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Home My WebLink AboutC-8183-1 - MOU for Rule 20A CreditsMEMORANDUM OF UNDERSTANDING This Memorandum of Understanding ("MOU") is entered into as of AOG VST S TIA , 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, CA 92660 ("Newport Beach") and the City of Laguna Woods, a California municipal corporation with its principal place of business at 24264 El Toro Road, Laguna Woods, CA 92637 ("Laguna Woods"). Newport Beach and Laguna Woods are sometimes individually referred to herein as "Party" and collectively as "Parties." RECITALS A. Electric utilities 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 an additional allocation of Rule 20A Funds to finance such Projects. C. Southern California Edison ("SCE") currently has designated and dedicated a balance of Thirty Four Thousand Nine Hundred and Fifty Nine Dollars and 00/100 ($34,959.00) in Rule 20A Funds for the benefit of Laguna Woods ("Laguna Woods Allocation") and Laguna Woods currently has no active projects which can make use of the Laguna Woods Allocation. D. Newport Beach desires to acquire, for consideration, the Laguna Woods Allocation to use in connection with the Projects, and Laguna Woods desires to transfer the Laguna Woods Allocation to Newport Beach to enable the Rule 20A Funds, which have been allocated to Laguna Woods, to be used for their intended purpose of undergrounding electric facilities and to derive economic benefit from the Laguna Woods Allocation. AGREEMENT NOW THEREFORE, the Parties hereto agree as follows: 1. Laguna Woods agrees to transfer and assign for use by Newport Beach, its rights and interest in the Laguna Woods Allocation to Newport Beach and Newport Beach agrees to acquire, for consideration, the Laguna Woods Allocation in accordance with the terms of this MOU. This MOU shall be subject to the approval of the City Council of Newport Beach and the City Council of Laguna Woods 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 September 30, 2019, then either Party may terminate this MOU upon five (5) business day's 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 Laguna Woods in the amount of Nineteen Thousand Two Hundred Twenty Seven Dollars and 45/100 ($19,227.45) ("Acquisition Price"), which is equivalent to Fifty -Five Cents Page 1 of 4 ($0.55) for every One Dollar ($1.00) of allocation. The Acquisition Price shall be made in immediately available funds via check or wire transfer to an account designated by Laguna Woods. The Acquisition Price shall constitute full consideration for the transfer and assignment of the Laguna Woods Allocation. 3. Within ten (10) business days of Laguna Woods' receipt of the Acquisition Price, Laguna Woods shall deliver a written request to SCE, with a copy to Laguna Beach, making a formal request to transfer and assign the entire balance of the Rule 20A Funds contained in the Laguna Woods Allocation to and for the benefit of Newport Beach. Laguna Woods 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. Newport Beach acknowledges and agrees that it has conducted its own investigation as to the applicability and transferability of the Laguna Woods Allocation for use in the Projects and that Laguna Woods has not made any representation or warranty to Newport Beach with respect to same. The actual use of the Laguna Woods Allocation by Newport Beach shall be subject to the rules and procedures adopted by SCE, CPUC and such other conditions or requirements as are set forth in the Public Utilities Code. Newport Beach may rescind the transaction before SCE approves the proposed Rule 20A transfer, for a period of one (1) year after the Effective Date of this MOU, and in the event of such rescission, Laguna Woods will return the Acquisition Price in full to Newport Beach within ten (10) business days of Newport Beach's written notification of rescission to Laguna Woods. 4. Newport Beach shall indemnify, defend and hold harmless Laguna Woods, 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 Laguna Woods Allocation in connection with the construction of the Projects, including legal challenges of all types of natures, including but not limited to, administrative, judicial or legislative. 5. 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 MOU on ten (10) business day's written notice to the defaulting Party unless the default is cured 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, Laguna Woods shall return to Newport Beach that portion of the Acquisition Price applicable to that portion of the Laguna Woods allocation not yet transferred by SCE to Newport Beach. 6. 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. Notice may further be given by electronic means, provided, however, that such notice shall not be deemed effective unless it is acknowledged in writing by the recipient of such notice. 7. 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 County of Orange. 8. If any legal proceeding, including an action for declaratory relief, is brought to enforce or interpret provisions of this MOU, the prevailing party will be entitled to reasonable attorney's fees, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which the party maybe entitled. Page 2 of 4 9. This MOU shall become effective when executed by all parties and may be executed in counterparts, any one of which shall be deemed to be an original instrument. Any proof of the MOU shall require production of only one such counterpart duly executed by the party to be charged therewith. PDF copy or facsimile copy of signatures shall be deemed original signatures. [SIGNATURES ON NEXT PAGE] Page 3 of 4 IN WITNESS WHEREOF, the Parties hereto have executed this MOU as of the Effective Date. CITY OF LAGUNA WOODS By: Signed in Counterpart Cynthia Conners, Mayor Attest: Signed in Counterpart By: Yolie Trippy, Deputy City Clerk Approved as to form: By: Signed in Counterpart David B. Cosgrove, City Attorney CITY OF NEWPORT BEACH By: Grace eung, City Manag Attest: By: i C Leil i I. 13 wn, City Clerk Approved as to form: By: lit For: Aaron C. Harp, City Attorney t4 w- Page 4 of 4 IN WITNESS WHEREOF, the Parties hereto have executed this MOU as of the Effective Date. CITY OF LAGUNA WOODS By: Cynthia Conners, Mayor Attest: .By: (01 ryy� Yolie itvi Deputy Cit ~I k U Approved as to form: By: A Ayaz/ A David Cosgrove, 61t y ttorney CITY OF NEWPORT BEACH By: Grace K. Leung, City Manager Attest: By: Leilani I. Brown, City Clerk Approved as to form: By: 0'0-Zk' Aaron C. Harp, City Attorney �- - I t - t'l Page 4 of 4