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CONTRACT 6925 Memorandum of UnderstandingAgreement No. 6925 MEMORANDUM OF UNDERSTANDING BETWEEN WISEBURN UNIFIED SCHOOL DISTRICT AND THE CITY OF EL SEGUNDO REGARDING THE RESOLUTION PROCESS OF THE POOL HEATERS AT THE AQUATICS CENTER THIS MEMORANDUM OF UNDERSTANDING ("MOU") is made and entered into this 15"' day of March 2024 ("Effective Date"), by and between the Wiseburn Unified School District (hereinafter "District"), a California public school district duly organized and existing under Chapter 1 of Division 3 of Title 2 of the Education Code of the State of California, and the City of El Segundo (hereinafter "City"), a municipal corporation (individually a "Party" and collectively "the Parties"). RECITALS WHEREAS, District owns property located at 201 N. Douglas, El Segundo, CA 90245 ("School Site"); WHEREAS, on May 22, 2013, the City and the School District entered into a settlement agreement to resolve a dispute concerning the School Site, which was amended on January 19, 2016 (collectively, the "Settlement Agreement"). The Settlement Agreement, as amended, required the School District to, among other things, improve the property by designing and constructing an Aquatics Center, including a competition pool, a smaller therapy pool, restrooms, locker facilities, and parking lot ("Facility or Aquatics Center"); WHEREAS, on January 10, 2019, the City and the School District entered into a Joint Use Agreement ("JUA") regarding use and operation of the Aquatics Center; WHEREAS, after the pools at the Aquatics Center were put into service, the City contends that it discovered that the systems and all components necessary to heat the pools (collectively, "Pool Heating System" or "System") was improperly designed which has resulted in reliability and performance issues that include, among other things, the inability to heat the water to temperatures required for recreational and competitive use thus rendering it unfit for use at times. The District contends that the City did not properly maintain the System and this failure by the City is causing the reliability and performance issues complained of by the City; WHEREAS, during the Summer of 2022, the City caused the Pool Heating System to be repaired ("Interim Repair") at a total cost of $207,820.00. The City used $120,000.00 of Replacement Reserve Funds ("Replacement Reserve" as this term is defined in the Settlement Agreement) that the District deposited with the City and the City expended $87,820.00 of its own monies to make the Interim Repair; WHEREAS, a dispute has resulted based upon the above stated positions of the Parties regarding the Pool Heating System and the City filed a lawsuit against the District on or about April 5, 2023, in the Superior Court of Los Angeles, case number 23TRCVO1031, and the District has filed a cross -complaint against the City and the designer of the Aquatics Center and the Pool Heating System (Arch-Pac, Inc.) on or about July 24, 2023 (the "Litigation" or "Dispute"); and Agreement No. 6925 WHEREAS, the Parties are desirous of promptly repairing the Pool Heating System to the City's desired performance standards. NOW THEREFORE, for and in consideration of the mutual covenants and conditions contained herein, the sufficiency of which consideration is acknowledged by the Parties, it is hereby agreed as follows: Section 1. Repair and Pa ments PooMeating System. The Parties hereby agree to split the estimated and ultimately the actual cost of the Interim Repair and the cost of the "Permanent Repairs" (detailed on Exhibit A), with the District's total contribution being capped at $400,000.00. Exhibit A is subject to change based on mutual written agreement between the Parties as long as the scope of the Permanent Repairs is consistent and not in conflict with Settlement Agreement and JUA. The actual cost of the Interim Repairs was $207,820.00 and the estimated costs of the Permanent Repairs is $554,323.00 for an estimated total of $762,173.00 so the parties current estimated total financial obligation for the Interim and Permanent Repairs is $381,086.50. The District will receive a credit of $120,000.00 towards its estimated total obligation of $381,086.50, based upon the City using this amount from the Replacement Reserve Fund for the Interim Repair. Accordingly, the District's additional payments are also limited to and capped at $280,000.00. The actual cost of the Permanent Repair may exceed the estimated amount set forth on Exhibit A but in no event shall the District's total obligation exceed $400,000 (inclusive of the credit of $120,000.) The District shall pay the City $130,543.25, which represents 50% of the District's estimated remaining financial obligation, when the City Council approves and awards the Permanent Repair contract to the contractor and pay the City the remaining amount owed by the District to the City based upon the actual costs of the Permanent Repair upon the City's approval of the notice of completion for the Permanent Repairs. The City shall have the authority to and responsibility of contracting for and overseeing the Permanent Repair without any approval, beyond this MOU, required by or from the District or any other entity. The District shall be named as an additional insured on the insurance policies and a co -obligee on the payment and performance bonds to be required in the agreement between the City and the contractor who will be constructing the Permanent Repair. The Permanent Repair shall include a warranty provided by the manufacturer of the System for the longest period available offered by the manufacturer. Should a dispute arise in the future regarding which party was responsible for selecting the design for the Permanent Repair, the City acknowledges, and the parties agree that the City selected and approved the design for the Permanent Repair. Section 2. Responsibility for Future System Failures or Repairs for the Pool. Heating System. Since the City is solely responsible for determining the scope of work for the Permanent Repair, the District shall not be responsible in any manner, for any liability, expenses, damages, or any costs related in any manner to the Pool Heating System resulting from any design failures relating to the Permanent Repair or construction failures with regard to the installation of the Permanent Repair. Other than the requirements and obligations set forth in this MOU and any waivers or releases set forth in this MOU, the Parties will continue to bound by terms and obligations set forth in the Settlement Agreement and JUA. The District and City shall be responsible for any liability (including vandalism), expenses, damages or any costs related in any manner to the Pool Heating System which is caused by their respective negligence or wrongful misconduct, except the District's design and construction of the Pool Heating System shall not be 2 Agreement No. 6925 Section 6. Effect of MOU. Except as specifically set forth herein about resolving the Dispute and Litigation regarding the Facility's Pool Heating System, nothing in this MOU shall change or limit the terms, conditions, obligations, responsibilities and/or requirements of the Parties set forth in the JUA or the Settlement Agreement, which shall remain unmodified and in full force and effect. Section 7. Relationship of the Parties. The Parties are and shall always remain as to each other, wholly independent entities. No Party to this MOU shall have power to incur any debt, obligation, or liability on behalf of another Party or otherwise act as an agent of another Party except as expressly provided to the contrary by this MOU. Section 8. Amendments. All amendments hereto must be in writing, approved and executed by all Parties and their respective governing Board or Council. Section 9. Independent Entities. Each Party shall be solely responsible and liable in connection with its actions associated with its responsibilities under this MOU. For purposes of this MOU, the relationship of the Parties is that of independent entities and not as agents of each other or as joint venturers or partners. The Parties shall maintain sole and exclusive control over their personnel, agents, consultants, and operations. Nothing in this MOU is intended to limit the legal authority or responsibilities of the Parties, except as agreed to herein. Section 10. Third Parties. Nothing in this MOU is intended to create duties or obligations to or rights in third parties to this MOU. Section 11. Binding MOU; Successors and Assigns. This MOU may not be assigned without prior written approval of all Parties. This MOU shall be binding on all Parties. This MOU shall be binding upon and inure to the benefit of the successors and assigns of the Parties. Section 12. Entire MOU. This MOU sets forth in full the terms of agreement between the Parties and is intended as the full, complete, and exclusive contract governing the subject matter of this MOU, the Dispute, for purposes of resolving the Dispute. Section 13. ,Authority. Each Party warrants that the person executing this MOU on behalf of the respective party is fully authorized by that Party to do so. Section 14. Construction. The section headings and captions of this MOU are, and the arrangement of this instrument is, for the sole convenience of the parties to this MOU. The section headings, captions and arrangement of this instrument do not in any way affect, limit, amplify or modify the terms and provisions of this MOU. This MOU shall not be construed as if it had been prepared by one of the Parties, but rather as if all parties have prepared it. The Parties to this MOU and their counsel have read and reviewed this MOU and agree that any rule of construction to the effect that ambiguities are resolved against the drafting Party shall not apply to the interpretation of this MOU. 0 Agreement No. 6925 allowed to be raised for purposes of attempting to hold the District responsible for any future failures of the Pool Heating System. Notwithstanding the above provisions, so long as the City continues to operate and maintain the Aquatics Center in compliance with the Settlement Agreement and JUA, the Parties shall be equally responsible for any liability, expenses, damages or any costs related in any manner to the Pool Heating System which is a result of an Act of God or ordinary wear and tear. Section 3. Recovery from Arch-P'ac. Should the District obtain any monetary payment or recovery from Arch-Pac arising from the District's cross -complaint, the Parties shall equally share in any such recovery or payment from Arch-Pac. The District shall have sole discretion in determining how and what amount is recovered from Arch-Pac including, but not limited to, not obtaining or demanding any costs based on positions or other defenses raised by Arch-Pac. Section 4. Breach. Should either Parry (the "defaulting party") breach any of the provisions of this MOU and the breach is material and the defaulting party fails to remedy that breach within seven (7) days after receipt of written notice from the non -defaulting party, requiring it to remedy that breach, the non -defaulting parry will be entitled to seek relief from the Court as necessary to carry out the intent of this MOU and the actions required thereunder. Section 5. Notices. All notices required to be given under this MOU shall be in writing and sent by first class mail or electronic mail as follows: To the School District: Jason Hasty, Ed.D. Assistant Superintendent Administrative Services and Chief Business Official (CBO) Wiseburn Unified School District 201 N. Douglas Street El Segundo, CA 90245 Email: `hast r)wiseburn.or Hugh Lee, Esq. Email: hlee@btaorossini.com To the City: Darrell George City Manager City of El Segundo 350 Main Street El Segundo, CA 90245 Email: d eor e@)els�o,o Mark Hensley, Esq. City Attorney Email: mhensl�laensl ,ylaw rg .con or to such other addresses that any Party may respectively designate by written notice to the others. 3 Agreement No. 6925 Section 15. Waiver. Waiver of any provision or of a breach or default under this MOU shall not constitute a continuing waiver or a waiver of a subsequent breach of the same or any other provision of this MOU. Section 16. Severability. In the event any provision of this MOU is held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall not be affected so long as it does not substantively affect the material purpose of the MOU. Section 17. Counterparts. This MOU may be executed in any number of counterparts, each of which shall be original, but all of which taken together shall constitute one instrument. Section 18. Representation. This MOU is executed voluntarily by each of the parties hereto, all of whom have been advised by independent counsel of their choice as to the content and effect of this MOU. Section 19. Governing Law. The MOU shall be governed by and construed according to the laws of the State of California. Section 20. Venue. Los Angeles County shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this MOU. Section 21. Legal Fees. The parties agree that they will each be responsible for their own legal fees and costs regarding the resolution of the Dispute. However, the prevailing party shall be entitled to its legal fees and costs for any dispute regarding the enforcement of the terms and conditions of this MOU. Section 22. No Admission of Liabilitv. This MOU shall not in any way be construed to be an admission by the City or District of any unlawful or wrongful acts or other liability whatsoever against each other or against any other person. The City and District specifically disclaim any liability to, or wrongful acts against, each other or against any other person on the part of themselves, any related person or any related predecessor or its or their agents, representatives or successors in interest and assigns. Section 23. Release of Claims. To implement a full and complete release and discharge, the Parties expressly acknowledge that this MOU is also intended to include in its effect, without limitation, all claims which the Parties know and do not know of or expect to exist at the time of the execution hereof based on or related to the Dispute. In addition, the Parties expressly waive and relinquish all rights and benefits afforded by California Civil Code section 1542 with respect to the Dispute, and dos so understand and acknowledge the significance and consequences of such specific waiver of said provisions of law. Civil Code section 1542 states as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD 5 Agreement No. 6925 HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. Section 24. Dismissal of Litigation. Upon final execution of this MOU, both Parties agree to dismiss each other with prejudice their complaint and cross -complaint against the other Party in the Litigation. IN WITNESS WHEREOF, the Parties hereto have executed this MOU on the date first above written. DATED: WISEBUP,N UNIF' I)]E " ' 0L DISTRICT Blake Silvers, p erint p endnt. Approved as to Forms Hugh-W.Ve,�bii�st�rict Counsel DATED: Attest: Datedd. _ By: —7*7 Secretary to the Board 2 Agreement No. 6925 DATED: Approved as to Form: Attest: Dated: 4 - Y.�3 -to CITY L, SEGUNDO By: A,--, - Darrell George, City Manager Ma By: Tracy Weaver, City Clerk Agreement No. 6925 Exhibit "A" Currently, there are a total of three (3) existing pool heaters. The pool heaters are a packaged system consisting of a natural gas hydronic' boiler and an indirect heat -exchanger. The three (3) boilers are as follows: 1. Two (2) 1.24-MMBH2 boilers for the main/competition pool with a total capacity of 2.48- MMbtu; and 2. One (1) 373,599 Btu/h3 boiler for the small/practice pool. The three (3) existing heat -exchangers are as follows: 1. Two (2) heat -exchangers for the main/competition pool, with a total of 2.48-MMBH capacity (1.24-MMBH each); and 2. One (1) heat -exchanger for the small/practice pool with a 373,599 Btu/h. The upgrades to the pool heating system will be done through one of the following two options: Option Install one (1) additional custom packaged pool heater system that includes: 1. One (1) 2-MMBH natural gas hydronic boiler that serves two (2) heat exchangers. 2. One (1) 1.5-MMBH heat -exchanger for the main/competition pool (-4-MMBH total) and 3. One (1) 500,000 Btu/h heat -exchanger for the small/practice pool (-0.9-MMBH total). Option 2 Replace all existing pool heaters with a single custom packaged pool heater skid that includes: 1. Three (3) 2-MMBH natural gas hydronic boiler, with a total heating capacity of 6- MM13H, that serves two (2) heat exchangers.4 2. One (1) 4-MMBH heat exchanger for the main/competition pool and 3. One (1) 1-MM13H heat exchanger for the small/practice pool. The repairs/changes will result in reconfiguration of the equipment within the equipment room, including but not limited to electrical, plumbing, and mechanical system changes. There is also the potential for changes being made to electrical, plumbing and mechanical system outside of the equipment room but the city is going to use its best efforts to avoid and/or minimize such changes. ' Hydronic is non -potable heating hot water. 2 MMBH is 1,000,000 British Thermal Units per Hour 3 Btu/h is British Thermal Units per Hour 4 The total heating capacity of the boilers is greater than the heat exchangers for redundancy, down time, and efficiency.