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HomeMy WebLinkAbout19 - BA-013 - Green Acres ProjectSeptember 27, 1999 CITY COUNCIL AGENDA ITEM NO, 19 BY I HE Q V''COUNCIL "ITY OF NFWrQRT MEAN TO: Mayor and Members of the City Council wyy FROM: Public Works Department SUBJECT: GREEN ACRES PROJECT LOAN AGREEMENT WITH THE BLUFFS HOMEOWNERS ASSOCIATION RECOMMENDATIONS: Approve a $145,000 Loan Agreement with the Bluffs Homeowners Association to be used for irrigation retrofit improvements related to the Green Acres Project and authorize the City Manager to execute the agreement. 2. Approve a Budget Amendment appropriating $145,000 from the Water Fund Reserves to fund the loan to the Bluffs Homeowners Association. DISCUSSION: At the September 13, 1999 City Council Study Session an update on the City's participation in the Orange County Water District's (OCWD) Green Acres Project (GAP) was given to the City Council. The Bluffs Homeowners Association (Bluffs) was one of the first to sign the required "End -User Agreement" in September 1996, as a requirement of OCWD to proceed with the Green Acres Extension into Newport Beach. They have not yet converted to reclaimed water and have requested, as provided for in the "End -User Agreement", a $145,000 loan to complete conversion of the irrigation system. Based on the input received at the Study Session, a loan from IRWD will not be pursued and the funds for this loan will come from the Water Enterprise Fund reserves. Attached for Council consideration is the proposed Loan Agreement with the Bluffs Homeowners Association. The loan is for ten years with an annual interest rate of 6.4%. This interest rate is in line with long term expectations for City investments. Payments will be made on an annual basis and included with their City Business license bill for easy tracking purposes. A "no penalty for early payment" clause has been included to allow the Bluffs the option to repay the loan before the ten year period has elapsed. SUBJECT: Green Acres Project Loan Agreement with the Bluffs Homeowners Association September 27, 1999 Page 2 A question was raised at the Study Session as to the legality of the City loaning funds to a private association. In this instance, the purpose of the loan is to allow the association to participate in a conservation program that is supported by the City and is in the overall public interest. The loan interest rate is consistent with the return the City is currently obtaining from its investments. Respectfully submitte , PUBLIC WORKS DEPARTMENT Don Webb, Director h By: '---4' U wvwva Micliael J. ' ac ri, P.E. Utilities E ine Attachments: Draft Loan Agreement with the Bluffs Homeowners Association f.\users\pbw\shared\council\fy99-00\september-27\bluffs - gap loan agreement.doc 24" IRWD PUMP 24� S 16' V � Nov ber 1997 OCWD Green Acres LOCATION OF OCWD/IRWD RECLAIMED Phase I Pipeline WATER INTERTIE FACILITIES ty OCWD Green Acres Phase 2 Pipeline Scale .5 01 mile Ak� MWD Pipeline I =0�O2000 3922 4000 50DO 6000 7000 NO rRWD Intertie Pipeline OCWD Green Acres End -User Sites Putdomofthle Mmpore copyrtotad,end reproduced w1th pamftalovi gr fad, by THOMAS 000S. MAPS. A., BAKE 24' JORN WAYNE AMPORT I ka XI 36' 3: is ,x'"41; s'T�.. Noe '_ Oleo / siti��N' }K� v! 24" IRWD PUMP 24� S 16' V � Nov ber 1997 OCWD Green Acres LOCATION OF OCWD/IRWD RECLAIMED Phase I Pipeline WATER INTERTIE FACILITIES ty OCWD Green Acres Phase 2 Pipeline Scale .5 01 mile Ak� MWD Pipeline I =0�O2000 3922 4000 50DO 6000 7000 NO rRWD Intertie Pipeline OCWD Green Acres End -User Sites Putdomofthle Mmpore copyrtotad,end reproduced w1th pamftalovi gr fad, by THOMAS 000S. MAPS. City of Newport Beach NO. BA- 013 BUDGET AMENDMENT 1999 -00 AMOUNT: ;145,000.00 OFECT ON BUDGETARY FUND BALANCE: Increase Revenue Estimates Increase in Budgetary Fund Balance �X Increase Budget Appropriations AND X Decrease in Budgetary Fund Balance Transfer Budget Appropriations No effect on Budgetary Fund Balance SOURCE: from existing budget appropriations from additional estimated revenues PX from reserved fund balance EXPLANATION: This budget amendment is requested to provide for the following: To appropriate $145,000 from Water Enterprise Fund Reserves to fund a loan agreement with the Bluffs Homeowners Association for Green Acres Project irrigation retrofit improvements. There have been no prior budget amendments. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Fund Account Description 500 3784 System Reserve REVENUE APPROPRIATIONS (3601) FundMivision Account Description EXPENDITURE APPROPRIATIONS (3603) Description Division Number 7501 Distribution and Piping Account Number C5500075 Reclaimed Water Irrigation Program Division Number Account Number Division Number Account Number Amount Debit Credit $145,000.00 ' $145,000.00 Signed: q�i�rv� (� Cam_= e =�J -o�� i S flrta�clal,,Approval: Finance�Director n Date ed: Admnsatve App l: City Manager Ateteb Signed: City Council Approval: City Clerk Date • LOAN AGREEMENT WITH BLUFFS HOMEOWNERS ASSOCIATION FOR GREEN ACRES END -USER RETROFIT WORK THIS AGREEMENT is made and entered into as of day of September, 1999, by and between the CITY OF NEWPORT BEACH, a Municipal Corporation and Charter City, referred to as "City ", and the Bluffs Homeowner Association, a private Corporation hereinafter referred to as "The Bluffs." RECITALS A. The Orange County Water District (OCWD) has developed a conservation program to provide reclaimed water to various areas served by OCWD in Orange County. This program is called the Green Acres Project (GAP). The City has agreed to participate in GAP to help conserve the available water supplies and has committed to provide GAP water to some users in the City. B. The OCWD has funded and constructed a pipeline in Newport Beach to serve reclaimed water from GAP to several planned end -user sites, which include but are not limited to the following: Big Canyon Country Club, Bluffs Homeowners Association, Bonita Creek Park, Corona Del Mar High School, • Eastbluff Park, Eastbluff School, Jamboree street medians and Newport Beach Country Club (Sites). End -user agreements for GAP water service to the Sites have been executed by the City and the respective end - users. C. The City agreed, through a September 27, 1996 End -User Agreement, to provide GAP water service to The Bluffs at a price not to exceed 80% of the City's retail rate for potable water. At the time of approval City committed to loan The Bluffs the funds necessary to accomplish on site retrofit improvements to enable The Bluffs to receive and use GAP water (the "Retrofit "). The commitment was subject to City approval of an agreement to repay the loan. The Bluffs intends to make payments on the loan in whole or in part from the reduced costs of GAP water. D. On March 18, 1999, The Bluffs submitted a written request for a $145,000 loan to provide for their end -user retrofits, and requested that the City prepare the necessary documents to accomplish the loan. City staff has reviewed and approved the loan request. E. The City has determined that it is in the best public interest to provide for water conservation in the City by participating in the GAP and that The Bluffs participation in GAP provides a public benefit by reducing demand for potable water. 1 F. The City desires to provide a loan for $145,000 to be paid back over a ten - year period based on the terms and conditions set forth in this agreement. NOW THEREFORE, in consideration of the facts recited above and the covenants, conditions and promises contained herein, the parties hereby agree as follows: 1.0 Within 60 days following the execution of this agreement The Bluffs shall have completed the Retrofit of their facilities in accordance with their loan request and make them ready to receive the reclaimed water. 2.0 City shall obtain, or cause to obtain, all the necessary approvals for the Retrofit from the California Department of Health Services, Orange County Health Care Agency, OCWD, and all other agencies having jurisdiction over use of recycled water on The Bluffs Site. 3.0 CITY agrees to provide The Bluffs with a one -time loan of one hundred forty five thousand dollars ($145,000) and The Bluffs agrees to receive said contribution solely for The Bluffs use to retrofit the site for use of reclaimed water, upon the following terms and conditions: • 3.0.1 Effective date of contribution shall be October 1, 1999. 3.0.2 Interest rate of contribution shall be set at 6.4% per annum. 3.0.3 The reimbursement period shall be 10 years. 3.0.4 Loan payments shall be $20,075.89 per year, and shall be made in accord with the "Reimbursement Amortization Schedule" shown in Exhibit "A." 4.0 The obligation of The Bluffs to make loan payments to CITY hereunder when due is absolute and unconditional and until such time as such reimbursements have been submitted in full. The Bluffs shall not discontinue or suspend any payment when due, whether or not the Retrofitted Facilities or any part thereof is operating or operable, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such reimbursements shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any user entity or party of any agreement for any cause whatsoever; and The Bluffs shall not assert any right of setoff or counterclaim against its obligation to make any reimbursement under this Agreement. FA 4.0.1 Any payment, which shall not be paid when due shall bear interest at • the rate of one percent (1 %) per month for each month or portion thereof that the reimbursement remains delinquent, or the legal maximum interest rate, whichever is lower. 4.0.2 The City's remedies upon the failure or refusal of Bluffs to make payments when due under this Agreement shall be governed by the provisions of this Section 4.0.2. (a) By notice in writing to The Bluffs, declare the entire principal amount of the outstanding reimbursement and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything contained herein to the contrary notwithstanding; provided, however, that if at any time after the entire principal amount of the outstanding reimbursement and the accrued interest thereon shall have been so declared due and before any judgment or decree for the reimbursement of the contribution due shall have been obtained or entered The Bluffs shall deposit with CITY a sum sufficient to offset the outstanding principal amount of the contribution due prior to such declaration and the accrued interest thereon, with • interest on such overdue installments as provided herein, and any and all other defaults known to CITY shall have been made good or cured to the satisfaction of CITY or provision deemed by CITY to be adequate shall have been made therefore, then and in every such case CITY, by written notice to The Bluffs may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon; (b) By any action, proceeding or suit, at law or in equity, to enforce its rights against The Bluffs or any director, officer or employee thereof, and to compel The Bluffs or any such director, officer or employee to carry out its, his or her duties under the law and the agreements and covenants required to be performed by it, him or her contained herein; (c) By suit in equity to enjoin any acts or things which are unlawful or violate the rights of CITY; (d) City may declare the loan in default and immediately begin charging The Bluffs, and The Bluffs agrees to pay, for GAP • 3 water at 100% of the City's retail rate for potable water. The difference between the 80% and 100% rate shall be applied by City to the balance of the loan and all accrued interest penalties, until paid in full. The Bluffs agrees that City action to enforce its rights to repay the loan, upon default shall not be considered breach of or conflict with the September 27, 1996 "End -User" Agreement. The provisions of this Section shall supercede the provisions of that Agreement. (e) No remedy herein conferred upon or reserved to CITY is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given to CITY under this Agreement, or otherwise at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient by CITY. 5.0 Notices: Any notice, instrument, reimbursement or document required to be given or delivered under this Agreement shall be given or delivered by personal delivery or by depositing the same in a United States mail depository, first class postage prepaid, registered or certified, and addressed as follows: If to The Bluffs: The Bluffs Homeowners Association P.O. Box 8167 Newport Beach, CA 92658 -8167 Attention: General Manager If to CITY: City of Newport Beach 3300 Newport Boulevard Post Office Box 1768 Newport Beach, CA 92658 -8915 Attention: City Manager or such other address as either party may direct in writing to the other. 6.0 Hold Harmless: Neither CITY nor The Bluffs shall be liable for the acts or omissions of the other. CITY and The Bluffs shall each protect, defend, indemnify and hold the other and its respective officers and employees harmless from and against any and all claims, actions, expenses, liabilities and losses incurred by one of the parties hereto as a result of any property 4 Revised damage or personal injury, including death, suffered or allegedly suffered by any person, and caused by any wrongful act or omission of the other party. 7.0 Term: The term of this Agreement shall terminate upon the repayment by The Bluffs of all payments as required in the "Reimbursement Amortization Schedule" included in Exhibit "A" hereto or shall terminate upon complete payment of all principal and accrued interest if The Bluffs so choose to payback the loan at an earlier date. 8.0 No Waiver of Breach: No failure to exercise or delay in exercising any right, power or remedy accruing to either party on any breach or default of the other hereunder shall impair any such right, power or remedy, or be construed as a waiver of any such breach or default, and no waiver of any single breach or default shall be construed as a waiver of any other breach or default heretofore or thereafter occurring. 9.0 Partial Invalidity: If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of CITY or The Bluffs shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. CITY and The Bluffs declare that they would have executed this Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof, irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstances may be held to be unconstitutional, unenforceable or invalid. 10.0 Execution in Counterparts: This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 11.0 Amendments Permitted: This Agreement and the rights and obligations of CITY and The Bluffs may be modified or amended at any time by an amendment hereto which shall become binding with the written consents of the parties hereto. No such modification or amendment shall extend the reimbursement dates, or reduce the rate of interest represented thereby, or extend the time of reimbursement of interest, or reduce the amount of principal represented thereby, or reduce any premium to be reimbursed on the pre- reimbursement thereof. 5 0 • 12.0 Integration and Construction: This Agreement represents the entire understanding of CITY and The Bluffs as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered by this Agreement. This Agreement shall be construed and governed in accordance with the laws of the State of California, and shall be construed as if drafted by both CITY and The Bluffs. 13.0 Successors and Assigns: Neither this Agreement nor any of the rights or obligations hereunder shall be assigned or conveyed by The Bluffs without the prior written consent of CITY; and this Agreement and any rights hereunder may be assigned by CITY, in whole or in part, without the necessity of obtaining the prior consent of The Bluffs. Subject to the foregoing, all of the terms, conditions and provisions of this Agreement shall inure to the benefit of, and be binding upon, City, The Bluffs and their respective successors and assigns. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above. APPROVED AS TO FORM: Robert Burnham, Esq City Attorney ATTEST: LaVonne Harkless City Clerk CITY OF NEWPORT BEACH A municipal corporation Homer Bludau City Manager The Bluffs Homeowners Association A private corporation Carlyle "Cork" Levinson, President Chuck Currier Secretary Fusers/ shared / council /fy9 -00 /september -27 /bluffs loan contract revised.doc M • REIMBURSEMENT AMORTIZATION SCHEDULE City of Newport Beach Green Acres Reclaimed Water Project Bluffs Homeowners Association Retrofits Loan Principal: $145,000.00 Required Pmt: $20,075.89 Interest Rate: 6.400% Est. Total Pmts: $200,758.94 Term (Years): 10.00 Est. Total Int: $55,758.94 Payment Remaining Cumulative Payment Payment Number Amount Principal Interest Principal Interest Date 1 $20,075.89 $10,795.89 $9,280.00 $134,204.11 $9,280.00 10/01/2000 2 $20,075.89 $11,486.83 $8,589.06 $122,717.27 $17,869.06 10/01/2001 3 $20,075.89 $12,221.99 $7,853.91 $110,495.29 $25,722.97 10/01/2002 4 $20,075.89 $13,004.20 $7,071.70 $97,491.09 $32,794.67 10/01/2003 5 $20,075.89 $13,836.46 $6,239.43 $83,654.63 $39,034.10 10/01/2004 6 $20,075.89 $14,722.00 $5,353.90 $68,932.63 $44,387.99 10/01/2005 7 $20,075.89 $15,664.21 $4,411.69 $53,268.42 $48,799.68 10/01/2006 8 $20,075.89 $16,666.72 $3,409.18 $36,601.71 $52,208.86 10/01/2007 9 $20,075.89 $17,733.38 $2,342.51 $18,868.32 $54,551.37 10/01/2008 10 $20,075.89 $18,868.32 $1,207.57 $0.00 $55,758.94 10/01/2009 • THE BLUFFS HOMEOWNERS COMMUNITY ASSOCIATION P.O. Box 8167 • Newport Beach, California 92658 -8 Telephone (714) 759 -1200 Fax (714) 759 -6620 March 13, 1999 Mr. Michael Sinacori,P.E. Utilities Engineer City of Newport Beach Public Works Department 3300 Newport Blvd. Newport Beach, Calif. 92663 Mr. Sinacori: Please consider this letter as our formal request for funding to complete the installation of the reclaimed water project within the Common Area of our Association. After consulting with Mr. Tom Epperson, ASL Consulting Engineers, Irvine, and as indicated on the attached sheets, we are requesting funding in the amount of $145,000 as a ten -year loan from the City of Newport Beach. Terms and conditions of this loan are as have been discussed in our meetings. • This Association is pleased to become an active participant in this water project, and look forward to a quick approval of funding so that our system may be put in service in the next couple of months, prior to our high demand season for water. Thank you again for your consideration of our request, and for the time you and the City Staff have invested to make this project a reality. On Behalf of the Board of Directors, Carlyle "Cork" Levinson, President Bluffs Homeowners Community Association Board of Directors 0 2414 Vista Del Oro • Newport Beach, California ASL Consulting Engineers 0 MEMORANDUM To: Kevin Shannon General Manager From: Tom Epperson, ASL Consulting Engineers Project: Reclaimed Water User On -Site Retrofit Design The Bluffs Homeowners Community Association Subject: Budget Costs to Retrofit Bluffs Community Greenbelt Date: March 18, 1999 The following is a brief summary of the budget costs to retrofit Bluffs Community Greenbelt to receive reclaimed water. This estimate is based on our preliminary discussions with the County Health and maintenance personnel. Budget Retrofit Costs • Labor Description of Work Material Costs Hours Costs 1. Reclaimed Water Meters 1. Vista Del Oro/ Vista Dorado 4" Strainer $1,000 56 $970 2. Vista Del Oro/ Vista Cajon 6" Strainer $2,000 40 $710 Connection to Irrigation $500 20 $360 3. Vista Del Oro/ Vista Laredo 4" Strainer $1,000 56 $970 Connection to Irrigation $1,000 28 $480 2. Additional RW piping - Vista Del Playa 6 -inch piping (320 feet) $5,000 96 $1,680 Connection to irrigation $1,000 20 $360 Turf restoration $800 3. RP backflows at pools (4 required) $3,000 72 $1,220 4. Change quick couplers and tags 1. Grande (54) $5,000 96 $1,680 2. Bonita (47) $4,500 96 $1,680 ASL Consulting Engineers MEMORANDUM March 18, 1999 Page 2 Q VulyFileslnblbluNsrev.wpd Labor Description of Work Material Costs Hours Costs 5. Brand valve covers and tag 1. Cajon (176) $2,000 180 $2,880 2. Laredo (130) $1,500 130 $2,080 3. Flora (133) $1,500 130 $2,080 4. Entrada (191) $2,000 200 $3,200 5. Grande (159) $1,700 160 $2,560 6. Dorado (100) $1,300 100 $1,600 7. Bonita (183) $2,000 180 $2,880 8. Caudal (318) $3,000 320 $5,120 6. Reclaimed Water Signs (about 10) $1,500 68 $1,160 7. Fountain Modifications (assuming RW) . Limit accessibility /addition of filters $15,000 224 $4,770 8. Additional work in adjacent properties Upgrade backflow preventers (2) $3,000 48 $840 9. Cross - connection verification $9,700 480 $9,120 (64 buildings) 10. Change sprinkler heads at perimeter Assume 100 heads $1,000 216 $3,600 Subtotal Budget Retrofit Costs $70,000 3,016 $52,000 Contingency (10 %) $7,000 $5,000 Engineering Support $6,000 Administration Costs $5,000 Total Budget Retrofit Costs $83,000 $62,000 Total Budget Retrofit Costs: $145,000.00 TLE /cg Q VulyFileslnblbluNsrev.wpd