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HomeMy WebLinkAboutK. Hovnanian at Gilroy LLC - Agreement for Community Facilities District No. 2011-01 Deer Park Landscape17046 -15 J H: CKL 1 -13 -11 DEPOSIT AND REIMBURSEMENT AGREEMENT City of Gilroy Community Facilities District No. 2011 -1 (Deer Park Landscape Maintenance) THIS DEPOSIT AND REIMBURSEMENT AGREEMENT (the "Agreement "), dated for convenience as of February 1, 2011, is by and between the City of Gilroy (the "City "), for the proposed City of Gilroy Community Facilities District No. 2011 -1 (Deer Park Landscape Maintenance) (the "CFD ") and K. Hovnanian at Gilroy, LLC, a California limited liability company (the "Landowner "). RECITALS: WHEREAS, the City and certain property owners in the proposed CFD have entered into a Landscape Installation and Maintenance Agreement (the "LIMA "), dated September 24, 2010; WHEREAS, in furtherance of the LIMA, the Landowner and the other property owners in the proposed CFD would like the City to consider taking actions necessary to form the CFD under Sections 53311 et seq. of the California Government Code (the "Act "); WHEREAS, the Landowner is willing to advance funds to the City or to its agents and consultants as necessary to ensure payment of any and all costs of the City in forming the CFD; WHEREAS, Section 53314.9 of the Act provides that, either before or after formation of the CFD, the City may accept advances of funds and may provide, by resolution, for the use of those funds, including but not limited to pay any cost incurred by the local agency in creating the CFD, and may agree to reimburse the advances under all of the following conditions: (1) the proposal to repay the advances is included both in the resolution of intention and the resolution of formation to establish the CFD; and (2) any proposed special tax is approved by the qualified electors of the CFD and, if the qualified electors of the district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election; and WHEREAS, the City and the Landowner now desire to specify the terms of the advances of funds and reimbursement. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein, and for other consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: AGREEMENT: Section 1. The Advances. The Landowner hereby agrees to provide 0.50 a10 in the form of cash or a check payable to the City (the "Initial Advance "), to be used by the City to pay the "Initial Costs" (as defined below); the Initial Advance shall be delivered to the City Manager of the City prior to the execution of this Agreement by the City. The City, by its execution hereof, acknowledges receipt of the Initial Advance. The Landowner further agrees to advance any additional amounts (collectively with the Initial Advance, the "Advances ") incurred or reasonably expected to be incurred by the City, promptly upon written demand therefore by the City Manager of the City, said Advances to be made to the City or directly to the City's consultants as specified by the City Manager in writing to the Landowner. In the event that the Landowner shall fail or refuse to remit any such amounts to or at the direction of the Assistant City Manager of the City, all processing by the City of the proceedings for the CFD shall cease until such time as the requested amounts are paid by the Landowner. The Initial Costs include, but are not limited to: (i) the fees and expenses of any consultants to the City employed in connection with the formation of the CFD (such as engineering, legal counsel, including special counsel to the City, financial advisory and special tax consultant); (ii) the costs of appraisals, absorption studies and other reports necessary or deemed advisable by City staff in forming the CFD and issuing bonds for the CFD; (iii) costs of publication of notices, preparation and mailing of ballots and other costs related to any election with respect to the CFD, any special tax to be levied therein; (iv) a reasonable charge, as determined by the City Manager, in his sole discretion, for an allocable share of administrative expense with respect to City staff engaged in analyzing and participating in the CFD formation and special tax formulation proceedings; and (v) any and all other actual costs and expenses incurred by the City with respect to the creation of the CFD. Section 2. Use of Funds. Pursuant to Section 53314.9 of the Act, the Advances are subject to reimbursement only as follows: (a) If the CFD is formed, then, within thirty (30) business days after the completion of the formation proceedings, the City Manager of the City shall return any then unexpended Advances to the Landowner, without interest, less an amount equal to any Initial Costs that have been incurred or committed, but not yet paid by the City from the Advances. (b) If the qualified electors of the CFD do not approve the proposed special tax to be levied on the property within the CFD, the City Manager of the City shall, within thirty (30) business days of the confirmation of the election results by the City Council of the City, return any then unexpended Advances to the Landowner, without interest, less an amount equal to any Initial Costs which have been incurred or committed, but not yet paid by the City from the Advances. Section 3. Agreement Not Debt or Liability of City. It is hereby acknowledged and agreed that this Agreement is not a debt or liability of the City, as provided in Section 53314.9(b) of the Act. The City shall in no event be liable hereunder other than to return any unexpended and uncommitted portions of any Advances as provided in Section 2 above and provide an accounting under Section 6 below. The City shall not be obligated to advance any of its own funds with respect to the establishment of the CFD or for any of the other purposes listed in Section 1 hereof. No member of the City Council of the City or member, associate member, director, officer, employee or agent of the City shall to any extent be personally liable hereunder. Section 4. No Obligation to Form CFD The provisions of this Agreement shall in no way obligate the City to form the CFD or to take any action with respect thereto. Section 5. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. -2- Section 6. Accounting. The Advances may be commingled with other funds of the City for purposes of investment and safekeeping, but the City shall at all times maintain records of the expenditure of the Advances. The City shall provide the Landowner with a written accounting, including copies of supporting invoices, of Advances expended pursuant to this Agreement within thirty (30) business days of receipt by the City Manager of the City of a written request therefor submitted by an authorized officer of the Landowner. No more than one accounting will be provided in any calendar month and the cost of providing the accounting shall be considered an Initial Cost. Section 7. Indemnification. The Landowner hereby agrees to assume the defense of, indemnify and hold harmless the City, and each of its members, officers, employees and agents, from and against all actions, claims or proceedings of every type and description to which they or any of them may be subjected or put, by reason of, or arising out of, any acts or omissions of the Landowner or any of its members, officers, employees, contractors or agents in connection with the establishment of the CFD and the issuance of any bonds by the City for the CFD. The City shall promptly notify the Landowner of any such claim, action or proceeding, and the City shall cooperate in the defense thereof. The obligations of the Landowner under this Section shall not apply to any claims, actions or proceedings arising through the negligence or willful misconduct of the City, its members, officers, employees or agents. Section 8. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of California. Section 9. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. Section 10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. -3- IN WITNESS THEREOF, the parties have executed this Agreement as of the day and year first written above. LANDOWNER: K. HOVNANIAN AT GILROY, LLC, a California limited liability company By: Name: 4 Its: Li' Dated: CITY: CITY OF GILROY on behalf of the proposed City of Gilroy Community Facilities District No. 2011 -1 (Deer Park Landscape Maintenance) By: _ Name: Its: Dated: Gust. 14 �f v✓-t J Cis ,TD f Ll, illUr' , -4- .