HomeMy WebLinkAbout12-12-17 FA&C Committee Packet 1
OTAY WATER DISTRICT
FINANCE, ADMINISTRATION AND COMMUNICATIONS
COMMITTEE MEETING
and
SPECIAL MEETING OF THE BOARD OF DIRECTORS
2554 SWEETWATER SPRINGS BOULEVARD
SPRING VALLEY, CALIFORNIA
BOARDROOM
TUESDAY
December 12, 2017
2:30 P.M.
This is a District Committee meeting. This meeting is being posted as a special meeting
in order to comply with the Brown Act (Government Code Section §54954.2) in the event that
a quorum of the Board is present. Items will be deliberated, however, no formal board actions
will be taken at this meeting. The committee makes recommendations
to the full board for its consideration and formal action.
AGENDA
1. ROLL CALL
2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO
SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD'S JU-
RISDICTION BUT NOT AN ITEM ON TODAY'S AGENDA
DISCUSSION ITEMS
3. EXAMINATION OF THE METROPOLITAN WATER DISTRICT INTEREST RATE
SWAPS (BELL) [5 minutes]
4. APPROVE THE ISSUANCE OF A PURCHASE ORDER TO SUNROAD AUTO LLC
DBA KEARNY PEARSON FORD IN THE AMOUNT OF $168,069.10 FOR THE
PURCHASE OF FIVE (5) REPLACEMENT HALF-TON TRUCKS (MARTINEZ) [5
minutes]
5. APPROVE THE JOINT POWERS AGENCY AMENDED AND RESTATED WATER
CONSERVATION GARDEN OPERATION AGREEMENT THROUGH JUNE 30, 2023
(OTERO) [5 minutes]
6. APPROVE AN AGREEMENT WITH THE LAW FIRM ARTIANO, SHINOFF AND
ABAD, A PROFESSIONAL CORPORATION, FOR A TERM OF TWO (2) YEARS
THROUGH DECEMBER 31, 2019, TO PROVIDE GENERAL COUNSEL SERVICES
TO THE DISTRICT (WATTON) [5 minutes]
7. ADJOURNMENT
2
BOARD MEMBERS ATTENDING:
Mark Robak, Chair
Mitch Thompson
All items appearing on this agenda, whether or not expressly listed for action, may be delib-
erated and may be subject to action by the Board.
The Agenda, and any attachments containing written information, are available at the Dis-
trict’s website at www.otaywater.gov. Written changes to any items to be considered at the
open meeting, or to any attachments, will be posted on the District’s website. Copies of the
Agenda and all attachments are also available through the District Secretary by contacting
her at (619) 670-2280.
If you have any disability which would require accommodation in order to enable you to par-
ticipate in this meeting, please call the District Secretary at 670-2280 at least 24 hours prior
to the meeting.
Certification of Posting
I certify that on December 8, 2017 I posted a copy of the foregoing agenda near the
regular meeting place of the Board of Directors of Otay Water District, said time being at least
24 hours in advance of the meeting of the Board of Directors (Government Code Section
§54954.2).
Executed at Spring Valley, California on December 8, 2017.
/s/ Susan Cruz, District Secretary
STAFF REPORT
TYPE MEETING: Finance, Administration, and
Communications Committee
Meeting
MEETING DATE: December 12, 2017
SUBMITTED BY: Rita Bell, Finance Manager PROJECT: DIV. NO. All
APPROVED BY:
(Chief)
Kevin Koeppen, Assistant Chief Financial Officer
Joseph R. Beachem, Chief Financial Officer
SUBJECT: Examination of the Metropolitan Water District Interest Rate
Swaps
GENERAL MANAGER’S RECOMMENDATION:
This is an informational item only.
COMMITTEE ACTION:
No action required.
BACKGROUND:
The General Manager has requested that staff review the Metropolitan
Water District’s (MWD) interest rate swaps to determine how fiscally
sound this debt vehicle has been for MWD and whether the District
allows this type of debt.
In the 2002 to 2006 timeframe, in connection with debt issuance, some
agencies entered into a derivative financing vehicle called a ‘‘swap’’
also known as a synthetic fixed instrument. This was a creative way to
hedge fixed rate borrowing against declining interest rates, or hedge
variable rate borrowing against interest rate increases. Typically,
this was supposed to reduce the overall interest cost or diversify a
mostly fixed rate or mostly variable rate debt portfolio.
A swap agreement is associated with a particular debt issuance, but is
a separate contract from the debt. The terms of each contract are
customized to meet the borrower’s specific risk management needs such
as start and end date, settlement frequency, the notional amount, and
rates on which the swap payments are made.
In the case of a fixed-to-floating rate swap, the borrower issues
fixed rate debt and then swaps the fixed rate payment from the swap
provider with a variable rate. In the case of a variable rate swap,
the borrower issues variable rate debt then uses an interest rate swap
to pay a fixed rate or pay an amount tied to another index (such as
LIBOR) to the swap provider, in exchange for the swap provider paying
the actual variable rate.
Swaps are a form of a derivative and should not be used as a financing
option for an unsophisticated issuer of debt. The swap hedges whether
interest rates will go up or down. Most of the swap agreements were
entered into prior to the 2007 recession, when agencies did not
anticipate interest rates dropping to a historic low and remaining low
for such a long time. Most swaps are currently upside down, so
financially, it made sense for agencies to get out of the swap and
refinance the debt with a fixed rate to take advantage of the low
rates in the market, even though it would cost money to buy out of the
agreement.
ANALYSIS:
MWD’s interest rate swap contracts are permissible by Section 5922 of
the California Government Code and by MWD’s Master Swap Policy. MWD’s
Master Swap Policy describes the conditions under which MWD may enter
into an interest rate swap agreement and defines the purpose of the
swap program and the parameters under which the program may operate.
MWD entered into twenty two interest rate swap deals between the years
2002 and 2006. Twenty of the swap agreements were fixed rate debt and
were swapped to pay variable interest payments. MWD states that the
costs were less than what MWD otherwise would have paid if they had
issued fixed rate debt in the tax-exempt municipal bond market. Two of
the swaps MWD entered into were the SIFMA indexed variable rate debt
swapped to the LIBOR indexed variable rate and both of these swaps
have since expired.
Current Status of Swaps:
Per the September 30, 2017 MWD Swap Quarterly Report, MWD had $493.6
million outstanding of the remaining eight interest rate swaps. The
mark-to-market value of the swap portfolio is a negative $68.5
million, as of September 30, 2017. This position has improved from a
negative $71.5 million, as of June 30, 2017, and a negative $105.9
million, as of June 30, 2016. Mark-to-market is the amount MWD would
have to pay the counterparty to terminate the swaps. As time passes
and interest rates rise, the mark-to-market value for MWD swaps has
been reduced.
Swap
Notional
Amount
Outstanding
Counter-
party
Start
Year
Fixed
Rate
Mark-to-
Market Value
Remaining
Average
Life in
Years
2002A $75,838,400 Morgan
Stanley
2002 3.30% ($8,251,400) 4.9
2002B $28,371,600 JPMorgan
Chase
2002 3.30% ($3,086,300) 4.9
2003 $158,597,500 Wells
Fargo
2003 3.26% ($23,089,900) 7.8
2003 $158,597,500 JPMorgan
Chase
2003 3.26% ($23,089,90) 7.8
2004C $7,760,500 Morgan
Stanley
2004 2.98% ($1,030,400) 8.7
2004C $6,349,500 Citigroup 2004 2.98% ($833,300) 8.7
2005 $29,057,500 JPMorgan
Chase
2005 3.36% ($4,609,700) 9.7
2005 $29,057,500 Citigroup 2005 3.36% ($4,560,000) 9.7
Total $493,630,000 ($68,550,900)
MWD’s Master Swap Policy, adopted on September 2001, states “The sum
total notional amount per swap counterparty may not exceed 25 percent
of MWD’s total revenue bond indebtedness.” As of June 30, 2017, MWD’s
total revenue bond indebtedness was $4.5 billion. No individual swap
agreement currently exceeds the limitation of $1.1 billion. The
percentage of swap debt versus traditional fixed or variable debt as
of June 30, 2016 is 12 percent.
Conclusion:
To determine whether MWD’s decision to enter swap agreements was
fiscally sound is difficult to say in hind sight. Much of the loss
shown on their financial statements may not be realized (if interest
rates rise as they are expected to, then the negative position is
reduced). It is difficult to determine if MWD fared better with the
swap agreements versus traditional debt financing without knowing the
alternative terms available to MWD at the time. MWD reports that
these transactions and their associated bonds resulted in $113.3
million in savings through September 30, 2017, however, this savings
is based on the refunding of the original debt into the swap debt
transactions (not based on the swap agreement itself).
The District’s current Debt Policy does not allow derivatives as a
financing option. Prior to 2013, the District’s policy did allow for
derivatives on a case-by-case basis. With that said, the District has
not entered into swap agreements on any of its debt. The Government
Finance Officers Association (GFOA) advises great caution in the use
of derivatives. They should be used only when issuers have developed a
sufficient understanding of the products, have internal staffing
expertise, and the controls to manage, monitor, and evaluate these
products properly.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
None.
STRATEGIC OUTLOOK:
N/A
LEGAL IMPACT:
None.
General Manager
STAFF REPORT
TYPE MEETING: Regular Board MEETING DATE: January 3, 2018
SUBMITTED BY:
Jose Martinez,
Asst. Chief Water Operations
Kent Payne, Purchasing and
Facilities Manager
PROJECT: DIV. NO. All
APPROVED BY:
Pedro Porras, Chief Water Operations
Mark Watton, General Manager
SUBJECT: Approval To Purchase Five (5) Replacement Half-Ton Trucks
GENERAL MANAGER’S RECOMMENDATION:
That the Board authorize the General Manager to issue a purchase
order to Sunroad Auto LLC DBA Kearny Pearson Ford in the amount of
$168,069.10 for the purchase of five (5) replacement half-ton
trucks.
COMMITTEE ACTION:
See Attachment “A.”
PURPOSE:
To obtain Board authorization to purchase five (5) replacement
half-ton trucks.
ANALYSIS:
Included in the approved FY 2018 budget are six (6) replacement
half-ton trucks. The purchases are to replace Units 161, 186, 187,
201, 203, and 210 as part of the District’s vehicle replacement
program. These units are utilized for the District’s day-to-day
maintenance of District facilities and the inspection of Capital
Improvement Projects (CIPs) throughout the District; however, Unit
186’s replacement was advanced earlier this year via the same
competitive solicitation process, therefore, staff is requesting
approval to replace the remaining 5 half ton trucks.
As part of the District’s continued efforts to evaluate products
that would provide the best long-term value, staff reviewed similar
vehicles from multiple manufacturers. Based on the review, staff
selected the Ford F-150, XL V6 (base model) to meet the District’s
long-term work performance needs while also maintaining a low total
cost of ownership. Review highlights for the Ford included but
were not limited to: best in-class fuel economy; dealer support
that picks up and delivers vehicles which reduces staff time and
related costs; and good District history of vehicle performance in
various conditions.
In accordance with District policy, quotes were solicited for the
five (5) vehicles. Three bids were received. Prices received
include all applicable fees, taxes, and delivery.
Funding for this purchase has been included in CIP P2282, Vehicle
Capital Purchases Program.
Dealer Bid Price
Penske Ford – San Diego, CA $181,645.45
Wondries Fleet Group - Alhambra, CA $168,613.25
Sunroad Auto LLC DBA Kearny Pearson Ford
- San Diego, CA $168,069.10
FISCAL IMPACT:
Projected purchase budget for five (5) trucks is $195,000 based on
preliminary research. The purchase of the trucks will cost
$168,069.10, which will be charged against the Vehicle Capital
Purchases CIP P2282. The total cost in this account will not exceed
budgeted funding.
The total FY18 project budget for the CIP P2282, Vehicle Capital
Purchases is $362,500. Existing expenditures and current
encumbrances for the CIP, including the five (5) trucks to be
purchased under this request if approved, are $329,399.10.
Based on the evaluation by the Assistance Chief of Water
Operations, the CIP P2282 budget is sufficient to complete the
budgeted purchase.
The Finance Department has determined that 100% of the funds are
available in the replacement fund.
Expenditure Summary:
Total CIP 2282 Vehicle Replacements
FY18 Budget: $362,500.00
Five (5) Proposed Half Ton Trucks ($168,069.10)
One (1) Half Ton Truck Purchase FY 17 ($33,830.00)
One (1) Compact Truck ($29,800.00)
One (1) Three Quarter Ton Truck ($48,200.00)
One (1) One Ton Truck ($49,500.00)
Projected CIP 2282 FY18 Under Budget $33,100.90
STRATEGIC GOAL:
Operate the system to meet demand twenty-four hours a day, seven
days a week.
LEGAL IMPACT:
None.
General Manager
Attachment “A,” Committee Action
ATTACHMENT A
SUBJECT/PROJECT: Approval to Purchase Five (5) Ford F150 Trucks
COMMITTEE ACTION:
The Finance, Administration and Communications Committee reviewed this
item at a meeting held on December 12, 2017 and the following comments
were made:
Note:
The “Committee Action” is written in anticipation of the Committee moving
the item forward for Board approval. This report will be sent to the Board
as a committee approved item, or modified to reflect any discussion or
changes as directed from the committee prior to presentation to the full
board.
STAFF REPORT
TYPE MEETING: Regular Board
MEETING DATE: January 3, 2018
SUBMITTED BY:
Tenille Otero
Communications Officer
PROJECT: Various DIV. NO. ALL
APPROVED BY:
Mark Watton, General Manager
SUBJECT: Joint Powers Agency Amended and Restated Water Conservation
Garden Operation Agreement
GENERAL MANAGER’S RECOMMENDATION:
That the Board of Directors approve the Amended and Restated Water
Conservation Garden Operation Agreement (Amended and Restated
Operation Agreement) [Attachment B – Redlined version of the Amended
and Restated Operation Agreement].
COMMITTEE ACTION:
See Attachment A.
PURPOSE:
To request that the Board approve the Amended and Restated Water
Conservation Garden Operation Agreement through June 30, 2023.
ANALYSIS:
Members of the JPA, including the Otay Water District and Helix Water
District who funded the construction of the Garden, along with San
Diego County Water Authority, Sweetwater Authority, and the City of
San Diego, continue to fund approximately 50 percent of its
operational costs. At its December 2016 Board meeting, the District
Board approved the first amendment to the original Operation
Agreement, dated October 13, 2010, extending the expiration date to
June 30, 2017.
At its April 20, 2017 committee meeting, the JPA reviewed a draft of
the revised Operation Agreement and concurred that the agreement was
moving in a suitable direction, focusing on the operations and
maintenance of the Garden and the water conservation goals of the JPA
members. However, the JPA members voted not to approve the agreement
because the agreement needed more revisions and the JPA needed more
time to thoroughly evaluate the agreement, provide feedback, and
solicit additional feedback from the JPA’s member agencies’ Boards.
JPA members also determined that since a final revised agreement
would need to be approved by each of the individual member agencies’
Boards, the deadline of June 30, 2017 could not be met. At its June
7, 2017 Board meeting, the District Board approved a second amendment
to extend the JPA Operation Agreement an additional 12 months through
June 30, 2018.
Two District Board members, Mark Robak as the District representative
and Mitch Thompson as the alternate, support the District on the JPA
committee. The JPA established a governance subcommittee to evaluate
the draft agreement thoroughly, present a framework for a revised
agreement, and develop a second draft agreement for the JPA committee
by a deadline of December 31, 2017. In September 2017, the JPA voted
to authorize the revised agreement framework with a funding schedule
that decreases over the next five years to an agreed amount each year
beyond the five years. The revised agreement framework also took into
consideration the JPA member agencies’ water-use efficiency goals by
focusing on conservation-related “Core Exhibits” as part of the
Garden’s operating expenses. These include the Irrigation Exhibit,
Backyard Retrofit House, Turf Exhibit, Tree Exhibits and Care,
Watershed/Water Capture, Soils, Erosion, California Water Story,
Seven Steps of Xeriscape, and Water Supply Towers.
A revised draft agreement was presented at the JPA’s October 16, 2017
meeting. The JPA members reviewed and discussed the updated draft
agreement and suggested revisions to the agreement. These
modifications were incorporated and sent via email as a redlined
document [Attachment B] on October 23, 2017 to JPA members. JPA
members reviewed the Amended and Restated Operation Agreement and
have already presented or are in the process of presenting the
revised agreement to their respective Boards of Directors.
Section 7.3.1. of the Amended and Restated Operation Agreement
details the agency contributions will remain at $484,000 in fiscal
year 2018-2019. The contributions reduce by five percent in fiscal
year 2019-2020, by 10 percent in fiscal year 2020-2021, and by 10
percent in fiscal year 2021-2022. In fiscal year 2022-2023
contributions will decrease by 14 percent to $320,000 and remain at
that level.
The District currently contributes $96,450 or 20 percent of the JPA
member agency contributions. The Helix Water District currently
contributes the same amount and percentage as the District. The San
Diego County Water Authority contributes $136,780 or 30 percent.
Sweetwater Authority and the City of San Diego each contribute
$77,160 or 15 percent of the baseline dues. The percentage formula
was set based on the agencies proximity to the Water Conservation
Garden. Under the Amended and Restated Operation Agreement, the
percentages remain unchanged.
As a JPA member agency, the District will continue to evaluate its
participation in funding and operating the Garden so it continues to
provide valuable water conservation programs and utilize the
facilities constructed at the Garden as intended by its founders.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The Water Conservation Garden funding of $96,450 is included in the
District’s Conservation budget for Fiscal Year 2018.
STRATEGIC GOAL:
Supports the objective in the District’s Strategic Plan to evaluate
and enhance the District's water conservation programs and services.
LEGAL IMPACT:
None.
Attachments:
Attachment A – Committee Action
Attachment B – Redlined version of the Amended and Restated Water
Conservation Garden Operation Agreement
ATTACHMENT A
SUBJECT/PROJECT:
Joint Powers Agency Amended and Restated Water Conservation
Garden Operation Agreement
COMMITTEE ACTION:
This attachment will be updated with notes from the discussion of the
Finance, Administration and Communications Committee meeting
scheduled on Tuesday, December 12, 2017.
60621.00001\30173836.430173836.6
WATER CONSERVATION AUTHORITY
AMENDED AND RESTATED WATER CONSERVATION GARDEN OPERATION AGREEMENT
(Cuyamaca College Water Conservation Garden)
THIS AMENDED AND RESTATED WATER CONSERVATION GARDEN
OPERATION AGREEMENT (Cuyamaca College Water Conservation Garden) (this
“Agreement’’) is dated as of _________, for reference purposes only, and is entered into
by and between the WATER CONSERVATION AUTHORITY, a Joint Powers Agency (the
“Authority”), and FRIENDS OF THE WATER CONSERVATION GARDEN, a California
nonprofit public benefit corporation (the “Operator”) (collectively the “Parties”), with
reference to the following recited facts:
RECITALS
A.The Grossmont-Cuyamaca Community College District (“GCCCD”), a California
community college district and the Authority have entered into that certain License Agreement
for Operation of a Water Conservation Garden, dated August 1, 2006 (“License Agreement”),
attached hereto as Exhibit C and incorporated herein by reference, with respect to certain real
property specifically described in the License Agreement for operation of a water conservation
demonstration garden (“Garden”); and
B.The Authority and the Operator entered into that certain Water Conservation
Garden Operation Agreement, dated October 13, 2010, to provide for the Operator to assume all
responsibility for operation and maintenance of the Garden in accordance with the License
Agreement and the terms and conditions of this Agreement.
C.The Authority and Operator now desire to amend and restate the Agreement to
clarify responsibilities and obligations associated with the operation of the Garden including, but
not limited to:
1.Committing that the Authority will continue and increase involvement with
the Garden as specified within this Agreement;
2.Authority member dues shall decrease over time to the Base Contribution
amount as defined herein;
3.Authority dues shall be based upon the maintenance of Core Exhibits, as
that term is defined herein; and
4.Operator shall increase and improve communication with Authority
member agencies, including clarifying the lines of communication between the constituent parties.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION AND THE
PROMISES OF THE AUTHORITY AND THE OPERATOR SET FORTH IN THIS
AGREEMENT, THE AUTHORITY AND THE OPERATOR AGREE, AS FOLLOWS:
1.DEFINITIONS. The following definitions apply in this Agreement:
1.1 “Application” means any agreement, application, certificate, document, or
submission (or amendment of any of the foregoing): (a) necessary or appropriate for any activity
Attachment B
60621.00001\30173836.430173836.6 2
regarding the Garden that this Agreement requires or allows, including any application for any
building permit, certificate of occupancy, utility service or connection, easement, covenant,
condition, restriction or such other instrument as the Operator may from time to time reasonably
request in performing its obligations under this Agreement; (b) to enable the Operator from time
to time to seek any Approval or to use or operate the Garden in accordance with this Agreement;
or (c) otherwise reasonably necessary and appropriate to permit the Operator to perform its
obligations under this Agreement.
1.2 “Approvals” means any and all licenses, permits, approvals, consents, certificates
(including certificate(s) of occupancy), rulings, variances, authorizations, or amendments to any
of the foregoing as shall be necessary or appropriate under any Law to commence, perform, or
complete any use, maintenance, repair or operation of the Garden.
1.3 “Authority” means the Water Conservation Authority, a California joint powers
authority.
1.4 “Authority Activity” shall have the meaning ascribed to the term in Section 5.13.
1.5 “Authority Parties” means, collectively, the Authority, its governing board,
officers, employees, agents and legal representatives.
1.6 “Authority Party” means, individually, the Authority and each of its officers,
employees, agents and legal representatives.
1.7 “Authority Representative” means an employee or agent of the Authority
designated, from time to time by the Authority through Notice to the Operator. As of the Effective
Date, the Authority Representative is the President of the Authority.
1.8 “Automobile Liability Insurance” means insurance coverage against claims of
personal injury (including bodily injury and death) and property damage covering all owned,
leased, hired and non-owned vehicles used by the Operator, with minimum limits for bodily injury
and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO
MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business
or commercial vehicle policy.
1.9 “Bankruptcy Law” means Title 11, United States Code, and any other or successor
state or federal statute relating to assignment for the benefit of creditors, appointment of a receiver
or trustee, bankruptcy, composition, insolvency, moratorium, reorganization, or similar matters.
1.10 “Bankruptcy Proceeding” means any proceeding, whether voluntary or
involuntary, under any Bankruptcy Law.
1.11 “Casualty” means any damage or destruction of any kind or nature, ordinary or
extraordinary, foreseen or unforeseen, affecting all or any part of the Garden Improvements,
whether or not insured or insurable.
1.12 “Casualty Termination” means a termination of this Agreement because of a
Substantial Casualty, when and as this Agreement expressly allows such a termination pursuant
to Section 13.3.
60621.00001\30173836.430173836.6 3
1.13 “Construction” means any alteration, construction, demolition, development,
expansion, reconstruction, redevelopment, repair, restoration, or other work affecting any Garden
Improvements, including new construction.
1.14 “County” means the County of San Diego, California.
1.15 “Core Exhibits” means Irrigation Exhibit , Backyard Retrofit House, Turf
Exhibit , Tree Exhibits and Care, Watershed/Water Capture, Soils, Erosion , California Water
Story, Seven Steps of Xeriscape, and Water Supply Towers.
1.16 “Default” means any Monetary Default or Non-Monetary Default.
1.17 “Deferred Maintenance Projects” shall mean DG pathway stabilizer, irrigation
upgrades, electrical upgrades, re-stucco/paint, and mature tree replacement.
1.18 “GCCCD” means the Grossmont-Cuyamaca Community College District, a
California community college district.
1.19 “Educational Programming” means those certain demonstration and educational
programs and activities approved by the Authority to be provided to the public by the Operator at
the Garden in accordance with the terms and conditions of this Agreement.
1.20 “Effective Date” means the first date on or after January 1, 2011 on which all of
the following events have occurred: (1) the Authority has received three (3) counterpart originals
of this Agreement executed by the authorized representative(s) of the Operator; (2) the Authority
has received a certified copy of the Operator Official Action executed by the authorized
representative(s) of the Operator; (3) this Agreement has been approved by the governing board
of the Authority; (4) this Agreement has been signed by the authorized representative(s) of the
Authority and a fully signed original of this Agreement has been delivered to the Operator by the
Authority.
1.21 “Environmental Law” means any Law regarding any of the following at, in, under,
above, or upon the Garden: (a) air, environmental, ground water, or soil conditions; or (b) clean-
up, control, disposal, generation, storage, release, transportation, use of, or liability or standards
of conduct concerning, Hazardous Substances.
1.22 “Expiration Date” means the date when this Agreement terminates or expires in
accordance with its terms, whether on the Scheduled Expiration Date, by the Authority’s exercise
of remedies for an Event of Default, termination of the License Agreement, or otherwise,
whichever is earlier.
1.23 “FF&E” means all movable furniture, furnishings, equipment, and personal
property that may be removed without material damage to the Garden and without adversely
affecting: (a) the structural integrity of the Garden Improvements; (b) any electrical, plumbing,
mechanical, or other system of the Garden; (c) the present or future operation of any such system;
(d) the present or future provision of any utility service to the Garden; or (e) the elements of any
exhibit within the Garden. FF&E includes items such as furniture, movable equipment,
telephone, telecommunications and facsimile transmission equipment, point of sale equipment,
televisions, radios, network racks, and computer systems and peripherals.
60621.00001\30173836.430173836.6 4
1.24 “Garden” is defined in Recital A to this Agreement.
1.25 “Garden Endowment Fund” means a non-wasting investment fund held by The
San Diego Foundation or its successor with bi-annual payments of interest paid to Operator for
maintenance of The Garden.
1.26 “Garden Expenses” means all costs of operating and maintaining the Garden
pursuant to the terms and conditions of this Agreement incurred after the Effective Date.
1.27 “Garden Improvements” means those certain improvements in existence at the
Garden as of the Effective Date and all improvements to or located at the Garden from time to
time after the Effective Date.
1.28 “Garden Maintenance Standards” means the standards, specifications, protocols
and conditions for maintenance of the Garden.
1.29 “Government” means each and every governmental agency, authority, bureau,
department, quasi-governmental body, or other entity or instrumentality having or claiming
jurisdiction over the Garden (or any activity this Agreement requires or allows), including the
United States government, the State of California, the County and their subdivisions and
Municipalities, including the Authority and all other applicable governmental agencies,
authorities, commissions, boards, department and subdivisions thereof.
1.30 “Group Function” means use by a Third Person of the Garden for a private event.
1.31 “Hazardous Substance” includes flammable substances, explosives, radioactive
materials, asbestos, asbestos-containing materials, polychlorinated biphenyls, chemicals known to
cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, medical
wastes, toxic substances or related materials, explosives, petroleum and petroleum products, and
any ‘‘hazardous” or “toxic” material, substance or waste that is defined by those or similar terms
or is regulated as such under any Law, including any material, substance or waste that is: (i)
defined as a “hazardous substance” under Section 311 of the Water Pollution Control Act
(33U.S.C. § 1317), as amended; (ii) substances designated as “hazardous substances” pursuant to
3 3.U.S.C. § 1321; (iii) defined as a “hazardous waste” under Section 1004 of the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., as amended; (iv) defined as a
“hazardous substance” or “hazardous waste” under Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by the
Superfund Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq. or any so-called “superfund” or
“super lien” law; (v) defined as a “pollutant” or “contaminant” under 42 U.S.C.A. § 960 1(33);
(vi) defined as “hazardous waste” under 40 C.F.R. Part 260; (vii) defined as a “hazardous
chemical” under 29 C.F.R. Part 1910; any matter within the definition of “hazardous substance”
set forth in 15 U.S.C. § 1262; (viii) any matter, waste or substance regulated under the Toxic
Substances Control Act (“TSCA’’) (15 U.S.C. Sections 2601 , et seq.); any matter, waste or
substance regulated under the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801,
et seq.; any matter, waste or substance regulated under the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States Department of
Transportation (DOT) Table (49 CFR 172.101], or designated by the EPA, or any successor
authority, as a hazardous substance [40 CFR Part 302]; and those substances defined as
“hazardous waste” in Section 25117 of the California Health and Safety Code or, as a “hazardous
60621.00001\30173836.430173836.6 5
substance” in Section 25316 of the California Health and Safety Code; (ix) subject to any other
Law regulating, relating to or imposing obligations, liability or standards of conduct concerning
protection of human health, plant life, animal life, natural resources, property or the enjoyment
of life or property free from the presence in the environment of any solid, liquid, gas, odor or any
form of energy from whatever source; or (x) other substances, materials, and wastes that are, or
become, regulated or classified as hazardous or toxic under federal, state, or local laws or
regulations and in the regulations adopted pursuant to said laws, and shall also include manure,
asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum
products.
1.32 “Hazardous Substance Discharge” means any deposit, discharge, generation,
release, or spill of a Hazardous Substance that occurs at or from the Garden, or into the Garden,
or that arises at any time from the use or operation of the Garden or any activities conducted at the
Garden or any adjacent or nearby real property, or resulting from seepage, leakage, or other
transmission of Hazardous Substances from other real property to the Garden, whether or not
caused by a Party to this Agreement and whether occurring before or after the Effective Date.
1.33 “Indemnify” means, where this Agreement states that the Parties shall
“indemnify” each other from, against, or for a particular matter, that the Parties shall indemnify
the other and defend and hold each other harmless from and against any and all loss, claims,
liability, penalties, judgments, damages, and other injury, detriment, or expense that each Party
suffers or incurs: (a) from, as a result of, or on account of the particular matter; or (b) in enforcing
the other Party’s indemnity obligation.
1.34 “Law” means all laws, ordinances, requirements, orders, proclamations, directives,
rules, and regulations of any Government affecting the Garden or this Agreement in any way,
including any use, maintenance, taxation, operation, or occupancy of, or environmental conditions
affecting the Garden or otherwise relating to this Agreement or any Party’s rights or remedies
under this Agreement, or any Transfer of any of the foregoing, whether in force on the Effective
Date or passed, enacted, or imposed at some later time, subject in all cases, however, to any
applicable waiver, variance, or exemption.
1.35 “Legal Costs” of any Person means all reasonable costs and expenses such Person
incurs in any legal proceeding (or other matter for which such Person is entitled to be reimbursed
for its Legal Costs), including reasonable attorneys’ fees, court costs and expenses.
1.36 “Liability Insurance” means commercial general liability insurance against claims
for personal injury, death, or property damage occurring upon, in, or about the Garden or
adjoining streets or passageways, providing coverage for a combined single limit of Two Million
Dollars ($2,000,000) for any one occurrence.
1.37 “License Agreement” is defined in Recital A to this Agreement.
1.38 “Maintenance and Repair” means all routine and ordinary maintenance and
repairs to the Garden required to preserve and operate the Garden in first-class condition during
the Term, in accordance with the Garden Maintenance Standards, including any required
Renovation.
60621.00001\30173836.430173836.6 6
1.39 “Modification” means any abandonment, amendment, cancellation, discharge,
extension, modification, rejection, renewal, replacement, restatement, substitution, supplement,
surrender, termination, or waiver of a specified agreement or document, or of any of its terms or
provisions, or the acceptance of any cancellation, rejection, surrender, or termination of such
agreement, document, or terms.
1.40 “Modify” means agree to, cause, make, or permit any Modification.
1.41 “Monetary Default” means the Operator’s failure to pay or deposit any money
(including insurance premiums) when and as this Agreement requires.
1.42 “Non-Monetary Default” means the Operator’s: (a) failure to comply with any
affiliate or negative covenant or obligation in this Agreement, except a Monetary Default; or
(b) breach of any representation or warranty (as of the date made or deemed made).
1.43 “Notice” means any consent, demand, designation, election, notice, or request
relating to this Agreement, including any Notice of Default.
1.44 “Notify” means give a Notice.
1.45 “Notice of Default” means any Notice claiming or giving Notice of a Default or
alleged Default.
1.46 “Operating Inventory” means consumable items used or held in storage for use in
the operation of the Garden, including bathroom supplies, paper towels, cleaning materials,
supplies, gardening supplies and equipment and other similar items.
1.47 “Operator” means the Friends of the Water Conservation Garden, a California
nonprofit public benefit corporation.
1.48 “Operator Official Action” means the official action of the Operator’s governing
body authorizing the Operator’s entry into and performance of this Agreement, in substantially
the form attached to this Agreement as Exhibit “‘B,” signed by the authorized representative(s) of
the Operator.
1.49 “Operator Parties” means, collectively, the Operator, its directors, officers,
employees, agents and legal representatives.
1.50 “Operator Party” means, individually, the Operator and each of its directors,
officers, employees, agents and legal representatives.
1.51 “Parties” means, collectively, the Authority and the Operator.
1.52 “Party” means, individually, either the Authority or the Operator, as applicable.
1.53 “Person” means any association, corporation, Government, individual, joint
venture, joint-stock company, limited liability company, partnership, trust, unincorporated
organization or other entity of any kind.
60621.00001\30173836.430173836.6 7
1.54 “Prohibited Lien” means any mechanic’s, vendor’s, laborer’s, or material supplier’s
statutory lien or other similar lien arising from work, labor, services, equipment, or materials
supplied, or claimed to have been supplied, to the Operator (or anyone claiming through the
Operator).
1.55 “Property Insurance” means insurance providing coverage against loss, damage, or
destruction of the Garden and all Garden Improvements by fire and other hazards encompassed
under the broadest form of property insurance coverage then customarily used for like properties
in the County (except earthquake or war risk) from time to time during the Term, in an amount
equal to 100% of the replacement value (without deduction for depreciation) of all of the Garden
Improvements (excluding excavations and foundations) and in any event sufficient to avoid co-
insurance, with “ordinance or law” coverage. Such insurance may contain a deductible clause not
exceeding Five Thousand Dollars ($5,000).To the extent customary for like properties in the
County at the time, such insurance shall include coverage for earthquake; coverage for explosion
of steam and pressure boilers and similar apparatus located at the Garden; coverage for terrorism;
an “increased cost of Construction” endorsement; and an endorsement covering demolition and
cost of debris removal.
1.56 “Property Insurance Proceeds” means net proceeds (after reasonable costs of
adjustment and collection, including Legal Costs) of Property Insurance, when and as received by
the Authority or the Operator.
1.57 “Renovation” means the replacement, major repair, renewal or reconstruction of
all or any portion of the Garden Improvements, including building roofs, slabs, foundations or
walls; heating, ventilation, air conditioning, plumbing, sewer, utility, irrigation or drainage
systems; lighting; paved areas, including circulation walkways; signage, windows, awnings, patio
covers and exterior facade components and coverings.
1.58 “Restoration” means, after a Casualty, the alteration, clearing, rebuilding,
reconstruction, repair, replacement, restoration and safeguarding of the damaged or remaining
Garden Improvements, substantially consistent with their condition before the Casualty, subject to
any changes in Law that would limit any such activities.
1.59 “Restoration Funds” means any Property Insurance Proceeds (and deposits by the
Operator) to be applied to Restoration.
1.60 “Restore” means accomplish a Restoration.
1.61 “Scheduled Expiration Date” means 11:59 p.m. on June 30, 2023.
1.62 “Substantial Casualty” means a Casualty that: (a) renders 40% (forty percent) or
more of the Garden not capable of being used or occupied for more than one hundred eighty (180)
days; (b) requires Restoration whose cost the Authority reasonably estimates in writing would
exceed Two Hundred Thousand Dollars ($200,000); or (c) pursuant to Law, prevents the Garden
from being Restored to substantially the same bulk, and for the same use(s), as before the
Casualty.
1.63 “Term” is defined in Section 4.
60621.00001\30173836.430173836.6 8
1.64 “Third Person” means any Person that is not a Party or an elected official, officer,
director, manager, shareholder, member, principal, partner, employee or agent of a Party.
1.65 “Unavoidable Delay” means delay in performing any obligation under this
Agreement, except payment of money, arising from or on account of any cause whatsoever beyond
the obligor’s reasonable control, despite such obligor’s reasonable diligent efforts, including
industry-wide strikes, labor troubles or other union activities, the obligor ‘s inability to obtain
required labor or materials after commercially reasonable efforts to do so, litigation (unless caused
by the obligor), Casualty, accidents, Laws, governmental preemption, war, or riots. Unavoidable
Delay shall exclude delay caused by the obligor’s financial condition, illiquidity, or insolvency.
Any Party claiming Unavoidable Delay shall Notify the other Party: (a) within ten (1 0) days after
the claiming Party knows of any such Unavoidable Delay; and (b) within ten (10) days after such
Unavoidable Delay ceases to exist. To be effective, any such Notice must describe the
Unavoidable Delay in reasonable detail. Where this Agreement states that performance of any
obligation is subject to Unavoidable Delay(s) or words of similar import, such Unavoidable
Delay(s) shall extend the time for such performance only by the number of days by which such
Unavoidable Delay(s) actually delayed such performance.
1.66 “Waiver of Subrogation” means a provision in, or endorsement to, any insurance
policy, by which the carrier agrees to waive rights of recovery by way of subrogation against either
Party to this Agreement for any loss such policy covers.
1.67 “Workers Compensation Insurance” means worker’s compensation insurance
complying with the provisions of California law and an employer’s liability insurance
endorsement with commercially standard limits covering all employees of the Operator, its
contractors and vendors.
2. INCORPORATION OF LICENSE AGREEMENT. This Agreement is expressly
subject to all of the terms and conditions of the License Agreement and this Agreement shall
automatically terminate on the termination of the License Agreement in its entirety. The Authority
shall have the right to modify or amend the License Agreement with the reasonable consent of the
Operator. All of the terms and conditions of the License Agreement are incorporated into this
Agreement by reference.
3. ASSUMPTION OF LICENSE OBLIGATIONS. The Operator hereby
acknowledges and assumes all obligations of the Authority under and pursuant to the terms and
conditions of the License Agreement regarding use and operation of the Garden.
4. TERM. The “Term” of this Agreement shall: (a) commence, if at all, on the Effective
Date; and (b) continue until the Scheduled Expiration Date, unless terminated sooner.
5. GARDEN OPERATION AND MAINTENANCE.
5.1 Operation and Maintenance Covenant. The Authority hereby contracts with the
Operator to maintain and operate the Garden pursuant to the terms of this Agreement, and the
Operator covenants and agrees to continuously maintain and operate the Garden pursuant to the
terms of this Agreement, throughout the entire Term.
60621.00001\30173836.430173836.6 9
5.2 Operation and Maintenance License. The Authority hereby licenses the Operator
to enter the Garden to perform Maintenance and Repair and to operate the Garden as provided in
this Agreement, without further consent or approval from the Authority, except as otherwise
provided in this Agreement.
5.3 Permits, Licenses, Etc. The Operator shall, for the full Term, at the Operator’s
sole cost and expense, maintain all franchises, permits, contractual arrangements, licenses, and
registrations necessary for the Operator to conduct all operations, Maintenance and Repair,
Educational Programming and other activities relating to the Garden to be undertaken by the
Operator pursuant to this Agreement.
5.4 Abandonment. The Operator shall not abandon or surrender the operation of all or
any part of the Garden during the Term, except as otherwise expressly provided in Section 14 or
Section 17.
5.5 General Operational Responsibilities. The Operator shall have the following
described general responsibilities regarding operation of the Garden, in which the Operator shall
perform at Operator’s sole expense:
5.5.1 enter into and pay any costs associated with contracts for the furnishing of
utilities, maintenance, telecommunications, repair and other services to the Garden;
5.5.2 incur and pay such expenses as shall be reasonably necessary for the proper
operation of the Garden;
5.5.3 maintain a level of Operating Inventory reasonably appropriate for
supplying the needs of the Garden and its users;
5.5.4 apply for, obtain and maintain all licenses and permits required of the
Operator in connection with the operation of the Garden. The Authority shall reasonably
cooperate with the Operator in the application for, obtaining and maintenance of such licenses
and permits; provided that such cooperation by the Authority is legally permitted and does not
result in any direct or indirect cost to the Authority;
5.5.5 exercise reasonable efforts to do, or cause to be done, all acts in and about
the Garden as shall be reasonably necessary to comply with any applicable insurance policies or
Law;
5.5.6 maintain FF&E and purchase new FF&E as necessary to perform
Maintenance and Repair and operate the Garden, including replacing worn out, damaged,
destroyed, lost or stolen FF&E;
5.5.7 in accordance, as applicable, with defense and indemnification rights
contained in contracts of insurance procured and maintained by the Operator, defend and settle
claims, lawsuits and demands relating to the Garden and retain legal counsel (and pay legal fees
and costs) who, under the direction of the Operator or the insurance carrier, will defend any claims
or actions brought against the Operator Parties relating to the Garden and will institute and defend
any and all legal actions or proceedings as shall be reasonably necessary to collect charges, fees or
other income for the Garden, or to cancel or terminate any license, vendor or concession
agreement or other contract on the grounds of default. The Operator shall notify the Authority of any
60621.00001\30173836.430173836.6 10
claims or lawsuits relating to the Garden on a timely basis. Legal counsel to the Operator’s
insurance carrier that is providing a defense to the Authority Parties shall be deemed satisfactory
to the Authority, subject to any conflict of interest or incompetency of such legal counsel; and
5.5.8 hire, train, and supervise all employees necessary for operation of the
Garden, including providing Educational Programming to the public;
5.5.9 make reasonable good faith marketing and outreach efforts to market the
Garden and Educational Programming to the public, including maintenance of the current website
marketing the Garden;
5.5.10 establish accounting and payroll procedures and functions for the Garden;
and
5.5.11 continue to operate the Garden on the days and at hours consistent with the
Authority’s practices as of the Effective Date, or greater, subject to closure due to inclement
weather, Casualty, or Unavoidable Delay.
5.6 Maintenance and Repair: Except to the extent that this Agreement otherwise
expressly provides or allows, the Operator shall, during the Term, keep and maintain the Garden
in good order, condition, and repair, at Operator’s sole cost and expense, subject to Casualty,
reasonable wear and tear, and any other condition that this Agreement does not require the
Operator to repair or Restore. The Operator’s obligation to maintain the Garden includes the
obligation to make all repairs and Restorations that the Garden may require (including plumbing,
heating, air conditioning, ventilating, electrical, lighting, fixtures, walls, any required Renovation,
building systems, ceilings, floors, windows, doors, plate glass, skylights, landscaping, driveways,
site improvements, curb cuts, parking lots, fences and signs located in, on or at the Garden, together
with any sidewalks and streets adjacent to the Garden) by Law, pursuant to applicable insurance
policies or pursuant to the Garden Maintenance Standards, from time to time during the Term,
whether structural or nonstructural, foreseen or unforeseen, capital or operating. The Operator shall
remove trash, snow, mud, sand and debris from the Garden and the adjoining sidewalks and
maintain them in a reasonably clean condition. Notwithstanding the foregoing and as a way of
clarification, the Parties agree to assign and share costs as set forth in Exhibit D.
5.7 Contracts and Agreements. All equipment leases, financing agreements, contracts
and agreements relating to the Garden (including without limitation contracts for utility services,
telecommunications services, Maintenance and Repair, pest control, supplies, landscaping
services, and agreements for Group Functions), entered into during the Term shall be entered into
by the Operator as the contracting party. The Operator shall not have any authority to enter into
any equipment lease, financing agreement, contract or agreement that extends beyond the Term
of this Agreement or that is secured by all or any part of the Garden or the Garden Improvements.
All contracts entered into by the Operator regarding the Garden shall automatically expire on the
Expiration Date.
5.8 No Discrimination or Segregation. Developer covenants by and for itself and all
Persons claiming under or through it that there shall be no discrimination against or segregation
of any Person or group of Persons, on account of any basis listed in subdivision (a) or (d) of Section
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision
(m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the
60621.00001\30173836.430173836.6 11
Government Code, in the use, occupancy, tenure, or enjoyment of the Garden nor shall the
Operator or any Person claiming under or through the Operator establish or permit any such
practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy, of users or vendors of the Garden.
5.9 Noise. The Operator shall not use or permit the use of the Garden in any manner
that creates or maintains any noise or sound that, when measured at any place along the boundary
line of the Garden, exceeds the applicable sound level standard established by any Government
for the Garden.
5.10 Nuisance. The Operator shall not itself and shall not allow any other Person to use
the Garden for any unlawful purpose and shall not itself and shall not allow any other Person to
perform, permit or suffer any act or omission upon or about the Garden that would result in a
nuisance or a violation of any Law, as the same may now or hereafter be in force and effect.
5.11 Signage.
5.11.1 All signs on or in the Garden will be maintained by the Operator in good
condition during the Term.
5.11.2 At the Authority’s request, the Operator will remove signs identified by the
Authority that are installed on or in the Garden by the Operator on or before the Expiration Date,
except as otherwise agreed between the Operator and the Authority, and repair and restore any
damage caused by installation or removal of such signs. All signs on or in the Garden shall comply
with all applicable Laws.
5.11.3 The Operator shall not cause or allow the display of any advertising of
alcohol, tobacco products or adult entertainment on, in or about the Garden.
5.12 Group Functions. The Operator shall be responsible for administration of Group
Functions at the Garden, including approving applications for Group Functions, entering into
Group Function agreements and charging fees for Group Functions.
5.13 Authority Activities. The Authority shall have the right to use the Garden for
Authority initiated special events that are scheduled with the prior approval of the Operator, in the
Operator’s reasonable discretion (each, an “Authority Activity”).The Garden shall be available
for each Authority Activity free of any facility rental or admission charge to the Authority.
5.14 Payment of Prevailing Wages.
5.14.1 When so required by California law, the Operator agrees that not less than
“prevailing wages,” as that term is defined in California Labor Code Sections 1770, et seq., shall
be paid by the Operator, its contractors, and any sub-contractors to all laborers employed in
connection with the Construction or installation of any improvements or Maintenance and Repair
related to the Garden. The Operator shall maintain and shall cause each of its contractors to
maintain certified payroll records, pursuant to California Labor Code Section 1776, relative to all
work performed relating to the Garden. The Authority shall have the right, but not the obligation,
to inspect and copy all of the Operator’s payroll records and the payroll records of each of the
Operator’s contractors and subcontractors relating to the Garden. The Authority shall also
have the right to exercise the remedies provided in the California Labor Code, in addition to all
60621.00001\30173836.430173836.6 12
other remedies available to the Authority at law, under contract, or in equity, in the event of a
breach or Default by the Operator of its obligations under this Section 5.14.
5.14.2 THE OPERATOR, ON BEHALF OF ITSELF, ITS SUCCESSORS, AND
ASSIGNS, WAIVES AND RELEASES THE AUTHORITY FROM ANY RIGHT OF ACTION
THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO CALIFORNIA LABOR
CODE SECTION 1781. THE OPERATOR ACKNOWLEDGES THE PROTECTIONS OF
CALIFORNIA CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND
RELEASE CONTAINED IN THIS SECTION 5.14, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
5.14.3 BY INITIALING BELOW, THE OPERATOR KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION
1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES CONTAINED IN
THIS SECTION 5.14.
5.14.4 ADDITIONALLY, THE OPERATOR SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS THE AUTHORITY, PURSUANT TO THE PROVISIONS OF
SECTION 13, AGAINST ANY CLAIMS PURSUANT TO CALIFORNIA LABOR CODE
SECTION L781 ARISING FROM THIS AGREEMENT OR THE CONSTRUCTION OR
INSTALLATION OF ANY IMPROVEMENTS OR MAINTENANCE AND REPAIR
RELATING TO THE GARDEN, UNDERTAKEN BY OR ON BEHALF OF THE
OPERATOR.
_____________
Initials of Authorized Operator Representative
5.15 Independent Contractor. The Operator shall at all times be an independent
contractor under this Agreement. Nothing contained in this Agreement shall be construed to be or
create a partnership or joint venture between the Authority and the Operator or its successors or
assigns.
5.16 Shared Resources. To the extent allowed by and consistent with Authority member
agencies rules, regulations, and policies, the Authority, through its member agencies, and Operator
shall use their best efforts to share resources and work cooperatively to advance the Garden. No
later than June 30, 2018,If necessary the Authority and Operator shall develop a policy designed
to increase cooperation in the following areas:
5.16.1 Donation of in kind services and support including donation of surplus
furniture, fixtures and equipment; and
5.16.2 Evaluation and census data collection efforts; and
5.16.3 Outreach and membership drives; and
60621.00001\30173836.430173836.6 13
5.16.4 Marketing development and efforts.
5.17 Naming Rights. The naming or renaming of the Garden, any facilities at the Garden,
or Core Exhibits shall be done by mutual consent of the Authority and the Operator.
6. OPERATOR ACCEPTANCE OF CONDITION OF GARDEN. The Operator
agrees to accept the Garden on the Effective Date in an “as-is” condition, subject to any and all
physical, legal or other faults. The Operator acknowledges that the Operator will be accepting the
Garden based upon the Operator’s own investigations of the Garden’s condition. Except as
otherwise specifically stated in this Agreement, the Operator also agrees to accept the Garden
based on the Operator’s knowledge that neither the Authority nor any agent of the Authority, has
made any representation or warranty whatsoever, express or implied, with regard to the physical
condition of the Garden or the suitability of the Garden for any particular purpose or use, including,
without limitation, any representations or warranties regarding the applicability or
non-applicability of any Law, the soil or subsoil, surface or subsurface conditions, topography,
possible Hazardous Substance contamination, fill, drainage, access to public roads, availability of
utilities, existence of underground storage tanks, applicability of or compliance with any
Environmental Laws, environmental impact report requirements or any other matter of any nature
whatsoever.
7. GARDEN EXPENSES
7.1 Operator to Pay All Garden Expenses. Except as expressly provided in Section
7.3, the Operator shall pay all Garden Expenses. The Operator shall pay and discharge, as and
when due, each and every item of expense, of every kind and nature whatsoever, related to or
arising from the Garden, or by reason of or in any manner connected with or arising from the
operation, management, maintenance, repair, use or any other matter affecting the Garden and
attributable to the Term. The Operator further acknowledges and agrees that the Operator will be
solely responsible for operating losses or deficits arising in the operation of the Garden during the
Term and that any such losses or deficits shall not abate any obligations of the Operator under this
Agreement.
7.2 Acknowledgment of Possessory Interest Tax. The Operator acknowledges that, if
and to the extent that this Agreement gives rise to assessment of a possessory interest tax under
Revenue and Taxation Code Section 107 or any other tax, the Operator shall be obligated to pay
such tax.
7.3 Authority Contribution and Annual Budget Process.
7.3.1 The Authority has and shall continue to make an annual financial
contribution (“Authority Contribution”) to the Operator. As of the date of this Agreement,
Authority’s Contribution for FY 2018/2019 is $484,000. The Authority’s Contribution shall
decrease annualannually, pursuant to the schedule below, until it reaches $320,000 (the “Base
Contribution”). Each subsequent fiscal year the Authority Contribution shall be the Base
Contribution.
(a) FY 2018/2019 Contribution: $484,000
(b) FY 2019/2020 Contribution: $459,800 (5% reduction)
60621.00001\30173836.430173836.6 14
(c) FY 2020/2021 Contribution $413,820 (10% reduction)
(d) FY 2021/2022 Contribution $372,440 (10% reduction
(e) FY 2022/2023 and forward annual Contribution $320,000 (14%
reduction)
7.3.2 By FY 2022/2023At least $20,000 of the Authority’s Contribution shall be
allocated as follows:to Deferred Maintenance annually.
(a) $300,000 for operations including maintenance staff, supplies and
utilities; and
(b) $20,000 for Deferred Maintenance Projects.
(c) Any additional funding provided by the Authority shall be allocated by
mutual consent of the Parties.
(a) (d) Any reallocation of the Base Contribution shall be by mutual
consent of the Parties.
7.3.3 On or before each May 15 during the Term, Operator shall prepare
and submit to Authority for the Authority’s information an annual operating budget for the Garden
for the fiscal year beginning on the immediately following July 1 showing, at a minimum,
projected income from Garden operations for such fiscal year (including the specific amounts of
fees or charges to be assessed for Garden use during such fiscal year), projected Operator
fundraising revenue for Garden Expenses for such calendar year and the projected amount of
Garden Expenses for such fiscal year, each on a semi- annual and annual basis. The proposed
annual budget shall show assumptions and anticipated significant events during the subject fiscal
year. Within thirty (30) calendar days following the Authority’s receipt of the proposed annual
budget for the Garden for a particular fiscal year, Authority shall provide any comments on the
proposed annual budget for Operator’s consideration.
7.4 Fundraising. The Operator shall at all times during the term maintain its non-
profit status with both the federal government of the United States and the government of the
State of California. The Operator shall at all times during the Term make good faith fundraising
efforts for the collection of charitable donations of funds from Persons other than the Authority
to pay Garden Expenses in accordance with the then current annual budget for the Garden
approvedreviewed by the Authority in accordance with Section 7.3.
7.5 Utilities. The Operator shall arrange and pay for all fuel, gas, light, power, water,
sewage, garbage disposal, telephone and other utility charges, and the expenses of installation,
maintenance, use, and service in connection with the foregoing, for the Garden during the Term.
The Authority shall have absolutely no liability or responsibility for any utilities or other
services for the Garden during the Term. Notwithstanding the foregoing, one half of all utility
costs shall be paid from the Authority contribution as set forth in Section 7.3.
7.6 Garden Endowment Contribution. The Parties agree that with the Authority
Contribution decreasing annually until reaching the Base Contribution in 2022/2023, the
Operator will need to increase fundraising and endowment growth efforts. The Operator shall
60621.00001\30173836.430173836.6 15
commence in FY 2019/2020 depositing five percent (5%) of revenue received from corporate
membership funds, overall sales onsite and online, and unrestricted donations into the Garden
Endowment Fund. In FY 2021/2022, the Parties shall conduct a fiscal assessment of the
Garden finances to determine if the this annual endowment contribution can be increased to a
maximum of ten percent (10%) of the above identified revenues. Any increase shall be at a
mutually agreed upon amount.
8. RECORDS, REPORTS AND AUDITS
8.1 Sales Recording and Records. The Operator shall record at the time of sale, in the
presence of the customer, receipts from sales or other transactions, whether cash or credit, in a
cash register or registers, or a point of sale terminal or terminals, having a tape that accumulates
and consecutively numbers all transactions. A receipt from any transaction showing the correct
amount of purchase shall be offered to the customer at the time of any transaction, including any
cash sale. Transactions not ordinarily recorded in a cash register or point of sale terminal shall be
noted on and kept in a ledger format.
8.2 Retention of Books and Records. The Operator shall, for a period of five (5)
years following the end of the Term, keep and maintain, safe and intact, all of the records, books
and accounts required to be maintained by the Operator regarding the Garden pursuant to this
Agreement, and shall from time to time, upon request, make these records available to the
Authority, the Authority’s auditor, representative or agent for examination at any reasonable time,
on ten (10) calendar days advance Notice. The Authority shall also have the right to make abstracts
from the records or make copies of any or all of the records. In addition, on request of the Authority
or the Authority’s representative, the Operator shall furnish copies of the Operator’s State of
California and local sales and use tax returns.
8.3 Annual Update to Strategic Plan. Annually, Operator will review the Strategic Plan
with the Authority.
8.4 Operator and Annual Reports.
8.4.1 Operator shall provide to each Authority member agency Board no later
than March 15, June 15, September 15, and December 15 of each year, in writing, or in person if
requested by the Authority member agency Board, a quarterly report which shall address:
(a) Financials: Financial reporting will include summary of fundraising
efforts, educational income, grants and earned revenue and expenses.
(b) Attendance: Attendance through turnstiles, classes, field trips,
assemblies and outreach.
(c) Garden Renewal: Update on renewal efforts of Deferred
Maintenance Projects and continued maintenance of Core Exhibits.
(d) Exhibits: Consultation regarding any new exhibits over $100,000 or
major overhaul of Core Exhibits consistent with Section 10 below.
60621.00001\30173836.430173836.6 16
8.4.2 By December 15 each year, Operator shall provide to each Authority
member agency Board in writing, or in person if requested by the Authority member agency Board,
the Operator’s Annual Report and updates to the Strategic Plan.
8.5 Communication. To facilitate open, effective, and efficient communication the
Parties shall utilize the following communication process:
8.5.1 Member agencies shall communicate to and through the Authority Board;
8.5.2 Authority may provide direction to the Executive Director regarding the
Core Exhibits and the Section 8.3 Reports. The Authority shall not provide direction to the
Executive Director regarding day to day operational issues;
8.5.3 Authority and Operator shall share information regularly, including holding
not less than one joint meeting annually. Authority may provide direction to the Operator regarding
Core Exhibits and the Section 8.3 Reports;
8.5.4 The Operator and Executive Director shall share information regularly. The
Operator Board may provide direction to the Executive Director regarding policy and operational
issues;
8.5.5 The Executive Director shall be responsible for all communication with
Garden staff.
9. LEGAL COMPLIANCE. The Operator shall during the Term, at the Operator’s
sole cost and expense, in all material respects: (a) comply with all Laws; and (b) procure and
comply with all Approvals required by Law.
10. ALTERATIONS TO GARDEN. Operator shall not do any of the following without the
prior written approval of Authority: (a) construct any new buildings or exhibits within the Garden
with a value in excess of One Hundred Thousand Dollars ($100,000.00);(b)remove any
exhibits; or (c) construct an exhibit so significant as to change the focus or purpose of the Core
Exhibit. Operator may make new plantings, modify existing exhibits or maintain existing
buildings and exhibits as reasonably required or desirable in the normal operation of the Garden
in accordance with its obligations under this Agreement, without any further consent of Authority.
11. PROHIBITED LIENS
11.1 Operator’s Covenant. If a Prohibited Lien is filed, then the Operator shall, within
fifteen (15) days after receiving notice of such filing, cause such Prohibited Lien to be released. If
the Authority receives notice of any such filing, then the Authority shall promptly Notify the
Operator.
11.2 Protection of the Authority. NOTICE IS HEREBY GIVEN THAT THE
AUTHORITY SHALL NOT BE LIABLE FOR ANY LABOR OR MATERIALS FURNISHED
OR TO BE FURNISHED TO THE OPERATOR UPON CREDIT AND THAT NO
MECHANIC’S OR OTHER LIEN FOR ANY SUCH LABOR OR MATERIALS SHALL
ATTACH TO OR AFFECT THE FEE ESTATE. NOTHING IN THIS AGREEMENT SHALL
BE DEEMED OR CONSTRUED IN ANY WAY TO CONSTITUTE THE AUTHORITY’S
CONSENT OR REQUEST, EXPRESS OR IMPLIED, BY INFERENCE OR OTHERWISE, TO
60621.00001\30173836.430173836.6 17
ANY CONTRACTOR, SUBCONTRACTOR, LABORER, EQUIPMENT OR MATERIAL
SUPPLIER FOR THE PERFORMANCE OF ANY LABOR OR THE FURNISHING OF ANY
MATERIALS OR EQUIPMENT, NOR AS GIVING THE OPERATOR ANY RIGHT, POWER
OR AUTHORITY TO CONTRACT FOR, OR PERMIT THE RENDERING OF, ANY
SERVICES, OR THE FURNISHING OF ANY MATERIALS OR EQUIPMENT THAT WOULD
GIVE RISE TO THE FILING OF ANY LIENS AGAINST THE FEE ESTATE. THE
OPERATOR SHALL INDEMNIFY THE AUTHORITY AGAINST ANY ACTION
UNDERTAKEN BY THE OPERATOR OR ANYONE CLAIMING THROUGH THE
OPERATOR, AND AGAINST ALL PROHIBITED LIENS, PURSUANT TO SECTION 13.
11.3 Garden Not Subject to Mechanic’s Liens. The Garden is owned by the GCCCD,
which is a public entity, and as a result, the Garden is not subject to the imposition of mechanic’s
liens. The Operator agrees to notify, in writing, each provider of labor, material or services on or
to the Garden of such fact and that neither the GCCCD, the Authority nor the Garden shall be
responsible for payment of any claims by any such providers of labor, material or services. The
Authority shall have the right at all reasonable times to post and keep posted on the Garden any
notices that the Authority may deem necessary for the protection of the Authority or the Garden
from mechanic’s liens or other claims. The Operator shall give the Authority, at least, ten (10)
calendar days prior Notice of the commencement of any work on the Garden with a reasonably
anticipated cost exceeding Ten Thousand Dollars ($10,000) and that could otherwise give rise to
a mechanic’s lien or other similar claim or lien, but for the Authority’s ownership of the Garden,
to enable the Authority to post any notices that the Authority may deem appropriate.
12. HAZARDOUS SUBSTANCES
12.1 Restrictions. The Operator shall not cause or permit to occur on, under or at the
Garden during the Term: (a) any violation of any Environmental Law; or (b) the use, generation,
release, manufacture, refining, production, processing, storage, or disposal of any Hazardous
Substance, or transportation to or from the Garden of any Hazardous Substance, unless both:
(i) reasonably necessary and customary to operate and maintain the Garden for uses this
Agreement permits; and (ii) in compliance with all Environmental Law.
12.2 Compliance; Clean-Up. The Operator shall, at the Operator’s sole expense:
(a) comply with all Environmental Laws applicable to the Garden and, to the extent Environmental
Law requires, clean up any Hazardous Substance Discharge; (b) make all submissions to, deliver
all information required by, and otherwise fully comply with all requirements of any Government
under Environmental Law; (c) if any Government requires any clean-up plan or clean-up because
of a Hazardous Substances Discharge, prepare and submit the required plans and all related bonds
and other financial assurances; (d) promptly and diligently carry out all such clean-up plans; and
(e) Indemnify the Authority Parties against any Hazardous Substances Discharge or violation of
Environmental Law, in accordance with Section 13.
13. INDEMNIFICATION; LIMIT ON LIABILITY OF AUTHORITY
13.1 Operator Indemnification of Authority Parties. The Operator shall Indemnify
the Authority Parties against any: (a) wrongful act, wrongful omission, or negligence of the
Operator (and anyone claiming by or through the Operator) or its or their shareholders, directors,
officers, elected officials, partners, attorneys, agents or employees; (b) breach or Default by the
Operator under this Agreement; or (c) breach of any representation or warranty the Operator makes
60621.00001\30173836.430173836.6 18
in this Agreement; (d) any Application made at the Operator’s request; (e) use, occupancy
management or operation of the Garden; (f) any agreements that the Operator (or anyone claiming
through the Operator) makes regarding the Garden; (g) the condition of the Garden or any street,
curb or sidewalk adjoining the Garden, or of any vaults, tunnels, passageways or space under,
adjoining or appurtenant to the Garden; and (h) any accident, injury or damage whatsoever caused
to any Person in or on the Garden or upon or under the sidewalks adjoining the Garden.
13.2 Authority Indemnification of Operator. The Authority shall Indemnify the
Operator against any: (a) wrongful act, wrongful omission, or negligence of the Authority (and
anyone claiming by or through the Authority) or its or their shareholders, directors, officers,
elected officials, partners, attorneys, agents or employees; (b) breach or Default by the
Authority under this Agreement; or (c) breach of any representation or warranty the Authority
makes in this Agreement; (d) any Application made at the Authority’s request; and (e) any
agreements that the Authority (or anyone claiming through the Authority) makes regarding the
Garden.
13.3 Limitation on Liability of the Authority. During the Term: (a) the Operator is and
shall be responsible for operation of the Garden; and (b) the Authority shall not be liable for
any injury or damage to any property (of the Operator or any other Person) or to any Person
occurring on or about the Garden, except to the extent caused by the Authority’s intentional or
negligent act or omission. Provisions of this Agreement or the License Agreement regarding the
Authority’s rights or obligations with respect to the Garden shall not impose upon the Authority
any liability to Third Persons. Nothing in this Agreement shall be construed to exculpate, relieve,
or Indemnify the Authority from or against any liability of the Authority: (i) to Third Persons
existing on or before the Effective Date; or (ii) arising from the Authority’s wrongful intentional
act or negligence.
13.4 Strict Liability. The indemnification obligations of the Operator under this
Agreement shall apply regardless of whether liability without fault or strict liability is imposed or
sought to be imposed on one or more of the Authority Parties.
13.5 Independent of Insurance Obligations. The Operator’s indemnification
obligations under this Agreement shall not be construed or interpreted as in any way restricting,
limiting, or modifying the Operator’s insurance or other obligations under this Agreement and
is independent of the Operator’s insurance and other obligations under this Agreement. The
Operator’s compliance with its insurance obligations and other obligations under this Agreement
shall not in any way restrict, limit, or modify the Operator’s indemnification obligations under this
Agreement and are independent of the Operator’s indemnification and other obligations under
this Agreement.
13.6 Survival of Indemnification and Defense Obligations. The indemnification and
defense obligations of the Operator under this Agreement shall survive the expiration or earlier
termination of this Agreement, until all claims against any of the Authority Parties involving any
of the indemnified matters are fully, finally, and absolutely and completely barred by the
applicable statutes of limitations.
14. INSURANCE
60621.00001\30173836.430173836.6 19
14.1 Operator to Insure. The Operator shall, during the Term, maintain the following
insurance (or its then reasonably available equivalent): (a) Property Insurance; (b) Liability
Insurance; (c) Automobile Liability Insurance; (d) Worker ‘s Compensation Insurance; and (e)
Director and Officers Insurance.
14.2 Nature of Insurance Program. All Property Insurance and Liability Insurance
policies this Agreement requires will be procured by the Operator through GCCCD or otherwise
shall be issued by carriers that: (a) are listed in the then current “Best’s Key Rating Guide-
Property/Casualty-United States & Canada” publication (or its equivalent, if such publication
ceases to be published) with a minimum financial strength rating and a minimum financial size
category equivalent to that of GCCCD; and (b) are admitted to do business in the State by the
State Department of Insurance. The Operator may provide any Property Insurance or Liability
Insurance coverage under a “blanket” or “umbrella” insurance policy, provided that: (i) such
policy specifies the amount(s) of the total insurance allocated to the Garden, which amount(s)
shall, when combined with the underlying policy liability limits, equal or exceed the amount(s)
required by this Agreement and shall not be reduced for claims made for other properties; and (ii)
such policy otherwise complies with this Agreement.
14.3 Policy Requirements and Endorsements. All insurance policies this Agreement
requires shall contain (by endorsement or other policy provision) the following provisions:
14.3.1 Insured. Liability Insurance policies shall name both the Authority and the
GCCCD as an “additional insured.” Property Insurance policies shall name both the Authority
and the GCCCD as loss payee, as their respective interests may appear. Notwithstanding anything
to the contrary in this Section 14.3.1, all Property Insurance Proceeds shall be paid and applied as
this Agreement provides.
14.3.2 Primary Coverage. All policies shall be written as primary policies, not
contributing to or in excess of any coverage that the Authority may carry.
14.3.3 Contractual Liability. Liability Insurance policies shall contain contractual
liability coverage, for the Operator’s indemnity obligations under this Agreement. The
Operator’s obtaining or failure to obtain such contractual liability coverage shall not relieve the
Operator from nor satisfy any indemnity obligation of the Operator under this Agreement.
14.3.4 Notice to the Authority. Each insurance policy shall require the carrier to
give the Authority no less than thirty (30) calendar days’ advance written notice of any
cancellation, non-renewal, material change in coverage or available limits of liability under any
insurance policy required by this Agreement; provided, however, only ten (10) calendar days’
advance written notice shall be required for cancellation of any insurance policy for non- payment
of the premium.
14.4 Deliveries to the Authority. On the Effective Date, and no later than twenty (20)
days before any Liability Insurance, Automobile Liability Insurance or Property Insurance expires,
is cancelled or its liability limits are materially reduced or exhausted, the Operator shall deliver to
the Authority policies of insurance evidencing the Operator ‘s maintenance of all Liability
Insurance, Automobile Liability Insurance and Property Insurance this Agreement requires, in
each case providing coverage for, at least, twelve (12) months from the date delivered.
60621.00001\30173836.430173836.6 20
14.5 Waiver of Certain Claims. Policies of Liability Insurance or Property Insurance
shall include a Waiver of Subrogation, by endorsement or other policy provision. The Parties
release each other, and their respective authorized representatives, from any claims for damage to
any Person or property that are caused by or result from risks insured against under such insurance
policies.
14.6 No Representation. Neither Party makes any representation that the limits, scope,
nor are forms of insurance coverage this Agreement requires adequate or sufficient.
15. CASUALTY
15.1 Notice. If either Party becomes aware of any Casualty, such Party shall promptly
Notify the other Party.
15.2 Effect of Casualty. If any Casualty occurs, then: (a) this Agreement shall not
terminate or be impaired; and (b) the Operator shall Restore with reasonable promptness
regardless of cost. If, however, the Casualty is a Substantial Casualty, then the Operator may, by
Notice to the Authority, given within thirty (30) days after the occurrence of the Casualty,
terminate this Agreement effective sixty (60) days after such Notice, provided that the Operator
assigns to the Authority all of the Operator’s right, title and interest in and to any Property
Insurance Proceeds (and rights thereto) arising from the Casualty.
15.3 Obligation to Restore. If the Operator does not timely elect to terminate this
Agreement or is required to Restore the Garden Improvements pursuant to this Agreement, the
Operator shall immediately deposit with the Authority either an amount equal to the deficiency in
insurance proceeds actually available for Restoration and the cost of Restoration, or security
reasonably satisfactory to the Authority for such deficiency. If the Operator is required or elects
to Restore, the Operator shall, as soon as is reasonable under the circumstances, commence and
continue thereafter diligently and without interruption, at the Operator’s sole cost and expense (but
the Operator may use any insurance proceeds available for such purpose), Restore the Garden
Improvements as nearly as possible to the condition they were in immediately prior to the Casualty,
or with such changes or alterations as may be approved by the Authority.
15.4 Adjustment of Claims; Use of Property Insurance Proceeds. Unless the Operator
has validly elected a Casualty Termination, the Operator shall have the sole right and authority to
adjust any insurance claim. Property Insurance Proceeds shall be disbursed to the Operator, to be
held in trust for the benefit of the Authority, and released by the Operator in installments based on
progress of completion of work of Restoration.
16. ASSIGNMENT. The Operator may not assign this Agreement, without the Authority’s
prior written consent, which may be given or withheld in the Authority’s sole and absolute
discretion. Any approved assignee of the Operator shall assume all obligations and liabilities of
the Operator under this Agreement in a writing reasonably satisfactory to the Authority, on the
effective date of any such assignment. After the Operator assigns this Agreement and the assignee
assumes the Operator’s obligations under this Agreement, in accordance with this Agreement, the
assignor shall have no obligation or liability under this Agreement, except: (a) any obligation to
hold and apply Restoration Funds held by the assignor at the date of the assignment (unless
transferred to the assignee in a form acceptable to the Authority); and (b) any unperformed
obligations that arose before the assignment (unless assumed in writing by the assignee in a form
60621.00001\30173836.430173836.6 21
acceptable to the Authority).If the Operator assigns this Agreement, then as between the Authority
and the Operator, the Operator shall be deemed to have assigned to the assignee all claims against
the Authority then existing, and the assignee shall be deemed, by assuming this Agreement, to
have assumed all liabilities and obligations of the Operator then existing or thereafter arising under
this Agreement (except as this Agreement otherwise expressly states).
17. AUTHORITY AND GCCCD ACCESS TO GARDEN. Notwithstanding anything to
the contrary in this Agreement, the Authority, its agents, representatives or designees may enter
the Garden to: (a) ascertain whether the Operator is complying with this Agreement; (b) cure the
Operator ‘s Defaults; (c) inspect the Garden; or (d) perform such tests, borings, and other analyses
as the Authority determines may be necessary or appropriate relating to (non)compliance with any
Law or possible Hazardous Substances Discharge. In addition, the GCCCD shall retain all rights
of access to the Garden reserved to it in the License Agreement. In entering the Garden, the
Authority or its designees shall not unreasonably interfere with operation of the Garden.
18. NO PROPERTY ESTATE OR INTEREST CONVEYED. Notwithstanding any
provision of this Agreement to the contrary, the Parties do not intend to convey any interest or
estate in real or personal property between them and nothing in this Agreement shall be construed
or interpreted as a grant of any interest or estate in any property, except to the extent that Operator
agrees to assignment of rights in License Agreement, which provides that property of Authority
shall go to Operator in the event of Authority dissolution. If this Agreement or any provision of
this Agreement is construed or interpreted by a court of competent jurisdiction as conveying an
estate or interest in property between the Parties (excepting FF&E on the Expiration Date), then
any Party not then in Default of this Agreement may, in such Party’s sole and absolute discretion,
terminate this Agreement, without liability to the other Party or any other person for such
termination, by delivering Notice of termination to the other Party within thirty (30) calendar days
following notice of such court determination. Without limiting the right of either Party to terminate
this Agreement, pursuant to the immediately preceding sentence, if neither Party has exercised its
contractual right to terminate this Agreement within thirty (30) calendar days following notice of
such court determination, then upon the expiration of such thirty (30) calendar day period, the
Parties’ respective rights to terminate this Agreement pursuant to this Section 18 shall be
extinguished.
19. EVENTS OF DEFAULT; REMEDIES
19.1 Definition of “Event of Default.” An “Event of Default” means the occurrence of
any one or more of the following:
19.1.1 Monetary Default. If a Monetary Default occurs and continues for ten (10)
calendar days after Notice from the Authority, specifying in reasonable detail the amount of money
not paid and the nature and calculation of each such payment.
19.1.2 Prohibited Liens. If the Operator fails to cause any Prohibited Lien to be
released within fifteen (15) calendar days after Notice from the Authority of such lien.
19.1.3 Bankruptcy or Insolvency. If the Operator ceases to do business as a going
concern, ceases to pay its debts as they become due or admits in writing that it is unable to pay its
debts as they become due, or becomes subject to any Bankruptcy Proceeding (except an
involuntary Bankruptcy Proceeding dismissed within sixty (60) calendar days after
60621.00001\30173836.430173836.6 22
commencement), or a custodian or trustee is appointed to take possession of, or an attachment,
execution or other judicial seizure is made with respect to, substantially all of the Operator’s
assets or the Operator’s interest in this Agreement (unless such appointment, attachment,
execution, or other seizure was involuntary and is contested with diligence and continuity and
vacated and discharged within sixty (60) calendar days).
19.1.4 Non-Monetary Default. If any Non-Monetary Default, other than those
addressed in Sections 19.1.2 and 19.1.3, occurs and the Operator does not cure such Non-
Monetary Default within thirty (30) calendar days after Notice from the Authority describing the
Default in reasonable detail, or, in the case of a Non-Monetary Default that cannot with
reasonable due diligence be cured within thirty (30) calendar days from such Notice, if the
Operator shall not: (i) within thirty (30) calendar days after the Authority’s Notice, advise the
Authority of the Operator’s intention to take all reasonable steps to cure such Non-
Monetary Default; (ii) duly commence such cure within such period, and then diligently prosecute
such cure to completion; and (iii)complete such cure within a reasonable time under the
circumstances.
19.2 Remedies. If an Event of Default occurs, then the Authority shall, in the
Authority’s sole discretion, have any or all of the following described remedies, all cumulative (so
exercise of one remedy shall not preclude exercise of another remedy), in addition to such other
remedies as may be available at Law or in equity or under any other terms of this Agreement. The
Authority’s remedies shall include:
19.2.1 Termination of Agreement. Either Party may initiate termination of this
Agreement if the other party fails to act in good faith under this Agreement and/or breaches any
of the terms herein. To initiate termination, either party may provide the other with a Notice of
Intent to Terminate or by any other lawful means. Within thirty (30) days of delivery and receipt
of such Notice, either party may elect for the parties to proceed to mediation with a mutually agreed
upon mediator. The cost of mediation will be equally divided by the parties. If no request for
mediation is made by either party within thirty (30) days, the Agreement shall terminate
immediately. If the parties participate in mediation and at the completion of such mediation either
party still seeks to terminate the Agreement, the Agreement shall terminate immediately. Upon
termination of the Agreement, such date of termination shall be the Expiration Date, and the
Operator shall immediately vacate the Garden. Additionally, the either Party may bring an action
to recover any amount necessary to compensate itself for all detriment proximately caused by the
other Party’s failure to perform their obligations under this Agreement.
19.2.2 Receipt of Moneys. No receipt of money by the Authority from the
Operator after Notice of Default, the Expiration Date, or the giving of any Notice of termination
of this Agreement, shall reinstate, continue, or extend this Agreement or affect any Notice
previously given to the Operator, or waive the Authority’s right to enforce payment of any amount
payable or later falling due, or the Authority’s right to enter the Garden, except as this Agreement
expressly states otherwise, it being agreed that after service of Notice of Default or Notice of
termination of this Agreement or the commencement of suit or proceedings, or after final order or
judgment, the Authority may demand, receive, and collect any moneys due or thereafter falling
due, without in any manner affecting any such Notice, proceeding, order, suit or judgment, all such
moneys collected being deemed payments on account of use of the Garden or, at the Authority’s
election, on account of the Operator’s liability to the Authority.
60621.00001\30173836.430173836.6 23
19.2.3 No Waiver. No failure by the Authority to insist upon strict performance of
any covenant, agreement, term or condition of this Agreement or to exercise any right or remedy
upon a Default, and no acceptance of full or partial payment during continuance of any such
Default, shall waive any such Default or such covenant, agreement, term or condition. No
covenant, agreement, term or condition of this Agreement to be performed or complied with by
the Operator, and no Default, shall be Modified, except by a written instrument executed by the
Authority. No waiver of any default shall modify this Agreement. Each and every covenant,
agreement, term and condition of this Agreement shall continue in full force and effect with respect
to any other then-existing or subsequent Default of such covenant, agreement, term or condition
of this Agreement.
19.2.4 Security Devices. The Authority may change the locks and other security
devices providing admittance to the Garden.
19.2.5 Damages. Subject to Section 26.2, the Authority may recover from the
Operator all damages the Authority incurs by reason of the Operator ‘s Default, including
reasonable costs of removing the Operator’s personnel or property from the Garden, and any and
all other damages legally recoverable by the Authority, and reimbursement of the Authority’s
reasonable out of pocket costs,. The Authority may recover such damages at any time after the
Operator ‘s Default, including after the Expiration Date.
19.2.6 Injunction of Breaches. Whether or not an Event of Default has occurred,
the Authority may obtain a court order enjoining the Operator from continuing any Default or from
committing any threatened Default. The Operator specifically and expressly acknowledges that
damages would not constitute an adequate remedy to the Authority for any Non-Monetary Default.
19.2.7 Continue Agreement. The Authority may, in the Authority’s sole
discretion, maintain the Operator’s right to operate the Garden pursuant to this Agreement. In
that case, this Agreement shall continue and the Authority may continue to enforce it.
19.2.8 Restoration Funds. Upon any termination of this Agreement, to the extent
that the Authority then holds any Restoration Funds, they shall be the sole property of the
Authority and may be applied solely as the Authority directs.
19.3 Authority’s Right to Cure. 30 days after a request to Operator by Authority to
cure Operator’s Default under this Agreement, the Authority, without waiving or releasing the
Operator from any obligation or Default and without waiving the Authority’s right to take such
action as this Agreement may permit as a result of such Default, may (but need not) make any
payment or take any action on behalf of the Operator to cure any Default of the Operator. The
Operator shall reimburse the Authority for an amount equal to all reasonable sums paid, and
reasonable costs and expenses incurred, by the Authority in exercising its cure rights under this
Section 19.3. Pursuant to paragraph 17, the Authority may enter the Garden to cure said Default.
19.4 Failure to Vacate. If for any reason or no reason the Operator does not vacate the
Garden (removal of all of the Operator ‘s personnel and property) on or before the Expiration Date,
then the Authority will suffer injury that is substantial, difficult, or impossible to measure
accurately. Therefore, if the Operator remains in the Garden after the Expiration Date, either by
its personnel or its property or both, for any reason or no reason, then in addition to any other rights
or remedies of the Authority, the Operator shall pay to the Authority, as liquidated damages and
60621.00001\30173836.430173836.6 24
not as a penalty, for each day during which the Operator remains in the Garden after the Expiration
Date, a sum equal to One Thousand Dollars ($1,000.00).
19.5 Survival. No entry into or onto the Garden by the Authority shall relieve the
Operator of its liabilities and obligations under this Agreement, all of which shall survive such
entry. Termination of this Agreement shall not relieve the Operator of any liabilities or obligations
of the Operator arising under this Agreement prior to the date of termination.
20. END OF TERM. Upon any Termination Date: (a) the Operator shall vacate the Garden
(removal of all of the Operator’s personnel), in the condition this Agreement requires, subject to
any Casualty that this Agreement does not require the Operator to Restore, and all Garden
Improvements and FF&E used in the operation of the Garden shall be the sole and exclusive
property of the Authority; (b) the Operator shall deliver the Garden free and clear of all claims
except claims that the Authority or any of its agents caused; (c) all unspent income or other
consideration due or becoming due for use of the Gardenassociated with unused Authority dues or
fundraised specifically for maintenance of the Core Exhibits as of the Expiration Date shall be
immediately transferred to the Authority; (d) all unspent income associated with educational
programming, weddings, third party events or funds raised to support educational program shall
remain with the Operator as of the Expiration Date; (e) all intellectual property associated with the
educational programming shall remain with the Operator as the exclusive owner thereof, including
but not limited to the Ms. Smarty Plants program; and (df) the Parties shall cooperate to achieve
an orderly transition of operation of the Garden from the Operator to the Authority or a designee
of the Authority, without interruption, including delivery of such books and records (or copies
thereof) as the Authority reasonably requires.
21. NO INTENDED THIRD PARTY BENEFICIARIES. This Agreement does not, and
shall not be deemed or construed to, confer upon or grant to any Third Person (excepting permitted
successors or assigns of the Operator or the Authority pursuant to the terms of this Agreement)
any right to claim damages or to bring any suit, action or other proceeding against either the
Authority or the Operator because of any breach of this Agreement or to enforce any term,
covenant, condition, restriction, reservation, provision or agreement contained in this Agreement.
22. NOTICES. All Notices shall be in writing and addressed to the Authority or the Operator
(and their designated copy recipients) as set forth in Exhibit “A.” Notices (including any required
copies) shall be delivered personally or by Federal Express, United Parcel Service or other
nationally or regionally recognized overnight (one business day) courier service to the addresses
set forth in Exhibit “A,” in which case they shall be deemed delivered on the date of delivery (or
when delivery has been attempted twice, as evidenced by the written report of the courier service)
to such address(es). Either Party may change its address for delivery of Notices by Notice in
compliance with this Agreement. Notice of such a change shall be effective only upon receipt.
Any Party giving a Notice may request the recipient to acknowledge receipt of such Notice. The
recipient shall promptly comply with any such request, but failure to do so shall not limit the
effectiveness of any Notice. Any attorney may give any Notice on behalf of its client.
23. NO BROKER. Each Party: (a) represents and warrants that it did not engage or deal with
any broker or finder in connection with this Agreement and no Person is entitled to any commission
or finder’s fee on account of any agreement or arrangement made by such Party; and (b) shall
indemnify the other Party against any breach of such representation.
Commented [1]: .Elyssa’s comment: All unspent income
associated with unused Authority dues, or funds raised specifically
for maintenance of the core exhibits as of the Expiration Date shall
be immediately transferred to the Authority d. All unspent income
associated with educational programming, weddings, third party
events or funds raised to support the educational programming will
remain with the Operator. E. all intellectual property associated with
the educational programming will remain with the operator as the
exclusive owner including but not limited to Ms. Smarty Plants
program.
60621.00001\30173836.430173836.6 25
24. MODIFICATION. Any Modification of this Agreement must be in writing and signed
by the Party to be bound.
25. SUCCESSORS AND ASSIGNS. This Agreement shall bind and benefit the Authority
and the Operator and their successors and assigns, but this Section 25 shall not limit or supersede
any Transfer restrictions contained in this Agreement. Nothing in this Agreement confers on any
Person (except the Authority and the Operator) any right to insist upon, or to enforce against the
Authority or the Operator, the performance or observance by either Party of its rights or obligations
under this Agreement.
26. MISCELLANEOUS
26.1 Waiver of Non-Disturbance. Notwithstanding anything to the contrary in this
Agreement, Operator expressly agrees that this Agreement shall terminate and expire in the event
that the License Agreement terminates or expires during the Term. To that end, Operator expressly
waives any claim of any right to non-disturbance upon expiration of the License Agreement.
26.2 No Consequential Damages. Whenever either Party may seek or claim damages
against the other Party (whether by reason of a breach of this Agreement by such Party, in
enforcement of any indemnity obligation, for misrepresentation or breach of warranty, or
otherwise), neither the Authority nor the Operator shall seek, nor shall there be awarded or granted
by any court, arbitrator, or other adjudicator, any speculative, consequential, collateral, special,
punitive, or indirect damages, whether such breach shall be willful, knowing, intentional,
deliberate, or otherwise. The Parties intend that any damages awarded to either Party shall be
limited to actual, direct damages sustained by the aggrieved Party. Neither Party shall be liable
for any loss of profits suffered or claimed to have been suffered by the other.
26.3 No Waiver by Silence. Failure of either Party to complain of any act or omission
on the part of the other Party shall not be deemed a waiver by the non-complaining Party of any
of its rights under this Agreement. No waiver by either Party at any time, express or implied, of
any breach of this Agreement shall waive the same such breach at another time or any other
breach.
26.4 Survival. All rights and obligations that by their nature are to be performed after
any termination of this Agreement shall survive any such termination.
26.5 Unavoidable Delay. Each Party’s obligation to perform or observe any
nonmonetary obligation under this Agreement shall be suspended during such time as such
performance or observance is prevented or delayed by Unavoidable Delay.
26.6 Authority Contract Administration. The Authority Representative shall administer
this Agreement on behalf of the Authority. Except as otherwise expressly provided in this
Agreement, the Authority Representative has the authority to approve or consent to those matters
in this Agreement requiring the Authority’s approval or consent and to make all other decisions
on behalf of the Authority, subject to the Authority Representative’s retained and reserved sole
and absolute discretion to seek approval of the Authority’s governing board of any such matter.
The Authority may revoke the authorization provided to the Authority Representative in this
Section 26.6, at any time, by Notice of such revocation to the Operator.
60621.00001\30173836.430173836.6 26
27. INTERPRETATION, EXECUTION, AND APPLICATION OF AGREEMENT
27.1 Captions. The captions of this Agreement are for convenience and reference only
and in no way affect this Agreement.
27.2 Counterparts. This Agreement may be signed in counterpart originals, each of
which shall constitute an original of this Agreement and that, collectively, shall constitute one and
the same agreement.
27.3 Entire Agreement. This Agreement contains all of the terms, covenants, conditions
and agreements between the Parties regarding the Garden. The Parties have no other
understandings or agreements, oral or written, regarding the Garden.
60621.00001\30173836.430173836.6
27.4 Governing Law. This Agreement, its interpretation and performance, the
relationship between the Parties, and any disputes arising from or relating to any of the foregoing,
shall be governed, construed, interpreted, and regulated under the laws of the State of California,
without regard to principles of conflicts or choice of laws.
27.5 Partial Invalidity. If any term or provision of this Agreement or its application to
any Person or circumstance shall to any extent be invalid or unenforceable, then the remainder of
this Agreement, or the application of such term or provision to Persons or circumstances, except
those as to which it is invalid or unenforceable, shall not be affected by such invalidity. All
remaining provisions of this Agreement shall be valid and be enforced to the fullest extent Law
allows.
27.6 Principles of Interpretation. No inference in favor of or against any Party shall be
drawn from the fact that such Party has drafted any part of this Agreement. The Parties have both
participated substantially in the negotiation, drafting, and revision of this Agreement, with advice
from counsel and other advisers of their own selection. A term defined in the singular in this
Agreement may be used in the plural, and vice versa, all in accordance with ordinary principles of
English grammar, which also govern all other language in this Agreement. The words “include”
and “including” shall be construed to be followed by the words: “without limitation.” Each
collective noun in this Agreement shall be interpreted as if followed by the words “(or any part of
it),” except where the context clearly requires otherwise. Every reference to any document,
including this Agreement, refers to such document as Modified from time to time (except any
Modification that violates this Agreement), and includes all exhibits, schedules, and riders to such
document. The word “or” includes the word “and.”
27.7 Reasonableness. Wherever this Agreement states that a Party’s approval shall be
“reasonable” or not unreasonably withheld: (a) such approval shall not be unreasonably delayed
or conditioned; (b) no withholding of approval shall be deemed reasonable, unless withheld by
Notice specifying reasonable grounds, in reasonable detail, for such withholding, and indicating
specific reasonable changes in the proposal under consideration that would make it acceptable;
and (c) if a Party grants its consent to any matter, this shall not waive its rights to require such
consent for any further or similar matter.
27.8 Time of Essence. Time is of the essence with respect to the performance of each
term, provision, covenant or agreement contained in this Agreement.
27.9 Exhibits. All of the exhibits attached to this Agreement are as follows and are
incorporated into this Agreement by reference:
Exhibit “A” =Notice Addresses
Exhibit “B” =Form of Operator Official Action
Exhibit “C” =License Agreement
Exhibit “D” = Operation and Maintenance Obligations
[Signatures on next page]
60621.00001\30173836.430173836.6
SIGNATURE PAGE TO
AMENDED AND RESTATED WATER CONSERVATION GARDEN OPERATION AGREEMENT
IN WITNESS WHEREOF, the Authority and the Operator have signed this Agreement by
and through the signatures of their authorized representatives set forth below:
AUTHORITY:
WATER CONSERVATION
AUTHORITY, a California joint powers
authority
By:
Board President
ATTEST:
By:
Board Secretary
APPROVED AS TO FORM:
Best Best & Krieger LLP
By:
Authority General Counsel
OPERATOR:
FRIENDS OF THE WATER
CONSERVATION GARDEN, a California
nonprofit public benefit corporation
By:
Name: _________________________
Title: __________________________
By:
Name: _________________________
Title: __________________________
ACKNOWLEDGEMENT AND CONSENT TO ASSIGNMENT OF RIGHTS UNDER LICENSE AGREEMENT
The undersigned hereby acknowledges and consents to the assignment of rights and
obligations by the Authority to the Operator under the License Agreement pursuant to the terms
and conditions of this Agreement.
GROSSMONT-CUYAMACA COMMUNITY
COLLEGE DISTRICT, a California
community college district:
By: _______________________________
Name: _____________________________
Title: ______________________________
60621.00001\30173836.430173836.6 A-1
Discussion Draft No. 3 September 23, 2017
EXHIBIT “A”
NOTICE ADDRESSES
Party: Notice Address: With a copy to:
Authority Water Conservation Authority
12122 Cuyamaca College Drive West
El Cajon, CA 92019
Attention: Executive Director
Best Best & Krieger LLP
655 West Broadway
15th Floor
San Diego, California 92101
Attention: Paula C.P. de Sousa
Operator Friends of Water Conservation Garden
60621.00001\30173836.430173836.6 B-1
Discussion Draft No. September 23, 2017
EXHIBIT “B
FORM OF OPERATOR OFFICIAL ACTION
[Attached behind this cover page]
60621.00001\30173836.430173836.6 B-2
RESOLUTION OF THE BOARD OF DIRECTORS OF FRIENDS OF THE WATER CONSERVATION GARDEN, A CALIFORNIA NON-PROFIT PUBLIC BENEFIT CORPORATION
At a meeting of the board of directors of Friends of the Water Conservation Garden, a California
nonprofit public benefit corporation (the “Corporation”), duly held on ____________, 20__, at which
meeting all of the directors of the Corporation were in attendance, the following resolutions were
unanimously adopted:
WHEREAS, the Corporation is about to enter into that certain Amended and Restated Water
Conservation Garden Operation Agreement with the Water Conservation Authority, a California joint
powers authority (“the Authority”), dated as of ______________, 20___ (the “Agreement”), to maintain
and operate certain real property and improvements specifically described in the Agreement (the “Garden”);
and
WHEREAS, the Board of Directors of the Corporation has reviewed the Agreement and all
documents executed or to be executed in connection with the Agreement and considers the transaction to
be in the best interest of the Corporation.
NOW, THEREFORE, BE IT RESOLVED that the Corporation execute the Agreement and all
documents previously presented to, reviewed, and approved by the Board of Directors of the Corporation.
RESOLVED, FURTHER, that the following officers of the Corporation acting alone be, and they
hereby are, authorized, empowered, and directed on behalf of the Corporation to execute and deliver the
Agreement and all other documents to be executed in connection with it, and to take all actions that may be
necessary to exercise the Corporation’s rights and perform the Corporation’s obligations under the
Agreement and any such other documents:
President
[Name]
Secretary
[Name]
The authority conferred by this Resolution shall be considered retroactive and any and all acts
authorized in this Resolution that were performed before the passage of this Resolution are hereby approved
and ratified by the Corporation. The authority conferred by this Resolution shall continue in full force and
effect until the Authority shall have received notice in writing, certified by the Secretary of the Corporation,
of the revocation of this authority by a separate resolution duly adopted by the Board of Directors of the
Corporation.
The undersigned, _______________________________, Secretary of the Corporation, certifies that
the foregoing is a true copy of the Resolution duly adopted by the Board of Directors of the Corporation at
a meeting held on ______________, 20__.
IN TESTIMONY WHEREOF, I have executed this Resolution and affixed the corporate seal of the
Corporation, as of ______________, 20__.
Date:
Name
Secretary
[Seal]
September 23, 2017
EXHIBIT “C” LICENSE AGREEMENT
[Attached behind this cover page]
LICENSE AGREEMENT FOR OPERATION OF A WATER CONSERVATION GARDEN
THIS AGREEMENT is made and entered into this First cfay of August, 2006, by and
between the GROSSMONT-CUYMAYACA COMMUNITY COLLEGE DISTRICT, on behalf of
CUYAMACA COLLEGE (hereinafter, "the District"), and the WATER CONSERVATION
GARDEN AUTHORITY, u Joint Powers Agency formed pursuant to Government Code section
6500 (hereinafter, "the Authority"), with reference to the following facts:
A. The parties have previously entered into an Agreement dated April 6, l993, for
the establishment of a Water Conservation Garden at Cuyamaca College for public education
purposes and to assist in reducing the demand for imported wnter in the San Diego region. Pursuant
to that Agreement, the Authority has operated u Water Conservation Gnrden nl Cuyamaca College
sinee 1999.
8. The parties desire to extend the term of their agreement and otherwise more clearly
set forth the relationship of the parties and the terms of operation of the Water Conservation Garden
(hereinafter referred to as "the Garden"};
NOW, THEREFORE, the parties hereby agree as follows:
l. LICENSE TO USE LAND. The District hereby grants Lo the Authority the right
to use the approximate 4.28-acre portion of the Cuyamaca College campus, commonly known ns the
existing Water Conservation Garden and located at 12122 Cuyamaca College Drive West, El Cajon,
California (more particularly described in Exhibits A and B attached hereto and incorporated by
this reference herein), for purposes of operating a water conservation demonstration garden for
public educational purposes.
2. LICENSE TO USE ADDITIONAL PARCELS OF LAND. The District hereby
grants to the Authority the right to use the approximate .20-acre portion of the Cuyarnaca College
campus, commonly known as the Future Parcel "A" located at 12122 Cuyarnaea College Drive
West, El Cajon, California (more particularly described in Exhibits A and B attached
hereto and incorporated by this reference herein), subject to the District and the Authority signing
an agreement defining the terms and conditions for the use of the future puree!. Additionally, the
District hereby grants to the Authority the right to use the approximate .37-acre portion of the
Cuyamaca College campus, commonly known as the Future Parcel "B" located at [2122
Cuyan1aca College Drive West, El Cajon, California (more particularly described in Exhibits A
and B attached hereto and incorporated by this reference herein), subject lo the District nnd the
Authority signing an agreement defining the terms and conditions for the use of the futw:e parcel.
3. TERM. The lean of this Agreement shall be from August l, 2006 to and including
July 31, 2033. This Agreement may be renewed for an additional ten-year period by mutual
agreement of the parties. This Agreement shall supersede all previous agreements between the
parties hereto, provided that it shall not supersede the Joint Powers Agreement Creating the Water
Conservation Authority.
4. OPERATION AND MAINTENANCE. The Authority shall operate the Garden
and shall make it accessible for visitation by members of the general public for a reasonable number
of hours each week. The Authority will maintain the Garden on a continuing basis at a level consistent
with its condition at the time of execution of this License Agreement. In the event that the
Authority fails to adequately maintain the Garden at such level, or fails to use and maintain the land
for a demonstration garden, the District may give written notice of default of this obligation. If the
default is not remedied within sixty (60) days, from the date such notice is delivered, the District may
then elect to terminate this Agreement without any further obligation to the Authority. Operation
and maintenance of the Garden shall be at no cost to the District, and Authority shall pay for all
required utilities.
S. INSURANCE. The District shall obtain and keep in force a policy of Commercial
General Liability Insurance, Automobile Liability Insurance and Property Insurance in amounts
acceptable to Authority insuring the District and naming the Authority as additional insured. The
District shall also obtain and keep in force a policy of Workers' Compensation Insurance covering
District’s employees.
2
Authority will obtain and keep in force Comprehensive Commercial General Liability and
Automobile Insurance, in an amount of S1,000,000 per occurrence, $1,000,000 aggregate, and
additional Property and Casualty Insurance covering the Authority and the Garden naming the
District as additional insured. The Authority shall also obtain and keep in force a policy of
Workers' Compensation Insurance covering Authority's employees.
6. INDEMNIFICATION. The District agrees to protect, save, defend and hold
harmless the Authority and its agents, officers and employees from any and all claims, liabilities,
expenses or damages of any nature, including attorneys' fees, for injury or death of any person,
or damage to property, or interference with use of property, arising out of or in any way connected
with District's use of the Garden, including negligent acts, errors or omissions or willful
misconduct by the District, District's agents, officers, or employees. The only exception to the
District's responsibility to protect, save, defend and hold harmless the Authority is for those claims
arising from the sole negligence, willful misconduct or active negligence of the Authority.
The Authority agrees to protect, save, defend and hold harmless the District and its
Governing Board members, agent,, officers and employees from any and all claims, liabilities,
expenses or damages of ,my nature, including attorneys' fees, for injury or death of any person,
damage to property, or interference with use of property, arising out of its use of the licensed
property. The only exception to the Authority's responsibility to protect, save, defend and hold
harmless the District is for those claims arising from the sole neglence, willful misconduct or active
negligence of the District.
7. APPLICATION OF HOLD HARMLESS CLAUSES. The hold harmless
provisions set forth in Section 5 shall apply to all liability regardless of whether any insurance
policies are applicable. The policy limits do not act as a limitation on the amount of
indemnification to be provided by either party.
8. ALCOHOLIC BEVERAGES. Both parties understand that California law
generally prohibits the possession or use of alcoholic beverages on a community college campus
except under certain specified conditions. The Authority agrees. that it shall not allow alcoholic
3
beverages to be brought into or consumed in the Garden, except under the conditions set forth in
Business and Professions Code section 25608. The parties recognize that legislation has been
introduced that would allow alcoholic beverages to be served in the Garden; if such legislation is
enacted into law, the parties agree to be governed by the law as amended by the legislation.
9. WATER GARDEN EMPLOYEES. The Authority shall be responsible for the
hiring, retention, discipline, and termination of the Garden employees.
1 0. DISTRICT'S RJGHT TO USE THE GARDEN. The District shall have the right
to utilize the Garden at reasonable times for District and College events and for College classes.
Prior arrangements for such use shall be made with the Executive Director of the Garden.
1I. OBLIGATIONS UPON TERMINATION. Upon expiration or termination of this
Agreement for any reason, the Authority will leave the Water Conservation Garden in its then-
current condition on the date of expiration, and any remaining improvements and equipment shall
become the property of the District.
1 2. NOTICES. All notices permitted or required under this Agreement shall be given
to the respective parties at the following address, or such other address as the respective parties
may provide in writing for this purpose:
The District:
The Authority:
Vice Chancellor, Business Services
Grossrnont-Cuyamaca Community College District 8800 Grossmont College Drive
El Cajon, California 92020
Executive Director
Water Conservation Garden
12122 Cuyamaca College Drive West
El Cajon, CA 920 \ 9
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on the
successors and assigns of the party and shall not be assigned by either party without the prior
written consent of the other party.
4
14. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of California. Any action brought to enforce the terms of this Agreement shall be brought in a state
or federal court located in the County of San Diego, State of California.
15. SEVERABILITY. If any section, subsection, sentence, clause, or phrase of this
Agreement or the application thereof to any of the parties is for any reason held invalid or
unenforceable, the validity of the remainder of the Agreement shall not be affected thereby and
may be enforced by the parties to this Agreement.
l6. AMENDMENTS. This Agreement may not be amended except by a writing signed
by the District and the Authority.
17. INTERPRETATION. In interpreting this Agreement, it shall be deemed that it was
prepared jointly by the parties with full access to legal counsel of their own. No ambiguity shall
be resolved against any party on the premise that it or its attorneys were solely responsible for
drafting this Agreement or any provision thereof.
18. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior negotiations,
understandings, or agreements.
WATER CONSERVATION GARDEN
AUTHORITY
GROSSMONT-CVYAMACA COMMUNITY
COLLEGE DISTRICT
Approved by the Board o f Directors on Approved by the Board of Trustees on
July 12, 2006
5
By:______________
EXHIBIT'A'
LEGAL DESCRIPTION
WATER GARDEN PARCEL
EXISTING PARCEL
Those portions of Tract "E," and Tract “F'' of RANCHO JAMACHA in the County of
San Diego, State of California, according to Partition Map thereof, filed in the Office of
the County Clerk of San Diego County, Case No. 13, Superior Court, Entitled William
M. Keighler, Et Al, VS. Mary H Eddy, Et Al, Being more particularly described as follows; Commencing at a 2" pipe with disk stamped WRCE 13782", marking a point on the
Northerly line of County of San Diego Tract 4032-4, according to Map thereof No 11285 in the County of San Diego, State of California, filed in the Office of the County
Recorder July 11, 1985 as File No. 85-247463 of Official Records, said 2" pipe bears North 58°23'07" East, 928.98 feet (North 57°54'39" East, 928.52) from a 2" pipe with disk stamped "RCE 13782, also marking a point on the Northerly line of said Map No. 11285; thence retracing along said Northerly line South 58°23'07" West, 346.14 feet to a point of intersection with the Northeasterly right-of-way of Cuyamaca College Drive West (60 feet wide), said intersection being the TRUE POINT OF BEGINNING;
thence North 31°36'10" West, 150.35 feet; thence South 58°23'50" West, 36.89 feet to the
beginning of a non tangent curve concave Southerly having a radius of240.00 feet and to
which a radial bears North 19°50'25" East; thenee Westerly78.97 feet along s.iid curve
through a central angle of l 8°5 l' 11"; thence North 40°34'04" West, 5.58 feet; thence
South 88°24'57" West, 6.87 feet; thence South 30°4 l'32" West, 6.15 feet; thence South
82°24'56" West, 138.87 feet lo n point herein designated ns Point 'A'; thence North
03°22'30" West, 67.95 feet; thence North 75°27'37" East, 12.38 feet lo the beginning of
a curve concave Northwesterly having a radius of 166.50 feet; thence Northeasterly
200.93 feet along said curve through a central angle of69°08'35"; thence North
80°5 l'46" West, 21.57 feet; thence North 05°17'39" East, 15.06 feel; thence South
82°15'22" East, 21.09 feet to the beginning of a non tangent curve concave Southwesterly
having a radius of 166.50 feet and to which a radial bears South 89°03'30" Ei,st; thence
Northwesterly 233.40 feet along said curve through a central angle of 80°18'59"; thence
South 58°11'04" West, 11.19 feet; thence North 87°14'33" West, 13.10 feet; thence North
39°29'! l" West, 12.06 feet to the beginning of a non tangent curve concave Northeasterly
having a radius of90.00 feet and to which a radial bears South 04°12'25" West; thence
Northwesterly 67.28 feet along said curve through a central angle of 42°49'54"; thence
North 42°57'41" West, 34.59 feet; thence North 47°28'48" East, 122.39 feet; thence
South 86°19'44" East, 52.01 feet; thence South 59°25'26" East, 348.57 feet; thence South
23°33'28" East, 84.l\2 feet; thence South 75°02'48" East, 57.59 feet lo a point herein
designated as Point 'B'; thence South 41°21'32" East, 92.86 feet; thence South 06°55'30"
West, 23.80 feet; thence South 86°54'\9" East, 44.08 feet; thence South 42°24'51" East,
66.14 feet; thence South 03°31'01" West, 87.49 feet lo a point on the Northerly line of
said Map No. 11285; thence along said Northerly line South 58°23'07" West, 256.54 feet
to the TRUE POINT OF BEGINNlNG.
Page 1 of)'f
1':\,db016'll2\Doc\LEGALS\LEASE PARCELS.doc
EXRIBIT'A'
TOGETHER WITH: (PROPOSED PARCEL A")
BEGINNING at the hereinabove described Point ‘A'; thence South 72°57'56" West,
30.28 feet to the beginning of a non tangent curve concave Northeasterly having a radius
of245.00 feet to which a radial bears South 03°36'02" East; thence Westerly 108.59 feet
along said curve through a central angle of25°23'38" to the beginning of a compound
curve concave Northeasterly having a radius of20.00 feet to which a radial bears South
21°47'36'' West; thence Northwesterly 23.88 feet along said curve through a central angle
of 68°24'15"; thence North 00°11'Sl '' East, 19.14 feet to a point herein referenced as Point 'C', said point also being the beginning of a curve concave Southeasterly having a radius of I 0.00 feet; thence Northeasterly 13.58 feet along said curve through a central angle of77°48'05"; thence North 77°59'56" East, 38.33 feet; thence South 63°21'\ l" East, 18.77 feet; thence North 88°18'34" East., 37.29 feet; thence North 75°27'37" East,
45.81 feet; thence South 03°22'30" East, 67.95 fe<:t to the point of BEGINNING.
TOGETHER WITH: (PROPOSED PARCEL "B")
BEGINNING at the hereinabove described Point '8'; thence South 41°2 l'32" East,
92.86 feet; thence South 06°55'30" West, 23.80 feet; thence South 86°54'19" East, 44.08
feet; thence South 42°24'51" East, 66.14 feet; thence North 40"2!'20" East, 94.57 fcer;
thence North 61°39'21" West, 65.11 feet; thence North 47°25'43" West, 101.29 feet;
thence North 71°24'33" West, 25.56 feet; thence South 84°06'49" West, 19.79 feet;
thence South 44°32'14" West, 46.41 feet to the point of BEGINNING.
Containing 211,796 or 4.86 Acres.
All as shown on map attached herewith and made a part hereof.
Prepared By: Nolle Associates, Inc.
Paul G. Robotta Date
L. s. 5334
Page 2 of 5
NolsdbOI 6412\Doc\LEG,\LSIU!ASE PARCELS.doe
EXH/81T 21'
CUYAAIACA COUEGE PORTIONS OF i TRACTS E 4 F RAHCJIO JAMACHA MAP NO. 1512
I
KEY MAP HO SCAI.£
NOTE: TH[ SUR','[Y FOR TH[ BOUNDARY OF CUYAJJACA COl.1[C£ WAS BASED ON TH[ llTl_[ REPORT PREPARED BY FIRST AMERICAN llTL[ INSURANCE COIIPANY OR()[R NO. NCS-65198-SD, DAT[D DEC£JJB[R 24, 200J.
VICINITY MAP WJ SCA!£
PAV!. G. 1/0BOrTA OAT[ LS SJ.14
.-.-.-1,.1.1....--...-a..n.:... ,..-_,. ,u
CUYAMACA COLLEGE LEASE PARCELS 1
PREPARED l'OR. CUYAMAC:A. COLl..alf: DATE MAY. IIOOI
L!Nl TAB/.£
WI[ BEARING LENGTH
l1 NIO'Jl'o,l"W 5.58' a S88'2'1'5nt 6.87 lJ e,n•11'r,"lr 6:15' u N7s7rJn 12,J{J'_ LS Nfl051'16lf ,.sr L6 N0577.J9"r 15.06' L1 S8n5'227: :ll.09' l8 S587l'ol1f 11.19' l9 NBn1•,n, IJ.10' LIO N.19 '111' 12""' UI N()l)71'517: ,ou· U2 S6.J71)f7: 1a.1r l/J NIJ878'.R7: Jl.29' LU SJ1Tl7'55"w ;au· l/5 Sll'J5'1,2"! 16.85' L/6 N71'20Jlf ?<«' l/7 SIU'06 9"W 19.79' LIB "''"Jl'll"/r 16.41'
aJ/1',£ f.48.£
QH?JCI RADIUS I ()[!IA lt£H(;TII
Ct I iiioo· I 6874'15" I 2188' Cl -i ,aoo· I ln8'D5' I IJ.5/f
EXHIBIT 21'
..P .,,<.1'6" ./J'o <:.,..,...,.v.. PORTJONS TRACTS E ,3
.• 0 - RANCHO JAloJACHA ..., MAP NO. 1512
...,
ffi MUS 0- 2t t-RCEL !;I 2.33 ,.c_
EXISTING WATER GARDEN 1116,521 S.F. 4.28 -
/ / GRAPHIC SCALE o· so' 100' zoo'
SCALE 1'= 100'
I N I
111091D 1111111.11•
CUY AMACA COLLEGE LEASE PARCELS
2
.Kl8"""8El! SOB018412 ,...,.....,.,mi. ........ --.Ollll,A.11 DATE YAY, 20CMI
60621.00001\30173836.430173836.6 C-1
.
EXHIBIT li'' I N I 6' ..,.
...P-t:-,.,.(1'
<' o.
'?'{."'"is> POfrf(OJ,/8 1RAC7'8 E i! F
· 'd 0 • RA#CHD JAl'iACHA MAP J,/O, 1512
MUSEUM PARCEL 101,728 S.F. 2.JJ AC.
GRAPHIC SCALE
SCALE 1·- 100·
:I:-I.T:O=ID.::l=l,t:l.ll.111. 111 ':';...
CUY AMACA COLLEGE
LEASE PARCELS
J------------------------+ - 3 l><E
Pl'IEPARED FOR, CUYAIU.CA COi.LEGE DATI. BUIMITTB>. IU.Y, 2000
3
ETS =!.!.
60621.00001\30173836.430173836.6 2
EXHIBIT D
OPERATION AND MAINTENANCE COSTS
[ATTACHED BEHIND COVER PAGE]
60621.00001\30173836.430173836.6 3
On-going Operations and Maintenance Costs – Operator Responsibility paid from Authority’s
Annual Contribution
1. Horticulture staff and benefits
2. Maintenance and supplies
a. Irrigation
b. Exhibit maintenance
c. Plants (includes annuals, perennials, and box trees as necessary)
d. Tools
3. Percentage of Utilities
Deferred Maintenance Costs – Authority Responsibility: paid from Annual Contribution
Deferred Maintenance set aside (see Section 7.3.2) over 5 years
1. Core Exhibit Repair
2. DG pathway stabilizer
3. Fence painting
4. Irrigation upgrade
5. Outside light bulbs (street lamps)
6. Upgrade electrical in plaza and replace GFR throughout Garden
7. Wall re-stucco and painting all buildings
Deferred Maintenance Costs – Operator Responsibility: Paid from Annual Contribution and
other funds raised by Operator
1. Amphitheater Bench Repair
2. Meeting Room Carpet
3. Parking Lot Asphalt Sealer
4. Path Edging
5. Water Feature Pumps
Deferred Maintenance Costs – shared responsibility
1. Mature Tree and Shrub Replacement
Summary report:
Litéra® Change-Pro 7.5.0.135 Document comparison done on 10/19/2017 2:24:14 PM
Style name: Default Style
Intelligent Table Comparison: Active
Original DMS:iw://iManage/iManage/30173836/4
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STAFF REPORT
TYPE MEETING: Regular Board Meeting MEETING DATE: January 3, 2018
SUBMITTED BY: Mark Watton,
General Manager
W.O./G.F. NO: DIV. NO.
APPROVED BY:
Mark Watton, General Manager
SUBJECT: Approve Agreement for General Counsel Services
GENERAL MANAGER’S RECOMMENDATION:
Approve an agreement with the law firm of Artiano, Shinoff and Abed,
A Professional Corporation, for a term of two (2) years through
December 31, 2019, to provide general counsel services to the
District.
COMMITTEE ACTION:
Please see Attachment A.
PURPOSE:
To present for the Board’s consideration an agreement with the law
firm of Artiano, Shinoff and Abed, A Professional Corporation, for a
term of two (2) years through December 31, 2019, to provide general
counsel services to the District.
ANALYSIS:
Artiano, Shinoff and Abed, A Professional Corporation (ASA), has
served as the District’s special counsel since January 1, 2011. The
District’s current contract with ASA was for a two-year period and is
set to expire at the end of calendar year 2017. Though the agreement
indicates an end date, it also included a clause that states, “the
agreement shall govern so long as Client desires to retain the Law
Firm in connection with Services.” Staff would like to present an
agreement to formally extend legal counsel services for another two
(2) years for the board’s consideration.
2
The District has been happy with the services provided by ASA and
recommends that the board approve the proposed agreement as per the
terms indicated in the agreement (Attachment B). If approved, the
agreement would provide for a two (2) year term expiring on December
31, 2019.
FISCAL IMPACT: Joe Beachem, Chief Financial Officer
The agreement allows for one hundred (100) hours or $20,000 per
calendar month of basic retainer services as described in the
attached agreement. Additional services, as described in Section 4.b
of the agreement, and time in excess of the one hundred (100) hours
will be compensated on an hourly basis based on the rates noted in
the agreement.
LEGAL IMPACT:
None.
Attachments:
Attachment A – Committee Actions
Attachment B – Proposed Legal Services Agreement
ATTACHMENT A
SUBJECT/PROJECT:
Approve Agreement for General Counsel Services
COMMITTEE ACTION:
This attachment will be updated with the notes from the Finance,
Administration and Communications Committee discussion following the
committee’s meeting scheduled on December 12, 2017.
Page 1 of 3
LEGAL SERVICES AGREEMENT
1. IDENTIFICATION OF PARTIES. This Agreement, executed in duplicate with
each party receiving an executed original, is made between Artiano Shinoff Abed Blumenfeld
Carelli Kostic Sleeth & Wade, APC, hereinafter referred to as “Law Firm” and Otay Water
District, hereinafter referred to as “Client.” This Agreement is entered into beginning the month
of January 2018, for legal services. The agreement is made for a term of two years up to and
including December 31, 2019. The Client and Law Firm will hold an annual review in 2018
regarding expectations, performance, and other issues impacting the Client and Law Firm under
this agreement.
2. LEGAL SERVICES TO BE PROVIDED. The legal services to be provided by
Law Firm to Client are as follows:
Representation, counsel and consultation in connection with Client’s general counsel
needs; human resources, legal support including review of policies and procedures, contract
review; preparation and participation in monthly Board meetings and special meetings
(“Services”).
Without limiting the generality of the foregoing, this Agreement shall govern so long as
Client desires to retain the Law Firm in connection with Services.
3. RESPONSIBILITIES OF LAW FIRM AND CLIENT. Law Firm will perform
the services called for under this Agreement, keep Client informed of progress and developments,
and respond promptly to Client’s inquiries and communications. Daniel R. Shinoff and Jeffery A.
Morris are intended to be the Law Firm attorneys primarily responsible for the consultation and
representation. Client will cooperate with the Law Firm in the representation set forth herein, and
will timely make any payments required by this Agreement.
4. ATTORNEY’S FEES. Client will pay Law Firm for attorneys’ fees for the
consultation and legal services provided under this Agreement as follows:
A. Basic Retainer. Law Firm shall be compensated for the performance of
basic retainer services pursuant to this Agreement in the amount of Twenty Thousand Dollars
($20,000) per calendar month commencing as of the effective date of this Agreement. Basic
retainer services for the purposes of this Agreement shall be deemed to be the first one hundred
(100) hours of Law Firm’s legal services rendered each month.
B. Additional Services. Law Firm shall be compensated for additional
services in accordance with the following:
1. As directed by the General Manager or Board President;
2. PERB hearings, writs of mandate, or other litigated matters not covered by
insurance;
Page 2 of 3
3. Other complex matters, employment, personnel matters, or special
projects with the approval of the General Manager or Board President.
Additional services and time in excess of the one hundred (100) hours per calendar month
spent by Law Firm’s Attorneys, Law Firm shall be compensated on an hourly basis at $240.00 per
hour for partners, $210.00 per hour for associates, and $95.00 per hour for paralegals. The Law
Firm will charge in increments of one-tenth of an hour, rounded off for each particular activity to
the nearest one-tenth of an hour. The minimum time charged for any particular activity will be
one-tenth of an hour.
Law Firm will charge for all activities undertaken in providing consultation and legal
services to Client under this Agreement, including, but not limited to, the following: time spent
formulating and dispensing legal advice and opinions; negotiation; gathering relevant information;
conferences; correspondence and legal documents (review and preparation); legal research; and
telephone conversations.
Client acknowledges that Law Firm has made no promises about the total amount of
attorneys’ fees to be incurred by Client under this Agreement.
5. COSTS. Client will pay all “costs” in connection with Law Firm’s representation
of Client under this Agreement. Costs will be billed directly to Client unless, at the option of Law
Firm, costs are advanced by Law Firm. Costs include, but are not limited to, long-distance
telephone charges, messenger service fees, photocopying expenses, as well as any other items
generally accepted as “costs.”
6. STATEMENTS AND PAYMENTS. Law Firm will send Client monthly
statements indicating attorneys’ fees and costs incurred and their basis, any amounts applied from
deposits, and any current balance owed. If no attorney’s fees or costs are incurred for a particular
month, or if they are minimal, the statement may be held and combined with that for the following
month. Any balance will be paid in full within thirty (30) days after the statement is mailed.
7. MEDIATION CLAUSE. Client and Law Firm are agreeing to have any and all
disputes (except where Client may request arbitration of a fee dispute by the State Bar) that arise
out of, or relate to this Agreement, including but not limited to claims of negligence or malpractice
arising out of or relating to the legal services provided by Law Firm to Client, go to mediation
before the filing of any civil proceeding. Client, however, may request arbitration of a fee dispute
by the State Bar or San Diego County Bar Association as provided by Business and Professions
Code Section 6200, et seq.
8. ERRORS AND OMISSIONS INSURANCE. The Law Firm maintains errors and
omissions insurance coverage applicable to the services to be rendered under this Agreement.
Page 3 of 3
9.TERMINATION. The Client or the Law Firm may, at any time, with or without
reason, terminate this Agreement upon thirty (30) days prior written notice to the other party. In
the event of termination, the Law Firm shall be entitled to payment only for acceptable and
allowable work performed under this Agreement through the date of termination.
THE FOREGOING IS AGREED TO BY:
DATED: ______________, 2017 OTAY WATER DISTRICT
By: _______________________________
Mark Watton
General Manager
DATED: November 30, 2017 ARTIANO SHINOFF ABED BLUMENFELD
CARELLI KOSTIC SLEETH & WADE, APC
By: _______________________________
Daniel R. Shinoff, Esq.