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HomeMy WebLinkAbout09 - Hoag Hospital Methane Gas Mitigation SystemTO: Mayor and Members of the City Council FROM: Public Works Department December 8, 1997 CITY COUNCIL AGENDA ITEM NO. 9 E CITY OF NEWPORT BEACH 1 ITC 81997 Af F' 11C E_Dr SUBJECT: HOAG HOSPITAL METHANE GAS MITIGATION SYSTEM C — -3cf--f'51 RECOMMENDATIONS: Approve the design and relocation of the Hoag Hospital Methane Gas Mitigation System; and • Based on the re-evaluation of the certified Environmental Impact Report, concur that there are no conditions described in California Environmental Quality Act Guidelines Section 15162 or Section 15163 which would require the preparation of a Subsequent EIR or Supplemental EIR; and • Authorize the City Manager to execute a Cooperative Agreement between Hoag Hospital and the City of Newport Beach. BACKGROUND: In the early 1980s, the City constructed a methane gas system that extracted methane gas from a series of deep wells and burned it through a flare located on what is now the Hoag Hospital lower campus. When Hoag purchased the property in the late 1980s, they also assumed responsibility for the operation and maintenance of the flare. In 1994, when Hoag Hospital proposed development of the lower campus, the City included a condition that Hoag upgrade the methane mitigation system to "scrub" the gas to remove the hazardous hydrogen sulfide. In 1996, the City, Hoag Hospital and Caltrans formed a partnership to design this new system. Caltrans agreed to contribute 50 percent, up to $750,000, of the total cost to construct, operate and maintain the system, with Hoag Hospital committing to cover the remaining project costs. Since Caltrans was prohibited from making a direct contribution to Hoag Hospital as a private organization, the City was asked to act as the Project Manager, which includes financial management of the Project. The City is finalizing an agreement with Hoag Hospital to permit the City to transfer the Caltrans funds to Hoag to begin construction of the project. A draft of the agreement is attached to this report. The design of the new mitigation system is complete, and includes a sophisticated vacuum system that extracts the methane gas from the three underground wells and piping systems. The gas is run through a chemical system that removes the hydrogen sulfide from the gas, then pipes the clean gas to the upper Hoag Hospital campus to generate energy for the hospital. The by-product of the scrubbing system is an inert material similar to chemical fertilizer that can be easily and safely disposed. The system includes an enclosed flare that could burn the gas if necessary. However, if the gas can be used for energy, the flare would only be used as a back-up emergency system. SUBJECT: HOAG HO: AL METHANE GAS MITIGATION SYSTEM December 8, 1997 Page 2 Hoag also intends to move the mitigation system from the middle of the lower campus to the far end near Superior Avenue. Three residential neighborhoods are affected by the Project: Villa Balboa, Balboa Coves and Newport Townhomes. City staff and/or Geo -Science, the technical consultants hired by Hoag, have made presentations to all three Associations. Newport Townhomes opposed the relocation of the system when the Coastal Commission reviewed the project a few months ago, citing safety concerns as well as an adverse affect on property values. All three Associations were notified when the Public Works Committee reviewed this issue at the October 27th meeting, and have been informed of the Council review this evening. Due to questions raised by Newport Townhomes, the City retained the environmental planning firm of LSA Associates, which prepared the original Environmental Impact Report, to compare the final engineering plans with the certified EIR to determine if the conditions had changed such that a Subsequent EIR or Supplemental EIR should be prepared for the project. LSA has determined that the project will not result in any new impacts or any change in the severity of impacts previously identified. Therefore, no conditions exist which would require a Subsequent or Supplemental EIR (Guidelines Section 15162 and 15163). A copy of LSA's report is attached for the information of the City Council. The Public Works Committee approved the design and relocation of the methane gas mitigation system and directed staff to forward the Hoag/City Cooperative Agreement to the City Council. Respectfilljy submitted, PUBLIC WORKS DEPARTMENT DON WEBB, DIRECTOR By: -/, Peggy Ducey Assistant to the City Manager P 1 . i, LSA December 2, 1997 Ms. Patricia Temple Planning Director City of Newport Beach Planning Department 3300 Newport Boulevard Newport Beach, CA 92663-3884 /.5A .Ivu(ialc,, /n(: iI Cr r 7.!/ = Alla/I ,ij ,ui, 1. gnrrcrirr; liiolu,I I IC1,t1,utdS ll,rlrihrt Rnr, rt ion R , , o ,c .Il,nr.r,unort Communa) and Lara! Planning, L.ord;caln A?(biteamc I o'ucolog) and Palcon!nlogi. Subject: Environmental Review of Proposed Hoag Memorial Hospital Methane Gas Recovery and Flare System Upgrade Dear Ms. Temple: LSA Associates, Inc. (LSA) has reviewed the engineering plans prepared for the proposed Hoag Hospital Methane Gas Recovery and Flare System Upgrade and compared the potential project specific impacts with the overall Master Plan impacts analyzed in EIR No. 142 and the Supplemental EIR. A description of the proposed project and our analysis and conclusions are provided below for your use. PROJECT DESCRIPTION The proposed project involves removing the existing methane gas flare and constructing a new, larger capacity flare and hydrogen sulfide scrubber system. Presently, a methane gas recovery and flare system exists on the lower campus. The existing flare is located adjacent to the Hospital's main entrance driveway, which provides access to and from Pacific Coast Highway. The existing blower is operating at its current rated capacity of 140 cubic feet per minute (cfm), which is about twice the capacity of the existing flare. The new system is planned to be located at the far west end of the existing lower campus parking lot, which parallels PCH. The new system would include a standby blower and numerous safety, shutdown, and monitoring features. It is designed for an increased capacity of 175 cfm, with future capability to 200 cfm. The methane gas currently recovered on site contains approximately 4,000 parts per million (ppm) of hydrogen sulfide gas. A scrubbing system is proposed as part of the project to extract the hydrogen sulfide so that it can be piped to the hospital boilers for burning. The new system will allow for two operating conditions: the recovered methane gas can be burned in the new 12!2/97« I:\CNB734\FLARE.LTR» P.n n Nil.i, Suitc 522 Trlcpbnnc 714 553-0666 Otbcr olfia•s lmatcd is Bcrkch_r 9?6/J 1,us»uilr7N 5)3-807(, P[. Richmond, Ri:o-Sidc and Sa,?amcwo I_ -mail ha i) (.,i�.u,!c(u "mu I's.'1 .'ls>11i.1r1' , In, flare system, or the recovered gas can be scrubbed of hydrogen sulfide, which will be burned in the Hoag boiler system. The existing flare system will be dismantled, and parts will be recycled for use in the proposed flare. The project includes the installation of the following structures and facilities: a 61 by 44 foot facility enclosure, bounded by an 8 foot high forest green fabric fence; a roll back entrance gate; two 29 foot high by 8 foot diameter scrubber tanks; one 35 foot tall flare stack; two blower packages used to pump the gas from the wells to the scrubber (less than five feet above grade); an air cooler; a main control panel; a garbage bin; and underground sulfur treatment system piping leading to the existing hospital boiler tie-ins. Installation of the sulfur piping will require excavation of a temporary, five foot deep trench traversing the existing paved parking lot. The new flare system would be located approxi- mately 270 feet southwest of the nearest residential structure in the Villa Bal- boa/Sea Faire condominium complex. ANALYSIS The project boundaries and limits of trenching are within the project boundary of the Hoag Master Plan, analyzed in Final EIR No. 142. The proposed project has been analyzed in relation to each environmental topic addressed in the Master Plan EIR, and the conclusions are discussed below. Earth Resources The flare system upgrade will not result in any impacts relative to earth re- sources that were not previously analyzed in EIR No. 142. The project will not involve any cuts into the existing bluff slopes. Only minor excavation for foun- dation construction, and minor trenching for pipe installation will be needed. As noted in EIR No. 142, no known faults traverse the lower campus, and the probability of ground rupture is considered remote. The new flare location will not result in increased seismic risks as compared the existing flare location. No new impacts related to earth resources beyond those analyzed in EIR No. 142 would occur. Hydrology/Water Quality The flare system upgrade will not result in increased runoff, as the site is al- ready paved and impervious. The flare system will not involve the release of hazardous substances into the storm or waste water system. The new system will be located within a 200 foot wide strip of land, located immediately north of and parallel to PCH, which is within the 100 to 500 year flood zone. The flooding potential is considered minor, and does not constitute a new or signif- icant impact. 12/2/97<<1ACNB734\FLARE.LTR» 2 LSM . l Soc'tatc.,, ht,: No new impacts related to hydrology or water quality beyond those analyzed in EIR No. 142 would occur. Biological Resources No additional habitat areas will be affected by the project beyond those identi- fied in EIR No. 142. The project site has already been paved for the existing parking lot, and no natural vegetation exists on site. No wildlife is expected to utilize the site. No new impacts related to biological resources beyond those analyzed in EIR No. 142 would occur. Cultural Resources The construction of the flare system will not involve extensive excavation and, therefore, is not expected to impact archeological or paleontologic resources. No surface evidence of archeological resources are present on site, although this does not rule out the possibility of subsurface resources. Also, as stated in EIR No. 142, "the project area lies within a sensitive zone with the potential to yield significant fossils from the Pleistocene and Miocene deposits. Therefore, monitoring during grading will be required." It was determined in EIR No. 142 that monitoring during construction would reduce potential impacts to a level of insignificance. Monitoring was conducted during previous grading activities for the existing parking lot. The depth of the trench for the sulfur treatment system piping will not be below previous disturbance; therefore, no additional monitoring will be required. Land Use EIR No. 142 analyzed potential land use impacts that could occur based on those uses allowed under the Hoag Planned Community Development Permit (PCDP) provisions and Development District regulations. Land uses allowed for the lower campus include support services (including power/mechanical/ auxiliary support and storage) and a methane gas flare burner, with collection wells and associated system components. These uses were analyzed in EIR No. 142, and mentioned specifically under Section 3.2, Project Description. The Land Use Section of EIR No. 142 determined that impacts of the Master Plan to relevant City of Newport Beach planning programs and LCP land use plan designations were insignificant. The zoning for the site allows the flare to be placed in any location that a building could be placed. The new flare will be replacing the existing flare and, therefore, does not represent an unaccounted for land use change. 12/2/97«I:\CNB734\FLARE.LTR» 3 Transportation/Circulation The new flare system is not expected to generate additional trips beyond those generated by the existing flare for periodic visits by maintenance personnel. During construction, some parking spaces at the west end of the lower campus parking lot may need to be used for construction equipment. The flare facility will permanently occupy a portion of the parking lot that could otherwise be used for approximately seven parking spaces. These impacts to available park- ing are insignificant, and no new impacts related to traffic/circulation beyond those analyzed in EIR No. 142 would occur. Air Quality The purpose of the existing flare system is to recover and burn off methane gas that seeps from natural, subsurface sources below the hospital site. The exist- ing flare burns the gas collected from three extraction wells and a subsurface collection system located at Balboa Coves. The methane extraction system is intended to improve local air quality by preventing the methane gas from reaching the surface. The new flare will increase the capacity of the recovery system from 140 to 175 cubic feet per minute, allowing more methane to be recovered and burned. Construction of the new flare will require issuance of a permit from the South Coast Air Quality Management District (SCAQMD). As part of the permit appli- cation, Hoag will need to submit for approval by SCAQMD a plan that demon- strates compliance with the requirements of those SCAQMD rules governing flare systems. The following mitigation measure was included in EIR No. 142 to ensure that necessary permits have been acquired from the SCAQMD prior to construction: 7-2 Prior to issuance of grading and building permits for each phase of development, the project sponsor shall provide evidence for verifica- tion by the Planning Department that the necessary permits have been obtained from the SCAQMD for regulated commercial equipment in- corporated within each phase. The hospital has complied with this measure by obtaining a construction per- mit (#329157, issued on September 19, 1997) from AQMD. AQMD has indicated that no air dispersion modeling is needed because the project is substantially under air quality emissions thresholds. Adverse effects that could occur if hydrogen sulfide was to be released rapidly during an emergency are discussed below under "Public Health and Safety." No new long-term or short-term impacts related to air quality beyond those analyzed in EIR No. 142 would occur. As no increase in traffic is expected as a 12/2/97« IACNB734\FLARE.LTR» 4 LS I Al gi:rt,<. /,:,. result of the project, no additional air quality impacts associated with vehicular exhaust are expected. Noise The new flare system will generate noise levels similar to the existing flare. As with the existing system, the noise generation will be intermittent based on when the flare and blowers are in operation. The new flare will include muf- fling equipment to prevent excessive operation noise. The following mitigation measure, included in EIR No. 142, will reduce noise levels to within applicable standards: 8-3 Prior to issuance of a grading and/or building permit the project spon- sor shall demonstrate to the City that existing noise levels associated with the on-site exhaust fan are mitigated to acceptable levels. Simi- larly, the project sponsor shall demonstrate that all noise levels gener- ated by mechanical equipment associated with the Master Plan are mitigated in accordance with applicable standards. This will include meeting City standards from 10:00 p.m. to 7:00 a.m. for noise as measured at the property line. The new flare will be situated directly adjacent to the steep bluff slopes above the existing parking lot. These slopes will help to attenuate noise generated by the flare and protect the Villa Balboa condominiums from noise impacts. Noise generated by the flare machinery is not expected to exceed the traffic noise levels generated along PCH during daylight and evening hours. Visual/Aesthetics The proposed flare system is in conformance with structural height limitations for the Lower Campus, and will not obstruct ocean or bay views from the Villa Balboa condominiums or linear view park. The maximum structure heights allowed by the PCDP in Zone A, which is where the new flare would be located, range from 45 to 48 feet above grade (or 65 to 68 feet above mean sea level). Height limits for the project site are 26/35 feet, as defined in the City's Zoning Code. In the 26/35 height limitation zone, the height limit shall be 26 feet; however, a structure may exceed 26 feet (up to a maximum of 35 feet) after the adoption of a Planned Community District, a Specific Area Plan, or a Use Per- mit. The new flare stack will be 35 feet in height, and each of the scrubber tanks will be 29 feet in height, which is below these height limitations for a site with an adopted PCD. The new flare structure will not obstruct the line of sight running from the view parks and condominiums to the ocean or bay. The flare system upgrade will result in the placement of mechanical equipment in an area currently used as a paved parking area. The flare system will intro- duce industrial type mechanical equipment into a portion of the site that cur - 12/2/97« I:\CNB734\FLARE.LTR» 5 LS. I , Issuciatcs, hx: rently has visually clean lines. This will affect the visual character of the Lower Campus as viewed from the Villa Balboa condominiums and view parks. The following mitigation measure included in EIR No. 142 was designed to mini- mize such impacts: 9-3 Prior to issuance of a building permit, the project sponsor shall submit plans to the City Planning Department which illustrate that all me- chanical equipment and trash areas will be screened from public streets, alleys and adjoining properties. Trash bins will be on site approximately two days every 90 days for disposal of sulfur retaining chemicals. Landscaping plans identify larger than typical (up to 48 inch boxes) box trees, so landscape coverage will be provided with the first planting of the boxed trees. However, due to the height of the stack and blower tanks, it may not be possible to completely obscure the facility from view. When the flare is operational, no flame will be visible. The flare will be shrouded by a pipe. Public Health and Safety The existing and proposed flare facilities are intended to prevent public health and safety impacts by collecting and properly disposing of the methane gas seeping from below the Hospital environs, thereby preventing chronic expo- sure and reducing the potential for explosion. The new flare will continue this beneficial function, with an increase in methane handling capacity from 140 to 175 CFM. As noted in the project description, the new system will be designed to remove (scrub) hydrogen sulfide from the incoming methane gas stream, which will then either be sent to the hospital's boiler or flared. In no case will hydrogen sulfide be flared. Hydrogen sulfide gas is lethal at high concentrations, and is much more dangerous than methane. The design for the site includes three hydrogen sulfide monitors and three methane sensors. A safety system, includ- ing alarms, warning lights, and automatic shutdown capabilities, will be in- stalled to ensure that a harmful release of high concentration gas does not occur. At the time EIR No. 142 was prepared, there were no specific plans as to how the methane could be utilized. Thus, a sulfur treatment/methane recovery system such as the one proposed was not yet planned, and health risks related to an accidental release of harmful gases was not evaluated in the EIR. The plans for the sulfur treatment system contain numerous safety features. In no case will hydrogen sulfide be flared. For this reason, it is not expected that the project would result in a significant threat to public health and safety. AQMD has stated that emissions will be substantially below threshold levels. 12/2/97<<1ACNB734\FLh,RE.LTR» 6 LS.I s_,ociate�, In,. The impact analysis in EIR No. 142 noted that a temporary increase in the level of underground methane may occur while the existing flare was being disman- tled and replaced by a new system. The following mitigation measure was included to ensure that temporary adverse effects did not occur: 10-12 The Project Sponsor may remove the flare system, contain the gas and utilize the gas for Lower Campus facilities. During the containment process and removal of the flare, the project sponsor shall ensure that methane levels are monitored throughout the project area to ensure that this transition does not create an upset in methane levels or cre- ate odors or risk of explosion. (EIR No. 142, page 4-199) This mitigation measure is applicable to the proposed project, and will reduce potential health and safety impacts. Public Services and Utilities No new impacts related to public services and utilities beyond those analyzed in EIR No. 142 would occur. One of the projects' objectives is utilize the scrubbed methane gas in the hospital's boilers, thereby decreasing the hospitals dependence on gas supplied by the City. Construction Activities Temporary construction impacts, such as construction noise and an increase in fugitive dust, will occur during construction of the new flare system. EIR No. 142 stated that construction noise would cause an unavoidable, significant impact to adjacent residences. Construction of the new flare system will not require a significant amount of grading and, therefore, construction noise is expected to be limited. Population, Employment and Housing No new impacts related to population, employment, and housing beyond those analyzed in EIR No. 142 would occur. Public Amenities The project will not directly impact plans for the 0.28 acre view park or 20 foot wide linear park planned to be built along the bluffs as part of the Hospital Master Plan. The flare facility will not block ocean or bay views from either of the parks. However, the presence of the flare stack, blower tanks, and associ- ated mechanical equipment directly below the view park may detract from the park visitors' experience. This impact is not considered significant, since the view parks themselves are beneficial amenities included in the Hospital Master 12/2/97<<IACNB734\FLARE.LTR» 7 LS.1 . kp)cial , hit. Plan. Mitigation Measure 9-3 included in EIR No. 142 and discussed above will help to shield this equipment from the view of park visitors. Conclusions The conclusions and findings in EIR No. 142 have been reviewed; the proposed project does not result in any increase in impacts or changes in the EIR condi- tions. All of the mitigation measures included in EIR No. 142 are still valid. There are no conditions described in CEQA Guidelines Section 15162 that would require a subsequent EIR. The proposed project will not result in any new, significant impacts not previously discussed. In accordance with CEQA Guidelines Section 15063 (b) (1) (B), the previously prepared EIR adequately analyzes the relocated flare system. Please call me or John Staight if you have any questions. Sincerely, LSA ASSOCIATES, INC. O� Carollyn Lobell Principal 12/2/97«I:\CNB734\FLARE.LTR» 8 09-26-1997 07:34AN FROM TO 6443020 P.02 PATIENT RELATIONS "ax :714-574-6860 Sep 25 16:12 P.01 /7 90,� ;1---6 VILLA�EPZS, September 21, 1997 California Coastal Commission South Coast Area P.O. Box 1450 Long Beach, CA 90802-4416 Dear Meg Vaughn, Coastal Program Analyst ^SLJBJBCf: PerznitNo.5-92-368-A1 Hoag Memorial Hospital Presbyterian Relocation and Upgrade of Methane Gas Elimination System Thank you for sending me the staff report to the Commission regarding the subject permit. The issue was discussed at the recent Board meeting of the Villa Balboa Community Association which includes 449 condominium residences adjoining Hoag's property near the existing and proposed location of the gas elimination. system. We all agree that it would be desirable if the ground did not contain the methanr gas, however that is not the case. Since it does we find it desirable that the City and Hoag have collaborated on a mitigation measure to reduce the impact on the local residences and proposed buildings planned by Hoag. The issue was brought -rp by the residences and considered by the Board. The Board resolved that we should send you a letter in support of the planned relocation and upgrade or the methane gas ellmination system as long as the cvnstruoted, operated and maintained facility is consistent with the summary included in your staff report to the Commission. Please provide this letter to the Commission for their considemtivn at the forthcoming Commission meeting which I believe is in Dana Point in, October 1997. If you have need to contact me I can be reached at home at 714.548-6180 ur at work at 714429- 2020 Ext, 2221. My home address is 200 Paris Lanc, No. 113, Newport Beach, CA 92663, Sincerel Frank Jones, sident Villa Balboa Community Association Copies to: Jeanne )Brady, Manager, Villa Balboa Hoag Hospital C:W)f Documents,Pcm7uil\VBCA\70921cee.doc Managing Agent: Villageway Management, Inc. P.O. Rnx 4708 • Irvine, CA 926M-4708 • (714) 553-1876 a FAX (714) 2$0-9009 TOTAL P.02 SEP -26-1997 08:06 93% P.02 °-' d` S.S. COOPERATIVE AGREEMEN7�' This AGREEMENT entered into on , 1997, is between the CITY OF NEWPORT BEACH, a municipal corporation of the State of California, referred to herein as CITY, and HOAG MEMORIAL HOSPITAL PRESBYTERIAN, a California Nonprofit Public Benefit Corporation, referred to herein as HOSPITAL. RECITALS WHEREAS, there is a methane gas field underlying the West Newport Beach area, surfacing in the area around Hoag Hospital, Balboa Coves and Pacific Coast Highway. In late 1995, Hoag Hospital requested that State Senator Ross Johnson introduce legislation to fund a new methane gas mitigation system (PROJECT) to be located on the lower campus of Hoag Hospital. Because the methane gas surfaced at Pacific Coast Highway and Hoag Drive, the State of California, Department of Transportation (STATE) agreed to cooperate with Hoag Hospital to partially finance the proposed mitigation system, and WHEREAS, per Caltrans' request, CITY became the project manager to oversee the construction of the PROJECT and manage the State financing. In partnering on PROJECT, STATE desires remediation system that only relieves gas seepage along and related to the Pacific Coast Highway; HOSPITAL desires remediation of gas necessary to develop HOSPITAL's lower campus, and WHEREAS, on September 9, 1996, CITY and STATE entered into a Cooperative Agreement under District Agreement No. 12-304, referred to herein as CITY/STATE AGREEMENT, and attached hereto as Exhibit "A", and WHEREAS, the parties hereto intend to define herein the terms and conditions under which IMPROVEMENTS are to be constructed, financed and maintained. I. Term. A. The term of this AGREEMENT shall be for twenty (20) years, commencing upon execution of AGREEMENT. B. Upon expiration or termination of this AGREEMENT, both parties shall be relieved of any further obligations under this AGREEMENT, although each shall continue to have available all remedies for any breach of this AGREEMENT occurring prior to the date of termination. C. All obligations under this AGREEMENT are subject to the appropriation of the resources by the Legislature and the allocation of resources by the California Transportation Commission, as stipulated in CITY/STATE AGREEMENT. II. Use. A. AGREEMENT governs the construction, maintenance, and operation of a methane gas mitigation system, including the construction of a methane gas extraction system, a scrubbing system to remove the sulfur and other impurities from the methane gas, and a transportation system to route the methane gas to HOSPITAL for use as energy. HOSPITAL agrees to PROJECT on HOSPITAL property. PROJECT will be in compliance with site plan and related drawings dated and approved by CITY. B. Any and all construction work performed pursuant to this AGREEMENT, including installation, operation, and maintenance of PROJECT, shall be subject to prior review and approval of CITY. HOSPITAL agrees to construct PROJECT in accordance with construction documents as approved by CITY. HOSPITAL agrees to furnish CITY a complete set of full-sized reproducible record documents for PROJECT. C. CITY agrees to expedite review and approval of construction documents and to waive all CITY permit fees, unless CITY must use outside contractors for review and approval process, for the review of construction documents for PROJECT. City agrees to obtain necessary encroachment permits for required work as part of PROJECT within the STATE right-of-way, in accordance with STATE's standard permit procedures, as described in CITY/STATE AGREEMENT. D. CITY and HOSPITAL shall jointly provide documentation necessary to the STATE to help assure allocation of resources by the California Transportation Commission. CITY and HOSPITAL agree that time is of the essence in obtaining funding from the California Transportation Commission, and that construction documents will be submitted to the STATE by no later than for consideration by the California Transportation Commission. E. HOSPITAL agrees to obtain and comply with all necessary certificates, permits and/or other approvals which may be required from any federal, state or local authority. CITY agrees to cooperate with HOSPITAL to obtain necessary certificates, permits or other approvals. Required permits may include, but are not limited to a Coastal Development Permit from the California Coastal Commission for construction of the PROJECT as well as a permit to construct, and annual Permit(s) to Operate, as required, from the South Coast Air Quality Management District for PROJECT. F. HOSPITAL shall maintain PROJECT free from hazards or risk to public health, safety or welfare. G. If existing public and/or private utilities conflict with the construction of PROJECT, CITY will make necessary arrangements with the owners of such utilities for their protection, relocation or removal in accordance with CITY/STATE AGREEMENT. III. Operation and Maintenance of Project. A. Once PROJECT is constructed and is operational, all assets in connection with CITY's PROJECT that are located on HOSPITAL property shall be owned., operated and maintained by HOSPITAL. B. HOSPITAL will contract with outside agency specializing in the operation and maintenance of PROJECT. Contractor shall oversee daily operation of PROJECT and provide routine as well as long-term maintenance and repairs. Routine maintenance shall include, but not be limited to ..... HOSPITAL shall prepare an annual PROJECT replacement and refurbishment schedule that assures the ongoing operation of the PROJECT during term of AGREEMENT. C. Methane Gas produced by PROJECT has a monetary value since it will be used by HOSPITAL to generate energy and therefore defray HOSPITAL overall energy costs. HOSPITAL shall provide on a semi- annual basis the amount of gas produced by PROJECT, and its equivalent dollar value based on methods outlined in Attachment 1. D. The value of the methane gas used by HOSPITAL shall be calculated as outlined in Attachment I. E. HOSPITAL'S fair share of PROJECT cost shall be offset by the calcualted value of the methane gas used for energy. IV. Alterations and Additions. A. HOSPITAL or any contractor or person selected by HOSPITAL shall not make or suffer to be made any alterations, additions or improvements in or to or about PROJECT without prior written consent of CITY. B. Upon written approval of CITY, HOSPITAL may augment/modify PROJECT to accommodate future HOSPITAL development, as described in the DEVELOPMENT AGREEMENT, with allowed modifications to include, but not limited to additional connections to PROJECT from existing and future HOSPITAL development. CITY may connect additional venting systems, extraction systems, or pipes originating outside of HOSPITAL property to PROJECT at any time during term of the AGREEMENT. V. Project Cost and Reimbursement Procedures. A. HOSPITAL shall bid PROJECT, per the CITY approved construction documents, and obtain not less than three bids to construct PROJECT. HOSPITAL shall also bid the cost to operate and maintain PROJECT on an annual basis. Prior to the commencement of any PROJECT construction, CITY and HOSPITAL will agree in writing the estimated PROJECT construction and operational costs, and of that cost, the STATE and HOSPITAL'S fair share of the total cost of the PROJECT. B STATE's fair share of the cost of PROJECT, described in the CITY/STATE AGREEMENT, shall be up to fifty percent (50%) of the total cost of constructing, operating and maintaining PROJECT during the term of this AGREEMENT, not to exceed a maximum total cost to STATE of seven hundred and fifty thousand dollars ($750,000.00). C. HOSPITAL agrees to pay for total cost of PROJECT, which are related to the design and construction of methane and hydrogen sulfide mitigation devices required for the development of structures on its lower campus, and its fair share of cost of PROJECT for methane gas mitigation along Pacific Coast Highway. D. CITY agrees to reimburse HOSPITAL for PROJECT expenditures incurred by HOSPITAL as part of design and construction of PROJECT as follows: 1. HOSPITAL shall submit invoices on a monthly basis for all design and construction costs incurred during the previous month. Invoices shall related to design and construction and cost as approved previously by CITY. 2. CITY shall forty-five days to review and reimbursement HOSPITAL for the submitted invoices. 7. Entry by City. A. HOSPITAL hereby agrees that CITY shall have right, during normal business hours and in the accompaniment of a representative of HOSPITAL, have the right to enter the PROJECT area and inspect same to determine if the same complied with each and every term and condition of this AGREEMENT. B. CITY shall have right to immediate access to PROJECT in the event that CITY deems there is a risk to public health and safety by PROJECT. C. HOSPITAL agrees to notify CITY immediately if operation of PROJECT is compromised, or if at any time, PROJECT is not operating. 8. Indemnification. A. Neither CITY nor any officer or employee thereof is responsible for any damage or liability occurring by reason of anything done or omitted to be done by HOSPITAL under or in connection with any work, authority or jurisdiction delegated to HOSPITAL under this AGREEMENT. It is understood and agreed to that, pursuant to Government Code Section 895.4, HOSPITAL shall fully defend, indemnify and save harmless the CITY, all officers and employees from all claims, suits or actions of every name, kind and description brought for or on account of injury (as defined in Government Code Section 810.8) occurring by reason of anything done or omitted to be done by HOSPITAL under or in connection with any work, authority or jurisdiction delegated to HOSPITAL under this AGREEMENT. B. Neither HOSPITAL nor any officer or employee thereof is responsible for any damage or liability occurring by reason of anything done or omitted to be done by CITY under or in connection with any work, authority or jurisdiction delegated to CITY under this AGREEMENT. It is understood and agreed that, pursuant to Government Code Section 895.4, CITY shall fully defend, indemnify and save harmless HOSPITAL from all claims, results or actions of every name, kind and description brought for or on account of injury (as defined by Government Code Section 810.8) occurring by reason of anything done or .omitted to be done by CITY under or in connection with any work, authority or jurisdiction delegated to CITY under this AGREEMENT. C. In the event of any lawsuit or claim filed by any third Party, the Parties to this Agreement shall cooperate with one another and the defense of the action then shall share equally all cost and expenses reasonably incurred in the defense of the claim or action. 7. Insurance. (pending per input from City Risk Manager) No alteration or variation of the terms of this AGREEMENT shall be valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not incorporated herein shall be binding on any of the parties hereto. IN WITNESS WHEREOF, the parties have executed this AGREEMENT by their duly authorized officers. HOAG MEMORIAL HOSPITAL PRESBYTERIAN CITY OF NEWPORT BEACH ICY,0 President BY: Mayor Attest: City Clerk