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CC Resolution No. 9884RESOLUTION NO. 9884 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO ESTABLISHING RULES FOR ACCEPTANCE OF PROPOSALS FOR THE LEASE OF THE CITY'S WATER SYSTEM WHEREAS, the City of Cupertino owns and operates a water system which serves properties both within and outside its boundaries; as more fully described in Exhibit A attached; WHEREAS, California Public Utilities Code Section 10061 et seq. authorizes a city to lease any water system for just compensation and upon terms which are just and reasonable to a public utility that the city finds best qualified to continue to provide equal, or better, service to the customer of the system; and WHEREAS, it is the judgment of the City of Council of the City of Cupertino, for the best interests of the city, that said water system be leased to either of the two public water utilities currently serving other parts of the city; NOW, THEREFORE, it is hereby determined and ordered that said water system shall be offered for lease to one of the two public water utilities currently serving other parts of the city under the following terms and conditions: 1. Proposal Date The City of Cupertino shall offer for lease the water system to San Jose Water Company and California Water Service Company. A session for receipt of proposals will be held on Tuesday, July 8, 1997, at 9:00 A.M., in the Cupertino Room of the Quinlan Community Center; 10185 No. Stelling Road; Cupertino, California. 2. Written Proposals Written proposals shall be presented on the form as shown in Exhibit B. The form must be received by the Director of Public Works of the City on or before the date of the proposal session. The form should be completed and placed in a sealed envelope along with the appropriate deposit as described in item 4. "Minimum Amount of Proposal," of this resolution. The outside of the envelope should state that it is a "sealed proposal." The proposal shall be hand delivered to the Director of Public Works at the Cupertino Room of the Quinlan Community Center; 10185 No. Stelling Road; Cupertino, California. 3. Proposal Incorporating Lease Terms All proposals shall incorporate all lease terms contained in the City's which is attached hereto as Exhibit C. lease form a copy of 4. Minimum Amount of Proposal The minimum amount payable to the City under any proposal shall constitute a "net present worth value" of $6,000,000.00 over the term of the lease (25 years). Any proposal may provide for all, or a portion of the sum payable to be made in cash as a concession fee and/or annual installments constituting base rent. The interest rate utilized by the proposers to calculate the "net present worth value" shall be 7.7 per cent per annum. 5. Modified Proposals In the event the submitter wishes to present a proposal involving unequal or intermittent installment payments, the following rules shall apply: (a) The submitter shall describe the payment schedule and fill out the "modified" proposal worksheet contained on the backside of each submitted form. (b) The net present worth of the modified proposal will be determined and the accumulated net present worth value demonstrated (based on 7.7% per annum) for each of the twenty five (25) years. (c) The accumulated net present worth of the modified proposal will be compared to an equivalent fixed only annual payment program (excluding C.P.I. and any concession fees during the term), for each of the twenty-five years (25). (d) The accumulated net present worth of the modified proposal compared must always equal or exceed the accumulated net present worth of the equivalent fixed only annual payment program on a year-to-year basis. (e) Any questions regarding the modified proposal shall be directed to the Director of Public Works, prior to the bid date. 6. Deposit (a) Amount of Deposit All submitted written proposals must be accompanied by a cashier's check in the amount of $100,000. Said deposit shall be made payable to the City of Cupertino. (b) Forfeiture of Deposit In the event a proposal is accepted and the proposer fails, within the term allotted hereunto, to execute any documents related to the lease, including the lease, or otherwise does not perform according to the terms of the proposal, the said proposer will forfeit an amount equal to the difference between the forfeiture proposal and the proposal which is ultimately accepted by the City, up to the full amount of the deposit. The difference, if any, remaining after subtracting the amount of the forfeiture from the original deposit shall be refunded to the proposer upon the determination that the proposer does not desire to consummate the lease. 2 (c) Return of Deposit The deposit of the unsuccessful proposer will be returned after the City's final acceptance of the successful proposal. No interest shall be paid by City on any deposits. 7. Authority of Representative Prior to the filing of any proposals, each proposer shall file with the Director of Public Works a written resolution of its Board of Directors or other document, acceptable to the City Attorney, which grants to a proposer's representatives the actual authority to bind the proposer with respect to any initial, amended, or subsequent proposal. 8. Lease Agreement/Discretion of the City The accepted proposal, this Resolution, the executed lease, and any exhibits thereto shall constitute the lease agreement. The City Council of the City of Cupertino reserves the right to accept a proposal which in its sole discretion it deems to be in the City's best interest. The City Council of the City of Cupertino reserves the right to reject all proposals, waive any irregularities, be the sole judge of the responsiveness of the proposals and to determine which proposal constitutes the greatest benefit to the City and its residents. 9. Attorneys Fees In the event that any legal action or litigation is undertaken by the City to enforce the provisions of any proposal or any subsequent written agreement against the successful proposer, said proposer agrees to pay reasonable attorneys fees incurred by the City. 10. Alternative Proposals Both proposers shall make a written proposal based both on their own existing rates and charges and rate structure applied and the other proposer's existing rates and charges and rate structure. In the event that a proposer is awarded the lease based upon the other proposer's existing rates and charges and rate structure, the successful proposer shall be required to maintain the other proposer's rate and rate structure as it exists or is modified by the California Public Utilities Commission during the term of the lease provided, however, that said rate may also be modified by the City Council pursuant to Section 8 of the attached lease regarding rates and charges. 11. Procedures The following procedures will be used in conducting the session: (a) Upon receipt of the written proposals as described in paragraph 2, the Director of Public Works will open the written proposals and shall announce details of the proposals. The Director shall be the sole judge of whether any proposal is or is not in conformance with the procedure described in this resolution. In the event that the sealed proposals for any of the categories result in amounts that are equal based on net present worth, the high proposal will be deemed to be the one that has the higher accumulated net present worth in the first ten (10) years of the Lease. (b) Thereafter, additional written proposals will be solicited. The first additional proposal shall exceed the highest initial proposal for each structure category of proposal by $100,000 in "net present worth value." Each subsequent additional proposal for each category shall exceed the next highest proposal for that category by $10,000, in net present worth value. (c) Each round of proposals will be separated by a period of up to two hours. At the conclusion of the two hour period, the Director of Public Works may grant additional time, in his discretion, for any proposer to submit a new proposal. At any time after the expiration of the two hour period, the Director upon written notification may terminate any proposer's right to submit an additional proposal. The Director may continue the session to another date. (d) Upon completion of the session, the Director of Public Works will tentatively accept the final proposal in each category from each proposer, adjourn the session, and deliver the proposals to the City Council who will consider the proposals at a public hearing and announce its decision. Any proposer will be allowed to correct errors in its proposal at any time prior to the adjournment of session provided that the error was made in filling out the proposal form and not due to error in judgment. No correction of errors shall be allowed after adjournment of the session. (e) The City Council, at its sole discretion, will resolve both the rate charge's rate structure to be used and the successful proposal. The City Council reserves the fight to accept the proposal, which it determines to be in the City's best interests. The City Council also reserves the right to reject any and all proposals and call for new proposals. (f) All proposals shall remain valid and unrevoked for a period of 30 days from the date of the adjournment of the session until acceptance of a proposal by the City Council, which occurs first. Upon final acceptance of a proposal by the City Council, the lease shall be executed within 14 days of said acceptance by the successful proposer. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 16th day of June, 1997 by the following vote: Vote Members of the City Council AYES: Burnett, NOES: None ABSENT: None ABSTAIN: None Chang, Dean, Sorensen, Bautista ATTEST: APPROVED: ~0~'~'it~- of ~upertino 4