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Home My WebLink AboutC-8591-1 - MOU - Rule 20A FundsMEMORANDUM OF UNDERSTANDING This Memorandum of Understanding ("MOU") is entered into as of 1L_ Ci , 2019, by and between the City of Newport Beach, a California municipal corporation and charter city with its principal place of business at 100 Civic Center Drive, Newport Beach, California 92660 ("Newport Beach"), and the City of Lynwood, a California municipal corporation and general law city with its principal place of business at 11330 Bullis Road, Lynwood, California 90262 ("Lynwood"). Newport Beach and Lynwood are sometimes individually referred to herein as "Party" and collectively as "Parties". RECITALS A. Electric utility companies collect and annually allocate funds to communities to convert overhead electric facilities to underground electric facilities ("Rule 20A Funds"). B. Newport Beach is actively planning one or more projects to underground overhead electric facilities that qualify for the application of California Public Utilities Commission ("CPUC") Rule 20A Funds ("Projects"). Newport Beach desires to obtain additional Rule 20A Funds to finance such Projects. C. Southern California Edison ("SCE") currently has designated and dedicated a balance of $2,722,215 in Rule 20A Funds for the benefit of Lynwood ("Lynwood Allocation"), and Lynwood currently has no active Projects that can make use of the Lynwood Allocation. D. Newport Beach desires to acquire, for consideration, the Lynwood Allocation to use in connection with the Newport Beach Projects, and Lynwood desires to transfer the Lynwood Allocation to Newport Beach to enable the Rule 20A Funds, which have been allocated to Lynwood, to be used for their intended purpose of undergrounding electric facilities and to derive economic benefit from the Lynwood Allocation. AGREEMENT NOW, THEREFORE, the Parties hereto agree as follows: 1. Lynwood agrees to assign, for use by Newport Beach, its rights and interests in the Lynwood Allocation to Newport Beach, and Newport Beach agrees to acquire, for consideration, the Lynwood Allocation in accordance with the terms of this MOU. This MOU shall be subject to the approval of each the City Council of Newport Beach and the City Council of Lynwood and shall become effective on the date when both such approvals have been obtained ("Effective Date"). Notwithstanding the foregoing, if this MOU has not become effective as of July 1, 2020, then either Party may terminate this MOU on five (5) business days' written notice to the other Party without incurring any liability, costs or further obligations to the other party or any third party. 2. Within fifteen (15) business days of the Effective Date, Newport Beach shall make a payment to Lynwood in the amount of One Million Five Hundred Seventy Eight Thousand Eight Hundred Eighty Five Dollars ($1,578,885) ("Acquisition Price"). The Acquisition Price shall be paid in immediately available funds via check or wire transfer to an account designated by Lynwood. The Acquisition Price shall constitute full consideration for the transfer and assignment of the Lynwood Allocation. 3. Lynwood agrees to sell the Lynwood Allocation to Newport Beach at a purchase rate of Fifty -Eight Cents ($0.58) for every One Dollar ($1.00) of Rule 20A Funds. Within ten (10) business days of Lynwood's receipt of the Acquisition Price funds, Lynwood shall deliver a written request to SCE, with a copy to Newport Beach, making a formal request to transfer and assign Two Million Seven Hundred Twenty Two Thousand Two Hundred Fifteen Dollars ($2,722,215) of Rule 20A Funds contained in the Lynwood Allocation to and for the benefit of Newport Beach. Lynwood shall cooperate in good faith with Newport Beach to provide any additional documentation or information that is reasonably requested by SCE to complete the transfer. In the event that SCE is unable to complete the transfer, or only complete a partial transfer, Lynwood shall return the unused Acquisition Price funds to Newport Beach within ten (10) business days of Newport Beach's notification to Lynwood. 4. Newport Beach acknowledges and agrees that it has conducted its own investigation as to the applicability and transferability of the Lynwood Allocation for use in the Projects and that Lynwood has not made any representation or warranty to Newport Beach with respect to same. The actual use of the Lynwood's Allocation by Newport Beach shall be subject to the rules and procedures adopted by SCE, CPUC, and such other conditions or requirements set forth in the Public Utilities Code. 5. Newport Beach shall indemnify, defend, and hold harmless Lynwood, its elected officials, officers, employees, and agents, from any claim, damage or liability arising in connection with the use of Rule 20A Funds from the Lynwood Allocation in connection with the construction of the Projects, including legal challenges of all types or natures, including but not limited to administrative, judicial, or legislative actions. 6. In the event that either Party is in breach of its obligations as set forth in this MOU, then the non -defaulting Party shall have the right to terminate this Agreement on ten (10) business days' written notice to the defaulting Party unless the default is cured, or cure has commenced, within the notice period. Upon termination for breach, the non - defaulting Party may exercise any right or remedy which it may have under applicable law. Within ten (10) business days of termination pursuant to this Section 6, Lynwood shall return to Newport Beach that portion of the Acquisition Price applicable to that portion of the Lynwood Allocation not yet transferred by SCE to Newport Beach. 7. All notices to be given pursuant to this MOU shall be delivered in person or by commercial overnight delivery to the address of the Party set forth above, and addressed to the City Manager of such Party and shall be effective upon receipt. 8. This MOU shall be governed and construed in accordance with the laws of the State of California, and any action brought relating to this MOU shall be adjudicated in a court of competent jurisdiction in the County of Orange. 9. Each Party shall at its own cost and expense comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. Memorandum of Understanding — Page 2 10. A waiver by either Party of any breach, of any term, covenant or condition of this MOU contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 11. The terms of this MOU shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of the MOU or any other rule of construction which might otherwise apply. 12. If any term or portion of this MOU is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this MOU shall continue in full force and effect. 13. In the event of any dispute or legal action arising under this MOU, the prevailing Party shall not be entitled to attorney's fees. 14. This MOU may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 15. Each Party signing this MOU explicitly affirms and provides they have the power and authority to bind their respective Party. [SIGNATURES ON FOLLOWING PAGE] Memorandum of Understanding — Page 3 IN WITNESS WHEREOF, the Parties hereto have executed this MOU as of the dates indicated below. CITY OF LYNWOOD, A Californ71:2 municipal corporation Date:..(-/ R J se Ometeotl City Manager ATTEST: Date: r aria Quinone City Clerk APPROVED AS TO FORM: Date: —17— 1— L 0 W' �—alrc Noel Tapia City Attorney CITY OF NEWPORT BEACH, A California municipal corporation Date: GK. Leung 6/ X90 Cilf Manager a ATTEST: p /� Date: CALIFO�" Leilani I. Brow . City Clerk APPROVED AS TO FORM: Date: 2 .,V,&'AarcMC. Harp m2� 1.1 City ttorney [END OF SIGNATURES] Memorandum of Understanding — Page 4