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03/11/20141 1 CITY OF GRAND TERRACE ` 4 AGENDA & STAFF REPORTS FOR THE REGULAR MEETING OF THE CITY COUNCIL AND THE CITY COUNCIL AS THE SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY & THE GRAND TERRACE HOUSING AUTHORITY TUESDAY, March 11, 2014 z 6:00 P,M.'Regular Meeting L COUNCIL CHAMBERS GRAND TERRACE CIVIC CENTER , 22795 BARTON ROAD GRAND TERRACE, CA 92313 - } \ ti ' 30 Walt Stanlckiewitz, Mayor Darcy McNaboe, Councilm,ember Jackie Mitchell, Councilmember Sylvia Robles, Councilmember Kenneth J Henderson, Interim City Manager Richard L Adams, City Attorney Cynthia Fortune, Finance Director Sandra Molina, Interim Community Development Director , Mari Mo'ntes, Secretary f l i r The Grand Terrace City Council meets on the Second and Fourth Tuesday of each month at 6 00 p.m Council Chambers CITY OF GRAND TERRACE CITY COUNCIL AGENDA • MARCH 11, 2014 Regular Meeting Grand Terrace Civic Center . 22795 Barton Road 600PM The City of Grand Terrace complies with the Americans with Disabilities Act of 1990 If you require special assistance to participate in this meeting, please call the City Clerk's office at (909) 824-6621 at least 48 hours prior to the meeting If you desire to address the City Council during the meeting, please complete a request to speak form available at the entrance and present it to the City Clerk Speakers will be called upon by the Mayor at the appropriate time Any documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection in the City Clerk's office at city hall located at 22795 Barton Road during normal business hours In addition, such documents will be posted on the City's website at www cityofgrandterrace org CALL TO ORDER Convene City Council and City Council as the Successor Agency to the Community Redevelopment Agency } Invocation Pledge of Allegiance Roll Call 1 2 3 A B Attendee Name 1 _ P_,�gsegt Absent T❑ Late Arrived Mayor Walt Stanckiewitz ❑ ❑— Council Member Darcy McNaboe ❑ ❑ ❑ Council Member Jackie Mitchell ❑ ❑ ❑ Council Member Sylvia Robles ❑ ❑ ❑ ITEMS TO DELETE SPECIAL PRESENTATIONS CONSENT CALENDAR The following Consent Calendar items are expected to be routine and noncontroversial They will be acted upon by the Council at one time without discussion Any Council Member, Staff Member, or Citizen may request removal of an item from the Consent Calendar for discussion Waive Full Reading of Full Ordinances on Agenda Approval of Minutes — Regular Meeting — 02/25/2014 City of Grand Terrace Page 1 Updated 41412013 11 29 AM ji � #� �f CITY OF GRAND TERRACE CITY COUNCIL MINUTES • FEBRUARY 25, 2014 Council Chambers Regular Meeting 5 00 PM 1 2 A B Grand Terrace Civic Center • 22796 Barton Road CLOSED SESSION AT 5 00 P M Conference with Legal Counsel - Anticipated Exposure to Litigation Pursuant to Paragraph (2) of Subdivision (d) Section 54956 9, One Potential Case CALL TO ORDER ,Attendee Name r } _ 'Title rt _M� Status A�riveit�,. Walt Stanckiewitz Mayor Present Darcy McNaboe Council Member Present Jackie Mitchell Council Member Present Sylvia Robles Council Member Present Kenneth J Henderson Interim Cit Manager Present Emily Wong Interim Assistant City Manager Present Char Sherwood MMC, Interim City Clerk - Present Sandra Molina Interim CommunityDevelo merit Director Present Steve Elam Finance Manager Present Cynthia Fortune Finance Director Present Donny Mahoney San Bernardino Co Sheriff Dept Present Mart Montes Secretary Present PUBLIC COMMENTS - NONE RECESS TO CLOSED SESSION AT 5 03 P M RECONVENE CITY COUNCIL MEETING 6 04 PM Mayor Walt Stanckiewitz reported that there was no further action taken in the Closed Session INVOCATION - PASTOR ANDY MCRAE, AZURE HILLS SEVENTH -DAY ADVENTIST PLEDGE OF ALLEGIANCE - ATTORNEY RICHARD ADAMS ITEMS TO DELETE - NONE SPECIAL PRESENTATIONS Updates for Legislative Representatives (Federal, State and County) - None Certificate of Appreciation for Past Chairman of the Emergency Operations Committee Mayor Walt Stanckiewitz presented Mr Media with a certificate of appreciation for his two years of service I s Chairman of the Emergency Operations Committee He will be leaving for basic training with the City of Grand Terrace Page 1 Updated 41412013 11 29 AM 2 3 B� Minutes Grand Terrace City Council February 25, 2014 5 COUNCIL REPORTS Council Member Jackie Mitchell said that in February, the San Bernardino Animal Shelter exercised a pardon where no animals were euthenized during the second week of February, and there was a rise in adoptions that week She encouraged people to adopt an animal Council Member Jackie Mitchell also said that player numbers were up 60 players increasing the full amount to over 300 in the League She said kudos to all of the volunteers in the community and specifically to the Little League Board Council Member Sylvia Robles said she was at the Jurupa Valley City Council meeting recently, and she said they have their council comments and announcements at the end of the agenda She said that way time is not taken up at the core of the meeting -Cl Council Member Darcy McNaboe extended a second invitation to the Pencil, Pen and Brush contest to e� 'a = read or judge She said the event takes place in Colton, at the district office on 1212 Valencia Drive, March3-7,900am to300pm v m Mayor Walt Stanckiewitz said he sent a letter to the McDonald's corporation, welcoming them to the = City of Grand Terrace He said that the additional sales tax will be good for the city C 0 v City Attorney Richard Adams told the City Council that they had 60 days from the vacancy of the Council a seat to appoint Following a,brief discussion on whether to appoint someone to the vacant Council seat, o Interim City Manager Ken Henderson said that if the City Council could not meet on a consensus, he C suggested moving forward to the next item on the agenda 6 PUBLIC HEARINGS - NONE CD N N 7 UNFINISHED BUSINESS - NONE LL 8 NEW BUSINESS U) .) Interim City Manager Ken Henderson presented a staff report to the City Council He said that at about 2Y00 p m today staff received communication from the County Auditors/Controllers office that the previously vetted and approved Redevelopment Property Trust Fund percentages of revenue that the City m would have received from the property tax distribution has changed once again, from 20% to 45% by the c County originally, now from 45% to 29% a .m Finance Manager, Steve Elam, read into the record that the information received by RSG was provided at Q 1 55 p m on February 25, 2014 He said that the because the audit has not been completed yet they do N not know what the final figure is right now m c Interim City Manager Ken Henderson suggested trying to retrieve reliable information and have it vetted in time to have the Mid Year Budget taken up formally by the City Council at the March 11, 2014 City Council meeting He said that staff will attempt to obtain the most reliable information from the County of San Bernardino A Mid -Year Budget Review for Fiscal Year 2013-14 Following discussion, the Mid -Year Budget Review was continued to the March 11-2014, City Council meeting Interim City Manager Ken Henderson suggested the City Council decide alternatives in addressing these continued problems The City Council thanked Staff for their hard work and said they are sorry they will have to go through it again City of Grand Terrace Page 3 Updated 41412013 11 29 AM MEETING PATE TITLE AGENDA REPORT March 11, 2014 Council & Successor Agency Item Approval of Check Register No 03-11-2014 PRESENTED BY Cynthia Fortune, Finance Director J RECOMMENDATION Approve Attached Check Register for March 11, 2014, as submitted, which includes the Check Register Account Index and Voucher Listings for Fiscal Year 2013-14 BACKGROUND The Check Register for March 11, 2014 is presented in accordance with Government Code §37202 and is hereby submitted for the City Council's approval The attached index to the Check Register is a guideline account list only and is not intended to replace the comprehensive chart of accounts used by the City and CRA Successor Agency Expenditure account number formats are XX-XXX-XXX [Fund - Department -Account] Expenditures may be made from trustlag'ency accountss (Fund 23-XXX-) or temporary clearing accounts which do not have a budgetary impact \° A total of $69,516 72 in accounts payable checks were issued during the period for services, reimbursements, supplies and contracts and are detailed in the attached check register New vendors Check k Payee Description Amount No New Vendors Payments larger than $10,000 Check No payee Description Amount 70130 Burrtec Waste Delinquent Trash Deposits for Fiscal $16,223 30 Industries, Inc Year 2012-2013 70132 City of San Animal Control Services for February $10,135 75 Bernardino 70126 Public Emp Contributions for Pay Period Ending $12,005 62 Retire System 1/31/2014 Payroll costs for the period ending February 28, 2014 Pay Per Period Ending Period Amount 5 2/28/2014 Estimated Biweekly Payroll for the $59,000 00 Period ,3 ,C a, vchlist Voucher List Page 1 02/28/2014 9 42 49AM CITY OF GRAND TERRACE Bank code bola Voucher Date Vendor Invoice Description/Account 70119 2/28/2014 011195 AMERICAN FIDELITY ASSURANCE CO 1021340B JAN EMP PAID FLEX SPENDING/DEP CARE 23-250-10-00 ` 10-190-265-000-000 Total 70120 2/28/2014 011195 AMERICAN FIDELITY ASSURANCE CO 70121 2/28/2014 011194 AMERICAN FIDELITY ASSURANCE CO 848599C DEC EMP PAID FLEX SPENDING/DEP CARE 23450-10-00 Total B087232 JAN EMP PAID ACC/SUP LIFE/SUP STD 23-250-20-00 Total 70122 2/28/2014 010996 CA PUB EMPLOYEES' RET SYSTEM 1344 70123 2/28/2014 010218 CHEVRON & TEXACO CARD SERVICES 40425729 MAR PERS HEALTH INSURANCE 09-440-142-000-000 10-120-142-000-000 10-140-142-000-000 10-175-142-000-000 10-185-142-000-000 10-370-142-000-000 10-380-142-000-000 10-450-142-000-000 10-625-142-000-000 16-175-142-000-000 21-175-142-000-000 21-625-142-000-000 32-200-142-000-000 10-190-265-000-000 10-022-61-00 JAN/FEB VEHICLE FUEL 10-175-272-000-000 10-185-272-000-000 Total Total Amount et 0 50472 N 9800 60272 c O Z 87804 L 87804 y m 46678 Y 46678 V 2 122 25 d 61304 0 31245 r 41528 11865 0 45483 39550 n 15820 ati 12458 IY 435 05' 19775 = 5339 V 18193 F� 36'93 3,12954 = 8,74937 a 37808 3694 41502 Page 1 IPacket,IP�ga �9i j vchlist 02/28/2014 9 42 49AM Voucher List CITY OF GRAND TERRACE Page 3 Bank code bofa Voucher Date Vendor Invoice Description/Account Amount 70130 2/28/2014 011170 BURRTEC WASTE INDUSTRIES, INC (Continued) Total 16,223 30 70131 3/11/2014 011031 CINTAS CORPORATION #150 150227133 CHILD CARE RESTROOM SUPPLIES c N 09-440-228-000-000 12993 150234163 CHILD CARE RESTROOM SUPPLIES M 09-440-228-000-000 11002 c Total 239,95 Z 70132 3/11/2014 006435 CITY OF SAN BERNARDINO 2014-100000033 FEB ANIMAL CONTROL SERVICES Q 10-187-256-000-000 10 135 75 Total 10,135 75 � 70133 3/11/2014 001950 DATA QUICK B1-2252282 JAN SUBSCRIPTION SERVICES .19 10-370-250-000-000 8700 .mac 10-380-250-000--000 4350 V Total et 13050CD 70134 3/11/2014 011061 EZ SUNNYDAY LANDSCAPE 4863 JAN PARK MAINTENANCE T N 10-450-255-000-000 3,96000 5070 FEB PARK MAINTENANCE c 10-450-255-000-000 3 390 00 `m Total 7,35000 v , 70135 3/11/2014 002867 GOLDEN PROTECTIVE SERVICES 192362 RUBBER GLOVES 09-440-228-000-000 8618 �c Total 8618 d :c 70136 3/11/2014 010773 KELLAR SWEEPING INC 8464 JAN STREET SWEEPING SERVICES 16-900-254-000-000 4,200 00 Total 4,200 00 E s 70137 3/11/2014 011298 MAILFINANCE N4483008 FEB-MAY POSTAGE MACHINE LEASE t� 10-190-211-000-000 41400 Q Total 41400 70138 3/11/2014 011261 MITCHELL JACQUELINE FEB 2014 FEB HEALTH, INSURANCE REIM-MITCHELL 10-110-142-000-000 21300 Page 3 `sP„acketsPg4 '1"17`y vchlist 02/28/2014 9 42 49AM Voucher List CITY OF GRAND TERRACE r Page 5 Bank code bofa Voucher Date Vendor Invoice Description/Account Amount 70144 3/11/2014 011253 TLMA ADMINSTRATION (Continued) Total 25869 70145 3/11/2014 007220 UNDERGROUND SERVICE ALERT 120140288 JAN DIG ALERT TICKETS T N 16-900-220-000-000 4350 Total 43 50 M Cl 70146 3/11/2014 001038 VERIZON WIRELESS -LA 960782863-0001 FINAL CELL PHONE BILL-CDD DIRECTOR o 10-175-235-000-000 14278 Z Total L 14278 a; N 70147 3/11/2014 011301 WELSHER, KAREN GT 006833 CITE GT006833 REFUND-DUP PYMT I) m 10-500-07 5500 Total 5500 v fy 70148 3/1112014 007854 WESTERN EXTERMINATORS CO 1957621 JAN PEST CONTROL SERVICES s V 10-195-245-000-000 9800 09-440-245-000-000 15600 c 10-805-245-000-000 3800 N Total 29200 r 30 Vouchers for bank code bofa Bank total of 69,616 72 d 30 Vouchers in69,616 this report Total vouchers 72 T pt Y V d t V .w+ C d E ..0 C� lF3 Q Page 5 „ Y Packet Pg �1k3�tt k AGENDA REPORT March 11, 2014 Council Item TITLE Mid -Year Budget Review for Fiscal Year 2013-14 PRESENTED BY Cynthia Fortune, Finance Director RECOMMENDATION (1) Receive and file report, (2) Approve proposed FY 2013-14 budget adjustments and reserve designations, (3) Approve recommended FY 2014-15 budget development guidelines and review schedule BACKGROUND The purpose of the Mid -Year Budget Review is to provide the City Council with budget - to -actual results through the first half of the fiscal year, projections for fiscal year-end, and any proposed budget adjustments for consideration In this year's Mid -Year Budget Review, staff is also recommending the City Council make several designations of General Fund Reserves, and approve the budget development guidelines and review schedule for the upcoming fiscal year prior to initiation of ,the budget process The Mid - Year Budget Review for Fiscal Year (FY) 2013-14 focuses on the City's three major funds General Fund, Child Care Fund and Waste Water Disposal Fund The schedules presented, in conjunction with the Mid -Year Budget Review, include estimated and actual results for the prior fiscal year (FY 2012-13) It should be noted that the beginning balances of each fund are unaudited The City's auditors have recently completed their preliminary audit for FY 2012-13 and are scheduled to return for the final audit in March As a result, the FY 2013-14 beginning balances presented in this report are subject to audit adjustment upon completion of the FY 2012-13 audit DISCUSSION General Fund FY 2012-13 (Exhibit A-1) Operating Revenues As of June 30, 2013, General Fund actual revenues received were $4,424,063 or 38% more than the FY 2012-13 projection This is primarily due to receipt of $1,083,607 in unexpected property tax revenue from the Redevelopment Property Tax Trust Fund (RPTTF) As previously discussed with the City Council, the City had relied on a RPTTF model provided by the City's property tax consultant, HdL Coren & Cone, which was discovered in November 2013 to have some erroneous assumptions, including the City's share of RPTTF residual distributions The County of San Bernardino Auditor - Controller's office disbursed $31a9,557 to the City as its share of the ROPS 3 residual balance, representing a 19 97% share of the residual balance For the ROPS 13-14A, i fund balance from $786,960 (fund balance on July 1, 2012) to $300,152 (projected fund balance on June 30, 2013) However, actual revenues, excluding RPTTF receipts, came in at 4 2% higher than estimated and expenditures came in at 2% below estimated This would have resulted in a net reduction of fund balance, of only $274,714--significantly lower than the original projected deficit of $486,808 However, as stated earlier, the RPTTF residual receipts totaling, $1,083,607 resulted in a net positive operating result of $808,893 The following table provides a summary of FY 2012-13 operating results Category Projection 6/30/13 Actuals (Unaudited) without RPTTF Receipts 6/30/13 Actuals (Unaudited) with RPTTF Recei t§ Revenues $3,205,668 $3,340,456 $4,424,063 Expenditures 3,692,476 3,615,170 3,615,170 Operating Surplus (Deficit) $486,808 $274,714 $868,893 FY 2013-14 (Exhibit A-2) Operating Revenues As of December 31, 2013, General Fund operating revenues received were $1,579,731, or 47 7% of the annual budget of $3,309,047 For this fiscal year, total revenues are projected at $4,694,545, which will include the City's share of RPTTF residual balance from each ROPS period (ROPS 13-14A and ROPS 13-14B), and the City's share of the $3,086,857 General Fund payment to the Successor Agency On May 14, 2013, City Council approved the following payments to the Successor Agency $1,086,857 in redevelopment -related credits paid by the General Fund for redevelopment agency projects that were disallowed by the Department of Finance (DOF) and $2 million in an accelerated loan, payment for the $3 2 million loan the City owes the Agency On December 29, 2013; the DOF approved the remittance of $3,086,857 of Agency funds to the County Auditor -Controller's office for immediate distribution to the taxing entities Since these receipts"are not property tax, they Will be considered "other funds"'per HSC Section 34177(d) The City would, in this case, receive its 19 97% share Total projected RPTTF receipts for FY 2013-14 are shown below Description Amount ROPS 13-14A (7/1/13 — 12/31/13) (representing a 45% share of the residual balance $217,705 ROPS 13-14B (1/1/14 — 6/30/14) (representing a 29% share of the residual balance 605,700 Projected receipts from accelerated loan payment and disallowed credits 19 97% 616,445 Total $1,439,850 Operating_ Expenditures - Gener"al Fund operating expenditures through December 31, 2013 are $1,674,449, which represents 43A8% of the annual budget of $3,822,060 nth 50% of the fiscal year elapsed through December, this appears to be a positive result, however, Packet Pg y 16 the RDA's Low/Moderate Income Housing Fund (LMIHF) $1,218,857 was credited against the loan, with $132,000 being credited against the LMIHF's $300,205 loan The City has made 2 loan payments against this loan Subsequent redevelopment dissolution and due difigence reporting to the DOF resulted in a denial of $1,086,857 of the original $1,218,857 credit Below is a table summarizing the loan activity Category CRA CRA — LMIHF Total Loan to General Fund $4,306,745 $300,205 $4,606,950 Redevelopment credits 1,086,857 (132,000) (1,218,857 Net of credits $3,219,888 $168,206 $3,388,093 FY2012-13 payment 147,308 - (147,308 FY2013-14 payment 147,308 - 147,308 Net of paynients $2,926,272) $168,206 $3,093,477 Accelerated loan 06ment 2,000,000 - 2,000,000 Loan Balance 6/30/2014 $926,272 $168,206 $1,093,477 *Note Redevelopment credits totaling $1,086,857 were denied by the DOF City Council actually approved a $3,086,857 payment to the Successor Agency $2 million 'in an accelerated loan payment and $1,086,857 in redevelopment -related credits paid from the City's fund balance The table below reflects the effect of these payments to the City's Fund Balance Category FY 2012-13 Unaudited FY 2013-14 Pro ected Beginning Fund Balance $786,960 $1,595,853 Revenues , 4,424,063 4,694,545 Expenditures 3,615,170 3,911,950 Net $1,595;853 $2,378,448 Fund balance authorized for Successor Agency Loan Re a ment disallowed redevelo meet -related credits (1,086,857) Ending FundyBalance $1,595,86V $1,291,591 Proposed General Fund Budget Adjustments With a protected General Fund ending fund balance of $1,291,591 as a frame of reference, the following budget adjustments are proposed Revenue Adjustment Oftentimes projected revenue increases or shortfalls versus the budgeted amounts are not booked as budget adjustments during a fiscal year Instead, the variances are simply reflected in the year-end financial reports However, due to the significant amount -of unbudgeted revenue to be received from the RPTTF residual distributions, staff recommends booking the additional projected revenues as a budget adjustment in order ,to maintain a balanced General Fund budget for the `remainder of FY 2013-14 The anticipated revenue adjustment for FY 2013-14 is $1,385,498, which reflects projected actual revenues at 6/30/14 ($4,694,545) less revenues in the Adopted Budget ($3,309,047) - m'Packet Rg �18 �- Deducting the proposed expenditure increases that are not already included in the projected year-end fund balance will reduce projected fund balance by $89,500, resulting in a projected 6/30/14 General Fund balance of $1,202,091 Designation of General Fund Reserves If the City Council approves the proposed expenditure adjustments as summarized in the preceding table, the projected General Fund balance at 6/30/14 will be $1,202,091 The following fund balance designations are recommended Unallocated General Fund Balance Designation / Explanation Amount General Fund Balance Projected General Fund Balance at 6/30/14 if proposed $1,202,091 expenditure adjustments are approved General contingency reserve representing two months of operating revenues, as recommended by the Government Finance Officers Association (GFOA) and established in the $600,000 $602,091 City's Reserves Policy (reserve estimate assumes $300,000 in RPTTF receipts) Initial funding for Equipment Replacement Fund The City has approximately $1 1 million in General Furid capital asset equipment, with "capital asset" defined as having a purchase price of $5,000 or more and a useful life of 2 years or longer It is a recommended "best practice" to depreciate capital equipment such that depreciation is charged as an operating $200,000 $402,091 expense to the applicable department and the depreciation expense is transferred to an Equipment Replacement Fund By doing so, funds are available to purchase replacement equipment without impacting the operating budget The City has not previously established an Equipment Replacement Fund Initial funding of $200,000 is recommended Reserve for Future Budget Stabilization This amount would be reserved to address future operating deficits, as identified in the Five -Year Financial Analysis and ,Budget Stabilization Plan (Five -Year Plan), even with the RPTTF residual revenues, or other funding needs As identified in the Five - Year Plan, two items needing future funding consideration are Retiree Medical Benefit Annual Required Contribution and funding for Leave Cash -outs Additionally, the City $402,091 $0 Council previously expressed an interest in providing funding for` items such as - City Council Chamber upgrades - Web streaming of City Council meetings - Additional patrol deputy - Automatic License Plate Recognition System (ALPRS) - Economic Development Program Packet°f?g :20� ri FY 2012-13 FY 2012-13 Category Projected Actual Unaudited Revenues $1,059,655 $1,085,165 Expenditures 1,058,386 1,083,999 Operating Surplus Deficit $1,269 $1,166 FY 2013-14 For the current fiscal year, the Child Care Fund's revenues and expenditures are generally on target through December and are expected to end the fiscal year slightly over budget Actual revenues through December are $557,459 and are projected to be $1,139,350 at fiscal year-end Mid -year expenditures are $538,475 and are projected at $1,144,326 by fiscal year-end The Child Care Fund is projected to end the fiscal year with a deficit of ($4,967) This projected deficit is due to two factors (1) The furnace in Classroom 2 had to be replaced, and (2) There was a rent increase during the year The table below shows the Child Care Fund operating summary Category FY 2013-14 Adjusted Budget" FY 2013-14 Year -End Projection Revenues $1,139,190 $1;139,350 Expenditures 1,139,907 1,144,326 Operating Surplus Deficit $717 $4,976 Fund Balance The budgeted Child Care operating deficit for FY 2013-14 was ($717), which would have reduced the projected fund balance at June 30, 2014 to $449 However, due to the unanticipated costs incurred by the fund, projected fund balance at June 30, 2014 is now ($3,810) as shown in the following table Category June 30, 2013 Fund Balance Unaudited June 30, 2014 Projected Fund Balance Beginning Fund Balance $0 $1,166 Revenues 1,085,165 1,139,350 Expenditures 1,083,999 1,144,326 Ending Fund Balance $1,166 $3,810 Rates for the Child Care Fund are reviewed each year, in conjunction with the annual budget process Staff recommends that no rate adjustment be considered at the present time, but that the proposed FY 2014-15 rates be established at a level that will provide an adequate operating surplus to allow for contingency items, including upcoming minimum wage increases thattWill impact operating expenses PacRPg{`�22 s -.�--�- Proposed FY 2014-15 Budget Development Guidelines and Review Schedule Immediately following the Mid -Year Budget Review process, staff will commence working on the City's FY 2014-15 budget To ensure the City Council is in agreement with the process for developing the FY 2014-15 budget, and the schedule leading up to budget adoption, the following budget development guidelines and review schedule are proposed for the City Council's approval Budget Development Guidelines The following guidelines are submitted for the City Council's review and approval If approved, they will be utilized in the development of the FY 2014-15 Budget • Departments should submit budgets that reflect no change in staffing or service levels from FY 2013-14 Personnel budgets will be developed by the Finance Department based on current staffing, compensation levels and program allocations Compensation will reflect the following constraints - Continuation of the 36-hour work week and corresponding 10% salary reduction, - Continued suspension of merit increases, and - No cost -of -living adjustment (COLA) Any reinstatement of the above compensation items will be by policy direction of the City Council • Payroll allocations for employees charging time to the Successor Agency may be adjusted in some cases, compared to FY 20f 3-14, based on the $400,000 state - mandated limit on Successor Agency administrative allowance (Successor Agency and Housing Successor Entity) • A general inflation factor should not be applied to contractual services or maintenance & operations line items unless multi -year contracts are in place that provide for inflationary adjustments Even in such cases, departments should make every effort to renegotiate pricing to maintain -expenditures at their current levels • Any proposed service level enhancements or staffing additions must be submitted for consideration as a New or Request, along with comprehensive justification Given the ongoing fiscal challenges facing the City, any such requests must have compelling justification • Any New Budget Request items that are supported by the City Manager will be separately identifiedx in the Proposed Budget, rather than being incorporated in the base budget This approach will enable the City Council to individually review and approve/disapprove each item that is being proposed Packet Pg° 24� • Recommended designations of General Fund balance ATTACHMENTS Exhibit A - C APPROVALS $1,202,091 Cynthia Fortune Completed 03/06/2014 5 44 AM Cynthia Fortune Completed 03/06/2014 5 45 AM Finance Completed 03/06/2014 5 45 AM City Attorney Completed 03/06/2014 11 51 AM City Manager Completed 03/06/2014 12 19 PM City Council Pending FA Packet Pg 26 7Aa Exhibit A-2 CITY OF GRAND TERRACE GENERALFUND 2013-14 2013-14 % 2013-14 2013-14 Actuals Year-end Year-end Adopted Actuals to without with Dept Bud et Dec2013 Budget RPTTF RPTTF REVENUES General Fund Property Taxes 1,348,944 228,657 17 0% 1,378 021 1,378 021 General Fund Sales Tax 1,039,703 290,354 27 9% 979 235 979 235 General Fund Licenses, Permits & Fees 779 400 204 771 26 3% 746 985 746 985 General Fund Intergovernmental Receipts & Grants 25,500 1 479 36 479 36 479 General Fund Charges for Services 42 700 5 112 12 0% 51,290 51,290 General Fund Fines & Forfeitures 37,500 14 642 39 0% 37 664 37 664 General Fund Use of Money & Property 28,700 11,290 39 3% 25 000 25,000 General Fund Miscellaneous 6 600 21 0 3% 21 21 General Fund Receipts from Accelerated Loan Payment - - - 616,445 General Fund Residual Balance (RPTTF) - 823 405 - 823 405 TOTAL REVENUES 3,309,047 1,579,731 47 7% 3,254,695 4,694,545 EXPENDITURES City Council City Council 54,025 24 722 45 8% 54 044 54,044 City Manager City Manager 210,650 86,902 41 3% 337 940 337 940 City Manager Management Information Systems (MIS) 103 060 41 649 40 4% 102,658 102 658 City Manager Senior Citizens Program 29 940 17,777 59 4% 30 475 30 475 City Clerk City Clerk 95 960 44,428 46 3% 81,226 81 226 City Clerk Historical & Cultural Commission 1 230 468 38 0% 1,236 1 236 Finance Finance 355,550 206,723 58 1% 372,489 372 489 City Attorney City Attorney 70 910 26 179 36 9% 70,910 70,910 Public Safety Law Enforcement 1,556 190 728 648 46 8% 1,547 725 1,547 725 Public Works Budding & Safety 129,370 83,201 64 3% 138 678 138,678 Public Works Public Works 175 770 68 584 39 0% 165,393 165 393 Public Works Rental Inspection Program 103,420 44,720 43 2% 102 454 102 454 Public Works Enforcement Program 160 214 74,653 46 6% 149 306 149,306 Public Works Facilities Maintenance 124,389 32,667 26 3% 105 446 105,446 Public Works Community & Economic Development 126,344 58,080 46 0% 130,640 130,640 Public Works Parks Maintenance 149,078 70,926 47 6% 142 672 142,672 Public Works National Pollutant Discharge Elimination Sys-NPDES 95 150 42 633 44 8% 92,748 92 748 Public Works Storm Dram Maintenance 16 000 6,414 40 1% 12 828 12 828 Public Works Planning Commission 2 260 715 31 6% 1 430 1,430 Public Works Emergency Operations Program 10 800 2 867 26 5% 5 734 5 734 Public Works Capital Projects - - - - Non -Dept General Government Non Departmental Expenditure, 738 850 249 793 33 8% 742 518 742,518 Non -Dept Overhead Cost Allocation 487 100 238 300 48 9% 476 600 476 600 TOTAL EXPENDITURES 3,822,060 1,674,449 43 8% 3,911,950 3,911,950 Revenues 3,309,047 1,579 731 47 7% 3,254,695 4 694 545 Expenditures 3 822 060 1 674 449 43 8% 3 911 950 3 911 950 NET (513,013) (94,718) (657,255) 782,595 Fund Balance - Beginning (July 1 2013) 300 152 512 246 1 595 853 Revenues less Expenditures (513 013) 657 255 782 595 Fund Balance - Ending (June 30, 2014) (212,861) {145,009) 2,378,448 Note Amount does not include adjustments made directly to fund balance ♦Packet ;Pg_ 28 Exhibit C CITY OF GRAND TERRACE WASTE WATER,FUND 2012-13 2012-13 2013-14 2013-14 % 2013-14 Adopted Actuals Actuals Year-end Dept Category Des c Projected Actuals Budget Dec2014 to Budget Proiechon REVENUES Wastewater Service Charge 1,499,000 1,533,397 1 528 980 796,320 52 1% 1 530,000 Wastewater Delinquent Service Charge - - - 17 745 17 745 ti Wastewater Sewer Connection Fees GI 4,000 - 4,080 - 0 0% - -' Wastewater Investment Earnings 6 900 4 987 7 040 - 0 0% 5 000 TOTAL REVENUES 1,509,900 1,538,384 1,540,'400 814,065 52 9% 1,552,745 EXPENDITURES Public Works Public Works Public Works Wastewater Disp - Colton Public Works Wastewater Disp - GT Public Works Line Maintenance Public Works NPDES Non -Dept O/H Cost Allocation TOTAL EXPENDITURES Revenues Expenditures NET -�f Fund Balance - Beginning Revenues less Expenditures Fund Balance - Ending 100 040 87,323 121,280 44,415 36 6% 82 623 1,182,000 1,182,000 1,182,000 689,500 58 3% 1,182 000 25,000 3,281 10,200 2016 19 8% 14 032 133 600 119,241 257,620 18,810 7 3% 136,620 33,400 31,794 39 660 18,235 46 0% 32,710 157 448 155 878 160 600 79,350 49 4% 158,700 1,631,488 1,579,517 1,771,860 852,326 481% 1,606,685 1,509 900 1 538,384 1 540 ,100 814 065 52 9% 1,552,745 1,631,488 1,579,517 1771,360 852 326 48 1 % 1 606 685 (121,588) (41,133) (231,260) (38,261) (53,940) 1,605 596 1,605,596 1,484,008 1,564,463 (121 588) (41 133) (231 260) (53 940) 1,484,008 1,564,463 1,252,748 r 1,510,523 S MEETING DATE AGENDA REPORT March 11, 2014 Successor Agency Item TITLE Selection of Design Alternatives for Washington Street Interchange/Mt Vernon Avenue Improvement Protect PRESENTED BY Kenneth Henderson, Interim City Manager RECOMMENDATION RECOMMENDATION That the Mayor and City Council of the City of Grand Terrace authorize and direct the Mayor to execute the attached letter from the cities of Colton and Grand Terrace to the executive director of San Bernardino Associated Governments (SanBag), supporting SanBag Alternative #6 as the cities' first design priority for the Washington Street Interchange/Mt Vernon Avenue Improvement Protect, SanBag Alternative #11 as the cities' second design priority and formally opposing the design and implementation of SanBag Alternative #10 BACKGROUND For the past two and one-half years, the cities of Colton and Grand Terrace have jointly promoted the design and development of the proposed Washington Street interchange For the first one and one-half years, Mayor Stanckiewitz, the City's SanBag representative worked on his own in an effort to get SanBag officials to consider adding the reconstruction of Mt Vernon Avenue to the proposed scope of work for the Washington Street' Interchange The Mayor's efforts to include the reconstruction of Mt Vernon Avenue in the overall scope of work received considerable impetus when Council Member Frank Navarro, of the City of Colton, was selected as that City's SanBag representative Since that time, the Mayor and the Counctl Member from Colton have worked hand in hand to provide considerable input into the design alternatives proposed to be considered by SanBag DISCUSSION At this point in time, there are three remaining design alternatives numbered 6, 10 and 11, respectively By law, SanBag must submit two design alternatives for detailed analysis before a final decision is made and construction commences once environmental clearances and financing have been obtained In light of the major impacts -that pertain to each of the design alternatives, much discussion took place among Colton and Grand Terrace elected and appointed officials, followed by meetings with the SanBag Executive Director and its Director of Freeway Interchange Programs a8rAa^-- t-- MAYOR r iSarah S Zamora U r COUNCIL MEMBERS David J Toro Mayor Pro Tem Prank A Gonzales District 2 Frank J Navarro District 3 Susan M Oliva District 4 March 5, 2014 Raymond Wolfe San Bemardino Associated Governments (SANBAG) 1170 W Third Street, 2❑d Floor San Bernardino, CA 92410-17J 5 RE Washington Street Interchange/Mt Vernon Avenue Improvement Project The purpose of this letter is to jointly express the official positions of the cities of Colton and Grand Terrace regarding the above referenced project This letter formally recommends SANBAG Alternative #6 as the cities' first design priority, &brnattve #L1 as the second desgn priority and includes -strong, joint apposition to Alternative *U because of its 100% taking of a vital shappmg Center in the City of Colton This-proj6tt will Mli0TL5-txafft gm-tift, and reduce traffic delays, along I-215 and the traffic between Riverside and San Bernardino Counties Also, the project will provide efficient access on and off Washington Street at Interstate I7215 and accommodate growth in adjacent developing areas The project supports Federal, state, regional, and local transportation plans and policies that identify the need for improving the I-215 freeway The area is stable, but has suffered community economic distress as a result of the Great Recession The Recession has had a particularly devastating impact on the Inland Empire The City of Colton has not given up on the area and sees the construction of Deirdre x Bennett i Alternative #6 as an opportunity to create growth -producing economic District 5 conditions and use the anticipated Interchange project to assist with enhancing growth in the region and surrounding developing areas The project will create relief to traffic congestion and improve circulation in the area A daily Isaac T Suohil estimated traffic volume of 165 000 vehicles er` da , this traffic volume District 6 I � p Y I represents significant sales tax proceeds to the economy of the community This area is already the home of "Ashley's" furniture, the largest furniture manufacturer in the United States, and hosts the largest retail sales tax home stare of this industry The Ashley furniture facility is located on parcels of "erty within 75 miles of the intetc-range Also, t1ae, "Mirad-e Mile", a now destination for Recreation Vehicle sales in Southern G-alifornia, eannot be overlooked For the City of Grand Terrace, Alternative #6 would include the improvement of Mt Vernon Avenue, from the Washington Street interchange to Canal Street in ` Grand Terrace. Currently, Mt. Vernon Avenue is a heavily -traveled two-lane CIVIC CENTER II road connecting Colton and Grand Terrace It suffers significantly from a 650 N LA CADENA DRIVE COLION, CA 92324 degrading slope and is closed periodically so work crews can clear the road of PH: (909) 370- dirt, rocks and mud flows as seismic and weather conditions dictate 5099 FX (909) 370- ;, Reconstruction of Mt Vernon Avenue, as envisioned by Alternative #6, will WEB resolve these slope managpment issues on a permanent basis going forward www ci Colton ca us � rPacket'Pg 33 r ', .�4 � J f �a y ytv�a. `^ f :..... 3 x ,- 1 f ----- ! ��s > / �a H � �~ .m' • { ` r k`�ry -r 1 � �>2 `,'.4R �% �,'�;� ��y i� r j'r�?O > 6"� �� i %r �\,, �Ar�4 �''S f O `�- �a 4 Z ` r . � � � ►1' /, ^ay �'� \J�� r,. ` y 4diy' " � � C. � + ` � �u ,9'q '+1 a f .` ^�.,'`` .f` ` r'" J'' ;,b�P, � � �_ _ ,>� _ _� y�`�,, ~^ {v 4 X0% �A r ! r er1fl 3 = � ;.` % ' ; t *a",�y �XQ C ~ 4 -{✓ + r E`� I �r +' uf' er }�y � tJ7 , � �� ; ��.} aj-i�•g r� y'\,, "Y ' � \�ti '� � `'- �l .rrf / .ar � � sf' a'1 � � 1 / �T �?�y a5 1 �/ff .�1�}` � • �i.�� ,^�y * art `�/ $ 9� ` -0a!a" '�►P �r'rf t,' +� �•t*5 `ti ," � • � ` !r y ��' � �140, - �' `' • 1 �� ~. �'� � ,.7 .�„' !l i � �Y � y+ r �irH,''ri � -J i > ' _� A. 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J i' Rr `• � �"V � V! 9 l � i R ? kp ti �� 1114iS�6 Tt�i l , �� a�' F�.ra' 1 +��.p.f a w' r 1@ �tp a` • y y S ♦ 4., a 1 4 tt �iilAy /',� CXM I tn�. \A•'�s} Ir,4xi rig SwwouTewff r V f __________ Y "" _=___A _-__�__.'.7'v � �_____ W_v - � _"u�u `�" � _4___��_� -i �___t�___�e�h___w_T �"j�."_`�. f_� � �__'_-� _ ___". wl'�_ LV•, _� � -_ _ � r ___ ___ y ___�_s_ _ __� -_ s -rr ILo '�sd zz zz zz 11AktiCAl[FORF!I 'ONATCA CNER HABIrA r,. \ . � a"a"�.°ter n°^`v0«�i"c cuae cHocosco v .r Ir�r>E .z el � y' �, ti ref L. �/ ILIVE a2 el SECLION �� ti,� �0 T Mt VERNON AVENUE"rt, artlip�x�a �� v to to v W Cr'A, C 1 - 7nn .� i , ► � i FRR•ry� - - a...., •� ;��jF°i'_ r"' _ z� �+F�h � taF" a �Y �n orb �Nt COU IV ;s�r<.. �,,�„„ �'"� ��F{`••°�'"gyy 1r i , 0'41^ "f��t�'�",;" -y�' ''�l�d� �1�L�v0y.,\,y,1�'�' ��``�� 'qU�� a . LEGEND �— POTENTIAL WALLS CALIFORNIA GNATCATCHER HABITAT AREA --------- CUT (ASSUMING WALLS ARE NOT BUILT) FILL (ASSUMING WALLS ARE NOT BUILT) Attachment Alternative 6 (Washington Street Interchange/Mt Vernon Improvement Project) 1-215/ Mt VERNON -WASHINGTON ALTERNATIVE 6v5 MODIFIED HOOK RAMP m D no_tn_I Ir r % 1 P ' ar. + �Y ' � � , ,. Yx. � c/`0} c `4TT' � � ♦ . 4`17g �+ I tioj� \� s "� Qr �`"� " � ° k '�+'. * ° dsk�0 �'. � a ~1t. -C �f � t � j'y { Y^'f h'' � ♦ f� � n y< i t � 1 W l� !`�\� yyr+ „� ' p � � � � "�• t r .1f fi l'' � , r� � �, �` ,'yZ•,! 1 y ,, ♦ '� `-y .J "l +n» �a y 'r `� '� : � Ty"'� �h.f,. '4 _ ;ti; r I I ( �1�Y s r r. is �>''t . `ilr•.f '� '� �,,, ' 1! r,i`� 1 d r� ('%r y {I .Sn `'Y ox Y r rf Imo+ All � , �, � �. } -'� �s �"• r � ^ 's'4' j� j „ a � ,� �� a {F � r �t �'�}+u�g.,y{ +jf��yy�5 �>, '. � } r � Cp�y, � F �( 4�' � 4�idy '4 f Y� � ` 4 A, �Yy 8`� �•. f + ! v" v� f�v`F+"fi f1 fvFli�t �.,ry": ? i r� t i� � ,,- w,r ! 1 •�"r.v A r4�,ti i� d +/ ate ,• S 4 r,' t :, 1�'asy{t�tpI1tr'I r(°Qi� "•7 1� � �4(9 Jtt I..p,'(rJC�� J ~ '�°iCI �y• ,: 't �.(,,F 4r� fY t/.r�v ! y, a �tf r_ 't , �` s+f 1,i. '� �3rbr,2p��{J — MAR ✓tiq �tfS r ' Se4 t Y S r s49 u r �t�f'Sf le lam{? ` S I if " r e �G'2 '+y,✓di 1 .,-.+•�,c <� 9`•�=� f � � .-w_... to fi („�' i¢ - er �- �, `"'- ;-..� -- - -- -`^! =rz~- -- <s ------ ,�Mp y'ea-�-'a->,.?�" ,gym.._-- --- ^•t --- - �� : ^�. - - �-e,--� va; -- ---'- - �-�-?s _ � ."_ t �~ is i� T1 �1 �^ ,, - ��x?� x�� f' �.e�. , 1 MLIu Y u�`4� �� yL`•� "wtlC f, " � `'4•r l �•,_ �( _ b,1 JJ //��Q�[*A,i,�^ ♦ � �i� lw^•J I i � �'0' A`I' ��y� ,{` r (,! .J Iq`• � ! � 1 tk rtµ2�-may ��y��9 �"1� A'!t t'*a�•IIr� # 2n �+.� .r-V �Y' 4n '�"'� t; x � � \4��1TY �,M•� g'�� Y S' �1! y}MO a f� .rj.,. l .o'' �fr?v { B B li 12 12 12 le j ^ I d< y b- sr vuo 1 swfo ac�jy a �'`O� y 0 1-1 Y "-' ' r r .� -M , r I G 4i Z I a r K y ,cY-Ua y i� 9y I a GAIT ! CNA2CA"i ER HABI AT _ r ( ,r Y>� W 1 Y r4l (TYPE A2 BI SEEYibI (TYPE A2 .1 Mt VEpNUN AVENUE d` ix m v� Vr CrAI C 7 — -Ann l EGEN POTENTIAL WALLS 1-215/ Mt VERNON-WASH'INGTON CALIFORNIA GNATCATCHER HABITAT AREA --------- CUT (ASSUMING WALLS ARE NOT BUILT) ALTERNATIVE 1 1 v5 HOOK RAMPS / TIGHT DIAMON ram; FILL (ASSUMING WALLS ARE NOT BUILT) Attachment Alternative l l (Washington Street InterchangelMt. Vemon Improvement Project) J I MEETING DATE TITLE AGENDA REPORT March 11, 2014 Council Item Wastewater Agreements Between the City of Grand Terrace and the City of Colton PRESENTED BY Emily Wong, Interim Assistant City Manager RECOMMENDATION Approve (a) the Settlement Agreement and Release with the City of Colton, (b) the Sewer Services Agreement with the City of Colton, and, the wastewater system Lease Agreement with the City of Colton BACKGROUND Special Counsel has been working on` agreements with the City of Colton regarding resolution of all outstanding issues between Grand Terrace and Colton regarding operation of the Grand Terrace wastewater collection system and sewer service charges It is anticipated that the proposed global resolution of having Colton operate the wastewater collection system, giving them the ability to address any issues concerning maintenance, capacity and related matters, will be in the best interest of Grand Terrace DISCUSSION Pursuant to City Council direction, Special Counsel, Mayor Stanckiewitz, former Council Member Sandoval and staff have met on several occasions, over the past several months, with counsel and staff for the City of Colton Based upon those discussions, the parties drafted three (3) agreements as follows (a) a Settlement Agreement and Release, (b) a Sewer Services Agreement, and (c) a Lease Agreement All three agreements are ready for adoption Pursuant to these agreements, Colton will undertake to operate and maintain the Grand Terrace wastewater collection system, and will collect all applicable charges from users in the City of Grand Terrace Colton will make an annual lease payment to Grand Terrace, which will be based upon a system evaluation currently being conducted by consultants approved by both cities and contracted with by Colton The agreements settle all related litigation between Grand Terrace and Colton, extricates Grand Terrace from the wastewater collection business, and associated liability exposure, and stipulates the terms and conditions relating to Colton providing wastewater collection, operation and maintenance activities on behalf of Grand Terrace users As described in the Sewer Services Agreement, Grand Terrace will receive a �8 a SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Mutual Release ("Agreement") is entered into by and between the City of Colton ("Colton"), the Colton Utility Authonty ("Colton Authonty") (collectively, "Colton") and the City of Grand Terrace ("Grand Terrace") Colton and Grand Terrace are sometimes referred to individually as "Party" and collectively as the "Parties " RECITALS w This Agreement is made with reference to the following facts WHEREAS, Grand Terrace owns and operates sanitary sewer collection system and the real property on which the structures constituting part of such system are located, and consisting generally of 36 24 miles of gravity sewers, no forced mains, an 6unknown length of lateral collection pipes, no lift stations, clean -outs, outlets, manholes, pumps, on -site generators, pipes, flow -meters, flow splatters, weirs and interceptors, and telemetry system together with all improvements thereto acquired, installed, constructed or reconstructed from time to time, and WHEREAS, the Parties previously entered into the Service Agreement — Sewage Transportation, Treatment, and Disposal, dated July 29, 1974 (the "1974 Agreement") and the Settlement Agreement and Amendment to 1974 "Service Agreement — Sewage Transportation, Treatment, and Disposal, dated September 26, 1980 (the "1980 Agreement," together with the 1974 Agreement, the "Prior Sewer Agreements"), pursuant to which the Parties agreed that Colton would transport and treat wastewater from the Wastewater System, and WHEREAS, the Parties have a dispute regarding the amount of fees Grand Terrace owed Colton pursuant to the terms and conditions of the Prior Sewer Agreements (the "Fee Dispute"), and WHEREAS, as a part of, and in addition to the terms and conditions of this Settlement Agreement, the Parties have determined that it is in the best interests of both Parties to have the Colton Authority operate and maintain the Wastewater System for and on behalf of Grand Terrace and to concurrently enter into this Agreement for that purpose, and WHEREAS, the Parties now desire to fully and finally settle and resolve any and all rights, claims, disputes, causes of action and alleged claims which currently exist or may in the future exist in favor of the Parties, including, but not limited to, all claims related to the Fee Dispute NOW, THEREFORE, in consideration of the above Recitals, which are all incorporated into this Agreement by this reference, and of the mutual promises, covenants, undertakings and agreements set forth below, and for other good and valuable consideration, the mutuality, receipt and sufficiency of which are acknowledged, the Parties agree as follows 23152 08201\842,0426.3 tPg � 8Ba intention, the release given herein shall be and remain in effect as a full and complete release, notwithstanding discovery of any such different or additional facts related to the Fee Dispute Therefore, the Parties acknowledge that they have been informed of and are familiar with the provisions of Civil Code section 1542, which provides as follows A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF {� EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR The Parties hereby waive and relinquish all rights and benefits under Civil Code section 1542 to the full extent that they may lawfully waive all such rights and benefits pertainmg only to the Fee Dispute 6 Denial of Liability The Parties agree and mutually acknowledge that this Agreement is for settlement purposes only All Parties deny any wrongdoing in connection with the Fee Dispute Neither this Agreement nor any action taken pursuant to this Agreement shall constitute any admission of any wrongdoing, fault, violation of law, or liability of any kind on the part of the Parties, or any admission by and of the Parties of any claim or allegations made in any action against such party This Agreement is entered into to avoid the attorneys' fees, costs, expenses and risks associated with litigating the Fee Dispute 7 No. Assignment of Claim The Parties represent and warrant that they have not sold, assigned or transferred, or purported to sell, assign or transfer, and shall not hereafter sell, assign or transfer, any obligations, liabilities, demands, claims, costs, expenses, debts, controversies, damages, rights, actions, or causes of action released pursuant to this Agreement 8 Warranty of Authorization Any person executing this Agreement on behalf of any Party does hereby personally represent and warrant to the other Parties that he or she has the authority to execute this Agreement on behalf of, and to fully bind, such Party Cz o1 9 Law and Venue This Agreement and disputes arising out of or relating to this c Agreement shall be governed by the laws of the State Any action or proceeding arising out of or relating to the Agreement or the Parties' relationship shall be brought in a State court situated in a the County of San Bernardino, California 10 Amendments No amendment is effective unless approved in writing by the m E d respective City Council of each Party and signed by an authorized representative of each Party N 11 Notices All notices permitted or required under this Agreement shall be given to the respective Parties at the following address, or at such other address as the respective Parties may provide in writing for this purpose Notices shall be in writing and delivered in person or by certified mail, return receipt, postage prepaid Until otherwise notified in writing of a change, all a notices and communications shall be sent to the respective Parties as follows Page 3 of 8 23152 0820 R1 420426 3 TacketRV 42 '8�Ba Notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U S mail, first class, postage prepaid, and addressed to the party at its applicable address Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service 12 Inte aattion Except as set forth in the Sewer Services Agreement executed concurrently herewith, this Agreement supersedes any and all other agreements, either oral or written, between the parties and contains all of the covenants and agreements between the parties Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party or anyone acting on behalf of any party, which are not embodied herein, and that any other agreement, statement or promise not contained in this Agreement shall not be valid, binding or relied upon in any way Any modification or amendment to this Agreement will be effective only if signed by the party to be charged 13 Third Party Rights Nothing contained in this Agreement shall create a contractual relationship with or a cause of action in favor of a third party against Colton, the Colton Authority or Grand Terrace Colton's services under this Agreement are being performed solely for Grand Terrace's benefit, and no other party or entity shall have any claim against Colton because of this Agreement or the performance or nonperformance of services hereunder 14 Cooperation, Further Acts The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement 15 Time of Essence Time is of the essence for each and every provision of this Agreement 16 Construction, Captions Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party The captions of the various sections and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement 17 Severability If any clause or provision is this Agreement is ruled invalid by any court of competent jurisdiction, the invalidity shall not affect any of the remaining provisions herein, and this Agreement shall be construed and enforced as if such invalid portion did not exist 18 Waiver The waiver by a party of any breach or violation of any term, covenant, or condition of this Agreement or of any provision, ordinance or law shall not be deemed to be a waiver of any earlier or later breach or violation of any term, covenant, or condition of this Agreement or of any provision, ordinance or law 19 Counterparts This Agreement may be executed in counterparts Wage 5 of 8 23152 08201 \8420426 3 Packet P �44 8 B4a IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates listed below Date CITY OF COLTON, a municipal corporation Date APPROVED AS TO FORM Date Date By Name Title City Manager COLTON UTILITY AUTHORITY, a public agency By Name Title Utility Executive BEST BEST & KRIEGER LLP By Name Title Partner CITY OF GRAND TERRACE, a municipal corporation By Name Title Partner Page 7 of 8 0 0 w� c d E d aM a c m E 19 d co c m E U R Q 23152 08201\8420426 3 SEWER SERVICES AGREEMENT BETWEEN CITY OF COLTON, COLTON UTILITY AUTHORITY AND CITY OF GRAND TERRACE 23152 08201\8598350 3 8dB'�b, Applicable Law means (1) any federal, state or local statute, law, code, ordinance or regulation, including without limitation, the Clean Water Act (33 U S C § 1251 et seq ) and its implementing regulations (40 C F R part 122) and the Porter -Cologne Water Quality Control Act (Water Code, § 13000 et seq ), (2) any formally adopted and c generally applicable rule, requirement, determination, standard, practice, policy, v guidance, implementation schedule, or other order of any Governmental Body having .a appropriate jurisdiction over the Wastewater System, (3) any established interpretation of law or regulation utilized by an appropriate Governmental Body if such interpretation is documented in writing by such Governmental Body and generally applicable, (4) any Governmental Approval, and (5) any consent order or decree, settlement agreement or t- similar agreement between Colton or Grand Terrace, the State and United States Environmental Protection Agency, the State Water Resources Control Board or the Regional Water Quality Control Board, Santa Ana Region, or any other Governmental c Body The items listed as (1) through (5) above constitute Applicable Law when they have the force or effect of law and are applicable from time to time to (a) the siting, v permitting, design, acquisition, construction, equipping, financing, ownership, s possession, start-up, testing, operation, maintenance, repair, replacement or management of the Wastewater System, (b) the conveyance, treatment, storage or discharge of wastewater from the Wastewater System, (c) the air emissions from the Wastewater System, and (d) any other transaction or matter contemplated hereby 00 N w Billing Services mean billing, collecting, accounting and reporting payments for the Sewer Service Fees, and other fees and charges as referenced in Section VIII (B) below, i as established from time to time by Grand Terrace and imposed on persons and property a with the wastewater service area in Grand Terrace Colton Wastewater System means Colton's sanitary sewer collection system, the w wastewater treatment plant and the real property on which the structures constituting part cc of such system are located, and consisting generally of One hundred ten (110) miles of gravity sewers, four (4) miles of force mains, an unknown length of lateral collection c pipes, eight (8) lift stations, clean -outs, outlets, manholes, pumps, on -site generators,, of pipes, flow -meters, flow splatters, weirs and interceptors, telemetry system and treatment plant together with all improvements thereto acquired, installed, constructed or d reconstructed from time to time The Wastewater System does not include storm drains, a� street gutters, channels streets or paving a Combined Wastewater System means the Grand Terrace Colton Wastewater System N d and the Grand Terrace Wastewater Systemca Contract Capacity means the contractual right possessed by Grand Terrace to discharge L d wastewater into the Colton Wastewater System The initial Contract Capacity shall be rn greater than or equal to the Influent being treated by Colton at the time that this Agreement is entered into, which is approximately 16 MGD, stated in terms of average s daily, dry weather flow The Contract Capacity shall be increased to the extent ca wastewater flows increase from new connections and/or increases from existing a 23152 08201\8598350 3 PacKet Pg 50 8.BSb Incident means the failure of a single unit of equipment, structure or improvement, or part thereof, constituting part of the Wastewater System, that causes an adverse impact either immediately or in the long term on the integrity or the functionality of that item or part thereof, and which failure is not the result of Colton's negligence or failure to perform its Normal Maintenance obligations Influent means all flows from the Wastewater System from all connected sources, including without limitation, residential, commercial, mumcipal sources, and industrial sources, and all vactor truck waste delivered from Grand Terrace to the WWTP Initial Term means the fifty (50) year period beginning on the Contract Date, and ending on June 30, 2064, unless earlier terminated Major Maintenance means reparative, corrective, or replacement activities required for operation continuity, safety and performance or to avert a failure of the equipment, vehicles or facilities or some component of the Wastewater System and costing more than the higher of twenty five thousand dollars ($25,000 00) per Incident, or the authority delegated to the Colton City Manager, from the Colton City Council MGD means millions of gallons per day Normal Maintenance means routine inspections and preventative, reparative and corrective actions to address normal wear, tear and usage or required or recommended by i the equipment or facility manufacturer or by Colton to maximize the usefiil life of equipment, velucles and facilities required to operate and maintain the Wastewater System Permit means any permit, order, decree, or similar document issued by any Governmental Body having j unsdiction over the Wastewater System Proceedings means any administrative, civil or criminal, action, suit, litigation, arbitration, or other legal or equitable proceeding having a bearing on this Agreement or on the operation of any maintenance of the Wastewater System, and all appeals therefrom Recycled Water means treated wastewater as defined in Title 22, Division 4, Chapter 3, Environmental Health, of the California Code of Regulations, as such may be amended form time to time Service Area means all territory in the municipal boundaries of the Cities of Colton and Grand Terrace Sewer Capacity Charge means the fee charged to any person, firm, corporation or other entity who requests a new connection to the Grand Terrace Wastewater System, an additional connection to the Grand Terrace Wastewater System, a larger connection to the Grand Terrace Wastewater System, or who in any other way increases the wastewater flow to an existing developed property connected to the Grand Terrace Wastewater 23152 08201\8598350 3 ,Raake�.ipg,52 II CONSIDERATION A One -Time Advance Lease Payment As consideration for this Agreement, the Authority shall pay Grand Terrace a one-time advance of $400,000, which shall be repaid to Colton in the event that Grand Terrace fails to meet the obligations set forth in Section IX, described below, and which shall be the subject of a separately negotiated lease agreement consistent with the terms set forth in Exhibit "A " The one-time advanced lease payment shall be paid by the Authority to the Grand Terrace General Fund The one-time advance lease payment is a condition subsequent to the other obligations contained in this Agreement and becomes due and owing after the Proposition 218 process is completed and the new rates have been adopted, and due at the time of execution of the Lease Agreement B Annual Lease Payments As further consideration for this Agreement the Authority shall make an annual lease payment commencing on July 1, 2014 and on July 1 of each year thereafter during the term of this Agreement The Annual Lease Payment will be the subject of a separately negotiated Lease Agreement between Colton and Grand Terrace and shall be consistent with the terms set forth in Exhibit "A " C Sale or Transfer of Grand Terrace Wastewater System Grand Terrace shall not sell, lease or otherwise dispose of the Grand Terrace Wastewater System or any partthereof essential to the proper operation of the Grand Terrace Wastewater System during the term of this Agreement without the prior written consent of Colton Grand Terrace shall not enter into any agreement or take any actions which impair or interfere with the operation of the Grand Terrace Wastewater System or any part thereof or otherwise impair or interfere with the rights of Colton under the terms of this Agreement or with respect to the operation and maintenance of the Wastewater System D Ownership of Grand Terrace Wastewater System Colton understands and agrees that it does not have any ownership rights or interests in Grand Terrace Wastewater System E Maintenance and Right-of-EntrX Grand Terrace grants to Colton the right to enter upon any sewer rights -of -way, sewer easements, city streets and roads within Grand Terrace to do all things necessary for the operation, maintenance, monitoring, repairs, replacements, and construction of the Wastewater System, and to fulfill its obligations under this Agreement Grand Terrace shall maintain the sewer rights -of -way, sewer easements, city streets and roads within Grand Terrace to a level that does not in any way impair the ability of Colton to perform its obligations under this Agreement Colton shall obtain any permits necessary to operate and maintain the Grand Terrace Wastewater System However, the permits shall be provided at no cost to Colton F Ownership of Maintenance Equipment Notwithstanding the provisions of Section II , subsection C hereof, upon entering into this Agreement Grand Terrace agrees to transfer ownership of or any leasehold interest in all existing Grand Terrace Wastewater System maintenance equipment currently owned or leased by Grand Terrace to Colton Upon termination of this Agreement, any equipment purchased by Colton for the maintenance of the Grand Terrace Wastewater System during the term of this Agreement shall be owned and retained by Colton Any equipment purchased exclusively with the proceeds from Grant Terrace 7 23152 08201\8598350 3 Packet Pg 5.4 2 Influent and Contract Capacity a Colton shall not be responsible for collecting, receiving or treating Influent from the Grand Terrace Wastewater System to the extent the Influent exceeds the Contract Capacity Contract Capacity shall increase upon approval of a new connection and collection of capacity fees by Colton b Colton shall not be responsible for collecting, receiving or treating Influent from the Grand Terrace Wastewater System that does not comply with all Applicable Laws as defined in this Agreement 3 Personnel Colton shall operate, manage, maintain and monitor the Grand Terrace Wastewater System with qualified personnel who meet federal and State licensing and certification requirements 4 Performance Colton shall operate, manage, maintain and monitor the Grand Terrace Wastewater System in accordance with recognized and sound engineering practices 5 Emergency Response At all times, Colton shall be available to and shall respond promptly to all Emergencies, including any unauthorized release, discharge, leak or spill of Influent from the Grand Terrace Wastewater System Colton shall be responsible sponsible for all Emergency Repairs of the Grand Terrace Wastewater System a Emergency Repairs During an Emergency, Colton may conduct any Emergency Repair to any unit of equipment or facility of the Grand Terrace Wastewater System, without obtaining the prior approval from Grand Terrace b Response to Unauthorized Release, Discharge Leak, Spill. On the occurrence of any unauthorized release of Influent,into the environment from the Grand Terrace Wastewater System, Colton will take the following actions (i) Colton will notify all Governmental Body(ies) with jurisdiction over the Grand Terrace Wastewater System (u) Immediately following the initial notification of the applicable Government Body(ies), or to the extent practicable, concurrently therewith, Colton will notify Grand Terrace of any such unauthorized release (ui) Colton will prepare a memorandum evidencing such notification and reporting and provide copies thereof to the Grand Terrace, together with any documents provided to the relevant Governmental Body(tes) regarding the release (iv) Colton will coordinate with Grand Terrace and all appropriate Governmental Body(ies) in effectuating the 0 23152 08201\8598350 3 iPacket Pg :56 V WASTEWATER SYSTEM CAPACITY A Contract Capacity 1 Right to Discharge In consideration of the obligations in this Agreement, Grand Terrace shall have a contractual right to discharge wastewater to Colton's wastewater system up to the Contract Capacity Such right shall not include a right to discharge materials or wastes that do not comply with Applicable Laws as defined in this Agreement 2 Additional Capacity Grand Terrace shall not authorize or issue a building permit or approve any construction plans of any person, firm, corporation or other entity who requests a new connection to the Grand Terrace Wastewater System, an additional connection to the Grand Terrace Wastewater System, a larger connection to the Grand Terrace Wastewater System, or who in any other way increases the wastewater flow to an existing developed property connected to the Grand Terrace Wastewater System as a result of new construction, the addition of any type of dwelling, commercial or industrial unit or units, or the conversion of all or a portion of any dwelling, commercial or industrial unit or units, without the prior written consent and approval of Colton and Colton's receipt of the required Sewer Connection Fee 3 Will Serve Letter Grand Terrace shall not authorize or issue any will serve letter or sewer service commitment letter to any person, firm, corporation or other entity without the prior written consent and approval of Colton It shall be the responsibility of Colton to issue all Will Serve Letters B Sewer Capacity Charges and Connection Fees 1 Sewer Capacity Charges Any person, firm, corporation or other entity who requests a new connection to the Grand Terrace Wastewater System, an additional connection to the Grand Terrace Wastewater System, a larger connection to the Grand Terrace Wastewater System, or who in any other way increases the wastewater flow to an existing developed property connected to the Grand Terrace Wastewater System as a result of new construction, the addition of any type of dwelling, commercial or industrial unit or units, or the conversion of all or a portion of any dwelling, commercial or industrial unit or units, shall pay Colton a sewer capacity charge or charges, as established from time to time by a resolution or ordinance of the Colton City Council a Purpose of Capacity Charge A sewer capacity charge or charges d may be imposed for the purpose of recovering the costs of existing wastewater facilities and new N wastewater facilities to be acquired or constructed in the future that are of proportional benefit to 3 the person, firm, corporation, other entity or property being charged, including capacity contracts v) for rights or entitlements, real property interests, and entitlements and other rights of Colton c involving capital expense relating to its use of existing or new wastewater facilities E s b, Issuance of Building Permit or Authorization to Connect Grand w Terrace shall not issue any building permit to any person, firm, corporation or other entity or a authorize any person, firm, corporation or other entity to connect to the Grand Terrace 11 23152 08201\8598350 3 �Packef,Pg J 58 VII CONSTRUCTION A New Construction No construction of a new sewer, new sewer connection or expanded sewer connection to the Grand Terrace Wastewater System shall be performed by any person who has not first complied with the ordinances, resolutions, rules and regulations of Colton and Grand Terrace and any other Applicable Law regulating such construction and connection, and obtained all permits required by the provisions of such ordinances, resolutions rules and regulations Any sewer constructed in Grand Terrace shall be constructed pursuant to and in accordance with the construction standards of Colton in effect at the time of construction B Review of Construction Plans All plans for construction of any sewer within Grand Terrace shall be submitted to Colton for review and approval prior to any construction permit being issued by Grand 'Terrace Colton has right to charge appropriate plan check fees for review and approval of the plans i C Right of Inspection Colton shall have the right to inspect and collect appropriate inspection fees for the construction of any sewer within Grand Terrace r D Fees and Charges Colton shall have the right to impose and collect any appropriate fees or charges to recover its costs of reviewing and approving any plans for the construction of any sewer within Grand Terrace and inspecting the construction of any sewer within Grand Terrace E Third Party Reimbursement Colton acknowledges that Grand Terrace has reimbursement agreements with certain developers for oversizing specific Grand Terrace ' Wastewater System facilities and improvements and that such agreements shall remain in effect during the term of this Agreement Grand Terrace shall continue to be responsible for all obligations under any such reimbursement agreements Colton shall honor all such agreements and require developers to pay Grand Terrace prior to connecting to the wastewater system F Development within Grand Terrace Grand Terrace shall notify Colton of any amendments to Grand Terrace's general plan, any specific plans or the adoption of a new general plan or any specific plans that may in any way impact the operations and maintenance of the Grand Terrace Wastewater System Such notice shall be provided to Colton in sufficient time for Colton to review and have input on the potential impacts to operations and maintenance of the Grand Terrace Wastewater System G Out of Service Area Connections Colton may, at its sole discretion, provide any services to customers located outside the Service Area Grand Terrace may require compensation for use of its system if any part of the system owned by Grand Terrace is used for conveyance of wastewater VIII BILLING AND COLLECTION OF GRAND TERRACE SEWER SERVICE FEES A Billing and Collection Subject to the other terms and conditions of this Agreement, at the expiration of the existing billing contracts between Grand Terrace and Burrtec and the Riverside Highland Water Co, Colton, at its sole option, may take over the Billing 13 23152 082011$598350 3 w c d E .0 0 co Packet Pg-s,GO �8Bb a At least three (3) months prior to proposing the adoption of any new or increases to the existing sewer service fees to be imposed within Colton and Grand Terrace, Colton shall notify Grand Terrace of the respective rates for the Sewer Service Fees to be unposed within Grand Terrace and the effective date or dates of such new or increases in the existing Sewer Service Fees b Except as otherwise may be prohibited by California Constitution article XIII D, section 6 and any other Applicable Law, the rates for Sewer Service and other Fees imposed within Grand Terrace shall be the same for all customer classes as the rates for the sewer service fees unposed within Colton C Grand Terrace Sewer Service Fees 1 Notice and Public Hearing Grand Terrace shall be responsible for mailing notice of and holding a public hearing and complying with all procedural requirements of California Constitution article XIII D, section 6 and any other Applicable Law, for the adoption of any new or increases in any existing Sewer Service Fees to be imposed on persons and property within the wastewater service area in Grand Terrace Such notice shall include the rates for the Sewer Service Fees to be imposed within Grand Terrace as determined by Colton 2 Majority Protest If written protests against any proposed new or increase to any existing Sewer Service Fees are presented by a majority of owners of the identified parcels in Grand Terrace upon which the fees or charges are proposed for imposition, as provided for under California Constitution article XIII D, section 6(a)(2) and any Applicable Law, and Grand Terrace is not authorized to impose the new or increase to the existing Sewer Service Fees, then Grand Terrace shall be responsible for paying to Colton any portion of the cost of providing wastewater services within Grand Terrace not otherwise funded from the Sewer Service Fees collected and then in effect within Grand Terrace a In such event, Colton shall notify Grand Terrace of the amount due and owing for the portion of the costs of providing wastewater services within Grand Terrace not otherwise funded from the Sewer Services Fees collected and then in effect in Grand Terrace b Such notice shall be provide each month on the first business day of each month for the wastewater services provided and billed within Grand Terrace in the previous thirty (30) calendar days 3 No Majority Protest If a majority protest against the imposition of any new or increase in any existing Sewer Service Fees by Grand Terrace does not exist, and Grand y Terrace determines not to adopt or impose the proposed new or increase in the existing Sewer 3 Service Fees, then Grand Terrace shall be responsible for paying to Colton any portion of the CO) cost of providing wastewater services within Grand Terrace not otherwise funded from the Sewer Service Fees collected and then in effect within Grand Terrace d E s a In such event, Colton shall notify Grand Terrace of the amount due a and owing for the portion of the costs of providing wastewater services within Grand Terrace not otherwise funded from the Sewer Services Fees collected and then in effect in Grand Terrace 15 23152 08201\8598350 3 Packet PgY`62 �8Bb XI INDEMNIFICATION Each Party agrees to defend at its own expense including attorneys' fees, mdemnify and hold harmless the other Party/(ies), its directors, agents, officer and employees, from all costs, c penalties, damages, liability and claims of any nature whatsoever, including but not limited to 0 liability for bodily injury, sickness, disease or death, property damage (including loss of use) or V violation of law, caused by or ansmg out of or relating to any negligent act, error or omission, or V C willful misconduct of that Party/(ies), its officers or employees, or any other agent acting pursuant to its control and performing under this Agreement To the extent that more than. one Party is determined to have been negligent or at fault, the Parties agree that each Party shall bear its own portion or percentage of liability and to indemnify and hold harmless the other Party/(ies) from that share L XII INSURANCE 0 w A Public Liability and Property Damage Insurance Grand Terrace shall maintain or cause to be maintained, throughout the term of this Agreement, a standard comprehensive w , general liability insurance policy or policies in protection of Grand Terrace, Colton and their respective members, officers, agents and employees Said policy or policies shall provide for indemnification of said Parties against direct or contingent loss or liability for damages for m bodily and personal injury, death or property damage occasioned by reason of the operation of the Grand Terrace Wastewater System Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and t in a minimum amount of $250,000 for damage to property (subject to a deductible clause of not to exceed $200,000 per claim) resulting from a single accident or event Such public liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks Such liability insurance may be maintained as part m of or in conjunction with any other liability insurance coverage carried or required to be carried by Grand Terrace, or in the form of self-insurance r. B Insurance Net Proceeds, Form of Policies The policy or policies of insurance required by this Section XII shall provide that all proceeds thereunder shall be provided by E insurers rated "A" or better by Best, Standard & Poor's Ratings Services or Moody's Investors Service, their successors and assigns Grand Terrace shall pay or cause to be paid when due the a premiums for such insurance policy required by this Agreement, and shall promptly furnish or m cause to be furnished evidence of such payments to Colton All such policies shall provide that Z Colton shall be given thirty (30) days' notice of each expiration thereof, any intended y cancellation thereof or reduction or amendment of the coverage provided thereby Colton shall not be responsible for the sufficiency of any insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by Colton E XIII TERMINATION OF PREVIOUS AGREEMENTS a The 1974 Agreement and the 1980 Agreement, and the respective rights and obligations of the Parties therein, are terminated as of the Contract Date 17 23152 08201\8598350 3 Packet�Pg`_ 64 COLTON City Manager City of Colton 650 North La Cadena Drive Colton, CA 92324 Phone (909) 370-5099 Fax (909) With a copy to Colton City Attorney c/o Best Best & Krieger LLP 2855 East Guasti Road, Suite 400 Ontario, CA 91761 Phone (909) 989-8584 Fax (909) 944-1441 COLTON UTILITY AUTHORITY Utility Director City of Colton 650 North La Cadena Drive Colton, CA 92324 Phone (909) 370-5099 Fax (909) With a copy to Colton City Attorney c/o Best Best & Krieger LLP 2855 East Guasti Road, Suite 400 Ontario, CA 91761 Phone (909) 989-8584 Fax (909) 944-1441 GRAND TERRACE With a copy to 23152 08201\8598350 3 City Manager City of Grand Terrace 22795 Barton Road Grand Terrace, CA 92313 Phone (909)824-6621 Fax (909) Grand Terrace City Attorney we, L Drafting Responsibility Neither party shall be held to a higher standard than the other party in the interpretation or enforcement of this Agreement, as a whole or any portion hereof, based on drafting responsibility M Attorneys' Fees In any action brought to declare the rights and obligations provided for herein or to resolve a dispute ansing in relation to this Agreement or to enforce the terms of this Agreement, the prevailing party shall be entitled to an award of reasonable r attorneys' fees in an amount to be determined by the court J N Assignment or Transfer Neither Party shall not assign, hypothecate or transfer, either directly or by operation of law, this Agreement or any interest herein without the pnor written consent of the other Party Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer O Force Ma�eure Colton will use all best efforts, in accordance with to continue operating, managing, maintaining and momtonng the Wastewater System in the event bf an Uncontrollable Circumstance [SIGNATURES APPEAR ON THE FOLLOWING PAGE ] 21 23152 08201\8598350 3 N W z CD Attachment Sewer Services Agreement_001 (Waste Water Agreements Between the Cities of Grand Terrace and Colton) 9 0 0 CA z 2 WASTEWATER ENTERPRISE LEASE AGREEMENT Dated as of July 1, 2014 by and between CITY OF GRAND TERRACE, CALIFORNIA as Lessee and the CITY OF COLTON, CALIFORNIA AND THE COLTON UTILITY AUTHORITY as Lessors 86c" "Event of Default" means any of the events described in Section 8 "Gross Revenues" means, for any Fiscal Year, the sum of all gross charges received for, and all other gross income and receipts derived by the Authority from the lease and operation of the Wastewater Enterprise or otherwise arising from the Wastewater Enterprise, including but not limited to investment earnings thereon, but excluding Sewer Capacity Fees and any grants received 11 "Lease" means the lease of the Wastewater Enterprise pursuant to this Agreement "Lease Payments" means the amounts payable by the Authority pursuant to Section 4 2, including any prepayments thereof pursuant to Article 9 hereof "Net Revenues" means, for any Fiscal Year, an amount equal to all of the Gross Revenues received with respect to such Fiscal Year, minus the amount required to pay all Direct Costs becoming payable with respect to such Fiscal Year, minus the amount required to pay debt service on any obligations incurred by the Authority with respect to the Wastewater Enterprise becoming payable with respect to such Fiscal Year "Payment Date" means each July 1st, commencing July 1, 2014 "Sewer Services Agreement" means the agreement of that name, dated as of March , 2014, by and between Grand Terrace, Colton and the Authority "Term of this Lease Agreement" means the time during which this Lease Agreement is in effect, as provided in Section 4 1 "Termination Date" means the date on which Colton and the Authority shall no longer act as Agent of Grand Terrace with respect to the Wastewater Enterprise pursuant to Section 3 2 of this Lease Agreement or Grand Terrace has terminated the Wastewater Enterprise Management Agreement "Total Rental" shall mean the total rental having an aggregate present value, when computed as of the Closing Date, of $300,000 per fiscal year or an amount to be agreed upon by the parties hereto subsequent to the Closing Date The Total Rental shall increase at the same percentage as the wastewater services rate charged to Grand Terrace's ratepayers "Wastewater Enterprise" means the Grand Terrace's wastewater system, consisting of the property and assets described in Exhibit A hereto ARTICLE 2 COVENANTS AND REPRESENTATIONS d E Section 2 1 Covenants and Representations of Grand Terrace The City makes the following covenants and representations to Colton and the Authority that as of the Closing Date a 23152 08201\8645358 2 2 Packet'Pg74 (a) Colton is a general law city duly organized and validly existing under the laws of the State, has full legal right, power and authority to enter into this Agreement and to carry out and consummate all transactions contemplated hereby, and by proper action has duly authorized the execution and delivery of this Agreement (b) The Authority is a joint powers authority, duly organized and existing under the laws of the State The Authority has the full right, authority and power to eater into the transactions contemplated by this Agreement and to carry out and consummate all transactions contemplated hereunder By proper action of its governing body, the Authority has been duly authorized to execute, deliver and duly perform this Agreement (c) Colton nor the Authority are not in default under any of the provisions of the laws of the State, which default would affect its existence or its powers referred to in subsections (a) and (b) of this Section 2 2 ARTICLE 3 LEASE AND OPERATION OF WASTEWATER ENTERPRISE Section 3 1 Lease of the Wastewater Enterprise Colton and the Authority agree to lease the Wastewater Enterprise from Grand Terrace, and Grand Terrace agrees to lease, and hereby does lease, such Wastewater Enterprise to Colton and the Authority, for the Total Rental Section 3 2 Appointment of Colton and the Authority as Agent of Grand Terrace Grand Terrace hereby appoints Colton and the Authority as its agent to carry out all aspects of the operation and maintenance of the Wastewater Enterprise pursuant to and in accordance with the provisions hereof and the Sewer Services Agreement Colton and the Authority hereby accept such appointment and assumes all rights, liabilities, duties and responsibilities of Grand Terrace regarding the operation and maintenance of the Wastewater Enterprise pursuant to the Sewer Services Agreement Colton and the Authority as agent of Grand Terrace hereunder, shall enter into, administer and enforce all contracts or other agreements relating to the operation and maintenance of the Wastewater Enterprise All contracts relating to the acquisition, operation and maintenance of the Wastewater Enterprise shall be subject to all applicable provisions of law relating to like property operated by joint powers authorities and by municipal corporations Grand Terrace may revoke the appointment of Colton and the Authority as its agent by delivering written notice at least thirty-six months (36 months) prior to the Termination Date Termination of this agreement shall be concurrent with the termination of Sewer Services Agreement That under no circumstances shall Grand Terrace appoint any other entity as its agent without consulting with Colton and the Authority and receiving Colton and the Authority's approval Section 3 3 Operation of the Wastewater Enterprise Colton and the Authority shall collect revenues, operate, maintain, manage and monitor the Wastewater Enterprise pursuant to the terms of the Sewer Services Agreement 23152 08201\8645358 2 4 Packet P- -76 other funds or property of the Authority be liable for the payment of the Lease Payments and any other amounts coming due and payable hereunder The Authority may at the Authority's own cost and expense and in the Authority's own name or in the name of the Authority prosecute or defend any action or proceeding or take any other action involving third persons which the Authority deems reasonably necessary in order to secure or protect the Authority's rights hereunder, and in such event the Authority hereby agrees to cooperate fully with Grand Terrace and to take such action necessary to effect the substitution of Grand Terrace for the Authority in such action or proceeding, if the Authority shall so request Section 4 5 Rates, Fees and Charges Grand Terrace, Colton and the Authority and the City shall fix, prescribe, revise and collect rates, fees and charges for the Wastewater Enterprise as a whole for the services and improvements furnished by the Wastewater Enterprise during each Fiscal Year that are at least sufficient, after making allowances for contingencies and error in the estimates to yield Gross Revenues that are sufficient to pay the following amounts in the following order of priority (a) all Direct Costs estimated by the Authority to become due and payable in such Fiscal Year, (b) on a parity basis, debt service payments on any bonds, notes or obligations of the Authority relating to the Wastewater Enterprise as they become due and payable during such - Fiscal Year and amount required to pay Lease Payments, and (c) all other payments required to meet any other obligations of the Authority that are charges, liens, encumbrances upon, or which are otherwise payable, from Gross Revenues during such Fiscal Year (d) Grand Terrace, Colton and the Authority shall establish, maintain and adjust the rates changed to the ratepayers of the Wastewater Enterprise in compliance with the terms of the Sewer Services Agreement ARTICLE 5 MAINTENANCE, TAXES, INSURANCE, AND OTHER MATTERS Section 5 1 Maintenance, Utilities, Taxes and Assessments Throughout the term of � this Agreement, all improvement, repair and maintenance of the Wastewater Enterprise shall be a`,; the responsibility of the Authority, and the Authority shall pay for or otherwise arrange for the 3 payment of all utility services supplied to the Wastewater Enterprise, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Wastewater Enterprise resulting from ordinary wear and tear d E r The Authority shall also pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority affecting the Wastewater Enterprise or its interest or a estate therein, provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Authority shall be 23152 08201\8645358 2 6 IPa6k6VPg 178 of the Wastewater Enterprise, or any other representation or warranty with respect to the Wastewater Enterprise In no event shall Grand Terrace be liable for incidental, indirect, special or consequential damages in connection with or arising out of this Agreement for the existence, furnishing, functioning or Colton and the Authority's use of the Wastewater Enterprise Section 6 2 Release and Indemnification Covenants Grand Terrace, Colton and the Authority shall and hereby agrees to the indemnifications as set forth in the Sewer Services a Agreement ARTICLE 7 ASSIGNMENT, SALE AND AMENDMENT Section 7 1 Assignment by the Authority This Agreement may not be assigned by Grand Terrace, Colton or the Authority Section 7 2 Sale of Wastewater Enterprise Subject to the provisions of the Authority's Joint Powers Agreement, the Authority covenants that its interest in the Wastewater Enterprise shall not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole, except to another public entity and with the prior written consent of the Bond Insurer Neither the Net Revenues nor any other funds pledged or otherwise made available to secure payment of the Lease Payments shall be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed or used except as authorized by the terms of this Agreement The Authority shall not enter into any agreement which impairs the operation of the Wastewater Enterprise or any part of it necessary to secure adequate Net Revenues to pay the Lease Payments, or which otherwise would impair the rights of Grand Terrace with respect to the Net Revenues If any substantial part of the Wastewater Enterprise shall be sold, the payment therefor shall either (a) be used for the lease, acquisition or construction of improvements, extensions or replacements of Wastewater Enterprise, or (b) to be applied to prepay the Debt Service Section 7 3 Sublease Colton and the Authority shall not sublease the Wastewater enterprise without written consent from Grand Terrace Section 7 4 Amendment of Agreement Grand Terrace, Colton and the Authority shall have the right to modify or amend this Agreement upon the written consent of each party hereto ARTICLE 8 EVENTS OF DEFAULT Section 8 1 Events of Default Defined The following events shall be Events of Default hereunder (a) Failure by the Authority to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than failure to pay when due any Lease Payment or other amount due under this Agreement, for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied has been given to the Authority 23152 08201\8645358 2 8 Packet Pg_ 80 ARTICLE 10 MISCELLANEOUS Section 10 1 Further Assurances Grand Terrace agrees that it will execute and deliver any and all such further agreements, instruments or other assurances as may be reasonably necessary or requested by Colton or the Authority to carry out the intention or to facilitate the performance of this Agreement Section 10 2 Amendment Grand Terrace, Colton and the Authority may amend this Agreement upon the written consent of each party hereto Section 10 3 Notices Any notice, request, complaint, demand or other communication under this Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopy, telex or other form of telecommunication, at its number set forth below Notice shall be effective either (a) upon confirmed transmission by telecopy, telex or other form of telecommunication, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt Grand Terrace, Colton and the Authority, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder COLTON City Manager City of Colton 650 North La Cadena Drive Colton, CA 92324 Phone (909) 370-5051 Fax (909) 370-5183 With a copy to Colton City Attorney c/o Best Best & Krieger LLP 2855 East Guasti Road, Suite 400 Ontario, CA 91761 Phone (909) 989-8584 Fax (909) 944-1441 COLTON UTILITY AUTHORITY Utility Director City of Colton 650 North La Cadena Drive Colton, CA. 92324 Phone (909) 370-5051 Fax (909) 370-5183 23152 08201\8645358 2 10 y � 8 B°,c �. Section 10 9 Waiver of Personal Liability No member of Colton or the Authority, nor any member of the governing board of Colton or the Authority or its members, nor any officer, agent or employee of Colton or the Authority or its members shall be individually or personally liable for the payment of Lease Payments or be subject to any personal liability or accountability by reason of this Agreement, but nothing herein contained shall relieve any such member or person from the performance of any official duty provided by law or by this Agreement Section 10 10 Benefit of Agreement Nothing 1n this Agreement, expressed or implied, is intended to give to any person other than Grand Terrace, Colton and the Authority, the Bond Insurer, the Trustee and the Bondowners any right, remedy or claim under or by reason of this Agreement IN WITNESS WHEREOF, Grand Terrace, Colton and the Authority have caused this Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates listed below Date Date Date 23152 08201\8645358 2 CITY OF COLTON, a municipal corporation I0 Name Title Mayor COLTON UTILITY AUTHORITY LM Name Title CITY OF COLTON, a municipal corporation By _ Name Title 12 EXHIBIT A DESCRIPTION OF THE WASTEWATER ENTERPRISE Wastewater Enterprise means the whole and each and every part of the wastewater collection and treatment system of the City of Grand Terrace, including the portion thereof existing on the date hereof, and including all additions, betterments, extensions and improvements to such wastewater collection and treatment system or any part thereof hereafter acquired or constructed c m E cc w a 23152 08201\8645358 2 -1-