement has not been executed in reliance upon any promise, representation, or warranty not contained herein.
8. Amendment must be in Writing. This Agreement may not be modified except by a writing signed by the Developer and City.
9. Venue for Resolving Disputes. Any arbitration or litigation arising out of this Agreement shall be conducted only in the County of Santa Barbara, State of California
10.Interpretation Guides. In interpreting this Agreement, it shall be deemed to have been prepared by the Parties jointly and no ambiguity shall be resolved against either Party on the premise that it or its attorneys was responsible for drafting this Agreement or any provision hereof. The captions or headings set forth in this Agreement are for convenience only and in no way define, limit, or describe the scope or intent or any Sections, Subsections, or other provisions of this Agreement. Any reference in the Agreement to a Section or to a Subsection, unless specified otherwise, shall be a reference to a Section or Subsection of this Agreement.
11.Due Authority of Signatures. Each individual signing this Agreement warrants and represents that he or she has been authorized by appropriate action of the 3 Party which he or she represents to enter into this Agreement on behalf of the Party
12.Notices. All notices, demands, and communications between the Developer and the City shall be duly addressed as indicated below and given by personal delivery, registered or certified mail (postage prepaid and return receipt requested), Federal Express or other reliable private express delivery, or by facsimile transmission.
Such notices, demands, or communications shall be deemed received (i) upon deliver if personally served or set by facsimile, or (ii) after three business days if given or sent by any other approved manner specified above. Any Party to this Agreement may change its below -specified name, address, facsimile number, or person to whom attention should be directed by giving notice as specified in this Section. A copy of any notice, demand, or communication sent to City pursuant to this Agreement shall be sent to the City's legal counsel. Notices, demands, and communications shall be duly addressed and sent as follows:
To City:
City of Santa Maria
Attn: City Manager
110 E. Cook Avenue
Santa Maria, CA 93454
To Developer:
Pacific West Communities, Inc.
Attn: Don Slattery
Address 430 E. State St, Suite
100
Address 2: Eagle, ID 83616
13.California Law Governs. This Agreement and all rights and obligations arising out of it shall be construed in accordance with the laws of the State of California
14. Counterparts. This Agreement may be signed in one or more counterparts; which, taken together, shall constitute one original document.
15.Exhibits. All Exhibits attached hereto or referenced herein are incorporated into this Agreement.
16.Effective Date. This Agreement shall be effective as of the date noted on page one (1) of this Agreement.
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4 IN WITNESS WHEREOF, the undersigned execute this Amendment on behalf of the parties.
City of Santa Maria Pacific West Communities, Inc.
By: By:
Alice M. Patino Name
Mayor Title
ATTEST:
City Clerk
Rhonda M. White, CMC
APPROVED AS TO FORM:
City Attorney
Thomas T. Watson
APPROVED AS TO FORM:
Risk Division Manager
Mellissa Guerrero
5 RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA
MARIA, CALIFORNIA, APPROVING A REIMBURSEMENT
AGREEMENT WITH PACIFIC WEST COMMUNITIES, INC., FOR THE
CONSTRUCTION UPGRADE OF SANITARY SEWER SEGMENT D-9
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 Felicia Drive and Santa Maria Way, identified as Segment D-9, is proposed to be upgraded; and WHEREAS, the Growth Mitigation Capital Improvement Program Wastewater Section identifies Segment D-9 as a required future upgrade; and WHEREAS, it is in the best interest of the City of Santa Maria to enter into 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 shall be established with Pacific West Communities, Inc., and the City of Santa Maria, and approved by the City Council of the City of Santa Maria, Califomia, as follows:
1. The City Manager, or designee, is hereby authorized and directed to execute for and on behalf of the City of Santa Maria, a reimbursement agreement with Pacific West Communities, Inc., 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 April 2023.
Mayor
ATTEST:
Chief Deputy City Clerk
APPRO D AS T M:
City Attorney
APPROVED AS TO CONTENT:
Department D rector
City Manager