HomeMy WebLinkAboutC-7833-4 - 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, California 92660 ("Newport Beach"), and the City of
Mission Viejo, a California municipal corporation with its principal place of business at
200 Civic Center, Mission Viejo, California 92691 ("Mission Viejo"). Newport Beach and
Mission Viejo 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
additional Rule 20A Funds allocation to finance such Projects.
C. Southern California Edison ("SCE") currently has designated and dedicated
a balance of Forty Seven Thousand Seven Hundred Sixty Six Dollars and 001100
($47,766.00) in Rule 20A Funds for the benefit of Mission Viejo (Mission Viejo Allocation),
and Mission Viejo currently has no active projects which can make use of the Mission
Viejo Allocation.
D. Mission Viejo has granted Newport Beach first right of refusal to purchase
Rule 20A allocations between the Effective Date and July 1, 2021.
E. Newport Beach desires to acquire, for consideration, the Mission Viejo
Allocation to use in connection with the Projects, and Mission Viejo desires to transfer the
Mission Viejo Allocation to Newport Beach to enable the Rule 20A Funds, which have
been allocated to Mission Viejo, to be used for their intended purpose of undergrounding
electric facilities and to derive economic benefit from the Mission Viejo Allocation.
AGREEMENT
NOW, THEREFORE, the Parties hereto agree as follows:
1. Mission Viejo agrees to assign, for use by Newport Beach, its rights and
interests in the Mission Viejo Allocation to Newport Beach, and Newport Beach agrees to
acquire, for consideration, the Mission Viejo 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 Mission Viejo 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 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 Mission Viejo in the amount of Twenty Six Thousand, Two Hundred
and Seventy One and 30/100 ($26,271.30) ("Acquisition Price"). The Acquisition Price
shall be made in immediately available funds via check or wire transfer to an account
designated by Mission Viejo. The Acquisition Price shall constitute full consideration for
the transfer and assignment of the Mission Viejo Allocation.
3. Mission Viejo agrees to sell the Mission Viejo Allocation to Newport Beach
at a purchase rate of Fifty -Five Cents ($0.55) for every One Dollar ($1.00) of Rule 20A
Funds. Within ten (10) business days of Mission Viejo's receipt of the Acquisition Price
funds, Mission Viejo shall deliver a written request to SCE, with a copy to Newport Beach,
making a formal request to transfer and assign the entire balance of the Rule 20A Funds
contained in the Mission Viejo Allocation to and for the benefit of Newport Beach. Mission
Viejo 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, Mission Viejo shall return the unused Acquisition Price funds to Newport
Beach within ten (10) business days of Newport Beach's notification to Mission Viejo.
4. Newport Beach acknowledges and agrees that it has conducted its own
investigation as to the applicability and transferability of the Mission Viejo Allocation for
use in the Projects and that Mission Viejo has not made any representation or warranty
to Newport Beach with respect to same. The actual use of the Mission Viejo 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.
5. Newport Beach shall indemnify, defend, and hold harmless Mission Viejo,
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 Mission Viejo 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 7, Mission Viejo
shall return to Newport Beach that portion of the Acquisition Price funds applicable to that
portion of the Mission Viejo Allocation not yet transferred by SCE to Newport Beach.
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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 Agreement 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.
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. Mission Viejo agrees to provide Newport Beach first right of refusal to
purchase future Rule 20A allocations between July 1, 2020 and July 1, 2022. If Mission
Viejo 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 Mission Viejo's notification stating intent to purchase said
allocations at the proposed purchase price. Newport Beach agrees to enter into an MOU
with Mission Viejo to complete the transfer within 90 days of said notification to Mission
Viejo.
12. 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.
13. 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.
14. In the event of any dispute or legal action arising under this Agreement, the
prevailing Party shall not be entitled to attorney's fees.
15. This Agreement 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.
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16. Each Party signing this Agreement explicitly affirms and provides they have
the power and authority to bind their respective Party.
IN WITNESS WHEREOF, the Parties hereto have executed this MOU as of the
dates indicated below.
CITY OF MISSION VIEJO,
A California municipal corporation
Date:
Dennis Wilberg
City Manager
ATTEST:
Date:
AJ4,L�id..'
Kimberly Sch itt
City Clerk
APPROVED AS TO FORM:
Date:
William P. Curley III
City Attorney
CITY OF NEWPORT BEACH,
A California municipal corporation
Date:
Grap". Leung
Ci anager
Leilani I. E
City Clerk
APPROVED AS TO FORM:
Date: /u / 2.0 -z'0
Aaron C. Harp 0AI-4 &-1/- 2-*
City Attorney
[END OF SIGNATURES]
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