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HomeMy WebLinkAbout09 - Robinson-Skinner Annuity for Newport Bay Dredging & Ecosystem RestorationCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 9 November 12, 2002 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office and City Attorney's Office Dave Kiff, Assistant City Manager and Bob Burnham, City Attorney 949/644 -3002 or dkiff @city.newport- beach.ca.us 949/644 -3131 orbburnham @city.newport- beach.ca.us SUBJECT: Resolution 2002 - and New Council Policy (H -5) Relating to Robinson- Skinner Annuity for Newport Bay Dredging and Ecosystem Restoration ISSUE: Should the City of Newport Beach adopt a Resolution and new Council Policy delineating the City's administration of an Annuity for Newport Bay dredging and ecosystem restoration? RECOMMENDATION: Adopt Resolution 2002 -_ authorizing the Mayor to execute a Memorandum of Agreement (MOA) between the City and the Regional Board relating to the City's administration of the Robinson - Skinner Annuity; and -- Adopt Council Policy H -5 relating to the administration of the Robinson - Skinner Annuity. DISCUSSION: Newport Bay is a water quality limited water body per §303(d) of the federal Clean Water Act. As such, the US Environmental Protection Agency (US EPA) and the State Water Resources Control Board (SWRCB) via the California Regional Water Quality Control Board, Santa Ana Region (Regional Board) is directed to prepare "total maximum daily loads" (TMDLs). A TMDL is a management plan to improve water bodies within a certain amount of time. Newport Bay appears on the §303(d) List for the following substances: • Sediment • Nutrients Robinson - Skinner Annuity MOA November 12, 2002 Page 2 • Fecal Coliform bacteria • Toxic Pollutants Here is what the TMDLs say: • Sediment. Adopted on October 9, 1998, the Sediment TMDL requires local partners (stakeholders in the watershed) to survey the Bay regularly and to reduce annual sediment coming into the Bay from 250,000 cubic yards to 125,000 cubic yards (a 50% reduction) by 2008. The TMDL's goal is to reduce dredging frequency in the Bay to once every 20 years. Reducing sediment inputs to the Bay is part of the Sediment TMDL. But first the Bay needs to be dredged and restored to its optimal ecosystem so that the sediment that does enter the Bay (within the TMDL's limits) does not exacerbate the impairment. The Newport Bay Ecosystem Restoration Project, a US Army Corps of Engineers -led effort intended to start construction in August 2004, restores the Bay to this optimal point. Earlier this year, the Corps told us that: • Project construction will be August 16, 2004 through January 22, 2007. It's likely that there will be a dredge in the Bay and barges going up and down the channel for a significant period of time, often working 24 hours a day. • The Project is designed to occur only once in 21 years. • The Project cost today is estimated at $32,475,000. • More than 2.1 million cubic yards of material will be removed. • While the US Congress has not yet approved funding for the Ecosystem Restoration Project, Congressman Christopher Cox has asked for language in a House Appropriations Bill that would formally start this project. The State of California has already set -aside $13 million to match the federal funds for this effort. Dredging Annuity - Paying for Next Time. As the City and others, including Congressman Cox, advocate for funding, the watershed partners have attempted to build an annuity that will fund the next Upper Bay dredging event set tentatively for 2028. State Senator Ross Johnson (R- Irvine) was successful four years ago in establishing a continuous appropriation of $200,000 annually from the State's General Fund to the Upper Newport Bay Ecological Reserve Maintenance and Preservation Fund within the budget of the California Department of Fish and Game (DFG). The Fund would have accrued $1,000,000 by the close of FY 2002 -03, but Governor Davis' FY 2002 -03 Budget zeroed the Fund to address the State's FY 2002 -03 budget deficit. Mayor Ridgeway issued a letter protesting this action on January 29, 2002. Robinson- Skinner Annuity MOA November 12, 2002 Page 3 Sadly, the Governor's action is consistent with Sacramento's long -term approach to maintaining the Department's Upper Newport Bay resource -- DFG gets little or no revenue in the State Budget to do even small maintenance activities like restroom upkeep and minor habitat repair. • Nutrients. Approved by US EPA on April 16, 1999, the Nutrient TMDL limits nitrogen and phosphorus inputs to the Bay. The Nutrient TMDL attempts to reduce the annual loading of nitrogen by 50% -- from 1,400 pounds per day today to approximately 850 to 802 pounds per day at San Diego Creek — by 2012. Phosphorus loading must fall from 86,912 pounds per year in 2002 to 62,080 pounds by 2007. In plain language, here's what the Nutrient TMDL means: Less nutrients should mean less algae. City must help pay for monitoring + sediment basin maintenance upstream since less sediment can mean less nutrients (about $30,000 /year) City works to keep upstream cities involved in the watershed management process (Watershed Executive Committee) • Fecal Coliform. Approved in late 1999, the Fecal Coliform TMDL attempts to reduce the amount of fecal coliform inputs to the Bay enough to make the Bay meet water contact recreation (RECD standards (swimming, wading, surfing) by 2014 and shellfish harvesting (SHEL) standards (where waters support shellfish acceptable for human consumption) by 2020. In plain language, here's what the Fecal Coliform TMDL means: Less fecal coliform in the water means fewer beach postings. City has more than 200 storm drain outlets that drain into the Bay. Over 2,200 catch basins take urban runoff into these 200 storm drains. Can we keep each one clean (below state standards for fecal coliform)? If any TMDL has the capacity to break the City's bank, it's this one. • Toxic Pollutants. Adopted by US EPA on June 14, 2002, the Toxic Pollutants TMDL addresses Bay inputs like heavy metals (chromium, copper, lead, cadmium, zinc) and priority organics like (endosulfan, DDT, Chlordane, PCBs, Toxaphene, diazinon, chlorpyriphos, more). It may lead to the reduction or elimination of pesticide use by residents, businesses, and municipal services in watershed. Some controls will be placed on heavy metals. The Toxic Pollutants TMDL also addresses existing toxic deposits in sediments in Rhine Channel and other areas in the Lower Bay. In plain language, here's what the Toxic Pollutants TMDL means: Robinson- Skinner Annuity MOA November 12, 2002 Page 4 Phase -out or limits on identified household and commercial chemicals like chlorpyrifos and diazinon; Municipal activities (more frequent street sweeping or additional filter installations) to reduce toxic inputs from cars and trucks. Potentially significant costs to remediate existing toxicity (Rhine Channel) — today, experts disagree as to whether it's best to leave the toxic sediment there (entomb it) or pick it up and dispose of it in a hazardous materials dumpsite. The American Trader Oil Spill On February 7, 1990, the single -hull tanker American Trader ran aground about 7,200' off of the Huntington Beach shoreline. About 416,600 gallons of crude oil came onto the shoreline between February 8 and February 12, 1990. Most oil came onshore between Huntington Beach and Newport Beach. The spill "Trustees" -- which consist of the cities of Newport Beach and Huntington Beach, along with DFG, the Department of Parks and Recreation, the California Regional Water Quality Control Board (Santa Ana Region), the State Coastal Conservancy, the State Lands Commission, and the County of Orange -- all received revenue from legal settlements associated with the spill. Newport Beach's share was about $4.7 million. The Trustees must spend the revenue on projects and programs that address water quality or that replace the habitat and recreational value lost due to the spill. Newport Beach has allocated its share of funds to pier renovations, restroom renovations, Corona Del Mar State Beach improvements, the Marine Studies Center on Shellmaker Island, and other improvements. The Regional Board received $3,800,000 in what the law classifies as fines relating to violations of the Clean Water Act. With the State Water Resources Control Board as an administrator, Regional Boards place these fines in the State Water Pollution Cleanup and Abatement Account. At its meeting in Loma Linda on December 3, 2002, the Santa Ana Regional Board will likely adopt a resolution that authorizes the City to receive and invest this $3.8 million. Under the Board's direction, the City would establish an annuity called the Robinson- Skinner Annuity (also known as the Newport Bay Maintenance Dredging and Total Maximum Daily Load Compliance Account) ( "Annuity "). Robinson - Skinner. At its meeting on April 9, 2002, the City Council directed that this Annuity be named in honor of Frank and Frances Robinson and Jack and Nancy Skinner for their contributions towards protecting Newport Bay. Both families were instrumental in working towards preservation of the Bay itself (including the Upper Newport Bay Ecological Reserve and Upper Newport Bay Robinson - Skinner Annuity MOA November 12, 2002 Regional Park) and water quality, including working to identify solutions to the Page 5 impairments identified within the TMDLs. While interest generated from the invested principal could be used for programs and projects that address each of the four Newport Bay TMDLs, the "main project" to be funded with the proposed Annuity will be the "long term maintenance dredging of Upper and Lower Newport Bay." The Board also intends that the Annuity be used to accept fines (called Supplemental Environmental Projects or SEPs) and contributions from other parties -- including the State and watershed partners -- to help build principal over time. The Newport Bay Watershed Executive Committee (WEC), with guidance from the Newport Bay Watershed Management Committee (WMC), would approve projects funded by the Annuity's interest. These committees include representatives from the County of Orange, the City (Council Member Glover has served as our representative to the WEC and I attend the WMC meetings), DFG, the cities of Irvine, Tustin, Costa Mesa, Santa Ana, Orange, and Lake Forest, the Irvine Ranch Water District, and the Regional Board itself. If invested at 4% interest, the Annuity will produce $152,000 per year for projects that help address the four TMDLs. The WEC would ultimately decide upon a future use of the principal as well as the interest proceeds. Earlier this year, the City Council adopted Resolution 2002 -31 reflecting the City's willingness to establish and manage the annuity according to the Board's direction. The Board has asked for a second resolution (attached) specifically authorizing the City to enter into a Memorandum of Agreement ( "MOA" - also attached) with the Regional Board relating to the administration of the Annuity. We further suggest that the Council adopt a formal policy (attached) relating to this MOA and the City's administration of the Annuity. Environmental Review: The City Council's approval of this Agenda Item does not require environmental review. Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). Submitted by: Dav ff Assistant City Manager Robinson - Skinner Annuity MCA November 12, 2002 Page 6 Attachments: Resolution 2002 - New Council Policy H -5 Memorandum of Agreement Attachment A RESOLUTION 2002- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING THE CITY TO ENTER INTO A MEMORANDUM OF AGREEMENT WITH THE CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD, SANTA ANA REGION, REGARDING THE ROBINSON- SKINNER ANNUITY WHEREAS, Newport Bay is a vital and important ecological and recreational resource to the residents of and visitors to Newport Beach; and WHEREAS, Newport Bay is water quality limited as defined by Section 303(d) of the federal Clean Water Act; and WHEREAS, these impairments include sediment, nutrients, fecal coliform bacteria, and toxic materials; and WHEREAS, the City of Newport Beach is an active participant in the Watershed Executive Committee and the Watershed Management Committee, two entities which collectively manage and administer plans called Total Maximum Daily Loads which are intended to restore Newport Bay's water quality; and WHEREAS, the California Regional Water Quality Control Board, Santa Ana Region intends to transfer up to $3.8 million to the City to hold in trust in an annuity fund called the Robinson- Skinner Annuity, also known as the Newport Bay Maintenance Dredging and Total Maximum Daily Load Compliance Account; and WHEREAS, interest revenue from the Account will be used according to standards and guidelines described in a Memorandum of Agreement executed by the Mayor and the Board upon adoption of resolutions authorizing the execution of the MCA; and WHEREAS, the Fund shall be invested prudently and in accordance with investment practices approved by the State Water Resources Control Board, the City, and the Regional Board within the aforementioned MCA; and WHEREAS, the City Council, on April 9, 2002, adopted Resolution 2002 -31 authorizing the creation of the Account and the City's acceptance of the responsibility to administer the Account properly and prudently; now, therefore be RESOLVED by the City Council of the City of Newport Beach that it hereby authorizes the Mayor to execute a Memorandum of Agreement with the California Regional Water Quality Control Board, Santa Ana Region, for the purposes of administering the Robinson - Skinner Annuity. ADOPTED this 12th day of November, 2002. TOD W. RIDGEWAY Mayor ATTEST: LAVONNE HARKLESS City Clerk Attachment B COUNCIL POLICY H -5 The Administration of the Robinson- Skinner Annuity for Newport Bay Dredging PURPOSE: To describe the manner in which the City shall administer funds within the Robinson- Skinner Annuity and to appropriately safeguard the principal within the Annuity so that the purposes of the Annuity are protected. These purposes include the establishment and long -term preservation of a funding source for the regular dredging of Upper Newport Bay and dredging of the Lower Newport Bay so that the City and its watershed partners achieve the goals and directives Loads) adopted for of the Sediment and Nutrient TMDLs (Total Maximum Daily Newport Bay in 1998. POLICY: It is the policy of the City Council of the City of Newport Beach to protect the principal within the Robinson- Skinner Annuity by prudently investing the principal in accordance with the City's conservative investment principles and the City's Statement of Investment Policy (Council Policy F -1). It is further the policy of the City Council that it shall follow the terms of the Memorandum of Agreement executed in December 2002 in the implementation and administration of the Annuity. Adopted: November 12, 2002 Attachment; C CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD SANTA ANA REGION RESOLUTION NO. R8- 2002 -00 MEMORANDUM OF AGREEMENT WITH THE CITY OF NEWPORT BEACH FOR THE CREATION AND MANAGEMENT OF THE ROBINSON- SKINNER ANNUITY ACCOUNT FOR MAINTENANCE DREDGING AND TMDL COMPLIANCE PROJECTS IN NEWPORT BAY •- • :u • c. Pursuant to Section 13440 -43 of the California Water Code, the State Water Resources Control Board ( "the State Board ") and the California Regional Water Quality Control Board, Santa Ana Region ( "the Regional Board ") hereby grants to the City of Newport Beach ( "the grantee ") a sum not to exceed three million eight hundred thousand dollars ($3,800,000), subject to grantee's strict compliance with the terms and conditions of this Memorandum of Agreement (MOA). This grant, and all funds derived from this grant such as interest or investment income, (collectively grant funs), shall be used by the grantee solely to implement the Newport Bay Maintenance Dredging Plan, and any of the implementation plans for the total maximum daily loads adopted by the Regional Board as more fully described in Section _. The grant funds shall be held by grantee in an separate account designated as the Robinson- Skinner Annuity Account (Endowment Account). PERMITTED USE OF FUNDSIPROJECT DESCRIPTION The principal in the endowment account shall be used solely to fund, or assist in funding, large scale dredging projects in Upper Newport Bay that are designed and intended to preserve or enhance is function as an estuary supporting rare and endangered species. Interest earned by the endowment account shall be used solely for periodic maintenance dredging in Newport Bay including periodic dredging of two sediment basins in the Upper Bay and other areas impacted by sediment deposition to comply with the TMDL for sediment adopted by the Regional Board. The interest on the endowment account may also be used to implement, or obtain information relevant to, other TMDLs adopted by the Regional Board if and when the interest generated by the account exceeds that needed for maintenance dredging. The grantee shall administer the endowment account, and use funds in the account, in strict compliance with this agreement and any worder or direction of the Executive Officer of the Regional Board (the "Executive Officer"). Resolution No. R8- 2002 -00 MOA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account The grantee shall not use any funds in the endowment account to implement any project unless and until the following conditions precedent have been met: Page 2 A resolution has been adopted by the City Council of the grantee authorizing the execution of this agreement and approving its terms and conditions. 2. The Executive Officer has approved in writing: The work program and projected budget for the project. b. The plans for the erection of signs and placards as provided in the "SIGNS" section of this agreement. 3. Written evidence has been provided to the Executive Officer: a. That all permits and approvals necessary to the commencement of the project under applicable local, state and federal laws and regulations have been obtained. b. That the California Coastal Commission has determined that all projects funded with this account are consistent with the Coastal Act. c. That the grantee and /or other project proponents have provided for liability insurance and the Regional Board is designated as an additional- insured in an appropriate endorsement, or is self- insured, as described in the "LIABILITY" section of this agreement. 4. The Regional Board, the grantee and, if any portion of the property on which the project will be implemented is not owned by grantee, then the owner of that property, have entered into and the grantee has recorded an agreement to protect the public interest in the improvements or facilities constructed under this grant as required by Public Resources Code Section 31116(c); The following conditions shall also apply to this agreement: The grantee shall submit an annual report as described in the "ENDOWMENT Resolution No. R8- 2002 -00 MCA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account Page 3 ACCOUNT' section of this agreement. 2. The grantee shall not spend principal from the endowment fund without the written approval of the Executive Officer. 3. The grantee shall not use the endowment fund to acquire an interest in real property. TERM OF AGREEMENT This agreement shall be deemed executed and effective when signed by both parties and received in the offices of the Regional Board together with the resolution described in the "CONDITIONS PRECEDENT TO COMMENCEMENT OF PROJECT AND DISBURSEMENT' section of this agreement. An authorized representative of the grantee shall sign the first page of the originals of this agreement in ink. This agreement shall run from its effective date through perpetuity (the "termination date ") unless otherwise terminated or amended as provided by the agreement. This agreement shall be terminated when funds no longer remain in the endowment account. The signature of the Executive Officer of the Regional Board on this agreement certifies that at its May 31, 2002 meeting, the Regional Board adopted the resolution included in the staff recommendation attached as Exhibit B. This agreement is executed pursuant to that authorization. Grantee shall establish a separate endowment account for the purpose of receiving, managing and disbursing the endowment funds in accordance with the terms and conditions of this Agreement. The endowment account shall consist of two funds, the "principal fund" and the "interest fund." The Grantee shall adopt a City Council policy consistent with this Agreement that will govern the investment and disbursement of the funds in the endowment account. The grantee shall maintain all endowment funds in a segregated account separate from all other grantee accounts, if any; All funds held in the account shall be invested as in accordance with the Resolution No. R8- 2002 -00 MCA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account Page 4 investment policies of grantee which shall be submitted to the Executive Officer; The grantee shall be authorized and obligated to make disbursements of interest only unless grantee has received the prior written authorization of the Executive Officer; The grantee shall shall appoint an individual who is principally responsible for carrying out its obligations as trustee and shall identify this individual to the Regional Board, in writing, the identity, providing his /her mailing address, position with grantee and phone number. Any change in the person principally responsible shall be communicated in writing to the Executive Officer within ten business days of the change; and The grantee shall submit to the Executive Officer an annual report by December 15 of each year, which itemizes all funds maintained, deposited, accrued and disbursed from the trust account and a summary of the investment portfolio which highlights changes in the portfolio over the past year. Grantee shall submit an annual report to the Regional Board which includes a projected budget for the following twelve month period and which summarizes the project. Grantee shall not spend principal from the endowment without the written approval of the Executive Officer of the Regional Board and shall not spend income or principal from the endowment for purposes other than the project described above. Prior to dispersal of funds, the grantee shall submit a detailed work program to the Executive Officer for review and written approval of its consistency with this agreement. The work program shall include: A comprehensive list of activities and expenses that may be funded through the endowment account, including administrative costs. 2. Projected project budget for the first 12 months. The work program shall have the same force and effect as if included in the text of this agreement. However, the work program may be modified without amendment of this agreement upon the grantee's submission of a modified work program and the Resolution No. R8- 2002 -00 MCA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account Page 5 Executive Officer's written approval of it. If this agreement and the work program are inconsistent, the agreement shall control. The grantee shall carry out the project in accordance with the approved work program. If the grantee intends to use any contractor(s) on any portion of the project to be funded under this agreement, construction shall not begin until each such contractor has furnished a performance bond in favor of the Regional Board and the grantee, in the following amounts: for faithful performance, one hundred percent (100°/x) of the contract value; and for labor and materials, one hundred percent (100°/x) of the contract value. This requirement shall not apply to any contract for less than $20,000. The grantee shall erect signs acknowledging State Board's and Regional Board's assistance and displaying the Regional Boards logo, unless the grantee incorporates this acknowledgement into other signage in a manner approved by the Executive Officer. Upon determination by the Executive Officer that all "CONDITIONS PRECEDENT TO COMMENCEMENT OF PROJECT AND DISBURSEMENT" have been fully met, the State Board agrees to disburse to the grantee the total amount of this grant for deposit in the endowment account. The grantee shall request disbursement by filing with the State Board a fully executed "Request for Disbursement" form (available from the Regional Board). The grantee shall include in the form its name and address, the number of this agreement, the date of the submission, the amount of the request, and a description of the project for which disbursement is requested. The form shall be signed by an authorized representative of the grantee. Failure to fully execute and submit a Request for Disbursement form will relieve the State Board of its obligation to disburse funds to the grantee unless and until all deficiencies in the form are rectified. Resolution No. R8- 2002 -00 MCA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account Page 6 Prior to the disbursement of funds to the grantee, either party may terminate this agreement for any reason by providing the other party with seven days notice in writing. Following the disbursement of funds to the grantee, the grantee may terminate this agreement for any reason by providing the Regional Board with seven days notice in writing. If the grantee terminates this agreement, the grantee shall be liable for immediate repayment of all amounts disbursed by the Regional Board under this agreement less the amount of principal expended by the grantee with the written approval of the Executive Officer. If the State Board terminates the agreement prior to the disbursement of funds to the grantee, the State Board shall not be responsible for any obligations incurred by the grantee. If the grantee fails to undertake the project in accordance with this agreement, or fails to fulfill any other obligations of this agreement prior to the termination date, the grantee shall be liable for immediate repayment to the State Board of all amounts disbursed by the State Board under this agreement. The State Board may, at its sole discretion, consider extenuating circumstances and not require repayment for work partially completed. This paragraph shall not be deemed to limit any other remedies the State Board may have for breach of this agreement. Throughout the term of the agreement, the State Board and the Regional Board shall have the right to inspect the project area to ascertain compliance with this agreement. The grantee shall be responsible for, indemnify and save harmless the State and Regional Boards, its officers, agents and employees from any and all liabilities, claims, demands, damage or costs resulting from, growing out of, or in any way connected with or incident to this agreement, except for active negligence of the boards, its officers, agents or employees. The duty of the grantee to indemnify and save harmless includes the duty to defend as set forth in Civil Code Section 2778. The grantee waives any and all rights to any type of express or implied indemnity or right of contribution from the State, its officers, agents or employees, for any liability resulting from, growing out of, or in any way connected with or incident to this agreement. Throughout the term of this agreement, the grantee shall provide and maintain public- Resolution No. R8- 2002 -00 MOA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account Page 7 liability and property- damage insurance for liability assumed by the grantee under this agreement with minimum limits of liability as follows: A single limit for bodily injury (including death) and property damage liability combined of $1,000,000 each occurrence and $1,000,000 in the aggregate. This insurance shall be issued by a company or companies admitted to transact business in the State of California. The liability insurance policy shall contain an endorsement specifying that: (a) The State of California, its officers, agents and employees are included as additional insureds for any liability resulting from, growing out of, or in any way connected with or incident to this agreement; and (b) The policy will not be cancelled or reduced in coverage without thirty days' prior written notice to the Regional Board. The State and Regional Boards are not responsible for premiums and assessments on the insurance policy. Nothing in this agreement is intended to create in the public or in any member of it rights as a third party beneficiary under this agreement. The grantee shall maintain standard financial accounts, documents, and records relating to the implementation of the project. The grantee shall retain these documents for three years throughout the term of this agreement. The documents shall be subject to examination and audit by the State and Regional Boards and the Bureau of State Audits during this period. The grantee may use any accounting system that follows the guidelines of "Generally Accepted Accounting Practices" published by the American Institute of Certified Public Accountants. During the performance of this agreement, the grantee and its contractors shall not unlawfully discriminate against harass, or allow harassment against any employee or applicant for employment because of sex, race, religion, color, national origin, ancestry disability, medical condition, marital status, age (over 40) or denial of family -care leave, Resolution No. R8- 2002 -00 MCA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account Page 8 medical -care leave, or pregnancy - disability leave. The grantee and its contractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination and harassment. The grantee and its contractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 12900 et seq.) and the applicable regulations (California Code of Regulations, Title 2, Section 7285.0 et seq.). The regulations of the Fair Employment and Housing Commission regarding Contractor Nondiscrimination and Compliance (Chapter 5 of Division 4 of Title 2 of the California Code of Regulations), are incorporated into this agreement. The grantee and its contractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. This nondiscrimination clause shall be included in all contracts and subcontracts entered into to perform work provided for under this agreement. The grantee, and the agents and employees of grantee, in the performance of this agreement, shall act in an independent capacity and not as officers or employees or agents of the State of California. Without the written consent of the State, this agreement is not assignable by the grantee in whole or in part. Time is of the essence in this agreement. LWA UM • The Executive Officer shall designate a Regional Board project manager who shall have authority to act on behalf of the Executive Officer with respect to this agreement. The Executive Officer shall notify the grantee of the designation in writing. As expressly provided in this agreement, no change in this agreement shall be valid unless made in writing and signed by the parties to the agreement. No oral Resolution No. R8- 2002 -00 MOA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account Page 9 understanding or agreement not incorporated in this agreement shall be binding on any of the parties. This agreement is deemed to be entered into in the County of Orange. BY THE CITY OF NEWPORT BEACH: TOD W. RIDGEWAY Mayor ATTEST: LAVONNE HARKLESS City Clerk APPROVED AS TO FORM: ROBERT BURNHAM City Attorney Resolution No. R8- 2002 -00 MCA, City of Newport Beach Robinson - Skinner Newport Bay Annuity Account BY THE CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD, SANTA ANA REGION: GERALD THIEBAULT Executive Officer ATTEST: APPROVED AS TO FORM: Clerk of the Board Board Counsel Page 10