HomeMy WebLinkAboutSanta Clara County Library - Agreement Settling Disputes and Releasing ClaimsAGREEMENT SETTLING DISPUTES AND RELEASING CLAIMS
This Agreement is entered into between the City of Milpitas ( "the City "), a
municipal corporation, and the Santa Clara County Library Joint Powers Authority ( "the
JPA"), a joint powers authority:
Recitals
A. The City of Milpitas and the County of Santa Clara ( "the County") entered
into an agreement dated April 28, 1981 entitled "Lease Agreement: Milpitas Branch
Library" ("the Leasers). The Lease provided that the City would construct a library on
land that it owned. The construction was to be financed by the sale of bonds or other
securities by the City. Upon completion of construction, the County would occupy the
building and operate it as a library. The Lease was to last for 30 years following the
occupation of the building by the County, with the option of two ten -year extensions of
the lease.
B. For each year of the lease the County was to pay rent to the City of an
amount equal to the payments the City had to make on the bonds or other securities
issued to pay for the construction of the library, provided, however, the annual rental
payments were capped at $120,000.
C. To finance the construction of the library, the City issued certificates of
participation. The library was constructed. The County occupied the library and began
making rental payments. Because the annual payments on the certificates of
participation exceeded $120,000 per year, the annual rental payments by the County
were $120,000.
D. In 1995 the JPA was formed, and the JPA assumed the County's
obligations under the Lease.
E. In 1998, the City retired the certificates of participation.
F. A dispute has now arisen regarding the JPA's rental payments. The City
contends that under the lease the annual rental payments continue until the end of the
30 year lease, while the JPA contends that its obligation to pay rent ended when the
City retired the certificates of participation.
Agreement
The City and the JPA ( "the Parties ") now agree as follows:
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AGREEMENT SETTLING DISPUTES AND RELEASING CLAIMS
This Agreement is entered into between the City of Milpitas ( "the City "), a
municipal corporation, and the Santa Clara County Library Joint Powers Authority ( "the
JPA"), a joint powers authority:
Recitals
A. The City of Milpitas and the County of Santa Clara ( "the County") entered
into an agreement dated April 28, 1981 entitled "Lease Agreement: Milpitas Branch
Library" ("the Leasers). The Lease provided that the City would construct a library on
land that it owned. The construction was to be financed by the sale of bonds or other
securities by the City. Upon completion of construction, the County would occupy the
building and operate it as a library. The Lease was to last for 30 years following the
occupation of the building by the County, with the option of two ten -year extensions of
the lease.
B. For each year of the lease the County was to pay rent to the City of an
amount equal to the payments the City had to make on the bonds or other securities
issued to pay for the construction of the library, provided, however, the annual rental
payments were capped at $120,000.
C. To finance the construction of the library, the City issued certificates of
participation. The library was constructed. The County occupied the library and began
making rental payments. Because the annual payments on the certificates of
participation exceeded $120,000 per year, the annual rental payments by the County
were $120,000.
D. In 1995 the JPA was formed, and the JPA assumed the County's
obligations under the Lease.
E. In 1998, the City retired the certificates of participation.
F. A dispute has now arisen regarding the JPA's rental payments. The City
contends that under the lease the annual rental payments continue until the end of the
30 year lease, while the JPA contends that its obligation to pay rent ended when the
City retired the certificates of participation.
Agreement
The City and the JPA ( "the Parties ") now agree as follows:
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_r OR-
1 - Recitals. The Parties agree that the above Recitals are true.
2. Continued Rental Payments. The JPA agrees to make settlement rental
payments of $120,000 per year in two annual installments, due on February 15" and
August 151h to the City until the expiration of the lease in 2012, pursuant to the schedule
shown on Exhibit "A ". The JPA also agrees to pay over to the City the $480,000, plus
accrued interest, in settlement rental payments that were paid by the JPA into an
escrow account pending the resolution of this dispute. There remain eleven annual
settlement rental payments of $120,000 per year yet to be made, with the last to be
made by February 15, 2013. The JPA may still exercise its two ten -year options to
extend the lease, and no settlement rental payments will be due during such
extensions.
3. Deduction of Rental Payments from Construction Allocations. The JPA
has adopted a building policy, and under this policy it has determined that the Cities of
Gilroy, Morgan Hill, and Milpitas should be allocated funds for the expansion of their
libraries. The allocation for -the City of Milpitas is currently $3,325,005. The allocation
for the City of Gilroy is currently $5,466,730. And the allocation for the City of Morgan
Hill is currently $3,706,260. These allocations are not guaranteed, and the JPA may
decide not to make them. However, the Parties agree that if funds for library
construction do become available, they should be divided between the Cities of
Milpitas, Gilroy, and Morgan Hill on a pro rata basis, based upon the amount of each
city's remaining allocation. The Parties further agree that every time a settlement rental
payment is made by the JPA to the City of Milpitas, the allocation to the City of Milpitas
shall be reduced by the amount of the settlement rental payment, and the City's pro
rata share of any available building funds shall consequently be reduced. A schedule
illustrating the manner in which these payments may be made is attached hereto, as
Exhibit "B ".
4. The City's Withdrawal from the JPA. In the event the City of Milpitas
withdraws from the JPA, the JPA shall cease to be obligated to make any further
settlement rental payments under this Agreement or under the Lease after (1) the City
declares its intent to withdraw from the JPA and (2) the completion of the withdrawal
process as reflected in the JPA Agreement. The City shall keep all of the settlement
rental payments that it has received, and shall still collect any unpaid settlement rental
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payments that came due before the effective date of the City's withdrawal from the JPA,
but shall not collect any settlement rental payments due after the effective date of the
City's withdrawal from the JPA.
5. Representation bYCounsel. The Parties acknowledge that each of them
has been represented by counsel with respect to this Agreement and all matters
covered by or related to this Agreement. Both Parties have been fully advised with
respect to all rights which are affected by this Agreement, and both hereby authorize
and direct their respective attorneys to execute and deliver such other and further
documents as may be required to carry out the terms of this Agreement.
6.- Binding Agreement. This Agreement shalt be binding upon and inure to
the benefit of the Parties, their respective legal successors, heirs, administrators, and
assigns.
7. California Law. This Agreement shall be construed under, and shall be
deemed governed by, the laws of the State of California.
8. Integration. This Agreement sets forth the entire understanding of the
Parties in connection with the dispute identified in section F of the Recitals. Neither of
the Parties have made any statement, representation, or warranty in connection
herewith except as expressly set forth herein, which has been relied upon by the other
party or which acted as an inducement for the other party to enter into this Agreement.
Nothing in this Agreement may be altered or amended in any respect except by a
writing executed by the Parties.
11. Valid Agreement. Should any provision or part of this Agreement be found
to be invalid or unenforceable, only that particular provision or part shall be inoperative,
and all provisions and parts this Agreement shall continue in full force and effect and
remain binding on the Parties.
12. Counterparts. This Agreement may be executed in counterparts and so
executed shall constitute an agreement binding on all the Parties hereto
notwithstanding that the Parties are not signatories to the original or the same
counterpart.
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12. Effective Date. This Agreement shall go into effect on the date the last
signature is affixed to the agreement.
For the CITY OF MILPI S-
Dated:
By: b
Its: r
For the SANTA CLARA COUNTY LIBRARY JOINT POWERS AUTHORITY:
Dated:
By: Dan Furtado
Its: Vice Chairperson
Dated:
Approved as to Form:
MEYERS, NAVE, RIBACK, SILVER & WILSON
By: Benda . Fay
Attorn or the CITY MILPITAS
Dated: So'. / 7 2-00�Z
APPROVED AS TO FORM AND LEGALITY:
By: Kathryn A. erry
Attorneys for the SANTA CLARA COUNTY LIBRARY
JOINT POWERS AUTHORITY
S:1 GeneralGovernment \Berry\Librarylsettlement agreement.wpd
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Payment Date
Amount Due
Thirty days following receipt of signed
settlement a eement from City..
$480,000 plus bank assigned
accrued interest
August 15, 2002
$60,000
February 15, 2003
$60,000. .
August 15, 2003
$60,000
February 15 2004
$60,000
August 15, 2004
$60,000
February 15, 2005
$60,000
August 15, 2005
$60,000
February 15, 2006
$60,000
August 15 2006
$60,000
February 15, 2007
$60,000
Aug2st 15, 2007
$60,000
February 15, 2008
$60,000
August 15, 2008
$60,000
February 15, 2009
$60,000
August 15, 2009
$60,000
February 15, 2010
$60,000
August 15, 2010
$60,000
February 15, 2011
$60,000
August 15, 2011
$60,000
February 15, 2012
$60,000
August 15 2012
$60,000
February 15, 2013
$60,000
Exhibit "A'
11
Exhibit B
PAYMENT SCHEDULE
Exhibit B
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(1)
(2)
(3)
(4)
(5)
Fiscal
Annual
Proportionate
Proportionate
Proportionate
Milpitas
Year
Deposit w/o
Payment to
Payment to
Payment to
Settlement
MI Lease
Gilroy
Morgan Hill
Milpitas
Rent Payment
Payment
2001 -02
154,000
480,000
2002 -03
256,000
120,000
2003 -04
256,000
120,000
2004 -05
256,000
118,822
80,557
56,621
120,000
2005 -06
256,000
120,072
81,405
54,523
120,000
2006 -07
256,000
121,379
82,291
52,330
120,000
2007 -08
256,000
122,747
83,218
- 50,035
120,000
2008 -09
256,000
124,180
84,190
47,629
120,000
2009 -10
256,000
125,686
85,211
45,103
120,000
2010 -11
256,000
127,270
86,285
42,445
120,000
2011 -12
256,000
128,940
87,417
39,643
120,000
2012 -13
256,000
130,704
88,613
36,683
120,000
2013 -14
376,000
194,716
132,011
49,273
2014 -15
376,000
194,716
132,011
49,273
2015 -16
376,000
194,716.
132,011
49,273
2016 -17
376,000
194,716
132,011
49,273
2017 -18
376,000
194,716
132,011
49,273
2018 -19
496,000
256,859
174,142
64,998
2019 -20
496,000
256,859
174,142
64,998
2020 -21
496,000
256,859
174,142
64,998
2021 -22
496,000
256,859
174,142
64,998
2022 -23
.496,000
256,859
174,142
64,998
2023 -24
496,000
256,859
174,142
64,998
2024 -25
496,000
256,859
174,142
64,998
2025 -26
496,000
256,859
174,142
64,998
2026 -27
496,000
256,859
174,142
64,998
2027 -28
496,000
256,859
174,142
64,998
2028 -29
496,000
256,859
174,142
64,998
2029 -30
496,000
256,859
174,142
64,998
2030 -31
496,000
256,859
174,142
64,998
2031 -32
496,000
256,859
174,142
64,998
2032 -33
496,000
256;859
174,142
64,998
2033 -34
496,000
256,859
174,142
64,998
_
_ $ 12,786,000
$6,203,132
$4,205,516
$1,711,352
$1,800,000
Exhibit B
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Exhibit B, Continued
This anticipated schedule is based on current funding streams.
This payment schedule is based upon the JPA's funding stream as projected in
2002. The JPA reserves the right not to. release any funds to any city (except for the
annual settlement "rental" payments of $120,000 due to the City of Milpitas under this
Agreement) until that city's library expansion has been constructed and occupied. If,
after ten years from the date of this Agreement, a city's library expansion has not been
constructed, and the JPA determines that that library expansion is not likely to be built,
then the JPA may at its discretion redistribute that city's allocable share for any library
purpose whatsoever.
Except for its commitment to make annual settlement "rental" payments of
$120,000 to the City of Milpitas, the JPA reserves the right to otherwise increase or
decrease the funding stream for library construction, as reflected in column one.
The Agreement shall take precedence over any inconsistencies which arise from
the interpretation of the Exhibits.
S .\Genera]GovernmenMerr)&Exhibit EWPA Milpitas Library.wpd
Exhibit B
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