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Home My WebLink AboutCC 7 CONST JAMBOREE 07-02-90DATE: JUNE 22, 1990 TO: WILLIAM HUSTON, CITY MANAGER Cu..JcNT CALENDAR N0. 7 7/2/90 Inter - Com FROM: PUBLIC WORKS DEPARTMENT/ENGINEERING DIVISION SUBJECT: JAMBOREE ROAD BETWEEN BARRANCA PARKWAY AND EDINGER AVENUE CONSTRUCTION CONTRACT RECOMMENDATION: That the Tustin City Council at their meeting of July 2, 1990 approve the Escrow Agreement for Security Deposits in Lieu of Retention for the Jamboree Road Construction Project between Barranca Parkway and Edinger Avenue, and authorize the Mayor to execute said agreement. BACKGROUND: The contractor for the Jamboree Road Construction Project between Barranca Parkway and Edinger Avenue, E. L. Yeager Construction Co., Inc., -- has requested an escrow account to be set up as a substitute for the retention earnings required to be withheld by the City pursuant to the construction contract entered into between the City and the Contractor. These retention monies amount to 10% of the total monies earned by the Contractor for the duration of the contract. Section 22300 of the Public Contracts Code of the State of California provides the Contractor the option to deposit securities with an Escrow Agent as a substitute for the above-mentioned retention earnings. The market value .of the securities at the time of substitution shall be at least equal to the cash amount then required to be withheld as retention. This procedure/escrow account then allows the City to make payments directly to the Contractor which otherwise would have been withheld. The City Attorney's office has indicated that Section 22300 of the Public Contracts Code requires the City to participate in this procedure once the Contractor has requested said action. DISCUSSION: The attached Escrow Agreement has been prepared by the City Attorney's office and provides for the following: 1. Security Pacific National Bank, P.O. box 712, Riverside, CA 92502, to be designated as "Escrow Agent". 2. Contractor is responsible for all fees and expenses incurred by the Escrow Agent in administering the escrow account. 3. Interest earned on securities or money market accounts held in escrow shall be for the sole account of the Contractor. 4. City shall control the withdrawal of any part of the principal of the escrow account until the account is no longer required and closed at JAMBOREE ROAD BETWEEN BARRANCA PARKWAY AND EDINGER AVENUE JUNE 22, 1990 PAGE 2 the completion of the project and the acceptance of the project by the City. 5. City maintains the right to draw upon the securities in the event of default on the contract by the Contractor. The attached agreement is presented for the City Council's review, approval, and execution by the Mayor. Bob Ledendecker Director of Public Works/City Engineer BL:mv Attach. ESCROW AGREEMENT FOR SECURITY DEPOSITS IN LIEU OF RETENTION This Escrow Agreement is made and entered into by and between the City of Tustin whose address is 300 Centennial Way, Tustin, California 92680, hereinafter called "Owner", E. L. Yeager Construction Company, Inc., whose address is P.O. Box 87, Riverside, California 92509, hereinafter called "Contractor" and Security Pacific National Bank, whose address is P.O. Box 712, Riverside, California 92502, 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 the 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 construction of Jamboree Road Extension between Barranca Parkway and Edinger Avenue in the amount of $10,636,440.00, dated March 13, 1990 (hereinafter referred to as the "Contract"). When Contractor deposits the securities as a substitute for Contract earnings, the 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 the terms of the Contract between the Owner and Contractor. Securities shall be held in the name of 1 Escrow Agent, and shall designate the Contractor as the beneficial owner. (2) The Owner shall make progress payments to the Contractor for such funds which otherwise would be withheld from progress payments pursuant to the Contract provisions, provided that the Escrow Agent holds securities in the form and amount specified above. (3) Alternatively, the Owner may make payments directly to Escrow Agent in the amount of retention for the benefit of the Owner until such time as the escrow created hereunder is terminated. (4) Contractor shall be responsible for paying all fees for the expenses incurred by Escrow Agent in administering the escrow account. These expenses and payment terms shall be determined by the 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 Owner to the Escrow Agent that Owner consents to the withdrawal of the amount sought to be withdrawn by Contractor. (7) The Owner shall have a right to draw upon the securities 2 in the event of default by the 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 payments of fees and charges. (9) Escrow Agent shall rely on the written notifications from the Owner and the Contractor pursuant to Sections (4) to (6), inclusive, of this agreement and the Owner and Contractor shall hold Escrow Agent harmless from Escrow Agent's release and disbursement of the 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 Owner: Director of Public Works/ City Engineer Robert Ledendecker Signat re 3 On behalf of Contractor: Secretary/Treasurer A. H. Pray Signature Address: 300 Centennial Way Tustin, California 92680 On behalf of Escrow Agent: Vice President/General Manager John S. Colladay \Signature Address: Security Pacific National Bank P.O. Box 712 Riverside, California 92502 Address: P.O. Box 87 Riverside, California 92502 At the time the Escrow Account is opened, the Owner and Contractor shall deliver to the Escrow Agent a fully executed counterpart of this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement by their proper officers on the date first set forth above. Owner Title Name Signature (Q\257 . c7 ) 04/04/90 0 Contractor A. .4, 9 ^V' Sv�CVgafyiT'rfea'` "' t Title Name Signature