2016 Bond Safeguard Ins Co - TR 32068 Citrus - Completion & Settlement AgrP
MEMORANDUM
TO: Frank J. Spevacek, City Manager
FROM: Bryan McKinney, PE, Development Services Principal Engineer
DATE: January 19, 2017
RE: Pomelo Release
Attached for your signature is the Pomelo Release. Please sign and return both
originals to the Design and Development for final distribution.
Requesting department shall check and attach the items below as appropriate:
N/A A Conflict of Interest Form 700 Statement of Economic Interests from Consultant(s) is attached with
no reportable interests in LQ or reportable interests
N/A A Conflict of Interest Form 700 Statement of Economic Interests is not required because this Consultant does
not meet the definition in FPPC regulation 18701(2).
Authority to execute this agreement is based upon:
Approved by the City Council on date
X City Manager's signature authority provided under Resolution No. 2005-095
Public Works projects for $30,000 or less.
City Manager's signature authority provided under Resolution No. 2005-096
Service agreements for $30,000 or less.
City Manager's signature authority provided under Contract Change Order Policy
Contracts under $100,000= 10% max, contracts over $100,000= $25,000 max
The following required documents are attached to the agreement:
N/A Insurance certificates as required by the agreement (initialed by Risk Manager on date)
N/A Performance bonds as required by the agreement (originals)
N/A City of La Quinta Business License (copy or note number & expiration date here
Release
To all to whom these Presents shall come or may Concern,
Know That
CITY OF LA QUINTA, CALIFORNIA,
as RELEASOR,
a municipal corporation duly organized and existing under the laws of the State of California, in
consideration of the sum of TEN DOLLARS ($10.00), and other good and valuable
consideration, received from
BOND SAFEGUARD INSURANCE COMPANY,
as RELEASEE,
receipt whereof is hereby acknowledged, releases and discharges
BOND SAFEGUARD INSURANCE COMPANY,
the RELEASEE, and the RELEASEE' S employees, officers, agents, successors, assigns and
transferees from any and all actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents, executions, claims and demands
whatsoever, in law, admiralty or equity, which against the RELEASEE, the RELEASOR and the
RELEASOR'S successors, assigns and transferees, ever had, now have, or hereafter can, shall or
may have, for, upon or by reason of any matter, cause or thing, relating to: (1) the subdivision
commonly known as The Gold Reserve at the Citrus — Tract 32068 (the "Subdivision"); (2) any
and all improvement agreements between RELEASOR and Pomelo Pacific, LLC in connection
with the Subdivision; and (3) Bond No. 5024055 executed by Bond Safeguard Insurance
Company on behalf of Pomelo Pacific, LLC, as principal, and RELEASOR, as obligee.
Whenever the text hereof requires, the use of the singular number shall include the
appropriate plural number as the text of the within instrument may require.
This RELEASE may be executed by facsimile or electronically, each of which shall be
deemed an original and all of which together shall constitute one and the same instrument.
This RELEASE may not be changed orally.
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In Witness Whereof, the RELEASOR has caused this RELEASE to be executed by its duly
authorized officers and its corporate seal to be hereunto affixed on the ...)D day of T
tr► v
2017.
In presence of
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss:
On the P,044 day of 76W d in the year 201� before me, the undersigned,
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personally appeared— enes► WKpS5c A, the c, (Title) City of La
Quinta, California, personally known to me or proved tom on the basis of satisfactory evidence
io be the individual whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the company or person upon behalf of which the individual acted, executed the
instrument.
Notary Public
TERESA THOMPSON
Commission # 2030796 -.
x . 4
' 4 a
Notary Public - California a`
a
Riverside County
My Comm. Cxpires Jun 24, 2017
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,COMPI. ETION AND SETTLEMENT AGR.EEKENI' .. .
This Completion and Settlement Agreement ("Agreement") is made by and between the
City of La Quinta (the "City") and Bond Safeguard Insurance Company ("Bond Safeguard") and
is effective this Iq day of y,.201&
RECITALS
A. The City .and Pomelo Pacific, LLC ("Pomelo") entered into a certain .improvement
agreement (".Improvement Agreement") in connection with a housing subdivision
commonly known as The Gold Reserve at the Citrus — Tract 32068 located in La Quinta,
California (the "Subdivision"). The .Improvement Agreement, among other -things,
required Pomelo to construct certain site improvements (collectively -"Public
Improvements") on -the Project.
B. The Improvement Agreement required Pomelo to provide a surety bond in .connection
with -the Public .Improvements. Pomelo procured subdivision. bond No. 5024055 in the
penal -sum of Your Hundred Ninety Nine Thousand Nine Hundred and Three Dollars
($499,903.00), which was issued by .Bond Safeguard, as surety, on behalf of Pomelo, as
principal, and the -City, as obligee (the""Bond").
,C. The City has declared Tomelo in default of the Improvement Agreement alleging :that
Pomelo has failed to complete certain Public Improvements.
D. The City made a claim against the Bond for the completion of the Public Improvements.
E. The City and Bond •Safeguard have worked together to prioritize the work remaining to
be .completed and have agreed that Bond Safeguard shall complete the improvements set
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forth in Exhibit "A", .attached hereto and made a- parthereof -as if -set- forth in full
(hereinafter "Scope of Work").
AGREEMENT
NOW, THEREFORE, in consideration of the terms and conditions set forth in this
Agreement, and for other good and valuable .consideration, the receipt and adequacy of which is
acknowledged, the City and Bond Safeguard agree as follows:
1. The above Recitals are incorporated herein. '
2. Bond Safeguard's .Obligation. Bond Safeguard shall - complete the work as
described and outlined in the Scope of Work (attached hereto .as Exhibit -"A.") by the Completion
Date.
3. Completion Date. The'Scope of Work shall be completed on or before August'30,
.2016 (the "Completion Date"). In the .event that the construction of the work is .interrupted or
prevented by acts of God, acts of war or rebellion, labor disturbances (other than those caused by
Bond Safeguard or its contractor), acts of Government or governmental officers or any cause
beyond the control of Bond Safeguard or its agents, including the Contractor, the time %r
completion shall be extended b.y an amount of time equal to -the number of days of delay. I
-4. Contractor's Agreement, Bond Safeguard shall hire a contractor ("Contractor") -to
complete all items listed under the Scope of Work by the Completion Date. Prior to the
beginning of construction of any of the work listed in the Scope of Work, Bond Safeguard and
the Contractor shall enter into a "Contractor's Agreement," which shall lay out the schedule that
Bond Safeguard and its Contractor intend to follow.
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5. Insurance. 'Bond Safeguard and its Contractor shall add the -City as an additional
insured on any insurance the Contractor or Bond Safeguard may purchase in connection with the
work contemplated under this Agreement.
6. Approval or Denial of Work Progress. Pursuant to the terms of this Agreement
and the Contractor's Agreement, the Contractor will be submitting to the City lists of work items
(a "Work List") at certain intervals. Each Work List will show the Contractor's calculation of the
percentage of work completed for each portion of the Scope of Work as of the end of the period
covered by that particular Work List. Within four (4) business days of receipt of one of the
Contractor's Work Lists, the City shall inspect the Contractor's work covered by that particular
Work List, and shall provide either -an Approval or Denial as follows:
a. Approval. In its sole discretion, the City may choose to issue a written
approval of the Contractor's Work List ,to -the Contractor and Bond Safeguard, which
approval shall .constitute .a representation by the City to Bond Safeguard, based upon the
City's inspection of the work, that to -the best of the City's knowledge, information and
belief, -the work has progressed to the point indicated in the Work List, and the quality of
the work .is in accordance with the requirements of this Agreement .and 'Scope of Work
(the "Approval"); or
b. Denial. If in the City's opinion the representations to Bond Safeguard as
stated in sub -paragraph (a), above cannot be made, the City will notify the contractor and
Bond Safeguard in writing of its reasons for withholding approval of the Work List, in
whole or in part (the "Denial").
i. At such time as the contractor has corrected the reasons -for the
City's failure to approve the Work List, the Contractor shall notify the City and
its n Kal
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the City shall re-irispect the work within four (4) business days of receiving said
notification.
ii, Upon completion of said re -inspection, the City shall either issue
its Approval or Denial in the manner set forth in subparagraphs (a) and (b), above.
7, City's Obligation, Within seven (7) days of providing the final Approval to Bond
Safeguard and the Contractor, which shall signify the completion of the Scope of Work, the City
shall: (1) deliver to Bond Safeguard a fully executed release in the form set forth in Exhibit "B";
and (2) file a stipulation of dismissal with prejudice as to Bond Safeguard, 'Lexon Insurance
Company and Lexon Surety Group in the action styled Ciry of La Quinta v. Pomelo Pacific, LLC,
.et al., Superior Court State of California, County of Riverside, Case No, PSC 1502992.
8. Amendments, Routine day-to-day operations and decisions as to the manner of
performance of -the Scope of Work will be made by the Contractor'hired by.Bond Safeguard. It
is acknowledged that no .contractual relationship exists between the .completing contractor and
the: City with -regard to the work. In this regard, Bond Safeguard and. -the City understand and
agree that any change orders or directions from the City that would have -the effect of: (1)
increasing the cost of performance; (2) increasing the Contract requirements; or (3) changing the
scope or -manner of performance, shall not be allowed or be binding on the completing contractor
or Bond Safeguard unless the direction is in writing and signed by an officer of the City with
sufficient authority and agreed to by Bond Safeguard,
9, Bond Safeguard's Liability. Notwithstanding anything herein to the contrary, the
parties agree that the liability of Bond Safeguard, as surety, under -,the aforesaid Bonds is limited
to the penal sum of Four Hundred Ninety Nine Thousand Nine .Hundred and Three Dollars
5JTS
3,00), and nothing in -this Agreement constitutes a waiver of such penal sum or an
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increase of Bond Safeguard's liability or responsibilities under- the aforesaid Bonds. - All
payments made by Bond Safeguard to a contractor hired by Bond Safeguard to complete the
Scope of Work as provided for in this Agreement regarding the improvements covered by the
Bond on the Project shall serve to reduce the penal sum of the Bonds and Bond Safeguard's
liability thereunder, provided the City gave the requisite Approval for the underlying work as laid
out in Section :5 of this Agreement.
10. This Agreement contains the entire understanding and agreement of the Parties.
All oral or written agreements prior to the effective date of this Agreement and which relate to
this Agreement and the matters set forth herein are declared -null and void. Any modification of
this Agreement must be made in writing and executed by the Parties.
11. Any notice required to be made under the -terms of this Agreement shall be
deemed made if either party mails 'such notice by first class mail, postage prepaid, as:follows:
As to the Cily of La Quinta
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Attn: City Manager
Tel.: (760) 7777000
with a copy -to Attorney: .
Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: City Attorney Bill I1irke
Tel.: (714) 641-.5100
Fax: (714) 546-9035
As -to Bond Safevard:
Jeremy T. Sentman, PE PLS CFM
Surety Management Company, LLC
900 South Frontage Road
cite 250
IT
itial-19flal
s
Woodridge, Illinois 6.0517
Tel.: (630) 495-9380
Fax: (630) -495-927.2
with a copy to Attorney:
Gavin M. Lankford, Esq,
Harris Beach PLLC
99 Garnsey Road
Pittsford, NY 14534
Tel: (585) 419-8662
Fax: (585) 419-8812
12. It is understood and agreed by Bond Safeguard and the City that this Agreement
shall be construed without any regard to any ,presumption or other rule requiring construction
against the party drafting -this Agreement.
13. This Agreement may be executed in counterparts. Signatures. transmitted by
-facsimile ore mail shall have -the same legal effect as original signatures.
14. The Parties agree that no third party shall have any rights under this Agreement.
Nothing herein shall be considered -to waive any rights or claims that the City or Bond Safeguard
may have against P omelo.
"1.5. This Agreement shall be governed by the laws of the State of California.
[The remainder of this page is intentionally blank].. .
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IN WF"I'NESS WHEREOF, the parties have executed this Agreement - this I9 day, of
2016.
CITY OF LA QUTNTA, a California
municipal corporation
Y ---
1
rai `J. SIS ce ity Manager]
ATTEST.
By:
Susan Maysels, City Clerk, City of La Quinta
BOND SAFEGUARD INSURANCE ATTEST;
COMPANY
B By:
[insert P rson] its (insert)
�z. •�� c..+` mss► r�� S t,�d-�� C�t,.thnh.�,
APPROVED AS TO FORM:
WILLIAM H. IHRKE, City Attorney
City of La Quinta, California
rem-ewloe
March .2016
EXHIBIT A
Bond 5024055
The Gold Reserve a# the Citrus —'Tract 32061
-Scope of Work
r-nnc+ri yr-+ A fnnt (-Ml l Wall at Lots 8, 9 and A.
MEMORANDUM
TO: Frank J. Spevacek, City Manager
FROM: A41mothy
R. Jonasson, Design and Development Director/City Engineer
DATE: July 12, 2016
RE: Completion and Settlement Agreement with Bond Safeguard Insurance
Company to construct outstanding on-site improvements for Tract
32068 (Pomelo).
Attached for your signature is the agreement between the Bond Safeguard Insurance
Company and the City of La Quints for services referenced above.
Please sign the attached agreement(s) and return to the City Clerk for processing and
distribution.
Requesting department shall check and attach the items below as appropriate:
NIA Contract payments will be charged to account number:
N/A A Conflict of Interest Form 700 Statement of Economic Interests from Consultant(s) is attached with
no reportable interests in LQ or _ reportable interests
X A Conflict of Interest Form 700 Statement of Economic Interests is not required because this Consultant does not
meet the definition in FPPC regulation 18701(2).
Authority to execute this agreement is based upon:
X Approved by the City Council on JULY 5, 2016
N/A City Manager's signature authority provided under Resolution No. 2015-045 for budgeted expenditures of
$50,000 or less
N/A Initial to certify that 3 written informal bids or proposals were received and considered in selection
The following required documents are attached to the agreement:
N/A Insurance certificates as required by the agreement (initialed by Risk Manager on date)
N/A Performance bonds as required by the agreement (originals)
NIA City of La Quinta Business License (copy or note number & expiration date here )
N/A Purchase Order number
CONSENT CALENDAR: 14
City of La Qu i nta
CITY COUNCIL MEETING:
STAFF REPORT
AGENDA TITLE: APPROVE COMPLETION AND SETTLEMENT AGREEMENT BETWEEN THE CITY
OF LA QUINTA AND BOND SAFEGUARD INSURANCE COMPANY FOR TRACT 32068 LOCATED
ALONG JEFFERSON BETWEEN AVENUE 50 AND 52
RECOMMENDATION
Approve Completion and Settlement Agreement with Bond Safeguard Insurance
Company to construct outstanding on -site improvements for Tract 32068.
EXECUTIVE SUMMARY
• Tract 32068, (in the Citrus, Attachment 1), was approved in September 2006.
• The developer did not complete some on -site improvements and filed for
bankruptcy; staff transmitted a Notice of Default to Bond Safeguard Insurance
Company (Safeguard) on March 2, 2015.
• The parties negotiated a settlement agreement wherein Safeguard will complete
the outstanding improvements.
FISCAL IMPACT — None
BACKGROUND/ANALYSIS
Tract Map 32068 was approved in 2006. The developer constructed most of the on -site
improvements and received a conditional acceptance in 2010; the remaining
improvements entailed completing a six-foot wall, curbs and gutter repairs, relocating
street signs, and installing a stop sign. The developer subsequently went bankrupt and
these improvements were never completed.
The City sent a Notice of Default in March 2015 to Bond Safeguard Insurance Company
compelling completion of these improvements. Staff and Safeguard subsequently
negotiated the Completion and Settlement Agreement (Attachment 2).
ALTERNATIVES
Council may not approve the agreement; these improvements would not be constructed.
Prepared by: Bryan McKinney, P.E., Principal Engineer
Approved by: Timothy R. Jonasson, P.E., Design & Development Director/City Engineer
Attachments: 1. Vicinity map
2. Completion and Settlement Agreement
ATTACHMENT 1
TRACT MAP NO. 32068 GOLD RESERVE
48th AVENUE
50th AVENUE
PROJECT
SITE
AVENUE
POMELO
0
w
w
54th AVENUE
1
VICINITY MAP
NOT TO SCALE