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HomeMy WebLinkAboutItem 12f - Rio Hondo/San Gabriel River Watershed Management Joint Powers AuthorityRio Hondo/San Gabriel River Watershed Management JPA May 17, 2022 Page 1 of 5 DATE: May 17, 2022 TO: Honorable Mayor and City Council FROM: Paul Cranmer, Public Works Services Director SUBJECT: AUTHORIZE PARTICIPATION IN A JOINT EXERCISE OF POWERS AGREEMENT WITH THE CITIES OF BRADBURY, DUARTE, MONROVIA, AND SIERRA MADRE TO CREATE THE RIO HONDO/SAN GABRIEL RIVER WATERSHED MANAGEMENT JOINT POWERS AUTHORITY Recommendation: Approve SUMMARY The Rio Hondo/San Gabriel River Water Quality Group (“Group”) consisting of the Cities of Arcadia, Bradbury, Duarte, Monrovia, and Sierra Madre has been working cooperatively for years to implement stormwater strategies on a regional basis. While the Group has had a series of cooperative agreements in place that have worked well, now that structures are about to be built, a more formal, long-term arrangement is warranted. The formation of a Joint Powers Authority (“JPA”) funded through the County of Los Angeles’ Safe Clean Water (Measure W) Program would act as a mechanism to provide liability protections to the individual Cities in the Group, provide the ability to bond on behalf of the Cities, would streamline processes, and would enable land holdings on behalf of the Group for any potential land acquisition that may arise in the future. It is recommended that the City Council authorize participation in a Joint Exercise of Powers Agreement with the Cities of Bradbury, Duarte, Monrovia, and Sierra Madre to create the Rio Hondo/San Gabriel River Watershed Management Joint Powers Authority. BACKGROUND In 2012, the Los Angeles Region Water Quality Control Board adopted the National Pollutant Discharge Elimination System Municipal Separate Storm Sewer System Permit (“MS4 Permit”, Order No. R4-2012-0175) which established waste discharge requirements for stormwater and non-stormwater discharges within the watersheds of Los Angeles County. The MS4 Permit includes provisions that allow permittees the flexibility to customize their stormwater programs to achieve compliance over time through the development of an Enhanced Watershed Management Program (“EWMP”) or Watershed Management Program (“WMP”) on a watershed scale utilizing customized strategies, control measures, and Best Management Practices (“BMPs”) to improve water quality. Rio Hondo/San Gabriel River Watershed Management JPA May 17, 2022 Page 2 of 5 In February 2013, the Cities of Azusa, Bradbury, Duarte, Monrovia, and Sierra Madre, along with the County of Los Angeles and Los Angeles County Flood Control District, formed the Rio Hondo/San Gabriel River Water Quality Group (“Group”) with an Oversight Committee comprised of City Managers and/or designated staff to fulfill the requirements of the Los Angeles County MS4 Permit. One of the first tasks of the Group was to develop a scope of work for the WMP, Coordinated Integrated Monitoring Program (“CIMP”), and EWMP Plans for the Rio Hondo and San Gabriel River watersheds. Subsequently, in May 2013, the Arcadia City Council approved a Memorandum of Understanding (“MOU”) with the City serving as the contract manager responsible for the administration and management of contract services on behalf of the participating agencies. These Plans were submitted to the Regional Board on July 28, 2014. On June 29, 2015, the CIMP was approved and subsequently approved in April 2016 with the requirement to start implementing the plan. The EWMP plan consisted of ten regional projects and 436 lane miles of "green streets" (e.g., bio-retention, bio-filtration, and permeable pavement systems within the street right-of-way that are designed to reduce runoff and improve water quality) to be completed over the next two decades. Soon after the EWMP approval, the Group began working to evaluate alternative implementation strategies to determine whether a modified set of alternative projects could possibly achieve the necessary volume and load reductions at a significantly reduced cost and still achieve compliance. In December 2016, the Group amended the MOU to collaborate on the EWMP revision without the City of Azusa. A revised EWMP was submitted and conditionally approved a year later but was downgraded from a revised EWMP to a WMP. The downgrade was the result of the changes in the control measures proposed in the revised EWMP. Currently, the Group is working with consultants to determine the feasibility of these regional projects: Arcadia Wash Ecosystem Restoration and Groundwater Recharge located at the Arboretum, the Rio Hondo Ecosystem Restoration located at the Peck Road Lake Park, Encanto Park Stormwater Capture located in the City of Duarte, and Basin 3E Enhancements located at the Santa Fe Spreading Grounds. Unfortunately, the project at the Arboretum was determined to be infeasible and the Group is now exploring an alternative project site that would utilize the area around the Arcadia County Park and Santa Anita Golf Course. These regional projects are estimated to cost upwards of $32 million to construct. Securing grant funding and/or other funding mechanism is crucial in developing these projects. The Group has been operating with different cities picking up the burden to ensure the Group maintains its current operational, administrative, and financial obligations. The complexities associated with the Group have continued to grow as implementation transitions from background studies to implementation strategies. The Group’s Encanto Park Regional Project, located in Duarte, was recently funded through the County of Los Angeles’ Safe Clean Water (Measure W) program. The funding of this Regional Project brought to the forefront several complexities associated with the current structure of how the Group operates together to meet requirements. Such as: Rio Hondo/San Gabriel River Watershed Management JPA May 17, 2022 Page 3 of 5 • If a liability incident were to occur at the construction site of a designated project location, who would be liable for such accidents/incidents? • How might the City of Arcadia’s role as the central administrative/financial hub impact a future project if another agency held the funds? • How long would term maintenance be addressed and who would be the lead/responsible City? Such complexities will only continue to grow as the Group further explores and receives funding for the Group’s larger regional projects, including two potential projects in Arcadia. A joint powers agreement is a formal, legal agreement between two or more public agencies that share a common power and want to jointly implement programs, build facilities or deliver services, forming a common Authority. A JPA is a new government organization created by the member agencies but is legally independent from the member agencies. The JPA shares powers and authorizations common to the member agencies, which are outlined in the joint powers agreement. The Joint Exercise Powers Act (Government Code Section 6500, et seq.) allows two or more agencies to create another legal entity or establish a joint approach to work on a common problem, fund a project, or act as a representative body for a specific activity. JPAs are subject to the Ralph M. Brown Act and shall hold open and public meetings. JPAs must also follow the Public Records Act, Political Reform Act and other public interest laws to ensure full transparency. The formation of a JPA begins when public officials agree to a formal agreement in which the agreement outlines formal roles, responsibilities and powers that each agency shares. Each participating member agency’s governing body must then approve the joint powers agreement. An agreement that establishes a new JPA describes the size, structure, membership, governing board, and the JPAs powers and functions. As a legally separate public agency, the JPA can seek legal action or can be sued itself, hire staff, obtain financing to build public facilities, and manage property. Examples of JPAs around the area include the San Gabriel Valley Councils of Government and Foothill Transit. Each comprises of multiple cities as members, and each are tasked with their specific purposes. DISCUSSION The JPA mechanism would act as the central hub for operational, administrative, and financial activities on behalf of the Group. In addition, it would allow the Group to exercise the powers in common such as approving and awarding contracts; acquiring, constructing, managing, maintaining and operating any building, structure, capital improvement project; seeking grants and other financial aid, obtaining insurance, participating in legislative advocacy, and conducting outreach. The Rio Hondo/San Gabriel River Watershed Management JPA outlines the term of agreement, governing board, voting, and functions. For example, the JPA requires three member agencies to establish the JPA, the duly appointed City Manager from each member agency will serve Rio Hondo/San Gabriel River Watershed Management JPA May 17, 2022 Page 4 of 5 indefinitely on the Governing Board and receives one vote. At present, staffing is yet to be determined. Should Arcadia decide to withdraw its membership at any time, a 30-day written notice to the Governing Board is required; however, there may be costs associated with leaving early, such as a continuing obligation to pay for ongoing expenses that were agreed to during the City’s membership period. It should be noted that the JPA cannot dissolve unless/until any assets, liabilities, or other obligations are retired or transferred back to the member agencies. The County of Los Angeles and the Los Angeles County Flood Control District have indicated that they would not be a participant in the JPA due to their own policy limitations but both entities will continue to enter into project-specific agreements and cost-share with the JPA. To date, staff and City Attorney's from the Cities of Arcadia, Bradbury, Duarte, Monrovia, and Sierra Madre have all reviewed and preliminarily approved the Joint Powers Agreement and have agreed to bring the document to their City Councils for review and formal approval as follows: • City of Bradbury: Approved on April 19, 2022 • City of Duarte: May 2022 • City of Monrovia: Approved on May 3, 2022 • City of Sierra Madre: May 10, 2022 ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. The JPA would be responsible for CEQA review for its various projects FISCAL IMPACT Costs for the JPA formation include the costs to hire an external auditor, attorney costs, and to purchase insurance. There is a possibility that there may be costs associated with staffing but at this point it is unknown. It should be noted that the City of Arcadia began collecting a 5% administrative fee for fulfilling the Group's administrative and financial needs in the latest MOU. Depending on how the JPA is ultimately managed, this fee may no longer benefit Arcadia and may instead fund staff and/or consultants to cover the Group's administrative/financial obligations. There will be future costs associated with meeting stormwater permitting requirements. These costs will occur regardless if a JPA is formed. A cost-sharing formula was informally established for shared expenses based on the 10% participation and 90% land Rio Hondo/San Gabriel River Watershed Management JPA May 17, 2022 Page 5 of 5 area and slated to be solidified in the JPA. It is anticipated that the member agencies would contribute a portion of their Safe, Clean Water (Measure W – Local Return) Program toward the operating cost of the JPA, but that amount has not been determined. Any such transfers would need to be approved by each agency’s City Council. All debts and expenses incurred by the JPA will not be the responsibility of the individual member entities. In addition, as a JPA the group could directly apply for state and federal grants to cover project expenses. RECOMMENDATION It is recommended the City Council determine that this action does not constitute a project and is, therefore, exempt under the California Environmental Quality Act (“CEQA”); and authorize participation in a Joint Exercise of Powers Agreement with the Cities of Bradbury, Duarte, Monrovia, and Sierra Madre to create the Rio Hondo/San Gabriel River Watershed Management Joint Powers Authority. Attachment: Joint Exercise of Powers Agreement -1- 12335-0001\2521693v2.doc JOINT EXERCISE OF POWERS AGREEMENT AMONG THE CITIES OF ARCADIA, BRADBURY, DUARTE, MONROVIA AND SIERRA MADRE, FOR THE PURPOSE OF CREATING THE RIO HONDO/SAN GABRIEL RIVER WATERSHED MANAGEMENT JOINT POWERS AUTHORITY (“AUTHORITY”) THIS JOINT EXERCISE OF POWERS AGREEMENT (“Agreement”), dated for reference as of ____________________, is entered into by and between the cities of Arcadia, Bradbury, Duarte, Monrovia, and Sierra Madre, each of which is a municipal corporation duly organized and existing under the laws of the State of California. Each of the foregoing are sometimes referred to herein as “Member,” or collectively as “Members.” RECITALS (i) Each Member is a “public agency,” as defined in the Joint Exercise of Powers Act, California Government Code Section 6500, et seq., and all are authorized to enter into this Joint Exercise of Powers Agreement in order to exercise powers common to these public agencies. (ii) Each Member is a permittee of the Los Angeles County MS4 Permit, which is required to develop a Watershed Management Program (“WMP”). Pursuant to Part VI.C.6 of the Los Angeles County MS4 Permit and implement a WMP upon approval by the Los Angeles Regional Water Quality Control Board. (iii) It is the intent of the Members in entering into this Agreement to create a single entity referred to as the Rio Hondo/San Gabriel River Watershed Management Joint Powers Authority (“Authority”). (iv) By this Agreement, the Members intend to exercise their powers jointly to accomplish the common objectives of financing and implementing the WMP, as feasible, and owning, maintaining and operating facilities and improvements as deemed necessary to implement the WMP. (v) The County of Los Angeles and the Los Angeles County Flood Control District also are permittees under the above-referenced Los Angeles County MS4 Permit and participants in the WMP and, while not Members, acknowledge this Agreement will cooperate as necessary with the Authority to further the objectives and requirements of the WMP. AGREEMENT NOW, THEREFORE, in consideration of the promises, terms, conditions and covenants contained herein, the Members agree as follows: 1. Recitals Incorporated. The recitals set forth above, are hereby incorporated by reference and made a part of this Agreement. 2. Authority and Purpose. This Agreement is made pursuant to the provisions of Article 1, Chapter 5, Division 7, Title 1 of the Government Code of the State of California (commencing with Section 6500) relating to the joint exercise of powers common to the public -2- 12335-0001\2521693v2.doc agencies. The Members are each empowered to exercise the powers within this Agreement. The purpose of this Agreement is to exercise such powers jointly in the development of plans, designs, maintenance of projects, and objectives to implement the WMP. Specifically, the Members have identified the following strands of WMP-related work that should be carried out by the Authority: (a) Public outreach and education regarding the details of the MS4 Permit, the requirements and costs of the WMP, and the need for a viable financing mechanism. (b) Working toward compliance with the approved WMP, including financing, land acquisition, project design, project construction and long-term ownership, maintenance, and management of improvements. (c) Advocacy for policy change to make the Clean Water Act, Porter Cologne Water Quality Act, MS4 permit and WMP requirements more viable and sustainable. 3. Establishment. Pursuant to the Joint Exercise of Powers Act (Government Code Sections 6500, et. seq.), there is hereby established a Joint Powers Authority which shall be a public entity separate from the parties to this Agreement. The name of such entity shall be the Rio Hondo/San Gabriel River Watershed Management Joint Powers Authority (“Authority”). The Authority shall carry out its functions through a Governing Board, as described in this Agreement. 4. Term of Agreement. This Agreement is effective as of the latest date by which at least three (3) Members have adopted resolutions by their legislative bodies approving joining the Authority and this Agreement, and thereafter having executed this Agreement and delivered executed copies to the other Members, and shall continue in full force and effect for so long as no less than three (3) such Members remain, or until terminated by unanimous consent, provided that all liabilities of the Authority have been satisfied and all assets of the Authority have been distributed as provided in this Agreement.. 5. Restriction on Exercise of Powers. Pursuant to and to the extent required by California Government Code Section 6509, the Authority shall be restricted in the exercise of its powers to the same extent as the City of Arcadia is restricted in its exercise of powers hereunder; provided that, if the City of Arcadia shall cease to be a Member, then the Authority shall be restricted in its exercise of powers to the same extent as the City of Monrovia is restricted in its exercise of powers hereunder. 6. Governing Board. The governing body of the Authority shall be the Governing Board which shall be made up of one representative from each Member. The Governing Board shall oversee the activities of the Authority and shall act consistent with and in furtherance of applicable law and the purposes of this Agreement and the Authority, as specified in Section 2, above. (a) Membership. The duly-appointed City Manager of each of the Members shall be that Member’s representative on the Governing Board. The City Manager from each of the Members shall designate an alternate representative for that Member. If neither the Board member nor the Board member’s alternate can attend a scheduled meeting, the City Manager may designate, in writing, a representative for that meeting who may attend and participate in that meeting as if they were a Governing Board member. -3- 12335-0001\2521693v2.doc (b) Term of Members. Each member of the Governing Board shall serve indefinitely, so long as they continue to hold the office of City Manager with the respective Member agency. Alternate Board members serve at the pleasure of the appointing Governing Board member and may be removed at any time. (c) Vacancies. A vacancy shall be declared if any Board member or alternate Board Member shall cease to serve on the appointing legislative body. Vacancies shall be filled in the same manner as the original appointment. (d) Compensation. Board members and alternate Board members shall receive no compensation for attending required meetings or performing other functions for the Authority. (e) Voting. Each Governing Board member shall have one (1) vote. If a Board member cannot attend a meeting, the alternate or designee attending shall be fully empowered to act and vote as the Board member for the meeting so attended. Voting on Authority business shall require a majority or super-majority vote as provided below in Section (i). All vote requirements specified in this Agreement are based on the full membership of the Governing Board. Those actions that require a “majority” vote shall require the affirmative vote of at least a majority (50%+1) of all Members, and those actions that require a “super-majority” vote shall require the affirmative votes of at least four/fifths (4/5) of all Members. If a vote requirement is not specified in this Agreement for any action of the Governing Board a majority vote is required. Abstentions or absences shall not be counted as votes for any purpose. (f) Responsibilities. It shall be the responsibility of the Governing Board of the Authority to: (1) Determine general policy for Authority activities. (2) Act on behalf of all Members in adopting strategies to pursue the purposes of the Authority, as set forth in Section 2 of this Agreement. (3) Approve an annual or bi-annual budget to receive and expend funds necessary to exercise the powers and achieve the purposes of the Authority, as set forth in this Agreement, and as otherwise provided by law. A majority vote of all the members shall be required to adopt a budget or assess the contribution of costs or to purchase any real property or enter into a long-term lease (over five years) for any real property. (4) Ensure that projects and programs that are undertaken are in the best interest of the residents and communities served by the Authority. (5) Authorize expenditures of funds in accordance with the adopted budget and any purchasing procedures adopted by the Governing Board. (6) Assess annual membership costs for each Member and Project contributions pursuant to the Cost Allocation Formula set forth on Exhibit A, each of which must be approved by a super-majority vote. Any deviation from the Cost Allocation Formula shall require the unanimous vote of all Member representatives on the Governing Board. -4- 12335-0001\2521693v2.doc (7) Approve or deny applications from similarly situated local agencies for admission to the Authority, or to withdraw as a Member, or from Members to expel a member from the Authority, which shall require a super-majority vote of the Governing Board and approval by the legislative bodies of the Members pursuant to Sections 12, 15 and 16. (8) Adopt by-laws, rules and regulations governing operations of the Authority. (9) Appoint such ad hoc or standing committees of its Members as it may deem appropriate, all in uniformity with the Ralph M. Brown Act (Sections 54950 et seq.) (g) Meetings. The Governing Board shall conduct regular and special meetings in accordance with the Ralph M. Brown Act, commencing with California Government Code Section 54950, or any successor provision thereto. It shall hold at least one regular meeting in each year and such additional meetings as may be necessary to accomplish the purposes specified herein. Regular meetings shall be held at such location as the Governing Board may determine by Resolution. The dates upon which, and the hour, date and place at which regular meetings shall be held shall be fixed by the Governing Board. (h) Minutes. Minutes shall be kept of all meetings of the Authority and the Secretary shall cause a copy to be forwarded to the Members and made available to the public. Meetings shall be conducted in accordance with the most current edition of “Rosenberg’s Rules of Order” unless otherwise provided by the Governing Board. (i) Quorum. A majority of the full membership of the Governing Board must be present at a meeting to constitute a quorum. 7. Organization. (a) Officers. The Governing Board shall elect from its members a Chair, a Vice-Chair, and/or such other officers as the Governing Board shall find appropriate. Each officer shall serve for a term of one (1) year unless sooner terminated at the pleasure of the Governing Board. Upon approval by the Governing Board, all contracts, deeds and other official documents on behalf of the Authority shall be executed by the Chair or the Executive Director, and attested to by the Secretary and approved as to form by the Authority’s legal counsel or the Lead Agency’s legal counsel (if a Lead Agency is designated by the Board). (b) Employees. The Governing Board may appoint an Executive Director, controller, clerk, secretary, legal counsel or other employees as it deems appropriate, or may contract for any such services, and may establish the duties, compensation and benefits of such employees and contractors in accordance with best public employment practices. The Governing Board may choose to utilize the services of employees of the Members by appointing a Lead Agency, as described below, and, if required, compensate the Member accordingly, or may directly appoint and employ its own staff. If the Authority directly employs employees, the Governing Board shall adopt a personnel system establishing rules and regulations comparable to the public sector generally. -5- 12335-0001\2521693v2.doc (c) Finances. The Controller of the Authority shall cause an independent annual audit of the Authority’s finances to be made by a certified public accountant in compliance with California Government Code Section 6505 or successor authority. The Treasurer of the Authority shall be the depositor and shall have custody of all money of the Authority received from whatever source. The Controller of the Authority shall draw warrants to pay demands against the Authority when the demands have been approved by the Authority by its authorized representative pursuant to any delegation of authority adopted by the Authority. The Treasurer and Controller shall comply strictly with the provisions of statutes relating to their duties, as set forth in the Joint Exercise of Powers Act. (d) Consultants. In addition to hiring employees, the Authority is authorized to enter into contracts and pay consultants pursuant to the Authority’s purchasing procedure to perform any work or activity it is empowered to perform hereunder, including for the provision of professional, financial, legal, administrative, technical or other services. (e) Lead Agency. The Governing Board may select from the Members, a Lead Agency for the Authority, although a Lead Agency is not required if the Authority employs staff to administer the Authority. In such case, the City Clerk of the Lead Agency shall be and act as the Secretary for the Authority and the Director of Finance of the Lead Agency shall be and act as the Treasurer and Auditor of the Authority, pursuant to California Government Code Section 6505.6. Pursuant to California Government Code Section 6505.1, the Secretary and Treasurer shall have charge of the property of the Authority and each shall file an official bond in the penal sum of Ten Thousand Dollars ($10,000.00) or such additional amount as the Governing Board may establish. The Authority is authorized to pay the additional costs of such bonds, if any. By majority vote, the Governing Board may change the Lead Agency at any time. In such event, the officers of the new Lead Agency shall serve as the respective officers of the Authority. (f) Property of the Authority. Pursuant to California Government Code Section 6505.1, the Governing Board may designate an officer or employee, or officers and employees, in addition to the Secretary and Treasurer, to receive, deposit, invest, and disburse the money of the Authority pursuant to California Government Code Sections 6505.5 and 6509.5. The Governing Board shall fix the amount of the official bond to be filed by each such designee. 8. Corporate and Political Powers. For purposes of exercising its authority, and subject to the limitations set forth herein, the Authority shall have all joint powers specified in California Government Code Section 6508 including, but not limited to, any or all of the following: (a) To exercise the common powers of its Members pursuant to Section 2 above; (b) To make and enter into contracts; (c) To employ agents and employees; (d) To acquire, construct, manage, maintain or operate any building, structure, work or improvement; (e) To acquire, hold or dispose of interests in real or personal property; -6- 12335-0001\2521693v2.doc (f) To incur debts, liabilities and obligations and issue bonds, notes, certificates of participation and other forms or evidence of indebtedness; (g) To sue and be sued in its own name; (h) To apply for, accept, receive and disburse grants, loans and other financial aid from any agency of the State of California or the United States of America and to receive donations of property, funds, services and other forms of assistance from persons, firms, corporations or governmental entities; (i) To obtain insurance for the Authority and contract for risk management services authority; (j) To invest money of the Authority in the same manner and on the same conditions as local agencies pursuant to California Government Code Section 53601; (k) To prepare and support or oppose legislation or administrative action related to the purposes of this Agreement; (l) To adopt rules, regulations, policies, bylaws and procedures for the carrying out of the foregoing powers or necessary for the governing of the operations of the Authority; and (m) To exercise all other powers necessary and proper to carry out the provisions of this Agreement including, without limitation, the power to levy special taxes and assessments and fees in compliance with applicable law, and to exercise the power of eminent domain for the public purposes of the Authority. 9. Expenditures and Contributions. From time to time, the Governing Board may require Member contributions in order to make expenditures necessary to carry out the purposes and functions of the Authority which may include, but are not limited to, retention of consultant(s) to conduct studies and prepare plans, reports and designs, and/or provide management services and the costs of project implementation. The contributions required from Members shall be determined pursuant to the Cost Allocation Formula set forth in Exhibit A, unless a deviation is approved by unanimous vote of all members of the Governing Board. Any individual expenditure of the Authority in excess of one million dollars ($1,000,000) shall require a super-majority vote. Within thirty (30) days of such a contribution requirement being approved by the Governing Board, each Member shall make the required contribution, providing that any Member not wishing to make such contribution may, in the alternative, withdraw from the Authority within said period by adopting a resolution of withdrawal by its legislative body. 10. Eligibility for Membership and Admission. Any local public agency that is a member of the Rio Hondo/San Gabriel River Watershed Quality Group may apply to become a member of the Authority and may become a Member upon a super-majority vote of the Governing Board. Upon admission, each new Member shall immediately execute this Agreement. At the time of approval of admission, the Governing Board may request that the new Member make a voluntary payment of its share of any costs incurred by the Authority to date, to the extent the benefit of those costs will be derived or will continue to be derived after the new Member agency -7- 12335-0001\2521693v2.doc has joined the Authority. Such shares shall be determined according to the Cost Allocation Formula set forth in Exhibit A. 11. Withdrawal by a Member. Subject to the provisions of this section, any Member may withdraw from the Authority by providing the Governing Board no less than thirty (30) days prior written notice including a copy of the initiating resolution approved by the legislative body of the withdrawing Member. The withdrawing Member shall pay all unpaid contributions that were approved by the Governing Board more than thirty (30) days prior to the date of the notice of withdrawal. No Member may withdraw unless and until it has satisfied any and all outstanding contractual obligations, or other indebtedness for which such Member would otherwise be obligated, in whole or in part, to pay. “Outstanding contractual obligations” includes the obligations for payments on contracts which the Authority has entered into and are legally binding but where additional services will be performed in the future, until the contract has been fully performed. 12. Accounts, Reports, and Audits. The following procedures shall be followed to ensure strict accountability of all funds of the Authority and to provide for accurate reporting of receipts and disbursements of said funds: (a) The auditor of the Authority shall either prepare or contract with a certified public accountant to prepare an annual audit of the Authority’s accounts and records. The minimum requirements for such audits shall be those prescribed by the State Controller for special districts under California Government Code Section 26909 or successor statute and shall conform to generally accepted accounting principles. (b) A report of said audit shall be filed as a public record with each Member and with the County Auditor of the County of Los Angeles. Such report shall be filed within six (6) months of the end of the fiscal year or years under examination. (c) Any additional procedures pertaining to accountability of funds and assets of the Authority, as specified in the Joint Exercise of Powers Act, shall be followed. 13. Obligation for Debts and Liabilities and Distribution of Assets. Except as otherwise provided herein, no Member shall be individually responsible for any of the debts, liabilities or obligations of the Authority, and all such debts, liabilities and obligations shall exclusively be those of the Authority. (a) Indemnification. (1) Each Member agrees to indemnify, defend and hold the Authority and all other Members, and employees, officers and agents of the Authority, free and harmless with respect to any and all claims, liabilities, losses, and damages, including legal fees and expenses, to the extent arising out of or connected with the acts or omissions, or breach or default, of such Member, or any person or entity acting on behalf of such Member, in the performance of any of its obligations under this Agreement. (2) The Authority shall indemnify, defend, and hold harmless, jointly and severally, each of its Members and the Members’ officers, officials, employees, agents, and -8- 12335-0001\2521693v2.doc representatives with respect to any loss, damage, injury, claim, litigation, or liability, including attorney’s fees and costs, arising out of or in any way related to the creation of operation, functioning, decisions, or actions of the Authority or the Authority’s officers, officials, employees, agents, or representatives. (3) The provision of indemnity set forth in this Section shall not be construed to obligate the Authority to pay any liability, including but not limited to punitive damages, which by law would be contrary to public policy or otherwise unlawful. (4) To the full extent permitted by law, the Authority shall require that all contractors and partners in Authority business and activities shall indemnify, defend and hold harmless the Authority and its Members for that entity’s acts or omissions, or breach or default, consistent with this Section 13(a). (b) Tort Liability. Government Code Section 895.2 imposes certain tort liability jointly upon public agencies solely by reason of such public agencies being parties to an agreement as defined in Government Code Section 895. Therefore, the Member public agencies, as among themselves, pursuant to the authorization contained in Government Code Sections 895.4 and 895.6, each assume the full liability imposed upon it or any of its officers, agents, employees or representatives by law for injury caused by a negligent or wrongful action or inaction, or omission, occurring in the performance of this Agreement, to the same extent that such liability would be imposed in the absence of Government Code Section 895.2. To achieve this purpose, each Member indemnifies and holds harmless each other Member and the Authority, for any loss, cost or expense, including reasonable attorney’s fees and consultant fees that may be imposed upon or incurred by such other Member or the Authority solely by virtue of Government Code Section 895.2. (c) Funds for Defense. Notwithstanding the provisions of paragraphs (a) or (b), above, by a super-majority vote of the Governing Board, the Governing Board may approve the expenditure of Authority funds to defend, indemnify and hold the Authority, members of the Governing Board, and any employee or agent of the Authority, free and harmless from claims and liabilities arising in connection with their actions taken in good faith, and while within the scope of their duties being performed on behalf of the Authority. (d) Self-Insure. The Authority may self-insure or purchase insurance, and/or require the Members to self-insure or purchase insurance, in order to comply with any of the defense and indemnity requirements herein. (e) Privileges and Immunities. All of the privileges and immunities from liability, exemptions from laws, ordinances, and rules, all pension, relief, disability, worker’s compensation, and other benefits which apply to the activity of officers, agents, or employees of any Member when performing their respective functions within the territorial limits of the Member, shall apply to them to the same degree and extent while engaged in the performance of any of their functions and duties extraterritorially hereunder. 14. Effect of Termination. Upon termination of this Agreement by the Authority consistent with Section 4, all of the existing assets shall be divided and distributed for public -9- 12335-0001\2521693v2.doc purposes in such manner as shall be determined by a super-majority vote of the Governing Board provided, however, that this Agreement and the Governing Board shall continue to exist for the purposes of disposing of all claims, administering the distribution of assets, and performing any other functions necessary to conclude the affairs of the Authority. This Agreement may not be terminated so long as the Authority has any outstanding contractual obligations or other indebtedness. 15. Notices. Notices permitted or required to be sent pursuant to this Agreement shall be sent by registered mail, return receipt requested, or reputable overnight delivery service addressed as follows: To each Member at each Member public agency’s official business address, personally addressed to the that agency’s Governing Board member; To the Authority at ______________________, Attention: Secretary. This address shall be the Authority’s official business address. This address may be changed by approval of the Governing Board and the giving of written notice to each Member at their official business address. 16. Amendment. This Agreement may only be amended, upon the recommendation of a super-majority vote of the Governing Board, by the unanimous vote of the legislative bodies of the Members acting by resolution with all such resolutions adopted within 90 days of the action by the Governing Board. 17. Legal Actions. (a) Remedies. The Authority is hereby authorized to take any and all legal or equitable actions, including but not limited to, seeking an injunction and/or specific performance, necessary or permitted by law, to enforce this Agreement. (b) Applicable Law and Forum. The laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflict of law principles. Legal actions must be instituted and maintained in the Superior Court of the County of Los Angeles, State of California, in any other appropriate court in that county. (c) Acceptance of Service of Process. In the event that any legal action is commenced against the Authority, service of process on the Authority shall be made by personal service upon the Executive Director or Secretary of the Authority, or in such other manner as may be provided by law. (d) Waivers. All waivers of any term or condition of this Agreement shall be in writing. No waiver of any term or same term or condition at a different time. 18. Liberal Construction; Severability. In the event of any litigation over the meaning of this Agreement or the authority of any agency of the Authority, this Agreement shall be liberally construed to effectuate its purposes. Should any part, term or provision of this Agreement be -10- 12335-0001\2521693v2.doc decided by any court of competent jurisdiction to be illegal or in conflict with any law of the State of California or federal law, or otherwise be rendered unenforceable or invalid, the validity of the remaining portions and/or provisions shall not be affected thereby. 19. Conflicts of Interest. No officers, official, or employee of the Authority shall have any financial interest, direct or indirect, in the Authority nor shall any such person participate in any decision relating to the Authority which affects his or her financial interests, in violation of any State law or regulation. When required, all Members and required employees or consultants shall complete the Conflict of Interest forms Form 700 of the Fair Political Practices (FPPC) entitled “Statement of Economic Interests for Designated Officials and Employees” in accordance with the requirements of the FPPC and in accordance with the requirements of the Conflict of Interest Code as adopted by the Authority. 20. Books and Records. All books, records, accounts, and documents of the Authority shall be available at any reasonable time to the Governing Board and, to the extent provided by the California Public Records Act (Government Code Section 6250 et. seq.) shall be public records. This Section does not authorize the release of any confidential documents which are exempt from disclosure under the California Public Records Act or other applicable law or regulations. 21. Principal Office. The principal office of the Authority shall be that of the office of the Executive Director or the Lead Agency or as from time to time designated by the Board. 22. Successors. This Agreement shall be binding upon all Members and shall inure to the benefit of the successors of each of the Members provided, however, that no Member may assign any right or obligation under this Agreement without the written consent of the Governing Board. 23. Effectuate Counterparts. This Agreement may be executed in counterparts, which together shall constitute the same and entire agreement. 24. Filing with Secretary of State. The Secretary of the Authority is directed to file with the office of the California Secretary of State a notice of adoption or amendment of this Agreement within thirty (30) days after the effective date of such adoption or amendment, as required by California Government Code Section 6503.5 and shall file all other official notices as may be required by law. [SIGNATURES APPEAR ON SEPARATE PAGES] -11- 12335-0001\2521693v2.doc IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed and attested by its duly authorized officers as of the dates set forth below. Dated: MEMBER: CITY OF ARCADIA By: Mayor ATTEST: City Clerk APPROVED TO FORM: City Attorney -12- 12335-0001\2521693v2.doc IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed and attested by its duly authorized officers as of the dates set forth below. Dated: MEMBER: CITY OF BRADBURY By: Mayor ATTEST: City Clerk APPROVED TO FORM: City Attorney -13- 12335-0001\2521693v2.doc IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed and attested by its duly authorized officers as of the dates set forth below. Dated: MEMBER: CITY OF DUARTE By: Mayor ATTEST: City Clerk APPROVED TO FORM: City Attorney -14- 12335-0001\2521693v2.doc IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed and attested by its duly authorized officers as of the dates set forth below. Dated: MEMBER: CITY OF MONROVIA By: Mayor ATTEST: City Clerk APPROVED TO FORM: City Attorney -15- 12335-0001\2521693v2.doc IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed and attested by its duly authorized officers as of the dates set forth below. Dated: MEMBER: CITY OF SIERRA MADRE By: Mayor ATTEST: City Clerk APPROVED TO FORM: City Attorney -16- 12335-0001\2521693v2.doc EXHIBIT A COST ALLOCATION FORMULA A. 10% Base Cost = [(Total Project costs - funds contributed from external sources) X 10%] /# of Members B. 90% Land Area = [(Total Project costs - funds contributed from external sources X90%] X Percentage of total developed land area (not including Angeles National Forest) For illustration purposes the Cost Allocation Formula for expected five initial Members of the Authority would be calculated as follows: Party Acres (Developed Land sq.mi) Percent of Area Base Cost (1/5th of 10% Project Total) Land Area (90%) Total Cost City of Arcadia 11 40% City of Bradbury 1.9 7% City of Duarte 3.6 13% City of Monrovia 8 29% City of Sierra Madre 2.8 10% TOTAL 27.3 100%