HomeMy WebLinkAboutC-7898-1 - MOU (for Rule 20A Funds)MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is entered into as of August 25,
2020 ("Effective Date"), 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 EI 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 Fifty Five Thousand Nine Hundred and Three Dollars and 00/100
($55,903.00) 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, as mentioned above as the Effective
Date. Notwithstanding the foregoing, if this MOU has not become effective as of October
30, 2020, 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.
Page 1 of 4
2. Within fifteen (15) business days of the Effective Date, Newport Beach shall
make a payment to Laguna Woods in the amount of Thirty Thousand Seven Hundred
Forty Six Dollars and 65/100 ($30,746.65) ("Acquisition Price"), which is equivalent to
Fifty -Five Cents ($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 Newport
Beach, making a formal request to transfer and assign the above -referenced 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. Laguna Woods agrees to provide Newport Beach first right of refusal to
purchase future Rule 20A allocations between the Effective Date and July 1, 2022. If
Laguna Woods intends to transfer its Rule 20A allocation within said dates it shall notify
Newport Beach of fund availability and the proposed purchase price by another city if
another city is proposing a purchase price higher than the purchase rate of Fifty -Five
Cents ($0.55) for every One Dollar ($1.00) of Rule 20A Funds. If Newport Beach desires
to acquire said allocations by matching the price proposed by another city, it shall respond
within fifteen (15) business days of Laguna Woods's notification stating intent to purchase
said allocations at the proposed purchase price. Newport Beach agrees to enter into an
MOU with Laguna Woods to complete the transfer within 90 days of said notification to
Laguna Woods.
5. 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.
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 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
Page 2 of 4
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.
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. 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.
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 County of Orange.
9. Each Party shall at its own cost and expense comply with all statutes,
ordinances, regulations and requirements of all government entities, including federal,
state, county or municipal, whether now in force or hereinafter enacted.
10. A waiver by either Party of any breach, of any term, covenant or condition
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 Agreement 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 Agreement or any other rule of construction which might
otherwise apply.
12. If any term or portion of this Agreement is held to be invalid, illegal, or
otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of
this Agreement shall continue in full force and effect.
13. 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.
14. 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.
15. Each Party signing this Agreement explicitly affirms and provides they have
the power and authority to bind their respective Party.
[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
S►�tn.� ! `� :_,.)unterpart
By: Dated:
Noel Hatch, Mayor
Attest:
Signed in Counterpart
By: Dated:
Yolie Trippy, City Clerk
Approved as to form:
Signed in Coi nterpc
By: Dated
David B. Cosgrove, City Attorney
CITY OF NEWPORT BEACH
By: Dated:
Grace ung, City Manager
►.�1...�.:..i.//1
Leila :. — f erk
Approved as to form:
Dated: • �•�
By: 4-4 ��,,' 76' Dated: $��( 2oZo
Aaron C. Harp, City Attorney
Page 4 of 4
IN WITNESS WHEREOF, the Parties hereto have executed this MOU as of the
Effective Date.
CITY OF LAGUNA WOODS
B . lG/ G Dated.
Y
Noel Hatch, Mayor
Attest:
By: � L i` ; �' Dated:
Yolie Trip City Cler
Approved as to form:
By:
David . Cosgrove, City ttorney
CITY OF NEWPORT BEACH
By -
Grace K. Leung, City Manager
Attest:
Bv:
Leilani I. Brown, City Clerk
Approved as to form:
Dated- ` -/ d o
Dated:
Dated -
By: -4, J -t r Dated- Wit ZaZa
Aaron C. Harp, City Attorney
Page 4 of 4