COOPERATIVE AGREEMENT

REGARDING

PROPOSITION 1A RECEIVABLES AND REIMBURSEMENTS

ATTRIBUTABLE TO STRUCTURAL FIRE FUND

THIS COOPERATIVE AGREEMENT (“Agreement”) is made and entered into this ______day of September, 2009 (the “Effective Date”), by and between the Orange County Fire Authority, a public agency, hereinafter referred to as “OCFA”, and the County of Orange, a public agency, hereinafter referred to as “County.”

RECITALS

WHEREAS, in consideration for OCFA discharging the County’s legal obligation to provide fire protection in the Structural Fire Fund Area, Article IV, Section 3.A. of the JPA Agreement requires the County to pay all Structural Fire Fund it receives to OCFA to meet budget expenses and fund reserves in accordance with the County’s normal tax apportionment procedures pursuant to the California Revenue and Taxation Code and the County’s tax apportionment schedules; and

WHEREAS, Proposition 1A, which was approved by the California voters in 2004, generally prohibits the State from modifying the share of ad valorem property tax revenuesrequired to be allocated to cities, counties, and special districts within each county, but authorizes the State to suspend this prohibition for a fiscal year under certain circumstances, provided a statute is enacted that provides for full repayment to the effected cities, counties, and special districts of the total amount of revenue losses resulting from the modification of ad valorem property tax revenue allocations to such local agencies within three (3) years; and

WHEREAS, pursuant to Proposition 1A, the State recently enacted Assembly Bill x4 14 and Assembly Bill x4 15, which added and/or amended various provisions of the California Government Code and California Revenue and Taxation Code that, generally,(i) suspend Proposition 1A’s prohibition on modification of local agencies’ allocation of ad valorem property tax revenues for the 2009-2010 fiscal year, (ii) provide for the reduction and transfer of eight percent (8%) of such property tax revenues to the Supplemental Revenue Augmentation Fund to be used to reimburse the State for the costs of providing health care, trial court, correctional, or other State-funded services and costs, (iii) require the State to repay local agencies no later than June 30, 2013; and (iv) authorize the securitization of local agencies’ right to repayment by the State through the sale of Proposition 1Areceivables representing such right to a Financing Authority authorized to purchase such Proposition 1A receivables; and

WHEREAS, Government Code Section 6588(x)(2) provides that all entities subject to a reduction of ad valorem property tax revenues required under Revenue and Taxation Code Section 100.06 be afforded the opportunity to sell their Proposition 1A receivables to theFinancing Authorityand requires theFinancing Authority to purchase such Proposition 1A Receivables so offered, or a pro rata share thereof, to the extent it can sell bonds therefor; and

WHEREAS, to the extent local agencies have not sold Proposition 1A receivables to the Financing Authority, California Revenue and Taxation Code Section 100.06(e) requires the State to make Proposition 1A Reimbursements for the property tax revenue reductions incurred by the local agencies no later than June 30, 2013; and

WHEREAS, through this Agreement,OCFA and County desire tomitigate the adverse effects of the State’s suspension of Proposition 1A on OCFA’s ability to provide fire protection services by establishing the terms and conditions under which the County will endeavor to sell the Proposition 1A receivables attributable to the Structural Fire Fund and will pay OCFA the proceeds from the sale ofthese Proposition 1A receivables and/or a proportionate share of any Proposition 1A Reimbursements received from the State.

NOW, THEREFORE, it is mutually understood and agreedby OCFA and County as follows:

AGREEMENT

  1. Definitions. In addition to terms defined elsewhere in this Agreement, the following definitions apply:
  2. “County Transactional Costs” – Those in-house County Counsel and County finance staff costs incurred by the County after the Effective Date of this Agreement as a direct result of the County’s actions to effectuate the sale of Proposition 1A receivables, including the Structural Fire Fund Proposition 1A Receivables, to the Financing Authority. County Transactional Costs shall not include any outside consultant costs, unless otherwise agreed in writing by OCFA.
  3. “Financing Authority” – A joint powers authority that is authorized to purchase Proposition 1A receivables pursuant to Section 6588.6 of the Government Code.
  4. “Financing Authority Transactional Costs” – Those fees or costs charged to the County by the Financing Authority in conjunction with the sale of Proposition 1A receivables.
  5. “JPA Agreement” – That certain Amended Orange County Fire Authority Joint Powers Agreement between the County and certain cities within the County for the purpose of jointly exercising the common powers of the County and the cities to provide fire suppression, protection, prevention and related incidental services.
  6. “Proposition 1A receivable” – This term refers to “Proposition 1A receivables” as defined in Section 6585, subdivision (g), of the Government Code.
  7. “Proposition 1A Reimbursements” – The amount of property tax revenue reductions and interest the State is required to reimburse to local agenciespursuant to California Revenue and Taxation Code Section 100.06, subdivision (e).
  8. “Structural Fire Fund” – The apportionment of ad valorem property tax revenues received by the County that the County is required to pay to OCFA pursuant to Article IV, Section 3.A. of the JPA Agreement.
  9. “Structural Fire Fund Area” – The areas in the County from which the County collects and apportions ad valorem property tax revenues to the Structural Fire Fund; and
  10. “SFF Proposition 1A Ratio” – The ratio resulting from the division of the Structural Fire Fund Proposition 1A Receivables offered for sale to the Financing Authority by the sum of total Proposition 1A Receivables offered for sale by the County (including the Structural Fire Fund Proposition 1A Receivables) to the Financing Authority.
  11. “Structural Fire Fund Proposition 1A Receivables” – The right to payment by the State pursuant to Proposition 1A and California Revenue and Taxation Code Section 100.06(e) of those monies that are attributable to the reduction in the amount of property tax revenue that the County would have otherwise apportioned to the Structural Fire Fund.
  12. “Transactional Costs” – The sum of the Financing Authority Transactional Costs and the County Transactional Costs chargeable to OCFA pursuant to this Agreement.
  13. Sale of Structural Fire Fund Proposition 1A Receivables.
  14. Upon receipt of a written request from OCFA,the County will include the portion of the Structural Fire Fund Proposition 1A Receivables that OCFA directs for sale to the Financing Authority prior to any applicable deadline established by the Financing Authority within those Proposition 1A Receivables collectively offered for sale by the County to the Financing Authority.
  15. If the County chooses not to offer any Proposition 1A Receivables for sale aside from the Structural Fire Fund Proposition 1A Receivables,then upon receipt of a written request from OCFA, County shall offer such portion of the Structural Fire Fund Proposition 1A Receivables that OCFA directs for sale to the Financing Authority as a County Proposition 1A Receivable.
  16. All proceeds received by the County from the sale of Structural Fire Fund Proposition 1A Receivables to the Financing Authority, minus the amount of Transactional Costs owing to the County pursuant to Section 3 of this Agreement,shall be deemed Structural Fire Fund for purposes of the JPA Agreement, and the County shall transfer such proceeds to OCFA within ten (10) calendar days of their receipt by the County. If the County has offered other Proposition 1A Receivables for sale to the Financing Authority, in addition to Structural Fire Fund Proposition 1A Receivables, but the Financing Authoritydoes not purchase all Proposition 1A receivables offered by the County, then OCFA shall receive the amount of the proceeds of the sale multiplied by the SFF Proposition 1A Ratio minus the amount of Transactional Costs owing to the County pursuant to Section 3 of this Agreement.
  17. Transactional Costs.
  18. Financing Authority Transactional Costs. The Parties anticipate that all Financing Authority Transactional Costs will be paid by the State. However, in the eventthe County is nonetheless required to pay any Financing Authority Transactional Costs, OCFA shall be responsible for that portion of Financing Authority Transactional Costs for which the County is not reimbursed by the State in an amount equal to the total Financing Authority Transactional Costs, multiplied by the SFF Proposition 1A Ratio.
  19. County Transactional Costs. OCFA shall be responsible for that portion of the County Transactional Costs in an amount equal to the total County TransactionalCosts, multiplied by the SFF Proposition 1A Ratio. If the County does not offer any other Proposition 1A receivables for sale aside from the Structural Fire Fund Proposition 1A Receivables, then OCFA shall bear all CountyTransactional Costs. Notwithstanding the foregoing, under no circumstances shall the County Transactional Costs chargeable to OCFA exceedTwelve Thousand Five Hundred Dollars ($12,500).
  20. County shallprovide OCFA with a full accounting of its calculation of the Transactional Costs chargeable to OCFA at the time of, or within a reasonable time following, its transfer of the proceeds received from the sale of Structural Fire Fund Proposition 1A Receivables to OCFA pursuant to Section 2.C. With respect to the Financing Authority Transactional Cost component of the Transactional Costs chargeable to OCFA, the County is only required under this Section 3.C to provide evidence of the amount of fees or costs charged to the County by the Financing Authority in conjunction with the sale of Proposition 1A receivables.
  21. To the extent any Transactional Costs chargeable to OCFA have not already been withheld from the proceeds received by the County from the sale of Structural Fire Fund Proposition 1A Receivables to the Financing Authority, County may deduct such amounts from the proceeds prior to transfer of such proceeds to OCFA pursuant to Section 2.C of this Agreement, provided the County provides OCFA with a full accounting of its calculation of the Transactional Costs at the time of such transfer. Alternatively, County may separately invoice OCFA for such Transactional Costs after the earlier of the following: (1)the transfer of the proceeds from the sale of Structural Fire Fund Proposition 1A Receivables to OCFA or (2) 120 days after the County has offered Proposition 1A receivables, including the Structural Fire Fund Proposition 1A Receivables, for sale to the Financing Authority regardless of whether the Financing Authority has purchased any, all, or none of these Proposition 1A receivables. Such invoice shall be accompanied by a full accounting of the Transactional Costs calculated by the County. OCFA shall pay all undisputed portions of such invoice within thirty (30) days.
  22. In the event OCFA disputes the amount of Transactional Costs calculated by the County, the OCFA Fire Chief and the County Executive Officer, or their designees, shall first meet and confer to attempt to resolve the dispute. If a resolution can not be achieved in a reasonable time, either party may assert its rights and take whatever action is required under law or equity to enforce said rights.
  23. Proposition 1A Reimbursements.
  24. That portion of any Proposition 1A Reimbursements received by the County, which are attributable to the reduction in the amount of property tax revenue that otherwise would have been required to be apportioned to the Structural Fire Fund, minus the amount of Transactional Costs owing to the County pursuant to Section 3 of this Agreement, shall be deemed Structural Fire Fund for purposes of the JPA Agreement. For purposes of clarification, and without limiting the foregoing, such amounts shall include (i) the Structural Fire Fund Proposition 1A Receivables, less the amount of the proceeds of the sale of Structural Fire Fund Proposition 1A Receivables to the Financing Authority, and (ii) the proportionate amount of interest attributable to this amount that is payable by the State pursuant to California Revenue and Taxation Code Section 100.06(e)(1)(B)(ii).
  25. To the extent the State fails to pay any portion of the Proposition 1A Reimbursements due the County, which are attributable to the reduction in the amount of property tax revenue that otherwise would have been required to be apportioned to the Structural Fire Fund, by the deadline set forth in California Revenue and Taxation Code Section 100.06, County hereby assigns to OCFA its rights under California Revenue and Taxation Code Section 100.06(f) to seek a writ of mandamus to compel the State to pay such amounts in the event the County decides not to seek a writ of mandamus on the County’s own behalf. This Subsection 4.B. shall not be interpreted or introduced as evidence to preclude or support OCFA’s efforts to intervene in any such writ proceeding to the extent otherwise authorized by law.
  26. Mutual Cooperation.

OCFA and County each agree to share such information and to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the terms and conditions of this Agreement. OCFA and County further agree to work diligently together and in good faith, using their best efforts to resolve any unforeseen issues and disputes arising out of the performance of this Agreement.

  1. Satisfaction of JPA Agreement.

In consideration of the County’s performance of its obligations under this Agreement, OCFA, on behalf of itself, successors, assigns, administrators, elected officials, officers, directors, employees, beneficiaries, representatives, and agents, hereby releases and dischargesthe County and its successors, assigns, administrators, elected officials, officers, directors, employees, beneficiaries, representatives, and agents from any and all claims, demands, costs, liabilities, objections, actions, and causes of action of every nature, whether in law or in equity, known or unknown, suspected or unsuspected, arising from: (i) the reduction of Structural Fire Fund apportioned by the County and/or received by OCFA pursuant to the JPA Agreement that is solely attributable to the State’s suspension of Proposition 1A, (ii) the failure or refusal of a Financing Authority to purchase some or all of the Structural Fire Fund Proposition 1A Receivables or other County offered Proposition 1A receivables offered for sale by the County pursuant to this Agreement, (iii) the State’s failure to pay any portion of the Proposition 1A Reimbursements due to the County, including those amounts that are attributable to the reduction in the amount of property tax revenue that otherwise would have been apportioned to the Structural Fire Fund, by June 30, 2013, or (iv) the State’s failure to comply with any portion of California Revenue and Taxation Code section 100.06(e).

  1. Miscellaneous Provisions.
  2. Entire Agreement. This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect.
  3. Amendment and Termination. This Agreement may be amended or terminated in writing at any time by the mutual consent of both parties. No amendment or termination shall have any force or effect unless in writing and executed by both parties.
  4. Binding Effect. The provision of this Agreement shall bind and inure to the benefit of each of the parties hereto and all successors or assigns of the parties hereto.
  5. Assignment. Notwithstanding any other provision of this Agreement, neither party may assign its rights, interest, duties or obligations under this Agreement without the written consent of the other party. Any assignment made without the consent of the other party shall be null and void.
  6. Waiver. Failure of either party to insist upon strict performance of any of the terms, conditions or covenants in this Agreement will not be deemed a waiver of any right or remedy that party may have and will not be deemed a waiver of any right or remedy for a subsequent breach or default of the terms, conditions or covenants contained in this Agreement, nor will it constitute a precedent for interpretation of this Agreement.
  7. Headings. The headings of all sections of this Agreement are inserted solely for the convenience of reference and are not part of and not intended to govern, limit or aid in the construction or interpretation of any terms or provision thereof.
  8. Severability. If any term, provision, covenant or condition of this Agreement is held to be invalid, void or otherwise unenforceable, to any extent, by any court of competent jurisdiction, the remainder to this Agreement shall not be affected thereby, and each term, provision, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
  9. No Third Party Beneficiaries. The provisions of this Agreement are for the exclusive benefit of OCFA and County and their respective successors and assigns, and no other party or entity shall have any right or claim or shall be entitled to enforce any provision against any party by reason of any provision of this Agreement.
  10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
  11. Authority to Execute Agreement. The persons executing this Agreement on behalf of the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said parties and that, by so executing this Agreement, the parties hereto are formally bound to the provisions of this Agreement.
  12. Counterparts. This Agreement may be executed and delivered in any number of counterparts, each of which, when executed and delivered shall be deemed an original and all of which together shall constitute the same agreement. Facsimile signatures will be permitted.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written.

COUNTY OF ORANGE / ORANGE COUNTY FIRE AUTHORITY
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Signature
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Name and Title / ______
Signature
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Name and Title
ATTEST
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Signature
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Name and Title / ATTEST
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Signature
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Name and Title
APPROVED AS TO FORM
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County Counsel / APPROVED AS TO FORM
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OCFA General Counsel

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