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HomeMy WebLinkAbout13 - BA-041 - Review of Newport Coast Assessment District Financial DataCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 13 January 28, 2003 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, Assistant City Manager 949/644 -3002 or dkiff @city.newport- beach.ca.us SUBJECT: Review of Newport Coast Assessment District Financial Data ISSUE: Should the City of Newport Beach hire legal counsel to examine the formation of and expenditures from certain assessment districts in the Newport Coast as required by the City's Pre - Annexation Agreement (PAA) for the Newport Coast? RECOMMENDATION: 1. Authorize the City Manager to execute Professional Services Agreements (PSAs) with Mr. Robert F. Messinger of Burke Williams & Sorenson, LLP and Mr. William R. Mitchell of Cummins and White, LLP regarding a review of Newport Coast assessment district financial data; and 2. Adopt a Budget Amendment (BA #_) of $93,750.00 relating to this expense. DISCUSSION: Background: The city added the Newport Coast community to the remainder of Newport Beach in January 2002. As a part of our annexation effort, the City Council entered into a Pre - Annexation Agreement (PAA) with residents of the Newport Coast to accomplish certain goals in their community. One aspect of the PAA included an expert legal review - funded at City expense - of certain assessment districts in the Newport Coast. The operative section (Section 8) of the PAA reads as follows: 8. ANALYSIS OF ASSESSMENT DISTRICTS AND RECOVERY OF MONIES OWED. The City shall retain legal counsel experienced in municipal financing including the formation and administration of improvement and assessment districts. City shall instruct legal counsel to conduct a thorough examination or audit of the documents prepared in conjunction with all Assessment Districts and Improvement Districts in the Newport Coast and Newport Ridge. For the purposes of this Section, these districts shall collectively be referred to as "Assessment Districts" and shall include, but not be limited to, County Assessment Districts #88 -1 and #92 -1. This examination shall be commenced within sixty (60) days after the Effective Date and shall be concluded within (150) days of the Effective Date subject to an extension of the examination period by Committee. City shall not place any limitation on legal counsel's budget for the reasonable and necessary expenses to be incurred in the performance of a complete and thorough examination, and the attainment of a result, which is satisfactory to the Committee. Legal counsel shall report findings to the Committee in writing within one hundred eighty (180) days after the Effective Date subject to an extension of time approved by the Committee. In the event that legal counsel determines that: (i) Modifications to any decision, document or practice could result in Assessment District debt relief for owners of fully improved and occupied single family residences; or (ii) Assessment District funds were not used in a legal manner; or (iii) Assessment District funds were not used in a manner that benefited those who were assessed in a manner proportionate to the assessment imposed; or (iv) The allocation of costs or expenses related to the Assessment District was inequitable or is based upon erroneous assumptions regarding use and /or benefit; then, ... the City shall use its best efforts, including initiation of litigation against any and all appropriate parties if determined appropriate by the City Council, to provide relief through a modification of the decision, documents, conditions and /or practice or to recover such funds. Furthermore, the City shall use its best efforts, including initiation of litigation against any and all appropriate parties, if determined appropriate by the City Council, to provide relief, as each new assessment district is proposed, or an existing assessment district is modified. Such relief may include, but is not limited to, a modification of the proposed assessment district formation or any decision, documents, conditions, and /or practice or, if appropriate, to recover funds. Assessment Districts. Following Proposition 13's passage in 1978, assessment districts have often funded significant new development in California. Proposition 13 - in addition to limiting most property taxes to 1% of the assessed value of property and any increase in assessed value of properties to 2% per year - also required 2 /3rd, voter approval of any new special tax, including increases above the 1 % "basic levy." Legislative bodies created assessment districts long before Proposition 13 (most California assessment acts date back to the early 1900s), but the districts came into greater use in the 1980s and 1990s. Major landowners interested in developing their land for residential development often -- with a single supportive vote of the landowner himself or herself -- created a special financing district to pay for the streets, sewers, water lines, fire stations, streetlights, and curbs and gutters that would serve the homes. Following the vote and the formation of the district, the district would then issue bonds and fund improvements based on revenue from special taxes that would be paid later by the homebuyers. These Community Facilities Districts ( "CFDs" -- also known as Mello -Roos Districts after their legislative authors, State Senator Henry Mello and Assemblyman Mike 2 Roos) and similarly- styled assessment districts are common today in new communities like Aliso Viejo, Rancho Santa Margarita, Mission Viejo, and the Newport Coast. Taxpayers' rights organizations criticized Mello -Roos districts, arguing that the districts were an "end- around" Proposition 13. Yet the districts themselves were approved by 100% of the landowners (one entity, generally), consistent with Proposition 13's 2/3 d' voter approval requirement for new special taxes. Newport Coast's Assessment Districts. When the Irvine Company developed the Newport Coast, it worked with the County of Orange to create two major assessment districts (ADs 88 -1 [Newport Coast] and 92 -1 [Newport Ridge]) that funded the construction of Newport Coast Drive, the widening of PCH, the fire station, and much more. To build Newport Coast Elementary School and improvements to CDM High School, the Newport - Mesa Unified School District (NMUSD) created an additional overlapping district at about the same period of time (CFD #90 -1). Many residents of Newport Beach (including at the Castways and Harbor Cove) also paid into CFD 90 -1. 1 have described these districts in more detail in Attachment C of this report. Four assessment districts are not described in Attachment C — these are two water ADs and two sewerage ADs formed and managed by the Irvine Ranch Water District. Assessment districts are not popular with the property owners who pay into them after purchasing a home. They can add 25% to 50% or more to an average homeowners tax bill for up to 15 to 20 years after the home's purchase (see examples of property taxes paid by various properties below). But each homebuyer clearly agrees to pay the assessments as a part of the buyers purchase documents — and it's likely that the home itself could not have been built (or supported with infrastructure) without the revenue provided by the district. A Pre -Prop 13 Home Newer NB Home w /CFD 90 -1 Newer NC Home Westcliff Home AV = $118,000 Taxes Paid: 1 %= $1,180.00 AD = None CFD = None Meas A = $7.67 total = $1,190.00 City gov't receives: $201 (16.9 %) Tax Rate = 1.01% Castaways Home AV = $893,740 Taxes Paid: 1 % _ $8,937.00 AD = $3,512.00 CFD = $667.00 Meas A = $58.04 total = $13,100.00 City gov't receives $1,528 (11.6 %) Tax Rate = 1.47% Pelican Hill Home AV = $2,126,779 Taxes Paid: 1% _ $21,267.00 AD = $4,015.00 CFD = $667.00 Meas A = $137.00 total = $26,400.00 City gov't receives: $3,169 (12 %) Tax Rate = 1.24% All that noted, several Newport Coast residents have attempted to better understand the complexities of their County ADs by communicating directly with the County of Orange. Both the questions asked by the residents and the County's responses were detailed and extensive. But the residents remain concerned that some AD implementation issues deserve additional scrutiny — thus the request via the FAA for City assistance. The City Council agreed to help because it believed that the City has a duty to both understand the Newport Coast ADs better and to ensure that our residents in the Newport Coast are being assessed fairly for infrastructure that the City now owns and operates. Examples of the residents' concerns include: • Whether it was legal to take a free road (the NW portion of Newport Coast Drive), paid for in part by AD dollars, and convert it to a tollroad; • The County's management of appropriate construction reserves within the ADs. • The County's use of developer fees funded by Newport Coast home purchases yet used to build facilities in Aliso Viejo; and • Whether or not all of the infrastructure projects funded by the ADs were clearly identified in the ADs' engineers reports, fully constructed, and built within budgeted amounts. Deputy Administrative Services Director Dick Kurth and I have listened to the residents' concerns about the ADs over the past 18 months or so. We both believe that they have raised valid questions that we cannot easily answer. While I believe that outside counsel and an outside financial consultant can help us answer many questions, I also will note my significant doubt that any impropriety occurred and, if so, whether or not a statute of limitations has run on any challenge to the Districts. Suggested Counsel. To fulfill the City's obligations under the FAA, we sought out at least two attorneys with some expertise in the field of public finance but had no conflict of interest with the Newport Coast. Conflicts included work with the Irvine Company, the County, or the Transportation Corridor Agencies. After speaking with several individuals and seeking referrals, we reviewed the qualifications of and met with Bill Mitchell of Cummins and White and with Robert Messinger of Burke Williams and Sorenson. Their curriculum vitae are attached. We believe that they are uniquely qualified to examine these issues, with Mr. Mitchell assigned to examine the Newport Coast Drive issue and Mr. Messinger assigned to look at the County ADs and any other relevant ADs. I do not anticipate an extensive amount of review associated with the IRWD assessment districts, given their low levy (typically levied at $0 per year). We anticipate continuing to use Jennifer Branin of Branin Financial to provide non -legal accounting assistance to us and to Mr. Messinger, because not all of the residents' questions involve the law. Ms. Branin ably assisted us in 1999 -2001 in examining several financial issues relating to our annexation proposal. Scope of Work. The scopes of work for Mitchell and Messinger are at the end of their proposed contracts and may involve at least two phases. The first phase of this work can be called an initial study and review — it will attempt to identify key legal issues (and any related avenues of interest) that we could pursue within a second, more focused phase (second phase not included with these contracts). I set the contracts up in this manner to allow the City to pursue those matters (in a second phase) that showed the most legal promise. Committee Action: The Newport Coast Advisory Committee and its Finance Subcommittee have concurred with my recommendation to retain Mr. Mitchell and Mr. Messinger. Environmental Review: The City Council's approval of this Agenda Item does not require environmental review. Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours in advance of the public meeting at which the City Council considers the item). Funding Availability: This item, while known about more than a year ago, did not have a scope of work nor an estimated expense -- as such, I did not provide specific funding for it within the current year's budget. It therefore requires a budget amendment of $93,750.00 for Phase I, which is attached. I intend to include any Phase II work in the City's proposed budget for FY 2003 -04. Submitted by: Dave kd Assistant City Manager Attachments: Professional Services Agreements with Mitchell and Messinger CVs for Mitchell and Messinger Summary of Newport Coast Assessment Districts Budget Amendment #BA -_ PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT, entered into this 13th day of January, 2003, by and between the City of Newport Beach ( "City "), a municipal corporation, and Burke Williams & Sorenson, LLP ( "Consultant "), is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the _ Charter of City. B. City desires to receive an analysis as to aspects of the formation and implementation of developer - related fees and certain County of Orange Assessment Districts ( "ADs ") 88 -1, 92 -1, and 01 -1 and construction projects created with these ADs within in the Newport Coast community of Newport Beach, California ( "Project"). C. City desires to engage Consultant to conduct this analysis based upon the terms and conditions contained in this Agreement. D. The principal member of Consultant, is for purpose of this Project, Robert F. Messinger. E. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to contract with Consultant under the terms of conditions provided in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: 1. TERM The term of this Agreement shall commence on the 28th day of January 2003 and shall terminate on the 28th day of January, 2004 unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the duties set forth in the scope of services, attached hereto as Exhibit "A" attached hereto and incorporated herein by reference. 3. COMPENSATION TO CONSULTANT City shall pay Consultant for the services in accordance with the provisions of this Section and the scheduled billing rates, attached hereto as Exhibit "B" and incorporated herein by reference. No rate changes shall be made during the term of this Agreement without prior written approval of City. Consultant's compensation for all work performed in accordance with this Agreement shall not exceed the total contract price of Forty -eight Thousand Seven Hundred Fifty Dollars ($48,750.00). 3.1 Consultant shall maintain accounting records of its billings which includes the name of the employee, type of work performed, times and dates of all work which is billed on an hourly basis and all approved incidental expenses including reproductions, computer printing, postage and mileage. 3.2 Consultant shall submit monthly invoices to City payable by City within thirty (30) days of receipt of invoice subject to the approval of City. 3.3 Consultant shall not receive any compensation for extra work without prior written authorization of City. Any authorized compensation shall be paid in accordance with Exhibit "B ". City shall reimburse Consultant only for those costs or expenses which have been specifically approved in this Agreement, or specifically approved in advance by City. 4. STANDARD OF CARE -4.1 All of the services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with the community professional standards. Qualified and experienced personnel who are not employed by City shall perform all services. Consultant represents and warrants to City that it has or shall obtain all licenses, permits, qualifications and approvals required of its profession. Consultant further represents and warrants that it shall keep in effect all such licenses, permits and other approvals during the term of this Agreement. 4.2 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, or acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's work promptly, or delay or faulty performance by City, contractors, or governmental agencies, or any other delays beyond Consultant's control or without Consultant's fault. 4.3 Consultant shall have control over or charge of and shall be responsible for the Project's design, the construction means, methods, techniques, sequences or procedures, or for any health or safety precautions and programs in connection with the Project. These duties are and shall remain the sole responsibility of. Consultant. Consultant shall not have control over or charge of acts or omissions of employees of the City. 5. INDEPENDENT PARTIES City retains Consultant on an independent contractor basis and Consultant is not an employee of City. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the details in means of performing the work provided that Consultant is compliance with the terms of this Agreement. Anything in this Agreement which may appear to give City the right to direct Consultant as to the details of the performance of the services or to exercise a measure of control over Consultant shall mean that Consultant shall follow the desires of City only with respect to the results of the services. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator, and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Consultant on the Project. 7. PROJECT MANAGER Consultant shall assign the Project to a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Project term. Consultant has designated Robert F. Messinger to be its Project Manager. Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. TIME OF PERFORMANCE Time is of the essence in the performance of the services under this Agreement and the services shall be performed by Consultant in accordance with the schedule specified in Exhibit A. The failure by Consultant to strictly adhere to the schedule may result in termination of this Agreement by City, and the assessment of damages against Consultant for delay. Notwithstanding the foregoing, Consultant shall not be responsible for delays which are due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the services to be provided for the Project, each party hereby agrees to provide notice to the other party so that all delays can be addressed. 8.1 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator not later than ten (10) calendar days after the start of the condition which purportedly causes a delay, and not later than the date upon which performance is due. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays, which are beyond Consultant's control. 8.2 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by either telephone, fax, hand delivery or mail. 9. CITY POLICY Consultant will discuss and review all matters relating to policy and project direction with the Project Administrator in advance of all critical decision points in order to ensure that the Project proceeds in a manner consistent with City goals and policies. 10. CONFORMANCE TO APPLICABLE REQUIREMENT All work prepared by Consultant shall conform to applicable city, county, state and federal law, regulations and permit requirements and be subject to approval of the Project Administrator and City. 11. HOLD HARMLESS Consultant shall indemnify, defend, save and hold harmless City, its City Council, officers, and employees (collectively "Indemnitees ") from and against any and all loss, damages, liability, claims, allegations of liability, suits, costs and expenses for damages of any nature whatsoever, including, but not limited to, bodily injury, death, personal injury, property damages, or any other claims arising from any and all acts or omissions of Consultant, its employees, agents or subcontractors in the performance of services conducted or performed or products provided pursuant to this Agreement. This indemnity shall apply even in the event of passive or concurrent negligence of Indemnitees, excepting only the sole negligence or willful misconduct of Indemnitees, and shall include attomeys' fees and all other costs incurred in defending any such claim. Nothing in this indemnity shall be construed as authorizing, any award of attorneys' fees in any action on or to enforce the terms of this Agreement. 12. INSURANCE Without limiting consultant's indemnification of Indemnitees, and prior to commencement of work, Consultant shall obtain and provide and maintain at its own expense during the term of this Agreement policy or policies of liabiNty insurance of the type and amounts described below and satisfactory to City. Certification of all required policies shall be signed by a person authorized by that insurer to bind coverage on its behalf and must be filed with City prior to exercising any right or performing any work pursuant to this Agreement. Except workers compensation, all insurance policies shall add City as additional insureds for all liability arising from Consultant's services as described herein. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Bests Key Rating Guide unless otherwise approved by the City Risk Manager. Such policies shall include but not be limited to: A. Worker's compensation insurance covering all employees and principals of Consultant, per the laws of the State of California. B. Commercial general liability insurance covering third party liability risks, including without limitation, contractual liability, in a minimum amount of $1 million combined single limit per occurrence for bodily injury, personal injury and property damage. If commercial general liability insurance or other form with a general aggregate is used, either the general aggregate shall apply separately to this Project, or the general aggregate limit shall be twice the occurrence limit. C. Commercial auto liability and property insurance covering any owned and rented vehicles of Consultant in a minimum amount of $1 million combined single limit per accident for bodily injury and property damage. Said policy or policies shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) days' prior notice has been given in writing to City. Consultant shall give City prompt and timely notice of claim made or suit instituted arising out of Consultant's operation hereunder. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. Consultant agrees that, in the event of loss due to any of the perils for which it has agreed to provide comprehensive general and automotive liability insurance, Consultant shall look solely to its insurance for recovery. Consultant hereby grants to City, on behalf of any insurer providing comprehensive general and automotive liability insurance to either Consultant or City with respect to the services of Consultant herein, a waiver of any right of subrogation which any such insurer of said Consultant may acquire against City by virtue of the payment of any loss under such insurance. 13. PROHIBITION AGAINST TRANSFERS Consultant shall not assign, sublease, hypothecate or transfer this Agreement or any for the services to be performed under this Agreement, directly or indirectly, by operation of law or otherwise without prior written consent of City. Any attempt to do so without consent of City shall be null and void. 14. CONFIDENTIALITY The information, which results from the services in this Agreement, is to be kept' confidential unless the release of information is authorized by City. 15. CITY'S RESPONSIBILITIES In order to assist Consultant in the execution of his responsibilities under this Agreement, City agrees to provide the following: A. Access to a financial analyst, either with the City or via another contracted employee, for basic financial research about the Project; and B. Assistance in contacting entities such as the County of Orange, the Irvine Company, the Irvine Ranch Water District, or any other entity that the Consultant deems necessary for Consultants completion of the Project. 16. ADMINISTRATION This Agreement will be administered by the City Manager's Office. Dave Kiff, Assistant City Manager, shall be considered the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 17. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records during normal business hours. Consultant shall allow inspection of all work, data, documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 18. WITHHOLDINGS City may withhold payment of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or his designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of seven percent (7 %) per annum from the date of withholding of any amounts found to have been improperly withheld. 19. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other consultants in connection with the Project. 20. CONFLICTS OF INTEREST A. The Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making decisions that will foreseeably financially affect such interest. B. If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 21. SUBCONSULTANT AND ASSIGNMENT . Except as specifically authorized under this Agreement, the services included in this Agreement shall not be assigned, transferred, contracted or.subcontracted without prior written approval of City. 22. NOTICES All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered personally or on the third business day after the deposit thereof in the United States mail, postage prepaid, first class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Mr. Dave Kiff, Assistant City Manager City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 949- 644 -3002 (phone) 949 - 644 -3020 (fax) dkiff @city.newport- beach.ca.us (e -mail) All notices, demands, requests or approvals from City to Consultant shall be addressed to Consultant at: Mr. Robert Messinger, Esq. Burke Williams & Sorenson, LLP Orange County Office 18301 Von Karman Avenue, Suite 1050 Irvine, CA 92612 -1009 949) 863 -3363 (phone) 949 - 863 -3350 (fax) rmessinger @bwslaw.com (e -mail) 23. TERMINATION In the event either part hereto fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) days, or if more than two (2) days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, the nondefaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. City shall have the option, at its sole discretion and without cause, of terminating this Agreement by giving seven (7) days' prior written notice to Consultant as provided herein. Upon termination of this Agreement, City shall pay to the Consultant that portion of compensation specified in this Agreement that is earned and unpaid prior to the effective date of termination. 24. COMPLIANCES Consultant shall comply with all laws, state or federal and all ordinances, rules and regulations enacted or issued by City. 25. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 26. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. Any modification of this Agreement will be effective only by written execution signed by both City and Consultant. 27. PATENT INDEMNITY The Consultant shall indemnify City, its agents, officers, representatives and employees against liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement, including costs, contained in Consultant's drawings and specifications provided under this Agreement. -IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: M3 Robert L Burnham, City Attorney CITY OF NEWPORT BEACH A Municipal Corporation By: Homer L. Bludau, City Manager CONSULTANT By. y Robert F. essinger, q. Burke Williams & Sorenson, LLP Exhibit A Scope of Work Consultant shall perform the work associated with this Project in three phases as follows: Phase One -- Define and Understand the Controversy /Fact Finding. In this phase, Consultant will assemble all relevant materials and compile the facts related to the concerns and issues associated with formation and implementation of County Assessment Districts 88 -1, 92 -1, and 01 -1. Estimated Hours = 50 Phase Two -- Identify Critical Issues and Information. This phase would focus on the critical issues associated with this matter and the unresolved facts associated with those issues. This would include identifying areas where the "facts' are in conflict or information remains insufficient to understand what transpired and why. Upon completion of these two phases, Consultant shall prepare a written report that summarizes the findings and delineates the critical unresolved issues and open factual contentions. The findings will address areas of concern or controversy that can be explained or resolved. The report will also outline what is needed, both in terms of action and costs, to answer the remaining critical issues and to ascertain or clarify open factual matters. Estimated Hours = 85 While the first two phases are intertwined, the third phase is independent and shall not be initiated until the report generated at the end of Phase Two has been reviewed and accepted by the City of Newport Beach. Phase Three -- Final Review and Report. The third phase will seek to resolve the open issues and factual contentions identified in the report culminating Phase Two. Further, based on the Phase Two report, the Newport Coast Advisory Committee may provide additional direction for the scope and nature of the Phase Three activities. In any case, this phase will have the most narrow focus and most concrete results. This phase will conclude with a written report of findings and conclusions. Estimated Hours = 65 The estimated hours necessary to complete each phase are subject to change as information is received and issues identified, and as additional direction is provided by the Newport Coast Advisory Committee. A -1 Exhibit B -1 Scheduled Billing Rates Mr. Robert F. Messinger Principal = $250.00 /hour. Ms. Julie Hayward Biggs Principal - $250.00 /hour. Consultant may provide the City with the services of other attorneys at its standard municipal rates, as is necessary and appropriate to provide the City with the most cost - effective legal service. - Exhibit C Schedule of Phases /Deliverables Phase 1 Phase 2 (including Written Report) Phase 3 (if appropriate) C -1 April 2003 May 2003 July 2003 l -. PROFESSIONAL SERVICES AGREEMENT THIS AGREEMENT, entered into this 5 —day of January, 2003, by and between the City of Newport Beach (City), a municipal corporation „and Cummins and White, LLP ( "CONSULTANT'), is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City desires to receive an analysis as to aspects of the construction of Newport Coast Drive and the San Joaquin Hills Transportation Corridor ( "Project "). C. City desires to engage Consultant to conduct this analysis based upon the terms and conditions contained in this Agreement. D. The principal member of Consultant, is for purpose of this Project, William R. Mitchell. E. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to contract with Consultant under the terms of conditions provided in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned Parties as follows: 1. TERM The term of this A reement shall commence on the Y day of January 2003 and shall terminate on the P day of January, 2004 unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the duties set forth in the scope of services, attached hereto as Exhibit "A" attached hereto and incorporated herein by reference. 3. COMPENSATION TO CONSULTANT City shall pay Consultant for the services in accordance with the provisions of this Section and the scheduled billing rates, attached hereto as Exhibit "B" and incorporated herein by reference. No rate changes shall be made during the term of this Agreement without prior written approval of City. Consultant's compensation for all work performed in accordance with this Agreement shall not exceed the total contract'price of Forty-Five Thousand Dollars ($45,000). 3.1 Consultant shall maintain accounting records of its billings which includes the name of the employee, type of work performed, times and dates of all work which is billed on an hourly basis and all approved incidental expenses including reproductions, computer printing, postage and mileage. 3.2 Consultant shall submit monthly invoices to City payable by City within thirty (30) days of receipt of invoice subject to the approval of City. 3.3 Consultant shall not receive any compensation for extra work without prior written authorization of City. Any authorized compensation shall be paid in accordance with Exhibit "B ". City shall reimburse Consultant only for those costs or expenses which have been specifically approved in this Agreement, or specifically approved in advance by City. 4. STANDARD OF CARE 4.1 All of the services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the services required by this Agreement, and that it will perform all services in a manner commensurate with the community professional standards. Qualified and experienced personnel who are not employed by City shall perform all services. Consultant represents and warrants to City that it has or shall obtain all licenses, permits, qualifications and approvals required of its profession. Consultant further represents and warrants that it shall keep in effect all such licenses, permits and other approvals during the term of this Agreement. 4.2 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, or acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's work promptly, or delay or faulty performance by City, contractors, or governmental agencies, or any other delays beyond Consultant's control or without Consultant's fault. 4.3 Consultant shall have control over or charge of and shall be responsible for the Project's design, the construction means, methods, techniques, sequences or procedures, or for any health or safety precautions and programs in connection with the Project. These duties are and shall remain the sole responsibility of. Consultant. Consultant shall not have control over or charge of acts or omissions of employees of the City. 5. INDEPENDENT PARTIES City retains Consultant on an independent contractor basis and Consultant is not an employee of City. The manner and means of conducting the work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. Nothing in this Agreement shall be deemed to constitute Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the details in means of performing the work provided that Consultant is compliance with the terms of this Agreement. Anything in this Agreement which may appear to give City the right to direct Consultant as to the details of the performance of the services or to exercise a measure of control over Consultant shall mean that Consultant shall follow the desires of City only with respect to the results of the services. 6. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator, and any other agencies that may have jurisdiction or interest in the work to be performed. City agrees to cooperate with the Consultant on the Project. 7. PROJECT MANAGER Consultant shall assign the Project to a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Project term. Consultant has designated William R. Mitchell to be its Project Manager. Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 8. TIME OF PERFORMANCE Time is of the essence in the performance of the services' under this Agreement and the services shall be performed by Consultant in accordance with the schedule specified in Exhibit A. The failure by Consultant to strictly_ adhere to the schedule may result in termination of this Agreement by City, and the assessment of damages against Consultant for delay. Notwithstanding the foregoing, Consultant shall not be responsible for delays which are due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the services to be provided for the Project, each party hereby agrees to provide notice to the other party so that all delays can be addressed. '7 8.1 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator not later than ten (10) calendar days after the start of the condition which purportedly causes a delay, and not later tfian the date upon which performance is due. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays, which are beyond Consultant's control. 8.2 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by either telephone, fax, hand delivery or mail. 9. CITY POLICY Consultant will discuss and review all matters relating to policy and project direction with the Project Administrator in advance of all critical decision points in order to ensure that the Project proceeds in a manner consistent with City goals and policies. 10. CONFORMANCE TO APPLICABLE REQUIREMENT All work prepared by Consultant shall conform to applicable city, county, state and federal law, regulations and permit requirements and be subject to approval of the Project Administrator and City. 11. HOLD HARMLESS Consultant shall indemnify, defend, save and hold harmless City, its City Council, officers, and employees (collectively "Indemnitees ") from and against any and all loss, damages, liability, claims, allegations of liability, suits, costs and expenses for damages of any nature whatsoever, including, but not limited to, bodily injury, death, personal injury, property damages, or any other claims arising from any and all acts or omissions of Consultant, its employees, agents or subcontractors in the performance of services conducted or performed or products provided pursuant to this Agreement. This indemnity shall apply even in the event of passive or concurrent negligence of Indemnitees, excepting only the sole negligence orwillful misconduct of Indemnitees, and shall include attorneys' fees and all other costs incurred in defending any such claim. Nothing in this indemnity shall be construed as authorizing, any award of attorneys' fees in any action on or to enforce the terms of this Agreement. 12. INSURANCE Without limiting consultant's indemnification of Indemnitees, and prior to commencement of work, Consultant shall obtain and provide and maintain at its own expense during the term of this Agreement policy or policies of liability insurance of the Ell type and amounts described below and satisfactory to City. Certification of all required policies shall be signed by a person authorized by that insurer to bind coverage on its behalf and must be filed with City prior to exercising any right or performing any work pursuant to this Agreement. Except workers compensation, all insurance policies shall add City as additional insureds for all liability arising from Consultan>s services as described herein. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Bests Key Rating Guide unless otherwise approved by the City Risk Manager. Such policies shall include but not be limited to: - A. Worker's compensation insurance covering all employees and principals of Consultant, per the laws of the State of California. B. Commercial general liability insurance covering third party liability risks, including without limitation, contractual liability, in a minimum amount of $1 million combined single limit per occurrence for bodily injury, personal injury and property damage. If commercial general liability insurance or other form with a general aggregate is used, either the general aggregate shall apply separately to this Project, or the general aggregate limit shall be twice the occurrence limit. C. Commercial auto liability and property insurance covering any owned and rented vehicles of-Consultant in a minimum amount of $1 million combined single limit per accident for bodily injury and property damage. Said policy or policies shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) days' prior notice has been given in writing to City. Consultant shall give City prompt and timely notice of claim made or suit instituted arising out of Consultant's operation hereunder. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work. Consultant agrees that, in the event of loss due to any of the perils for which it has agreed to provide comprehensive general and automotive liability insurance, Consultant shall look solely to its insurance for recovery. Consultant hereby grants to City, on behalf of any insurer providing comprehensive general and automotive liability insurance to either Consultant or City with respect to the services of Consultant herein, a waiver of any right of subrogation which any such insurer of said Consultant may acquire against City by virtue of the payment of any loss under such insurance. 13. PROHIBITION AGAINST TRANSFERS Consultant shall not assign, sublease, hypothecate or transfer this Agreement or any for the services to be performed under this Agreement, directly or indirectly, by operation of law or otherwise without prior written consent of City. 'Any attempt to do so without consent of City shall be null and void. 14. CONFIDENTIALITY The information, which results from the services in this Agreement, is to be kept confidential unless the release of information is authorized by City. 15. CITY'S RESPONSIBILITIES In order to assist Consultant in the execution of his responsibilities under this Agreement, City agrees to provide the following: A. Access to a financial analyst, either with the City or via another contracted employee, for basic financial research about the Project; and B. Assistance in contacting agencies such as the County of Orange, the Newport-Mesa Unified School District, the Transportation Corridor Agencies, or any other entity that the Consultant deems necessary for Consultant's completion of the Project. 16. ADMINISTRATION This Agreement will be administered by the City Manager's Office. Dave Kiff, Assistant City Manager, shall be considered the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator or his /her authorized representative shall represent City in all matters pertaining to the services to be rendered pursuant to this Agreement. 17. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate' records with respect to the costs incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records during normal business hours. Consultant shall allow inspection of all work, data, documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. 18. WITHHOLDINGS City may withhold payment of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deerried to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or his designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of seven percent (7 %) per annum from the date of withholding of any amounts found to have been improperly withheld. 19. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other consultants in connection with the Project. 20. CONFLICTS OF INTEREST A. The Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act"), which (1) requires such persons to disclose financial interest that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making, or participating in making decisions that will foreseeably financially affect such interest. B. If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 21. SUBCONSULTANT AND ASSIGNMENT Except as specifically authorized under this Agreement, the services included in this Agreement shall not be assigned, transferred, contracted or subcontracted without prior written approval of City. 22. NOTICES All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered personally or on the third business day after the deposit thereof in the United States mail, postage prepaid, first class mail, addressed as hereinafter provided. All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Mr. Dave Kiff, Assistant City Manager City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 949 -644- 3002(phone) 949 - 644 -3020 (fax) dkiff @city.newport- beach.ca.us (e -mail) All notices, demands, requests or approvals from City to Consultant shall be addressed to Consultant at: Mr. William R. Mitchell Cummins & White, LLP 2424 S.E. Bristol St. Suite 300 Newport Beach, CA 92660 949 - 852 -1800 (phone) 949 - 852 -8510 (fax) bmitchell @cwlawyers.com (e -mail) 23. TERMINATION In the event either part hereto fails or refuses to perform any of the provisions hereof at the time and in the manner required hereunder, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) days, or if more than two (2) days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, the nondefaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. City shall have the option, at its sole discretion and without cause, of terminating this Agreement by giving seven (7) days' prior written notice to Consultant as provided herein. Upon termination of this Agreement, City shall pay to the Consultant that portion of compensation specified in this Agreement that is earned and unpaid prior to the effective date of termination. 24. COMPLIANCES Consultant shall comply with all laws, state or federal and all ordinances, rules and regulations enacted or issued by City. 25. WAIVER A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 26. INTEGRATED CONTRACT This Agreement represents the full and complete understanding of every kind or nature whatsoever between the Parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. Any modification of this Agreement will be effective only by written execution signed by both City and Consultant." 27. PATENT INDEMNITY The Consultant shall indemnify City, its agents, officers, representatives and employees against liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement, including costs, contained in Consultant's drawings and specifications provided under this Agreement. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the day and year first written above. APPROVED AS TO FORM: 0 CITY OF NEWPORT BEACH A Municipal Corporation Robert L Burnham, City Attorney Homer L. Bludau, City Manager CONSULTANT By: r � William R. Mitchell, Esq. Cummins and White, LLP Exhibit A Scope of Work Consultant shall perform the work associated with this Project in three phases as follows: , Phase One — Define and Understand the Controversy /Fact Finding. In this phase, Consultant will assemble all relevant materials and compile the facts related to the concerns and issues associated with the taking of the section of Newport Coast Drive. Estimated Hours = 12 to 18 Phase Two — Identify Critical Issues and Information. This phase would focus on the critical issues associated with this matter and the unresolved facts associated with those issues. This would include identifying areas where the "facts' are in conflict or information remains insufficient to understand what transpired and why. The effect of the summary adjudication of Newport Coast Drive Defense Fund v. San Joaquin Hills Transportation Corridor Agency (4th Appellate District, Division 4, Case No. G020843) should be addressed in full during this phase. Upon completion of these two phases, Consultant shall prepare a written report that summarizes the findings and delineates the critical unresolved issues and open factual contentions. The findings will address areas of concern or controversy that can be explained or resolved. The report will also outline what is needed, both in terms of action and costs, to answer the remaining critical issues and to ascertain or clarify open factual matters. Estimated Hours = 14 to 22 While the first two phases are intertwined, the third phase is independent and shall not be initiated until the report generated at the end of Phase Two has been reviewed and accepted by the City of Newport Beach. Phase Three -- Final Review and Report. The third phase will seek to resolve the open issues and factual contentions identified in the report culminating Phase Two. Further, based on the Phase Two report, the Newport Coast Advisory Committee may provide additional direction for the scope and nature of the Phase Three activities. In any case, this phase will have the most narrow focus and most concrete results. This phase will conclude with a written report of findings and conclusions. Estimated Hours = 10 to 16 10 SCHEDULE KB" —FEES 0 Senior Partner $250 Partner/"Of Counsel" 225 Lead Sr. Associate 195 Senior Associate 175 Associate 145 Senior Law Clerk 85 Law Clerk 85 Senior Paralegal 85 Paralegal 85 Litigation Analyst 40 Exhibit C Schedule of Phases /Deliverables Phase 1 Phase 2 (including Written Report) Phase 3 (if appropriate) `K April 2003 May 2003 July 2003 ROBERT F. MESSINGER Page 1 of 1 BURKE WILLIAMS & SORENSEN, LLP A t t o r n e y. P r o f e s s i o n a l 8 u m m a r y Mr. Messinger is a partner in the Firms Public _Law Practice Group and chairs the Firm's Municipal Tax & Finance Specialty Group. He was admitted to the California Bar in 1994 and the Colorado Bar Robert F. in 1995. Mr. Messinger has a J.D. (1994) from the University Illinois, an M.P.A. (1987) from the University of Southern Messinger camorniaandaB.A. in International Studies (1981) from The American University. Mr. Messinger was Notes Editor (1992 -93) and Editor -in -Chief (1993 -94) of the Recent Decisions Section of the Illinois Bar Journal and a founding Member (1992 -93) and Associate Editor (1993 -94) of The Elder Law Journal. G E -mail Robert F. Messinger Mr. Messinger devotes a large portion of his practice to municipal tax and finance matters. Mr. Messinger has served as bond counsel P (949) 863 -3363 and underwriters counsel in connection with revenue bonds, tax allocation bonds, special assessment bonds, COP'S, TRANS, and tax exempt leases. He has extensive experience in advising public Practice Groups & agencies on financial matters including, but not limited to, treasury Related Links: and fiscal administration, investment policies, assessments and assessment district formation, municipal taxation, business license Public Law Practice taxes, utility users taxes, transient occupancy taxes, fees, rates and Group charges, and Proposition 218. The Fighting lllini In addition to his public finance practice, Mr. Messinger has developed expertise in joint powers agreements and serves as General Counsel to several joint powers authorities, including the California Joint Powers Insurance Authority, the Riverside -San Bernardino Housing & Finance Agency and the Gateway Cities Council of Governments in Los Angeles County. He also serves as Legal Counsel to the Arroyo Seco Regional Library Network (Region 1V of the Library of California). In his public law practice, Mr. Messinger advises councils and governing boards of public entities of the legal requirements for conducting city or agency business, including agency formation, the Brown Act, the Public Records Act and the Political Reform Act. kw Before becoming an attorney, Mr. Messinger was employed in the California public sector, serving in the City of Downey as Assistant to the City Manager and in the City of Cudahy as Assistant to the City Manager and Acting Finance Director. Mr. Messinger is a member of the National Association of Bond Lawyers and is active in the League of California Cities. Mr. Messinger serves as a contributing editor to the California Municipal Law Handbook and has authored numerous articles. 2001 Burke, Williams & Sorensen, LLP 3C) httnr / /www.bwslaw.com/messineer.html 01/21/2003 Cummins & White, LLP - Lawyers c. )Vv Orange County Office 2424 S.E, Bristol St. Suite 200 t,e"crt Bcael-, CA92660 949;052 -113W -(FAX; 94 1652 -6510 Page 1 of 1 Los Angeles County office 2141 Rosccoms Ave. Suite 113C El Seguncu. CA 97245 -4750 213:6-4 -I000 - (FAX; 21WG -aC5C0 HOME I OUR FIRM I OUR F:RPERIENCH I Dull. L wyeits I roACRiCR GROUPS j PUSUSHSD DR.CISIONS !%1&V'S I SEMINAR8 NIiW$_ _ Oof Appellate WILLIAM R. MITCHELL Business Insurance / Self Insured Personal Services / Estate & Tax Planning Real Estate William R Mitchell joined Cummins & White, LLP as a partner in 2002. Mr. Mitchell's practices focuses on corporate law and business liligahou. formerly. he was Vice Pmsidenl- Oencrul Ctnmsci of Interstate Specialty Marketing Inc., a sole practioncr. and General Counsel to Pick Systems, Mr Mitchell represents corporations and business professionals in all matters related to the fbmution and 0vcn1JnLC Of bu>moo moue,. Ile handles transactions, mergers and acquisitions, and the review and preparation of business agreements. Mr. Mitchell has expertise in intellectual property licensing, distribution and pmlection for technology companies. as well as agency agreements for advertising and marketing companies. Mr. Mitchell also has depth of experience and success in the management of business litigation, including sophisticated, complex and out -of- -state lawsuits. He also acts as General Counsel for many of'the firm's business clients. M Mitchell is a member of the Slate Bar California and the Orange Bar Association. Mr. Mitit chell was appointed by the Orange County Board of Supervisors to o the the Government Practices O%crsight Committee where he served as Vice Chairman (1995 - 1996). lie served as Chairman of Orange County Common Cause (1990 -1996) and on the Board of Directors of California Common Cause (1992 - 1996). Mr. Mitchell was also Chairman of the Board of Directors of Career Beginning, a program that assisted at risk high school students in Santa Ana. California. Mr. Mitchell attended the University of Southern California (1977) - w here he was honored with membership in Skull & Dagger and Blue Key. He eamed a .11). from the University of the Pacific McGeorge School of Law (198'1), where he was a member of the Traynor Society and received the American Jurispnidence Award in Corporations. Mr. Mitchell was bom in Los Angeles. CA. He and his family reside in Coto de Caca, California. Elm Larry Daniel Siobhan Susan Laya David Josh Annabelle Kristen Arnold Bath Bishop Dallas Dogmetchi Gerlt Grushkin Harris Hopkins MRS Marshall Laura William Jennifer Marilyn Karen Albert James Fred Hunt McFeaters Mitchell Ramsden Steele Taillon Tong Wakefield Whitaker Hume I Our Firni I Otic..Experience I Our Lavyy_ers I PIz..ctice Gr9upg I Published t)ectsin�s I7lients Seminars I Vrws I (bntact 's .J 2002 Cummins & White. LLP Updated:: 11/25/2002 Special Financing Districts in the Newport Coast A summary of the three major public financing districts in the Newport Coast/Ridge area There are three major public financing districts in the Newport Coast and Ridge. A description of the districts, plus the improvements that they support, follows: Assessment District #88 -1 (COAST). The County of Orange established this Municipal Improvement Act of 1913 Assessment District in 1988 to pay for the improvements listed below. The bonding capacity of the District is $165.7 million, with $7 million of that amount available to call or retire bonds as of the District's Annual Administrative Report for FY 1997 -98. The property liens that repay the bonds are amortized over a period of up to 30 years on each parcel of developed land. ROAD IMPROVEMENTS • Construction of Newport Coast Drive • Construction of San Joaquin Hills Road from Spyglass to Newport Coast Drive • Construction of Pelican Hill Road • Construction of vista Ridge and Ridge Palk Road • widening of Pacific Coast Highway from Corona del Mar to Muddy Canyon OTHERIMPROVEMENTS • Traffic Signals at Nine Coast Intersections • 35% of the Newport Coast Fire Station • Utility Infrastructure (CAN, electric, telephone, gas, water, and sewer. OTHER USES OF FUNDS • Planning and Engineering, Surveying, Permit Inspection Fees, Staking, Printing, Advertising • District Administrative Expenses rl Special Financing Districts in the Newport Coast (continued) Assessment District #92 -1 (RIDGE). The County of Orange established this Municipal Improvement Act of 1913 Assessment District in 1992 to pay for the improvements listed below. The bonding capacity of the District is $18.4 million. The property liens that repay the bonds are amortized over a period of up to 39 years on each parcel of developed land. ROAD IMPROVEMENTS • Construction of Newport Ridge Drive West • Construction of Newport Ridge Drive East • San Joaquin Hills Road right turn lanes • Ridge Park Road from Newport Coast Drive to San Joaquin Hills Road OTHERIMPROVEMENTS • Traffic Signals at four Ridge Intersections • 32% of the Newport Coast Fire Station • Canyon Watch and Harbor Watch view Parks • Coyote Canyon Landfill Methane Mitigation • Utility Infrastructure (CAN, electric, telephone, gas, water, and sewer. OTHER USES OF FUNDS • Planning and Engineering, Surveying, Permit Inspection Fees, Staking, Printing, Advertising, etc. • District Administrative Expenses Assessment District #92 -1 Location Map Special Financing Districts in the Newport Coast (continued) Community Facilities District #90 -1. This "Mello- Roos" District (also known as a "CFD' is levied according to the Mello -Roos Community Facilities Act of 1982. The Act allows school districts, cities, counties, and other local agencies to levy a special tax on parcels to fund a variety of public infrastructure projects. CFD #90 -1 is levied and administered by the Newport-Mesa Unified School District. NMUSD has the authority to issue up to $26 million in bonds via this CFD — the authorization continues until NMUSD chooses to end it. The CFD applies a minimum tax of $983 in FY 1997 -98 to 6,239 dwelling units in Newport Beach, Newport Ridge, and Newport Coast. Funds generated from the CFD go towards: SCHOOLIMPROVEMENTS • $4 million for Reconstruction and Remodeling of School Facilities within the Corona del Mar zone - including Lincoln Elementary and Corona del Mar High School. • $4 million for a school site of 10 acres (with four acres for "grassy recreational" activities) and the design, construction, and equipping of a school facility for 400 students in Newport Coast. castaways - 119 OTHER USES OF FUNDS • $5 million for a NMUSD "Endowment Fund" for enhanced educational programs in the NMUSD. • CFD #90 -1's administrative expenses Newport-Mesa USD CFD #90 -1 Location and Number of Parcels Affected Other Newport Beach "Infill" .. 906 _� �� Newport Ridge -2,039 Harbor Cove • 149 Newport Coast — 2,600 -),HJ City of Newport Beach BUDGET AMENDMENT 2002 -03 EFFECT ON BUDGETARY FUND BALANCE: Increase Revenue Estimates X Increase Expenditure Appropriations Transfer Budget Appropriations SOURCE: from existing budget appropriations from additional estimated revenues PX from unappropriated fund balance EXPLANATION: NO. BA- 041 AMOUNT: $93,750.00 Increase in Budgetary Fund Balance AND X Decrease in Budgetary Fund Balance No effect on Budgetary Fund Balance This budget amendment is requested to provide for the following: To increase expenditure appropriations for a legal review of the Newport Coast Assessment Districts. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Fund Account 010 3605 REVENUE ESTIMATES (3601) Fund /Division Account EXPENDITURE APPROPRIATIONS (3603) Description General Fund Fund Balance Description Signed: Signed: Signed: Services Director City Manager City Council Approval: City Clerk Amount Debit Credit $93,750.00 - Automatic $93,750.00 / -a?i -cam Date � D e Date Description Division Number 0310 City Manager Account Number 8080 Services - Professional & Technical Division Number Account Number Division Number Account Number Division Number Account Number Division Number Account Number Signed: Signed: Signed: Services Director City Manager City Council Approval: City Clerk Amount Debit Credit $93,750.00 - Automatic $93,750.00 / -a?i -cam Date � D e Date