HomeMy WebLinkAboutCity/Koll Real Estate Co. - 1997-06-02l
a
Council/Agency Meeting Held: ?/y 9
Deferred/Continued to:
Conditionally App
Council Meeting Date: August 4, 1997 Department ID Number: CB 97-081
d'JWIP7
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: CONNIE BROCKWAY, City Clerk
PREPARED BY: CONNIE BROCKWAY, City Clerk
SUBJECT: Bolsa Chica Development Letter Of Understanding -.Deletion Of City
Clerk's Attestation Signature
Statement of Issue, Funding Source,, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s)
Statement of Issue: On the Bolsa Chica Development Letter of Understanding signed by
Michael Dolder, Fire .Chief, Huntington Beach Fire Department, Ken MacLeod, Acting
Director of Fire Services, Orange County Fire Authority and Ed Mountford, Vice President,
Koll Real Estate Company, the City Clerk,. in error, added her attestation signature line on
the Letter of Understanding before copying it for presentation to the City Council at the
7/21/97 meeting. The Request for Council Action accompanying the document called for
only the Fire Chief to sign.
Recommended Action: Motion to approve the City Clerk's request to delete the City
Clerk's attestation signature line and her signature which in error she affixed to the Bolsa
Chica Development Letter of Understanding signed by Michael Dolder, Fire Chief,
Huntington Beach Fire Department, Ken MacLeod, Acting Director of Fire Services, Orange
County Fire Authority and Ed Mountford, Vice President, Koll Real Estate Company, which
on July 21, 1997 the City Council authorized only the Fire Chief to sign.
Alternative, Action: Not Applicable.
Analysis: Most city documents on which the City Council takes action are prepared by
the City Attorney. These documents contain a recommended motion that Council
authorize execution by the Mayor and City Clerk, or the City Administrator and City Clerk
or another specifically named city official and the City Clerk. These documents often
accidentally omit the signature line for the City Clerk to sign even though the
recommended motion on the Request for Council Action directs her to sign and affix the
official city Seal. In these cases in a time crunch, the City Clerk adds the line before
presentation to Council and attests and affixes the official city Seal after the meeting.
(Continued next page)
SUEST FOR COUNCIL ACTIN
MEETING DATE: August 4, 1997
DEPARTMENT ID NUMBER: CB 97-081
As the Letter of Understanding, on Page 1, names the City, Koll Real Estate, and the
Orange County Fire Authority, I added the attestation and signed. I did not realize the City
Attorney did not prepare this Letter of Understanding and purposely did not "approve as to
form" the document, thus the agreement cannot contain the City Clerk's attestation or the
official Seal of the City of Huntington Beach.
Attachments:
1 Bolsa Chica Development Letter of Understanding
2 Request for Council Action dated 7/21/97 Authorizing the Fire Chief to
sign the Bolsa Chica Development Letter of Understanding
3 Action Agenda dated 7/21 /97 .
4 City Attorney memorandum to Fire Chief dated 5/22/97
97-081 ES. DOC -2- 07/31/97 4:57 PM
BOLSA CHICA DEVELOPMENT
LETTER OF UNDERSTANDING
This letter of understanding is intended to document the major points of agreement
reached in numerous discussions and meetings between the Orange County Fire
Authority (OCFA), the Koll Company (Koll), and the City of Huntington Beach (City)
regarding the provision of Fire, Rescue, Emergency Paramedic Services, and
Ambulance Transportation Services to the unincorporated Bolsa Chica development
area and other areas as described below and shown in Exhibit I.
It has been mutually discussed and agreed that a partnership between the above
mentioned parties is necessary to provide the described Emergency Response Services
in a cost effective and efficient manner to the future residents of the Bolsa Chica
development as well as to City residents and visitors in the surrounding unincorporated
areas. City has agreed to provide overall system -wide enhancements in order to
optimize City services to areas identified on Exhibit 1.
This letter of understanding is not intended to be a binding document or to take the
place of any official agreements or contracts. This letter is intended to outline and
document the general understanding of -the parties. From this understanding, OCFA will
prepare and enter into an Implementation Agreement with Koll as required by County of
Orange conditions of approval for this project.
04/8/97
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BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 2
Additionally, OCFA will prepare and enter into Emergency Fire Service Agreements with
City to provide Fire, Rescue, Emergency Paramedic and Ambulance Transportation
Services to the areas described below and shown on Exhibit 1.
The parties agree that the following items reflect a general consensus of understanding:
K II and OCFA
• Koll agrees to provide $2,800,000 to OCFA as a fair share capital contribution to
be paid to OCFA as follows:
1. $50,000 upon signing of an implementation agreement with OCFA.
2. $300,000 prior to issuance of the first building permit for any habitable
structures, including models.
3. $2,450,000 within two years of the issuance of the first building permit for
habitable structures, including models.
• Koll agrees to irrevocably dedicate to OCFA a one acre fire station site in the Bolsa
Chica development (subject to OCFA approval) to be used for a fire station in ,the
event it is necessary for OCFA to construct a future fire station.
04/8/97
BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 3
• OCFA and City intend to enter into irrevocable Fire Service Agreements to provide
Emergency Response Services to the unincorporated area known as Bolsa Chica
shown in Area A on Exhibit 1. In the unlikely event that the City fails to provide
services as stipulated and a permanent fire station in the development is required,
Koll acknowledges that they will be responsible for any staffing shortfall costs prior
to project buildout.
City and OCFA
City and OCFA have mutually agreed that City will provide the following Emergency
Response Services to the areas described below and shown on Exhibit 1:
Area A - Bolsa Chica and Other adjacent unincorporated areas east and south of
Warner Avenue
Area B - The unincorporated area of Sunset Beach and the area known as Surfside
Colony in the City of Seal Beach.
04/8/97
BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 4
Area A Services (Bolsa Chica Development Area)
• City shall enter into an irrevocable Emergency Fire Services Agreement with OCFA
to provide Fire, Rescue, Emergency Paramedic and Ambulance Transportation
Services to the area identified as Area A. Services will be provided at a level
deemed appropriate by OCFA and City, which will be consistent with service levels
provided to other areas of the County and the City. OCFA and City agree that
OCFA Station 3, in Sunset Beach, will be placed in an appropriate order of
response into Area A and will be utilized for all emergency responses to that area.
OCFA will continue to provide non -suppression fire services, including plan review and
inspection services.
• The City will begin providing service delivery effective July 1, 1998. As consideration
for the ;services set forth in this letter of understanding, OCFA agrees to pay City an
agreed upon sum (base amount) which represents eighty percent (80%) of the
County's Fiscal Year 1997/98 Structural Fire Fund revenue generated by the tax rate
area protected (the tax pass -through). This amount will be adjusted for the percentage
increase or decrease in the gross assessed valuation, including secured and
unsecured rolls of the area during July 1, 1998 through June 30, 1999, as compared to
the gross assessed valuation, including secured and unsecured rolls of the area,
during the County's 1997-98 Fiscal Year.
04/8/97
C�
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BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 5
• The determination of the area served for the above purpose shall be based on the
unincorporated status of the territory as agreed upon by City and OCFA and
reflected in the County assessment roll for the County's fiscal years in question. In
subsequent fiscal years, the consideration will be adjusted for the percentage
increase or decrease in the gross assessed valuation using the methodology
discussed above.
• OCFA will notify City of the calculation and assessed valuation by parcel number
each December, commencing December 1998. The total yearly compensation due
the City shall be paid in two equal installments on February 1 and June 1, with the first
payment commencing February 1, 1999. City will submit an invoice for each six month
period to the Director of Fire Services, who will process the invoice for payment.
• OCFA and City will enter into a Conditional Capital Contribution Agreement
whereby, after receipt of monies from Koll, OCFA agrees to provide to City a one-
time capital contribution of a not to exceed amount of $1,250,000. It is agreed and
understood that:
04/8/97
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BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 6
1. These funds are intended for the partial funding of the relocation of Huntington
Beach Fire Station 8 to City owned property at Graham and Production in the
City of Huntington Beach.
2. Capital contribution will not be used for any other use than the above stated
purpose.
3. OCFA's obligation to provide a one-time capital contribution to City is contingent
upon receipt of said funds from Koll. It is understood that capital contribution is in
exchange for a commitment by City to continue to honor an irrevocable contract to
provide services.
4. OCFA will notify City within 30 days after receipt of funds from Koll in the amount of
$300,000. OCFA will pass through funds in the amount of up to $150,000 based
upon request from City with proper supporting documentation for the agreed
upon use, i.e., signed contract for architectural design consultant for relocation of
Huntington Beach Station 8.
r
04/8/97
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BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 7
5. OCFA will notify City within 30 days after receipt of funds from Koll in the amount of
$2,450,000. OCFA will pass through funds in the amount of up to $1,100,000
based upon request from City with proper supporting documentation for the
agreed upon use, i.e., signed contract for construction of new Fire Station 8 at
Graham and Production.
• In the unlikely event that the City terminates this agreement, and/or fails to provide
full Emergency Fire Services to the Bolsa Chica development in Area A in
accordance with this agreement, the following will apply:
1. If a failure to provide services occurs within the first five (5) years of
the agreement, City agrees to return all capital funds received to date
from OCFA, and all tax pass -through monies received to date. All returned
monies will be increased by an amount known as a "Default Rate". This
means 4% per annum in excess of the prime rate as quoted in the Wall Street
Journal on the date of the Event of Default not to exceed the maximum rate of
interest, if any, allowed by applicable law.
04/S/97
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BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 8
2. If a failure to provide services occurs after the.first five (5) years of the
agreement, City agrees to return all capital funds received to date from
OCFA. Tax pass -through monies received to date will remain the property of
the City, except for the final two years tax pass -through, which will be
forfeited. All returned monies will be increased by an amount known as a
"Default Rate". This means 4% per annum in excess of the prime rate as
quoted in the Wall Street Journal on the date of the Event of Default not to
exceed the maximum rate of interest, if any, allowed by applicable law..
In the unlikely event that OCFA terminates the Area A agreement with the City, the
following will apply:
1. City bears no obligation to return to OCFA any Capital Contribution Funds or
any tax pass -through funds already received. In addition, any tax pass -
through funds due the City for services rendered, but not yet received, must
be paid to City.
Area B Services (Sunset Beach and Surfside Colony.
• In consideration of the Conditional Capital Contribution Agreement and past area
response agreements, OCFA and City agree to enter into a Fire Services Agreement
whereby the City will provide Emergency Paramedic Services for Area B. This
Agreement will carry a one year notice of termination by either party, and does not
affect the terms and conditions of the Area A agreement.
04/8/97
•
BOLSA CHICA DEVELOPMENT
Letter of Understanding
Page 9
- As part of the Fire Services Agreement for Area B, OCFA agrees to consider City's
request to provide Ambulance Transportation Services to the areas of Sunset Beach
and Surfside during the next ambulance contract renewal cycle.
IN WITNESS WHEREOF, the parties have caused this understanding to be executed:
Date Y - 3 a — q7
Ken MacLeod
Acting Director of Fire Services
Orange County Fire Authority
Date
Michael P. Dolder
Fire Chief
Huntington Beach Fire Department
Date fZ-1 % - ?7
Ed Mountford
Vice President
Koll Real Estate Company
04j8J97
EXHIBIT 1
BOLSA CHICA DEVELOPMENT
And-Sther Identified Service Areas
4/1/97
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ATTACHMENT 2
C 16. 1 �
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Council/Agency Meeting Held:_vC�
Deferred =ontinued to
❑ Approved ❑ Conditionally%% prove-6 ''❑ Denied
Council Meeting Date
71.01/4-7 y-
SUBMITTED TO:
SUBMITTED BY:
PREPARED BY:
SUBJECT:
City Clerk',§ Si
June 2, 1997 1 Department ID Number:
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
'54�1e• eo
HONORABLE MAYOR AND CITY COUNCIL MEMBERS
MICHAEL T. UBERUAGA, City Administra or
MICHAEL P. DOLDER, Fire Chief
FD 97-005
LETTER OF UNDERSTANDING REGARDING FIRE SERVICES
FOR THE BOLSA CHICA DEVELOPMENT
Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s)
Statement of Issue: Should the City sign a Letter of Understanding outlining the general areas of
agreement for developing a future Bolsa Chica development area fire services contract with Orange
County Fire Authority?
Funding Source: None Required.
Recommended Action: Motion authorizing the Fire Chief to sign the Letter of Understanding
regarding Fire Services for the Bolsa Chica development area.
Alternative Action(s): Direct staff to renegotiate specific deal points regarding fire services to the
Bolsa Chica.
Analysis: The Orange County Fire Authority (OCFA) has the responsibility of providing fire and
medical services to the unincorporated Bolsa Chica development area. OCFA is prepared and
capable of providing these services. However, recognizing that the Bolsa Chica mesa is surrounded
by the City of Huntington Beach (City) and that existing City fire resources could effectively provide
fire, emergency medical, and ambulance transport services, the OCFA entered into discussions with
City staff to pursue this option.
After numerous meetings between the OCFA, the Koll Company (Koll), and City staff regarding the
provision of Fire, Rescue, Emergency Paramedic Service, and Ambulance Transportation Service to
the unincorporated Bolsa Chica development area, various areas of agreement were reached and
are described in a Letter of Understanding (Attachment 1). This Letter of Understanding is not
intended to be a binding document, but rather to serve as an outline for developing separate
Implementation Agreements between:
1. Orange County Fire Authority and the Koll Company
2. Orange County Fire Authority and the City of Huntington Beach
1
RAUEST FOR COUNCIL ACTA -
MEETING DATE: June 2, 1997 DEPARTMENT ID NUMBER: FD 97-005
The OCFA and City staff propose that the City would provide Fire Department Emergency Response
Services to the Bolsa Chica Development Area (Area A) and to Sunset Beach and Surfside Colony
(Area B). The proposed separate service requirements for Area A and Area B are as follows:
Area A Services (Bolsa Chica Development Area)
➢ The City's agreement with the OCFA to provide Emergency Services would be irrevocable.
The OCFA would provide non -emergency (non -suppression) fire services, including plan review
and inspection services.
➢ The City would begin service delivery effective July 1, 1998. In turn, the OCFA would pay the
City 80% of the County's Fiscal Year 1997/1998 Structural Fire Fund revenue. At build -out of
the project area, the annual revenue is estimated to be $600,000 to $700,000 per year. Yearly
payments for City Fire services would be made in two equal installments on February 1 and
June 1 with the first payment commencing February 1, 1999.
➢ The City and OCFA would enter into a Conditional Capital Contribution Agreement whereby,
after the OCFA receives monies from Koll, the OCFA would provide the City a one-time capital
contribution not to exceed $1,250,000. The capital contribution would be applied towards the
relocation of Fire Station 8 to Graham and Production.
➢ The City would be financially penalized for terminating or failing to provide full Fire Emergency
Services to Area A.
Area B Services (Sunset Beach and Surfside Colony)
➢ In consideration of the Conditional Capital Contribution Agreement and past area response
agreements, the City and OCFA would enter into a Fire Services Agreement, whereby the City
would provide Emergency Paramedic Services to Area B. This Agreement would have a one
year termination notice by either party and would not affect the terms and conditions of the Area
A agreement.
➢ OCFA agrees to consider the City's request to provide Ambulance Transportation Services
during the next ambulance contract renewal cycle.
The Letter of Understanding (Attachment 1) also contains the deal points of a future agreement
between the OCFA and Koll. Although the economic terms of the agreement between OCFA and
Koll would affect the economic terms between OCFA and the City, this Letter of Understanding does
not include a future proposed agreement between the City and Koll. The future contract agreement
for fire services to Area A and Area B would be between the City and OCFA only.
What is the service impact to Fire Station 7 if Area A and Area B are added?
Huntington Beach Fire Station 7, located at Warner and Pacific Coast Highway, currently operates
one paramedic engine staffed with four personnel. In comparing Station 7 with one of our busier
paramedic engines located at Station 1 on Gothard Street we find that Fire Station 7 has an unused
service capacity of 40%. In other words, relative to the number of emergency calls, Station 7 is only
operating at 60% of Station 1's emergency calls. Adding Area A and Area B to Station 7's response
load will add an additional 20% to its current emergency workload. This leaves an unused service
capacity of 20%. Therefore, adding the fire service demands of the Bolsa Chica development to Fire
Station 7 will not have an operational impact on existing resources and will not require adding
Iditional personnel to meet these service demands. E-/6-16
A -2- 05/20/97 5:04 PM
HOR:CAROLYN STROOK
RLOEST FOR COUNCIL ACTIC*�
MEETING DATE: June 2, 1997 DEPARTMENT ID NUMBER: FD 97-005 -
What other Fire Department needs exist that will benefit from the Bolsa Chica contract
revenues?
Currently two critical Fire delivery needs exist for the City of Huntington Beach. One City need is the
relocation of Fire Station 8 to Graham and. Production. The other City need is adding additional
personnel to the Holly-Seacliff development area when Fire Station 6 opens in the summer of 1999.
The relocation of Station 8 is part of the City's adopted Fire Master Plan. Station 8's relocation will
provide coverage to northern areas of the City which, currently, cannot be served within the Growth
Management Element's standards of arrival on scene within five minutes 80% of the time. The
proposed OCFA/Bolsa Chica contract will provide one time Capital funding as well as an ongoing
revenue stream forYinancing Fire Station 8's relocation costs.
When the Holly-Seacliff Fire Station 6 opens in summer of 1999, existing fire personnel will be shifted
to staff a portion of one new paramedic engine. However, three new personnel will be required to
completely staff the new fire station at an annual cost of approximately $275,000 per year. The new,
ongoing staffing costs can be financed with a portion of the ongoing revenues generated from the
proposed Bolsa Chica contract.
Does a Bolsa Chica Contract with Orange County Fire Authority require Local Agency
Formation Commission approval?
The question has been raised as to whether a Bolsa Chica Fire contract with OCFA requires Local
Agency Formation Commission (LAFCO) approval. Section 56133 of the State Government Code
(Attachment 3) provides that a city may provide services by contract or agreement outside its
jurisdiction if it receives approval from LAFCO. However, contracts or agreements solely, involving
two or more public agencies do not need LAFCO approval.
The letter of understanding being consider by the City Council is neither a contract or an agreement
and only provides direction for developing the contents of a future contract. If the City Council
authorizes the Fire Chief to sign the letter of understanding a formal contract between the OCFA and
the City will be brought back at a future date. Prior to bringing back a contract the City Attorney and
OCFA Counsels will consider whether LAFCO approval is necessary because Capital monies will be
transferred to the OCFA from the Koll Real Estate Group.
Conclusion
Providing City Fire Services to Area A and Area B makes both economic sense as well as regional
sense and a contract between the City and the OCFA should be drafted for future approval.
Environmental Status: No impact.
Attachment(s):
q'6' X te
City Clerk's ;Page Number
1. Bolsa Chica Development Letter of Understanding
2 City Attorney's May 22"d review of Letter of Understanding
3 Extract from Section 56133 of State Government Code (Page 37 only)
E-1647 A- -AARe F4 ' 6 1� X Ze
fd97005.dic.doc [i!u e- iA•Uit� .3- 07/14/97 1:29 PM
AUTHORNichael P. Dolder, Fire Chief
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ATTACHMENT 3
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Page 14 - Council/Agency Agenda - 07/21/97
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(14)
F-3. (City Council) Creation Of A Citizen's Advisory Committee - City -Wide Public
Awareness Proaram Reaardina Community's Infrastructure Svstems Needs
Communication from the Deputy City Administrator -Public Information Officer, Deputy
City Administrator -Administrative Services Director, and the Public Works Director
recommending the creation of a Citizen's Advisory Committee that would work with city
staff and a consultant to develop and implement a Public Awareness Program to inform
the local residents about the condition and needs of the city's infrastructure systems in a
clear and understandable manner and the choices to be made to fund these systems.
Recommended Motion:
To authorize the Mayor and Mayor Pro Tern to v, ork with city staff to dr -:lop [a
procedure for developing] a representative list of community Lased
organizations and individuals that the City Council could appoint to serve on a
Citizen's Advisory Committee for the purpose of working with staff, and a consultant,
to develop and implement a Public Awareness Program to inform the Ic. al residents
about the condition and needs of the city's infrastructure systems in a clear and
understandable manner and the choices to be made to fund these systems.
[Approved as amended 7-0]
F-4. (City Council) (Deferred From June 2, 1997) Letter Of Understanding Regarding
Fire Services For The Bolsa Chica Development Project (440.60)
Communication from the Fire Chief informing Council that after numerous meetings
between the Orange County Fire Authority, the Koll Company (Koll), and city staff
regarding the provision of Fire, Rescue, Emergency Paramedic Service, :=.nd Ambulance
Transportation Service to the unincorporated Bolsa Chica development a -aa, various
areas of agreement were reached. This letter of understanding is not intended to be a
binding document, but rather to serve as an outline for developing separate
Implementation Agreements between the Orange County Fire Authority and Koll
'Company; Orange County Fire Authority and the city. (Slide report included).
Recommended Motion:
Authorize the Fire Chief and City Clerk to execute the Letter of Understanding
regarding Fire Services for the Bolsa Chica development area.
[Approved 4-3 (Bauer, Sullivan, Harman -- No)] .
(14) -
ATTACHMENT 4
CITY OF HUNTINGTON BEACH
INTER -DEPARTMENT COMMUNICATION
HUNTINCTON BEACH
TO: Michael Dolder, Fire Chief
FROM: Gail Hutton, City Attorney
DATE: May 22, 1997
SUBJECT: Bolsa Chica Development Letter of Understanding
RLS 97-354
Thank you for the opportunity to review the proposed Letter of Understanding
regarding providing fire services to the Bolsa Chica and Sunset Beach areas. Since
this is not a binding contract, it is not necessary or appropriate for the City
Attorney to formally approve the document as to form. However, since this
document will lead to negotiating a binding agreement, we appreciate the
opportunity to be placed in the "loop" as early as possible.
We have reviewed the Letter of Understanding and find nothing in it inappropriate.
We do wish to be involved in preparing the implementation agreement. In
particular, we would assume that the agreement should be prepared pursuant to
the authority vested in cities and counties to enter into fire and police protection
agreements under Government Code Section 55631-55634. (a copy of which is
attached). Alternatively, a joint powers authority could be created. Each of these
approaches has their own advantages and disadvantages that need to be discussed
at the time of negotiating the appropriate agreements.
Ae'_�
4&�_
Gail Hutton
City Attorney
Attachments: Government Code Sections 55631-55634
E- 4'. '
SF/s:G:SF-97Nit mos:Dold-522
5122/97 - K !
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CITY OF HUNTINGTON BEACH
Lo INTER -DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
TO: Honorable Mayor and Members of the City Council
FROM: Scott Field, Acting City Attorney
DATE: August 4,1997
SUBJECT: Bolsa Chica Letter of Understanding regarding
Fire Services
Councilmember Tom Harman had requested a copy of an internal memorandum of the
City Attorney's office regarding the Bolsa Chica Letter of Understanding for fire
services. Attached is that memo.
You should be aware that the opinion of the City Attorney's Office is that the Letter of
Understanding (LOU) is clear and certain that it is only an agreement to agree and not a
binding contract. The LOU states that it "is not intended to be a binding document or to
take the place of any official agreements or contracts." Memoranda or letters of
understanding like these are very commonly used as a stepping stone to a final
agreement. In this case, the LOU is to provide direction to the Fire Authority when
preparing two agreements, one an implementation agreement between Koll and the
Authority, and another a emergency fire services agreement between the Authority and
the City.
The objection to the LOU as described in the attached memorandum is essentially that
Koll and the County will enter into an implementation agreement that will be dependent
upon the City providing fire services to Bolsa Chica, and that consequently, the City will
not be able to avoid entering into its emergency services agreement with the Authority
because Koll' and the, Authority will already be dependent upon the City's participation.
However, the parties expressly stated in the beginning of the LOU that it was not
"intended to be a binding document." Consequently, any reliance on the part of Koll or
the County on the City would be unreasonable and misplaced. This office's conclusion
is based upon the fact that "it is hornbook law that evidence of preliminary negotiations
or an agreement to enter into a binding contract in the future does not alone constitute a
contract." (Racine & Laramie v. Department of Parks and Recreation (1992) 11
Cal.App.4 1026 (citing from Channel Home Centers v. Grossman (3rd Circuit 1986)
795 to F.2d 291, 298).)
SF/s:G:SF-97-Memos: M&CC8-4
8/4/97 - #3
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This principle is illustrated in Beck v. American Health Group Int. (1989)
211 Cal.App.3d 1555, 1562. At issue in that case was a letter from the defendant
hospital corporation that began: "It is a pleasure to draft the outline of our future
agreement." The letter then outlined the terms, and asked plaintiff to sign it "if this is a
general understanding of the agreement," in order that the hospital may "forward it to
Corporate Counsel for the drafting of a contract." The letter concluded: "When we
have a draft, we will discuss it, and hopefully shall have a completed contract and
operating unit in the very near future."
When the plaintiff sued to enforce the terms contained in the letter, the court said:
"Taken in their ordinary sense, the words of the letter
manifest an intention of the parties that no binding contract
would come into being until the terms of the letter. were
embodied in a formal contract to be drafted by corporate.
counsel. Assignment of the drafting to an attorney evidences
an expectation that the terms set forth in the letter were
subject to his approval.... That plaintiff may have intended
or believed a binding contract came into existence upon his
signing the letter is immaterial in the fact of its language
which plainly indicated otherwise." (211 Cal.App.3d 1563.)
Similarly, in a very recent 1992 case, a concessionaire at Old Town San Diego State
Historic Park sued the California Department of Parks and Recreation when the
Department failed to enter into an amendment to an existing concession contract. The
parties had been negotiating an amendment to the concession contract for a number of
years. When negotiations would not conclude to the concessionaire's satisfaction, he
sued. While admitting that in "special circumstances" a letter of understanding could
impose a duty on a party to enter into good faith negotiations, the Court indicated that as
a general matter, one party may decline to enter into a contract for any reason, including
engaging in "unreasonable, unfair, or otherwise bad faith negotiation tactics." Racine &
Laramie v. Dept. of Parks and Recreation, 11 Cal.AppAth at 1031.
One example of special circumstances the Court identified was "promissory estoppel,"
the same doctrine as cited in the attached memo. -A court will apply "estoppel" to bind a
party to perform even absent a contract if the party made some promise which he "should
reasonably. expect to induce action or forbearance of a definite and substantial character
on the part of the other party and which does induce such action or forbearance
... if injustice can be avoided only by enforcement of the promise." Racine, 11
Cal.AppAth at 1034. However, estoppel may not be applied against a public entity even
if the entity's conduct meets the above test, if the result would be against "public policy."
Long Beach v. Mansell (1970) 3 Cal.3d 462, 496-97, 91 Cal.Rptr. 23.
SF/s:G:SF-97-Memos:M&CC8-4 2
8/4/97 - #3
In this circumstance, for Huntington Beach to be estopped from refusing to provide fire
service to Bolsa Chica even though the Council never agreed by contract to provide fire
service, Koll would have to prove that the City took some action to induce action by Koll.
For example, one way that the City could induce reliance by Koll and the County absent
the emergency .fire service agreement would be if Koll were to pay the County the
$2,450,000 capital contribution contemplated in the LOU, and the City would accept the
pass -through of up to $1, 250,000 of that money and use it to relocate Huntington Beach
Fire Station 8 to the City -owned property at Graham and Production. However, we doubt
the City Fire Department would take such unilateral action to collect the capital
contribution without the Council first entering into the emergency fire service agreement.
And even then, the estoppel would be doubtful because the City Council would have
never approved a fire services contract pursuant to Government Code § 54981, 55632,
and LAFCO would never have approved the contract. (See discussion below.)
Consequently, offering fire service would be against public policy, and given the fact that
the LOU already states plainly that it is not intended to be a binding document, it is this
office's conclusion that any reliance placed upon it by Koll or the County would be
misplaced.
However, reasonable minds may differ and a transmittal letter has been prepared that
would accompany the signed LOU to the County and the Koll Company further
confirming that the letter is not a binding document. A copy of that pro esod-left er
attached. In the view of this office, it addresses all the concerns r ' d in Mr.
DeLaLoza's memorandum.
In addition, since the last City Council meeting, we have recg
Clark Alsop of Best, Best & Krieger to the Orange County I�,
That letter indicates that LAFCO must approve the City prow:
Chica "because a private developer is involved in the agreem,
service outside the City boundaries." Scott Field of this offic
Alsop to clarify when LAFCO approval must be obtained. N
LAFCO approval is required prior to implementing fire servii
Consequently, any emergency fire.services agreement should
obtaining LAFCO approval.
Scott Field
Acting City Attorney
,6d the enclosed letter
�CO concerning the L
ing fire service in Bol
it for the provision of
has spoken with Mr.
Alsop has advised
Ito Bolsa Chica.
conditionayupon
Attachment: Memo to Scott Field from Art DeLaLoza dated July 25, 1997
c: Michael T. Uberuaga, City Administrator
Ray Silver, Assistant City Administrator
SF/s:G: SF-97-Memos: M&CC8-4
8/4/97 - #3
j � q
FH CITY OF HUNTINGTON BEACH
INTER -DEPARTMENT COMMUNICATION
HUNTINCTON BEACH
TO: Scott F:-Field, Deputy City Attorney
FROM: Art DeLaLoza, Deputy City Attorney
DATE: July 25, 1997
SUBJECT: Bolsa Chica Development Letter of Understanding
RLS No. 97-594
You may wish to seek a motion to reconsider the subject letter on the following grounds:
1. Koll is in Bankruptcy, and it is unclear how the Bankruptcy Court will treat this letter for
purposes of reorganization.
2. The City may be estopped from denying it is a "contract."
3. It is not clear how the Letter applies to the Master Property Tax Transfer Agreement as
interpreted by the County.
The Letter of Understanding provides that:
"This letter ... is intended to document the major points of
agreement reached ... between the Orange County Fire Authority
(OCFA), the Koll Company (Koll), and the City of Huntington
Beach (City)."
The Letter further provides:
City has agreed to provide overall system -wide enhancements in
order to optimize City services to areas identified on Exhibit "l ."
Notwithstanding the phrase, "This Letter of Understanding is not intended to be a binding
document or to take the place of any official agreements or contracts," the Letter goes on to state,
"This Letter is intended to outline and document the general understanding of the parties." This
calls into question what the letter actually is. In the Letter, there is a clear, expressed intent to
bring about reliance by at least two (2) parties:
"From this understanding, OCFA will prepare and enter into an
Implementation Agreement with Koll as required by County of
Orange condition of approval for this project."
Scott F. Field • •
July 25, 1997
Page 2
Koll and the County will contend that they detrimentally relied on the express representations in
the Letter as approved by the City Council.
These issues are raised because Shirley Detloff stated in the press that the Letter was not a
contract with Koll.
Koll would contend it is a third party creditor beneficiary if not a party to the Agreement. Since
Koll is in Bankruptcy, we should consult with a Bankruptcy expert to determine whether there
are other special Bankruptcy problems we need to address.
Although you do not agree that estoppel may apply to this Letter, I am not as convinced that the
City should take that chance --especially when the purported legal effect is that it is simply not a
contract.
The risk that estoppel will apply is much greater than the benefit bestowed on the City if, in fact,
it is deemed to be of no legal effect.
"Although there is authority to the contrary, the prevailing view is that
whether an estoppel may be invoked against a governmental entity is
generally to be tested by the same rules that apply to private individuals.
In other words, the government may be bound by an equitable estoppel in
the same manner as a private party if the elements requisite to an estoppel
against a private party are present and if, in the considered view of a court
of equity, the injustice which would result from a failure to uphold an
estoppel is of sufficient dimension to justify any effect on the public
interest or policy that would result from the raising of such estoppel."
"In determining whether an estoppel may be raised against a public agency
an important consideration is the degree of culpability or negligence of the
public agency or its representatives in their conduct or advice and the
seriousness of the impact or effect of such conduct or advice on the
claimant." '
Peck v. Modesto (1960, 3d Dist) 181 CA2d 465, 5 Cal. Rptr. 482; Strong
v. County of Santa Cruz (1975) 15 C3d 720, 125 Cal. Rptr 896, 543 P2d
264; Long Beach v. Mansell (1970) 3 C3d 462, 91 Cal. Rptr. 23, 476 P.2d
423; Canfield v. Prod (1977, 1st Dist) 67 CAM 722, 137 Cal. Rptr. 27;
Lee v. Board of Administration (1982, 3d Dist) 130 CAM 122, 181 Cal.
Rptr. 754
In sum, it is the considered view of a court of equity, which controls whether the Letter is
binding on the City --not our opinions.
1
Scott F. Field • •
July 25, 1997
Page 3 -
Moreover here, Koll would argue that the public agency actually voted on the issue with the
intent to induce Koll's reliance. Such reliance in entering into "an implementation agreement"
with OCFA would result in an injustice as to Koll if the City were allowed to materially amend
the provisions in the Letter or deny the existence of a contract.
RECOMMENDATION:
1. A Motion for Reconsideration should be made by one on the prevailing side until the
three issues above have been closely examined.
2. The Letter should be modified to cover the concerns mentioned herein with provisions of
no estoppel, no reliance, agreement to defend and indemnify, etc.
AR DE LA LOZA
Deputy City Attorney
ADL/pw
c: Gail Hutton, City Attorney
gAde1a1oza\97memos\b1sachic
J� City Huntington of Huntiton Beach
2000 MAIN STREET CALIFORNIA92648
OFFICE OF THE CITY ADMINISTRATOR
August 4, 1997
ORANGE COUNTY FIRE AUTHORITY
180 South Water Street
Orange, CA 92666
KOLL REAL; ESTATE GROUP
4400 MacArthur Blvd., Suite 300
Newport Beach, CA 92660
RE: BOLSA CHICA DEVELOPMENT LETTER OF UNDERSTANDING
Enclosed is the Bolsa Chica Development Letter of Understanding as executed by the
Huntington Beach Fire Chief.
In transmitting that document I note that the Letter of Understanding (LOU) is clear and
certain that it is only an agreement to agree and not a binding contract. The LOU states
that it "is not intended to be a binding document or to take the place of any official
agreements or contracts." In this case, the LOU is to provide direction to the Fire
Authority when preparing two agreements, specifically an Implementation Agreement
between Koll and the Authority, and an Emergency Fire Services Agreement between the
Authority and the City.
When preparing the Implementation Agreement with Koll, the Authority should be
mindful that City provision of fire services is dependent on the City entering into the Fire
Services Agreement with the Authority. Since the LOU is not "intended to be a binding
document," any reliance on the part of Koll or the County on the City providing fire
services would be unreasonable and misplaced absent an Emergency Fire Services
Agreement approved by the City Council. And in fact, Koll is already aware that the City
may not enter into an Agreement since the LOU states that if "the City fails to provide
services as stipulated and a permanent fire station in the development is required, Koll
acknowledges that they will be responsible for any staffing shortfall costs prior to project
buildout."
SF/s:G:SF-97Ltrs: Kol I-804
8/4/97.- #4
DRUG USE
IS
AB
Telephone (714) 536-5202
•
0
OCFA/Koll
August 4, 1997
Page 2
Consequently, the LOU is not to be relied upon by any party hereto, or any third party for
any purpose whatsoever except as proposed deal points for a future fire services
agreement subject to the approval by the City Council of the City of Huntington Beach.
In addition, it is our understanding that the Koll Real Estate Group is presently
reorganizing under jurisdiction of the Bankruptcy Court. In signing the LOU, Koll
should provide evidence that it has the authority to enter into the LOU.
Very truly yours,
MICHAEL T. UBERUAGA
City Administrator
SF/s:G: SF-97Ltrs: Kol I-804
8/4/97 - #4
August 4, 1997
ORANGE COUNTY FIRE AUTHORITY
180 South Water Street
Orange, CA 92666
KOLL REAL ESTATE GROUP
4400 MacArthur Blvd., Suite 300
Newport Beach, CA 92660
RE: BOLSA CHICA DEVELOPMENT LETTER OF UNDERSTANDING
Enclosed is the Bolsa Chica Development Letter of Understanding as executed by the
Huntington Beach Fire Chief.
In transmitting that document I note that the Letter of Understanding (LOU) is clear and
certain that it is only an agreement to agree and not a binding contract. The LOU states
that it "is not intended to be a binding document or to take the place of any official
agreements or contracts." In this case, the LOU is to provide direction to the Fire
Authority when preparing two agreements, specifically an Implementation Agreement
between Koll and the Authority, and an Emergency Fire Services Agreement between the
Authority and the City.
When preparing the Implementation Agreement with Koll, the Authority should be
mindful that City provision of fire services is dependent on the City entering into the Fire
Services Agreement with the Authority. Since the LOU is not "intended to be a binding
document," any reliance on the part of Koll or the County on the City providing fire
services would be unreasonable and misplaced absent an Emergency Fire Services
Agreement approved by the City Council. And in fact, Koll is already aware that the City
may not enter into an Agreement since the LOU states that if "the City fails to provide
services as stipulated and a permanent fire station in the development is required, Koll
acknowledges that they will be responsible for any staffing shortfall costs prior to project
buildout."
SF/s:G:SF-97Ltrs:Ko11-804
8/4/97 - #4
•
11
OCFA/Koll
August 4, 1997
Page 2
Consequently, the LOU is not to be relied upon by any party hereto, or any third party for
any purpose whatsoever except as proposed deal points for a future fire services
agreement. subject to the approval by the City Council of the City of Huntington Beach.
In addition, it is our understanding that the Koll Real Estate Group is presently
reorganizing under jurisdiction of the Bankruptcy Court. In signing the LOU, Koll
should provide evidence that it has the authority to enter into the LOU.
Very truly yours,
MICHAEL T. UBERUAGA
City Administrator
SF/s:G:SF-97Ltrs:Ko11-804
8/4/97 - #4
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Dana Srrif:h C=' -�
Executiv!, Officer
Orange C junty Local Agency Formation Commission '
12 Civic Cetlmer-PlalA c'-
Room 2:t_
Santa A±:._, CA 92701
Re: Bolsa Chica Development and Service Agreement
'bear Rana:
We understand that the City of Huntington Beach is considering entering into a three-
way agre-emeat with the Orange County Piro Authority and the Kot Company which would result
in the Ciro- providing fire service to the undeveloped County area commorJy known as the Bo1sa
Chica. ,
A question has been raised whether such an agreement for City service in the County
area is subject to the provisions of Government Code 56133 and, therofore, would require LAFCO
approval,
Government Code Section 56133, provides in part that a city or district may provide
new or extended services by contract or agreement outside its jurisdictional boundarles only if it first
requests and receives written approval from the Commission in the affected County. The Section
goes on to state that "this Section does not apply to contracts or agreements solely involving two or
more public agencies."
XV?U91CHAu?9e9
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Dana Smith
July 17, 1997
Page 2
The Bolsa Chica proposal would involve three parties: two government agencies and
one private developer. Section 56133 specifically exempts agreements between two or more public
agencies. Since a private developer is also included in the proposed agreement, J believe that it falls
within the first sentence of 56133, which requires such extension of services to be brought before and
approved by LAFCO.
This is in contrast to a situation where two govvwnent agencies merely wish to
contract regarding the provision service. For instance, a city and county could contract for a city to
provide water service, or fire service, or any other kind of service in a county area where it would be
more efficient for the city to serve than for the county to serve. In such instance, that agreement
would not need to go before LAFCO.
Therefore, in summary, it is my opinion that because a private developer is involved
in the agreement for the provision of service outside of the city boundaries, LAFCO must approve
that provision of service.
If you have any further Questions, please don't hesitate to give me a call.
Very truly yours,
Clark H. risop
of BEST BVIST & KMGER LLP
CHAltjh
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a�1INS
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RECEIVED
CITY CLERK
OFFICE OF
CITY OF
CITY ATTORNEY
NUNTIhGTOH
7ct,CN, CALIF.
P.O. Box 190
SEP
19 I H ° 9 t
2000 Main Street
Telephone
Gail Hutton
Huntington Beach, California 92648
(714) 536-5555
City Attorney
Fax (714) 374-1590
September 4, 1997
Lucy Dunn
Senior Vice President
Koll Real Estate Group
1400 MacArthur Boulevard, Suite 300
Newport Beach, CA 92660
Re: Letter of Understanding regarding Fire Services
Dear Ms. Dunn:
Gail Hutton, the City Attorney, asked that I respond to your letter of August 26, 1997. In that
letter, you were questioning our letter to you of August 14, 1997, as to what type of information
we were requesting.
As you know, Koll signed the Letter of Understanding while it was under the jurisdiction of
Bankruptcy Court. In fact, it appears that Koll is still under the jurisdiction of Bankruptcy Court,
even though its reorganization and recapitalization plan has been approved.
It is our understanding that any agreements entered into prior to entering into the protection of
Bankruptcy Court may be disavowed, and any agreements entered into while under the
jurisdiction of Bankruptcy Court require Court approval. Consequently, we are requesting an
opinion from your bankruptcy counsel indicating that Koll had the authority to enter into the
Letter of Understanding.
Should you have any questions, please don't hesitate to contact me.
Sincerely,
Scott F. Field
Deputy City Attorney
c: Honorable Mayor Ralph Bauer
Members of the City Council
Michael Uberuaga, City Administrator
Michael Dolder, Fire Chief
Connie Brockway, City Clerk ;
Gail Hutton, City Attorney
SF-97Ltrs:Dunn-903
9/4/97 - #2
< <_� • M•' 1�011
Real Estate
Group
August 26, 1997
Gail Hutton
City Attorney
City of Huntington Beach
P.O. Box 190
2000 Main Street
N z
Huntington Beach, California 92648rn
<n
Re: Development at PCH and Warner, near Bolsa Chica
Dear Gail:
c.o =rt
I am in receipt of your August 14, 1997 letter regarding the LOU on fire services among
Koll Real Estate Group, the City and County of Orange.
I'm not quite sure what you need. If you are referring to the reorganization and
recapitalization plan, the bankruptcy court formally approved the plan August 19, 1997,
with 95% of our shareholders and bondholders in support. We have converted $210 million
of debt into equity; increased our corporate net worth to approximately $140 million;
eliminated all corporate debt; and preserved approximately $200 million in tax loss
carryforwards. This was favorably reported on August 20, 1997 in the Wall Street Journal,
Los Angeles Times and Orange County Register.
In July, and at the request of Councilmember Dave Garofalo, I sent to Paul D'Alessandro,
Deputy City Attorney, the independent counsel's legal opinion and backup information on
the recapitalization. If he did not get this information, I'll be happy to duplicate it.
Attached is a background statement on Koll Real Estate Group's wholly owned subsidiery,
Signal Bolsa Corporation, the legal owner of our 200 acres at PCH and Warner, next to the
Bolsa Chica Wetlands. Please let me know what additional information you may need.
Very truly yours,
Senior Vice,,`President
LD J
cc: Honorable Mayor Ralph Bauer
Members of the City Council
Michael Uberuaga, City Administrator
Michael Dolder, Fire Chief
Connie Brockway, City Clerk
4400 MacArthur Boulevard
Suite 300
Newport Beach, CA 92660
(714)477-0873
1,;� : .
BACKGROUND OF THE BOLSA CHICA PROPERTY
AND STATUS OF BANKRUPTCY FILING BY
KOLL REAL ESTATE GROUP, INC.
The Bolsa Chica property was acquired in 1970 by Signal Bolsa Corporation, which is
today the legal owner of the property. In 1986, the Henley Group acquired Signal Bolsa
Corporation. The Henley Group reorganized its assets and Signal Bolsa Corporation
became a subsidiary of Henley Properties, Inc.
In 1989, Henley Properties, Inc., was spun -off to become a publically traded company on
Wall Street, but in the process incurred approximately $110 million of debt in the form of
pay-in-kind debentures.
In 1993, The Koll Company's commercial development business combined with Henley
Properties, Inc., to form KOLL REAL ESTATE GROUP, INC. ("KREG"). The debt
inherited from the original 1989 spin-off continued to accrue substantial interest so that, as
of today, the debt total from the debentures exceeds $200 million.
In April 1996, KREG initiated discussions with the owners of the pay-in-kind debentures
(bondholders) to restructure the debt under a proposed Prepackaged Plan of
Reorganization. Under this Plan, the outstanding $200 mullion in debt would be exchanged
for 90% of KREG's stock. The existing KREG shareholders would retain 10% of the
stock. Upon completion of the Plan, KREG will be debt -free, enjoy a net worth of
approximately $140 million, and retain $200 million in approved tax credits.
In May 1997, the Security and Exchange Commission reviewed all required registration
statements and disclosure documents and KREG requested formal shareholder and
bondholder approvals for the Plan. As of June 1997, over 95% of the shareholders and
bondholders approved the Plan.
A Court Confirmation Hearing for KREG's Plan is scheduled for August 19, 1997. With
the overwhelming support of the shareholders and bondholders, KREG anticipates Court
approval of the Plan and completion of the reorganization process by the end of August
1997.
The legal owner of the Bolsa Chica property, Signal Bolsa Corporation, remains a
subsidiary of KREG.
air INS
fi
f�41/rTV
Gail Hutton
City Anorney
August 14, 1997
L_J
OFFICE OF
CITY ATTORNEY
P.O. Box 190
2000 Main Street
Huntington Beach, California 92648
Koll Real Estate Group
4400 MacArthur Blvd., Suite 300
Newport Beach, CA 92660
Re: BOLSA CHICA DEVELOPMENT
LETTER OF UNDERSTANDING (LOU)
Telephone
(714) 536-SS55
Fax (714) 374-1590
In addition to the subject LOU, the Mayor of Huntington Beach recently sent you a letter
dated August 12, 1997, which requested in the last paragraph that Koll Real Estate Group
("Koll") provide evidence that Koll "has the authority to enter into the LOU".
Kindly transmit such evidence to the undersigned so that I will be in a position to
evaluate and forward such evidence to the Mayor and City Council.
Very truly yours,
GAIL HUTTON
City Attorney
/jn V" U
c: Honorable Mayor Ralph Bauer
Members of the City Council
Michael Uberuaga, City Administrator
Ray Silver, Assistant City Administrator
Michael Dolder, Fire Chief
Arthur DeLaLoza, Deputy City Attorney
Scott Field, Deputy City Attorney
Connie Brockway, City Clerk
P &62 234.837
US Postal Service
Receipt for Certified Mail
No Insurance Coverage Provided.
Do not use for International Mail See reverse
Sent to Ken MacLeod
reef mbar
180 South Water si-rppf-
Post office, State, & ZIP Code
Orange,
Postage
$
Certified Fee
Special Delivery Fee
Restricted Delivery Fee
Return Receipt Showing to
*'
Whom & Date Delivered
a
Retum Receipt Showing to Whom,
Q
Date, & Addressee's Address
20
TOTAL Postage & Fees
$
Postmark or Date
7
U EL
M
P 562 234 838
I US Postal Service
Receipt for Certified Mail
No Insurance Coverage Provided.
ch
LL
co
a
Do not use for International Mail See reverse
Sent to Ed Mountford
r e um er
4400 MacArthur Blvd Ste 3
Post office, State, & ZIP Code .
Postage
$
Certified Fee
Special Delivery Fee
Restricted Delivery Fee
Return Receipt Showing to
Whom & Date Delivered
Return Receipt Slowing to Whom,
Date, & Addressee's Address
TOTAL Postage & Fees
$
Postmark or Date
IN
c��y
City of Huntington Beach
(r+�� 2000 MAIN STREET CALI FORNIA 92648
OFFICE OF THE MAYOR
Telephone (714) 536-5553
August 12, 1997
ORANGE COUNTY FIRE AUTHORITY
180 South Water Street
Orange, CA 92666
KOLL REAL ESTATE GROUP
4400 MacArthur Blvd., Suite 300
Newport Beach, CA 92660
RE: BOLSA CHICA DEVELOPMENT LETTER OF UNDERSTANDING
Enclosed is the Bolsa Chica Development Letter of Understanding as executed by the
Huntington Beach Fire Chief.
In transmitting that document I note that the Letter of Understanding (LOU) is clear and
certain that it is only an agreement to agree and not a binding contract. The LOU states
that it "is not intended to be a binding document or to take the place of any official
agreements or contracts." In this case, the LOU is to provide direction to the Fire
Authority when preparing two agreements, specifically an Implementation Agreement
between Koll and the Authority, and an Emergency Fire Services Agreement between the
Authority and the City.
When preparing the Implementation Agreement with Koll, the Authority should be
mindful that City provision of fire services is dependent on the City entering into the Fire
Services Agreement with the Authority. Since the LOU is not "intended to be a binding
document," any reliance on the part of Koll or the County on the City providing fire
services would be unreasonable and misplaced absent an Emergency Fire Services
Agreement approved by the City Council. And in fact, Koll is already aware that the City
may not enter into an Agreement since the LOU states that if "the City fails to provide
services as stipulated and a permanent fire station in the development is required, Koll
acknowledges that they will be responsible for any staffing shortfall costs prior to project
buildout."
DRUG USE
ISr ;
AB
SF/s:G:SF-97Urs:Kol1-804
8/12/97 - #4
Anjo, ,Japan
SISTER CITIES
\\ ailakcre. \t-%, Zealand
OCFA/Koll
August 12, 1997
Page 2
Consequently, it is the intent of the City Council that the LOU is not to be relied upon by
any party hereto, or any third party for any purpose whatsoever except as proposed deal
points for a future fire services agreement subject to the approval by the City Council of
the City of Huntington Beach.
In addition, it is our understanding that the Koll Real Estate Group is presently
reorganizing under jurisdiction of the Bankruptcy Court. In signing the LOU, Koll
should provide evidence that it has the authority to enter into the LOU.
Very truly yours,
RALPH BAUER
Mayor
City of Huntington Beach
S F/s:G: S F-97Ltrs: Kol 1-804
8/12/97 - #4
SENDER:
■Complete items t an0oor 2 for addi'` 'services.
I also -wish to rP"`1"A the
■Complete items 3, 4a, and 4b. ; J
following servli �r an
■ Print your name and address on the --verse of this form so that we can return this
extra fee):
card to you.
■Attach this form to the front of the mailpiece�or on the back if space does not
1. ❑ Addressee's Address
�Retum
■Writet Receipt Requested' on) h9q7aQ4 b the article number,
2. ❑ Restricted Delivery
d
N
■The Return Receipt will show to w ellrered and the date
delivered.? / ._ : ;
Consult postmaster for fee.
r''
Ken MacLeod
Acting Director
Orange County Fire
180 South Water Street
Orange, CA 92666
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-iv
STATEMENT OF ACTION OF THE CITY COUNCIL
CITY OF HUNTINGTON BEACH
*********-Indicates Portions Of The Meeting Not Included In The Statement Of Action
Council Chamber, Civic Center
Huntington Beach, California
Monday, August 4, 1997
An audio tape recording of the 5:00 p.m. portion
of this meeting and a video tape recording of the 7:00 p.m. portion
of this meeting are on file in the Office of the City Clerk
Mayor Bauer called the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to order at 5:00 p.m. in Room B-8.
CITY COUNCIUREDEVELOPMENT AGENCY ROLL CALL
PRESENT: Julien, Harman, Dettloff, Bauer, Sullivan, Green, (Garofalo arrived at
5:20 p.m.)
ABSENT: None
(City Council) Bolsa Chica Letter Of Understanding - Deletion Of City Clerk's
Attestation Signature - Approved - Further Council Direction Given Regarding
Letter of Transmittal To Be Sent By Mayor To The Koll Company and Orange
County Fire Authority
The City Council considered a communication from the City Clerk requesting Council
approval to delete the City Clerk's attestation signature line and her signature which in
error she affixed to the Bolsa Chica Development Letter of Understanding signed by
Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken MacLeod, Acting
Director of Fire Services, Orange County Fire Authority and Ed Mountford, Vice
President, Koll Real Estate Company, which on July 21, 1997 the City Council
authorized only the Fire Chief to sign.
Councilmember Sullivan informed the City Council of the reasons why this item
heightened his concerns relative to the Bolsa Chica Development Letter of
Understanding that at the July 21, 1997 Council meeting the Fire Chief was authorized
to sign. He stated his concerns, including the fact that the Koll Company is bankrupt
and that the city does not know with whom it is dealing until that situation is resolved;
also that the Letter of Understanding is a lot more binding than it appears and could.
Deputy City Attorney De La Loza reported that a Letter of Transmittal had been
prepared today and circulated to the City Councilmembers which specifically requests
that the Koll Company demonstrate that even though it is in reorganization in
bankruptcy that it demonstrate that it has the authority to execute the Letter of
Understanding. He stated that to the extent the Koll Company is able to do so and it is
not a problem with respect to the bankruptcy court itself, it appears that that issue may
be resolved. He stated that he believes it will depend upon what is produced by the
Koll Company to overcome the bankruptcy issue.
Deputy City Attorney De La Loza reported on the doctrine of estoppel in response to
Councilmember Sullivan's question regarding possible legal ramifications of the Letter
of Understanding. He explained the reasons why Deputy City Attorney Field had
prepared the August 4, 1997 letter referred to during this meeting which states to the
Orange County Fire Authority (OCFA) and the Koll Company to not rely on the Letter of
Understanding. He informed Council that the transmittal letter is meant to overcome
the estoppel issue.
Mayor Pro Tern Dettloff presented her understanding of the Letter of Understanding.
She requested a resolution of this matter and requested clarification by Deputy City
Attorney De La Loza. Deputy City Attorney De La Loza informed Mayor Pro Tern
Dettloff that the Letter of Understanding is not a contract and that has always been the
opinion of the City Attorney's Office; however, in certain circumstances, a judge can still
hold that the City of Huntington Beach has to stick with the deal even though it is not a
contract. He further clarified the intent of the transmittal letter dated August 4, 1997
prepared by Deputy City Attorney Field which advises not to rely on that section of the
Letter of Understanding which sets forth that "from this understanding, the Orange
County Fire Authority will prepare and enter into an Implementation Agreement with
Koll as required by County of Orange conditions of approval for this project." In
response to Mayor Pro Tern Dettloff, Deputy City Attorney De La Loza reported on the
purpose of the transmittal letter, including that it reiterates that the bankruptcy court is
still an issue and to insure the Koll Company returns to the city showing that it has
authority from a bankruptcy court to sign the Letter of Understanding.
A motion was made by Green, second Garofalo to approve the City Clerk's request for
Council approval to delete the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997 the City
Council authorized only the Fire Chief to sign.
e
Page 3.- Statement of Action
Councilmember Sullivan presented reasons why he believed that in order for the Letter
of Transmittal to be effective it should be voted on by the City Council and signed by
the Mayor rather than signed by the City Administrator.
In response to Mayor Pro Tern Dettloff, Deputy City Attorney De La Loza referred to the
memorandum to the City Council from Scott Field, Acting City Attorney, dated August 4,
1997, Subject: Bolsa Chica Letter of Understanding Regarding Fire Services, and
clarified reasons for the city's need to make it clear that the estoppel doctrine is not
going to apply to the Letter of Understanding.
Mayor Pro Tem Dettloff stated she intends to meet with Deputy City Attorney Field,
Deputy City Attorney De La Loza, the City Administrator and the Fire Chief regarding
unanswered questions in order to present to the public a legal and clear understanding
as to what the Council has done.
Deputy City Attorney De La Loza stated three issues that are clear: that Koll Company
signed the Letter of Understanding; Koll Company is in bankruptcy; the city has no
assurance that Koll Company has the authority from the bankruptcy court to sign the
Letter of Understanding.
Councilmember Harman stated that he had the same concerns as expressed by the
Acting City Attorney. He stated his desire to see this matter resolved and
recommended that this matter be reconsidered.
The City Clerk referred the City Council to her communication and clarified the reason
for her request to correct the error she had made in attesting to the Letter of
Understanding, including the fact that the City Attorney had not prepared the Letter of
Understanding and she can attest only to signatures on documents prepared by the
City Attorney. She spoke regarding the need for the item of the transmittal letter to be
announced pursuant to the Brown Act; also that the Letter of Transmittal will not be part
of her official files unless Council direction is given rather than only being sent out by
individual staff members.
The motion made by Green, second Garofalo carried unanimously.
Councilmember Sullivan stated that the City Council had taken official action on the
Letter of Understanding at the last Council meeting and spoke regarding what he
believes is the need for Council action on this Letter of Transmittal so that it has effect
and force and to direct the Mayor and not the City Administrator to sign it so that it has
some force.
A motion was made by Sullivan, second Harman to direct the Mayor to sign the Letter
of Transmittal so that it has some effect and force.
Page 4 - Statement of Action
Discussion was held between the Council and Deputy City Attorney De La Loza
regarding the procedure to reconsider the action just voted upon which directed the City
Clerk to remove the City Clerk's attestation line and signature from the Letter of
Understanding. Deputy City Attorney De La Loza responded to Council that the
signature of the Mayor would carry greater weight than the City Administrator's
signature. He explained that to the extent that this entire City Council which previously
approved the Letter of Understanding now states that it wishes something else, that
Council wants to go with the Letter of Understanding which will carry greater weight and
be under the equal dignities rule a sufficient basis upon which to put Koll Company on
notice that this is the will of the City Council.
A motion was made by Green that the Mayor draft a letter to the Koll Company and the
Fire Authority to accompany the Bolsa Chica Letter of Understanding stating the
position of the City Council and that the substance of the letter has to do with the fact
that they should not rely on this document as set forth in the letter written by Scott
Field, Deputy City Attorney, dated August 4, 1997 and that the letter also evokes a
comment from the Koll Company as to whether they are authorized to sign the Letter of
Understanding as it may come back from the bankruptcy court that they are not
authorized to sign the Letter of Understanding.
In response to Mayor Bauer, Councilmember Sullivan stated that the letter of August 4,
1997 which is attached to the memorandum from Scott Field, Acting City Attorney,
dated August 4, 1997 did reflect what he intended and that he would like to have the
words added to Councilmember Green's words that "it is the position of the City
Council" and then have the Mayor sign it.
The Mayor questioned Deputy City Attorney De La Loza as to whether the procedure
rules had been followed. Deputy City Attorney De La Loza confirmed the Council has
done so; however, that a motion is necessary to reconsider the action taken authorizing
the City Clerk to remove the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997 the City
Council authorized only the Fire Chief to sign.
Councilmember Green withdrew his motion for the moment in order to allow a motion
for reconsideration of as recommended by Deputy City Attorney De La Loza.
A motion was made by Sullivan, second Dettloff to reconsider the City Clerk's request
for Council approval to delete the City Clerk's attestation signature line and her
signature which in error she affixed to the Bolsa Chica Development Letter of
Understanding signed by Michael Dolder, Fire Chief, Huntington Beach Fire
Department, Ken MacLeod, Acting Director of Fire Services, Orange County Fire
Authority and Ed Mountford, Vice President, Koll Real Estate Company, which on
Page 5 - Statement of Action
July 21, 1997 the City Council authorized only the Fire Chief to sign. The motion
carried unanimously.
Councilmember Garofalo stated his concern that the Letter of Transmittal which Council
is now authorizing does not materially interfere with the negotiations between the Fire
Chief and the Orange County Fire Authority and does not take any leaves that are not
reflective in the original letter.
The City Administrator, in response to Councilmember Garofalo, stated that he and the
Fire Chief obviously do not know that, that they will be meeting with the Orange County
Fire Authority and really the agreement is to between the Orange County Fire Authority
and the city. The letter to the Koll Company is a letter to the Koll Company so he does
not think it would have a material effect upon negotiations with the Orange County Fire
Authority but they have not talked to them.
Councilmember Green confirmed to Councilmember Sullivan that his motion included
the words "it is the intent of the City Council." In response to the Mayor,
Councilmember Green stated that his motion included authorizing the City Clerk to
remove her attestation to the Letter of Understanding.
The City Clerk requested that the motion be repeated and asked who the maker of the
second was. She was informed that Sullivan was the second. Councilmember Green
repeated his motion stating that the Mayor be authorized to write a letter to the Koll
Company with a copy to the Orange County Fire Authority stating it quite clearly that
this Letter of Understanding is indeed not a binding document and that the City Council
would like assurances that the Koll Company is able to enter into an agreement with
regard to fire services and that the City Clerk's attestation signature be removed from
the :Letter of Understanding. The motion carried by the following roll call vote:
AYES: Julien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo
NOES: None
ABSENT: None
Mayor Bauer adjourned the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to Wednesday, August 6, 1997, 7:30 a.m.,
Pacific-B Room, Waterfront Hilton, 21100 Pacific Coast Highway, Huntington Beach,
California.
•
Page 6 - Statement of Action
ATTEST:
/s/ Connie Brockway
City Clerk/Clerk
STATE OF CALIFORNIA )
County of Orange ) ss:
City of Huntington Beach )
/s/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach, California
/s/ Ralph Bauer
Mayor
I, Connie Brockway, the duly elected City Clerk of the City of Huntington Beach,
California, do hereby certify that the above and foregoing is a true and correct
Statement of Action of the City Council of said City at their regular meeting held on the
4th day of August, 1997.
Witness my hand and seal of the said City of Huntington Beach this the 8th day of
August, 1997.
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach, California
i
V6 Fax:7144762075
F. 03/03
C4all-,:p
S n`11;W.c�
64- l�! L*L011L
BACKGROUND OF THE BOLSA CHTCA PROPERTY ti
AND STATUS OF BANKRUPTCY FILriG BY c�
KOLL REAL ESTATE GROUP, INC.
N
The Bolsa Chica property was acquired in 1970 by Signal Bolsa Corporation, w*ch�s
today the legal owner of the property. In 1986, the Henley Group acquired Signoa
Corporation. The Henley Group reorganized its assets and Signal Bolsa Corporation
became a subsidiary of Henley Properties, Inc.
Au, j 15 : 21
a6 ,-
y:3SPm I
In 1989, Henley Properties, Inc., was spun -off to become a publically traded company on
Wall Street, but in the process incurred approximately $110 million of debt in the form of
pay-in-kind debentures.
In 1993, The Koll Company's commercial development business combined with Henley
Properties, Inc., to form KOLL REAL ESTATE GROUP, MC: ("KREG"). The debt
inherited from the original 1989 spin-off continued to accrue substantial interest so that, as
of today, the debt total from the debentures exceeds $200 million.
In April 1996, KREG initiated discussions with the owners of the pay-in-kind debentures
(bondholders) to restructure the debt under a proposed Prepackaged Plan of
Reorganization. Under this Plan, the outstanding $200 million in debt would be exchanged
for 90% of KREG's stock. The existing KREG shareholders would retain 10% of the
stock.. Upon completion of the Plan, KREG will be debt -free, enjoy a net worth of
approximately S140 million, and retain $200 million in approved tax -credits.
In May 1997, the Security and Exchange Commission reviewed all required registration
statements and disclosure documents and KREG requested formal shareholder and
bondholder approvals for the Plan. As of June 1997, over 95% of the shareholders and
bondholders approved the Plan.
A Court Confirmation Hearing for KREG's Plan is scheduled for August 19, 1997. With
the overwhelming support of the shareholders and bondholders, KREG anticipates Court
approval of the Plan and completion of the reorganization process by the end of August
1997.
The legal owner of the Bolsa Chica property, Signal Bolsa Corporation, remains a
subsidiary of KREG.
Null
Peal Estate
Gail Hutton
City Attorney
City of Huntington Beach
P.O. Box 19.0
2000 Main Street
Huntington Beach, California 92648
Re, Development at PCH and Warner, near Bolsa Chica
Dear Gail:
I am in receipt of your August 14, 1997 letter regarding the LOU on fire services among
Koll Real Estate Group, the City and County of Orange.
I'm not quite sure what you need. If you are referring to the reorganization and
recapitalization plan, the bankruptcy court formally approved the }flan August 19, 1997,
with 95% of our shareholders and bondholders in support. We have converted $210.million
of debt into equity; increased our corporate net worth to approximately $140 million-,
eliminated all corporate debt; and preserved approximately $200 million in tax loss
carryforwards. This was favorably reported on August 20, 1997 in the Wall S'ii•eet Journal,
Los Angeles Times and Orange County Register.
In July, and at the request of Councilmember Dave Garofalo, I sent to Paul D'Alessandro,
Deputy City Attorney, the independent counsel's legal opinion and backup information on
the recapitalization. If he did not get this infonnation, I'll be happy to duplicate it.
Attached is a background statement on Koll Real Estate Group's wholly owned subsidiery,
Signal Bolsa Corporation, the legal owner of our 200 acres at PCH and Warner, next to the
Bolsa Chica Wetlands. Please let me know what additional information you may need.
Very t ily yours,
I Luc unn�
Senior Vichresident
LU I
cc' Honorable Mayor Ralph Bauer
Members of the City Council
Michael Uberuaga, City Administrator
Michael Dolder, Fire Chief
Connie Brockway, City Clerk
su;.csQU
N'ewpOrt Beach, CA 92660
(714) 4-'7-Q673
ii`AX (714) 476-2675
I '
•
•
f.UlIU.�
KOLL REAL ESTATE GROUP
4400 MacArthur Boulevard, Suite 300
Newport Beach, CA 92660
(714) 477-0873
FACSIMILE COVER SHEET
KOLL FACSIMILE NUMBER: (714) 476-2075
TO:
DATE:
TOTAL NUMBER OF PAGES:
(IncIiuding this cover sheet)
ORIGINAL TO FOLLOW: YES NO
COMMENTS:
• • 97-651
Distribution :
White: Requesting Department
Yellow: Office Control File
Pink: Assigned Staff Member
REQUEST FOR LEGAL SERVICES FOLLOW-UP MEMORANDUM
To: Connie From: Office of the
City Attorney
Subject: Your Request for Legal Services Date: 8/13/97
This will acknowledge receipt of your Request for Legal Services,
below listed.
Dated: 8/13/97
[ J
[ J
C J
C J
Type of Legal Service Requested:
Ordinance [ ] Insurance
Resolution [ ] Bonds
Contract/Agreement [ ] Opinion
Other:
Description: Mayor Bauer's request for follow-up to letter of
transmittal/letter of understanding - Bolsa Chica Development - Council
actions of 7/21/97 and 8/4/97
This Request for Legal Services has been assigned
to ART DELALOZA for handling. He/she can be reached
through extension 5555.
The Control Number assigned to this request is: 97-651
Please reference this number when making any inquiries in regard to
this matter. Thank you.
0673L
J.
HUNTI,NGTON BEACH
TO:
FROM:
DATE:
SUBJECT:
CITY OF t#UNTINGTON BEACH
INTER -DEPARTMENT COMMUNICATION ,
isf,••by ep BY C_ -
�Ts+"7YKY►�fT77U�. �fLr+�
Honorable Mayor and Members of the City Council V-41.1
/ s6h . CS$�octw
Scott Field, Acting City Attorney c.Cl
August 4, 1997
Bolsa Chica Letter of Understanding regarding
Fire Services
Councilmember Tom Harman had requested a copy of an internal memorandum of the
City Attorney's office regarding the Bolsa Chica Letter of Understanding for fire
services. Attached is that memo.
You should be aware that the opinion of the City Attorney's Office is that the Letter of
Understanding (LOU) is clear and certain that it is only an agreement to agree and not a
binding contract. The LOU. states that it "is not intended to be a binding document or to
take the place of any official agreeients or contracts.". Memoranda or letters of
understanding like these are very commonly used as a stepping stone to a final
agreement. In this case, the LOU is to provide direction to the Fire Authority when
preparing two agreements, one an implementation agreement between Koll and the
Authority, and another a emergency fire services agreement between the Authority and
the City.
The objection to the LOU as described in, the attached memorandum is essentially that
Koll and the County will enter into an implementation agreement that will be dependent
upon the City providing fire services to Bolsa Chica, and that consequently, the City will
not be able to avoid entering into its emergency services agreement with the Authority
because Koll and the, Authority will already be dependent upon the City's participation.
However, the parties expressly stated in the beginning of the LOU that it was not
"intended to be a binding document." Consequently, any reliance on the part of Koll or
the County on the City would be unreasonable and misplaced. This office's conclusion
is based upon the fact that "it is hornbook law that evidence of preliminary negotiations
or an agreement to enter into a binding contract in the future does not alone constitute a
contract." (Racine & Laramie v. Department of Parks and Recreation (1992) 11
Cal.App.4 1026 (citing from Channel Home Centers v. Grossman (3rd Circuit 1986)
795 to F.2d 291, 298).)
SF/s:G:SF-97-Memos:\1RCC84
-,18/4/97 . #3
1
s
This principle is illustrated in Beck v. American Health Group Int. (1989)
211 Ca1.App.3d 1555, 1562. At issue in that case was a letter from the defendant
hospital corporation that began: "It is a pleasure to draft the outline of our future
agreement." The letter then outlined the terms, and asked plaintiff to sign it "if this is a
general understanding of the agreement," in order that the hospital may "forward it to
Corporate Counsel for the drafting of a contract." The letter concluded: "When we
have a draft, we will discuss it, and hopefully shall have a completed contract and
operating unit in the very near future."
When the plaintiff sued to enforce the terms contained in the letter, the court said:
"Taken in their ordinary sense, the words of the letter
manifest an intention of the parties that no binding contract
would come into being until the terms of the letter. were
embodied in a formal contract to be drafted by corporate
counsel. Assignment of the drafting to an attorney evidences
an expectation that the terms set forth in the letter were.
subject to his approval.... That plaintiff may have intended
or believed a binding contract came into existence upon his
signing the letter is immaterial in the fact of its language
which plainly indicated otherwise." (211 Ca1.App.3d 1563.)
Similarly, in a very recent 1992 case, a concessionaire at Old Town San Diego State
Historic Park sued the California Department of Parks and Recreation when the
Department failed to enter into an amendment to an existing concession contract. The
parties had been negotiating an amendment to the concession contract for a number of
years. When negotiations would not conclude to the concessionaire's satisfaction, he
sued. While admitting that in "special circumstances" a letter of understanding could
impose a duty on a party to enter into good faith negotiations, the Court indicated that as
a general matter, one party may decline to enter into a contract for any reason, including
engaging in "unreasonable, unfair, or otherwise bad faith negotiation tactics." Racine &
Laramie v. Dept. of Parks and Recreation, 11 Cal.AppAth at 1031.
One example of special circumstances the Court identified was "promissory estoppel,"
the same doctrine as cited in the attached memo. A court will apply "estoppel" to bind a
party to perform even absent a contract if the party made some promise which he "should
reasonably expect to induce action or forbearance of a definite and substantial character
on the part of the other party and which does induce such action or forbearance
... if injustice can be avoided only by enforcement of the promise." Racine, 11
Cal.AppAth at 1034. However, estoppel may not be applied against a public entity even
if the entity's conduct meets the above test, if the result would be against "public policy."
Long Beach v. Mansell (1970) 3 Cal.3d 462, 496-97, 91 Cal.Rptr. 23.
SF/s:G:SF-97-Memos:M&CC8-4 2
8/4/97 - 43
In this circumstance, for Huntington Beach to be estopped from refusing to provide fire
service to Bolsa Chica even though the Council never agreed by contract to provide fire
service, Koll would have to prove that the City took some action to induce action by Koll.
For example, one way that the City could induce reliance by Koll and the County absent
the emergency fire service agreement would be if Koll were to pay the County the
$2,450,000 capital contribution contemplated in the LOU; and the City would accept the
pass -through of up to $1, 250,000 of that money and use it to relocate Huntington Beach
Fire Station 8 to the City -owned property at Graham and Production. However, we doubt
the City Fire Department would take such unilateral action to collect the capital
contribution without the Council first entering into the emergency fire service agreement.
And even then, the estoppel would be doubtful because the City Council would have
never approved a fire services contract pursuant to Government Code § 54981, 55632,
and LAFCO would never have approved the contract. (See discussion below.)
Consequently, offering fire service would be against public policy, and given the fact that
the LOU already states plainly that it is not intended to be a binding document, it is this
office's conclusion that any reliance placed upon it by Koll or the County would be
misplaced.
However, reasonable minds may differ and a transmittal letter has been prepared that
would accompany the signed LOU to the County and the Koll Company further
confirming that the letter is not a binding document. A copy of that prrooPeseTle�Cer
attached. In the view of this office, it addresses all the concerns ra's�d in Mr.
DeLaLoza's memorandum.
In addition, since the last City Council meeting, we have rec�
Clark Alsop of Best, Best & Krieger to the Orange County L,
That letter indicates that LAFCO must approve the City prow
Chica "because a private developer is involved in the agreem
service outside the City boundaries." Scott Field of this offic
Alsop to clarify when LAFCO approval must be obtained. N.
LAFCO approval is required prior to implementing fire servii
Consequently, any emergency fire services agreement should
obtaining LAFCO approval.
Scott Field
Acting City Attorney
ied the enclosed letter from
FCO concerning the LOU.
ng fire service in Bolsa
it for the provision ofj
has spoken with Mr
Alsop has advised t. at
e\ to Bolsa Chica. J
ade conditiona /u on
Attachment: Memo to Scott Field from Art DeLaLoza dated July 25, 1997
c: Michael T. Uberuaga, City Administrator
Ray Silver, Assistant City Administrator
SF/s:G:SF-97-N1emos:M&CC84 3
8/4/97 - #3
�� no CITY OF HUNTINGTON BEACH
•� INTER -DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
TO: Scott F. Field, Deputy City Attorney
FROM: Art DeLaLoza, Deputy City Attorney
DATE: . July 25, 1997
SUBJECT: Bolsa Chica Development Letter of Understanding
RLS No. 97-594
You may wish to seek a motion to reconsider the subject letter on the following grounds:
1. Koll is in Bankruptcy, and it is unclear how the Bankruptcy Court will treat this letter_ for
purposes of reorganization.
2. The City may be estopped from denying it is a "contract."
3. It is not clear how the Letter applies to the Master Property Tax Transfer Agreement as
interpreted by the County.
The Letter of Understanding provides that:
"This letter ... is intended to document the major points of
agreement reached ... between the Orange County Fire Authority
(OCFA), the Koll Company (Koll), and the City of Huntington
Beach (City)."
The Letter further provides:
City has agreed to provide overall system -wide enhancements in
order to optimize City services to areas identified on Exhibit "L-2
Notwithstanding the phrase, "This Letter of Understanding is not intended to be a binding
document or to take the place of any official agreements or contracts," the Letter goes on to state,
"This Letter is intended to outline and document the general understanding of the parties." This.
calls into question what the letter actually is. In the Letter, there is a clear, expressed intent to
bring about reliance by at least two (2) parties:
"From this understanding, OCFA will prepare and enter into an
Implementation Agreement with Koll as required by County of
Orange condition of approval for this project."
1
Scott F. Field
July 25, 1997
Page 2
Koll and the County will contend that they detrimentally relied on the express representations in
the Letter as. approved by the City Council.
These issues are raised because Shirley Detloff stated in the press that the Letter was not a
contract with Koll.
Koll would contend it is a third party creditor beneficiary if not a party to the Agreement. Since
Koll is in Bankruptcy, we should consult with a Bankruptcy expert to determine whether there
are other special Bankruptcy problems we need to address.
Although you do not agree that estoppel may apply to this Letter, I am not as convinced that the
City should take that chance --especially when the purported legal effect is that it is simply not a
contract.
The risk that estoppel will apply is much greater than the benefit bestowed on the City if, in fact,
it is deemed to be of no legal effect.
"Although there is authority to the contrary, the prevailing view is that
whether an estoppel may be invoked against a governmental entity is
generally to be tested by the same rules that apply to private individuals.
In other words, the government may be bound by an equitable estoppel in
the same manner as a private party if the elements requisite to an estoppel
against a private party are present and if, in the considered view of a court
of equity, the injustice which would result from a failure to uphold an
estoppel is of sufficient dimension to justify any effect on the public
interest or policy that would result from the raising of such estoppel."
"In determining whether an estoppel may be raised against a public agency
an important consideration is the degree of culpability or negligence of the
public agency or its representatives in their conduct or advice and the
seriousness of the impact or effect of such conduct or advice on the
claimant." '
Peck v. Modesto (1960, 3d Dist) 181 CA2d 465, 5 Cal. Rptr. 482; Strong.
v. County of Santa Cruz (1975) 15 C3d 720, 125 Cal. Rptr 896, 543 P2d
264; Long Beach v. Mansell (1970) 3 C3d 462, 91 Cal. Rptr. 23, 476 P.2d
423; Canfield v. Prod (1977, 1st Dist) 67 CAM 722, 137 Cal. Rptr. 27;
Lee v. Board of Administration (1982, 3d Dist) 130 CA3d 122, 181 Cal.
Rptr. 754
In sum, it is the considered view of a court of equity, which controls whether the Letter is
binding on the City --not our opinions.
Scott F. Field
July 25, 1997
Page 3
Moreover here, Koll would argue that the public agency actually voted on the issue with the
intent to induce Koll's reliance. Such reliance in entering into "an implementation agreement"
with OCFA would result in an injustice as to Koll if the City were allowed to materially amend
the provisions in the Letter or deny the existence of a contract.
RECOMMENDATION:
1. A Motion for Reconsideration should be made by one on the prevailing side until the
three issues above have been closely examined.
2. The Letter should be modified to cover the concerns mentioned herein with provisions of
no estoppel, no reliance, agreement to defend and indemnify, etc.
AR DE LA LOZA
Deputy City Attorney
ADL/pw
c: Gail Hutton, City Attorney
gAde1a1oza\97memos\blsachic
City . of Huntington Beach
2000 MAIN STREET CALI FORNIA 92648
OFFICE OF THE CITY ADMINISTRATOR
August 4, 1997
ORANGE COUNTY FIRE AUTHORITY
180 South Water Street
Orange, CA 92666
KOLL REAL ESTATE GROUP
4400 MacArthur Blvd., Suite 300
Newport Beach, CA 92660
RE: BOLSA CHICA DEVELOPMENT LETTER OF UNDERSTANDING
Enclosed is the Bolsa Chica Development Letter of Understanding as executed by the
Huntington Beach Fire Chief.
In transmitting that document I note that the Letter of Understanding (LOU) is clear and
certain that it is only an agreement to agree and not a binding contract. The LOU states
that it "is not intended to be a binding document or to take the place of any official
agreements or contracts." In this case, the LOU is to provide direction to the Fire
Authority when preparing two agreements, specifically an Implementation Agreement
between Koll and the Authority, and an Emergency Fire Services Agreement between the
Authority and the City.
When preparing the Implementation Agreement with Koll, the Authority should be
mindful that City provision of fire services is dependent on the City entering into the Fire
Services Agreement with the Authority. Since the LOU is not "intended to be a binding
document," any reliance on the part of Koll or the County on the City providing fire
services would be unreasonable and misplaced absent an Emergency Fire Services
Agreement approved by the City Council. And in fact, Koll is already aware that the City
may not enter into an Agreement since the LOU states that if "the City fails to provide
services as stipulated and a permanent fire station in the development is required, Koll
acknowledges that they will be responsible for any staffing shortfall costs prior to project
buildout."
— SF/s:G:SF-97Ltrs:Ko11-804
8/4/97.- #4
"DRUG
Telephone (714) 536-5202
OCFA/Koll
August 4, 1997
Page 2
Consequently, the LOU is not to be relied upon by any party hereto, or any third party for
any purpose whatsoever except as proposed deal points for a future fire services
agreement subject to the approval by the City Council of the City of Huntington Beach.
In addition, it is our understanding that the Koll Real Estate Group is presently
reorganizing under jurisdiction of the Bankruptcy Court. In signing the LOU, Koll
should provide evidence that it has the authority to enter into the LOU.
Very truly yours,
MICHAEL T. UBERUAGA
City Administrator
— SF/s:G:SF-97Ltrs:Ko11-804
8/4/97 - #4
August 4, 1997
ORANGE COUNTY FIRE AUTHORITY
180 South Water Street
Orange, CA 92666
KOLL REAL ESTATE GROUP
4400 MacArthur Blvd., Suite 300
Newport Beach, CA 92660
RE: BOLSA CHICA DEVELOPMENT LETTER OF UNDERSTANDING
Enclosed is the Bolsa Chica Development Letter of Understanding as executed by the
Huntington Beach Fire Chief.
In transmitting that document I note that the Letter of Understanding (LOU) is clear and
certain that it is only an agreement to agree and not a binding contract. The LOU states
that it "is not intended to be a binding document or to take the place of any official
agreements or contracts." In this case, the LOU is to provide direction to the Fire
Authority when preparing two agreements, specifically an Implementation Agreement
between Koll and the Authority, and an Emergency Fire Services Agreement between the
Authority and the City.
When preparing the Implementation Agreement with Koll, the Authority should be
mindful that City provision of fire services is dependent on the City entering into the Fire
Services Agreement with the Authority. Since the LOU is not "intended to be a binding
document," any reliance on the part of Koll or the County on the City providing fire
services would be unreasonable and misplaced absent an Emergency Fire Services
Agreement approved by the City Council. And in fact, Koll is already aware that the City
may not enter into an Agreement since the LOU states that if "the City fails to provide
services as stipulated and a permanent fire station in the development is required, Koll
acknowledges that they will be responsible for any staffing shortfall costs prior to project
buildout."
SF/s:G:SF-97Ltrs: Ko11-804
8/4/97 - N4
•
•
OCFA/Koll
August 4, 1997
Page 2
Consequently, the LOU is not to be relied upon by any party hereto, or any third party for
any purpose whatsoever except as proposed deal points for a future fire services
agreement subject to the approval by the City Council of the.. City of Huntington Beach.
In addition, it is our understanding that the Koll Real Estate Group is presently
reorganizing under jurisdiction of the Bankruptcy Court. In signing the LOU, Koll
should provide evidence that it has the authority to enter into the LOU.
Very truly yours,
MICHAEL T. UBERUAGA
City Administrator
S F/s: G: S F-9 7 Ltrs: Ko 11-8 04
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July 17, 1997
Dana. Siriih
Executiv Officer
Orange C junty Local Agency Formation Commission
12 Civic Center -Pima
Room 2:I =
Santa A:i:, CA 92701
Re: Bolsa Chica Development and Service Agreement
Dear Dana:
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We understand that the City of Huntington Beach is considering entering into a three.
way agrecment with the Orange County Fire Authority and the Koll Company which would result
in the Cite providing fire service to the undevcloped Cowity area commonly known as the Bolsa
Chica.
A question has been raised wh&.her such an agreement for City service in tl:e County
area is subject to the provisions of Government Code 56133 and, therefore, would require LAFCO
approval,
Government Code Section 56133, provides in part that a city or district may provide
new or extended services by contract or agreement otitaide its juriadiotional boundaries only if it first
requests and receives written approval from the Comnvssion in the affected County. The Section
goes on to state that "this Section does not apply to contracts or agreements solely involving two or
more public agencies."
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Dana Smith
July 17, 1997
Page 2
The Bolsa Chic& pmposal would involve three parties: two government agencies and
one private developer. Section 56133 specifically exempts agreements between two or more public
agencies. Since a private developer is also included in the proposed agreement, I believe that it falls
within the first sentence of 56133, which requires such exxension of services to be brought before and
approved by LAFCO.
This is in contrast to a situation where two government agencies merely wish to
contract regarding the provision service. For instance, a city and county could contract for a city to
provide water service, or fire service, or any other kind of service in a county area where it would be
more efficient for the city to serve than for the county to serve. in such instance, that agreement
would not need to go before LAFCO.
Therefore, in summary, it is my opinion that because a private developer Is involved
in the agreement for the provision of service outside of the city boundaries, LAFCO must approve
that provision of service.
if you have any further questions, please don't hesitate to give me a call.
Very truly yours,
0 �OO
Clark H. Alsop
of BEST BVIST & MEGERLLP
clwtjh
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•
REQUEST FOR COUNCIL ACTION
MEETING DATE: June 2, 1997 DEPARTMENT ID NUMBER: FD 97-005
The OCFA and City staff propose that the City would provide Fire Department Emergency Response
Services to the Bolsa Chica Development Area (Area A) and to Sunset Beach and Surfside Colony
(Area B). .The proposed separate service requirements for Area A and Area B are as follows:
Area A Services (Bolsa Chica Development Area)
➢ The City's agreement with the OCFA to provide Emergency Services would be irrevocable.
.The OCFA would provide non -emergency (non -suppression) fire services, including plan review
and inspection services.
➢ The City would begin service delivery effective July 1, 1998. In turn, the OCFA would pay the
City 80% of the County's Fiscal Year 1997/1998 Structural Fire Fund revenue. At build -out of
the project area, the annual revenue is estimated to be $600,000 to $700,000 per year. Yearly
payments for City Fire services would be made in two equal installments on February 1 and
June 1 with the first payment commencing February 1, 1999.
➢ The City and OCFA would enter into a Conditional Capital Contribution Agreement whereby,
after the OCFA receives monies from Koll, the OCFA would provide the City a one-time capital
contribution not to exceed $1,250,000. The capital contribution would be applied towards the
relocation of Fire Station 8 to'Graham and Production.
➢ The City would be financially penalized for terminating or failing to provide full Fire Emergency
Services to Area A.
Area B Services (Sunset Beach and Surfside Colony)
➢ In consideration of the Conditional Capital Contribution Agreement and past area response
agreements, the City and OCFA would enter into a Fire Services Agreement, whereby the City
would provide Emergency Paramedic Services to Area B. This Agreement would have a one
year termination notice by either party and would not affect the terms and conditions of the Area
A agreement.
➢ OCFA agrees to consider the City's request to provide Ambulance Transportation Services
during the next ambulance contract renewal cycle.
The Letter of Understanding (Attachment 1) also contains the deal points of a future agreement
between the OCFA and Koll. Although the economic terms of the agreement between OCFA and
Koll would affect the economic terms between OCFA and the City, this Letter of Understanding does
not include a future proposed agreement between the City and Koll. The future contract agreement
for fire services to Area A and Area B would be between the City and OCFA only.
What is the service impact to Fire Station 7 if Area A and Area B are added?
Huntington Beach Fire Station 7, located at Warner and Pacific Coast Highway, currently operates
one paramedic engine staffed with four personnel. In comparing Station 7 with one of our busier
paramedic engines located at Station 1 on Gothard Street we find that Fire Station 7 has an unused
service capacity of 40%. In other words, relative to the number of emergency calls, Station 7 is only
operating at 60% of Station 1's emergency calls. Adding Area A and Area B to Station 7's response
load will add an additional 20% to its current emergency workload. This leaves an unused service
capacity.of 20%. Therefore, adding the fire service demands of the Bolsa Chica development to Fire
Station 7 will not have an operational impact on existing resources and will not require adding
additional personnel to meet these service demands.
Bolsadel -2- 05/20/97 5:04 PM
AUTHOR:CAROLYN STROOK
REQUEST FOR COUNCIL ACTIO �L_
MEETING DATE:.June 2, 1997 DEPARTMENT ID NUMBER: FD 97-005
What other Fire Department needs exist that will benefit from the. Bolsa Chica contract
revenues?
Currently two critical Fire delivery needs exist.for the City of Huntington Beach. One City need is the
relocation"of Fire Station 8 to. Graham and Production. The other City need is adding additional
personnel. to the Holly-Seacliff development area when Fire. Station 6 opens in the summer of 1999.
The relocation of Station 8 is part of the City's adopted Fire Master Plan. Station 8's relocation will
provide coverage to northern areas of the City which, currently, cannot be served within the Growth
Management Element's standards' of arrival on scene within five minutes 80% of. the time. The
proposed OCFA/Bolsa Chica contract will provide onetime Capital funding as well as an ongoing
revenue stream for financing Fire Station 8's relocation costs.
When the Holly-Seacliff Fire Station 6 opens in summer of 1999, existing fire personnel will be shifted
to staff a portion of one new paramedic engine.. However, three new personnel will be required to.
completely staff the new fire station at an annual cost of approximately $275,000 per year. The new,
ongoing staffing costs can be financed with a portion of the ongoing revenues generated from the
proposed Bolsa Chica contract.
Does a Bolsa Chica Contract with Orange County Fire Authority require Local Agency
Formation Commission approval?
The question has been raised as to whether a Bolsa Chica Fire contract with OCFA requires Local
Agency Formation Commission (LAFCO) approval. Section 56133 of the State Government Code
(Attachment 3) provides that a city may provide services by contract or agreement outside its
jurisdiction if it receives approval from LAFCO.. However, contracts or agreements solely involving
two or more public agencies do not need LAFCO approval.
The letter. of understanding being consider by the City Council is neither a contract or an agreement
and only provides direction for developing the contents of a future contract. If the City Council
authorizes the Fire Chief to sign the letter of understanding a formal contract between the OCFA and
the City will be brought back at a future date. Prior to bringing back a contract the City Attorney and
OCFA Counsels will consider whether LAFCO approval is necessary because Capital monies will be
transferred to the OCFA from the Koll Real Estate Group.
Conclusion
Providing City Fire Services to Area A and Area B makes both economic sense as well as regional
sense. and a contract between the City and the OCFA should be drafted for future approval.
Environmental Status: No impact.
Attachment(s):
qQ ii2oaacotie�u ale 7�/8,���
cv"Foffl—
1. Bolsa Chica Development Letter of Understanding
2' City Attorney's May 22"d. review of Letter of Understanding
a. ! 0 •
Page 14 - Council/Agency Agenda - 07/21/97 �. (14)
F-3. City Coun6lLCreation Of A Citizen's Advisory Committee - City -Wide Public
Awareness Program Regarding Community's Infrastructure Systems Needs
Communication from the Deputy City Administrator -Public Information Officer, Deputy
City Administrator -Administrative Services Director, and the Public Works Director
recommending the creation of a Citizen's Advisory Committee that would work with city
.staff and a consultant to develop and implement a Public Awareness Program to inform
-the local residents about the condition and needs of the city's infrastructure systems in a
clear and understandable manner and the choices to be made to fund these systems.
Recommended Motion:
To authorize the Mayor and Mayor Pro Tem to vrork with city staff to dr-,. glop [a
procedure for developing] a representative list of community Lased
organizations and individuals that the City Council could appoint to serve on a
Citizen's Advisory Committee for the purpose of working with staff, and a consultant,
to develop and implement a Public Awareness Program to inform the Ic;-al residents
about the condition and needs of the city's infrastructure systems in a clear and
understandable manner and the choices to be made to fund these systems.
[Approved as amended 7-0]
F-4. (City Council) (Deferred From June 2, 1997) Letter Of Understanding Regarding
Fire Services For The Bolsa Chica Development Project (440.60)
Communication from the Fire Chief informing Council that after numerous meetings
between the Orange County Fire Authority, the Koll Company (Koll), and city staff
regarding the provision of Fire, Rescue, Emergency Paramedic Service, :=_nd Ambulance
Transportation Service to the unincorporated Bolsa Chica development a--aa, various
areas of agreement were reached. This letter of understanding is not intended to be a
binding document, but rather to serve as an outline for developing separate.
Implementation Agreements between the Orange County Fire Authority and Koll
Company; Orange County Fire Authority and the city. (Slide report included).
Recommended Motion:
Authorize the Fire Chief and City Clerk to execute the Letter of Understanding
regarding Fire Services for the Bolsa Chica development area.
[Approved 4-3 (Bauer, Sullivan, Harman -- No)]
(14)
F
Ji CITY OF HUNTINGTON BEACH
INTER -DEPARTMENT COMMUNICATION.
HUNTINGTON BEACH
TO: Michael Dolder, Fire Chief
FROM: Gail Hutton, City Attorney
DATE: May 22, 1997
SUBJECT: Bolsa Chica Development Letter of Understanding
RLS 97-384
Thank you for the opportunity to review the proposed Letter of Understanding
regarding providing fire services to the Bolsa Chica and Sunset Beach areas. Since
this is not a binding contract, it is not necessary or appropriate for the City
Attorney to formally approve the document as to form. However, since this
document will lead to negotiating a binding agreement, we appreciate the
or': ortunity to be placed in the "loop" as early as possible.
gave reviewed the Letter of Understanding and find nothing in it inappropriate.
1� - ..o wish to be involved in preparing the implementation agreement. In
. - pacular, we would assume that the agreement should be prepared pursuant to
the authority vested in cities and counties to enter into fire and police protection
agreements under Government Code Section 55631-55634 (a copy of which is
attached). Alternatively, a joint powers authority could be created. Each of these
approaches has their own advantages and disadvantages that need to be discussed
at the time of negotiating the appropriate agreements.
Gail Hutton
City Attorney
Attachments: Government Code Sections 55631-55634
SF/s:G:SF-97 ,%!cmos:Dold-522
5/22197 - 91
ATTACHMENT 1
•
•
ORANGE COUNTY FIRE AUTHORITY
PO Box 86, Orange, CA 92856-0086 • 180 South Water St., Orange, CA 92866-2175
Larry J. Holms, Director of Fire Services
May 2,1997
Chief Michael P. Dolder
Huntington Beach Fire Department
2000 Main Street
Huntington Beach, CA 92648
Dear Chief Dolder:
(714) 744-0400
Enclosed you will find three sets of the final Letter of Understanding for the Bolsa
Chica Development. Please execute all three sets, retain one original for your use,
and return the remaining two copies back to me.
It was a pleasure working with you on this project. We look forward to finalizing
the resulting service agreements with you. Our plan is to complete the master
agreement with Koll Company, then branch off to complete the subsequent service
agreements with the City.
If you have any questions, please contact me at 744-0484.
Sincerely,
Nanc Fo an
Communi Safety Department
Enclosure (3 sets of Letter of Understanding) r 4k
RECEIVED
MAY 5 .1997
�oaru�nmrt
Serving the Cities of: Buena Park • Cypress • Dana Point • Irvine • Laguna Hills • Laguna Niguel • Lake Forest • La Palma • Los Alamitos • Mission Viejo • Placentia
San Clemente • San Juan Capistrano • Seal Beach • Stanton • Tustin • Villa Park • Westminster • Yorba Linda- and Unincorporated Areas of Orange County
RESIDENTIAL SPRINKLERS AND SMOKE DETECTORS SAVE LIVES
Vol' CITY OF HUNTINGTON Br=ACH
INTER -DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
TO: Michael Dolder, Fire Chief
FROM: Gail Hutton, City Attorney
DATE: May 22, 1997
SUBJECT: Bolsa Chica Development Letter of Understanding
RLS 97-384
Thank you for the opportunity to review the proposed Letter of Understanding
regarding providing fire services to the Bolsa Chica and Sunset Beach areas. Since
this is not a binding contract, it is not necessary or appropriate for the City
Attorney to formally approve the document as to form. However, since this
document will lead to negotiating a binding agreement, we appreciate the
opportunity to be placed in the "loop" as early as possible.
We have reviewed the Letter of Understanding and find nothing in it inappropriate.
We do wish to be involved in preparing the implementation agreement. In
particular, we would assume that the agreement should be prepared pursuant to
the authority vested in cities and counties to enter into fire and police protection
agreements under Government Code Section 55631-55634 (a copy of which is
attached). Alternatively, a joint powers authority could be created. Each of these
approaches has their own advantages and disadvantages that need to be discussed
at the time of negotiating the appropriate agreements.
A.,.
4&�_
Gail Hutton
City Attorney
Attachments: Government Code Sections 55631-55634
S F/s:G:SF-971%1emos:Dold-522
5/22/97 - # 1
ARTICLE 2
Supplementary Fire or Police Protection
[Title 5, Local Agencies' --Division 2, Cities, Counties, and Other Agencies
—Part 2, Powers and Duties Common to Cities, Counties, and Other
Agencies --Chapter 4, Fire and Police Protection —Article 2, Supplemen-
tary Fire or Police Protection; added by Stats 1949 ch 81 § 1.]
§ 55630. [Repealed)
§ 55631. "Local agency"
§ 55632. Contracts between local agencies for fire or police protection
§ 55633. [Repealed)
§ 55634. Extension of privileges, immunities, and benefits to fire or police force
functioning outside territory
Collateral References:
Cal Digest of Official Reports 3d Series, Counties §§ 6, 14, Municipalities §§ 23, 84,
85-88.
Am Jur 2d Municipal Corporations, Counties, and Other Political Subdivisions
§§ 13, 115, 133.
§ 55630. (Added by Stats 1949 ch 81 § I and repealed by Stats 1955
ch 624 § 53.)
§ 55631. "Local agency'
As used in this article, "local agency" means neighboring city,
county, county fire or police protection district, federal government or
any federal department or agency.
Added Stats 1949. ch 81 § 1; Amended Stats 1963 ch 990 § 5. '
Amendments:
1963 Amendment: (1) deleted "or" after "county,'; and (2) added ", federal
government or any federal department or agency".
Collateral References:
Cal Jur 3d Law Enforcement Officers § 3.
§ 55632. Contracts between local agencies for fire or police protection
The legislative body of any local agency may contract with any other
247
'a
U
•
§ 55632 CITIES, COUNTIES, OTHER AGENCIES
local agency for the furnishing of fire or police protection to such
other local agency.
Added Stats 1949 ch 81 § 1; Amended Stats 1959. ch 437 § 1; Stats 1970 ch 1068 § 1.
Prior Law: Stats 1883 ch 49 § 862b, as added by Stats 1937 ch 243 § 1 p 540, amended by
Stats 1947 ch 618 § 1 p 1625.
Amendments:
1959 Amendment: Substituted (1) "The legislative body of any local agency" for
"Any city legislative body"; and (2) "such other local agency" for "the city by
the local agency,'.
1970 Amendment: Deleted "supplementary" before "fire or police".
Cross References:
"Local agency": § 55631.
Collateral References:
Cal Jur 3d Law Enforcement Officers § 3.
Attorney General's Opinions:
32 Ops Atty Gen 223 (authority of city to agree or contract to render mutual police
protection to other city).
NOTES OF DECISIONS
In view, among other things, of power of city supervisor of county within which municipality is
council to contract with county supervisors for fire located. People v Bagshaw (1942) 55 CA2d 155,
protection, duties of councilman of municipal cor- 130 P2d 243.
poration are incompatible with duties of county
§ 55633. [Added by Stats 1949 ch 81 § 1 and repealed by Stats 1959
ch 437 § 2.]
Prior Law: Stats 1883 ch 49 § 862b, as added by Stats 1937 ch 243 § 1 p 540, amended by
Stats 1947 ch 618 § 1 p 1625.
§ 55634. Extension of privileges, immunities,. and benefits to fire or
police force functioning outside territory
All the privileges and immunities from liability, exemptions from laws
and rules, and all pension, relief, disability, workmen's compensation
and all other benefits granted the fire or police force of any local
agency performing its functions within the territorial limits of such
local agency shall extend and apply to such fire or police force
performing its function within the territorial limits of any other local
agency, and while traveling to and from such other local agency
under and by virtue of any contract with such other local agency
entered into under the provisions of this article.
Added Stats 1949 ch 81 § 1; Amended Stats 1959 ch 437 § 3.
Prior Law: Stats 1883 ch 49 § 862b, as added by Stats 1937 ch 243 § 1 p 540, amended by
Stats 1947 ch 618 § 1 p 1625.
248
Amendments:
1959 Amendr
privileges
local agenc
when the ft
contract pu
Cross Reference
"Local agencN
Action for an
CODE GOVERNMENT CODE MW § 55640
(b) If the Department of Finance determines for any fiscal year specified in
subdivision (a) that the county is financially able to remit the repayment
amount, the county shall remit that amount during the fiscal year to the
county Controller, for deposit in the General Fund. If the Department of Finance
determines for any fiscal year described in subdivision (a) that the county is
ith the financially unable to remit the repayment amount, the count)' shall remit that
°puties, _portion of the repayment amount to the Controller that the Department of
hin the Finance deems the county financially able to remit in the annual written
determination required by subdivision (a). Any portion of. the repayment
amount that the county fails to remit in the relevant fiscal year described in
subdivision (a) shall be allocated in equal portions to increase the amounts
subject to repayment for subsequent fiscal years through the 2004-05 fiscal
year.
:ion or Added Stats 1995 ch 808 § 1 (AB 6), effective October 13, 1995.
Editor's 'Notes —For repeal of article, see Gov C § 55623.
rection
tin the 5 55622. (Operative until July 1, 2005) Assessment of county's fiscal condi-
.allaw tion
In the 1999-2000 fiscal year the County of Merced shall, in conjunction with
the Department of Finance, the Legislative Analyst, and the staffs of the fis-
cal committees of the Legislature, assess the county's fiscal condition and its
performance in repaying the loan amount appropriated pursuant to Section
55620.
Added Stats 1995 ch 808 § 1 (AB 6), effective October 13. 1995.
Editor's Notes —For repeal of article, see Gov C § 5562K
-
c 55623. (Operative until July 1, 2005) Repeal of article
This article shall become inoperative on July 1, 2005, and, as of January 1,
2006, is repealed, unless a later enacted statute, that becomes operative on or
)y ap-
before January 1, 2006, deletes or extends the dates on which it becomes
I Fire
inoperative and is repealed.
lereed
Added Stars 1995 ch 808 § 1 (AB 6), effective October 13, 1995.
!nder-
-1tes a
ARTICLE 2
arned
Supplementary Fire or Police Protection
dance
§ 55631. "Local agency"
As used in this article, "local agency" means a neighboring city, county, fire
protection district, police protection district, federal government or any
itv to
federal department or agency.
Amended Stats 1988 ch 465 sec 3, effective August 20, 1988,
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Amendments:
is its
1988 Amendment: Substituted "a neighboring city, county, fire protection district." for "neiel)boring city,
is
county. county fire or-.
' that
ment
ARTICLE 3
e ap.
Rescue and Resuscitator Services
2as6d
Collateral References:
Department of Forestry and Fire Protection has no authority to provide hazardous material cleanup,
Beginning in 1992,
(14 Gov Cl italics indicate changes or additions. • • • indicate omissions. 71
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ATTACHMENT 3
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�f Services by contract outside
city and district
jurisdictional boundaries
Constitution because of the following special
circumstances:
The Broadmoor Police Protection District
consists primarily of suburban residential
properties which have long enjoyed an urban
level of police services. The threat of
continued piecemeal detac'rments. of territory
from the district threatens its ability to
continue providinc ghat level of service on an
ecoromitally efficient basis.
(c) This section shall remain in effect only_
until January 1, 1996, and as of that date is
repealed, unless a later enacted statute, whit:
is enacted before January 1, 1996, deletes or
extends that date.
(Added by Stats. 1991, Ch. 1229.)
56133. A city or district may provide new
or extended services by contract or agreement
outside its jurisdictional boundaries only if
it first recruests and receives written approval
from the commission in the affected county.
The commission may authorize a city or district
to provide new or extended services outside its
jurisdictional boundaries but within its sphere
of influence in anticipation of a later chance
of organization. Boa- ages -ag
teO� sL e e t s
—cczes. This section does not
apply to contracts for the transfer of
nonpotable or nontreated water. This section
does not apply to contracts or agreements
solely involving the provision of surplus water
to agricultural lands for projects that serve
conservation purposes or that directly support
agricultural industries. However, prior to
extending surplus water service to any eroiect
that will support or'induce.develonme^t, the
cipy or district shall first re _nest and
receive written ancroval.from the commission in
the affected county. This section shall not
apply to an extended service that a city or
district was providing on January 1, 1994.
(Added by Stats. 1993, Ch. 1307. r,mended by
Stats. 1994, Ch. 654.)
CHAPTER 4. NOTICE
Applicability 56150. Unless the provision or context
otherwise. requires, whenever this division
requires notice to be published, posted, or
mailed, the notice shall be published, posted,
or mailed as provided in this chapter.
- 37 -
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Huntington Beach.
Fire Department
...................................................................
Status of City Fire Response Needs
And
Bolsa Chica Service Opportunities
............................................
City Fire. Response Needs
♦ 1974 Fire Master Plan specifies Fire
Station locations needed.
♦ Standards of Coverage and
Response established in Growth
Management Element of General
Plan (5 minutes 80% of the time).
..................... ................. ........................
Huntington Beach Fire Department Slide i
.................................................... .........
City Fire Response Needs (Cont.)
Currently, a deficiency exists in the
northern area of the City, and
requires the. relocation of Fire
Station 8.
♦ The City already owns a 1.3 Acre
site at Graham and Production.
..................
Huntington Beach Fire Department Slide 2
�.........
City Fire Response Needs (Cont.)
♦ The City has a Capital funding need
of $3.2M for relocating -Fire Station 8
in order to mitigate existing
response deficiencies in the
northern area of.the City..
♦ Response deficiency is compounded
by the current McDonnell Douglas
area dpVlopment:............:..................
Huntington Beach Fire Department Slide 3
...................................................
City Fire Response ont.
P Needs ) .
♦ With the City's current situation and
needs we have an opportunity to
meet some of our Fire/Medical
response and service needs through
a Bolsa Chica Fire/Medical response
contract with the Orange County
Fire Authority (OCFA).
................ . i�, .............................................
Huntington Beach Fire Department Slide a
Summary of Actions
♦ Points of Agreement
Koll, Orange County -Fire Authority and
Huntington Beach Fire Department
♦ Koll / Orange County Fire Authority
Agreement
♦ Separate OCFA / City Agreement
- Understanding to enter into two separate
fire/medical response agreements
♦ Bolsa Chica Mesa
• Sun t Beach / Surfside Colony Areas
. .................................I............
Huntington Beach Fire Department Slide 5
•
Bolsa Chica Mesa Area
• Under the proposal, the City would provide
emergency services for fire, rescue,
paramedic and ambulance transportation to
the Bolsa Chica Mesa.
• City Revenues:
- At buildout, $600,000 to $700,000 / year
(80% of Fire Fund Property Tax)
- Within two years of first building permit, $1.25
million one-time capital contribution for Fire
Station
/8�- Heil relocation
...........................................
Huntington Beach Fire Department Slide 6
i
HE is!
�
Surfslde,
Sunset Beach
k ` W
Lt
UM
Bolsa Chlca F
Mesa
New�Sta M8
x as
f ;a
Proposed Station Coverage
L_J
Sunset Beach / Surfside
♦ Current service practices
- OCFA: Primary fire, rescue and ambulance
- HBFD: Primary paramedic response
- HBFD: Backup fire and rescue
♦ Proposed Service Agreement
formalizes current service practices
OCFA through an agreement with Koll, will provide
one-time capital transfer of $1.25 million to the City
for Fire Station 8 relocation
HBFD would have future bid opportunity for City
ambula a services to the area
...........................................
Huntington Beach Fire Department Slide a
Benefits of Bolsa Chica
and Sunset / Surfside Proposals
♦ New, ongoing revenue source of
$600,000 to $700,000 annually for
City emergency response system
allowing for:
- Ongoing revenue stream for the relocation and
construction of Fire Station 8 - Heil
- Funding additional staffing costs for the overall
fire protection system
...........................................................
Huntington Beach Fire Department Slide 9
RECEIV"
CITY CLERK
CITY OF-
Hl1NTINCT�lr At; frA`IIF-.
JUL 18 q 38 PM '97
OPINION: ..IS LAFCO APPROVAL REQUIRED IN CONNECTION WITH ENTERING
INTO A WATER SERVICES AGREEMENT WITH KOLL COMPANY?
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10
F�4CITY OF HUNTINGTON BEACH
INTER -DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
TO: Michael T. Uberuaga, City Administrator
Ray Silver, Assistant City Administrator
Les Jones, Director of Public Works
Michael Dolder, Fire Chief
Melanie Fallon, Director of Community Development
FROM: Gail Hutton, City Attorney
DATE: July 18, 1997
SUBJECT: Is LAFCO approval required in connection with entering
into a water services agreement with Koll Company?
RLS 97-236
INDEX: Internal Organization Operation; Departmental Powers
and Duties; Proprietary Activities; Water; Municipal
Organization; General; Intergovernmental Relations;
Special Districts and Agencies;
Background:
The Koll Company is proceeding with developing a large residential project located in the
Bolsa Chica, which is located outside of and adjacent to the City, but within its sphere of
influence. The City is considering entering into a water service agreement with Koll to
provide water to Koll's Bolsa Chica development. The City is also considering entering into
an agreement with the County Fire Authority for the City to provide certain fire services to
the Bolsa Chica development in exchange for receiving capital facilities fees from the
Authority and receiving a portion of the property taxes the Authority receives for rendering
fire protection services. The Authority will receive a portion of the capital facilities fees to
be paid to the City byway of a separate agreement between the Authority and Koll.
Government Code § 56133 provides that "a city or district may provide new or extended
services by'contract or agreement outside its jurisdictional boundaries only if it first
requests and receives written approval from the [Local Agency Formation] Commission
["LAFCO"] in the affected county." This section further provides that "however, prior to
extending surplus water service to any project that will support or induce development,"
the city must first receive LAFCO approval.
Issue:
1. Must the City obtain LAFCO approval to provide water service to Bolsa Chica?
SF/s:G:SF-97Memos: Water714
7/18/97 - #6
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2. Must the City obtain LAFCO approval to provide fire protection services to Bolsa
Chica?
Answer:
The City must obtain LAFCO approval to provide water services to Bolsa Chica.
LAFCO will likely condition approval of such an agreement on the existence of a
preannexation agreement providing for annexation of Bolsa Chica to the City.
2. The City may be required to obtain LAFCO approval to provide fire services to Bolsa
Chica, depending upon the form of the final agreements between Koll and the
Authority, and the Authority and the City.
Discussion:
Government Code Section 56133 is directly on point regarding providing water service to
Bolsa Chica. It states that "prior to extending surplus water service to any project that
will support or induce development, the city or district shall first request and receive
written approval from the Commission in the affected county." Consequently, any
agreement to provide water services to the Koll Company must be contingent upon
obtaining LAFCO approval.
In addition, Section 56133 provides that:
"The Commission may authorize a city or district to provide new or
extended services outside its jurisdictional boundaries but within its
sphere of influence in anticipation of a later change of organization."
This language requires LAFCO to condition any extension of service for water beyond the
city boundaries upon adding the territory to the city's sphere of influence and conditioning
the service on annexation of the territory to the city or some other change of jurisdictional
boundaries. In this'case, Bolsa Chica already is within the City's sphere, so LAFCO would
only need to condition the extension upon a change of jurisdictional boundaries. This could
be satisfied through a pre -annexation agreement.
We have spoken with the Assistant Executive Officer to the Orange County LAFCO
concerning this provision. Orange County LAFCO has not adopted formal procedures
regarding provision of services by contract, but instead Orange County LAFCO Staff
follows the procedures that San Diego LAFCO has adopted. Attached to this memo is page
52 from the San Diego LAFCO procedures, which have been provided to our office by the
Orange County LAFCO. In San Diego, out -of -agency service agreements can only be
approved in anticipation of annexation of the territory to a city.
Although Orange County LAFCO has not formally adopted this process, it is our
understanding that LAFCO staff would recommend annexation of Bolsa Chica to
Huntington Beach if there was to be water service, or at the very least, a pre -annexation
agreement between Koll and the City.
2
SF/s:G:SF-97Memos: Water714
7/18/97 -#6
The question regarding providing fire services to Bolsa Chica is more complex. Section
56133 initially states that agreements to provide "new or extended services" outside
jurisdictional boundaries require Commission approval. However, it then contains an
exception for "contracts or agreements solely involving two or more public agencies." This
exception suggests that the agreement between the City and the Fire Authority does not
require LAFCO approval. However, the City/Authority agreement does not "solely" involve
two public agencies. Rather, the agreement is predicated upon a second agreement
between the Authority and the Koll Company. Moreover, the agreement contemplates the
City providing fire service outside.of the City's jurisdiction. Consequently,. while an
argument exists that the fire services agreement is exempt from Section 56133, another
reading of the statute is that the City must obtain LAFCO approval. If this is the case,
then LAFCO approval of any fire agreement would be conditioned upon an agreement
providing for annexation of Bolsa Chica to the City.
It should be noted that the City is presently entering into a Letter of Understanding with
the Authority that will lay out the broad outlines of a fire services agreement that will be
negotiated in the future. Entering into this Letter of Understanding does not require
LAFCO approval since the LOU is not a binding agreement. Once we know what -the final
terms of the agreement are, we will be in a better position to advise you whether LAFCO
approval is required.
Finally, because of our own uncertainty whether LAFCO approval of a fire agreement is
required, we have asked LAFCO's attorney to review the matter. Earlier this week, our
office confirmed with LAFCO's Assistant Executive Officer that LAFCO's attorney is
presently reviewing the Letter of Understanding. Once we are informed of his opinion, we
will inform you immediately.
Gail Hutton 1 I $ I
City Attorney
Attachment
SF/s:G:SF-97Memos: Water714
7/18/97 - #7
o/�&ai 1u:bb:11
• Date:6/2/87 Time: 10:55:11
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Page 1 of 1
June 2.1997
RECEIVED
CITY CLERK
4ITY 00
HUNTINGTON i'ACHrtALIF.
MAY 33 1112 AN '97
Mayor Ralph Bauer and City Council Members:
I am writing to urge a No vote on Fire Agreement-F 1 on the
agenda.
Koll says in a letter to the city 4/8 Pg.2 under Lave Enforcement "
the city should use a portion of the city's profits( i.e. , revenue in
excess of cost to provide fire service) from the OCFA contract to
cover the city's anticipated cost for police services " ( to Koll's
Bolsa Chica project)
Mayor Ralph Bauer asked 5/5/97" Item 4-7he fire agreement will
not be a three party agreement but with the City and OCFA" Koll
has never answered this question.
The City manager says it is a three party agreement. Koll 4/8 letter
says" Koll provides $2.4 in capital improvements funds to OCFA
at a specified development milestone, OCFA then contracts with
HBFD to provide fire and emergency medical services for our
property."
The City and environmental groups are trying to find a third party
to buy or trade KREG land for acquiring the mesa and save it as
open space for generations to come.
If you vote yes on the fire agreement you are opening the door for
the development.
If we had Bolsa Chica Mesa as a bio-diversity park the City
would make a profit from tourists and preserve this wonderful open
space at no cost to the taxpayers.
,voting for the fire agreement will bring the city one step closer to a
project which will cost us $670,000 annually FOREVER plus
costs estimated as 16 million by the time the project is completed.
Please vote No on. F1.
Eileen Murphy
EXHIBIT 1
BOLSA CHICA DEVELOPMENT.
And-Cffher Identified Service Areas
4/1/9T
C7
r %h/ 5 1 S P1`i4W A C1+ 7'�5-4` co . 7b
REQUEST FOR COUNCIL ACTIO 111A/
MEETING DATE: June 2, 1997 DEPARTMENT ID NUMBER: FD 97-005 3
What other Fire Department needs exist that will benefit from the Bolsa Chica contract
revenues?
Currently two critical Fire delivery needs exist for the City of Huntington Beach. One City need is the
relocation of Fire Station 8 to Graham and Production. The other City need is adding additional
personnel to the Holly-Seacliff development area when Fire Station 6 opens in the summer of 1999.
The relocation of Station 8 is part of the City's adopted Fire Master Plan. Station 8's relocation will
provide coverage to northern areas of the City which, currently, cannot be served within the Growth
Management Element's standards of arrival on scene within five minutes 80% of the time. The
proposed OCFA/Bosa Chica contract will provide one time Capital funding as well as an ongoing
revenue stream for financing Fire Station 8's relocation costs.
When the Holly-Seacliff Fire Station 6 opens in summer of 1999, existing fire personnel will be shifted
to staff a portion of one new paramedic engine. However, three new personnel will be required to
completely staff the new fire station at an annual cost of approximately $275,000 per year. The new,
ongoing staffing costs can be financed with a portion of the ongoing revenues generated from the
proposed Bolsa Chica contract.
Conclusion
Providing City Fire Services to Area A and Area B makes both economic sense as well as regional
sense and should be approved.
Environmental Status: No impact.
Attachment(s):
1. Bolsa Chica Development Letter of Understanding
2. Memo dated May 22nd stating that the
City Attorney has reviewed the Letter of
of Unders6ind hg
Bolsadel -3- 05/20/97 5:04 PM
AUTHOR:CAROLYN STROOK
,CEIVED FROM �
^dD MADE A PART OF THE R ECORD T THE
COUNCIL MEETING OF"
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY, CITY CLERK
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�,1
Bolsa Chica Mesa Area
Proposed Station Coverage
Sunset Beach / Surfside
Benefits of Bolsa Chica
and Sunset/Surfside Proposals
Benefits of Bolsa Chica
and Sunset/Surfside Proposals
Huntington Beach
Fire Department
City Fire Response Needs
City Fire Response Needs (Cont.)
wl
07
City Fire Response Needs (Cont.)
existing
City Fire Response Needs (Cont.)
Summary of Actions Of
Bolsa Chica Mesa Area
IL\
Sunset Beach / Surfside
Benefits of Bolsa Chica I
and Sunset / Surfside Proposals
Benefits of Bolsa Chica
and Sunset / Surfside Proposals
FROM : BOLSA CHICA-LAND TRUST
PHONE NO. : 714 960 9939 Jul. 21.1997 09:36-PM P2
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BCOLSA
CHICAIAND
TRUST
207 215t Street
Huntington Beach, CA 92648
.7I4/960-9939
July 21, 1997
City Council VIA PAX
2000 Main Street
Huntington Beach, CA 92648
Dear City Council members,
On behalf of the Bolsa Chica Land Trust I would like to urge you to
put off.a vote on the contract with the County Fire Authority.
We feel that Chief Dolder has been working hard on this project and
we are grateful for that.
However, the City has not reached agreement on the services besides
fire. While this -agreement has an amount of $60,000 per year (that
is 33 cents/yeas/per resident!) for control of brush fires at aolsa-
Chica, it has many other items which may be detrimental. In
addition, this agreement is posited on the idea thatthere will be.
building on the mesa. Hopefully, this will not be the case.
A separate agreement may be trade on the $$60,000 annual payment now.
Then, if there is need for it, an agreement with the Fire Authority
may be made latex when other services have been negotiated. It does.
not need to be done now, especially in a situation where the City is
negotiating around a project of a bankrupt company.
We ask the City Council to vote NO on this measure at this time.
sincerely,
J
Q
ow,t°C.;,• a Ncy. D ven
Pie ident
Gr t�
Z Cam.:
r
x
"x
FROM : BOLSA CHICA LAND TRUST
•
PHONE NO. 714 '360 9939 Jul. 21 1997 08:35AM PI
.7
...........
C6-
Tir
.� it_x In CITY OF HUNT114OTON BEA,Clir-i
INTER -DEPARTMENT COMNIUNICATION
HUNt1NG104 8EACH
TO: i'tlichael Dolder, Fire Chief
FR.OII: Gail Hutton, City Attorney
DATE: flay 22, 1997
SUBJECT: Bolsa Chica Development Letter of Understanding
RLS 97-384
Thank you for the opportunity to review the proposed Letter of Understanding
regarding providing fire services to the Bolsa Chica and Sunset Beach areas. Since
this is not a binding contract, it is not necessary or appropriate for the City
Attorney to formally approve the document as to form. However, since this
document will lead to negotiating a binding agreement, we appreciate the
op-. ortunity to be placed in the "loop" as early as possible.
IV., 'gave reviewed the Letter of Understanding and find nothing in it inappropriate.
=..o wish to be involved in preparing the implementation agreement. In
pay : cular, 'we would assume that the agreement should be prepared pursuant to
the authority vested in cities and counties to enter into fire and police protection
agreements under Government Code Section 55631-55634 (a copy of which is
attached). Alternatively, a joint powers authority could be created. Each of these
approaches has their own advantages and disadvantages that need to be discussed
at the time of negotiating the appropriate agreements.
Ae'_�
Gail Hutton
City Attorney
Attachments
1-7
Government Code Sections 55631-55634
Lila
HUNTINGTON BEACH
TO:
FROM:
DATE:
SUBJECT:
CITY OF HUNTINGTON BEACH
INTER -DEPARTMENT. COMMUNICATION
Michael Dolder, Fire Chief
Gail Hutton, City Attorney
May 22, 1997
Bolsa Chica Development Letter of Understanding
RLS 97-384
Thank you for the opportunity to review the proposed Letter of Understanding
regarding providing fire services to the Bolsa Chica and Sunset Beach areas. Since
this is not a binding contract, it is not necessary or appropriate for the City
Attorney to formally approve the document as to form. However, since this
document will lead to negotiating a binding agreement, we appreciate the
opportunity to be placed in the "loop" as early as possible.
We have reviewed the Letter of Understanding and find nothing in it inappropriate.
We do wish to be involved in preparing the implementation agreement. In
particular, we would assume that the agreement should be prepared pursuant to
the authority vested in cities and counties to enter into fire and police protection
agreements under Government Code Section 55631-55634 (a copy of which is
attached). Alternatively, a joint powers authority could be created. Each of these
approaches has their own advantages and disadvantages that need to be discussed
at the time of negotiating the appropriate agreements.
Gail Hutton
City Attorney
Attachments: Government Code Sections 55631-55634
S F/s:G:SF-97Memos: Dol d-522
5/22/97 - # 1
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STATEMENT OF ACTION OF THE CITY COUNCIL
CITY OF HUNTINGTON BEACH
********* - Indicates Portions Of The Meeting Not Included In The Statement Of Action
Council Chamber, Civic Center
Huntington Beach, California
Monday, August 4, 1997
An audio tape recording of the 5:00 p.m. portion
of this meeting and a video tape recording of the 7:00 p.m. portion
of this meeting are on file in the Office of the City Clerk
Mayor Bauer called the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to order at 5:00 p.m. in Room B-8.
CITY COUNCIL/REDEVELOPMENT AGENCY ROLL CALL
PRESENT: Julien, Harman, Dettloff, Bauer, Sullivan, Green, (Garofalo arrived at
5:20 p.m.)
ABSENT: None
(City Council) Bolsa Chica Letter Of Understanding - Deletion Of City Clerk's
Attestation Signature - Approved - Further Council Direction Given Regarding
Letter of Transmittal To Be Sent By Mayor To The Koll Company and Orange
County Fire Authority
The City Council considered a communication from the City Clerk requesting Council
approval to delete the City Clerk's attestation signature line and her signature which in
error she affixed to the Bolsa Chica Development Letter of Understanding signed by
Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken MacLeod, Acting
Director of Fire Services, Orange County Fire Authority and Ed Mountford, Vice
President, Koll Real Estate Company, which on July 21, 1997 the City Council
authorized only the Fire Chief to sign.
Councilmember Sullivan informed the City Council of the reasons why this item
heightened his concerns relative to the Bolsa Chica Development Letter of
Understanding that at the July 21, 1997 Council meeting the Fire Chief was authorized
to sign. He stated his concerns, including the fact that the Koll Company is bankrupt
and that the city does not know with whom it is dealing until that situation is resolved;
also that the Letter of Understanding is a lot more binding than it appears and could
Page 2 - Statement of Action
cause legal problems to the city. Councilmember Sullivan requested that Deputy City
Attorney De La Loza comment on this matter.
Deputy City Attorney De La Loza reported that a Letter of Transmittal had been
prepared today and circulated to the City Councilmembers which specifically requests
that the Koll Company demonstrate that even though it is in reorganization in
bankruptcy that it demonstrate that it has the authority to execute the Letter of
Understanding. He stated that to the extent the Koll Company is able to do so and it is
not a problem with respect to the bankruptcy court itself, it appears that that issue may
be resolved. He stated that he believes it will depend upon what is produced by the
Koll Company to overcome the bankruptcy issue.
Deputy City Attorney De La Loza reported on the doctrine of estoppel in response to
Councilmember Sullivan's question regarding possible legal ramifications of the Letter
of Understanding. He explained the reasons why Deputy City Attorney Field had
prepared the August 4, 1997 letter referred to during this meeting which states to the
Orange County Fire Authority (OCFA) and the Koll Company to not rely on the Letter of
Understanding. He informed Council that the transmittal letter is meant to overcome
the estoppel issue.
Mayor Pro Tem Dettloff presented her understanding of the Letter of Understanding.
She requested a resolution of this matter and requested clarification by Deputy City
Attorney De La Loza. Deputy City Attorney De La Loza informed Mayor Pro Tem
Dettloff that the Letter of Understanding is not a contract and that has always been the
opinion of the City Attorney's Office; however, in certain circumstances, a judge can still
hold that the City of Huntington Beach has to stick with the deal even though it is not a
contract. He further clarified the intent of the transmittal letter dated August 4, 1997
prepared by Deputy City Attorney Field which advises not to rely on that section of the
Letter of Understanding which sets forth that "from this understanding, the Orange
County Fire Authority will prepare and enter into an Implementation Agreement with
Koll as required by County of Orange conditions of approval for this project." In
response to Mayor Pro Tem Dettloff, Deputy City Attorney De La Loza reported on the
purpose of the transmittal letter, including that it reiterates that the bankruptcy court is
still an issue and to insure the Koll Company returns to the city showing that it has
authority from a bankruptcy court to sign the Letter of Understanding.
A motion was made by Green, second Garofalo to approve the City Clerk's request for
Council approval to delete the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997 the City
Council authorized only the Fire Chief to sign.
Page 3 - Statement of Action
Councilmember Sullivan presented reasons why he believed that in order for the Letter
of Transmittal to be effective it should be voted on by the City Council and signed by
the Mayor rather than signed by the City Administrator.
In response to Mayor Pro Tern Dettloff, Deputy City Attorney De La Loza referred to the
memorandum to the City Council from Scott Field, Acting City Attorney, dated August 4,
1997, Subject: Bolsa Chica Letter of Understanding Regarding Fire Services, and
clarified reasons for the city's need to make it clear that the estoppel doctrine is not
going to apply to the Letter of Understanding.
Mayor Pro Tem Dettloff stated she intends to meet with Deputy City Attorney Field,
Deputy City Attorney De La Loza, the City Administrator and the Fire Chief regarding
unanswered questions in order to present to the public a legal and clear understanding
as to what the Council has done.
Deputy City Attorney De La Loza stated three issues that are clear: that Koll Company
signed the Letter of Understanding; Koll Company is in bankruptcy; the city has no
assurance that Koll Company has the authority from the bankruptcy court to sign the
Letter of Understanding.
Councilmember Harman stated that he had the same concerns as expressed by the
Acting City Attorney. He stated his desire to see this matter resolved and
recommended that this matter be reconsidered.
The City Clerk referred the City Council to her communication and clarified the reason
for her request to correct the error she had made in attesting to the Letter of
Understanding, including the fact that the City Attorney had not prepared the Letter of
Understanding and she can attest only to signatures on documents prepared by the
City Attorney. She spoke regarding the need for the item of the transmittal letter to be
announced pursuant to the Brown Act; also that the Letter of Transmittal will not be part
of her official files unless Council direction is given rather than only being sent out by
individual staff members.
The motion made by Green, second Garofalo carried unanimously.
Councilmember Sullivan stated that the City Council had taken official action on the
Letter of Understanding at the last Council meeting and spoke regarding what he
believes is the need for Council action on this Letter of Transmittal so that it has effect
and force and to direct the Mayor and not the City Administrator to sign it so that it has
some force.
A motion was made by Sullivan, second Harman to direct the Mayor to sign the Letter
of Transmittal so that it has some effect and force.
Page 4 - Statement of Action
Discussion was held between the Council and Deputy City Attorney De La Loza
regarding the procedure to reconsider the action just voted upon which directed the City
Clerk to remove the City Clerk's attestation line and signature from the Letter of
Understanding. Deputy City Attorney De La Loza responded to Council that the
signature of the Mayor would carry greater weight than the City Administrator's
signature. He explained that to the extent that this entire City Council which previously
approved the Letter of Understanding now states that it wishes something else, that
Council wants to go with the Letter of Understanding which will carry greater weight and
be under the equal dignities rule a sufficient basis upon which to put Koll Company on
notice that this is the will of the City Council.
A motion was made by Green that the Mayor draft a letter to the Koll Company and the
Fire Authority to accompany the Bolsa Chica Letter of Understanding stating the
position of the City Council and that the substance of the letter has to do with the fact
that they should not rely on this document as set forth in the letter written by Scott
Field, Deputy City Attorney, dated August 4, 1997 and that the letter also evokes a
comment from the Koll Company as to whether they are authorized to sign the Letter of
Understanding as it may come back from the bankruptcy court that they are not
authorized to sign the Letter of Understanding.
In response to Mayor Bauer, Councilmember Sullivan stated that the letter of August 4,
1997 which is attached to the memorandum from Scott Field, Acting City Attorney,
dated August 4, 1997 did reflect what he intended and that he would like to have the
words added to Councilmember Green's words that "it is the position of the City
Council" and then have the Mayor sign it.
The Mayor questioned Deputy City Attorney De La Loza as to whether the procedure
rules had been followed. Deputy City Attorney De La Loza confirmed the Council has
done so; however, that a motion is necessary to reconsider the action taken authorizing
the City Clerk to remove the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997 the City
Council authorized only the Fire Chief to sign.
Councilmember Green withdrew his motion for the moment in order to allow a motion
for reconsideration of as recommended by Deputy City Attorney De La Loza.
A motion was made by Sullivan, second Dettloff to reconsider the City Clerk's request
for Council approval to delete the City Clerk's attestation signature line and her
signature which in error she affixed to the Bolsa Chica Development Letter of
Understanding signed by Michael Dolder, Fire Chief, Huntington Beach Fire
Department, Ken MacLeod, Acting Director of Fire Services, Orange County Fire
Authority and Ed Mountford, Vice President, Koll Real Estate Company, which on
Page 5 - Statement of Action
July 21, 1997 the City Council authorized only the Fire Chief to sign. The motion
carried unanimously.
Councilmember Garofalo stated his concern that the Letter of Transmittal which Council
is now authorizing does not materially interfere with the negotiations between the Fire
Chief and the Orange County Fire Authority and does not take any leaves that are not
reflective in the original letter.
The City Administrator, in response to Councilmember Garofalo, stated that he and the
Fire Chief obviously do not know that, that they will be meeting with the Orange County
Fire Authority and really the agreement is to between the Orange County Fire Authority
and the city. The letter to the Koll Company is a letter to the Koll Company so he does
not think it would have a material effect upon negotiations with the Orange County Fire
Authority but they have not talked to them.
Councilmember Green confirmed to Councilmember Sullivan that his motion included
the words "it is the intent of the City Council." In response to the Mayor,
Councilmember Green stated that his motion included authorizing the City Clerk to
remove her attestation to the Letter of Understanding.
The City Clerk requested that the motion be repeated and asked who the maker of the
second was. She was informed that Sullivan was the second. Councilmember Green
repeated his motion stating that the Mayor be authorized to write a letter to the Koll
Company with a copy to the Orange County Fire Authority stating it quite clearly that
this Letter of Understanding is indeed not a binding document and that the City Council
would like assurances that the Koll Company is able to enter into an agreement with
regard to fire services and that the City Clerk's attestation signature be removed from
the Letter of Understanding. The motion carried by the following roll call vote:
AYES: Julien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo
NOES: None
ABSENT: None
Mayor Bauer adjourned the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to Wednesday, August 6, 1997, 7:30 a.m.,
Pacific-B Room, Waterfront Hilton, 21100 Pacific Coast Highway, Huntington Beach,
California.
Page 6 - Statement of Action
ATTEST:
/s/ Connie Brockway
City Clerk/Clerk
STATE OF CALIFORNIA )
County of Orange ) ss:
City of Huntington Beach )
/s/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach, California
/s/ Ralph Bauer
Mayor
I, Connie Brockway, the duly elected City Clerk of the City of Huntington Beach,
California, do hereby certify that the above and foregoing is a true and correct
Statement of Action of the City Council of said City at their regular meeting held on the
4th day of August, 1997.
Witness my hand and seal of the said City of Huntington Beach this the 8th day of
August, 1997.
City Clerk and ex-officio Cler of
the City Council of the City of
Huntington Beach, -California
i
STATEMENT OF ACTION OF THE CITY COUNCIL
CITY OF HUNTINGTON BEACH
********* - Indicates Portions Of The Meeting Not Included In The Statement Of Action
Council Chamber, Civic Center
Huntington Beach, California
Monday, August 4, 1997
An audio tape recording of the 5:00 p.m. portion
of this meeting and a video tape recording of the 7:00 p.m. portion
of this meeting are on file in the Office of the City Clerk
Mayor Bauer called the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to order at 5:00 p.m. in Room B-8.
CITY COUNCIUREDEVELOPMENT AGENCY ROLL CALL
PRESENT: Julien, Harman, Dettloff, Bauer, Sullivan, Green, (Garofalo arrived at
5:20 p.m.)
ABSENT: None
(City Council) Bolsa Chica Letter Of Understanding - Deletion Of City Clerk's
Attestation Signature - Approved - Further Council Direction Given Regarding
Letter of Transmittal To Be Sent By Mayor To The Koll Company and Orange
County Fire Authority
The City Council considered a communication from the City Clerk requesting Council
approval to delete the City Clerk's attestation signature line and her signature which in
error she affixed to the Bolsa Chica Development Letter of Understanding signed by
Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken MacLeod, Acting
Director of Fire Services, Orange County Fire Authority and Ed Mountford, Vice
President, Koll Real Estate Company, which on July 21, 1997 the City Council
authorized only the Fire Chief to sign.
Councilmember Sullivan informed the City Council of the reasons why this item
heightened his concerns relative to the Bolsa Chica Development Letter of
Understanding that at the July 21, 1997 Council meeting the Fire Chief was authorized
to sign. He stated his concerns, including the fact that the Koll Company is bankrupt
and that the city does not know with whom it is dealing until that situation is resolved;
also that the Letter of Understanding is a lot more binding than it appears and could
Page 2 - Statement of Action
cause legal problems to the city. Councilmember Sullivan requested that Deputy City
Attorney De La Loza comment on this matter.
Deputy City Attorney De La Loza reported that a Letter of Transmittal had been
prepared today and circulated to the City Councilmembers which specifically requests
that the Koll Company demonstrate that even though it is in reorganization in
bankruptcy that it demonstrate that it has the authority to execute the Letter of
Understanding. He stated that to the extent the Koll Company is able to do so and it is
not a problem with respect to the bankruptcy court itself, it appears that that issue may
be resolved. He stated that he believes it will depend upon what is produced by the
Koll Company to overcome the bankruptcy issue.
Deputy City Attorney De La Loza reported on the doctrine of estoppel in response to
Councilmember Sullivan's question regarding possible legal ramifications of the Letter
of Understanding. He explained the reasons why Deputy City Attorney Field had
prepared the August 4, 1997 letter referred to during this meeting which states to the
Orange County Fire Authority (OCFA) and the Koll Company to not rely on the Letter of
Understanding. He informed Council that the transmittal letter is meant to overcome
the estoppel issue.
Mayor Pro Tern Dettloff presented her understanding of the Letter of Understanding.
She requested a resolution of this matter and requested clarification by Deputy City
Attorney De La Loza. Deputy City Attorney De La Loza informed Mayor Pro Tern
Dettloff that the Letter of Understanding is not a contract and that has always been the
opinion of the City Attorney's Office; however, in certain circumstances, a judge can still
hold that the City of Huntington Beach has to stick with the deal even though it is not a
contract. He further clarified the intent of the transmittal letter dated August 4, 1997
prepared by Deputy City Attorney Field which advises not to rely on that section of the
Letter of Understanding which sets forth that "from this understanding, the Orange
County Fire Authority will prepare and enter into an Implementation Agreement with
Koll as required by County of Orange conditions of approval for this project." In
response to Mayor Pro Tern Dettloff, Deputy City Attorney De La Loza reported on the
purpose of the transmittal letter, including that it reiterates that the bankruptcy court is
still an issue and to insure the Koll Company returns to the city showing that it has
authority from a bankruptcy court to sign the Letter of Understanding.
A motion was made by Green, second Garofalo to approve the City Clerk's request for
Council approval to delete the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997 the City
Council authorized only the Fire Chief to sign.
Page 3 - Statement of Action
Councilmember Sullivan presented reasons why he believed that in order for the Letter
of Transmittal to be effective it should be voted on by the City Council and signed by
the Mayor rather than signed by the City Administrator.
In response to Mayor Pro Tern Dettloff, Deputy City Attorney De La Loza referred to the
memorandum to the City Council from Scott Field, Acting City Attorney, dated August 4,
1997, Subject: Bolsa Chica Letter of Understanding Regarding Fire Services, and
clarified reasons for the city's need to make it clear that the estoppel doctrine is not
going to apply to the Letter of Understanding.
Mayor Pro Tern Dettloff stated she intends to meet with Deputy City Attorney Field,
Deputy City Attorney De La Loza, the City Administrator and the Fire Chief regarding
unanswered questions in order to present to the public a legal and clear understanding
as to what the Council has done.
Deputy City Attorney De La Loza stated three issues that are clear: that Koll Company
signed the Letter of Understanding; Koll Company is in bankruptcy; the city has no
assurance that Koll Company has the authority from the bankruptcy court to sign the
Letter of Understanding.
Councilmember Harman stated that he had the same concerns as expressed by the
Acting City Attorney. He stated his desire to see this matter resolved and
recommended that this matter be reconsidered.
The City Clerk referred the City Council to her communication and clarified the reason
for her request to correct the error she had made in attesting to the Letter of
Understanding, including the fact that the City Attorney had not prepared the Letter of
Understanding and she can attest only to signatures on documents prepared by the
City Attorney. She spoke regarding the need for the item of the transmittal letter to be
announced pursuant to the Brown Act; also that the Letter of Transmittal will not be part
of her official files unless Council direction is given rather than only being sent out by
individual staff members.
The motion made by Green, second Garofalo carried unanimously.
Councilmember Sullivan stated that the City Council had taken official action on the
Letter of Understanding at the last Council meeting and spoke regarding what he
believes is the need for Council action on this Letter of Transmittal so that it has effect
and force and to direct the Mayor and not the City Administrator to sign it so that it has
some force.
A motion was made by Sullivan, second Harman to direct the Mayor to sign the Letter
of Transmittal so that it has some effect and force.
Page 4 - Statement of Action
Discussion was held between the Council and Deputy City Attorney De La Loza
regarding the procedure to reconsider the action just voted upon which directed the City
Clerk to remove the City Clerk's attestation line and signature from the Letter of
Understanding. Deputy City Attorney De La Loza responded to Council that the
signature of the Mayor would carry greater weight than the City Administrator's
signature. He explained that to the extent that this entire City Council which previously
approved the Letter of Understanding now states that it wishes something else, that
Council wants to go with the Letter of Understanding which will carry greater weight and
be under the equal dignities rule a sufficient basis upon which to put Koll Company on
notice that this is the will of the City Council.
A motion was made by Green that the Mayor draft a letter to the Koll Company and the
Fire Authority to accompany the Bolsa Chica Letter of Understanding stating the
position of the City Council and that the substance of the letter has to do with the fact
that they should not rely on this document as set forth in the letter written by Scott
Field, Deputy City Attorney, dated August 4, 1997 and that the letter also evokes a
comment from the Koll Company as to whether they are authorized to sign the Letter of
Understanding as it may come back from the bankruptcy court that they are not
authorized to sign the Letter of Understanding.
In response to Mayor Bauer, Councilmember Sullivan stated that the letter of August 4,
1997 which is attached to the memorandum from Scott Field, Acting City Attorney,
dated August 4, 1997 did reflect what he intended and that he would like to have the
words added to Councilmember Green's words that "it is the position of the City
Council" and then have the Mayor sign it.
The Mayor questioned Deputy City Attorney De La Loza as to whether the procedure
rules had been followed. Deputy City Attorney De La Loza confirmed the Council has
done so; however, that a motion is necessary to reconsider the action taken authorizing
the City Clerk to remove the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997 the City
Council authorized only the Fire Chief to sign.
Councilmember Green withdrew his motion for the moment in order to allow a motion
for reconsideration of as recommended by Deputy City Attorney De La Loza.
A motion was made by Sullivan, second Dettloff to reconsider the City Clerk's request
for Council approval to delete the City Clerk's attestation signature line and her
signature which in error she affixed to the Bolsa Chica Development Letter of
Understanding signed by Michael Dolder, Fire Chief, Huntington Beach Fire
Department, Ken MacLeod, Acting Director of Fire Services, Orange County Fire
Authority and Ed Mountford, Vice President, Koll Real Estate Company, which on
Page 5 - Statement of Action
July 21, 1997 the City Council authorized only the Fire Chief to sign. The motion
carried unanimously.
Councilmember Garofalo stated his concern that the Letter of Transmittal which Council
is now authorizing does not materially interfere with the negotiations between the Fire
Chief and the Orange County Fire Authority and does not take any leaves that are not
reflective in the original letter.
The City Administrator, in response to Councilmember Garofalo, stated that he and the
Fire Chief obviously do not know that, that they will be meeting with the Orange County
Fire Authority and really the agreement is to between the Orange County Fire Authority
and the city. The letter to the Koll Company is a letter to the Koll Company so he does
not think it would have a material effect upon negotiations with the Orange County Fire
Authority but they have not talked to them.
Councilmember Green confirmed to Councilmember Sullivan that his motion included
the words "it is the intent of the City Council." In response to the Mayor,
Councilmember Green stated that his motion included authorizing the City Clerk to
remove her attestation to the Letter of Understanding.
The City Clerk requested that the motion be repeated and asked who the maker of the
second was. She was informed that Sullivan was the second. Councilmember Green
repeated his motion stating that the Mayor be authorized to write a letter to the Koll
Company with a copy to the Orange County Fire Authority stating it quite clearly that
this Letter of Understanding is indeed not a binding document and that the City Council
would like assurances that the Koll Company is able to enter into an agreement with
regard to fire services and that the City Clerk's attestation signature be removed from
the Letter of Understanding. The motion carried by the following roll call vote:
AYES: Julien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo
NOES: None
ABSENT: None
Mayor Bauer adjourned the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to Wednesday, August 6, 1997, 7:30 a.m.,
Pacific-B Room, Waterfront Hilton, 21100 Pacific Coast Highway, Huntington Beach,
California.
•
•
Page 6 - Statement of Action
ATTEST:
/s/ Connie Brockway
City Clerk/Clerk
STATE OF CALIFORNIA )
County of Orange ) ss:
City of Huntington Beach )
/s/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach, California
/s/ Ralph Bauer
Mayor
I, Connie Brockway, the duly elected City Clerk of the City of Huntington Beach,
California, do hereby certify that the above and foregoing is a true and correct
Statement of Action of the City Council of said City at their regular meeting held on the
4th day of August, 1997.
Witness my hand and seal of the said City of Huntington Beach this the 8th day of
August, 1997.
City Clerk and ex-officio Clerk of
the City Council of, =the City of
Huntington Beach, California
STATEMENT OF ACTION OF THE CITY COUNCIL
CITY OF HUNTINGTON BEACH
*********-Indicates Portions Of The Meeting Not Included In The Statement Of Action
Council Chamber, Civic Center
Huntington Beach, California
Monday, August 4, 1997
An audio tape recording of the 5:00 p.m. portion
of this meeting and a video tape recording of the 7:00 p.m. portion
of this meeting are on file in the Office of the City Clerk
Mayor Bauer called the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to order at 5:00 p.m. in Room B-8.
CITY COUNCIL/REDEVELOPMENT AGENCY ROLL CALL
PRESENT: Julien, Harman, Dettloff, Bauer, Sullivan, Green, (Garofalo arrived at
5:20 p.m.)
ABSENT: None
(City Council) Bolsa Chica Letter Of Understanding - Deletion Of City Clerk's
_Attestation Signature - Approved - Further Council Direction Given Regarding
Letter of Transmittal To Be Sent By Mayor To The Koll Company and Orange
County Fire Authority
The City Council considered a communication from the City Clerk requesting Council
approval to delete the City Clerk's attestation signature line and her signature which in
error she affixed to the Bolsa Chica Development Letter of Understanding signed by
Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken MacLeod, Acting
Director of Fire Services, Orange County Fire Authority and Ed Mountford, Vice
President, Koll Real Estate Company, which on July 21, 1997 the City Council
authorized only the Fire Chief to sign.
Councilmember Sullivan informed the City Council of the reasons why this item
heightened his concerns relative to the Bolsa Chica Development Letter of
Understanding that at the July 21, 1997 Council meeting the Fire Chief was authorized
to sign. He stated his concerns, including the fact that the Koll Company is bankrupt
and that the city does not know with whom it is dealing until that situation is resolved;
also that the Letter of Understanding is a lot more binding than it appears and could
0
Page 2 - Statement of Action
cause legal problems to the city. Councilmember Sullivan requested that Deputy City
Attorney De La Loza comment on this matter.
Deputy City Attorney De La Loza reported that a Letter of Transmittal had been
prepared today and circulated to the City Councilmembers which specifically requests
that the Koll Company demonstrate that even though it is in reorganization in
bankruptcy that it demonstrate that it has the authority to execute the Letter of
Understanding. He stated that to the extent the Koll Company is able to do so and it is
not a problem with respect to the bankruptcy court itself, it appears that that issue may
be resolved. He stated that he believes it will depend upon what is produced by the
Koll Company to overcome the bankruptcy issue.
Deputy City Attorney De La Loza reported on the doctrine of estoppel in response to
Councilmember Sullivan's question regarding possible legal ramifications of the Letter
of Understanding. He explained the reasons why Deputy City Attorney Field had
prepared the August 4, 1997 letter referred to during this meeting which states to the
Orange County Fire Authority (OCFA) and the Koll Company to not rely on the Letter of
Understanding. He informed Council that the transmittal letter is meant to overcome
the estoppel issue.
Mayor Pro Tern Dettloff presented her understanding of the Letter of Understanding.
She requested a resolution of this matter and requested clarification by Deputy City
Attorney De La Loza. Deputy City Attorney De La Loza informed Mayor Pro Tern
Dettloff that the Letter of Understanding is not a contract and that has always been the
opinion of the City Attorney's Office; however, in certain circumstances, a judge can still
hold that the City of Huntington Beach has to stick with the deal even though it is not a
contract. He further clarified the intent of the transmittal letter dated August 4, 1997
prepared by Deputy City Attorney Field which advises not to rely on that section of the
Letter of Understanding which sets forth that "from this understanding, the Orange
County Fire Authority will prepare and enter into an Implementation Agreement with
Koll as required by County of Orange conditions of approval for this project." In
response to Mayor Pro Tern Dettloff, Deputy City Attorney De La Loza reported on the
purpose of the transmittal letter, including that it reiterates that the bankruptcy court is
still an issue and to insure the Koll Company returns to the city showing that it has
authority from a bankruptcy court to sign the Letter of Understanding.
A motion was made by Green, second Garofalo to approve the City Clerk's request for
Council approval to delete the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997.the City
Council authorized only the Fire Chief to sign.
Page 3 - Statement of Action
Councilmember Sullivan presented reasons why he believed that in order for the Letter
of Transmittal to be effective it should be voted on by the City Council and signed by
the Mayor rather than signed by the City Administrator.
In response to Mayor Pro Tern Dettloff, Deputy City Attorney De La Loza referred to the
memorandum to the City Council from Scott Field, Acting City Attorney, dated August 4,
1997, Subject: Bolsa Chica Letter of Understanding Regarding Fire Services, and
clarified reasons for the city's need to make it clear that the estoppel doctrine is not
going to apply to the Letter of Understanding.
Mayor Pro Tem Dettloff stated she intends to meet with Deputy City Attorney Field,
Deputy City Attorney De La Loza, the City Administrator and the Fire Chief regarding
unanswered questions in order to present to the public a legal and clear understanding
as to what the Council has done.
Deputy City Attorney De La Loza stated three issues that are clear: that Koll Company
signed the Letter of Understanding; Koll Company is in bankruptcy; the city has no
assurance that Koll Company has the authority from the bankruptcy court to sign the
Letter of Understanding.
Councilmember Harman stated that he had the same concerns as expressed by the
Acting City Attorney. He stated his desire to see this matter resolved and
recommended that this matter be reconsidered.
The City Clerk referred the City Council to her communication and clarified the reason
for her request to correct the error she had made in attesting to the Letter of
Understanding, including the fact that the City Attorney had not prepared the Letter of
Understanding and she can attest only to signatures on documents prepared by the
City Attorney. She spoke regarding the need for the item of the transmittal letter to be
announced pursuant to the Brown Act; also that the Letter of Transmittal will not be part
of her official files unless Council direction is given rather than only being sent out by
individual staff members.
The motion made by Green, second Garofalo carried unanimously.
Councilmember Sullivan stated that the City Council had taken official action on the
Letter of Understanding at the last Council meeting and spoke regarding what he
believes is the need for Council action on this Letter of Transmittal so that it has effect
and force and to direct the Mayor and not the City Administrator to sign it so that it has
some force.
A motion was made by Sullivan, second Harman to direct the Mayor to sign the Letter
of Transmittal so that it has some effect and force.
Page 4 - Statement of Action
Discussion was held between the Council and Deputy City Attorney De La Loza
regarding the procedure to reconsider the action just voted upon which directed the City
Clerk to remove the City Clerk's attestation line and signature from the Letter of
Understanding. Deputy City Attorney De La Loza responded to Council that the
signature of the Mayor would carry greater weight than the City Administrator's
signature. He explained that to the extent that this entire City Council which previously
approved the Letter of Understanding now states that it wishes something else, that
Council wants to go with the Letter of Understanding which will carry greater weight and
be under the equal dignities rule a sufficient basis upon which to put Koll Company on
notice that this is the will of the City Council.
A motion was made by Green that the Mayor draft a letter to the Koll Company and the
Fire Authority to accompany the Bolsa Chica Letter of Understanding stating the
position of the City Council and that the substance of the letter has to do with the fact
that they should not rely on this document as set forth in the letter written by Scott
Field, Deputy City Attorney, dated August 4, 1997 and that the letter also evokes a
comment from the Koll Company as to whether they are authorized to sign the Letter of
Understanding as it may come back from the bankruptcy court that they are not
authorized to sign the Letter of Understanding.
In response to Mayor Bauer, Councilmember Sullivan stated that the letter of August 4,
1997 which is attached to the memorandum from Scott Field, Acting City Attorney,
dated August 4, 1997 did reflect what he intended and that he would like to have the
words added to Councilmember Green's words that "it is the position of the City
Council" and then have the Mayor sign it.
The Mayor questioned Deputy City Attorney De La Loza as to whether the procedure
rules had been followed. Deputy City Attorney De La Loza confirmed the Council has
done so; however, that a motion is necessary to reconsider the action taken authorizing
the City Clerk to remove the City Clerk's attestation signature line and her signature
which in error she affixed to the Bolsa Chica Development Letter of Understanding
signed by Michael Dolder, Fire Chief, Huntington Beach Fire Department, Ken
MacLeod, Acting Director of Fire Services, Orange County Fire Authority and Ed
Mountford, Vice President, Koll Real Estate Company, which on July 21, 1997 the City
Council authorized only the Fire Chief to sign.
Councilmember Green withdrew his motion for the moment in order to allow a motion
for reconsideration of as recommended by Deputy City Attorney De La Loza.
A motion was made by Sullivan, second Dettloff to reconsider the City Clerk's request
for Council approval to delete the City Clerk's attestation signature line and her
signature which in error she affixed to the Bolsa Chica Development Letter of
Understanding signed by Michael Dolder, Fire Chief, Huntington Beach Fire
Department, Ken MacLeod, Acting Director of Fire Services, Orange County Fire
Authority and Ed Mountford, Vice President, Koll Real Estate Company, which on
Page 5 - Statement of Action
July 21, 1997 the City Council authorized only the Fire Chief to sign. The motion
carried unanimously.
Councilmember Garofalo stated his concern that the Letter of Transmittal which Council
is now authorizing does not materially interfere with the negotiations between the Fire
Chief and the Orange County Fire Authority and does not take any leaves that are not
reflective in the original letter.
The City Administrator, in response to Councilmember Garofalo, stated that he and the
Fire Chief obviously do not know that, that they will be meeting with the Orange County
Fire Authority and really the agreement is to between the Orange County Fire Authority
and the city. The letter to the Koll Company is a letter to the Koll Company so he does
not think it would have a material effect upon negotiations with the Orange County Fire
Authority but they have not talked to them.
Councilmember Green confirmed to Councilmember Sullivan that his motion included
the words "it is the intent of the City Council." In response to the Mayor,
Councilmember Green stated that his motion included authorizing the City Clerk to
remove her attestation to the Letter of Understanding.
The City Clerk requested that the motion be repeated and asked who the maker of the
second was. She was informed that Sullivan was the second. Councilmember Green
repeated his motion stating that the Mayor be authorized to write a letter to the Koll
Company with a copy to the Orange County Fire Authority stating it quite clearly that
this Letter of Understanding is indeed not a binding document and that the City Council
would like assurances that the Koll Company is able to enter into an agreement with
regard to fire services and that the City Clerk's attestation signature be removed from
the Letter of Understanding. The motion carried by the following roll call vote:
AYES: Julien, Harman, Dettloff, Bauer, Sullivan, Green, Garofalo
NOES: None
ABSENT: None
Mayor Bauer adjourned the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to Wednesday, August 6, 1997, 7:30 a.m.,
Pacific-B Room, Waterfront Hilton, 21100 Pacific Coast Highway, Huntington Beach,
California.
•
�J
Page 6 - Statement of Action
ATTEST:
/s/ Connie Brockway
City Clerk/Clerk
STATE OF CALIFORNIA )
County of Orange ) ss:
City of Huntington Beach )
/s/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach, California
/s/ Ralph Bauer
Mayor
I, Connie Brockway, the duly elected City Clerk of the City of Huntington Beach,
California, do hereby certify that the above and foregoing is a true and correct
Statement of Action of the City Council of said City at their regular meeting held on the
4th day of August, 1997.
Witness my hand and seal of the said City of Huntington Beach this the 8th day of
August, 1997.
City Clerk and ex-officio Clerk 00
the City Council of the City of
Huntington Beach; California