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2007/10/09 City Council Resolution 2007-165RESOLUTION NO. 2007 -165 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK AUTHORIZING AND APPROVING AN ESCROW AGREEMENT FOR SECURITY DEPOSITS IN LIEU OF RETENTION WITH KENRIDGE BUILDERS, INC. FOR THE CITY HALL RENOVATION PROJECT - PHASE II CITY PROJECT NO. 2004-33 WHEREAS, the City of Rohnert Park entered into a construction agreement with KenRidge Builders, Inc. on July 24, 2007, for the City Hall Renovation Project - Phase II, Project No. 2004 -33; and WHEREAS, pursuant to Section 22300 (b) of the Public Contract Code of the State of California, a contractor may request that a public agency make payment of retentions earned directly to an escrow agent at the expense of the contractor; and WHEREAS, the contractor may direct the investment of the payments into securities and the contractor shall receiver the interest earned on the investments for securities deposited by the contractor; and WHEREAS, upon satisfactory completion of the contract, the contractor shall receive from the escrow agent all securities, interest, and payments received by the escrow agent from the public agency. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Rohnert Park that it does hereby authorize and approve an escrow agreement for security deposits in lieu of retention by and between KenRidge Builders, Inc., a corporation, and the City of Rohnert Park, a municipal corporation. BE IT FURTHER RESOLVED that the City Manager is hereby authorized and directed to execute this agreement in substantially similar form to the attached agreement for and on behalf of the City of Rohnert Park. DULY AND REGULARLY ADOPTED this 91h day of October, 2007. AT T- i City Clerk I CITY OF ROHNERT PARK BREEZE: AYE MACKENZIE: AB_ SENT SMITH: AYE STAFFORD: AYE VH)AK MARTINEZ: AYE AYES: (4) NOES: (0) ABSENT: (1) ABSTAIN: (0) ROHNERT PARK CITY HALL RENOVATION - PHASE II CITY OF ROHNERT PARK P.C.C. Section 22300 ESCROW AGREEMENT FOR SECURITY DEPOSITS IN LIEU OF RETENTION This Escrow Agreement ( "Escrow Agreement") is made and entered into by and between City of Rohnert Park whose address is 6750 Commm erce'Boulevard, Rohnert Park, CA 94928 hereinafter called ( "Owner "),;KenRidge Builders, Inc.; whose address is 1360 Industrial Avenue, Suite D, Petaluma CA 94952, hereinafter called ( "Contractor "), and Sonoma Bank, whose address is 1650 Northpoint Parkway,. Suite A, Santa Rosa., CA 95407 hereinafter called ( "Escrow Agent")- For the consideration hereinafter set forth, the Owner, Contractor and Escrow Agent agree as follows: 1. 'Pursuant to Section 22300 of Public Contract Code of the State of California, Contractor has the option to deposit securities with Escrow Agent as a substitute for retention earnings required to be withheld by Owner pursuant to the " Construction Contract entered into between the Owner and Contractor for Rohnert Park City Hall Renovation - Phase II in the amount of $4,699,607.00, . dated July 24, 2007, (hereinafter referred to as the "Contract"). Alternatively, on written request of Contractor, the Owner shall make payments of the retention earnings directly to the Escrow Agent. When the Contractor deposits the securities as a substitute for Contract earnings, Escrow Agent shall notify the Owner within 10 days of the deposit. The market value of the securities at the time of the substitution shall be at least equal to the cash amount then required to be withheld as retention under terms of Contract between the Owner and Contractor. Securities shall be held in name of the Owner, and shall designate Contractor as beneficial owner. 2. The Owner shall make progress payments to the Contractor for those funds which otherwise would be withheld from progress payments pursuant to Contract provisions, provided that Escrow Agent holds securities in form and amount specified above. 3. When the Owner makes payment of retentions earned directly to the Escrow. Agent, the: Escrow Agent shall hold them for the benefit of the Contractor until the time that the escrow created under this Escrow Agreement is. terminated.. The Contractor may direct the investment of the payments into securities. All terms and conditions of this agreement and the rights and responsibilities of the parties shall be equally applicable and binding when the Owner pays the Escrow Agent directly. 4. Contractor shall be responsible for paying all fees for the expenses incurred by EscrowAgent in administering the Escrow Account and all expenses of the Owner. These expenses and payment terms shall be determined by the Owner, Contractor, and Escrow Agent. 5. The interest_ earned on the securities or the, money market accounts held in escrow and all interest earned on that interest shall be for the sole account of Contractor and shall be subject to withdrawal by Contractor at any time and from time to time without notice to the Owner. 6. Contractor shall have the right to withdraw all or any part of the principal in the Escrow Account only by written notice to Escrow Agent accompanied by written authorization from the Owner to the Escrow Agent that the, Owner consents to withdrawal of amount sought to be withdrawn by Contractor. 7. The Owner shall have a right to draw upon the securities in event of de fault by Contractor. Upon seven days' written notice to the Escrow Agent from the Owner, of the default, the Escrow Agent shall immediately convert the securities to cash and shall distribute the cash as instructed by the Owner. 8. Upon receipt of written notification from the Owner certifying that the Contract is final and complete, and that the Contractor has complied with all requirements and procedures applicable to the Contract, Escrow Agent shall release to Contractor all securities and interest on deposit less escrow fees and charges of the Escrow Account. The escrow shall be closed immediately upon disbursement of all moneys and securities on deposit and payment of fees and charges. 9. Escrow Agent shall rely on written notifications from the Owner and the Contractor pursuant to Sections 5 to 8, inclusive, of.this Escrow Agreement and the Owner and Contractor shall hold Escrow Agent harmless from Escrow Agent's release and disbursement of securities and interest as set forth above. 10. The names of the persons who are authorized to give written notice or to receive written notice on behalf of the Owner and on behalf of Contractor in connection with the foregoing, and exemplars of their respective signatures are as follows: On behalf of: On behalf of City of Rohnert.Park KenRidge Builders, Inc. . (Owner) (Contractor) Mr. of Public Works /City Engineer President Title Title Darr'in Jenkins Frank R. Ruggirello Name Name Signaturef Signature City of Rohnert Park KenRidge Builders, Inc. 6750 Commerce Boulevard 1360 Industrial Avenue, Suite D Rohnert Park, CA 94928 Petaluma, CA 94952 On Behalf of Sonoma Bank: . (Escrow Agent) Title. Name Signature Sonoma Bank 1650 Northpoint Parkway Santa Rosa, CA 95407 At the time the Escrow account is. opened, the Owner and Contractor shall deliver to Escrow Agent a fully executed counterpart of this Agreement.