HomeMy WebLinkAboutContinental Residential Inc; 2000-04-14;AGREEMENT FOR REIMBURSEMENT OF COSTS
FOR CONSTRUCTION OF RANCH0 CARRILLO OFF-SITE SEWER
CMWD PROJECT NO. 86-502
THISAGREEMENTFORREIMBURSEMENTOFCOSTSFORCONSTRUCTIONOFRANCHO
CARRILLO OFF-SITE SEWER dated as of -9 2000 (“Agreement”), is made at Carlsbad,
California, between CONTINENTAL RESIDENTIAL, INC., a California corporation (“Continental”), and
the CITY OF CARLSBAD, a municipal corporation of the State of California (“City”), with reference to the
following recitals:
REClT.ALS
A. Continental is the developer of real property located in the City of Carlsbad, California, as
shown on Exhibit “A” attached hereto and made a part hereof (Ranch0 Carrillo). Ranch0 Carrillo consists
of several Villages, as designated on Exhibit “A.” As used herein, the term “Villages” shall refer, as indicated,
to one or more of such Villages so designated on Exhibit “A.” The various Villages as shown on Exhibit “A”
either are, or will become, separate legal parcels in accordance with the applicable legal requirements of the
State of California and the City of Carlsbad.
B. As separate legal parcels, Continental intends to convey or cause conveyance of record title
to the Villages to other persons pursuant to contractual commitments not related to this Agreement. Any further
development activity with respect to any ofthe Villages will be the responsibility ofthe respective transferee.
All of the Villages of Ranch0 Carrillo are herein referred to collectively as the “Ranch0 Carrillo Project.”
Continental is the developer of the Ranch0 Carrillo Project.
C. The City Council of City adopted Resolution No. 97-645 on October 2 1, 1997, approving
Ranch0 Carrillo Master Plan Amendment, General Plan Amendment, Addendum to Master Environmental
Impact Report 93-O 1, and the findings and conditions of the Planning Commission Resolutions No. 4 165,
4 166 and 4 167 (GPA 96-05 and MP 139[F]) relating to development of a mixed-use, master-planned community
within the City of Carlsbad. Finding No. 2 of Resolution No. 4167 provides as follows:
All necessary public facilities can be provided concurrent with need and adequate
provisions have been provided to implement those portions ofthe capital improveme
program applicable to the subject property. The Master Plan has language in the text
stating that all future development shall comply with the public facility performance
standards and phasing requirements of the Local Facilities Management Plan (LFMP)
for Zone 18. Public facilities are required to be constructed as development in the
Master Plan creates demand for additional facilities. A financing plan approved by
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the City Council for the Zone 18 LFMP will provide mechanisms for the financing
of the required public facilities.
D. Continental has advanced on behalf of City the cost of constructing off-site sewer facilities
consisting of a new sewage lift station, a force main and a trunk sewer pipeline as identified by the Zones
10, 17 and 18 Local Facilities Management Plan, hereinafter collectively referred to as the “Sewer Work.”
E. Pursuant to Resolution No. 9 1-2 1, adopted by Carlsbad City Council on January 22, 199 1,
City has implemented a plan for levying and collecting sewer benefit area fees in order to fund improvements
in various sewer benefit areas within the City of Carlsbad. Said plan is set forth in the January 1992 Update
to the December 1987 Master Plan of Sewerage, prepared by Wilson Engineering (hereinafter the “Wilson
Report”), and is subject to further review and modification by City. The sewer benefit area fees, in addition
to sewer connection fees, will be collected by City from builders upon City’s issuance of building permits.
The Sewer Work is contained in Sewer Benefit Area “H.”
F. City will utilize funds collected from Sewer Benefit Area “H” fees to reimburse the costs
advanced hereunder by Continental for the Sewer Work. The sewer benefit area “II” fee is currently $626
per equivalent dwelling unit.
G. City and Continental recognize that the Sewer Work exceeds the infrastructure otherwise
required of the Ranch0 Carrillo Project as required by the Growth Management provisions of the LFMPs for
Zones 10, 17 and 18. Continental’s share of the estimated costs of the Sewer Work is currently estimated to
be $1,387,977. City agrees to reimburse Continental the balance of the project cost (which, based on the
percentages and amounts given elsewhere in this Agreement, is currently estimated not to exceed $1,590,5 14)
(the “Reimbursable Work”), with the understanding that any reimbursement paid to Continental is dependent
on City’s receipt of funds within Sewer Benefit Area “H.” The amounts are derived from Ranch0 Carrillo’s
currently anticipated share (46.6%) ofequivalent dwelling units (“EDUs”) within future Area “H.” (The Wilson
Report anticipated that Zone 18B, Ranch0 Carrillo, would have 2,254 of the 4,836 total future EDUs in Area
“H.“) However, the terms of this Agreement shall govern City’s actual reimbursement obligations.
H. City and Continental desire to enter into a Reimbursement Agreement which covers the
Reimbursable Work contemplated by the construction of the Sewer Work.
I. A fuller description of the “Sewer Work” is the various items of construction described in
subsections (1) through (3) below:
(1) Poinsettia Sewage Lift Station. Continental agrees to construct a sewage lift station,
referred to as Poinsettia Sewage Lift Station. The Poinsettia Sewage Lift Station is located along future Poinsettia
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Lane northeast ofthe La Costa Golf Course in the area as shown in the attached Exhibit “B.” The work necessary
for said construction is shownon Drawing No. 33 I- lE, Carlsbad Municipal Water District Project No. 95-402.
c-4 Ranch0 Carrillo Force Main. Continental will advance the costs necessary to construct
the Ranch0 Carrillo Force Main, a 1Zinch diameter pipeline, extending from the Poinsettia Sewage Lift Station
west to El Camino Real as shown on Drawing No. 33 1-lF, Carlsbad Municipal Water District Project No.
86-502.
(3) Ranch0 Carrillo Trunk Sewer. Continental will advance the costs necessary to construct
Ranch0 Carrillo Trunk Sewer, a 15-inch diameter pipeline, as shown on Drawing No. 33 1-lC, Carlsbad
Municipal WaterDistrict ProjectNo. 86-502 (referencedas“ReachesVBTlA,VBTlC,VBTlD andVBTlF”
in the Wilson Report), extending from the subdivision’s west boundary to the Poinsettia Sewage Lift Station.
J. Estimated Cost of Sewer Work. The Total Cost of the Sewer Work (subject to verification
and audit) is currently estimated to be $2,978,491. The estimated Total Cost includes the total of the Hard
and Soft Costs shown below plus, (i) an overhead allocation of four percent (4%) of the Total Hard Cost in
lieu of other reimbursement for Continental’s cost incurred for salary and benefits for staff of Continental’s
home offices, supervision above the level of on-site superintendent, general corporate, legal, and accounting
fees, the cost of borrowed funds, insurance and bond premiums, expenses for meetings with and presentations
to governmental agencies which issue permits or otherwise regulate project approval (collectively, the “Overhead
Costs”), and (ii) an additional two and one-half percent (2.5%) of the “Total Hard Cost” for construction
administration.
Item Descrhtion Total Cost
Hard Costs:
1 Poinsettia Sewage Lift Station $ 1,464,500
2 Ranch0 Carrillo Force Main 343,700
3 Ranch0 Carrillo Trunk Sewer 460,900
Total Hard Cost: $2,269,100
Soft costs:
4 Utility Fees
5 City Plan Check & Inspection Fee
6 Bond Premiums
7 Preliminary Design
$ 70,700
153,500
14,600
42,800
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8
9
10
11
12
13
14
Environmental Consultant 12,000
Planning Consultant 2,100
Design Consultant 187,800
Landscape Architect 12,000
Soils Engineer 33,600
Surveying 23,600
Property Acquisition 9,200
Total Soft Cost: $ 561,900
Overhead Costs (4% of Hard Costs) $ 90,764
Construction Administration
(2.5% of Hard Costs)
Total Estimated Costs of Sewer Work
56,727
$2.978491
K. Additional Work. In addition to and separate from the Sewer Work, as defined above,
Continental installed a third pump and motor (the “Additional Work”) at City’s request. The Total Cost of
the Additional Work was $42,494. The Additional Work was requested by City to provide increased reliability
for pumping flows from Ranch0 Carrillo, but is also required to pump the sewage flows tributary to the Poinsettia
Sewage Lift Station from other areas. The cost of the Additional Work (the “Immediate Reimbursement
Amount”) will be paid to Continental by City. However, City shall be reimbursed for the Immediate
Reimbursement Amount through payment of Sewer Benefit Area “H” fees collected from areas outside Ranch0
Carrillo before reimbursement payments other than those described in Sections 4(d) and 4(f), below, are made
to Continental; in addition, the Sewer Benefit Area “II” fee estimate will include the Immediate Reimbursement
Amount.
L. Vallecitos Reimbursement. By separate agreement between the City and Vallecitos Water
District (“Vallecitos”), eighty (80) residential lots in Vallecitos will be allowed to connect to the Sewer Work.
Further, there is an understanding among the City, Continental, Vallecitos, and Presley Homes, Inc. (the
developer in Vallecitos) that the sewer connection fee to be paid by Vallecitos to the City will be $963 per
EDU for a total of $77,040. This sum (the “Vallecitos Reimbursement”) will be deposited into the Sewer
Benefit Area “II” fund to be used for project cost reimbursement.
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C
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. RECITALS.
The above Recitals are true and correct.
2. SATISFACTION OF OBLIGATION.
Continental’s agreement to perform the Sewer Work, as set forth herein, and the actual construction
thereof, shall fully satisfy and constitute full compliance with all requirements regarding the Ranch0 Carrillo
Project with respect to the Sewer Work.
3. CONTINENTAL OBLIGATIONS.
(a) In consideration of City’s reimbursement and other undertakings as set forth herein,
Continental agrees to construct and install the Sewer Work and the Additional Work.
(b) Continental will obtain all property interest necessary for the construction, operation
and maintenance of the improvements herein described.
cc> Continental shall complete all work no later than three (3) years from the effective
date ofthe Agreement. Sewer Work and Additional Work completed before the effective date ofthis Agreement
shall, subject to the other provisions of this Agreement, also satisfy this Agreement.
(4 Continental shall use the complete set of City approved plans, specifications and
other design documentation for the Sewer Work and Additional Work.
(e> By entering into this Agreement, Continental waives any and all potential constitutional
(Nollan/Dolan) objections relating to the Sewer Work and Additional Work.
4. CITY OBLIGATIONS.
(4 Subject to the availability of funds in City’s Sewer Benefit Area “II” fund, City shall
pay Continental the “Reimbursable Amount,” which is the Total Cost ofthe Sewer Work (as defined in Recital
“I”) multiplied by the percentage of the Sewer Work serving portions of Sewer Benefit Area “II” outside the
Ranch0 Carrillo Project.
(9 The percentage of the Sewer Work serving portions of Sewer Benefit Area
“I-I” outside the Ranch0 Carrillo Project shall be measured by dividing the number of EDUs within Sewer
Benefit Area “H” outside the Ranch0 Carrillo Project by the total number of EDUs within Sewer Benefit Area
“II” (including the Ranch0 Carrillo Project).
(ii) The parties anticipate that the City will revise the Sewer Benefit Area “II”
fees before building permits are issued for other properties within Area “H.” However, the City Council retains
the right to determine whether and when to make that determination. Any change may require a consultant
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study and a Council ordinance and/or resolution. Continental shall have the same right as any other property
owner within Sewer Benefit Area “IT’ to request that the Council order preparation of a fee revision.
(iii) Any revision to the Area “II” fees would reflect (i) the actual cost of the Sewer
Work including the cost of the Additional Work, rather than the amount estimated in the Wilson Report, (ii)
changes in (or best estimates of anticipated changes to) EDU counts within Area “H,” and (iii) the cost of
preparing the revision. Continental does not hereby waive the right to comment on the proposed revision
before Council adoption thereof.
(iv) Nothing in this Section 4(a) (including subsections (i) through (iii)) shall
be deemed to affect Sections 4(c) or 4(d).
(b) City shall pay Continental for the Reimbursable Work in compliance with the process
described in Sections 5 and 6 below.
(cl The City shall collect the sewer benefit area fee for all EDUs within the boundary
of Sewer Benefit Area “H,” except those within the Ranch0 Carrillo Project, whether or not the Sewer Work
is utilized.
Cd) Any sewer benefit area fees paid for any property within the Ranch0 Carrillo Project
shall be refunded to Continental or the appropriate guest builder (whichever paid the fee), within thirty (30)
days of the execution of this Agreement or within thirty (30) days of payment, whichever comes first.
(e> City shall pay Continental the Vallecitos Reimbursement. Upon payment by City,
the Vallecitos Reimbursement shall count as a payment toward the Reimbursable Amount.
(0 City shall pay Continental the Immediate Reimbursement Amount within thirty (30)
days of signing this Agreement. In addition, City shall pay Continental the Vallecitos Reimbursement within
twenty (20) days of City’s receipt ofthose funds. Section 5 ofthis Agreement shall not apply to City’s payment
of the Vallecitos Reimbursement.
5. ACCOUNTING OF COSTS.
(4 When an item of the Sewer Work has been completed, as described in Section 5(e)
below, Continental shall present City with a complete and detailed accounting of the costs and expenses
advanced by Continental in connection with such Sewer Work. Upon its receipt of a written request therefor
from City, Continental will allow an audit of such costs and expenses to be prepared at Continental’s expense
by certified public accountants specified by City.
(b) With respect to all “Hard Costs” of construction comprising the Sewer Work,
Continental shall solicit bids from three reputable contractors. Reimbursable Work shall be bid together with
non-Reimbursable Work for that portion ofthe Sewer Work which is being bid by such contractor. Continental
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may reject a low bid if, in its reasonable discretion, it does not believe the low bidder will be able to complete
its portion of the Sewer Work competently or timely.
cc> During the performance of any Sewer Work, Continental shall retain detailed payment
records for all items of Sewer Work, for use by City in auditing any subsequent requests by Continental.
Continental’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 Sewer Work. Reimbursement Requests may be submitted in
stages upon completion of any item of the Sewer Work in conformance with Section 5(e).
(4 Continental shall send one copy of each contractor invoice to the City’s Deputy City
Engineer together with an invoice for all other components of the Sewer Work. The Deputy City Engineer
shall consider and approve the request pursuant to this Agreement. If the Deputy City Engineer objects to
any items comprising the Sewer Work, the Deputy City Engineer shall notify Continental within ten (10) days
of receipt of all invoices forwarded by Continental. Failure to notify Continental shall be deemed the Deputy
City Engineer’s approval of such invoices. In the event the Deputy City Engineer does object, Continental
and the Deputy City Engineer shall meet to discuss the disputed amount (at which time Continental shall make
available all ofthe Sewer Work documentation) and attempt to resolve thematterthrough good-faith negotiation.
(e) Prior to the submission to the Deputy City Engineer of the final invoices, Continental
shall obtain necessary or appropriate releases from the contractor, and shall obtain from City, and from any
and all appropriate governmental agencies, all approvals, certificates and other documents necessary to indicate
the completion ofthe Sewer Work and the ability to put the Sewer Work into use. The date Continental receives
all such lien releases, approvals, and certificates shall be deemed the date of completion of the Sewer Work
(the “Completion Date”). Continental may submit its accounting and Reimbursement Requests at any time.
Any delay by Continental in such submittals shall not prejudice Continental’s rights, but shall delay day-for-day
the time in which City must take any responsive action.
03 Notwithstanding the foregoing, if Continental disputes the Deputy City Engineer’s
determination of Reimbursable Work or believes that sum established by the Deputy City Engineer is not
consistent with the specific provisions of the Agreement, then Continental may elect to appeal the Deputy
City Engineer’s decision pursuant to Section 7(a).
6. CITY’S COLLECTION AND PAYMENT OF REIMBURSABLE WORK.
City shall collect sewer benefit area fees upon its issuance of building permits to developers within
Sewer Benefit Area “H,” excluding those in the subdivision boundary of Ranch0 Carrillo MP 139(F) in Sewer
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Benefit Area “H,” described in detail in the Wilson Report and depicted in the attached Exhibit “C.” As each
item of the Sewer Work identified in Recital “I” is completed and accepted by City, as manifested by City’s
approval of a notice of completion for said item, then the City’s reimbursement payment for said item is due
and payable. Thereafter, City shall pay to Continental in semiannual installments on each June 30 (for sewer
benefit area fees collected by City through the preceding May 3 1) and on each December 3 1 (for sewer benefit
area fees collected by City through the preceding November 30) any such fees collected by City for building
permits issued within Sewer Benefit Area “H,” until Continental is fully paid the Reimbursable Amount.
Continental acknowledges that ultimate build-out of the properties within Benefit Area “H” (outside of the
Ranch0 Carrillo Project) may not include enough EDUs to fully reimburse Continental prior to expiration
of this Agreement.
7. MISCELLANEOUS.
(4 Disnutes: Claims. If a dispute should arise regarding the performance or interpretation
of this Agreement, the following procedure shall be used to resolve any question of fact or interpretation not
formally resolved by the parties. Such questions, ifthey become identified as a part of adispute among persons
operating under the provisions of this Agreement, shall be reduced to writing by City’s principal engineer
or the Deputy Public Works Director. A copy of such documented dispute shall be forwarded to both parties
involved along with recommended methods ofresolution which would be ofbenefit to both parties. The Deputy
Public Works Director, or principal engineer, shall reply to the letter, including a recommended method of
resolution, within ten (10) days of receipt. If the resolution thus obtained is unsatisfactory to the aggrieved
party, a letter outlining the dispute shall be forwarded to the City Council through the office ofthe City Manager
for the Council’s resolution. 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 seeking remedies available to
them at law.
(b) Jurisdiction. Continental agrees and hereby stipulates that the proper venue and
jurisdiction for resolution of any disputes between the parties arising out ofthis Agreement is San Diego County,
California.
(c) Obligations and Benefits Not Running With Land; No Third Partv Beneficiaries.
This Agreement shall bind and inure to the benefit of the parties and their respective successors and assigns.
However, it shall not run with the land or be recorded, and all payments due from the City shall be made only
to Continental Residential, Inc. or such assignee as Continental Residential, Inc. designates in writing. This
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Agreement shall not be deemed to confer any rights upon any individual or entity which is not a party hereto;
the parties hereto expressly disclaim any such third-party benefit.
(4 Notice. 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 service), or by facsimile
transmission with back-up copy mailed the same day, or as ofthe second business day after mailing by United
States certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Continental: Continental Residential, Inc.
Attention: Mr. David Lother
2237 Faraday Avenue, Suite 100
Carlsbad, California 92008
Telephone: (760) 931-1980
Facsimile: (760) 93 l-0237
If to City: Carlsbad Municipal Water District
Attention: Mr. Robert J. Greaney, Deputy Public Works Director
5950 El Camino Real
Carlsbad, California 92008
Telephone: (760) 43 S-2722 X 7 106
Facsimile: (760) 43 l- 160 1
or to such other address or to such other person as any party shall designate to the others for such purpose
in the manner set forth above.
(4 Counternarts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which, taken together, shall constitute one and the same
instrument.
(0 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of California.
(g> Comulete Agreement. This Agreement contains the entire agreement between the
parties with respect to the matters set forth herein, and supersedes all prior or contemporaneous agreements
(whether oral or written) between the parties with respect to the matters set forth herein.
09 Amendment. This Agreement may be amended only by a written instrument signed
by both City and Continental Residential, Inc. or such assignee as Continental has previously designated in
writing.
(9 Term. This Agreement shall be effective as of the date hereof, and shall terminate
on the earlier of(i) the date City fully reimburses Continental the Reimbursable Amount, or (ii) January 1,
2015.
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CO Pavments to Continental. Any payments to Continental by City hereunder shall be
made payable to Continental Residential, Inc. and shall be forwarded to the following address, or to such other
address as Continental specified in writing to the City Manager of City:
c/c Continental Residential, Inc.
Attention: Mr. David Lother
2237 Faraday Avenue, Suite 100
Carlsbad, California 92008
09 Citv Authoritv. City warrants, represents and agrees that it has the legal authority
to collect the funds that it will use to reimburse Continental. City further warrants, represents and agrees that
it has the legal authority to pay these funds to Continental. These warranties, representations and agreements
are a material inducement to Continental to enter into this Agreement.
Ill
Ill
Ill
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as ofthe date first set forth above.
xecuted by DEVELOPER this 24 day of
EVELOPER:
ONTINENTAL RESIDENTIAL, INC.,
California Corporation .
Y: ‘u,-g4
Sign here
Dwro A.toTW=. vef'.
Xame and Title of Sicmatorv I
CITY:
CITY OF C&AD,
ATTEST:
By:
LORRAINE M. WOOD, City Clerk
(SEAL)
(Chairman, president or vice-president and secretary or assistant secretary, CFO or assistant treasurer must
sign for corporations. Otherwise, the corporation must attach a resolution certified by the secretary or assistant
secretary under corporate seal empowering that officer(s) signing to bind the corporation.)
(If signed by an individual partner, the partnership must attach a statement of partnership authorizing the partner
to execute the instrument.)
APPROVED AS TO FORM:
RONALD R. BALL
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State of California >
> ss.
County of San Diego )
On February 24, 2000, before me, Toni Carter, Notary Public, personally
appeared David A. Lother, of Continental Residential, Inc., personally
known to me 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.
SS my hand and offkial seal.
Toni Carter, Notary Public
State of California )
) ss.
County of San Diego )
On February 24, 2000, before me, Toni Carter, Notary Public, personally
appeared Gregory A. Hastings, of Continental Residential, Inc., personally
known to me 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.
- TONIC ~~
1 Comm’hion # 1211801 II
Notary PubIll - Califomia z
y MyE~Z$,a
seal.
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Benefit Area H contains sewer drainage
rimes 6B, lOA, lOB, lOC, 17A,l7B and
18B. Zone 18B is the subdivision
boundary of Ranch0 Card10 MO 139(F).