HomeMy WebLinkAboutStaff Report 1445City of Palo Alto (ID # 1445)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/21/2011
March 21, 2011 Page 1 of 3
(ID # 1445)
Summary Title: Withdrawal from FARECal, a Financing Authority
Title: Resolution to Withdraw from the Financing Authority for Resource
Efficiency of California
From:City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the City Council adopt a resolution withdrawing the City of Palo Alto
(City) from the Financing Authority for Resource Efficiency of California (FARECal).
Executive Summary
In order to be able to finance various energy efficiency and water conservation projects and
programs, certain public agencies, including the City entered into a Joint Powers Agreement
(JPA) creating FARECal in 1993. The agencies comprised a subset of the membership of the
California Municipal Utilities Association. While some agencies have outstanding financings
through FARECal, the City has not sought to finance any of its projects or programs through
FARECal, and does not anticipate needing to seek any financings through FARECal. The City, as
a member of the JPA, is responsible for its share of the cost to maintain the JPA and further
bears some risk associated with the debts, liabilities and obligations of FARECal. Because the
City does not foresee a need to finance any projects or programs through FARECal, staff
recommends withdrawing from FARECal.
Background
In 1993, the Cities of Anaheim, Colton, Healdsburg, Palo Alto, Pasadena, Redding and Riverside,
the Northern California Power Agency, the Department of Water and Power of the City of Los
Angeles, the North Marin Water District, the Sacramento Municipal Utility District, and the
Turlock Irrigation District entered into the JPA to create a separate public entity and agency
with the power to exercise the planning, financing, purchase, lease, construction, operation and
maintenance of “Resource Efficiency Programs and Facilities.” A number of the members have
chosen to be “inactive” and other members later joined FARECal. Currently, the active
members of FARECal include the Cities of Anaheim, Azusa, Colton, Palo Alto, Pasadena, and
Riverside, and the Marin Water District and the Trinity Public Utility District (Trinity PUD).
The Cities of Azusa and Colton have outstanding financings stemming from original debt
issuances in 1997 and 2003. Colton’s original 1997 bond amount was for $16.19 million and
March 21, 2011 Page 2 of 3
(ID # 1445)
Azusa’s original 2003 bond amounts were for $31.18 million. The projects financed through
FARECal included electric system interconnection facilities, substations, and distribution system
upgrades. In order to remain in compliance with legal auditing requirements related to the
financings, in November, 2010, the FARECal Board of Directors (Board), which includes the City,
approved an arrangement between FARECal and Azusa, in which Azusa will maintain FARECal’s
accounts and records and related auditing activities. Azusa is to be reimbursed for its costs.
Currently, FARECal has $50,000 from member contributions. It is anticipated that Azusa will be
able to provide the first-year account and records maintenance within the $50,000 amount.
Discussion
Staff does not anticipate any need for the City to finance projects or programs through FARECal
in large part because the City can obtain project financing at favorable rates based on its own
positive credit standing. However, as a member of FARECal, the City incurs costs and liabilities.
To reduce unnecessary cost and liabilities, staff recommends terminating the City’s
membership in FARECal. Under Section 5.4.1 of the JPA, the City may withdraw from FARECal
upon (i) filing with the Board, a certified copy of a resolution of the City Council expressing its
desire to withdraw, and (ii) payment of, or making arrangement satisfactory to the Board to
pay,the pro rata portion of any incurred obligation arising under the JPA, which matures after
the date of filing the withdrawal resolution.
Approval of the accompanying resolution will enable withdrawal from FARECal.
Resource Impact
Although still preliminary a recommendation will be made to the FARECal Board at its meeting
on March 31, 2011,to make no additional assessment of costs for the City’s withdrawal,
beyond the contributions the City has already made to the $50,000 currently in the FARECal
treasury. At the March 31 Board meeting, the City will also inquire if any funds are due back to
the City. Over the long term, withdrawal from FARECal will result in savings of administrative
costs paid to FARECal. Further, withdrawal from FARECal will eliminate any liabilities arising
from member financings in the event of default or member bankruptcies.
The last audited financial report of FARECal was prepared for fiscal year 2005. In 2010, FARECal
entered into an agency agreement with the City of Azusa to have Azusa procure accounting and
auditing services to fulfill FARECal’s obligations with respect to financial reporting. Azusa
recently issued an RFP for these services, and the FARECal Board may approve a contract award
at its March 31, 2011 meeting. The administrative costs for Azusa’s agency role and any
contracted financial services are unknown at this time.
Policy Implications
This recommendation does not represent a change to current City policies.
Environmental Review
Approval of a resolution to withdraw from the Financing Authority for Resource Efficiency of
California does not meet the definition of a project pursuant to Section 21065 of the California
March 21, 2011 Page 3 of 3
(ID # 1445)
Environmental Quality Act (CEQA). Thus, no environmental review is required.
Attachments:
·Attachment A -Reso FARECal (DOC)
·Attachment B -Joint Powers Agreement Creating Financing Authority for Resource
Efficiency of California (PDF)
·Attachment C -Bylaws of Financing Authority for Resource Efficiency of California (PDF)
·Attachment D -Agency Agreement Between FARECal and the City of Azusa, Acting By and
Through the Light & Water Department, as Agent (DOC)
·This page was intentionally left blank (PDF)
Prepared By:Debra Lloyd, Manager
Department Head:Valerie Fong, Director
City Manager Approval: James Keene, City Manager
ATTACHMENT A
* NOT YET APPROVED *
1
110315 dm 6051548
Resolution No. ______
Resolution of the Council of the City of Palo Alto to
Withdraw from the Financing Authority for Resource
Efficiency of California
WHEREAS,the City of Palo Alto (City) entered into a Joint Powers Agreement
creating the Financing Authority for Resource Efficiency of California (FARECal) dated July 1,
1993;and
WHEREAS,the City is a Charter Member of FARECal; and
WHEREAS, currently active members of FARECal are the Cities of Anaheim,
Azusa, Colton, Pasadena, Palo Alto, Riverside,the Marin Water District and the Trinity Public
Utility District; and
WHEREAS,FARECal was formed to enable financing for activities, programs
and/or equipment designed to conserve, change usage patterns or reduce the demand for
electrical or other energy or capacity, natural gas or water, including water reuse or recycling,
and any other programs, equipment or facilities which meet resource efficiency or management
needs or requirements; and
WHEREAS, the Cities of Azusa and Colton have outstanding bonds financed
through FARECal totaling $47.37 million; and
WHEREAS,City, through the Joint Powers Agreement, incurs liability risk in the
event of default under a contract with FARECal; and
WHEREAS,City has agreed to fund FARECal operations under the Joint Powers
Agreement; and
WHEREAS,City has no current financing needs and anticipates no future financing
needs through FARECal; and
WHEREAS,City desires to mitigate its exposure and liability risk and reduce its
costs in funding FARECal; and
WHEREAS,City intends to withdraw from FARECal upon settlement of any
outstanding payment obligations.
NOW, THEREFORE, the Council of the City of Palo Alto does hereby RESOLVE
as follows:
ATTACHMENT A
* NOT YET APPROVED *
2
110315 dm 6051548
SECTION 1.That the Council of the City of Palo Alto hereby authorizes the
City Manager, consistent with Section 5.4 of the Joint Powers Agreement to provide notice to
FARECal of such withdrawal.
SECTION 2.The Council finds that the Financing Authority for Resource
Efficiency of California does not meeting the definition of a project pursuant to Section 21065 of
the California Environmental Quality Act (CEQA) and, therefore, no environmental impact
assessment is necessary.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
______________________________________________________
City Clerk Mayor
APPROVED AS TO FORM:APPROVED:
______________________________________________________
Acting Deputy City Attorney City Manager
___________________________
Director of Utilities
___________________________
Director of Administrative
Services
ATTACHMENT D
AGENCY AGREEMENT
BETWEEN
FINANCING AUTHORITY FOR
RESOURCE EFFICIENCY OF CALIFORNIA
AND
THE CITY OF AZUSA, ACTING BY AND THROUGH
ITS LIGHT & WATER DEPARTMENT, AS AGENT
November 2010
Execution Copy
2
TABLE OF CONTENTS
1.PARTIES .............................................................................................................................................4
2.RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS................................................4
3.AGREEMENT.....................................................................................................................................5
4.DEFINITIONS ....................................................................................................................................5
4.1 Agency Costs..........................................................................................................................5
4.2 Agency Work..........................................................................................................................5
4.3 Agent ......................................................................................................................................6
4.4 Agreement ..............................................................................................................................6
4.5 Effective Date.........................................................................................................................6
4.6 Indebtedness ...........................................................................................................................6
5.APPOINTMENT OF AGENT ............................................................................................................6
5.1 Appointment of Agent ...........................................................................................................6
5.2 Agent’s Performance of Agency Work in Accordance with Applicable Laws, Rules
and Regulations .....................................................................................................................6
5.3 Other Agents...........................................................................................................................6
5.4 Procurement............................................................................................................................6
5.5 Compliance with the Federal Tax Law Requirements............................................................6
6.RIGHTS, DUTIES AND RESPONSIBILITIES OF FARECAL........................................................6
6.1 FARECAL’s Role...................................................................................................................6
7.ACTIVITIES TO BE PERFORMED BY AGENT .............................................................................7
7.1 Inform FARECAL..................................................................................................................7
7.2 Expend Funds for Agency Costs ............................................................................................7
7.3 Arrange Services for Agency Work; Administer Contracts; Agent’s Employees..................7
7.4 Prepare and Submit Estimates of Agency Costs.....................................................................7
7.5 Keep Accounting Records of Expenditures; Audit of Accounting Records...........................7
7.6 Furnish Additional Assistance and Information .....................................................................7
8.AGENCY COSTS ...............................................................................................................................8
8.1 Agency Costs..........................................................................................................................8
8.2 No Profit .................................................................................................................................8
9.PAYMENT TO AGENT FOR AGENCY COSTS; AUDITS.............................................................8
9.1 Payment and Audit Procedures...............................................................................................8
9.2 Disputed Invoices ...................................................................................................................9
10.LIABILITY .........................................................................................................................................9
10.1 No Liability of FARECAL or Agent, Their Directors, Officers, Etc.; FARECAL
and Agent’s, Directors, Officers, Employees, Not Individually Liable..................................9
10.2 Extent of Exculpation; Enforcement of Rights in Equity.....................................................10
10.3 No Relief From Insurer’s Obligations..................................................................................10
3
10.4 No General Liability of FARECAL .....................................................................................10
10.5 No Warranty for Agent Services ..........................................................................................10
11.ALTERNATIVE DISPUTE RESOLUTION ....................................................................................10
11.1 NonBinding Dispute Resolution...........................................................................................10
11.2 Role of FARECAL Board of Directors; Nonbinding Mediation Procedure.........................10
12.RELATIONSHIP OF THE PARTIES...............................................................................................10
12.1 Separate and Several Interests ..............................................................................................10
13.UNCONTROLLABLE FORCES......................................................................................................11
13.1 Excuse of Performance by Reason of Uncontrollable Forces ..............................................11
14.BINDING OBLIGATIONS...............................................................................................................11
14.1 All Obligations Binding........................................................................................................11
15.GENERAL PROVISIONS GOVERNING AGREEEMENT ...........................................................11
15.1 Waiver Not to Effect Subsequent Events .............................................................................11
15.2 Headings Not Binding ..........................................................................................................11
16.INDEMNITY AND RELATED MATTERS ....................................................................................11
16.1 Indemnification of Agent......................................................................................................11
16.2 Separate Legal Capacities.....................................................................................................12
17.GOVERNING LAW .........................................................................................................................12
18.TERM AND EXPIRATION..............................................................................................................12
18.1 Effective Date.......................................................................................................................12
18.2 Termination ..........................................................................................................................12
19.SEVERABILITY...............................................................................................................................12
20.REPRESENTATION AND NOTICES.............................................................................................13
21.AMENDMENTS...............................................................................................................................13
50305946.1 4
AGENCY AGREEMENT
1.PARTIES.This Agency Agreement, effective as of this ___day of ____, 2010, by and
between the FINANCING AUTHORITY FOR RESOURCE EFFICIENCY OF
CALIFORNIA, a joint powers agency and a public entity organized under the laws of the
State of California, hereinafter referred to as “FARECal,” or “the Authority” created under
the provisions of the Act, and the CITY OF AZUSA acting by and through its LIGHT &
WATER DEPARTMENT a California municipal utility under California law hereinafter
referred to as the “City” or the “Agent.” The City and FARECal are also sometimes
referred to herein, with respect to this Agreement, individually as the “Party” and together
as the “Parties”.
2.RECITALS, CONSTRUCTION AND PRELIMINARY MATTERS.The Recitals set
forth herein and the facts which follow are incorporated into this Agreement by reference
for all purposes. This Agreement has been reviewed by both Parties and shall not be
interpreted with reference to the rules of construction providing for construction against a
Party responsible for drafting or creating a particular provision or section, but should instead
be interpreted in a manner which broadly carries forth the goals and objectives of the Parties
as expressed herein. References to “Sections,” “Annexes,” “Appendices,” “Schedules” and
“Exhibits” shall be to Sections, Annexes, Appendices, Schedules and Exhibits, as the case
may be, of this Agreement unless otherwise specifically provided. Section headings in this
Agreement are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect. Any of the
terms defined herein may, unless the context otherwise requires, be used in the singular or
the plural, depending on the reference. The use herein of the word “include” or “including”,
when following any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately following
such word or to similar items or matters, whether or not non-limiting language (such as
“without limitation” or “but not limited to” or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter. All terms
capitalized and not otherwise defined herein shall have the meaning set forth in the Joint
Powers Agreement or Bylaws of FARECal. This Agreement is made with reference to the
following facts among others:
2.1 FARECal was created pursuant to provisions contained in the Joint Exercise of
Powers Act found in Chapter 5 of Division 7 of Title 1 of the Government Code
of California, as amended from time to time (the “Act”), by its members, which
are municipalities, water districts, joint action agencies, municipal utility districts,
public utility districts, irrigation districts and an irrigation district that supply,
among other things, electrical energy and water, in the State of California, for the
purpose of jointly and cooperatively undertaking the planning, ,development
financing, purchase, lease construction, operation and maintenance of Resource
Efficiency Programs and Facilities.
5
2.2 The City is a California municipal utility which provides electric energy and
water to its citizens through its municipally-owned electric and water system.
The City is one of the parties to the FARECal Joint Powers Agreement.
2.3 FARECal was established, designed and brought to fruition in order to create a
viable joint powers authority with the objective of representing and carrying forth
the common goals, the common aspirations and the common objectives of any
public agency eligible for membership in the California Municipal Utilities
Association (“CMUA”) and located in California.
2.4 Pursuant to the terms of the Act, and its Joint Power Agreement, FARECal has
any and all powers authorized by law to two or more of its Members relating to
the planning, development, undertaking, purchase, lease, acquisition,
construction, financing, disposition, use, operation, repair, replacement or
maintenance of facilities for the generation, production, transmission,
conservation, reuse, recycling, storage, treatment or distribution of electrical or
other energy or capacity, natural gas, water, waste water or recycled water, or
Resource Efficiency Programs and Facilities, or any combination thereof.
2.5 Over the course of the past several years members of FARECal, including the
City, have untaken projects through FARECal for which FARECal has issued
Indebtedness. Under California Government Code Section 6505 and Section 4.5
of the FARECal Joint Powers Agreement, FARECal is required to have its
accounts and records audited by independent certified public accountants.
Auditors have advised FARECal that the audit should include financial records
relating to outstanding FARECal Indebtedness.nce its inception, FARECal
administrative tasks, including the maintenance of FARECal’s books and records
and the administration and oversight of related audits, have been carried out
and/or administered by the staff of CMUA. CMUA staff has requested assistance
with respect to the maintenance of FARECal accounts and records and all related
auditing activities.
2.6 The City has offered to assist with respect to the maintenance of FARECal’s
accounts and records and related auditing activities provided it is made whole for
all of its related costs.
3.AGREEMENT.For and in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, and in order to carry forth certain objectives of FARECal
and to appoint as agent for FARECAL for the purposes set forth herein, the Parties agree as
follows.
4.DEFINITIONS. The terms set forth below, when initially capitalized, shall have the
respective meaning set forth below:
4.1 Agency Costs. The costs, as set forth in Section 8 hereof, of carrying out Agency
Work.
4.2 Agency Work. Agency shall be responsible for providing accounting and auditing
services for FARECal and such other activities denoted under Section 7 of this
6
Agreement. Such work may be performed in whole or in part, as determined by
Agent, by its own employees or by outside contractors.
4.3 Agent. The City of Azusa acting by and through its Light & Water Department,
which shall be responsible, in accordance with the terms of this Agreement, for
carrying out the Agency Work as Agent for and on behalf of FARECal.
4.4 Agreement. This Agreement, as it may be amended, modified or supplemented
from time to time.
4.5 Effective Date. The date first set forth above.
4.6 Indebtedness: Indebtedness shall have the meaning as ascribed thereto in the
Joint Powers Agreement for FARECal.
5.APPOINTMENT OF AGENT.
5.1 Appointment of Agent. In accordance with the terms and conditions of this
Agreement FARECal hereby appoints, designates, authorizes and directs the City
to carry out, as agent for and on behalf of FARECal, Agency Work in accordance
with the terms of this Agreement. The City hereby accepts such appointment,
designation, authorization and direction.
5.2 Agent’s Performance of Agency Work in Accordance with Applicable Laws,
Rules and Regulations. In carrying forth its Agency Work pursuant to the terms
of this Agreement Agent shall, in all material respects, observe all applicable
laws, rules and regulations.
5.3 Other Agents. The Authority shall at all times have the right to appoint another
agent or agents to perform, apart from and concurrent with this Agreement.
5.4 Procurement. In carrying out its duties under this Agreement, the City shall
utilize the procedures, protocols and restrictions of the City of Palo Alto or the
City of Riverside (as determined by FARECal’s Board of Directors) which either
Palo Alto or Riverside use when exercising similar powers, including but not
limited to procurement and contracting powers.
5.5 Compliance with the Federal Tax Law Requirements. Notwithstanding anything
to the contrary in this Agreement, each of the Parties shall take such actions in the
administration and the performance of this Agreement as may be necessary, if
applicable, to comply with the Federal tax law requirements on the Indebtedness,
and each shall refrain from taking any action that would adversely affect
compliance with the Federal tax law requirements.
6.RIGHTS, DUTIES AND RESPONSIBILITIES OF FARECAL. FARECAL shall have
the following rights, duties and responsibilities under this Agreement:
6.1 FARECal’s Role. FARECal acting by and through its Board of Directors shall
have the following rights duties and responsibilities under this Agreement:
7
6.1.1 Review Agency Cost Estimates: Review, modify and approve the estimates
of Agency Costs submitted by the Agent pursuant to this Agreement.
6.1.2 Monitor Agency Work: Monitor the continuation and completion of
Agency Work.
6.1.3 Make Recommendations and/or Modifications Regarding Agency Work:
Make (i) recommendations to the Agent with respect to Agency Work
and/or (ii) modifications to Agency Work undertaken by Agent.
6.1.4 Provide Assistance: Provide such other assistance to the Agent in carrying
out Agency Work as the Board of Directors shall deem reasonable and
proper and as the Agent shall request.
6.1.5 Perform Other Functions and Duties: Perform such other functions and
duties as may be required of FARECal in connection with this Agreement.
7.ACTIVITIES TO BE PERFORMED BY AGENT.
7.1 Inform FARECal. Promptly inform FARECal regarding significant factors which
may affect or have affected Agency Work.
7.2 Expend Funds for Agency Costs. Expend moneys for Agency Costs in
accordance with this Agreement; provided, however, in no event shall Agent
expend money or incur costs for Agency Costs that exceed the estimate of
Agency Costs previously approved by FARECal.
7.3 Arrange Services for Agency Work; Administer Contracts; Agent’s Employees.
Negotiate, arrange for, administer, perform and enforce all contracts necessary for
the performance and completion of Agency Work and furnish conformed copies
of such contracts or other related documentation to FARECal. In performing
Agency Work, the Agent may use its own employees and equipment and facilities
owned or directly leased by the Agent without obtaining any consent or approval
of FARECal.
7.4 Prepare and Submit Estimates of Agency Costs. Prepare and submit to FARECal
for each fiscal year, the Agent’s estimate of Agency Costs.
7.5 Keep Accounting Records of Expenditures; Audit of Accounting Records. Keep
and maintain records of moneys expended, obligations incurred, and credits
accrued; and maintain for auditing those accounting records prepared, or caused
to be prepared, by the Agent with respect to FARECal’s moneys and
Indebtedness; direct and oversee fiscal audits of FARECal.
7.6 Furnish Additional Assistance and Information. In addition to the services set
forth in Section 7.5, furnish, upon request, to FARECal any assistance requested
by FARECal’s Board of Directors and agreed to by the City.
8
8.AGENCY COSTS.
8.1 Agency Costs. Agency Costs shall include the following:
8.1.1 All costs approved by the Agent of labor and services, performed by the
Agent or by others, in connection with this Agreement.
8.1.2 Payroll and other expenses of employees of the Agent while performing
work in connection with this Agreement, including applicable overhead
costs and labor loading charges, including but not limited to time-off
allowances, assignment pay, payroll taxes, workers’ compensation
insurance, retirement and death benefits and other employee benefits.
8.1.3 Costs of the Agent, to the extent not provided for by insurance, of
discharging or paying any liability and loss, damage and expense, including
costs and expenses for attorneys' fees and other costs of defending, settling
or otherwise administering claims, liabilities or losses arising out of
workers' compensation or employer's liability claims or by reason of
property damage or injuries to or death of any person or persons or by
reason of claims of any and every character, or costs that should be paid or
provided to Agent to satisfy indemnification obligations under Section 16
of this Agreement or other costs that should be paid or provided to Agent to
satisfy indemnification obligations resulting from, arising out of or
connected with the performance of Agency Work, including negligent or
grossly negligent acts or omissions, but excluding willful misconduct of the
Agent, its City Council, or its respective officers or employees.
8.2 No Profit. The Agent shall not receive any profit under this Agreement, nor shall
the Agent be obligated to make any expenditure or incur any obligation regarding
Agency Work with respect to which it shall not be entitled to reimbursement
under this Agreement.
9.PAYMENT TO AGENT FOR AGENCY COSTS; AUDITS.
9.1 Payment and Audit Procedures. From time to time, and at such times (not more
than twice annually) as the Agent shall determine, it shall submit to FARECal
requests and requisitions for payment of items of Agency Costs incurred or paid;
provided, however, such Agency Costs do not exceed the estimate of Agency
Costs previously approved by FARECal as provided in Section 6.1.1. FARECal
agrees to raise funds sufficient to pay all Agency Costs through whatever means
authorized under the FARECal Joint Powers Agreement, including Section 4.4 of
the Joint Powers Agreement which provides that Members shall make such
contributions, payments and advances to the Authority as are approved from time
to time by the Board of Directors of FARECal. FARECal shall pay or cause to be
paid the amount of each such request or requisition within 60 days after its receipt
thereof. At such reasonable times as shall be requested by FARECal, the books
and cost records of the Agent relevant to Agency Costs shall be subject to audit
by or on behalf of FARECal.
9
9.2 Disputed Invoices. In case any portion of any invoice received by FARECal from
Agent shall be in bona fide dispute, FARECal shall pay Agent the full amount of
such invoice and, upon determination of the correct amount, the difference
between such correct amount and such full amount, if any, including interest at
the rate received by Agent on any overpayment, will be credited to FARECal by
Agent after such determination; provided, however, that such interest shall not
accrue on any overpayment that is acknowledged by Agent and returned to
FARECal by the fifth calendar day following the receipt by Agent of the disputed
overpayment. In the event such invoice is in dispute, Agent will give
consideration to such dispute and will advise FARECal with regard to Agent’s
position relative thereto within 30 days following receipt of written notification
by FARECal of such dispute.
10.LIABILITY.
10.1 No Liability of FARECal or Agent, Their Directors, Officers, Etc.; FARECal and
Agent’s Directors, Officers, Employees, Not Individually Liable. Both Parties
agree that neither FARECal nor the Agent, nor any of their past, present or future
directors, officers, employees, board members, agents, attorneys or advisors
(collectively, the “Released Parties”) shall be liable to any other of the Released
Parties for any and all claims, demands, liabilities, obligations, losses, damages
(whether direct, indirect or consequential), penalties, actions, loss of profits,
judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses)
or disbursements of any kind or nature whatsoever in law, equity or otherwise
(including, without limitation, death, bodily injury or personal injury to any
person or damage or destruction to any property of the City, FARECal or third
persons) suffered by any Released Party as a result of the action or inaction or
performance or non-performance by any of the Released Parties under this
Agreement (including negligent or grossly negligent acts or omissions and
excluding willful misconduct which, unless otherwise agreed by the Parties, is to
be determined and established by a court of competent jurisdiction in a final,
nonappealable order). Each Party shall release each of the other Released Parties
from any claim or liability that such Party may have cause to assert as a result of
any action or inaction or performance or non-performance by the Released Parties
under this Agreement (including negligent or grossly negligent acts or omissions
and excluding willful misconduct which, unless otherwise agreed by the Parties,
is to be determined and established by a court of competent jurisdiction in a final,
nonappealable order). Notwithstanding the foregoing, no such action or inaction
or performance or non-performance by any of the Released Parties shall relieve
either Party from its respective obligations under this Agreement, including either
Party’s obligation to make payments required under this Agreement. The
provisions of this Section 10.1 shall not be construed so as to relieve the Agent
from any obligation under this Agreement or any agreement related to FARECal
Indebtedness. It is also hereby recognized and agreed that no member of the
FARECal Board of Directors, the Agent nor their officers, employees, board
members, agents, attorneys or advisors, or member of FARECal in its capacity as
a member of FARECal, shall be individually liable in respect of any undertakings
by any of the Released Parties under this Agreement or any agreement related to
FARECal Indebtedness.
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10.2 Extent of Exculpation; Enforcement of Rights in Equity. The exculpation
provision set forth in Section 10.1 hereof shall apply to all types of claims or
actions including, but not limited to, claims or actions based on contract or tort.
Notwithstanding the foregoing, either Party may protect and enforce its rights
under this Agreement by a suit or suits in equity for specific performance of any
obligation or duty of the other Party and the Agent may enforce by any legal
means its right to payment for Agency Costs in accordance with the terms of this
Agreement.
10.3 No Relief From Insurer’s Obligations. The provisions of Section 10.1 shall not be
construed so as to relieve any insurer of its obligation to pay any insurance
claims.
10.4 No General Liability of FARECal. The undertakings by FARECal under this
Agreement shall never constitute a debt or indebtedness of FARECal within the
meaning of any provision or limitation of the constitution or statutes of the State
of California. Any provision of this Agreement to the contrary notwithstanding,
the obligation of FARECal under this Agreement to make or cause to be made
payments shall be limited to those payments permitted by and monies available
under a FARECAl indenture or any agreement related to FARECal Indebtedness
or as provided for in this Agreement.
10.5 No Warranty for Agent Services. All services provided by Agent are provided on
an “as is” basis. Agent disclaims all warranties, express or implied, statutory or
otherwise, including, without limitation, any implied warranties of
merchantability or fitness for a particular purpose.
11.ALTERNATIVE DISPUTE RESOLUTION.
11.1 Nonbinding Dispute Resolution. If any dispute arises out of or relates to this
Agreement, or the asserted breach thereof, the Parties agree that the Parties shall
first employ the non binding mediation process which is set forth in this Section
11 before initiating any other type of legal action.
11.2 Role of FARECal Board of Directors; Nonbinding Mediation Procedure.If a
dispute arises between the Parties under this Agreement, the Parties may submit
the dispute to the FARECal Board of Directors. If the Board of Directors is
unable to resolve the dispute, the Parties may then submit the dispute to non
binding mediation.
12.RELATIONSHIP OF THE PARTIES.
12.1 Separate and Several Interests. The covenants, obligations and liabilities of the
Parties are intended to be several and not joint or collective and nothing herein
contained shall ever be construed to create an association, joint venture, trust,
partnership or other legal entity, or to impose a trust or partnership covenant,
obligation or liability on or with regard to either or both of the Parties. Each Party
shall be individually responsible for its own covenants, obligations and liabilities
under this Agreement. Neither Party shall be under the control of or shall be
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deemed to control any other Party. Neither Party shall be the agent of or have a
right or power to bind the other Party without its express written consent, except
as expressly provided in this Agreement.
13.UNCONTROLLABLE FORCES.
13.1 Excuse of Performance by Reason of Uncontrollable Forces. Other than with
respect to the obligation of a Party to make payments as provided in this
Agreement, neither Party shall be considered to be in default in the performance
of any of its obligations under this Agreement when a failure of performance shall
be due to an uncontrollable force. The term “uncontrollable force” shall be any
cause beyond the control of the Party affected, including but not limited to failure
of or threat of failure of facilities, flood, earthquake, tornado, storm, fire,
lightning, epidemic, war, terrorism, riot, civil disturbance or disobedience, labor
dispute, labor or material shortage, sabotage, restraint by court order or public
authority, and action or non-action by, or inability to obtain the necessary
authorizations or approvals from, any governmental agency or authority, which by
exercise of due diligence such Party could not reasonably have been expected to
avoid and which by exercise of due diligence it shall be unable to overcome.
Nothing contained herein shall be construed so as to require a Party to settle any
strike or labor dispute in which it may be involved. In the event a Party is
rendered unable to fulfill any of its obligations under this Agreement by reason of
an uncontrollable force, such Party shall give prompt written notice of such fact to
the other Party and shall exercise due diligence to remove such inability with all
reasonable dispatch. In such event, the Parties shall diligently and expeditiously
determine how they may equitably proceed to carry out the objectives of this
Agreement.
14.BINDING OBLIGATIONS.
14.1 All Obligations Binding. All of the obligations set forth in this Agreement shall
bind the Parties and their successors and assigns.
15.GENERAL PROVISIONS GOVERNING AGREEMENT.
15.1 Waiver Not to Effect Subsequent Events. Any waiver at any time by a Party of its
rights with respect to a default or any other matter arising in connection with this
Agreement shall not be deemed a waiver with respect to any subsequent default or
matter.
15.2 Headings Not Binding. The headings and captions in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Agreement
16.INDEMNITY AND RELATED MATTERS.
16.1 Indemnification of Agent. In its capacity as Agent under this Agreement, Agent
shall be entitled to indemnification from FARECal as set forth herein. FARECal
shall, to the extent permitted by law, indemnify and hold harmless Agent, its City
Council members, officers, employees, agents, attorneys and advisors, past,
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present or future when acting for Agent (collectively, “Agent Indemnitees”) from
and against any and all claims, demands, liabilities, obligations, losses, damages
(whether direct, indirect or consequential), penalties, actions, loss of profits,
judgments, orders, suits, costs, expenses (including attorneys’ fees and expenses)
or disbursements of any kind or nature whatsoever in law, equity or otherwise
(including, without limitation, death, bodily injury or personal injury to any
person or damage or destruction to any property of the City, FARECal or third
persons) (collectively, “Losses”) arising by reason of any actions, inactions, errors
or omissions incident to the performance of this Agreement (including negligent
or grossly negligent acts or omissions and excluding willful misconduct which,
unless otherwise agreed by the Parties, is to be determined and established by a
court of competent jurisdiction in a final, nonappealable order) on the part of
Agent Indemnitees. At Agent’s option, FARECal shall defend Agent Indemnitees
from and against any and all Losses. If FARECal, with Agent’s consent, defends
any Agent Indemnitee, Agent shall approve the selection of counsel, and Agent
shall further approve any settlement or disposition, such approval not to be
unreasonably withheld
16.2 Separate Legal Capacities. The Parties acknowledge that the City, as Agent under
and a Party to this Agreement, acts in a legal capacity that is separate from its
capacity as a member of FARECal or a participant in any FARECal Indebtedness.
Accordingly, for purposes of this Agreement, the rights, entitlements, obligations
and liabilities of the City, as Agent and a Party to this Agreement, shall not apply
to or otherwise be affected by, and shall be legally separate from the rights,
entitlements, obligations, and liabilities of the City as a participant in any
FARECal Indebtedness.
17.GOVERNING LAW. This Agreement shall be governed by, interpreted and enforced in
accordance with the laws of the State of California, without regard to conflict of law
principles.
18.TERM AND EXPIRATION.
18.1 Effective Date. This Agreement shall become effective and in full force and
effect on the date first set forth above (the “Effective Date”).
18.2 Termination. This Agreement shall continue in force and effect from the
Effective Date until terminated by either Party, for any reason, upon not less than
sixty (60) days prior written notice to the other Party. Payment obligations of the
Parties hereunder shall survive any termination of the Agreement until satisfied.
Upon termination of this Agreement, Agent shall deliver FARECal's books and
accounts maintained by the Agent to CMUA or such other entity as directed by
FARECal.
19.SEVERABILITY.In case any one or more of the provisions of this Agreement shall for
any reason be held to be illegal or invalid by a court of competent jurisdiction, it is the
intention of each of the Parties hereto that such illegality or invalidity shall not affect any
other provision hereof, but this Agreement shall be construed and enforced as if such illegal
or invalid provision had not been contained herein unless a court holds that the provisions
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are not separable from all other provisions of this Agreement.
20.REPRESENTATION AND NOTICES. Any notice, demand or request provided for in
this Agreement shall be deemed properly served, given or made if delivered in person or
sent by registered or certified mail, postage prepaid, to the persons specified below:
Financing Authority for Resource Efficiency of California
c/o Executive Director of CMUA
915 L Street, Suite 1460
Sacramento, California 95814
City of Azusa, Light and Water Department
Director of Utilities
729 North Azusa Avenue, P.O. Box 9500
Azusa, California 91702-9500
21.AMENDMENTS. The Parties acknowledge and agree that any amendment to this
agreement shall be in writing and duly executed by the Parties.
IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be
executed on their respective behalves by their duly authorized representatives.
FINANCING AUTHORITY FOR RESOURCE
EFFICIENCY OF CALIFORNIA
Dated: ___________By: _____________________________
George F. Morrow
President
CITY OF AZUSA acting by and through its LIGHT
AND WATER DEPARTMENT
Dated: ___________By: _____________________________
Joseph R. Rocha
Mayor