HomeMy WebLinkAboutIrrevocable Standby Letter of Credit in lieu of Performance t
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Union Bank of California N.A.
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Trade Service Operations s
1980 Saturn Street, V01-516
. . Monterey Park, CA 91755
SWIFT: BOFCUS33LAX E
Irrevocable
Standby Letter of Credit No. ¢.
S305433M .
Beneficiary: Applicant:
City of Huntington Beach Rainbow Disposal Co Inc
2000 Main St., P.O. Box 190 17121 Nichols Street
Huntington Beach,CA 92648 Huntington Beach,CA 92647 United States a
Attn: Director of Public Works United States s
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Date of Issue: Date and Place of Expiry:
May 13,2008 June 01,2009 at our counters a
SLC Amount: z
USD 1,000,000.00 One Million and 00/100 United States s
Dollars
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Ladies/Gentlemen:
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At the request and for the account of Rainbow Disposal Co Inc. located at 17121 Nichols St. t
Huntington Beach,CA 92647, we hereby establish our Irrevocable Letter of Credit in favor of the City I
of Huntington Beach, ("City") in the amount of One Million and 00/100 United States Dollars f
($1,000,000.00).This Letter of Credit is available with us at our above office by payment of City
draft(s)drawn on us at sight accompanied by City's signed and dated statement worded as follows:
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"The undersigned,the City Administrator of the City of Huntington Beach("City"), hereby certifies that
(1)Rainbow Disposal Co, Inc.has failed to perform,as required by the City pursuant to the Revised I
and Restated Refuse Collection and Disposal Services Franchise Agreement dated July 17,2006 and t
(2)the amount of the accompanying draft drawn under Union Bank of California, N.A., represents the
amount the City is entitled to draw as a result of such event of default."
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Instr#S305433M Page 1 of 3
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Union Bank of California N.A. i
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Each draft must also be accompanied by the original of this Letter of Credit for our endorsement on
this Letter of Credit of our payment of such draft.
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Partial and multiple drawings are permitted under this Letter of Credit.
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Each draft must be marked: r
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"Drawn under Union Bank of California, N.A., Letter of Credit No. S305433M."
This Letter of Credit shall be deemed automatically extended without an amendment for a one year
period beginning on the present expiration date hereof,tune 1,2009, and upon each anniversary of 4..
such date, unless at least sixty(60)days prior to any such expiration date we have sent you at your g
above address written notice by courier service or overnight mail that we elect not to permit this Letter s
of Credit to be so extended beyond, and will expire on its then current expiry date. No presentation
made under this Letter of Credit after such expiry date will be honored.
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All banking charges under this Letter of Credit are for the account of the Applicant.
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Dreft(s)and document(s) under this Letter of Credit must be presented for payment at:
Union Bank of California, N.A.,Trade Service Operation, 1980 Saturn Street, V01-519, Monterey Park,
California, 91755-7417 Attention: Standby Letter of Credit Section.
If requested by City, payment of City conforming drawing(s)under this Letter of Credit will be made in F
immediately available funds of Union Bank of California, N.A. by wire transfer to City's account with a
bank designated by City which is a member of the Federal Reserve System. If City does request that
any such payment be made by wire transfer to an account with another bank or to an account with us,
we and/or such other bank may rely on an account number specified in such request as long as the
account number identifies the City of Huntington Beach as the intended payee. 4
This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits(1993
Revision), International Chamber of Commerce Publication No.500,and engages us in accordance p
with the terms thereof.
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We hereby engage the City that each draft drawn and presented to us in compliance with the terms
and provisions of this Letter of Credit will be duly honored by payment to City of the amount requested.
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Instr#S305433M Page 2 of 3
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Union Bank of California N.A.
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Regards, l
Authori S&ature(s)
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Inser#S305433M Page 3 of 3
Council/Agency Meeting Held: O
Deferred/Continued to: j
*Appro ed ❑ Conditionally Approved ❑ Denied City Cle k's Si natur
Council Meeting Date: 4/21/2008 Department ID umber: PW 08-27
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEM S
SUBMITTED BY: PAUL EMERY, INTERIM CITY ADMINISTRATO
PREPARED BY: TRAVIS K. HOPKINS, PE, DIRECTOR OF UBLIC WORKS
SUBJECT: Approve Letter of Credit in lieu of Bond from Rainbow Disposal Co., Inc.
Statement of Issue,Funding Source, Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue: Rainbow Disposal Co., Inc. has requested to submit an Irrevocable
Standby Letter of Credit in lieu of the performance bond required by the July 3, 2006
franchise agreement.
Funding Source: No funding is necessary for this action.
Recommended Action: Motion to:
Approve acceptance of a $1 million irrevocable standby Letter of Credit in lieu of.
performance bond in a form approved by the City Attorney and the City Treasurer.
Alternative Action(s):
Do not approve acceptance of a Letter of Credit in lieu of bond.
REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: 4/21/2008 DEPARTMENT ID NUMBER: PW 08-27
Analysis: On July 3, 2006, City Council approved a revised franchise agreement for trash
hauling services with Rainbow Disposal Co., Inc. (Rainbow). The terms of the revised
agreement increased the required performance bond amount from fifty thousand dollars
($50,000) to one million dollars ($1,000,000). Rainbow has requested to furnish a $1 million
Irrevocable Standby Letter of Credit (L/C) in lieu of the required bond in a form substantially
similar to the sample attached. Staff recommends that City Council authorize the acceptance
of the L/C in lieu of performance bond to satisfy the terms of the franchise agreement.
Public Works Commission Action: Not required.
Strategic Plan Goal: C-2: Provide quality public services with the highest professional
standards to meet community expectations and needs, assuring that the City is sufficiently
staffed and equipped overall.
Environmental Status: Not applicable.
Attachment(s):
City Clerk's
Page Number No. Description
9 3
1. Sample Letter of Credit
-2- 4/3/2008 2:02 PM
ATTACHMENT # 1
EXHIBIT FOR STANDBY LETTER OF CREDIT APPLICATION:
THIS EXHIBIT, IN THIS FINAL FORM, IS AN INTEGRAL PART OF AND MUST BE ATTACHED TO
UNION BANK OF CALIFORNIA, N.A. APPLICATION AND AGREEMENT FOR
IRREVOCABLE STANDBY LETTER OF CREDIT DATED
APPLICANT: RAINBOW DISPOSAL CO., INC.
Irrevocable Standby Letter of Credit No.
SOUTHERN CALIFORNIA
TRADE SERVICE OPERATIONS
1980 Saturn Street, V01-519
Monterey Park, California 91755-7417
Attention: Standby Letter of Credit Section
Date: [Bank Use Only]
BENEFICIARY APPLICANT::::::::
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City of Rainbow Disposal C'o>CE- ;;; < `'`' '
17121 Nichols St.
Huntington Beach, CA 926'47
Currency: USD
Amount:
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Available : Payment at this office.
Expiry Date: [insert date 1 200 or any` ufomatically:eXtended date as herein set
forth at the close of busine ...........
bf;this offi in Monterey Park, California
Ladies/Gentlemen:
At the request and for the account of Rainb is.posaI 6.1ne, located at 17121 Nichols St.
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Huntington Beach, CA 92647, we hereby i st b[i$Y;.our Irrdvadd Letter of Credit in favor of the City
of ("City") in the amount of . This Letter of Credit is available with
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us at our above office by payment o€: :ty draft' dravuu on:::us at sight accompanied by City's signed
and dated statement worded as folip <<:<;::::;:.
"The undersigned, the City Adaistrafoi'p >tl�e:>Cit of ("City"), hereb certifies that 1
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Rainbow Disposal Co, Inc. has f 1I0.'d 0.::perforrn, as required by the City pursuant to the Fill in
the Blank(constructip:n:performance`b r7d'>or trash collection agreement dated) and (2) the
amount of the ae t p�rn ing:d,raft drawn;€:Under Union Bank of California, N.A. represents the
amount the City is:er I* r i ;a;:result of such event of default."
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Each draft must alsal�" eQmpanied by the original of this Letter of Credit for our
endorsement on;th;is.,..Letter of' edt of our payment of such draft.
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Parti6"Fand multi;p[e drawin are permitted under this Letter of Credit.
EaC[1 aff.:M.:. st'be i iarlced "Drawn under Union Bank of California N.A. Letter of Credit
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No. "
This Letter of Credit shall be deemed automatically extended without an amendment for a one
year period beginning on the present expiration date hereof[Insert date at time of issuance
1 2008, and upon each anniversary of such date, unless at least sixty (60) days prior to any
such expiration date we have sent the City's Director of Public Works written notice by courier service
or overnight mail that we elect not to permit this Letter of Credit to be so extended beyond, and will
EXHIBIT TO APPLICATION,PAGE 1 OF 2
APPLICANT'S SIGNATURE APPLICANTS SIGNATURE
DATE OF APPLICATION DATE OF APPLICATION
EXHIBIT FOR STANDBY LETTER OF CREDIT APPLICATION:
THIS EXHIBIT, IN THIS FINAL FORM, IS AN INTEGRAL PART OF AND MUST BE ATTACHED TO
UNION BANK OF CALIFORNIA, N.A. APPLICATION AND AGREEMENT FOR
IRREVOCABLE STANDBY LETTER OF CREDIT DATED
APPLICANT: RAINBOW DISPOSAL CO., INC.
expire on its then current expiry date. No presentation made under this Letter of Credit after such
expiry date will be honored.
All banking charges under this Letter of Credit are for the account of the Applicant.
Draft(s) and document(s) under this Letter of Credit must be presen;todfor payment at:
Union Bank of California, N.A. Southern California Trade Service OperatiorC '1i980 Saturn Street, V01-
519, Monterey Park, California, 91755-7417 Attention: Standby Letter of: �edit Serf Q .
If requested by City, payment of City conforming drawing(s) undertihsatter of Credit:will be
made in immediately available funds of Union Bank of California, N.A. by w1r tr hsfer tv ty's account
with a bank designated by City which is a member of the Federal Reserve Sysfd1 ; ity`does
request that any such payment be made by wire transfer to an account with anothel=bck or to an
account with us, we and/or such other bank may rely on an,aoount number specified in such request
as long as the account number identifies the City of Huntingt 1! ac.,h as the int l;tled payee.
This Letter of Credit is subject to the Uniform Gusto ia,and P:ractice;for€Documentary Credits
1993 Revision), International Chamber of Commerc 'Pdk l[cct[an No."50.0:: es us in
engages( ) ......: 9 9
accordance with the terms thereof.
We hereby engage the City that each draft dr Wn-artd>presented to us in compliance with the
terms and provisions of this Letter of Credituila.be duff ortored by payment to City of the amount
requested.
V trUly rs,
j < AN :OF CALIFORNIA N.A.
U:N El.;:B ;.
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(Authorized signature)
EXHIBIT TO APPLICATION,PAGE 2 OF 2
APPLICANTS SIGNATURE APPLICANTS SIGNATURE
DATE OF APPLICATION DATE OF APPLICATION
RCA ROUTING SHEET
INITIATING DEPARTMENT: Public Works
SUBJECT: Approve Letter of Credit in lieu of Bond from Rainbow
Disposal Co., Inc.
COUNCIL MEETING DATE: April 21, 2008
RC"TTAGHMENTS :,STATUS
Ordinance (w/exhibits & legislative draft if applicable) Attached ❑
Not A plicable
Resolution (w/exhibits & legislative draft if applicable) Attached ❑
Not Applicable
Tract Map, Location Map and/or other Exhibits Attached
Not Applicable ❑
Contract/Agreement (w/exhibits if applicable) Attached ❑
(Signed in full by the City Attorney) Not Applicable
Subleases, Third Party Agreements, etc. Attached ❑
(Approved as to form by City Attorney) Not Applicable
Certificates of Insurance (Approved by the City Attorney) Attached ❑
Not Applicable
Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑
Not Applicable
Bonds (If applicable) Notached El
t Applicable
Staff Report (If applicable) Attached ❑
Not Applicable
Commission, Board or Committee Report (If applicable) Attached ❑
Not Applicable
Findings/Conditions for Approval and/or Denial Attached ❑
Not Applicable
EXPLANATION FOR MISSING ATTACHMENTS,,,
„k REVIEWED RETURNED f0 DED
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Administrative Staff (,. ) ( )
Deputy City Administrator Initial
City Administrator Initial G
City Clerk ( )
EXPLANATION FOR RETURN ,OMM:
Only)(Below Space For City Clerk's Use
RCA Author: Jubinsky:jg