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HomeMy WebLinkAboutItem 4.13 DR Acq DeficitCostsCITY CLERK File # 600-30 AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 16, 2001 SUBJECT: Agreement Between City of Dublin and DR Acquisitions, L.L.C. to Fund Deficit Between Costs of Providing Service to and Revenues Generated in Eastern Dublin Report Prepared by Richard C. Ambrose, City Manager ATTACHMENTS: RECOMMENDATION: Agreement Between City of Dublin and DR Acquisitions, L.L.Co Authorize Mayor to execute the Agreement FINANCIAL STATEMENT: None DESCRIPTION: The City's General Plan and the Eastern Dublin Specific Plan contain goals and policies to prevent development within the Eastern Extended Planning Area and the Specific Plan area from drawing upon and diluting the financial base of the remainder of the City. Pursuant to those policies, upon the annexation of Dublin Ranch, the City required that the Lins, pursuant to the Dublin Ranch annexation agreement, to fund the deficit between revenues generated in Eastern Dublin and the City's costs of providing services to Eastern Dublin. The Lins' obligations under the annexation agreement expired when a deficit no longer existed. The development of Area A of Dublin Ranch necessitates the building of a fire station within Eastern Dublin to serve the area. Various conditions in the Master Vesting Tentative Map for Area A (City of Dublin Planning Commission Resolution Noo 00-36) require DR Acquisitions, L.L.C. to construct, outfit, and dedicate to the City a new fire station in Eastern Dublin. Since the operation ora new fire station will result in significant new operational costs to the City, which may again result in a deficit between the revenues generated in and the costs of providing services to Eastern Dublin, the Master Vesting Tentative Map for Area A also includes a condition that requires DR Acquisitions to enter into an agreement with the City to fund the difference between the revenues generated in and the costs of providing services to Eastern Dublin. The attached agreement requires DR Acquisitions, L.L.Co to fund 100% of the deficit between costs and revenues from the date of the opening of the fire station until June 30, 2010.. Under the agreement, each ' year the City will prepare a fiscal analysis to determine the amount of the deficit, if any. The agreement also requires the DR Acquisitions to provide security at the time and in a form and amount acceptable to COPIES TO: [4. G:\CC~MTGSk2001QTR4\OCTOBER\10-16-01\AS-FIRE STA FUND DEFICIT.DOC the City Manager. Finally, the agreement requires that the City seek to collect from future developers of property within Eastern Dublin their fair and proportionate share of the amounts contributed by DR Acquisitions and to reimburse those amounts to DR Acquisitions. Recommendation: Authorize the Mayor to execute an Agreement with DR Acquisitions, L.L.Po to Fund Deficits Between Costs of Providing Service to and Revenues Generated in Eastern Dublin. City of Dublin When Recorded Mail To: City Clerk City of Dublin 100 Civic Plaza Dublin, CA 94568 Space above this line for P, ecorder~s Use AGREEMENT BETWEEN CITY OF DUBLIN AND DR ACQUISITIONS, L.L.C. TO FUND DEFICIT BETWEEN COSTS OF PROVIDING SERVICE TO AND REVENUES GENERATED IN EASTERN DUBLIN THIS AGREEMENT dated for identification this __ day of October, 2001, is entered into by and between the City of Dublin, a municipal corporation, ("the City") and . DR Acquisitions, EEC., a Delaware limited liability corporation ("Developer"). Recitals 1. In 1993, the City Council of the City adopted the Eastern Dublin General Plan Amendment and Eastern Dublin Specific Plan ("the Specific Plan"). The Specific Plan provides a planning framework for the future growth and development of approximately 3,300 acres (collectively, "the Specific Plan Area"). 2. The General Plan and the Specific Plan include goals and policies to prevent development within the Eastern Extended Planning Area and the Specific Plan Area (hereinafter collectively "Eastern Dublin") from drawing upon and diluting the fiscal base of the remainder of the City. 3. The Developer owns certain property ("a portion of Dublin Ranch Area A") within the Specific Plan Area described more particularly in Exhibit A, which is incorporated herein by reference. In July of 2000, the City approved a Master Vesting Tentative Map for Dublin Ranch Area A to divide the 369 +/- acre parcel into 12 separate parcels of various uses, including 7 parcels for residential use that would be subsequently subdivided by subsequent tentative maps. 4. As part of the annexation of the territory that includes Dublin Ranch Area A, the Lins, Developer's predecessor in interest, agreed to recompense the City for the deficit between the costs of providing services to the newly annexed territory and the revenue generated within the territory annexed to the City. Pursuant to that agreement, the Lins payment obligations terminated on June 30, 1999 when revenues generated to the City within the territory exceeded the costs of providing services to the territory. Agreement Between City of Dublin and DR Acquisitions, L.L.C. to Fund Deficit Between Costs of Providing Service to and Revenues Generated in Eastern Dublin Page 1 of 6 October 16, 2001 , /.~ / ~//~'/'~ / 5. Pursuant to the conditions of approval of the Master Vesting Tentative Map for Dublin Ranch Area A (City of Dublin Planning Commission Resolution No. 00-36), Developer is required, prior to the completion of a Certain number of residential units within Dublin Ranch Area A, to construct and dedicate a new fire station and to provide funding for apparatus necessary to operate the facility. 6. When the new facility becomes operational, it is estimated that the cost of providing public services to the Eastern Dublin Area may again exceed revenues generated to the City from property within the Eastern Dublin Area. 7. Accordingly, Condition No. 109 of Resolution 00-36 (for the Master Vesting Tentative Map) further requires the Developer to enter into an agreement with the City, prior to the recordation of the master final map for Dublin Ranch Area A, to fund the difference between the revenues generated in and the costs associated with services to the Eastern Dublin Area, as defined below, commencing upon the new fire station becoming operational. 8. The conditions of approval further obligate the City to consider a fair and appropriate way of reimbursing Developer for some of the amounts paid to the City pursuant to the agreement, including requiring owners of property within the Eastern Dublin General Plan area who seek City approval of development entitlements to pay a fair and proportionate share of the amount of the deficit paid by Developer. For instance, pursuant to an annexation agreement, the developer of a property known as the Quarry Lane School has agreed to pay the City 0.42% of the deficit. 9. As new development occurs within the Eastern Dublin Area as anticipated, it will generate revenues to the City that will reduce and, in the near future, eliminate the above-described deficit. 10. Consistent with the goals and policies of the General Plan and Specific Plan, and the requirements of the conditions of approval of the Master Vesting Tentative Map, Developer and CitY wish to enter into an agreement to assure the City that the Developer will fund the deficit between revenues and costs for the Eastern Dublin Area. AGREEMENT NOW THEREFORE, in consideration of the mutual promises and conditions contained herein, the Parties agree as follows: Section I. General Fund Shortfalls A. The Developer's Payment Obligations; Definitions. Developer shall pay the City 100% (100 percent) of the deficit, if any, between Public Service Costs and General Revenues. "Public Service Costs" shall mean the City's General Fund cost of providing public services to the Eastern Dublin Area which shall be calculated in the same manner as costs are calculated city wide. "General Revenues" shall mean those revenues deposited to the City's General Fund from property and inhabitants within the Agreement Between City of Dublin and DR Acquisitions, L.LC. to Fund Deficit Between Costs of Providing Service to and Revenues Generated in Eastern Dublin Page 2 of 6 October 16, 2001 Eastern Dublin Area which shall be calculated in the same manner as revenues are calculated city wide. "Eastern Dublin Area" shall include all lands within the Eastern Dublin General Plan Amendment area that are currently within or are annexed to the City limits of Dublin. B. Duration of Payment Obligations. The Developer's payment obligation under this Section ! shall begin when the new fire station to be constructed in Eastern Dublin (Fire Station 18) becomes operational and shall terminate June 30, 2010 ("Deficit Period"). C. Annual Fiscal Analyses. The City shall prepare a fiscal analysis during the Deficit Period in April of each year to estimate the amOunt by which the Public Service Costs will exceed General Revenues. The fiscal analysis will be prepared on a fiscal year basis (July 1 to June 30) and will calculate the deficit for the preceding fiscal year. The fiscal analysis shall, in general, be as agreed upon by letter between the City Manager and Developer. Developer shall be responsible for the costs of preparation of the studies. D. Payments to the City. No later than October 1 of each year during the Deficit Period, Developer shall pay to City 100% of the deficit between Public Services Costs and General Revenues for the preceding fiscal year, based on the fiscal analysis, plus 100% of the cost of the fiscal analysis described in Section I.C. E. Security for Payment. When in the judgment of the City Manager a deficit between Public Services Costs and General Revenues is likely to exist, Developer will provide the City with security in an amount, which shall not exceed $500,000, and form satisfactory to the City Manager to become effective once Fire Station 18 becomes operational (or some other mutually agreeable date), to secure the payments to the City described in Section I.D above. The security may consist of a letter of credit or similar instrument° The letter of credit (or comparable security) may be replaced with a letter of credit (or comparable security) in. the amount of the shortfalls for succeeding years disclosed by the fiscal analyses to be performed each April pursuant to Section I.Co F= Reimbursement From Other Property Owners. The City shall consider fair and appropriate ways of reimbursing the Developer some of the amounts Developer may be required to pay under this Section l. To the extent permitted by law, the City shall require owners of property within the Eastern Dublin General Plan area that seek City approval of development entitlements for such property to pay a fair and proportionate share of the amounts that Developer is required to pay pursuant to this agreement. Section Il. Additional Provisions A. Correctness of the Recitals. The Recitals set forth in this Agreement are true and correct and are a part hereof. Agreement Between City of Dublin and DR Acquisitions, L.LC. to Fund Deficit Between Costs of Providing Service to and Revenues Generated in Eastern Dublin Page 3 of 6 October 16, 2001 B. Further Assurances. The Parties shall execute, acknowledge, and deliver such additional documents or instruments as may be necessary to carry out the intent of this Agreement, including but not limited', to, those expressly referred to in this Agreement. C. Construction by California Law. This Agreement is entered into in the State of California and shall be construed and interpreted in accordance with its laws. D. Representation of Comprehension of Document. In entering into this Agreement, the Parties represent that they have relied upon the. legal advice of their attorneys who are the attorneys of their choice. The Parties further represent that the terms of this Agreement have been completely read by and explained to them by their attorneys, and that they fully understand and voluntarily acCept those terms. E, Authorship. Each Party and counsel for each Party has reviewed and revised this Agreement, and acCordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement or any amendment of F. Authority to Execute. Each of the Parties represents and warrants that each has full power to enter into this Agreement. G. Entire Agreement; Amendment, This Agreement satisfies Condition No. 109 of Resolution 00-36 and contains the entire agreement between the Parties with regard to the matters set forth. There are no additional written or oral agreements or promises between the Parties concerning these matters that are not expressly set forth in this Agreement. This Agreement may be amended or modified only by an agreement · in writing executed in the same manner as this Agreement. H. Attorneys Fees, In the event a Party to this Agreement is found in a court of law to have breached this Agreement, said Party shall pay the opposing Party's reasonable attorneys fees and costs incurred in litigating the breach of contract action. I, Approval of Project. By entering into this Agreement, City makes no commitment that it will approve the Project. J. Notices. All notices shall be by certified mail or hand delivered to the Parties as follows: Agreement Between City of Dublin and DR Acquisitions, L.L.C. to Fund Deficit Between Costs of Providing Service to and ReVenues Generated in Eastern Dublin Page 4 of 6 October 16, 2001 To the City: City Clerk City of Dublin 100 Civic Plaza P. O. Box 2340 Dublin, CA 94568 To the Developer: DR Acquisitions, LLoC. c/o Martin Inderbitzen 7077 Koll Center Pkwy, Suite 120 Pleasanton, California 94566-3152 K. Recordation. This Agreement shall be recorded against the Property described in EXhibit A (a portion of Dublin Ranch Area A), IN WITNESS WHEREOF, the parties have executed this agreement the day and year first above written. CITY OF DUBLIN DEVELOPER Guy S. Houston, Mayor Approved as to form: DR Acquisitions, LLC Its: City Attorney Attest: City Clerk [NOTARIZATIONS ATTACHED] J:\wpd~vlnrsw\114\103~AGREE\fim station cost of service_100801 .doc Agreement Between City of Dublin and DR Acquisitions, LLC. to Fund Deficit Between Costs of Providing Service to and Revenues Generated in Eastern Dublin Page 5 of 6 October 16, 2001 19155-2 lO/11/Ol B.C. DESCRIPTION PROPERTY SUBJECT TO FIRE STATION AGREEMENT ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF DUBLIN, COUNTY OF ALAMEDA, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: PARCEL 'C' OF TRACT 7135 AS SHOWN ON THE MAP OF TRACT 7135, FILED FOR RECORD AUGUST 10, 2001 IN BOOK 259 OF MAPS, PAGES 57 THRU 63, ALAMEDA COUNTY RECORDS. END OF DESCRIPTION LICENSED STATE mAt:KAY& ;omPs CML ENGINEERING* LAND PLANNING e LAND SURVEYING 5142 FrankJln Drive Suite B, Pleasanton, CA. 94588-3355 (925) 225-0690 19155-2bc10-11-01FiveStatio~Agreement-doc EXHIBIT A