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21-0927_SANTA MARGARITA WATER DISTRICT_Assignment and Assumption AgreementASSIGNMENT AND ASSUMPTION AGREEMENT This Assignment and Assumption Agreement, dated as of R 7 2021 (this "Agreement'), is entered into by and between SANTA MARGARI A WATER DISTRICT, a California Water District duly organized and existing under Division 13 of the Water Code of the State of California (the "Assignee" or "SMWD"), and the CITY OF SAN JUAN CAPISTRANO, a municipality duly organized and existing under and by virtue of the laws of the State of California (the "Assignor" or "City")'. Assignor and Assignee are, together, referred to in this Agreement as the "Parties" and, individually, as a "Party." RECITALS A. The Parties entered into an Annexation Agreement dated as of January 21, 2020 (the "Annexation Agreement") wherein City agreed to transfer its potable water system and recycled water system and its wastewater system (collectively the "Utilities System") to SMWD in accordance with the terms of the Annexation Agreement and after approval of and consistent with any terms and conditions established by the Orange County Local Agency Formation Commission ("LAFCO"). B. City and SMWD are member agencies of the South Orange County Wastewater Authority, a California joint powers authority ("SOCWA"). C. SOCWA was formed pursuant to a Joint Exercise of Powers Agreement entered into as of July 1, 2001, which brought together former joint powers agencies known as South East Regional Reclamation Authority ("SERRA") formed March 9, 1970, Aliso Water Management Agency ("AWMA") formed March 1, 1972, and South Orange County Reclamation Authority ("SOCRA") formed November 29, 1994. The formation of SOCWA terminated the existence of SERRA, AWMA, and SOCRA and the July 1, 2001 Joint Exercise of Powers Agreement provided that certain underlying agreements for the construction and operation of facilities ("Project Committee Agreements") continued as to terms, conditions, and obligations of the parties for facilities of SERRA, AWMA and SOCRA that transferred to SOCWA under its July 1, 2001 Joint Exercise of Powers Agreement ("SOCWA JPA Agreement'). D. SOCWA consolidated interests in Project Committee Agreements into one legal entity with ownership of various wastewater treatment and reclamation facilities and responsibility for operations, maintenance, administration and capital improvements for such facilities. Each participating member agency or party in SOCWA was recognized as holding allocated shares of capacity, with attendant rights and obligations under the Project Committee Agreements. E. As a member agency of SOCWA, the City is a participant in certain agreements more particularly described in Exhibit "A" to this Agreement (the "Project Agreements") which establish capacity rights and obligations for specific wastewater facilities, interests in certain operational permits, and other rights and obligations related to specific projects. F. SMWD is also a participant in all of the City Project Agreements, and the City desires to assign all of its rights, title, interests, duties responsibilities and obligation in the Project Agreements to SMWD and SMWD desires to accept such assignment to effectuate the annexation of the City's Utilities System to SMWD, with such assignment and acceptance to be effective as of the Annexation Effective Date (as defined in the Annexation Agreement). NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND CONDITIONS CONTAINED HEREIN, AND OTHER VALUABLE CONSIDERATION, THE ADEQUACY OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS: AGREEMENT 1. Recitals. The recitals above are hereby incorporated in and made a part of this Agreement. 2. Assignment and Acceptance. As of the Annexation Effective Date, the Assignor, does unconditionally assign and transfer to the Assignee without recourse, all of its rights, title, interest, duties and obligations under the Project Agreements and all rights, title, interests, duties and obligations held by Assignor arising from participation in any SOCWA project committees (including but not limited to such rights, title and interests relating to any personal or real property) and the Assignee unconditionally accepts all of the Assignor's rights, title, interest, duties and obligations under the Project Agreements and all rights, title interests, duties and obligations held by Assignor arising from participation in any SOCWA project committees (including but not limited to such rights title and interests relating to any personal or real property). 3. Representations and Warranties. The Parties represent and warrant that the execution, delivery and performance of this Agreement have been duly authorized by their respective governing boards by all necessary action. The Parties represent and warrant that, as of the date of this Agreement, there is no claim, action or proceeding pending and notice of which has been received by such party., or to the knowledge of such party, threatened against such party before any court, arbitrator or governmental agency or regulatory or administrative agency or commission challenging the validity, enforceability or legality of this Agreement. 4. Assumption of Post -Transfer Liabilities. From and after the Annexation Effective Date, Assignee shall be responsible for all obligations, claims, demands, actions, causes of action, liabilities, losses, costs, damages and expenses (of any nature whatsoever, in law or equity, known or unknown, foreseen or unforeseen, contingent or non -contingent), in any way related to or in any way arising out of or in connection with the Project Agreements, unless such obligations, claims, demands, actions, causes of action, liabilities, losses, costs, and damages or expenses both: (i) arose prior to the Annexation Effective Date, and (ii) are covered under Assignor's risk pool insurance (hereinafter "SOCWA Projects Post -Transfer Liabilities"). Assignee further agrees that from and after the Annexation Effective Date, Assignee shall pay Assignor's applicable share of costs and expenses associated with Assignor's membership in SOCWA that are not attributable to a particular Project Agreement (including, without limitation, costs and expenses arising from the Assignor's withdrawal of its membership and any costs relating to pension and any other post-retirement benefits), whether such costs or expenses were incurred before, on or after the Annexation Effective Date ("SOCWA Membership Costs"). The intent of the foregoing'is for Assignee to assume responsibility for all SOCWA Projects Post - Transfer Liabilities and not expand any liability of Assignee that would not have been the Assignor's liability during its participation in the Project Agreements. 5. SOCWA Membership and Governance. Nothing in this Agreement is intended to affect the governance of SOCWA, except upon the Annexation Effective Date the City will cease being a Participating Member Agency, as such term is defined in the SOCWA JPA Agreement, with respect to all SOCWA Projects and related project committees and project agreements. The City shall remain a member of SOCWA until.such time as withdrawal of the City occurs in accordance with the SOCWA JPA Agreement or any amendment thereto. The City, while it remains a member of SOCWA, will continue to appoint a director in accordance with the SOCWA JPA Agreement. Pursuant to Section 4 of this Agreement, after the Annexation Effective Date SMWD shall be responsible for all City SOCWA Membership Costs and SOCWA Projects Post -Transfer Liabilities. 6. Indemnification. From and after the Annexation Effective Date, Assignee shall defend, with counsel approved by Assignor, indemnify and hold harmless the Assignor from and against (i) all SOCWA Projects Post -Transfer Liabilities; and (ii) all SOCWA Membership Costs. In addition, from and after the dated date of this Agreement, Assignee shall defend, with counsel approved by Assignor, indemnify and hold harmless the Assignor from and against any action or proceeding to attack, review, set aside, enjoin, void or annul this Agreement. Assignee shall also defend, with counsel approved by Assignor, indemnify and hold harmless Assignor's officials, employees and agents for any matter within the scope of the indemnification under this Section 5, to the same extent, and subject to the same limitations, that apply to the Assignor's obligations to defend, indemnify and hold harmless such Assignor officials, employees and agents under California law or applicable Assignor contract with those officials, employees or agents. Assignee shall not seek reimbursement or contribution from the Assignor for any cost, expenses or damages for, or related to, matters within the scope of the indemnification under this Section 5. The protections in favor of Assignor set forth in this Section 5 and in Section 4: (i) shall not be construed in any way to limit the protections in favor of Assignor under the provisions of the Annexation Agreement, and (ii) shall be in addition to the provisions of the Annexation Agreement. 7. Governing Law and Venue. The interpretation, validity and enforcement of this Agreement shall be governed by and construed under the laws of the State of California. Venue for any action brought to enforce or interpret this Agreement shall be brought in the appropriate federal or state court in or nearest to the South Orange County Judicial District, County of Orange. S. Cooperation. The Parties agree to execute such other and further documents, assignments and instruments and to take such other actions as are or may become necessary or convenient to carry out this Agreement. 9. Authority. Each of the individuals executing this Agreement verifies that each of them has the authority to enter into this Agreement, that the necessary resolutions or approvals of the governing bodies of the City or SMWD, as applicable, have been passed or obtained, and that this Agreement shall be binding on the party for whom each of them is signing. 10. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of any Party shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. The Parties hereby declare that they would have executed this Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. 11. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the day and year first written above. SANTA MARGARITA WATER DISTRICT, a California Water District Its: General Manager Date: August 23, 2021 r i ATTEST:y � K•�t�l/(Lr ��,„t�— Santa Margarita Water istrict Secretary APPROVED AS TO FORM: Sloan Sakai Yeung & Wong LLP, Santa Margarita Water District Special Counsel APPROVED AS TO FORM: CITY OF SAN JUAN CAPISTRANO, a municipality By: !, � I � Date: -1-27-y1 Richards, Watson & Gershon, A Professional Corporation, City of San Juan Capistrano Special Counsel EXHIBIT "A" PROJECT AGREEMENTS That certain Agreement for Acquisition, Use, Operation, Maintenance and Expansion of Sewage Treatment Plant of City San Juan Capistrano By South East Regional Reclamation Authority for and on Behalf of Project Committee No. 2, dated June 28, 1973, ("PC 2 Agreement"), as amended by that certain Amendment No. 1, dated May 18, 1998, as further amended by that certain Amendment No. 2 dated June 29, 2000, and as supplemented by Addendum 1 to Amendment No. 2 dated October 5, 2006, Addendum 2 to Amendment No. 2 dated May 3, 2007, and Addendum 3 to Amendment No. 2 dated August, 2008. 2. That certain Agreement for Acquisition of Capacity, Construction, Use, Operation, and Maintenance of Outfall Facilities for South East Regional Reclamation Authority for and on Behalf of Project Committee No. 5 dated August 18, 1977, as supplemented by that certain Addendum dated November 10, 1977, and as amended by that certain Amendment No. 1 dated March 10, 1988, as further amended by that certain Amendment No. 2 dated March 14, 1991, as further amended by that certain Amendment No. 3 dated February 7, 2002, as further amended by that certain Amendment No. 4 dated October 5, 2006. That certain Memorandum of Understanding between the South East Regional Reclamation Authority Acting on behalf of Project Committee No. 5 and all Member Agencies relative to the compliance of Capistrano Beach Sanitary District with the Discharge Requirements contained in Amendment No. 1 to Agreement for Acquisition of Capacity, Construction Use, Operation and Maintenance of Outfall Facilities for South East Regional Reclamation Authority dated March 10, 1988, as amended June 13, 1991. 4. That certain Agreement for Application for Waiver of Ocean Discharge Requirements for the South East Regional Reclamation Authority and on Behalf of Project Committee No. 17, dated September 7, 1982. That certain Agreement for Application for Waiver of Ocean Discharge Requirements for the South East Regional Reclamation Authority and on Behalf of Project Committee No. 17, dated October 13, 1983, as amended by that certain Amendment No. I dated August 8, 1985, as further amended by that certain Amendment No. 2 dated October 10, 1985. 6. That certain Agreement for Funding of Management of the South East Regional Reclamation Authority Project Committee No. 15, dated November 10, 1982. That certain Agreement for Design, Construction, Use, Operation and Maintenance of Solids Handling and Cogeneration Facilities at the J.B. Latham Regional Wastewater Treatment Plant for and on Behalf of South East Regional Reclamation Authority for and on Behalf of Project Committee No. 16 dated November 10, 1982. That certain Agreement for the Preparation of a Master Plan for the South East Regional Reclamation Authority for and on Behalf of Project Committee No. 12 dated April 14, 1983. 9. That certain Agreement Between South East Regional Reclamation Authority on Behalf of Project Committee No. 19 and Participating Member Agencies of Project Committee No. 19 Relative to Expansion, of J.B. Latham Regional Treatment Plant dated November 9, 1983. 10. That certain Agreement regarding Project Committee Nos. 2, 7 and 7-A of the South East Regional Reclamation Authority Relative to Verification of Liquid Treatment and Solids Handling Capacity at the Jay B. Latham Regional Wastewater Treatment Plant dated November 8, 1984, as further amended by that certain Amendment No. 1 dated May 18, 1998, as further amended by that certain Amendment No. 2 dated June 29, 2000, as further supplemented by Addendum 3 to Amendment No. 2 dated August 7, 2008. Without limiting the foregoing, "Project Agreements" shall include all agreements, including supplements and amendments thereto, for SOCWA projects for which the City is a participant.