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<br />by OCFA under this Agreement (the "Bond"), or (b) establish an escrow account, naming OCFA as
<br />beneficiary and on terms and conditions acceptable to OCFA in its sole and absolute discretion, with an
<br />escrow agent acceptable to OCFA in its sole and absolute discretion and funded with cash in the amount
<br />of one full monthly payment for services rendered by OCFA under this Agreement (the "Escrow" and,
<br />collectively with the Bond, the "Security"). On or before July 1, 2013, and thereafter on or before July 1
<br />of each succeeding year, CITY shall make payments sufficient to adjust the amount of the Security to
<br />equal the amount of one monthly payment for the final charges as established pursuant to Paragraph 5 of
<br />this Section VII, below.
<br />
<br />The Security shall serve as security for CITY's obligations under this Agreement. In the event
<br />that CITY defaults in any of such obligations, without in any way limiting any of OCFA's other rights and
<br />remedies, OCFA shall be entitled to collect upon the Bond or draw upon the Escrow, as applicable, in
<br />partial compensation for such default and in accordance with the terms of the documentation governing
<br />such Security. In the event that OCFA collects upon the Bond or draws upon the Escrow, CITY shall
<br />have a period of thirty (30) days to establish new Security in the amount and as set forth in the preceding
<br />Paragraph. If CITY fails to do so, OCFA shall have the right to terminate this Agreement upon written
<br />notice to CITY.
<br />
<br />On or after July 1, 2014, CITY may present information to the OCFA Board of Directors that the
<br />City's financial condition has improved such that the need for the Security has changed and that the
<br />requirement for the Security should be reduced, eliminated or modified as a result. The OCFA Board of
<br />Directors may, in its sole discretion, reduce, eliminate or otherwise modify the requirement of this Section
<br />VII. 4."
<br />
<br />5. For each subsequent fiscal year covered by this Agreement, commencing with FY 2012/13,
<br />the Fire Chief shall notify the CITY Manager, in writing, of the estimated charges for providing the agreed
<br />services to CITY during the following fiscal year on or before March 1 of each year. Final charges for
<br />providing services to CITY during the following fiscal year will be provided, in writing, on or before May 1
<br />of each year. CITY will pay such final charges, in monthly installments, at the beginning of each month,
<br />in advance.
<br />
<br />6. The estimated costs and charges shall be determined pursuant to the JPA Agreement,
<br />including but not limited to Article IV, 9 3B and Article VI of the JPA Agreement.
<br />
<br />VIII. START-UP COSTS:
<br />
<br />1. The parties agree that a sum, estimated not-to-exceed $1,580,439 is owing to OCFA by CITY
<br />for start-up costs, as specified in this Agreement. Those start-up costs are as follows:
<br />
<br />Communications/IT
<br />Facilities
<br />Personnel
<br />Service Center
<br />Fleet Services
<br />TOTAL
<br />
<br />$843,727
<br />27,000
<br />220,764
<br />395,963
<br />92,985
<br />$1,580,439
<br />
<br />2. OCFA agrees to amortize these one-time start-up costs over the first five years of this
<br />Agreement. OCFA will invoice CITY for the annual prorated amount of $316,088 with the first monthly
<br />invoice for each fiscal year for five years, commencing with FY 2012/13. The OCFA will track all costs
<br />relating to the start-up as the work is performed and those funds in excess to the amount listed above will
<br />be adjusted and, if already collected from CITY, reimbursed to the CITY upon conclusion of the transition.
<br />In the event of termination of this Agreement for any reason, and upon the effective date of the
<br />termination, the CITY shall immediately pay the full balance then remaining for the start-up costs adjusted
<br />as set forth herein.
<br />
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