Resolution No. 2015-053RESOLUTION NO. 2015-53
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUT1IORIZING THE EXECUTION OF
AN ADDED FACILITIES AGREEMENT BY AND BETWEEN THE
CITY OF VERNON AND GRAND PACKAGING INC.
WHEREAS, Grand Packaging, Inc. ("Grand Packaging") operates a
manufacturing plant in the City of Vernon that manufactures and
distributes carry bags for retailers, the food -service industry, and
restaurants in the United States; and
WHEREAS, Grand Packaging currently receives electric service
through several points of delivery and has requested to add one
additional electric service consolidating the monthly usages of the new
service with another main service into a single point of delivery
metered at 16KV (the "Added Facilities"); and
WHEREAS, by memorandum dated August 4, 2015, the Director of
Gas & Electric has recommended that the City enter into an agreement
with Grand Packaging setting forth the terms and conditions under which
the City will design, engineer, procure, construct, install, own,
operate and maintain the Added Facilities, subject to the appropriate
costs being paid by Grand Packaging; and
WHEREAS, the City Council of the City of Vernon desires to
approve the Added Facilities Agreement with Grand Packaging.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the above recitals are true and correct.
SECTION 2: The City Council of the City of Vernon finds
that this action is exempt under the California Environmental Quality
Act (CEQA), in accordance with Section 15301(b), because this approval
will merely lead to the possible construction of additional laterals
and related meters to deliver electric service, and such construction
is, at most, a negligible expansion of the existing facilities of the
City's electric utility.
SECTION 3: The City Council of the City of Vernon hereby
approves the Added Facilities Agreement with Grand Packaging, Inc., in
substantially the same form as the copy which is attached hereto as
Exhibit A.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the Mayor or Mayor Pro-Tem to execute said Agreement for,
and on behalf of, the City of Vernon and the City Clerk, or Deputy City
Clerk, is hereby authorized to attest thereto.
SECTION 5: The City Council of the City of Vernon hereby
instructs the City Administrator, or his designee, to take whatever
actions are deemed necessary or desirable for the purpose of
implementing and carrying out the purposes of this Resolution and the
transactions herein approved or authorized, including but not limited
to, any non -substantive changes to the Agreement attached herein.
SECTION 6: The City Council of. the City of Vernon hereby
directs the City Clerk, or the Deputy City Clerk, to send a fully
executed Agreement to Grand Packaging.
- 2 -
SECTION 7: The City Clerk, or Deputy City Clerk, of the
City of Vernon shall certify to the passage, approval and adoption of
this resolution, and the City Clerk, or Deputy City Clerk, of the City
of Vernon shall cause this resolution and the City Clerk's, or Deputy
City Clerk's, certification to be entered in the File of Resolutions of
the Council of this City.
APPROVED AND ADOPTED this 4eh day of August, 2015.
ATTEST:
Aria cia
-CTt Cl-6M / Deputy City Clerk
APPROVED AS TO FORM:
U%,LI� �'�
Brian Byun, Deputy Y
ity Attorney
Name: W. Michael McCormick
Title: Mayor / ,Mayor—Pro—Tetir
- 3 -
STATE OF CALIFORNIA
) as
COUNTY OF LOS ANGELES
IAna B$KCBa C,rty,.C-l-r--k:4 Deputy City Clerk of the City
of Vernon, do hereby certify that the foregoing Resolution, being
Resolution No. 2015-53, was duly passed, approved and adopted by the
City Council of the City of Vernon at a regular meeting of the City
Council duly held on Tuesday, August 4, 2015, and thereafter was duly
signed by the Mayor or Mayor Pro-Tem of the City of Vernon.
Executed this rj day of August, 2015, at Vernon, California.
(SEAL)
- 4 -
Ana $ar
Ci Ey-Cie-rer_/ Deputy City Clerk
THE CITY OF VERNON
ADDED FACILITIES AGREEMENT (CITY FINANCED)
1. PARTIES: The Parties to this Added Facilities Agreement ("Agreement") are Grand
Packaging, Inc., a California corporation ("Customer") and the City of Vernon, a California
municipal corporation ("City"), hereinafter referred to individually as "Party" and
collectively as "Parties."
2. RECITALS:
2.1 Customer's property is located at 3840 E. 26°i Street, Vernon, California (the "Property").
Customer manufactures and distributes carry bags for retailers, the food -service industry,
and restaurants in the United States.
2.2 Customer currently receives electric services through several points of delivery and has
requested to add one additional electric service. Customer wishes to consolidate the
monthly usages of the new service with another main service into a single point of delivery
metered at 16KV. Both services will be served from the same primary 16KV wireline
entering the western portion of the Property.
2.3 Parties agree that City shall provide the design, engineering, procurement, construction,
installation, ownership, and maintenance of the electric facilities described in Exhibit A,
and hereinafter referred to as "Added Facilities," the cost of which shall be borne by the
Customer and which will be located at the service address as shown in Exhibit A. Added
Facilities consist of two 2,500 KVA, 16KV pad -mounted transformers, primary metering
equipment, poles, wires, cables and material for the benefit of the Customer in the location
and on the terms and conditions set forth in this Agreement.
3. AGREEMENT: Parties agree to the terms and conditions set forth herein, including
Exhibits A through C, referenced in Section 2.1, attached hereto and incorporated herein.
4. EFFECTIVE DATE AND TERM:
4.1 This Agreement shall be effective and binding upon execution by the Parties and upon
approval by the City Council of the City of Vernon. Subject to Customer's fulfillment of
the conditions precedent set forth in section 19 below, City will use its best efforts to have
the Added Facilities installed and operational such that electric service under the
Agreement may begin by August 17, 2015.
4.2 This Agreement shall continue in effect until Customer gives notice of termination of
service in accordance with Vernon's Rules for Electric Service (as amended, the "Electric
Service Rules"), or this Agreement is terminated by City due to an Event of Default by
Customer; provided, however, that if this Agreement is terminated, all unpaid Added
Facilities Monthly Charges due through the date of termination, and the Termination Fee,
as described in Appendix 1 of Exhibit B, must be paid in frill prior to the effective date of
termination of this Agreement. No election to terminate this Agreement shall be effective
unless and until such costs, including the Termination Fee, as described in Exhibit B, are
paid in full.
5. DEFINITIONS: The following terms, when used herein with initial capitalization, whether
in the singular or the plural, shall have the following meanings:
5.1 Added Facilities: The facilities to be constructed as specified in Exhibit A attached hereto
and incorporated herein by reference, which are being allocated for the Customer's use and
benefit as Added Facilities as well as replacements or betterments associated therewith.
5.2 Added Facilities Installation Cost: All costs associated with the design, engineering,
procurement, constriction and installation of the Added Facilities.
5.3 Added Facilities Monthly Rate: The Added Facilities Monthly Rate pursuant to Exhibit B
5.4 Agreement and Amendments: This Agreement, including all attachments and exhibits
hereto, as may be amended from time to time. Modifications and amendments to this
Agreement shall be valid and enforceable only if in writing and signed by the Parties. In
the event the final cost of the Added Facilities exceeds or is below the estimated value
outlined in Exhibit B, the Added Facilities Installation Cost will reflect such a change in
capital cost; unless such cost exceeds 20% of the estimate, in which case the Added
Facilities Installation Cost may only increase by 20%.
5.5 Added Facilities Monthly Charge: The charge to Customer for Added Facilities that is
payable monthly to City as outlined in Exhibit B. The Added Facilities Monthly Charge
recovers the Added Facilities Installation Cost, replacement cost, and operations and
maintenance cost.
5.6 Services: The design, engineering, procurement, construction, installation, ownership,
operation and maintenance of the Added Facilities.
6. ADDED FACILITIES:
6.1 City shall design, engineer, procure, construct, install, own, operate, and maintain the
Added Facilities. Subject to Customer's fulfillment of the conditions precedent set forth
in section 19 below, City will use its best efforts to install the Added Facilities so that they
are fully operational by August 17, 2015, at which time, the charges outlined in Exhibit B
will commence. Added Facilities shall at all times remain the property of City.
6.2 City shall commence performance of the design and construction of the Added Facilities
upon full execution of this Agreement and Customer's fulfillment of all conditions
precedent set forth in section 19 below. Vernon shall complete the installation of the Added
Facilities per Project Schedule, Exhibit C, after the effective date of this Agreement.
However, City shall not be liable for any cost or damage incurred by Customer because of
any delay in the completion of the installation of any Added Facilities. Should the Added
Facilities not be completed by August t7, 2015, the charges outlined in Exhibit B shall be
abated until such time as the Added Facilities are installed and operational.
2
6.3 City shall construct and maintain the Added Facilities diligently and pursuant to all
applicable federal, state and local safety codes, regulations, and laws, including but not
limited to the requirements of California's General Orders No. 95, 128 and 165.
Additionally, and included in the Added Facilities Installation Cost outlined in Exhibit B,
Customer shall have the exclusive right of use of the Added Facilities; provided, however,
that if City, at its sole cost and expense, makes any improvements or additions to the Added
Facilities beyond the scope of the Customer's plans and specifications as described in
Exhibit A, then Customer's use of the Added Facilities shall be non-exclusive; provided,
however, that City shall in all events be required to provide to the Customer the full use of
the Added Facilities as originally constructed pursuant to the Customer's plans and
specifications. Such improvements shall be reasonably coordinated with Customer prior
to any such improvements made in order to avoid interruption of Customer's operations.
7. CHARGES
7.1 Customer shall pay to City the charges outlined in Exhibit B as payment for all costs
incurred by City for designing, engineering, procuring, constructing, installing, owning,
operating, and maintaining the Added Facilities.
If at any time Customer requests upgrades to the Added Facilities for Customer's
convenience, City shall determine if such upgrades are feasible. If such upgrades are made
at Customer's request for Customer's convenience and benefit, the costs shall be paid by
Customer at the times and on the basis as agrees( to by the Parties at the time.
8. MODIFICATIONS OR REPLACEMENT OF ADDED FACILITIES: Whenever Added
Facilities are repaired or replaced due to damage or equipment failure, the work shall be
completed at City's sole expense in accordance with good utility practice, unless the
damage or equipment failure is caused by or due to action or inaction by the Customer, in
which case the Customer shall be solely responsible for the entire cost of repair or
replacement. Where an upgrade of Added Facilities is required for City's convenience or
necessity, no increase shall be made in the investment amount for Added Facilities or the
Added Facilities Installation Cost. City shall be responsible for all routine maintenance
and repairs required to maintain the Added Facilities in good operating condition and shall
make those capital expenditures (including capital repairs and replacements, as necessary)
required to maintain the Added Facilities.
9. RIGHT-OF-WAY: Customer hereby grants to City the right of ingress to and egress from
Customer's Property as determined by City in its sole discretion for any purpose connected
with the construction, operation, and maintenance of the Added Facilities. Customer
agrees to provide right-of-way or easements of sufficient space to provide legal clearance
from all structures now or hereafter erected on Customer's Property for any facilities of
City. Customer will promptly execute a recordable document evidencing the above
described right of ingress and egress and right-of-way or easement, with the recordation
costs to be borne by City.
10. BILLING AND PAYMENT:
3
10.1 City shall prepare and deliver monthly bills to Customer for the Added Facilities Monthly
Charge.
10.2 The Customer shall pay City the charges outlined in Exhibit B concurrently with its electric
service bills. Late charges will be applied pursuant to the City's Electric Service Rules.
NOTICES: Except as otherwise provided in this Agreement, any notice, demand, or request
provided for in this Agreement, or served, given, or made in connection with the Agreement, shall
be in writing and shall be deemed properly served, given, or made if delivered in person, or sent
by United States Mail, postage prepaid, or sent by reputable overnight delivery service, to the
address specified below:
Company: Grand Packaging, Inc.
3 840 E. 26 ' ' , Street
Attn: Albert Hatimi
Telephone- 323-446-3302
Email: ahalimi@commandpackaging.com
Vernon: City of Vernon
Vernon Gas & Electric Department
Attn: Carlos Fandino, Director
4305 Santa Fe Avenue
Vernon, CA 90058
Copy to: Vernon City Attorney's Office
Attn: Ilema Patel, City Attorney
4305 Santa Fe Avenue
Vernon, CA 90058
Either Party may at any time, by notice to the other Party, change the designation or address of the
person so specified as the one to receive notices pursuant to this Agreement. Notices are deemed
given and received on the date of delivery or attempted delivery, if delivery is not accepted.
11. FORCE MAJEURE: Neither Party shall be considered to be in default in the performance
of any of its obligations under this Agreement (other than obligations to make payments
pursuant to this Agreement) when failure of performance shall be due to uncontrollable
forces. The term "uncontrollable forces" means any cause beyond the control of the Party
failing to perform, including, but not restricted to, failure of facilities, flood, earthquake,
storm, lightning, fire, epidemic, war, riot, terrorism, civil disturbance or disobedience,
labor dispute, labor or material shortage, sabotage, restraint by court order or public
authority, and action or non -action by, or inability to obtain the necessary authorizations
or approvals from, any governmental agency or authority which by exercise of due
diligence such Party could not reasonably have been expected to avoid and which by
exercise of due diligence it has not overcome. Either Party rendered unable to fulfill any
of its obligations under this Agreement by reason of an uncontrollable force shall give
prompt written notice of such fact to the other Party and shall exercise due diligence to
4
remove such liability. Nothing contained herein shall be construed to require a Party to
settle any strike or labor dispute in which it may be involved.
12. INDEMNIFICATION AND LIMITATIONS ON LIABILITY:
12.1 Except to the extent of Vernon Gas & Electric's gross negligence or willful misconduct,
Customer agrees to indemnify, defend, and hold harmless City of and from any and all
claims, causes of action, damages and judgments arising out of any act or omission of City,
and its respective officers, directors, employees and agents that may have caused injury or
damage to any person, or to the equipment, fixtures, goods, products, or other property of
the Customer, the Customer's employees, contractors, invitees, customers, or any other
person in or about the Property, regardless of cause or whether or not such injury or damage
results from conditions arising from Services provided by City hereunder or the
installation, operation or maintenance of the Added Facilities or any failure of the Added
Facilities to deliver electrical power or any defect in the Added Facilities, or explosion,
tire, or steam released from the Added Facilities.
12.2 Notwithstanding either Party's negligence or breach of this Agreement, under no
circumstances shall either Party be liable to the other Party for indirect, special, or
consequential loss, damage, claim, cost, charge, or expense including, but not limited to,
loss of business or any loss of income or profit therefrom, loss of use of a Party's facilities,
loss of revenue, cost of replacement power or water, and claims of any third party,
including any customer of the other Party.
13. ENTIRE AGREEMENT: This Agreement, including Exhibits A-C, constitutes the
complete and final expression of the agreement between the Parties and is intended as a
complete and exclusive statement of the terms of their agreement which supersedes all
prior and contemporaneous offers, promises, representations, negotiations, discussions,
communications, and other agreements which may have been made in connection with
the subject matter of this Agreement.
14. RELATIONSHIP OF PARTIES: The covenants, obligations, and liabilities of the Parties
are intended to be several and not joint or collective, and nothing contained in this
Agreement shall ever be construed to create an association, joint venture, trust or
partnership, or to impose a trust or partnership covenant, obligation, or liability on or with
regard to either Party. Each Party shall be individually responsible for its own covenants,
obligations, and liabilities as provided in this Agreement. Neither Party shall be under the
control of the other Party. Neither Party shall be the agent of or have a right or power to
bind the other Party without such other Party's express written consent.
15. NO THIRD -PARTY RIGHTS: The parties do not intend to create rights in, or to grant
remedies to, any third Party as a beneficiary either of this Agreement or of any duty,
covenant, obligation, or undertaking established herein.
16. ARBITRATION: The Parties agree that any and all disputes arising out of or in relation
to this Agreement, including without limitation any action in tort, shall be resolved
exclusively, finally and conclusively by arbitration in Los Angeles County, California
5
under the auspices of and pursuant to the rules of the Judicial Arbitration & Mediation
Services, Inc. (JAMS). Each Party will select an arbitrator. Those two arbitrators will then
select a third. The three member panel will make the final decision. All decisions of the
arbitrators shall be in writing, and the arbitrators shall provide written reasons for their
decision. The arbitration decision shall be final, unappealable and binding on the parties.
Notwithstanding the foregoing, the Parties shall be permitted to access the court system to
enforce any arbitration award or to obtain injunctive relief. The exclusive jurisdiction and
venue for any such action shall be the Superior Court of California, Los Angeles County.
17. ATTORNEYS' FEES: If either Party institutes an action or legal proceeding arising out
of or related to this Agreement or the relationship of the Parties or their rights or duties in
connection with the matters set forth in this Agreement, whether sounding in tort, contract,
or otherwise, the prevailing Party in such action or proceeding shall be entitled to recover
from the other party all costs and expenses, including all costs and reasonable attorneys'
fees, in addition to any other remedy awarded by the arbitration panel.
18. INSURANCE: The Customer shall, for the duration of this Agreement, obtain and
maintain at its own expense, premises liability coverage with a minimum combined single
limit of $1,000,000 per occurrence and provide City with proof of insurance providing and
maintaining the coverages and endorsements set forth herein. Said proof of insurance shall
also provide that said policy or policies shall not be canceled or materially reduced in
coverage without giving at least thirty (30) days prior written notice to the City. The
insurance coverage as listed herein, shall be properly endorsed to include those contractual
obligations which may be identified further within this Agreement and shall be endorsed
to provide City all the rights and privileges of an additional insured. Customer shall cause
its insurers to issue, including but not limited to, Certificates of Insurance or, upon request,
certified copies of the insurance policies evidencing that the coverages and policy
endorsements required under this Agreement, are maintained in force.
19. CONDITIONS PRECEDENT: City's obligations umder this Agreement are subject to
the following conditions:
19.1 By its execution of this Agreement, Customer agrees to pay all costs incurred by City for
the design and construction of the Facilities according to the terms of this Agreement. If
Customer terminates this Agreement in writing during the design and construction
process, Customer shall be obligated to reimburse City for all costs incurred( and
committed to date, including, without limitation, costs of design and construction and
demolition and removal, which costs shall include costs of employees of Vernon and
costs paid to or owed to third party vendors.
19.2 Prior to the date on which City provides electrical service, Customer shall have obtained
and paid for all necessary local and state licenses and permits for operation of its business
including Vernon building, electrical and mechanical permits, health permit, certificate of
occupancy, business license, etc.
19.3 City shall not provide electrical service under this Agreement until Customer has notified
City in writing of its date of commencing operations, which shall not occur prior to the
6
date on which Customer has obtained all of the licenses and permits described in Section
19.2 above.
20. EVENTS OF DEFAULT: Any default described herein that is not cured by the
Customer within ten (10) days of delivery of notice of default shall constitute an "Event
of Default"; provided, however, that such default shall not constitute an Event of Default
if Customer commences to cure the default within such ten (10) day period and diligently
prosecutes the cure to completion. City shall have the right, at its option, to terminate
this Agreement and to demand payment as described herein upon the occurrence of an
"Event of Default." Upon demand by City following an Event of Default, Customer shall
immediately pay all accrued and unpaid amounts of the Monthly Charges as of the date
of termination and the Termination Fee, as described in Appendix 1 to Exhibit B,
calculated as of the date of termination. Customer shall be given ten (10) days written
notice of any Event of Default with a request that Customer care said default. The
termination of the obligations of City will not terminate the obligation of Customer until
Customer has repaid City for any costs incurred pursuant to this Agreement. Each of the
following shall constitute an Event of Default:
20.1 Customer relocates outside Vernon prior to the date on which the Added Facilities
Installation Cost has been paid in full.
20.2 Customer breaches or defaults under any term, condition, provision, representation, or
warranty in this Agreement, if that breach or default shall continue for ten (10) days after
notice of the breach or default to Customer from Vernon Gas & Electric.
20.3 Occurrence of any of the following: (i) the making of any general arrangement or
assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C.
§ 101 or any successor statute thereto (unless, in the case of an involuntary petition filed
against Customer, the same is dismissed within 60 days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Customer's assets located at
the Property, where possession is not restored to Customer within 30 clays; or (iv) the
attachment, execution or other judicial seizure of substantially all of Customer's assets
located at the Property, where such seizure is not discharged within 30 clays; provided,
however, in the event that any provision of this subparagraph is contrary to any
applicable law, such provision shall be of no force or effect, and not affect the validity of
the remaining provisions.
21. ASSIGNMENT: This Agreement shall bind and inure to the benefit of the Parties and
their respective successors and assigns; provided however, that Customer shall not assign
this Agreement or any of its rights, duties, or obligations without the prior written consent
of Vernon Gas & Electric, which consent shall not be unreasonably withheld.
22. NO WAIVER: No delay or omission to exercise any right, power or remedy accruing to
a Party on any breach or default of the other Party under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any such breach
or default, or any acquiescence in such breach or default occurring later; nor shall any
waiver of any single breach or default be considered a waiver of any other prior or
subsequent breach or default. Any waiver, permit, consent, or approval of any kind by a
party of any breach or default under this Agreement, or any waiver of any provisions or
condition of this Agreement, must be in writing and shall be effective only to the extent
specifically set forth in that writing.
23. REMEDIES: All remedies, either under this Agreement or by law or otherwise afforded
to a Party, shall be cumulative and not alternative.
24. HEADINGS NOT BINDING.: The use of headings in this Agreement is only for ease of
reference, shall have no legal effect and are not to be considered pail or a term of this
Agreement.
25. SEVERABILITY: If any portion of this Agreement shall be held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions shall
remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each portion of
this Agreement containing any provision held to be invalid, void, or otherwise
unenforceable that is not itself invalid, void, or enforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, void, or unenforceable.
26. GOVERNING LAW: This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of California, without regard to its conflict of laws
rules.
27. COUNTERPARTS: This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but all of which, taken together, shall constitute one and the
same agreement.
28. In the event of a conflict between this Agreement and any other rules or agreements issued
by the City of Vernon governing the Added Facilities, this Agreement shall control.
29. SIGNATURE CLAUSE: The signatories hereto represent that they have been
appropriately authorized to enter into this Agreement on behalf of the Party for whom they
sign. This Agreement is hereby executed as of
THE CITY OF VERNON
By:
W. Michael McCormick, Mayor
ATTEST:
Maria E. Ayala, City Clerk
APPROVED AS TO FORM:
Brian W. Byun, Deputy City Attorney
CUSTOMER
By:
Name:
Title:
By:
9
ADDED FACILITIES PLANS AND SPECIFICATIONS
Service Address:
3840 E. 26""' Street
Vernon, CA 90058
Facilities
3840 E.26[" Street, Vernon CA 90058
'rotal Added Facilities (I):
Investment
a. New Facilities
$127,000
b. Existing Facilities
_
$45,000
c. Calculated Replacement Cost
$68,800
d. Total cost of Added Facilities
$172,000
(1) Labor:
$52,561
Equipment:
$6,272
Material:
$113,167
Total:
$172,000
City's 16kV Circuit
NEW POLE 3509VP M)- PRIMARY METER
EXISTING POLE 2365VP 2500KVA
-- �A 16KV
277/480V
EXISTING POLE 1867VP
2500KVA
16KV
277/480V
10
i�r
ADDED FACILITIES MONTHLY CHARGE
Customer shall pay a monthly added facilities charge at the rate set below. The rate is based
on it percentage of the Added Facilities Installation Cost.
1. Added Facilities Monthly Rate (1) 1.00%
2. Added Facilities Installation Cost (2) $172,000
3. Added Facilities Monthly Charge $1,720.00
(1) Pursuant to Rule 2.11
(2) Pursuant to Exhibit A to this Agreement
11
TERMINATION FEE
If this Agreement is terminated by Customer for any reason, or by City due to an Event of
Default by Customer, prior to full repayment of the Added Facilities Installation Cost, Customer
shall pay City in full the Termination Fee calculated as set forth below:
Added Facilities Installation Cost to be recovered at the time of
termination:
® Added Facilities Installation Cost less 0.667% of the Added
Facilities Monthly Charges paid through the date of termination
® Plus: Cost of Upgrades made at Customer's request for Customer's convenience (if any).
• Plus: Demolition and Removal cost (if applicable).
® Plus: Other documented costs actually incurred by City (such as insurance, taxes,
cancellation fees, etc., if any),
12
City Council Approval:
Construction Start Date:
Construction Completion date:
EXHIBIT C
PROJECTSCHEDULE
August 4, 2015
August 7, 2015
August 17, 2015
13
� � s 1
i �?,, � `� � 1� � � '? i ( � y
i
r
V, 1�
Iry
L c•� r�v�.i
OFFICE OF THE CITY CLERK
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
August 10, 2015
Grand Packaging, Inc.
Attn: Albert Elalimi
3840 E 26"' Street
Vernon, CA 90058
Re: Added Facilities Agreement — Grand Packaging, Inc.
Dear Mr. Elalimi:
Transmitted herewith is an original fully executed agreement, as referenced above, approved by
City Council on August 4, 2015, through Resolution No. 2015-53.
If you have any questions regarding this matter, please contact Ali Nour at (323) 583-88 11 Est,
316.
Very truly yours,
Deborah R. Juarez
Records Management Assistant
Enclosure
Carlos Fandino
Ali Nour
Anthony Serrano
Resolution No. 2015-53
Agreement File No. 15-077
EXcrusivefy Industriaf
r � r . f• u
CONTRACT/AMENDMENT SIGNATURE ROUTING FORM
CONTRACTOR: a? �
CONTRACT PURPOSE:
CONTRACT IS: ❑ FEDERAL ❑ PREVAIL.ING WAGE ❑ COMPETITIVE SELECTION & NOTICED REP
❑ COMPETITIVE BID & NOTICED INVITATION TO BID
❑ EXEMPT FROM COMPETITIVE PROCESS (APPROVAL ATTACHED)
SERVICES Ll MATERIALS O BUDGETED O NOT BUDGETED
"TOTAL CONTRACT VALUE: S Charge Acct. No(s)
Amendment Value $ ❑ Contract is an Amendment to Contract No. (if applicable)
RESPONSIBLE DEPARTMENT PERSON: ^Iz/ y PHONE: ext. 16
AUTHORIZATION: Approved by Council on P /- /C
(Check One) Resolution No. ( f applicable)
❑ Approved by City Administrator on
Note: Attach supporting documentation
❑Amendment Approved by (if applicable)
ROUTING SEQUENCE: (Please Follow In Order - Do not use N/A) Initials Date
(1) Responsible Department Person
Checks substance of contract and assembles two (2) copies of & /�/ t�
contract, insurance & bond documents, certifies compliance
with Competitive Bidding and Purchasing Ordinance
(2) Liability and Claims ( -J 'Pro, I
Approves insurance and sureties, if bonds required !
(3) Finance (Purchasing) ,�
Checks compliance with Competitive Bidding & Living Wage Ordinances
and reflected in Current budget
(4) City Attorney � J
Approves contract as to form, verifies bonds and insurance/l�",[included 4
(5) City Signatory
Signs all copies on behalf of City
(6) City Clerk
Attests signatures, numbers, files contract, insurance and bonds, and
transmits duplicate original to contractor, notifies IT to remove related RFP/bid `
notice, notifies any "consultant" of duties to Tile Form 700, if applicable
Rev. uz7nn
THE CITY OF VERNON
ADDED FACILITIES AGREEMENT (CITY FINANCED)
1. PARTIES: The Parties to this Added Facilities Agreement ("Agreement") are Grand
Packaging, Inc., a California corporation ("Customer") and the City of Vernon, a California
municipal corporation ("City"), hereinafter referred to individually as "Party" and
collectively as "Parties."
2. RECITALS'
2.1 Customer's property is located at 3840 E. 26s' Street, Vernon, California (the "Property"),
Customer manufactures and distributes carry bags for retailers, the food -service industry,
and restaurants in the United States.
2.2 Customer currently receives electric services through several points of delivery and has
requested to add one additional electric service. Customer wishes to consolidate the
monthly usages of the new service with another main service into a single point of delivery
metered at 16KV. Both services will be served from the same primary 16KV wireline
entering the western portion of the Property.
2.3 Parties agree that City shall provide the design, engineering, procurement, construction,
installation, ownership, and maintenance of the electric facilities described in Exhibit A,
and hereinafter referred to as "Added Facilities," the cost of which shall be borne by the
Customer and which will be located at the service address as shown in Exhibit A. Added
Facilities consist of two 2,500 KVA, 16KV pad -mounted transformers, primary metering
equipment, poles, wires, cables and material for the benefit of the Customer in the location
and on the terms and conditions set forth in this Agreement.
3. AGREEMENT: Parties agree to the terms and conditions set forth herein, including
Exhibits A through C, referenced in Section 2.1, attached hereto and incorporated herein.
4. EFFECTIVE DATE AND TERM:
4.1 This Agreement shall be effective and binding upon execution by the Parties and upon
approval by the City Council of the City of Vernon. Subject to Customer's fulfillment of
the conditions precedent set forth in section 19 below, City will use its best efforts to have
the Added Facilities installed and operational such that electric service under the
Agreement may begin by August 17, 2015.
4.2 This Agreement shall continue in effect until Customer gives notice of termination of
service in accordance with Vernon's Rules for Electric Service (as amended, the "Electric
Service Rules"), or this Agreement is terminated by City due to an Event of Default by
Customer; provided, however, that if this Agreement is terminated, all unpaid Added
Facilities Monthly Charges due through the date of termination, and the Termination Fee,
as described in Appendix 1 of Exhibit B, must be paid in fill prior to the effective date of
termination of this Agreement. No election to terminate this Agreement shall be effective
unless and until such costs, including the Termination Fee, as described in Exhibit B, are
paid in full.
5 DEFINITIONS: The following terms, when used herein with initial capitalization, whether
in the singular or the plural, shall have the following meanings:
5.1 Added Facilities: The facilities to be constructed as specified in Exhibit A attached hereto
and incorporated herein by reference, which are being allocated for the Customer's use and
benefit as Added Facilities as well as replacements or betterments associated therewith.
5.2 Added Facilities Installation Cost: All costs associated with the design, engineering,
procurement, construction and installation of the Added Facilities,
5.3 Added Facilities Monthly Rate: The Added Facilities Monthly Rate pursuant to Exhibit B
5.4 Agreement and Amendments: This Agreement, including all attachments and exhibits
hereto, as may be amended from time to time. Modifications and amendments to this
Agreement shall be valid and enforceable only if in writing and signed by the Parties. In
the event the final cost of the Added Facilities exceeds or is below the estimated value
outlined in Exhibit B, the Added Facilities Installation Cost will reflect such a change in
capital cost; unless such cost exceeds 20% of the estimate, in which case the Added
Facilities Installation Cost may only increase by 20%.
5.5 Added Facilities Monthly Charge_The charge to Customer for Added Facilities that is
payable monthly to City as outlined in Exhibit B. The Added Facilities Monthly Charge
recovers the Added Facilities Installation Cost, replacement cost, and operations and
maintenance cost.
5.6 Services: The design, engineering, procurement, construction, installation, ownership,
operation and maintenance of the Added Facilities.
6. ADDED FACILITIES:
6.1 City shall design, engineer, procure, construct, install, own, operate, and maintain the
Added Facilities. Subject to Customer's fulfillment of the conditions precedent set forth
in section 19 below, City will use its best efforts to install the Added Facilities so that they
are fully operational by August 17, 2015, at which time, the charges outlined in Exhibit B
will commence. Added Facilities shall at all times remain the property of City.
6.2 City shall commence performance of the design and construction of the Added Facilities
upon full execution of this Agreement and Customer's fulfillment of all conditions
precedent set forth in section 19 below. Vernon shall complete the installation of the Added
Facilities per Project Schedule, Exhibit C, after the effective date of this Agreement.
However, City shall not be liable for any cost or damage incurred by Customer because of
any delay in the completion of the installation of any Added Facilities. Should the Added
Facilities not be completed by August 17, 2015, the charges outlined in Exhibit B shall be
abated until such time as the Added Facilities are installed and operational.
2
6.3 City shall construct and maintain the Added Facilities diligently and pursuant to all
applicable federal, state and local safety codes, regulations, and laws, including but not
limited to the requirements of California's General Orders No. 95, 128 and 165.
Additionally, and included in the Added Facilities Installation Cost outlined in Exhibit B,
Customer shall have the exclusive right of use of the Added Facilities; provided, however,
that if City, at its sole cost and expense, makes any improvements or additions to the Added
Facilities beyond the scope of the Customer's plans and specifications as described in
Exhibit A, then Customer's use of the Added Facilities shall be non-exclusive; provided,
however, that City shall in all events be required to provide to the Customer the full use of
the Added Facilities as originally constructed pursuant to the Customer's plans and
specifications. Such improvements shall be reasonably coordinated with Customer prior
to any such improvements made in order to avoid interruption of Customer's operations.
7. CHARGES
7.1 Customer shall pay to City the charges outlined in Exhibit B as payment for all costs
incurred by City for designing, engineering, procuring, constructing, installing, owning,
operating, and maintaining the Added Facilities.
If at any time Customer requests upgrades to the Added Facilities for Customer's
convenience, City shall determine if such upgrades are feasible. If such upgrades are made
at Customer's request for Customer's convenience and benefit, the costs shall be paid by
Customer at the times and on the basis as agreed to by the Parties at the time.
8. MODIFICATIONS OR REPLACEMENT OF ADDED FACILITIES: Whenever Added
Facilities are repaired or replaced due to damage or equipment failure, the work shall be
completed at City's sole expense in accordance with good utility practice, unless the
damage or equipment failure is caused by or due to action or inaction by the Customer, in
which case the Customer shall be solely responsible for the entire cost of repair or
replacement. Where an upgrade of Added Facilities is required for City's convenience or
necessity, no increase shall be made in the investment amount for Added Facilities or the
Added Facilities Installation Cost. City shall be responsible for all routine maintenance
and repairs required to maintain the Added Facilities in good operating condition and shall
make those capital expenditures (including capital repairs and replacements, as necessary)
required to maintain the Added Facilities,
9. RIGHT-OF-WAY: Customer hereby grants to City the right of ingress to and egress from
Customer's Property as determined by City in its sole discretion for any purpose connected
with the construction, operation, and maintenance of the Added Facilities. Customer
agrees to provide right-of-way or easements of sufficient space to provide legal clearance
from all structures now or hereafter erected on Customer's Property for any facilities of
City. Customer will promptly execute a recordable document evidencing the above
described right of ingress and egress and right-of-way or easement, with the recordation
costs to be borne by City.
3
10. BILL,ING AND PAYMENT
10.1 City shall prepare and deliver monthly bills to Customer for the Added Facilities Monthly
Charge.
10.2 The Customer shall pay City the charges outlined in Exhibit B concurrently with its electric
service bills. bate charges will be applied pursuant to the City's Electric Service Rules.
NOTICES: Except as otherwise provided in this Agreement, any notice, demand, or request
provided for in this Agreement, or served, given, or made in connection with the Agreement, shall
be in writing and shall be deemed properly served, given, or made if delivered in person, or sent
by United States Mail, postage prepaid, or sent by reputable overnight delivery service, to the
address specified below:
Company: Grand Packaging, Inc.
3840 E. 26 Tx Street
Attn: Albert Halimi
Telephone- 323-446-3302
Email: ahalimi@commandpackaging.com
Vernon: City of Vernon
Vernon Gas & Electric Department
Attn: Carlos Fandino, Director
4305 Santa Fe Avenue
Vernon, CA 90058
Copy to: Vernon City Attorney's Office
Attn: I3ema Patel, City Attorney
4305 Santa Fe Avenue
Vernon, CA 90058
Either Party may at any time, by notice to the other Party, change the designation or address of the
person so specified as the one to receive notices pursuant to this Agreement. Notices are deemed
given and received on the date of delivery or attempted delivery, if delivery is not accepted.
11. FORCE MAJEURE: Neither Party shall be considered to be in default in the performance
of any of its obligations under this Agreement (other than obligations to make payments
pursuant to this Agreement) when failure of performance shall be due to uncontrollable
forces. The term "uncontrollable forces" means any cause beyond the control of the Party
failing to perform, including, but not restricted to, failure of facilities, flood, earthquake,
storm, lightning, fire, epidemic, war, riot, terrorism, civil disturbance or disobedience,
labor dispute, labor or material shortage, sabotage, restraint by court order or public
authority, and action or non -action by, or inability to obtain the necessary authorizations
or approvals from, any governmental agency or authority which by exercise of due
diligence such Party could not reasonably have been expected to avoid and which by
exercise of due diligence it has not overcome. Either Party rendered unable to fulfill any
of its obligations under this Agreement by reason of an uncontrollable force shall give
1]
prompt written notice of such fact to the other Party and shall exercise due diligence to
remove such liability. Nothing contained herein shall be construed to require a Party to
settle any strike or labor dispute in which it may be involved.
12. INDEMNIFICATION AND LIMITATIONS ON LIABILITY:
12.1 Except to the extent of Vernon Gas & Electric's gross negligence or willful misconduct,
Customer agrees to indemnify, defend, and hold harmless City of and from any and all
claims, causes of action, damages and judgments arising out of any act or omission of City,
and its respective officers, directors, employees and agents that may have caused injury or
damage to any person, or to the equipment, fixtures, goods, products, or other property of
the Customer, the Customer's employees, contractors, invitees, customers, or any other
person in or about the Property, regardless of cause or whether or not such injury or damage
results from conditions arising from Services provided by City hereunder or the
installation, operation or maintenance of the Added Facilities or any failure of the Added
Facilities to deliver electrical power or any defect in the Added Facilities, or explosion,
fire, or steam released from the Added Facilities.
12.2 Notwithstanding either Party's negligence or breach of this Agreement, under no
circumstances shall either Party be liable to the other Party for indirect, special, or
consequential loss, damage, claim, cost, charge, or expense including, but not limited to,
loss of business or any loss of income or profit therefrom, loss of use of a Party's facilities,
loss of revenue, cost of replacement power or water, and claims of any third party,
including any customer of the other Party.
13. ENTIRE AGREEMENT: This Agreement, including Exhibits A-C, constitutes the
complete and final expression of the agreement between the Parties and is intended as a
complete and exclusive statement of the terms of their agreement which supersedes all
prior and contemporaneous offers, promises, representations, negotiations, discussions,
communications, and other agreements which may have been made in connection with
the subject matter of this Agreement.
14. RELATIONSHIP OF PARTIES: The covenants, obligations, and liabilities of the Parties
are intended to be several and not joint or collective, and nothing contained in this
Agreement shall ever be construed to create an association, joint venture, trust or
partnership, or to impose a trust or partnership covenant, obligation, or liability on or with
regard to either Party. Each Party shall be individually responsible for its own covenants,
obligations, and liabilities as provided in this Agreement. Neither Party shall be under the
control of the other Party. Neither Party shall be the agent of or have a right or power to
bind the other Party without such other Party's express written consent.
15. NO THIRD -PARTY RIGHTS: The parties do not intend to create rights in, or to grant
remedies to, any third Party as a beneficiary either of this Agreement or of any duty,
covenant, obligation, or undertaking established herein.
16. ARBITRATION: The Parties agree that any and all disputes arising out of or in relation
to this Agreement, including without limitation any action in tort, shall be resolved
5
exclusively, finally and conclusively by arbitration in Los Angeles County, California
under the auspices of and pursuant to the rules of the Judicial Arbitration & Mediation
Services, Inc. (JAMS). Each Party will select an arbitrator. Those two arbitrators will then
select a third. The three member panel will make the final decision. All decisions of the
arbitrators shall be in writing, and the arbitrators shall provide written reasons for their
decision. The arbitration decision shall be final, unappealable and binding on the parties.
Notwithstanding the foregoing, the Parties shall be permitted to access the court system to
enforce any arbitration award or to obtain injunctive relief The exclusive jurisdiction and
venue for any such action shall be the Superior Court of California, Los Angeles County.
17, ATTORNEYS' FEES: If either Party institutes an action or legal proceeding arising out
of or related to this Agreement or the relationship of the Parties or their rights or duties in
connection with the matters set forth in this Agreement, whether sounding in tort, contract,
or otherwise, the prevailing Party in such action or proceeding shall be entitled to recover
from the other party all costs and expenses, including all costs and reasonable attorneys'
fees, in addition to any other remedy awarded by the arbitration panel.
18. INSURANCE: The Customer shall, for the duration of this Agreement, obtain and
maintain at its own expense, premises liability coverage with a minimum combined single
limit of $1,000,000 per occurrence and provide City with proof of insurance providing and
maintaining the coverages and endorsements set forth herein. Said proof of insurance shall
also provide that said policy or policies shall not be canceled or materially reduced in
coverage without giving at least thirty (30) days prior written notice to the City. The
insurance coverage as listed herein, shall be properly endorsed to include those contractual
obligations which may be identified further within this Agreement and shall be endorsed
to provide City all the rights and privileges of an additional insured. Customer shall cause
its insurers to issue, including but not limited to, Certificates of Insurance or, upon request,
certified copies of the insurance policies evidencing that the coverages and policy
endorsements required under this Agreement, are maintained in force.
19. CONDITIONS PRECEDENT: City's obligations under this Agreement are subject to
the following conditions
19.1 By its execution of this Agreement, Customer agrees to pay all costs incurred by City for
the design and construction of the Facilities according to the terms of this Agreement. If
Customer terminates this Agreement in writing during the design and construction
process, Customer shall be obligated to reimburse City for all costs incurred and
committed to date, including, without limitation, costs of design and construction and
demolition and removal, which costs shall include costs of employees of Vernon and
costs paid to or owed to third party vendors.
19.2 Prior to the date on which City provides electrical service, Customer shall have obtained
and paid for all necessary local and state licenses and permits for operation of its business
including Vernon building, electrical and mechanical permits, health permit, certificate of
occupancy, business license, etc.
3
19.3 City shall not provide electrical service under this Agreement. until Customer has notified
City in writing of its date of commencing operations, which shall not occur prior to the
date on which Customer has obtained all of the licenses and permits described in Section
19.2 above.
20. EVENTS OF DEFAULT: Any default described herein that is not cured by the
Customer within ten (10) days of delivery of notice of default shall constitute an "Event
of Default", provided, however, that such default shall not constitute an Event of Default
if Customer commences to cure the default within such ten (10) day period and diligently
prosecutes the cure to completion. City shall have the right, at its option, to terminate
this Agreement and to demand payment as described herein upon the occurrence of an
"Event of Default." Upon demand by City following an Event of Default, Customer shall
immediately pay all accrued and unpaid amounts of the Monthly Charges as of the date
of termination and the Termination Fee, as described in Appendix 1 to Exhibit B,
calculated as of the date of termination. Customer shall be given ten (10) days written
notice of any Event of Default with a request that Customer cure said default. The
termination of the obligations of City will not terminate the obligation of Customer until
Customer has repaid City for any costs incurred pursuant to this Agreement. Each of the
following shall constitute an Event of Default:
20.1 Customer relocates outside Vernon prior to the date on which the Added Facilities
Installation Cost has been paid in full.
20.2 Customer breaches or defaults under any term, condition, provision, representation, or
warranty in this Agreement, if that breach or default shall continue for ten (10) days after
notice of the breach or default to Customer from Vernon Gas & Electric.
20.3 Occurrence of any of the following: (i) the making of any general arrangement or
assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.
§ 101 or any successor statute thereto (unless, in the case of an involuntary petition filed
against Customer, the same is dismissed within 60 days), (in) the appointment of a
trustee or receiver to take possession of substantially all of Customer's assets located at
the Property, where possession is not restored to Customer within 30 days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Customer's assets
located at the Property, where such seizure is not discharged within 30 days; provided,
however, in the event that any provision of this subparagraph is contrary to any
applicable law, such provision shall be of no force or effect, and not affect the validity of
the remaining provisions.
21. ASSIGNMENT: This Agreement shall bind and inure to the benefit of the Parties and
their respective successors and assigns, provided however, that Customer shall not assign
this Agreement or any of its rights, duties, or obligations without the prior written consent
of Vernon Gas & Electric, which consent shall not be unreasonably withheld.
22. NO WAIVER: No delay or omission to exercise any right, power or remedy accruing to
a Party on any breach or default of the other Party under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any such breach
7
or default, or any acquiescence in such breach or default occurring later; nor shalt any
waiver of any single breach or default be considered a waiver of any other prior or
subsequent breach or default. Any waiver, permit, consent, or approval of any kind by a
party of any breach or default under this Agreement, or any waiver of any provisions or
condition of this Agreement, must be in writing and shall be effective only to the extent
specifically set forth in that writing.
23. REMEDIES: All remedies, either under this Agreement or by law or otherwise afforded
to a Party, shall be cumulative and not alternative.
24. HEADINGS NOT BINDING: The use of headings in this Agreement is only for ease of
reference, shall have no legal effect and are not to be considered part or a term of this
Agreement.
25, SEVERABILITY: If any portion of this Agreement shall be held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions shall
remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each portion of
this Agreement containing any provision held to be invalid, void, or otherwise
unenforceable that is not itself invalid, void, or enforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, void, or unenforceable.
26. GOVERNING LAW: This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of California, without regard to its conflict of laws
rules.
27. COUNTERPARTS: This Agreement maybe executed in counterparts, each of which shall
be deemed to be an original, but all of which, taken together, shall constitute one and the
same agreement.
28. In the event of a conflict between this Agreement and any other rules or agreements issued
by the City of Vernon governing the Added Facilities, this Agreement shall control.
29. SIGNATURE CLAUSE: The signatories hereto represent that they have been
appropriately authorized to enter into this Agreement on behalf of the Party for whom they
sign. This Agreement is hereby executed as of
CUSTOM�,'.R _� I (
i' i`1 t ✓�
Name: �._ Y��!d%'-� �-�. �- � �✓�
f
Title:
By:
Title:
THE CITY OF VERNON
W. Michael McCormick, Mayor
ATTEST:
Maria ?. Ayala, CS Clerk
APPROVED AS TO FORM:
Ale
Brian W. Byun, Deputy , ity Attorney
EXHIBIT A
ADDED FACILITIES PLANS AND SPECIFICATIONS
Service Address:
3840 E. 26Trt Street
Vernon, CA 90058
Facilities
3840 E. 26" I Street, Vernon CA 90058
Total Added Facilities (IF
Investment
a, New Facilities
$127,000
b. Existing Facilities
$45,000
e. Calculated Replacement Cost
$68,800
d_ Total cost of Added Facilities
$172,000
(1) Labor:
$52,561
Equipment:
$6,272
Material:
$113,167
Total:
$172,000
Clty's 1 6kV Circuit
NE1IV POLE 35XNP (\/L; PRIMARY METER
EXISTING POLE 23G5VP
EXISTING POLE 1867VP
:<.......,tt 2500KVA
BKV
\s..a... 2500KVA
WKV
2771480V
10
EXHIBIT B
ADDED FACILTTIES MONTHLY CHARGE
Customer shall pay a monthly added facilities charge at the rate set below. The rate is based
on a percentage of the Added Facilities Installation Cost.
I. Added Facilities Monthly Rate (1) 1.00%
2. Added Facilities Installation Cost (2) $172,000
3. Added Facilities Monthly Charge $1,720.00
(1) Pursuant to Rule 2.H
(2) Pursuant to Exhibit A to this Agreement
11
APPIi,NDIX I TO EXHIBIT B
TERMINATION FEE
If this Agreement is terminated by Customer for any reason, or by City due to an Event of
Default by Customer, prior to full repayment of the Added Facilities Installation Cost, Customer
shall pay City in dull the Termination Fee calculated as set forth below:
Added Facilities Installation Cost to be recovered at the time of
termination:
® Added Facilities Installation Cost less 66.7% of the Added
Facilities Monthly Charges paid through the date of termination
® Plus: Cost of Upgrades made at Customer's request for Customer's convenience (if any).
® Plus: Demolition and Removal cost (if applicable).
® Plus: Other documented costs actually incurred by City (such as insurance, taxes,
cancellation fees, etc., if any),
12
City Council Approval:
Construction Start Date:
Construction Completion date:
EXIIIBIT C
PROJECT SCHL+;DULE
August 4, 2015
August 7, 2015
August 17, 2015
13
,i , � ?C j1
C IY NFIC
MAI
DATE: August 4, 2015
TO: Honorable Mayor and City Council IL1/
FROM: Carlos Fandino .Jr., Director of Vernon Gas & Electric Department
Originator: Ali Nour, Utilities Engineering Manager
RE: Request for Approval and Authorization of an Added Facilities Agreement
(City Financed) By and Between the City of Vernon and Grand Packaging,
Inc.
Recommendation
A. Find that the approval of an Added Facilities Agreement with Command Packaging is
eategoricatly exempt from the California Environmental Quality Act (CEQA) pursuant to
CEQA Guidelines §15301(b), because this approval will merely lead to the possible
construction of additional laterals and related meters to deliver electric service, and such
construction is, at most, a negligible expansion of the existing facilities of the City's
electric utility; and
B. Approve the resolution to thereby permit the execution of an Added Facilities Agreement
by and between the City of Vernon and Grand Packaging Inc. pursuant to Rule No. 2.11
which provides long-term benefits for the Customer and the Department.
Background
The City of Vernon Rules for Electric Service "Description of Service" Rule No. 2, has a
provision identified as section II, Added Facilities. Where a customer requests and the City
agrees to install Added Facilities, the costs thereof shall be borne by the customer. Such costs
shall include continuing costs as may be applicable. Unless otherwise provided by the City Rate
Schedules, these Added Facilities will be installed, owned and maintained or allocated by the
City solely as an accommodation to the Customer. Added Facilities are defined in City's Rule
2.11 as those which are in addition to, or in substitution for the standard Facilities City would
normally install to serve Customer. A Customer has options to either request Customer -financed
Added Facilities or City -financed Added hacilities.
Page I of 2
Customers being served by the Customer -financed Added Facilities shall pay a monthly charge
of 0.33% of the amount advanced. Customers being served by City -financed Added Facilities
shalt pay a monthly charge of 1.0% of the additional cost associated with the Added Facilities.
The monthly charges include maintenance and replacement of the facilities allocated for the
customer's use.
Grand Packaging, Inc. is installing a new electric service to expand its operations in Vernon.
The Customer has asked the City to install additional facilities to accommodate metering the new
service along with one other existing service at one point of delivery. The estimated total cost of
the said Added Facilities and the existing Added Facilities is set in Exhibit " B" of the attached
Agreement.
With the use of primary metering the services, the customer receives a 4% discount on its
monthly electric bill; however, the primary meter wilt register to an additional estimated 2%
transformer loss which it would not have if served using standard facilities, resulting in a net 2%
discount on the customer's monthly invoice. In addition, the Customer pays $1,720 per month
for the added facilities charges in perpetuity. The net result is approximately 1% discount on
Customer's monthly bill compared to standard services.
Fiscal Impact
The fiscal impact to City's gross revenue by serving the Customer via primary metering as
opposed to standard services is estimated at $25,200.
Attachment(s)
None.
Page 2 of 2