HomeMy WebLinkAbout2003-08-12; City Council; Resolution 2003-2161
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RESOLUTION NO. 2003-216
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, TO APPROVE AND AUTHORIZE
EXECUTION OF A REIMBURSEMENT AGREEMENT WITH
KELLY LAND COMPANY AND SHEA HOMES LIMITED
PARTNERSHIP FOR PIPELINE IMPROVEMENTS WITHIN
CANNON ROAD REACH 2, PROJECT NO. 3583, AND
APPROPRIATE FUNDS
WHEREAS, Kelly Land Company and Shea Homes Limited Partnership are the
developers of the Cannon Road Reach 2 project; and
WHEREAS, at the request of the City of Carlsbad, 8, 12", 15", and 20" diameter sewer
Dipelines and a 14" diameter forcemain were constructed within Cannon Road Reach 2 as part of
:he City's South Agua Hedionda Interceptor Sewer, Project No. 3583; and
WHEREAS, Kelly Land Company and Shea Homes Limited Partnership has requested the
Zity Council's approval of a reimbursement agreement for the costs of constructing the South
4gua Hedionda Interceptor Sewer pipeline improvements; and
WHEREAS, an Environmental Impact Report (EIR 83-04) was approved for the
Zannon Road Reach 2, including utilities by the City Council on November 15, 1983 and a
Mitigated Negative Declaration was issued by the Planning Director in September 1996; and
WHEREAS, the total reimbursable cost for the sewer pipeline improvements in Cannon
?oad Reach 2 is estimated at $1,605,500; and
WHEREAS, it is estimated that at buildout of development in Sewer Benefit Areas C, D, E,
and F, there will be sufficient funds available in the Sewer Benefit Area Fee Fund needed to
*eimburse the Kelly Land Company for the South Agua Hedionda Interceptor Sewer pipeline
mprovements in Cannon Road Reach 2.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
;alifornia, as follows:
1.
2.
That the above recitations are true and correct.
That the reimbursement agreement between the City of Carlsbad, Shea Homes
lmited partnership, and Kelly Land Company for the reimbursement of costs for the South Agua
iedionda Interceptor Sewer improvements within Cannon Road Reach 2, attached as Exhibit "A
s hereby approved and the Mayor is authorized to execute said agreement on behalf of the City.
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3. That the Kelly land Company shall be paid for the forcemain within 30 days after
approval of the reimbursement agreement if all conditions in the reimbursement agreement are
satisfied by the parties.
4. That an appropriation of $435,243 is approved from the Sewer Benefit Area C, D,
E, and F fund for the forcemain.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council
held on the 12th day of August , 2003 by the following vote, to wit:
AYES: Council Members Lewis, Kulchin, Hall and Packard
NOES: None
ABSENT:
CLAUDE A. LEWIS,
ATTEST
Page 2 of Resolution No. 2003-216
(SEAL)
RECORDING REQUESTED BY
KELLY LAND COMPANY
WHEN RECORDED MAIL TO:
City Clerk
CITY OF CARLSBAD
1200 Carlsbad Village Dr.
Carlsbad. CA 92008
Please record the documents at no fee
as it is to the benefit of the City of Carlsbad
(Gov. Code 161031
SPACE ABOVE THIS LINE FOR RECORDER'S USE
AGREEMENT FOR REIMBURSEMENT OF COSTS FOR
CONSTRUCTION OF SOUTH AGUA HEDIONDA INTERCEPTOR
SEWER PIPELINE IMPROVEMENTS WITHIN
CANNON ROAD WEST (REACH 2) AND ITS
INTERSECTION WITH EL CAMINO REAL
BETWEEN
CITY OF CARLSBAD,
A Municipal Corporation
AND
KELLY LAND COMPANY, a Delaware Corporation
AND
SHEA HOMES LIMITED PARTNERSHIP,
a California Limited Partnership
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AGREEMENT FOR REIMBURSEMENT OF COSTS FOR
CONSTRUCTION OF SOUTH AGUA HEDIONDA INTERCEPTOR
SEWER PIPELINE IMPROVEMENTS WITHIN CANNON ROAD WEST
(REACH 2) AND ITS INTERSECTION WITH EL CAMINO REAL
(KELLY LAND COMPANY,
AND SHEA HOMES LIMITED PARTNERSHIP)
This Agreement for Reimbursement of Sewer Pipeline Improvements within Cannon
Road West (Reach 2) dated as of flJ66r I5 ,2003 ("Agreement"), is made at Carlsbad,
California, between KELLY LAND COMPANY, a Delaware corporation ('Kelly"), SHEA
HOMES LIMITED PARTNERSHIP, a California limited partnership ("Shea"), and the CITY
OF CARLSBAD, a Municipal Corporation ("City"), with reference to the following recitals:
RECITALS
A. Shea is the record owner of that certain real property located in the City of
Carlsbad, California, and more particularly described as the "Shea Core Area" on Exhibit "A"
attached hereto and made a part hereof (the "Shea Core Area"). Pursuant to that certain Real
Property Purchase and Sale Agreement between Kelly, Shea and Archstone-Smith Operating
Trust, a Maryland real estate investment trust formerly known as Archstone Communities Trust
("Archstone") dated as of July 5, 2001, as amended by that certain First Amendment to Purchase
Agreement dated as of January 3 1,2002, and by that certain Second Amendment to Purchase
Agreement dated as of February 5, 2002 (collectively, the "Kelly Ranch Purchase Agreement"),
Shea purchased the Shea Core Area from Kelly by deed recorded in the Official Records of San
Diego County on February 15,2002 as Document No. 2002-0135152.
B. The Shea Core Area, and the development thereof, is collectively referred to
herein as the "Kelly Ranch Project". The Kelly Ranch Project is a portion of the land which is
the subject of Final Map No. 14340, which was filed in the Office of the County Recorder of San
Diego County, California, on February 1,2002. Said Final Map was recorded pursuant to former
Tentative Map No. CT 97-16A.
C. Shea also purchased from Kelly by deed recorded in the Official Records of San
Diego County on September 22,1998 as Document No. 1998-605046, certain other real property
which adjoins the Kelly Ranch Project and which was commonly referred to as Village E.
Village E and the development thereof is sometimes referred to herein as the "E Project".
D. On December 15, 1998, the City Council approved that certain Agreement for
Reimbursement of Costs for the Construction of Cannon Road from El Camino Real to the
Western Boundary of Kelly Ranch Including Modifications to the Intersection of El Camino
Real and Cannon Road between City and Kelly dated as of December 15, 1998, which provided
for the construction of Reach 2 of Cannon Road West from Faraday Avenue to El Camino Real
("Cannon Road Reach 2") covering reimbursable work for road and drainage facilities. Such
Agreement was duly executed and recorded as Document No. 1999-0015247, and has since been
amended by Amendment No. 1 and Amendment No. 2 thereto, each dated as of February 8,2002
(collectively, the "Prior Road Reimbursement Agreement"). This agreement is intended to
augment and complement the Prior Road Reimbursement Agreement, which has already been
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further augmented by a separate Reimbursement Agreement for Water and Recycled Water
Pipelines, which was entered into between Kelly and the Carlsbad Municipal Water District and
recorded as Document No. 2000-b360087.
E. The final map for the E Project (Map No. 13715) was recorded in the Official
Records of San Diego County on December 31, 1998. One of the conditions of approval for the
Tentative Map (CT 96-07) for the E Project required Kelly (or a successive owner) to construct
certain sewer improvements, which are referred to herein below as the First Segment Sewer, and
which have been completed simultaneously with the "First Segment" of Cannon Road Reach 2 as
defined in the Prior Road Reimbursement Agreement.
F. One of the conditions of approval for the Tentative Map (CT 97-16A) for the
Kelly Ranch Project required Kelly (or successive owner) to construct certain additional
interceptor sewer pipelines and appurtenances within portions of Cannon Road Reach 2 and
El Camino Real. The construction of such interceptor sewer pipelines and appurtenances,
together with all the other sewerline improvements identified in Exhibits C, D, E and F to this
Agreement are collectively referred to herein as the "Sewerline Work".
G. Pursuant to its contract with Kelly for the purchase of Village E, Shea has (i)
assumed all obligations of Kelly under the Prior Road Reimbursement Agreement and
constructed the First Segment Sewer simultaneously with the First Segment of the Cannon Road
Reach 2 improvements, and (ii) executed the subdivision improvement agreement and posted the
bond required by the City in connection with the First Segment.
H. Prior to its sale to Shea of the Kelly Ranch Project, Kelly had commenced
construction of the Second Segment of the Cannon Road Reach 2 improvements, but had not
commenced the Sewerline Work including the Second Segment Sewer. Also prior to such sale
to Shea, Kelly had entered into the following contracts relating to the Second Segment and to the
Sewerline Work (the "Construction Contracts"): (i) that certain Master Agreement for
Construction, Master Agreement Number: M1, dated as of June 30, 1999, between Kelly and
Errecas, Inc., a California corporation ("Contractor"), as amended; (ii) that certain Construction
Contract, Contract Number: CR2S1, Cannon Road Segment 2 Surface Improvements, dated as of
June 30, 1999, between Kelly and Contractor, as amended; (iii) that certain Construction
Contract, Contract Number: CR2S W, Cannon Road Segment 2 Sewer Line Improvements, dated
as of June 2001, between Kelly and Contractor, as amended; and (iv) that certain Construction
Contract, Contract Number: CR2W1, Cannon Road Segment 2 Water and Recycled Water
Pipeline Improvements, dated as of June 18,200 1, between Kelly and Contractor, as amended.
Pursuant to the Kelly Ranch Purchase Agreement, Shea has assumed responsibility for the
construction of the Second Segment (except to the extent of construction already performed by
Kelly) and of the Sewerline Work, and the Construction Contracts were assigned to and assumed
by Shea pursuant to that certain Assignment and Assumption of Construction Contracts dated as
of February 12,2002 and recorded in the Official Records of San Diego County on February 15,
2002 as Document No. 2002-0135568.
I. The parties desire to provide for both (i) reimbursement to Kelly for the First
Segment Sewer already completed and (ii) construction of all Sewerline Work simultaneously
with Cannon Road Reach 2, in the location generally shown on Exhibit "C".
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J. Shea (as the successor to Kelly) agrees to cause the construction of the Sewerline
Work, provided that the City agrees to reimburse Kelly as set forth in this Agreement. The
Sewerline Work shall be as set forth on Exhibit ID", "E", and "F", subject to modification as set
forth in this Agreement'. Line item descriptions of the work items included in the Sewerline
Work, all of which are reimbursable (the 'Reimbursable Sewerline Work") are included within
Exhibits "D', "E", and "F" attached hereto and incorporated herein by this reference.
K. Kelly hereby requests reimbursement from the City pursuant to the Subdivision
Map Act for the cost of having constructed Sewerline Work in the First Segment Sewer and the
Second Segment Sewer.
L. The parties acknowledge that Government Code Section 66485 allows the City of
Carlsbad to require a subdivider to construct improvements benefiting property outside the
subdivision; and Government Code Section 66486 requires the City to enter into a
reimbursement agreement for such improvements. The parties intend that this agreement satisfy
the requirements of Government Code Section 66486.
M. The parties recognize that the Sewerline Work exceeds the infrastructure
otherwise required of Shea and Kelly in their buildout of the Kelly Ranch Project. Shea agrees
to install the Sewerline Work and the City agrees to reimburse Kelly as set forth in this
Agreement.
N. City acknowledges that Kelly has sold the Kelly Ranch Project as set forth in
Recital B. It is acknowledged that Kelly is and shall be entitled to cause the Sewerline Work to
be constructed by Shea as its successor, and that Shea has assumed the obligation to cause such
Sewerline Work to be so constructed. It is acknowledged that, notwithstanding that the
obligation for such construction of the Sewerline Work has been assumed by Shea (or one or
more successors), the obligations of the City for reimbursement under this Agreement shall be
only to Kelly, and any and all such reimbursement payments shall be made to Kelly.
NOW, THEREFORE, Shea, Kelly and City agree as follows:
1.
reference.
Recitals. The Recitals above are true and correct and incorporated herein by this
2. Satisfaction of Obligation. The agreement to perform the Sewerline Work as set
forth herein, and the actual construction thereof, shall fully satisfy and constitute full compliance
with all requirements regarding the Kelly Ranch Project with respect to the Sewerline Work.
3. General Developer Obli nations. -
a) In consideration of the City's reimbursement and other undertakings as set
forth herein, Shea agrees to cause the construction of the Sewerline Work, by and through its
general contractor, Erreca's, Inc., which work shall include the following improvements, as
shown on City Drawing No. 333-20 E, Sheets 1, 2, 8, 9, 10, 11, 23, and 25, dated October 21,
1998 prepared by O'Day Consultants, the First Segment Sewer, and City Drawing No. 396-2,
Sheets 1,2,3,4, 5A, 6,7A, 8A, 9, and 10A, dated September 19, 2001, prepared by Daniel
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Boyle Engineering, the Second Segment Sewer, (the "Plans") and as shown in the attached
Exhibits "C", "D", "E", and "F", which are incorporated herein by reference:
b) ' First Segment Sewer. The gravity sewer portion of the first segment (the
"First Segment - Gravity Sewer") for which estimates of quantities and costs are set forth in
Exhibit "D" to be constructed simultaneously with the "First Segment" of the Cannon Road
Reach 2 improvements, including:
(i) Approximately 144 lineal feet of 15" sewer main in 20" casing and
appurtenant work across El Camino Real;
(ii) Approximately 2,645 lineal feet of 20" PVC sewer main and
appurtenant work in Cannon Road; approximately 133 lineal feet of 20" PVC sewer main are
placed inside a 36" steel casing; and
(iii) Approximately 128 lineal feet of 8" PVC sewer main and
appurtenant work in Cannon Road to maintain sewer service to Rancho Carlsbad Mobile Home
Park.
c) Second Segment - Gravity Sewer. The gravity sewer portion of the
second segment (the "Second Segment - Gravity Sewer"), for which estimates of quantities and
costs are set forth in Exhibit "E", to be constructed simultaneously with the "Second Segment"
(as defined in the Prior Road Reimbursement Agreement") of the Cannon Road Reach 2
improvements, including:
(i) Approximately 2,510 lineal feet of 12" PVC sewer main and
appurtenant work in Cannon Road.
d) Second Segment - Force Main and Lift Station Related. The force main
and lift-station-related portion of the second segment (the "Second Segment - Force Main and
Lift Station-Related'), for which estimates of quantities and costs are set forth in Exhibit "F", to
be constructed simultaneously with the Second Segment of the Cannon Road Reach 2
improvements, including:
(i) Approximately 2,434 lineal feet of 14" HDPE sewer force main
and .appurtenant work in Cannon Road; and
(ii) Other improvements in Cannon Road required in preparation for or
to support construction of a lift station adjacent to Cannon Road.
The Sewerline Work shall include all necessary appurtenances, including those necessary
to connect the Sewerline Work to the City's pipelines in El Camino Real and Faraday Avenue.
e) Any portion of the Sewerline Work completed before the effective date of
this Agreement shall be included as a part of the Sewerline Work for reimbursement, subject to
the other provisions of this Agreement.
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0 Shea shall cause the construction of the Sewerline Work in compliance
with the City-approved plans and specifications, and other design documentation.
g) Shea shall cause construction of all Non-Reimbursable Work at no cost to
City.
h) By entering into this Agreement, Shea waives any and all potential
constitutional objections (NolladDolan) relating to the Sewerline Work improvements.
i) It shall be the responsibility of Shea to observe and follow the
requirements of City as defined within the Project's specifications for retention of records and the
submittal of payroll records, and other required documentation in connection with the Sewerline
Work Improvements, as specified in this Agreement.
j) Prevailing Wage. Pursuant to the California Labor Code, the director of
the Department of Industrial Relations has determined the general prevailing rate of per diem
wages in accordance with California Labor Code, Section 1773 and a copy of a schedule of said
general prevailing wage rates is on file in the office of the City Engineer, and is incorporated by
reference herein. Pursuant to California Labor Code, Section 1775, contractor for the Second
Segment Sewer shall pay prevailing wages for any laborers building the Sewerline Work.
Contractor shall post copies of all applicable prevailing wages on the job site.
k) The parties acknowledge that the First Segment Sewer has already been
completed and accepted by City, and that the line items and dollar figures for the First Segment
Sewer as set forth in Exhibit "D" represent the actual costs of construction of the First Segment
Sewer. City has issued or will promptly issue its Notice of Completion for the First Segment
Sewer.
1) The parties also acknowledge that Contractor has been mutually selected
by City and Kelly as the contractor for the Second Segment - Gravity Sewer andor the Second
Segment - Force Main and Lift Station-Related (collectively, the "Second Segment Sewer"), and
a contract amount for such Second Segment Sewer work has been agreed upon. The costs
thereof shall be allocated among the categories consistent with the method and process used in
Exhibits "E" and "F" attached hereto as Reimbursable Sewer Work. Costs for the Second
Segment Sewer shall be subject to modification through change orders.
m) Exhibits "E" and "F" set forth the preliminary cost estimates for the
Reimbursable Sewerline Work for the Second Segment Sewer. The parties acknowledge that
Exhibits "E" and "F", which were prepared by Kellys engineers based on Contractor's prices
applied to engineer's quantity estimates, are for illustrative purposes only and that all costs are
subject to audit for eligibility for payment in accordance with the procedures of Section 6.
n) During the performance of any Sewerline Work, Kelly shall retain (or
cause Shea to retain) detailed payment records for all items for Sewerline Work, for use by City
in auditing any subsequent Reimbursement Requests by Kelly.
0) Kelly's requests for reimbursement (each a "Reimbursement Request")
shall set forth the requested Reimbursement Amount and shall include the following relating to
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the work which is subject to such Reimbursement Request: copies of construction contract,
change orders, invoices submitted by Contractor, invoices for all other components of the Actual
Cost not otherwise reflected on the Contractor's invoice, payment slips, canceled checks (front
and back), lien releases (which may be conditioned upon receipt of payment) and other
documentation reasonably required by City to evidence the completion and payment for each
item of Reimbursable Sewerline Work ("Work Documentation"). Each Reimbursement Request
(including the applicable Work Documentation) shall be submitted by Kelly to the Public Works
Director.
p) The Public Works Director shall confirm and approve the Reimbursement
Amount based upon the components of Actual Costs and Overhead Amounts set forth in
Section 4(b) of this Agreement. If the Public Works Director objects to any items comprising
the Reimbursement Amount, the Public Works Director shall notify Kelly within thirty (30) days
of receipt of the Reimbursement Request. Failure to do so notify Kelly shall be deemed the
Public Works Director's approval of such invoices and of the Reimbursement Amount to the
extent of such deemed approved invoices. In the event the Public Works Director does object,
Kelly and the Public Works Director shall meet to discuss the disputed amount (at which time
Kelly shall make available all of the Work Documentation) and attempt to resolve the matter
through good-faith negotiation.
q) Prior to the submission to the Public Works Director of the final invoices,
Kelly shall obtain (or cause Shea to obtain) necessary or appropriate lien releases from the
Contractor, and shall obtain from the City all approvals and other evidence of final acceptance by
City necessary to indicate the completion of the respective portion of the Sewerline Work and
the ability to put such improvements into use (the "Completion of Work"). Kelly shall be
entitled to submit a Reimbursement Request respectively for the Second Segment - Gravity
Sewer or the Second Segment - Force Main and Lift Station-Related upon the respective
Completion of Work therefore.
r) City acknowledges that it has reviewed and approved the First Segment
Sewer change orders numbered 1 through 8, inclusive, 10 and 11.
4. General City Obligations.
a) City shall make available for Kelly's use the complete set of plans,
specifications, geotechnical reports, and other design documentation for the Sewerline Work.
b) "Reimbursable Sewerline Work" shall include both the First Segment
Sewer and the Second Segment Sewerline Work as set forth on Exhibits "C", "D", "E", and "F".
City agrees to reimburse Kelly for the Reimbursable Sewerline Work as described in Section 6
and 7 below. The amount that shall be reimbursable to Kelly, (the "Reimbursement Amount")
shall be equal to (i) the actual cost of the Reimbursable Sewerline Work (the "Actual Cost"), plus
(ii) overhead allocation of four percent (4%) of the Actual Cost (the "Overhead Amount") in lieu
of other reimbursement to compensate for the overhead expenses incurred by Kelly (or Shea, as
the case may be) including the costs for salary and benefits for home office staff, project
supervision above the level of on-site superintendent, bid solicitation, general corporate legal and
accounting fees, the cost of borrowed funds, and expenses for meetings with and presentations to
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government agencies which issue permits or otherwise regulate project approval. The Actual
Cost shall include all costs associated with the installation of the First Segment Sewer, the
Second Segment Sewer, and includes allowances for soils compaction testing, pipeline
surveying, staking, and other incidental costs as set forth on Exhibits "C", "D", "E" and "F".
5. Reimbursable Sewerline Work.
a) With respect to all hard costs of construction comprising the Sewerline
Work Improvements, Reimbursable Sewerline Work has been bid together with Non-
Reimbursable work for that portion of the Sewerline Work Improvements. The costs of the
Sewerline Work have been allocated among the categories ("Units") consistent with the method
and process used in Exhibits "D", "E", and "F". The parties agree that the spreadsheets attached
hereto as Exhibits "D", "E", and "F" is a fair allocation of the costs under such contract as among
the categories of reimbursable Sewerline Work. Costs shown in Exhibits "D", "E", and "F" are
subject to modification through change orders pursuant to Paragraph 6(h) of this Agreement.
b) During the performance of any Reimbursable Sewerline Work, Shea shall
retain detailed payment records for all items of Reimbursable Sewerline Work, for use by City in
auditing subsequent reimbursement requests by Kelly. Kelly's requests for reimbursement (each
a "Reimbursement Request") shall include copies of plans, specifications, engineer's cost
estimates, bids received, contracts, change orders, invoices, payment slips, canceled checks
(front and back), lien releases and other documentation reasonably required by City to evidence
the completion and payment for each item of Reimbursable Sewerline Work. Reimbursement
Requests may be submitted monthly in arrears, as identified in Section 6 (a) below, by Kelly for
each segment of work.
6. Audit of Reimbursable Expenses
a) Expenses for Reimbursable Sewerline Work (including without limitation
overhead and the allowance permitted under clause (f) below) are referred to herein collectively
as "Reimbursable Expenses". Kelly shall be entitled to submit requests for Reimbursable
Expenses monthly in arrears, and separately for each construction segment.
b) Kelly's Reimbursement Requests will be processed and audited for City by
a reputable consulting engineer selected by City ("Auditing Engineer"). The costs of the
Auditing Engineer shall be paid directly by City from Project Funds.
c) The Auditing Engineer shall review all Reimbursement Requests and the
payment records submitted in connection therewith and shall within thirty (30) days thereafter
issue to City and Kelly a report either accepting Kelly's submittal or specifying with particularity
any reimbursement items or amounts not approved. Any reimbursement items or amounts not
approved by the Auditing Engineer may be further pursued by Kelly using the dispute resolution
provision of Section 9 below.
d) With each Reimbursement Request, following 30-day review by Auditing
Engineer, the Auditing Engineer shall forward one copy of each invoice submitted by Kelly from
Contractor, to the City's Public Works Director ("Director"), together with an invoice for all
other components of the Actual Cost not otherwise reflected on the Contractor's invoice. The
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Director shall confirm and approve the Reimbursement Amount based upon the components of
Actual Costs and Overhead Costs set forth in Section 5 of this Agreement. If the Director
objects to any items comprising the Reimbursement Amount, the Director shall notify Kelly
within thirty (30) days of receipt of a1 invoices forwarded by Kelly. Failure to do so notify
Kelly shall be deemed the Director's approval of such invoices.
e) City's reimbursement obligations hereunder shall be based upon the actual
costs incurred by Kelly or Shea in performing Reimbursable Work (including overhead and the
allowances specified in (f) below).
f) Notwithstanding anything herein to the contrary, and without limitation
and in addition to the Reimbursable Sewerline Work, City specifically agrees that each of the
following shall be deemed Reimbursable Expenses, in addition to the Actual Cost and the
Overhead Amount specified in Section 4(b), provided that Kelly shall submit appropriate
receipts to evidence the expenses incurred for each of the following:
(i) Costs for soils engineering and testing during construction of the
sewer pipelines;
(ii) The cost of bond premiums;
(iii) The cost of printing plans for use during construction and
in spec tion.
g) Before Kelly submits all invoices to Director, Kelly shall obtain necessary
or appropriate lien releases from all contractors, and shall obtain from the City and all
appropriate governmental agencies, all approvals, certificates, and other documents necessary to
indicate the completion of the Reimbursable Sewerline Work, and the ability to put the Public
Improvements into use. The date Kelly receives all such final lien releases, approvals, and
certificates shall be deemed the date of completion of the Sewerline Work Improvements (the
"Completion Date'').
h) All change orders shall be subject to approval by the City. At the time of
approval, the parties shall determine the portion of each change order that is allocated to the
Reimbursable Work. In making such decisions, the parties shall be guided by the principle that
the allocation of the portion related to Reimbursable Work should be in proportion to the
allocation for that portion of the Sewerline Work Improvements identified in Exhibits "D", "E",
and "F", provided that the change order is necessary due to changed circumstances or oversight
in original design; or to perform the applicable portion of the Sewerline Work Improvements in
an orderly, reasonable and prudent manner according to the standard engineering and
construction practice applicable to the improvements.
7. Payment of Reimbursable Expenses
a) The City shall not unreasonably withhold acceptance of the Sewerline
Work Improvements.
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b) Kelly and City agree that the City's General Fund is not part of this
Agreement, and shall not be obligated under the terms of this Agreement nor available for
reimbursement purposes.
c) The City of Carlsbad shall collect all its normal sewer benefit area fees
upon its issuance of all building permits without credit or offset for any of the Sewerline Work.
Payment of Reimbursement Amounts under this Agreement shall not be reduced for fees or
charges that may be payable as a condition of obtaining permits for the development of any
portion of the Kelly Ranch Project or E Project. City shall not offset Kelly's entitlement to
reimbursement under this Agreement against any obligation of any person.
d) The parties acknowledge that the Sewerline Work will be part of a system
which includes the South Agua Hedionda Interceptor Sewer, and that the payment of
Reimbursement Amounts will come from funds collected and disbursed as set forth in Section 8
below.
8. Reimbursement Procedure. For purposes of this Section 8, the following
definitions shall apply:
"Approved Reimbursement Amount" shall mean the amount of reimbursable expenses
incurred by Kelly, Shea or other developers to construct sewer conveyance system improvements
pursuant to reimbursement agreements executed with City, as audited and approved by City;
including without limitation, as to Kelly, Reimbursement Amounts (as defined in Section 4(b)
above) approved by City.
"Sewer Benefit Area Fees" shall mean the fees established by City Resolution No. 91-21
for the purpose of collecting funds to construct or to reimburse developers for constructing sewer
conveyance system improvements.
"South Agua Hedionda Interceptor Sewage Drainape Basin" or "Sewage Drainage Basin"
shall mean the area identified by the City of Carlsbad Master Plan of Sewerage, prepared by
Wilson Engineering, dated January 1992, consisting of Sewer Benefit Areas C, D, E, and F, as
described in City Resolution No. 91-21.
"South Agua Hedionda Interceptor System" or the "Interceptor System" shall mean the
sewer conveyance system improvements, including Cannon Road Lift Station (formerly called
South Agua Hedionda Lift Station), force main, interceptors, trunk sewers, and other
improvements and appurtenant work, as identified by the City of Carlsbad Master Plan of
Sewerage, prepared by Wilson Engineering, dated January 1992, to serve developments in South
Agua Hedionda Interceptor Sewage Drainage Basin.
"South Agua Hedionda Sewer Benefit Area Fee Fund" or the "Fee Fund" shall mean a
fund or subfund of the City of Carlsbad for depositing Sewer Benefit Area Fees collected from
developments in the South Agua Hedionda Interceptor Sewage Drainage Basin, which was
updated by City Resolution No. 2002-279.
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Procedure for Reimbursement:
a) City shall deposit in the Fee Fund all Sewer Benefit Area Fees collected
from developments in the Sewage Drainage Basin (i.e., Sewer Benefit Areas C, D, E, and F) and
not previously expended.
b) City shall construct, or cause to be constructed, the Cannon Road lift
station, force main, interceptor, and such other improvements and appurtenant work of the
Interceptor System as are required to convey sewage from the western terminus of an interceptor
constructed by Shea (as successor to Kelly) as part of the First Segment Sewer, to the eastern
terminus of an existing interceptor in Cannon Road east of Interstate 5. City shall complete these
improvements no later than December 2005, using the balance of the Fee Fund and such other
funds as City may advance to the Fee Fund, provided City obtains all required permits and
environmental review approvals.
c) Kelly shall submit separate Reimbursement Requests for (1) First Segment
Sewer, which has been completed and accepted by City; (2) Second Segment - Force Main and
Lift Station-Related, upon Completion of Work therefore; and (3) Second Segment - Gravity
Sewer, upon Completion of Work therefore. City shall review each such Reimbursement
Request and determine the respective Approved Reimbursement Amount.
d) City acknowledges that Second Segment - Force Main and Lift Station-
Related shall be reimbursed within thirty (30) days after approval of a Reimbursement Request
therefore and without limitation to the amount then in the Fee Fund. To the extent that there are
insufficient monies in the Fee Fund, City shall advance funds to the Fee Fund as required to
make reimbursement payments to Kelly for this item.
e) The reimbursement for the First Segment Sewer and the Second Segment -
Gravity Sewer shall come solely from amounts available in the Fee Fund. Twice a year, by June
30 and by December 3 1 ("Distribution Dates"), City shall distribute the then current balance of
the Fee Fund as follows:
(i) First, to City to repay any advance by City to the Fee Fund which
has not previously been repaid.
(ii) Second, to Kelly and other developers of Interceptor System
improvements who have executed reimbursement agreements with the City, in proportion to
each developer's cumulative total of Approved Reimbursement Amounts.
(iii) If the proportional distribution of the Fee Fund balance to any
developer would exceed the balance of reimbursement payable to that developer, then only the
balance shall be paid, and the developer's Approved Reimbursement Amount shall be removed
from calculation on subsequent Distribution Dates. Any undistributed balance in the Fee Fund
shall be distributed to developers with outstanding balance of reimbursement payable, in
proportion to cumulative total of Approved Reimbursement Amounts.
WOZ-SD:DMlU1278146.6
061 103
-1 1-
City shall maintain records of any transactions which affect the Fee Fund, including dates and
amounts of Sewer Benefit Area Fees collected and repayments for City's advances. All records
shall be available for inspection and copying upon request by Kelly.
f> If on any Distribution Date the pro rata distribution of the Fee Fund
described in paragraph (e) would exceed the balance of reimbursement payable for any party,
then only the balance shall be paid and the party's Approved Reimbursement Amount shall be
removed from calculation on subsequent Distribution Dates. The excess of calculated pro rata
distribution and the balance of reimbursement payable shall be distributed to remaining parties
with outstanding balance of reimbursement payable, in proportion to cumulative total of
Approved Reimbursement Amount.
9. Dispute/Claims. If a dispute should arise regarding the performance or
interpretation of this Agreement, the following procedure shall be used to resolve any question or
fact or interpretation not informally resolved by the parties. Such questions, if they become
identified as a part of a dispute among persons operating under the provisions of this Agreement
shall be reduced to writing by the principal of Kelly or the Director. A copy of such documented
dispute shall be forwarded to both parties involved along with recommended methods of
resolution which would be of benefit to both parties. The Director, or principal, upon receipt,
shall reply to the letter, including a recommended method of resolution within ten (10) days. If
the recommended resolution is unsatisfactory to the aggrieved party, a letter outlining the dispute
shall be forwarded to the City Council for their resolution through the office of the Executive
Manager. The City Council may, but is not obligated to resolve the dispute. If the City Council
considers the dispute, and directs a solution, the action of the City Council shall be binding upon
the parties involved, although nothing in this procedure shall prohibit the parties from seeking
remedies available to them at law.
10. Successors: Covenant to Run with Real Property. This Agreement and the
covenants contained herein shall be binding upon and inure to the benefit of Kelly, Shea and City
and shall run with the real property and create an equitable servitude upon the real property.
After City acceptance of City Improvements, the provisions of this Agreement shall no longer
apply to, and the same shall no longer be or constitute an equitable servitude against or run with
the land and the equitable servitude hereby created shall automatically terminate as to all of such
land, Upon the request of Shea, City shall execute and deliver to Shea, in recordable form, any
further documents and/or instruments reasonably necessary to evidence that the land is thereafter
fully released and free from the provisions of this Agreement, provided that the cost of preparing
the recording such documents and/or instruments shall be paid by Shea.
11. Assignment of Contract. Kelly shall not assign this Agreement or any part thereof
or any monies due thereunder without the prior written consent of the City; provided, however,
that City hereby consents to any such assignment to Shea provided that City shall still render its
reimbursement payments to Kelly and let Kelly forward to Shea any amounts Kelly may owe to
Shea.
12. Notices. Unless otherwise specifically provided herein, all notices, demands or
other communications given hereunder shall be in writing and shall be deemed to have been duly
delivered upon personal delivery, or by Federal Express (or similar reputable express delivery
WO2-SD:DM 16 1278 146.6
061 103
-12-
service), or by facsimile transmission with back-up copy mailed the same day, or as of the
second business day after mailing by United States Certified Mail, return receipt requested,
postage prepaid, addressed as shown below. Notices required to be given to Kelly shall be
addressed as follows:
If to Kelly: Kelly Land Company C/O Hillman Properties West, Inc.
201 1 Palomar Airport Road, Suite 112
Carlsbad, CA 92009
Attention: Scott Medansky
Telephone: (760 93 1 - 1 190
Facsimile: (760) 93 1-7950
With a copy to:
If to Shea:
With a copy to:
Sheppard, Mullin, Richter, & Hampton UP
501 West Broadway, Suite 1900
San Diego, CA 92101-3598
Attention: Christopher B. Neils
Telephone: (619) 338-6500
Facsimile: (619) 234-3815
Shea Homes Limited Partnership
10721 Treena Street, Suite 200
San Diego, CA 92131
Attention: Mr. Paul Barnes
Telephone: (858) 549-3156
Facsimile: (858) 549-01 12
Hecht, Solberg, Robinson, Goldberg 8z Bagley
600 West Broadway, 8"' Floor
San Diego, CA 92101
Attention: Darryl 0. Solberg, Esq.
Telephone: (6 19) 239-3444
Facsimile: (619) 232-6828
Notices to City shall be delivered to the following:
CITY OF CARLSBAD
Attention: Public Works Director
1635 Faraday Avenue
Carlsbad, CA 92008
Telephone: (760) 602-2730
Fax: (760) 602-8562
Each party shall notify the other immediately of any changes of address that would
require any notice delivered hereunder to be directed to another address.
13. Transfer by Shea. The obligations of Shea under this Agreement shall not be
transferred upon sale of the Shea Core Area.
WOZ-SD:DMl\S 1278146.6 -13-
061 103
14. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute one and the same instrument.
15. Governing Law and Venue. This Agreement shall be interpreted and enforced
under the laws of the State of California, and venue shall reside in San Diego County, California.
16. Complete Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter contained herein, and supersedes all negotiations,
discussions, and prior drafts with respect to this subject matter.
17. Amendment. This Agreement may be amended by a written instrument executed
by City, Shea and Kelly except that no amendment regarding the provisions for reimbursement
to Kelly shall be valid unless executed by both Kelly and the City.
18. Term. This Agreement shall be effective as of the date first above written, and
shall teminate on the earlier of (i) the date the City fully reimburses Kelly the Reimbursement
Amount, or (ii) January 1,2030.
19. No Third Party Beneficiaries. This Agreement shall not be deemed to confer any
rights upon any individual or entity which is not a party hereto, and the parties hereto expressly
disclaim any such third-party benefit.
W02-SD:DMl\51278146.6
061 103
-14-
20. Severability. The invalidity or unenforceability of any provision of this
Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity
or enforceability of any other provision hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
"Kelly"
KELLY LAND COMPANY,
a Delaware Corporation
CITY OF CARLSBAD, a municipal
By: %&P<e
(sign here)
ATTEST: Mark N. Poljak, Vice President
(print name and title of dgnatory) \
"Shea"
SHEA HOMES LIMITED PARTNERSHIP, a
California limited partnership
By: J. F. SHEA LLC, a Delaware limited
liability company, General Partner
By:
(sign here)
(print name and title of signatory) 1
WO2-SDDMIS 1278146.6
061 IO3
Reimbursement Agreement between the City
of Carlsbad, Kelly Land Co., ti Shea
Homes (1 of 3 signature pages)
-15-
20. Severability. The invalidity or unenforceability of any provision of this
Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity
or enforceability of any other provision hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
"Kelly"
KELLY LAND COMPANY,
a Delaware Corporation
Y OF CARLSBAD, a municipal
of the State of California
"Shea"
SHEA HOMES LIMITED PARTNERSHIP, a
California limited partnership
By: J. F. SHEA LLC, a Delaware limited
liability company, General Partner
fad L.L. i5dWlsS, PsrL SeL
(print name and title of signatory)
WO2-SD:DM 1 \5 1278 146.6
061103
Reimbursement Agreement between the City
of Carlsbad, Kelly Land Co., & Shea
Homes. (1 of 3 signature pages.) -15-A
” (sign here)
Soh0 R- khw. p1 SSL sc-
(print name and title of signatory)
(Proper notarial acknowledgment of execution by Developer must be attached.
Chairman, president or vice-president and secretary, assistant secretary, CFO or assistant
treasurer must sign for corporation. Otherwise, the corporation must attach a resolution certified
by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to
bind the corporation).
APPROVED AS TO FORM:
RONALD R. BALL, City Attorney
By:: Deputy City Attorney
WOZ-SD:DMl\SI 278146.6
061 103
-16-
Reimbursement Agreement between the City
of Carlsbad, Kelly Land Co., & Shea
Homes. (1 of 3 signature pages.)
State of California )
On y%Zl, before me, , 8 , Notary Public,
the person whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the instrument.
pers ally peared P,-P CL ’ R9dJ
nr r- <to be personally known to me of
WITNESS my hand and official seal.
State of California 1
G , Notary Public,
;to be
the person whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
W02-SD:DM1\51278146.6
061 103
-17-
State of California ) 1
County of QR+W)DE 1
On \ \ . 2003 before me, 'LL 5- \h) &UE L Ci-1 , Notary Public,
personally appeared
personally known to me or
the person whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the instrument.
SCOT Ne D AuS'vCY
proved to me on the basis of satisfactory evidence to be
WITNESS my hand and official seal.
On L'd tq6 before e, L. SL,l&- , Notary Public,
personally Lppeared (Lldhk &f - t8 3.A
personally known to me or
the person whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the instrument.
proved to me on the basis of satisfactory evidence to be
WITNESS my hand and official seal.
WO2-SD:DMlS 1278 146.6
061 103
-17-
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
I State of California
, before me,
Date Name and Title of Officer (e a , "Jane Doe, kotarv Public') f
,&personally known to me
0 proved ta me on the basis of satisfactory
evidence
to be the person(s) whose name(s) Ware
subscribed to the within instrument and
acknowledged to me that hefshe/they executed
the same in Wltheir authorized
capacity(ies), and that by ki4H4erAheir
signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seak
Place Notary Seal Above
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attache
Title or Type of Document:
Document Date: J 15-1 Am3 Number of Pages:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer
Signer's Name:
Individual
U Corporate Officer - Title(s):
17 Partner - U Limited n General
0 Attorney in Fact
17 Trustee
U Guardian or Conservator
0 Other:
Signer Is Representing: u
0 1999 National Notary Associabon - 9350 De Soto Ave , P.0. Box 2402 * Chalswoflh. CA 91313-2402 www nationalnolaryorg Prod. No. 5907 Reorder: Call Toll-Free l-EOO-E76-6E27
EXHIBITS A, C, D, E, AND F TO BE ATTACHED
EXHIBIT B TO READ "INTENTIONALLY OMITTED"
W02-SDDM 1\5 1278 146.6
061 103
-18-
EXHIBIT "A"
Kellv Ranch Project
Shea Core Area:
Lots 1 through 79, inclusive, 81, 83 through 159, inclusive, 161, 163, 164, 170 and 171 of
Carlsbad Tract No. 97-16A Kelly Ranch Core according to Map thereof No. 14340 filed in the
Office of the County Recorder of San Diego County, California, on February 1,2002.
EXHIBIT "B"
INTENTIONALLY OMITTED
APR-15' 03 12: 26 FROM: 858- 535- 1498 TO: 17689317956 mGE:82
EXHIBIT D
KELLY RANCH REIMBURSEMENT AGREEMENT
SEWER PIPELINE IMPROVEMENTS IN EL CAMINO REAL AND CANNON ROAD REACH 2 SEGMENT 1
March 7,2003
Non-Reimb.
Cost Summary cost Reimbursable Total Cost
1.0 SEGMENT 1 SEWER
I .I GENERAL CONTRACT
SI. 1 El Camino Real $ $ 102,652.00 $ 102,652.00
S1.2 Cannon Road 7,020.00 554,752.50 561,772.50
Subtotal 7,020.00 657,404.50 664,424.50
1.2.1 Soils Engineering 891.41 83,477.95 84,369.36
1.2.2 Bond premiums 19.21 1,798.75 1,817.96
1.2.3 Other -- Blueprinting 1.26 1 17.99 11 9.25
Subtotal 91 I .88 85,394.69 86,306.57
Total -- General and Non-general Contracts 7,931.88 742,799.1 9 750,731.07
1.3 Overhead (4%) 29,711.97 29,711.97
1.2 NON-GENERAL CONTRACT
1.4 Other[l] 10,000.00 10,000.00
TOTAL SEGMENT 1 SEWER 7,931.88 $ 782,511 .I6 $ 790,443.04
-d-
Note:
1. Segment 1 has been completed; this item is to cover costs not previously recorded, pending final
accounting .
-
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EXHIBIT E
KELLY RANCH REIMBURSEMENT AGREEMENT
GRAVITY SEWER PIPELINE IMPROVEMENTS IN CANNON ROAD REACH 2 SEGMENT 2
March 7, 2003
I Non-Reimb. I
Reimbursable Total Cost ]cost Summary cost I
2.0 SEGMENT 2 GRAVITY SEWER
2.1 GENERAL CONTRACT
S2.1 Gravity Sewer $ 4,680.00 $ 310,995.00 $ 315,675.00
Subtotal 4,680.00 310,995.00 315,675.00
2.2 NON-GENERAL CONTRACT
2.2.1 Soils Engineering (5%) 234.00 15,549.75 15,783.75
6,219.90 6,313.50 2.2.2 Bond premiums (2%) 93.60
2.2.3 Other Incidental Costs (2%) 93.60 6,219.90 6,313.50
Subtotal 421.20 27,989.55 28,410.75
Total -- General and Non-general Contracts 5,101.20 338,984.55 344,085.75
2.3 Overhead (4%) 13,559.38 13,763.43
2.4 Contingency (10%) [l] 35,254.39 35,784.92
TOTAL SEGMENT 2 GRAVITY SEWER $ 5,101.20 $ 387,798.32 $ 393,634.10
Note:
1. 10% of general and non-general contracts and overhead costs.
-
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EXHIBIT F
KELLY RANCH REIMBURSEMENT AGREEMENT
March 7,2003
SEWER FORCE MAIN AND LIFT STATION-RELATED IMPROVEMENTS IN CANNON ROAD REACH 2 SEGMENT 2
Non-Reimb.
Cost Summary cost Reimbursable Total Cost
3.0 SEGMENT 2 -- FORCE MAIN AND WORK REQUIRED
FOR SOUTH AGUA HEDIONDA LIFT STATION
3.1 GENERAL CONTRACT
S3.1 Force Main [I]
53.2 Work Required for SAH L.S. [2]
Subtotal
3.2.1 Soils Engineering (5%)
3.2.2 Bond premiums (2%)
3.2.3 Other Incidental Costs (2%)
Subtotal
3.2 NON-GENERAL CONTRACT
Total -- General and Non-general Contracts
3.3 Overhead (4%)
3.4 Contingency (1 0%) [3]
Total - Segment 2 Force Main and
Work for Lift Station
$
$
$ 239,140.58 $ 239,140.58
109,902.50 109,902.50
349,043.08 349,043.08
17,452.15 17,452.1 5
6,980.86 6,980.86
6,980.86 6,980.86
31,413.87 31,413.87
380,456.95 380,456.95
15,218.28 15,218.28
39,567.52 39,567.52
$ 435,242.75 $ 435,242.75
- Notes:
SAH L.S. South Agua Hedionda Llft Station
I. See pages E-2 ff. for detail.
2. "Off-site" work in Cannon Road, required to serve future lift station adjacent to the road; see pages E-2 ff.
3. 10% of general and non-general contracts and overhead costs.
CRSwAgmtExh3: EmF Page F-5