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HomeMy WebLinkAboutResolution - 2554 STATE OF CALIFORNIA) RESOLUTION NO. 2554 L, COUNTY OF RIVERSIDE)ss CITY OF SAN JACINTO) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JACINTO, CALIFORNIA, AUTHORIZING ESTABLISHMENT OF ESCROW AGREEMENTS FOR SECURITY DEPOSITS IN LIEU OF RETENTION AND ESTABLISHMENT OF FEES THEREFORE WHEREAS, the City of San Jacinto, from time to time, awards public contracts; and WHEREAS, the City withholds a portion of the contractor payments in a public contract or retention as security for contractor performance; and WHEREAS, Section 22300 (a) of the Public Contract Code allows that the contractor may substitute securities in lieu of the City withholding contract retention; and WHEREAS, Section 22300 (b) of the Public Contract Code a§lows that the contractor may request any retention money withheld by a City be placed in an escrow account for the benefit of the contractor and may be invested for the benefit of the contractor; and WHEREAS, Section 22300 of the Public Contract Code provides that the contractor must bear the cost of administering any escrow account and any other costs involved with any such investments, substitutions of investments, and trustee costs; and WHEREAS, the City of San Jacinto incurs costs for staff time utilized in processing applications for, and creation and maintenance of such escrow accounts; and WHEREAS, it is necessary to establish a service fee for costs incurred by the City for processing applications for escrow accounts, creation of escrow account agreements, and monitoring such accounts; and WHEREAS, pursuant to Government Code section 66018 a notice of public hearing has been published ten days prior to the hearing, at least two times, in order to notify the public that the City will conduct a hearing on the proposed fee. Such notice included the time and place of the hearing, and a general explanation of the matter to be considered, and Page 1 of 3 RVIIIt}1V IAVIVA SI IAN1'167a t56,I THE CITY COUNCIL OF THE CITY OF SAN JACINTO DOES RESOLVE AS FOLLOWS: Section 1. Incorporation of Recitals. The City Council hereby finds and determines that the Recitals of this Resolution are true and correct and are hereby incorporated into this Resolution as though fully set forth herein. Section 2. Authorization. Upon request of the contractor, the City Manager or Finance Director is authorized to execute any escrow agreement, in the form attached hereto as Exhibit A, and incorporated by reference herein, for security deposits in lieu of retention under Public Contract Code 22300. Section 3. Amount of Deposit. All securities deposited with the City as monies withheld by a public agency to ensure performance under a contract shall have a present value that is equal to or greater than the retention amount. Section 4. City Fee and Additional Costs. The annual fee to cover the City's cost of administering such escrow agreements shall be Five Hundred and Thirty Dollars ($530.00) plus any additional hourly costs that are set forth in Exhibit B, attached hereto and incorporated by reference herein. The annual fee and additional hourly costs, if any, is based upon the study conducted by the City, attached hereto as Exhibit B, and does not exceed the estimated reasonable cost of providing the service for which the fee is charged. Hourly rates for City employees are in addition to any fees that shall also be charged to the contractor, for costs incurred by the City for outside consultants hired by the City to assist in the administration of such escrow agreements. Section 5. Time of Payment. Contractor shall pay the annual fee in advance and prior to execution of the escrow agreement. Payment shall be made on a yearly basis (every twelve months) until completion of the contract. Any additional costs of administering the escrow account will be paid monthly by the contractor. Section 6. Payment of Third Party Fees. If securities are to be deposited in lieu of withholding retention, contractor shall pay the annual fee in advance, plus any estimated trustee or custodian costs prior to execution of the escrow agreement. Payment shall be made on a yearly basis (every twelve months) until completion of the contract. Any additional costs of administering the escrow account will be paid monthly by the contractor. Page 2 of 3 F,VPI1W-I I WIVA SIIANF�67a1 i6.1 APPROVED, PASSED and ADOPTED at a regular meeting of the City Council on the 15S day of July, 2004 by the following vote: Ayes: Carlson-Buydos, Conner, Shaw, Stubblefield, Ayres Nays: None Absent: None Abstain: None City of San Jacinto By Ayres, or ATTEST: "04d rothy L. ouinard, City Clerk APPR AST FORM: lr— y Attorney Best Best & Krieger LLP Page ; of; KVPUIVIAVIVASIIAND! ,4156,I EXHIBIT "A" TO CITY OF SAN JACINTO RESOLUTION ESCROW ACREEI4MENT FOR SECURITY DEPOSITS IN LIEU OF RETENTION This Escrow Agreement is madc and entered into by and between the City of San Jacinto, a municipal corporation whose address is 201 E. Main Street, San Jacinto_ California 92593 hereinafter called "Owner." and whose address is hereinafter called "Contractor" and whose address is hereinafter called "Escrow Agent." for the consideration hereinafter set forth, the Owner, Contractor, and Escrow Agent agree as follows: (1) Pursuant to Section 22300 of the Public Contract Code of the State of Calift�rnia. Contractor has the option to deposit securities with Escrow Agent as a substitute for retention earnings required to be withhold by Owner pursuant to the Construction Contract entered into between the Owner and Contractor for in the amount of dated (hereinafter referred to as the "Contract"). Alternatively, on written request of the Contractor, the Owner shall make payments of the retention earnings directly to the Escrow Agent. When the Contractor deposits the securities as a substitute for Contract earnings, the Escrow Agent shall notify the Owner within 10 days of the deposit. The market value of the securities at the tine of the substitution shall be at least equal to the cash amount then required to he withheld as retention under the terms of' the Contract between the Owner and Contractor. Securities shall be held in the name of San Jacinto. and shall designate the Contractor as the beneficial owner. (2) The Owner shall make progress payments to the Contractor for those funds which otherwise would be withheld from progress payments pursuant to the Contract provisions, provided that the Escrow Agent holds securities in the form and amount specified above. (3) When the Owner makes payment of retentions earned directly to the Escrow Agent, the Escrow Agent shall hold them for the benefit of the Contractor until the time that the escrow created under this contract is terminated, The Contractor may direct the investment of the payments into securities. All terms and conditions of this agreement and the rights and responsibilities of the parties shall be equally applicable and binding when the Owner pays the Escrow Agent directly. (4) Contractor shall be responsible for paying all lees for the expenses incurred by Escrow Agent in administering the Escrow Account and all expenses of the Owner. These expenses and payment terms shall be determined by the Owner, Contractor, and Escrow Agent. z:.hiha A KVPUB�HAVIVA.SHANF.%i)7J 156.1 (5) The interest earned on the securities or the money market accounts held in escrow � and all interest earned on that interest shall be for the sole account of Contractor and shall be subject to withdrawal by Contractor at any time and from time to time without notice to the Owner, (6) Contractor shall have the right to withdraw all or any part of the principal in the Escrow Account only by written notice to Escrow Agent accompanied by written authorization from the Owner to the Il'scrow Agent that Owner consents to the withdrawal of the amount sought to be withdrawn by Contractor. {7) The Owner shall have a right to draw upon the securities in the event of default by the Contractor. Upon seven days' written notice to the Escrow Agent from the owner of the default, the Escrow Agent shall immediately convert the securities to cash and shall distribute the cash as instructed by the Owner. (8) Upon receipt of written notification from the Owner certifying that the Contract is final and complete, and that the Contractor has complied with all requirements and procedures applicable to the Contract, Fscrow Agent shall release. to Contractor all securities and interest on deposit less escrow fees and charges of the Escrow Account. The escrow shall be closed immediately upon disbursement of all moneys and securities on deposit and payments of fees and charges. (9) Fscrow Agent shall rely on the written notifications from the Owner and the Contractor pursuant to Sections (5) to (8), inclusive, of this Agreement and the Owner and Contractor shall hold Escrow Agent harmless from Fscrow Agent's release and disbursement of the securities and interest as set forth above. (10) The names of the persons who are authorized to give written notice or to receive written notice on behalf of the Owner and on behalf of Contractor in connection with the foregoing, and exemplars of their respective signatures are as follows: On behalf of Owner: On behalf of Contractor: City Manager or designee Title Name [Name Signature Signature RVI'1JMIIAVIVA.SIIANF:674l5G I Address Address On behalf of Escrow Agent: Title Name Signature Address At the time the Escrow Account is opened, the Owner and Contractor shall deliver to the Escrow Agent a fully executed counterpart of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement by their proper officers on the date first set forth above. Owner Contractor City Manager, or designee Title Name Name Signature Signature I\hihn A RVPUB1 HAVIV M1ANI'ih741">6.1 Exhibit "B" I%W City of San Jacinto Estimated Annual Costs to Administer"Escrow Agreement for Security Deposits in Lieu of Retention Time Time Personnel Description Monthly Annual Cost Finance Director Review Contract and execute, approve disbursement 2 $ 162.57 Accountant Setup project, review Invoices, and approve disbursement amounts, track Retention payments and process final retention 05 6 $ 30457 Account Clerk II Process approvec invoices and process additional check to bank and mail out- (two checks monthly) 0.16 1.92 $ 60.66 (majority of time for set-up and processing) Estimated Total Annual Cost S 527 80 Burdened Hourly Rate for Finance Staff As of June 5, 2004 Total Burdened Current Employer Admin Benefits Hourly Hourly Rate Benefits Costs OIH % & O/H Rate Finance Director $ 40.86 31,61% 3.32% 64.00% 98.93% $ 81.28 Accountant 25-52 3161% 3.32% 64.00% 98.93% $ 50.76 iy Account Clerk 11 15,88 31.61% 3 32% 64 00% 98 93% $ 31.60 Benefits % Employer Costs % PERS-EE 7.00% Med/Fica 1.45% PERS-ER 9.35% Workers Comp 1-31% Med,rDent/Dlsab 15.26% Unemployment 0 560/c Total 31.61% Total 3.32% F\hibA r3 RVPI IB'%f-AVIVA.S-iANU16741 i0.'