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HomeMy WebLinkAboutRes 06-137 Joint Facilities and Reimbursement Agreements Section 29 ADCITY OF PALM DESERT STAFF REPORT REQUEST: CONSIDERATION OF APPROVAL OF A JOINT FACILITIES AGREEMENT AND A DEPOSIT AND REIMBURSEMENT AGREEMENT IN CONNECTION WITH THE PROPOSED SECTION 29 ASSESSMENT DISTRICT SUBMITTED BY: DAVID YRIGOYEN, DIRECTOR OF REDEVELOPMENT/ HOUSING DATE: OCTOBER 12, 2006 CONTENTS: RESOLUTION NO. 06- 137 JOINT FACILITIES AGREEMENT DEPOSIT AND REIMBURSEMENT AGREEMENT Recommendation: By Minute Motion, that the City Council: • adopt Resolution No. 06-137 in connection with the proposed formation of the City of Palm Desert Section 29 Assessment District (i) approving the form of a Joint Facilities Agreement by and among the City of Palm Desert, the Coachella Valley Water District, and certain property owners and (ii) approving the form of a Deposit and Reimbursement Agreement by and among the City and such property owners. Executive Summary: Approval of the Joint Facilities Agreement is required in connection with the proposed formation of the Section 29 Assessment District to fund public infrastructure improvements. Approval of the Deposit and Reimbursement Agreement is recommended in order to accommodate the construction schedule of certain of the property owners within the proposed Assessment District. Discussion: The owners of certain property located within the City of Palm Desert have requested that the City Council undertake proceedings pursuant to the Municipal Improvement Act of 1913 (California Streets and Highways Code Section 10000, et seq.) (the "1913 Act") to form the Section 29 Assessment District for the purpose of acquiring, constructing and installing certain public infrastructure, including sewer and water lines, street improvements and sto-m drain improvements. Staff Report Consideration of Approval of Joint Facilities Agreement and Deposit and Reimbursement Agreement in connection with Section 29 A.D. Page 2 of 3 October 12, 2006 Because the proposed sewer and water facilities to be financed through the Assessment District are to be owned by the Coachella Valley Water District ("CVWD"), the 1913 Act requires the City and CVWD to enter into a joint facilities agreement. Staff has been working with the property owners in the proposed Assessment District and CVWD in the drafting of the Joint Facilities Agreement. The Joint Facilities Agreement sets forth the obligations of the parties with respect to the formation of the Assessment District, issuance of bonds, construction of the sewer and water improvements and acceptance of the sewer and water improvements by CVWD. The Board of CVWD will consider approval of the Joint Facilities Agreement at its meeting of October 10, 2006. In order to accommodate the construction schedules of Ponderosa Homes II, Inc. and Rilington Dolce, LLC, two developers within the proposed Assessment District (the "Developers"), the sewer and water facilities have been divided into two phases. Phase Improvements consists of sewer improvements to be installed and constructed in advance of the formation of the proposed Assessment District. If the City does not award a contract for the Phase I Improvements until after the formation of the Assessment District and receipt of bond proceeds, the installation and construction of the Phase I Improvements will impact the developer's schedule for construction. Therefore, in order to allow the City to award a contract for the Phase I Improvements and have the Phase I Improvements completed in advance of the formation of the Assessment District, the Developers have deposited a security deposit with the City to cover the City's estimated cost of the installing and constructing the Phase I Improvements, including the cost of a construction manager related thereto. Pursuant to the attached Deposit and Reimbursement Agreement, the City has received an aggregate deposit of $697,642.00 for installation and construction costs and $73,404.09 for related constructioi manager costs. Pursuant to the Deposit and Reimbursement Agreement, if the Assessment District is formed and the bonds are issued in a sufficient amount, bond proceeds will be used to reimburse the Developers for their deposit. If the Assessment District is not formed or bonds are not issued in a sufficient amount, the City may apply the Developer deposit to reimburse the City for the Phase I costs. On June 22, 2006, the City Council approved the form of the Deposit and Reimbursement Agreement. The Deposit and Reimbursement Agreement is being presented to the City Council again for its consideration because at the time of its initial consideration, the scope and estimated cost of the Phase I Improvements was not known. The attached Deposit and Reimbursement Agreement has been revised to include this information. g:lgroups\rda\arla scott\word\staff repts\cvwd contract &deposit agmt-section 29 Staff Report Consideration of Approval of Joint Facilities Agreement and Deposit and Reimbursement Agreement in connection with Section 29 A.D. Page 3 of 3 October 12, 2006 Future Actions: The Council will be asked at a later date to consider additional proceedings for formation of the Assessment District and the issuance of Improvement bonds. Submitted by: David Yri • n Director - edevelopment/Housing DY:AKS:mh Approval: Carlos L. Ortega, City Manager Approval: McCarthy Redevelopm Paul S. Gibson, Director of Finance .ITY COUNCILv TION: APPROVED DENIED RECEIVED OTHER fictp.c/ / A/0. Q(D—1 /2 MEETING DATE /O-(,-OCo AYES: en 6Y1, KLIJai reff s n NOES: NOW.. J ABSENT: /1IQrt.Q_ ABSTAIN: AMU - VERIFIED BY: (l� Original on File w City Clerk's Office g:\groups\rda\arla scott\word\staff repts\cvwd contract &deposit agmt-section 29 RESOLUTION NO. 06- 137 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT IN CONNECTION WITH THE PROPOSED SECTION 29 ASSESSMENT DISTRICT TO APPROVE THE FORM OF A JOINT FACILITIES AGREEMENT AND TO APPROVE THE FORM OF A DEPOSIT AND REIMBURSEMENT AGREEMENT RECITALS: WHEREAS, the owners of certain property located within the City of Palm Desert, as shown on Exhibit A, attached hereto, have requested the City Council to initiate proceedings pursuant to the Municipal Improvement Act of 1913 (Division 12 of the Streets and Highways Code, commencing with Section 10,000) (the "1913 Act") to form an assessment district to be known as the "Section 29 Assessment District" for the purpose of acquiring, constructing and installing certain public infrastructure improvements (sewer and water lines, street improvements, storm drainage) of special benefit to the properties in the Assessment District; and WHEREAS, the Coachella Valley Water District (the "CVWD") provides water and sewer service to the property within the proposed Assessment District. Included among the public facilities proposed to be installed and constructed are certain facilities necessary to serve the property within the proposed Assessment District and which will be owned, operated and maintained by CVWD; and WHEREAS, Sections 10109 and 10110 of the 1913 Act permit the City to finance facilities to be owned or operated by a public agency othe- than the City, such as CVWD, pursuant to a joint facilities agreement; and WHEREAS, the form of a Joint Community Facilities Agreement by and among the City, CVWD, Ponderosa Homes II, Inc. a California corporation ("Ponderosa"), and Rilington Dolce LLC, a California limited liability company ("Rilington") (the "JCFA"), has been presented to this City Council for its consideration; and WHEREAS, Ponderosa and Rilington have requested the City to cause certain of the proposed sewer and water improvements (the "Phase I Improvements") to be installed and constructed in advance of the formation of the proposed Assessment District and issuance of bonds and to that end have deposited with the City the City's estimated costs of installing and constructing the Phase I Improvements, together with the costs of a construction manager related thereto; and WHEREAS, the form of a Deposit and Reimbursement Agreement by and among the City, Ponderosa and Rilington, which Deposit and Reimbursement Agreement will govern the application of the above -described deposit, has been presented to this City Council for its consideration; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PALM DESERT: 1. Recitals. The above recitals are all true and correct. 1'6101 1033:920188\ 1 2. Approval of JCFA. The form of JCFA as presented to this City Council at this meeting and on file with the City Clerk is hereby approved. Subject to the approval of the JCFA by the Board of CVWD, the Mayor is hereby authorized and directed to execute and deliver the JCFA substantially in the form on file with the City Clerk and presented to this meeting, with such additions thereto or changes or insertions therein as may be approved by the Mayor (such approval to be conclusively evidenced by such execution and delivery). 3. Approval of Deposit and Reimbursement Agreement. The form of Deposit and Reimbursement Agreement as presented to this City Council at this meeting and on file with the City Clerk is hereby approved. The Mayor is hereby authorized and directed to execute and deliver the Deposit and Reimbursement Agreement substantially in the form on file with the City Clerk and presented to this meeting, with such additions thereto or changes or insertions therein as may be approved by the Mayor (such approval to be conclusively evidenced by such execution and delivery).The Deposit and Reimbursement Agreement as presented to the City Council at this meeting supercedes the Deposit and Reimbursement Agreement presented to the City Council at its meeting of June 22, 2006. 4. Other Acts. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things, and to execute and deliver any and all documents which they may deem necessary or advisable, in order to effectuate the purposes of this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed. PASSED AND ADOPTED this 12th day of October, 2006, by the following vote, to wit: AYES: Councilmembers NOES: Councilmembers ABSENT: Councilmembers ABSTAIN: Councilmembers ATTEST: Rachelle D. Klassen, City Clerk Jim Ferguson, Mayor P6401 '1033 920188\ 1 2 EXHIBIT "A" P64011 03 3 920188� A-1 DEPOSIT AND REM-11BURSEMENT AGREEMENT (PHASE I IMPROVEMENTS) in connection with proposed Citv of Palm Desert Section 29 Assessment District THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (PHASE I IMPROVEMENTS) (the "Agreement") is made and entered into as of the day of 2006, by and between the City of Palrn Desert, a charter city, (the "City"), Ponderosa Horncs 11, Inc., a California corporation ("Ponderosa"). and Rilington Dolce, LLC, a California limited liability company ("Rilington")(each a "Developer" and, collectively, the "Developers"). R E C I TALS: A. The owners of certain property located within the City of Palm Desert (the "City"), as shown on Exhibit A, attached hereto and incorporated herein, have requested the City Council (the "City Council") of the City to undertake proceedings pursuant to the Municipal Improvement Act of 1913 (Division 12 of the Streets and Highways Code, commencing with Section 10,000) (the "Ao") to form an assessm--nt district to be known as the "Section 29 Assessment District" (the "Assessment District") for the purpose of acquiring, constructing and installing certain public infrastructure improvements of special benefit to the properties in the Assessment District. B. The City Council intends, but is not obligated. to be responsible for the installation and construction of certain of the improvements to be financed through the Assessment District by the issuance of Bonds (the "Improvements"). To that end, the City Council has solicited, or intends to solicit, bids for the installation and construction of the Improvements (the "Bids") in accordance with the provisions of the City's Municipal Code and, following the formation of the Assessment District and the receipt of Bond Proceeds, to award a contract to install and construct the Improvements to the lowest responsible and responsive bidder (the "Bidder"). C. The Developers and the City acknowledge that if the City does not award a contract for the Improvements until after the formation of the Assessment District and the receipt of Bond Proceeds, the installation and construction of certain of the Improvements (the "Phase I Improvements") may not be undertaken on a schedule that best meets the needs of the Developers. Therefore, on the terrns set forth herein, the Parties wish to provide for the Developers to deposit with the City a security deposit or deposits to cover the City's cost of the installation and construction of the Phase I Improvements, including incidental expenses, shown on Exhibit B ("Phase I Improvement Costs"), attached hereto and incorporated herein, and a security deposit to cover the City's estimated costs related to the Phase I Improvements of the construction manager chosen by the City to oversee the Improvements on behalf'of the City (the "Construction Manager Costs"). AGREEMENT NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties hereto agree as follows: PO4- 01- i o ; 3 .s96254% 1 u.doc Recitals. Each of the above recitals is incorporated herein and is true and correct. (a) Definitions. Unless the context clearly otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meanings herein specified. (b) "Bond Proceeds" shall mean those net funds generated by the sale of the Bonds and investment earnings thereon. (c) "Bonds" shall mean those bonds, or other securities, issued by City for the Assessment District in one or more series. (d) "Party" or "Parties" shall mean any one or all of the parties to this Agreement. (e) "Proportionate Share" shall mean with respect to Ponderosa seventy three percent (73%) of any amounts deposited or to be deposited hereunder and with respect to Rilington twenty seven percent (27%) of any amounts deposited or to be deposited hereunder. 2. City Awarding of Contract. Subject to the receipt of the deposits set forth in Section 3 and 4, the City agrees that it will proceed towards making a contract award to the Bidder for the Phase I Improvements within a r!asonable time. Provided, however, the City retains the right to reject all Bids. Deposits fbr Phase I Improvement Costs and Construction Manap-er Costs. (a) As security for payment by the City of the Phase I Improvement Costs, the City hereby acknowledges the receipt of a deposit by Ponderosa of $509.278.66 and a deposit by Rilington of $188,363.34, being, in the aggregate, the amount determined by the Director of Public Works, in his sole discretion. as the contract price for the Phase I Improvement Costs based on the Bidder's Bid amounts. (b) As security for payment by the City of the Construction Manager Costs, the City hereby acknowledges the receipt of a deposit by Ponderosa of $198,462.91 and a deposit by Rilington of $73,404.09, being, in the aggregate, the estimated Construction Manager Costs (the "Construction Manager Costs Deposit"). 4. In addition to the deposits set forth in Section 3, each Developer agrees to deposit its Proportionate Share of the following amounts with the City by cash or cashiers' check within seven days of a written request of the City's Director of Public Works as security for payment by the City of additional Phase I Improvement Costs: To the extent not included in the contract price described in the foregoing Section 3(a), the amount determined by the Director of'Public Works, in his sole discretion, as being (i) the estimated costs incurred or to be incurred in design, engineering and preparation of plans and speci tications for the Phase I Improvements, (ii) the estimated fees paid or to be paid to consultants and government agencies in connection with and for inspection, obtaining permits, licenses or other required governmental approvals associated with the Phase I Improvements. (iii) estimated professional costs such as engineering, legal. accounting, inspection construction staking, materials testing and similar professional services P6401-1033,896254%-]O.doc 2 associated with the Phase I Improvements, and (iv) costs of payment, performance or maintenance bonds, and insurance costs (including the costs of any title insurance) associated with the Phase I Improvements (collectively, with the deposits set forth in Section 3(a), the "Phase I Improvement Costs Deposit"). 5. Provosed Formation of the Assessment District and Issuance of Bonds: Discretion of the Citv. No provision of this Agreement shall be construed as a promise, warranty or agreement by the City to award a contract for the Phase I Improvements, to form the Assessment District, to issue the Bonds, or to issue the Bonds in an amount sufficient to pay, for the Phase I Improvement Costs or the Construe --ion Manager Costs. The City shall bear no liability to the Developers for its decision not to award a contract for the Phase I Improvements, form the Assessment District, issue the Bonds, or issue the Bonds in an amount sufficient to pay for the Phase I Improvement Costs and the Construction Manager Costs. If the City does not award a contract for the Phase I Improvements by January 1, 2007, the City shall, within three business days following such date, return to each Developer its Proportionate Share of the then unexpended and unencumbered Phase I Improvement Costs Deposit and the then unexpended and unencumbered Construction Manager Costs Deposit, with interest, detennined at the rate and by the method established by the City's Finance Director. In such event this Agreement shall be of no further force and effect. 6. Riaht of Entrv. At the time, and by appropriate instruments prescribed by the City, each Developer shall grant to the City and/or Coachella Valley Water District all casements across its property and/or fee title ownerships deeds and/or public access or rights -of -way as the City and%or Coachella Valley Water District may require for the proper installation, construction. operation and maintenance of the Phase I Improvements, or any part thereof. The easements and or fee title shall be in a width and at such locations as shall be acceptable to the Coachella Valley Water District and the City and the Coachella Valley Water District and the City shall have access to the site of the work at all reasonable times for the purpose of accomplishing any inspection of the Phase 1 Improvements. 7. Change Orders. In the event of any increase in the cost of the installation and construction of the Phase I Improvements after the award of the contract by virtue of a change order or otherwise, the City shall not be obligated to incur any additional costs. In the event the City intends to execute a change order or otherwise approve an increase in cost in connection with the installation and construction of the Phase I Improvements after the contract has been awarded, the City's Director of Public Works, in his sole discretion, may notify each Developer in writing of its Proportionate Share of the additional cost of the Phase I Improvements. In such case, the Developers may make additional deposits with the City by cash or cashier's check within three days of such written notice as security for payment by the City of the additional costs. In the event that the Developers make additional deposits pursuant to this Section 6, such additional deposits shall be governed by the terms of this Agreement applicable to the Phase I Improvement Costs Deposit. 8. Sale of Bonds and Use of Bond Proceeds. In conjunction with the issuance and sale of the Bonds, each Developer may execute and submit a payment request, in a form, and in the manner, approved by the City's Director ol' Public Works, requesting disbursement to the City from the Bond Proceeds of an amount equal to Developer's Proportionate Share of the P6401-10 3,896254� 10.doc 3 Phase I Improvement Costs Deposit and the Developer's Proportionate Share of the Construction Manager Costs Deposit and the return to the Developer of its Proportionate Share of the Phase I Improvement Costs Deposit and its Proportionate Share of the Construction Manager Costs Deposit. Within ten days of the City's receipt of funds pursuant to such payment request, the City shall return to the Developer its Proportionate Share of the Phase 1 Improvement Costs Deposit and Construction Manager Costs Deposit, with interest, determined at the rate and by the method established by the City's Finance Director. In the event Bonds are not issued within nine months of the date of this Agreement, or Bonds are issued in an amount which is not sufficient to pay the Phase 1 Improvement Costs and the Construction Manager Costs, the City's Director of Public Works may, in his sole discretion, apply the Phase I Improvement Costs Deposit to reimburse the City for the Phase I Improvement Costs and may apply the Construction Manager Costs Deposit to reimburse the City for Construction Manager Costs and the Phase I Improvement Costs Deposit and the Construction Manager Costs Deposit shall no longer be ref..ected as deposits on the accounts of the City. In such event, interest earned on such Phase I Improvement Costs Deposit and the Construction Manager Costs Deposit, detennined at the rate and by the method established by the City's Finance Director, shall be returned to the Developers in proportion to their Proportionate Shares within ten days of the date the Phase I Improvement Costs Deposit and the Construction Manager Costs Deposit arc applied to the Phase I Improvement Costs and the Construction Manager Costs. 9. Indemnification. The Developers, jointly and severally, hereby agree to indemnify, defend (with counsel acceptable to the City), protect and hold harmless the City and its elective or appointive boards, council members, officers, and employees from any and all claims, rights, grievances, demands, damages, debts. liabilities, obligations, costs, expenses, causes of action, or damages of any kind or nature, including attorneys' fees, whether known or unknown, existing or potential, anticipated or unanticipated, or which ]-nay hereafter be sustained, arising out of, related to, or having any connection with this Agreement, the forination of the Assessment District, the levy and collection of any assessments for the Assessment District or the issuance of Bonds. The only exception to the Developers' responsibility to indemnify, defend, protect and hold harmless the City is claims due to the sole negligence or willful misconduct of the City or the breach by the City of any express obligation of the City set forth in this Agreement. This hold harmless agreement shall apply to all liability regardless of whether any insurance policies are applicable or insurance proceeds are available to the Developers. Any such policy limits do not act as a limitation upon the amount of indemnification to be provided by the Developers. Notwithstanding the foregoing, nothing in this Section 9 is intended to limit or otherwise affect the Developers' obligations under Section 5.19 of that certain Joint Facilities Agreement by and among the City, the Developers and the Coachella Valley Water District. 10. Release. Except in the event of the City's sole negligence or willful ]misconduct or the breach by the City of any express obligation of the City set forth in this Agreement, each Developer hereby fully and irrevocably releases, waives, acquits and discharges the City and its elective or appointive boards, council ]members, officers, and employees of and from any and all claims, rights, grievances, demands, damages, debts, liabilities, obligations, costs, expenses. causes of action, or damages of any nature, including attorneys' fees, whether known or P6401-1033 8962�,4vIO.doc 4 unknown, existing or potential, anticipated or unanticipated, or which may hereafter be sustained, arising out of, or related to, this Agreement, the formation of the Assessment District. the levy and collection of any assessments for fie Assessment District or the issuance of Bonds. To this end, each Developer expressly waives and relinquishes all rights and benefits under California Civil Code Section 1542, which states as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 11. Notices. Any notice to be provided pursuant to this Agreement shall be delivered to the following addresses: Ponderosa: 6671 Owens Drive Pleasanton, CA 94588 Attention: Jeffrey C. Schroeder Rilington: 30-885 Date Palm Drive Cathedral, CA 92234 Attention: Mickey Riley City: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 Attention: Director of Public Works Copy to: Richards, Watson & Gershon 355 South Grand Avenue, 40th Floor Los Angeles, CA 90071 Attention: William L. Strausz Each Party may change its address for delivery of notice by delivering written notice of such change of address to the other Party. 12. Assisnment. The Developers may not assign their interest in this Agreement without the prior written consent of the City, which consent shall not unreasonably be withheld. 13. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent.jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent pennitted by law. 14. Entire Aw-eement. This Agreement contains the entire agreement between the Parties with respect to the matters provided for herein. P6401-1033•1896354�,I0.doc 5 15. Non-Liabilitv of Officials and Employees of the Citv. No member of the City Council or any officer, agent, or employee of the City shall personally be liable to the Developers in the event of any default by the City under the terms of this Agreement. 16. Independent Contractor. It is agreed to by the Parties that the Developers shall act and be independent contractors and not agents or employees of the City. 17. Time of Essence. Time is of the essence in the performance of this Agreement. 18. Authority to Execute. The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement. 19. Attornevs' Fees. If any Party brings an action to enforce the terms hereof or declare its rights hereunder, the prevailing Party in any such action shall be entitled to its reasonable attorneys' fees to be paid by the losing Party as fixed by the court. 20. Interpretation. This Agreement shall be interpreted as though prepared by both parties. 21. Amendments. This Agreement may be amended or modified only by written instrument signed by all Parties. 22. Counterparts. This Agreement may be executed in counterparts, each of which shall be dcerned an original. 23. Governinu Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California. 24. No Third Partv Beneficiaries. No person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the City or the Developers, any rights, remedies, obligations or liabilities under or by reason of this Agreement. 116401-1033.896254v1O.d0c 6 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written above. ATTEST: City Clerk CITY OF PALM DESERT Mayor PONDEROSA HOMES II, INC., a California corporation By: Jeffrey C. Schroeder Its Senior Vicc President RILINGTON DOLCE, LLC, a California limited liability company Its 11640 1-1 033•.896254\,10.doc 7 EXHIBIT A DESCRIPTION OF PROPERTY 116401- l 033` 896254 %,10.doc EXHIBIT B DESCRIPTION OF SEWER FACILITIES PHASE 1 Sewer Facilities Those sewer improvements shown on the plans entitled "Palm Desert Assessment District 2004- 02, Sewer Improvement Plans -Phase I," consisting of 12 sheets (District Drawing No.'s 34957 through 34968), on Portola Avenue, Dinah Shore Drive, 35t1i Avenue and Street C. P6401-1033'896254%10.doc JOIN"f FACILITIES AGREEMENT BY AND AMONG THE CITY OF PALM DESERT, THE COACHELLA VALLEY WATER DISTRICT, PONDEROSA HOMES II, INC. AND RILINGTON DOLCE, LLC City of Palm Desert Section 29 Assessment District THIS JOINT FACILITIES AGREEMENT (this "Agreement"), dated as of 2006 is entered into by and among the CITY OF PALM DESERT, a municipal corporation (the "City"), the COACHELLA VALLEY WATER DISTRICT, a county water district (the "Water District"), Ponderosa Homes II, Inc., A California Corporation ("Ponderosa") and Rilington Dole, LLC, a California limited liability company ("Rilington"). RECITALS: A. The City Council of the City has initiated proceedings to establish an assessment district pursuant to the Municipal Improvement Act of 1913 (California Streets and Highways Code Section 10000, et seq.) (the "Act") to include territory in the City located generally in Section 29 of the City ;the "Property") for the purpose of financing the construction and/or acquisition of certain public facilities of the City (the "City Facilities") and certain water and sewer system facilities of the Water District (the "Water and Sewer- Facilities") necessary to serve new development within the Property. The Water and Sewer Facilities are described in Exhibit "A" attached he_eto and incorporated herein by reference. Such assessment district is proposed to be designat--d as the "City of Palm Desert Section 29 Assessment District" or a similar naive (the "Assessment District"). Upon the completion of the construction of the Water and Sewer Facilities to the satisfaction of the Water District and the acceptance of the Water and Sever Facilities by the Water District, the ownership of the Water and Sewer Facilities would be assumed by the Water District. B. Ponderosa. and Rilington are each the owners of certain real property which is located within the boundaries of the City and Water District and within the proposed boundaries of the Assessment District. C. Pursuant to Sections 10109 and 101 10 of the Act, the City may finance facilities to be owned or operated 'ay the Water District pursuant to an agreement with the Water District. D. The purpose of' this Agreement is to set forth the understandings of the Parties with respect to the Water and Sewer Facilities. NOW, THEREFORE, in consideration of the preceding recitals and the mutual covenants hereinafter contained, the parties agree as follows: P6401- 1033%910008\,7.doc ARTICLE I GENERAL PROVISIONS 1.1 Recitals. The above recitals are true and correct and are hereby incorporated by this reference. 1.2. Definitions. Unless the context clearly otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meanings herein specified. "Bonds" shall have the meaning ascribed to the term in Section 2.1(a). "Contractor" or "Contractors" means any contractors or subcontractors employed for or in connection with the construction of the Water and Sewer Facilities. "Party" or "Parties" means any one or all of the parties to this Agreement. "Plans and Specifications" shall have the meaning ascribed to the term in Section 3.1(a). "Substantially Complete" or "Substantial Completion" means that such Water and Sewer Facilities are substantially complete in accordance with the Plans and Specifications and are available for use by the public for their intended purpose, notwithstanding any final "punch list" items still required to be completed, unless such items are required for the safe operation of such Water and Sewer Facilities, and shall be based upon approval of the Water District's inspectors, which shall not be unreasonably withheld. "Water District Representative" means the Water District General Manager or any designee thereof. ARTICLE II FORMATION OF ASSESSMENT DISTRICT 2.1. Assessment District Formation Proceedings; Responsibilitv. (a) The City Council of the City, in its sole discretion. shall have the jurisdiction to conduct, and shall be solely responsible for conducting, proceedings pursuant to the Act for the establishment of the Assessment District. The City Council, in its sole discretion, shall also have the jurisdiction to conduct, and shall be solely responsible for conducting, proceedings pursuant to the Act and the Improvement Bond Act of 1915 (California Streets and Highways Code Section 8500, et seq.) to authorize the City to issue improvement bonds for the purpose of financing the construction and/or acquisition of the City Facilities and the Water and Sewer Facilities (the "Bonds"). The City Council of the City shall have the sole discretion to establish the terms and conditions for, and approve the issuance of Bonds. Nothing herein shall be deemed to limit the discretion of the City in regard to the foregoing and the City shall have no liability to the Water District or Ponderosa and Rilington if the Asscssinent District is not fonned, or if the Bonds are not issued. P0401-1033.910008)� Tdoc 2 (b) The City hereby agrees that the name "Coachella Valley Water District" or the initials "CVWD" shall not appear in the name of the Assessment District or on any property tax billing in connection with the Assessment District. Further, the City agrees that any property tax billing in connection with the Assessment District will not indicate that the billing or any portion thereof is for water and/or sewer facilities. (c) The Water District is not directly or indirectly approving, or responsible in any way whatsoever for the formation of the Assessment District, the authorization for the levy of' assessments within the Assessment District, or the issuance of' Bonds by the City. The Water District shall not be responsible in any way whatsoever for the costs of fonnation of' the Assessment District or any matter whatsoever having to do with the same. The City acknowledges that it is s3lely responsible for the fonnation, implementation, and administration of the Assessment District. 2.2. Resvonsibility for Debt Service or Assessments, Construction of Water and Sewer Facilities. The Water District shall have no obligation, responsibility, or authority with respect to the issuance and sale of the Bonds, the proceeds of the Bonds available to finance the construction and acquisition of the Water and Sewer Facilities, the payment of the principal and interest on the Bonds, or for the levy of assessments within the Assessment District to provide for the payment of principal and interest thereon. The City shall have the sole authority and responsibility for all such matters. It is understood and agreed by the Parties that the Water District will not be considered a participant in the proceedings relative to fonnation of the District or the issuance of the Bonds, other than as a party to this Agreement. The Parties hereto specifically agree that the liabilities of the City with respect to the Assessment District, including liabilities, if any, of the City pursuant to the documents providing for the issuance of Bonds:, shall not be or become liabilities of the Water District. Nothing in this Agreement shall be construed to obligate the City to cause to be constructed and completed the Water and Sewer Facilities. ARTICLE III CONSTRUCTION AND ACQUISITION OF WATER AND SEWER FACILITIES 3.1. Plans and Specifications for Water and Sewer Facilities, Survevs, etc. (a) The City has, at its sole cost and expense, prepared or caused to be prepared plans and specifications for the construction of' the Water and Sewer Facilities (the "Plans and Specifications"). The Plans and Specifications shall be in full accordance with the Water District's design criteria and standards and shall be submitted to the Water District for review and approval prior to construction, which approval shall not be unreasonably withheld. In the event the Water District disapproves the Plans and Specifications, the City shall modify or cause to be modified the Plans and Specifications in accordance with the reasons given for disapproval and shall resubmit the revised Plans and Specifications to the Water District for approval or disapproval. The foregoing procedure shall be continued until the Plans and Specifications have been approved by the Water District. The Water District agrees to process any Plans and P6401-1033.910004v7.dcu 3 Specifications for approval with such diligence and in such time as the Water District accords customers similarly situated. The cost and expense of the Water District's review (including but not limited to, agents, employees and independent contractors) shall be paid by the City to the Water District. The City represents that the Plans and Specifications will conform to all applicable Federal, State and local governmental rules, ordinances, regulations and all applicable environmental laws. (b) The City shall provide all field engineering surveys detennined to be necessary by the Water District inspec�ion personnel. The City shall promptly furnish to the Water District a complete set of grade shots listing all locations. offsets, etc., in accordance with good engineering practices, and attendant data and reports resulting from the City's engineering surveys and/or proposed facility design changes. The Water District shall have the right, but not the obligation. to review, evaluate and analyze whether such results comply with applicable specifications. (c) The cost of all surveying, soils testing and report costs associated with Water and Sewer Facilities shall be paid for by the City. (d) The Water District shall not be responsible for conducting any environmental, archaeological, biological, or cultural studies or any mitigation requirements related to the Water and Sewer Facilities that may be requested by appropriate Federal, State, and/or local agencies. The City shall, at its sole cost and expense, be responsible for compliance with all environmental laws and all requirements of the Federal Endangered Species Act and the California Endangered Species Act, arising out of or in connection with the planning, design, construction and installation of the Water and Sewer Facilities and for compliance with all conditions and mitigation measures of each consent which must be satisfied for the purpose of the planning, design, construction and installation of the Water and Sewer Facilities. The tern "environmental laws" shall include. without limitation, the California Envirorunental Quality Act and all other applicable State and Federal environmental laws. Section 3.2. Construction. (a) Following receipt of the Water District's written approval of the Plans and Specifications, the City shall employ a licensed contractor or contractors to construct and complete the Water and Sewer Facilities at no cost or expense to the Water District and in accordance with the laws, rules and regulations of all governmental bodies and agencies having jurisdiction over the Water and Sewer Facilities. The Water and Sewer Facilities shall be installed in strict compliance with the Plans and Specifications. Any deviations from the approved Plans and Specifications must be approved by the Water District, in writing. (b) The Water and Sewer Facilities may be constructed and completed in two or more phases as detennined by the City in its sole discretion. The preliminary phasing of the construction and completion of the Water and Sewer Facilities is shown on Exhibit "A" attached hereto and incorporated herein by reference. (c) The City shall, at its sole cost and expense, apply for and obtain all necessary consents, approvals, permits, authority and entitlements as shall be required for the design, construction and installation of the Water and Sewer Facilities, if any, from all appropriate r640i-I03 39100o8vTdoc 4 governmental authorities. The City shall directly pay all costs associated with the construction of the Water and Sewer Facilities, including but not limited to, furnishing of materials, and the City shall keep the Water District free and hannless from all such costs. (d) The City shall, at its sole cost and expense, require each Contractor to furnish labor and material payment bonds and contract performance bonds in an amount equal to one hundred percent (100%) of the applicable contract price for the respective Water and Sewer Facilities to be constructed by such Contractor, naming the City and the Water District as obligees and issued by insurance or surety companies approved by the Water District. All such bonds shall be in a fonn approved by the Water District. (e) The City shall require each Contractor to procure (prior to commencing work on any of the Water and Sewer Facilities), and shall deliver to the Water District, a Certificate of Insurance evidencing coverage for "builder's risk," evidence of employer liability insurance with limits of at least One Million Dollars ($1,000,000.00) per occurrence and evidence of commercial general liability insurance (automobile and general liability) with limits of at least Two Million Dollars (S2,000,000.00) per person/per occurrence. The City shall require each Contractor to maintain, keep in force and pay all premiums required to maintain and keep in force all insurance at all times during which such Contractor's work is in progress. The general liability insurance to be obtained by any Contractor shall name the City and the Water District as additional insureds. The City shall further require each Contractor to maintain and provide evidence of worker's compensation insurance coverage as provided by law. (f) The City shall comply with such other reasonable requirements relating to the construction of the Water and Sewer Facilities which the Water District may impose by written notification delivered to the City at any time, either prior to the receipt of bids by such City for the construction of a phase of the Water and Sewer Facilities, or, to the extent required as a result of changes in applicable laws, during the progress of construction thereof. (g) Intentionally Omitted. (h) It shall be a condition to the Water District's acquisition of any Water and Sewer Facilities that the Water District shall have received, by appropriate instruments prescribed by the Water District, from the City, Ponderosa and/or Rilington, all easements, pen -nits, public access or rights -of -way which may be necessary for the proper operation and maintenance of the Water and Sewer Facilities or any part thereof: all in a width and location as shall be acceptable to the Water District, with all monetary liens, including deeds of trust and mortgages, subordinated to the easements, public access or rights -of -way (or reconveyed as to the fee title ownership). (1) Upon completion of any Water and Sewer Facilities and completion of the final inspection, testing and written assurance thereof by the Water District, the City shall execute and deliver a bill of sale in the fonn and content acceptable to the Water District. The bill of sale shall convey title of such completed Water and Sewer Facilities to the Water District. The Water and Sewer Facilities shall be transferred to the Water District free of all liens and encumbrances. P6401-1033'910008v7.doc 5 Nothing contained herein shall require the Water District to accept the Water and Sewer Facilities if such facilities are Substantially Complete. The Water District shall only accept any Water and Sewer Facilities if such Water and Sewer Facilities are complete, including all punch list items that need to be completed and/or corrected. 0) The City warrants and represents to the Water District that the Water and Sewer Facilities shall be free from construction defects (and shall correct or cause to be corrected any such defects). The City shall cause the applicable Contractor to provide a two (2) year bond (following final acceptance by the Water District of the Water and Sewer Facilities) reasonably acceptable in form and substance to Water District for such defects in materials and workmanship, which appear within said period. Such defects will be repaired, replaced or corrected by the City and/or the surety, at no cost to the Water District. The City and/or the surety shall commence such repair, replacement or correction of any such defects within forty- eight (48) hours after written notice thereof from the Water District to the City. Notwithstanding the above -provided forty-eight (48) hour period, the Water District shall have the unqualified right to immediately make any emergency repairs necessary as determined by the Water District, in its sole and absolute discretion. to eliminate any threat to the public's health, safety and welfare, at the City's sole cost and expense and shall complete such repairs, replacement or correction as soon as practicable. Any warranties, guarantees or other evidences of contingent obligations of third persons with respect to the Water and Sewer Facilities shall be delivered to the Water District as part of the transfer of title. (k) After the acceptance of any Water and Sewer Facilities, all permits, plans and operating manuals relating thereto, shall become the sole property of the Water District, at no cost to the Water District, subject to any warranty work. On the acceptance of Water and Sewer Facilities by the Water .District, the City shall deliver to the Water District, at no cost to the Water District, all surveys and as -built drawings associated with the construction of such Water and Sewer Facilities. (1) The Water District shall have the right to review all books and records of the City pertaining to costs and expenses incurred by the City for the design and construction of the Water and Sewer Facilities. Section 3.3 Public Works Reauirements. The City shall recuire Contractors to pay prevailing wages and to otherwise comply with applicable provisions of the Labor Code, the Government Code, the Public Contracts Code, and the Civil Code as they relate to public works projects (including without limitation Sections 3247 and 3248 of the Civil Code requiring the filing of a payment bond (and naming the City and the Water District as beneficiaries)), and as required by the procedures and standards of the Water District with respect to the construction of its public works projects. The City shall provide proof to the Water District, at such intervals and in such form as the Water District Representative may require, that the foregoing requirements have been satisfied as to all of the Water and Sewer Facilities. P6401-1033 9I0008vTdoc 6 Section 3.4 Inspection; Completion of Construction. The Water District shall have the right to inspect, or cause to be inspected, the construction of the Water and Sewer Facilities. The Water District's personnel shall have access to the site of the work at all reasonable times for the purpose of accomplishing such inspection. Any inspection completed by the Water District shall be for the sole use and benefit of the Water District and no third party shall be entitled to rely thereon for any purpose. The Water District does not undertake or assume any responsibility for or owe a duty to inspect, review or supervise the creation of the Water and Sewer Facilities. Upon Substantial Completion of the construction of any of the Water and Sewer Facilities, the City shall notify the Water District Representative in writing that the construction of such Water and Sewer Facilities has been Substantially Completed. The cost and expense of the Water District's inspection (including, but not limited to, agents, employees and independent contractors) shall be paid by the City to the Water District. Upon receiving such written notification from the City that construction of any of the Water and Sewer Facilities has been completed and final inspection, testing and written assurance thereof has been completed, the Water District shall accept such Water and Sewer Facilities. Upon receiving such notification, the City shall forthwith file with the County Recorder of the County of Riverside a Notice of Completion pursuant to the provisions of Section 3093 of the Civil Code. The City shall furnish to the Water District Representative a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County Recorder. Section 3.5 Liens. Prior to the acceptance of any Water and Sewer Facilities by the Water District, the City shall provide to the Water District Representative such evidence or proof as the Water District shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment on behalf of the City for the construction of such Water and Sewer Facilities has been paid, and that there are no claims by or on behalf of any such person, firm or corporation. Section 3.6 Acquisition. Provided the City has complied with the requirements of this Agreement, the Water District agrees to acquire the Water and Sewer Facilities. Nothing contained herein shall require the Water District to pay any amount for the Water and Sewer Facilities. Section 3.7 Maintenance. Prior to the transfer of ownership of Water and Sewer Facilities to the Water District, as provided in Section 3.6 hereof, the City shall be responsible for the maintenance thereof and shall maintain and transfer such Water and Sewer Facilities to the Water District in as good condition as the Water and Sewer Facilities were in at the time the City notified the Water District Representative pursuant to Section 3.4 hereof that construction of same had been Substantially Completed in accordance with the Plans and Specifications. Upon the transfer of ownership of the Water and Sewer Facilities or any portion thereof from the City to the Water District, as provided in Section 3.6 hereof, the Water District shall be responsible for the maintenance of the Water and Sewer Facilities or the portion transferred. P6401-1033•.910008k Tdoc 7 ARTICLE IV TERM AND TERMINATION Section 4.1 Effective Date. This Agreement shall become effective and of full force and effect as of the date set forth in the first paragraph of this Agreement ("Effective Date") provided it is approved by the City Council of the City an6 the governing board of the Water District, to be confinned by the execution hereof by the authorized representatives of the Parties hereto. Section 4.2 Termination. In the event that the City has not awarded a contract for the construction of the Water and Sewer- Facilities prior tc twelve (12) months after the Effective Date of this Agreement, this Agreement shall automatically terminate and be of no further force and effect. ARTICLE V ADDITIONAL GENERAL PROVISIONS Section 5.1 Partial Invalidity. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. Section 5.2 Notice. Any notice, payment or instrument required or permitted by this Agreement must be in writing, and sent to the addresses of each Party set forth below. Notice will be sufficiently given or delivered to a Party for all purposes as follows: (a) when personally delivered to the recipient, notice is effective on delivery; (b) when mailed certified mail, return receipt requested, postage prepaid, notice is effective on receipt, if a return receipt confirms its delivery; (c) when delivered by an overnight delivery service such as Federal Express, charges prepaid or charged to the sender's account, notice is effective on delivery, if delivery is confinned by the delivery service; (d) when delivered by facsimile transmission, notice is effective on receipt, provided that the facsimile machine provides the sender a notice that indicates that the transmission was successful and that a copy is mailed by first class mail of the facsimile transmission date. Addresses for purpose of giving notice are as follows: City of Palm Desert City: 73-510 Fred Wanng Drivc Palin Desert. CA 92260 Facsimile: (760) 776-6306 Attention: City Manager P6401-1033.410003%Tdoc 8 Coachella Valley Water District Water District: Highway 1 1 I and Avenue 52 P.O. Box 1058 Coachella Valley, CA 92236 Facsimile : (760) 398-371 1 Attention: General Manager -Chief Engineer 6671 Owens Drive Ponderosa: Pleasanton, CA 94588 Attention: Jeffrey C. Schroeder 30-885 Date Palm Drive Rilington: Cathedral, CA 92234 Attention: Mickey Riley Each Party can change its address for delivery of notice by delivering written notice of such change or address to the other parties within ten (10) calendar days prior to such change. Section 5.3 Captions. The captions to Sections used herein are for convenience purposes only and are not part of this Agreement. Section 5.4 Governinp- Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California applicable to contracts made and performed in such State. Section 5.5 Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement. Section 5.6 Amendments. This Agreement may be amended or modified only in writing executed by the authorized representative(s) of each of the Parties hereto. Section 5.7 Waiver. The failure of any Party hereto to insist on compliance within any of the terms, covenants or conditions of this Agreement by any other Party hereto, shall not be deemed a waiver of such terms, covenants or conditions of this Agreement by such other Party, nor shall any waiver constitute a relinquishment of any other right or power for all or any other times. P6401-1033 910008,�Tdoc 9 Section 5.8 No Third Partv Beneficiaries. No person or entity shall be deemed to be a third party beneficiary hereof: and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the Parties, any rights, remedies, obligations or liabilities under or by reason of this Agreement. Section 5.9 Cooaeration and Execution of Documents. The Parties hereto agree to complete and execute any further or additional documents which may be reasonably necessary to complete or further the terms of this Agreement. Section 5.10 Attornevs' Fees. In the event of the bringing of any action or suit by any Party against any other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses of suit, including reasonable attorneys' fees. Section 5.11 Signatories. The signatories hereto represent that they have been appropriately authorized to enter into this Agreement on belialf'of the Party for whom they sign. Section 5.12 Singular ,and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine. Section 5.13 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. Section 5.14 Venue. Any legal action or proceeding concerning this Agreement shall be filed and prosecuted in the appropriate California state court in the County of Riverside, California. Each Party irrevocably consents to the personal jurisdiction of that court. The Parties each hereby expressly waive to the maximum legal extent the benefit of any provision of federal or state law or judicial decision providing for the filing, removal or change of venue to any other court or jurisdiction, including, without implied limitation, federal district court, due to any diversity of citizenship between the Parties. Section 5.15 Construction. The language in all parts of this Agreement shall in all cases be construed as a whole according to its fair meaning and not strictly for or against any Party. All provisions and any P6401- l 03 3.9 l 0008v7.doc 10 variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identification of the person or persons, firm or firms, corporation or corporations may require. This Agreement is the product of mutual negotiation and drafting efforts. Accordingly, the rule of construction that ambiguities in a document are to be construed against the drafter of that document shall have no application to the interpretation or enforcement of this Agreement. Section 5.16 Time is of the Essence. Time is of the essence of this Agreement and each and every provision thereof. Section 5.17 Independent Contractor. In performing this Agreement, the City is an independent contractor and not the agent of the Water District. It is not intended by the Parties to this Agreement to create a partnership or joint venture among them and this Agreement shall not otherwise be construed. 5.18 Assip-nment. The City shall not have the right to assign or otherwise transfer this Agreement, either voluntarily or by operation of law, in whole or in part, without the prior written consent of' the Water District, which consent may be withheld in the Water District's sole and absolute discretion. Neither Ponderosa nor Rilington shall have the right to assign or otherwise transfer this Agreement, voluntarily or by operation of law, in whole or in part, without the prior written consent of the Water District and the City, which consent may be withheld by the City or the Water District, each in its sole and absolute discretion. 5.19 Indemnification (a) Ponderosa and Rilington shall, jointly and severally, indemnify, defend, and hold hannless the Water District and its officers, directors, employees, agents, officials, representatives, successors and assigns (each a "Water District Indemnified Person", and collectively the "Water District Indemnified Persons") and each and every one of them from and against all actions, causes of action, liabilities, costs, damages, clairns, losses or expenses of every type and description (including without limitation attorneys' fees) (collectively "Costs") to which they may be subjected or put, whether known or unknown, existing or potential, anticipated or unanticipated, by reason of, or resulting or arising from this Agreement, including without limitation, the following: (i) any act or omission of the Water District, City, Rilington or Ponderosa under this Agreement, including, but not limited to, any act or omission by Water District's or City's consultants, employees, agents, contractors, subcontractors and anyone directly or indirectly employed by the City or the Water District, or anyone for whose acts any of them may be liable (collectively, "Representatives"), in connection with the planning or construction of the Water and Sewer Facilities; (ii) the establishment of the Assessment District; (iii) the levy of assessments; (iv) the issuance of Bonds; (v) the financing of all or a portion of the Water and Sewer Facilities from Bond Proceeds; (vi) any disclosure made in connection with the offering and sale of the Bonds or any continuing disclosure rnade at any time with respect to the Bonds, or any matter related thereto; (vii) any violation or alleged violation, breach or alleged breach by Ponderosa, Rilington, the City, the Water District, or their respective Representatives of this Agreement; (viii) any property damage, bodily injury or death caused by P6401-1033 :910008� Tdoc 1 I City, the Water District, or their respective Representatives; (ix) any violation or alleged violation by the City and/or Water District or their respective Representatives of the Act or any laws or regulation now or hereafter enacted with respect to the subject matter of this Agreement; (x) any enforcement by 1he City or Water District of the provisions of this Agreement; (xi) the design, engineering, construction and installation of the Water and Sewer Facilities, and (xii) the nature or physical condition of the Sewer and Water Facilities or any land or easements conveyed to the City or the Water District hereunder (including, but not limited to, the presence of any hazardous materials thereon or therein); provided, however, that Ponderosa and Rilington shall not be required to indemnify a Water District Indemnified Person as to Costs resulting from gross negligence or willful misconduct of such City Indemnified Person. The foregoing indemnity includes without limitation, Costs arising from a legal challenge to the Assessment District and this Agreement. The Water District may make all decisions with respect to its representation in any legal proceeding covered by this Section 5.19(a). If' Ponderosa and/or Rilington fail to do so, the Water District shall have the right, but not the obligation, to defend the same and charge all of the direct or incidental costs of such defense, including any fees and costs, to and recover the same from Ponderosa and/or Rilington. (b) Ponderose. and Rilington shall, jointly and severally, indemnify, defend, and hold harmless the City and its officers, directors, employees, agents, officials, representatives, successors and assigns (each a "City Indemnified Person", and collectively the "City Indemnified Persons") and each and every one of theirs from and against all actions, causes of' action, liabilities, costs, damages, claims, losses or expenses of every type and description (including without hinilation attorneys' fees) (collectively "Costs") to which they may be subjected or put, whether known or unknown, existing or potential, anticipated or unanticipated, by reason of, or resulting or arising from this Agreement, including without limitation, the following: (i) any act or omission of the City, Water District, Rilington or Ponderosa, or their respective Representatives under this Agreement, including, but not limited to, any act or omission by the City's or Water District's consultants, employees, agents, contractors, subcontractors and anyo:ie directly or indirectly employed by the Water District, or anyone for whose acts any of them may be liable (collectively, "Representatives"), in connection with the planning or constructioni of the Water and Sewer Facilities; (ii) the establishment of the Assessment District; (Ili) the levy of assessments; (iv) the issuance of Bonds, (v) the financing of all or a portion of the Water and Sewer Facilities from Bond Proceeds; (vi) any disclosure made in connection with the offering and sale of the Bonds or any continuing disclosure made at any time with respect to the Bonds, or any matter related thereto: (vii) any violation or alleged violation, breach or alleged breach by Ponderosa, Rilington, the City or the Water District of this Agreement; (viii) any property damage, bodily injury or death caused by the City or Water District or their respective Representatives; (ix) any violation or alleged violation by the City and/or Water District or their respective Representatives of the Act or any law or regulation now or hereafter enacted with respect to the subject matter of this Agreement; (x) any enforcement by the City or Water District of any provisions of this Agreement; (xi) the design, engineering, construction and installation of the Water and Sewer Facilities; and (xii) the nature or physical condition of the Sewer and Water Facilities or any land or easements conveyed to the City or Water District for the Sewer and Water Facilities (including, but not limited to, the presence of' any hazardous materials thereon or therein); provided, however, that Ponderosa and Rilington shall not be required to indemnify a City Indemnified Person as to Costs resulting from gross negligence or willful misconduct of' such City Indemnified Person. The foregoing indemnity P6401-1 o;3•.91 oous\ 7.doc 12 includes without limitation, Costs arising from a legal challenge to the Assessment District and this Agreement. The City may make all decisions with respect to its representation in any legal proceeding covered by this Section 5.19(b). If Ponderosa and/or Rilington fail to do so, the City shall have the right, but not the obligation, to defend the same and charge all of the direct or incidental costs of such defense, including any fees and costs, to and recover the same from Ponderosa and/or Rilington. (c) Ponderosa and Rilington each waive. release and covenant not to pursue: (i) any and all claims against the City for reimbursement or contribution, (ii) any and all claims against the City based on subrogation to any claims. rights or remedies of the Water District against City and (iii) and any and all similar claims, rights and remedies, in each case that may result from or arise out of Ponderosa's or Rilington's performance of their obligations under Section 5.19(a). Notwithstanding the foregoing, nothing in this Section 5.19 is intended to limit or otherwise affect any rights to return of funds that the Developers may have under Section 8 of that certain Deposit and Reimbursement Agreement (Phase I) by and among the City and the Developers. P6401-1033',9I 0008\ Tdoc 13 (d) The obligations of Ponderosa and Rilington hereunder this Section 5.19 shall survive termination of this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year first above written. ATTEST: City Clerk ATTEST: Secretary of the Board of' Directors CITY OF PALM DESERT By: Mayor COACHELLA VALLEY WATER DISTRICT By: President of the Board of' Directors PONDEROSA HOMES II, INC., a California corporation By: Jeffrey C. Schroeder Its: Senior Vice President RILINGTON DOLCE, LLC. a California limited liability company By: Its: P(r101-10 33:910003vTdoc 14 EXHIBIT "A" DESCRIPTION OF WATER AND SEWER FACILITIES PHASE I Sewer Facilities Those sewer improvements shown on the plans entitled "Palen Desert Assessment District 2004- 02, Sewer Improvement flans -Phase 1," consisting of 12 sheets (District Drawing No.'s 34957 through 34968), on Portola Avenue, Dinah Shore Drive, 35`1' Avenue and Street C. PHASE II Sewer Facilities Those sewer improvements shown on the plans entitled "Palm Desert Assessment District 2004- 02, I-10 Sewer Crossing Improvement Plans" consisting of 4 sheets (District Drawing No.'s 34803 through 34806). oil Portola Avenue north of Dinah Shore Drive, including crossings for the Interstate 10 and the :Southern Pacific Railroad. Water- Facilities Those water improvements shown on the plans entitled "Palm Desert Assessment District 2004-02, Water Improvement Plans -Phase 1," consisting of 12 sheets (District Drawing No.'s 34945 through 34956), on Monterey Avenue, "A" Street, Gateway Drive, Dinah Shore Drive, Portola Avenue and Street C. Those water improvements shown on the plans entitled "Palm Desert Assessment District 2004-02, Water Improvement Plans -Phase 2", consisting of 5 sheets (District Drawing No.'s 34969 though 34973), on. Gerald Ford Drive. 116401-1 o33 910o08vTdoc