CITY COUNCIL 9.C.7 RESOLUTION NO. (CM) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WATSONVILLE APPROVING MEMORANDUM OF UNDERSTANDING BY AND BETWEEN THE FREEDOM COUNTY SANITATION DISTRICT AND THE CITY OF WATSONVILLE FOR THE COST SHARING OF ENGINEERING AND CONSTRUCTION COSTS FOR THE AIRPORT FREEDOM TRUNK SEWER REPLACEMENT PROJECT, NO. SS-16-02, AND DIRECTING THE CITY MANAGER TO EXECUTE SAME BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATSONVILLE, CALIFORNIA, AS FOLLOWS: 1. That the Memorandum of Understanding by and between the Freedom County Sanitation District and the City of Watsonville for the cost sharing of engineering and construction costs for the Airport Freedom Trunk Sewer Replacement Project, No. SS-16-02, which Memorandum of Understanding is attached hereto and incorporated herein by this reference, is fair and equitable and is hereby ratified and approved. 2. That the City Manager be and is hereby authorized and directed to execute such Memorandum of Understanding for and on behalf of the City of Watsonville. *************************************** Reso No. (CM) Q:\COUNCIL\2016\042616\Freedom Trunk Sewer Project\MOU Freedom Sanitation District.docx ri 4/21/2016 9:16:49 AM AJS CAM PWU 1
AIRPORT FREEDOM TRUNK SEWER REPLACEMENT PROJECT MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING is entered into this day of, 2016, by and between the Freedom County Sanitation District, hereinafter referred to as District, the City of Watsonville, hereinafter referred to as City. RECITALS WHEREAS, on June 26, 1984, the City and District entered into an Agreement, hereinafter referred to as 1984 Agreement, to jointly coordinate efforts for the collection, transmission, treatment and disposal of wastewater in order to protect public health and safety; and WHEREAS, Chapter IV, Section B, Transmission Facility Improvements of 1984 Agreement, prescribes the way and means of apportioning the costs of sewer transmission and collection improvement projects which mutually benefit the City and District; and WHEREAS, the City and District shared in the cost of the Sanitary Sewer System Capacity Evaluation and Assurance Plan, prepared MWH Consulting Engineers, dated February 2007, hereinafter referred to as Plan ; and WHEREAS, the Airport Freedom Trunk Sewer, hereinafter referred to as Trunk Sewer, transmits sanitary sewage from the district to the collection system operated by the City and therefore said Trunk Sewer is jointly owned by City and District; and WHEREAS, the Plan determined that under existing peak wet weather flow potential overflow is predicted for the Trunk Sewer between the Manhole No. SSM 2830 located on the Watsonville Airport property adjacent to Memorial Avenue and Manhole No. SSM 2707 located at the end of Landis Avenue; and WHEREAS, private property improvements have encroached upon the easement where the Trunk Sewer is located; and WHEREAS, the City has proposed the Airport Freedom Trunk Replacement Project, hereinafter referred to as Project, to increase the capacity of the sewer in order to eliminate the potential for overflow and to reroute the sewer to improve access easements within public street right of ways; and WHEREAS, the Project the City proposes to construct 4,820 lineal feet of 18-inch and 21-inch sanitary sewer at an estimated cost of $3,007,579; and
WHEREAS, the City has applied for a Clean Water State Revolving Fund loan, hereinafter referred to CWSRF loan from the California State Water Quality Control Board to fully fund the project; and WHEREAS, the CWSRF loan program may forgive up to 50% of the loan amount to disadvantaged communities for which the criteria is met by the City; and WHEREAS, the City and District wish to share the cost of the Trunk Main replacement project as provided for under the 1984 Agreement. NOW, THEREFORE, in consideration of the mutual promises of the 1984 Agreement, and the considerations contained herein, the City and District agree to the following: 1. Cost Sharing Not withstanding Chapter IV, Section B, Transmission Facility Improvements, the City and District agree to share the actual project costs equally, and the District s share of annual costs shall not exceed $89,000 per year for the term of the CWSRF loan unless prior approval by the District s Board of Directors. Actual project costs may be different than the estimated project costs contained herein. 2. Project Management - The City and District agree that the City will provide project management and professional engineering services for the Project and the City will act as the Lead Agency for all purposes not otherwise designated in the 1984 Agreement. The City and District agree the City will make payment to contractors and consultants for work related to the Project on behalf of the District. The District shall have reasonable time to review the plans and specifications, and shall present to the District s Board of Directors the apparent low bidder of the Project prior to award of the contract for the construction of the Project. The City shall require its contractor(s) for the Project to (a) indemnify, (b) name as an additional insured and (c) list as co-obligee on all payment and performance bonds the District to the same extent as the City. 3. CWSRF Loan - The City and District agree that the City will apply for a $3,007,579 CWSRF loan to fully fund the project with a 20 year repayment term. Failure to secure the CWSRF loan will terminate this Memorandum of Understanding. 4. CWSRF Loan Program Debt Service The City and District agree that the District will pay its share of the CWSRF loan debt service to the City and that the District will owe no other payments to the City prior to the first CWSRF loan debt service payment. Payments of the CWSRF loan will begin twelve months after the completion of the funded Project. The District s share of the payment will be made to the City annually on or near June 1 st of the calendar year. Such payments will be passed through to the CWSRF loan account.
5. CWSRF Loan Program Debt Forgiveness The City and District agree to share any debt forgiveness granted by the Clean Water State Revolving Fund. 6. Annexation of the Freedom County Sanitation District to the City of Watsonville - The City and District agree that in the event the City annexes the Freedom County Sanitation District to the City of Watsonville, the City shall assume the Freedom County Sanitation District s debt obligation detailed by this Memorandum of Understanding. 7. Estimated Project Activities Schedule: Complete CWSRF loan grant August 30, 2016 Complete Plans Specifications and Estimate for project October 31, 2016 Complete Construction September 30, 2017 Commencement of Debt Service October 31, 2018 This Memorandum of Understanding may not be altered, amended, or modified, except in a written document that is executed by duly authorized representatives of the City and District. This Memorandum of Understanding will be governed by and construed, enforced, and performed in accordance with the laws of the State of California. The Parties agree to the provisions of this Memorandum of Understanding by having their authorized representatives sign below: Charles E. Montoya, Watsonville City Manager Approved as to Form: Alan J. Smith, City Attorney
John Presleigh, District Engineer Approved as to Form: District Counsel