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TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: DIRECTOR OF PLANNING, BUILDING AND CODE ENFORCEMENT
DATE: JULY 6, 2004
SUBJECT: OCEAN TRAILS - PEER REVIEW PANEL SERVICES
Staff Coordinator: Gregory Pfost, AICP, Deputy Planning Director
That the City Council authorize the Mayor and City Clerk to sign a second agreement between the City and Ocean Trails pertaining to the Peer Review Panel.
The City and Ocean Trails previously agreed that a Peer Review Panel will settle a current geological dispute regarding Landslide A and the location of the Foundation Set-back Line, which determines where residential structures can be built in proximity to Landslide A. Since that agreement was entered into, two additional geologic disputes have arisen. Ocean Trails has requested that a second agreement between the City and Ocean Trails be entered into to broaden the scope of the Peer Review Panel so that they can also review these additional geologic disputes. Staff recommends that the City Council approve the agreement, as the Peer Review Panel is the most expeditious and equitable method to address the disputes.
Construction on the Landslide C repair is moving forward. In fact, the rough grading has been completed, and the developer is in the process of conducting the finish contouring and planting for this portion of the golf course. Ocean Trails projects that the full 18-hole golf course, with all recent modifications completed (waterfalls, tee and green changes), will be open in Fall/Winter 2004.
In addition to Landslide C, two other existing ancient landslides (Landslides A and B) are located within the boundaries of VTTM 50666. A portion of the golf course (Holes #10 and #11) is located on Landslide A. Staff has informed the developer that because there are uncertainties as to the exact location of the boundaries of Landslide A and the respective foundation setback line that determines where residential homes may be constructed in proximity to Landslide A, this issue will need to be addressed prior to City Council approval of the Final Map for Tract 50666.
Cotton Shires Associates (CSA) is the City's geotechnical consultant responsible for reviewing geotechnical issues pertaining to the Ocean Trails project. Shortly after the failure of Landslide C, which occurred on June 2, 1999, the City engaged the assistance of a "panel of experts" to provide additional third-party geotechnical review over the complexities surrounding the landslide repair efforts. The "panel of experts" included Bing Yen, Glenn Brown and Monte Ray.
In addition to reviewing the landslide repair, the "panel" was involved in the review of other geotechnical issues pertaining to Ocean Trails, such as the Landslide A issue discussed above. The purpose of the Peer Review Panel's involvement in this issue was to settle a difference of opinion between the City's Geologist (CSA) and the Developer's Geologist (Converse Consultants). Basically, CSA feels that Landslide A daylights into VTTM 50666 further inland and into some of the residential lots, than what Converse Consultants believes. Although both parties believed that there was enough evidence to prove either side, the Peer Review Panel was unable to make a determination as to which party was correct. Instead, they requested that additional review of existing data be performed and additional data be obtained in the field. Since Ocean Trails felt that there was enough information available to make a decision on this issue, Ocean Trails requested that a new Peer Review Panel be formed and that both the City and Ocean Trails agree to be bound by the recommendations and determinations of the new Panel.
Subsequently, through a process agreed to by both the City and Ocean Trails, a new Peer Review Panel was formed. The new panel is composed of two geologists, Mr. Eldon Gath and Mr. Scott Kerwin, and one geotechnical engineer, Mr. Glenn Tofani. On September 2, 2003, the City Council approved an agreement between Ocean Trails and the City as well as contracts between the City and the respective Peer Review Panel Members. Since September 2nd, both CSA and Converse Consultants have submitted data regarding Landslide A to the peer Review Panel Members. Ocean Trails had concerns with CSA's data as they felt it included new information and as such, requested that Converse Consultants be able to prepare an amended report to the Peer Review Panel. The City agreed. As of the date that this report was distributed, the City had not yet received the revised report.
Since the Council approved the Peer Review Panel agreement with Ocean Trails, two additional geologic disputes between CSA and Converse Consultants have arisen. They involve the Clay Cap/As-Built Report and the proposed expansion to the Clubhouse Building.
The Clay Cap/As-Built Report is the final report that is to be prepared by the developer after all improvements have been made to the 18-hole course. It will discuss any geologic issues that arose during construction, changes to the project during construction, including the fact that the Clay Cap does not underlie all of the irrigated areas of the golf course, and monitoring procedures for the project after the project opens. The City Geologist, CSA, is required to approve the Report prior to the opening of the 18-hole course (Staff has advised the developer of this fact). Basically, the report acts like a certificate of use and occupancy, meaning that if CSA grants approval, they are stating that the course can be permanently open to the public. To date, Converse Consultants disagrees with CSA as to what additional work is needed before the Report can be approved.
Additionally, when the Council approved the Clubhouse Expansion on August 19, 2003, the Staff Report noted that the condition requiring a 1.5 Factor of Safety (FOS) would continue to be enforced and would need to be satisfied prior to issuance of any building permits for the proposed expansion. The issue of dispute is that Converse Consultants believes that data presented by Converse Consultants proves that there is a 1.5 FOS for the Clubhouse Expansion, while CSA believes that there is not sufficient sub-surface data to support the interpretations and conclusions that Converse Consultants was providing in their reports, and that additional sub-surface data needs to be collected.
At the June 15, 2004 City Council meeting, the Council discussed whether or not to enter into an agreement to permit the Peer Review Panel to review these additional two disputes. At the meeting, the Council expressed concern that the agreement should be amended to reflect that the Panel does not have the ability to alter conditions of approval or matters of policy, which are issues that only the City Council may determine. As part of the discussion of this issue, there was unanimous agreement among the Council Members that the establishment of the 1.5 Factor of Safety for the Clubhouse expansion was a policy matter that the Panel could not alter. However, the Council also agreed that the issue of whether the current condition of the Property where the expansion is to be constructed meets the 1.5 Factor of Safety is a matter for determination by the Panel, which would be binding on the City Council. Likewise, if that area of the Property does not currently have a Factor of Safety of 1.5, the Panel could make recommendations about how the 1.5 Factor of Safety could be achieved, which would be binding upon the City.
The other issue, which was discussed at the June 15th meeting, concerned the requirement that a clay cap be installed under the irrigated areas of the golf course and whether that was a policy matter that only the City Council may determine. At the June 15th meeting, the Council decided not to enter into the Agreement, as originally drafted, because the Council was concerned that the Panel’s determinations could be construed to bind the City with respect to legislative or quasi-juridical decisions that the City Council is required by law to make.
After the June 15th meeting, City Staff reviewed the City’s files. That review demonstrates that the clay cap was not a condition or mitigation measure that was imposed by the City Council. Instead, it was a measure that was developed by the project geologists, Leighton and Associates ("Leighton") and the City’s geologic and geotechnical experts during their review of the project. It is for this reason that during the last three years, CSA has attempted to address the fact that the clay cap does not underlie all of the golf course by requiring other measures be installed in the areas of the golf course that are subject to risk of land failure. Thus, although the clay cap was discussed in the original EIR, along with the use of a water-monitoring program, the details of what the clay cap was to consist of actually were developed in the more detailed geologic reports, which occurred after the Council approved the project and prior to issuance of the grading permit. Accordingly, if changes need to be made to the specifications concerning the clay cap, this is an issue that should be determined by the project geologist with review and approval by the City’s geologic and geotechnical experts, including the Panel.
Based upon this recent information, the City Attorney has prepared a second agreement between the City and Ocean Trails. The agreement expands the Panel's scope of services to include the Peer Review Panel's review of other geologic issues besides the Landslide A issue, which is addressed in the first agreement. The agreement states that the Panel shall provide an impartial analysis of the geological and geotechnical data related to the Property and shall resolve disagreements between City’s geological and geotechnical experts and the experts that are performing work on behalf of Developer, pursuant to a written scope of work or written instructions that are prepared jointly by the City and the Developer.
The attached agreement states that it binds both parties to a decision by the Peer Panel in response to the mutually agreed upon scope of work or instructions. However, the agreement also states that it shall not affect the ability of the current City Council or any future City Council to make legislative or quasi-judicial determinations regarding the golf course and residential project that is being constructed on the Property pursuant to the provisions of Federal or State law or the Rancho Palos Verdes Municipal Code.
It is important to note that the Panel's review of these issues will be very focused, based upon the mutual written instructions or scope of work that are submitted jointly by the City and the Developer. For example, the Panel will not evaluate whether the project needs the clay cap, nor whether or not the Clubhouse Expansion needs to meet the 1.5 Factor of Safety. Instead, the Panel will focus primarily upon whether the recommendations made by the City's Geologist, CSA, are valid. It is these recommendations that the project Geologist, Converse, disputes. Although Staff and Ocean Trails have not agreed to the exact Scope of Review that the Panel will focus upon, Staff believes that the Scope needs to address the following questions:
Clubhouse Expansion: Focus of Peer Panel
Has Converse Consultants provided sufficient data to show that the proposed Clubhouse Expansion has a 1.5 FOS?
Is the additional data that CSA requested in their comment letter appropriate to enable the first question to be answered?
Clay Cap/As-Built Report:
Is the monitoring program and additional information required by CSA's most recent review letter sufficient to address public safety and the lack of the Clay Cap over the entire golf course?
By providing specific questions and issues for the Panel to address in written instructions or a written scope of work provided jointly from the City and the Developer, this should enable the Panel to focus their review upon the areas of dispute between the City and the Developer’s experts and avoid issues that the Council is required to decide.
Finally, at the Council meeting on June 15th, the Council discussed having this agreement have a specific term of thirty-six months. Upon further reflection about this issue, a specific term has not been included for the following reasons: (1) the parties always can agree to terminate the contracts; (2) there would be two agreements addressing the peer review process, one of which would have a term and one of which would not, and (3) having two agreements could make administration of the agreements confusing for everyone because, assuming that the Panel were reviewing a geologic issue three years from now, Staff would have to be sure that the agreement that is covering the particular issue still is in effect so that its protections are in place. Due to these reasons, Staff recommends against including this provision in the new agreement.
In addition to the staff recommendation, the City Council may also wish to consider the following alternatives:
A. Decline to execute the agreement with Ocean Trails. If this alternative were selected, Staff has identified the following two likely outcomes:
B. Identify any issues of concern with the process or the amended agreement, provide Staff with any direction, and continue the item to the next Council meeting.
The current agreement with each of the Peer Review Panel Members contains a fee for service to be paid to the Panel Member by the City. However, there are no Fiscal Impacts to the City as a result of this decision, as all fees paid to the Panel Members by the City are through a Trust Deposit Account that is required to be replenished by the Developer. Of course, if Alternative A above is selected, the City may be faced with costs associated in defending the City's position if these issues are litigated in a court of law.
Joel Rojas, AICP
Director of Planning, Building and Code Enforcement
Second Agreement between the City and Ocean Trails
SECOND AGREEMENT BETWEEN THE CITY OF
RANCHO PALOS VERDES AND V.H. PROPERTIES, CORPORATION
REGARDING GEOLOGIC ISSUES
THIS SECOND AGREEMENT BETWEEN THE CITY OF RANCHO PALOS VERDES AND V.H. PROPERTIES, CORPORATION REGARDING GEOLOGIC ISSUES is made and entered this ____ day of ___________, 2004, by and between the City of Rancho Palos Verdes, a California municipal corporation ("City") and V.H. Properties, Corporation ("Developer"). City and Developer are sometimes referred to singularly herein as "Party" and collectively as the "Parties."
A. Developer is the owner of that certain real property encompassed within Tentative Tract Map No. 50666, a portion of which is proposed for single-family residential development (the "Property"). The Property is part of a larger development, which is owned by Developer and is generally located at 1 Ocean Trails Drive, Rancho Palos Verdes, California, commonly known as the Ocean Trails Project ("Ocean Trails"). Ocean Trails consists of a 258-acre site bounded by Palos Verdes Drive South on the north, the Portuguese Bend Club on the west, the Pacific Ocean on the south and Shoreline Park on the east.
B. City approved various applications for the Ocean Trails project to allow the construction of a Residential Planned Development of 75 single family dwelling units and the development of an 18-hole golf course with associated clubhouse and parking facilities.
C. The Property encompasses three landslide areas. Because portions of the Property that are being developed for residential purposes and for public parks and trails may be affected by one or more landslides on the Property, the public safety, health and welfare require that the geological and geotechnical conditions of the Property be thoroughly analyzed and addressed before the entire eighteen-hole golf course can open for public use.
D. City and Developer have each retained experts to analyze the geological conditions that underlie the site and to make recommendations regarding the potential development of the Property. However, given the inherent complexity of the geology on the Property and the inherent subjectivity of the science of geology, the Parties’ respective experts have not always agreed on the geologic conditions on the Property.
E. In the past, the Parties have found it useful to utilize a three-member panel of independent experts to review the geological and geotechnical data for the Ocean Trails Project to resolve any differences between the Parties’ respective experts. However, the former panel of experts did not provide the definitive guidance desired by either City or Developer regarding the development of the residential lots in Tentative Tract 50666. Accordingly, City and Developer formed a new three-member panel (the "Panel") to resolve disputes regarding the geotechnical and geological issues affecting the development of the residences on the Property.
F. City and Developer have selected three new geological/geotechnical experts to comprise the Panel and entered into an Agreement to memorialize their understanding with respect to certain work that is to be performed by the Panel regarding the boundaries of Landslide A and its affect on future development of the Property ("the First Agreement").
G. City and Developer wish to enter into another agreement so that the Panel can resolve additional disputes between the City’s geological and geotechnical experts and the experts that are performing work on behalf of Developer, which previously were determined by the City’s geologist or geotechnical engineer, regarding additional geotechnical and geological conditions affecting the Property.
NOW, THEREFORE, in consideration of the mutual promises, obligations and covenants hereinafter set forth, the Parties hereto agree as follows:
Section 1. Incorporation of Recitals. Each and every recital set forth above is hereby incorporated by this reference as though set forth in full and expressly made a part of this Agreement.
Section 2. Selection of Panel Experts. City and Developer previously selected three experts who are the members of the Panel pursuant to the provisions of the First Agreement.
Section 3. Impartial Review. The Parties hereby acknowledge and agree that although City shall retain the three experts who will comprise the Panel, the Panel shall be charged with providing an impartial analysis of certain geological and geotechnical data related to the Property and to resolve disagreements between City’s geological and geotechnical experts and the experts that are performing work on behalf of Developer, pursuant to a scope of work that is prepared jointly by the Parties. The Parties further acknowledge and agree that the Panel shall be instructed not to meet, either individually or as a panel, privately with either the City, its geologists or its geotechnical engineers or the Developer, its geologists or its geotechnical engineers. City and Developer further agree that: (i) City and Developer shall limit their contact with the Panel to times when both Parties are present; (ii) City and Developer shall have equal input into the Panel’s performance of its impartial review; and (iii) City and Developer shall provide joint instructions to the Panel. However, nothing in this Section 3 shall be construed to prevent the members of the Panel from meeting with one another privately to discuss the geological and geotechnical data, nor shall this Section 3 prevent the Panel from seeking additional input from the Parties, so long as such requested input shall be either communicated to the City and the Developer in a meeting at which both parties are present or in a writing, which is provided to both Parties simultaneously.
Section 4. Compensation for Panel. Upon execution of this Agreement, Developer shall deposit with the City the sum of $15,000. City shall hold these funds in a trust account established for the purpose of compensating the members of the Panel for their services rendered pursuant to this Agreement. When the balance in the trust account drops below $5,000, City shall notify Developer and request additional funds. Developer shall deposit such additional funds with City within ten (10) business days of receipt of the written request from the City. Notwithstanding the immediately preceding sentence, Developer shall not be in default hereunder if it fails to deposit such additional funds with City, but either party shall have the right to terminate this Agreement if Developer fails to deposit such additional funds with City, all as more specifically set forth in Section 5 below. Nothing herein shall be construed to permit Developer to fail to reimburse City for work that already has been performed by the Panel prior to the date of termination of this Agreement.
Section 5. Termination. If Developer fails to deposit any additional funds contemplated by Section 4 above or Section 8 below, then Developer shall not be default hereunder, but either Developer or City shall have the right to terminate this Agreement by providing at least thirty (30) days advance written notice to the other Party. If Developer fails to provide documentation that has been requested by the Panel within a reasonable period of time, as specified by the Panel and the Parties hereto, City shall have the right to terminate this Agreement by providing at least thirty (30) days advance written notice to the other Party and an opportunity to provide the documentation. Additionally, if Developer sells or otherwise transfers the golf course or substantially all of the residential property contained within Tentative Tract Map No. 50666 to a person or entity that is not affiliated with or related to Developer, then Developer shall have the right to terminate this Agreement by providing at least thirty (30) days advance written notice to the City. If this Agreement is terminated prior to the resolution of the geologic issues concerning the Property, the members of the Panel shall be compensated for the work that has been performed as provided in Section 4, and City again shall use its standard process of having its geologists and geotechnical engineers review the reports and recommendations of the Developer’s experts. Developer further acknowledges that if this Agreement is terminated prior to the resolution of the geologic issues concerning the Property, Developer shall not have the right to rely on this Agreement, that the issue of the developability of particular areas of the Property may not have been resolved to City’s satisfaction, and that City shall not be bound by this Agreement.
Section 6. Scope of Panel’s Review. The Panel shall provide an impartial analysis of the geological and geotechnical data related to the Property and shall resolve disagreements between City’s geological and geotechnical experts and the experts that are performing work on behalf of Developer, pursuant to a written scope of work or written instructions that are prepared jointly by the City and the Developer. In addition to the issues concerning whether the residential lots within Tract 50666 can be developed, which are governed by the First Agreement, the Panel shall resolve the current disputes between the Parties’ geologic and geotechnical experts regarding the proposed expansion of the Clubhouse and regarding the review of the golf course Clay Cap/As-Built Report. City and Developer hereby acknowledge and agree not to restrict the areas that the Panel may explore to make such determinations and to defer to the judgment of the Panel with respect to what additional geologic studies and tests, if any, should be conducted and what additional changes or improvements, if any, should be incorporated into the Project to address these issues and insure public safety. The Panel also shall resolve any other area of dispute between the City’s geological and geotechnical experts and the experts that are performing work on behalf of Developer, pursuant to the written scope of work or written instructions that are prepared jointly by the Parties.
Section 7. Hold Harmless and Covenant not to Sue. The Parties hereby acknowledge that the Panel is being retained to resolve differences between the respective geological/ geotechnical experts retained by the Parties in order to allow Developer to complete the development of the Project, and that the Panel is solely providing impartial analysis and recommendations based on their combined professional judgment and are not preparing geotechnical designs for any future structures on the Property or insuring that the stability is sufficient to safely support such structures. The Parties further acknowledge that the members of the Panel are not in any way interested in the development of the Property, either financially or otherwise, and would not provide the advice contemplated by this Agreement absent assurances by the Parties that they will not sue the Panel or its individual members based on the advice provided. Accordingly, City and Developer hereby covenant and agree not to sue the Panel or any of its individual members for any advice, opinions, conclusions or recommendations the Panel makes with respect to the geological and geotechnical conditions underlying the Property and the stability of the Property for development. Developer further agrees to indemnify, defend and hold the Panel and each member thereof harmless from any claims, losses, costs or damages that result from geological instability on the Property. The members of the Panel are third party beneficiaries of this Agreement, and the provisions of this Section 7 shall also run to the benefit of the members of the Panel as if made directly to them. This Covenant shall survive the termination of this Agreement.
Section 8. Covenant to be Bound. City and Developer hereby agree that this Agreement shall not affect the ability of the current City Council or any future City Council to make legislative or quasi-judicial determinations regarding the golf course and residential project that is being constructed on the Property pursuant to the provisions of Federal or State law or the Rancho Palos Verdes Municipal Code. City and Developer further covenant and agree that any decisions rendered by the Panel regarding geologic or geotechnical issues that are directed to the Panel pursuant to joint instructions from the Parties, which otherwise would be made by the City’s geologic or geotechncial experts, shall be binding on both City and Developer, including, but not limited to: (i) any decisions supporting, or disagreeing with, the recommendations or conclusions of one Party’s geologic or geotechnical experts; and (ii) any conclusions or recommendations regarding geologic or geotechnical issues that are arrived at independently by the Panel, including any recommendations regarding additional studies, borings or analysis to be performed or improvements to be constructed, in response to the joint scope of work or joint written instructions from the Parties. The Parties further agree to take all steps reasonably necessary to diligently pursue and implement the recommendations of the Panel. Notwithstanding the foregoing, Developer shall not be in default hereunder if Developer elects not to incur any additional cost or expense as a result of any such recommendations provided that, in such event, either Party shall have the right to terminate this Agreement as more specifically provided in Section 5 above. This Agreement shall inure to the benefit of and bind the Parties to this Agreement and each of their respective heirs, assigns and successors in interest. Nothing herein shall be construed to grant the Panel any authority to obligate the City to incur any expense whatsoever; and except as expressly provided herein, nothing herein shall be construed to grant the Panel any authority to obligate the Developer to incur any expense whatsoever.
Section 9. Further Assurance. Each Party hereto agrees to take such actions, and to execute such certificates and other instruments, as may be necessary or appropriate to give effect to and carry out the provisions of this Agreement.
Section 10. Integration and Amendment.
10.1. This Agreement, and any documents incorporated herein by specific reference, represents the entire and integrated agreement between Developer and City with respect to the subject matter hereof. This Agreement supersedes all prior negotiations, representations or agreements, whether oral or written. However, this Agreement does not supercede or amend the First Agreement between the Parties.
10.2 This Agreement may not be amended, modified, or expanded except by a written instrument signed by each of the Parties hereto.
10.3 The City has entered into an agreement with each of the members of the Panel. Those three agreements are attached hereto as Exhibits A, B and C and are incorporated herein by this reference, and shall not be amended without Developer’s prior written consent. This Agreement shall not be amended, terminated or otherwise modified without thirty days advance written notice first being provided to all of the members of the Panel.
Section 11. Assignment. Neither Party shall assign its interest in this Agreement, or any portion of this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Developer shall have the right to assign this Agreement to any person or entity to whom Developer sells the golf course or substantially all of the residential portions of Tentative Tract Map No. 50666, provided that at least fifteen days prior to the effective date of such assignment, Developer shall give written notice thereof to City, and provided, further, that Developer shall deliver to City a copy of the proposed assignment and assumption agreement for City’s review and approval, which shall not be unreasonably withheld, and Developer shall deliver a copy of the executed assignment and assumption agreement, in the form approved by the City, prior to the effective date of the assignment.
Section 12. Interpretation. This Agreement is deemed to have been prepared by both of the Parties hereto, after consulting with legal counsel, and any uncertainty or ambiguity herein shall not be interpreted against the drafter, but rather, if such ambiguity or uncertainty exists, shall be interpreted according to the applicable rules of interpretation of contracts under the law of the State of California.
Section 13. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California.
Section 14. Notices. Any notice required or authorized to be given by this Agreement shall, unless otherwise specified herein, be in writing, shall be served on the receiving Party either by personal delivery or deposit in the United States mail with first-class postage prepaid, and shall be addressed to the receiving party’s specified contact person and address listed below, unless written notice is provided of a change of address as to either party. For the purposes of this Agreement, notices delivered in person shall be deemed communicated as of the date of actual receipt; notices sent via regular mail shall be deemed communicated as of three (3) days after deposit thereof in the United States mail, addressed as shown on the addressee’s registry or certificate of receipt.
All notices served pursuant to this Agreement shall be addressed as follows:
If to City: Les Evans, City Manager
City of Rancho Palos Verdes
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275
With a copy to:
Carol W. Lynch, City Attorney
Richards, Watson & Gershon
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071
If to Developer: V.H. Properties Corporation
1 Ocean Trails Drive
Rancho Palos Verdes, California 90275
Attn: Jeff Kaplinski
With a copy to:
Kenneth Wolfson, Esq.
Latham & Watkins
650 Town Center Drive, 20th Floor
Costa Mesa, California 92626-1925
Either City or Developer may change its mailing address at any time by giving written notice of such change to the other party in the manner provided herein at least ten (10) days prior to the date such change is effected.
IN WITNESS WHEREOF, Developer and City have executed this Agreement as of the date first hereinabove written.
CITY OF RANCHO PALOS VERDES
Peter Gardiner, Mayor
Jo Purcell, City Clerk
V. H. PROPERTIES CORPORATION
AGREEMENT WITH AMEC EARTH &ENVIRONMENTAL, INC.
AGREEMENT WITH EARTH CONSULTANTS INTERNATIONAL
AGREEMENT WITH GEOKINETICS