HomeMy WebLinkAboutC-3330 - Agreement Relative to Annexation (Water and Sewer Service)AMENDMENT NO. 1
TO
AGREEMENT BETWEEN IRVINE RANCH WATER DISTRICT
AND CITY OF NEWPORT BEACH RELATIVE TO ANNEXATION
This Amendment No. 1 ("AMENDMENT NO. 1") is made and entered into this 151'1 day of
VdAC 4 2001, by and between the IRVINE RANCH WATER DISTRICT ("IRWD") and the
CITY OF NEWPORT BEACH (the "City").
WITNESSETH:
WHEREAS, IRWD and the City have entered into an agreement entitled "AGREEMENT
BETWEEN IRVINE RANCH WATER DISTRICT AND CITY OF NEWPORT BEACH RELATIVE TO
ANNEXATION," dated January 24, 2000 ("AGREEMENT'); and
WHEREAS, the parties desire to amend the AGREEMENT with respect to the provisions
establishing the effective date thereof.
NOW, THEREFORE, in light of the Recitals and the mutual covenants and conditions contained in
this AMENDMENT NO 1., the parties hereby agree as follows:
1. Amendment of Section 1. Section 1 of the AGREEMENT is hereby amended to read as
Termination of 1973 Agreement. This AGREEMENT, when effective, shall
follows:
terminate and supersede the 1973 Agreement.
2. Effective Date of AGREEMENT. The AGREEMENT, as amended by this
AMENDMENT NO. 1, shall be effective upon the execution and delivery of this AMENDMENT NO. 1. By
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executing and delivering this AMENDMENT No. 1, the parties hereby ratify the AGREEMENT, as so
amended.
3. Validation. The parties shall jointly prepare, file and prosecute an action pursuant to
Code of Civil Procedure Section 860 et seq. to determine the validity of the AGREEMENT and the rights,
duties and obligations therein (the "validation action"). The validation action shall be filed no later than
forty-five (45) days after the execution and delivery of this AMENDMENT No. 1. The parties shall fully
cooperate with each other in the preparation, filing and prosecution of the validation action.
4. Counterparts. This AMENDMENT No. 1 may be executed in one or more counterparts.
Each will be deemed an original and all, taken together, will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT No. 1 the day and
year first written above.
APP •VED AS TO FORM:
City Attorney
CITY OF NEWPORT BEACH
By Offor„rl. ...1111'
Mayor
B,,,,V5-7.,,)2-) x4.4ez,,,
City Clerk
(SEAL)
IRVINE RANCH WATER DISTRICT
By
President
2
APPROVED AS TO FORM:
77
Counsel for IRWD
72669/
IRVINE RANCH WATER DISTRICT
(SEAL)
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• •
AGREEMENT BETWEEN IRVINE RANCH WATER DISTRICT
AND CITY OF NEWPORT BEACH RELATIVE TO ANNEXATION
This agreement (AGREEMENT) is made and entered into this
2000, by and between the IRVINE RANCH WATER DISTRICT ("IRWD") and the CITY OF NEWPORT
BEACH (the "City").
WITNESSETH:
WHEREAS, IRWD and the City entered into an agreement on September 11, 1972 relative to
future adjustment of service area boundaries for an area described therein as the "Property," which was
superseded and replaced by a similar agreement executed on September 10, 1973 (the agreements are
collectively referred to as the "1973 Agreement"); and
WHEREAS, the City is currently in the process of preparing to annex unincorporated areas and
territory within its sphere of influence including Bay Knolls, Santa Ana Heights, Newport Coast (including
the Property) and Newport Ridge, all as described in the October 25, 1999 public hearing conducted by
the City. The areas proposed for annexation by the City are, except for Bay Knolls, collectively referred to
as the "Annexation Area" and are depicted in Exhibit "A" which is incorporated by this reference. The
Annexation Area is within IRWD's service area and receives water, sewer and/or reclaimed water service
from IRWD; and
WHEREAS, IRWD has constructed and acquired facilities to provide transmission, storage, and
distribution of water, as well as collection, treatment, reclamation, and disposal of sewage and wastewater
to the Annexation Area as well as other territory within IRWD's service area;
WHEREAS, the facilities constructed and acquired by IRWD in Newport Coast and Newport Ridge
have been financed by means of bonds payable from assessments and property taxes assessed on
property; and
WHEREAS, the City has expended funds and made improvements in contemplation of providing
water and sewer service to all or a portion of the Annexation Area; and
WHEREAS, the parties, through this AGREEMENT, intend to resolve all issues relating to the
meaning and effectiveness of, and to supersede and terminate, the 1973 Agreement. The parties also
intend to clearly establish IRWD's right to provide water, sewer and reclaimed water service to the
Annexation Area, to establish their respective duties with respect to the proposed annexation of the
Annexation Area by the City and to compensate the. City for the value of the 1973 Agreement and the
improvements made in reliance on the 1973 Agreement.
NOW, THEREFORE, in light of the Recitals and the mutual covenants and conditions contained in
this AGREEMENT, the parties hereby agree as follows:
1. Termination of 1973 Agreement. This AGREEMENT, when effective, shall terminate
and supersede the 1973 Agreement. This AGREEMENT shall be effective upon execution and the entry
of a final judgment by a court of competent jurisdiction validating this AGREEMENT.
2. City Annexation of Annexation Area. The City and IRWD agree that the City may
proceed at the City's discretion to pursue the annexation of the Annexation Area, in one or more phases.
The City's annexation proposal(s), including but not limited to any applicable plan for services, shall
specify that water, sewer, and reclaimed water services (existing and to be extended in the future) will be
provided in the Annexation Area by IRWD (except to the extent regional sewer service is provided by the
Orange County Sanitation District), and that the water, sewer, and reclaimed water facilities and utilities
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(existing and to be constructed or extended) serving the Annexation Area shall be owned by IRWD
(except for regional sewer facilities owned by the Orange County Sanitation District). No detachment from
IRWD or reallocation of IRWD's general property tax allocation shall occur in conjunction with or result
from the City's annexation of the Annexation Area.
3. IRWD Support of Annexation. IRWD will support the City's proposal(s) to annex the
Annexation Area when considered by the Local Agency Formation Commission ("LAFCO") and any other
public entity. IRWD agrees to oppose any change of organization or reorganization proposal that
competes or conflicts with or precludes the City's annexation of the Annexation Area. The City agrees to
oppose any change of organization or reorganization proposal with respect to the Annexation Area that
includes detachment of any territory from IRWD's service area, the transfer of water, sewer or reclaimed
water services from IRWD to any other public entity, or reallocation of IRWD's general property tax
allocation.
4. IRWD Settlement Payment. Upon completion of the annexation (consistent with Section
2 of this AGREEMENT) of the Annexation Area, or any portion of the Annexation Area, to the City, IRWD
shall pay the City the amount of $25,000,000.00 (Consideration). The Consideration is due and payable in
installments, without interest, in accordance with the following schedule:
Payment No. 1 Thirty (30) days following LAFCO's filing of $15,000,000.00
Certificate(s) of Completion for the annexation
Payment No. 2 Second (2nd) anniversary of the date Payment 5,000,000.00
No.1 is due
Payment No. 3 Fourth (4`") anniversary of the date Payment No. 3,000,000.00
1 is due
Payment No. 4 Sixth (6"') anniversary of the date Payment No. 1 2,000,000.00
is due
TOTAL $25,000,000.00
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The parties acknowledge that the Consideration and related payment schedule equitably accounts for the
improvements made by the City in contemplation of providing service to the Annexation Area. The parties
also acknowledge that the Consideration and related payment schedule account for the risk to each party
that IRWD's current allocation of the general property tax levy with respect to the Annexation Area may be
changed or discontinued by state legislation. No amount shall be due unless and until the annexation of
the Annexation Area or any portion of the Annexation Area is completed, as evidenced by the recording
and filing of a certificate(s) of completion by LAFCO.
5. Third Party Annexation or Incorporation.
(a) The provisions of Section 4 notwithstanding, it is the intent of the parties that the
Consideration is allocated to specific water and sewer tax rate areas ("TRAs") for purposes of adjusting
Consideration if any portion of the Annexation Area is incorporated, annexed or otherwise included in a
jurisdiction other than the City ("Third Party Jurisdiction"), the Third Party Jurisdiction takes over water,
sewer or reclaimed water services from IRWD, .and the Third Party Jurisdiction is allocated all or a portion
of IRWD's share of the general property tax levy for such area.
(b) The parties agree that, for the purpose of adjusting the Consideration in the event
of the circumstances described in Subsection a, the Consideration will be allocated by water and sewer
TRA as shown in Exhibit "B" attached hereto and incorporated herein by this reference. In the event the
property tax allocation to IRWD for any TRA is reduced for the reasons described in Subsection a, the
Consideration shall be adjusted and reduced according to a revised TRA table that reflects the change in
property tax allocation for the affected TRA(s) (adjustment). To the extent any installment(s) have been
paid by IRWD prior to the adjustment, the City shall refund the amount of the adjustment(s), without
interest, to IRWD, within ninety (90) days of the effective date of the Third Party Jurisdiction incorporation
or annexation. Any remaining installment(s) will be adjusted in conformance with the revised TRA table. If
the incorporation or annexation by the Third Party Jurisdiction results in the division of TRAs or partial
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•
•
.
reallocation within a TRA or other variation not directly addressed by this Subsection, the parties agree to
adjust the methodology herein to preserve the intent of this Section. An example adjustment calculation is
shown in Exhibit "C" attached hereto and incorporated herein by this reference.
6. Future Jurisdictional and Service Changes. The City agrees that it will not initiate or
support any proceeding or action, through LAFCO or otherwise, for the detachment from IRWD, or other
reorganization, of any portion of IRWD's jurisdiction, including but not limited to unannexed portions of the
Annexation Area, or the transfer of any water, sewer or reclaimed water facilities, services or utilities from
IRWD, without the express consent of IRWD. IRWD agrees that it will not initiate or support any
proceeding or action, through LAFCO or otherwise, for the acquisition of the City's water or sewer
facilities, services or utilities or the adjustment or modification of the City's service area, without the
express consent of the City.
7. Service and Tax Rates Within the City Annexed Area.
(a) IRWD agrees, effective upon annexation of the entire Annexation Area into the
City, that it will not increase water, sewer or reclaimed water commodity rates or ad valorem debt -service
assessments applicable within the Annexation Area, except increases that are generally applicable and
established in the same manner as such increases are established on a District -wide basis (excluding
areas that are subject to special service contracts or conditions, such as areas other than the Annexation
Area which are annexed into the IRWD service area in the future). All other IRWD fees, charges and
assessments within the Annexation Area, including but not limited to pumping or elevation surcharges,
shall be IRWD's standard fees, charges and assessments, established in the same manner as in other
portions of IRWD.
(b) The provisions of this Section shall not prohibit IRWD from implementing such
rates, charges, assessments, or increases therein as IRWD may deem necessary to prevent or cure any
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default in connection with debt service on bonded indebtedness or to reimburse a credit facility provider as
required by agreement with such provider in the event of its acquisition of unremarketed or defaulted
bonds .
(c) This Section shall not apply within Santa Ana Heights for so long as the IRWD
rates, charges and assessments in such area are governed by the separate agreements entered into in
conjunction with the acquisition of the Sante Ana Heights Water Company by IRWD.
8. Disclosure. The parties agree to prepare a joint statement to disclose the terms of
this AGREEMENT to the public. In addition to such disclosure, the parties acknowledge that this
AGREEMENT shall be released as required by law.
9. Interpretation. Both of the parties have negotiated the provisions of this AGREEMENT
with the assistance of their counsel Accordingly, the parties waive the effect of Califomia Civil Code
Section 1654 or any other statute or common law principle of similar effect which interprets uncertainties
in a contract against the party who drafted the contract.
10. No Waiver. No failure of either party to exercise any power given that party under this
AGREEMENT or to insist on strict compliance by the other party to•its obligations; and no custom or
practice of the parties in variation with the terms of this AGREEMENT will constitute a waiver of any
parry's right to demand exact compliance with the terms of this AGREEMENT.
11. Successors and Assigns. The provisions of this AGREEMENT will be binding on and will
inure to the benefit of the parties and their respective heirs, successors, and assigns, except for any public
entity other than the parties which acquires jurisdiction over the Annexation Area or any portion thereof
through any change of organization or reorganization.
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12. Counterparts. This AGREEMENT may be executed in one or more counterparts. Each
will be deemed an original and all, taken together, will constitute one and the same instrument.
13. Notices. Any notice, request, demand, consent, approval or other communication
required or permitted pursuant to this AGREEMENT or by law shall be validly given or made only if in
writing and delivered in person or seventy-two (72) hours after deposit in the United States mail, duly
certified or registered (return receipt requested), postage prepaid, and delivered (in the case of personal
delivery) or addressed (in the case of mail delivery) to the Party for whom intended, as follows:
If to IRWD:
If to the City:
IRVINE RANCH WATER DISTRICT
15600 Sand Canyon Avenue
P.O. Box 57000
Irvine, CA 92619-7000
Attention: General Manager
CITY OF NEWPORT BEACH
3300 Newport Boulevard
P.O. Box 1768
Newport Beach, CA 92659-1768
Attention: City Manager
Either party may substitute a different addressfor its above -stated address by giving written
notice to the other in the manner herein provided.
14. Authority. Each of the undersigned represents and warrants to the other party hereto
that they have the authority to bind the party on behalf of whom they sign. Each of the undersigned
represents that it has all requisite authority to perform each of its obligations hereunder.
15. Entire Agreement. This AGREEMENT constitutes the entire agreement between the
parties concerning the subject matter hereof. All prior agreements, representations, negotiations and
understandings of the parties are superseded and merged in this AGREEMENT. This AGREEMENT shall
be amended only in writing executed by both parties.
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16. No Third Party Beneficiaries. Nothing in this AGREEMENT is intended or shall be
construed to give any person, other than the parties and their respective successors and assigns, any
legal or equitable right, remedy or claim under or in respect of this AGREEMENT or any provision. This
AGREEMENT and each condition and provision is intended to be for the sole and exclusive benefit of the
parties and their respective successors and assigns, and for the benefit of no other person.
17. Mutual Release. It is understood and agreed that this AGREEMENT is a compromise
settlement of a disputed claim and that the furnishing of the consideration for this settlement and general
release shall not be deemed or construed as an admission of liability or responsibility at any time for any
purpose. It is further agreed and understood that this AGREEMENT is intended to constitute a complete
and total release of any and all claims, rights, demands, actions, obligations, liabilities, and causes of
action either party may have with respect to the 1973 Agreement. Accordingly:
IT IS UNDERSTOOD AND AGREED THAT ALL RIGHTS UNDER SECTION 1542 OF THE CIVIL
CODE WHICH PROVIDES AS FOLLOWS,
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST
HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
ARE HEREBY EXPRESSLY WAIVED.
18. Specific Performance. The parties agree that the party entitled to receive performance of
each obligation herein other than an obligation to pay money has no adequate remedy at law for the
breach of such obligation and is entitled to specific performance thereof except as prohibited by law.
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111
//
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IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT the day and year
first written above.
APPROV D AS TO FORM:
City Attorney
r
APPROVED AS TO FORM:
ounsel for IRWD
62 .5
CITY OF NEWPORT BEACH
By
By&tht//U 11/
City Clerk
(SEAL)
IRVINE RANCH WATER DISTRICT
By
By
ecretary
(SEAL)
7,1b
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Exhibit A
Agreement between Irvine Ranch Water District and
City of Newport Beach relative to Annexation
Santa Ana Heights
Bay Knolls
`" 7'%
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4,4 ����� • N r,�
�A
OhillWV
PACIFIC
N 1
OCEAN
S
0 1 2 Miles
C
C
CC
Legend
Annexation Areas)
West Newport Area
Crystal Cove State Park
City Boundary
•
55036
Exhibit B
55039.
55030,:-=
55091- 55048-
_
•
t• r err ,
B2
TRAs in Newport Coast;
= 55092 55024
55086 55093 55064
-a• te •-- - _
•
55085
•
•
•
6014
Ogg
•
•
Coast streets
Coast TRA's
55008
55017
55024
55030
• 55031
:! •; 55034
55036
55039
h= 55048
55056
55064
»T 55082
';‘,;•:';', 55083
55085
//r, 55086
r r 55087
55088
• 55089
c41 55090
55091
• 55092
55093
55094
f 66014
= 66036
▪ n 66037
66043
:iii 66044
'J 66050
• % 66051
•
EXHIBIT "C"
Example
New jurisdiction formed inclusive of TRA 55036 water and sewer, 55039 water only and only a
portion of the tax levy and acreage of 55085 water only.
Original TRA Allocation New Jurisdiction IRWD
TRA (2) Water Sewer Water Sewer Water Sewer
5009 0.0055% 0.0169% 0.0055% 0.0169%
5012 0.0119% 0.0367% 0.0119% 0.0367%
7066 0.0073% 0.0073%
55008 0.0029% 0.0090% 0.0029% 0.0090%
55017 2.7172% 8.4139% 2.7172% 8.4139%
55025 0.0036% 0.0113% 0.0036% 0.0113%
55030 0.2641% 0.8163% 0.2641% 0.8163%
55031 2.1743% 2.1743%
55036 1.4740% 4.5641% 1.4740% 4.5641%
55039 0.7650% 2.3688% 0.7650% 2.3688%
55056 0.2662% 0.2662%
55066 0.0155% 0.0155%
55082 0.6161 % 1.9077% 0.6161 % 1.9077%
55083 0.0271% 0.0084% 0.0271 % 0.0084%
55085 A 3.6b77% 11.1714% 2.8862% (1)
55085 B 5.4116% 16.7571%
55085 9.0194% 27.9285% 2.8862%
0.7215%
5.4116%
6.1332%
11.1714%
16.7571%
27.9285%
55089 0.0047% 0.0147% 0.0047% 0.0147%
55090 1.4814% 1.4814%
66010 0.0015% 0.0045% 0.0015% 0.0045%
66014 0.0020% 0.0061 % 0.0020% 0.0061%
66030 0.2152% 0.6663% 0.2152% 0.6663%
66036 2.1690% 6.7163°% 2.1690% 6.7163%
66037 0.0020% 0.0063% 0.0020% 0.0063%
66043 0.0801 % 0.2479% 0.0801 % 0.2479%
66044 1.4405% 4.4607°4 1.4405% 4.4607%
66051 4.6452% 14.3840°% 4.6452% 14.3840%
Subtotal 27.4115% 72.5885% 5.1251% 4.5641% 22.2864% 68.0244%
Add Water 27.4115°% 5.1251% 22.2864%
Total 100.0000% 9.6892% 90.3108%
From New Jurisdiction 9.6892%
Total 100.0000°%
(1) - The new jurisdiction includes only 40% of the acreage in TRA 55085 and only 80% of the water tax levy to IRWD.
Therefore the allocation is as follows: (9.0194% * 40% * 80% = 2.8862%) .
(2) - Not all TRAs located within the agreement area were incuded in this exhibit. If the TRA did not receive a portion
of the general property tax levy then the TRA was excluded from the exhibit.
In this example, the City would return 9.6892% of the $25 million consideration (an amount equal
to $25 million * 9.6892%, or $2,422,300) to IRWD in accordance with Section 5 of the Agreement.