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HomeMy WebLinkAbout09-04-2018 Agenda Packet Tuesday, September 4, 2018 4:00 PM REGULAR MEETING Council Chamber 990 Palm Street San Luis Obispo Page 1 CALL TO ORDER: Mayor Heidi Harmon ROLL CALL: Council Members Aaron Gomez, Andy Pease, Dan Rivoire, Vice Mayor Carlyn Christianson and Mayor Heidi Harmon PUBLIC HEARING AND BUSINESS ITEMS 1. PUBLIC HEARING TO INTRODUCE AN ORDINANCE ESTABLISHING LOCATIONS WHERE CANNABIS BUSINESS ACTIVITY MAY BE PERMITTED WITHIN THE CITY (CODRON/COHEN – 30 MINUTES) Recommendation: Introduce an Ordinance entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, amending the City’s Zoning Code and Zoning Map to designate seven areas of the City as Cannabis Business Overlay Zones where cannabis businesses may be located as may be allowed or conditionally allowed by the underlying zoning district and the rules and regulations established in the Cit y’s Municipal Code (Code-1058-2017)” STUDY SESSION ITEMS 2. STUDY SESSION TO RECEIVE A COMMUNITY CHOICE ENERGY STATUS REPORT AND PROVIDE DIRECTION ON KEY COMMUNITY CHOICE ENERGY ISSUES (HILL/READ – 60 MINUTES) Recommendation: 1. Receive the community choice energy reports and presentation; and 2. Provide policy direction for key community choice energy issues; 1) joint powers agreement components, 2) joint powers authority, 3) director assignments, 4) community choice energy implementing ordinance, and 5) direction on technical energy study components. ADJOURN TO THE REGULAR MEETING OF SEPTEMBER 4, 2018 TO BEGIN AT 6:00 P.M., IN THE COUNCIL CHAMBER Tuesday, September 4, 2018 6:00 PM REGULAR MEETING Council Chamber 990 Palm Street San Luis Obispo Page 2 CALL TO ORDER: Mayor Heidi Harmon ROLL CALL: Council Members Aaron Gomez, Andy Pease, Dan Rivoire, Vice Mayor Carlyn Christianson and Mayor Heidi Harmon PLEDGE OF ALLEGIANCE: Council Member Gomez PROCLAMATIONS AND APPOINTMENTS 3. PROCLAMATION - RECOGNITION OF SERVICE - RON DECARLI 4. PROCLAMATION FOR DRIVE ELECTRIC WEEK 5. APPOINTMENT TO THE HUMAN RELATIONS COMMISSION, PLANNING COMMISSION AND TOURISM BUSINESS IMPROVEMENT DISTRICT BOARD Recommendation: 1. Confirm the appointment of William (Bill) Crewe to the Human Relations Commission, to complete an unexpired term through March 31, 2019; 2. Confirm the appointment of Nicholas Quincey to the Planning Commission, to complete an unexpired term through March 31, 2021; and 3. Confirm the appointment of Dean Hutton to the Tourism Business Improvement District Board, to complete an unexpired term through March 31, 2021. San Luis Obispo City Council Agenda September 4, 2018 Page 3 PUBLIC COMMENT PERIOD FOR ITEMS NOT ON THE AGENDA (not to exceed 15 minutes total) The Council welcomes your input. You may address the Council by completing a speaker slip and giving it to the City C lerk prior to the meeting. At this time, you may address the Council on items that are not on the agenda. Time limit is three minutes. State law does not allow the Council to discuss or take action on issues not on the agenda, except that members of the Council or staff may briefly respond to statements made or questions posed by persons exercising their public testimony rights (Gov. Code sec. 54954.2). Staff may be asked to follow up on such items. CONSENT AGENDA Matters appearing on the Consent Calendar are expected to be non-controversial and will be acted upon at one time. A member of the public may request the Council to pull an item for discussion. Pulled items shall be heard at the close of the Consent Agenda unless a majority of the Council chooses another time. The public may comment on a ny and all items on the Consent Agenda within the three minute time limit. 6. REVIEW MINUTES OF THE AUGUST 21, 2018 MEETING (PURRINGTON) Recommendation: Approve the minutes of the City Council meeting held on August 21, 2018. 7. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES (PURRINGTON) Recommendation: Waive reading of all resolutions and ordinances as appropriate. 8. 2018 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT APPLICATION (CANTRELL/ELLSWORTH) Recommendation: 1. Authorize staff to submit an application for a 2018 Edward Byrne Memorial Justice Assistance Grant in the amount of $15,227. 2. If the grant is awarded, authorize the City Manager to execute necessary grant documents and direct the appropriation of monies into the accounts requir ed to administer the grant. San Luis Obispo City Council Agenda September 4, 2018 Page 4 9. AUTHORIZE A SOLAR POWER PURCHASE AGREEMENT WITH FOREFRONT POWER FOR CITY FACILITIES (HILL/READ) Recommendation: 1. Authorize staff to negotiate a solar power purchase agreement with ForeFront Power for the design and potential development, operation, and maintenance of solar energy systems at and for city facilities; and 2. Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, making findings on energy savings and determining other matters in connection with energy service agreements;” and 3. Authorize the City Manager to enter into a solar power purchase agreement with ForeFront Power in a form subject to the approval of the City Attorney; and 4. Authorize the City Manager to enter into Interconnection Agreements to maintain “time of use” rates for City facilities in a form subject to the approval of the City Attorney. 10. ELIMINATE THE SPECIFIED HOURS OF OPERATION FOR ALL PUBLIC PARKING STRUCTURES TO ALLOW THE PARKING STRUCTURES TO BE OPERATIONAL ON A 24/7/365 BASIS (GRIGSBY/LEE) Recommendation: Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, to eliminate hours of operation at public parking structures” 11. REVIEW OF A MILLS ACT HISTORIC PRESERVATION AGREEMENT FOR THE MASTER LIST HISTORIC HARRY E. LYMAN HOUSE (CODRON/OETZELL) Recommendation: Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving a historic pro perty preservation agreement between The City and the owner of the Harry E. Lyman House at 868 Upham Street” 12. REVIEW OF A MILLS ACT HISTORIC PRESERVATION AGREEMENT FOR THE MASTER LIST HISTORIC TEASS HOUSE (CODRON/OETZELL) Recommendation: Adopt a Reso lution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving a Historic Property Preservation Agreement between the City and the Owner of the Teass House at 890 Osos Street.” San Luis Obispo City Council Agenda September 4, 2018 Page 5 13. APPROVAL OF SOLE SOURCE ELECTRIC VEHICLE CHARGING STATION CONTRACT WITH CHARGEPOINT, APPROPRIATE ADDITIONAL FUNDS FROM PARKING FUND, AUTHORIZE CITY MANAGER TO ESTABLISH ELECTRIC VEHICLE CHARGING RATES AND TO SIGN MASTER SERVICES AND SUBSCRIPTION AGREEMENTS (GRIGSBY/LEE) Recommendation: 1. Approve the award of a sole source contract to ChargePoint for the purchase of Electric Vehicle charging stations; and 2. Appropriate $150,000 in additional funds from the Parking unreserved working capital to cover additional costs for expanding the project to include the Marsh Street Structure and two floors in the 919 Palm Street Structure; and 3. Authorize the City Manager, or his designee, to establish and modify the EV charging rates for each location; and 4. Authorize the City Manager, or his designee, to sign the Master Services and Subscription Agreement with ChargePoint. PUBLIC HEARING AND BUSINESS ITEMS 14. WATER RESOURCE RECOVERY FACILITY PROJECT UPDATE (MATTINGLY/HIX – 15 MINUTES) Recommendation: Receive and file the update on the Water Resource Recovery Facility Project and associated Project Labor Agreement negotiations. 15. ANHOLM BIKEWAY AND GENERAL PLAN AMENDMENTS (GRIGSBY/HUDSON – 150 MINUTES) Recommendation: 1. Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, to approve an amendment to The Anholm Bikeway Plan” to define neighborhood wide traffic calming measures and a trial traffic diverter at the intersection of Broad St. and Ramona/Meinecke Streets; and 2. Adopt a Resolution entit led, “A Resolution of the City Council of the City of San Luis Obispo, California, to approve an amendment to the Circulation Element of the General Plan, an addendum to the General Plan Circulation Element Final Environmental Impact report and an amendment to The Anholm Bikeway Plan,” amending Figure 1 of the General Plan Circulation element reclassifying Chorro St. (Foothill Blvd. to Palm St.) and Lincoln St. (Chorro St. to Broad St.), from Residential Collectors (major) to Residential Arterials, and Meinecke Ave. & Murray St. (Broad St. to Santa Rosa St.) from Local to Residential Collector (minor), and approving an addendum to the General Plan Final Environmental Impact Report. San Luis Obispo City Council Agenda September 4, 2018 Page 6 LIAISON REPORTS AND COMMUNICATIONS (Not to exceed 15 minutes) Council Members report on conferences or other City activities. At this time, any Council Member or the City Manager may ask a question for clarification, make an announcement, or report briefly on his or her activities. In addition, subject to Council Policies and Procedures, they may provide a reference to staff or other resources for factual information, request staff to report back to the Council at a subsequent meeting concerning any matter, or take action to direct staff to place a matter of business on a futu re agenda. (Gov. Code Sec. 54954.2) ADJOURNMENT The next Special and Regular City Council Meetings are scheduled for September 18, 2018, at 5:30 p.m. and 6:00 p.m., respectively, in the Council Hearing Room and Council Chamber, 990 Palm Street, San Luis Obispo, California. LISTENING ASSISTIVE DEVICES are available for the hearing impaired--please see City Clerk. The City of San Luis Obispo wishes to make all of its public meet ings accessible to the public. Upon request, this agenda will be made available in appropriate alternative formats to persons with disabilities. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should direct such request to the City Clerk’s Office at (805) 781-7100 at least 48 hours before the meeting, if possible. Telecommunications Device for the Deaf (805) 781-7107. City Council regular meetings are televised live on Charter Channel 20. Agenda related writings or documents provided to the City Council are available for public inspection in the City Clerk’s Office located at 990 Palm Street, San Luis Obispo, California during normal business hours, and on the City’s website www.slocity.org. Persons with questions concerning any agenda item may call the City Clerk’s Office at (805) 781 -7100. Meeting Date: 9/4/2018 FROM: Michael Codron, Community Development Director Prepared By: Rachel Cohen, Associate Planner SUBJECT: CANNABIS OVERLAY ZONES RECOMMENDATION As recommended by the Planning Commission, introduce an ordinance to adopt seven Cannabis Business Overlay Zones (CBZs) establishing the locations where cannabis business activity may be permitted within the City of San Luis Obispo. DISCUSSION Background On May 15, 2018, the City Council adopted Ordinance 1647 (2018 Series) establishing overall regulations fo r cannabis businesses in the City and identifying the zones where various business types are allowed (Council Reading File). The regulations establish a two-step process that first requires certification of eligible business operators, and then approval of a land use permit for the specific site. The overall cannabis ordinance will not go into effect unless the residents of the City approve a revenue measure on the November 2018 election ballot that provides for the taxation of various cannabis business activities. Implementation of the ordinance also requires the establishment of overlay zones, further defining where cannabis business activities may be allowed. On July 25, 2018, the Planning Commission reviewed the boundaries of seven proposed Cannabis Business Overlay Zones (CBZs), made modifications and forwarded its recommendation to the City Council for approval. CBZ Basics The seven proposed CBZs have been identified as areas that are appropriate for cannabis business activity (full color maps can be found in Attachment B). A cannabis business may only be established within these zones following a two- step process. First, the business must be certified as eligible through the City’s application process, and second, the business must obtain the appropriate land use permit and State license for its specific location. The location of the CBZs takes into account buffers required by State law, buffers required by the City’s ordinance, and other potential land use Packet Pg. 7 Item 1 conflicts. Going forward, the use of overlay zones is intended to improve awareness and understanding of where cannabis businesses may operate within the City. The overlay zones will also ensure consistent application of the City’s standards and prevent cannabis businesses from being located in areas of the City that have previously been deemed inappropriate. If the City Council approves the establishment of the proposed CBZs, t he process for a business or property owner to identify an eligible location for a cannabis business would be to: 1. Locat e available property within a CBZ; 2. Ensure that the property is also zoned appropriately for the type of business to be conducted; 3. Ensure that the City and State requirements for buffers from sensitive land uses can be met ; and 4. Proceed with the applicatio n process to be established by the City. Buffers State Law requires buffers of 600 feet from any cannabis business to any school, park, day care center, or youth center. These buffers must be maintained in order for a business to get its State license. The City’s ordinance works in conjunction with State mandated buffers to ensure land use compatibility between cannabis businesses and adjacent land uses. The following table summarizes the City’s buffers, and how buffers and overlay zones function in conjunction with one another. Type of Business City Buffer State Buffer Retail Store • 1,000 feet from any other retail store, school or park. • 600 feet from any day care center, and • 300 feet from residential zoning located within the overlay zone only • 600 feet from any school, park, day care center, or youth center Cultivation • None • 600 feet from any school, park, day care center, or youth center Manufacturing • None • 600 feet from any school, park, day care center, or youth center Distribution • None • 600 feet from any school, park, day care center, or youth center Testing • None • 600 feet from any school, park, day care center, or youth center Non-Storefront Retail • None • 600 feet from any school, park, day care center, or youth center Packet Pg. 8 Item 1 As noted in the table, the City’s ordinance only requires buffers for retail stores, however, businesses will still need to comply with State required buffers in order to receive their State license. While there is no buffer from residential uses in State law, the City has established a 300-foot buffer between residentially zoned land and retail stores. However, this buffer only applies from residential zoning that occurs within that same overlay zone. There are two locations where this occurs, one is in the Broad Street Corridor CBZ, and the other is in the Airport Area CBZ. Cannabis Business Zones The Planning Commission carefully reviewed and discussed each of the proposed CBZs. Modifications were made to the Higuera Commerce Park CBZ to pull the zone boundary back from Prado Road due to residential land uses across Prado. In addition, the South Higuera Street CBZ was pulled back from the street frontage south of Vachell Lane due to a school site located at the corner of Los Osos Valley Road and South Higuera Street. Finally, the Co mmission pulled back the CBZ boundary off of Orcutt Road in the Duncan-McMillan CBZ because of the proximity of residential uses. Each of these adjustments reduce the number of parcels available for a cannabis retail store. This has created some concern that the number of available properties for a retail storefront is too limited. Staff has had some feedback from prospective business operators that there is limited property available within the proposed CBZs for retail stores. As a result, staff will continue to monitor the situation and may propose additional CBZs if determined to be necessary to support the establishment of three retail stores as allowed by the regulations. 1. Mid-Higuera Area The Mid-Higuera CBZ generally follows the boundaries of t he Mid-Higuera Area Plan, except that the area does not extend south of South Street. In addition, the boundary does not extend to the east side of Parker Street because of adjacent residential uses. The Mid -Higuera Area includes Service Commercial and Ret ail Commercial zoning. Higuera Street is an arterial road. Therefore, staff expects that one of the City’s three possible retail storefronts will be located in this area. 2. Broad Street Corridor The Broad Street Corridor CBZ generally follows the bound aries of the Broad Street Corridor Plan. This plan area includes residentially zoned land within the CBZ boundary. As a result, the map depict s a 300-foot buffer. Retail stores are required to be located outside of the residential buffer area depicted on t he map, however, other cannabis businesses that do not include customer visitation may be permitted in these areas. The Broad Street Corridor Area includes Service Commercial and Retail Commercial zones and Broad Street is an arterial road. Therefore, staff expects one of the City’s three retail storefronts to be located in this area. 3. Orcutt Road Area The Orcutt Road Area is contiguous with the Broad Street Corridor Area but there is no pedestrian or vehicle circulation between the two areas. In addit ion, there is a service alley and significant grade change between the residential land above (Villa Rosa and Moylan Terrace) and the services and manufacturing area located on McMillan Street and Duncan Street. The zoning in this area is Manufacturing. Packet Pg. 9 Item 1 4. Airport Area The Airport Area is the largest CBZ and includes land along Tank Farm, South Higuera, Broad Street, Suburban and local streets within the area. South Higuera, Tank Farm Road, and Broad Street are arterial roads. Service Commercial zoned land along these streets within the Airport Area CBZ would be appropriate for one of the City’s three retail storefronts. There is one area with residentially zoned land in the Airport Area located along Tank Farm Road close to Broad Street. The site is currently developed with the Hidden Hills Mobile Home Lodge. A 300-foot buffer from this property is depicted on the CBZ map for reference. 5. Margarita Area The Margarita Area includes land that is zoned Business Park on the south side of Prado Road. This is undeveloped land with significant infrastructure requirements precedent to development. This area is separated from residential land in the area by Prado Road. Prado is an arterial road, however, Business Park zoning does not allow for a retail storefro nt. 6. Higuera Commerce Park The Higuera Commerce Park is an area zoned Service-Commercial that includes a variety of light manufacturing, design and production offices, and other similar uses. The area is characterized by relatively high employee dens ity, with low-scale offices and on-site parking. The area is bordered by South Higuera Street, which is arterial road. It may be possible for a retail storefront to be located in this area. This area is likely to see a variety of other cannabis business activities with properties suitable for distribution centers, testing labs, and manufacturing. 7. Sacramento Drive The Sacramento Drive area is very similar to the Higuera Commerce Park area except that the lots are generally larger and there are a larger variety of business types in this area - from telecommunications to food manufacturing. The zoning is primarily Manufacturing and storefront retail sales would not be permitted either as a stand -alone operation or as part of a microbusiness. Zoning Regulations Cannabis businesses must be located in a CBZ and comply with the underlying zoning for the property upon which the building is established. Cannabis business activity includes a variety of business types that are only allowed with prior approval of a permit. The following table highlights the use types, the zones they are allowed to be located in, and the type of permit required. Packet Pg. 10 Item 1 Next Steps Staff is working on two additional items for the City Council to consider as part of the cannabis business regulatory program, as follows: 1. Application Requirements and Ranking Criteria (October 2) 2. Cost of Services Study and Fee Schedule (November 13) In addition, through this overlay zoning process, staff has developed a better understanding of effect of State required buffers and the buffers established in the City’s regulations. Accordingly, prior to the effective date of Ordinance No. 1647 (2018 Series), staff intends on bringing back minor modifications to the buffer sections of that Ordinance in order to be fully consistent with the CBZ overlay zones as proposed in this Ordinance. Once these items are completed, and if the residents of San Luis Obispo approve the cannabis business tax on the November ballot, the City can move forward and launch its regulatory program by opening up the first application period for cannabis businesses. A target date will be established with the City Council on October 2. ENVIRONMENTAL REVIEW Business and Professions Code section 26055, subdivision (h), as amended by SB 94 (otherwise known as the Medical and Adult Use Cannabis Regulation and Safety Act (MAUCRSA)), provides that the California Environmental Quality Act (“CEQA”) does not apply to the adoption of an ordinance, rule, or regulation by a local jurisdiction that req uires discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity, so long as the discretionary review includes any applicable environmental review pursuant to CEQA. Future applications for commercial cannabis business activities in the City will be subject to CEQA, per the normal environmental review process. Packet Pg. 11 Item 1 FISCAL IMPACT As legal cannabis sales and production is an emerging industry, staff has worked with two different consultants, HdL and MuniServices, to develop an estimated amount of revenue to expect from a cannabis business tax. Optimistically, cannabis business activities would begin at the earliest in January 2019. However, it is expected to take some time for the City to establish it s permitting and regulatory protocols, and for businesses to find appropriate properties and obtain the necessary permits to operate. As a result, tax revenues from Cannabis are anticipated to increase through the next several years as businesses mature. T he annual projected revenue from cannabis related businesses is expected to increase over the next several years to an estimate of $1,500,000. Cannabis business tax revenue estimates have been included in the City’s Fiscal Health Response Plan presented to Council on April 17, 2018. The plan includes an estimate of $100,000 in FY 2018-2019 in cannabis tax revenue. ALTERNATIVES 1. Modify the Proposed Ordinance. The City Council is free to make modifications to the recommendations presented. The Council can make minor modifications “on the fly” during the meeting. More significant changes should return to the Council following additional staff analysis. 2. Continue Consideration of Ordinances to a Future Date. The City Council could direct staff to conduct addit ional research or outreach on more or more components of the recommended ordinances. If this alternative is taken, the Council should provide direction to staff regarding additional information needed to move forward. 3. Direct Staff Not to Move Forward with Overlay Zones. The City Council could decide not to establish overlay zones. In this case, the zoning of a property would be sufficient to allow an application to move forward. This alternative is not recommended because there are certain C-R (Retail Commercial), and C-S (Service Commercial) zones that are located adjacent to downtown, along Foothill Boulevard, or adjacent to sensitive land uses that would not be appropriate for cannabis business activity and retail cannabis stores in particular. Attachments: a - Draft Council Ordinance b - Exhibit A Cannabis Overlay Zone Maps c - Adopted Cannabis Ordinance (O-1647 (2018 Series)) Packet Pg. 12 Item 1 R ______ ORDINANCE NO. _____ (2018 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING THE CITY’S ZONING CODE AND ZONING MAP TO DESIGNATE SEVEN AREAS OF THE CITY AS CANNABIS BUSINESS OVERLAY ZONES WHERE CANNABIS BUSINESSES MAY BE LOCATED AS MAY BE ALLOWED OR CONDITIONALLY ALLOWED BY THE UNDERLYING ZONING DISTRICT AND THE RULES AND REGULATIONS ESTABLISHED IN THE CITY’S MUNICIPAL CODE (CODE-1058-2017) WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing on July 25, 2018 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, for the purpose of considering amendments to the zoning code and the zoning map to establish Cannabis Overlay Zones and making recommendations to the City Council regarding such amendments; WHEREAS, overlay zones are recommended as a more precise way to establish the locations in the City where cannabis business activities may be appropriate; and WHEREAS, the proposed Cannabis Overlay Zones are sufficient in size to allow for a variety of cannabis business activities to occur in various locations of the City; and WHEREAS, the locations of the zones have been established in consideration of adjacent uses, and, all new cannabis businesses are subject to a requirement to obtain a land use permit, which is a process that provides for notification of neighbor ing property owners, businesses, and residents, and ensures compatibility of uses through the imposition of conditions of approval; and WHEREAS, on September 4, 2018, the City Council considered such amendment in a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California ; and WHEREAS, the City Council has duly considered all evidence, including the testimony interested parties, and the evaluation and recommendations of staff presented at said hearing. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows: SECTION 1. Finding. The proposed “CBZ” overlay zoning is intended to more precisely implement the rules and regulations associated with cannabis business activity in the City, as detailed in Chapter 17 and Chapter 9 of the City’s Municipal Code. SECTION 2. Environmental Review. The project is exempt from environmental review per the Business and Professions Code (Section 26055(h)) because the project includes the adoption of ordinances, rules, or regulations for the purpose of regulating cannabis business activity in the City. The City’s cannabis business regulations require discretionary review and Packet Pg. 13 Item 1 Resolution No. _____ (2018 Series) Page 2 approval of permits, licenses, or other authorizations to engage in co mmercial cannabis activity. Future applications for commercial cannabis business activities in the City will be subject to CEQA, per the normal environmental review process. SECTION 3. Action. The City Council hereby adopts an ordinance: (1) amending the City’s Zoning Map to designate properties that will be included in the CBZ, in seven separate areas of the City as depicted in Exhibit A which is incorporated herein by this reference; and (2) amending San Luis Obispo Municipal Code Section 17.06.0 10 by adding the “CBZ - Cannabis Business Overlay Zone” as a zoning designation. SECTION 4. Severability. If any subdivision, paragraph, sentence, clause or phrase of this Ordinance is, for any reason, held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect the validity or enforcement of the remaining portions of this Ordinance, or any other provisions of the City’s rules and regulations. It is the City’s express intent that each remaining p ortion would have been adopted irrespective of the fact that any one or more subdivisions, paragraphs, sentences, clauses, or phrases be declared invalid or unenforceable. INTRODUCED on the ____ day of _______ 2018, AND FINALLY ADOPTED by the Council of t he City of San Luis Obispo on the _____ day of _______2018, on the following vote: AYES: NOES: ABSENT: ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney Packet Pg. 14 Item 1 Resolution No. _____ (2018 Series) Page 3 IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo , California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 15 Item 1 PISMO STC A R M E L S TPACIFIC STHIGH ST HIGUERASTMARSHSTBEEBEE STSOUTH ST W A L K E R S T A R C H E R S T BROOK STBUCHON STBIANCHI ST PACIFICPISMOALLEYSANDERCOCK ST BRANCH STPARKER STHWY101Cannabis Zones Parcels C-R C-S C-T C/OS M R-2 R-3 R-4 Mid-Higuera 0 100 200 300 400 500 FeetO Overlay Area 2018/08/15 Packet Pg. 16 Item 1 B R O A D S T MUTSUHITO AVEROUNDHOUSE AVE SOUTH ST FENNEL STLAWRENCE DR ORCUTT RDSANTABARBARASTMORRISON ST SAN CARLOS DR FRANCIS STCAUDILL ST GAIL PLBUSHNELL STLAWTON AVEVI C T O R I A A V E VI C T O R I A A V E LEONAAVECHANDLER STWOODBRIDGE ST FUNSTON AVE ALPHONSO STGARIBALDI AVEHUMBERT AVECAUDILL STMITCHELL DR STONERIDGE DR LAWRENCE DR SWEENEY LN BRANCH ST PERKINS LNEMILY STBLVD DEL CAMPOFENNELSTDUNCAN RDMCMILLAN AVECannabis Zones Parcels 300' Residential Zone C-C C-N C-R C-S C/OS M O PF R-1 R-2 R-3 R-4 South Broad 0 200 400 600 800 1,000 FeetO Overlay Area 2018/08/15 Packet Pg. 17 Item 1 ORCUTT RD MORRISON ST GARIBALDI AVEDUNCAN RDMCMILLAN AVECannabis Zones Parcels C-C C-S C/OS M O PF R-3 R-4 Duncan McMillan 0 100 200 300 400 500 FeetO Overlay Area 2018/08/15 Packet Pg. 18 Item 1 FENNEL STLAVENDERSTTARRAGON LN CORIANDER STFENNELSTBAYLEAFDR VIA ESTEBANSA C R A M E N T O D RROBERTOC T M I G U E L I T O C T BASILLN H O L L Y H O C K W A YWILLOWCIRB U L L O C K L N INDUSTRI AL W A YRICARDO STC A P IT O L IO W A Y BROAD ST B O U G A IN V IL L E A S T Cannabis Zones Parcels C-C C-R C-S C/OS M PF R-1 R-2 R-3 R-4 Sacramento Industrial 0 100 200 300 400 500 FeetO Overlay Area 2018/08/15 Packet Pg. 19 Item 1 S HIGUERA STGRANADA DR PRADORD BONETTI DR HIND LN LONG STSUELDO STEMPRESA DREMPLEO STOLD WINDMILL LNTAN K FARM RD ZACA L N FRONTAGE RDMEISSNER ST PRADO RD Cannabis Zones Parcels BP C-S C/OS M O PF R-2 Higuera Commerce Park 0 100 200 300 400 500 FeetO Overlay Area 2018/08/15 Packet Pg. 20 Item 1 SUELDO STTANK FARM RD PRADO RD MARGARITA AV E Cannabis Zones Parcels BP C-N C-S C/OS M O PF R-1 R-2 R-3 Margarita 0 200 400 600 800 1,000 FeetO Overlay Area 2018/08/15 Packet Pg. 21 Item 1 TANK FARM RD BUCKLEY RD SANTA FERDHOOVERRDB R O A D S T PRADO RD LOSOSOSVALLEYRD HWY 101MARGARITA AV E S HIGUERA STCannabis Zones Parcels 300' Residential Zone BP C-C C-N C-R C-S C-T C/OS M O PF R-1 R-2 R-3 R-4 Airport 0 800 1,600 2,400 3,200 4,000 FeetO Overlay Area 2018/08/23 EXHIBIT A Packet Pg. 22 Item 1 Meeting Date: 9/4/2018 FROM: Robert Hill, Interim Deputy Director, Office of Sustainability Prepared By: Chris Read, Sustainability Manager SUBJECT: STATUS REPORT AND DIRECTION ON COMMUNITY CHOICE ENERGY STUDY SESSION RECOMMENDATIONS 1. Receive the attached community choice energy reports and presentation; and 2. Provide policy direction for key community choice energy issues ; 1) joint powers agreement components, 2) joint powers authority, 3) director assignments, 4) community choice energy implementing ordinance, and 5) direction on technical energy study components. REPORT IN BRIEF This report provides and overview and high-level explanation of Community Choice Energy (CCE, also known as Community Choice Aggregation), as well as a summary of City Council direction and work completed to date. The September 18, 2018 City Council meeting will give the City Council an opportunity to approve an implementing ordinance and resolution to establish a CCE program, or to cease work on the effort. If Council decides to proceed, it will need to approve two documents: 1) the implementing CCE Ordinance; and 2) a Resolution approving a Joint Exercise of Powers Agreement which contractually creates the Joint Powers Authority (JPA) that would host and operate the CCE program and appoint City representatives to serve on the Board of Directors. This report describes and provides four attachments to assist with City Council’s decision: 1) the draft Technical Study assessing program feasibility (Attachment A), 2) the draft CCE implementing Ordinance (Attachment B), 3) the draft JPA Agreement (Attachment C), and 4) the draft JPA resolution (Attachment D). Staff will compile Council comments at the meeting on all the attachments and return with the completed technical study and the final implementing Ordinance, JPA Resolution, and JPA Agreement at Council’s September 18, 2018 meeting dependent on Council direction. DISCUSSION Background About Community Choice Energy CCE, authorized by Assembly Bill 117, is a state law that allows cities, counties and other authorized entities to aggregate electricity demand within their jurisdictions to purchase and/or generate electricity supplies for residents and businesses within their jurisdiction while maintaining the existing electricity provider for physical transmission and distribution services. CCEs are typically created to provide a higher percentage of renewable energy electricity, such as wind and solar, at competitive and potentially cheaper rates than existing Investor Owned Packet Pg. 23 Item 2 Utilities (IOUs), while giv ing consumers local choices and promoting the development of renewable power sources and local economic development. The City Council has been supportive of the research and development of a viable regional Community Choice Energy (CCE) program for the Cit y of San Luis Obispo and surrounding communities for the last several years. Previous Council Direction In December of 2013, City staff presented the City Council with a detailed report to educate the Council and Community about Community Choice Energy (CCE). In March of 2015, the City Council approved Resolution No. 10609 confirming the City of San Luis Obispo’s participation in the exploration of CCE. The Resolution authorized participation in an inter-jurisdictional investigation into CCE feasibility allowing execution of appropriate documents to allow technical consultants to acquire energy usage load data from the electric distribution utility for analysis in feasibility study. In June of 2017, the City Council adopted the 2017-2019 Financial Plan, which identifies Climate Action as a Major City Goal. The goal includes the following objective: “Assess and report the requirements to achieve the ’net -zero carbon City’ target including feasibility analysis and implementation of a Community Choice Energy p rogram.” Should the City Council decide to move forward with implementation, these actions would surpass the goals and outcomes anticipated in the Major City Goal work program and thus Council would need to be cognizant of the limited resources moving forward to take on other climate related actions. Given the GHG reduction potential of taking this action, staff recommends that this is a worthwhile tradeoff and embodies the principle of focusing sustainability resources on actions that have the highest pot ential to reduce GHG emissions. In December of 2017, the City Council reviewed results of CCE feasibility studies and held a study session reviewing CCE options. The two CCE feasibility studies (one study assessing the feasibility of a program in the counties of Santa Barbara, Ventura, and San Luis Obispo, the other assessing the feasibility of a program including the City and County of San Luis Obispo) provided a range of results, but across the studies, staff interpreted the results to confirm that a CCE program in PG&E service territory could be feasible. As a result, City Council provided staff direction to “pursue forming a new CCE, in conjunction with other interested jurisdictions in San Luis Obispo County and/or in PG&E territory of Santa Barbara Co unty. If that option is not feasible, then staff should pursue joining an existing CCE such as Monterey Bay Clean Power or other comparable alternatives.” In January of 2018, Mayor Harmon sent letters to the County of San Luis Obispo and the Cities of Paso Robles, Atascadero, Morro Bay, Grover Beach, Pismo Beach, and Arroyo Grande. On April 24, 2018, Morro Bay City Council committed to pursuing CCE program formation with the City of San Luis Obispo. Packet Pg. 24 Item 2 In February of 2018, the California Public Utilities Commission (CPUC) issued Resolution E- 4907, which requires new CCE programs to have one full calendar year elapse prior to serving customers. This issue has altered timing considerations and presents the following timelines: • If an Implementation Plan is submitted by January 1, 2019, customers can begin service on January 1, 2020 • If an Implementation Plan is submitted after January 1, 2019, but before January 1, 2020, customers can begin service on January 1, 2021 Since March of 2018, staff have met with representatives from operational CCE programs, trade groups, service providers, local experts, and the SLO Climate Coalition Task Force to vet potential approaches and understand timing and cost issues for each. The City’s preferred approach is to operate the program through a JPA with Morro Bay with the intention of inviting other regional jurisdictions to participate in future years. In May of 2018, the City Council authorized the release of an RFP for a technical and energy services vendor to refresh feasibility assessment assumptions, draft the CPUC required Implementation Plan, provide credit solutions to financing initial power purchases, and provide power procurement -related operational services (e.g., purchasing power on the City’s behalf, interacting with the California Independent System Operator (CAISO), assisting with regulatory findings, etc.). At the same meeting, City Council authorized the City Manager to enter into an agreement with the selected vendor. Vendor Selection Process The City received three proposals. The proposals were reviewed, and the proposing entities were interviewed by a six-member review team consisting of: • Chris Read, City of San Luis Obispo, Sustainability Manager • Bob Hill, City of San Luis Obispo, Interim Deputy Direct or, Office of Sustainability • Scott Collins, City of Morro Bay, City Manager • Eric Veium, SLO Climate Coalition Task Force, Chair • Deb Emerson, Sonoma Clean Power, Director of Power Services • Shawn Marshall, LEAN Energy, Executive Director The Energy Authorit y (TEA) was identified as the most experienced, flexible, high quality, and lowest cost option. After proposal review and interviews, the review team unanimously selected TEA. As a requirement of the RFP, TEA agreed to defer incurred costs for all technic al work until the program becomes operational in 2020. If the City Council chooses not to proceed with Community Choice Energy at the September 18, 2018 meeting, the City may withdraw from the contract at no cost. Additionally, the negotiated agreement wit h TEA allows for the full transfer of all contractual liabilities and obligations from the City to the JPA created to host the CCE. If the City Council commits to moving forward at the September 18, 2018 meeting and the JPA does not form, the City continue s working with TEA to form a single jurisdiction CCE program. In the unlikely worst-case scenario that the CCE program does not launch at all, the City would Packet Pg. 25 Item 2 be responsible for up to $250,000 in deferred costs to TEA. As a matter of responsible financial planning, staff recommends reserving carryover funds from the 2017 -18 budget should the City unexpectedly need to accommodate this contingent liability. Technical Study The draft Technical Study provided by TEA evaluates the feasibility of implement ing a CCE program in three groupings of the Cities of San Luis Obispo, Morro Bay, Paso Robles, and Grover Beach. The findings presented in this Council Agenda Report focus exclusively on the participation scenario that includes the Cities of San Luis Obispo and Morro Bay. The Technical Study evaluates three power supply scenarios. Each scenario contains a different amount of California Renewable Portfolio Standard (RPS) compliant power . RPS compliant power includes power sources such as solar, wind, small-hydroelectric, and bio-mass. Additional power sources exist that do not generate GHG emissions, but are not legally defined as “renewable” in California (e.g., large hydroelectric and nuclear). The Technical Study’s financial pro forma assumes each scenario is 100 percent greenhouse-gas (GHG) free. TEA concludes that under base-case market and regulatory conditions, all three presented supply scenarios would be feasible while offering customers a rate-discount relative to PG&E. Table 1 shows cumulative net revenues in the third year of operations as a total and as a percent of annual operating expenses assuming the CCA offers a 3% rate discount relative to PG&E. The draft Technical Study is provided as Attachment A. Table 1. Draft Technical Study Summary Findings Metric Supply Scenario 1 Supply Scenario 2 Supply Scenario 3 Renewable Portfolio Standard Percentage RPS-Compliant (33% in 2020, increasing to 50% by 2030) 50% 75% GHG Free Percentage 100% 100% 100% Average Rate Savings 3% 3% 3% Cumulative Net Revenues at End of Year 3 $12.3 million $11.3 million $9.7 million Cumulative Net Revenues at End of Year 3 as a Percentage of Annual Operating Expenses 68% 61% 51% Generating cumulative net revenues at the levels shown in Table 1 is an indication that adequate funds should be available for the CCE program to meet critical financial needs such as: • Self-funding working capital requirements; • Establishing a rate stabilization fund; • Demonstrating the creditworthiness needed to enter into long -term contracts; and • Investing in local programs critical to meeting the goals of the CCA. Packet Pg. 26 Item 2 TEA also conducted a stress-test analysis on the results assuming 75th percentile energy market prices (an approximately $5 per MWh increase above current forward price s), a 40 percent increase in the Power Charge Indifference Adjustment (PCIA) rate, and lower than expected generation rates for PG&E. Under these stress-test conditions, all three supply scenarios resulted in negative net revenues year-over-year. Rate premiums would be required to generate a similar level of cumulative net revenues to what is shown in the base case scenario. It is important to note that a four city CCE scenario that also incudes Grover Beach and Paso Robles is the most resilient to the stress-test scenario, which is consistent with the greater economies of scale provided by this alternative. The Power Charge Indifference Adjustment (PCIA) is one of the most critical variables in projecting future CCE program financial viability. The PCIA is an exit fee charged by investor- owned utilities (IOUs) to customers that switch to another provider of electricity generation service through direct access or community choice aggregation. The fee is designed to cover above-market costs from contracts that the utilities entered into but no longer need and cannot sell in the market for the price they paid. The California Public Utilities Commission has an open proceeding, the PCIA Rulemaking Proceeding R.17-06-026, intended to make changes to how the fee is calculated. The final outcome of this proceeding is expected to be known on September 13, 2018 but may not be known until October. TEA has attempted to analyze the possible range of outcomes that may result from this proceeding. While the Technical Study ultimately concludes the CCE program in question would be feasible under most market and regulatory conditions, these findings are highly subject to changes in market and regulatory conditions. As such, it will be critical to continually re-evaluate feasibility following the PCIA ruling, and throughout the implementation process. TEA advises the City of San Luis Obispo and the City of Morro Bay to view the results of the Technical Study as supportive of continuing to move forward with CCE program development, including preparation of an Implementation Plan. However, CCE viability should continue to be assessed on an ongoing basis at each critical step of program development. CCE Implementing Ordinance and Joint Powers Agreement Section 366.2(c)(12)(B) of the Public Utilities Code expressly contemplates the creation of a JPA so that counties and cities can “participate as a group in a community choice aggregation program.” California cities and counties can exercise this option by doing two things: 1) ente ring into a Joint Powers Agreement forming a JPA under Section 6500, et seq. of the Government Code; and 2) adopting an Ordinance electing to implement a community choice program within its jurisdiction as required by Section 366.2(c)(12)(A). Implementing Ordinance An Ordinance that complies with the requirements of Section 366.2(c)(12)(A) is included as Attachment B. Staff is requesting Council’s comments on Attachment B. Staff will present the Ordinance for adoption at the September 18, 2018 meeting and will present the Ordinance for a second reading at the October 2, 2018 meeting. Packet Pg. 27 Item 2 JPA Agreement The draft JPA Agreement and supporting resolution establishing the JPA are provided as Attachment C and Attachment D. The draft language is recommended by the joint City of Morro Bay and City of San Luis Obispo planning team that has been meeting on this topic for several months. The planning team, with support from the City of San Luis Obispo and City of Morro Bay city attorneys, and outside legal support from Greg Stepanicich of Richards, Watsons, & Gershon, drafted the JPA document and ordinance working from discussions with key stakeholders, the SLO Climate Coalition Task Force, and existing documents provided by other jurisdictions that formed similar CCE pro grams (e.g. Valley Clean Energy Alliance, Peninsula Clean Energy, East Bay Community Energy). The JPA document establishes the framework for operation of the CCE program. Key provisions of the JPA document address: • Governance and Internal Organization (Ar ticle 3) • Roles and responsibilities of the Board of Directors and Operations Board (Section 3.1) • Recovery of initial funding by founding cities (Section 5.3) • Addition of new member jurisdictions and withdrawal of existing members (Section 2.5) Adoption of the Resolution approving the JPA Agreement also requires the City to appoint two members to the Board of Directors (Section 3.1). Staff is recommending that the Council appoint two members to the Board of Directors at the September 18, 2018 meeting to fac ilitate scheduling of the first JPA Board meeting in November. Proposed Agency Name The JPA document requires an agency name to be identified. After discussions with the SLO Climate Coalition Task Force, the City of Morro Bay, and internal discussions, st aff proposes the name “Central Coast Community Energy.” The name is selected to resonate with all potential regional growth partners and intentionally focuses on the “community” aspect of community choice energy. Operating Capital and Shared Resource Needs Should the City Council vote to proceed with the CCE program at the September 18, 2018 meeting, the operation of the JPA will require operating capital support in the amount of approximately $1,000,000 prior to the program launch in 2020. The operating capital requirements for the JPA will vary depending on the level of staffing needed and the capacity for member cities to lend staff, office, and service resources. Many existing CCE JPAs limited pre-launch costs through shared resources with its member agencies. For example, some CCE programs have shared office space, IT support, HR support, meeting space, accounting and back office systems, and JPA management staffing with member agency facilities and staff Should the cities seek to share resources in t his manner with the JPA the costs associated with those resources will be closely tracked and reimbursed in the manner agreed to upon by all parties through a shared services agreement or cost allocation plan. Any arrangement of this nature would require additional approval by the City Council. Regardless of shared resources, the JPA will need working capital to hire a General Manager and conduct pre - launch activities. The amount, which is approximately $1,000,000, could be loaned by the Packet Pg. 28 Item 2 participating citie s at their preferred interest rate, or could be obtained through a bank loan backed by the City’s credit via cash collateral or a credit guarantee agreement between the City or cities and the selected bank partner . Pre-launch working capital in the total o f $1.1 million ($1,000,000 plus an additional $100,000 contingency) has been incorporated into TEA’s Technical Study financial pro forma and is projected to be reimbursed in the first 24 months of operations. Project Schedule The following is an outline of the project schedule through 2020: Activity Date City of San Luis Obispo City Council study session to preview Technical Study components, proposed JPA structure, and CCE ordinance 9/4/18 City of Morro Bay City Council study session to preview Tech nical Study components, proposed JPA structure, and CCE ordinance 9/11/18 Public hearing to present Technical Study to City of San Luis Obispo City Council. If Council chooses to proceed, pass resolution to create and join the JPA and conduct first reading of the CCE ordinance 9/18/18 Public hearing to present Technical Study to City of Morro Bay City Council. If Council chooses to proceed, pass resolution to create and join the JPA and conduct first reading of the CCE ordinance 9/25/18 Public hearing to conduct second reading of the CCE ordinance (City of San Luis Obispo) 10/2/18 Public hearing to conduct second reading of the CCE ordinance (City of Morro Bay) 10/9/18 First JPA Board Meeting to seat the Board of Directors and establish initial policies Week of 11/6/18 Second JPA Board Meeting to adopt Implementation Plan for submittal to the California Public Utilities Commission Week of 11/20/18 Program Implementation and Operations Preparation 2019 Begin CCE Program Operation Early 2020 Packet Pg. 29 Item 2 FOCUS QUESTIONS FOR STUDY SESSION Focus Questions for Study Session 1. Technical Study (Attachment A) - Do the Technical Study and Council Agenda Report provide sufficient information to inform Council’s decision making? 2. Technical Study (Attachment A) – If so, do you want to continue developing a CCE program? 3. Technical Study (Attachment A) - If not, what clarifications or additions would Council like to see at the September 18, 2018 Council meeting? 4. JPA (Attachment C) – Does the overall agreement reflect Council’s values and priorities? 5. JPA (Attachment C) – Do the proposed governance structure and voting provisions support Council’s vision of the program? (Article 3, page 5) 6. JPA Resolution (Attachment D)– Does Council want to identify which Council Members would be initial Directors? (Section 2, page 2) CONCURRENCES The City Attorney’s Office concurs with the form of this report. The Departments of Finance and Administration concur with the intent of this report. ENVIRONMENTAL REVIEW The establishment of a CCE is exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to the CEQA Guidelines, as it is not a “project” as it has no potential to result in a direct or reasonably foreseeable indirect physical change to the environment because energy will be transported through existing infrastructure (14 Cal. Code Regs. § 15378(a)). Further, establishing a CCE is exempt from CEQA as there is no possibility that this it would have a significant effect on the en vironment (14 Cal. Code Regs. § 15061(b)(3)). Further, the establishment of a CCE is also categorically exempt because it is an action taken by a regulatory agency to assume the maintenance, restoration, enhancement or protection of the environment (14 Cal. Code Regs. § 15308). FISCAL IMPACT Staff’s approach has been to establish a program with nearly no net cost to the City and a limited exposure to risk by creating deferred compensation contracts that are transferable to the JPA. Staff has so far been successful in this approach, however fiscal risks exist as described in this report including one-time risk (upfront debt requirements of approximately $1,000,000 for working capital and requirements to pay up to $250,000 in deferred costs to TEA in the eve nt the program does not launch) and ongoing risk (e.g., energy market and regulatory uncertainty). One-time risk will be managed by updating the Technical Study findings at key points through program development to limit exposure and to reserve carryover funds as described above. To manage recurring risk, per TEA’s risk management section of the Technical Study, the CCE program will build financial reserves, develop and implement a risk management program, hire qualified management and staff, build a strong relationship with the community, closely manage key accounts, and engage in regulatory and legislative monitoring. Packet Pg. 30 Item 2 Potential Community Impact The CCE program seeks to be rate competitive with PG&E and to build reserves to ensure a stable program that can deliver local benefits to ratepayers. The updated Technical Study indicates that GHG free electricity, competitive rates, and a financially healthy organization are possible under base case and forecast market conditions, with the exception of the “stress test” case. Should the City pursue the CCE program, the intended outcomes would be energy related local economic development opportunities and a competitively priced cleaner electricity source. As mentioned above, under the technical study’s “stress t est” case (a scenario including unexpected market volatility, slow PG&E rate growth, and a rapid increase in the Power Charge Indifference Adjustment, the program would not be financially viable. In an ongoing environment with these conditions, or in a worst -case scenario of energy market collapse, severe agency mismanagement, or other unlikely scenarios, the JPA could fail and go bankrupt. In that scenario, customers would be returned to PG&E service without service interruption and the financial obligatio ns of the JPA would be limited exclusively to the JPA and would not affect the community nor the member agencies. Potential Agency Impact Should the unlikely scenario occur where the City “goes it alone”, but fails to launch a program, it would be exposed to up to $250,000 in deferred costs owed to TEA. Consistent with the approach taken by operating CCE programs and noted above, the JPA will require short -term resource sharing and working capital to complete the start -up phase and begin serving customers. Should the program move forward, t he participating cities will be asked to consider options to provide credit support for this bridge funding later this Fall/early Winter. Although the required working capital prior to program launch will vary widely as mentioned above, staff expects a need for approximately $1,000,000, based on member city capacity to provide shared resources. This debt is usually short term (e.g. a one to two-year line of credit) and is often provided by a third-party lender, although it can be municipally financed as well. The amount of pre-revenue credit needed to support the program will require a credit guaranty which is usually provided by one or more members of the CCE Agency. The JPA’s guaranty requirement, would be released soon after receiving operational revenues (usually within 12 months or program launch). This basic structure of third party financing (generally a line of credit) with a credit guarantee to support the pre-revenue portion of the credit has been used in successful CCE launches including Valley Clean Energy Alliance, Marin Clean Energy, Sonoma Clean Power, and Silicon Valley Clean Energy. Should the JPA form and receive operating capital, and/or lines of credit from the cities, and should JPA operations fail to launch, the cities would not be reimbursed, and/or would be responsible for any remaining debt. Packet Pg. 31 Item 2 ALTERNATIVES 1. The City Council could direct staff to pursue a single-city (City of San Luis Obispo only) municipal program. As identified in Attachment A, t his alternative is still financially feasible and would provide a path for the City to achieve its climate action goals. This alternative would require additional organizational support as it would be housed as a department within the City. Specifics around this support would require additional research. A regional approach (e.g., growing to allow regional cities and the County of San Luis Obispo to participate) would be more challenging under this alternative, as future expansion would require the creation of a JPA and a transfer of all the established services and contracts to the JPA. 2. The City Council could direct staff to join an existing CCE program. Monterey Bay Community Power (MBCP), which operates in Monterey, Santa Cruz, and San Benito counties, has supported City staff in the past and could provide an alternative to starting a local/regional program. Joining an existing program would limit initial exposure to financial risk. However, the local economic development, program implementation, and loc al control components of the program would be constrained. 3. The City Council could request additional information. Staff has been working on an accelerated timeline to ensure program operation can begin in 2020. If the City Council feels significant addit ional information is required to proceed, it can direct staff to gather that information and return at a later date. This would delay program initiation until 2021. 4. The City Council could elect not to proceed with Community Choice Energy at this time. Not developing a CCE program would eliminate financial risk exposure and would free staff time to pursue other sustainability initiatives. However, not having a CCE program would substantially constrain staff’s ability to achieve the City’s greenhouse gas em issions and economic development objectives. Attachments: a - Draft CCE Technical Study b - Draft CCE Implementing Ordinance c - Draft Joint Exercise of Power Agreement d - Draft JPA Resolution Packet Pg. 32 Item 2 1 August 28, 2018 City of San Luis Obispo Draft CCE Technical Study Prepared by: Packet Pg. 33 Item 2 2 CONTENTS 1 EXECUTIVE SUMMARY ............................................................................................. 3 2 INTRODUCTION ....................................................................................................... 4 3 PROSPECTIVE CCE MEMBER COMMUNITIES............................................................ 5 4 INDICATIVE POWER SUPPLY PORTFOLIO SCENARIOS ............................................ 11 5 FINDINGS AND CONCLUSIONS ............................................................................... 16 6 FINANCIAL PROJECTIONS ....................................................................................... 18 7 CCE RISK ANALYSIS ................................................................................................ 24 APPENDIX A: KEY ASSUMPTIONS.................................................................................. 25 Packet Pg. 34 Item 2 3 1 Executive Summary This study evaluates the feasibility of implementing a Community Choice Energy (CCE, also referred to as Community Choice Aggregation, or CCA) program in three groupings of the Cities of San Luis Obispo, Morro Bay, Paso Robles, and Grover Beach. For each city participation scenario, the study evaluates three power supply options for a total of nine scenarios. The power supply scenarios are illustrative of potential supply options and should not be considered prescriptive. They vary the amount of California Renewable Portfolio Standard (RPS) compliant power in the CCE’s portfolio while maintaining a 100% greenhouse-gas (GHG) free and non- nuclear power supply in all scenarios. TEA concludes that under base-case market and regulatory conditions, all nine scenarios would be feasible while offering customers a rate-discount relative to PG&E. Table ES1 shows cumulative net revenues in the third year1 of operations as a total and as a percent of annual operating expenses. These scenarios assume the CCE offers a 3% rate discount relative to PG&E, which is the average discount currently being offered by operating CCE programs. Table ES1: Cumulative net revenues in the third year of operations as a total and a percent of annual operating expenses. City Participation Scenario Power Supply Scenario RPS-Compliant, 100% GHG-Free 50% RPS, 100% GHG-Free 75% RPS, 100% GHG-Free San Luis Obispo $.9.9 million 63% of op. exp $9.1 million 57% of op. exp $7.6 million 47% of op. exp San Luis Obispo and Morro Bay $12.3 million 68% of op. exp $11.3 million 61% of op. exp $9.7 million 51% of op. exp San Luis Obispo, Morro Bay, Paso Roble, and Grover Beach* $23.9 million 80% of op. exp $22.4 million 74% of op. exp $20.1 million 64% of op. exp * Paso Robles and Grover Beach are not joining the potential CCE in 2020, but may join in 2021. TEA modeled these cities’ loads ramping up in 2021 in the 4-city scenario, which impacts 3rd year cumulative net revenues as a share of annual revenue requirement. Generating cumulative net revenues at the levels shown is an indication that adequate funds should be available for the CCE to meet critical financial needs such as: 1 In these scenarios, net revenues are positive in all operating years modeled. Third year cumulative net revenues are presented because it reflects a time point after which the CCE has paid off its startup loan and phased in all loads. Packet Pg. 35 Item 2 4 • Self-funding working capital requirements; • Establishing a rate stabilization fund; • Demonstrating the creditworthiness needed to enter into long-term contracts; • Investing in local programs to meet the long-term goals of the CCE. TEA also conducted a sensitivity analysis in which these scenarios were tested under less favorable market and regulatory conditions referred to as the alternative prices scenario. In that scenario, TEA assumed 75th percentile energy market prices (an approximately $5.5 per MWh increase above current forward prices), a 40% increase in the Power Charge Indifference Adjustment (PCIA) rate, and lower than expected generation rates for PG&E.2 Under these conditions, all three city grouping scenarios resulted in negative net revenues year-over-year without a 0%-2% rate premium over PG&E. Even higher rate premiums would be required to generate a similar level of cumulative net revenues to what is shown in the base case scenario. Of the three city-grouping scenarios, the 4-city CCE scenario was the most resilient to the adverse market conditions, which is consistent with the greater economies of scale provided by a program with more customers. It is important to note that the PCIA Rulemaking Proceeding R.17-06-026 is currently underway. The final outcome of this proceeding is expected on September 13th, but could be delayed. TEA has attempted to analyze the possible range of outcomes that may result from this proceeding. While this study ultimately concludes the CCE would be feasible under most market and regulatory conditions, these findings are sensitive to changes in market and regulatory conditions. As such, it will be critical to continually re-evaluate program feasibility throughout the implementation process. TEA advises SLO to view the results of this study as supportive of continuing to move forward with CCE development, including preparation of an Implementation Plan . However, CCE viability should continue to be assessed on an ongoing basis at each critical step. 2 Introduction On December 12, 2017, the City of San Luis Obispo City Council directed staff to “pursue forming a new CCE in conjunction with other interested jurisdictions in San Luis Obispo County and/or in PG&E territory of Santa Barbara County.” On April 24, 2018, the City of Morro Bay City Council expressed formal interest in participating in the creation of a new CCE program. Other jurisdictions, most notably the Cities of Paso Robles and Grover Beach, provided access to their data to understand the potential of joining a CCE program in the future. 2 The PCIA is an exit fee charged by investor-owned utilities (IOUs) to customers that switch to another provider of electricity generation service through direct access or community choice energy programs. The fee is designed to cover above-market costs from contracts that the utilities entered into but no longer need and cannot sell in the market for the price they paid. Packet Pg. 36 Item 2 5 To support the potential for a regional CCE program over time, the preferred governance structure is the development of a new Joint Powers Authority similar to the operational and governance approach of many currently operational CCE programs in California. The purpose of this analysis is to assess the potential benefits and risks associated with forming a CCE program under a few illustrative scenarios considering different configurations of community participation and power supply portfolios. It is important to note that the prospective scenarios evaluated in this study do not obligate an eventual CCE program to implement a particular scenario outlined in this study. Rather, the scenarios evaluated are intended to demonstrate program viability under a range of options and reasonable outcomes. 3 Prospective CCE Member Communities Three alternative levels of community participation were evaluated in this study: • Scenario 1: City of San Luis Obispo only • Scenario 2: Cities of San Luis Obispo and Morro Bay • Scenario 3: Cities of San Luis Obispo, Morro Bay, Paso Robles and Grover Beach In Scenario 3, we model the customers in the Cities of Paso Robles and Grover Beach being migrated in 2021, while customers from the Cities of San Luis Obispo and Morro Bay ramp up in 2020. 3.1 Number of Customers and Retail Load Forecast To create a load forecast for each scenario described above, Item 16 load data provided by PG&E for each city was aggregated by customer type by first shifting the monthly billing data from billing cycles to calendar months. Next, TEA applied PG&E load profiles for each customer class. The resulting hourly historical data set was summed to monthly values and then smoothed to account for weather effects. Growth rates were applied to each customer class using customer class growth forecasts assumed in the California Energy Commission’s California Demand Forecast for 2018 – 20303. Total number of customers and annual load for each scenario are shown in Table 1. Figure 1 summarizes monthly energy and peak demands for each load scenario. 3 https://efiling.energy.ca.gov/getdocument.aspx?tn=223244 Packet Pg. 37 Item 2 6 Table 1a: CCE Scenario 1 Load Forecast: City of San Luis Obispo Only Table 1b: CCE Scenario 2 Load Forecast: Cities of San Luis Obispo and Morro Bay 2016/17 Rate Class 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Avg # of Accts Residential 63,255 62,877 62,806 62,591 62,854 62,739 62,704 62,681 62,659 62,636 16,730 Low Income Res 12,729 12,652 12,637 12,595 12,649 12,624 12,618 12,614 12,610 12,605 2,463 Agriculture 111 110 110 110 110 109 109 109 108 108 10 Small Commercial 59,053 59,350 59,907 60,343 61,209 61,694 62,297 62,896 63,495 64,094 3,628 Med Commercial 50,754 51,015 51,495 51,870 52,614 53,028 53,548 54,062 54,577 55,091 293 Lg Commercial 58,552 58,846 59,397 59,836 60,689 61,178 61,776 62,372 62,968 63,564 127 Industrial - - - - - - - - - - - Street Lighting 653 651 652 653 657 658 659 661 663 664 161 Total Retail Sales 245,107 245,501 247,005 247,998 250,781 252,030 253,713 255,396 257,079 258,763 23,411 Total Wholesale Requirements 257,362 257,776 259,355 260,398 263,320 264,631 266,398 268,166 269,933 271,701 Annual Load Forecast (MWh) 2016/17 Rate Class 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Avg # of Accts Residential 81,336 80,857 80,766 80,488 80,819 80,671 80,625 80,593 80,561 80,529 21,712 Low Income Res 17,293 17,190 17,170 17,113 17,185 17,150 17,142 17,136 17,129 17,123 3,306 Agriculture 132 131 131 130 130 130 130 129 129 129 13 Small Commercial 71,139 71,497 72,168 72,691 73,735 74,320 75,046 75,768 76,489 77,211 4,401 Med Commercial 54,295 54,574 55,088 55,488 56,285 56,727 57,283 57,834 58,384 58,935 329 Lg Commercial 64,850 65,176 65,787 66,273 67,217 67,758 68,420 69,080 69,739 70,399 150 Industrial - - - - - - - - - - - Street Lighting 821 818 820 820 824 826 827 829 831 833 194 Total Retail Sales 289,866 290,243 291,929 293,004 296,196 297,582 299,474 301,369 303,263 305,158 30,105 Total Wholesale Requirements 304,359 304,755 306,526 307,654 311,005 312,461 314,448 316,437 318,427 320,416 Annual Load Forecast (MWh) Packet Pg. 38 Item 2 7 Table 1c: CCE Scenario 3 Load Forecast: Cities of San Luis Obispo, Morro Bay, Paso Robles, and Grover Beach 4 4 Note that the loads in 2020 are only for the Cities and San Luis Obispo and Morro Bay because the Cities of Paso Robles and Grover Beach are modeled as joining the CCE in 2021 in this scenario. 2016/17 Rate Class 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Avg # of Accts Residential 81,336 148,354 148,175 147,697 148,244 147,973 147,880 147,811 147,742 147,672 35,088 Low Income Res 17,293 38,488 38,441 38,321 38,463 38,388 38,366 38,349 38,331 38,313 7,617 Agriculture 132 1,424 1,421 1,417 1,416 1,411 1,408 1,405 1,402 1,399 41 Small Commercial 71,139 117,192 118,289 119,165 120,842 121,807 122,994 124,172 125,351 126,529 7,224 Med Commercial 54,295 108,169 109,184 109,989 111,560 112,430 113,536 114,626 115,715 116,805 379 Lg Commercial 64,850 98,080 98,999 99,730 101,148 101,961 102,957 103,948 104,939 105,930 231 Industrial - - - - - - - - - - - Street Lighting 821 1,959 1,962 1,961 1,972 1,974 1,978 1,982 1,986 1,991 278 Total Retail Sales 289,866 513,667 516,469 518,280 523,646 525,943 529,120 532,292 535,465 538,638 50,858 Total Wholesale Requirements 304,359 539,351 542,293 544,194 549,828 552,240 555,576 558,907 562,238 565,570 Annual Load Forecast (MWh) Packet Pg. 39 Item 2 8 Figure 1a: City of San Luis Obispo Monthly Energy and Peak Demand - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonthly Load (MWh)Scenario 1 -City of San Luis Obispo Only Residential Low Income Res Agriculture Small Commercial Med Commercial Lg Commercial Industrial Street Lighting 0 20 40 60 80 100 120 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecNon-Coindient Peak (MW)Scenario 1 -City of San Luis Obispo Only Packet Pg. 40 Item 2 9 Figure 1b: City of San Luis Obispo and Morro Bay Monthly Energy and Peak Demand - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonthly Load (MWh)Scenario 2 -Cities of San Luis Obispo and Morro Bay Residential Low Income Res Agriculture Small Commercial Med Commercial Lg Commercial Industrial Street Lighting 0 20 40 60 80 100 120 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecNon-Coincident Peak (MW)Scenario 2 -Cities of San Luis Obispo and Morro Bay Packet Pg. 41 Item 2 10 Figure 1c: City of San Luis Obispo, Morro Bay, Grover Beach, & Paso Robles Monthly Energy and Peak Demand - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecMonthly Load (MWh)Scenario 3 -Cities of San Luis Obispo, Morro Bay, Paso Robles and Grover Beach Residential Low Income Res Agriculture Small Commercial Med Commercial Lg Commercial Industrial Street Lighting 0 20 40 60 80 100 120 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecNon-Coincident Peak (MW)Scenario 3 -Cities of San Luis Obispo, Morro Bay, Paso Robles and Grover Beach Packet Pg. 42 Item 2 11 4 Indicative Power Supply Portfolio Scenarios Three indicative supply scenarios were created to assess the viability of a CCE program. • Supply Scenario 1: Compliance with California Renewable Portfolio Standard (33% RPS in 2020 increasing to 50% RPS requirement in 2030). • Supply Scenario 2: Constant 50% renewable energy portfolio content throughout the study period. • Supply Scenario 3: Constant 75% renewable energy portfolio content throughout the study period. This study presumes that the new CCE would want to meet, and ideally exceed, the renewable and GHG-free generation component of the PG&E portfolio. However, it is difficult to estimate PG&E’s future renewable energy and GHG-free content given uncertainty in how CCE load migration and retirement of Diablo Canyon generation will impact PG&E’s future renewable procurement and overall GHG-free content. To address this uncertainty, a range of scenarios were evaluated to test financial viability under a likely range of future outcomes that may be implemented to meet CCE program goals, as well as to ensure that a new CCE has a renewable and GHG-free portfolio content equal to, or greater than, that of PG&E. To meet this objective, TEA also included procurement of incremental carbon-free supply in excess of renewable energy to achieve a projected overall 100% GHG-free emissions level in each program year. The scenarios also assume that the CCE will not procure nuclear power as part of its clean power portfolio. Discussion of PG&E’s future portfolio is discussed in greater detail in Section 4.1. It is important to note that the prospective supply scenarios evaluated in this study do not obligate an eventual CCE to implement a particular scenario outlined in this study. Rather, the scenarios evaluated are intended to demonstrate program viability under a range of reasonable outcomes. 4.1 Portfolio Composition 4.1.1 CCE Resource Alternatives The following supply sources were considered in the analysis: • Portfolio Content Category 1 (“Bucket 1”) Renewable Energy : renewable energy produced by generating resources located inside a California Balancing Authority Area or that is directly delivered to a California Balancing Authority Area • Portfolio Content Category 2 (“Bucket 2”) Renewable Energy : renewable energy produced by generating resources located outside the state of California that is “stored and shaped” prior to redelivery to a California Balancing Authority Area. Packet Pg. 43 Item 2 12 • Carbon Free Energy: GHG energy supply, typically large hydroelectric generation, that does not meet the renewable eligibility requirements of California’s RPS program, which caps RPS-eligible hydroelectric generation at 30 MW. 4.1.2 PG&E Power Content Label Table 2 shows PG&E’s proportionate use of various power sources during the two most recent historical years – 2015 and 2016 - for which data Power Content Label data is available. Table 2: PG&E 2015 and 2016 Power Content Labels5 Key takeaways from this data: • Eligible renewable generation supplied 30% and 33%, respectively, of PG&E’s energy requirements in 2015 and 2016; • GHG-free generation supplied 59% and 69%, respectively, of PG&E’s total energy requirements in 2015 and 2016. PG&E’s 2017 Power Content Label will be published in the fall of 2018, but PG&E has publically stated that its 2017 energy requirements were sourced 33% from eligible renewable generation and approximately 79% from GHG free generation6, with 25% of this total coming from nuclear power. The challenge for this study is forecasting future PG&E energy requirements met by eligible renewables and GHG-free generation. Forecasting PG&E’s future portfolio content requires adjustments for load migration to CCEs, the shutdown of Diablo Canyon in 2024-2025 and 5 https://www.energy.ca.gov/pcl/labels/2016_labels/Pacific_Gas__and__Electric.pdf; https://www.energy.ca.gov/pcl/labels/2015_labels/Pacific_G as_and_Electric_(PGandE).pdf;. 6 http://www.pgecurrents.com/2018/02/20/pge-clean-energy-deliveries-already-meet-future-goals/ Energy Resources 2015 PG&E Power Mix 2016 PG&E Power Mix 2016 California Power Mix Eligible Renewable Biomass & biowaste Geothermal Eligible hydroelectric Solar Wind 30% 4% 5% 1% 11% 8% 33% 4% 5% 3% 13% 8% 25% 2% 4% 2% 8% 9% Coal 0% 0% 4% Large Hydroelectric 6% 12% 10% Natural Gas 25% 17% 37% Nuclear 23% 24% 9% Other 0% 0% 0% Unspecified sources of power 17% 14% 15% Total 100% 100% 100% Packet Pg. 44 Item 2 13 potential variability in hydroelectric generation. Each of these adjustments is described in further detail below. 4.1.2.1 CCE Load Migration (2019-2020) Relative to 2017 data , PG&E’s load is expected to decrease by roughly 36% in future years because of load migration to CCEs. Five new CCEs have, or are expected to, launch in 2018. The most notable of these new CCEs are East Bay Community Energy, San Jose Clean Energy, Monterey Bay Community Power, and the addition of Contra Costa County to Marin Clean Energy. The projected amount of CCE load migration is taken from the CEC’s California Demand Forecast for 2018 – 2030. 4.1.2.2 Forecasting PG&E Power Content (2020-2030) There are three components to PG&E’s portfolio that need to be considered to forecast future portfolio content: nuclear, hydro and renewables. • Nuclear: Historically, Diablo Canyon has met between 23% - 24% of PG&E’s demand in the last two years (see Power Content Labels for 2015 and 2016 respectively). Accounting for departing load, and assuming Diablo Canyon will continue to generate around its capacity over the remainder of its life, it could deliver over 40% of PG&E’s needs between 2020 and 2024. Even if PG&E did not replace Diablo Canyon with preferred resources (an unlikely scenario), expected CCE load migration will more than offset the loss of Diablo Canyon in the second half of the evaluation period. • Hydro: 2016 was celebrated at the time as a “wet” water year because it was significantly better than the previous 3 years that were critical or drought years; however, 2016 was actually a below-normal/dry water year. In contrast, 2017 was classified as “wet” according to the California Department of Water Resources report. Strong hydroelectric generation in 2017 helps explain PG&E’s reported 10% increase in GHG-free power in 2017 over 2016. It also suggests that 2016 could be more the norm than the high. Assuming 2015 hydro generation from 2020-2029 (a critical water year), hydro would supply over 10% of PG&E’s annual energy requirements during that time due to departing load. Assuming 2016 hydro generation from 2020-2029, hydro would supply over 20% of PG&E’s demand during that period. Of these, 2016 appears to be closer to the mean as well as the more conservative assumption for evaluation purposes in this study. • Renewables: PG&E’s existing renewable portfolio (based on deliveries in 2017) is large enough to exceed 50% of their total power needs starting in 2019 due to departing load. However, PG&E may continue to procure at least some RPS-eligible resources and exceed the requirements. Accounting for all these factors, it is highly probable that PG&E will be able to serve close to 100% of the energy requirements of bundled customers with GHG-free resources from 2020- 2025. After the retirement of Diablo, the share of GHG-free power may drop as low as 70% in Packet Pg. 45 Item 2 14 the most critical water years and would likely be between 85% and 90% in typical years, assuming PG&E acquired no preferred resources to replace Diablo Canyon, which seems unlikely. 4.1.3 CCE Portfolio Assumptions To be conservative, this study assumes all CCE power supply portfolios will be comprised of 100% GHG-free, non-nuclear power supply throughout all years of the study period to ensure the new CCE meets or exceeds the GHG-free content of PG&E’s portfolio. Table 3 summarizes the portfolios evaluated in this study. Table 3: CCE Portfolio Assumptions RPS Target GHG-Free Target Scenario 1 RPS Compliant: 30% in 2020 ramping up to 50% by 2030 100% Scenario 2 50% 100% Scenario 3 75% 100% 4.1.4 Renewable Energy and Storage Procurement Requirements As the CCE builds its portfolio, it will need to also plan to meet several mandatory requirements, which are described below. • Renewable Portfolio Standard (RPS): current RPS requirements are mandated by Senate Bill 2 (1X) passed in 2011. This bill mandated RPS procurement requirements within multi-year compliance periods. During the current 10-year forecast period, a minimum of 75% of required RPS procurement must be sourced from PCC 1 resources and a maximum of 10% can be sourced from PCC 3 resources. The difference can be sourced from PCC 2. For purposes of this analysis, no PCC3 resources were included. • SB 350: In October 2015, Senate Bill 350 (SB 350) was signed into law establishing new clean energy, clean air and greenhouse gas reduction goals for 2030 and beyond. SB 350 established California’s 2030 GHG reduction target of 40% below 1990 levels. To accomplish this, SB 350 set ambitious targets for renewable energy and energy efficiency. In particular, SB 350 increases California’s RPS goal from 33% by 2020 to 50% by 2030. The corresponding CPUC regulations require that transitions from the previous mandate will be implemented gradually with straight line increases during each year of the compliance regime. Additionally, SB 350 established that CCEs must have at least 65% of their RPS procurement under contracts of 10 years or longer beginning in 2021. Table 4 summarizes the CCE’s annual RPS requirements, as well as the amount of renewable energy that will need to be procured under a 10-year or longer agreement. Packet Pg. 46 Item 2 15 Table 4: Annual RPS Compliance Requirements 7,8 7 In Scenario 3, RPS requirements in 2020 are only for the Cities and San Luis Obispo and Morro Bay because the Cities of Paso Robles and Grover Beach are modeled as joining the CCE in 2021. 8 Long-term RPS refers to contracts for renewable energy of 10-years or longer that contribute to the CCE’s long-term procurement obligation defined in SB350. 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Annual RPS Requirements 33.0% 34.8% 36.5% 38.3% 40.0% 41.7% 43.3% 45.0% 46.7% 48.3% Scenario 1 - City of San Luis Obispo Only: Total RPS Requirements (MWh)80,885 85,434 90,157 94,983 100,312 105,096 109,858 114,928 120,056 124,982 Total RPS Requirements (aMW)9.2 9.8 10.3 10.8 11.5 12.0 12.5 13.1 13.7 14.3 Long-Term RPS Requirement (MWh)- 55,532 58,602 61,739 65,203 68,313 71,407 74,703 78,036 81,239 Long-Term RPS Requirement (aMW)- 6.3 6.7 7.0 7.4 7.8 8.2 8.5 8.9 9.3 Scenario 2 - Cities of San Luis Obispo and Morro Bay: Total RPS Requirements (MWh)95,656 101,005 106,554 112,220 118,478 124,092 129,672 135,616 141,624 147,391 Total RPS Requirements (aMW)10.9 11.5 12.2 12.8 13.5 14.2 14.8 15.5 16.2 16.8 Long-Term RPS Requirement (MWh)- 65,653 69,260 72,943 77,011 80,660 84,287 88,150 92,056 95,804 Long-Term RPS Requirement (aMW)- 7.5 7.9 8.3 8.8 9.2 9.6 10.1 10.5 10.9 Scenario 3 - Cities of San Luis Obispo, Morro Bay, Paso Robles and Grover Beach: Total RPS Requirements (MWh)95,656 178,756 188,511 198,501 209,458 219,318 229,109 239,532 250,062 260,162 Total RPS Requirements (aMW)10.9 20.4 21.5 22.7 23.9 25.0 26.2 27.3 28.5 29.7 Long-Term RPS Requirement (MWh)- 116,192 122,532 129,026 136,148 142,557 148,921 155,696 162,540 169,105 Long-Term RPS Requirement (aMW)- 13.3 14.0 14.7 15.5 16.3 17.0 17.8 18.6 19.3 Packet Pg. 47 Item 2 16 • AB 2514: The California Energy Storage Bill, AB 2514, was signed into law in September 2010 and established energy storage targets for IOUs, CCEs, and other LSEs in September 2013. The applicable CPUC decision established an energy storage procurement target for CCEs and other LSEs equal to 1 percent of their forecasted 2020 peak load. The decision requires that contracts be in place by 2020 and projects be installed by 2024. Beginning on January 1, 2018, and every two years thereafter, LSEs must file an advice letter demonstrating progress toward meeting this target and a description of the methodologies for insuring projects are cost effective. Depending on the particular load scenario, the prospective CCE’s storage requirement will be between 0.5 and 1.0 MW. 5 Findings and Conclusions The major findings of this study are summarized in Table 5 below. Table 5a: City of San Luis Obispo Only CCE Program Metric Supply Scenario 1 Supply Scenario 2 Supply Scenario 3 RPS Percentage RPS-Compliant 50% 75% Annual GHG emissions (MT CO2e) 0 0 0 Average Rate Savings: 3% 3% 3% Residential Customers: Average rate savings in 2020 Average 5-yr rate savings $1.10/month $1.15/month $1.10/month $1.15/month $1.10/month $1.15/month Commercial Customers: Average rate savings in 2020 Average 5-yr rate savings $50.00/month $54.88/month $50.00/month $54.88/month $50.00/month $54.88/month Cumulative net revenues at end of year 3: Total $ % of Annual Op. Expenses $.9.9 million 63% of op. exp $9.1 million 57% of op. exp $7.6 million 47% of op. exp Table 5b: Two-City CCE Program (San Luis Obispo and Morro Bay) Metric Supply Scenario 1 Supply Scenario 2 Supply Scenario 3 RPS Percentage RPS-Compliant 50% 75% Annual GHG emissions (MT CO2e) 0 0 0 Average Rate Savings 3% 3% 3% Residential Customers: Packet Pg. 48 Item 2 17 Average rate savings in 2020 Average 5-yr rate savings $1.09/month $1.15/month $1.09/month $1.15/month $1.09/month $1.15/month Commercial Customers: Average rate savings in 2020 Average 5-yr rate savings $47.65/month $52.30/month $47.65/month $52.30/month $47.65/month $52.30/month Cumulative net revenues at end of year 3: Total $ % of Annual Op. Expenses $12.3 million 68% of op. exp $11.3 million 61% of op. exp $9.7 million 51% of op. exp Table 5c: Four-City CCE (San Luis Obispo, Morro Bay, Paso Robles and Grover Beach) Metric Supply Scenario 1 Supply Scenario 2 Supply Scenario 3 RPS Percentage RPS-Compliant 50% 75% Annual GHG emissions (MT CO2e) 0 0 0 Average Rate Savings: 2020 Average Rate Savings: 5-yr 3% 3% 3% 3% 3% 3% Residential Customers: Average rate savings in 2020 Average 5-yr rate savings $1.09/month $1.28/month $1.09/month $1.28/month $1.09/month $1.28/month Commercial Customers: Average rate savings in 2020 Average 5-yr rate savings $47.65/month $62.65/month $47.65/month $62.65/month $47.65/month $62.65/month Cumulative net revenues at end of year 3: Total $ % of Annual Op. Expenses $23.9 million 80% of op. exp $22.4 million 74% of op. exp $20.1 million 64% of op. exp In all nine scenarios, net revenues are positive in all modeled years while offering customers a 3% rate discount relative to PG&E, which is the average discount currently being offered by operating CCE programs. Moreover, all scenarios show that the CCE would be able to accumulate net revenues in excess of 150 days of expenses over three years of operations under these scenarios. Based on these findings, TEA concludes that under base-case market and regulatory conditions, all nine scenarios would be feasible. Packet Pg. 49 Item 2 18 6 Financial Projections A detailed summary of key assumptions is provided in Appendix A. Below are a few key assumptions: • January 2020 launch for customers in the Cities of San Luis Obispo and Morro Bay, and January 2021 launch for customers in the Cities of Paso Robles and Grover Beach • Customer opt-out rate of 10% • CCE electric generation rates are assumed to be set 3% below PG&E, inclusive/net of PCIA exit and franchise fees. • The PCIA charge reflects the existing PCIA rate setting structure using the market-price benchmark mechanism described in both the Administrative Law Judges’ Proposed Decision in the PCIA Rulemaking Proceeding and the Alternative Proposed Decision. 6.1 Projected Results Table 6a: Financial Projections for City of San Luis Obispo assuming Minimum RPS Compliance 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 12,051,583$ 12,943,149$ 13,458,921$ 13,954,627$ 14,555,244$ 15,079,528$ 15,579,292$ 16,114,000$ 16,674,750$ 17,239,420$ Portfolio & Data Management 625,906$ 644,683$ 664,023$ 683,944$ 704,462$ 725,596$ 747,364$ 769,785$ 792,879$ 816,665$ General and Administrative 1,042,628$ 1,150,686$ 1,204,491$ 1,254,843$ 1,319,580$ 1,372,791$ 1,421,860$ 1,475,262$ 1,531,706$ 1,588,011$ Cost of Credit for Procurement 231,626$ 231,999$ 233,420$ 234,358$ 236,988$ -$ -$ -$ -$ -$ PG&E Billing Services 53,121$ 53,652$ 54,189$ 54,731$ 55,278$ 55,831$ 56,389$ 56,953$ 57,523$ 58,098$ Startup Loan Repayment 697,000$ 550,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 14,701,864$ 15,574,169$ 15,615,044$ 16,182,504$ 16,871,553$ 17,233,747$ 17,804,905$ 18,416,000$ 19,056,858$ 19,702,195$ Revenues 18,352,836$ 18,596,535$ 19,182,468$ 19,293,856$ 19,701,118$ 20,095,001$ 21,096,339$ 22,212,092$ 23,437,774$ 24,696,996$ Net Revenue Annual 3,541,185$ 2,911,120$ 3,452,674$ 2,995,936$ 2,711,712$ 2,741,045$ 3,165,235$ 3,663,218$ 4,240,710$ 4,847,062$ Cumulative ($)3,541,185$ 6,452,305$ 9,904,979$ 12,900,915$ 15,612,627$ 18,353,672$ 21,518,907$ 25,182,125$ 29,422,835$ 34,269,897$ Cumulative (% of Tot. Rev. Req.)24% 41% 63% 80% 93% 106% 121% 137% 154% 174% Packet Pg. 50 Item 2 19 Table 6b: Financial Projections for City of San Luis Obispo assuming 50% RPS Table 6c: Financial Projections for City of San Luis Obispo assuming 75% RPS 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 12,314,092$ 13,188,239$ 13,685,671$ 14,160,472$ 14,739,418$ 15,238,591$ 15,711,010$ 16,216,318$ 16,745,398$ 17,275,932$ Portfolio & Data Management 625,906$ 644,683$ 664,023$ 683,944$ 704,462$ 725,596$ 747,364$ 769,785$ 792,879$ 816,665$ General and Administrative 1,080,129$ 1,185,699$ 1,236,884$ 1,284,250$ 1,345,891$ 1,395,514$ 1,440,677$ 1,489,879$ 1,541,798$ 1,593,227$ Cost of Credit for Procurement 231,626$ 231,999$ 233,420$ 234,358$ 236,988$ -$ -$ -$ -$ -$ PG&E Billing Services 53,121$ 53,652$ 54,189$ 54,731$ 55,278$ 55,831$ 56,389$ 56,953$ 57,523$ 58,098$ Startup Loan Repayment 697,000$ 550,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 15,001,874$ 15,854,272$ 15,874,187$ 16,417,754$ 17,082,037$ 17,415,532$ 17,955,440$ 18,532,935$ 19,137,598$ 19,743,923$ Revenues 18,352,836$ 18,596,535$ 19,182,468$ 19,293,856$ 19,701,118$ 20,095,001$ 21,096,339$ 22,212,092$ 23,437,774$ 24,696,996$ Net Revenue Annual 3,241,174$ 2,631,017$ 3,193,531$ 2,760,685$ 2,501,228$ 2,559,260$ 3,014,700$ 3,546,283$ 4,159,969$ 4,805,334$ Cumulative ($)3,241,174$ 5,872,191$ 9,065,722$ 11,826,407$ 14,327,635$ 16,886,895$ 19,901,594$ 23,447,877$ 27,607,847$ 32,413,181$ Cumulative (% of Tot. Rev. Req.)22% 37% 57% 72% 84% 97% 111% 127% 144% 164% 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 12,700,136$ 13,588,713$ 14,102,493$ 14,592,918$ 15,190,823$ 15,706,421$ 16,195,268$ 16,717,878$ 17,264,869$ 17,812,871$ Portfolio & Data Management 625,906$ 644,683$ 664,023$ 683,944$ 704,462$ 725,596$ 747,364$ 769,785$ 792,879$ 816,665$ General and Administrative 1,135,278$ 1,242,909$ 1,296,429$ 1,346,028$ 1,410,377$ 1,462,347$ 1,509,856$ 1,561,530$ 1,616,009$ 1,669,933$ Cost of Credit for Procurement 231,626$ 231,999$ 233,420$ 234,358$ 236,988$ -$ -$ -$ -$ -$ PG&E Billing Services 53,121$ 53,652$ 54,189$ 54,731$ 55,278$ 55,831$ 56,389$ 56,953$ 57,523$ 58,098$ Startup Loan Repayment 697,000$ 550,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 15,443,067$ 16,311,956$ 16,350,554$ 16,911,979$ 17,597,929$ 17,950,195$ 18,508,877$ 19,106,146$ 19,731,279$ 20,357,567$ Revenues 18,352,836$ 18,596,535$ 19,182,468$ 19,293,856$ 19,701,118$ 20,095,001$ 21,096,339$ 22,212,092$ 23,437,774$ 24,696,996$ Net Revenue Annual 2,799,982$ 2,173,333$ 2,717,164$ 2,266,461$ 1,985,336$ 2,024,597$ 2,461,262$ 2,973,072$ 3,566,288$ 4,191,690$ Cumulative ($)2,799,982$ 4,973,314$ 7,690,478$ 9,956,939$ 11,942,275$ 13,966,871$ 16,428,134$ 19,401,206$ 22,967,495$ 27,159,185$ Cumulative (% of Tot. Rev. Req.)18% 30% 47% 59% 68% 78% 89% 102% 116% 133% Packet Pg. 51 Item 2 20 Table 6d: Financial Projections for Cities of San Luis Obispo & Morro Bay assuming Minimum RPS Compliance Table 6e: Financial Projections for Cities of San Luis Obispo & Morro Bay assuming 50% RPS 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 14,039,695$ 15,093,064$ 15,694,712$ 16,271,514$ 16,971,219$ 17,580,921$ 18,160,779$ 18,781,744$ 19,432,229$ 20,087,585$ Portfolio & Data Management 709,199$ 730,475$ 752,390$ 774,961$ 798,210$ 822,157$ 846,821$ 872,226$ 898,393$ 925,344$ General and Administrative 1,228,140$ 1,356,662$ 1,420,007$ 1,479,139$ 1,555,144$ 1,617,587$ 1,675,041$ 1,737,620$ 1,803,647$ 1,869,578$ Cost of Credit for Procurement 273,923$ 274,280$ 275,873$ 276,889$ 279,905$ -$ -$ -$ -$ -$ PG&E Billing Services 68,331$ 69,015$ 69,705$ 70,402$ 71,106$ 71,817$ 72,535$ 73,260$ 73,993$ 74,733$ Startup Loan Repayment 697,000$ 550,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 17,016,290$ 18,073,496$ 18,212,686$ 18,872,905$ 19,675,583$ 20,092,481$ 20,755,176$ 21,464,850$ 22,208,262$ 22,957,241$ Revenues 21,599,097$ 21,877,993$ 22,566,097$ 22,682,240$ 23,152,444$ 23,607,888$ 24,779,429$ 26,085,643$ 27,517,689$ 28,989,458$ Net Revenue Annual 4,453,601$ 3,673,622$ 4,218,419$ 3,673,648$ 3,338,362$ 3,374,183$ 3,876,020$ 4,464,748$ 5,144,815$ 5,858,801$ Cumulative ($)4,453,601$ 8,127,222$ 12,345,642$ 16,019,290$ 19,357,652$ 22,731,834$ 26,607,855$ 31,072,602$ 36,217,418$ 42,076,218$ Cumulative (% of Tot. Rev. Req.)26% 45% 68% 85% 98% 113% 128% 145% 163% 183% 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 14,350,142$ 15,382,821$ 15,962,702$ 16,514,715$ 17,188,745$ 17,768,733$ 18,316,257$ 18,902,482$ 19,515,568$ 20,130,644$ Portfolio & Data Management 709,199$ 730,475$ 752,390$ 774,961$ 798,210$ 822,157$ 846,821$ 872,226$ 898,393$ 925,344$ General and Administrative 1,272,489$ 1,398,056$ 1,458,292$ 1,513,882$ 1,586,219$ 1,644,417$ 1,697,252$ 1,754,868$ 1,815,553$ 1,875,729$ Cost of Credit for Procurement 273,923$ 274,280$ 275,873$ 276,889$ 279,905$ -$ -$ -$ -$ -$ PG&E Billing Services 68,331$ 69,015$ 69,705$ 70,402$ 71,106$ 71,817$ 72,535$ 73,260$ 73,993$ 74,733$ Startup Loan Repayment 697,000$ 550,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 17,371,086$ 18,404,646$ 18,518,962$ 19,150,848$ 19,924,185$ 20,307,123$ 20,932,865$ 21,602,837$ 22,303,507$ 23,006,450$ Revenues 21,599,097$ 21,877,993$ 22,566,097$ 22,682,240$ 23,152,444$ 23,607,888$ 24,779,429$ 26,085,643$ 27,517,689$ 28,989,458$ Net Revenue Annual 4,098,805$ 3,342,471$ 3,912,144$ 3,395,705$ 3,089,761$ 3,159,541$ 3,698,332$ 4,326,760$ 5,049,571$ 5,809,591$ Cumulative ($)4,098,805$ 7,441,276$ 11,353,420$ 14,749,125$ 17,838,885$ 20,998,426$ 24,696,758$ 29,023,518$ 34,073,089$ 39,882,680$ Cumulative (% of Tot. Rev. Req.)24% 40% 61% 77% 90% 103% 118% 134% 153% 173% Packet Pg. 52 Item 2 21 Table 6f: Financial Projections for Cities of San Luis Obispo & Morro Bay assuming 75% RPS Table 6g: Financial Projections for Cities of San Luis Obispo, Morro Ba y, Paso Robles, and Grover Beach assuming Minimum RPS Compliance 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 14,806,681$ 15,856,280$ 16,455,333$ 17,025,640$ 17,721,897$ 18,321,120$ 18,887,864$ 19,494,339$ 20,128,357$ 20,763,851$ Portfolio & Data Management 709,199$ 730,475$ 752,390$ 774,961$ 798,210$ 822,157$ 846,821$ 872,226$ 898,393$ 925,344$ General and Administrative 1,337,709$ 1,465,693$ 1,528,667$ 1,586,871$ 1,662,383$ 1,723,329$ 1,778,910$ 1,839,419$ 1,903,094$ 1,966,187$ Cost of Credit for Procurement 273,923$ 274,280$ 275,873$ 276,889$ 279,905$ -$ -$ -$ -$ -$ PG&E Billing Services 68,331$ 69,015$ 69,705$ 70,402$ 71,106$ 71,817$ 72,535$ 73,260$ 73,993$ 74,733$ Startup Loan Repayment 697,000$ 550,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 17,892,844$ 18,945,742$ 19,081,968$ 19,734,763$ 20,533,501$ 20,938,423$ 21,586,131$ 22,279,245$ 23,003,837$ 23,730,116$ Revenues 21,599,097$ 21,877,993$ 22,566,097$ 22,682,240$ 23,152,444$ 23,607,888$ 24,779,429$ 26,085,643$ 27,517,689$ 28,989,458$ Net Revenue Annual 3,577,046$ 2,801,375$ 3,349,138$ 2,811,790$ 2,480,444$ 2,528,241$ 3,045,066$ 3,650,352$ 4,349,240$ 5,085,925$ Cumulative ($)3,577,046$ 6,378,421$ 9,727,559$ 12,539,349$ 15,019,793$ 17,548,034$ 20,593,100$ 24,243,453$ 28,592,693$ 33,678,618$ Cumulative (% of Tot. Rev. Req.)20% 34% 51% 64% 73% 84% 95% 109% 124% 142% 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 14,018,186$ 25,692,345$ 26,719,867$ 27,707,315$ 28,905,050$ 29,949,112$ 30,943,800$ 32,005,432$ 33,116,933$ 34,235,972$ Portfolio & Data Management 709,199$ 999,287$ 1,029,266$ 1,060,144$ 1,091,948$ 1,124,707$ 1,158,448$ 1,193,201$ 1,228,997$ 1,265,867$ General and Administrative 608,883$ 1,424,565$ 1,495,038$ 1,560,636$ 1,646,094$ 1,715,388$ 1,778,803$ 1,847,815$ 1,920,704$ 1,993,252$ Cost of Credit for Procurement 273,923$ 485,416$ 488,064$ 489,775$ 494,845$ -$ -$ -$ -$ -$ PG&E Billing Services 68,331$ 117,149$ 118,320$ 119,504$ 120,699$ 121,906$ 123,125$ 124,356$ 125,599$ 126,855$ Startup Loan Repayment 847,000$ 700,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 16,525,523$ 29,418,762$ 29,850,555$ 30,937,374$ 32,258,636$ 32,911,112$ 34,004,176$ 35,170,804$ 36,392,234$ 37,621,947$ Revenues 21,599,097$ 38,728,023$ 39,941,554$ 40,129,417$ 40,937,892$ 41,730,837$ 43,800,579$ 46,101,461$ 48,619,664$ 51,206,014$ Net Revenue Annual 4,944,367$ 9,077,588$ 9,852,067$ 8,951,987$ 8,434,363$ 8,570,088$ 9,534,386$ 10,654,875$ 11,936,585$ 13,277,749$ Cumulative ($)4,944,367$ 14,021,955$ 23,874,021$ 32,826,008$ 41,260,371$ 49,830,460$ 59,364,845$ 70,019,720$ 81,956,305$ 95,234,055$ Cumulative (% of Tot. Rev. Req.)30% 48% 80% 106% 128% 151% 175% 199% 225% 253% Packet Pg. 53 Item 2 22 Table 6h: Financial Projections for Cities of San Luis Obispo, Morro Bay, Paso Robles, and Grover Beach assuming 50% RPS Table 6i: Financial Projections for Cities of San Luis Obispo, Morro Bay, Paso Robles, and Grover Beach assuming 75% RPS 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 14,328,632$ 26,205,152$ 27,193,986$ 28,137,501$ 29,289,615$ 30,281,048$ 31,218,552$ 32,218,726$ 33,264,109$ 34,311,988$ Portfolio & Data Management 709,199$ 999,287$ 1,029,266$ 1,060,144$ 1,091,948$ 1,124,707$ 1,158,448$ 1,193,201$ 1,228,997$ 1,265,867$ General and Administrative 639,587$ 1,475,282$ 1,541,929$ 1,603,182$ 1,684,128$ 1,748,217$ 1,805,976$ 1,868,910$ 1,935,260$ 2,000,770$ Cost of Credit for Procurement 273,923$ 485,416$ 488,064$ 489,775$ 494,845$ -$ -$ -$ -$ -$ PG&E Billing Services 68,331$ 117,149$ 118,320$ 119,504$ 120,699$ 121,906$ 123,125$ 124,356$ 125,599$ 126,855$ Startup Loan Repayment 847,000$ 700,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 16,866,673$ 29,982,287$ 30,371,564$ 31,410,105$ 32,681,235$ 33,275,877$ 34,306,101$ 35,405,193$ 36,553,966$ 37,705,481$ Revenues 21,599,097$ 38,728,023$ 39,941,554$ 40,129,417$ 40,937,892$ 41,730,837$ 43,800,579$ 46,101,461$ 48,619,664$ 51,206,014$ Net Revenue Annual 4,603,217$ 8,514,063$ 9,331,057$ 8,479,255$ 8,011,764$ 8,205,324$ 9,232,461$ 10,420,486$ 11,774,853$ 13,194,216$ Cumulative ($)4,603,217$ 13,117,281$ 22,448,337$ 30,927,593$ 38,939,356$ 47,144,680$ 56,377,141$ 66,797,627$ 78,572,480$ 91,766,696$ Cumulative (% of Tot. Rev. Req.)27% 44% 74% 98% 119% 142% 164% 189% 215% 243% 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Costs Power Supply 14,785,171$ 27,043,072$ 28,065,528$ 29,041,252$ 30,232,177$ 31,257,330$ 32,228,669$ 33,264,284$ 34,346,283$ 35,429,865$ Portfolio & Data Management 709,199$ 999,287$ 1,029,266$ 1,060,144$ 1,091,948$ 1,124,707$ 1,158,448$ 1,193,201$ 1,228,997$ 1,265,867$ General and Administrative 684,739$ 1,558,153$ 1,628,125$ 1,692,564$ 1,777,349$ 1,844,772$ 1,905,878$ 1,972,317$ 2,042,288$ 2,111,330$ Cost of Credit for Procurement 273,923$ 485,416$ 488,064$ 489,775$ 494,845$ -$ -$ -$ -$ -$ PG&E Billing Services 68,331$ 117,149$ 118,320$ 119,504$ 120,699$ 121,906$ 123,125$ 124,356$ 125,599$ 126,855$ Startup Loan Repayment 847,000$ 700,000$ -$ -$ -$ -$ -$ -$ -$ -$ Total Revenue Requirement 17,368,364$ 30,903,078$ 31,329,303$ 32,403,238$ 33,717,018$ 34,348,715$ 35,416,120$ 36,554,158$ 37,743,168$ 38,933,917$ Revenues 21,599,097$ 38,728,023$ 39,941,554$ 40,129,417$ 40,937,892$ 41,730,837$ 43,800,579$ 46,101,461$ 48,619,664$ 51,206,014$ Net Revenue Annual 4,101,526$ 7,593,272$ 8,373,318$ 7,486,123$ 6,975,981$ 7,132,486$ 8,122,442$ 9,271,521$ 10,585,651$ 11,965,780$ Cumulative ($)4,101,526$ 11,694,798$ 20,068,116$ 27,554,239$ 34,530,220$ 41,662,706$ 49,785,148$ 59,056,668$ 69,642,319$ 81,608,099$ Cumulative (% of Tot. Rev. Req.)24% 38% 64% 85% 102% 121% 141% 162% 185% 210% Packet Pg. 54 Item 2 23 6.2 Sensitivity Analysis TEA created an alternative price scenario to test the financial viability of the CCE program. The alternative price scenario modified three key assumptions and was applied to each community participation scenario assuming a 50% RPS power portfolio. The three variables modified in the sensitivity scenario are: 1) Market Prices were increased by an average of $5.57/MWh over base-case forward prices for the study horizon. Based on current market price volatility, there is a 75% chance that market prices will be lower than those assumed in this alternative scenario but a 25% chance that actual market prices will be higher. 2) Power Charge Indifference Adjustment (PCIA) rates were increased 40% relative to the base case. This higher PCIA estimate is representative of the possible impact if the CPUC adopts the Alternative Proposed Decision in Rulemaking Proceeding R.17-06-026. It is difficult to assign a probability to this scenario, but it is important to remember that the Alternative Proposed Decision was proposed by Commissioner Peterman. 3) PG&E Generation Rates were decreased by an average of 10% over the study horizon relative to the base-case scenario – equivalent to PG&E generation rates increasing at 2% annually from 2019 through the study period. This is in contrast to current rate forecasts, which show a significant PG&E rate increase in 2020 due to large departing load. Like the PCIA increase, it is difficult to assign a probability to this decreased generation rate scenario. However, this scenario is consistent with the assumption above regarding a larger PCIA, which would offset some of PG&E’s generation costs. TEA views this alternative price scenario as a plausible outcome that the CCE should be prepared to address. Results of the alternative price scenario are presented in Table 7 below. Table 7: Alternative price scenario results for all three community participation scenarios assuming 50% RPS under two rate discount scenarios Community Participation Scenario Cumulative net revenues at end of year 3: 3% Generation Rate Discount to PG&E 0% Generation Rate Discount to PG&E Total ($ Million) % of Annual Expenses Total ($ Million) % of Annual Expenses City of San Luis Obispo ($3.2M) (18%) ($1.0M) (6%) Cities of San Luis Obispo and Morro Bay ($3.2M) (16%) ($0.6M) (3%) Cities of San Luis Obispo, Morro Bay, Paso Roble, and Grover Beach $0.6M 2% $4.5M 13% Packet Pg. 55 Item 2 24 Under the alternative prices, the 1 and 2-city scenarios result in negative net revenues year- over-year when maintaining the 3% rate discount relative to PG&E, while the 4-city scenario presents slightly positive results. If the rate discount is set at zero, only the 4-city scenario yields positive net revenue, while the 1 and 2-city scenarios require between a 1% and 2% rate premium over PG&E in order to achieve positive net revenues. However, it’s important to note that these scenarios do not take into account some mitigating factors such as the CCE’s ability to make more conservative policy and budgeting decisions than were assumed for this study. These results demonstrate the need for the potential CCE member communities to continue to reevaluate market and regulatory conditions throughout the CCE planning and implementation process. The participating communities will be able to adjust program design if these adverse conditions begin to develop. 7 CCE Risk Analysis While there are many benefits to a CCE, there are also risks that need to be identified, monitored, and mitigated. A detailed risk assessment is beyond the scope of this study, but there are a few primary risks associated with power supply procurement and legal/regulatory changes that need to be considered as part of the decision to launch a CCE program. If the new CCE’s rates become significantly higher than PG&E’s, there is a risk that customers may revert to PG&E service, which could potentially threaten the CCE’s financial viability. It will therefore be important for the CCE to follow industry best practices including: • Financial Reserves – Building financial reserves as a buffer against unexpected cost increases, as well as to serve as a means of demonstrating creditworthiness for long- term contracting. A key measure considered in this study is how quickly the new CCE will build financial reserves to a level equivalent to 150 to 180 days of annual operating expenses. A financial buffer of this magnitude can help mitigate unexpected changes in procurement costs, PG&E rates and/or other unexpected cost shocks. • Risk Management – Implementing an energy risk management program consistent with industry best practices, including spreading procurement over time, across counterparties and among different generation technologies, as well as continually monitoring open positions and the expected cost of the same. • Qualified Staff – Employing competent and experienced staff and third-party service providers that can enable a new CCE to quickly launch and implement best practices. • Regulatory and Legislative Monitoring – Coordinating with Cal-CCE, other CCEs and other interested parties to understand and influence legislative and regulatory decisions, as well as actively monitor proceedings. • Demonstrating Customer and Community Value Beyond Rate Savings – Implementing customer and community-based programs and having a positive reputation in the community will help mitigate customer opt-outs as has been demonstrated by other Packet Pg. 56 Item 2 25 CCE programs that have been through periodic cycles of higher rates than PG&E as a result of fluctuating PCIA charges. 7.1 PCIA Rulemaking Arguably, the single largest risk currently facing a new CCE is the outcome of the current PCIA Rulemaking proceeding. A final ruling in this proceeding is not expected until after completion of this study, sometime in mid/late September. Updates that have material impact on this report’s current analysis will be provided right away. To test financial viability under a range of future possible scenarios, TEA has created a sensitivity scenario that increases the PCIA charge 40% above the base case scenario. The assumed customer class weighted PCIA charge for both base and stressed scenarios is provided in Appendix A: Key Assumptions. Prior to submitting its Implementation Plan, TEA also recommends updating the financial analysis after the final PCIA ruling is available. 7.2 Long-term Contracting A unique challenge facing all CCEs launching in 2020 is the need to immediately enter into long- term contracts to satisfy the requirement to procure 65% of renewable supply under a 10-year or longer contract. While the long-term contract requirement is not unique, having to satisfy the creditworthiness standards of potential generators without the benefit of accumulating financial reserves and establishing an operating track record is a unique challenge. For the purposes of this study, TEA has assumed base PCC1 prices are sufficient to cover the mid-point of expected long-term renewable contracting costs (see Appendix). However, the implied REC premium of long-term contracts must be assessed on a case-by-case basis as these costs can vary widely depending on generation profile and congestion at the point the generator connects with the CAISO grid. Fortunately, the extended timeline prior to implementation in 2020 gives the prospective CCE time to explore with other CCEs, as well as potential generators, the requirements for long-term contracting that a new CCE will face. This inquiry will enable the new CCE to incorporate these requirements into financial and operating plans and policies established at program launch. Possible direct and indirect means of addressing long-term contract requirements may include, but are not limited to: • Contracting with economically-priced local generators that are likely to be have greater interest in establishing a mutually beneficial, long-term, relationship with a local CCE; • Partnering with established CCEs in their procurement activities for a portion of long- term requirements; • Being disciplined in executing rate and financial policies to achieve and maintain a strong liquidity positon and generate the required levels of free cash flow; • Building a strong relationship with the local community to help ensure commitment to the CCE program, even during a period when rates may need to be set above PG&E to meet the procurement goals of the CCE. Packet Pg. 57 Item 2 26 Appendix A: Key Assumptions • Customer Opt-out rate of 10% for all scenarios • Startup costs equal $1.25 million for the 1 and 2-city scenarios and $1.55 million for the 4-city scenario, including the $147,000 CPUC bond. • The $500,000 posting to CAISO needed to satisfy the credit requirements for the CCE to be a Candidate Congestion Revenue Rights (CRR) Holder is not included at this time, nor has the revenue associated with CRRs been included. Historically, CRR revenues have provided $0.50 to $1.50 per MWh. • Accumulated Net Revenues o Target by end of 2024 equal to 5-6 months of operating expenses (including power supply expenses) o Annual target equal to 8.3 to 10% of projected operating expenses in year 5 • Forward Power Supply Costs ($/MWh) Table 8: Forward Power Supply Cost Assumptions Energy (ATC) PCC1 PCC29 CF 2020 $34.16 $17.50 $7.00 $3.00 2021 $37.11 $18.00 $7.25 $3.25 2022 $38.35 $18.50 $7.50 $3.50 2023 $39.54 $19.00 $7.75 $3.75 2024 $40.68 $19.50 $8.00 $4.00 2025 $41.78 $20.00 $8.25 $4.25 2026 $42.87 $20.50 $8.50 $4.50 2027 $43.99 $21.00 $8.75 $4.75 2028 $45.14 $21.50 $9.00 $5.00 2029 $46.32 $22.00 $9.25 $5.25 • Miscellaneous Power Supply Costs o CAISO: $1.44/MWh o Distribution losses: 5% 9 Due to the passage of California Assembly Bill 1110, PCC2 purchases are not considered carbon-free. Accordingly, TEA assumed carbon-free power would need to be purchased in addition to all PCC2 purchases in order to achieve the CCE goal of zero GHG emissi ons. Packet Pg. 58 Item 2 27 o Portfolio Management and Scheduling Coordination consistent with TEA’s proposal • Non-power supply costs o Internal staffing, overhead and administration: $90,000 per month for the City of San Luis Obispo only; $109,000 per month for the City of San Luis Obispo and Morro Bay; and $126,000 for the City of San Luis Obispo, Morro Bay, Paso Robles, and Grover Beach o Data management fees: $1.15 per customer per month in 2020, escalating at 3% per year o PG&E service fees: $0.21 per customer per month • PG&E Generation and PCIA Rate Forecast (Load Weighted Average) Table 9: Forward Power Supply Cost Assumptions PG&E Gen Rate ($/MWh) PG&E PCIA ($/MWh) 2020 $110.92 $24.71 2021 $112.55 $25.18 2022 $113.74 $25.66 2023 $115.64 $26.15 2024 $117.42 $26.65 2025 $119.23 $27.16 2026 $123.72 $27.67 2027 $128.83 $28.20 2028 $134.29 $28.74 2029 $139.99 $29.29 • Uncollected debt equals 0.3% of revenues based on the historic collection rates at public utilities throughout California. Packet Pg. 59 Item 2 O ______ ORDINANCE NO. _____ (2018 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING THE IMPLEMENTATION OF A COMMUNITY CHOICE AGGREGATION PROGRAM WHEREAS, On December 12, 2017, the City Council directed staff to investigate the feasibility and formation of a Community Choice Aggregation (CCA) program under the provisions of the Public Utilities Code section 366.2 (referred to locally as Community C hoice Energy, or CCE). in order to provide electric service to customers within the City of San Luis Obispo with the intent of providing local electric service, reduced greenhouse gas emissions, local renewable power development, competitive electric rates, and the implementation of energy conservation and other energy programs ; and WHEREAS, the City of San Luis Obispo commissioned a technical study that indicated a CCA program serving the City and surrounding communities would provide several benefits, including: ▪ Providing customers a choice of power providers and power supply options; ▪ Increasing local control and involvement in energy rates and other energy-related matters; ▪ Providing stable electric rates that are competitive with those provided by the incumbent utility; ▪ Reducing greenhouse gas emissions arising from electricity use within the City and surrounding region; ▪ Increasing local renewable generation capacity; ▪ Increasing energy conservation and efficiency projects and programs; ▪ Increasing regional energy self-sufficiency; ▪ Improving the local economy resulting from the implementation of a CCA program and local renewable and energy efficiency projects over time; and WHEREAS, the Cities of San Luis Obispo, Morro Bay, formed a Joint Powers Agency creating the Central Coast Community Energy Authority (“Authority.”) Under the Joint Powers Agreement, cities and towns within San Luis Obispo County and adjoining Counties may participate in the Central Coast Community Energy CCA program by adopting the JPA resolution and ordinance required by Public Utilities Code section 366.2. Cities and towns choosing to participate in the CCA program will have membership on the Board of Directors of the Authority as provided in the Joint Powers Agreement; and WHEREAS, the Authority will enter into Agreements with electric power suppliers and other service providers, and based upon those Agreements the Authority will be able to provide power to residents and business at rates that are competitive with those of the incu mbent utility (“PG&E”). Once the California Public Utilities Commission certifies the Implementation Plan adopted by the Authority, the Authority will provide service to customers within the City of San Luis Obispo and the jurisdictions of those cities and Counties that have chosen to participate in the Central Coast Community Energy CCA program; and Packet Pg. 60 Item 2 Ordinance No. _____ (2018 Series) Page 2 O ______ WHEREAS, under Public Utilities Code section 366.2, customers have the right to opt - out of a CCA program and continue to receive service from the incumbent ut ility. Customers who wish to continue to receive service from the incumbent utility will be able to do so at any time; and WHEREAS, on September 18 and October 2, the City Council held public hearings on the topic of CCA at which time interested persons had an opportunity to testify either in support of or opposition to the implementation of a CCA program serving the City of San Luis Obispo ; and WHEREAS, this ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to the CEQA Guidelines, as it is not a “project” as it has no potential to result in a direct or reasonably foreseeable indirect physical change to the environment. (14 Cal. Code Regs. § 15378(a)). Further, the ordinance is exempt from CEQA as there is no possibility that the ordinance or its implementation would have a significant effect on the environment. (14 Cal. Code Regs. § 15061(b)(3)). The ordinance is also categorically exempt because it is an action taken by a regulatory agency to assume the maintenance, restoration, enhancement or protection of the environment. (14 Cal. Code Regs. § 15308). NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo as follows/or that (whatever action is needed): SECTION 1. The above recit ations are true and correct and material to this Ordinance. SECTION 2. Authorization to Implement a Community Choice Aggregation Program. Based upon the forgoing, and in order to provide business and residents within the City of San Luis Obispo with a cho ice of power providers and with the benefits described above, the City Council ordains that it shall implement a community choice aggregation program for their City by participating as a group with other cities and towns as described above in the Central C oast Community Energy Authority, as generally described in the Joint Powers Agreement. Packet Pg. 61 Item 2 Ordinance No. _____ (2018 Series) Page 3 O ______ SECTION 3. This Ordinance shall be in full force and effective 30 days after its adoption, and shall be published and posted as required by law. INTRODUCED on the ____ day of ____, 2018, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on the ____ day of ____, 201 8, on the following vote: AYES: NOES: ABSENT: ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo , California, this ______ day of ______________, _________. ______________________________ Teresa Purrington City Clerk Packet Pg. 62 Item 2 Page 1of 19 01181.0001/491349.1 JOINT EXERCISE OF POWER AGREEMENT RELATING TO AND CREATING CENTRAL COAST COMMUNITY ENERGY This Joint Exercise of Powers Agreement , effective as of ____________, 2018 is made and entered into pursuant to the provisions of Title 1, Division 7, Chapter 5, Article 1 (Section 6500 et seq.) of the California Government Code among the Parties. RECITALS A. The Parties share various powers under California law, including , but not limited to, the power to purchase, supply, and aggregate electricity for themselves and customers within their jurisdictions. B. In 2006, the State Legislature adopted AB 32, the Global Warming Solutions Act, which mandates a reduction in greenhouse gas emis sions in 2020 to 1990 levels. In 2016, the State Legislature adopted SB 32, which mandates statewide greenhouse gas emissions be reduced to 40 percent below the 1990 level by 2030. The California Air Resources Board is promulgating regulations to impleme nt the greenhouse gas reduction targets, which will require local governments to develop programs to reduce greenhouse gas emissions. C. The purposes for entering into this Agreement include: a. Reducing greenhouse gas emissions; b. Providing electric power to customers at a competitive cost; c. Carrying out programs to reduce energy consumption; d. Stimulating and sustaining the local economy by developing local jobs in renewable energy and energy efficiency; and e. Promoting long-term electric rate stability and energy security and reliability for residents through local control of electric generation resources. D. It is the mission and purpose of this Agreement to build a strong Community Choice Energy (CCE) program that is locally controlled and delivers greenhouse gas emiss ion reductions, cost-competitive clean electricity, product choice, price stability, and energy efficiency. E. It is the intent of this Agreement to promote the development and use of a wide range of renewable energy sources and energy efficiency programs, including but not limited to solar, wind, and biomass energy production. The purchase of renewable power and greenhouse gas-free energy sources will decrease regional greenhouse gas emissions and accelerate the State’s transition to clean power resources to the extent feasible. Implementing a CCE program pursuant to this Agreement also will add increasing levels of locally generated renewable resources. Packet Pg. 63 Item 2 Page 2 of 19 01181.0001/491349.1 F. The Parties desire to establish a separate public agency, known as Central Coast Community Energy, a California joint powers authority, or CCCE, under the provisions of the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.) (“Act”) in order to collectively study, promote, develop, conduct, operate, and manage energy programs. G. The Parties have each adopted an ordinance electing to implement , through the CCCE, a common CCE program (also known as a Community Choice Aggregation (CCA) program) hereinafter called the CCE Program, pursuant to California Public Utilities Code, sections 331.1(b) and 366.2. The first priority of the CCCE will be the consideration of those actions necessary to implement the CCE Program. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises, covenants, and conditions hereinafter set forth, it is agreed by and among the Parties as follows: ARTICLE 1. DEFINITIONS AND EXHIBITS 1.1 Definitions. Capitalized terms used in this Agreement shall have the meanings specified in E xhibit A, unless the context requires otherwise. 1.2 Documents Included. This Agreement consists of this document and the following exhibits, all of which are hereby incorporated into this Agreement: Exhibit A: Definitions Exhibit B: List of the Parties Exhibit C: Annual Energy Use Exhibit D: Voting Shares Exhibit E: Signatures ARTICLE 2. FORMATION OF CENTRAL COAST COMMUNITY ENERGY 2.1 Effective Date and Term. This Agreement shall become effective and CCCE shall exist as a separate public agency on [insert date], or when both the cities of San Luis Obispo and Morro Bay have executed this Agreement, whichever occurs later. The CCCE shall provide notice to the Parties of the Effective Date. CCCE shall continue to exist, and this Agreement shall be effective, until this Agr eement is terminated in accordance with Section 6.4, subject to the rights of the Parties to withdraw from CCCE. 2.2 Formation. There is formed, as of the Effective Date, a public agency named Central Coast Community Energy. Pursuant to Sections 6506 and 6507 of the Act, CCCE is a public agency separate from the Parties. Pursuant to Sections 6508.1 of the Act, the debts, liabilities or obligations of CCCE shall not be debts, liabilities or obligations of the individual Parties unless the governing Packet Pg. 64 Item 2 Page 3 of 19 01181.0001/491349.1 body of a Party agrees in writing to assume any of the debts, liabilities or obligations of CCCE. A Party who has not agreed to assume an CCCE debt, liability or obligation shall not be responsible in any way for such debt, liability or obligation even if a majorit y of the Parties agree to assume the debt, liability or obligation of CCCE. Notwithstanding Section 7.4 of this Agreement, this Section 2.2 may not be amended, unless such amendment is approved by the governing body of each Party. 2.3 Name. CCCE may change its name at any time through adoption of a resolution of the Board of Directors. 2.4 Purpose. The purpose of this Agreement is to establish an independent public agency in order to exercise powers common to each Party to establish and operate a CCE Program that achieves long-term GHG emission reductions by offering clean, cost effective and price stable electricity to residents, businesses, and agricultural producers, while carrying out innovative programs to reduce customer energy use, substantially increase local renewable energy production, and power the local transportation system. To that end, CCCE will study, promote, develop, conduct, operate, and manage energy, energy efficiency and conservation, and other energy-related programs, and to exercise all other powers necessary and incidental to accomplishing this purpose. Without limiting the generality of the foregoing, the Parties intend for this Agreement to be used as a contractual mechanism by which the Parties are authorized to participat e in the CCE Program, as further described in Section 4.1. The Parties intend other agreements shall define the terms and conditions associated with the implementation of the CCE Program and any other energy programs approved by CCCE. 2.5 Membership in CCCE 2.5.1 The initial members of CCCE are the City of San Luis Obispo and the City of Morro Bay. Additional cities or counties may also become initial members of CCCE by executing this Agreement and delivering an executed copy of this Agreement and a copy of the ado pted ordinance required by Public Utilities Code Section 366.2(c)(12) prior to the Effective Date. 2.5.2 Any city or county that is not an initial member may request to become a member of CCCE by submitting a resolution adopted by its City Council or Board of Supervisors to the Board of CCCE. The Board shall review the request and shall vote to approve or disapprove the request by resolution. The Board may establish conditions, including, but not limited, to financial conditions, under which the city or county may become a member of CCCE. The Board shall notify the existing members of CCCE of that request and the date the request will be on the Board’s meeting agenda for action. The date set for Board action shall be at least forty-five (45) days after the date the notice is mailed to the members. If the request is approved by a two-thirds vote of the entire Board, then the Packet Pg. 65 Item 2 Page 4 of 19 01181.0001/491349.1 city or county shall become a member of CCCE under the terms and conditions set forth by the Board and upon the adoption of an ordinance required by Public Utilities Code, section 366.2(c)(12) and the approval and execution of this Agreement by the city or county. 2.6 Powers. CCCE shall have all powers common to the Parties and such additional powers accorded to it by law. CCCE is authorized, in its own name, to exercise all powers and do all acts necessary and proper to carry out the provisions of this Agreement and fulfill its purposes, including, but not limited to, each of the following powers, subject to the voting requirements set forth in Section 3.8: 2.6.1 Make and enter into contracts; 2.6.2 Employ agents and employees, including but not limited to an Executive Officer and General Counsel; 2.6.3 Acquire property by eminent domain, or otherwise, except as limited under Section 6508 of the Act, and to hold or dispose of any property; 2.6.4 Lease any property; 2.6.5 Sue and be sued in its own name; 2.6.6 Incur debts, liabilities, and obligations, including but not limited to loans from private lending sources pursuant to its temporary borrowing powers such as Government Code, section 53850 et seq. or any legal authority under the Act or other laws; 2.6.7 Form other entities if necessary, to carry out energy supply and energy conservation programs or conduct other programs or activities within the powers of CCCE; 2.6.8 Issue revenue bonds and other forms of indebtedness; 2.6.9 Apply for, accept, and receive all licenses, permits, grants, loans or other assistance from any federal, state, or local public agency; 2.6.10 Submit documentation and notices, register, and comply with orders, tariffs and agreements for the establishment and implementation of the CCE Program and other energy programs; 2.6.11 Adopt policies, rules and regulat ions governing the operation of CCCE ; 2.6.12 Make and enter into service agreements relating to the provision of services necessary to plan, implement, operate and administer the CCE Program and other energy programs; Packet Pg. 66 Item 2 Page 5 of 19 01181.0001/491349.1 2.6.13 Designate another entity authorized to be a community choice aggregator to act as the community choice energy aggregator on behalf of CCCE. 2.7 Limitation on Powers. As required by Government Code, section 6509, the power of CCCE is subject to the restrictions upon the manner of exercising power possessed by City of San Luis Obispo. 2.8 Compliance with Local Zoning and Building Laws . Notwithstanding any other provisio ns of this Agreement or state law, any facilities, buildings or structures located, constructed or caused to be constructed by CCCE within the territory of CCCE shall comply with the General Plan, zoning and building laws of the local jurisdiction within which the facilities are constructed . ARTICLE 3. GOVERNANCE AND INTERNAL ORGANIZATION 3.1 Board of Directors. CCCE shall be governed by a legislative body known as the a Board of Directors. The initial Board shall consist of two Directors appointed by the governing body of each of the initial Parties. For example, if the initial Parties are the City of San Luis Obispo and the City of Morro Bay, the Board shall consist of four Directors with two Directors appointed by the City Council of San Luis Obispo and two Directors appointed by the City Council of Morro Bay. Each Director shall serve at the pleasure of the governing body of the Party who m appointed such Director, and may be removed as Director by such governing body at any time. If at any time a vacancy occurs on the Board, then a replacement shall be appointed to fill the position of the previous Director within 45 days after the date that position becomes vacant. Directors must be members of the City Council or Board of Supervisors of a Party to this Agreement. Each Party shall appoint an alternate(s) to serve in the absence of its Director(s). Alternates may be members of the City Council or Board of Supervisors of the Party or a staff member of the Party. If additional cities or counties join CCCE, as provided in Section 2.5.2, each city or county that becomes a member of CCCE shall be entitled to two Directors who shall be appointed as set forth above. When the fifth member joins CCCE, the number of Directors per Party shall be reduced to one Director per Party; and each Party shall determine which Director shall continue as that Party’s representative on the Board. 3.2 Quorum. A majority of the appointed Directors shall constitute a quorum, e xcept that less than a quorum may adjourn from time to time in accordance with law. 3.3 Powers and Functions of the Board. The Board shall exercise the general governance and legislative powers of CCCE, consistent with this Agreement and applicable law. The Board shall provide general policy guidance on the CCE Program and other energy programs. This Agreement delegates contracting powers and administrative powers and oversight over the operations and activities Packet Pg. 67 Item 2 Page 6 of 19 01181.0001/491349.1 of SLO to the Operations Board as further described in Section 3.5. Board of Director approval shall be required for any of the following actions in addition to any other actions specified by this Agreement or required by law: 3.3.1 The issuance of bonds or any other financing even if program revenues are expected to pay for such financing. 3.3.2 The appointment or termination of the Executive Officer and General Counsel. 3.3.3 The appointment or removal of officers described in Section 3.10. 3.3.4 Any decision to provide retirement or post-retirement benefits. 3.3.5 The adoption of the annual budget. 3.3.6 The adoption of an ordinance. 3.3.7 The initiation or resolution of claims and litigation where CCCE will be the plaintiff, petitioner, cross complainant or cross petitioner, or intervenor; provided, however, that the Executive Officer or General Counsel, on behalf of CCCE, may intervene in, become a party to, or file comments with respect to any proceeding pending at the California Public Utilities Commission, the Federal Energy Regulatory Commission, or any other administrat ive agency, without approval of the Board as long as such action is consistent with any adopted Board policies. 3.3.8 The adoption of the Implementation Plan. 3.3.9 The approval of major capital expenditures, excluding power purchases, as defined by Board resolution. 3.3.10 The setting of rates for power sold by CCCE and the setting of charges for any other category of service provided by CCCE. 3.3.11 The approval of new members pursuant to Section 2.5.2. 3.3.12 Termination of the CCE Program. 3.4 Executive Officer. The Board of Directors shall appoint an Executive Officer for CCCE, who shall be responsible for the day-to-day operation and management of CCCE and the CCE Program. The Executive Officer may be retained under contract with CCCE, be an employee of CCCE, or be an employee of one of the Parties. The Executive Officer shall report directly to the Board of Directors and serve as staff to CCCE. The Executive Officer also shall report to and work with the Operations Board on those matters within the jurisdiction of the Operations Board. Except as otherwise set forth in this Agreement, the Executive Officer may exercise all powers of CCCE, including the power to hire, discipline and Packet Pg. 68 Item 2 Page 7 of 19 01181.0001/491349.1 terminate employees, as well as the power to approve any agreement if the total amount payable under the agreement is less than $100,000 in any fiscal year, or such higher amount as established by the Board from time to time, by resolution of the Board, except the powers specifically set forth in Section 3.3 or those powers, which by law, must be exercised by the Board of Directors. The Executive Officer shall be responsible for coordinating the actions of the Board of Directors and the Operations Board. The Executive Officer shall serve at the pleasure of the Board of Directors. 3.5 Operations Board. The Operations Board shall consist of the City Manager of each city Party and the Chief Administrative Office or Chief Executive Officer of each county Party. Each Party also may appoint an alternate Director to the Operations Board who shall be a management level employee of the Party. The Operations Board shall provide direction to the Chief Executive Officer on the day-to-day operations of CCCE and shall have the authority to approve and take action on the following matters: 3.5.1 The approval of all contracts and contract amendments except as provided by Section 3.3.9, including, but not limited to, power purchase agreements. 3.5.2 The adoption of personnel rules and regulations. 3.5.3 The adoption of administrative rules and regulations except as provided otherwise by this Agreement. 3.5.4 Any matters referred to the Operations Board by the Board of Directors for study, review, recommendation or final action. 3.6 Commissions, Boards, and Committees. The Board of Directors may establish commissions, boards or committees, including, but not limited to, a standing executive committee and community advisory committee, as the Board deems appropriate, to advise and assist the Board in carrying out its authority and functions under this Agreement and may delegate authority to such commission, board or committee as set forth in a Board resolution. Such delegation may be modified, amended or revoked at any time as the Board may deem appropriate. The Board may establish rules, regulatio ns, policies, bylaws or procedures to govern any such commissions, boards, or committees, and shall determine whether members shall be compensated or entitled to reimbursement for expenses. Any commission, board or committee established by the Board of Directors shall comply with the applicable requirements of the Ralph M. Brown Act. 3.7 Director Compensation. Directors shall serve without compensation from CCCE. However, Directors may be compensated by their respective appointing authorities. The Board, ho wever, may adopt by resolution a policy relating to the reimbursement by CCCE of expenses incurred by Directors. Packet Pg. 69 Item 2 Page 8 of 19 01181.0001/491349.1 3.8 Board Voting. Except when a supermajority vote is required by Section 3.8.4, action by the Board of Directors or the Operations Board shall require a majority vote of the total number of Directors of the entire Board; provided, however, that so long as CCCE consists of three or less members, all actions of the Board shall require the affirmative vote of at least one Director appointed by each Party. In addition, as described below in Section 3.8.3, upon request of two Directors, each from a different Party, a weighted vote by shares also will be conducted. When such a request is made, an action must be approved by both a majority vote of Directors present and a majority of the voting shares of the entire Board. No action may be approved solely by a vote by shares. The voting shares of Directors and the requirements for voting by shares shall be as follows: 3.8.1 Voting Shares. Each Party shall have a voting share as determined by the following formula: (Annual Energy Use/Total Annual Energy) multiplied by 100, where (a) “Annual Energy Use” means, (i) with respect to the first two years following the Effective Date, the annual electricity usage, expressed in kilowatt hours (“kWh”), within the Party’s respective jurisdiction and (ii) with respect to the period after the second anniversary of the Effective Date, the annual electricity usage during the prior Fiscal Year, expressed in kWh, of accounts within a Party’s respective jurisdiction that are served by CCCE; and (b) “Total Annual Energy” means the sum of all Parties’ Annual Energy Use. The initial values for Annual E nergy Use will be designated in Exhibit C, and shall be adjusted annually as soon as reasonably practicable after January 1, but no later than March 1 of each year. Those adjustments shall be approved by the Board of Directors. (c) The combined voting share o f all Directors representing a Party shall be based upon the annual electricity usage within the Party’s jurisdiction; the combined voting share of a county shall be based upon the annual electricity usage within the unincorporated area of the county. For the purposes of weighted voting by shares, if a Party has more than one Director on the Board of Directors present and voting, then the voting shares allocated to the entity shall be equally divided amongst its Directors that are present and voting. 3.8.2 Exhibit Showing Voting Shares. The initial voting shares will be set forth in Exhibit D. Exhibit D shall be revised no less than annually, as necessary to account for changes in the number of Parties and changes in Packet Pg. 70 Item 2 Page 9 of 19 01181.0001/491349.1 the Parties’ Annual Energy Use. Adjustments to Exhibit D shall be approved by the Board of Directors. 3.8.3 Option for Approval by Voting Shares. Any two Directors, each appointed from a different Party, present at a meeting may demand approval of any matter related to the CCE Program shall be determined on the basis of both voting shares and by the affirmative vote of a majority of Directors present at the meeting. If two Directors, each appointed from a different Party, make such a demand with respect to approval of any such matter, then approval of such matter shall require the affirmative vote of a majority of Directors present at the meeting and the affirmative vote of Directors having a majority of the voting shares of the entire Boardt. In the event any one Party has a voting share that equals or exceeds that which is necessary to disapprove the matter being voted on by the Board, at least one other Party shall be required to vote in the negative in order to disapprove such matter. 3.8.4 Special Voting Requirements for Certain Matters. (a) Two-Thirds and Weighted Voting Approval Requirements Relating to Specified Actions. Action of the Board on the matters set forth in Section 2.5.2 (approval of new members), 6.2 (involuntary termination of a Party), or Section 7.4 (amendment of this Agreement) or the approval of any bonds, loans or other indebtedness shall require the affirmative vote of at least two - thirds of the Directors of the entire Board. Notwithstanding the foregoing, any two Directors present at the meeting, each appointed from a different Party, ma y demand that the vote be determined on the basis of both voting shares and by the affirmative vote of Directors, and if any two Directors, each appointed from a different Party, makes such a demand, then approval shall require the affirmative vote of both at least two- thirds of the Directors on the entire Board and the affirmative vote of Directors having at least two -thirds of the voting shares of the entire Board, as determined by Section 3.8; but, Directors from at least two Parties must vote against a matter for the vote to fail. On votes to involuntarily terminate a Party under Section 6.2, the Director(s) for the Party subject to involuntary termination may not vote, and the number of Directors constituting two-thirds of all Directors, and the weight ed vote of each Party shall be recalculated as if the Party subject to possible termination were not a Party. (b) Seventy-Five Percent Special Voting Requirement for Eminent Domain . (i) A decision to exercise the power of eminent domain on behalf of CCCE to acquire any property interest other than Packet Pg. 71 Item 2 Page 10 of 19 01181.0001/491349.1 an easement, right -of-way, or temporary construction easement shall require a vote of at least 75% of all the members of the Board of Directors. (ii) Notwithstanding the foregoing, any two Directors present at the meeting, each appointed by a different Party, may demand a vote under subsection (i) be determined on the basis of voting shares and by the affirmative vote of Directors, and if any two Directors, each appointed from a different Party, makes such a demand, then appro val shall require both the affirmative vote of at least 75% of the entire Directors on the Board and the affirmative vote of Directors having at least 75% of the voting shares of the entire Board, but Directors from at least two Parties must vote against a matter for the vote to fail. 3.9 Regular and Special Meetings of the Boards. The Board of Directors and Operations Board shall hold the number of regular meetings provided by resolution of each Board. The date, hour and place of each regular meeting shall be fixed by resolution of each Board. Regular meetings may be adjourned to another meeting time. Special and emergency meetings of the Boards may be called in accordance with the provisions of California Government Code , sections 54956 and 54956.5. Directors may participate in meetings telephonically, with full voting rights, only to the extent permitted by law. All meetings shall be conducted in accordance with the provisions of the Ralph M. Brown Act (California Government Code, sections 54950 et seq.). 3.10 Selection of Board Officers. 3.10.1 Chair and Vice Chair. The Directors shall select, from among themselves, a Chair, who shall be the presiding officer of all Board meetings, and a Vice Chair, who shall serve in the absence of the Chair. The Chair and Vice Chair shall each serve for a one-year term at the pleasure of the Board. There shall be no limit on the number of terms held by either the Chair or Vice Chair. The office of either the Chair or Vice Chair shall be declared vacant and a new selection sha ll be made if: (a) the person serving dies, resigns, or the Party the person represents removes the person as its representative on the Board, or (b) the Party that he or she represents withdraws from CCCE pursuant to the provisions of this Agreement. 3.10.2 Secretary. The Board of Directors shall appoint a Secretary who shall be responsible for keeping the minutes of all meetings of the Board and all other official records of CCCE. Packet Pg. 72 Item 2 Page 11 of 19 01181.0001/491349.1 3.10.3 Treasurer and Auditor. The Board of Directors shall appoint a Treasurer who shall function as the combined offices of Treasurer and Auditor pursuant to Government Code section 6505.6 and shall strictly comply with the statutes related to the duties and responsibilities specified in Section 6505.5 of the Act. The Treasurer for CCCE shall be the depository and have custody of all money of CCCE from whatever source and shall draw all warrants and pay demands against CCCE as approved by the Board. The Treasurer shall cause an independent audit(s) of the finances of CCCE to be made by a certified public accountant, or public accountant, in compliance with Section 6505 of the Act. The Treasurer shall report directly to the Board of Directors and shall comply with the requirements of treasurers of incorporated municipalities. The Board may transfer the responsibilities of Treasurer to any person or entity as the law may provide at the time. The duties and obligations of the Treasurer are further specified in Article 5. The Treasurer shall serve at the pleasure of the Board of Directors. 3.11 Administrative Services Provider. The Operations Board may appoint one or more administrative services providers to serve as CCCE’s agent for planning, implementing, operating and administering the CCE Program, and any other program approved by the Board, in accordance with the provisions of an Administrative Services Agreement. The appointed administrative services provider may be one of the Parties. One or more of the Parties may agree to provide all or a portion of the services in the manner set forth in an Ad ministrative Services Agreement. Employees of the Parties utilized to perform such services shall remain employees of the Parties and subject to the employing Party’s control and supervision. An Administrative Services Agreement shall set forth the terms and conditions by which the appointed administrative services provider shall perform or cause to be performed all or enumerated tasks necessary for planning, implementing, operating and administering the CCE Program and other approved programs. The Administrative Services Agreement shall set forth the term of this Agreement, the services to be provided, and the circumstances under which the Administrative Services Agreement may be terminated by CCCE. This section shall not in any way be construed to limit the discretion of CCCE to hire its own employees to administer the CCE Program or any other program. ARTICLE 4. IMPLEMENTATION ACTION AND CCCE DOCUMENTS 4.1 Preliminary Implementation of the CCE Program. 4.1.1 Enabling ordinance. To be eligible to participate in the CCE Program, each Party must adopt an ordinance in accordance with Public Utilities Code section 366.2(c)(12) for the purpose of specifying the Party intends to implement a CCE program by and through its participation in CCCE. Packet Pg. 73 Item 2 Page 12 of 19 01181.0001/491349.1 4.1.2 Implementation Plan. CCCE shall cause to be prepared an Implementation Plan meeting the requirements of Public Utilities Code , section 366.2 and any applicable Public Utilities Commission regulations, as soon after the Effective Date as reasonably practicable. The Implementation Plan shall not be filed with the Public Utilities Commission until it is approved by the Board of Directors. 4.1.3 Integrated Resource Plan. CCCE shall cause to be prepared an Integrated Resource Plan in accordance with CPUC regulations that will ensure the long-term development and administration of a variety of power resources in compliance with the State Renewable Portfolio Standard and other statutory and regulatory requirements of the State of California. 4.1.4 Termination of CCE Program. Nothing contained in this Article or this Agreement shall be construed to limit the discretion of CCCE to terminate the implementation or operation of the CCE Program at any time in accordance with any applicable requirements of state law. 4.2 CCCE Documents. The Parties acknowledge and agree the affairs of CCCE will be implemented through various documents duly adopted by the Board of Directors or Operations Board through Board resolution or minute action; provided, that any Operations Board actions must be consistent with the polices established by the Board of Directors. The Parties agree to abide by and comply with the terms and conditions of all such documents that may be adopted by the Board, subject to the Parties’ right to withdraw from CCCE as described in Article 6. ARTICLE 5. FINANCIAL PROVISIONS 5.1 Fiscal Year. CCCE’s fiscal year shall be 12 months commencing July 1 and ending June 30. The fiscal year may be changed by resolution of the Board of Directors . 5.2 Depository. 5.2.1 All funds of CCCE shall be held in separate accounts in the name of CCCE and not commingled with funds of any Party or any other person or entity. 5.2.2 All funds of CCCE shall be strictly and separately accounted for, and regular reports shall be rendered of all receipts and disbursements, at least quarterly during the fiscal year. The books and records of CCCE shall be open to inspection by the Parties at all reasonable times. The Board of Directors shall contract with a certified public accountant or public accountant to make an annual audit of the accounts and records of CCCE, which shall be conducted in accordance with the requirements of Section 6505 of the Act. Packet Pg. 74 Item 2 Page 13 of 19 01181.0001/491349.1 5.2.3 All expenditures shall be made in accordance with the approved budget and upon the approval of any officer so authorized by the Board in accordance with its policies, rules and regulations. The Treasurer shall draw checks or warrants or make payments by other means for claims or disbursements not within an applicable budget only upon the prior approval of the Board. 5.3 Budget and Recovery of Costs. 5.3.1 Budget. The initial budget shall be approved by the Board of Directors. The Board may revise the budget from time to time as may be reasonably necessary to address contingencies and unexpected expenses. All subsequent budgets of CCCE shall be approved by the Board of Directors. 5.3.2 Funding of Initial Costs. In the event the CCE Program becomes operational, any Initial Costs paid by the Parties shall be included in the customer charges for electric services as provided by Sect ion 5.3.3 to the extent recovery of such costs is permitted by law, and the Parties shall be reimbursed from the payment of such charges by customers of CCCE. Prior to such reimbursement, the Parties shall provide such documentation of costs paid as the Board may request. CCCE may establish a reasonable time period over which such costs are recovered. In the event the CCE Program does not become operational, the Parties who had contributed Initial Costs shall not be entitled to any reimbursement fro m CCCE or any other Party. If any Party assists in funding initial costs, then that Party shall also be entitled to reimbursement pursuant to this section. 5.3.3 CCE Program Costs. The Parties desire all costs incurred by CCCE that are directly or indirectly attributable to the provision of electric, conservation, efficiency, incentives, financing, or other services provided under the CCE Program, including, but not limited to, the establishment and maintenance of various reser ves and performance funds and administrative, accounting, legal, consulting, and other similar costs, shall be recovered through charges to CCE customers receiving such electric services, or from revenues from grants or other third-party sources. 5.3.4 Additional Contributions and Advances. Pursuant to Government Code section 6504, the Parties may, in their sole discretion, make financial contributions, loans or advances to CCCE for the purposes of CCCE set forth in this Agreement. The repayment of such contributions, loans or advances will be on the written terms agreed to by the Party making the contribution, loan or advance to the CCCE. ARTICLE 6. WITHDRAWAL AND TERMINATION 6.1 Withdrawal Provisions. Packet Pg. 75 Item 2 Page 14 of 19 01181.0001/491349.1 6.1.1 General Right to Withdraw. A Party may withdraw its membership in CCCE, effective as of the beginning of CCCE ’s fiscal year, by giving no less than 6-months’ advance written notice of its election to do so, which notice shall be given to CCCE and each Party. Withdrawal of a Party shall require an affirmative vote of the Party’s governing body. 6.1.2 Right to Withdraw After Amendment . Notwithstanding Section 6.1.1, a Party may withdraw its membership in CCCE following an amendment to this Agreement adopted by the Board of Directors which the Party’s Director(s) voted against ; provided,that such notice is given in writing within thirty (30) days following the date of the vote. Withdrawal of a Party under this section shall require an affirmative vote of the Party’s governing body and shall not be subject to the six-month advance notice provided in Section 6.1.1. In the event of such withdrawal, the Party shall be subject to the provisions of Section 6.3. 6.1.3 The Right to Withdraw Prior to Program Launch. After receiving bids from power suppliers before the CCE Program launch, CCCE shall provide to the Parties a report from the consultant retained by CCCE that compares the total estimated electrical rates that CCCE will be charging to customers as well as the estimated greenhouse gas emissions rate and the amount of estimated renewable energy used with that of the incumbent utility. If the report finds that any one of the following conditions exists, then a Party may immediately withdraw its membership in CCCE without any financial obligation, as long as the Party provides written notice of its intent to withdraw to CCCE Board of Directors no more than fifteen (15) days after receiving the report. Those conditions include: 1) the CCCE is unable to provide total electrical rates that are equal to or less than the incumbent utility at time of program launch, 2) the CCCE is unable to provide electricity that has equal or lower greenhouse gas emissions than the incumbent utility, and 3) the CCCE is not able to match or exceed the incumbent utility’s renewable energy performance pursuant to the State Renewable Portfolio Standard. Any Party that withdraws from CCCE pursuant to this section shall not be entitled to any refund of the Initial Costs it has paid to CCCE prior to the date of withdrawal unless CCCE is later terminated pursuant to Section 6.4. In such event, any Initial Costs not expended by CCCE shall be returned to all Parties, including any Party that has withdrawn pursuant to this section, in proportion to the contribution that each made. Notwithstanding anything to the cont rary in this Agreement, any Party that withdraws pursuant to this section shall not be responsible for any liabilities or obligations of CCCE after the date of withdrawal, including without limitation any liability arising from power purchase agreements entered into by CCCE. 6.1.4 Withdrawal Documents. Except as provided by Section 6.1.3, a Party that withdraws its participation in the CCE Program may be subject to certain Packet Pg. 76 Item 2 Page 15 of 19 01181.0001/491349.1 continuing financial obligations, as described in Section 6.3. Each withdrawing Party and CCCE shall execute and deliver all further instruments and documents, and take any further action that may be reasonably necessary, as determined by the Board, to effectuate the orderly withdrawal of such Party from participation in the CCE Program. 6.2 Involuntary Termination of a Party. Participation of a Party in the CCE Program may be terminated for material non-compliance with provisions of this Agreement or any other agreement relating to the Party’s participation in the CCE Program upon a vote of Board members as provided in Section 3.8.4(a). Prior to any vote to terminate participation with respect to a Party, written notice of the proposed termination and the reason(s) for such termination shall be delivered to the Party whose termination is proposed at least thirty (30) days prior to the regular Board meeting at which such matter shall first be discussed as an agenda item. The written notice of proposed termination shall specify the particular provisions of this Agreement or other agreement that the Party has allegedly violated. The Party subject to possible termination shall have the opportunity at the next regular Board meeting to respond to any reasons and allegations that may be cited as a basis for termination prior to a vote regarding termination. A Party that has had its participation in the CCE Program terminated shall be subject to in the provisions of Section 6.3. 6.3 Continuing Financial Obligations; Refund. Except as provided by Section 6.1.3, upon a withdrawal or involuntary termination of a Party, the Party shall remain responsible for any claims, demands, damages, or other financial obligations arising from the Party membership or participation in the CCE Program through the date of its withdrawal or involuntary termination, subject to the provisions of Section 2.2. Thereafter, notwithstanding Section 2.2, the withdrawing or terminated Party shall be responsible and liable for any damages, losses or costs incurred by CCCE resulting from the Party’s withdrawal including, but are not limited to, losses from the resale of power contracted for by CCCE to serve the Party’s load. With respect to such financial obligations, upon notice by a Party that it wishes to withdraw from the CCE Program, CCCE shall notify the Party of the minimum waiting period under which the Party would have no costs for withdrawal if the Party agrees to stay in the CCE Program for such period. The waiting period will be set to the minimum duration required so no costs are transferred to remaining ratepayers. If the Party elects to withdraw before the end of the minimum waiting period, then the charge for withdrawal shall be set at a dollar amount that would offset the estimated losses to CCCE and costs to the remaining rat epayers, and may not include punitive charges that exceed actual costs. For the purposes of this section, actual costs shall include not only any financial losses or increased operating costs incurred by CCCE, but also all staff time and consultant costs related to the withdrawal. CCCE may withhold funds otherwise owing to the Party or may require the Party to deposit sufficient funds with CCCE, as reasonably determined by and approved by the Board of Directors, to cover the Party’s financial obligations for the costs described above. Any amount of the Party’s funds held on deposit with CCCE above that which is Packet Pg. 77 Item 2 Page 16 of 19 01181.0001/491349.1 required to pay any financial obligations shall be returned to the Party. If there is a disagreement related to the charge(s) for withdrawal or ex iting, then the Parties shall attempt to settle the amount through mediation or other dispute resolution process as authorized by Section 7.1. If the dispute is not resolved, then the Parties may agree in writing to proceed to arbitration, or any party ma y seek judicial review. 6.4 Mutual Termination. This Agreement may be terminated by mutual agreement of all the Parties; provided, however, the foregoing shall not be construed as limiting the rights of a Party to withdraw its participation in the CCE Progr am, as described in Section 6.1. 6.5 Disposition of Property upon Termination of CCCE. Upon termination of this Agreement, any surplus money or assets in possession of CCCE for use under this Agreement, after payment of all liabilities, costs, expenses, and charges incurred under this Agreement and under any program documents, shall be returned to the then-existing Parties in proportion to the contributions made by each. ARTICLE 7. MISCELLANEOUS PROVISIONS 7.1 Dispute Resolution. The Parties and CCCE shall make reasonable efforts to informally settle all disputes arising out of or in connection with this Agreement. Before exercising any remedy provided by law, a Party or Parties and CCCE shall engage in nonbinding mediation or arbitration in the manner agreed upon by the Party or Parties and CCCE. In the event nonbinding mediation or arbitration is not commenced or does not result in the settlement of a dispute within 120 days after the demand for nonbinding mediation or arbitration is made, the Party or Parties and CCCE may pursue any remedy provided by law. 7.2 Liability of Directors, Officers, and Employees. The Directors, officers, and employees of CCCE shall use ordinary care and reasonable diligence in the exercise of their powers and in the performance of their duties pursuant to this Agreement. No current or former Director, officer, or employee will be responsible for any act or omission by another Director, officer, or employee. CCCE shall defend, indemnify and hold harmless the individual current and former Directors, officers, and employees for any acts or omissions in the scope of their employment or duties in the manner provided by Government Code section 995 et seq. Nothing in this section shall be construed to limit the defenses and immunities available under the law, to the Parties, CCCE, or its Directors, officers, or employees. 7.3 Indemnification of Parties. CCCE shall acquire such insurance coverage as is necessary to protect the interests of CCCE, the Parties, and the public. CCCE shall defend, indemnify, and hold harmless the Parties and each of their respective Council and Board of Supervisors Members, officers, officials, agents and employees, from any and all claims, losses, damages, costs, injuries, and Packet Pg. 78 Item 2 Page 17 of 19 01181.0001/491349.1 liabilities of every kind arising directly or indirectly from the conduct, activities, operations, acts, and omissions of CCCE under this Agreement. 7.4 Amendment of this Agreement . This Agreement may not be amended except by a written amendment approved by the Board of Directors as provided in Section 3.8.4(a). CCCE shall provide written notice to all Parties of amendments to this Agreement, including the effective date of such amendments, at least 30 days prior to the date upon which the Board votes on such amendments. 7.5 Assignment . Except as otherwise expressly provided in this Agreement, the rights and duties of the Parties may not be assigned or delegated without the advance written consent of all of the other Parties, and any attempt to assign or delegate such rights or duties in contravention of this Section 7.5 shall be null and void. This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of the Parties. This Section 7.5 does not prohibit a Party from entering into an independent agreement with another agency, person, or entity regard ing the financing of that Party’s contributions to CCCE, or the disposition of proceeds which that Party receives under this Agreement, so lo ng as such independent agreement does not affect, or purport to affect, the rights and duties of CCCE or the Parties under this Agreement. 7.6 Severability. If one or more clauses, sentences, paragraphs or provisions of this Agreement shall be held to be unlawful, invalid or unenforceable, then it is hereby agreed by the Parties, the remainder of this Agreement shall not be affected thereby. Such clauses, sentences, paragraphs or provision shall be deemed reformed so as to be lawful, valid and enforced to the maximum extent possible. 7.7 Further Assurances. Each Party agrees to execute and deliver all further instruments and documents, and take any further action that may be reasonably necessary, to effectuate the purposes and intent of this Agreement. 7.8 Execution by Counterparts. This Agreement may be executed in any number of counterparts, and upon execution by all Parties, each executed counterpart shall have the same force and effect as an original instrument and as if all Parties had signed the same instrument . Any signature page of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon, and may be attached to another counterpart of this Agreement identical in form hereto but having at tached to it one or more signature pages. 7.9 Parties to be Served Notice. Any notice authorized or required to be given pursuant to this Agreement shall be validly given if served in writing either personally, by deposit in the United States mail, first class postage prepaid with return receipt requested, or by a recognized courier service. Notices given (a) personally or by courier service shall be conclusively deemed received at the time of delivery and receipt and (b) by mail shall be conclusively deemed given 48 hours after the deposit thereof (excluding Saturdays, Sundays and holidays) if Packet Pg. 79 Item 2 Page 18 of 19 01181.0001/491349.1 the sender receives the return receipt. All notices shall be addressed to the office of the clerk or secretary of CCCE or Party, as the case may be, or such other person designated in writing by CCCE or Party. Notices given to one Party shall be copied to all other Parties. Notices given to CCCE shall be copied to all Parties. [Signatures on next page] Packet Pg. 80 Item 2 Page 19 of 19 01181.0001/491349.1 CITY OF SAN LUIS OBISPO, a California municipal corporation By: ______________________________ (Insert name), Mayor ATTEST By: ____________________________ (Insert name), City Clerk APPROVED AS TO FORM: By: ____________________________ (Insert name), City Attorney CITY OF MORRO BAY, a California municipal corporation By: ____________________________ (Insert name), Mayor ATTEST _____________________________ (Insert name), City Clerk APPROVED AS TO FORM _____________________________ (Insert Name), City Attorney Packet Pg. 81 Item 2 01181.0001/491349.1 EXHIBIT A DEFINITIONS “Act ” means the Joint Exercise of Powers Act of the State of California (Government Code section 6500 et seq.) “Administrative Services Agreement ” means an agreement or agreements entered into after the Effective Date by CCCE with an entity that will perform tasks necessary for planning, implementing, operating and/or administering the CCE Program, or any portion of the CCE Program or any other energy programs adopted by CCCE. “Agreement ” means this Joint Powers Agreement. “Annual Energy Use ” has the meaning given in Section 3.7.1. “Board” means the Board of Directors of CCCE unless the context indicates that the use of the word “Board” also is intended to include the Operations Board . “CCE” or “Community Choice Energy” or “CCA” or “Community Choice Aggregation” means an electric service option available to cities and counties pursuant to Public Utilities Code Section 366.2. “CCE Program” or “CCA Program” means CCCE ’s program relating to CCE that is principally described in Sections 2.3, 2.4, and 4.1. “Director” means a member of the Board of Directors or the Operations Board representing a Party. “Effective Date” means the date on which this Agreement shall become effective and CCCE shall exist as a separate public agency, as described in Section 2.1. “Implementation Plan” means the plan generally described in Section 4.1.2 of this Agreement that is required under Public Utilities Code section 366.2 to be filed with the California Public Utilities Commission for the purpose of describing a propo sed CCE Program. “Initial Costs” means all costs incurred by Parties and/or CCCE relating to the establishment and initial operation of CCCE, such as the hiring of an Executive Officer and any administrative staff, and any required accounting, administrative, technical, or legal services in support of CCCE’s initial activities or in support of the negotiation, preparation, and approval of one or more Administrative Services Agreements, Power Purchase Agreements, or financing transactions. Operations Board means the Board established by Section 3.5. “Parties” or “Members” means, collectively, the City of San Luis Obispo and the City of Morro Bay and any other city or county which timely executes this Agreement pursuant to Section 2.5.1 or is added to this Agreement pursuant to Section 2.5.2 and is listed in Exhibit B . Packet Pg. 82 Item 2 01181.0001/491349.1 “Party,” “Member” or “Member Agency” means a signatory to this Agreement. “Total Annual Energy” has the meaning given in Section 3.7.1. “CCCE Document(s)” means document(s) duly adopted by the Board by resolution or motion implementing the powers, functions, and activities of CCCE, including but not limited to the annual budget, rules, regulations, plans and policies. Packet Pg. 83 Item 2 01181.0001/491349.1 EXHIBIT B LIST OF PARTIES Packet Pg. 84 Item 2 Exhibit C Page 1 of 1 01181.0001/491349.1 EXHIBIT C ANNUAL ENERGY USE/VOTING SHARES (as of 2015) City of San Luis Obispo 237,472 MWh City of Morro Bay 45,882 MWh Packet Pg. 85 Item 2 Exhibit D Page 1 of 1 01181.0001/491349.1 EXHIBIT D VOTING SHARES (as of ______) Packet Pg. 86 Item 2 Exhibit E Page 1 of 1 01181.0001/491349.1 EXHIBIT E SIGNATURE PAGES Packet Pg. 87 Item 2 R ______ RESOLUTION NO. _____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, TO APPROVING THE JOINT POWERS AGREEMENT ESTABLISHING CENTRAL COAST COMMUNITY ENERGY ON BEHALF OF THE CITY OF SAN LUIS OBISPO. WHEREAS, AB 117, adopted as California state law in 2002, permits cities, counties, or city and county Joint Power Authorities to aggregate residential, commercial, industrial, municipal and institutional electric loads through Community Choice Aggregation (CCA); and WHEREAS, the City of San Luis Obispo commissioned a technical study to analyze the feasibility of a CCA program serving the city and the San Luis Obispo region; and WHEREAS, the City of San Luis Obispo wishes to be a community choice aggregator and has introduced the Ordinance as required by Public Utilities Code Section 366.2 in order to do so; and WHEREAS, the City of Morro Bay also wishes to be a community choice aggregator and will also introduced the Ordinance as required by Public Utilities Code Section 366.2 in order to do so; and WHEREAS, pursuant to Section 366.2 two or more entities authorized to be a community choice aggregator, may participate as a group in a community choice aggregation program through a joint powers agency established pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code, if each entity adopts the aforementioned ordinance; and WHEREAS, the City Council has considered the proposed Joint Exercise of Powers Agreement, a draft of which is attached hereto as Exhibit A, under which the City of San Luis Obispo and City of Morro Bay will become the initial members of Central Coast Community Energy (CCCE) Authority; and WHEREAS, Once the California Public Utilities Commission certifies the Implementation Plan created by CCCE, it will provide service to customers within the cities and counties that choose to join CCCE and to participate in the CCA program; and WHEREAS, under Public Utilities Code section 366.2, customers have the right to opt - out of the CCE program and continue to receive service from the incumbent utility. Customers who wish to continue to receive service from the incumbent utility will be able to do so. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that : SECTION 1. The City Council hereby approves the Joint Exercise of Powers Agreement with the City of Morro Bay to form the Central Coast Community Energy (CCCE) Authority. Packet Pg. 88 Item 2 Resolution No. _____ (2018 Series) Page 2 R ______ SECTION 2. That_______________ and _______________ are hereby appointed as the initial Directors on the CCCE Board representing the City of San Luis Obispo. SECTION 3. This resolution and the establishment of the Central Coast Community Energy Authority is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to the State CEQA Guidelines, as it is not a “project” since this action invol ves organizational and administrative activities of government that will not result in direct or indirect physical changes in the environment. (14 Cal. Code Regs. § 15378(b)(5)). Further, the ordinance is exempt from CEQA as there is no possibility that the ordinance or its implementation would have a significant negative effect on the environment. (14 Cal. Code Regs.§ 15061(b)(3)). A Notice of Exemption shall be filed as authorized by CEQA and the State CEQA guidelines. SECTION 4. This resolution shall be effective upon the adoption of Ordinance No. ______, an Ordinance of the City of San Luis Obispo authorizing the implementation of a Community Choice Aggregation (CCA) Program. BE IT FURTHER RESOLVED that the Mayor and/or City Manager is hereby authorized and directed to execute the Joint Exercise of Powers Agreement on behalf of the City of San Luis Obispo , which will establish CCCE with the City as a founding member. Upon motion of _______________________, seconded by _______________________, and on t he following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2018. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: Packet Pg. 89 Item 2 Resolution No. _____ (2018 Series) Page 3 R ______ _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo , California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 90 Item 2 Meeting Date: 9/4/2018 FROM: Teresa Purrington, City Clerk Prepared By: Heather Goodwin, Deputy City Clerk SUBJECT: APPOINTMENT TO THE HUMAN RELATIONS COMMISSION, PLANNING COMMISSION, AND TOURISM BUSINESS IMPROVEMENT DISTRICT BOARD RECOMMENDATION In accordance with the recommendation of the Council Subcommittees: 1. Confirm the appointment of William (Bill) Crewe to the Human Relations Commission, to complete an unexpired term through March 31, 2019; 2. Confirm the appointment of Nicholas Quincey to the Planning Commission, to complete an unexpired term through March 31, 2021; and 3. Confirm the appointment of Dean Hutton to the Tourism Board Improvement District Board, to complete an unexpired term through March 31, 2021. DISCUSSION Human Relations Commission (Council Liaison Subcommittee Members Harmon and Rivoire) Due to the resignation of Samuel Hughes, effective July 20, 2018, an unscheduled vacancy occurred on the Human Relations Commission. Mr. Hughes’s term would have expired on March 31, 2019. The Council Liaison Subcommittee recommends the appointment of William (Bill) Crewe, effective September 4, 2018, to a term expiring March 31, 2019. Planning Commission (Council Liaison Subcommittee Members Christianson and Rivoire) Due to the resignation of Nicholas Osterbur, effective July 23, 2018, an unscheduled vacancy occurred on the Planning Commission. Mr. Osterbur’s term would have expired on March 31, 2021. The Council Liaison Subcommittee recommends the appointment of Nicholas Quincey, effective September 4, 2018, to a term expiring March 31, 2021. Packet Pg. 91 Item 2 Tourism Business Improvement District Board (Council Liaison Subcommittee Members Harmon and Rivoire) Due to the resignation of Kimberly Walker, effective June 28, 2018, an unscheduled vacancy occurred on the Tourism Business Improvement District Board. Ms. Walker’s term would have expired on March 31, 2021. The Council Liaison Subcommittee recommends the appointment of Dean Hutton, effective September 4, 2018, to a term expiring March 31, 2021. RECRUITMENT The fo llowing Advisory Bodies have vacancies and interested individuals are encouraged to apply online at www.slocity.org/volunteer. . 1. Citizens’ Revenue Enhancement Oversight Commission (1) 2. Construction Board of Appeals (1) – Representative with Disability 3. Jack House Committee (1) – SLO County Historical Society Representative 4. Mass Transportation Committee (2) – Alternate Representative and Cal Poly Student Representative designated by Associated Students, Inc. (ASI) For general Advisory Body information, eligibility requirements and term limits refer to the Advisory Body handbook on the City’s website. CONCURRENCES The Council Liaison subcommittees concur with the recommendations. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended actions in this report. FISCAL IMPACT There is no fiscal impact associated with the appointment to the Human Relations Commission and Tourism Business Improvement District Board . The Cit y Council has approved a stipend of $70 per meeting (not to exceed $280 monthly) for each member of the Planning Commission (Resolution No. 10887 (2018 Series) which is included in the adopted budget for Community Development. AVAILABLE FOR REVIEW IN THE COUNCIL OFFICE All applications are available in the City Council reading file and for public review in the City Clerk’s office. Packet Pg. 92 Item 2 San Luis Obispo Page 1 Tuesday, August 21, 2018 Special Meeting of the City Council CALL TO ORDER A Special Meeting of the San Luis Obispo City Council was called to order on Tuesday, August 21, 2018 at 4:00 p.m. in the Council Hearing Room, located at 990 Palm Street, San Luis Obispo, California, by Mayor Harmon. ROLL CALL Council Members Present: Council Members Aaron Gomez, Andy Pease, Dan Rivoire, Vice Mayor Carlyn Christianson, and Mayor Heidi Harmon. Council Members Absent: None City Staff Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; and Teresa Purrington, City Clerk; were present at Roll Call. Other staff members presented reports or responded to questions as indicated in the minutes. PUBLIC COMMENT ON CLOSED SESSION ITEMS None. ---End of Public Comment --- CLOSED SESSION Item A: CONFERENCE REGARDING PROPERTY NEGOTIATIONS Pursuant to Government Code §54956.8 Property: APNs 002-321-003, 002-412-004; 002-412-011; 002-412-012 Agency Negotiators: Derek Johnson, Christine Dietrick, Greg Hermann, Jon Ansolabehere, Robert Hill, Tim Bochum Negotiating Parties: Kevin Harris and Michael Simkins for the San Luis Obispo Repertory Theatre, a California non-profit corporation Under Negotiation: Price and terms of payment Packet Pg. 93 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 2 Item B: CONFERENCE REGARDING PROPERTY NEGOTIATIONS Pursuant to Government Code §54956.8 Property: APN 001-043-027 Agency Negotiators: Derek Johnson, Christine Dietrick, Greg Hermann, Jon Ansolabehere, Daryl Grigsby, Tim Bochum, Jennifer Rice Negotiating Parties: Kirit Chunibhai Patel and Gita Kirit Patel Under Negotiation: Price and terms of payment Property: APNs 001-042-023 & 001-042-024 Agency Negotiators: Derek Johnson, Christine Dietrick, Greg Hermann, Jon Ansolabehere, Daryl Grigsby, Tim Bochum, Jennifer Rice Negotiating Parties: Universal Management LLC Under Negotiation: Price and terms of payment RECESSED AT 4:26 P.M. TO THE REGULAR MEETING OF AUGUST 21, 2018 TO BEGIN AT 4:30 PM IN THE COUNCIL CHAMBER Packet Pg. 94 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 3 CALL TO ORDER A Regular Meeting of the San Luis Obispo City Council was called to order on Tuesday, August 21, 2018 at 4:31 p.m. in the Council Hearing Room, located at 990 Palm Street, San Luis Obispo, California, by Mayor Harmon. ROLL CALL Council Members Present: Council Members Aaron Gomez, Andy Pease, Dan Rivoire, Vice Mayor Carlyn Christianson, and Mayor Heidi Harmon. Council Members Absent: None City Staff Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; and Teresa Purrington, City Clerk; were present at Roll Call. Other staff members presented reports or responded to questions as indicated in the minutes. PUBLIC HEARING AND BUSINESS ITEMS 1. THE CITY OF SAN LUIS OBISPO FIRE DEPARTMENT FIVE-YEAR STRATEGIC PLAN 2018 – 2023 Fire Chief Garret Olson, Assistant Chief Keith Aggson and Administrative Analyst James Blattler provided an in-depth staff report and responded to Council questions. Public Comments: Armando Gutierrez ---End of Public Comment --- ACTION: Receive and file the Fire Department’s Five-Year Strategic Plan. 2. PUBLIC HEARING - REVIEW OF A COMMON INTEREST VESTING TENTATIVE TRACT MAP NO. 3113 TO CREATE 8 RESIDENTIAL LOTS, A USE PERMIT TO ALLOW DEVELOPMENT ON A SITE WITH A SPECIAL CONSIDERATIONS OVERLAY AND A MITIGATED NEGATIVE DECLARATION OF ENVIRONMENTAL REVIEW Council Member Pease recused herself due to a conflict of interest as she has worked with the project architect. Associate Planner Rachel Cohen provided an in-depth staff report and responded to Council questions. Packet Pg. 95 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 4 Public Comments: None ---End of Public Comment --- ACTION: MOTION BY COUNCIL MEMBER GOMEZ, SECOND BY COUNCIL MEMBER RIVOIRE, CARRIED 4-0-1 (COUNCIL MEMBER PEASE RECUSED) to Adopt a Resolution No. 10929 (2018 Series) entitled: “A Resolution of the City Council of the City of San Luis Obispo, California, approving a Common Interest Vesting Tentative Tract Map No. 3113 to create eight (8) residential lots, a Use Permit to allow development on a site with a Special Considerations Overlay, and adopting a Mit igated Negative Declaration of Environmental Review (SBDV-1211-2017/EID-1303-2017)” RECESSED AT 5:08 P.M. TO THE REGULAR MEETING OF AUGUST 21, 2018 TO BEGIN AT 6:00 PM IN THE COUNCIL CHAMBER Packet Pg. 96 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 5 CALL TO ORDER A Regular Meeting of the San Luis Obispo City Council was called to order on Tuesday, August 21, 2018 at 6:00 p.m. in the Council Chamber, located at 990 Palm Street, San Luis Obispo, California, by Mayor Harmon. ROLL CALL Council Members Present: Council Members Aaron Gomez, Andy Pease, Dan Rivoire, Vice Mayor Carlyn Christianson, and Mayor Heidi Harmon. Council Members Absent: None City Staff Present: Derek Johnson, City Manager; Christine Dietrick, City Attorney; and Teresa Purrington, City Clerk; were present at Roll Call. Other staff members presented reports or responded to questions as indicated in the minutes. PLEDGE OF ALLEGIANCE Council Member Andy Pease led the Pledge of Allegiance. CITY ATTORNEY REPORT ON CLOSED SESSION City Attorney Dietrick stated that there was no reportable action for Closed Session Items A and B. INTRODUCTION CHARLENE ROSALES - ECONOMIC DEVELOPMENT MANAGER Greg Hermann, Interim Deputy City Manager introduced Charlene Rosales as the new Economic Development Manager. PUBLIC COMMENT ON ITEMS NOT ON THE AGENDA Carol Weiser Sean Hope Dan Feldman Jill Stearns, Cuesta College Rick Russell Jeffery Specht David Brodie Vince Kirkhuff Sandi Sigurdson Molly Kern Terry Mohan Don Hedrick Jim Duenow ---End of Public Comment--- Packet Pg. 97 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 6 CONSENT AGENDA ACTION: MOTION BY COUNCIL MEMBER RIVOIRE, SECOND BY VICE MAYOR CHRISTIANSON, CARRIED 5-0 to approve Consent Calendar Items 3 thru 16. 3. WAIVE READING IN FULL OF ALL RESOLUTIONS AND ORDINANCES CARRIED 5 – 0 to waive reading of all resolutions and ordinances as appropriate. 4. MINUTES OF JULY 10, 2018 AND JULY 17, 2018 CARRIED 5 – 0 to approve the minutes of the City Council meetings for July 10, 2018 and July 17, 2018. 5. ADOPTION OF AN ORDINANCE APPROVING THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND MI SAN LUIS RANCH, LLC CARRIED 5 – 0 to adopt Ordinance No. 1649 (2018 Series) entitled, “An Ordinance of the City Council of the City of San Luis Obispo, California, approving the Development Agreement between the City of San Luis Obispo, a Charter City, and MI San Luis Ranch, LLC” 6. REQUEST FOR STATEMENTS OF QUALIFICATION FOR ELECTRICAL SUBCONTRACTORS FOR WATER RESOURCE RECOVERY FACILITY PROJECT CARRIED 5 – 0 to: 1. Adopt Resolution No. 10930 (2018 Series) entitled, “A Resolution of The City Council of the City of San Luis Obispo, California, adopting Bidder Prequalification Documents and Procedures and Establishing the Bidder Prequalification Appeals Panel for the Water Resource Recovery Facility Project;” and 2. Authorize the City Manager, following City evaluation of the Statements of Prequalification, to identify a final list of prequalified subcontractors to provide Electrical Subcontracting Services. 7. REQUEST FOR QUALIFICATIONS – CONSTRUCTION MANAGEMENT SERVICES, LANDSCAPE ARCHITECTURE SERVICES, ENVIRONMENTAL SERVICES, SOILS AND MATERIALS TESTING CARRIED 5 – 0 to: 1. Approve the Request for Qualifications (RFQ) to provide: a. Construction Management Services, Specification No. 50410.2018.CM b. Landscape Architecture Services, Specification No. 50410.2018.LS c. Environmental Services, Specification No. 50410.2018.ES d. Soils and Materials Testing Services, Specification No. 50410.2018.SMT 2. Authorize the City Manager to execute agreements with selected consulting firms. Packet Pg. 98 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 7 3. Authorize the Finance Director to execute and amend Purchase Orders for individual consultant services contracts in an amount not-to-exceed the authorized project budget. 4. Authorize the City Engineer to amend or extend the agreement for services in accordance with its terms and within the available annual budget. 8. CONSIDERATION OF 2018-19 HUMAN RELATIONS COMMISSION GRANTS- IN-AID FUNDING RECOMMENDATIONS Public Comment Donna Fioravanti Teresa Tardiff ---End of Public Comment --- CARRIED 5 – 0 to: 1. Approve the 2018-19 Grants-in-Aid funding allocations in the amount of $139,652; and 2. Authorize the Community Development Director to execute agreements with each grant recipient. 9. MARSH STREET BRIDGE REPLACEMENT, SPECIFICATION NO. 90480 CARRIED 5 – 0 to: 1. Authorize the Mayor to execute an agreement with 1042 Pacific Street, a California general partnership, for a temporary construction easement at 1042 Pacific Street. 2. Authorize the Mayor to execute an agreement with Elizabeth Lucille Zanoli, Surviving Trustee, for a temporary construction easement and a permanent easement at 1043 Marsh Street. 3. Authorize the Mayor to execute an agreement with the Maino Family Trusts for a temporary construction easement at 1020 Marsh Street. 4. Authorize the Mayor to execute an agreement with the Maino Family Trusts for a temporary construction easement and a permanent easement at 1080 Marsh Street. 10. AMENDMENT TO THE CURRENT AGREEMENT FOR JOINT CONSTRUCTION AND FINANCING COSTS FOR AN ANIMAL SERVICES SHELTER CARRIED 5 – 0 to authorize the City Manager to approve an amendment to the Agreement for Allocation of Construction and Financing Costs for an Animal Services Shelter. Packet Pg. 99 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 8 11. PROGRAM AND DESIGN CONTRACT AMENDMENTS FOR THE WATER RESOURCES RECOVERY FACILITY PROJECT CARRIED 5 – 0 to: 1. Approve a contract amendment with CH2M Hill Engineers, Inc. for $446,177 for completion of Design Services for the Water Resource Recovery Facility Project , Spec. No. 91363. 2. Approve a contract amendment with Water Systems Consulting, Inc. for $237,884 fo r completion of Phase 3 Program Management Services for the Water Resource Recovery Facility Project , Spec. No. 91219. 3. Approve funding of $40,000 for Project Labor Agreement legal services/representation. 4. Approve transfer of $744,061 from Sewer Fund working capital to the Water Resource Recovery Facility project account. 12. PURCHASE OF FIRE ENGINE, SPECIFICATION NO. 91672 CARRIED 5 – 0 to: 1. Approve the sole source lease purchase of a 2018 Pierce Arrow PUC Type 1 Fire Engine in the amount of $673,096; and 2. Authorize the City Manager or designee, Finance Director or designee and City Attorney or designee to execute all related documents on behalf of the City to execute a five -year (60-month) agreement with JPMorgan Chase Bank and purchase agreement with Pierce Manufacturing to accomplish the above-mentioned lease purchase; and 3. Authorize the Finance Director or designee to execute a lease-purchase purchase order in the amount noted associated with the above-mentioned fleet replacement; and 4. Authorize the appropriation of $20,000 from the Fleet Completed Projects fund for the additional funding needed to complete the engine build-up. 13. CALIFORNIA OFFICE OF EMERGENCY SERVICES HAZARD MITIGATION GRANT APPLICATION CARRIED 5 – 0 to: 1. Authorize staff to prepare and submit a grant application to the State of California Office of Emergency Services (CalOES) Hazard Mitigation Grant Program. 2. Adopt a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing application to the State of California Office of Emergency Services Hazard Mitigation Grant Program”. 3. Approve the use of $255,000 from Water Fund unreserved working capital for local funding match of 25 percent of the total project cost. 4. Authorize the City Manager, or designee, to execute required grant application documentation. Packet Pg. 100 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 9 14. LOWER SAN LUIS OBISPO CREEK WATERSHED MODEL FUNDING CARRIED 5 – 0 to: Authorize the use of $102,000 from the Completed Capital Projects and $8,000 from the Prado Road Interchange Project Account to develop a comprehensive flood model of the San Luis Obispo Creek corridor from Marsh & Higuera to approximately the Octagon Barn. 15. RESOLUTION SUPPORTING THE COUNTY-WIDE MEASURE G-18: PROTECT OUR WATER, AIR AND LAND: BAN FRACKING AND OIL EXPANSION IN SLO COUNTY INITIATIVE CARRIED 5 – 0 to: Adopt a Resolution 10932 (2018 Series) entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, supporting Measure G-18: Protect Our Water, Air, and Land: Ban Fracking and Oil Expansion in SLO County Initiative.” Public Comment Dominique Dashwood Elizabeth Demsetz Russ Brown ---End of Public Comment --- 16. AUTHORIZATION TO SUBMIT AN APPLICATION FOR PG&E ON-BILL FINANCING IN SUPPORT OF ENERGY EFFICIENCY LIGHTING RETROFITS (GRIGSBY / CRUCE / HILL / READ) CARRIED 5 – 0 to authorize the submittal of the non-binding PG&E On-Bill Financing Application. PUBLIC HEARING ITEMS AND BUSINESS ITEMS 17. PUBLIC HEARING – REVIEW OF THE PROPOSED COMPREHENSIVE UPDATE TO THE CITY’S ZONING REGULATIONS (TITLE 17) OF THE MUNICIPAL CODE AND ASSOCIATED ZONING AMENDMENTS (CODRON / DAVIDSON) Community Development Director Michael Codron and Community Development Deputy Director of Development Review Doug David son provided an in-depth staff report and responded to Council questions. RECESS Council recessed at 7:50 p.m. and reconvened at 8:00 p.m., with all Council Members present. Packet Pg. 101 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 10 Public Comments: Barry Rands Nick Andre Richard Waddell Audrey Bigelow Ellie Washington Simon Lowrie LynAnne Wiest Greg Wynn Savanna Cooper Justin Bradshaw Melissa Godsey Ken Kienow Jeanne Kinney T. Keith Gurnee Bruce Silverberg Les Beck Jenn Yost James Papp Jonathon Reynolds Phil Hurst Bob Tedone Carolyn Huddleston Babak Naficy Sarah Crable Susan Pyburn Doug Rio n Stacey White Celeste Goyer Cristina Pires Russ Brown Dustin Pires Molly Kern Eric Veium Jeff Diedenhofen Don Hedrick Mila Vujovich-Labarre Janine Rands Steve Delmartini Ann Wilson ---End of Public Comment--- ACTION: MOTION BY COUNCIL MEMBER PEASE, SECOND BY VICE MAYOR CHRISTIANSON, CARRIED 5-0 to introduce Ordinance No. 1650 (2018 Series entitled: “An Ordinance of the City Council of the City of San Luis Obispo, California repealing and replacing Title 17 of the Municipal Code (Zoning Regulat ions) to implement the Land Use and Circulation Element (Luce), clarify and advance City goals and policies, provide internal consistency, and to re -organize the Zoning Code, including the adoption of a Negative Declaration of Environmental Review, as represented in the staff report and attachments dated June 27, 2018 (Zoning Regulations, GENP-0327-2017)” With the following items removed and brought back to the Planning Commission: • Tiny homes on wheels. o Size to be reduced to 300 sq. ft. not including the size of the loft. o Establish design standards for approval. • Look at size criteria for ADU lot coverage consideration. Further direction from Council to return to the Planning Commission for consideration of the following items: • Review excluding the owner occupancy requirement for an ADU in the multi-family zones. • Implement new State Law to provide the ability to include child care facilities as part of the affordable housing developments • Further implement the Climate Action Plan by requiring installation of Electric Vehicle capable parking spaces with new development or significant remodels. Packet Pg. 102 Item 6 San Luis Obispo City Council Minutes of August 21, 2018 Page 11 ACTION: MOTION BY COUNCIL MEMBER PEASE, SECOND BY VICE MAYOR CHRISTIANSON, CARRIED 5-0 to introduce Ordinance No. 1651 (2018 Series) entitled: “An Ordinance of the City Council of the City of San Luis Obispo, California, amending Ordinance No. 1130 (1989 Series), modifying the design criteria, Section 5 (Code-1630-2018; south side of Monterey Street between 103 and 2223 Monterey, inclusive.” ACTION: MOTION BY COUNCIL MEMBER PEASE, SECOND BY VICE MAYOR CHRISTIANSON, CARRIED 5-0 to direct staff to bring back to Planning Commission amending the 1100 block of Higuera Street and the 1100 through 1300 block of Monterey Street, as C-R-D, Retail Commercial with a Downtown Overlay Zone overlay zone to incorporate the requirement for a Development Agreement to be approved to take advantage of the increased height, specifically to get more affordable and workforce housing. ACTION: MOTION BY COUNCIL MEMBER PEASE, SECOND BY VICE MAYOR CHRISTIANSON, CARRIED 5-0 to introduce Ordinance No. 1652 (2018 Series) entitled: “An Ordinance of the City Council of the City of San Luis Obispo, California, amending the City’s Zoning Map to designate approximately 20.2 acres within the R-1 and C/Os-20 zones on the West Side of Broad Street, south of Serrano Drive, as R-1-S, Low-Density Residential Zone and C/Os-S-20, Conservation/Open Space with a Special Considerations Overlay (Rz-1629- 2018; 159 & 161 Broad Street and 141 Bressi Place). COUNCIL COMMUNICATIONS AND LIAISON REPORTS None ADJOURNMENT The meeting was adjourned at 11:10 p.m. To a Special City Council meeting to be held on Tuesday, August 28, 2018 at 4:30 in the City Council Hearing Room, 990 Palm Street, San Luis Obispo, Califo rnia, for the purposes of conducting a closed session. The next Regular City Council Meeting is scheduled for September 4, 2018 at 6:00 p.m., in the Council Chamber, 990 Palm Street, San Luis Obispo, California. __________________________ Teresa Purrington City Clerk APPROVED BY COUNCIL: XX/XX/2018 Packet Pg. 103 Item 6 Page intentionally left blank. Packet Pg. 104 Item 6 Meeting Date: 9/4/2018 FROM: Deanna Cantrell, Chief of Police Prepared By: Melissa Ellsworth, Senior Administrative Analyst SUBJECT: 2018 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT APPLICATION RECOMMENDATION 1. Authorize staff to submit an application for a 2018 Edward Byr ne Memorial Justice Assistance Grant in the amount of $15,227. 2. If the grant is awarded, authorize the City Manager to execute necessary grant documents and direct the appropriation of monies into the accounts required to administer the grant. DISCUSSION Grant Program Information The U.S. Department of Justice Edward Byrne Memorial Justice Assistance Grant (JAG) Program is the primary provider of federal criminal justice funding to the State and local jurisdictions. JAG funds may be used to fund technical assistance, training, personnel, equipment, supplies, contractual support, and criminal justice information systems for any of the following purpose areas: 1. Law enforcement programs 2. Prosecution and court programs 3. Prevention and education programs 4. Corrections and community corrections programs 5. Drug treatment and enforcement programs 6. Planning, evaluation, and technology improvement programs 7. Crime victim and witness programs (other than compensation) The JAG Program is a non-competitive formula grant and the funding allocation is based on the population and crime rate of the local jurisdiction. The amount available to the City of San Luis Obispo for 2018 is $15,227. JAG Program funds must be used to supplement existing local funds for program activit ies and cannot replace or supplant funds that have been appropriated for the same purpose. The grant application is due on August 22, 2018. Due to timing restrictions, staff has already submitted the grant application; however if Council requests that the application be retracted staff will contact the granting agency. Packet Pg. 105 Item 8 Proposed Use of Grant Funds On October 18th, 2016, Council authorized the Police Department to accept a donated Mobile Command Trailer from the Arroyo Grande Police Department. When the trailer was donated, it had minimal equipment installed; however, over the past year staff utilized existing funding to install a useable workstation. Staff intends to finish the trailer interior with additional equipment to ensure it can be effectively used in emergency situations. Items will include computer(s), monitors, mounts, tactical digital radio with dual heads for police and fire, display screen and other equipment related to emergency calls for service. Staff is also requesting 2018 JAG funds t o purchase a laptop to run existing software used to capture data points and process scenes related to traffic accidents and other types of crime scenes. CONCURRENCES The Director of the Finance and the IT Manager concur with staff’s recommendation. ENVIRONMENTAL REVIEW There is no environmental review required for this request. FISCAL IMPACT City matching funds are not required for this grant. The City may draw down any or all JAG funds after acceptance of the award. To do so, a trust fund mu st be established in order to maintain the funds separate from the General Fund. ALTERNATIVES 1. Modify the staff recommendation. Council may direct staff to apply for the JAG funds for a different purpose, as long as the use is consistent with the purpo se areas described in this report. 2. Do not submit a grant application. Council may direct staff to withdraw the grant application. This alternative is not recommended. The JAG Program is non-competitive and the funds have already been allocated to the City upon application, as long as the use is consistent with the purpose areas described in this report. Packet Pg. 106 Item 8 Meeting Date: 9/4/2018 FROM: Robert Hill, Interim Deputy Director, Office of Sustainability Prepared By: Chris Read, Sustainability Manager SUBJECT: AUTHORIZE A SOLAR POWER PURCHASE AGREEMENT WITH FOREFRONT POWER FOR CITY FACILITIES. RECOMMENDATION 1. Authorize staff to negotiate a solar power purchase agreement with ForeFront Power for the design and potential development, operation, and maintenance of solar energy systems at and for City facilities; and 2. Adopt a resolution making findings on energy savings as required by Govern ment Code 4217.12 (Attachment F); and 3. Authorize the City Manager to enter in to a solar power purchase agreement with ForeFront Power in a form subject to the approval of the City Attorney; and 4. Authorize the City Manager to enter into Interconnection Agreements to maintain “time of use” rates for City facilities in a form subject to the approval of the City Attorney (Attachment G). DISCUSSION Background In June of 2017, the City Council adopted the 2017-2019 Financial Plan, which identifies Climate Action as a Major City Goal. Task 9 and Task 10 of the Climate Action Major City Goal Action Plan directs staff to perform energy audits on City-owned facilities and to implement related energy and cost saving measures and projects. In April of 2018, the City Council Adopted the Fiscal Health Response Plan (FHRP) to address a budget shortfall of $8.9 million over the next three years as a result of changing California Public Employees’ Retirement System (CalPERS) funding requirements. As part of the FHRP, the C ity committed to “new ways of doing business”, including a commitment to energy efficiency and investments in sustainable infrastructure with short -term paybacks on investment. The FHRP identifies future savings as the result of energy efficiency and other resource consumption reductions. The City of San Luis Obispo’s Climate Action Plan provides a roadmap for achieving the City’s adopted 2020 greenhouse gas (GHG) reduction target and provides strategies for reducing transportation related GHG emissions. T he City of San Luis Obispo Climate Action Plan Measure “Government Operations 2” directs the City to install renewable energy systems at appropriate facilities. Additionally, the City’s Conservation and Open Space Element of the General Plan has a goal of sustainable energy use and calls for the City to increase the use of renewable resources in City services and facilities (Action 3.6.13) and to promote the use of renewable energy resources (Action 4.3.4). Packet Pg. 107 Item 9 Staff reviewed City-owned facilities for solar potential and identified two sites as suitable candidates based on on-site energy use, access to grid interconnection, and sufficient ground space: 1) Reservoir 1, a potable water storage facility located east of the City, and 2) the San Luis Obispo Swim Ce nter at 900 Southwood Drive. With regard to Reservoir 1, the concept of installing solar at this site was originally envisioned as part of the initial phase of the Water Energy Efficiency Project involving Pacific Gas & Electric (PG&E) and approved by Co uncil earlier this year. Progress to date with this site has included initial design and working with PG&E on a draft interconnection agreement to maintain access to existing favorable electricity generation tariffs (i.e. time of use rates). Entering into interconnection agreement s for the Reservoir 1 project , and potentially other City facilities, would allow the City to maintain access to time of use rates. With a t ime of use rate structure, the cost of electricity varies throughout the day based on dema nd. This structure encourages the most efficient energy use and can reduce the overall costs for operation of City facilities. The draft Interconnection Agreement is provided at Attachment G. With Council approval, agreements would be further negotiated by City staff, with the final agreement for execution by the City Manager. As part of a second round of screening, additional projects may surface as viable candidates, but have not yet been assessed in detail, including Fire Station #1 at 2160 Santa Barbara Avenue, and the Bus Yard at 19 Prado Road. Procurement and Financing Approach Staff reviewed different procurement and financing mechanisms for installing solar systems. Included in this review was the analysis of the potential costs and benefits of: 1) system ownership through financing; 2) system leasing; and 3) power purchase agreements. Staff concluded that a Power Purchase Agreement (PPA, also referred to as an Energy Service Agreement or ESA) was the most financially viable mechanism for the pro curement of solar power without significant capital expenditures. Through a PPA, a third-party solar developer takes on all responsibility to finance, design, construct, operate, and maintain a solar installation. The beneficiary (the City in this case) receives and purchases energy at a contractually specified rate. Under a PPA, PG&E, the local electricity provided, continues to provide electrical services to the site for any consumption that is not covered by the power generated by the solar installation. This procurement mechanism also allows the City access to solar installations with no upfront capital costs and to realize an immediate financial benefit by paying less for energy produced by the solar installation than what was being paid to PG&E. “The School Project for Utility Rate Reduction” (SPURR) and ForeFront Power In the spring of 2018, staff learned of a joint powers authority, referred to as the School Project for Utility Rate Reduction (SPURR), comprised of over 200 school districts, cities, community colleges, counties, and other public entities. SPURR has multiple programs that aggregate the buying power of member agencies to secure competitive pricing and terms for members. Packet Pg. 108 Item 9 One of SPURR’s programs, the Renewable Energy Aggregated Procurement (REAP) program, allows member agencies to leverage SPURR’s competitively bid Request for Proposal (RFP) to procure solar energy and battery storage services. On July 19, 2017, SPURR invited experienced solar vendors from around the State to participate in an RFP for solar and battery storage services, and associated services related to those projects. On October 31, 2017, SPURR awarded the RFP to ForeFront Power. SPURR allows any local government in California to participate in the REAP program and to leverage the public procurement process and competitive terms negotiated therein. The REAP program has been utilized by numerous local public agencies including the County of San Luis Obispo, the City of Paso Robles, Paso Robles Joint Unified School Distr ict, Atascadero Unified School District, and Templeton Unified School District. Due to the program’s benefits, and the significant time and cost savings associated with not preparing a separate City RFP, staff have been working with ForeFront Power to de velop projects, including siting, system size, and financing. Initial work estimating project performance at Reservoir 1 and at the SLO Swim Center are provided as Attachment A. The standard ForeFront Power contracts as negotiated by SPURR, and pending Cou ncil direction will be further negotiated by City staff, are provided as Attachments B and C. The draft sample PPAs as provided in Attachments B and C have a term of twenty years. Payments for energy services would occur monthly for energy produced the p rior month. Beginning at year six of the term, the City has the option to purchase the system outright. At the end of the 20-year term, the City has the option to renew the PPA, purchase the system, or have ForeFront Power remove the system at no cost to the City. Proposed Projects and Estimated Performance Reservoir 1 The project at Reservoir 1 would consist of 816 kW of ground-mounted solar panels. As the site is not adjacent to any power consuming meters, the City would participate in PG&E’s Renewable Energy Self-Generation Bill Credit Transfer (RES-BCT) program, which can benefit the generation component of a meter elsewhere in the City. The project would save the Water and Sewer Enterprise Fund s approximately $800,000 over the 20-year life span. A conceptual is provided at Attachment D. Including Reservoir 1 in the ForeFront Power project would allow the Utilities Department to focus the limited funds available towards the remainder of the projects identified in the Water Energy Efficiency project. This strategy would also allow the City to more quickly realize the benefits of GHG reduction while eliminating the need for City staff to operate the facility. SLO Swim Center The Project at the SLO Swim Center would consist of 150 kW of car port mounted s olar panels. The site would offset approximately 90 percent of the SLO Swim Center’s electricity use and would save the General Fund approximately $300 ,000 over the 20-year life span. A conceptual layout is provided at Attachment E. Packet Pg. 109 Item 9 Additional Projects The additional projects at the Bus Yard and Fire Station #1 are currently under review. Although the energy use at these sites could support solar installations, and the shade structures would provide shade to fleet vehicles and equipment, further site chara cteristics (e.g., grid interconnection potential, future site needs, etc.) must be assessed before a project can be presented. Should a viable project be identified in these sites, it would be included in the negotiated PPA with ForeFront Power and SPURR. Estimated Performance As illustrated in Table 1, the two potential solar photovoltaic projects, as currently conceived, would reduce the City‘s electricity expenses by an average of $4,500 per month, for a total 20 - year savings of $1.1 million. Additiona lly, the projects would provide an annual average greenhouse gas emissions reduction of 24,000 metric tons of CO 2. Table 1. Initial Project Characteristics Site Reservoir 1 SLO Swim Center Corporation/Bus Yard PPA Rate ($/kWh) $0.1150* $0.150 TBD Current Rate Paid to PG&E ($/kWh) $0.108 $0.165 TBD kWh Generated 1,475,039 260,963 TBD Year 1 Savings $-9,678* $1,893 TBD Average Annual Savings $42,453 $16,200 TBD Cumulative Year 20 Savings $849,049 $324,500 TBD *As noted in Attachment A, the Reservoir 1 project alternative with no up-front costs would have a slightly higher rate in years one and two, but would beat the estimated grid rate in years three through twenty. Conflict of Interest State Law and California Government Code 4217 Per California Government Code 1090, state law generally prohibits the hiring of a vendor to complete work which that vendor has proposed under a previous effort. California Government Code 4217 provides an exception to this prohibition if that project is energy efficienc y or renewable energy related. To illustrate consistency with Government Code 4217, the City must publicly notice this meeting, and must adopt a resolution making certain findings related to energy and cost savings. The resolution is provided as Attachment F. CONCURRENCES The potential projects would affect and support several departments. Staff from Utilities, Public Works, and Parks and Recreation have reviewed and concur with the form and intent of this report . Packet Pg. 110 Item 9 ENVIRONMENTAL REVIEW The execution of a power purchase agreement with Forefront Power as described in this report is statutorily and categorically exempt from environmental review on the basis that the projects are: installation of solar energy systems on existing roofs or at existing parking lots (Public Resources Code § 21080.35; new construction or conversion of small structures (CEQA Guidelines § 15303); minor alterations to land (CEQA Guidelines § 15304); projects which consist of the construction or placement of minor accessory structures to existing facilities (CEQA Guidelines § 15311); and activities which can be seen with seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment (CEQA Guidelines § 15061(b)(3). As individual projects come forward, each will be reviewed for any necessary environmental review and CEQA determination. FISCAL IMPACT Under the two projects presented in this report, the Water and Sewer Enterprise Funds are estimated to save a cumulative 20 -year total of $849,049, and the General Fund is estimated to save a cumulative 20-year total of $324,500, for a combined total savings of $1,173,549. ALTERNATIVES 1. The City Council could direct staff to pursue an alternative financing and procurement method for solar installations on City facilities. 2. The City Council could elect not to proceed with solar installations on City facilities at this time. Attachments: a - Proposed Projects Savings Analysis b - SPURR REAP ESA General Conditions - Draft c - SPURR REAP ESA Special Conditions (Solar) - Draft d - Reservoir 1 Conceptual Layout e - SLO Swim Center Conceptual Layout g - Draft Interconnection Agreement f - Gov. Code 4217 Resolution Packet Pg. 111 Item 9 Project Cashflows Financial Assumptions Parameter Value Project SLO City Res 1 Site Year 1 PPA Rate ($/kWh)$0.0950 Scenario No PG&E Upgrade Expenses PPA Rate Escalator (%/yr)0.0% Year 1 Savings $19,971 Utility Rate Escalator (%/yr)3.0% Cumulative Savings $1,414,690 Solar Degradation Rate (%)0.50% Payback Period Immediate Year Production (kWh) Average Weighted Bill Credit Value ($/kWh) Bill Credits ($)PPA Rate Solar Payment ($)Total Savings for District ($)Cumulative Savings 1 1,482,451 $0.1085 160,804 $0.0950 140,833 19,971 19,971 2 1,475,039 $0.1117 164,800 $0.0950 140,129 24,671 44,642 3 1,467,663 $0.1151 168,895 $0.0950 139,428 29,467 74,110 4 1,460,325 $0.1185 173,092 $0.0950 138,731 34,361 108,471 5 1,453,024 $0.1221 177,394 $0.0950 138,037 39,356 147,827 6 1,445,758 $0.1257 181,802 $0.0950 137,347 44,455 192,282 7 1,438,530 $0.1295 186,320 $0.0950 136,660 49,659 241,941 8 1,431,337 $0.1334 190,950 $0.0950 135,977 54,973 296,914 9 1,424,180 $0.1374 195,695 $0.0950 135,297 60,398 357,311 10 1,417,059 $0.1415 200,558 $0.0950 134,621 65,937 423,249 11 1,409,974 $0.1458 205,542 $0.0950 133,948 71,594 494,843 12 1,402,924 $0.1502 210,649 $0.0950 133,278 77,372 572,214 13 1,395,910 $0.1547 215,884 $0.0950 132,611 83,273 655,487 14 1,388,930 $0.1593 221,249 $0.0950 131,948 89,300 744,787 15 1,381,985 $0.1641 226,747 $0.0950 131,289 95,458 840,245 16 1,375,075 $0.1690 232,381 $0.0950 130,632 101,749 941,994 17 1,368,200 $0.1741 238,156 $0.0950 129,979 108,177 1,050,171 18 1,361,359 $0.1793 244,074 $0.0950 129,329 114,745 1,164,916 19 1,354,552 $0.1847 250,139 $0.0950 128,682 121,457 1,286,373 20 1,347,780 $0.1902 256,355 $0.0950 128,039 128,316 1,414,690 Total 28,282,056 $0.0000 $4,101,485 $0.0950 $2,686,795 $1,414,690 $1,414,690 44,455 65,937 128,316 0 50000 100000 150000 200000 250000 300000 Res 1 RES-BCT Site Annual Savings Average Weighted Bill Credit Value ($/kWh)Solar Payment ($)Total Savings for District ($) 192,282 423,249 1,414,690 0 500,000 1,000,000 1,500,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Res 1 RES-BCT Site Cumulative Savings Cumulative Savings Packet Pg. 112 Item 9 Project Cashflows Financial Assumptions Parameter Value Project SLO City Res 1 Site Year 1 PPA Rate ($/kWh)$0.1150 Scenario With PG&E Upgrade Expenses PPA Rate Escalator (%/yr)0.0% Year 1 Savings -$9,678 Utility Rate Escalator (%/yr)3.0% Cumulative Savings $849,049 Solar Degradation Rate (%)0.50% Payback Period Immediate Year Production (kWh) Average Weighted Bill Credit Value ($/kWh) Bill Credits ($)PPA Rate Solar Payment ($)Total Savings for District ($)Cumulative Savings 1 1,482,451 $0.1085 160,804 $0.1150 170,482 -9,678 -9,678 2 1,475,039 $0.1117 164,800 $0.1150 169,629 -4,830 -14,507 3 1,467,663 $0.1151 168,895 $0.1150 168,781 114 -14,394 4 1,460,325 $0.1185 173,092 $0.1150 167,937 5,155 -9,239 5 1,453,024 $0.1221 177,394 $0.1150 167,098 10,296 1,057 6 1,445,758 $0.1257 181,802 $0.1150 166,262 15,540 16,597 7 1,438,530 $0.1295 186,320 $0.1150 165,431 20,889 37,485 8 1,431,337 $0.1334 190,950 $0.1150 164,604 26,346 63,831 9 1,424,180 $0.1374 195,695 $0.1150 163,781 31,914 95,745 10 1,417,059 $0.1415 200,558 $0.1150 162,962 37,596 133,341 11 1,409,974 $0.1458 205,542 $0.1150 162,147 43,395 176,736 12 1,402,924 $0.1502 210,649 $0.1150 161,336 49,313 226,049 13 1,395,910 $0.1547 215,884 $0.1150 160,530 55,354 281,403 14 1,388,930 $0.1593 221,249 $0.1150 159,727 61,522 342,925 15 1,381,985 $0.1641 226,747 $0.1150 158,928 67,818 410,743 16 1,375,075 $0.1690 232,381 $0.1150 158,134 74,248 484,991 17 1,368,200 $0.1741 238,156 $0.1150 157,343 80,813 565,804 18 1,361,359 $0.1793 244,074 $0.1150 156,556 87,518 653,322 19 1,354,552 $0.1847 250,139 $0.1150 155,774 94,366 747,688 20 1,347,780 $0.1902 256,355 $0.1150 154,995 101,361 849,049 Total 28,282,056 $0.0000 $4,101,485 $0.1150 $3,252,436 $849,049 $849,049 15,540 37,596 101,361 -50000 0 50000 100000 150000 200000 250000 300000 Res 1 RES-BCT Site Annual Savings Average Weighted Bill Credit Value ($/kWh)Solar Payment ($)Total Savings for District ($) 16,597 133,341 849,049 -200,000 0 200,000 400,000 600,000 800,000 1,000,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Res 1 RES-BCT Site Cumulative Savings Cumulative Savings Packet Pg. 113 Item 9 Project Cashflows Financial Assumptions Parameter Value Project SLO City Res 1 Site Year 1 PPA Rate ($/kWh)$0.1050 Scenario $200K PG&E Upgrade Expenses PPA Rate Escalator (%/yr)0.0% Year 1 Savings $5,147 Utility Rate Escalator (%/yr)3.0% Cumulative Savings $1,131,869 Solar Degradation Rate (%)0.50% Payback Period Immediate Year Production (kWh) Average Weighted Bill Credit Value ($/kWh) Bill Credits ($)PPA Rate Solar Payment ($)Total Savings for District ($)Cumulative Savings 1 1,482,451 $0.1085 160,804 $0.1050 155,657 5,147 5,147 2 1,475,039 $0.1117 164,800 $0.1050 154,879 9,921 15,067 3 1,467,663 $0.1151 168,895 $0.1050 154,105 14,791 29,858 4 1,460,325 $0.1185 173,092 $0.1050 153,334 19,758 49,616 5 1,453,024 $0.1221 177,394 $0.1050 152,567 24,826 74,442 6 1,445,758 $0.1257 181,802 $0.1050 151,805 29,997 104,439 7 1,438,530 $0.1295 186,320 $0.1050 151,046 35,274 139,713 8 1,431,337 $0.1334 190,950 $0.1050 150,290 40,659 180,373 9 1,424,180 $0.1374 195,695 $0.1050 149,539 46,156 226,528 10 1,417,059 $0.1415 200,558 $0.1050 148,791 51,767 278,295 11 1,409,974 $0.1458 205,542 $0.1050 148,047 57,494 335,789 12 1,402,924 $0.1502 210,649 $0.1050 147,307 63,342 399,131 13 1,395,910 $0.1547 215,884 $0.1050 146,571 69,313 468,445 14 1,388,930 $0.1593 221,249 $0.1050 145,838 75,411 543,856 15 1,381,985 $0.1641 226,747 $0.1050 145,108 81,638 625,494 16 1,375,075 $0.1690 232,381 $0.1050 144,383 87,998 713,493 17 1,368,200 $0.1741 238,156 $0.1050 143,661 94,495 807,988 18 1,361,359 $0.1793 244,074 $0.1050 142,943 101,131 909,119 19 1,354,552 $0.1847 250,139 $0.1050 142,228 107,911 1,017,031 20 1,347,780 $0.1902 256,355 $0.1050 141,517 114,839 1,131,869 Total 28,282,056 $0.0000 $4,101,485 $0.1050 $2,969,616 $1,131,869 $1,131,869 29,997 51,767 114,839 0 50000 100000 150000 200000 250000 300000 Res 1 RES-BCT Site Annual Savings Average Weighted Bill Credit Value ($/kWh)Solar Payment ($)Total Savings for District ($) 104,439 278,295 1,131,869 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Res 1 RES-BCT Site Cumulative Savings Cumulative Savings Packet Pg. 114 Item 9 Project Cashflows: SLO Swim Center - Portfolio Pricing - Flat PPA Rate Scenario Current Solutions Solar + Storage Project Canopy Financial Assumptions Year 1 Savings $1,893 Parameter Value Cumulative Savings $324,550 PPA Rate Escalator (%/yr)0.0% Cumulative NPV Savings $224,242 Utility Energy Escalator (%/yr)2.7% Payback Period Immediate Utility Demand Escalator (%/yr)5.0% Solar System Size (KW)163 Discount Rate (%)3.0% Storage System Size (KW)0 Solar Degradation Rate (%)0.50% Year KWH Generated Historic Utility Bill (without solar) Total Electricity Costs (PPA + Utility)Net Savings Cumulative Savings Cumulative NPV Savings 1 260,963 60,650 58,757 1,893 1,893 1,893 2 259,658 62,787 59,622 3,165 5,058 4,966 3 258,360 65,007 60,536 4,471 9,529 9,180 4 257,068 67,313 61,503 5,810 15,339 14,497 5 255,783 69,709 62,524 7,185 22,524 20,881 6 254,504 72,198 63,602 8,597 31,120 28,296 7 253,231 74,786 64,739 10,047 41,167 36,710 8 251,965 77,474 65,937 11,537 52,705 46,091 9 250,705 80,269 67,200 13,070 65,774 56,409 10 249,452 83,175 68,529 14,645 80,420 67,633 11 248,205 86,196 69,929 16,266 96,686 79,737 12 246,964 89,337 71,402 17,935 114,621 92,693 13 245,729 92,603 72,951 19,652 134,273 106,477 14 244,500 96,001 74,579 21,422 155,695 121,064 15 243,278 99,535 76,291 23,244 178,939 136,431 16 242,061 103,212 78,089 25,123 204,062 152,557 17 240,851 107,037 79,977 27,060 231,123 169,420 18 239,647 111,018 81,959 29,059 260,181 187,001 19 238,448 115,161 84,040 31,120 291,301 205,281 20 237,256 119,473 86,224 33,248 324,550 224,242 Total 4,978,627 $1,732,941 $1,408,391 $324,550 $324,550 $224,242 Packet Pg. 115 Item 9 GENERAL CONDITIONS v.20.1 CONFIDENTIAL AND PROPRIETARY *** GENERAL TERMS AND CONDITIONS OF ENERGY SERVICES AGREEMENT These General Terms and Conditions (“General Conditions”) are dated as of the ____ day of _________, 201__ and are witnessed and acknowledged by FFP BTM, LLC, a Delaware limited liability company (“ForeFront Power”) and [INSERT LEGAL NAME, ENTITY TYPE AND STATE OF FORMATION] (“Purchaser”), as evidenced by their signature on the last page of this document. These General Conditions are intended to be incorporated by reference into Energy Services Agreements that may be entered into between ForeFront Power and Purchaser or between their respective affiliates. These General Conditions shall have no binding effect upon ForeFront Power or Purchaser, respectively, except to the extent ForeFront Power or Purchaser becomes a party to an Energy Services Agreement that incorporates these General Conditions. 1. DEFINITIONS. 1.1 In addition to other terms specifically defined elsewhere in the Agreement, where capitalized, the following words and phrases shall be defined as follows: “Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by or under common control with such specified Person. “Agreement” means, the Energy Services Agreement. “Applicable Law” means, with respect to any Person, any constitutional provision, law, statute, rule, regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction, registration, license, franchise, permit, authorization, guideline, Governmental Approval, con sent or requirement of any Governmental Authority having jurisdiction over such Person or its property, enforceable at law or in equity, including the interpretation and administration thereof by such Governmental Authority. “Assignment” has the meaning set forth in Section 13.1. “Bankruptcy Event” means with respect to a Party, that either (i) such Party has (A) applied for or consented to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property; (B) admitted in writing its inability, or be generally unable, to pay its debts as such debts become due; (C) made a general assignment for the benefit of its creditors; (D) commenced a voluntary case under any bankruptcy law; (E) filed a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up, or composition or readjustment of debts; (F) taken any corporate or other action for the purpose of effecting any of th e foregoing; or (ii) has a petition in bankruptcy filed against it, and such petition is not dismissed within ninety (90) days after the filing thereof. “Business Day” means any day other than Saturday, Sunday or any other day on which banking institutions in New York, NY are required or authorized by Applicable Law to be closed for business. Packet Pg. 116 Item 9 Page 2 of 25 “Commercial Operation ” has the meaning set forth in Section 3.3(b). “Commercial Operation Date” has the meaning set forth in Section 3.3(b). “Confidential Information ” has the meaning set forth in Section 15.1. “Construction Start Date” has the meaning set forth in Section 5 of the Special Conditions. “Covenants, Conditions and Restrictions” or “CCR” means those requirements or limitations related to the Premises as may be set forth in a lease, if applicable, or by any association or other organization, having the authority to impose restrictions. “Delay Liquidated Damages” means the daily payment of (i) $0.250/day/kW if the ForeFront Power fails to achieve the Commercial Operation Date by the Guaranteed Commercial Operation Date. “Disruption Period” has the meaning set forth in Section 4.3. “Early Termination Date” means any date on which the Agreement terminates other than by reason of expiration of the then applicable Term. “Early Termination Fee” means the fee payable by Purchaser to ForeFront Power under the circumstances described in Section 11.2. “Effective Date” has the meaning set forth in the preamble to the Special Conditions. “Energy Services” has the meaning set forth in the Special Conditions. “Energy Services Agreement” means each Energy Services Agreement (including the Schedules attached thereto) that may be entered into between ForeFront Power and Purchaser or between their respective affiliates that incorporates these General Conditions by reference. “Energy Services Payment” has the meaning set forth in Schedule 2 of the Special Conditions. “Environmental Attributes” shall mean, without limitation, carbon trading credits, renewable energy credits or certificates, emissions reduction credits, emissions allowances, green tags, tradable renewable credits, or Green-e® products. “Environmental Documents” has the meaning set forth in Section 7.2(h). “Environmental Law” means any and all federal, state, local, provincial and foreign, civil and criminal laws, statutes, ordinances, orders, common law, codes, rules, regulations, judgments, decrees, injunctions relating to the protection of health and the environment, worker health and safety, and/or governing the handling, use, generation, treatment, storage, transportation, disposal, manufacture, distribution, formulation, packaging, labeling, or release to the environment of or exposure to Hazardous Materials, including any such requirements implemented through Governmental Approvals. “Estimated Remaining Payments” means as of any date, the estimated remaining Energy Services Payments to be made through the end of the then -applicable Term, as reasonably determined by ForeFront Power. “Expiration Date” means the date on which the Agreement terminates by reason of expiration of the Term. “Fair Market Value” means, with respect to any tangible asset or service, the price that would be negotiated in an arm’s-length, free market transaction, for cash, between an informed, willing seller and an informed, willing buyer, neither of whom is under compulsion to complete the transaction. Fair Market Value of the System will be determined pursuant to Section 2.4. Packet Pg. 117 Item 9 Page 3 of 25 “Financing Party” means, as applicable (i) any Person (or its agent) from whom ForeFront Power (or an Affiliate of ForeFront Power ) leases the System, (ii) any Person (or its agent) who has made or will make a loan to or otherwise provides financing to ForeFront Power (or an Affiliate of ForeFront Power) with respect to the System, or (iii) any Person acquiring a direct or indirect interest in ForeFront Power or in ForeFront Power’s interest in the Agreement or the System as a tax credit investor. “Force Majeure Event” has the meaning set forth in Section 10.1. “ForeFront Power ” has the meaning set forth in the Special Conditions. “ForeFront Power Default” has the meaning set forth in Section 11.1(a). “General Conditions” means these General Terms and Conditions of the Energy Services Agreement, including all Exhibits hereto. “Guaranteed Commercial Operation Date” has the meaning set forth in Section 5 of the Special Conditions, which date shall be extended day-for-day for Force Majeure Events and for other events outside of ForeFront Power’s reasonable control. “Governmental Approval” means any approval, consent, franchise, permit, certificate, resolution, concession, license, or authorization issued by or on behalf of any applicable Governmental Authority, including any such approval, consent, order or binding agreements with or involving a governmental authority under Environmental Laws . “Governmental Authority” means any federal, state, regional, county, town, city, or municipal government, whether domestic or foreign, or any department, agency, bureau, or other administrative, regulatory or judicial body of any such government. “Hazardous Materials” means any hazardous or toxic material, substance or waste, including petroleum, petroleum hydrocarbons or petroleum products, and any other chemicals, materials, substances or wastes in any amount or concentration which are regulated under or for which liability can be imposed under any Environmental Law. “Indemnified Parties” has the meaning set forth in Section 16.1. “Initial Term” has the meaning set forth in Section 2 of the Special Conditions. “Installation Work” means the construction and installation of the System and the start-up, testing and acceptance (but not the operation and maintenance) thereof, all performed by or for ForeFront Power at the Premises. “Invoice Date” has the meaning set forth in Section 6.2. “Liens” has the meaning set forth in Section 7.1(e). “Local Electric Utility” means the local electric distribution owner and operator providing electric distribution and interconnection services to Purchaser at the Premises. “Losses” means all losses, liabilities, claims, demands, suits, causes of action, judgments, awards, damages, cleanup and remedial obligations, interest, fines, fees, penalties, costs and expenses (including all attorneys’ fees and other costs and expenses incurred in defending any such claims or other matters or in asserting or enforcing any indemnity obligation). “Option Price” has the meaning set forth in Section 2.3. “Party” or “Parties” has the meaning set forth in the preamble to the Special Conditions. Packet Pg. 118 Item 9 Page 4 of 25 “Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, firm, or other entity, or a Governmental Authority. “Pre-existing Environmental Conditions” means any: (i) violation of, breach of or non -compliance with any Environmental Laws with respect to the Premises that first existed, arose or occurred on or prior to ForeFront Power’s commencement of construction at the Premises and (ii) the presence or release of, or exposure to, any Hazardous Materials at, to, on, in, under or from the Premises that first existed, arose or occurred on or prior to ForeFront Power’s commencement of construction at the Premises. “Premises” means the premises described in Schedule 1 of the Special Conditions. The Premises includes the entirety of any structures and underlying real property located at the address in Schedule 1 of the Special Conditions. “Purchase Date” means the first Business Day that occurs after the applicable purchase date set forth in Schedule 3 of the Special Conditions. “Purchaser” has the meaning set forth in the preamble to the Special Conditions. “Purchaser Default” has the meaning set forth in Section 11.2(a). “Renewal Term” has the meaning set forth in Section 2.1. “Representative” has the meaning set forth in Section 15.1. “Security Interest” has the meaning set forth in Section 8.2. “Site-Specific Requirements” means the site-specific information and requirements as may be set forth in Schedule 6 of the Special Conditions. “Special Conditions” means each Energy Services Agreement, excluding these General Conditions. “Stated Rate” means a rate per annum equal to the lesser of (a) the “prime rate” (as reported in The Wall Street Journal) plus two percent (2%) or (b) the maximum rate allowed by Applicable Law. “System” has the meaning set forth in Schedule 1 of the Special Conditions. “System-based Incentives” means any accelerated depreciation, installation or production -based incentives, investment tax credits and subsidies including, but not limited to, the subsidies in Schedule 1 of the Special Conditions and all other related subsidies and incentives. “System Operations” means ForeFront Power’s operation, maintenance and repair of the System performed in accordance with the requirements herein. “Term” has the meaning set forth in Section 2 of the Special Conditions. “Term Year” means a twelve (12) month period beginning on the first day of the Term and each successive twelve (12) month period thereafter. “Termination Date” means the date on which the Agreement ceases to be effective, including on an Early Termination Date or the Expiration Date. “Transfer Time” has the meaning set forth in Section 4.3(a). 1.2 Interpretation. The captions or headings in these General Conditions are strictly for convenience and shall not be considered in interpreting the Agreement. Words in the Agreement that impart the singular connotation shall be interpreted as plural, and words that impart the plural connotation shall be interpreted as singular, Packet Pg. 119 Item 9 Page 5 of 25 as the identity of the parties or objects referred to may require. The words “include”, “includes”, and “including” mean include, includes, and including “without limitation” and “without limitation by specification.” The words “hereof”, “herein”, and “hereunder” and words of similar import refer to the Agreement as a whole and not to any particular provision of the Agreement. Except as the context otherwise indicates, all references to “Article s” and “Sections” refer to Articles and Sections of these General Conditions. 2. TERM AND TERMINATION. 2.1 Term; Early Termination; Milestone Dates. (a) Term. The term of the Agreement shall commence on the Effective Date and shall continue for the number of years after the Commercial Operation Date that are specified in the Special Conditions (the “Initial Term”), unless and until extended or terminated earlier pursuant to the provisions of the Agreement. (b) Early Termination. Purchaser may terminate the Agreement prior to any applicable Expiration Date for any reason upon sixty (60) days’ prior written notice. If Purchaser terminates the Agreement prior to the Expiration Date of the Initial Term, Purchaser shall pay, as liquidated damages, the Early Termination Fee set forth on Schedule 3, Column 1 of the Special Conditions, and ForeFront Power shall cause the System to be disconnected and removed from the Premises. Upon Purchaser’s payment to ForeFront Power of the Early Termination Fee, the Agreement shall terminate automatically. (c) Purchaser may (i) if ForeFront Power fails to commence construction by the Construction Start Date, be entitled (as its sole remedy) to Delay Liquidated Damages not to exceed $22.5/kW, (ii) terminate this Agreement with no liability whatsoever if ForeFront Power fails to commence construction of the System by the date that is 90 days after the Construction Start Date, or (iii) if ForeFront Power fails to achieve Commercial Operation by the Guaranteed Commercial Operation Date, be entitled (as its sole remedy) to Delay Liquidated Damages not to exceed $15/kW, plus (if Installation Work had commenced at the Premises as of the date of termination) any costs reasonably incurred by Purchaser to return its Premises to its condition prior to commencement of the Installation Work. Further, Purchaser may terminate this Agreement with no liability whatsoever if ForeFront Power fails to commence Commercial Operation by the date that is 60 days after the Guaranteed Commercial Operation Date. The Construction Start Date and Guaranteed Commercial Operation Date shall be extended on a day-for-day basis if, notwithstanding ForeFront Power’s commercially-reasonable efforts, interconnection approval is not obtained within 60 days after the Effective Date, provided that interconnection applications are submitted within 45 days of the later of (a) the Effective Date and (b) finalization of the System layout. 2.2 Purchase Option. On any Purchase Date, so long as a Purchaser Default shall not have occurred and be continuing, Purchaser has the option to purchase the System for a purchase price (the “Option Price”) equal to the greater of (a) the Fair Market Value of the System as of the Purchase Date, or (b) the Early Termination Fee as of the Purchase Date, as specified in Schedule 3, Column 2 of the Special Conditions. To exercise its purchase option, Purchaser shall, not less than one hundred and eighty (180) days prior to the proposed Purchase Date, provide written notice to ForeFront Power of Purchaser’s intent to exercise its option to purchase the System on such Purchase Date. Within thirty (30) days of receipt of Purchaser’s notice, ForeFront Power shall specify the Option Price, and Purchaser shall then have a period of thirty (30) days after notification to confirm or retract its decision to exercise the purchase option or, if the Option Price is equal to the Fair Market Value of the System, to dispute the determination of the Fair Market Value of the System. In the event Purchaser confirms its exercise of the purchase option in writing to ForeFront Power (whether before or after any determination of the Fair Market Value determined pursuant to Section 2.3), (i) the Parties shall promptly execute all documents necessary to (A) cause title to the System to pass to Purchaser on the Purchase Date, free and clear of any Liens, and (B) assign all vendor warranties for the System to Purchaser , and (ii) Purchaser shall pay the Option Price to ForeFront Power on the Purchase Date, such payment to be made in accordance with any previous written instructions delivered to Purchaser by ForeFront Power or ForeFront Power’s Financing Party, as applicable, for payments under the Agreement. Upon execution of the document s and payment of the Option Price, in each case as described in the preceding sentence, the Agreement shall terminate automatically. Payment of the Option Price shall be in lieu of and instead of any payments as described in Section 2.2 hereof. In the event Purchaser retracts its exercise of, or does not timely confirm, the purchase option, the provisions of the Agreement shall be applicable as if Purchaser had not exercised any option to purchase the System. Packet Pg. 120 Item 9 Page 6 of 25 2.3 Determination of Fair Market Value. If the Option Price indicated by ForeFront Power in accordance with Section 2.2 is equal to the Fair Market Value (as determined by ForeFront Power) and Purchaser disputes such stated Fair Market Value within thirty (30) days of receipt of such notice from ForeFront Power, then the Parties shall mutually select an independent appraiser with experience and expertise in the Energy Services industry. Such appraiser shall act reasonably and in good faith to determine Fair Market Value and shall set forth such determination in a written opinion delivered to the Parties. The valuation made by the appraiser shall be binding upon the Parties in the absence of fraud or manifest error. The costs of the appraisal shall be borne by Purchaser if such appraisal results in a value equal or greater than the value provided by ForeFront Power pursuant to Section 2.3; otherwise, the Parties shall equally share such cost. 2.4 Removal of System at Expiration. Subject to Purchaser’s exercise of its purchase option under Section 2.2, upon the expiration or earlier termination of the Agreement, ForeFront Power shall, at ForeFront Power’s expense, remove all of its tangible property comprising the System from the Premises on a mutually convenient date but in no case later than ninety (90) days after the Termination Date. The Premises shall be returned to its original condition, except for System mounting pads or other support structures on roof-mounted systems only, and ordinary wear and tear. If the System is to be located on a roof, then in no case shall ForeFront Power’s removal of the System affect the integrity of Purchaser’s roof, which shall be as leak proof as it was prior to removal of System (other than ordinary wear and tear). For purposes of ForeFront Power’s removal of the System, Purchaser’s covenants pursuant to Section 7.2 shall remain in effect until the date of actual removal of the System. ForeFront Power shall leave the Premises in neat and clean order. If ForeFront Power fails to remove or commence substantial efforts to remove the System by such agreed upon date, Purchaser shall have the right, at its option, to remove the System to a public warehouse and restore the Premises to its original condition (other than System mounting pads or other support structures and ordinary wear and tear) at ForeFront Power’s reasonable cost. 2.5 Conditions of the Agreement Prior to the Commercial Operation Date. (a) In the event that any of the following events or circumstances occur prior to the Commercial Operation Date, ForeFront Power may (at its sole discretion) provide notice that it is terminating the Agreement, in which case neither Party shall have any liability to the other except for any such liabilities that may have accrued prior to such termination: (i) ForeFront Power determines that the Premises, as is, is insufficient to accommodate the System or unsuitable for construction or operation of the System. (ii) There exist site conditions (including environmental conditions) or construction requirements that were not known as of the Effective Date and that could reasonably be expected to materially increase the cost of Installation Work or would adversely affect the electricity production from the System as designed. (iii) There is a material adverse change in the regulatory environment, incentive program or federal or state tax code (including the expiration of any incentive program or tax incentives in effect as of the Effective Date) that could reasonably be expected to adversely affect the economics of the installation for ForeFront Power and its investors. (iv) ForeFront Power is unable to obtain financing for the System on terms and conditions satisfactory to it. (v) ForeFront Power has not received: (1) a fully executed a license in the form of Exhibit A of these General Conditions from the owner of the Premises (if the Purchaser is a tenant), (2) a release or acknowledgement from any mortgagee of the Premise, if required by ForeFront Power’s Financing Party, to establish the priority of its security interest in the System, and (3) such other documentation as may be reasonably requested by ForeFront Power to evidence Purchaser’s ability to meet its obligations under Section 7.2(d)(ii) to ensure that ForeFront Power will have access to the Premises throughout the Term. (vi ) There has been a material adverse change in the rights of Purchaser to occupy the Premises or ForeFront Power to construct the System on the Premises. Packet Pg. 121 Item 9 Page 7 of 25 (viii) Purchaser has determined that there ar e easements, CCRs or other land use restrictions, liens or encumbrances that would materially impair or prevent the installation, operation, maintenance or removal of the System. (ix) There has been a material adverse change in Purchaser’s credit-worthiness. (b) If any of the conditions set forth in Section 2.5(a) are partly or wholly unsatisfied, and ForeFront Power wishes to revise the information in the Special Conditions, then ForeFront Power may propose modifications to the Special Conditions for acceptance by Purchaser. If Purchaser does not accept such modified Special Conditions, ForeFront Power may terminate this Agreement as provided in Section 2.5(a). If Purchaser accepts such revised Special Conditions, such revised Special Conditions shall be deemed an amendment of the Agreement, and the Agreement shall remain in force and effect upon execution by both Parties. 3. CONSTRUCTION, INSTALLATION AND TESTING OF SYSTEM. 3.1 Installation Work. ForeFront Power will cause the System to be designed, engineered, installed and constructed substantially in accordance with Schedule 1 of the Special Conditions and Applicable Law. At its request, Purchaser shall have the right to review all construction plans and designs, including engineering evaluations of the impact of the System. ForeFront Power shall perform the Installation Work at the Premises between the hours of 7:00 a.m. and 7:00 p.m. in a manner that minimizes inconvenience to and interference with the use of the Premises to the extent commercially practical. 3.2 Approvals; Permits. Purchaser shall assist ForeFront Power in obtaining all necessary consents, approvals and permits required to perform Purchaser’s obligations under this Agreement, including but not limited to those related to the Local Electric Utility, any Governmental Approval, and any consents, waivers, approvals or releases required pursuant to any applicable contract or CCR. 3.3 System Acceptance Testing. (a) ForeFront Power shall conduct testing of the System in accordance with such methods, acts, guidelines, standards and criteria reasonably accepted or followed by providers of Energy Services similar to those provided by the System in the United States. (b) If the results of such testing indicate that the System is capable of providing the Energy Services, using such instruments and meters as have been installed for such purposes, and the System has been approved for interconnected operation by the Local Electric Utility (“Commercial Operation”), then ForeFront Power shall send a written notice to Purchaser to that effect, and the date of such notice shall be the “Commercial Operation Date”. 4. SYSTEM OPERATIONS. 4.1 ForeFront Power as Owner and Operator . The System will be owned by ForeFront Power or ForeFront Power ’s Financing Party and will be operated and maintained and, as necessary, repaired by ForeFront Power at its sole cost and expense; provided, any repair or maintenance costs incurred by ForeFront Power as a result of Purchaser ’s negligence or breach of its obligations hereunder shall be reimbursed by Purchaser. 4.2 Metering. ForeFront Power shall install and maintain a utility grade kilowatt-hour (kWh) meter for the measurement of electrical energy provided by the System and may, at its election, install a utility grade kilowatt- hour (kWh) meter for the measurement of electrical energy delivered by the Local Electric Utility and consumed at the Premises. 4.3 System Disruptions. In the event that (a) the owner or lessee of the Premises repair s the Premises for any reason not directly related to damage caused by the System, and such repair req uires the partial or complete temporary disassembly or movement of the System, or (b) any act or omission of Purchaser or Purchaser’s employees, Affiliates, agents or subcontractors (collectively, a “Purchaser Act”) results in a disruption or outage in System production, then , in either case, Purchaser shall (i) pay ForeFront Power for all work required by ForeFront Power to Packet Pg. 122 Item 9 Page 8 of 25 disassemble or move the System and (ii) continue to make all payments for the Energy Services during such period of System disruption (the “Disruption Period”), and (iii) reimburse ForeFront Power for any other lost revenue during the Disruption Period, including any lost revenue associated with any reduced sales of Environmental Attributes and any reduced System-based Incentives, if applicable, during the Disruption Period. For the purpose of calculating Energy Services Payments and lost revenue for such Disruption Period, Energy Services for each month of said months shall be deemed to have been produced at the average rate over the same month for which data exists (or, if the disruption occurs within the first twelve (12) months of operation, the average over such period of operation). 5. TITLE TO SYSTEM. 5.1 Throughout the duration of the Agreement, ForeFront Power or ForeFront Power’s Financing Party shall be the legal and beneficial owner of the System at all times, and the System shall remain the personal property of ForeFront Power or ForeFront Power’s Financing Party and shall not attach to or be deemed a part of, or fixture to, the Premises. The System shall at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code. Purchaser covenants that it will use reasonable commercial efforts to place all parties having an interest in or lien upon the real property comprising the Premises on notice of the ownership of the System and the legal status or classification of the System as personal property. If there is any mortgage or fixture filing against the Premises which could reasonably be construed as attaching to the System as a fixture of the Premises, Purchaser shall provide, at ForeFront Power’s request, a disclaimer or release from such lien holder. If Purchaser is the fee owner of the Premises, Purchaser consents to the filing by ForeFront Power, on behalf of Purchaser, of a disclaimer of the System as a fixture of the Premises in the office where real estate records are customarily filed in the jurisdiction of the Premises. If Purchaser is not the fee owner, Purchaser will, at ForeFront Power’s request, use commercially reasonable efforts to obtain such consent from such owner. 5.2 Environmental Attributes And System-Based Incentives. Purchaser’s purchase of Energy Services includes Environmental Attributes, but does not include System-based incentives. System-based Incentives shall be owned by ForeFront Power or ForeFront Power’s financing party for the duration of the System’s operating life. Purchaser disclaims any right to System-based Incentives based upon the installation of the System at the Premises, and shall, at the request of ForeFront Power, execute any document or agreement reasonably necessary to fulfill the intent of this Section 5.2. 6. PRICE AND PAYMENT. 6.1 Consideration. Purchaser shall pay to ForeFront Power a monthly Energy Services Payment for the Energy Services provided during each calendar month of the Term as set forth in the Special Conditions. 6.2 Invoice. ForeFront Power shall invoice Purchaser on or about the first day of each month (each, an “Invoice Date”), commencing on the first Invoice Date to occur after the Commercial Operation Date, for the Energy Services Payment in respect of the immediately preceding month. The last invoice shall include Energy Services provided only through the Termination Date of this Agreement. 6.3 Time of Payment. Purchaser shall pay all undisputed amounts due hereunder within thirty (30) days after the date of the applicable Invoice Date. 6.4 Method of Payment. Purchaser shall make all payments under the Agreement either (a) by electronic funds transfer in immediately available funds to the account designated by ForeFront Power from time to time or (b) by check timely delivered to the location designated by ForeFront Power from time to time. All payments that are not paid when due shall bear interest accruing from the date becoming past due until paid in full at a rate equal to the Stated Rate. 6.5 Disputed Payments. If a bona fide dispute arises with respect to any invoice, Purchaser shall not be deemed in default under the Agreement and the Parties shall not suspend the performance of their respective obligations hereunder, including payment of undisputed amounts owed hereunder. If an amount disputed by Purchaser Packet Pg. 123 Item 9 Page 9 of 25 is subsequently deemed to have been due pursuant to the applicable invoice, interest shall accrue at the Stated Rate on such amount from the date becoming past due under such invoice until the date paid. 7. GENERAL COVENANTS. 7.1 ForeFront Power’s Covenants. ForeFront Power covenants and agrees to the following: (a) Notice of Damage or Emergency. ForeFront Power shall (x) promptly notify Purchaser if it becomes aware of any damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System, (y) immediately notify Purchaser if it becomes aware of any event or circumstance relating to the System or the Premises that poses a significant risk to human health, the environment, the System or the Premises. (b) Governmental Approvals. While providing the Installation Work, Energy Services, and System Operations, ForeFront Power shall obtain and maintain and secure all Governmental Approvals required to be obtained and maintained and secured by ForeFront Power and to enable ForeFront Power to perform such obligations. (c) Health and Safety. ForeFront Power shall take all necessary and reasonable safety precaution s with respect to providing the Installation Work, Energy Services, and System Operations that shall comply with all Applicable Laws pertaining to the health and safety of persons and real and personal property. All work shall be performed by licensed professionals, as may be required by Applicable Law, and in accordance with such methods, acts, guidelines, standards and criteria reasonably accepted or followed by a majority of System integrators in the United States. (d) Liens. Other than a Financing Party’s security interest in or ownership of the System, ForeFront Power shall not directly or indirectly cause, create, incur, assume or suffer to exist any mortgage, pledge, lien (including mechanics’, labor or materialman’s lien), charge, security interest, encumbrance or claim of any nature (“Liens”) on or with respect to the Premises or any interest therein, in each case to the extent such Lien arises from or is related to ForeFront Power’s performance or non-performance of its obligations hereunder. If ForeFront Power breaches its obligations under this Section, it shall (i) immediately notify Purchaser in writing, (ii) promptly cause such Lien to be discharged and released of record without cost to Purchaser, and (iii) defend and indemnify Purchaser against all costs and expenses (including reasonable attorneys’ fees and court costs at trial and on appeal) incurred in discharging and releasing such Lien ; provided, ForeFront Power shall have the right to contest any such Lien, so long as it provides a statutory bond or other reasonable assurances of payment that either remove such Lien from title to the Premises or that assure that any adverse judgment with respect to such Lien will be paid without affecting title to the Premises. 7.2 Purchaser’s Covenants. Purchaser covenants and agrees as follows: (a) Notice of Damage or Emergency. Purchaser shall (i) promptly notify ForeFront Power if it becomes aware of any damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System, (ii) immediately notify ForeFront Power it becomes aware of any event or circumstance that poses an imminent risk to human health, the environment, the System or the Premises. In the event of damage to Purchaser’s premises caused by, or as the result of, the System, ForeFront Power shall, at its sole cost, repair said premises to the condition existing prior to such damage. (b) Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or suffer to exist any Liens on or with respect to the System or any interest therein. If Purchaser breaches its obligations under this Section, it shall immediately notify ForeFront Power in writing, shall promptly cause such Lien to be discharged and released of record without cost to ForeFront Power, and shall indemnify ForeFront Power against all costs and expenses (including reasonable attorneys’ fees and court costs at trial and on appeal) incurred in discharging and releasing such Lien. (c) Consents and Approvals. To the extent that only Purchaser is authorized to request, obtain or issue any necessary approvals, Governmental Approvals, rebates or other financial incentives, Purchaser shall cooperate with ForeFront Power to obtain or issue such approvals, Governmental Approvals, rebates or other financial incentives Packet Pg. 124 Item 9 Page 10 of 25 in the name of ForeFront Power. Purchaser shall provide to ForeFront Power copies of all Governmental Approvals and CCRs applicable to the Premises, other than those obtained by ForeFront Power or to which ForeFront Power is a party. (d) Access to Premises, Grant of License. (i) Purchaser hereby grants to ForeFront Power a commercial license coterminous with the Term containing all the rights necessary for ForeFront Power to use and occupy portions of the Premises for the installation, operation , maintenance and removal of the System pursuant to the terms of this Agreement, including ingress and egress rights to the Premises for ForeFront Power and its employees, contractors and subcontractors and access to electrical panels and conduits to interconnect or disconnect the System with the Premises’ electrical wiring; provided, with respect to Provider’s access to the Site, such license shall be subject to conditions or limitations for the protection of minor students that are imposed generally on commercial contractors by Purchaser or by Applicable Law. If ForeFront Power ’s financing structure requires that Purchaser enter into a license agreement directly with Financing Party, ForeFront Power shall enter into such an agreement which shall be in a form set forth by ForeFront Power and which contain substantially the same rights as set forth in this Section 7.2(d). (ii) Regardless of whether Purchaser is owner of the Premises or leases the Premises from a landlord, Purchaser hereby covenants that (x) ForeFront Power shall have access to the Premises and System during the Term of this Agreement and for so long as needed after termination to remove the System pursuant to the applicable provisions herein, and (y) neither Purchaser nor Purchaser’s landlord will interfere or handle any ForeFront Power equipment or the System without written authorization from ForeFront Power; provided, Purchaser and Purchaser’s landlord shall at all times have access to and the right to observe the Installation Work or System removal . (iii) If Purchaser is a lessee of the Premises, Purchaser further covenants that it shall deliver to ForeFront Power, a license from Purchaser’s landlord in substantially the form attached hereto as Exhibit A of these General Conditions. (e) Temporary storage space during installation or removal . Purchaser shall use commercially reasonable efforts to obtain an agreement for sufficient space at the Premises for the temporary storage and staging of tools, materials and equipment and for the parking of construction crew vehicles and temporary construction trailers and facilities reasonably necessary during the Installation Work, System Operations or System removal, and access for rigging and material handling. (f) On or before the Effective Date of each Special Conditions Purchaser shall identify and set forth in each Special Conditions and unless previously delivered, Purchaser shall, to the extent the same are known and available, deliver to ForeFront Power copies of all reports, agreements, plans, inspections, tests, studies or other materials concerning the presence of Hazardous Materials at, from or on the Premises including, but not limited to, soil reports, design drawings, environmental reports, sampling results or other documents relating to Hazardous Materials that have been identified or may be present on, in or under the Premises (collectively, the “Environmental Documents”). Thereafter, Purchaser agrees to provide copies of any new Environmental Documents within ten (10) days of receipt of same. Purchaser hereby agrees to furnish such other documents in Purchaser’s possession or control with respect to Governmental Approvals compliance with Environmental Law or Hazardous Materials with respect to the Premises as may be reasonably requested by ForeFront Power from time to time. (g) Notwithstanding anything to the contrary in the Agreement, Purchaser shall operate and maintain the Premises to comply with the requirements of all applicable Environmen tal Laws that limit or govern the conditions or uses of the Premises, without impairing or interfering with ForeFront Power’s construction, operation and ownership of the System or occupancy of the Premises. In no event shall ForeFront Power have any liability or obligation with respect to any Pre-existing Environmental Condition on, in or under the Premises, or operations or maintenance of the Premises required to comply with Environmental Laws with respect to Pre-Existing Environmental Conditions. (j) Purchaser shall indemnify, hold harmless and defend ForeFront Power from and against all claims, pay costs and expenses, and conduct all actions required under Environmental Laws in connection with (i) the Packet Pg. 125 Item 9 Page 11 of 25 existence at, on, above, below or near the Premises of any Pre-existing Environmental Conditions, and (ii) any Hazardous Materials released, spilled or deposited at, on above or below the Premises by the Purchaser . 8. REPRESENTATIONS & WARRANTIES. 8.1 Representations and Warranties of Both Parties. In addition to any other representations and warranties contained in the Agreement, each Party represents and warrants to the other as of the Effective Date that: (a) it is duly organized and validly existing and in good standing in the jurisdiction of its organization; (b) it has the full right and authority to enter into, execute, deliver, and perform its obligations under the Agreement; (c) it has taken all requisite corporate or other action to approve the execution, delivery, and performance of the Agreement; (d) the Agreement constitutes its legal, valid and binding obligation enforceable against such Party in accordance with its terms, except as may be limited by applicable bankruptcy and other similar laws now or hereafter in effect; (e) there is no litigation, action, proceeding or investigation pending or, to the best of its knowledge, threatened before any court or other Governmental Authority by, against, affecting or involving any of its business or assets that could reasonably be expected to adversely affect its ability to carry out the transactions contemplated herein; (f) its execution and performance of the Agreement and the transactions contemplated hereby do not and will not constitute a breach of any term or provision of, or a default under, (i) any contract, agreement or Governmental Approval to which it or any of its Affiliates is a party or by which it or any of its Affiliates or its or their property is bound, (ii) its organizational documents, or (iii) any Applicable Laws ; and (g) its execution and performance of the Agreement and the transactions contemplated hereby do not and will not require any consent from a third party, including any Governmental Approvals from any Governmental Authority, that are not identified in the Special Conditions. 8.2 Representations of Purchaser. Purchaser represents and warrants to ForeFront Power as of the Effective Date that: (a) Purchaser acknowledges that it has been advised that part of the collateral securing the financial arrangements for the System may be the granting of a first priority perfected security interest (the “Security Interest”) in the System to a Financing Party; (b) To Purchaser’s knowledge, the granting of the Security Interest will not violate any term or condition of any coven ant, restriction, lien, financing agreement, or security agreement affecting the Premises; (c) Purchaser is aware of no existing lease, mortgage, security interest or other interest in or lien upon the Premises that could attach to the System as an interest adverse to ForeFront Power’s Financing Party’s Security Interest therein ; (d) To Purchaser’s knowledge, there exists no event or condition which constitutes a default, or would, with the giving of notice or lapse of time, constitute a default under this Agreement; (e) To Purchaser’s knowledge, Purchaser has identified and disclosed to ForeFront Power in the Special Conditions (i) all Environmental Documents, (ii) all CCRs, Governmental Approvals or other restrictions imposed under Applicable Laws with respect to the use of the Premises that could affect the construction and operation of the System, and (iii) all environmental reports, studies, data or other information relating to the use of the Premises by ForeFront Power within the Purchaser’s possession or control; Packet Pg. 126 Item 9 Page 12 of 25 (f) The Premises is in compliance with Environmental Laws, and that Purchaser holds and is in compliance with all Governmental Approvals required for the ownership and any current operations or activities conducted at the Premises; and (g) Purchaser has identified in the Special Conditions and delivered to ForeFront Power all material reports and information concerning the presence or release of Hazardous Materials on, in or under the Premises. Any Financing Party shall be an intended third-party beneficiary of this Section 8.2. 8.3 EXCLUSION OF WARRANTIES. EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH HEREIN, THE INSTALLATION WORK, SYSTEM OPERATIONS, AND ENERGY SERVICES PROVIDED BY FOREFRONT POWER TO PURCHASER PURSUANT TO THIS AGREEMENT SHALL BE “AS-IS WHERE-IS.” NO OTHER WARRANTY TO PURCHASER OR ANY OTHER PERSON, WHETHER EXPRESS, IMPLIED OR STATUTORY, IS MADE AS TO THE INSTALLATION, DESIGN, DESCRIPTION, QUALITY, MERCHANTABILITY, COMPLETENESS, USEFUL LIFE, FUTURE ECONOMIC VIABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE SYSTEM, THE ENERGY SERVICES OR ANY OTHER SERVICE PROVIDED HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY FOREFRONT POWER. 9. TAXES AND GOVERNMENTAL FEES. 9.1 Purchaser Obligations. Purchaser shall reimburse and pay for any documented taxes, fees or charges imposed or authorized by any Governmental Authority and paid by ForeFront Power due to ForeFront Power’s sale of the Energy Services to Purchaser (other than income taxes imposed upon ForeFront Power). ForeFront Power shall notify Purchaser in writing with a detailed statement of such amounts, which shall be invoiced by ForeFront Power and payable by Purchaser. Purchaser shall timely report, make filings for, and pay any and all sales, use, income, gross receipts or other taxes, and any and all franchise fees or similar fees assessed against it due to its purchase of the Energy Services. This Section 9.1 excludes taxes specified in Section 9.2. 9.2 ForeFront Power Obligations. Subject to Section 9.1 above, ForeFront Power shall be responsible for all income, gross receipts, ad valorem, personal property or real property or other similar taxes and any and all franchise fees or similar fees assessed against it due to its ownership of the System. 10. FORCE MAJEURE. 10.1 Definition. “Force Majeure Event” means any act or event that prevents the affected Party from performing its obligations in accordance with the Agreement, if such act or event is beyond the reason able control, and not the result of the fault or negligence, of the affected Party and such Party had been unable to overcome such act or event with the exercise of due diligence (including the expenditure of reasonable sums). Subject to the foregoing conditions, “Force Majeure Event” shall include without limitation the following acts or events: (i) natural phenomena, such as storms, hurricanes, floods, lightning, volcanic eruptions and earthquakes; (ii) explosions or fires arising from lightning or other causes unrelated to the acts or omissions of the Party seeking to be excused from performance; (iii) acts of war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, terrorist acts, or rebellion; (iv) strikes or labor disputes (except strikes or labor disputes caused solely by employees of ForeFront Power or as a result of such party’s failure to comply with a collective bargaining agreement); (v) action or inaction by a Governmental Authority (unless Purchaser is a Governmental Authority and Purchaser is the Party whose performance is affected by such action nor inaction ). A Force Majeure Event shall not be based on the economic hardship of either Party, or upon the expiration of any lease of the Premises by the Pur chaser from the owner of the Premises. 10.2 Excused Performance. Except as otherwise specifically provided in the Agreement, neither Party shall be considered in breach of the Agreement or liable for any delay or failure to comply with the Agreement (other than the failure to pay amounts due hereunder), if and to the extent that such delay or failure is attributable to the occurrence of a Force Majeure Event; provided, the Party claiming relief under this Article 10 shall as soon as practicable after becoming aware of the circumstances constituting Force Majeure (i) notify the other Party in writing Packet Pg. 127 Item 9 Page 13 of 25 of the existence of the Force Majeure Event, (ii) exercise all reasonable efforts necessary to minimize delay caused by such Force Majeure Event, (iii) notify the other Party in writing of the cessation or termination of said Force Majeure Event and (iv) resume performance of its obligations hereunder as soon as practicable thereafter; provided, Purchaser shall not be excused from making any payments and paying any unpaid amounts due in respect of Energy Services delivered to Purchaser prior to the Force Majeure Event performance interruption. 10.3 Termination in Consequence of Force Majeure Event. If a Force Majeure Event shall have occurred that has affected ForeFront Power’s performance of its obligations hereunder and that has continued for a continuous period of one hundred eighty (180) days, then either Party shall be entitled to terminate the Agreement upon ninety (90) days’ prior written notice to the other Party. If at the end of such ninety (90) day period such Force Majeure Event shall still continue, the Agreement shall automatically terminate. Upon such termination for a Force Majeure Event, neither Party shall have any liability to the other (other than any such liabilities that have accrued prior to such termination). 11. DEFAULT. 11.1 ForeFront Power Defaults and Purchaser Remedies. (a) ForeFront Power Defaults. The following events shall be defaults with respect to ForeFront Power (each, a “ForeFront Power Default”): (i) A Bankruptcy Event shall have occurred with respect to ForeFront Power; (ii) ForeFront Power fails to pay Purchaser any undisputed amount owed under the Agreement within thirty (30) days from receipt of notice from Purchaser of such past due amount; and (iii) ForeFront Power breaches any material representation, covenant or other term of the Agreement and (A) if such breach can be cured within thirty (30) days after Purchaser’s written notice of such breach and ForeFront Power fails to so cure, or (B) ForeFront Power fails to commence and pursue a cure within such thirty (30) day period if a longer cure period is needed. (b) Purchaser’s Remedies. If a ForeFront Power Default described in Section 11.1(a) has occurred and is continuing, in addition to other remedies expressly provided herein, and subject to Article 12, Purchaser may terminate the Agreement and exercise any other remedy it may have at law or equity or under the Agreement. 11.2 Purchaser Defaults and ForeFront Power’s Remedies. (a) Purchaser Default. The following events shall be defaults with respect to Purchaser (each, a “Purchaser Default”): (i) A Bankruptcy Event shall have occurred with respect to Purchaser; (ii) Purchaser breaches any material representation, covenant or other term of the Agreement if (A) such breach can be cured within thirty (30) days after ForeFront Power’s notice of such breach and Purchaser fails to so cure, or (B) Purchaser fails to commence and pursue said cure within such thirty (30) day period if a longer cure period is needed; and (iii) Purchaser fails to pay ForeFront Power any undisputed amount due ForeFront Power under the Agreement within thirty (30) days from receipt of notice from ForeFront Power of such past due amount. (b) ForeFront Power’s Remedies. If a Purchaser Default described in Sections 11.2(a) has occurred and is continuing, in addition to other remedies expressly provided herein, and subject to Article 12, ForeFront Power may terminate this Agreement and upon such termination, (A) ForeFront Power shall be entitled to receive from Purchaser the Early Termination Fee, and (B) ForeFront Power may exercise any other remedy it may have at law or equity or under the Agreement. Packet Pg. 128 Item 9 Page 14 of 25 11.3 Cross Default. With respect to any Systems that are co-located at the same Premises, if a Party defaults under the Agreement related one such System, it shall also be a default of such Party under the Agreement(s) related to the other co-located System(s); provided, a cure of the original default shall be a cure of any such cross default. In the event of a cross default, the non -defaulting Party shall be entitled to exercises its rights with respect to all such Agreements, including terminating all such Agreements (but not less than all such Agreements) and, if ForeFront Power terminates the Agreements due to a Purchaser Default, Purchaser shall pay the Early Termination Fees for all such terminated Agreements. 11.4 Removal of System. Upon any termination of the Agreement pursuant to this Article 11, ForeFront Power will remove the System pursuant to Section 2.4 hereof, absent any purchase of the System by Purchaser pursuant to Section 2.2 hereof. 12. LIMITATIONS OF LIABILITY. 12.1 Except as expressly provided herein, neither Party shall be liable to the oth er Party or its Indemnified Persons for any special, punitive, exemplary, indirect, or consequential damages, losses or damages for lost revenue or lost profits, whether foreseeable or not, arising out of, or in connection with the Agreement. 12.2 A Party’s maximum liability to the other Party under the Agreement, shall be limited to the aggregate Estimated Remaining Payments as of the date of the events giving rise to such liability, provided, the limits of liability under this Section 12.2 shall not apply with respect to (i) indemnity obligations hereunder in respect of personal injury or environmental claims, (ii) any obligation of Purchaser to pay Energy Service Payments, the Early Termination Fee or the Option Price, and (iii) any obligation of ForeFront Power to pay for Lost Savings in accordance with the Special Conditions, if applicable. 13. ASSIGNMENT. 13.1 Assignment by ForeFront Power. ForeFront Power shall not sell, transfer or assign (collectively, an “Assignment”) the Agreement or any interest therein, without the prior written consent of Purchaser, which shall not be unreasonably withheld, conditioned or delayed; provided, Purchaser agrees that ForeFront Power may assign this Agreement without the consent of the Purchaser to an affiliate of ForeFront Power or any party providing financing for the System. In the event that ForeFront Power identifies a secured Financing Party in the Special Conditions, or in a subsequent notice to Purchaser, then Purchaser shall comply with the provisions set forth in Exhibit B of these General Terms and Conditions and agrees to provide such estoppels and acknowledgments as ForeFront Power may reasonably request from time to time. Any Financing Party shall be an intended third-party beneficiary of this Section 13.1. Any Assignment by ForeFront Power without obtaining the prior written consent and release of Purchaser , when such consent is required by this Section 13.1, shall not release ForeFront Power of its obligations hereunder. 13.2 Acknowledgment of Collateral Assignment. In the event that ForeFront Power identifies a secured Financing Party in the Special Conditions, or in a subsequent notice to Purchaser, then Purchaser hereby acknowledges: (a) The collateral assignment by ForeFront Power to the Financing Party, of ForeFront Power’s right, title and interest in, to and under the Agreement, as consented to under Section 13.1 of the Agreement. (b) That the Financing Party as such collateral assignee shall be entitled to exercise any and all rights of lenders generally with respect to ForeFront Power’s interests in this Agreement. (c) That it has been advised that ForeFront Power has granted a first priority perfected security interest in the System to the Financing Party and that the Financing Party has relied upon the characterization of the System as personal property, as agreed in this Agreement in accepting such security interest as collateral for its financing of the System. Any Financing Party shall be an intended third- party beneficiary of this Section 13.2. Packet Pg. 129 Item 9 Page 15 of 25 13.3 Assignment by Purchaser. Purchaser shall not assign the Agreement or any interest therein, without ForeFront Power ’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any Assignment by Purchaser without the prior written consent of ForeFront Power shall not release Purchaser of its obligations hereunder. 14. NOTICES. 14.1 Notice Addresses. Unless otherwise provided in the Agreement, all notices and communications concerning the Agreement shall be in writing and addressed to the other Party (or Financing Party, as the case may be) at the addresses set forth in the Special Conditions, or at such other address as may be designated in writing to the other Party from time to time. 14.2 Notice. Unless otherwise provided herein, any notice provided for in the Agreement shall be hand delivered, sent by registered or certified U.S. Mail, postage prepaid, or by commercial overnight delivery service, and shall be deemed delivered to the addressee or its office when received at the address for notice specified above when hand delivered, upon confirmation of sending when sent by facsimile (if sent during normal business hours or the next Business Day if sent at any other time), on the Business Day after being sent when sent by overnight delivery service (Saturdays, Sundays and legal holidays excluded), or five (5) Business Days after deposit in the mail when sent by U.S. mail. 14.3 Address for Invoices. All invoices under the Agreement shall be sent to the address provided by Purchaser . Invoices shall be sent by regular first class mail postage prepaid. 15. CONFIDENTIALITY. 15.1 Confidentiality Obligation . If either Party provides confidential information, including business plans, strategies, financial information, proprietary, patented, licensed, copyrighted or trademarked information, and/or technical information regarding the financing, design, operation and maintenance of the System or of Purchaser ’s business (“Confidential Information”) to the other or, if in the course of performing under the Agreement or negotiating the Agreement a Party learns Confidential Information regarding the facilities or plans of the other, the receiving Party shall (a) protect the Confidential Information from disclosure to third parties with the same degree of care accorded its own confidential and proprietary information, and (b) refrain from using such Confidential Information, except in the negotiation and performance of the Agreement. Notwithstanding the above, a Party may provide such Confidential Information to its officers, directors, members, managers, employees, agents, contractors , consultants, Affiliates, lenders (existing or potential), investors (existing or potential) and potential third-party assignees of the Agreement or third-party acquirers of ForeFront Power or its Affiliates (provided and on condition that such potential third-party assignees be bound by a written agreement restricting use and disclosure of Confidential Information) (collectively, “Representatives”), in each case whose access is reasonably necessary. Each such recipient of Confidential Information shall be informed by the Party disclosing Confidential Information of its confidential nature and shall be directed to treat such information confidentially and shall agree to abide by these provisions. In any event, each Party shall be liable (with respect to the other Party) f or any breach of this provision by any entity to whom that Party improperly discloses Confidential Information. The terms of the Agreement (but not its execution or existence) shall be considered Confidential Information for purposes of this Article, except as set forth in Section 15.3. All Confidential Information shall remain the property of the disclosing Party and shall be returned to the disclosing Party or destroyed after the receiving Party’s need for it has expired or upon the request of the discl osing Party. 15.2 Permitted Disclosures. Notwithstanding any other provision herein, neither Party shall be required to hold confidential any information that: (a) Becomes publicly available other than through the receiving Party; (b) Is required to be disclosed by a Governmental Authority, under Applicable Law or pursuant to a validly issued subpoena or required filing, but a receiving Party subject to any such requirement shall promptly notify the disclosing Party of such requirement; Packet Pg. 130 Item 9 Page 16 of 25 (c) Is independently developed by the receiving Party; or (d) Becomes available to the receiving Party without restriction from a third party under no obligation of confidentiality. 15.3 Goodwill and Publicity. Neither Party shall use the name, trade name, service mark, or trademark of the other Party in any promotional or advertising material without the prior written consent of such other Party. The Parties shall coordinate and cooperate with each other when making public announcements related to the execution and existence of the Agreement, and each Party shall have the right to promptly review, comment upon, and approve any publicity materials, press releases, or other public statements by the other Party that refer to, or that describe any aspect of, the Agreement; provided, no such publicity releases or other public statements (except for filings or other statements or releases as may be required by Applicable Law) shall be made by either Party without the prior written consent of the other Party. At no time will either Party acquire any rights whatsoever to any trademark, trade name, service mark, logo or other intellectual property right belonging to the other Party. Notwithstanding the foregoing, Purchaser agrees that ForeFront Power may, at its sole discretion, take photographs of the installation process of the System and/or the completed System, and ForeFront Power shall be permitted to use such images (regardless of media) in its marketing efforts, including but not limited to use in brochures, advertisements, websites and news outlet or press release articles. The images shall not include any identifying information without Purchaser permission and the installation site shall not be disclosed beyond th e type of establishment (such as “Retail Store,” “Distribution Center,” or such other general terms), the city and state. 15.4 Enforcement of Confidentiality Obligation. Each Party agrees that the disclosing Party would be irreparably injured by a breach of this Article 15 by the receiving Party or its Representatives or other Person to whom the receiving Party discloses Confidential Information of the disclosing Party and that the disclosing Party may be entitled to equitable relief, including injunctive relief and specific performance, in the event of any breach of the provisions of this Article 15. To the fullest extent permitted by Applicable Law, such remedies shall not be deemed to be the exclusive remedies for a breach of this Article 15, but shall be in addition to all other remedies available at law or in equity. 16. INDEMNITY. 16.1 Indemnity. Subject to Article 12, each Party agrees that it shall indemnify and hold harmless the other Party, its permitted successors and assigns and their respective directors, officers, members, shareholders and employees (collectively, the “Indemnified Parties”) from and against any and all Losses incurred by such Indemnified Parties to the extent arising from or out of any injury to or death of any Person or loss or d amage to property of any Person to the extent arising out of the indemnifying Party’s negligence or willful misconduct; provided, neither Party shall be required to reimburse or indemnify any Indemnified Party for any Loss to the extent such Loss is due to the negligence or willful misconduct of any Indemnified Party. 17. INSURANCE. 17.1 Generally. Purchaser and ForeFront Power shall each maintain the following insurance coverages in full force and effect throughout the Term either through insurance policies or acceptable self-insured retentions: (a) Workers’ Compensation Insurance as may be from time to time required under appl icable federal and state law, (b) Commercial General Liability Insurance with limits of not less than $2,000,000 general aggregate, $1,000,000 per occurrence, and (c) automobile insurance with commercially reasonable coverages and limits. Additionally, ForeFront Power shall carry adequate property loss insurance on the System which need not be covered by Purchaser’s property coverage. The amount and terms of insurance coverage will be determined at ForeFront Power’s sole discretion. 17.2 Certificates of Insurance. Each Party, upon request, shall furnish current certificates evidencing that the insurance required under Section 17.1 is being maintained. Each Party’s insurance policy provided hereunder shall contain a provision whereby the insured agrees t o give the other Party thirty (30) days’ written notice before the insurance is cancelled or materially altered. Packet Pg. 131 Item 9 Page 17 of 25 17.3 Additional Insureds. Each Party’s insurance policy shall be written on an occurrence basis and shall include the other Party as an additional insured as its interest may appear. 17.4 Insurer Qualifications. All insurance maintained hereunder shall be maintained with companies either rated no less than A- as to Policy Holder’s Rating in the current edition of Best’s Insurance Guide (or with an association of companies each of the members of which are so rated) or having a parent company’s debt to policyholder surplus ratio of 1:1. 18. MISCELLANEOUS. 18.1 Integration; Exhibits. The Agreement, together with the Exhibits and Schedules attached thereto or incorporated by reference, constitute the entire agreement and understanding between ForeFront Power and Purchaser with respect to the subject matter thereof and supersedes all prior agreements relating to the subject matter hereof which are of no further force or effect. The Exhibits and Schedules attached to the Agreement, including these General Conditions as incorporated by reference, are integral parts of the Agreement and are an express part of the Agreement. In the event of a conflict between the provisions of these General Conditions and any applicable Special Conditions, the provisions of the Special Conditions shall prevail. 18.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of ForeFront Power and Purchaser. 18.3 Industry Standards. Except as otherwise set forth herein, for the purpose of the Agreement the normal standards of performance within the Energy Services industry in the relevant market shall be the measure of whether a Party’s performance is reasonable and timely. Unless expressly defined herein, words having well -known technical or trade meanings shall be so construed. 18.4 Cumulative Remedies. Except as set forth to the contrar y herein, any right or remedy of ForeFront Power or Purchaser shall be cumulative and without prejudice to any other right or remedy, whether contained herein or not. 18.5 Sovereign Immunity. To the extent permitted by Applicable Law, Purchaser hereby waives any defense of sovereign immunity that Purchaser might otherwise have in connection with any action taken by ForeFront Power to enforce its rights against Purchaser under this Agreement. 18.6 Limited Effect of Waiver . The failure of ForeFront Power or Purchaser to enforce any of the provisions of the Agreement, or the waiver thereof, shall not be construed as a general waiver or relinquishment on its part of any such provision, in any other instance or of any other provision in any instance. 18.7 Survival. The obligations under Section 2.4 (Removal of System), Section 7.1 (ForeFront Power Covenants), Sections 7.2(d), (e), (f), (g) and (j) (Purchaser Covenants), Section 8.3 (Exclusion of Warranties), Article 9 (Taxes and Governmental Fees), Article 12 (Limitation of Liability), Article 14 (Notices), Article 15 (Confidentiality), Article 18 (Miscellaneous), all payment or indemnification obligations accrued prior to termination of this Agreement, or pursuant to other provisions of this Agreement that, by their sense and context, are intended to survive termination of this Agreement shall survive the expiration or termination of this Agreement for any reason. 18.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to any choice of law principles. The Parties agree that the courts of the State of California and the Federal Courts sitting therein shall have jurisdiction over any action or proceeding arising under the Agreement to the fullest extent permitted by Applicable Law. The Parties waive to the fullest extent permitted by Applicable Law any objection it may have to the laying of venue of any action or proceeding under this Agreement any courts described in this Section 18.8. 18.9 Severability. If any term, covenant or condition in the Agreement shall, to any extent, be invalid or unenforceable in any respect under Applicable Law, the remainder of the Agreement shall not be affected thereby, and each term, covenant or condition of the Agreement shall be valid and enforceable to the fullest extent permitted Packet Pg. 132 Item 9 Page 18 of 25 by Applicable Law and, if appropriate, such invalid or unen forceable provision shall be modified or replaced to give effect to the underlying intent of the Parties and to the intended economic benefits of the Parties. 18.10 Relation of the Parties. The relationship between ForeFront Power and Purchaser shall not be that of partners, agents, or joint ventures for one another, and nothing contained in the Agreement shall be deemed to constitute a partnership or agency agreement between them for any purposes, including federal income tax purposes. ForeFront Power an d Purchaser, in performing any of their obligations hereunder, shall be independent contractors or independent parties and shall discharge their contractual obligations at their own risk. 18.11 Successors and Assigns. This Agreement and the rights and obligations under the Agreement shall be binding upon and shall inure to the benefit of ForeFront Power and Purchaser and their respective successors and permitted assigns. 18.12 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument. 18.13 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and facsimile or electronic, “pdf” delivery of the signature page of a counterpart to the other Party. 18.14 Liquidated Damages Not Penalty. Purchaser acknowledges that the Early Termination Fee constitutes liquidated damages, and not penalties, in lieu of ForeFront Power’s actual damages resulting from the early termination of the Agreement. Purchaser further acknowledges that ForeFront Power’s actual damages may be impractical and difficult to accurately ascertain, and in accordance with Purchaser’s rights and obligations under the Agreement, the Early Termination Fee constitutes fair and reasonable damages to be borne by Purchaser in lieu of ForeFront Power ’s actual damages. [Remainder of page intentionally left blank.] Packet Pg. 133 Item 9 Page 19 of 25 These General Terms and Conditions are witnessed and acknowledged by ForeFront Power and Purchaser below. Neither ForeFront Power nor Purchaser shall have any obligations or liability resulting from its witnessing and acknowledging these General Terms and Conditions. “FOREFRONT POWER”: FFP BTM, LLC By: _________________________________________ Name: _______________________________________ Title: ________________________________________ Date: ________________________________________ “PURCHASER”: [INSERT LEGAL NAME] By: _________________________________________ Name: _______________________________________ Title: ________________________________________ Date: ________________________________________ Packet Pg. 134 Item 9 Page 20 of 25 Exhibit A of General Conditions [PURCHASER’S LETTERHEAD] [Landlord’s Address] Attn: Authorized Representative Re: Proposed Energy System Installation at [Address of Premises] Lease dated [ ] between [PURCHASER] and [LANDLORD] (the “Lease”) Dear Authorized Representative: As has been discussed with you, [PURCHASER] (“Purchaser”) and [Forefront Power], LLC and an affiliate of Forefront Power, LLC (“ForeFront Power”) have entered into an Energy Services Agreement, pursuant to which ForeFront Power will install, finance, operate, and maintain a [solar photovoltaic] [battery storage] system at the above-referenced premises which [PURCHASER] leases from you pursuant to the Lease. By signing below and returning this letter to us, you confirm that: 1. The [solar photovoltaic] [battery storage] system and the renewable energy (including environmental credits and related attributes) produced by the system are personal property, and shall not be considered the property (personal or otherwise) of [LANDLORD] upon installation of the system at the premises. Landlord consents to the filing by ForeFront Power of a disclaimer of the System as a fixture of the Premises in the office where real estate records are customarily filed in the jurisdiction of the Premises. 2. ForeFront Power or its designee (including finance ForeFront Powers) shall have the right without cost to access the premises in order to install, operate, inspect, maintain, and remove the [solar photovoltaic] [battery storage] system. [LANDLORD] will not charge Purchaser or ForeFront Power any rent for such right to access the premises. 3. [LANDLORD] has been advised that the finance ForeFront Powers for the [solar photovoltaic] [battery storage] system have a first priority perfected security interest in the system. ForeFront Power and the finance ForeFront Powers for the [solar photovoltaic] [battery storage] system (including any system lessor or other lender) are intended beneficiaries of [LANDLORD]’s agreements in this letter. 4. [LANDLORD] will not take any action inconsistent with the foregoing. We thank you for your consideration of this opportunity and we look forward to working with you in our environmental campaign to increase the utilization of clean, renewal energy resources. Very truly yours, [PURCHASER] Packet Pg. 135 Item 9 Page 21 of 25 By:______________________________ Name: Title: Authorized Representative Acknowledged and agreed by: [LANDLORD] By: ________________________ Name: Title: Authorized Representative Packet Pg. 136 Item 9 Page 22 of 25 Exhibit B of General Conditions Certain Agreements for the Benefit of the Financing Parties Purchaser acknowledges that ForeFront Power will be receiving financing accommodations from one or more Financing Parties and that ForeFront Power may sell or assign the System or this Agreement and/or may secure ForeFront Power ’s obligations by, among other collateral, a pledge or collateral assignment of this Agreement and a first security interest in the System. In order to facilitate such necessary sale, conveyance, or financing, and with respect to any such Financing Party, Purchaser agrees as follows: (a) Consent to Collateral Assignment. Purchaser consents to either the assignment, sale or conveyance to a Financing Party or the collateral assignment by ForeFront Power to a Financing Party, of ForeFront Power’s right, title and interest in and to this Agreement. (b) Notices of Default. Purchaser will deliver to the Financing Party, concurrently with delivery thereof to ForeFront Power , a copy of each notice of default given by Purchaser under the Agreement, inclusive of a reasonable description of ForeFront Power default. No such notice will be effective absent delivery to the Financing Party. Purchaser will not mutually agree with ForeFront Power to cancel, modify or terminate the Agreement without the written consent of the Financing Party. (c) Rights Upon Event of Default. Notwithstanding any contrary term of this Agreement: i. The Financing Party, shall be entitled to exercise, in the place and stead of ForeFront Power, any and all rights and remedies of ForeFront Power under this Agreement in accordance with the terms of this Agreement and only in the event of ForeFront Power’s or Purchaser’s default. The Financing Party shall also be entitled to exercise all rights and remedies of secured parties generally with respect to this Agreement and the System . ii. The Financing Party shall have the right, but not the obligation, to pay all sums due under this Agreement and to perform any other act, duty or obligation required of ForeFront Power thereunder or cause to be cured any default of ForeFront Power thereunder in the time and manner provided by the terms of this Agreement. Nothing herein requires the Financing Party to cure any default of ForeFront Power under this Agreement or (unless the Financing Party has succeeded to ForeFront Power’s interests under this Agreement) to perform any act, duty or obligation of ForeFront Power under this Agreement, but Purchaser hereby gives it the option to do so. iii. Upon the exercise of remedies under its security interest in the System, including any sale thereof by the Financing Party, whether by judicial proceeding or under any power of sale contained therein, or any conveyance from ForeFront Power to the Financing Party (or any assignee of the Financing Party) in lieu thereof, the Financing Party shall give notice to Purchaser of the transferee or assignee of this Agreement. Any such exercise of remedies shall not constitute a default under this Agreement. iv. Upon any default not reasonably susceptible to cure by a Finance Party, including, without limitation, rejection or other termination of this Agreement pursuant to any process undertaken with respect to ForeFront Power under the United States Bankruptcy Code, at th e request of the Financing Party made within ninety (90) days of such default, Purchaser shall enter into a new agreement with the Financing Party or its designee having the same terms and conditions as this Agreement. (d) Right to Cure. Packet Pg. 137 Item 9 Page 23 of 25 i. Purchaser will not exercise any right to terminate or suspend this Agreement unless it shall have given the Financing Party prior written notice by sending notice to the Financing Party (at the address provided by ForeFront Power ) of its intent to terminate or suspend this Agreement, specifying the condition giving rise to such right, and the Financing Party shall not have caused to be cured the condition giving rise to the right of termination or suspension within thirty (30) days after such notice or (if longer) the periods provided for in this Agreement. The Parties agree that the cure rights described herein are in addition to and apply and commence following the expiration of any notice and cure period applicable to ForeFront Power The Parties respective obligations will otherwise remain in effect during any cure period; provided, if such ForeFront Power default reasonably cannot be cured by the Financing Party within such period and the Financing Party commences and continuously pursues cure of such default within such period, such period for cure will be extended for a reasonable period of time under the circumstances, such period not to exceed additional ninety (90) days. ii. If the Financing Party (including any purchaser or transferee), pursuant to an exercise of remedies by the Financing Party, shall acquire title to or control of ForeFront Power’s assets and shall, within the time periods described in Sub-section (c)(i). above, cure all defaults under this Agreement existing as of the date of such change in title or control in the manner required by this Agreement and which are capable of cure by a third person or entity, then such person or entity shall no longer be in default under this Agreement, and this Agreement shall continue in full force and effect Packet Pg. 138 Item 9 Page 24 of 25 Exhibit C of General Conditions Requirements Applicable To The Installation Work Section B.1 Prohibition Against Use of Tobacco. All properties and facilities owned, leased or operated by the Purchaser are tobacco-free work places. No person on, at or in any Purchaser -controlled property or facility, including, without limitation, the Premises, may smoke, chew or otherwise use toba cco products. ForeFront Power shall be responsible for: (i) informing any and all persons present on or at the Premises on account of the Installation Work about the Purchaser’s tobacco-free policy; and (ii) strictly enforcing such policy with respect to the Premises. The Purchaser, ForeFront Power, and each Subcontractor shall require that any person present on or at the Premises on account of the Installation Work who violates such policy must permanently leave the Premises, and shall prohibit such person from thereafter being present or performing any of the Installation Work on or at the Premises. Section B.2 Prohibition Against Use of Drugs. (a) Purchaser Drug-Free Policy. All properties and facilities owned, leased or operated by the Purchaser are drug-free work places. No person on, at or in any Purchaser -controlled property or facility, including, without limitation, the Premises, may: (i) engage in the unlawful manufacture, dispensation, possession or use, including being under the influence, of any controlled substance, (ii) possess or use any alcoholic beverage, or (iii) use any substance which may cause significant impairment of normal abilities. ForeFront Power shall be responsible for: (i) informing any and all persons present on or at the Premises on account of the Installation Work about the Purchaser’s drug-free policy; and (ii) strictly enforcing such policy with respect to the Premises. The Purchaser, ForeFront Power, and each Subcontractor shall require that any person present on or at the Premises on account of the Installation Work who violates such policy must permanently leave the Premises, and shall prohibit such person from thereafter being present or performing any of the Installation Work on or at the Premises. (b) Drug-Free Workplace Certification. ForeFront Power is hereby made subject to the requirements of Government Code Sections 8350 et seq., the Drug-Free Workplace Act of 1990. Section B.3 Compliance with Labor Requirements. The Installation Work is a “public works” project as defined in Section 1720 of the California Labor Code (“Labor Code”) and made applicable pursuant to Section 1720.6 of the Labor Code. Therefore, the Installation Work is subject to applicable provisions of Part 7, Chapter 1, of the Labor Code and Title 8 of the California Code of Regulations, Section 16000 et seq. (collectively, “Labor Law”). ForeFront Power acknowledges that, as provided by Senate Bill 854 (Stats. 2014, Ch. 28), the Project is subject to labor compliance monitoring and enforcement by the California Department of Industrial Relations (“DIR”). Section B.4 Compliance with Labor Code Requirements. ForeFront Power must be, and shall be deemed and construed to be, aware of and understand the requirements of the Labor Law that require the payment of prevailing wage rates and the performance of other requirements on public works projects. ForeFront Power, at no additional cost to the Purchaser, must: (i) comply with any and all applicable Labor Law requirements, including, without limitation, requirements for payment of prevailing wage rates, inspection and submittal (electronically, as required) of payroll records, interview(s) of workers, et cetera; (ii) ensure that its Subcontractors are aware of and comply with the Labor Law requirements; (iii) in connection with Labor Law compliance matters, cooperate with the DIR, the Purchaser and other entities with competent jurisdiction; and (iv) post all job-site notices required by law in connection with the Installation Work, including, with out limitation, postings required by DIR regulations. A Subcontractor that has been debarred in accordance with the Labor Code, including, without limitation, pursuant to Sections 1777.1 or 1777.7, is not eligible to bid on, perform, or contract to perform any portion of the Installation Work. Wage rates for the Installation Work shall be in accordance with the general prevailing rates of per -diem wages determined by the Director of Industrial Relations pursuant to Labor Code Section 1770. The following Labor Code sections are by this reference incorporated into and are a fully operative part of the Contract, and ForeFront Power shall be responsible for compliance therewith: Packet Pg. 139 Item 9 Page 25 of 25 (a) Section 1735: Anti-Discrimination Requirements; (b) Section 1775: Penalty for Prevailing Wage Rate Violations; (c) Section 1776: Payroll Records; (d) Sections 1777.5,1777.6 and 1777.7: Apprenticeship Requirements; (e) Sections 1810 through 1812: Working Hour Restrictions; (f) Sections 1813 and 1814: Penalty for Failure to Pay Overtime; and (g) Section 1815: Overtime Pay. Section B.5 Requirements for Payroll Records. ForeFront Power must comply with all applicable provisions of Labor Code Sections 1776 and 1812, which relate to preparing and maintaining accurate payroll records, and making such payroll records available for review and copying by the Purchaser, the DIR Division of Labor Standards Enforcement, and the DIR Division of Apprenticeship Standards. The payroll records must be certified and made available as required by Labor Code Section 1776. Section B.6 Contractor Registration . On and after March 1, 2015, no contractor may bid on a public works project unless the contractor is, and no subcontractor may be listed in any bid for a public works project unless the subcontractor is, currently registered with the DIR and qualified to perform public work pursuant to Labor Code Section 1725.5. On and after April 1, 2015, no contractor or subcontractor may be awarded a contract for work on a public works project, or may perform any work on a public works project, unless the contractor or subcontractor is currently registered with the DIR and qualified to perform public work pursuant to Labor Code Section 1725.5. It is not a violation of Labor Code Section 1725.5 for an unregistered contractor to submi t a bid authorized by Business and Professions Code Section 7029.1 or Public Contract Code Section 20103.5, if the contractor is registered at the time the contract is awarded. Section B.7 Permits and Licenses. Without limiting anything set forth in Section B.7 of this Exhibit C, ForeFront Power, its Subcontractors, and all of their respective employees and agents: (i) shall secure and maintain in force at all times during the performance of the Installation Work such licenses and permits as are required by law; and (ii) shall comply with all federal and State, and County laws and regulations, and other governmental requirements applicable to the System or the Installation Work. ForeFront Power or its subcontractors shall obtain and pay for all permits and licenses required for the performance of, or necessary in connection with, the Installation Work, and shall give all necessary notices and deliver all necessary certificates to the Purchaser, and shall pay all royalties and license fees arising from the use of any material, machine, method or process used in performing the Installation Work. ForeFront Power shall be solely responsible for all charges, assessments and fees payable in connection with any such licenses, permits, materials, machines, methods, and processes. Section B.8 Protection of Minor-Aged Students. ForeFront Power, in conformance with Education Code Section 45125.1, shall require and be responsible for ensuring compliance by each and every person who will be on or at the Premises in connection with the construction, maintenance, operation or other purposes related to the System with all California Department of Justice guidelines and requirements relating to fingerprinting and criminal -history background checks, regardless of whether Section 45125.1 otherwise by its terms would apply to any such activities. In the event Education Code Section 45125.1 is repealed or superseded, ForeFront Power, following receipt of written notice from the Purchaser, shall comply with such successor or other requirements as determined by the Purchaser in its reasonable discretion. The Purchaser, in its discretion, may exempt in writing any person(s) from the foregoing requirements if ForeFront Power makes alternative arrangements for supervision of such person(s) that are acceptable to the Purchaser in its sole discretion. Packet Pg. 140 Item 9 CONFIDENTIAL AND PROPRIETARY ENERGY SERVICES AGREEMENT – SOLAR This Energy Services Agreement (“Agreement”) is made and entered into as of this ____ day of ___________, 201__ (or, if later, the latest date of a Party’s execution and delivery to the other Party of this Agreement , the “Effective Date”), between FFP BTM, LLC, a Delaware limited liability company] (“ForeFront Power”), and [INSERT LEGAL NAME, ENTITY TYPE AND STATE OF FORMATION] (“Purchaser”; and, together with ForeFront Power, each, a “Party” and together, the “Parties”). RECITALS A. Purchaser desires that ForeFront Power install and operate a solar photovoltaic system at the Premises (as hereafter defined) for the purpose of providing Energy Services (as hereafter defined), and ForeFront Power is willing to do the same; B. ForeFront Power and Purchaser acknowledged those certain General Terms and Conditions of Energy Services Agreement between Forefront Power, LLC and Purchaser dated as of ____________, 201__ (“General Conditions”), which are incorporated by reference as set forth herein; and C. The terms and conditions of this Energy Services Agreement, excluding the General Conditions incorporated herein, constitute the “Special Conditions” referred to in the General Conditions. In consideration of the mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. Incorporation of General Conditions. The General Conditions are incorporated herein as if set forth in their entirety. 2. Initial Term. The Initial Term of the Agreement shall commence on the Effective Date and shall continue for Twenty (20) years from the Commercial Operation Date (as defined in the General Conditions), unless and until extended or terminated earlier pursuant to th e provisions of the Agreement. After the Initial Term, the Agreement may be renewed for an additional five (5) year term (a “Renewal Term”). At lea st one hundred and eighty (180) days, but no more than three hundred and sixty five (365) days, prior to the expiration of the Initial Term, ForeFront Power shall give written notice to Purchaser of the availability of the Renewal Term. Purchaser shall have sixty (60) days to agree to continuation of the Agreement for the Renewal Term. Absent agreement to the Renewal Term this Agreement shall expire on the Expiration Date. The Initial Term and the subsequent Renewal Term, if any, are referred to collectively as the “Term”. {FP Note: If System is paired with an energy storage System, ensure alignment of commencement of Term in the Energy Storage Special Conditions.} 3. Schedules. The following Schedules hereto are hereby incorporated into this Agreement: Schedule 1 Description of the Premises, System and Scope of Work Schedule 2 Energy Services Payment Schedule 3 Early Termination Fee Schedule 4 Estimated Annual Production Schedule 5 Notice Information Schedule 6 Site-Specific Information and Requirements 4. Privacy. Purchaser acknowledges that the System may collect certain information about Purchaser’s electricity usage and the System performance. Such information may be stored and processed in the United Packet Pg. 141 Item 9 CONFIDENTIAL AND PROPRIETARY 2 States or any other country in which ForeFront Power or its third-party service ForeFront Powers, or its or their respective affiliates, subsidiaries, or service ForeFront Powers, maintain facilities. Purchaser consents to any such transfer of information outside of Purchaser’s country. 5. Milestone Dates. 5.1 The Construction Start Date is 210 days from Effective Date. 5.2 The Guaranteed Commercial Operation Date is 180 days from Construction Start Date. 6. Purchase Requirement; Energy Services Payment. Purchaser agrees to purchase one hundred percent (100%) of the Energy Services generated by the System and made available by ForeFront Power to Purchaser during each relevant month of the Term, up to a maximum of one hundred and ten percent (110%) of Estimated Annual Production, as defined in Schedule 4. While the Energy Services are calculated and billed on a per kWh basis as set forth in Schedule 2 of these Special Conditions, they represent a package of services and benefits. 7. Estimated Annual Production. The annual estimate of electricity generated by the system for each year of the initial term is set as forth in Schedule 4 of the Special Conditions (“Estimated Annual Production”). Within 60 days of each annual anniversary of the Commercial Operation Date, ForeFront Power will provide a statement to Purchaser that shows the actual annual kWh production from the System for the Term Year, the Estimated Annual Production, and the Minimum Guaranteed Output (defined below). 8. Minimum Guaranteed Output. If the System fails to generate at least ninety-five percent (95%) of the Estimated Annual Production for a full Term Year (such amount, the “Minimum Guaranteed Output”), other than as a result of the acts or omissions of Purchaser or the Local Electric Utility (including a Disruption Period), or an Event of Force Majeure, ForeFront Power shall credit Purchaser an amount equal to Purchaser’s Lost Savings on the next invoice or invoices during the following Term Year. The formula for calculating Lost Savings for the applicable Term Year is as follows: Lost Savings = (MGO*WPR - AE) x RV MGO = Minimum Guaranteed Output, as measured in total kWh, for the System for the applicable Term Year. WPR = Weather Performance Ratio, measured as the ratio of the actual insolation over typical (pro- forma) insolation. Such Weather Performance Ratio shall only apply if the ratio is less than 1.00. AE = Actual Electricity, as measured in total kWh, delivered by the System for the Term Year plus the estimated lost energy production during a Disruption Period. RV = (ATP - kWh Rate) ATP = Average tariff price, measured in $/kWh, for the Term Year paid by Purchaser with respect to the Premises. This price is determined by dividing the total cost for delivered electricity, including all charges associated with such electricity howsoever named, including, without limitation, charges for distribution, transmission, demand, and systems benefits, paid to the Local Electric Utility during the applicable Term Year by the total amount of delivered electricity by the electric utility during such Term Year. kWh Rate = the kWh Rate in effect for the applicable Term Year(s), measured in $/kWh. If the RV is zero or less, then no Lost Savings paymen t is due to Purchaser. Any Lost Savings payment shall occur no later than sixty (60) days after the end of the Term Year during which such Lost Savings occurred. Packet Pg. 142 Item 9 CONFIDENTIAL AND PROPRIETARY 3 9. Allowed Disruption Time. Notwithstanding the provisions in Section 4.3 of the General Conditions to the contrary, during years 4 through 20 (but not years 1 through 3) of the Term, Purchaser shall be afforded a one-time allocation of fifteen (15) days which may be used consecutively or in separate periods of at least twenty-four (24) hours each (“Allowed Disruption Time”) during which the System shall be rendered non - operational. Purchaser shall not be obligated to make payments to Provider for electricity not received during the Allowed Disruption Time, nor shall Purchaser be required to reimburse Provider for any other lost revenue during the Allowed Disruption Time, including any lost revenue associated with any reduced sales of Environmental Attributes, and Provider shall be credited for the estimated lost production the System would have produced during such Allowed Disruption Time toward satisfaction of its Minimum Guaranteed Output, as set forth in Section 8 of the Special Conditions, such estimated lost production to be calculated in the same manner as set forth in Section 4.3 of the General Conditions. 10. Sunlight Easements. Purchaser will take all reasonable actions as necessary to prevent other buildings, structures or flora from overshadowing or otherwise blocking access of sunlight to the System. 11. Use of System. Purchaser will not use electrical energy generated by the System for the purposes of heating a swimming pool within the meaning of Section 48 of the Internal Revenue Code. IN WITNESS WHEREOF and in confirmation of their consent to the terms and conditions contained in this Agreement and intending to be legally bound hereby, ForeFront Power and Purchaser have executed this Agreement as of the Effective Date. “PURCHASER”: FFP BTM LLC By: Name: Title: Date: “FOREFRONT POWER”: [INSERT PURCHASER LEGAL NAME] By: Name: Title: Date: Packet Pg. 143 Item 9 CONFIDENTIAL AND PROPRIETARY 4 SCHEDULES I. Schedule 1 – Description of the Premises, System and Subsidy A. Premises [Physical Address: _______________________] [APN Number: _____________] Site diagram attached:  Yes No B. Description of Solar System [Grid-interconnected or any other general descriptors] Solar System Size: [ ] kW (DC) (this is an estimate (and not a guarantee) of the System size; ForeFront Power may update the System Size prior to the Commercial Operation Date.) C. Anticipated Subsidy or Rebate [$ ] II. Schedule 2 – Energy Services Payment Purchaser shall pay to ForeFront Power a monthly payment (the “Energy Services Payment”) for the Energy Services provided by the System during each calendar month of the Term equal to the product of (x) Actual Monthly Production for the System for the relevant month multiplied by (y) the kWh Rate. The “Actual Monthly Production” means the amount of energy recorded by ForeFront Power’s metering equipment during each calendar month of the Term. The kWh Rate with respect to the System under the Agreement shall be in accordance with the following schedule: Term Year kWh Rate[*] ($/kWh) Term Year $/kWh Rate[*] ($/kWh) 1 11 2 12 3 13 4 14 5 15 6 16 7 17 8 18 9 19 10 20 [*Calculated based on the year 1 kWh Rate multiplied by [X%] inflation factor each year.] Packet Pg. 144 Item 9 CONFIDENTIAL AND PROPRIETARY 5 If distribution upgrades are required by the Local Electric Utility, within 30 days of receipt of notice from the Local Electric Utility of the distribution upgrade costs, Purchaser will provide written notice to Provider of Purchaser’s election of one of the following options: 1. For every [$] per watt DC of such distribution upgrade costs, the kWh rate in Table 1 will increase [$] per kWh, with a maximum kWh rate increase of [$] per kWh. 2. Purchaser will pay the entire amount of such distribution upgrade costs, and the kWh rate as stated in Table 1 will remain unchanged. Purchaser shall make payments directly to the Local Electric Utility in accordance with the requirements of the Local Electric Utility. III. Schedule 3 – Early Termination Fee The Early Termination Fee with respect to the System under the Agreement shall be calculated in accordance with the following: Early Termination Occurs in Year: Column 1 Early Termination Fee where Purchaser does not take Title to the System ($/Wdc including costs of removal) Purchase Date Occurs on the 91st day following: (Each “Anniversary” below shall refer to the anniversary of the Commercial Operation Date) Column 2 Early Termination Fee where Purchaser takes Title to the System ($/Wdc, does not include costs of removal) 1* -- 2 -- 3 -- 4 -- 5 -- 6 5th Anniversary 7 6th Anniversary 8 7th Anniversary 9 8th Anniversary 10 9th Anniversary 11 10th Anniversary 12 11th Anniversary 13 12th Anniversary 14 13th Anniversary 15 14th Anniversary 16 15th Anniversary 17 16th Anniversary 18 17th Anniversary 19 18th Anniversary 20 19th Anniversary At Expiration (the end of the Initial Term), the amount in Column 1 shall be deemed to be zero (0). *Includes Early Termination prior to the Commercial Operation Date. Packet Pg. 145 Item 9 CONFIDENTIAL AND PROPRIETARY 6 IV. Schedule 4 – Estimated Annual Production Estimated Annual Production commencing on the Commercial Operation Date with respect to System under the Agreement shall be as follows: Term Year Estimated Production (kWh) Term Year Estimated Production (kWh) 1 11 2 12 3 13 4 14 5 15 6 16 7 17 8 18 9 19 10 20 The values set forth in the table above are estimates (and not guarantees), of approximately how many kWhs are expected to be generated annually by the System assuming the System size indicated in Schedule 1. ForeFront Power may deliver to Purchaser an updated table upon the Commercial Operation Date based on the actual System size. V. Schedule 5 – Notice Information Purchaser: [ ] ForeFront Power: [ForeFront Power], LLC Attn: Director, Energy Services 100 Montgomery St., Suite 1400 San Francisco, CA 94104 With a copy to [ForeFront Power], LLC Legal Department 100 Montgomery St., Suite 1400 San Francisco, CA 94104 Email: FPLegal@forefrontpower.com Financing Party: [To be provided by ForeFront Power when known] VI. Schedule 6 – Site Specific Information and Requirements In accordance with Section 7.2(f) of the General Conditions, the following information references any known restrictions on the use of the Premises for the construction, ownership, use and operation of the System, Packet Pg. 146 Item 9 CONFIDENTIAL AND PROPRIETARY 7 including any land use restrictions, known underground structures or equipment, or limitations arising under permits or applicable law, as well as any additional Environmental Documents, reports or studies in the possession or control of the Purchaser, which shall each have been delivered to ForeFront Power as of the Effective Date: Type of Information Information Delivered to ForeFront Power as of the Effective Date Phase I environmental site assessment [Insert applicable details, or mark “Not Applicable”] Reports on site sampling (soil or groundwater) [Insert applicable details, or mark “Not Applicable”] Land use restrictions imposed by governmental authorities [Insert applicable details, or mark “Not Applicable”] Lease restrictions on proposed solar installation [Insert applicable details, or mark “Not Applicable”] Cleanup plan, corrective action plan or permits applicable to Premises [Insert applicable details, or mark “Not Applicable”] Open spill reports or unresolved release reports [Insert applicable details, or mark “Not Applicable”] Known underground storage tanks, foundations, utilities [Insert applicable details, or mark “Not Applicable”] Utility easements or public rights of way [Insert applicable details, or mark “Not Applicable”] Completed closure or “cap” on buried waste or other materials [Insert applicable details, or mark “Not Applicable”] Systems in place for extracting and collecting methane, groundwater or leachate [Insert applicable details, or mark “Not Applicable”] Subject to the control of a trustee, group of en tities or entities other than landlord and/or Purchaser [Insert applicable details, or mark “Not Applicable”] Packet Pg. 147 Item 9 A B C D E 1 2 3 4 5 6 DATE: 06.22.2018 DRAWN BY: RP ENGINEER: RP APPROVED BY: PROJECT PHASE: SCALE: 1" = 100' SHEET NO: THIS DRAWING IS THE PROPERTY OF FOREFRONT POWER, LLC. THIS INFROMATION IS CONFIDENTIAL AND IS TO BE USED ONLY IN CONNECTION WITH WORK DESCRIBED BY FOREFRONT POWER, LLC. NO PART IS TO BE DISCLOSED TO OTHERS WITHOUT WRITTEN PERMISSION FROM FOREFRONT POWER, LLC. STAMP: PROJECT NUMBER: SHEET TITLE: SHEET SIZE: NO.REVISION DATE INIT. NOT FOR CONSTRUCTION City of San Luis Obispo Reservoir - 1 N Hwy 101 Reservoir 1, San Luis Obispo, CA 93401 CA-18-0118 CL-1 CONCEPTUAL LAYOUT TABLOID 11" X 17" PRELIMINARY DESIGN TILT ANGLE AZIMUTH ANGLE MODULE TYPE LAT/LONG AREA INVERTERS 25° 180° LONGI LR6-72PH-360M 35.2692;-120.6349 3.77 Acres (11) PVI 60TL QUANTITY 2268 SYSTEM DESCRIPTION NOTE: DESKTOP ANALYSIS OF TOPOGRAPHY AND TREE HEIGHTS WERE ASSUMED FOR THE DESIGNS. FINAL SYSTEM SIZE AND LOCATION WILL VARY BASED ON FURTHER DILIGENCE 100 MONTGOMERY STREET #1400 SAN FRANCISCO, CA 94104 (855) 204-5083 www.ForeFrontPower.com 2017 FOREFRONT POWER, LLC AND ITS AFFILIATES ALL RIGHTS RESERVED SYSTEM SIZE (DC) SYSTEM SIZE (AC) 816.48 kW 660.00 kW SNOWLOAD 0 PSF WINDSPEED 100 MPH SEISMIC DESIGN CAT.D PITCH 268 INCHES FENCING REQUIRED, TYP. LINEAR FENCING: 2700' ACCESS ROAD: ~100' AC Combiners ASSUMING THE EXISTING UTILITY TRANSFORMER IS BIG ENOUGH TO ACCEPT THIS PV SYSTEM SIZE PROPOSED POCC 480V* Meter #1009921396 AC Run: ~315' Packet Pg. 148 Item 9 A B C D E 1 2 3 4 5 6 DATE: 07-27-2018 DRAWN BY: RP ENGINEER: RP APPROVED BY: PROJECT PHASE: SCALE: 1" : 70' SHEET NO: THIS DRAWING IS THE PROPERTY OF FOREFRONT POWER, LLC. THIS INFROMATION IS CONFIDENTIAL AND IS TO BE USED ONLY IN CONNECTION WITH WORK DESCRIBED BY FOREFRONT POWER, LLC. NO PART IS TO BE DISCLOSED TO OTHERS WITHOUT WRITTEN PERMISSION FROM FOREFRONT POWER, LLC. STAMP: PROJECT NUMBER: SHEET TITLE: SHEET SIZE: NO.REVISION DATE INIT. NOT FOR CONSTRUCTION San Luis Obispo Sinsheimer Park 900 Southwood Dr, San Luis Obispo, CA 93401 CA-18-0149 CL-1 CONCEPTUAL LAYOUT TABLOID 11" X 17" PRELIMINARY DESIGN TILT ANGLE AZIMUTH ANGLE MODULE TYPE LAT/LONG SNOWLOAD NO.OF TREES/LIGHTP INVERTERS 7° 233° LONGI LR6-72PH-360M 35.2665;-120.6446 0 PSF ~7/4 (1)PVI 60TL (2)PVI 36TL QUANTITY 396 SYSTEM DESCRIPTION NOTE: DESKTOP ANALYSIS OF TOPOGRAPHY AND TREE HEIGHTS WERE ASSUMED FOR THE DESIGNS. FINAL SYSTEM SIZE AND LOCATION WILL VARY BASED ON FURTHER DILIGENCE 100 MONTGOMERY STREET #1400 SAN FRANCISCO, CA 94104 (855) 204-5083 www.ForeFrontPower.com 2017 FOREFRONT POWER, LLC AND ITS AFFILIATES ALL RIGHTS RESERVED SYSTEM SIZE (DC) SYSTEM SIZE (AC) 142.56 kW 132.00 kW WINDSPEED 110 MPH SEISMIC CATEGORY D AC Run: ~210' Location of POCC 480V, 400A Meter #: 1003634973 1x7 1x6 1x10 CANOPY BLOCK DETAILS 10 STRING CANOPY BLOCK : 1 6 STRING CANOPY BLOCKS: 2 Packet Pg. 149 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 1 of 10 Form 79-1191 Advice 5140-E September 2017 This Generating Facility Interconnection Agreement for Local Government Renewable Energy Self- Generation Bill Credit Transfer (RES-BCT), (Agreement) is entered into by and between __________________________________________, a ___________________________________ (Producer), and Pacific Gas and Electric Company (PG&E) a California Corporation. Producer and PG&E are sometimes also referred to in this Agreement jointly as “Parties” or individually as “Party.” In consideration of the mutual promises and obligations stated in this Agreement and its attachments, the Parties agree as follows: 1. SCOPE AND PURPOSE This Agreement provides for Producer to interconnect and operate a Local Government Renewable Energy Self Generation Bill Credit Transfer Generating Facility in parallel with PG&E’s Distribution System to serve the electrical loads connected to the electric service account that PG&E uses to interconnect Producer’s Generating Facility (or, where permitted under Section 218 of the California Public Utilities Code (PUC), the electric loads of an on- site or neighboring party lawfully connected to Producer’s Generating Facility through Producer’s circuits). 2. SUMMARY AND DESCRIPTION OF PRODUCER’S GENERATING FACILITY 2.1. A description of the Generating Facility, including a summary of its significant components and a single-line diagram showing the general arrangement of how Producer’s Generating Facility and loads are interconnected with PG&E’s Distribution System, are attached to and made a part of this Agreement. (Supplied by Producer as Appendix A). 2.2. Generating Facility identification number: _________________ (Assigned by PG&E). 2.3. Producer’s electric service agreement ID number: _______________ (Assigned by PG&E). 2.4. Name and address used by PG&E to locate the electric service account used to interconnect the Generating Facility with PG&E’s Distribution System: Name: Address: City/Zip Code: 2.5. The Gross Nameplate Rating of the Generating Facility is: ______ kW. 2.6. The Net Nameplate Rating of the Generating Facility is ______ kW. 2.7. The expected annual energy production of the Generating Facility is _______ kWh. 2.8. For the purpose of securing the Competition Transition Charge exemption available under Section 372 of the California Public Utilities Code (PUC), Producer hereby declares that the Generating Facility does / does not meet the Packet Pg. 150 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 2 of 10 Form 79-1191 Advice 5140-E September 2017 requirements for Cogeneration as such term is used in Section 216.6 of the California Public Utilities Code. 2.9. The Generating Facility’s expected date of Initial Operation is _________________. The expected date of Initial Operation shall be within two years of the date of this Agreement. 3. DOCUMENTS INCLUDED; DEFINED TERMS 3.1. This Agreement includes the following exhibits which are specifically incorporated herein and made a part of this Agreement. Appendix A- Description of Generating Facility and Single-Line Diagram (Supplied by Producer). Appendix B- Copies of Rules 2 and 21 and other selected rules and tariffs of PG&E (Supplied by PG&E). Appendix C- A Copy of PG&E’s Agreement for Installation of Allocation of Special Facilities for Parallel Operation of Nonutility-Owned Generation and/or Electrical Standby Service (Form 79-280) (Special Facility Agreement), if applicable, (Formed by the Parties). Appendix D- Producer Warranty that it Meets the Requirements for an Eligible Customer-Generator and is an Eligible Renewable Electrical Generation Facility Pursuant to Section 2830 of the California Public Utilities Code Appendix E- Producer Certification that it meets the Definition of a Local Government, as Defined in Public Utilities Section 2830(A) 3.2. When initially capitalized, whether in the singular or in the plural, the terms used herein shall have the meanings assigned to them either in this Agreement or in PG&E’s Rule 21, Section C. 4. TERM AND TERMINATION 4.1. This Agreement shall become effective as of the last date entered in Section 19, below. The Agreement shall continue in full force and effect until the earliest date that one of the following events occurs: (a) The Parties agree in writing to terminate the Agreement. (b) Unless otherwise agreed in writing by the Parties, at 12:01 A.M. on the day following the date the electric service account through which Producer’s Generating Facility is interconnected to PG&E’s Distribution System is closed or terminated. (c) At 12:01 A.M. on the 61st day after Producer or PG&E provides written Notice pursuant to Section 12 below to the other Party of Producer’s or PG&E’s intent to terminate this Agreement. 4.2. Producer may elect to terminate this Agreement pursuant to the terms of Section 4.1(c) for any reason. PG&E may elect to terminate this Agreement Packet Pg. 151 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 3 of 10 Form 79-1191 Advice 5140-E September 2017 pursuant to the terms of Section 4.1(c) for one or more of the following reasons: (a) A change in applicable rules, tariffs, and regulations, as approved or directed by the Commission, or a change in any local, state or federal law, statute or regulation, either of which materially alters or otherwise affects PG&E’s ability or obligation to perform PG&E’s duties under this Agreement; or, (b) Producer fails to take all corrective actions specified in PG&E’s Notice that Producer’s Generating Facility is out of compliance with the terms of this Agreement within the time frame set forth in such Notice; or, (c) Producer fails to interconnect and operate the Generating Facility per the terms of this Agreement prior to 120 days after the date set forth in Section 2.9, above, as the Generating Facility’s expected date of Initial Operation; or, (d) Producer abandons the Generating Facility. PG&E shall deem the Generating Facility to be abandoned if PG&E determines, in its sole opinion, the Generating Facility is non-operational and Producer does not provide a substantive response to PG&E Notice of its intent to terminate this Agreement as a result of Producer’s apparent abandonment of the Generating Facility affirming Producer’s intent and ability to continue to operate the Generating Facility. 4.3. Notwithstanding any other provisions of this Agreement, PG&E shall have the right to unilaterally file with the Commission, pursuant to the Commission’s rules and regulations, an application to terminate this Agreement. 4.4. Any agreements attached to and incorporated into this Agreement shall terminate concurrently with this Agreement unless the Parties have agreed otherwise in writing. 5. GENERATING FACILITY, OPERATION AND CERTIFICATION REQUIREMENTS 5.1. If Producer declares that its Generating Facility meets the requirements for Cogeneration as such term is used in Section 216.6 of the PUC (or any successor definition of Cogeneration) (Cogeneration Requirements), Producer warrants that, beginning on the date of Initial Operation and continuing throughout the term of this Agreement, its Generating Facility shall continue to meet such Cogeneration Requirements. If Producer becomes aware that its Generating Facility has ceased to meet the Cogeneration Requirements, Producer shall promptly provide PG&E with Notice of such change pursuant to Section 12.1 below. If at any time during the term of this Agreement PG&E determines in its sole discretion that Producer’s Generating Facility may no longer meet the Cogeneration Requirements, PG&E may require Producer to provide evidence that its Generating Facility continues to meet the Cogeneration Requirements within 15 business days of PG&E’s request for such evidence. Additionally, PG&E may periodically (typically, once per year) inspect Producer’s Generating Facility and/or require documentation from Producer to monitor the Generating Facility’s compliance with Section 216.6 of the PUC. If PG&E determines in its sole judgment that Producer either failed to provide Packet Pg. 152 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 4 of 10 Form 79-1191 Advice 5140-E September 2017 evidence in a timely manner or that it provided insufficient evidence that its Generating Facility continues to meet the Cogeneration Requirements, then the Cogeneration status of the Generating Facility shall be deemed ineffective until such time as Producer again demonstrates to PG&E’s reasonable satisfaction that the Generating Facility meets the requirements for a Cogeneration facility (the Status Change). 5.1.1. PG&E shall revise its records and the administration of this Agreement to reflect the Status Change and provide Notice to Producer of the Status Change pursuant to Section 12.1 below. This Notice shall specify the effective date of the Status Change. This date shall be the first day of the calendar year for which PG&E determines in its sole discretion that the Generating Facility first ceased to meet the Cogeneration Requirements. PG&E’s Notice shall include an invoice for Competition Transition Charges (CTCs) that were not previously billed during the period between the effective date of the Status Change and the date of the Notice in reliance upon Producer’s representations that the Generating Facility complied with the Cogeneration Requirements and therefore was eligible for the exemption from CTCs available under Section 372 of the PUC. 5.1.2. Any amounts to be paid or refunded by Producer, as may be invoiced by PG&E pursuant to the terms of this Section 5.1, shall be paid to PG&E within 30 days of Producer’s receipt of such invoice. 6. INTERCONNECTION FACILITIES 6.1. Producer and/or PG&E, as appropriate, shall provide Interconnection Facilities that adequately protect PG&E’s Distribution System, personnel, and other persons from damage or injury, which may be caused by the operation of Producer’s Generating Facility. 6.2. Producer shall be solely responsible for the costs, design, purchase, construction, operation, and maintenance of the Interconnection Facilities that Producer owns. 6.3. If the provisions of PG&E’s Rule 21, or any other tariff or rule approved by the Commission, requires PG&E to own and operate a portion of the Interconnection Facilities, Producer and PG&E shall promptly execute an Special Facilities Agreement that establishes and allocates responsibility for the design, installation, operation, maintenance, and ownership of the Interconnection Facilities. This Special Facilities Agreement shall be attached to and made a part of this Agreement as Appendix C. 7. DISTRIBUTION UPGRADES The Distribution Provider shall design, procure, construct, install, and own the Distribution Upgrades described in a Special Facilities Agreement attached to an d made a part of this Agreement as Appendix C. The actual cost of the Distribution Upgrades, including overheads, shall be directly assigned to the Interconnection Customer. Packet Pg. 153 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 5 of 10 Form 79-1191 Advice 5140-E September 2017 8. NETWORK UPGRADES 8.1. No portion of this Section 9 shall apply unless the interconnection of the Generating Facility requires Network Upgrades. 8.2. The Distribution Provider or the Distribution Owner shall design, procure, construct, install, and own the Network Upgrades described in Attachment 6 of this Agreement. Unless the Distribution Provider elects to pay for Network Upgrades, the actual cost of the Network Upgrades, including overheads, shall be borne by the Interconnection Customer unless Section 8.2.1 directs otherwise. 8.2.1. To the extent that the CAISO Tariff, as referenced in Rule 21 section E.4, provides for cash repayment to interconnection customers for contribution to the cost of Network Upgrades, the Interconnection Customer shall be entitled to a cash repayment, equal to the total amount paid to the Distribution Provider and Affected System operator, if any, for Network Upgrades, including any tax gross-up or other tax-related payments associated with the Network Upgrades, and not otherwise refunded to the Interconnection Customer, to be paid to the Interconnection Customer on a dollar-for-dollar basis for the non-usage sensitive portion of transmission charges, as payments are made under the Distribution Provider's Tariff and Affected System's Tariff for transmission services with respect to the Generating Facility. Any repayment shall include interest calculated in accordance with the methodology set forth in FERC’s regulations at 18 C.F.R. §35.19a(a)(2)(iii) from the date of any payment for Network Upgrades through the date on which the Interconnection Customer receives a repayment of such payment pursuant to this subparagraph. The Interconnection Customer may assign such repayment rights to any person. To the extent that the CAISO Tariff does not provide for cash repayment to interconnection customers for contribution to the cost of Network Upgrades, Interconnection Customer is not entitled to a cash repayment for amounts paid to the Distribution Provider and Affected Sys tem operator for Network Upgrades, and no cash repayment shall be made pursuant to this Agreement. Packet Pg. 154 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 6 of 10 Form 79-1191 Advice 5140-E September 2017 8.2.1.1. If the Interconnection Customer is entitled to a cash repayment pursuant to Article 8.2.1, the Interconnection Customer, the Distribution Provider, and any applicable Affected System operators may adopt any alternative payment schedule that is mutually agreeable so long as the Distribution Provider and said Affected System operators take one of the following actions no later than five years from the Commercial Operation Date: (1) return to the Interconnection Customer any amounts advanced for Network Upgrades not previously repaid, or (2) declare in writing that the Distribution Provider or any applicable Affected System operators will continue to provide payments to the Interconnection Customer on a dollar-for-dollar basis for the nonusage sensitive portion of transmission charges, or develop an alternative schedule that is mutually agreeable and provides for the return of all amounts advanced for Network Upgrades not previously repaid; however, full reimbursement shall not extend beyond twenty (20) years from the commercial operation date. 8.2.1.2. If the Generating Facility fails to achieve commercial operation, but it or another generating facility is later constructed and requires use of the Network Upgrades, the Distribution Provider and Affected System operator shall at that time reimburse the Interconnection Customer for the amounts advanced for the Network Upgrades if the Interconnection Customer is entitled to a cash repayment pursuant to Article 8.2.1. Before any such reimbursement can occur, the Interconnection Customer, or the entity that ultimately constructs the generating facility, if different, is responsible for identifying the entity to which reimbursement must be made. 8.3. Notwithstanding any other provision of this Agreement, nothing herein shall be construed as relinquishing or foreclosing any rights, including but not limited to firm transmission rights, capacity rights, transmission congestion rights, or transmission credits, that the Interconnection Customer shall be entitled to, now or in the future, under any other agreement or tariff as a result of, or otherwise associated with, the transmission capacity, if any, created by the Network Upgrades, including the right to obtain cash reimbursements or transmission credits for transmission service that is not associated with the Generating Facility. 9. LIMITATION OF LIABILITY Each Party’s liability to the other Party for any loss, cost, claim, injury, liability, or expense, including reasonable attorney’s fees, relating to or arising from any act or omission in its performance of this agreement, shall be limited to the amount of direct damage actually incurred. In no event shall either Party be liable to the other Party for any indirect, special, consequential, or punitive damages of any kind whatsoever. 10. INSURANCE Packet Pg. 155 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 7 of 10 Form 79-1191 Advice 5140-E September 2017 10.1. In connection with Producer’s performance of its duties and obligations under this Agreement, Producer shall maintain, during the term of this Agreement, general liability insurance with a combined single limit of not less than: (a) Two million dollars ($2,000,000) for each occurrence if the Gross Nameplate Rating of Producer’s Generating Facility is greater than one hundred (100) kW; (b) One million dollars ($1,000,000) for each occurrence if the Gross Nameplate Rating of Producer’s Generating Facility is greater than twenty (20) kW and less than or equal to one hundred (100) kW; and (c) Five hundred thousand dollars ($500,000) for each occurrence if the Gross Nameplate Rating of Producer’s Generating Facility is twenty (20) kW or less. (d) Two hundred thousand dollars ($200,000) for each occurrence if the Gross Nameplate Rating of Producer’s Generating Facility is ten (10) kW or less and Producer’s Generating Facility is connected to an account receiving residential service from PG&E. Such general liability insurance shall include coverage for “Premises-Operations, Owners and Contractors Protective, Products/Completed Operations Hazard, Explosion, Collapse, Underground, Contractual Liability, and Broad Form Property Damage including Completed Operations.” 10.2. The general liability insurance required in Section 11.1 shall, by endorsement to the policy or policies, (a) include PG&E as an additional insured; (b) contain a severability of interest clause or cross-liability clause; (c) provide that PG&E shall not by reason of its inclusion as an additional insured incur liability to the insurance carrier for payment of premium for such insurance; and (d) provide for thirty (30) calendar days’ written notice to PG&E prior to cancellation, termination, alteration, or material change of such insurance. 10.3. Evidence of the insurance required in Section 11.2 shall state that coverage provided is primary and is not in excess to or contributing with any insurance or self-insurance maintained by PG&E. 10.4. Producer agrees to furnish the required certificates and endorsements to PG&E prior to Initial Operation. PG&E shall have the right to inspect or obtain a copy of the original policy or policies of insurance. 10.5. If Producer is self-insured with an established record of self-insurance, Producer may comply with the following in lieu of Sections 11.1 through 11.3: (a) Producer shall provide to, PG&E, at least thirty (30) calendar days prior to the date of Initial Operation, evidence of an acceptable plan to self-insure to a level of coverage equivalent to that required under Section 11.1. (b) If Producer ceases to self-insure to the level required hereunder, or if Producer are unable to provide continuing evidence of Producer’s ability to Packet Pg. 156 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 8 of 10 Form 79-1191 Advice 5140-E September 2017 self-insure, Producer agrees to immediately obtain the coverage required under Section 11.1. 10.6. All insurance certificates, statements of self-insurance, endorsements, cancellations, terminations, alterations, and material changes of such insurance shall be issued and submitted via email or fax to the following: Pacific Gas and Electric Company c/o EXIGIS LLC support@exigis.com Fax: 646-755-3327 11. NOTICES 11.1. Any written notice, demand, or request required or authorized in connection with this Agreement (Notice) shall be deemed properly given if delivered in person or sent by first class mail, postage prepaid, to the person specified below: If to PG&E: Pacific Gas and Electric Company Attention: Electric Generation Interconnection - Contract Management 245 Market Street Mail Code N7L San Francisco, California 94105-1702 If to Producer: Producer Name: Address: City: Phone: ( ) FAX: ( ) 11.2. A Party may change its address for Notices at any time by providing the other Party Notice of the change in accordance with Section 12.1. 11.3. The Parties may also designate operating representatives to conduct the daily communications, which may be necessary or convenient for the administration of this Agreement. Such designations, including names, addresses, and phone numbers may be communicated or revised by one Party’s Notice to the other. 12. REVIEW OF RECORDS AND DATA 12.1. PG&E shall have the right to review and obtain copies of Producer’s operations and maintenance records, logs, or other information such as, unit availability, maintenance outages, circuit breaker operation requiring manual reset, relay targets and unusual events pertaining to Producer’s Generating Facility or its interconnection with PG&E’s Distribution System. 12.2. Producer authorizes to release to the California Energy Commission (CEC) Packet Pg. 157 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 9 of 10 Form 79-1191 Advice 5140-E September 2017 information regarding Producer’s facility, including customer name, location, size, and operational characteristics of the unit, as requested from time to time pursuant to the CEC’s rules and regulations. 13. ASSIGNMENT Producer shall not voluntarily assign its rights nor delegate its duties under this Agreement without PG&E’s written consent. Any assignment or delegation Producer makes without PG&E’s written consent shall not be valid. PG&E shall not unreasonably withhold its consent to Producer’s assignment of this Agreement. 14. NON-WAIVER None of the provisions of this Agreement shall be considered waived by a Party unless such waiver is given in writing. The failure of a Party to insist in any one or more instances upon strict performance of any of the provisions of this Agreement or to take advantage of any of its rights hereunder shall not be construed as a waiver of any such provisions or the relinquishment of any such rights for the future, but the same shall continue and remain in full force and effect. 15. GOVERNING LAW, JURISDICTION OF COMMISSION, INCLUSION OF PG&E’s TARIFF SCHEDULES AND RULES 15.1. This Agreement shall be interpreted, governed, and construed under the laws of the State of California as if executed and to be performed wholly within the State of California without giving effect to choice of law provisions that might apply to the law of a different jurisdiction. 15.2. This Agreement shall, at all times, be subject to such changes or modifications by the Commission as it may from time to time direct in the exercise of its jurisdiction. 15.3. The interconnection and services provided under this Agreement shall at all times be subject to the terms and conditions set forth in the Tariff Schedules and Rules applicable to the electric service provided by, PG&E, which Tariff Schedules and Rules are hereby incorporated into this Agreement by this reference. 15.4. Notwithstanding any other provisions of this Agreement, PG&E shall have the right to unilaterally file with the Commission, pursuant to the Commission’s rules and regulations, an application for change in rates, charges, classification, service, tariff or rule or any agreement relating thereto. 16. AMENDMENT AND MODIFICATION This Agreement can only be amended or modified in writing, signed by both Parties. 17. ENTIRE AGREEMENT This Agreement, including any incorporated Tariff Schedules and rules, contains the entire agreement and understanding between the Parties, their agents, and employees as to the subject matter of this Agreement. Each party also represents that in entering into this Agreement, it has not relied on any promise, inducement, representation, warranty, Packet Pg. 158 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 10 of 10 Form 79-1191 Advice 5140-E September 2017 agreement or other statement not set forth in this Agreement or in the incorporated tariff schedules and rules. 18. SIGNATURES IN WITNESS WHEREOF, the Parties hereto have caused two originals of this Agreement to be executed by their duly authorized representatives. T his Agreement is effective as of the last date set forth below. BY: PACIFIC GAS AND ELECTRIC COMPANY (Producer’s Company Name) (Signature) (Signature) (Print Name) (Print Name) (Title) (Title) (Date) (Date) Packet Pg. 159 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page __ of __ Form 79-1191, Appendix A Advice 5140-E September 2017 APPENDIX A DESCRIPTION OF GENERATING FACILITY AND SINGLE-LINE DIAGRAM, (Provided by Producer) Packet Pg. 160 Item 9 SHEET:REVISIONS NO.DATE ONE LINE DIAGRAM DWG #: DECEMBER 2017 SCALE: DRAWN BY: DESIGNED BY: JOB #: DATE: CRT XXX-17-170 GRO AS SHOWN JOE PREVENDAR, PE CA. EE 16581 GARY R. OLSEN, PE CA. EE 8283 4049 NORTH FRESNO ST. FRESNO, CA 93726 559-221-7230 FAX 559-221-0507 joe@epsfresno.com gary@epsfresno.com SOLAR IMPROVEMENT SAN LUIS OBISPO RESERVOIR SAN LUIS OBISPO, CAE-1XXX170_RES_E1_SLAB CDEGFHIJKL1234567891011121314151617181912345678910111213141516171819NOTE: CALL "USA UNDERGROUND (811)" BEFOREPENETRATING ANY EXISTING SURFACE TO EARTH BELOWELECTRICAL POWER SYSTEMS, Inc. (EPS) IS RESPONSIBLE FOR DESIGN OF ELECTRICAL SYSTEMS AS SHOWN ON THIS DOCUMENTONLY. EPS IS NOT RESPONSIBLE FOR ANY WORK SAFETY PROCEDURES AS DICTATED BY INTERNATIONAL, NATIONAL (USA), STATE ORTERRITORY OF THE USA, LOCAL, AND/OR OTHER ENTITIE(S) AND/OR RESULTS OF SAID REQUIREMENTS. ANY USE OF THIS DOCUMENTFOR ANY PURPOSE MUST ALSO REFER TO RESPECTIVE PROJECT (THIS DOCUMENT IS APART OF) SPECIFICATIONS, IF ANY, (WHICHMAY BE UNDER SEPARATE COVER) AND ABIDE BY SAID SPECIFICATIONS AND ANY AND ALL REQUIREMENTS WITHIN SAIDSPECIFICATIONS IN ADDITION TO REQUIREMENTS ON OR IN THIS DOCUMENT. THE ORIGINAL OF THIS DOCUMENT (HARD COPY ORELECTRONIC FILE) IS OWNED BY EPS AND MAY NOT BE CHANGED OR ALTERED IN ANY MANNER WITHOUT THE EXPRESS PERMISSIONOF EPS. ANY CHANGES MADE BY OTHER THAN EPS MUST BE IMMEDIATELY TRANSMITTED TO EPS. EPS WILL NOT BE RESPONSIBLEFOR "ANY RESULT" ARISING OR OCCURRING FROM ANY CHANGES TO THIS DOCUMENT NOT EXACTLY MATCHING EPS'S FILE COPY OFTHE ORIGINAL DOCUMENT AND/OR UN-AUTHORIZED CHANGES TO THE LATEST MASTER DOCUMENT ON FILE AT EPS.PG&EPG&E 480/277V SERVICE PERPG&E FOR 960KWe SOLAR FIELD &EXISTING WWTP LOAD. OWNERWILL FURNISH & INSTALL ALLSUBSTRUCTURES. IF PGE WISHES A59N GROUND ON HI SIDE, PGE TOPROVIDE . PGE TO PROVIDE RULE21 CONSTRUCTION PLAN ANDSPEC'S.12KVPG&ERECLOSER12kVPG&E PAD MOUNT(???) kVA XFMRPER PG&E480/277V SERVICESWITCHGEAR 'M1'480/277V1600A-3PH-4W-65kAICMPG&E NETMETER1PH15kVA CPT80/2PANEL 'A'240/120V-100A1PH-3W24 CKT20/120/12 GFIsSWBD LIGHTS20/2ISOLATED BATTERY SECTION3-20/1SOLAR HMITBSTB3410AaT T T T STB3410Ab51C51R51GREDUNDANTBECKWITH W/TESTBLOCKS480VDC275981O81U2559N(PROVIDED BYPG&E PER PG&E)3-1600:5A,BA,B,C3-1600:552-MI862500A FR2000A TPDRAW OUTPOWER CB, LSIG,3P, 65KAICMINIMUM, ABBSACE Emax2DRAWOUT48VDCCLOSE/TRIP3-FTBA,B3-F3410A52a52bMAIN BUS - 'M1' 480/277V-3P2500A CU,480/277V, 3Ph,4W,65KAICFLOAT1EQUALSUMMARYALARMPG&E LVALARM10A3410Aa10A3410Ab30ASLUG52-MI52-MITRIPSPARE20APANEL 'B'50AAT-10CHARGER IN/OUTC.B.s MAG TRIP ONLYLOAD (8HR)TO 1.15VTO AGENCY 24HRMONITORALI-CAD BATTERY80AH 8HRNGPERCEC20/1TVENT FAN20/1HTRT1600/3PG&E REQUIREDVISIBLE BLADELOCKABLE 65kAICU.G.PULL SECTIONMCECSOLARMONITORMETERINGVIA 3rdPARTYSWITCH BOARD S1-PART OF MAIN SWITCHBOARD M1 - 1600A, 480/277V, 3PH, 4W,65KAICSOLAR GENERATION CONTTIBUTION:1152A960KW (PF = >0.99)MAX 1632 AMPS INT SYM FAULTCONTRIBUTION (ALL INVERTERS)TO FULL FAULT UPSTREAM-ALL INVERTERS ON1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S1SEE E-2 TO E-4 FORCONTINUATION1234567GENERAL NOTE:1- ALL WORK IS TO COMPLY WITH CA-CEC, US-NESC, OSHA REQUIREMENTS, ALL UTILITY REQUIREMENTS, CA-CEC REQUIREMENTS, CAISO REQUIREMENTS WHERE APPLICABLE, AND ANYOTHER REGULATION, RULE, REQUIREMENT THAT APPLIES TO ALL ELECTRICAL WORK AND SOLAR WORK.2-FOLLOW ALL SOLAR MANUFACTURE REQUIREMENTS WHERE APPLICABLE WITHOUT VIOLATING ANY REQUIREMENTS IN 1- ABOVEDATE:20/1SECTION HEATERS ASNEEDED CIRCUITSFURNISH WITH HYDROGEN DETECTOR - ALARM 1 =FAN ON/TELEMETRY, ALARM 2 = DANGER/TELEMETRYSPG&EMETERPERPG&E3410A2 SETS3-1600:53410ATB52-M12000/3 FR1600/3 TP65kAICLSIG48VDCCONTROLPER PGEMMCPT-15KVA1PH, 3W60/2PANEL 'A'240/120V24 CKTTTYPICALHEATEREACHSECTIONCECMETERPER 3RDPARTY1600/3UTILITYDISCONNECT65kAICLOCKABLEDOORANDHANDLE225A FRSPACEBATTERYSYSTEMTHERMALLYISOLATEDVENTEDSECTIONPANEL 'B1'FANTTTTTSSSMMSSNEWNEWA,B3410ASYNCPGE APPROVED W.P.2500A BUS DUCTMAIN TO XFCONNECTIONNOMINAL48VDCNiCad86CSALL LEDINDICATORSDIRECT 480V INVIA SW/FUSE BLKFUSEDPRINGLETYPEQA123T480VBOLTEDPRESSURE200KKAIC225A FR200/3 TPARRAY S1LSIG65kAIC225A FRSPACE225A FRSPACESWBS S-1SWBD M1225A FR200/3 TP LSIG65kAICT240/120V, 1PH, 3W2-FORIT FUNCTION 50REQUIRED THEN RELAYBECOMES 3520IN2 = 52aIN1 = 52b2-26-18 REV 1.0SH 1 OF 4DESCRIPTION 1 2-26-18 REVISIONS PER PGE100/3FR50/3TPLSI, 65KAICPRINGLE BOLTED PRESSURE SWITCH,VISIBLE BLADE POSITION, LOCKABLEDOOR AND HANDLE PROVISIONS FORPGE SEAL. FUSED CLASS 'L', 1600A,480V 200,000KAIC, LOAD BREAKPRINGLE #QA1233T480PROVIDE OPEN DELTA 10KVA-15KVA A-A PAD MOUNTEDTRANSFORMERS ON NEW PAD OUTSIDE STRUCTURE MAINAND CONNECT OPEN DELTA 3PH, 4 WIRE (240/120V MID TAP)TO EXISTING 100A MAIN, FOLLOW CEC REQUIREMENTS ONRECONNECTION. REMOVE OLD PG&E SERVICE. GROUND TOEXISTING GROUND AT EXISTING METER AND NEW SERVICEGROUND WITH #1/0 CU MINIMUM PER CEC.1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S2SEE E-2 TO E-4 FORCONTINUATION225A FR200/3 TP LSIG65kAIC1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S3SEE E-2 TO E-4 FORCONTINUATION225A FR200/3 TP LSIG65kAIC1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S4SEE E-2 TO E-4 FORCONTINUATION225A FR200/3 TP LSIG65kAIC1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S5SEE E-2 TO E-4 FORCONTINUATION225A FR200/3 TP LSIG65kAIC1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S6SEE E-2 TO E-4 FORCONTINUATION225A FR200/3 TP LSIG65kAIC1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S7SEE E-2 TO E-4 FORCONTINUATION225A FR200/3 TP LSIG65kAIC1-2.5"D3-#4/0CU PH1-#4/0 N1-2 GNDVD=<3%TO FIELDARRAY S8SEE E-2 TO E-4 FORCONTINUATION225A FR200/3 TP LSIG65kAICWINDOWINSTALL REQUIRED PG&E NAME PLATES PER PGE400./3FR, 50/3TPLSI400/3 SPACE225/3 SPACE225A FR200/3 TPARRAY 8LSIG65kAIC6 MOREBREAKERS ASNOTED FORARRAYS 2-72000A BUS2000A BUS1600A BUS T:\files\XXX (MISC)\170 - SLO WWTP Solar\DWGS - Reservoir\DWGS REV 1.0 2-27-18\XXX170_Res_E1_SL.dwg, SINGLE LINE, 2/27/2018 5:52:48 PM, Gary, 1:2.04651 Packet Pg. 161Item 9 SHEET:REVISIONS REVISIONNO. DATE ONE LINE DIAGRAM DWG #: DECEMBER 2017 SCALE: DRAWN BY: DESIGNED BY: JOB #: DATE: CRT XXX170 SLO RESERVOIR GRO AS SHOWN JOE PREVENDAR, PE CA. EE 16581 GARY R. OLSEN, PE CA. EE 8283 4049 NORTH FRESNO ST. FRESNO, CA 93726 559-221-7230 FAX 559-221-0507 joe@epsfresno.com gary@epsfresno.com SOLAR IMPROVEMENT SAN LUIS OBISPO RESERVOIR SAN LUIS OBISPO, CAE-2XXX170_RES_E2_SLAB CDEGFHIJKL12345678910111213141516171819NOTE: CALL "USA UNDERGROUND (811)" BEFOREPENETRATING ANY EXISTING SURFACE TO EARTH BELOWELECTRICAL POWER SYSTEMS, Inc. (EPS) IS RESPONSIBLE FOR DESIGN OF ELECTRICAL SYSTEMS AS SHOWN ON THIS DOCUMENTONLY. EPS IS NOT RESPONSIBLE FOR ANY WORK SAFETY PROCEDURES AS DICTATED BY INTERNATIONAL, NATIONAL (USA), STATE ORTERRITORY OF THE USA, LOCAL, AND/OR OTHER ENTITIE(S) AND/OR RESULTS OF SAID REQUIREMENTS. ANY USE OF THIS DOCUMENTFOR ANY PURPOSE MUST ALSO REFER TO RESPECTIVE PROJECT (THIS DOCUMENT IS APART OF) SPECIFICATIONS, IF ANY, (WHICHMAY BE UNDER SEPARATE COVER) AND ABIDE BY SAID SPECIFICATIONS AND ANY AND ALL REQUIREMENTS WITHIN SAIDSPECIFICATIONS IN ADDITION TO REQUIREMENTS ON OR IN THIS DOCUMENT. THE ORIGINAL OF THIS DOCUMENT (HARD COPY ORELECTRONIC FILE) IS OWNED BY EPS AND MAY NOT BE CHANGED OR ALTERED IN ANY MANNER WITHOUT THE EXPRESS PERMISSIONOF EPS. ANY CHANGES MADE BY OTHER THAN EPS MUST BE IMMEDIATELY TRANSMITTED TO EPS. EPS WILL NOT BE RESPONSIBLEFOR "ANY RESULT" ARISING OR OCCURRING FROM ANY CHANGES TO THIS DOCUMENT NOT EXACTLY MATCHING EPS'S FILE COPY OFTHE ORIGINAL DOCUMENT AND/OR UN-AUTHORIZED CHANGES TO THE LATEST MASTER DOCUMENT ON FILE AT EPS.12-21-20172 OF 4225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#4/0 CU P1-#4/0 CU N1-#2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 1600A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S1TOTAL SOLAR SUMMARY:FIELD = 960KW,TOTAL AMPS = 1,152, MAXIMUM M @ pf = 0.999XTOTAL AMPS SC OUT - 1,632) (MAX UNRESTRAINED TIME) - 10 SECONDS) (17A PER INVERTER)TOTAL NUMBER OF INVERTERS = 96 (2 STRINGS PER INVERTER), INDIVIDUAL SOLAR PANELS PER SUPPLIER MEETING CEC APPROVALINVERTERS = FRONIUS SYMO SERIES, 10.0-3-480, RATED 9995VA OUT, 480V DELTA + NEUTRAL & GROUND, THD = <1.75%, 60HZ, PFRANGE = 0-1 IND/CAP, REMOTE J-BOX OUTPUT BREAKER = 15/3(100% RATED) OR 20/3 LI, MAX EFF. = 98.1%, CEC EFF, = 96.5%,NIGHT CONSUMPTION = 1W, COOLING =- VS FAN, NEMA 4X, UL 1741-SA (CA SUPPLEMENT APPROVED) , UL 1998,SEE MANUFACTURE DATA FOR OTHER APPROVALS.DATE:225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAP225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#40 CU P1-#4/0 CU1-#2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 2000A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERFIELD SUB-DISTRIBUTION PANELMOUNTED ON PANEL RACKSMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S2225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAP225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#4/0 CU P1-#4/0 CU N1-#2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 2000A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERFIELD SUB-DISTRIBUTION PANELMOUNTED ON PANEL RACKSMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S3225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAPREV 1.01.0 2-27-18 CHANGED INVERTERS SOLAR FIELD WIRING TO SOLAR CO.J-BOX MOUNTED ON SOLAR PANEL RACKS PER APPLICABLE CEC ELECTRICAL CODE REQUIREMENTS. SOLAR CO.J-BOXIS NEMA 3R PANEL WITH INCOMING LUGS FOR FEEDERS FROM SWBD-S1-1 AND 4 DISTRIBUTION BOLT-ON 35KAIC 20/3 DISTRIBUTION BREAKERSMARKED AS TO INVERTER FED. NUMBER AND A-FIX PVC ENGRAVED NAME PLATE TO SWBD-S1-1 SUB FEED BREAKER, J-BOX, INDIVIDUAL SUB BREAKERSAND INVERTERS AS TO ARRAY SWBD FEEDER" SX", AND J-BOX "SX-Y", J-BOX SUB-BREAKER NUMBERS "SX-Y-Z" AND INVERTER "INV-SX-Y-Z"TYP. ALL ARRAYST:\files\XXX (MISC)\170 - SLO WWTP Solar\DWGS - Reservoir\DWGS REV 1.0 2-27-18\XXX170_Res_E2_SL.dwg, SINGLE LINE, 2/27/2018 5:55:25 PM, Gary, 1:2 Packet Pg. 162Item 9 SHEET:REVISIONS REVISIONNO. DATE ONE LINE DIAGRAM DWG #: DECEMBER 2017 SCALE: DRAWN BY: DESIGNED BY: JOB #: DATE: CRT XXX170 SLO RESERVOIR GRO AS SHOWN JOE PREVENDAR, PE CA. EE 16581 GARY R. OLSEN, PE CA. EE 8283 4049 NORTH FRESNO ST. FRESNO, CA 93726 559-221-7230 FAX 559-221-0507 joe@epsfresno.com gary@epsfresno.com SOLAR IMPROVEMENT SAN LUIS OBISPO RESERVOIR SAN LUIS OBISPO, CAE-3XXX170_RES_E3_SLAB CDEGFHIJKL12345678910111213141516171819NOTE: CALL "USA UNDERGROUND (811)" BEFOREPENETRATING ANY EXISTING SURFACE TO EARTH BELOWELECTRICAL POWER SYSTEMS, Inc. (EPS) IS RESPONSIBLE FOR DESIGN OF ELECTRICAL SYSTEMS AS SHOWN ON THIS DOCUMENTONLY. EPS IS NOT RESPONSIBLE FOR ANY WORK SAFETY PROCEDURES AS DICTATED BY INTERNATIONAL, NATIONAL (USA), STATE ORTERRITORY OF THE USA, LOCAL, AND/OR OTHER ENTITIE(S) AND/OR RESULTS OF SAID REQUIREMENTS. ANY USE OF THIS DOCUMENTFOR ANY PURPOSE MUST ALSO REFER TO RESPECTIVE PROJECT (THIS DOCUMENT IS APART OF) SPECIFICATIONS, IF ANY, (WHICHMAY BE UNDER SEPARATE COVER) AND ABIDE BY SAID SPECIFICATIONS AND ANY AND ALL REQUIREMENTS WITHIN SAIDSPECIFICATIONS IN ADDITION TO REQUIREMENTS ON OR IN THIS DOCUMENT. THE ORIGINAL OF THIS DOCUMENT (HARD COPY ORELECTRONIC FILE) IS OWNED BY EPS AND MAY NOT BE CHANGED OR ALTERED IN ANY MANNER WITHOUT THE EXPRESS PERMISSIONOF EPS. ANY CHANGES MADE BY OTHER THAN EPS MUST BE IMMEDIATELY TRANSMITTED TO EPS. EPS WILL NOT BE RESPONSIBLEFOR "ANY RESULT" ARISING OR OCCURRING FROM ANY CHANGES TO THIS DOCUMENT NOT EXACTLY MATCHING EPS'S FILE COPY OFTHE ORIGINAL DOCUMENT AND/OR UN-AUTHORIZED CHANGES TO THE LATEST MASTER DOCUMENT ON FILE AT EPS.12-21-20172 OF 4225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#4/0 CU P1-#4/0 CU N1-#2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 1600A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S4TOTAL SOLAR SUMMARY:FIELD = 960KW,TOTAL AMPS = 1,152, MAXIMUM M @ pf = 0.999XTOTAL AMPS SC OUT - 1,632) (MAX UNRESTRAINED TIME) - 10 SECONDS) (17A PER INVERTER)TOTAL NUMBER OF INVERTERS = 96 (2 STRINGS PER INVERTER), INDIVIDUAL SOLAR PANELS PER SUPPLIER MEETING CEC APPROVALINVERTERS = FRONIUS SYMO SERIES, 10.0-3-480, RATED 9995VA OUT, 480V DELTA + NEUTRAL & GROUND, THD = <1.75%, 60HZ, PFRANGE = 0-1 IND/CAP, REMOTE J-BOX OUTPUT BREAKER = 15/3(100% RATED) OR 20/3 LI, MAX EFF. = 98.1%, CEC EFF, = 96.5%,NIGHT CONSUMPTION = 1W, COOLING =- VS FAN, NEMA 4X, UL 1741-SA (CA SUPPLEMENT APPROVED) , UL 1998,SEE MANUFACTURE DATA FOR OTHER APPROVALS.DATE:225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAP225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#4/0 CU P1-#4/0 CU N1-#2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 2000A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERFIELD SUB-DISTRIBUTION PANELMOUNTED ON PANEL RACKSMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S5225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAP225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#4/0 CU P1-#4/0 CU N1-2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 2000A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERFIELD SUB-DISTRIBUTION PANELMOUNTED ON PANEL RACKSMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S6225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAPREV 1.01.0 2-27-18 CHANGED INVERTERS SOLAR FIELD WIRING TO SOLAR CO.J-BOX MOUNTED ON SOLAR PANEL RACKS PER APPLICABLE CEC ELECTRICAL CODE REQUIREMENTS. SOLAR CO.J-BOXIS NEMA 3R PANEL WITH INCOMING LUGS FOR FEEDERS FROM SWBD-S1-1 AND 4 DISTRIBUTION BOLT-ON 35KAIC 20/3 DISTRIBUTION BREAKERSMARKED AS TO INVERTER FED. NUMBER AND A-FIX PVC ENGRAVED NAME PLATE TO SWBD-S1-1 SUB FEED BREAKER, J-BOX, INDIVIDUAL SUB BREAKERSAND INVERTERS AS TO ARRAY SWBD FEEDER" SX", AND J-BOX "SX-Y", J-BOX SUB-BREAKER NUMBERS "SX-Y-Z" AND INVERTER "INV-SX-Y-Z"TYP. ALL ARRAYST:\files\XXX (MISC)\170 - SLO WWTP Solar\DWGS - Reservoir\DWGS REV 1.0 2-27-18\XXX170_Res_E3_SL.dwg, SINGLE LINE, 2/27/2018 5:56:53 PM, Gary, 1:2 Packet Pg. 163Item 9 SHEET:REVISIONS REVISIONNO. DATE ONE LINE DIAGRAM DWG #: DECEMBER 2017 SCALE: DRAWN BY: DESIGNED BY: JOB #: DATE: CRT XXX170 SLO RESERVOIR GRO AS SHOWN JOE PREVENDAR, PE CA. EE 16581 GARY R. OLSEN, PE CA. EE 8283 4049 NORTH FRESNO ST. FRESNO, CA 93726 559-221-7230 FAX 559-221-0507 joe@epsfresno.com gary@epsfresno.com SOLAR IMPROVEMENT SAN LUIS OBISPO RESERVOIR SAN LUIS OBISPO, CAE-4XXX170_RES_E4_SLAB CDEGFHIJKL12345678910111213141516171819NOTE: CALL "USA UNDERGROUND (811)" BEFOREPENETRATING ANY EXISTING SURFACE TO EARTH BELOWELECTRICAL POWER SYSTEMS, Inc. (EPS) IS RESPONSIBLE FOR DESIGN OF ELECTRICAL SYSTEMS AS SHOWN ON THIS DOCUMENTONLY. EPS IS NOT RESPONSIBLE FOR ANY WORK SAFETY PROCEDURES AS DICTATED BY INTERNATIONAL, NATIONAL (USA), STATE ORTERRITORY OF THE USA, LOCAL, AND/OR OTHER ENTITIE(S) AND/OR RESULTS OF SAID REQUIREMENTS. ANY USE OF THIS DOCUMENTFOR ANY PURPOSE MUST ALSO REFER TO RESPECTIVE PROJECT (THIS DOCUMENT IS APART OF) SPECIFICATIONS, IF ANY, (WHICHMAY BE UNDER SEPARATE COVER) AND ABIDE BY SAID SPECIFICATIONS AND ANY AND ALL REQUIREMENTS WITHIN SAIDSPECIFICATIONS IN ADDITION TO REQUIREMENTS ON OR IN THIS DOCUMENT. THE ORIGINAL OF THIS DOCUMENT (HARD COPY ORELECTRONIC FILE) IS OWNED BY EPS AND MAY NOT BE CHANGED OR ALTERED IN ANY MANNER WITHOUT THE EXPRESS PERMISSIONOF EPS. ANY CHANGES MADE BY OTHER THAN EPS MUST BE IMMEDIATELY TRANSMITTED TO EPS. EPS WILL NOT BE RESPONSIBLEFOR "ANY RESULT" ARISING OR OCCURRING FROM ANY CHANGES TO THIS DOCUMENT NOT EXACTLY MATCHING EPS'S FILE COPY OFTHE ORIGINAL DOCUMENT AND/OR UN-AUTHORIZED CHANGES TO THE LATEST MASTER DOCUMENT ON FILE AT EPS.12-21-20172 OF 4225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#4/0 CU P1-#4/0 CU N1-#2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 1600A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S7TOTAL SOLAR SUMMARY:FIELD = 960KW,TOTAL AMPS = 1,152, MAXIMUM M @ pf = 0.999XTOTAL AMPS SC OUT - 1,632) (MAX UNRESTRAINED TIME) - 10 SECONDS) (17A PER INVERTER)TOTAL NUMBER OF INVERTERS = 96 (2 STRINGS PER INVERTER), INDIVIDUAL SOLAR PANELS PER SUPPLIER MEETING CEC APPROVALINVERTERS = FRONIUS SYMO SERIES, 10.0-3-480, RATED 9995VA OUT, 480V DELTA + NEUTRAL & GROUND, THD = <1.75%, 60HZ, PFRANGE = 0-1 IND/CAP, REMOTE J-BOX OUTPUT BREAKER = 15/3(100% RATED) OR 20/3 LI, MAX EFF. = 98.1%, CEC EFF, = 96.5%,NIGHT CONSUMPTION = 1W, COOLING =- VS FAN, NEMA 4X, UL 1741-SA (CA SUPPLEMENT APPROVED) , UL 1998,SEE MANUFACTURE DATA FOR OTHER APPROVALS.DATE:225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAP225/3 FR200/3 TPLSIG 65KAIC1-2.5"D3-#4/0 CU P1-#4/0 CU N1-#2 GNDVP =<3%SWBD-S1-1, 480/277V, 225A, 3Ph, 4W, 35KAIC CU, N-3R60/3 LSI35KAIC1.5"C3-#4,1-#2/GSOLARCO. J-BOXINVERTERFRONIUSSYMO10.O-3-48010KW OUT12.0A FLA17.0A Isc2 STRINGS14 PNL'sEA STRINGREC # REC345TP2S72ALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS 30KWAFL=36ASC =5160/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS60/3 LSI35KAICSOLARCO. J-BOXALLWIRINGBELOWBYSOLARSUPPLIERINSTALLEDONRACKS120KW144A204ASC`SWBD-S1, 480/277V, 2000A, 3Ph, 4W, 65KAIC CU, N-3R---FIELD U.G. FEEDERFIELD U.G. FEEDERFIELD SUB-DISTRIBUTION PANELMOUNTED ON PANEL RACKSMAIN SOLAR DISTRIBUTION PANL IN MAIN SWITCH BOARDARRAY S8225/3 FR200/3 TPLSIG 35KAIC 30KWAFL=36ASC =51 30KWAFL=36ASC =51 30KWAFL=36ASC =511.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDER1.5"C3-#4,1-#2/GFIELD U.G. FEEDERNOTE: EACH INVERTER SPEC MAXIMUM OUTPUT IS 9.995KW AT 480V AND 12 AMPS CONNECTED DELTAWITH NEUTRAL, THEREFORE ROUNDED UP TO 10KW FOR PURPOSES OF CALCULATIONS. EACH INVERTERMEETS THE REQUIREMENTS OF UL #1741-SA INCLUDING ANTI-ISLANDING AND CEC EFFICIENCY IS 96.5%.THD = <1.75 AND PF RANGE IS 0-1 IND/CAPREV 1.01.0 2-27-18 CHANGED INVERTERS SOLAR FIELD WIRING TO SOLAR CO.J-BOX MOUNTED ON SOLAR PANEL RACKS PER APPLICABLE CEC ELECTRICAL CODE REQUIREMENTS. SOLAR CO.J-BOXIS NEMA 3R PANEL WITH INCOMING LUGS FOR FEEDERS FROM SWBD-S1-1 AND 4 DISTRIBUTION BOLT-ON 35KAIC 20/3 DISTRIBUTION BREAKERSMARKED AS TO INVERTER FED. NUMBER AND A-FIX PVC ENGRAVED NAME PLATE TO SWBD-S1-1 SUB FEED BREAKER, J-BOX, INDIVIDUAL SUB BREAKERSAND INVERTERS AS TO ARRAY SWBD FEEDER" SX", AND J-BOX "SX-Y", J-BOX SUB-BREAKER NUMBERS "SX-Y-Z" AND INVERTER "INV-SX-Y-Z"TYP. ALL ARRAYST:\files\XXX (MISC)\170 - SLO WWTP Solar\DWGS - Reservoir\DWGS REV 1.0 2-27-18\XXX170_Res_E4_SL.dwg, SINGLE LINE, 2/27/2018 5:58:49 PM, Gary, 1:2 Packet Pg. 164Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page __ of __ Form 79-1191, Appendix B Advice 5140-E September 2017 APPENDIX B RULES “2” AND “21” Note: PG&E’s electric Rules “2” and “21” may be subject to such changes or modifications by the Commission as the Commission may, from time to time, direct in the exercise of its jurisdiction. PG&E’s tariffs, including Rules “2” and “21” can be accessed via the PG&E website at www.pge.com/tariffs. Upon request, PG&E can provide copies to Producer of Rules “2” and “21.”) Packet Pg. 165 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page __ of __ Form 79-1191, Appendix C Advice 5140-E September 2017 APPENDIX C (If Applicable) RULE 21 “SPECIAL FACILITIES” AGREEMENT (Formed between the Parties) Packet Pg. 166 Item 9 GENERATING FACILITY INTERCONNECTION AGREEMENT FOR LOCAL GOVERNMENT RENEWABLE ENERGY SELF-GENERATION BILL CREDIT TRANSFER (RES-BCT) Automated Document, Preliminary Statement Part A Page 1 of 1 Form 79-1191, Appendix E Advice 5140-E September 2017 APPENDIX E PRODUCER CERTIFICATION THAT IT MEETS THE DEFINITION OF A LOCAL GOVERNMENT, AS DEFINED IN PUBLIC UTILITIES SECTION 2830(A) The Producer certifies that it is a Local Government that meets the definition of a “Local Government” as defined in Public Utilities code (PU) Section 2830 (a) (6) and, where applicable, PU Section 2830 (a) (3). PU Code § 2830 (a) (6) reads as follows: "Local government" means a city, county, whether general law or chartered, city and county, special district, school district, political subdivision, or other local public agency, but shall not mean a joint powers authority, the state or any agency or department of the state, other than an individual campus of the University of California or the California State University. And a campus is defined in PU Code 2830 (a) (3) as: "Campus" means an individual community college campus, individual California State University campus, or individual University of California campus. In addition applicant certifies that all of the service agreements listed on Appendix A – Designation of Bill Credit Allocation Percentages to RES-BCT Arrangement Accounts are accounts for this same Local Government. I am duly authorized to make this certification on behalf of the Local Government submitting this RES- BCT Application. Name: Title: Authorized Signature: Date Packet Pg. 167 Item 9 R ______ RESOLUTION NO. _____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, MAKING FINDINGS ON ENERGY SAVINGS AND DETERMINING OTHER MATTERS IN CONNECTION WITH ENERGY SERVICE AGREEMENTS WHEREAS, it is the policy of the State of California and the intent of the State Legislature to promote all feasible means of energy conservation and all feasible uses of alternative energy supply sources; and WHEREAS, the City of San Luis Obispo (“City”) desires to reduce energy costs at its facilities; and WHEREAS, the City proposes to enter into power purchase agreements (“Power Purchase Agreements”) and related contract documents with ForeFront Power (“ForeFront”) for facilities at the City’s real property sites, pursuant to which ForeFront will design, construct, and install solar photovoltaic and energy storage facilities and arrange with the local utility for interconnection of the facilities, which will generate and store energy for the sites on which such facilities are located; and WHEREAS, ForeFront has provided the City with analysis showing the financial and other benefits of entering into the Power Purchase Agreements, which analysis is attached he reto as Exhibit A and made part hereof by this reference; and WHEREAS, Exhibit A includes data showing that the anticipated cost to the City for the electrical energy provided by the solar photovoltaic and energy storage facilities will be less than the anticipated cost to the City of electrical energy that would have been consumed by the City in the absence of such measures; and WHEREAS, ForeFront was the selected vendor for School Project for Utility Rate Reduction’s (“SPURR”) Renewable Energy Aggregated Procurement (“REAP”) Program, a competitive statewide solar and energy storage request for proposals (“RFP”) process, and the City adopts the REAP Program’s competitive process as its own; and WHEREAS, the City proposes to enter into the Power Purchase Agreements and related contract documents, each in substantially the form presented at this meeting, subject to such changes, insertions or omissions as the City Manager and City Attorney reasonably deems necessary following the Council’s adoption of this Resolution; and WHEREAS, pursuant to Government Code section 4217.12, this Council held a public hearing, public notice of which was given two weeks in advance, to receive public comment . Packet Pg. 168 Item 9 Resolution No. _____ (2018 Series) Page 2 R ______ NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo t hat: SECTION 1. The terms of the Power Purchase Agreements and related agreements are in the best interests of the City. SECTION 2. In accordance with Government Code section 4217.12, and based on data provided by Exhibit A, the Council finds that the anticipated cost to the City for electrical energy provided by the Power Purchase Agreements will be less than the anticipated cost to the City of electrical energy that would have been consumed by the City in the absence of the Power Purchase Agreements. SECTION 3. The Council hereby approves the Power Purchase Agreements in accordance with Government Code section 4217.12. SECTION 4. The City Manager and City Attorney are hereby authorized and directed to negotiate any further changes, insertions and omissions to the Power Purchase Agreements as they reasonably deems necessary, and thereafter to execute and deliver the Power Purchase Agreements following the Council’s adoption of this Resolution. The City Manager is further authorized and directed to execute and deliver any and all papers, instruments, opinions, certificates, affidavits and other documents and to do or cause to be done any and all other acts and things necessary or proper for carrying out this Resolution and said Agreements. SECTION 5. Environmental Review. The City Council hereby determines that the execution of a power purchase agreement with Forefront Power are statutorily and categorically exempt from environmental review on the basis that the projects are: installation of solar energy systems on existing roofs or at existing parking lots (Public Resources Code § 21080.35; new construction or conversion of small structures (CEQA Guidelines § 15303); minor alterations to land (CEQA Guidelines § 15304); projects which consist of the construction or placeme nt of minor accessory structures to existing facilities (CEQA Guidelines § 15311); and activities which can be seen with seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment (CEQA Guidelines § 15061(b)(3). . Packet Pg. 169 Item 9 Resolution No. _____ (2018 Series) Page 3 R ______ SECTION 7. City staff are hereby authorized to file and process a Notice of CEQA Exemption for the Project in accordance with CEQA and the State CEQA Guidelines, and the findings set forth in this resolution. Upon motion o f _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2018. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo , California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 170 Item 9 Meeting Date: 9/4/2018 FROM: Daryl Grigsby, Director of Public Works Prepared By: Scott Lee, Parking Services Manager SUBJECT: RESOLUTION TO ELIMINATE THE HOURS OF OPERATION IN PUBLIC PARKING STRUCTURES RECOMMENDATION Adopt a Resolution to eliminate the specified hours of operation for all public parking structures. DISCUSSION The new Parking Access and Revenue Control System (PARCS) will allow the parking structures to be operational on a 24/7/365 basis which requires the removal of the current hours of operation. BACK GROUND Resolution No. 10273 (2011 Series) modified the hourly rates and daily maximum rates for all three public parking structures and included the specific hours of operation when rates were applicable. The hourly rates and daily maximum rates were aga in modified with Resolution No. 10823 on July 18, 2017 by the City Council. At this time, it is necessary to eliminate the hours of operation to allow the new PARCS system to capture the revenue due for all vehicles parked in the public parking structur es regardless of time of entry or exit and according to the hourly rate and daily maximum rate established in Resolution No. 10823 (2017 Series). Controlling gate access at all times is a necessity to allow for accurate counting of occupancies for the new public information systems that will eventually be brought on line using the new equipment. NEXT STEPS After approval of this Resolution and upon installation of the replacement PARCS system, Parking Services will program the new system to capture and co llect revenue for each hour a vehicle is parked in any public parking structure according to the rates and maximums established in Resolution No. 10823. CONCURRENCES None. Packet Pg. 171 Item 10 ENVIRONMENTAL REVIEW The recommended actions are not a “project” within the meaning of the CEQA and therefore, no environmental review is required. FISCAL IMPACT The projected amount of additional revenue has not been quantified as there is no accurate method to estimate the number of vehicles exiting the structures after the existing hours of operation. The additional revenue collected will be used for Parking Fund operations and Parking CIP projects including the maintenance and eventual replacement of the PARCS system. ALTERNATIVE The City Council may choose to not repeal Re solution No. 10273 and leave the limited hours of operation unchanged. The Parking Manager and staff do not recommend this alternative as this option will limit the collection of revenue for parking in public structures and will not help to recover the cost of the new PARCS system. Attachments: a - Resolution Repealing Resolution 10723 - Hours of Operation at Parking Structures Packet Pg. 172 Item 10 R ______ RESOLUTION NO. ______ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, TO ELIMINATE HOURS OF OPERATION AT PUBLIC PARKING STRUCTURES. WHEREAS, the City of San Luis Obispo wishes to maintain effective usage of its three parking structures; and WHEREAS, the City wishes to provide secure and user -friendly parking for all users of the parking structures; and WHEREAS, the parking program needs to continue to be self-sufficient for its financial commitments; WHEREAS, Resolution No. 10273 (2011 Series) established hours of operation, and revised the hourly rates and daily maximum rates for each of the parking structures; WHEREAS, Resolution No. 10823 (2017 Series) revised the hourly rates and daily maximum rates for each of the parking structures; WHEREAS, the City is replacing the Parking Access and Revenue Control System (PARCS) at each of the parking structures; WHEREAS, the removal of the hours of operation will allow the new PARCS system to collect the applicable parking fees regardless of the hour of entry or exit, and to provide an accurate occupancy count for the future public information systems to eb brought on line. NOW THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Effective September 10, 2018, hours of operation at the 842 Palm, 919 Palm and 871 Marsh parking structures are hereby eliminated. Hourly rates and daily maximum rates shall continue as set forth in Resolution 10823 (2017 Series). Packet Pg. 173 Item 10 Resolution No. _____ (2018 Series) Page 2 R ______ SECTION 2. Resolution No. 10273 (2011 Series) is hereby superseded to the extent inconsistent herewith. Upon motion of ___________________, seconded by_____________________ and on the following vote: AYES: NOES: ABSENT: The foregoing resolution was passed and adopted this ____ day of ___________, 2018. _______________________ Mayor Heidi Harmon ATTEST _____________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 174 Item 10 Meeting Date: 9/4/2018 FROM: Michael Codron, Community Development Director Prepared By: Walter Oetzell, Assistant Planner SUBJECT: REVIEW OF A MILLS ACT HISTORIC PRESERVATION AGREEMENT FOR THE MASTER LIST HISTORIC HARRY E. LYMAN HOUSE RECOMMENDATION As recommended by the Cu ltural Heritage Committee, adopt a resolution (Attachment A) approving a Historic Property Preservation Agreement between the City and the owners of the Harry E. Lyman House at 868 Upham Street, under the terms described in the draft agreement (Attachment B). DISCUSSION The owners of the Harry E. Lyman House at 868 Upham Street have submitted an application to enter into a Mills Act historic preservation agreement with the City for the improvement and preservation of the historic property in exchange for property tax relief. The Mills Act Program The Mills Act Property Tax Abatement Program enables California cities to enter into contracts with owners of historical property to provide them with tax relief in exchange for an agreement to actively participate in the restoration and maintenance of historical resources. A Mills Act contract is effective for an initial 10-year period, and then is automatically extended annually for an additional year. After the initial term, either the City or the owner may, by written notice, decide not to renew the contract. During the effective term of the contract, the property owner must improve or rehabilitate the property, maintain the property consistent with the Secretary of the Interior’s Standards, and provide visibi lity of the historical resource from the public right -of-way. Figure 1: Harry E. Lyman House Packet Pg. 175 Item 11 The Conservation and Open Space Element (COSE) of the General Plan describes the City’s goals and policies for the protection of cultural resources. It is the City’s policy that significant historic resources be rehabilitated and preserved (COSE § 3.3). Participation in the Mills Act Program is one of the means by which the City encourages the maintenance and restoration of historic properties (COSE § 3.6.2). A property must be on the City’s Master List of Historic Resources in order to be enrolled in the program. Currently there are 55 properties participating in the program, with the last request approved by the Council in April 2017. The Harry E. Lyman House The Harry E. Lyman House was built in 1912 by Harry Lyman, a noted local architect and builder. The house is noted as an excellent example of the Craftsman Style with eclectic influence and was designated as a Master List Historic Resource in March 2012 (Resolution 10338). The house appears to be in very good condition. Behind the house are two accessory buildings: a workshop built in 1908; and a garage built in 1940. In 2005 the workshop was converted to a residential dwelling and the garage was converted into a guest space. The accessory structures were not evaluated for historical significance at the time the property was included on the City’s Inventory of Historic Resources, though they were acknowledged to be associated with Mr. Lyman (see the findings set out in Resolution 10338, Att achment D). Because the historical significance of the property is concentrated in the primary dwelling, proposed improvements to the accessory structures have not been included in the draft preservation agreement. Proposed Improvements Several improvements and maintenance items are proposed to be completed (see Attachment E). Proposed improvements which are most relevant to the preservation of the historic character of the property have been included in Exhibit A of the proposed agreement (Attachment B) and are summarized below: ▪ Maintenance of site landscaping, including: health of original trees behind the main residence; replacement of dying and diseased trees; ▪ Replace dilapidated front door with a new door in keeping with the architectural style of the residence; ▪ Update exterior lighting in keeping with historic style of house; ▪ Add HVAC system (for primary residence); ▪ Repair and rebuild fencing and retaining wall along the rear of property and the driveway side of property; ▪ Replace roofing (of primary residence); ▪ Repaint interior of main house; ▪ Refinish original wood floors in main residence; ▪ Repaint exterior of main house; ▪ Re-glaze and restore original windows (of primary residence); Packet Pg. 176 Item 11 Cultural Heritage Committee Recommendation The Cultural Heritage Committee reviewed the application and the terms of the draft contract at a public hearing on July 23, 2018. The Committee, by unanimous vote, recommended that the Council approve the contract. The resolution adopted by the Committee is attached to this report (Attachment C). ENVIRONMENTAL REVIEW Entering into a “Mills Act Contract” with the owners of historic property is not subject to the provisions of the California Environmental Quality Act (CEQA) because it is not a project as defined in CEQA Guidelines § 15378 (Definitions – Project). Implementation of the Mills Act is a government fiscal activity which does not involve commitment to any specific project resulting in a potentially significant physical impact on the environment (Guidelines § 15378 (b) (4)). FISCAL IMPACT Recent estimates of tax savings suggest that, for property valued at $1,000,000, a property owner might realize approximately $60,000 in tax savings over the initial 10 -year term of the Mills Act Contract. About 3.36% of property taxes were allocated to the City for the 2015-2016 fiscal year,1 and so the tax savings may have an impact to the City of about $2,100 over the initial 10-year period of the contract. The Restricted Value of the property is calculated by the County Assessor after the contract is agreed upon, and the assessed property value indicated in Assessor records often does not accurately reflect the current value of the property, particularly after a change of ownership, making it difficult to accurately estimate the tax sa vings and resulting fiscal impacts to the City. ALTERNATIVES 1. Continue consideration of the request to a future date for additional analysis or research ; 2. Do not enter into a Mills Act Historic Preservation Contract with the property owner. This alternative is not recommended. The contract provides a tax relief incentive that is a tool for achieving the City’s goals for historical preservation. Attachments: a - Council Resolution (Draft) b - Historic Property Preservation Agreement (Draft) c - CHC Resolution (CHC-1006-2018) d - Resolution 10338 (2012) e - Applicant Letter and List of Proposed Improvements 1 Property Tax Perspective, Fiscal Year July 1, 2015 to June 30, 2015; County of San Luis Obispo [ ONLINE at http://www.slocounty.ca.gov/Assets/AC/Digita l/Property+Tax/Perspective/2015-16+Property+Tax+Perspective.pdf, accessed July 20, 2016] Packet Pg. 177 Item 11 RESOLUTION NO. ____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING A HISTORIC PROPERTY PRESERVATION AGREEMENT BETWEEN THE CITY AND THE OWNER OF THE HARRY E. LYMAN HOUSE AT 868 UPHAM STREET WHEREAS, the City Council of the City of San Luis Obispo is authorized by California Government Code § 50280 et seq. (known as “the Mills Act”) to enter into contracts with the owners of qualified historical properties to provide for appropriate use, maintenance, a nd rehabilitation such that these historic properties retain their historic characteristics; and WHEREAS, the City Council has adopted Resolution No. 9136 (2000 Series), establishing the Mills Act Historic Property Tax Incentive Program as an on-going historic preservation program to promote the preservation, maintenance and rehabilitation of historic resources through financial incentives; and WHEREAS, the City Council of the City of San Luis Obispo has designated this property as a historic resource o f the City of San Luis Obispo pursuant to the policies in the City’s Historic Preservation Program Guidelines; and WHEREAS, Maggie and Jason Browning are the owners of real property that certain qualified real property, together with associated structures and improvement thereon, located on Assessor’s Parcel Number 003-646-014, located at 868 Upham Street, in the City of San Luis Obispo, California, also described as the Harry E. Lyman House ; and WHEREAS, the City and Owner, for their mutual benefit, now desire to enter into this agreement to limit the use of the property to prevent inappropriate alterations and to ensure that character-defining features are preserved and maintained in an exemplary manner, and repairs and improvements are completed as necessary to carry out the purposes of California Government Code, Chapter 1, Part 5 of Division 1 of Title 5, Article 12, Sec. 50280 et seq., and to qualify for an assessment of valuation pursuant to Article 1.9, Sec. 439 et. seq. of the Revenue and Taxation Code. WHEREAS, the Cultural Heritage Committee of the City of San Luis Obispo conducted a public hearing in the Council Hearing Room of City Hall, 990 Palm Street, San Luis Obispo, California, on July 23, 2018 for the purpose of reviewing the proposed historic property preservation agreement , and recommended that the City enter into the agreement ; and WHEREAS, the City Council conducted a public hearing in the Council Chamber at 990 Palm Street, San Luis Obispo, California, on September 4, 2018 for the purpose of considering approval of the historic property preservation agreement, and has duly considered all evidence, including the record of the Cultural Heritage Committee hearing and recommendation, testimony of the applicant and interested parties, and the evaluation and recommendation by staff, present at said hearing; and Packet Pg. 178 Item 11 Resolution No. ____ (2018 Series) WHEREAS, notices of said public hearings were made at the time and in the manner required by law. NOW, THEREFORE, BE IT RESOLVED, by the Council of t he City of San Luis Obispo as follows: SECTION 1. Findings. Based upon all the evidence, the City Council makes the following findings: 1. Conservation and Open Space Element Program 3.6.2 states that the City will participate in financial assistance programs such as property tax reduction programs that encourage maintenance and restoration of historic properties. 2. The Harry E. Lyman House, located at 868 Upham Street, has been recognized as a historic asset in the community by its designation as a Master List Historic Property by the City Council on March 6, 2012 (Resolution 10338). As such, maintaining the structure will meet the City’s goals for historic preservation listed in policies 3.3.1 through 3.3.5 of the Conservation and Open Space Element. SECTION 2. Environmental Determination. The City Council has determined that the above actions do not constitute a project, as defined in California Environmental Quality Act Guidelines § 15378 and are not subject to environmental review. SECTION 3. Historic Property Preservation Agreement Approved. The City Council hereby approves the “Historic Property Preservation Agreement between the City of San Luis Obispo and the Owners of the Historic Property Located at 868 Upham Street,” to be entered into by the City and the property owners, Maggie and Jason Browning. SECTION 4. Community Development Director Authorized to Sign Agreement for City. The City Council hereby authorizes the Community Development Director to execute said agreement on behalf of the Council of the City of San Luis Obispo . Packet Pg. 179 Item 11 Resolution No. ____ (2018 Series) SECTION 5. Recordation of the Agreement . No later than twenty (20) days after the parties enter into said agreement, the City Clerk shall cause the agreement to be recorded in the Office of the County Recorder of the County of San Luis Obispo. On motion of Council Member ___________, seconded by Council Member __________, and on the following roll call vote: AYES: NOES: REFRAIN: ABSENT: The foregoing resolution was passed a nd adopted this 4th day of September 2018. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, 2018. ____________________________________ Teresa Purrington, City Clerk Packet Pg. 180 Item 11 HISTORIC PROPERTY PRESERVATION AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND THE OWNERS OF THE HISTORIC PROPERTY LOCATED AT 868 UPHAM STREET, IN THE CITY OF SAN LUIS OBISPO, SAN LUIS OBISPO COUNTY, STATE OF CALIFORNIA. THIS AGREEMENT is made and entered into this ________ day of ________ , 2018, by and between the City of San Luis Obispo, a municipal corporation (hereinafter referred to as the “City”), and Maggie and Jason Browning (hereinafter referred to as “Owners”), and collectively referred to as the “parties.” WHEREAS, Owners are the owners of that certain real property commonly known as 868 Upham Street (APN 003-646-014), and legally described as shown in the attached “Exhibit B” (“Owners’ Property”); and WHEREAS, Owners have agreed to enter into an Historic Property Preservation Agreement with the City for the preservation, maintenance, restoration, or rehabilitation of Owners’ Property, an historic resource within the City; NOW, THEREFORE, in consideration of the above recitals and in further consideration of the mutual benefits, promises, and agreements set out herein, the parties agree as follows: Section 1. Description of Preservation Measures. The Owners, their heirs, or assigns hereby agree to undertake and complete, at his expense, the preservation, maintenance, and improvements measures described in “Exhibit A” attached hereto. Section 2. Effective Date and Term of Agreement. This agreement shall be effective and commence upon recordation and shall remain in effect for an initial term of ten (10) years thereafter. Each year upon the anniversary of the agreement’s effective date, such initial term will automatically be extended as provided in California Government Code Section 50280 through 50290 and in Section 3, below. Section 3. Agreement Renewal and Non-renewal. a. Each year on the anniversary of the effective date of this agreement (hereinafter referred to as “annual renewal date”), a year shall automatically be added to the initial term of this agreement unless written notice of non-renewal is served as provided herein. b. If the Owners or the City desire in any year not to renew the agreement, the Owners or the City shall serve written notice of non-renewal of the agreement on the other party. Unless such notice is served by the Owners to the City at least ninety (90) days prior to the annual renewal date, or served by the City to the Owners at least sixty (60) days prior to the annual renewal date, one (1) year shall automatically be added to the term of the agreement as provided herein. Packet Pg. 181 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 2 c. The Owners may make a written protest of the notice. The City may, at any time prior to the annual renewal date, withdraw its notice to the Owners of non-renewal. d. If either the City or the Owners serve notice to the other party of non-renewal in any year, the agreement shall remain in effect for the balance of the term then remaining. Section 4. Standards and Conditions. During the term of this agreement, the historic property shall be subject to the following conditions: a. Owners agree to preserve, maintain, and, where necessary, restore or rehabilitate the building and its character-defining features, including: the building’s general architectural form, style, materials, design, scale, proportions, organization of windows, doors, and other openings; interior architectural elements that are integral to the building’s historic character or significance; exterior materials, coatings, textures, details, mass, roof line, porch, and other aspects of the appearance of the building’s exterior, as described in Exhibit A, to the satisfaction of the Community Development Director or his designee. b. All building changes shall comply with applicable City specific plans, City regulations and guidelines, and conform to the rules and regulations of the Office of Historic Preservation of the California Department of Parks and Recreation, namely the U.S. Secretary of the Interior’s Standards for Rehabilitation and Standards and Guidelines for Historic Preservation Projects. Interior remodeling shall retain original, character-defining architectural features such as oak and mahogany details, pillars and arches, special tile work, or architectural ornamentation to the greatest extent possible. c. The Community Development Director shall be notified by the Owners of changes to character-defining exterior features prior to their execution, such as major landscaping projects and tree removals, exterior door or window replacement, repainting, remodeling, or other exterior alterations requiring a building permit. The Owners agree to secure all necessary City approvals and/or permits prior to changing the building’s use or commencing construction work. d. Owners agree that property tax savings resulting from this agreement shall be used for property maintenance and improvements as described in Exhibit A. e. The following are prohibited: demolition or partial demolition of the historic building; exterior alterations or additions not in keeping with the standards listed above; dilapidated, deteriorating, or unrepaired structures such as fences, roofs, doors, walls, windows; outdoor storage of junk, trash, debris, appliances, or furniture visible from a public way; or any de vice, decoration, structure, or vegetation which is unsightly due to lack of maintenance or because such feature adversely affects, or is visually incompatible with, the property’s recognized Packet Pg. 182 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 3 historic character, significance, and design as determined by the Community Development Director. f. Owners shall allow reasonable periodic examination, by prior appointment, of the interior and exterior of the historic property by representatives of the County Assessor, the State Department of Parks and Recreation, the State Board of Equalization, and the City as may be necessary to determine the owners’ compliance with the terms and provisions of this agreement. Section 5. Furnishing of Information. The Owners hereby agree to furnish any and all information requested by the City which may be necessary or advisable to determine compliance with the terms and provisions of this agreement. Section 6. Cancellation. a. The City, following a duly-noticed public hearing by the City Council as set forth in Government Code Sect ion 50285, may cancel this agreement if it determines that the Owners have breached any of the conditions of this agreement or has allowed the property to deteriorate to the point that it no longer meets the standards for a qualified historic property; or if the City determines that the Owners have failed to preserve, maintain, or rehabilitate the property in the manner specified in Section 4 of this agreement. If a contract is cancelled because of failure of the Owners to preserve, maintain, and rehabilit ate the historic property as specified above, the Owners shall pay a cancellation fee to the State Controller as set forth in Government Code Section 50286, which states that the fee shall be 12 ½% of the full value of the property at the time of cancellat ion without regard to any restriction imposed with this agreement. b. If the historic building is acquired by eminent domain and the City Council determines that the acquisition frustrates the purpose of the agreement, the agreement shall be cancelled and no fee imposed, as specified in Government Code Section 50288. Section 7. Enforcement of Agreement. a. In lieu of and/or in addition to any provisions to cancel the agreement as referenced herein, the City may specifically enforce, or enjoin the breach of, the terms of the agreement. In the event of a default, under the provisions to cancel the agreement by the Owners, the City shall give written notice of violation to the Owners by registered or certified mail addressed to the address stated in this agreement. If such a violation is not corrected to the reasonable satisfaction of the Community Development Director or designee within thirty (30) days thereafter; or if not corrected within such a reasonable time as may be required to cure the breach or default of said breach; or if the default cannot be cured within thirty (30) days (provided that acts to cure the breach or default may be commenced within thirty (30) days and shall thereafter be diligently pursued to completion by the Owners); Packet Pg. 183 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 4 then the City may, without further notice, declare a default under the terms of this agreement and may bring any action necessary to specifically enforce the obligations of the Owners growing out of the terms of this agreement, apply to any court, state or federal, for injunctive relief against any violation by the Owners or apply for such relief as may be appropriate. b. The City does not waive any claim of default by the Owners if the City does not enforce or cancel this agreement. All other remedies at law or in equity which are not otherwise provided for in this agreement or in the City’s regulations governing historic properties are available to the City to pursue in the event that there is a breach or default under this agreement. No waiver by the City of any breach or default under this agreement shall be deemed to be a waiver of any other subsequent breach thereof or default herein under. c. By mutual agreement, City and Owners may enter into mediation or binding arbitration to resolve disputes or grievances growing out of this contract. Section 8. Binding Effect of Agreement. The Owners hereby subject the historic building located at 868 Upham Street , San Luis Obispo, California, Assessor’s Parcel Number 003-646-014, to the covenants, reservations, and restrictions as set forth in this agreement. The City and Owners hereby declare their specific intent that the co venants, reservations, and restrictions as set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Owners’ successors and assigns in title or interest to the historic property. Every contract, deed, or ot her instrument hereinafter executed, covering or conveying the historic property or any portion thereof, shall conclusively be held to have been executed, delivered, and accepted subject to the covenants, reservations, and restrictions expressed in this ag reement regardless of whether such covenants, restrictions, and reservations are set forth in such contract, deed, or other instrument. Section 9. Notice. Any notice required by the terms of this agreement shall be sent to the address of the respective parties as specified below or at other addresses that may be later specified by the parties hereto. To City: Community Development Director City of San Luis Obispo 919 Palm Street San Luis Obispo, CA 93401 To Owners: Maggie and Jason Browning 868 Upham Street San Luis Obispo CA 93401 Section 10. General Provisions. a. None of the terms, provisions, or conditions of this agreement shall be deemed to create a partnership between the parties hereto and any of their heirs, successors, or Packet Pg. 184 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 5 assigns, nor shall such terms, provisions, or conditions cause them to be considered joint ventures or members of any joint enterprise. b. The Owners agree to hold the City and its elected and appointed officials, officers, agents, and employees har mless from liabilit y for damage or from claims for damage for personal injuries, including death, and claims for property damage which may arise from the direct or indirect use or activities of the Owners, or from those of his contractor, subcontractor, agent, employee, or other person acting on the Owners’ behalf which relates to the use, operation, maintenance, or improvement of the historic property. The Owners hereby agree to and shall defend the City and its elected and appointed officials, officers, agents, and employe es with respect to any and all claims or actions for damages caused by, or alleged to have been caused by, reason of the Owners’ activities in connection with the historic property, excepting however any such claims or actions which are the result of the sole negligence or willful misconduct of City, its officers, agents, or employees. c. This hold harmless provision applies to all damages and claims for damages suffered, or alleged to have been suffered, and costs of defense incurred, by reason of the operat ions referred to in this agreement regardless of whether or not the City prepared, supplied, or approved the plans, specifications, or other documents for the historic property. d. All of the agreements, rights, covenants, reservations, and restrictions contained in this agreement shall be binding upon and shall inure to the benefit of the parties herein, their heirs, successors, legal representatives, assigns, and all persons acquiring any part or portion of the historic property, whether by operation of law or in any manner whatsoever. e. In the event legal proceedings are brought by any party or parties to enforce or restrain a violation of any of the covenants, reservations, or restrictions contained herein, or to determine the rights and duties of any party hereunder, the prevailing party in such proceeding may recover all reasonable attorney’s fees to be fixed by the court, in addition to court costs and other relief ordered by the court. f. In the event that any of the provisions of this agreement are held to be unenforceable or invalid by any court of competent jurisdiction, or by subsequent preemptive legislation, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby. g. This agreement shall be construed and governed in accordance with the laws of the State of California. Section 11. Amendments. This agreement may be amended, in whole or in part, only by a written recorded instrument executed by the parties hereto. Packet Pg. 185 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 6 Section 12. Recordation and Fees. No later than twenty (20) days after the parties enter into this agreement, the City shall cause this agreement to be recorded in the office of the County Recorder of the County of San Luis Obispo. Participation in the program shall be at no cost to the Owners; however, the City may charge reasonable and necessary fees to recover direct costs of executing, recording, and administering the historical property contracts. IN WITNESS WHEREOF, the City and Owners have executed this agreement on the day and year written above. OWNERS ____________________________________ ______________________________ Maggie Browning Date ____________________________________ ______________________________ Jason Browning Date CITY OF SAN LUIS OBISPO ____________________________________ ______________________________ Mayor Heidi Harmon Date Pursuant to authority conferred by Resolution No. __________(2018 Series) ATTEST: ______________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ______________________________ J. Christine Dietrick City Attorney ALL SIGNATURES MUST BE NOTARIZED Packet Pg. 186 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 7 EXHIBIT “A” MAINTENANCE AND IMPROVEMENT MEASURES FOR THE TEASS HOUSE LOCATED AT 868 UPHAM STREET, SAN LUIS OBISPO, CALIFORNIA Owners shall preserve, maintain, and repair the historic building, including its character -defining architectural features in good condition, to the satisfaction of the Community Development Director or designee, pursuant to a Mills Act Preservation Contract with the City of San Luis Obispo for property located at 868 Upham Street. Character-defining features shall include, but are not limited to: roof, eaves, dormers, trim, porches, walls and siding, architectural detailing, doors and windows, window screens and shutters, balustrades and railings, foundat ions, and surface treatments. Owners agree to make the following improvements and/or repairs during the term of this contract but in no case later than ten (10) years from the contract date. All changes or repairs shall be consistent with the City’s Historic Preservation Ordinance and the Secretary of the Interior’s Standards for the Treatment of Historic Properties: ▪ Maintenance of site landscaping, including: health of original trees behind the main residence; replacement of dying and diseased trees; ▪ Replace dilapidated front door with a new door in keeping with the architectural style of the residence; ▪ Update exterior lighting in keeping with historic style of house; ▪ Add HVAC system (for primary residence); ▪ Repair and rebuild fencing and retaining wall along the rear of property and the driveway side of property; ▪ Replace roofing (of primary residence); ▪ Repaint interior of main house; ▪ Refinish original wood floors in main residence; ▪ Repaint exterior of main house; ▪ Re-glaze and restore original windows (of primary residence); ▪ General maintenance of roofing and interior and exterior surfaces, trim, and decoration of primary residence, including painting and replacement, as necessary ▪ General maintenance, including landscaping, plumbing, heating, and electrical system. Packet Pg. 187 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 8 EXHIBIT “B” Legal Description For APN/Parcel ID(s): 003-646-014 PARCEL 1: Lot 12 in Block 180 of Loomis' Addition to the City of San Luis Obispo, in the City of San Luis Obispo, County of San Luis Obispo, State of California, according to Map recorded January 4, 1877. PARCEL2: That portion of Lot 9 in Block 180 of Loomis' Addition to the City of San Luis Obispo, in the City of San Luis Obispo, County of San Luis Obispo, State of California, according to Map recorded January 4, 1877, described as follows: Beginning at the most Northerly corner of said Lot and running thence Southeasterly along the Northeasterly line thereof; 50 feet to the most Easterly corner of said Lot; Thence Southwesterly along the Southeasterly line of said Lot, 39.1 feet; Thence Northwesterly and parallel with the Northeasterly line of said Lo t, 50 feet to a point in the Northwesterly line of said Lot; Then Northeasterly along said Northwesterly line, 39.1 feet to the point of beginning. Packet Pg. 188 Item 11 Historic Property Preservation Agreement 868 Upham Street Page 9 State of California } County of San Luis Obispo } On________________, before me __________________________________________, Date Name and Title of the Officer personally appeared, _____________________________________________________, Name of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature __________________________________ Signature of Notary Public Place Notary Seal Above State of California } County of San Luis Obispo } On________________, before me __________________________________________, Date Name and Title of the Officer personally appeared, _____________________________________________________, Name of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature __________________________________ Signature of Notary Public Place Notary Seal Above A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached and not the truthfulness, accuracy, or validity of that document. A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached and not the truthfulness, accuracy, or validity of that docu ment. Packet Pg. 189 Item 11 Packet Pg. 190 Item 11 Packet Pg. 191 Item 11 RESOLUTION NO . 10338 (2012 Series) A RESOLUTION OF THE CITY OF SAN LUIS OBISPO ADDING THE PROPERT Y LOCATED AT 868 UPHAM STREET TO THE MASTER LIST O F HISTORIC RESOURCES, CHC 63-1 1 WHEREAS,applicants Jason and Maggie Browning, on June 2, 2011, submitted a n application to add their property to the Master List of Historic Resources ; and WHEREAS,the Cultural Heritage Committee of the City of San Luis Obispo at a publi c hearing held in the Council Meeting Room of City Hall, 990 Palm Street, San Luis Obispo, California, on July 25, 2011, and recommended the Council add the property located at 86 8 Upham Street to the Master List of Historic Resources ; and WHEREAS,the City Council conducted a public hearing on September 6, 2011, for th e purpose of considering adding the property located at 868 Upham Street to the Master List o f Historic Resources (CHC 63-11) and referred the project back to the CHC to determine whether th e porch enclosure can remain and still make findings of integrity ; an d WHEREAS,the Cultural Heritage Committee of the City of San Luis Obispo conducte d a 2nd public hearing in the Council Meeting Room of City Hall, 990 Palm Street, San Lui s Obispo, California, on October 24, 2011, and determined the porch enclosure can remain and stil l make findings of integrity ; and WHEREAS,the City Council conducted a public hearing on March 6, 2012, for th e purpose of considering adding the property located at 868 Upham Street to the Master List o f Historic Resources (CHC 63-11); and WHEREAS,the City Council has duly considered all evidence, including the testimony of the applicants, interested parties, the records of the Cultural Heritage Committee hearing, an d the evaluation and recommendations by staff, presented at said hearing . NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Lui s Obispo as follows : SECTION 1 .Findings .The Council makes the following findings of consistency wit h Historic Preservation Program Ordinance eligibility criteria for Master List Historic Resources : 1 . The house is eligible for the Master List of Historic Resources because it meets Histori c Preservation Guidelines Historic Significance criteria for Architectural Criteria – Style . The house is an excellent example of the Craftsman style with eclectic influences ; has integrity ; purity of style ; and, effectively conveys the historical value of the property . R 10338Packet Pg. 192 Item 11 Resolution No . 1033 8 Page 2 2.The house is eligible for the Master List of Historic Resources because it meets Histori c Preservation Guidelines Historic Significance criteria for Architectural Criteria — Design . The structure exhibits notable attractiveness with aesthetic appeal because of artistic merit, detail s and craftsmanship . 3.The house is eligible for the Master List of Historic Resources because it meets Histori c Preservation Guidelines Historic Significance criteria for Criteria for Building Evaluations — Architect . The building was designed and built in 1912 by a prominent architect and builde r in the local area and was lived in by Harry E . Lyman until his death in 1931 . 4.The house and associated outbuildings are eligible for the Master List of Histori c Resources since the property meets Historic Preservation Guidelines Historic Significanc e criteria for Architecture — Architect . Harry E . Lyman made significant contributions to Sa n Luis Obispo by constructing many homes within the City of San Luis Obispo includin g several historically designated homes in the City of San Luis Obispo and many other home s which are now located in the Old Town Historic District and in the Upham Stree t neighborhood area in the vicinity of 868 Upham Street . 5.The house is eligible for the Master List of Historic Resources criteria for Integrity sinc e is occupies its original site and foundation ; has maintained its historic character an d appearance to be recognizable as an historic resource and conveys the reasons for it s significance with intact original building materials and architectural details in the exterior an d interior ; and, the resource has retained its design, setting, materials, workmanship, feelin g and association . 6.The enclosed porch does not alter the integrity of the resource since the porch enclosur e was constructed during the era of significance of the residence, and it did not alter th e original fabric of the residence since the original wall and windows still exist and th e enclosure was of designed to blend with the architectural style of the building . 7.The enclosed porch does not materially alter the buildings ability to convey its historica l significance as an excellent example of a Craftsman style home with eclectic influences sinc e the building exhibits a high level of integrity of original interior and exterior features all th e way around the structure and no additions or other alterations have occurred ; and, the enclosed porch does not impact the structures ability to convey its significance as the home o f Harry E . Lyman and his family . SECTION 2 .Action .The Council of the City of San Luis Obispo does hereby add th e property located at 868 Upham Street to the Master List of Historic Resources as the historic "Harr y E . Lyman House". SECTION 3 .Environmental Determination .The City Council has determined that th e above actions do not constitute a project, as defined by Section 15308 of the Californi a Environmental Quality Act and are exempt from environmental review . Packet Pg. 193 Item 11 Resolution No . 1033 8 Page 3 Upon motion of Vice Mayor Carpenter, seconded by Council Member Smith, and on th e following vote : AYES :Council Members Ashbaugh, Carter and Smith, Vice Mayor Carpenter an d Mayor Mar x NOES :None ABSENT : None The foregoing resolution was adopted this 6 th day of March, 2012 . ATTEST : Elaina Cano City Clerk Packet Pg. 194 Item 11 Packet Pg. 195 Item 11 Packet Pg. 196 Item 11 Packet Pg. 197 Item 11 Page intentionally left blank. Packet Pg. 198 Item 11 Meeting Date: 9/4/2018 Figure 1: Teass House FROM: Michael Codron, Community Development Director Prepared By: Walter Oetzell, Assistant Planner SUBJECT: REVIEW OF A MILLS ACT HISTORIC PRESERVATION AGREEMENT FOR THE MASTER LIST HISTORIC TEASS HOUSE RECOMMENDATION As recommended by the Cultural Heritage Committee, adopt a resolution (Attachment A) approving a Historic Property Preservation Agreement between the City and the owners of the Teass House at 890 Osos Street, under the terms described in the draft agreement (Attachment B). DISCUSSION The owners of the Teass House at 890 Osos have submitted an application to enter into a Mills Act historic preservation agreement with the City for the improvement and preservation of the historic property in exchange for property tax relief. The Mills Act Program The Mills Act Property Tax Abatement Program enables California cities to enter into contracts with owners of historical property to provide them with tax relief in exchange for an agreement to actively participate in the restoration and maintena nce of historical resources. A Mills Act contract is effective for an initial 10-year period, and then is automatically extended annually for an additional year. After the initial term, either the City or the owner may, by written notice, decide not to renew the contract. During the effective term of the contract, the property owner must improve or rehabilitate the property, maintain the property consistent with the Secretary of the Interior’s Standards, and provide visibility of the historical resource fro m the public right-of-way. Packet Pg. 199 Item 12 The Conservation and Open Space Element (COSE) of the General Plan describes the City’s goals and policies for the protection of cultural resources. It is the City’s policy that significant historic resources be rehabilitated and preserved (COSE § 3.3). Participation in the Mills Act Program is one of the means by which the City encourages the maintenance and restoration of historic properties (COSE § 3.6.2). A property must be on the City’s Master List of Historic Resources in order to be enrolled in the program. Currently there are 55 properties participating in the program, with the last request approved by the Council in April 2017. The Teass House The Teass House was built as a combined residence and office in 1929 for Dr. C hester J. Teass, a former army physician who helped build the new General Hospital in the City. City records describe the architectural style as Mediterranean, designed by the architectural firm of Abrahms and Simms of Santa Barbara, with Theo Maino as bui lder (see Attachment C). It is two-stories in height, and currently serves as commercial office space. The property appears to be in very good condition (see property photographs, Attachment E). It was designated as a Master List Resource by the City Counc il in August 1993 (Resolution 5197). Proposed Improvements Several improvements and maintenance items have been identified by the applicant (see Attachment F) as having already been completed, along with a few items identified for completion under the terms of the proposed preservation agreement for this property. Future proposed improvements which are most relevant to the preservation of the historic character of the property have been included in Exhibit A of the proposed agreement (Attachment B) and are summarized below: ▪ Refurbishing of much of the roofing, including clay tiles ▪ Replacement of windows (where not possible to repair) ▪ Repainting of building exterior ▪ Repair of water leaks into the basement Cultural Heritage Committee Recommendation The Cult ural Heritage Committee reviewed the application and the terms of the draft contract at a public hearing on July 23rd, 2017. The Committee, by unanimous vote, recommended that the Council approve the contract. The resolution adopted by the Committee is att ached to this report (Attachment D). ENVIRONMENTAL REVIEW Entering into a “Mills Act Contract” with the owners of historic property is not subject to the provisions of the California Environmental Quality Act (CEQA) because it is not a project as defined in CEQA Guidelines § 15378 (Definitions – Project). Implementation of the Mills Act is a government fiscal activity which does not involve commitment to any specific project resulting in a potentially significant physical impact on the environment (Guidel ines § 15378 (b) (4)). Packet Pg. 200 Item 12 FISCAL IMPACT Recent estimates of tax savings suggest that, for property valued at $1,000,000, a property owner might realize approximately $60,000 in tax savings over the initial 10 -year term of the Mills Act Contract. About 3.36% of property taxes were allocated to the City for the 2015-2016 fiscal year,1 and so the tax savings may have an impact to the City of about $2,100 over the initial 10-year period of the contract. The Restricted Value of the property is calculated by the C ounty Assessor after the contract is agreed upon, and the assessed property value indicated in Assessor records often does not accurately reflect the current value of the property, particularly after a change of ownership, making it difficult to accurately estimate the tax savings and resulting fiscal impacts to the City. ALTERNATIVES 1. Continue consideration of the request to a future date for additional analysis or research; 2. Do not enter into a Mills Act Historic Preservation Contract with the property o wner. This alternative is not recommended. The contract provides a tax relief incentive that is a tool for achieving the City’s goals for historical preservation. Attachments: a - Council Resolution (Draft) b - Historic Property Preservation Agreement (Draft) c - Historic Resources Inventory Form d - CHC Resolution (CHC-1007-2018) e - Photographs and Recognition f - Request Letter and List of Improvements (Applicant) 1 Property Tax Perspective, Fiscal Year July 1, 2015 to June 30, 2015; County of San Luis Obispo [ ONLINE at http://www.slocounty.ca.gov/Assets/AC/Digital/Property+Tax/Perspective/2015 -16+Property+Tax+Perspective.pdf, accessed July 20, 2016] Packet Pg. 201 Item 12 RESOLUTION NO. ____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING A HISTORIC PROPERTY PRESERVATION AGREEMENT BETWEEN THE CITY AND THE OWNER OF THE TEASS HOUSE AT 890 OSOS STREET WHEREAS, the City Council of the City of San Luis Obispo is authorized by California Government Code § 50280 et seq. (known as “the Mills Act”) to enter into contracts with the owners of qualified historical properties to provide for appropriate use, maintenance, and rehabilitation such that these historic properties retain their historic characteristics; and WHEREAS, the City Council has adopted Resolution No. 9136 (2000 Series), establishing the Mills Act Historic Property Tax Incentive Program as an on-going historic preservation program to promote the preservation, maintenance and rehabilitation of historic resources through financial incentives; and WHEREAS, the City Council of the City of San Luis Obispo has designated this property as a historic resource of the City of San Luis Obispo pursuant to the policies in the City’s Historic Preservation Program Guidelines; and WHEREAS, Vintage Properties (“Owner”) is the owner of that certain qualified real property, together with associated structures and improvement thereon, located on Assessor’s Parcel Number 002-323-012, located at 890 Osos Street, in the City of San Luis Obispo, California, also described as the Teass House; and WHEREAS, the City and Owner, for their mutual benefit, now desire to enter into this agreement to limit the use of the property to prevent inappropriate alterations and to ensure tha t character-defining features are preserved and maintained in an exemplary manner, and repairs and/or improvements are completed as necessary to carry out the purposes of California Government Code, Chapter 1, Part 5 of Division 1 of Title 5, Article 12, S ec. 50280 et seq., and to qualify for an assessment of valuation pursuant to Article 1.9, Sec. 439 et. seq. of the Revenue and Taxation Code. WHEREAS, the Cultural Heritage Committee of the City of San Luis Obispo conducted a public hearing in the Council Hearing Room of City Hall, 990 Palm Street, San Luis Obispo, California, on July 23, 2018 for the purpose of reviewing the proposed historic property preservation agreement , and recommended that the City enter into the agreement ; and WHEREAS, the City Co uncil conducted a public hearing in the Council Chamber at 990 Palm Street, San Luis Obispo, California, on September 4, 201 8 for the purpose of considering approval of the historic property preservation agreement, and has duly considered all evidence, including the record of the Cultural Heritage Committee hearing and recommendation, testimony of the applicant and interested parties, and the evaluation and recommendation by staff, present at said hearing; and Packet Pg. 202 Item 12 Resolution No. ____ (2018 Series) R ______ WHEREAS, notices of said public hearings wer e made at the time and in the manner required by law. NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. Based upon all the evidence, the City Council makes the following findings: a) Conservation and Open Space Element Program 3.6.2 states that the City will participate in financial assistance programs such as property tax reduction programs that encourage maintenance and restoration of historic properties. b) The Teass House, located at 890 Osos Street, has been recognized as a historic asset in the community by its designation as a Master List Historic Property by the City Council on August 16, 1983 (Resolution 5197). As such, maintaining the structure will meet the City’s goals for historic preservation listed in policies 3.3.1 through 3.3.5 of the Conservation and Open Space Element. SECTION 2. Environmental Determination. The City Council has determined that the actions set forth in this Resolution do not constitute a project, as defined in California Environmental Quality Act Guidelines section 15378 and therefore, no environmental review is required. SECTION 3. Historic Property Preservation Agreement Approved. The City Council hereby approves the “Historic Property Preservation Agreement between the City of San Luis Obispo and the Owner of the Historic Property Located at 890 Osos Street,” to be entered into by the City and the property owner, Vintage Properties. SECTION 4. Community Development Director Authorized to Sign Agreement for City. The City Council hereby authorizes the Community Development Director to execute said agreement on behalf of the Council of the City of San Luis Obispo . Packet Pg. 203 Item 12 Resolution No. ____ (2018 Series) R ______ SECTION 5. Recordation of the Agreement . No later than twenty (20) days after the parties enter into said agreement, the City Clerk shall cause the agreement to be recorded in the Office of the County Recorder of the County of San Luis Obispo. On motion of Council Member ___________, seconded by Council Member __________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was passed and adopted this 4th day of September 2018. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, 2018. ____________________________________ Teresa Purrington City Clerk Packet Pg. 204 Item 12 HISTORIC PROPERTY PRESERVATION AGREEMENT BETWEEN THE CITY OF SAN LUIS OBISPO AND THE OWNER OF THE HISTORIC PROPERTY LOCATED AT 890 OSOS STREET, IN THE CITY OF SAN LUIS OBISPO, SAN LUIS OBISPO COUNTY, STATE OF CALIFORNIA. THIS AGREEMENT is made and entered into this ________ day of ________ , 2018, by and between the City of San Luis Obispo, a municipal corporation (hereinafter referred to as the “City”), and Vintage Properties (hereinafter referred to as “Owner”), and collectively referred to as the “parties.” WHEREAS, Owner is the owner of that certain real property commonly known as 890 Osos Street (APN 002-323-012), and legally described as shown in the attached “Exhibit B” (“Owner’s Property”); and WHEREAS, Owner has agreed to enter into an Historic Property Preservation Agreement with the City for the preservation, maintenance, restoration, or rehabilitation of Owner’s Property, an historic resource within the City; NOW, THEREFORE, in consideration of the above recitals and in further consideration of the mutual benefits, promises, and agreements set out herein, the parties agree as follows: Section 1. Description of Preservation Measures. The Owner, his heirs, or assigns hereby agree to undertake and complete, at his expense, the preservation, maintenance, and improvements measures described in “Exhibit A” attached hereto. Section 2. Effective Date and Term of Agreement. This agreement shall be effective and commence upon reco rdation and shall remain in effect for an initial term of ten (10) years thereafter. Each year upon the anniversary of the agreement’s effective date, such initial term will automatically be extended as provided in California Government Code Section 50280 through 50290 and in Section 3, below. Section 3. Agreement Renewal and Non-renewal. a. Each year on the anniversary of the effective date of this agreement (hereinafter referred to as “annual renewal date”), a year shall automatically be added to the initial term of this agreement unless written notice of non-renewal is served as provided herein. b. If the Owner or the City desire in any year not to renew the agreement, the Owner or the City shall serve written notice of non-renewal of the agreement on the other party. Unless such notice is served by the Owner to the City at least ninety (90) days prior to the annual renewal date, or served by the City to the Owner at least sixty (60) days prior to the annual renewal date, one (1) year shall automatically be added to the term of the agreement as provided herein. Packet Pg. 205 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 2 c. The Owner may make a written protest of the notice. The City may, at any time prior to the annual renewal date, withdraw its notice to the Owner of non-renewal. d. If either the City or the Owner serves notice to the other party of non-renewal in any year, the agreement shall remain in effect for the balance of the term then remaining. Section 4. Standards and Conditions. During the term of this agreement, the historic property shall be subject to the following conditions: a. Owner agrees to preserve, maintain, and, where necessary, restore or rehabilitate the building and its character-defining features, including: the building’s general architectural form, style, materials, design, scale, proportions, organization of windows, doors, and other openings; interior architectural elements that are integral to the building’s historic character or significance; exterior materials, coatings, textures, details, mass, roof line, porch, and other aspects of the appearance of the building’s exterior, as described in Exhibit A, to the satisfaction of the Community Development Director or his designee. b. All building changes shall comply with applicable City specific plans, City regulations and guidelines, and conform to the rules and regulations of the Office of Historic Preservation of the California Department of Parks and Recreation, namely the U.S. Secretary of the Interior’s Standards for Rehabilitation and Standards and Guidelines for Historic Preservation Projects. Interior remodeling shall retain original, character-defining architectural features such as oak and mahogany details, pillars and arches, special tile work, or architectural ornamentation to the greatest extent possible. c. The Community Development Director shall be notified by the Owner of changes to character-defining exterior features prior to their execution, such as major landscaping projects and tree removals, exterior door or window replacement, repainting, remodeling, or other exterior alterations requiring a building permit. The Owner agrees to secure all necessary City approvals and/or permits prior to changing the building’s use or commencing construction work. d. Owner agrees that property tax savings resulting from this agreement shall be used for property maintenance and impro vements as described in Exhibit A. e. The following are prohibited: demolition or partial demolition of the historic building; exterior alterations or additions not in keeping with the standards listed above; dilapidated, deteriorating, or unrepaired structures such as fences, roofs, doors, walls, windows; outdoor storage of junk, trash, debris, appliances, or furniture visible from a public way; or any device, decoration, structure, or vegetation which is unsightly due to lack of maintenance or because such feature adversely affects, or is visually incompatible with, the property’s recognized Packet Pg. 206 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 3 historic character, significance, and design as determined by the Community Development Director. f. Owner shall allow reasonable periodic examinatio n, by prior appointment, of the interior and exterior of the historic property by representatives of the County Assessor, the State Department of Parks and Recreation, the State Board of Equalization, and the City as may be necessary to determine the owner’s compliance with the terms and provisions of this agreement. Section 5. Furnishing of Information. The Owner hereby agrees to furnish any and all information requested by the City which may be necessary or advisable to determine compliance with the terms and provisions of this agreement. Section 6. Cancellation. a. The City, following a duly-noticed public hearing by the City Council as set forth in Government Code Section 50285, may cancel this agreement if it determines that the Owner has breached any of the conditions of this agreement or has allowed the property to deteriorate to the point that it no longer meets the standards for a qualified historic property; or if the City determines that the Owner has failed to preserve, maintain, or rehabilitat e the property in the manner specified in Section 4 of this agreement. If a contract is cancelled because of failure of the Owner to preserve, maintain, and rehabilitate the historic property as specified above, the Owner shall pay a cancellation fee to t he State Controller as set forth in Government Code Section 50286, which states that the fee shall be 12 ½% of the full value of the property at the time of cancellation without regard to any restriction imposed with this agreement. b. If the historic building is acquired by eminent domain and the City Council determines that the acquisition frustrates the purpose of the agreement, the agreement shall be cancelled and no fee imposed, as specified in Government Code Section 50288. Section 7. Enforcement of Agreement. a. In lieu of and/or in addition to any provisions to cancel the agreement as referenced herein, the City may specifically enforce, or enjoin the breach of, the terms of the agreement. In the event of a default, under the provisions to cancel the agreement by the Owner, the City shall give written notice of violation to the Owner by registered or certified mail addressed to the address stated in this agreement. If such a violation is not corrected to the reasonable satisfaction of the Community Development Director or designee within thirty (30) days thereafter; or if not corrected within such a reasonable time as may be required to cure the breach or default of said breach; or if the default cannot be cured within thirty (30) days (provided that acts to cure the breach or default may be commenced within thirty (30) days and shall thereafter be diligently pursued to completion by the Owner); Packet Pg. 207 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 4 then the City may, without further notice, declare a default under the terms of this agreement and may bring any action necessary to specifically enforce the obligations of the Owner growing out of the terms of this agreement, apply to any court, state or federal, for injunctive relief against any violation by the Owner or apply for such relief as may be appropriate. b. The City does not waive any claim of default by the Owner if the City does not enforce or cancel this agreement. All other remedies at law or in equity which are not otherwise provided for in this agreement or in the City’s regulations governing historic properties are available to the City to pursue in the event that there is a breach or default under this agreement. No waiver by the City of any breach or default under this agreement shall be deemed to be a waiver of any other subsequent breach thereof o r default herein under. c. By mutual agreement, City and Owner may enter into mediation or binding arbitration to resolve disputes or grievances growing out of this contract. Section 8. Binding Effect of Agreement. The Owner hereby subjects the historic building located at 890 Osos Street, San Luis Obispo, California, Assessor’s Parcel Number 002-323-012, to the covenants, reservations, and restrictions as set forth in this agreement. The City and Owner hereby declare their specific intent that the covenants, reservations, and restrictions as set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Owner ’s successors and assigns in title or interest to the historic property. Every contract, deed, or other instrument hereinafter executed, covering or conveying the historic property or any portion thereof, shall conclusively be held to have been executed, delivered, and accepted subject to the covenants, reservations, and restrictions expressed in this agreement regardless of whether such covenants, restrictions, and reservations are set forth in such contract, deed, or other instrument. Section 9. Notice. Any notice required by the terms of this agreement shall be sent to the address of the respective part ies as specified below or at other addresses that may be later specified by the parties hereto. To City: Community Development Director City of San Luis Obispo 919 Palm Street San Luis Obispo, CA 93401 To Owner: Vintage Properties 979 Osos Street Suite B-2 San Luis Obispo CA 93401 Packet Pg. 208 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 5 Section 10. General Provisions. a. None of the terms, provisions, or conditions of this agreement shall be deemed to create a partnership between the parties hereto and any of their heirs, successors, or assigns, nor shall such terms, provisions, or conditions cause them to be considered joint ventures or members of any joint enterprise. b. The Owner agrees to hold the City and its elected and appointed officials, officers, agents, and employees har mless from liability for damage or from claims for damage for personal injuries, including death, and claims for property damage which may arise from the direct or indirect use or activities of the Owner, or from those of his contractor, subcontractor, agent, employee, or other person acting on the Owner’s behalf which relates to the use, operation, maintenance, or improvement of the historic property. The Owner hereby agrees to and shall defend the City and its elected and appointed officials, officers, agents, and employees with respect to any and all claims or actions for damages caused by, or alleged to have been caused by, reason of the Owner’s activities in connection with the historic property, excepting however any such claims or actions which are the result of the sole negligence or willful misconduct of City, its officers, agents, or employees. c. This hold harmless provision applies to all damages and claims for damages suffered, or alleged to have been suffered, and costs of defense incurred, by reason of the operations referred to in this agreement regardless of whether or not the City prepared, supplied, or approved the plans, specificatio ns, or other documents for the historic property. d. All of the agreements, rights, covenants, reservations, and restrictions contained in this agreement shall be binding upon and shall inure to the benefit of the parties herein, their heirs, successors, legal representatives, assigns, and all persons acquiring any part or portion of the historic property, whether by operation of law or in any manner whatsoever. e. In the event legal proceedings are brought by any party or parties to enforce or restrain a violation of any of the covenants, reservations, or restrictions contained herein, or to determine the rights and duties of any party hereunder, the prevailing party in such proceeding may recover all reasonable attorney’s fees to be fixed by the court, in addition to court costs and other relief ordered by the court. f. In the event that any of the provisions of this agreement are held to be unenforceable or invalid by any court of competent jurisdiction, or by subsequent preemptive legislation, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby. g. This agreement shall be construed and governed in accordance with the laws of the State of California. Packet Pg. 209 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 6 Section 11. Amendments. This agreement may be amended, in whole or in part, only by a written recorded instrument executed by the parties hereto. Section 12. Recordation and Fees. No later than twenty (20) days after the parties enter into this agreement, the City shall cause this agreement to be recorded in the office of the County Recorder of the County of San Luis Obispo. Participation in the program shall be at no cost to the Owner; however, the City may charge reasonable and necessary fees to recover direct costs of executing, recording, and administering the historical property contracts. IN WITNESS WHEREOF, the City and Owner have executed this agreement on the day and year written above. OWNER ____________________________________ ______________________________ for: Vintage Properties Date CITY OF SAN LUIS OBISPO ____________________________________ ______________________________ Mayor Heidi Harmon Date Pursuant to authority conferred by Resolution No. __________(2018 Series) ATTEST: ______________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ______________________________ J. Christine Dietrick City Attorney ALL SIGNATURES MUST BE NOTARIZED Packet Pg. 210 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 7 EXHIBIT “A” MAINTENANCE AND IMPROVEMENT MEASURES FOR THE TEASS HOUSE LOCATED AT 890 OSOS STREET, SAN LUIS OBISPO, CALIFORNIA Owner shall preserve, maintain, and repair the historic building, including its character -defining architectural features in good condition, to the satisfaction of the Community Development Director or designee, pursuant to a Mills Act Preservation Contract with the City of San Luis Obispo for property located at 890 Osos Street. Character-defining features shall include, but are not limited to: roof, eaves, dormers, trim, porches, walls and siding, architectural detailing, doors and windows, window screens and shutters, balustrades and railings, foundat ions, and surface treatments. Owner agrees to make the following improvements and/or repairs during the term of this contract but in no case later than ten (10) years from the contract date. All changes or repairs shall be consistent with the City’s Historic Preservation Ordinance and the Secretary of the Interior’s Standards for the Treatment of Historic Properties: ▪ Refurbishment of roofing, including clay tiles; ▪ Repair of original windows, or “in-kind” replacement of original windows that cannot be repaired; ▪ Investigation and repair of water leaks into the basement of the building; ▪ General maintenance of roofing and interior and exterior surfaces, trim, and decoration, including painting and replacement, as necessary; ▪ General maintenance, including landscaping, plumbing, heating, and electrical system. Packet Pg. 211 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 8 EXHIBIT “B” Legal Description For APN/Parcel ID(s): 002-323-012 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: ALL THAT PORTION OF BLOCK 25 OF THE CITY OF SAN LUIS OBISPO, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE MAP COMPILED BY HUBERT C. WARD IN 1878, FILED FOR RECORD JUNE 24, 1882, IN BOOK A, PAGE 168 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID BLOCK; THENCE NORTH 53° 38' EAST ALONG THE SOUTHEASTERLY LINE OF SAID BLOCK, 75 FEET; THENCE NORTH 36° 22' WEST, 140 FEET TO THE SOUTHEASTERLY LINE OF A 20 FOOT ALLEY; THENCE SOUTH 53° 38' WEST ALONG SAID SOUTHEASTERLY LINE, 75 FEET TO THE SOUTHWESTERLY LINE OF SAID BLOCK; THENCE SOUTH 36° 22' EAST ALONG SAID SOUTHWESTERLY LINE, 140 FEET TO THE POINT OF BEGINNING, BEING ALSO KNOWN AS LOTS 17, 18 AND 19 OF THE MC DOUGALL SUBDIVISION OF BLOCK 25 OF THE CITY OF SAN LUIS OBISPO. Packet Pg. 212 Item 12 Historic Property Preservation Agreement 890 Osos Street Page 9 State of California } County of San Luis Obispo } On________________, before me __________________________________________, Date Name and Title of the Officer personally appeared, _____________________________________________________, Name of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature __________________________________ Signature of Notary Public Place Notary Seal Above State of California } County of San Luis Obispo } On________________, before me __________________________________________, Date Name and Title of the Officer personally appeared, _____________________________________________________, Name of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed t he same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws o f the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature __________________________________ Signature of Notary Public Place Notary Seal Above A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached and not the truthfulness, accuracy, or validity of that document. A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached and not the truthfulness, accuracy, or validity of that document. Packet Pg. 213 Item 12 Packet Pg. 214 Item 12 Packet Pg. 215 Item 12 Packet Pg. 216 Item 12 Packet Pg. 217 Item 12 Packet Pg. 218 Item 12 Packet Pg. 219 Item 12 Packet Pg. 220 Item 12 Packet Pg. 221 Item 12 Packet Pg. 222 Item 12 Packet Pg. 223 Item 12 Packet Pg. 224 Item 12 Packet Pg. 225 Item 12 Packet Pg. 226 Item 12 Meeting Date: 9/4/2018 FROM: Daryl Grigsby, Director of Public Works Prepared By: Scott Lee, Parking Services Manager SUBJECT: APPROVAL OF SOLE SOURCE EV CHARGING STATION CONTRACT WITH CHARGEPOINT, APPROPRIATE ADDITIONAL FUNDS FROM PARKING FUND, AUTHORIZE CITY MANAGER TO ESTABLISH EV CHARGING RATES AND TO SIGN MASTER SERVICES AND SUBSCRIPTION AGREEMENTS. RECOMMENDATIONS 1. Approve the award of a sole source contract to ChargePoint for the purchase of Electric Vehicle charging stations; and 2. Appropriate $150,000 in additional fu nds from the Parking unreserved working capital to cover additional costs for expanding the project to include the Marsh Street Structure and two floors in the 919 Palm Street Structure; and 3. Authorize the City Manager, or his designee, to establish and mod ify the EV charging rates for each location; and 4. Authorize the City Manager, or his designee, to sign the Master Services and Subscription Agreement with ChargePoint. DISCUSSION In June of 2017, the City made Climate Action a Major City Goal in the 2017 -19 Financial Plan with an overall goal of reducing citywide greenhouse gas (GHG) emissions. As noted in the City’s Climate Action Plan, GHG emissions from fossil fuel combustion in on-road vehicles account for approximately 50 percent of the City’s 2006 ba seline emissions inventory. As part of the Climate Action Major City Goal budget in the 2017-19 Financial Plan, $105,000 in Parking Funds were allocated to establish electric vehicle charging stations for City fleet vehicles in the basement o f the 919 Palm Parking Structure. Staff has been working on that project and soliciting shared funding opportunities with other entities promoting EV Charging programs. In 2017, PG&E announced they would be installing the infrastructure for 7,500 EV charging stations t hroughout the state over the next three years, at their own expense. In December 2017, the City submitted applications with PG &E to participate in this EV charging network program. Initially, three sites were submitted, but one was rejected by PG &E as not meeting the criteria to participate in this program. The two remaining sites, 919 Palm and 871 Marsh Street were approved. The agreement with PG &E requires a minimum of 10 units per location (or floor) and that the units remain in service for a minimum period of 10 years. This allows the City to expand the EV Charging program beyond the initial City only fleet program. Staff has worked with PG&E to develop a project that will now install up to 43 stations in these two locations with 10 units designated for city fleet vehicles, and 33 for the general public. Packet Pg. 227 Item 13 PG&E requires the participant to purchase the equipment from their approved list of vendors. PG&E does not perform this work and only pays a portion of the installation costs. After evaluating the var ious factors and the configuration necessary for the locations selected, only the ChargePoint product and administration program was viable for City needs. While there are other vendors that offer the installation of this product it is city staff’s preference to deal directly with the manufacturer to provide the product , annual warranty coverage and also provide the necessary nationwide charging services that limit the City’s operating costs for the equipment and services. Additionally, ChargePoint has an extensive network throughout California and nationwide with over 53,000 places to charge. T heir mobile app allows users to check for open spots in real time, search by price and charging speed , to start the charging session with their mobile phone, and get notifications when the car is done charging or when a station opens up. The proposed purchase contract with ChargePoint includes: 1) both single and dual output wall mounted units, 2) initial system activation and configuration, 3) assembly and install ation of each unit, 4) five-year prepaid warranty and software upgrades, and five-year prepaid maintenance and management program. The City has a budget of $105,000 for this project from the Climate Action Major City Goal and PG&E will also pay a small amount toward the actual cost per unit ($575) but this still leaves an estimated shortfall of $150,000. The Parking Fund is proposing to fund this amount from its unreserved working capital. The actual rate for parking in the EV charging stalls will var y by location depending on whether the hourly parking rate is separate, or included, from the EV charging costs. At 919 Palm Street, the EV charging stations will be located within the public parking structure, so the EV charge will be calculated and paid separately from the parking charges. At 871 Marsh Street, the location will not require a vehicle to actually enter the structure, so the charge assessed will include the approved hourly parking rates (during applicable hours) as well as the EV charging costs. The vendor will process and collect all the revenue through their system, and remit to the City the net amount after retaining a 10% fee for processing and managing service. Recovery of upfront capital costs may also be part of the rate structure; which is yet to be determined. There will be a total of 43 charging stations, including 10 dedicated for fleet vehicles in the basement of 919 and 14 additional for public use on the 4 th floor. 19 charging stations will also be located in the annex portion of the Marsh Street Structure at street level. There will be a net increase of 39 charging stations with 29 designated as public and 10 for city fleet vehicles. The City currently has a total of four public EV charging stations with three in the 871 Marsh Street structure, and one in the annex portion. These four stations will be removed and replaced as part of the new system. The new system will be centrally managed by the vendor, ChargePoint. Packet Pg. 228 Item 13 NEXT STEPS Upon approval from Council, staff w ill contract with the approved vendor for the purchase and installation of all EV charging stations. This will be scheduled to coincide with the service line installation by PG &E. CONCURRENCES City Administration and the Office of Sustainability both support this request. ENVIRONMENTAL REVIEW The recommended actions are exempt from environmental review per CEQA Guidelines section 15303, New Construction or Conversion of Small Structures. FISCAL IMPACT The difference between the actual cost s, including installation, and the total amount available from the Climate Action Major City Goal and the rebate from PG &E, will be funded from the Parking Fund from its unreserved working capital which has a balance of approximately $12 million dollars. It is anticipated that t his amount will be recovered over the next five years through a surcharge assessed in the EV charging rate. Additional funds recovered thru the EV charging program will be used to fund the second five-year warranty program and to establish a reserve account for future replacement or for addition of more charging stations in the future. PG&E estimates the total cost for PG&E to provide the required infrastructure is $400,000 for all locations. This includes an upgrade of one transformer, installation of the necessary conduits and ports from each transformer to the site of each charging station, and preparation of all the necessary design specifications and drawings provided at no cost to the City as part of this program. The City is utilizing this opportunity to leverage the prior amount set aside in the budget and advancing additional funds to maximize this one-time program to install additional charging stations at multiple location to not only serve the fleet vehicles, but also to prov ide additional charging stations for the general public. Without the PG&E program, the public stations would not have been possible without considerable additional city funding. ALTERNATIVES The City Council may choose to not approve the sole source contract, or to not appropriate the additional funds from the Parking Fund or to not delegate the authority to establish EV charging rates to City Manager or their designee. The Parking Manager and staff do not recommend this alternative as any of these optio ns will delay the installation and operationalization of EV charging stations for the City and not achieve the Major City Goal and require the City to fund the additional infrastructure costs associated with the PG&E Program. Packet Pg. 229 Item 13 Attachments: a - City of SLO PGE Quote b - ChargePoint - MSSA - FINAL 2.13.17 (3) Packet Pg. 230 Item 13 Quotation ChargePoint, Inc. Driving a Better Way™ chargepoint.com \i2\ Sales Representative: Brendan ODonnell Quote Number: Q-29210-1 E-Mail: brendan.odonnell@chargepoint.com Date: 6/18/2018 Telephone: 949.521.3386 Expires On: 6/17/2018 Primary Contact: \i1\\i2\ Bill To Address Scott Lee City of San Luis Obispo Ship To Address Scott Lee City of San Luis Obispo 1260 Chorro Street San Luis Obispo CA 93401-3668 NJPA Product Name Product Description Qty List Price Disc%Unit Price Total Price CT4023 Dual Output, Wall Mount Unit - 208/240V @30A with Cord Management 17 USD 6,190 25 USD 4,643 USD 78,931 CT4013-GW1 Single Output Gateway Option USA, Wall Mount Unit - 208/240V @30A with Cord Management 4 USD 4,505 25 USD 3,379 USD 13,516 CT4013 Single Output, Wall Mount Unit - 208/240V @30A with Cord Management 4 USD 3,990 25 USD 2,993 USD 11,972 CPSUPPORT-ACTIVE Initial Station Activation & Configuration Service includes activation of cloud services and configuration of radio groups, custom groups, connections, access control, visibility control, pricing, reports and alerts. One time initial service per station. 25 USD 349 100 USD 0 USD 0 CT4000-INSTALLVALID Customer works with their own contractor to perform the all construction to the point where the stations can be bolted down and connected. ChargePoint will engage one of their O&M Partners to install the station on the prepared site and validation of electrical capacity, transformers, panels, breakers, wiring, cellular coverage and that station installation meets all ChargePoint published requirements and local codes. CT4000-INSTALLVALID is priced per CT4000 station. A successful Site Validation is a prerequisite to purchase ChargePoint Assure. 25 USD 1,200 50 USD 600 USD 15,000 © 2018 ChargePoint, Inc. Page 1 of 2 Packet Pg. 231 Item 13 Product Name Product Description Qty List Price Disc%Unit Price Total Price CPCLD-COMMERCIAL-5 5yr Prepaid Commercial Cloud Plan. Includes Secure Network Connection, On- going Station Software updates, Station Inventory, 24x7 Driver Support, Host Support, Session Data and Analytics, Fleet Vehicle Management and Integration, Fleet Access Control, Valet Dashboard, Power Management (Circuit, Panel, Site Sharing), Scheduled Charging, Driver Access Control, Pricing and Automatic Funds Collection, Waitlist, Videos (on supported hardware). 42 USD 1,105 0 USD 1,105 USD 46,410 CT4000-ASSURE5 5 prepaid years of ChargePoint Assure.25 USD 2,495 0 USD 2,495 USD 62,375 Quote Total:USD 228,204.00 Estimated Tax:USD 8,092.48 Shipping and Handling:USD 2,750.00 Grand Total:USD 239,046.48 Sales tax in applicable states (AZ, CA, FL, GA, MA, NY, PA, TX, WA) and shipping fees will be applied to invoice. Quote Acceptance Purchase Terms and Conditions are attached hereto and incorporated herein by reference. By signing this quote I hereby acknowledge that I have the authority to purchase the product detailed on this document on behalf of my organization. Furthermore, I agree to the referenced terms and conditions and that this signed quote shall act as a purchase order. Signature :/SE1/Title :\t1\ Name (Print) :\PN1\Date :\D1\ Company Name :\CompanyName_1\ Requested Ship Date :\dsrequestedshipdate_1\ AP Contact Name :\tapcontactname_1\ AP Contact E-Mail :\eapcontactemail_1\ © 2018 ChargePoint, Inc. Page 2 of 2 Packet Pg. 232 Item 13 CT4021 CT4000 Level 2 Commercial Charging Station Specifications and Ordering Information Ordering Information Specify model number followed by the applicable code(s). The order code sequence is: Model-Options. Software, Services and Misc are ordered as separate line items. Hardware Description Order Code Model 1830 mm (6') Single Port Bollard Mount 1830 mm (6') Dual Port Bollard Mount 1830 mm (6') Single Port Wall Mount 1830 mm (6') Dual Port Wall Mount 2440 mm (8') Dual Port Bollard Mount 2440 mm (8') Dual Port Wall Mount CT4011 CT4021 CT4013 CT4023 CT4025 CT4027 Options Integral Gateway Modem - USA Integral Gateway Modem - Canada -GW1 -GW2 Misc Power Management Kit Bollard Concrete Mounting Kit CT4000-PMGMT CT4001-CCM Software & Services Description Order Code ChargePoint Commercial Service Plan CTSW-SAS-COMM-n1 ChargePoint Service Provider Plan CTSW-SAS-SP-n1 ChargePoint Assure CT4000-ASSUREn2 Station Activation and Configuration CPSUPPORT-ACTIVE ChargePoint Station Installation and Validation CT4000-INSTALLVALID Note: All CT4000 stations require a network service plan. 1 Substitute n for desired years of service (1, 2, 3, 4, or 5 years). 2 Substitute n for the duration of the coverage (1, 2, 3, 4, or 5 years). Order Code Examples If ordering this the order code is 1830 mm (6') Dual Port Bollard USA Gateway Station with Concrete Mounting Kit ChargePoint Commercial Service Plan, 3 Year Subscription ChargePoint Station Installation and Validation 2 Years of Assure Coverage CT4021-GW1 CT4001-CCM CTSW-SAS-COMM-3 CT4000-INSTALLVALID CT4000-ASSURE2 1830 mm (6') Single Port Wall Mount Station ChargePoint Commercial Service Plan, 5 Year Subscription 4 Years of Assure Coverage Station Activation and Configuration CT4013 CTSW-SAS-COMM-5 CT4000-ASSURE4 CPSUPPORT-ACTIVE The First ENERGY STAR® Certified EV Charger Packet Pg. 233 Item 13 ChargePoint CT4000 Family 2 chargepoint.com CT4021 1830 mm (6') CT4025 2440 mm (8') Bollard CT4023 1830 mm (6') CT4027 2440 mm (8') Wall Mount 347 mm (13.7") CT4023 1811 mm (71.3") 1184 mm (46.6") 483 mm (19.0") 302 mm (11.9") 347 mm (13.7") 233 mm (9.2") 233 mm (9.2") CT4021 1811 mm (71.3") 1186 mm (46.7") CT4025 2426 mm (95.5") CT4027 2426 mm (95.5") 470 mm (18.5") 289 mm (11.4") Packet Pg. 234 Item 13 chargepoint.com 3 CT4000 Family Specifications Electrical Input Single Port (AC Voltage 208/240V AC)Dual Port (AC Voltage 208/240V AC) Input Current Input Power Connection Required Service Panel Breaker input Current Input Power Connection Required Service Panel Breaker Standard 30A One 40A branch circuit 40A dual pole (non-GFCI type)30A x 2 Two independent 40A branch circuits 40A dual pole (non-GFCI type) x 2 Standard Power Share n/a n/a n/a 32A One 40A branch circuit 40A dual pole (non-GFCI type) Power Select 24A 24A One 30A branch circuit 30A dual pole (non-GFCI type) 24A x 2 Two independent 30A branch circuits 30A dual pole (non-GFCI type) x 2 Power Select 24A Power Share n/a n/a n/a 24A One 30A branch circuit 30A dual pole (non-GFCI type) Power Select 16A 16A One 20A branch circuit 20A dual pole (non-GFCI type) 16A x 2 Two independent 20A branch circuits 20A dual pole (non-GFCI type) x 2 Power Select 16A Power Share n/a n/a n/a 16A One 20A branch circuit 20A dual pole (non-GFCI type) Service Panel GFCI Do not provide external GFCI as it may conflict with internal GFCI (CCID) Wiring - Standard 3-wire (L1, L2, Earth)5-wire (L1, L1, L2, L2, Earth) Wiring - Power Share n/a 3-wire (L1, L2, Earth) Station Power 8W typical (standby), 15W maximum (operation) Electrical Output Standard 7.2kW (240V AC @ 30A)7.2kW (240V AC@30A) x 2 Standard Power Share n/a 7.2kW (240V AC@30A) x 1 or 3.8kW (240V AC@16A) x 2 Power Select 24A 5.8kW (240V AC@24A) 5.8kW (240V AC@24A) x 2 Power Select 24A Power Share n/a 5.8kW (240V AC@24A) x 1 or 2.9kW (240V AC@12A) x 2 Power Select 16A 3.8kW (240V AC@16A)3.8kW (240V AC@16A) x 2 Power Select 24A Power Share n/a 3.8kW (240V AC@16A) x 1 or 1.9kW (240V AC@8A) x 2 Functional Interfaces Connector(s) Type SAE J1772™SAE J1772™ x 2 Cable Length - 1830 mm (6') Cable Management 5.5 m (18')5.5 m (18') x 2 Cable Length - 2440 mm (8') Cable Management n/a 7 m (23') Overhead Cable Management System Yes LCD Display 145 mm (5.7") full color, 640x480, 30fps full motion video, active matrix, UV protected Card Reader ISO 15693, ISO 14443, NFC Locking Holster Yes Yes x 2 Packet Pg. 235 Item 13 ChargePoint CT4000 Family ChargePoint, Inc. 240 East Hacienda Avenue Campbell, CA 95008-6617 USA +1.408.841.4500 or +1.877.370.3802 US and Canada toll-free chargepoint.com Listed by Underwriters Laboratories Inc. Safety and Connectivity Features Ground Fault Detection 20mA CCID with auto retry Open Safety Ground Detection Continuously monitors presence of safety (green wire) ground connection Plug-Out Detection Power terminated per SAE J1772™ specifications Power Measurement Accuracy +/- 2% from 2% to full scale (30A) Power Report/Store Interval 15 minute, aligned to hour Local Area Network 2.4 GHz Wi-Fi (802.11 b/g/n) Wide Area Network 3G GSM, 3G CDMA Safety and Operational Ratings Enclosure Rating Type 3R per UL 50E Safety Compliance UL listed for USA and cUL certified for Canada; complies with UL 2594, UL 2231-1, UL 2231-2, and NEC Article 625 Surge Protection 6kV @ 3000A. In geographic areas subject to frequent thunder storms, supplemental surge protection at the service panel is recommended. EMC Compliance FCC Part 15 Class A Operating Temperature -30°C to +50°C (-22°F to 122°F) Storage Temperature -30°C to +60°C (-22°F to 140°F) Non-Operating Temperature -40°C to +60°C (-40°F to 140°F) Operating Humidity Up to 85% @ +50°C (122°F) non-condensing Non-Operating Humidity Up to 95% @ +50°C (122°F) non-condensing Terminal Block Temperature Rating 105°C (221°F) Charging Stations per 802.11 Radio Group Maximum of 10. Each station must be located within 45m (150') “line of sight” of a gateway station. ChargePoint, Inc. reserves the right to alter product offerings and specifications at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document. Contact Us Visit chargepoint.com Call +1.408.705.1992 Email sales@chargepoint.com Copyright © 2018 ChargePoint, Inc. All rights reserved. CHARGEPOINT is a U.S. registered trademark/service mark, and an EU registered logo mark of ChargePoint, Inc. All other products or services mentioned are the trademarks, service marks, registered trademarks or registered service marks of their respective owners. DS-CT4000-05. April 2018. PN 73-001020-01-11. Packet Pg. 236 Item 13 Revised 12.21.16 CHARGEPOINT® MASTER SERVICES AND SUBSCRIPTION AGREEMENT IMPORTANT: THIS MASTER SERVICES AND SUBSCRIPTION AGREEMENT IS A LEGAL AGREEMENT BETWEEN YOU OR THE CORPORATION, PARTNERSHIP OR OTHER LEGAL ENTITY YOU REPRESENT (“SUBSCRIBER”) AND CHARGEPOINT, INC., A DELAWARE CORPORATION (“CPI”). PLEASE READ IT CAREFULLY. BY USING ANY OF THE CHARGEPOINT SERVICES, YOU INDICATE YOUR ACCEPTANCE OF THIS AGREEMENT. IF YOU DO NOT AGREE WITH ANY OF THESE TERMS AND CONDITIONS, DO NOT USE ANY CHARGEPOINT SERVICES. IF YOU ARE ENTERING INTO THIS AGREEMENT ON BEHALF OF A CORPORATION, PARTNERSHIP OR OTHER LEGAL ENTITY, THAT ENTITY REPRESENTS THAT YOU HAVE AUTHORITY TO BIND SUCH ENTITY TO THESE TERMS AND CONDITIONS. IF YOU DO NOT HAVE SUCH AUTHORITY TO BIND SUCH ENTITY TO THESE TERMS AND CONDITIONS, YOU MAY NOT ENTER INTO THIS AGREEMENT AND SUCH ENTITY MAY NOT USE THE CHARGEPOINT SERVICES. 1. AGREEMENT. 1.1 SCOPE OF AGREEMENT. This Agreement governs the following activities: (a) Provisioning of Subscriber’s Charging Station(s), if any, on ChargePoint; (b) Activation and use of the ChargePoint Services on Subscriber’s Charging Station(s), if any; (c) Subscriber’s use of the APIs as part of the ChargePoint Services; (d) Each grant of Rights by Subscriber; and (e) Each grant of Rights by a third party to Subscriber. 1.2 EXHIBITS AND PRIVACY POLICY. This Agreement includes the CPI Privacy Policy, as amended from time to time, and the following Exhibits, which are made a part of , and are hereby incorporated into, this Agreement by reference. Exhibit 1: Flex Billing Terms Exhibit 2: API Terms Exhibit 3: Terms Regarding Granting and Receipt of Rights In the event of any conflict between the terms of this Agreement on the one hand, and the Privacy Policy or any Exhibit on the other hand, this Agreement shall govern. Capitalized terms not otherwise defined in any Exhibit or the Privacy Policy shall have the same meaning as in this Agreement. 2. DEFINITIONS. The following terms shall have the definitions set forth below when used in this Agreement: 2.1 “Affiliate” means any entity which directly or indirectly controls, is controlled by, or is under common control with the subject entity. “Control”, for purposes of this definition, means direct or indirect ownership or control of fifty percent (50%) or more of the voting interests of the subject entity. 2.2 "APIs" means, individually or collectively, the application programming interfaces which are made available to Subscriber from time to time, as and when updated by CPI. 2.3 “ChargePoint Connections” shall have the meaning ascribed to it in the applicable data sheet. The term ChargePoint Connections shall also mean any successor service provided by CPI. Packet Pg. 237 Item 13 Page 2 of 18 Revised 12.21.16 2.4 “ChargePoint®” means the open-platform network of electric vehicle charging stations and the vehicle charging applications the network delivers, that is operated and maintained by CPI (as defined below) in order to provide various services to, among others, Subscriber and its employees. 2.5 “ChargePoint Services” means, collectively, the various cloud services offerings (including, without limitation, APIs and application service plans) made available for subscription by CPI. 2.6 “ChargePoint Application” means any of the applications established and maintained by CPI which will allow Subscriber to access ChargePoint Services. 2.7 “Charging Station” means the electric vehicle charging station(s) purchased by Subscriber, whether manufactured by CPI or by a CPI authorized entity, which are registered and activated on ChargePoint. 2.8 "Content" means all data collected or maintained by CPI in connection with the operation of ChargePoint. 2.9 “CPI Marks” means the various trademarks, service marks, trade names, logos, domain names, and other distinctive brand features and designations used in connection with ChargePoint and/or CPI manufactured Charging Stations, including without limitation, ChargePoint. 2.10 “CPI Property” means (i) ChargePoint, (ii) the ChargePoint Services (including all Content), (iii) all data generated or collected by CPI in connection with the operation of ChargePoint and ChargePoint Services, (iv) the CPI Marks, (v) the ChargePoint Cards, and (vi) all other CPI-supplied material developed or provided by CPI for Subscriber use in connection with the ChargePoint Services. 2.11 “Documentation” means written information (whether contained in user or technical manuals, product materials, specifications or otherwise) pertaining to ChargePoint Services and/or ChargePoint and made available from time to time by CPI to Subscriber in any manner (including on-line). 2.12 “Effective Date” means the earlier of (a) the date that Subscriber electronically accepts this Agreement, or (b) the date of Subscriber’s first use of the ChargePoint Services. 2.13 “Intellectual Property Rights” means all intellectual property rights, including, without limitation, patents, patent applications, patent rights, trademarks, trademark applications, trade names, service marks, service mark applications, copyrights, copyright applications, franchises, licenses, inventories, know-how, trade secrets, Subscriber lists, proprietary processes and formulae, all source and object code, algorithms, architecture, structure, display screens, layouts, inventions, development tools and all documentation and media constituting, describing or relating to the above, including, without limitation, manuals, memoranda and records. 2.14 “Malicious Code” means viruses, worms, time bombs, Trojan horses and all other forms of malicious code, including without limitation, malware, spyware, files, scripts, agents or programs. 2.15 “Party” means each of CPI and Subscriber. 2.16 “PII” means personally identifiable information regarding Subscriber or a User (e.g., name, address, email address, phone number or credit card number) that can be used to uniquely identify, contact or locate Subscriber or such User. 2.17 “Provisioning” means activating Charging Stations, warrantees and Service Plans on ChargePoint 2.18 “Rights” means the rights, authorizations, privileges, actions, information and settings within the ChargePoint Services which a Rights Grantor grants to an Rights Grantee, to enable such Rights Grantee to access, obtain and use certain portions of the ChargePoint Services and certain information available therein in the course of providing services to or on behalf of such Rights Grantor in connection Packet Pg. 238 Item 13 Page 3 of 18 Revised 12.21.16 with one or more of the Rights Grantor’s Charging Stations. A Rights Grantor shall be deemed to have granted Rights to the entity that will be responsible for creating Subscriber’s account and Provisioning Subscriber’s Charging Stations. Such deemed grant may be terminated by Subscriber at any time. 2.19 “Service Plan(s)” means subscription plans to the ChargePoint Services which are offered and sold by CPI from time to time, which vary according to their features, privileges and pricing. 2.20 “Subscriber” means . 2.21 “Subscriber Content and Services” means any content and/or services that a Subscriber provides or makes available to Users and/or the general public in connection with the ChargePoint Services, other than Content, ChargePoint Services and CPI Property. 2.22 “Subscriber Marks” means the various trademarks, service marks, trade names, logos, domain names, and other distinctive brand features and designations used by Subscriber in connection with its business and/or Charging Stations. 2.23 “Subscription Fees” means the fees payable by Subscriber for subscribing to any ChargePoint Services. 2.24 “Taxes” shall mean all present and future taxes, imposts, levies, assessments, duties or charges of whatsoever nature including without limitation any withholding taxes, sales taxes, use taxes, service taxes, value added or similar taxes at the rate applicable for the time being imposed by any national or local government, taxing authority, regulatory agency or other entity together with any penalty payable in connection with any failure to pay or any delay in paying any of the same and any interest thereon. 2.25 “Token(s)” means the serialized proof of purchase of a Service Plan that is used by CPI in connection with enabling Services and/or provisioning Charging Stations. 2.26 “User” means any person using a Charging Station. 3.AVAILABLE CHARGEPOINT SERVICES & SERVICE PLANS. A description of the various ChargePoint Services and Service Plans currently available for subscription is located on the CPI website. CPI may make other ChargePoint Services and/or Service Plans available from time to time, and may amend the features or benefits offered with respect to any ChargePoint Service or Service Plan at any time and from time to time. Subscription Fees are based on Subscriber’s choice of Service Plan and not on actual usage of the Subscription. 4.CPI’S RESPONSIBILITIES AND AGREEMENTS. 4.1 OPERATION OF CHARGEPOINT. CPI agrees to provide and shall be solely responsible for: (i) provisioning and operating, maintaining, administering and supporting ChargePoint and related infrastructure (other than Subscriber’s Charging Stations and infrastructure for transmitting data from Charging Stations to any ChargePoint operations center); (ii) provisioning and operating, maintaining, administering and supporting the ChargePoint Applications; and (iii) operating ChargePoint in compliance with all applicable laws. CPI will protect the confidentiality and security of PII in accordance with all applicable laws and regulations, customary practices in the industry and the CPI Privacy Policy and acknowledges that it is responsible for the security of “cardholder data” (as that term is defined for purposes of the Payment Card Industry – Data Security Standards), if any, that CPI possesses, otherwise stores, processes or transmits on behalf of Subscriber or for any impact, if any, on the security of Subscriber’s cardholder data environment. 4.2 LIMITATIONS ON RESPONSIBLITY. CPI shall not be responsible for, and makes no representation or warranty with respect to the following: (i) specific location(s) or number of Charging Packet Pg. 239 Item 13 Page 4 of 18 Revised 12.21.16 Stations now, or in the future, owned, operated and/or installed by persons other than Subscriber, or the total number of Charging Stations that comprise ChargePoint; (ii) continuous availability of electrical service to any of Subscriber’s Charging Stations; (iii) continuous availability of any wireless or cellular communications network or Internet service provider network necessary for the continued operation by CPI of ChargePoint; (iv) availability of or interruption of the ChargePoint Network attributable to unauthorized intrusions; and/or (v) charging stations that are not registered with and activated on the ChargePoint Network. 5.SUBSCRIBER’S RESPONSIBILITIES AND AGREEMENTS. 5.1 GENERAL. (a)All use of ChargePoint and ChargePoint Services by Subscriber, its employees and agents and its grantees of Rights shall comply with this Agreement and all of the rules, limitations and policies of CPI set forth in the Documentation. All ChargePoint Services account details, passwords, keys, etc. are granted to Subscriber solely for Subscriber’s own use (and the use of its grantees of Rights), and Subscriber shall keep all such items secure and confidential. Subscriber shall prevent, and shall be fully liable to CPI for, any unauthorized access to or use of ChargePoint or ChargePoint Services via Subscriber’s Charging Stations, ChargePoint Services account(s) or other equipment. Subscriber shall immediately notify CPI upon becoming aware of any such unauthorized use. (b)Subscriber shall be solely responsible for: (i) Provisioning of its Charging Stations, if any; (ii) keeping Subscriber’s contact information, email address for the receipt of notices hereunder, and billing address for invoices both accurate and up to date; (iii) updating on the applicable ChargePoint Application, within five (5) business days, the location to which any of Subscriber’s Charging Stations are moved; (iv) the maintenance, service, repair and/or replacement of Subscriber’s Charging Stations as needed, including informing CPI of the existence of any Charging Stations that are non-operational and not intended to be replaced or repaired by Subscriber; and (v) compliance with all applicable laws. (c)Subscriber shall deliver in full all benefits promised to Users by Subscriber in exchange for such Users connecting with Subscriber using ChargePoint Connections. 5.2 REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER. Subscriber represents and warrants to CPI that: (i) it has the power and authority to enter into and be bound by this Agreement and shall have the power and authority to install the Charging Stations and any other electrical vehicle charging products which are registered and activated on the ChargePoint Network; (ii) the electrical usage to be consumed by Subscriber’s Charging Stations will not violate or otherwise conflict with the terms and conditions of any applicable electrical purchase or other agreement including, without limitation, any lease, to which Subscriber is a party; and (iii) it has not installed or attached and will not install or attach Charging Stations on or to infrastructure not owned by Subscriber without proper authority, or in a manner that will block any easement or right of way. 5.3 CHARGEPOINT CARDS. Subscriber may be permitted by CPI, in CPI's reasonable discretion, to obtain CPI-provisioned radio-frequency identification cards ("ChargePoint Cards") which enable the individual card recipients to access and use ChargePoint. Subscriber may distribute such ChargePoint Cards to individuals, and each individual ChargePoint Card recipient is responsible for activating his or her ChargePoint Card on ChargePoint directly with CPI on the CPI web site. In no event will Subscriber create any separate ChargePoint accounts for any ChargePoint Card recipients or other third parties, nor will Subscriber create anonymous ChargePoint accounts associated with any ChargePoint Card. 5.4 USE RESTRICTIONS AND LIMITATIONS. Subscriber shall not: Packet Pg. 240 Item 13 Page 5 of 18 Revised 12.21.16 (a)sell, resell, license, rent, lease or otherwise transfer the ChargePoint Services or any Content therein to any third party; (b)knowingly interfere with or disrupt the ChargePoint Services, servers, or networks connected to the ChargePoint Services, or disobey any requirements, procedures, policies, or regulations of networks connected to the ChargePoint Services; (c)restrict or inhibit any other user from using and enjoying the ChargePoint Services or any other CPI services; (d)attempt to gain unauthorized access to the ChargePoint Network or the ChargePoint Services or related systems or networks or any data contained therein, or access or use ChargePoint or ChargePoint Services through any technology or means other than those provided or expressly authorized by CPI; (e) create any ChargePoint Services user account by automated means or under false or fraudulent pretenses, or impersonate another person or entity on ChargePoint, or obtain or attempt to obtain multiple keys for the same URL; (f)reverse engineer, decompile or otherwise attempt to extract the source code of the ChargePoint Services or any part thereof, or any Charging Station, except to the extent expressly permitted or required by applicable law; (g)create derivative works based on any CPI Property; (h)remove, conceal or cover the CPI Marks or any other markings, labels, legends, trademarks, or trade names installed or placed on the Charging Stations or any peripheral equipment for use in connection with Subscriber’s Charging Stations; (i)except as otherwise expressly permitted by this Agreement or in any applicable data sheet relating to a ChargePoint Service, copy, frame or mirror any part of the ChargePoint Services or ChargePoint Content, other than copying or framing on Subscriber’s own intranets or otherwise solely for Subscriber’s own internal business use and purposes; (j) access ChargePoint, any ChargePoint Application or the ChargePoint Services for the purpose of monitoring their availability, performance or functionality, or for any other benchmarking or competitive purpose, or for any improper purpose whatsoever, including, without limitation, in order to build a competitive product or service or copy any features, functions, interface, graphics or “look and feel;” (k)use any robot, spider, site search/retrieval application, or other device to retrieve or index any portion of the ChargePoint Services or Content or collect information about ChargePoint users for any unauthorized purpose; (l)upload, transmit or introduce any Malicious Code to ChargePoint or ChargePoint Services; (m)use any of the ChargePoint Services if Subscriber is a person barred from such use under the laws of the United States or of any other jurisdiction; or (n)use the ChargePoint Services to upload, post, display, transmit or otherwise make available (A) any inappropriate, defamatory, obscene, or unlawful content; (B) any content that infringes any patent, trademark, copyright, trade secret or other proprietary right of any party; (C) any messages, communication or other content that promotes pyramid schemes, chain letters, constitutes disruptive commercial messages or advertisements, or is prohibited by applicable law, the Agreement or the Documentation. Packet Pg. 241 Item 13 Page 6 of 18 Revised 12.21.16 5.5 CONTENT. (a)ChargePoint Content (including but not limited to Charging Station data and status) is provided for planning purposes only. Subscriber may find that various events may mean actual Charging Station conditions (such as availability or pricing) differ from what is set forth in the Content. In addition, certain Charging Station-related Content, including Charging Station name and use restrictions, is set by the Charging Station owner and is not verified by CPI. Subscriber should exercise judgment in Subscriber’s use of the Content. (b) Certain Content may be provided under license from third parties and is subject to copyright and other intellectual property rights of such third parties. Subscriber may be held liable for any unauthorized copying or disclosure of such third party-supplied Content. Subscriber’s use of such Content may be subject to additional restrictions set forth in the Documentation. (c)Subscriber shall not copy, modify, alter, translate, amend, or publicly display any of the Content except as expressly permitted by the Documentation. Subscriber shall not present any portion of the Content in any manner, that would (i) make such Content false, inaccurate or misleading, (ii)falsify or delete any author attributions or labels of the origin or source of Content, or (iii) indicate or suggest that the Charging Station locations provided as part of the Content are anything other than ChargePoint® Network Charging Stations. (d) Subscriber shall not remove, obscure, or alter in any manner any proprietary rights notices (including copyright and trademark notices), warnings, links or other notifications that appear in the ChargePoint Service. 6.SUBSCRIPTION FEES AND PAYMENT TERMS. 6.1 SUBSCRIPTION FEES. Subscriber shall pay all Subscription Fees within thirty (30) days of its receipt of CPI’s invoice. All payments shall be made in U.S. Dollars by check, wire transfer, ACH payment system or other means approved by CPI. Customer may not offset any amounts due to CPI hereunder against amounts due to Customer under this Agreement or any other agreement. Fees payable to CPI do not include any Taxes, and Subscriber is responsible for any and all such Taxes, if any. All payment obligations under this Agreement are non-cancelable and non-refundable. 6.2 LATE PAYMENTS. Late payments shall be subject to a charge equal to the lesser of (i) one and one-half percent (1.5%) per month or (ii) the maximum rate permitted by law. Subscriber will reimburse CPI for attorneys’ fees and other expenses reasonably incurred by CPI in the collection of any late payments. If any amount owing by Subscriber under this Agreement is more than thirty (30) days overdue, CPI may, without otherwise limiting CPI’s rights or remedies, (a) suspend the use by Subscriber of the ChargePoint Services until such amounts are paid in full, and/or (b) condition future ChargePoint Service renewals and other Subscriber purchases on payment terms other than those set forth herein; provided that CPI shall not exercise any such rights if Subscriber has reasonably disputed such charges and is cooperating diligently in good faith to resolve the dispute. 7.INTELLECTUAL PROPERTY RIGHTS AND LICENSES. 7.1 CPI PROPERTY. As between CPI and Subscriber, CPI retains and reserves all right, title and interest (including all related Intellectual Property Rights) in and to the CPI Property and any improvements thereto. No rights are granted to Subscriber in the CPI Property hereunder except as expressly set forth in this Agreement. Packet Pg. 242 Item 13 Page 7 of 18 Revised 12.21.16 7.2 SUBSCRIBER PROPERTY. As between CPI and Subscriber, Subscriber retains and reserves all right, title and interest (including all related Intellectual Property Rights) in and to (i) all Subscriber Marks and (ii) all Subscriber Content and Services (collectively, the “Subscriber Property”). No rights are granted to CPI in the Subscriber Property hereunder except as expressly set forth in this Agreement. 7.3 LIMITED LICENSE TO SUBSCRIBER. CPI hereby grants to Subscriber a royalty-free, non- assignable, non-transferable, and non-exclusive license to use the CPI Property solely in accordance with the terms of this Agreement (including without limitation all limitations and restrictions on such use) to the extent necessary for Subscriber to access, use and receive the ChargePoint Services as permitted herein. 7.4 LIMITED LICENSE TO CPI. Subscriber hereby grants to CPI a non-assignable, non- transferable, and non-exclusive license to use the Subscriber Property solely in accordance with the terms of this Agreement (including without limitation all limitations and restrictions on such use) to the extent necessary for CPI to provide the ChargePoint Services. CPI may utilize the Subscriber Marks to advertise that Subscriber is using the ChargePoint Services. The foregoing license includes a perpetual and irrevocable right of CPI to reproduce, adapt, modify, translate, publicly perform, publicly display and distribute all Subscriber Content and Services submitted, posted or displayed by Subscriber in the ChargePoint Services, solely for the purpose of enabling CPI to operate, market and promote the ChargePoint Services, and to index and serve such Subscriber Content and Services as search results through ChargePoint Services. CPI shall have a royalty-free, worldwide, transferable, sublicensable, irrevocable perpetual license to use or incorporate in the ChargePoint Services any suggestions, enhancement requests, recommendations or other feedback provided by Subscriber or Subscriber Rights Grantees relating to the ChargePoint Services. 7.5 ADDITIONAL TERMS REGARDING CPI MARKS. (a)USE LIMITATIONS. Subscriber shall display the CPI Marks in connection with Subscriber Charging Stations as required in this Agreement during the term of Subscriber’s Service Plan. Subscriber shall not use any of the CPI Marks for or with any products other than its Charging Stations. From time to time, CPI may provide updated CPI Mark usage guidelines on the ChargePoint Application or elsewhere in the Documentation, and Subscriber shall thereafter comply with such updated guidelines. For any use of the CPI Mark not authorized by such guidelines, or if no such guidelines are provided, then for each initial use of the CPI Mark, Subscriber must obtain CPI’s prior written consent, which shall not be unreasonably withheld or delayed, and after such consent is obtained, Subscriber may use the CPI Mark in the approved manner. All use by Subscriber of CPI's Marks (including any goodwill associated therewith) will inure to the benefit of CPI. (b)PROHIBITIONS. Subscriber shall not use or display any CPI Mark (or any likeness of a CPI Mark): (i)as a part of the name under which Subscriber’s business is conducted or in connection with the name of a business of Subscriber or its Affiliates; (ii)in any manner that (x) implies a relationship or affiliation with CPI other than as described under the Agreement, (y) implies any sponsorship or endorsement by CPI, or (z) can be reasonably interpreted to suggest that any Subscriber Content and Services has been authored by, or represents the views or opinions of CPI or CPI personnel; (iii)in any manner intended to disparage CPI, ChargePoint, or the ChargePoint Services, or in a manner that is misleading, defamatory, infringing, libelous, disparaging, obscene or otherwise objectionable to CPI; Packet Pg. 243 Item 13 Page 8 of 18 Revised 12.21.16 (iv) in any manner that violates any law or regulation; or (v)that is distorted or altered in any way (including squeezing, stretching, inverting, discoloring, etc.) from the original form provided by CPI. (c)NO REGISTRATION OF CPI MARKS. Subscriber shall not, directly or indirectly, register or apply for, or cause to be registered or applied for, any CPI Marks or any patent, trademark, service mark, copyright, trade name, domain name or registered design that is substantially or confusingly similar to a CPI Mark, patent, trademark, service mark, copyright, trade name, domain name or registered design of CPI, or that is licensed to, connected with or derived from confidential, material or proprietary information imparted to or licensed to Subscriber by CPI. At no time will Subscriber challenge or assist others to challenge the CPI Marks (except to the extent such restriction is prohibited by law) or the registration thereof by CPI. (d)TERMINATION AND CESSATION OF USE OF CPI MARKS. Upon termination of this Agreement, Subscriber will immediately discontinue all use and display of all CPI Marks. 8.LIMITATIONS OF LIABILITY. 8.1 DISCLAIMER OF WARRANTIES. CHARGEPOINT AND THE CHARGEPOINT SERVICES ARE PROVIDED “AS IS” AND “AS AVAILABLE” FOR SUBSCRIBER’S USE, WITHOUT WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NONINFRI NGEMENT. WITHOUT LIMITING THE FOREGOING, CPI DOES NOT WARRANT THAT (A) SUBSCRIBER’S USE OF THE CHARGEPOINT SERVICES WILL BE UNINTERRUPTED, TIMELY, SECURE, FREE FROM ERROR, OR MEET SUBSCRIBER’S REQUIREMENTS; (B) ALL CONTENT AND OTHER INFORMATION OBTAINED BY SUBSCRIBER FROM OR IN CONNECTION WITH THE CHARGEPOINT SERVICES WILL BE ACCURATE AND RELIABLE; (C) ALL DEFECTS IN THE OPERATION OR FUNCTIONALITY OF THE CHARGEPOINT SERVICES WILL BE CORRECTED. ALL CONTENT OBTAINED THROUGH THE CHARGEPOINT SERVICES IS OBTAINED AT SUBSCRIBER’S OWN DISCRETION AND RISK, AND SUBSCRIBER WILL BE SOLELY RESPONSIBLE FOR ANY DAMAGE TO SUBSCRIBER’S COMPUTER SYSTEM OR OTHER DEVICE, LOSS OF DATA, OR ANY OTHER DAMAGE OR INJURY THAT RESULTS FROM THE DOWNLOAD OR USE OF ANY SUCH CONTENT. 8.2 EXCLUSION OF CONSEQUENTIAL AND RELATED DAMAGES. REGARDLESS OF WHETHER ANY REMEDY SET FORTH HEREIN FAILS OF ITS ESSENTIAL PURPOSE OR OTHERWISE, IN NO EVENT WILL EITHER PARTY TO THI AGREEMENT BE LIABLE TO THE OTHER FOR ANY LOST REVENUE OR PROFIT, LOST OR DAMAGED DATA, BUSINESS INTERRUPTION, LOSS OF CAPITAL, OR FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY OR WHETHER ARISING OUT OF THE USE OF OR INABILITY TO USE THE CHARGEPOINT NETWORK, ANY CHARGEPOINT SERVICES, THIS AGREEMENT, A GRANT OR RECEIPT OF RIGHTS OR OTHERWISE OR BASED ON ANY EXPRESSED, IMPLIED OR CLAIMED WARRANTIES BY SUBSCRIBER NOT SPECIFICALLY SET FORTH IN THIS AGREEMENT. 8.3 ELECTRICAL, CELLULAR AND INTERNET SERVICE INTERRUPTIONS. Neither CPI nor Subscriber shall have any liability whatsoever to the other with respect to damages caused by: (i) electrical outages, power surges, brown-outs, utility load management or any other similar electrical service interruptions, whatever the cause; (ii) interruptions in wireless or cellular service linking Charging Stations to ChargePoint; (iii) interruptions attributable to unauthorized ChargePoint Network intrusions; (iv) interruptions in services provided by any Internet service provider not affiliated with CPI; or (v) the inability of a Charging Station to access ChargePoint as a result of any change in product offerings (including, without limitation, the any network upgrade or introduction of any “next generation” services) Packet Pg. 244 Item 13 Page 9 of 18 Revised 12.21.16 by any wireless or cellular carrier. This includes the loss of data resulting from such electrical, wireless, cellular or Internet service interruptions. 8.4 LIMITATION OF LIABILITY. CPI’s aggregate liability under this Agreement shall not exceed aggregate Subscription Fees paid by Subscriber to CPI in the twelve (12) calendar months prior to the event giving rise to the liability. 8.5 CELLULAR CARRIER LIABILITY. IN ORDER TO DELIVER THE CHARGEPONT SERVICES, CPI HAS ENTERED INTO CONTRACTS WITH ONE OR MORE UNDERLYING WIRELESS SERVICE CARRIERS (THE “UNDERLYING CARRIER”). SUBSCRIBER HAS NO CONTRACTUAL RELATIONSHIP WITH THE UNDERLYING CARRIER AND SUBSCRIBER IS NOT A THIRD PARTY BENEFICIARY OF ANY AGREEMENT BETWEEN CPI AND THE UNDERLYING CARRIER. SUBSCRIBER UNDERSTANDS AND AGREES THAT THE UNDERLYING CARRIER HAS NO LIABILITY OF ANY KIND TO SUBSCRIBER, WHETHER FOR BREACH OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE. SUBSCRIBER AGREES TO INDE MNIFY AND HOLD HARMLESS THE UNDERLYING CARRIER AND ITS OFFICERS, EMPLOYEES, AND AGENTS AGAINST ANY AND ALL CLAIMS, INCLUDING WITHOUT LIMITATION CLAIMS FOR LIBEL, SLANDER, OR ANY PROPERTY DAMAGE, PERSONAL INJURY OR DEATH, ARISING IN ANY WAY, DIRECTLY OR IND IRECTLY, IN CONNECTION WITH USE, FAILURE TO USE, OR INABILITY TO USE THE WIRELESS SERVICES EXCEPT WHERE THE CLAIMS RESULT FROM THE UNDERLYING CARRIER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THIS INDEMNITY WILL SURVIVE THE TERMINATION OF THE AGREEMENT. SUBSCRIBER HAS NO PROPERTY RIGHT IN ANY NUMBER ASSIGNED TO IT, AND UNDERSTANDS THAT ANY SUCH NUMBER CAN BE CHANGED. SUBSCRIBER UNDERSTANDS THAT CPI AND THE UNDERLYING CARRIER CANNOT GUARANTEE THE SECURITY OF WIRELESS TRANSMISSIONS, AND WILL NOT BE LIABLE FOR ANY LACK OF SECURITY RELATING TO THE USE OF THE CHARGEPOINT SERVICES. 8.6 ADDITIONAL RIGHTS. BECAUSE SOME STATES OR JURISDICITONS DO NOT ALLOW THE LIMITATION OR EXCLUSION OF CONSEQUENTIAL OR INCIDENTAL DAMAGES AND/OR THE DISCLAIMER OF IMPLIED WARRANTIES AS SET FORTH IN THIS SECTION 8, ONE OR MORE OF THE ABOVE LIMITATIONS MAY NOT APPLY; PROVIDED THAT, IN SUCH INSTANCES, CPI’S LIABILTY AND/OR IMPLIED WARRANTIES GRANTED IN SUCH CASES SHALL BE LIMITED TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. 9.TERM AND TERMINATION. 9.1 TERM OF AGREEMENT. This Agreement shall become effective on the Effective Date and shall continue until the expiration of all of Subscriber’s Service Plans. 9.2 SERVICE PLAN TERM. Each Service Plan acquired by Subscriber shall commence as follows: Each Service Plan acquired for use with a new Charging Station will commence on the earlier to occur of (i) the date of Provisioning such new Charging Station, or (ii) one year from the date the Token(s) necessary for Provisioning such new Charging Station is made available to Subscriber or its installer. Renewals of Service Plans will commence on the date of the expiration of the Subscription being renewed. Each Subscriber Service Plan shall continue for the applicable duration thereof, unless this Agreement is terminated earlier in accordance with its terms. 9.3 TERMINATION BY CPI. (a) This Agreement may be immediately terminated by CPI: (i) if Subscriber is in material breach of any of its obligations under this Agreement, and has not cured such breach within thirty (30) days (or within five (5) days in the case of any payment default) of Subscriber’s receipt of written notice thereof; (ii) Subscriber becomes the subject of a petition in bankruptcy or any other proceeding related to insolvency, receivership, liquidation or an assignment for the benefit of creditors; (iii) upon the determination by any regulatory body that the subject matter of this Agreement is subject to any governmental regulatory authorization or review that imposes additional costs of doing business upon Packet Pg. 245 Item 13 Page 10 of 18 Revised 12.21.16 CPI; or (iv) as otherwise explicitly provided in this Agreement. Regardless of whether Subscriber is then in breach, CPI may, in its reasonable discretion, determine that it will not accept any renewal by Subscriber of its subscription to ChargePoint Services. In such case, this Agreement shall terminate upon the later of the expiration of all of Subscriber’s subscriptions to ChargePoint Services. (b)CPI may in its reasonable discretion suspend Subscriber’s continuing access to the ChargePoint Services or any portion thereof if (A) Subscriber has breached any provision of this Agreement; (B) such suspension is required by law (for example, due to a change to the law governing the provision of the ChargePoint Services); or (c) providing the ChargePoint Services to Subscriber could create a security risk or material technical burden as reasonably determined by CPI. Subscriber shall not be liable to CPI for any Subscription Fees if such suspension is due to section (B) or (C) of the foregoing sentence. 9.4 TERMINATION BY SUBSCRIBER. This Agreement may be immediately terminated by Subscriber without prejudice to any other remedy of Subscriber at law or equity: (i) if CPI is in material breach of any of its obligations under this Agreement, and has not cured such breach within thirty (30) days of the date of its receipt of written notice thereof, (ii) CPI becomes the subject of a petition in bankruptcy or any other proceeding related to insolvency, receivership, liquidation or an assignment for the benefit of creditors (iii) for convenience and upon sixty (60) days prior written notice to CPI of such termination. 9.5 REFUND OR PAYMENT UPON TERMINATION. Upon any termination of this Agreement for cause by Subscriber pursuant to Section 9.4(i) or by CPI pursuant to Section 9.3(a)(iii), CPI shall refund to Subscriber a pro-rata portion of any pre-paid Subscription Fees based upon the remaining Service Plan term. Upon any termination for any other reason, Subscriber shall not be entitled to any refund of any Subscription Fees as a result of such termination. In no event shall any termination relieve Subscriber of any unpaid Subscription Fees due CPI for the Service Plan term in which the termination occurs or any prior Service Plan term. 9.6 SURVIVAL. Those provisions dealing with the Intellectual Property Rights of CPI, limitations of liability and disclaimers, restrictions of warranty, Applicable Law and those other provisions which by their nature or terms are intended to survive the termination of this Agreement will remain in full force and effect as between the Parties hereto regardless of the termination of this Agreement. 10.INDEMNIFICATION. Subscriber hereby agrees to indemnify, defend and hold CPI, its officers, directors, agents, affiliates, distribution partners, licensors and suppliers harmless from and against any and all claims, actions, proceedings, costs, liabilities, losses and expenses (including, but not limited to, reasonable attorneys’ fees) (collectively, “Claims”) suffered or incurred by such indemnified parties resulting from or arising out of Subscriber’s actual or alleged use (directly, or through a grantee of Rights by Subscriber) of the ChargePoint Services, ChargePoint or Subscriber Content and Services. Subscriber will cooperate as fully as reasonably required in the defense of any claim. CPI reserves the right, at its own expense, to assume the exclusive defense and control of any matter subject to indemnification by Subscriber. CPI hereby agrees to indemnify, defend and hold Subscriber, its officials, officers, employees, agents, from and against any and all claims, actions, proceedings, costs, liabilities, losses and expenses (including, but not limited to, reasonable attorneys’ fees) (collectively, “Claims”) suffered or incurred by such indemnified parties resulting from or arising out of CPI’s provision and licensing of the ChargePoint Services, ChargePoint or Subscriber Content and Services. CPI will cooperate as fully as reasonably required in the defense of any claim. Subscriber reserves the right, at its own expense, to assume the exclusive defense and control of any matter subject to indemnification by CPI. Packet Pg. 246 Item 13 Page 11 of 18 Revised 12.21.16 11.GENERAL. 11.1 AMENDMENT OR MODIFICATION. CPI reserves the right to modify this Agreement from time to time. CPI will provide notice of each such modification to Subscriber. Subscriber’s continued use of the ChargePoint Services following such notice will constitute an acceptance of the modified Agreement. 11.2 WAIVER. The failure of either Party at any time to enforce any provision of this Agreement shall not be construed to be a waiver of the right of such Party to thereafter enforce that provision or any other provision or right. 11.3 FORCE MAJEURE. Except with respect to payment obligations, neither CPI nor Subscriber will be liable for failure to perform any of its obligations hereunder due to causes beyond such party’s reasonable control and occurring without its fault or negligence, including but not limited to fire, flood, earthquake or other natural disaster (irrespective of such Party’s condition of any preparedness therefore); war, embargo; riot; strike; labor action; any lawful order, decree, or other directive of any government authority that prohibits a Party from performing its obligations under this Agreement; material shortages; shortage of transport; and failures of suppliers to deliver material or components in accordance with the terms of their contracts. 11.4 NOTICE TO CALIFORNIA CUSTOMERS. (a)California’s Low Carbon Fuel Standard (“LCFS”) was enacted to ensure that the mix of fuels sold by California oil refiners and distributers meets applicable greenhouse gas emissions targets. California has a statewide goal to reduce carbon intensity of transportation fuels by at least 10% by 2020. (b)The ChargePoint Network can track the fueling of electric vehicles, which positively contributes to reducing California’s carbon intensity. If applicable reporting requirements are met, LCFS credits are issued by the California Air Resources Board. An available LCFS credit may be claimed by certain owners and operators of electric vehicle charging stations, including both Subscriber and CPI. However, the LCFS credits are only available to one party, meaning any available credits may be claimed by either Subscriber or CPI, but not by both. CPI intends to claim available LCFS credits generated from use of the Charging Stations, but will not claim any available LCFS credits that Subscriber intends to claim. If Subscriber intends to claim the LCFS credits, it must engage in the reporting and other administrative obligations necessary to generate such credits. (c)Subscriber agrees that it will provide CPI with written notice of its intent to claim LCFS credits within ten (10) days of the date of the Effective Date. If Subscriber does not currently intend to claim the LCFS credits, but desires to do so at any time in the future, Subscriber may, by providing written notice to CPI, elect to claim LCFS credits generated thirty (30) days or more after the date of such notice. Subscriber represents and warrants to CPI that, in the absence of providing written notice, Subscriber will not claim any LCFS credits. All notices shall be provided by email to CP I at lcfsnotification@chargepoint.com. 11.5 NOTICE TO OREGON CUSTOMERS (a)Oregon’s Clean Fuel Program (“OCFP”) was created with the purpose of reducing greenhouse gas emissions in the transportation sector. (b)The fueling of electric vehicles, and the operation of the ChargePoint Network, contributes to reducing Oregon’s greenhouse gas emissions and is eligible for OCFP credits, which are issued by the Oregon Department of Environmental Quality. By reporting the amount of electric vehicle Packet Pg. 247 Item 13 Page 12 of 18 Revised 12.21.16 fueling, ChargePoint is able to help Oregon track the growing use of electric vehicles in the state, for which ChargePoint will receive OCFP credits. (c)An available OCFP credit may be claimed by certain owners and operators of electric vehicle charging stations, including both Subscriber and CPI. However, the OCFP credits are only available to one party. This means any available credits may be claimed by either Subscriber or CPI, but not by both. CPI intends to claim available OCFP credits generated from use of the Charging Stations, but will not claim any available OCFP credits that Subscriber intends to claim. (d)Subscriber agrees that it will provide CPI with written notice of its intent to claim OCFP credits within ten (10) days of the date of the Effective Date. If Subscriber does not currently intend to claim the OCFP credits, but desires to do so at any time in the future, Subscriber may, by providing written notice to CPI, elect to claim OCFP credits generated thirty (30) days or more after the date of such notice. Subscriber represents and warrants to CPI that, in the absence of providing written notice, Subscriber will not claim any OCFP credits. All notices shall be provided by email to CPI at lcfsnotification@chargepoint.com. 11.6 NOTICES. Other than the notices required in Sections 11.5 and 11.6, any notice required or permitted by this Agreement shall be sent (a) if by CPI, via electronic mail to the address indicated by Subscriber in Subscriber’s ChargePoint Services account; or (b) if by Subscriber, via electronic mail to mssa@chargepoint.com. 11.7 INJUNCTIVE RELIEF. Subscriber acknowledges that damages for improper use of the ChargePoint Services may be irreparable; therefore, CPI is entitled to seek equitable relief, including but not limited to preliminary injunction and injunction, in addition to all other remedies. 11.8 SEVERABILITY. Except as otherwise specifically provided herein, if any term or condition of this Agreement or the application thereof to either Party will to any extent be determined jointly by the Parties or by any judicial, governmental or similar authority, to be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to this Agreement, the Parties or circumstances other than those as to which it is determined to be invalid or unenforceable, will not be affected thereby. 11.9 ASSIGNMENT. Subscriber may not assign any of its rights or obligations hereunder, whether by operation of law or otherwise, without the prior written consent of CPI (not to be unreasonably withheld). In the event of any purported assignment in breach of this Section, CPI shall be entitled, at its sole discretion, to terminate this Agreement upon written notice given to Subscriber. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the parties, their respective successors and permitted assigns. CPI may assign its rights and obligations under this Agreement. 11.10 NO AGENCY OR PARTNERSHIP. CPI, in the performance of this Agreement, is an independent contractor. In performing its obligations under this Agreement, CPI shall maintain complete control over its employees, its subcontractors and its operations. No partnership, joint venture or agency relationship is intended by CPI and Subscriber to be created by this Agreement. Neither Party has any right or authority to assume or create any obligations of any kind or to make any representation or warranty on behalf of the other Party, whether express or implied, or to bind the other Party in any respect whatsoever. 11.11 ENTIRE AGREEMENT. This Agreement (including the attached Exhibits) contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes and cancels all previous and contemporaneous agreements, negotiations, commitments, understandings, Packet Pg. 248 Item 13 Page 13 of 18 Revised 12.21.16 representations and writings. All purchase orders issued by Subscriber shall state that such purchase orders are subject to all of the terms and conditions of this Agreement, and contain no other term other than the type of Service Plan, the number of Charging Stations for which such Service Plan is ordered, the term of such Service Plans and applicable Subscription Fees. To the extent of any conflict or inconsistency between the terms and conditions of this Agreement and any purchase order, the Agreement shall prevail. Notwithstanding any language to the contrary therein, no terms or conditions stated in any other documentation shall be incorporated into or form any part of this Agreement, and all such purported terms and conditions shall be null and void. 11.12 COPYRIGHT POLICIES. It is CPI's policy to respond to notices of alleged copyright infringement that comply with applicable international intellectual property law (including, in the United States, the Digital Millennium Copyright Act) and to terminate the accounts of repeat infringers. 11.13 THIRD PARTY RESOURCES. The ChargePoint Services may include hyperlinks to other websites or resources. CPI has no control over any web sites or resources that are provided by companies or persons other than CPI. Subscriber acknowledges and agrees that CPI is not responsible for the availability of any such web sites or resources, CPI does not endorse any advertising, products or other materials on or available from such web sites or resources, and CPI is not liable for any loss or damage that may be incurred by Subscriber as a result of any reliance placed by Subscriber on the completeness, accuracy or existence of any advertising, products, or other materials on, or available from, such websites or resources. 11.14 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute but one and the same document. 11.15 ENGLISH LANGUAGE AGREEMENT GOVERNS. Where CPI has provided Subscriber with a translation of the English language version of this Agreement, Subscriber agrees that the translation is provided for Subscriber’s convenience only and that the English language version of this Agreement governs Subscriber’s relationship with CPI. If there is any conflict between the English language version of this Agreement and such translation, the English language version will prevail. Subscriber: ChargePoint, Inc. Name: ___________________________________ Name: Jonathan Kaplan Title: _____________________________________ Title: General Counsel Date: ____________________________________ Date:____________________________________ Address: __________________________________ Address: 254 E. Hacienda Ave _________________________________________ Campbell, CA 95008 EXHIBIT 1 Packet Pg. 249 Item 13 Page 14 of 18 Revised 12.21.16 FLEX BILLING TERMS This Exhibit sets forth certain additional terms and conditions (“Flex Billing Terms”) pursuant to which Subscriber may charge Users fees for the use of Subscriber’s Charging Stations. In order to charge such fees, Subscriber must subscribe to a Service Plan that includes CPI’s management, collection and/or processing services related to such fees (“Flex Billing”). 1.DEFINITIONS. The following additional defined terms shall apply to these Flex Billing Terms: 1.1 “CPI Fees” means a fee, currently equal to ten percent (10%) of Session Fees, charged for a particular Session. CPI Fees are charged by CPI in exchange for its collection and processing of Session Fees on behalf of Subscriber. CPI will provide Subscriber with thirty (30) days prior written notice (which may include, without limitation, notice provided by CPI through its regular newsletter to Subscriber) of any increase in CPI Fees. 1.2 “Net Session Fees” means the total amount of Session Fees collected on behalf of the Subscriber by CPI, less CPI Fees and Taxes, if any, required by law to be collected by CPI from Users in connection with the use of Charging Stations. Except as required by law, Subscriber shall be responsible for the payment of all Taxes incurred in connection with use of Subscriber’s Charging Stations. 1.3 “Session” or “Charging Session” means the period of time during which a User uses Subscriber’s Charging Station to charge his or her electric vehicle for a continuous period of time not less than two (2) minutes commencing when a User has accessed such Charging Station and ending when such User has terminated such access. 1.4 “Session Fees” means the fees set by the Subscriber for a Charging Session, inclusive of any applicable Taxes. 2.FLEX-BILLING SERVICE FOR CHARGING STATIONS. 2.1. SESSION FEES. Subscriber shall have sole authority to determine and set in real -time Session Fees. Subscriber shall be solely responsible for determining and charging Session Fees in compliance with all applicable laws and regul ations (including without limitation any restriction on Subscriber’s use of per-kWh pricing). Subscriber acknowledges that CPI is not responsible for informing Subscriber of applicable laws or changes thereto, and CPI will not be liable to Subscriber or any third party for any alleged or actual failure of Subscriber to comply with such applicable laws and regulations. 2.2 DEDUCTIONS FROM SESSION FEES. In exchange for CPI collecting Session Fees on behalf of the Subscriber, the Subscriber hereby authorizes CPI to deduct from all Session Fees collected: (i) CPI Fees and (ii) to the extent required by Section 3, applicable Taxes. 2.3 PAYMENT TO SUBSCRIBER OF NET SESSION FEES. CPI shall remit Net Session Fees to Subscriber not more than thirty (30) days after the end of each calendar month as directed by Subscriber from time to time through the applicable ChargePoint Services . Notwithstanding the foregoing, no such payment will be required if at the end of any calendar month the amount due to Subscriber hereunder is less than fifty U.S. Dollars ($50), except in connection with the expiration or termination of this Agreement. In no event shall CPI remit amounts due to Subscriber, regardless of the amount then due, later than thirty (30) days following the end of each calendar quarter. 3.TAXES. Subscriber is responsible for the payment of all Taxes incurred in connection with Session Fees; provided that CPI is solely responsible for all Taxes assessable based on CPI’s income, property and Packet Pg. 250 Item 13 Page 15 of 18 Revised 12.21.16 employees. Where CPI is required by law to collect and/or remit the Taxes for which Subscriber is responsible, the appropriate amount shall be invoiced to Subscriber and deducted by CPI from Session Fees, unless Subscriber has otherwise provided CPI with a valid tax or regulatory exemption certificate or authorization from the appropriate taxing or regulatory authority. Packet Pg. 251 Item 13 Page 16 of 18 Revised 12.21.16 EXHIBIT 2 API TERMS This Exhibit sets forth certain additional terms and conditions (“API Terms”) governing Subscriber’s use of the APIs in connection with Subscriber’s use of the ChargePoint Services. The API Terms are part of the Agreement, and all such use of the APIs remains subject to the Agreement terms. 1.ADDITIONAL DEFINITIONS. The following additional definitions shall apply to the API Terms. 1.1 "API Implementation" means a Subscriber software application or website that uses any of the APIs to obtain and display Content in conjunction with Subscriber Content and Services. 1.2 “API Documentation” means all Documentation containing instructions, restrictions or guidelines regarding the APIs or the use thereof, as amended and/or supplemented by CPI from time to time. 1.3 “CPI Site Terms” means the Terms and Conditions displayed on CPI’s website, governing use of CPI’s website and the ChargePoint Services by visitors who are not Service Plan subscribers. 2.API USE. Subscriber may use the APIs as and to the extent permitted by Subscriber’s Service Plan and the API Documentation, subject to the terms and conditions of the Agreement. 2.1 AVAILABLE APIs AND FUNCTION CALLS. The APIs give Subscriber access to information through a set of function calls. The particular APIs and API function calls made available by CPI from time to time (and the Content available through such APIs and function calls) will be limited by Subscriber’s Service Plan, and Subscriber’s particular Service Plan may not include all APIs and function calls then available from CPI. 2.2 USE AND DISPLAY OF CONTENT. Subscriber is permitted to access, use and publicly display the Content with Subscriber Content and Services in Subscriber’s API Implementation, subject to the following requirements and limitations. (a) All Charging Station locations provided to Subscriber as part of the Content shall be clearly identified by Subscriber in Subscriber’s API Implementation as ChargePoint® Network Charging Stations and shall contain the Brand Identifiers required by the API Documentation. In no event shall Subscriber’s API Implementation identify or imply that any Charging Station is a part of any network of charging stations other than ChargePoint. (b)Subscriber shall keep the Content used by Subscriber’s API Implementation current with Content obtained with the APIs to within every forty eight (48) hours. (c)Content provided to Subscriber through the APIs may contain the trade names, trademarks, service marks, logos, domain names, and other distinctive brand features of CPI’s business partners and/or other third party rights holders of Content indexed by CPI, which may not be deleted or altered in any manner. (d)Subscriber shall not: Packet Pg. 252 Item 13 Page 17 of 18 Revised 12.21.16 (i)pre-fetch, cache, or store any Content, except that Subscriber may store limited amounts of Content for the purpose of improving the performance of Subscriber’s API Implementation if Subscriber does so temporarily, securely, and in a manner that does not permit use of the Content outside of the ChargePoint Service; (ii)hide or mask from CPI the identity of Subscriber’s service utilizing the APIs, including by failing to follow the identification conventions listed in the API Documentation; or (iii) defame, abuse, harass, stalk, threaten or otherwise violate the legal rights (such as rights of privacy and publicity) of others. 2.3 REQUIRED INFORMATION. Subscriber must: (a) display to all viewers and users of Subscriber’s API Implementation the link to the CPI Site Terms and Conditions as presented through the ChargePoint Services or described in the Documentation; (b) explicitly state in the use terms governing Subscriber’s API Implementation that, by using Subscriber’s API Implementation, such viewers and users are agreeing to be bound by the CPI Site Terms; and (c) include in Subscriber’s API Implementation, and abide by, a privacy policy complying will all applicable laws; and (d) comply with all applicable laws designed to protect the privacy and legal rights of users of Subscriber’s API Implementation. 2.4 REPORTING. Subscriber must implement reporting mechanisms, if any, that CPI requires in the API Documentation. 3.CPI BRANDING REQUIREMENTS AND RESTRICTIONS. 3.1 MANDATORY CPI BRANDING. Subject to Section 3.2 below and the restrictions on use of CPI Marks set forth in the Agreement, Subscriber agrees that each page comprising Subscriber’s API Implementation will include a ChargePoint logo and will state that Subscriber’s application or website is provided, in part, through the ChargePoint Services. 3.2 RESTRICTIONS. Subscriber shall not: (a)display any CPI Mark as the most prominent element on any page in Subscriber’s API Implementation or Subscriber’s website (except as used in connection with the display of Charging Stations); or (b)display any CPI Mark anywhere in Subscriber’s API Implementation or on Subscriber’s website if Subscriber’s API Implementation or website contains or displays adult content or promotes illegal activities, gambling, or the sale of tobacco or alcohol to persons under twenty -one (21) years of age. Packet Pg. 253 Item 13 Page 18 of 18 Revised 12.21.16 EXHIBIT 3 TERMS REGARDING GRANTING OF RIGHTS This Exhibit sets forth certain additional terms and conditions applicable to Rights Grantors and Rights Grantees regarding the granting of Rights (“Rights Terms”). The Rights Terms are part of the Agreement, and all use of the ChargePoint Services permitted pursuant to the Rights Terms remains subject to the Agreement. 1.ADDITIONAL DEFINITIONS. The following additional definitions shall apply. 1.1 “Rights Grantor” means Subscriber. 1.2 “Rights Grantee” means a any person to whom Subscriber has granted Rights. For purposes of this Agreement, a Subscriber shall be deemed to have granted Rights to the entity assisting Subscriber with creating its account and initiating Subscriber’s access to Services. 2.TERMS. This Section governs Subscriber’s granting of Rights as a Rights Grantor. 2.1 LIMITED RIGHTS. A Rights Grantee’s right to access and use the ChargePoint Services for and on behalf of a Rights Grantor is limited to the specific Rights granted by such Rights Grantor to such Rights Grantee. Such Rights may be limited according to the Service Plan(s) subscribed to by Subscriber. Subscriber may revoke Rights, or any portion thereof, it has granted to a Rights Grantee at will and such Rights will thereafter by terminated with respect to such Rights Grantee. In no event may Subscriber grant Rights in excess of those provided to it through the Service Plan(s) to which it has subscribed. 2.2 RESPONSIBILITY FOR AUTHORIZED USER. All use of the ChargePoint Services by a Rights Grantee exercising Rights granted by Subscriber shall be subject to the terms and conditions of the Agreement (including without limitation Subscriber’s indemnification obligation pursuant to Section 10 thereof). Subscriber shall be responsible for the actions, omissions, or performance of such Rights Grantee while exercising any such Rights, as if such action, omission or performance had been committed by Subscriber directly. 2.3 NO AGREEMENT. Subscriber acknowledges and agrees that the ChargePoint Services merely enable a Rights Grantor to extend Rights to Rights Grantees. The mere extension of such Rights by a Rights Grantor to a Rights Grantee does not constitute an agreement between Rights Grantor and the Rights Grantee with respect to the granted Rights or the exercise of such Rights by the Rights Grantee. CPI does not, either through the terms of the Agreement or the provision of ChargePoint Services undertake to provide any such agreement. It is the responsibility of the Rights Grantor and the Rights Grantee to enter into such an agreement on terms mutually acceptable to each. CPI expressly undertakes no liability with respect to such an agreement and Rights Grantor fully and unconditionally releases CPI from any liability arising out of such an agreement. Further Rights Grantor agrees to indemnify and hold CPI, its officers, directors, agents, affiliates, distribution partners, licensors and suppliers harmless from and against any and all claims, actions, proceedings, costs, liabilities, losses and expenses (including, but not limited to, reasonable attorneys’ fees) (collectively, “Claims”) suffered or incurred by such indemnified parties resulting from or arising out of such agreement. Packet Pg. 254 Item 13 Meeting Date: 9/4/2018 FROM: Carrie Mattingly, Utilities Director Prepared By: Lianne Westberg, Assistant Program Manager – WSC SUBJECT: WATER RESOURCE RECOVERY FACILITY PROJECT UPDATE RECOMMENDATION Receive and file update on Water Resource Recovery Facility Project and associated Project Labor Agreement negotiations. DISCUSSION The Water Resource Recovery Facility (WRRF) Project has achieved the 95% design milestone. All plans and specifications are essentially complete with only minor quality assurance and quality contro l items pending. These documents are available as Council Reading Files for public review in the office of the City Clerk. Key items of interest related to project costs and funding are: 1. Value engineering was performed at the 60% design milestone. This w ork resulted in seven million dollars in cost reductions. 2. The 95% design cost estimate (Attachment D) is within the range of costs provided at 60% design, although overall the range has increased. Cost Estimate Design Milestone Low Median High 60% Design $91,100,000 $107,180,000 $128,620,000 95% Design $102,960,000 $114,400,000 $131,560,000 Cost increases are related to several unit processes (including the membrane bioreactor) and t he more detailed design has resulted in increased cost for concrete, steel, and electrical components. 3. The design estimate includes a ten percent construction contingency. 4. The bid documents include the Water Resource Center. It is an ‘additive alternate’ in the bid package. This approach preserves maximum flexibility for the City by allowing this portion of the project to be separated out if necessary due to funding constraints. 5. The City will receive a State Revolving Fund (SRF) loan up to $140 million at an interest rate that is half the State’s General Obligation Bond interest rate. The City has been recommended for $4 million of principal forgiveness from green project reserve funding. The funding package has been approved by State Board management and the Initial Agreement is near ly complete. 6. Two grants are in the approval process (CalOES and the Integrated Regional Water Packet Pg. 255 Item 14 Management Plan). If the grants make it all the way through the ir respective processes, they are expected to total about $3 million. WRRF Project Overview and Update The WRRF Project is divided into five phases. Phases 1 and 2 are complete. Phase 3, which runs through the award of the construction contract, is near completion. A milestone schedule is provided as Attachment A. WRRF Project Phasing Plan Phase Schedule Status Phase 1– Project Planning January 2014 – June 2015 Complete Phase 2 – Preliminary Design July 2015 – June 2016 Complete Phase 3 – Final Design July 2016 – April 2019* Ongoing Phase 4 – Construction May 2019 – May 2022 Pending Phase 5 – Close Out June 2022 – August 2022 Pending *Phase 3 - Final Design includes the bidding timeframe to the start of construction Work efforts currently underway include: 1. Building permit review 2. Project Labor Agreement negotiations per Council direction 3. Construction Management and Inspection Services 4. Contractor pre-qualification Over the next several months, the City Council will be considering and taking action on the following WRRF Project-related items: 1. Consideration of Project Labor Agreement 2. Authorization to bid the Project 3. State Revolving Fund Initial Agreement 4. Construction Manage ment and Inspection Services agreement 5. Phase 4 Program Management services 6. Engineering services during construction Project Labor Agreement Update A staff negotiating team (consisting of the City Attorney, the Utilities Director, the City’s retained project consultant , and retained Project Labor Agreement counsel), have been in negotiations with the Trades Council negotiating team to attempt to define and prioritize objectives and develop mutually agreeable language for a Project Labor Agreement covering the WRRF Project. The teams engaged in a lengthy in-person negotiating session on August 10, 2018 during which the teams reviewed the draft agreement proposed by the Trades Council, and discussed City Council direction, City bargaining objectives, public input received related to the Council study session, and significant input conveyed to staff and the City Council by local contractors and contractors’ association representatives. Packet Pg. 256 Item 14 During that initial meeting, the teams had very productive discussions, clarifying priorities and anticipated focus areas of negotiation for both the City and the Trades Council. Subsequent to the meeting, the staff negotiating team met internally to develop counterproposal language and that language has been conveyed to and is under consideration by the Trades Council team. Staff believes negotiations are proceeding constructively and anticipate that further areas of negotiation will become very focused through next round exchanges and that both teams will be in a position to assess the likelihood of reaching agreement in the time frame established by Council and in alignment with the Project timelines set forth above. If staff reaches a point where further Council direction is required, staff will return to Council with a further status summary and request for additional direction on any remaining areas of disagreement prior to the October 2018 negotiating deadline. ENVIRONMENTAL REVIEW The Environmental Impact Report (EIR) for the WRRF Project was certified by Council on August 16, 2016. CONCURRENCES Utilities has collaborated with the Public Works and Community Development Departments. Community Development concurs with the environmental review findings. The Public Works and Community Development Departments are reviewing the Building Permit Submittal. Comments will be incorporated into the Bid Set, and the City Engineer will provide final approval. FISCAL IMPACT The WRRF Project will primarily be financed through a low -interest SRF loan administered by the State Water Resources Control Board Water Recycling Funding Program. The City’s SRF funding package has been approved by SWRCB management and the Initial Agreement is being developed. While the State Water Resources Contro l Board initially committed to providing the Initial Agreement by August 2018, it is experiencing delays due to an enterprise fiscal software change. The State’s plan is to provide the Initial Agreement to the City in October for Council to execute in November. The State Board has assured the City that the project will receive the funding agreement this calendar year. The project is listed as a “fundable project’ in the State Board’s Intended Use Plan. The State Water Resources Control Board has also provid ed the attached letter and draft Initial Agreement (Attachments B and C). Packet Pg. 257 Item 14 Adequate funding is available in the Sewer Fund to support the project’s construction, including a 12% percent City-held contingency. The project budget is $140,000,000 and the estimated range of construction costs at 95% design is provided below. Cost Estimate Design Milestone Low Median High 95% Design $102,960,000 $114,400,000 $131,560,000 Other project costs will include contingencies and soft costs (such as construction ma nagement, engineering services during construction, and other project support services). AVAILABLE FOR REVIEW IN THE COUNCIL OFFICE Building Permit Submittal Plans, Specifications and Cost Estimate for the Water Resource Recovery Facility Project , Specification No. 91620. Attachments: a - WRRF Project Milestone Graphic b - Funding Decision Letter c - WRRF Project Draft ISA Construction Agreement 5-31-18 d - COUNCIL READING FILE - Basis of Estimate - 95pct Packet Pg. 258 Item 14 Packet Pg. 259 Item 14 Packet Pg. 260 Item 14 Packet Pg. 261 Item 14 DRAFT 5/31/18 CITY OF SAN LUIS OBISPO AND CALIFORNIA STATE WATER RESOURCES CONTROL BOARD CONSTRUCTION INSTALLMENT SALE AGREEMENT San Luis Obispo Water Resource Recovery Facility Expansion and Improvements Project PROJECT NO. [C-06-8029-110] AGREEMENT NO. [ ] AMOUNT: $ ELIGIBLE START DATE: _________________ COMPLETION OF CONSTRUCTION DATE: ______________ FINAL DISBURSEMENT REQUEST DATE: _____________ FINAL REPAYMENT DATE: _____________ RECORDS RETENTION END DATE: _____________ Packet Pg. 262 Item 14 THIS PAGE INTENTIONALLY LEFT BLANK Packet Pg. 263 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 i TABLE OF CONTENTS WHEREAS, ................................................................................................................................................... 1 ARTICLE I DEFINITIONS ......................................................................................................................... 1 1.1 Definitions. .......................................................................................................................................... 1 1.2 Exhibits Incorporated.......................................................................................................................... 6 ARTICLE II REPRESENTATIONS, WARRANTIES, AND COMMITMENTS ........................................... 6 2.1 Application and General Recipient Commitments. ............................................................................ 6 2.2 Authorization and Validity. .................................................................................................................. 6 2.3 No Violations. ..................................................................................................................................... 6 2.4 No Litigation. ...................................................................................................................................... 6 2.5 Solvency and Insurance. .................................................................................................................... 6 2.6 Legal Status and Eligibility. ................................................................................................................ 7 2.7 Financial Statements and Continuing Disclosure. ............................................................................. 7 2.8 Completion of Project. ........................................................................................................................ 7 2.9 Award of Construction Contracts. ...................................................................................................... 7 2.10 Notice. ............................................................................................................................................. 7 2.11 Findings and Challenge .................................................................................................................. 9 2.12 Project Access. ............................................................................................................................... 9 2.13 Project Completion; Initiation of Operations. .................................................................................. 9 2.14 Continuous Use of Project; Lease, Sale, Transfer of Ownership, or Disposal of Project. .......... 9 2.15 Project Reports. .............................................................................................................................. 9 2.16 Federal Disadvantaged Business Enterprise (DBE) Reporting. ................................................... 10 2.17 Records. ....................................................................................................................................... 10 2.18 Audit. ............................................................................................................................................. 11 ARTICLE III FINANCING PROVISIONS ................................................................................................. 11 3.1 Purchase and Sale of Project. .......................................................................................................... 11 3.2 Amounts Payable by the Recipient. ................................................................................................. 12 Packet Pg. 264 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 ii 3.3 Obligation Absolute. ......................................................................................................................... 13 3.4 No Obligation of the State. ............................................................................................................... 13 3.5 Disbursement of Project Funds; Availability of Funds. ..................................................................... 13 3.6 Withholding of Disbursements and Material Violations. ................................................................... 14 3.7 Pledge; Rates, Fees and Charges; Additional Debt. ....................................................................... 15 3.8 Financial Management System and Standards. .............................................................................. 16 3.9 Accounting and Auditing Standards. ................................................................................................ 16 3.10 Other Assistance. ......................................................................................................................... 16 ARTICLE IV MISCELLANEOUS PROVISIONS ..................................................................................... 17 4.1 Amendment and Integration. ............................................................................................................ 17 4.2 Assignability. .................................................................................................................................... 17 4.3 Bonding. ........................................................................................................................................... 17 4.4 Competitive Bidding ......................................................................................................................... 17 4.5 Compliance with Law, Regulations, etc. .......................................................................................... 17 4.6 Conflict of Interest. ........................................................................................................................... 18 4.7 Damages for Breach Affecting Tax-Exempt Status or Federal Compliance .................................... 18 4.8 Disputes. .......................................................................................................................................... 18 4.9 Governing Law. ................................................................................................................................ 18 4.10 Income Restrictions. ..................................................................................................................... 18 4.11 Indemnification and State Reviews. ............................................................................................. 19 4.12 Independent Actor. ....................................................................................................................... 19 4.13 Leveraging Covenants. ................................................................................................................. 19 4.14 Non-Discrimination Clause. .......................................................................................................... 20 4.15 No Third Party Rights. .................................................................................................................. 20 4.16 Operation and Maintenance; Insurance. ...................................................................................... 21 4.17 Permits, Subcontracting, and Remedies. ..................................................................................... 21 4.18 Prevailing Wages. ......................................................................................................................... 21 4.19 Public Funding. ............................................................................................................................. 22 Packet Pg. 265 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 iii 4.20 Recipient’s Responsibility for Work. ............................................................................................. 22 4.21 Related Litigation. ......................................................................................................................... 22 4.22 Rights in Data. .............................................................................................................................. 22 4.23 State Water Board Action; Costs and Attorney Fees. .................................................................. 22 4.24 Termination and Remedies Upon Event of Default. ..................................................................... 22 4.25 Timeliness. .................................................................................................................................... 23 4.26 Unenforceable Provision. ............................................................................................................. 23 4.27 Useful Life. .................................................................................................................................... 24 4.28 Venue. .......................................................................................................................................... 24 4.29 Waiver and Rights of the State Water Board. .............................................................................. 24 ARTICLE V TAX COVENANTS .............................................................................................................. 24 5.1 Purpose. ........................................................................................................................................... 24 5.2 Tax Covenant. .................................................................................................................................. 24 5.3 Governmental Unit. .......................................................................................................................... 24 5.4 Financing of a Capital Project. ......................................................................................................... 24 5.5 Ownership and Operation of Project. ............................................................................................... 24 5.6 Temporary Period. ............................................................................................................................ 25 5.7 Working Capital. ............................................................................................................................... 25 5.8 Expenditure of Proceeds. ................................................................................................................. 25 5.9 Private Use and Private Payments. ................................................................................................. 25 5.10 No Sale, Lease or Private Operation of the Project. .................................................................... 26 5.11 No Disproportionate or Unrelated Use. ........................................................................................ 26 5.12 Management and Service Contracts. ........................................................................................... 26 5.13 No Disposition of Financed Property. ........................................................................................... 26 5.14 Useful Life of Project..................................................................................................................... 26 5.15 Installment Payments. .................................................................................................................. 27 5.16 No Other Replacement Proceeds. ................................................................................................ 27 5.17 No Sinking or Pledged Fund. ........................................................................................................ 27 Packet Pg. 266 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 iv 5.18 Reserve Amount. .......................................................................................................................... 27 5.19 Reimbursement Resolution. ......................................................................................................... 27 5.20 Reimbursement Expenditures. ..................................................................................................... 27 5.21 Change in Use of the Project. ....................................................................................................... 28 5.22 Rebate Obligations. ...................................................................................................................... 28 5.23 No Federal Guarantee. ................................................................................................................. 28 5.24 No Notices or Inquiries from IRS. ................................................................................................. 28 5.25 Amendments. ................................................................................................................................ 28 5.26 Reasonable Expectations. ............................................................................................................ 28 EXHIBIT A - SCOPE OF WORK & INCORPORATED DOCUMENTS EXHIBIT A - FBA –FINAL BUDGET APPROVAL EXHIBIT B - FUNDING AMOUNT EXHIBIT C - PAYMENT SCHEDULE EXHIBIT D - SPECIAL CONDITIONS EXHIBIT E - PROGRAMMATIC CONDITIONS & CROSS-CUTTERS EXHIBIT F - SCHEDULE OF SYSTEM OBLIGATIONS EXHIBIT G - DAVIS-BACON REQUIREMENTS EXHIBIT H - COMPLIANCE WITH CROSS-CUTTING STATE AUTHORITIES Packet Pg. 267 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 1 2017 cx9ii18 WHEREAS, 1. The State Water Board is authorized to provide financial assistance under this Agreement pursuant to the following: • Chapter 6.5 of Division 7 of the California Water Code (State Act) • Title VI of the federal Water Pollution Control Act (Federal Act) 2. The State Water Board determines eligibility for financial assistance, determines a reasonable schedule for providing financial assistance, establishes compliance with the Federal Act and the State Act, and establishes the terms and conditions of a financial assistance agreement. 3. The Recipient has applied to the State Water Board for financial assistance for the Project described in Exhibit A of this Agreement and the State Water Board has selected the application for financial assistance. 4. The State Water Board proposes to assist in providing financial assistance for eligible costs of the Project, and the Recipient desires to participate as a recipient of financial assistance from the State Water Board and evidence its obligation to pay Installment Payments, which obligation will be secured by Net Revenues, as defined herein, upon the terms and conditions set forth in this Agreement, all pursuant to the Federal Act and the State Act. NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and agreements herein set forth, the State Water Board and the Recipient, each binding itself, its successors and assigns, do mutually promise, covenant, and agree as follows: Subject to the satisfaction of any conditions precedent to this Agreement, this Agreement shall become effective upon the signature of both the Recipient and the State Water Board. Upon execution, the term of the Agreement shall begin on the Eligible Start Date and extend throu gh the Final Repayment Date. ARTICLE I DEFINITIONS 1.1 Definitions. Unless otherwise specified, each capitalized term used in this Agreement has the following meaning: "Additional Payments" means the Additional Payments described in Section 3.2(c) of this Agreement. "Agreement" means this Installment Sale Agreement, including all exhibits and attachments. "Allowance" means an amount based on a percentage of the accepted bid for an eligible project to help defray the planning, design, and construction engineering and administration costs of the Project. "Authorized Representative" means the duly appointed representative of the Recipient as set forth in the certified original of the Recipient’s authorizing resolution that designates the authorized representative by title. "Bank" means the California Infrastructure and Economic Development Bank. Packet Pg. 268 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 2 2017 cx9ii18 “Bond Funded Portion of the Project Funds” means any portion of the Project Funds which was or will be funded with Bond Proceeds. “Bond Proceeds” means original proceeds, investment proceeds, and replacement proceeds of Bonds . "Bonds" means any series of bonds issued by the Bank, the interest on which is excluded from gross income for federal tax purposes, all or a portion of the proceeds of which have been, are, or will be applied by the State Water Board to fund all or any portion of the Project Costs or that are secured in whole or in part by Installment Payments paid hereunder. "Code" as used in Article V of this Agreement means the Internal Revenue Code of 1986, as amended, and any successor provisions and the regulations of the U.S. Department of the Treasury promulgated thereunder. "Completion of Construction" means the date, as determined by the Division after consultation with the Recipient, that the work of building and erection of the Project is substantially complete, and is identified in Exhibit A of this Agreement. “CWSRF” means the Clean Water State Revolving Fund. “Days” means calendar days unless otherwise expressly indicated. “Debt Service” means, as of any date, with respect to outstanding System Obligations and, in the case of the additional debt tests in Section 3.7 of this Agreement, any System Obligations that are proposed to be outstanding, the aggregate amount of principal and interest scheduled to become due (either at maturity or by mandatory redemption), calculated with the following assumptions: a. Principal payments (unless a different subsection of this definition applies for purposes of determining principal maturities or amortization) are made in accordance with any amortization schedule published for such principal, including any minimum sinking fund payments; b. Interest on a variable rate System Obligation that is not subject to a swap agreement and that is issued or will be issued as a tax-exempt obligation under federal law, is the average of the SIFMA Municipal Swap Index, or its successor index, during the 24 months preceding the date of such calculation; c. Interest on a variable rate System Obligation that is not subject to a swap agreement and that is issued or will be issued as a taxable obligation under federal law, is the average of LIBOR, or its successor index, during the 24 months preceding the date of such calculation; d. Interest on a variable rate System Obligation that is subject to a swap agreement is the fixed swap rate or cap strike rate, as appropriate, if the variable rate has been swapped to a fixed rate or capped pursuant to an interest rate cap agreement or similar agreement; e. Interest on a fixed rate System Obligation that is subject to a swap agreement such that all or a portion of the interest has been swapped to a variable rate shall be treated as variable rate debt under subsections (b) or (c) of this definition of Debt Ser vice; f. Payments of principal and interest on a System Obligation are excluded from the calculation of Debt Service to the extent such payments are to be paid from amounts Packet Pg. 269 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 3 2017 cx9ii18 then currently on deposit with a trustee or other fiduciary and restricted for the defeasance of such System Obligations; g. If 25% or more of the principal of a System Obligation is not due until its final stated maturity, then principal and interest on that System Obligation may be projected to amortize over the lesser of 30 years or the useful life of the financed asset, and interest may be calculated according to subsections (b)-(e) of this definition of Debt Service, as appropriate. “Deputy Director” means the Deputy Director of the Division. "Division" means the Division of Financial Assistance of the State Water Board or any other segment of the State Water Board authorized to administer this Agreement. “Eligible Start Date” means the date set forth in Exhibit B, establishing the date on or after which construction costs may be incurred and eligible for reimbursement hereunder. “Enterprise Fund” means the enterprise fund of the Recipient in which Revenues are deposited. “Event of Default” means the occurrence of any one or more of the following events: a) Failure by the Recipient to pay Installment Payments when due, or failure to make any other payment required to be paid pursuant to this Agreement; b) A representation or warranty made by or on behalf of the Recipient in this Agreement or in any document furnished by or on behalf of the Recipient to the State Water Board pursuant to this Agreement shall prove to have been inaccurate, misleading or incomplete in any material respect; c) A material adverse change in the condition of the Recipient, the Revenues, or the System, which the Division reasonably determines would materially impair the Recipient’s ability to satisfy its obligations under this Agreement. d) Failure by the Recipient to comply with the additional debt test or reserve fund requirement, if any, in Section 3.7 or Exhibit D of this Agreement; e) Failure to operate the System or the Project without the Division’s approval; f) Failure by the Recipient to observe and perform any covenant, condition, or provision in this Agreement, which failure shall continue for a period of time, to be determined by the Division; g) The occurrence of a material breach or event of default under any System Obligation that results in the acceleration of principal or interest or otherwise requires immediate prepayment, repurchase or redemption; h) Initiation of proceedings seeking arrangement, reorganization, or any other relief under any applicable bankruptcy, insolvency, or other similar law now or hereafter in effect; or the appointment of or taking possession of the Recipient’s property by a receiver, liquidator, assignee, trustee, custodian, conservator, or similar official; or the Recipient’s entering into a general assignment for the benefit of creditors; or any action in furtherance of any of the foregoing; i) Initiation of resolutions or proceedings to terminate the Recipient’s existence; j) A determination pursuant to Gov. Code § 11137 that the Recipient has violated any provision in Article 9.5 of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code; “Final Disbursement Request Date” means the date established in Exhibit A, after which date, no further Project Funds disbursements may be requested. “Final Repayment Date” is the date by which all principal and accrued interest due under this Agreement is to be paid in full to the State Water Board and is specified in Exhibit B and Exhibit C. Packet Pg. 270 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 4 2017 cx9ii18 "Fiscal Year" means the period of twelve (12) months terminating on June 30 of any year, or any other annual period selected and designated by the Recipient as its Fiscal Year in accordance with applicable law. "Force Account" means the use of the Recipient's own employees or equipment. “GAAP” means generally accepted accounting principles, the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor. “Indirect Costs” means those costs that are incurred for a common or joint purpose benefiting more than one cost objective and are not readily assignable to the Project (i.e., costs that are not directly related to the Project). Examples of Indirect Costs include, but are not limited to: central service costs; general administration of the Recipient; non-project-specific accounting and personnel services performed within the Recipient organization; depreciation or use allowances on buildings and equipment; the costs of operating and maintaining non-project-specific facilities; tuition and conference fees; generic overhead or markup; and taxes. "Initiation of Construction" means the date that notice to proceed with work is issued for the Project, or, if notice to proceed is not required, the date of commencement of building and erection of the Project. "Installment Payments" means Installment Payments due and payable by the Recipient to the State Water Board under this Agreement, the amounts of which are set forth as Exhibit C hereto, or as may be set forth in the final payment schedule forwarded to Recipient after all disbursements have been paid and construction of the Project has been completed. “Listed Event” means, so long as the Recipient has outstanding any System Obligation subject to Rule 15c2-12, any of the events required to be reported pursuant to Rule 15c2-12(b)(5). “Maximum Annual Debt Service” means the maximum amount of Debt Service due on System Obligations in any Fiscal Year during the period commencing with the Fiscal Year for which such calculation is made and terminating with the last Fiscal Year in which Debt Service for any System Obligations will become due. "Net Revenues" means, for any Fiscal Year, all Revenues received by the Recipient less the O perations and Maintenance Costs for such Fiscal Year. "Obligation" means the obligation of the Recipient to make Installment Payments and Additional Payments as provided herein, as evidenced by the execution of this Agreement, proceeds of such obligations being used to fund the Project as specified in the Project Description in Exhibit A and Exhibit A- FBA and in the documents thereby incorporated by reference. "Operations and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the Recipient for maintaining and operating the System, determined in accordance with GAAP, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the System in good repair and working order, and including all reasonable and necessary administrative costs of the Recipient that are charged directly or apportioned to the operation of the System, such as salaries and wages of employees, overhead, taxes (if any), the cost of permits, licenses , and charges to operate the System and insurance premiums; but excluding, in all cases depreciation, replacement, and obsolescence charges or reserves therefor and amortization of intangibles. “Other Material Obligation” means an obligation of the Recipient set forth in Exhibit F that is not payable from Net Revenues, but is otherwise material to this transaction. Packet Pg. 271 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 5 2017 cx9ii18 "Policy" means the State Water Board's “Policy for Implementing the Clean Water State Revolving Fund,” as amended from time to time, and including the Intended Use Plan in effect as of the Eligible Start Date. “Project” means the Project financed by this Agreement as described in Exhibit A, Exhibit A-FBA, and in the documents incorporated by reference herein. "Project Completion" means the date, as determined by the Division after consultation with the Recipient, that operation of the Project is initiated or is capable of being initiated, whichever comes first . "Project Costs" means the incurred costs of the Recipient which are eligible for financial assistance under this Agreement, which are allowable costs as defined under the Policy, and which are reasonable, necessary and allocable by the Recipient to the Project under GAAP, plus capitalized interest. “Project Funds” means all moneys disbursed to the Recipient by the State Water Board pursuant to this Agreement. “Project Manager” means the person designated by the State Water Board to manage performance of the Agreement. “Recipient” means the City of San Luis Obispo. “Records Retention End Date” means the last date that the Recipient is obligated to maintain records pursuant to Section 2.17 of this Agreement. “Regional Water Quality Control Board” or “Regional Water Board” means the appropriate Regional Water Quality Control Board. “Reimbursement Resolution” means the Recipient’s reimbursement resolution identified in Exhibit A of this Agreement. “Reserve Fund” means the reserve fund required pursuant to Section 3.7 of this Agreement. "Revenues" means, for each Fiscal Year, all gross income and revenue received or receivable by the Recipient from the ownership or operation of the System, determined in accordance with GAAP, including all rates, fees, and charges (including connection fees and charges) as received by the Recipient for the services of the System, and all other income and revenue howsoever derived by the Recipient from the ownership or operation of the System or arising from the System, including all income from the deposit or investment of any money in the Enterprise Fund or any rate stabilization fund of the Recipient or held on the Recipient’s behalf, and any refundable deposits made to establish credit, and advances or contributions in aid of construction. “Rule 15c2-12(b)(5)” means Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. “SRF” means the Clean Water State Revolving Fund. “State” means State of California. “State Water Board” means the State Water Resources Control Board. "System" means all wastewater collection, pumping, transport, treatment, storage, and disposal facilities, including land and easements thereof, owned by the Recipient, including the Project, and all other properties, structures, or works hereafter acquired and constructed by the Recipient and determined t o be Packet Pg. 272 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 6 2017 cx9ii18 a part of the System, together with all additions, betterments, extensions, or improvements to such facilities, properties, structures, or works, or any part thereof hereafter acquired and constructed . “System Obligation” means any obligation of the Recipient payable from the Revenues, including but not limited to this Obligation and obligations reflected in Exhibit F and such additional obligations as may hereafter be issued in accordance with the provisions of such obligations and this Agreement. “Year” means calendar year unless otherwise expressly indicated. 1.2 Exhibits Incorporated. All exhibits to this Agreement, including any amendments and supplements hereto, are hereby incorporated herein and made a part of this Agreement. ARTICLE II REPRESENTATIONS, WARRANTIES, AND COMMITMENTS The Recipient represents, warrants, and commits to the following as of the Eligible Start Date set forth on the first page hereof and continuing thereafter for the term of this Agreement. 2.1 Application and General Recipient Commitments. The Recipient has not made any untrue statement of a material fact in its application for this financial assistance, or omitted to state in its application a material fact that makes the statements in its application not misleading. The Recipient shall comply with all terms, provisions, conditions, and commitments of this Agreement, including all incorporated documents, and shall fulfill all assurances, declarations, representations, and commitments in its application, accompanying documents, and communications filed in support of its request for financial assistance. 2.2 Authorization and Validity. The execution and delivery of this Agreement, including all incorporated documents, has been duly authorized by the Recipient. Upon execution by both parties, this Agreement constitutes a valid and binding obligation of the Recipient, enforceable in accordance with its terms, except as such enforcement may be limited by law. 2.3 No Violations. The execution, delivery, and performance by Recipient of this Agreement, including all incorporated documents, do not violate any provision of any law or regulation in effect as of the date set forth on the first page hereof, or result in any breach or default under any contract, obligation, indenture, or other instrument to which Recipient is a party or by which Recipient is bound as of the date set forth on the first page hereof. 2.4 No Litigation. As of the date of the execution of this Agreement, there are no current pending or, to Recipient’s knowledge, threatened actions, claims, investigations, suits, or proceedings before any governmental authority, court, or administrative agency which materially affect the financial condition or operations of the Recipient, the System, the Revenues, and/or the Project. 2.5 Solvency and Insurance. Packet Pg. 273 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 7 2017 cx9ii18 None of the transactions contemplated by this Agreement will be or have been made with an actual intent to hinder, delay, or defraud any present or future creditors of Recipient. As of the date set forth on the first page hereof, Recipient is solvent and will not be rendered insolvent by the transactions contemplated by this Agreement. Recipient is able to pay its debts as they become due. Recipient maintains sufficient insurance coverage considering the scope of this Agreement, including, for example but not necessarily limited to, general liability, automobile liability, workers compensation and employers liability, professional liability. 2.6 Legal Status and Eligibility. Recipient is duly organized and existing and in good standing under the laws of the State of California. Recipient shall at all times maintain its current legal existence and preserve and keep in full force and effect its legal rights and authority. Recipient shall maintain its eligibility for funding under this Agreement. 2.7 Financial Statements and Continuing Disclosure. The financial statements of Recipient previously delivered to the State Water Board as of the date(s) set forth in such financial statements: (a) are materially complete and correct; (b) present fairly the financial condition of the Recipient; and (c) have been prepared in accordance with GAAP. Since the date(s) of such financial statements, there has been no material adverse change in the financial condition of the Recipient, nor have any assets or properties reflected on such financial s tatements been sold, transferred, assigned, mortgaged, pledged or encumbered, except as previously disclosed in writing by Recipient and approved in writing by the State Water Board. The Recipient is current in its continuing disclosure obligations associated with its material debt. 2.8 Completion of Project. The Recipient shall expeditiously proceed with and complete construction of the Project in sub stantial accordance with Exhibit A and Exhibit A-FBA. 2.9 Award of Construction Contracts. (a) The Recipient shall award the prime construction contract timely in order to meet the start of construction date specified in Exhibit A. (b) The Recipient shall promptly notify the Division in writing, via mail or email, both of the award of the prime construction contract for the Project and of Initiation of Construction of the Project. The Recipient shall make all reasonable efforts to complete construction in substantial conformance with the terms of the contract by the Completion of Construction date established in Exhibit A. 2.10 Notice. (a) The Recipient shall notify the Deputy Director Division and the Project Manager in writing, via mail or email, within five (5) working days of the occurrence of any of the following events: 1) Bankruptcy, insolvency, receivership or similar event of the Recipient, or actions taken in anticipation of any of the foregoing; 2) Change of ownership of the System or change of management or service contracts, if any, for operation of the System; 3) Material loss, theft, damage, or impairment to the Revenues or the System; 4) Failure to meet any debt service coverage test in section 10 of this Agreement; 5) Unscheduled draws on the Reserve Fund; 6) Listed Events or Events of Default, except as set forth in subdivisions (b) or (c) of this section; or Packet Pg. 274 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 8 2017 cx9ii18 7) Failure to observe or perform any covenant in this Agreement. (b) The Recipient shall notify the Deputy Director of the Division and the Project Manager in writing within ten (10) working days of the following: 1) Material defaults on System Obligations, other than this Obligation; 2) Unscheduled draws on debt service reserves held for System Obligations, other than this Obligation, if any, reflecting financial difficulties; 3) Unscheduled draws on credit enhancements on System Obligations, if any, reflecting financial difficulties; 4) Substitution of credit or liquidity providers, if any or their failure to perform; 5) Any litigation pending or threatened with respect to the Project or the Recipient’s technical, managerial or financial capacity to operate the System or the Recipient’s continued existence, circulation of a petition to repeal, reduce, or otherwise challenge the Recipient’s rates for services of the System, or any other event that could materially impair the Revenues; 6) Adverse tax opinions, the issuance by the Internal Revenue Service or proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices of determinations with respect to the tax status of any tax-exempt bonds; 7) Rating changes on outstanding System Obligations, if any; 8) Issuance of additional parity obligations; or 9) Any enforcement actions by the Regional Water Board; (c) The Recipient shall notify the Division promptly, within three (3) working days, of the following: (1) The discovery of a false statement of fact or representation made in this Agreement or in the application to the Division for this financial assistance, or in any certification, report, or request for disbursement made pursuant to this Agreement, by the Recipient, its employees, agents, or contractors; (2) Any substantial change in scope of the Project. The Recipient shall undertake no substantial change in the scope of the Project until prompt written notice of the proposed change has been provided to the Division and the Division has given written approval for the change; (3) Cessation of all major construction work on the Project where such cessation of work is expected to or does extend for a period of thirty (30) days or more; (4) Any circumstance, combination of circumstances, or condition, which is expected to or does delay Completion of Construction for a period of ninety (90) days or more beyond the estimated date of Completion of Construction as specified in Exhibit A; (5) Discovery of any unexpected endangered or threatened species, as defined in the federal Endangered Species Act. Should a federally protected species be unexpectedly encountered during construction of the Project, the Recipient agrees to promptly notify the Division. This notification is in addition to the Recipient’s obligations under the federal Endangered Species Act; (6) Any Project monitoring, demonstration, or other implementation activities required in Exhibit A or Exhibit D of this Agreement, if any; (7) Any public or media event publicizing the accomplishments and/or results of this Agreement and provide the opportunity for attendance and participation by state representatives with at least ten (10) working days’ notice to the Division; Packet Pg. 275 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 9 2017 cx9ii18 (8) Any events requiring notice to the Division pursuant to the provisions of Exhibit E to this Agreement; or (9) Completion of Construction of the Project, and actual Project Completion. (d) The Recipient shall notify the Division within 24 hours of any discovery of any potential tribal cultural resource and/or archeological or historical resource. Notice shall be addressed to the Deputy Director of the Division and to Ahmad Kashkoli at Ahmad.Kashkoli@waterboards.ca.gov and via phone at (916) 341-5855. Should a potential tribal cultural resource and/or archeological or historical resource be discovered during construction, the Recipient shall ensure that all work in the area of the find will cease until a qualified archeologist has evaluated the situation and made recommendations regarding preservation of the resource, and the Division has determined what actions should be taken to protect and preserve the resource. The Recipient shall implement appropriate actions as directed by the Division. 2.11 Findings and Challenge Upon consideration of a voter initiative to reduce Revenues, the Recipient shall make a finding regarding the effect of such a reduction on the Recipient's ability to satisfy the rate covena nt set forth in Section 3.7 of this Agreement. The Recipient shall make its findings available to the public and shall request, if necessary, the authorization of the Recipient’s decision-maker or decision-making body to file litigation to challenge any such initiative that it finds will render it unable to satisfy the rate covenant set forth in Section 3.7 and its obligation to operate and maintain the Project for its useful life. The Recipient shall diligently pursue and bear any and all costs related to such challenge. The Recipient shall notify and regularly update the State Water Board regarding the status of any such challenge. 2.12 Project Access. The Recipient shall ensure that the State Water Board, the Governor of the State, the United States Environmental Protection Agency, the Office of Inspector General, any member of Congress, or any authorized representative of the foregoing, will have safe and suitable access to the Project site at all reasonable times during Project construction and thereafter for the term of the Obligation. The Recipient acknowledges that, except for a subset of information regarding archaeological records, the Project records and locations are public records, including but not limited to all of the submissions accompanying the application, all of the documents incorporated by Exhibit A and Exhibit A-FBA, and all reports, disbursement requests, and supporting documentation submitted hereunder. 2.13 Project Completion; Initiation of Operations. Upon Completion of Construction of the Project, the Recipient shall expeditiously initiate Project operations. 2.14 Continuous Use of Project; Lease, Sale, Transfer of Ownership, or Disposal of Project. The Recipient agrees that, except as provided in this Agreement, it will not abandon, substantially discontinue use of, lease, sell, transfer ownership of, or dispose of all or a significant part or portion of the Project during the useful life of the Project without prior written approval of the Division. Such approval may be conditioned as determined to be appropriate by the Division, including a condition requiring repayment of all disbursed Project Funds or all or any portion of all remaining funds covered by this Agreement together with accrued interest and any penalty assessments that may be due. 2.15 Project Reports. Packet Pg. 276 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 10 2017 cx9ii18 (a) Status Reports. The Recipient shall provide status reports no less frequently than quarterly, starting with the execution of this Agreement. A status report must accompany any disbursement request and is a condition precedent to any disbursement. At a minimum, the reports will contain the following information: (1) A summary of progress to date including a description of progress since the last report, percent construction complete, percent contractor invoiced, and percent schedule elapsed; (2) A description of compliance with environmental requirements; (3) A listing of change orders including the dollar amount, description of work, and change in contract amount and schedule; and (4) Any problems encountered, proposed resolution, schedule for resolution, and status of previous problem resolutions. (b) Project Completion Report. The Recipient shall submit a Proj ect Completion Report to the Division with a copy to the appropriate Regional Water Board on or before the due date established by the Division and the Recipient at the time of final project inspection. The Project Completion Report must address the following: (1) Describe the Project, (2) Describe the water quality problem the Project sought to address, (3) Discuss the Project’s likelihood of successfully addressing that water quality problem in the future, and (4) Summarize compliance with environmental conditions, if applicable. If the Recipient fails to submit a timely Project Completion Report, the State Water Board may stop processing pending or future applications for new financial assistance, withhold disbursements under this Agreement or other agreements, and begin administrative proceedings. (c) As Needed Reports. The Recipient shall provide expeditiously, during the term of this Agreement, any reports, data, and information reasonably required by the Di vision, including but not limited to material necessary or appropriate for evaluation of the funding program or to fulfill any reporting requirements of the state or federal government. 2.16 Federal Disadvantaged Business Enterprise (DBE) Reporting. The Recipient shall report DBE utilization to the Division on the DBE Utilization Report, State Water Board Form DBE UR334. The Recipient must submit such reports to the Division annually within ten (10) calendar days following October 1 until such time as the "Notice of Completion" is issued. The Recipient shall comply with 40 CFR § 33.301. 2.17 Records. (a) Without limitation of the requirement to maintain Project accounts in accordance with GAAP, the Recipient shall: Packet Pg. 277 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 11 2017 cx9ii18 (1) Establish an official file for the Project which adequately document s all significant actions relative to the Project; (2) Establish separate accounts which will adequately and accurately depict all amounts received and expended on the Project, including all assis tance funds received under this Agreement; (3) Establish separate accounts which will adequately depict all income received which is attributable to the Project, specifically including any income attributable to assistance funds disbursed under this Agreement; (4) Establish an accounting system which will accurately depict final total costs of the Project, including both direct and indirect costs; (5) Establish such accounts and maintain such records as may be necessary for the State to fulfill federal reporting requirements, including any and all reporting requirements under federal tax statutes or regulations; and (6) If a Force Account is used by the Recipient for any phase of the Project, other than for planning, design, and construction engineering and administration provided for by allowance, accounts will be established which reasonably document all employee hours charged to the Project and the associated tasks perf ormed by each employee. Force Account Indirect costs are not eligible for funding. (b) The Recipient shall maintain separate books, records and other material relative to the Project. The Recipient shall also retain such books, records, and other material for itself and for each contractor or subcontractor who performed or performs work on the Project for a minimum of thirty-six (36) years after Completion of Construction. The Recipient shall require that such books, records, and other material are subject at all reasonable times (at a minimum during normal business hours) to inspection, copying, and audit by the State Water Board, the California State Auditor, the Bureau of State Audits, the United States Environmental Protection Agency (USEPA), the Office of Inspector General, the Internal Revenue Service, the Governor, or any authorized representatives of the aforementioned. The Recipient shall allow and shall require its contractors to allow interviews during normal business hours of any employees who might reasonably have information related to such records. The Recipient agrees to include a similar duty regarding audit, interviews, and records retention in any contract or subcontract related to the performance of this Agreement. The provisions of this section shall survive the discharge of the Recipient's Obligation and the term of this Agreement. 2.18 Audit. (a) The Division may call for an audit of financial information relative to the Project if the Division determines that an audit is desirable to assure program integrity or if an audit becomes necessary because of state or federal requirements. If an audit is called for, the audit shall be performed by a certified public accountant independent of the Recipient and at the cost of the Recipient. The audit shall be in the form required by the Division (b) Audit disallowances will be returned to the State Water Board. ARTICLE III FINANCING PROVISIONS 3.1 Purchase and Sale of Project. The Recipient hereby sells to the State Water Board and the State Water Board hereby purchases from the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases from the State Packet Pg. 278 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 12 2017 cx9ii18 Water Board, and the State Water Board hereby sells to the Recipient, the Project in accordance with the provisions of this Agreement. All right, title, and interest in the Project shall immediately vest in the Recipient on the date of execution and delivery of this Agreement by both parties without further action on the part of the Recipient or the State Water Board. The State Water Board’s disbursement of funds hereunder is contingent on the Recipient’s compliance with the terms and conditions of this Agreement. 3.2 Amounts Payable by the Recipient. (a) Installment Payments. Interest will accrue beginning with each disbursement. Beginning one year after Completion of Construction, repayment of the principal of the Project Funds, together with all interest accruing thereon, shall be repaid annually, and shall be fully amortized by the Final Repayment Date. The Installment Payments are based on a standard fully amortized assistance amount with equal annual payments. The remaining balance is the previous balance, plus the disbursements, plus the accrued interest on both, less the Installment Payment. Installment Payment calculations will be made beginning one (1) year after Completion of Construction. Exhibit C is a payment schedule based on the provisions of this article and an estimated disbursement schedule. Actual payments will be based on actual disbursements. Upon Completion of Construction and submission of necessary reports by the Recipient, the Division will prepare an appropriate payment schedule and supply the same to the Recipient. The Division may amend this schedule as necessary to accurately reflect amounts due under this Agreement. The Division will prepare any necessary amendments to the payment schedule and send them to the Recipient. The Recipient shall make each Installment Payment on or before the due date therefor. A ten (10) day grace period will be allowed, after which time a penalty in the amount of costs incurred by the State Water Board will be assessed for late payment. These costs may include, but are not limited to, lost interest earnings, staff time, bond debt service default penalties, if any, and other related costs. For purposes of penalty assessment, payment will be deemed to have been made if payment is deposited in the U.S. Mail within the grace period with pos tage prepaid and properly addressed. Any penalties assessed will not be added to the assistance amount balance, but will be treated as a separate account and obligation of the Recipient. The interest penalty will be assessed from the payment due date. The Recipient is obligated to make all payments required by this Agreement to the State Water Board, notwithstanding any individual default by its constituents or others in the payment to the Recipient of fees, charges, taxes, assessments, tolls or other charges ("Charges") levied or imposed by the Recipient. The Recipient shall provide for the punctual payment to the State Water Board of all amounts which become due under this Agreement and which are received from constituents or others in the payment to the Recipient. In the event of failure, neglect or refusal of any officer of the Recipient to levy or cause to be levied any Charge to provide payment by the Recipient under this Agreement, to enforce or to collect such Charge, or to pay over to the State Water Board any money collected on account of such Charge necessary to satisfy any amount due under this Agreement, the State Water Board may take such action in a court of competent jurisdiction as it deems necessary to compel the performance of all duties relating to the imposition or levying and collection of any of such Charges and the payment of the money collected therefrom to the State Water Board. Action taken pursuant hereto shall not deprive the State Water Board of, or limit the application of, any other remedy provided by law or by this Agreement. Each Installment Payment shall be paid in lawful money of the United States of America by check or other acceptable form of payment set forth at www.waterboards.ca.gov/make_a_payment. Packet Pg. 279 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 13 2017 cx9ii18 The Recipient shall not be entitled to interest earned on undisbursed funds. Upon execution of this Agreement, the State Water Board shall encumber an amount equal to the Obligation. The Recipient shall pay Installment Payments and Additional Payments from Net Revenues and/or other amounts legally available to the Recipient therefor. Interest on any funds disbursed to the Recipient shall begin to accrue as of the date of each disbursement. (b) Project Costs. The Recipient shall pay any and all costs connected with the Project including, without limitation, any and all Project Costs. If the Project Funds are not sufficient to pay the Project Costs in full, the Recipient shall nonetheless complete the Project and pay that portion of the Project Costs in excess of available Project Funds, and, unless otherwise agreed to by the State Water Board, shall not be entitled to any reimbursement therefor from the State Water Board. (c) Additional Payments. In addition to the Installment Payments required to be made by the Recipient, the Recipient shall also pay to the State Water Board the reasonable extraordinary fees and expenses of the State Water Board, and of any assignee of the State Water Board's right, title, and interest in and to this Agreement, in connection with this Agreement, including all expenses and fees of accountants, trustees, staff, contractors, consultants, costs, insurance premiums and all other extraordinary costs reasonably incurred by the State Water Board or assignee of the State Water Board. Additional Payments may be billed to the Recipient by the State Water Board from time to time, together with a statement executed by a duly authorized representative of the State Water Board, stating that the amounts billed pursuant to this section have been incurred by the State Water Board or its assignee for one or more of the above items and a copy of the invoice or statement for the amount so incurred or paid. Amounts so billed shall be paid by the Recipient within thirty (30) days after receipt of the bill by the Recipient. (d) The Recipient may not prepay any portion of the principal and interest due under this Agreement without the written consent of the Deputy Director of the Division. 3.3 Obligation Absolute. The obligation of the Recipient to make the Installment Payments and other payments required to be made by it under this Agreement from Net Revenues and/or other amounts legally available to the Recipient therefor, is absolute and unconditional, and until such time as the Installment Payments and Additional Payments have been paid in full, the Recipient shall not discontinue or suspend any Installment Payments or other payments required to be made by it hereunder when due, whether or not the System or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments and other payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever. 3.4 No Obligation of the State. Any obligation of the State Water Board herein contained shall not be an obligation, debt, or liability of the State and any such obligation shall be payable so lely out of the moneys encumbered pursuant to this Agreement. 3.5 Disbursement of Project Funds; Availability of Funds. (a) Except as may be otherwise provided in this Agreement, disbursement of Project Funds will be made as follows: Packet Pg. 280 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 14 2017 cx9ii18 (1) Upon execution and delivery of this Agreement by both parties, the Recipient may request immediate disbursement of any eligible incurred planning and design allowance as specified in Exhibit B from the Project Funds through submission to the State Water Board of the Disbursement Request Form 260, or any amendment thereto, duly completed and executed. (2) The Recipient may request disbursement of eligible construction and equipment costs consistent with budget amounts referenced in Exhibit B and Exhibit A-FBA. (Note that this Agreement will be amended to incorporate Exhibit A-FBA after final budget approval.) (3) Additional Project Funds will be promptly disbursed to the Recipient upon receipt of Disbursement Request Form 260, or any amendment thereto, duly completed and executed by the Recipient for incurred costs consistent with this Agreement, along with receipt of status reports due under Section 2.15 above. (4) The Recipient shall not request disbursement for any Project Cost until such cost has been incurred and is currently due and payable by the Recipient, although the actual payment of such cost by the Recipient is not required as a condition of disbursement request. (5) Recipient shall spend Project Funds within thirty (30) days of receipt. Any interest earned on Project Funds shall be reported to the State Water Board and may be required to be returned to the State Water Board or deducted from future disbursements. (6) The Recipient shall not be entitled to interest earned on undisbursed funds. (7) The Recipient shall not request a disbursement unless that Project Cost is allowable, reasonable, and allocable. (8) Notwithstanding any other provision of this Agreement, no disbursement shall be required at any time or in any manner which is in violation of or in conflict with federal or state laws, policies, or regulations. (b) The State Water Board's obligation to disburse Project Funds is contingent upon the availability of sufficient funds to permit the disbursements provided for herein. If sufficient funds are not available for any reason, including but not limited to failure of the federal or State government to appropriate funds necessary for disbursement of Project Funds, the State Water Board shall not be obligated to make any disbursements to the Recipient under this Agreement. This provision shall be construed as a condition precedent to the obligation of the State Water Board to make any disbursements under this Agreement. Nothing in this Agreement shall be construed to provide the Recipient with a right of priority for disbursement over any other agency. If any disbursements due the Recipient under this Agreement are deferred because sufficient funds are unavailable, it is the intention of the State Water Board that such disbursement will be made to the Recipient when sufficient funds do become available, but this intention is not binding. 3.6 Withholding of Disbursements and Material Violations. Notwithstanding any other provision of this Agreement, the State Water Board may withhold the disbursement of all or any portion of the Project Funds upon the occurrence of any of the following events: a. The Recipient’s failure to maintain reasonable progress on the Project; b. Placement on the ballot or passage of an initiative or referendum to repeal or reduce the Recipient’s taxes, assessments, fees, or charges levied for operation of the System or repayment of debt service on System Obligations; Packet Pg. 281 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 15 2017 cx9ii18 c. Commencement of litigation or a judicial or administrative proceeding related to the System, Project, or Revenues that the State Water Board determines may impair the timely completion of the Project or the repayment of the Obligation; d. Any investigation by the District Attorney, California State Auditor, Bureau of State Audits, United States Environmental Protection Agency’s Office of Inspector General, the Internal Revenue Service, Securities and Exchange Commission, a grand jury, or any other state or federal agency, relating to the Recipient’s financial management, accounting procedures, or internal fiscal controls; e. A material adverse change in the condition of the Recipient, the Revenues, or the System, which the Division reasonably determines would materially impair the Recipient’s ability to satisfy its obligations under this Agreement, or any other event that the Division reasonably determines would materially impair the Recipient’s ability to satisfy its obligations under this Agreement, f. The Recipient’s material violation of, or threat to materially violate, any term of this Agreement; and g. An Event of Default. 3.7 Pledge; Rates, Fees and Charges; Additional Debt. (a) Establishment of Enterprise Fund and Reserve Fund. In order to carry out its System Obligations, the Recipient covenants that it shall establish and maintain or shall have established and maintained the Enterprise Fund. All Revenues received shall be deposited when and as received in trust in the Enterprise Fund. As required in paragraph (f) of this Section, the Recipient shall establish and maintain a Reserve Fund. (b) Pledge of Net Revenues, Enterprise Fund, and Reserve Fund. The Obligation hereunder shall be secured by a lien on and pledge of the Enterprise Fund, Net Revenues, and any Reserve Fund in priority as specified in Exhibit F (senior, parity, or subordinate). The Recipient hereby pledges and grants such lien on and pledge of the Enterprise Fund, Net Revenues, and any Reserve Fund to secure the Obligation, including payment of Installment Payments and Additional Payments hereunder. The Net Revenues in the Enterprise Fund, shall be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the Recipient. (c) Application and Purpose of the Enterprise Fund. Subject to the provisions of any outstanding System Obligation, money on deposit in the Enterprise Fund shall be applied and used first, to pay Operations and Maintenance Costs, and thereafter, all amounts due and payable with respect to the System Obligations. After making all payments hereinabove required to be made in each Fiscal Year, the Recipient may expend in such Fiscal Year any remaining money in the Enterprise Fund for any lawful purpose of the Recipient, including payment of subordinate debt. (d) Rates, Fees and Charges. The Recipient shall, to the extent permitted by law, fix, prescribe and collect rates, fees and charges for the System during each Fiscal Year which are reasonable, fair, and nondiscriminatory and which will be sufficient to generate Revenues in the amounts necessary to cover Operations and Maintenance Costs, and shall ensure that Net Revenues are equal to at least 110% the Maximum Annual Debt Service with respect to all outstanding System Obligations. The Recipient may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates, fees and charges then in effect unless the Net Revenues from such reduced rates, fees, and charges will at all times be sufficient to meet the requirements of this section. Packet Pg. 282 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 16 2017 cx9ii18 (e) Additional Debt Test. (1) Additional Senior Debt. The Recipient’s future debt that is secured by the Net Revenues pledged herein may not be senior to this Obligation, except where the new senior obligation refunds or refinances a senior obligation with the same lien position as the existing senior obligation, the new senior obligation has the same or earlier repayment term as the refunded senior debt, the new senior debt service is the same or lower than the existing debt service, and the new senior debt will not diminish the Recipient’s ability to repay its SRF obligations. (2) Additional Parity or Subordinate Debt. The Recipient may issue additional parity or subordinate debt only if (A) Net Revenues in the most recent Fiscal Year, excluding transfers from a rate stabilization fund, if any, meet the ratio for rate covenants set forth in paragraph (d) of this Section with respect to all outstanding and proposed additional obligations ; (B) The Recipient is in compliance with any reserve fund requirement of this Obligation. (f) Reserve Fund. Prior to Completion of Construction, the Recipient shall establish a restricted Reserve Fund, held in its Enterprise Fund, equal to one year’s Debt Service on this Obligation. The Recipient shall maintain the Reserve Fund throughout the term of this Agreement. The Reserve Fund shall be subject to lien and pledged as security for this Obligation, and its use shall be restricted to payment of this Obligation during the term of this Agreement. (g) The Recipient may issue or incur subordinate obligations or otherwise issue or incur obligations payable from a lien on Net Revenues that is subordinate to the lien of Net Revenues securing the Obligation. (h) The Recipient shall not make any pledge of or place any lien on Revenues and shall not make any pledge of or place any lien on Net Revenues except as otherwise provided or permitted by this Agreement. 3.8 Financial Management System and Standards. The Recipient shall comply with federal standards for financial management systems. The Recipient agrees that, at a minimum, its fiscal control and accounting procedures will be sufficient to permit preparation of reports required by the federal government and tracking of Project funds to a level of expenditure adequate to establish that such funds have not been used in violation of federal or State law or the terms of this Agreement. To the extent applicable, the Recipient shall be bound by, and comply with, the provisions and requirements of the federal Single Audit Act of 1984, Office of Management and Budget (OMB) Circular No. A-133 and 2 CFR Part 200, subpart F, and updates or revisions, thereto. 3.9 Accounting and Auditing Standards. The Recipient must maintain Project accounts according to GAAP as issued by the Governmental Accounting Standards Board (GASB) or its successor. The Recipient shall maintain GAAP-compliant project accounts, including GAAP requirements relating to the reporting of infrastructure assets. 3.10 Other Assistance. If funding for Project Costs is made available to the Recipient from sources other than this Agreement, the Recipient shall notify the Division. The Recipient may retain such funding up to an amount which equals the Recipient's local share of Project Costs. To the extent allowed by requirements of other Packet Pg. 283 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 17 2017 cx9ii18 funding sources, excess funding shall be remitted to the State Water Board to be applied to Installment Payments due hereunder, if any. ARTICLE IV MISCELLANEOUS PROVISIONS 4.1 Amendment and Integration. No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by both the Recipient and the Deputy Director or designee. This Agreement constitutes the complete and final agreement between the parties. No prior oral or written understanding or agreement not incorporated in this Agreement shall be binding on either party. 4.2 Assignability. The Recipient consents to any pledge, sale, or assignment to the Bank or a trustee for the benefit of the owners of the Bonds, if any, at any time of any portion of the State Water Board's estate, right, title, and interest and claim in, to and under this Agreement and the right to make all related waivers and agreements in the name and on behalf of the State Water Board, as agent and attorney-in-fact, and to perform all other related acts which are necessary and appropriate under this Agreement, if any, and the State Water Board's estate, right, title, and interest and claim in, to and under this Agreement to Installment Payments (but excluding the State Water Board's rights to Additional Payments and to notices, opinions and indemnification under each Obligation). This Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the State Water Board in the form of a formal written amendment to this Agreement. 4.3 Bonding. Where contractors are used, the Recipient shall not authorize construction to begin until each contractor has furnished a performance bond in favor of the Recipient in the f ollowing amounts: faithful performance (100%) of contract value; labor and materials (100%) of contract value. This requirement shall not apply to any contract for less than $25,000.00. 4.4 Competitive Bidding Recipient shall adhere to any applicable State law or local ordinance for competitive bidding and applicable labor laws. 4.5 Compliance with Law, Regulations, etc. The Recipient shall, at all times, comply with and require its contractors and subcontractors to comply with all applicable federal and State laws, rules, guidelines, regulations, and requirements. Without limitation of the foregoing, to the extent applicable, the Recipient shall: (a) Comply with the provisions of the adopted environmental mitigation plan, if any, for the term of this Agreement; (b) Comply with the State Water Board's Policy; (c) Comply with and require compliance with the list of State laws attached as Exhibit H. (d) Comply with and require its contractors and subcontractors on the Project to comply with federal DBE requirements; and Packet Pg. 284 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 18 2017 cx9ii18 (e) Comply with and require its contractors and subcontractors to comply with the list of federal laws attached as Exhibit E. 4.6 Conflict of Interest. As of the date of execution of this Agreement, the Recipient certifies that its owners, officers, directors, agents, representatives, and employees are in compliance with applicable State and federal conflict of interest laws. The Recipient shall ensure that its owners, officers, directors, agents, representatives, and employees maintain compliance with applicable State and federal conflict of interest laws for the term of this Agreement. 4.7 Damages for Breach Affecting Tax-Exempt Status or Federal Compliance In the event that any breach of any of the provisions of this Agreement by the Recipient shall result in the loss of tax-exempt status for any bonds of the State or any subdivision or agency thereof, including Bonds issued on behalf of the State Water Board, or if such breach shall result in an obligation on the part of the State or any subdivision or agency thereof to reimburse the federal government by reason of any arbitrage profits, the Recipient shall immediately reimburse the State or any subdivision or agency thereof in an amount equal to any damages paid by or loss incurred by the State or any subdivision or agency thereof due to such breach. In the event that any breach of any of the provisions of this Agreement by the Recipient shall result in the failure of Project Funds to be used pursuant to the provisions of this Agreement, or if such breach shall result in an obligation on the part of the State or any subdivision or agency thereof to reimburse the federal government, the Recipient shall immediately reimburse the State or any subdivision or agency thereof in an amount equal to any damages paid by or loss incurred by the State or any subdivision or agency thereof due to such breach. 4.8 Disputes. (a) The Recipient may appeal a staff decision within thirty (30) days to the Deputy Director of the Division or designee, for a final Division decision. The Recipient may appeal a final Division decision to the State Water Board within thirty (30) days. The Office of the Chief Counsel of the State Water Board will prepare a summary of the dispute and make recommendations relative to its final resolution, which will be provided to the State Water Board’s Executive Director and each State Water Board Member. Upon the motion of any State Water Board Member, the State Water Board will review and resolve the dispute in the manner determined by the State Water Board. Should the State Water Board determine not to review the final Division decision, this decision will represent a final agency action on the dispute. (b) This clause does not preclude consideration of legal questions, provided that nothing herein shall be construed to make final the decision of the State Water Board, or any official or re presentative thereof, on any question of law. (c) Recipient shall continue with the responsibilities under this Agreement during any dispute. (d) This section 4.8 relating to disputes does not establish an exclusive procedure for resolving claims within the meaning of Government Code sections 930 and 930.4. 4.9 Governing Law. This Agreement is governed by and shall be interpreted in accordance with the laws of the State of California. 4.10 Income Restrictions. Packet Pg. 285 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 19 2017 cx9ii18 The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest thereon) accruing to or received by the Recipient under this Agreement shall be paid by the Recipient to the State Water Board, to the extent that they are properly allocable to costs for which the Recipient has been reimbursed by the State Water Board under this Agreement. 4.11 Indemnification and State Reviews. The parties agree that review or approval of Project plans and specifications by the State Water Board is for administrative purposes only , including conformity with application and eligibility criteria, and expressly not for the purposes of design defect review or construction feasibility, and does not relieve the Recipient of its responsibility to properly plan, design, construct, operate, and maintain the Project. To the extent permitted by law, the Recipient agrees to indemnify, defend, and hold harmless the State Water Board, the Bank, and any trustee, and their officers, employees, and agents for the Bonds, if any (collectively, "Indemnified Persons"), against any loss or liability arising out of any claim or action brought against any Indemnified Persons from and against any and all losses, claims, damages, liabilities , or expenses, of every conceivable kind, character, and nature whatsoever arising out of, resulting from, or in any way connected with (1) the System or the Project or the conditions, occupancy, use, possession, conduct, or management of, work done in or about, or the planning, design, acquisition, installation , or construction, of the System or the Project or any part thereof; (2) the carrying out of any of the transactions contemplated by this Agreement or any related document; (3) any violation of any applicable law, rule or regulation, any environmental law (including, without limitation, the Federal Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the California Hazardous Substance Account Act, the Federal Water Pollution Control Act, the Clean Air Act, the Toxic Substances Control Act, the Occupational Safety and Health Act, the Safe Drinking Water Act, the California Hazardous Waste Control Law, and California Water Code Section 13304, and any successors to said laws), rule or regulation or the release of any toxic substance on or near the System; or (4) any untrue statement or alleged untrue statement of an y material fact or omission or alleged omission to state a material fact necessary to make the statements required to be stated therein, in light of the circumstances under which they were made, not misleading with respect to any information provided by the Recipient for use in any disclosure document utilized in connection with any of the transactions contemplated by this Agreement, except those arising from the gross negligence or willful misconduct of the Indemnified Persons. The Recipient shall also provide for the defense and indemnification of the Indemnified Parties in any contractual provision extending indemnity to the Recipient in any contract let for the performance of any work under this Agreement, and shall cause the Indemnified Parties to be included within the scope of any provision for the indemnification and defense of the Recipient in any contract or subcontract. To the fullest extent permitted by law, the Recipient agrees to pay and discharge any judgment or award entered or made against Indemnified Persons with respect to any such claim or action, and any settlement, compromise or other voluntary resolution. The provisions of this section shall survive the term of this Agreement and the discharge of the Recipient's Obligation hereunder. 4.12 Independent Actor. The Recipient, and its agents and employees, if any, in the performance of this Agreement, shall act in an independent capacity and not as officers, employees, or agents of the State Water Board. 4.13 Leveraging Covenants. (a) Tax Covenant. Notwithstanding any other provision hereof, the Recipient covenants and agrees that it will comply with the Tax Covenants set forth in Article V of this Agreement. (b) Disclosure of Financial Information, Operating Data, and Other Information. The Recipient covenants to furnish such financial, operating and other data pertaining to the Recipient as may be requested by the State Water Board to: (i) enable the State Water Board to cause the issuance of Bonds and provide for security therefor; or (ii) enable any underwriter of Bonds Packet Pg. 286 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 20 2017 cx9ii18 issued for the benefit of the State Water Board to comply with Rule 15c2-12(b)(5). The Recipient further covenants to provide the State Water Board with copies of all continuing disc losure documents or reports that are disclosed pursuant to (i) the Recipient’s continuing disclosure undertaking or undertakings made in connection with any outstanding System Obligation, (ii) the terms of any outstanding System Obligation, or (iii) a volu ntary disclosure of information related to an outstanding System Obligation. The Recipient shall disclose such documents or reports to the State Water Board at the same time such documents or reports are submitted to any dissemination agent, trustee, nationally recognized municipal securities information repository, the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (EMMA) website or other person or entity. 4.14 Non-Discrimination Clause. (a) The Recipient shall comply with Government Code section 11135 and the implementing regulations (Cal. Code Regs, tit. 2, § 11140 et seq.), including, but not limited to, ensuring that no person is unlawfully denied full and equal access to the benefits of, or unlawfully subjected to discrimination in the operation of, the Project or System on the basis of sex, race, color, religion, ancestry, national origin, ethnic group identification, age, mental disability, physical disability, medical condition, genetic information, marital status, or sexual orientation as such terms are defined under California law, for as long as the Recipient retains ownership or possession of the Project. (b) If Project Funds are used to acquire or improve real property, the Recipient shall include a covenant of nondiscrimination running with the land in the instrument effecting or recording the transfer of such real property. (c) The Recipient shall comply with the federal American with Disabilities Act of 1990 and implementing regulations as required by Government Code section 11135(b). (d) The Recipient’s obligations under this section shall survive the term of this Agreement. (e) During the performance of this Agreement, Recipient and its contractors and subcontractors shall not unlawfully discriminate, harass, or allo w harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, sexual orientation, physical disability (including HIV and AIDS), mental disability, medical condition (cancer), age (over 40), marital status, denial of family care leave, or genetic information, gender, gender identity, gender expression, or military and veteran status. (f) The Recipient, its contractors, and subcontractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. (g) The Recipient, its contractors, and subcontractors shall comply with the provisions of the Fair Employment and Housing Act and the applicable regulations promulgated thereunder. (Gov. Code, §12990, subds. (a)-(f) et seq.;Cal. Code Regs., tit. 2, § 7285 et seq.) Such regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. (h) The Recipient, its contractors, and subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (i) The Recipient shall include the nondiscrimination an d compliance provisions of this clause in all subcontracts to perform work under this Agreement. 4.15 No Third Party Rights. Packet Pg. 287 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 21 2017 cx9ii18 The parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary of this Agreement, or of any duty, covenant, obligation , or undertaking established herein. 4.16 Operation and Maintenance; Insurance. The Recipient agrees to sufficiently and properly staff, operate and maintain all portions of the System during its useful life in accordance with all applicable state and federal laws, rules, and regulations. The Recipient will procure and maintain or cause to be maintained insurance on the System with responsible insurers, or as part of a reasonable system of se lf-insurance, in such amounts and against such risks (including damage to or destruction of the System) as are usually covered in connection with systems similar to the System. Such insurance may be maintained by a self -insurance plan so long as such plan provides for (i) the establishment by the Recipient of a separate segregated self -insurance fund in an amount determined (initially and on at least an annual basis) by an independent insurance consultant experienced in the field of risk management employing accepted actuarial techniques and (ii) the establishment and maintenance of a claims processing and risk management program. In the event of any damage to or destruction of the System caused by the perils covered by such insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the System. The Recipient shall begin such reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such net proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same shall be completed and the System shall be free and clear of all claims and liens. If such net proceeds are insufficient to reconstruct, repair, or restore the System to the extent necessary to enable the Recipient to pay all remaining unpaid principal portions of the Installment Payments, if any, in accordance with the terms of this Agreement, the Recipient shall provide additional funds to restore or re place the damaged portions of the System. Recipient agrees that for any policy of insurance concerning or covering the construction of the Project, it will cause, and will require its contractors and subcontractors to cause, a certificate of insurance to be issued showing the State Water Board, its officers, agents, employees, and servants as additional insured; and shall provide the Division with a copy of all such certificates prior to the commencement of construction of the Project. 4.17 Permits, Subcontracting, and Remedies. The Recipient shall comply in all material respects with all applicable federal, state and local laws, rules and regulations. Recipient shall procure all permits, licenses and other authorizations necessary to accomplish the work contemplated in this Agreement, pay all charges and fees, and give all notices necessary and incidental to the due and lawful prosecution of the work. Signed copies of any such permits or licenses shall be submitted to the Division before construction begins. The Recipient shall not contract or allow subcontracting with excluded parties. The Recipient shall not contract with any party who is debarred or suspended or otherwise excluded from or ineligible for participation in any work overseen, directed, funded, or administered by the State Water Board program for which this funding is authorized. For any work related to this Agreement, the Recipient shall not contract with any individual or organization on the State Water Board’s List of Disqualified Businesses and Persons that is identified as debarred or suspended or otherwise excluded from or ineligible for participation in any work overseen, directed, funded, or adm inistered by the State Water Board program for which funding under this Agreement is authorized. The State Water Board’s List of Disqualified Businesses and Persons is located at http://www.waterboards.ca.gov/water_issues/programs/enforcement/fwa/dbp.shtml 4.18 Prevailing Wages. Packet Pg. 288 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 22 2017 cx9ii18 The Recipient agrees to be bound by all applicable provisions of State Labor Code regarding prevailing wages. The Recipient shall monitor all agreements subject to reimbursement from this Agreement to ensure that the prevailing wage provisions of the State Labor Code are being met. In addition, the Recipient agrees to comply with the provisions of Exhibit G (Davis-Bacon). 4.19 Public Funding. This Project is publicly funded. Any service provider or contractor with which the Recipient contracts must not have any role or relationship with the Recipient, that, in effect, substantially limits the Recipient's ability to exercise its rights, including cancellation rights, under the contract, based on all the facts and circumstances. 4.20 Recipient’s Responsibility for Work. The Recipient shall be responsible for all work and for persons or entities engaged in work performed pursuant to this Agreement, including, but not limited to, contractors, subcontractors, suppliers, and providers of services. The Recipient shall be responsible for responding to any and all disputes arising out of its contracts for work on the Project. The State Water Board will not mediate disputes between the Recipient and any other entity concerning responsibility for perform ance of work. 4.21 Related Litigation. Under no circumstances may the Recipient use funds from any disbursement under this Agreement to pay costs associated with any litigation the Recipient pursues against the State Water Board or any Regional Water Quality Control Board. Regardless of the outcome of any such litigation, and notwithstanding any conflicting language in this Agreement, the Recipient agrees to repay all of the disbursed funds plus interest in the event that Recipient does not complete the Project. 4.22 Rights in Data. The Recipient agrees that all data, plans, drawings, specifications, reports, computer programs, operating manuals, notes, and other written or graphic work produced in the performance of this Agreement are subject to the rights of the State as set forth in this section. The State shall have the right to reproduce, publish, and use all such work, or any part thereof, in any manner and for any purposes whatsoever and to authorize others to do so. If any such work is copyrightable, the Recipient may copyright the same, except that, as to any work which is copyrighted by the Recipient, the State reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, and use s uch work, or any part thereof, and to authorize others to do so, and to receive electronic copies from the Recipient upon request . 4.23 State Water Board Action; Costs and Attorney Fees. Any remedy provided in this Agreement is in addition to and not in derogation of any other legal or equitable remedy available to the State Water Board as a result of breach of this Agreement by the Recipient, whether such breach occurs before or after completion of the Project, and exercise of any remedy provided by this Agreement by the State Water Board shall not preclude the State Water Board from pursuing any legal remedy or right which would otherwise be available. In the event of litigatio n between the parties hereto arising from this Agreement, it is agreed that each party shall bear its own costs and attorney fees. 4.24 Termination and Remedies Upon Event of Default. For purposes of this section, the term “State Water Board” shall mean the State Water Board and its assignees. Packet Pg. 289 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 23 2017 cx9ii18 (a) Acceleration of Obligation. Whenever the State Water Board determines that an Event of Default shall have occurred, the State Water Board may declare all principal components of Installment Payments and accrued interest thereon to be immediately due and payable, whereupon the same shall become due and payable, along with Additional Payments and penalty assessments, if any, notwithstanding anything in this Agreement to the contrary. In the event of such accelerati on, interest shall accrue from the date of such acceleration at the highest legal rate of interest. (b) Judicial remedies. Whenever the State Water Board determines that an Event of Default shall have occurred, the State Water Board may enforce its rights under this Agreement by any judicial proceeding, whether at law or in equity. Without limiting the generality of the foregoing, the State Water Board may: by suit in equity, require the Recipient to account for amounts relating to this Agreement as if the Recipient were the trustee of an express trust; by mandamus or other proceeding, compel the performance by the Recipient and any of its officers, agents, and employees of any duty under the law or of any obligation or covenant under this Agreement, including, but not limited to, the imposition and collection of rates for the services of the System sufficient to meet all requirements of this Agreement; and take whatever action at law or in equity as may appear necessary or desirable to the State Water Board to collect the Installment Payments then due or thereafter to become due, or to enforce performance of any obligation or covenant of the Recipient under this Agreement. (c) Termination. Upon an Event of Default, the State Water Board may terminate this Agreement. Interest shall accrue on all amounts due at the highest legal rate of interest from the date that the State Water Board delivers notice of termination to the Recipient. (d) Remedies Not Exclusive. None of the remedies available to the State Water Board shall be exclusive of any other remedy, and each such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. The State Water Board may exercise any remedy, now or hereafter existing, without exhausting and without regard to any other remedy. (e) Non-waiver. Nothing in this section or any other section of this Agreement shall affect or impair the Recipient’s obligation to pay Installment Payments as provided herein or shall affect or impair the right of the State Water Board to bring suit to enforce such payment. No delay or omission of the State Water Board in the exercise of any right arising upon an Event of Default shall impair any such right or be construed to be a waiver of any such Event of Default. The State Water Board may exercise from time to time and as often as shall be deemed expedient by the State Water Board, any remedy or right provided by law or pursuant to this Agreement. (f) Status Quo. If any action to enforce any right or exercise any remedy shall be brought and either discontinued or determined adversely to the State Water Board, then the State Water Board shall be restored to its former position, rights and remedies as if no such action had been brough t. 4.25 Timeliness. Time is of the essence in this Agreement. 4.26 Unenforceable Provision. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. Packet Pg. 290 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 24 2017 cx9ii18 4.27 Useful Life. The Recipient warrants that the economic useful life of the Project, commencing at Project Completion, is at least equal to the term of this Agreement, as set forth in Exhibit B. 4.28 Venue. Any action arising out of this Agreement shall be filed and maintained in the Superior Court in and for the County of Sacramento, California. 4.29 Waiver and Rights of the State Water Board. Any waiver of rights by the State Water Board with respect to a default or other matter arising under this Agreement at any time shall not be considered a waiver of rights with respect to any other default or matter. Any rights and remedies of the State Water Board provided for in this Agreement are in addition to any other rights and remedies provided by law. ARTICLE V TAX COVENANTS 5.1 Purpose. The purpose of this Article V is to establish the reasonable expectations of the Recipient regarding the Project and the Project Funds, and is intended to be and may be relied upon for purposes of Sections 103, 141 and 148 of the Code and as a certification described in Section 1.148-2(b)(2) of the Treasury Regulations. This Article V sets forth certain facts, estimates and circumstances which form the basis for the Recipient’s expectation that neither the Project nor the Bond Funded Portion of the Project Funds is to be used in a manner that would cause the Obligation to be classified as “arbitrage bonds” under Section 148 of the Code or “private activity bonds” under Section 141 of the Code. 5.2 Tax Covenant. The Recipient agrees that it will not take or authorize any action or permit any action within its reasonable control to be taken, or fail to take any action within its reasonable control, with respect to the Project which would result in the loss of the exclusion of interest on the Bonds from gross income for federal income tax purposes under Section 103 of the Code. 5.3 Governmental Unit. The Recipient is a state or local governmental unit as defined in Section 1.103 -1 of the Treasury Regulations or an instrumentality thereof (a "Governmental Unit") and is not the federal government or any agency or instrumentality thereof. 5.4 Financing of a Capital Project. The Recipient will use the Project Funds to finance costs it has incurred or will incur for the construction, reconstruction, installation or acquisition of the Project. Such costs shall not have previously been financed with the proceeds of any other issue of tax-exempt obligations. 5.5 Ownership and Operation of Project. The Recipient exclusively owns and, except as provided in Section 5.12 hereof, operates the Project. Packet Pg. 291 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 25 2017 cx9ii18 5.6 Temporary Period. The Recipient reasonably expects that at least eighty-five percent (85%) of the Bond Funded Portion of the Project Funds will be allocated to expenditures for the Project within three (3) years of the earlier of the effective date of this Agreement or the date the Bonds are issued ("Applicable Date"). The Recipient has incurred, or reasonably expects that it will incur within six (6) months of the Applicable Date, a substantial binding obligation (i.e., not subject to contingencies within the control of the Recipient or a related party) to a third party to expend at least five percent (5%) of the Bond Funded Portion of the Project Funds on Project Costs. The completion of acquisition, construction, improvement and equipping of the Project and the allocation of the Bond Funded Portion of the Project Funds to Project Costs will proceed with due diligence. 5.7 Working Capital. No operational expenditures of the Recipient or any related entity are being, have been or will be financed or refinanced with Project Funds. 5.8 Expenditure of Proceeds. The Bond Funded Portion of the Project Funds shall be used exclusively for the following purposes: (i) Reimbursement Expenditures (as defined in Section 5.20 below), (ii) Preliminary Expenditures (as defined in Section 5.20 below) in an aggregate amount not exceeding twenty percent (20%) of the Bond Funded Portion of the Project Funds, (iii) capital expenditures relating to the Project originally paid by the Recipient on or after the date hereof, (iv) interest on the Obligation through the later of three (3) years after the Applicable Date or one (1) year after the Project is placed in service, and (v) initial operating expenses directly associated with the Project in the aggregate amount not more than five percent (5%) of the Bond Funded Portion of the Project Funds. 5.9 Private Use and Private Payments. No portion of the Project Funds or the Project is being, has been or will be used in the aggregate for any activities that constitute a Private Use (as defined below). No portion of the principal of or interest with respect to the Installment Payments will be secured by any interest in property (whether or not the Project) used for a Private Use or in payments in respect of property used for a Private Use, or will be derived from payments in respect of property used for a Private Use. "Private Use" means any activity that constitutes a trade or business that is carried on by persons or entities, other than a Governmental Unit. The leasing of the Project or the access by or the use of the Project by a person or entity other than a Governmental Unit on a basis other than as a member of the general public shall constitute a Private Use. Use by or on behalf of the State of California or any of its agencies, instrumentalities or subdivisions or by any local Governmental Unit and use as a member of the general public will be disregarded in determining whether a Private Use exists. Use under an arrangement that conveys p riority rights or other preferential benefits is generally not use on the same basis as the general public. Arrangements providing for use that is available to the general public at no charge or on the basis of rates that are generally applicable and uniformly applied do not convey priority rights or other preferential benefits. For this purpose, rates may be treated as generally applicable and uniformly applied even if (i) different rates apply to different classes of users, such as volume purchasers, if the differences in rates are customary and reasonable; or (ii) a specially negotiated rate arrangement is entered into, but only if the user is prohibited by federal law from paying the generally applicable rates, and the rates established are as comparable as reasonably possible to the generally applicable rates. An arrangement that does not otherwise convey priority rights or other preferential benefits is not treated, nevertheless, as general public use if the term of the use under the arrangement, inc luding all renewal options, is greater than 200 days. For this purpose, a right of first refusal to renew use under the arrangement is not treated as a renewal option if (i) the compensation for the use under the arrangement is redetermined at generally applicable, fair market value rates that are in effect at the time of renewal; and (ii) the use of the financed Packet Pg. 292 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 26 2017 cx9ii18 property under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business. 5.10 No Sale, Lease or Private Operation of the Project. The Project (or any portion thereof) will not be sold or otherwise disposed of, in whole or in part, to any person who is not a Governmental Unit prior to the final maturity date of the Obligation. The Project will not be leased to any person or entity that is not a Governmental Unit prior to the final maturity date of the Obligation. Except as permitted under Section 5.12 hereof, the Recipient will not enter any contract or arrangement or cause or permit any contract or arrangement to be entered with persons or entities that are not Governmental Units if that contract or arrangement would confer on such persons or entities any right to use the Project on a basis different from the right of members of the general public. The contracts or arrangements contemplated by the preceding sentence include but are not limited to management contracts, take or pay contracts or put or pay contracts, and capacity guarantee contracts. 5.11 No Disproportionate or Unrelated Use. No portion of the Project Funds or the Project is being, has been, or will be used for a Private Use that is unrelated or disproportionate to the governmental use of the Project Funds. 5.12 Management and Service Contracts. The Recipient represents that, as of the date hereof, it is not a party to any contract, agreement or other arrangement with any persons or entities engaged in a trade or business (other than Governmental Units) that involve the management or operation of property or the provision of services at or with respect to the Project that does not comply with the standards of the Treasury Regulations, Revenue Procedure 97-13, as modified by Revenue Procedure 2001-39 and IRS Notice 2014-67, or Revenue Procedure 2017-13, as applicable. The Recipient represents that it will not be party to any su ch contract, agreement or arrangement with any person or entity that is not a Governmental Unit for the management of property or the provision of services at or with respect to the Project, while the Obligation (including any obligation or series thereof issued to refund the Obligation, as the case may be) is outstanding, except: (a) with respect to any contract, agreement or arrangement that does not constitute “private business use” of the Project under Code §141(b), or (b) with respect to any contract, agreement or arrangement that complies with (i) Revenue Procedure 97-13, 1997-1 C.B. 632, as amended by Revenue Procedure 2001-39, 2001- 2 C.B. 38, and as amplified by Notice 2014-67, with respect to contracts entered into before August 18, 2017 and not materially modified or extended after August 18, 2017, or (ii) Revenue Procedure 2017-13, with respect to contracts entered into or materially modified or extended on or after August 18, 2017, or (c) with respect to any contract, agreement or arrangement that does not give rise to use of the Bond Funded Portion of the Project Funds or the Project by a non-Governmental Unit of more than the amount of such non-qualified use permitted by the Code, or (d) in the event that the Recipient receives an opinion of counsel, satisfactory to the State Water Board and the Bank and expert in the issuance of state and local government bonds the interest on which is excluded from gross income under Section 103 of the Code (“Nationally-Recognized Bond Counsel”), that such contract, agreement or arrangement will not adversely affect the exclusion of the interest on the Obligation from gross income for federal income taxation purposes. 5.13 No Disposition of Financed Property. As of the date hereof, the Recipient does not expect to sell or otherwise dispose of any portion of the Project, in whole or in part, prior to the final maturity date of the Obligation. 5.14 Useful Life of Project. Packet Pg. 293 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 27 2017 cx9ii18 As of the date hereof, the Recipient reasonably expects that the economic useful life of the Project, commencing at Project Completion, will be at least equal to the term of this Agreement, as set forth on Exhibit B hereto. 5.15 Installment Payments. Installment Payments generally are expected to be derived from assessments, taxes, fees, charges or other current Revenues of the Recipient in each year, and such current Revenues are expe cted to equal or exceed the Installment Payments during each payment period. Any amounts accumulated in a sinking fund or bona fide debt service fund to pay Installment Payments (whether or not deposited to a fund or account established by the Recipient) will be disbursed to pay Installment Payment s within thirteen months of the initial date of accumulation or deposit. Any such fund used for the payment of Installment Payments will be depleted once a year except for a reasonable carryover amount not exceeding the greater of earnings on such fund or one-twelfth of the Installment Payments in either case for the immediately preceding year. 5.16 No Other Replacement Proceeds. The Recipient will not use any of the Bond Funded Portion of the Project Funds to replace or substitute other funds of the Recipient that were otherwise to be used to finance the Project or which are or wi ll be used to acquire securities, obligations or other investment property reasonably expected to produce a yield that is materially higher than the yield on the Bonds. 5.17 No Sinking or Pledged Fund. Except as set forth in Section 5.18 below, the Recipient will not create or establish any sinking fund or pledged fund which will be used to pay Installment Payments on the Obligation within the meaning of Section 1.148-1(c) of the Treasury Regulations. If any sinking fund or pledged fund comes into being with respect to the Obligation before the Obligation has been fully retired which may be used to pay the Installment Payments, the Recipient will invest such sinking fund and pledged fund moneys at a yield that does not exceed the yield on the Bonds. 5.18 Reserve Amount. The State Water Board requires that the Recipient maintain and fund a separate account in an amount equal to one (1) year of Debt Service with respect to the Obligation (the “Reserve Amount”) as set forth in Section 3.7. The Recipient represents that the Reserve Amount is and will be available to pay debt service with respect to the Obligation, if and when needed. The Reserve Amount consists solel y of revenues of the Recipient and does not include any proceeds of any obligations the interest on which is excluded from gross income for federal income tax purposes or investment earnings thereon. The aggregate of the Reserve Amount, up to an amount not exceeding the lesser of (i) ten percent of the aggregate principal amount of the Obligation, (ii) the maximum annual debt service with respect to the Obligation, or (iii) 125 percent of the average annual debt service with respect to the Obligation, will be treated as a reasonably required reserve fund. 5.19 Reimbursement Resolution. The “reimbursement resolution” adopted by the Recipient is incorporated herein by reference, pursuant to Exhibit A. 5.20 Reimbursement Expenditures. Reimbursements are disallowed, except as specifically authorized in Exhibit B or Exhibit D of this Agreement. To the extent so authorized, a portion of the Bond Funded Portion of the Project Funds may be applied to reimburse the Recipient for Project Costs paid before the date hereof, so long as the Project Packet Pg. 294 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 28 2017 cx9ii18 Cost was (i) not paid prior to sixty (60) days before the Recipient’s adoption of a declaration of official intent to finance the Project, (ii) not paid more than eighteen (18) months prior to the date hereof or the date the Project was placed-in-service, whichever is later, and (iii) not paid more than three (3) years prior to the date hereof (collectively, “Reimbursement Expenditures”), unless such cost is attributable to a “preliminary expenditure.” Preliminary expenditure for this purpose means architectural, engineering, surveying, soil testing and similar costs incurred prior to the commencement of construction or rehabilitation of the Project, but does not include land acquisition, site preparation and similar costs incident to the commencement of acquisition, construction or rehabilitation of the Project. Preliminary expenditures may not exceed 20% of the Bond Funded Portion of the Project Funds. 5.21 Change in Use of the Project. The Recipient reasonably expects to use all of the Bond Funded Portion of the Project Funds and the Project for the entire stated term to maturity of the Obligation. Absent an opinion of Nationally- Recognized Bond Counsel to the effect that such use of the Bond Funded Portion of the Project Funds will not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Section 103 of the Code, the Recipient will use the Bond Funded Portion of the Project Funds and the Project solely as set forth in this Agreement. 5.22 Rebate Obligations. If the Recipient satisfies the requirements of one of the spending exceptions to rebate specified in Section 1.148-7 of the Treasury Regulations, amounts earned from investments, if any, acquired with the Bond Funded Portion of the Project Funds will not be subject to the rebate requirements imposed under Section 148(f) of the Code. If the Recipient fails to satisfy such requirements for any period, it will notify the State Water Board and the Bank immediately and will comply with the provisions of the Code and the Treasury Regulations at such time, including the payment of any rebate amount calculated by the State Water Board or the Bank. 5.23 No Federal Guarantee. The Recipient will not directly or indirectly use any of the Bond Funded Portion of the Project Funds in any manner that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code, taking into account various except ions including any guarantee related to investments during an initial temporary period until needed for the governmental purpose of the Bonds, investments as part of a bona fide debt service fund, investments of a reasonably required reserve or replacement fund, investments in bonds issued by the United States Treasury, investments in refunding escrow funds or certain other investments permitted under the Treasury Regulations. 5.24 No Notices or Inquiries from IRS. Within the last 10 years, the Recipient has not received any notice of a final action of the Internal Revenue Service that determines that interest paid or payable on any debt obligation of the Recipient is or was includable in the gross income of an owner or beneficial owner thereof for federal income tax purposes under the Code. 5.25 Amendments. The provisions in this Article may be amended, modified or supplemented at any time to reflect changes in the Code upon obtaining written approval of the State Water Board and the Bank and an opinion of Nationally-Recognized Bond Counsel to the effect that such amendment, modification or supplement will not adversely affect the exclusion from federal gross inc ome of interest on the Bonds pursuant to Section 103 of the Code. 5.26 Reasonable Expectations. Packet Pg. 295 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 29 2017 cx9ii18 The Recipient warrants that, to the best of its knowledge, information and belief, and based on the facts and estimates as set forth in the tax covenants in this Article, the expectations of the Recipient as set forth in this Article are reasonable. The Recipient is not aware of any facts or circumstances that would cause it to question the accuracy or reasonableness of any representation made in the provisions in this Article V. Packet Pg. 296 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 30 2017 cx9ii18 IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. CITY OF SAN LUIS OBISPO: By:____________________________________ Name: [Officer] Title: [Title1] Date:__________________________________ STATE WATER RESOURCES CONTROL BOARD: By:____________________________________ Name: Title: Deputy Director Division of Financial Assistance Date:_________________________________ Packet Pg. 297 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 A-1 EXHIBIT A – SCOPE OF WORK 1. Eligible Start Date. The Eligible Start Date is __________. 2. Start of Construction Date. The Recipient agrees to start construction no later than the estimated date of __________. 3. Completion of Construction Date. The Completion of Construction date is hereby established as ___________. The Recipient shall deliver any request for extension of the Completion of Construction date no less than 90 days prior to the Completion of Construction date. 4. Final Disbursement Request Date. The Recipient agrees to ensure that its final Request for Disbursement is received by the Division no later than _______________ [six months after Completion of Construction], unless prior approval has been granted by the Division. Otherwise, the undisbursed balance of this Agreement will be de-obligated. 5. Records Retention Date is __________. 6. Incorporated Documents. Incorporated by reference into this Agreement are the following documents: a. the Final Plans & Specifications, dated __________, which are the basis for the construction contract to be awarded by the Recipient (Agreement will be amended to incorporate such document); b. the Waste Discharge Requirement Order No. _________ (and/or National Pollutant Discharge Elimination System Permit No. _________); c. the Recipient’s Reimbursement Resolution No. _______ dated _________________; d. the Recipient’s Tax Questionnaire dated _________________. 7. Reporting. Status Reports due at least quarterly. 8. Scope of Work. [insert scope] 9. Signage. The Recipient shall place a sign at least four feet tall by eight feet wide made of ¾ inch thick exterior grade plywood or other approved material in a prominent location on the Project site and shall maintain the sign in good condition for the duration of the construction period. The sign must include the following disclosure statement and color logos (available from the Division): “Funding for this $x.x million [name of ]project has been provided in full or in part by the Clean Water State Revolving Fund through an agreement with the State Water Resources Control Packet Pg. 298 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 A-2 Board. California’s Clean Water State Revolving Fund is capitalized through a variety of funding sources, including grants from the United States Environmental Protection Agency and State bond proceeds.” The Project sign may include another agency's required promotional information so long as the above logos and disclosure statement are equally prominent on the sign. The sign shall be prepared in a professional manner. The Recipient shall include the following disclosure statement in any document, written report, or brochure prepared in whole or in part pursuant to this Agreement: “Funding for this project has been provided in full or in part through an agreement with the State Water Resources Control Board. California’s Clean Water State Revolving Fund is capitalized through a variety of funding sources, including grants from the United States Environmental Protection Agency and state bond proceeds. The contents of this document do not necessarily reflect the views and policies of the foregoing, nor does mention of trade names or commercial products constitute endorsement or recommendation for use.” Packet Pg. 299 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 B-1 EXHIBIT B – FUNDING AMOUNT 1. Estimated Reasonable Cost. The estimated reasonable cost of the total Project, including associated planning and design costs is Written Dollar Amount dollars and no cents ($Dollar Amount). 2. Project Financing. Subject to the terms of this Agreement, the State Water Board agrees to provide Project Funds in the amount of up to Written Dollar Amount dollars and no cents ($Dollar Amount). A portion of this amount Written Dollar Amount dollars and no cents ($Dollar Amount) is anticipated to be a forgiven. The estimated amount of principal that will be due to the State Water Board under this Agreement is Written Dollar Amount dollars and no cents ($Dollar Amount). 3. Payment, Interest Rate, and Charges. The Recipient agrees to make all Installment Payments according to the schedule in Exhibit C at an interest rate of Written Interest Rate % (X%) per annum. The Recipient agrees to pay an Administrative Service Charge in lieu of interest to be reflected in Exhibit C. The Recipient agrees to pay a Small Community Grant Fund Charge in lieu of interest to be reflected in Exhibit C. 4. Contingent Principal Forgiveness. Contingent on the Recipient’s performance of its ob ligations under this Agreement, the State Water Board agrees to forgive up to Written Dollar Amount dollars and no cents ($Dollar Amount) of the principal under this Agreement. 5. Useful Life. The useful life of this Project is at least ________ years. 6. The Final Repayment Date is _________________. 7. Budget costs are contained in the Project Cost Table below, which is part of Exhibit A-FBA. (This Agreement will be amended to incorporate Exhibit A-FBA.) 8. Preliminary budget costs are as follows: Planning and design allowances: $ Construction costs and disbursements are not available until after this Agreement has been amended to incorporate Exhibit A-FBA. Construction costs incurred prior to the Eligible Start Date are not eligible for reimbursement. Failure to begin construction according to the timelines set forth in Exhibit A may require the Recipient to repay to the State Water Board all disb ursed Project Funds, including planning and design allowances. Packet Pg. 300 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 C-1 EXHIBIT C – PAYMENT SCHEDULE See the attached preliminary Payment Schedule dated Date. The final Payment Schedule will be forwarded to the Recipient after all disbursements have been paid and construction of the Project has been completed. Packet Pg. 301 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 D-1 EXHIBIT D – SPECIAL CONDITIONS Recipient acknowledges and agrees to the following special conditions: [environmental] [credit – coverage, real property, conditions precedent] [technical] [other legal] – As a condition precedent to this Agreement, the Recipient must deliver an opinion of bond counsel and general counsel satisfactory to the State Water Board’s counsel. Packet Pg. 302 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 E-1 EXHIBIT E – PROGRAMMATIC CONDITIONS & CROSS-CUTTERS The Recipient agrees to comply with the following federal conditions: (A) Federal Award Conditions (1) American Iron and Steel. Unless the Recipient has obtained a waiver from USEPA on file with the State Water Board or unless this Project is not a project for the construction, alteration, maintenance or repair of a public water system or treatment work , the Recipient shall not purchase “iron and steel products” produced outside of the United States on this Project. Unless the Recipient has obtained a waiver from USEPA on file with the State Water Board or unless this Project is not a project for the construction, alteration, maintenance or repair of a public water s ystem or treatment work, the Recipient hereby certifies that all “iron and steel products” used in the Project were or will be produced in the United States. For purposes of this section, the term "iron and steel products" means the following products made primarily of iron or steel: lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials. “Steel” means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. (2) Wage Rate Requirements (Davis-Bacon). The Recipient shall include in full the language provided in Exhibit G of this Agreement in all contracts and subcontracts. (3) Signage Requirements. The Recipient shall comply with the USEPA’s Guidelines for Enhancing Public Awareness of SRF Assistance Agreements, dated June 3, 2015, as otherwise specified in this Agreement. (4) Public or Media Events. The Recipient shall notify the State Water Board and the EPA contact as provided in the notice provisions of this Agreement of public or media events publicizing the accomplishment of significant events related to this Project and provide the opportunity for attendance and participation by federal representatives with at least ten (10) working days’ notice. (5) EPA General Terms and Conditions (USEPA GTCs). The Recipient shall comply with applicable EPA general terms and conditions found at http://www.epa.gov/ogd, including but not limited to the following: (a) DUNS. No Recipient may receive funding under this Agreement unless it has provided its DUNS number to the State Water Board. (b) Executive Compensation. The Recipient shall report the names and total compensation of each of its five most highly compensated executives for the preceding completed fiscal year, as set forth in the USEPA GTCs. (c) Federal Exclusion or Disqualification. The Recipient represents and warrants that it and its principals are not excluded or disqualified from participating in this transaction as such terms are defined in Parts 180 and 1532 of Title 2 of the Code of Federal Regulations (2 CFR). If the Recipient is excluded after execution of this Agreement, the Recipient shall notify the Division within ten (10) days and shall inform the Division of the Recipient’s exclusion in any request for amendment of this Agreement. The Recipient shall comply with Subpart C of Part 180 of 2 CFR, as supplemented by Subpart C of Part 1532 of 2 CFR. Such Packet Pg. 303 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 E-2 compliance is a condition precedent to the State Water Board’s performance of its obligations under this Agreement. When entering into a covered transaction as defined in Parts 180 and 1532 of 2 CFR, the Recipient shall require the other party to the covered transaction to comply with Subpart C of Part 180 of 2 CFR, as supplemented by Subpart C of Part 1532 of 2 CFR. (d) Conflict of Interest. To the extent applicable, the Recipient shall disclose to the State Water Board any potential conflict of interest consistent with USEPA’s Final Financial Assistance Conflict of Interest Policy at https://www.epa.gov/grants/epas-final-financial-assistance-conflict-interest-policy. A conflict of interest may result in disallowance of costs. (e) Copyright and Patent. i. USEPA and the State Water Board have the right to reproduce, publish, use and authorize others to reproduce, publish and use copyrighted works or other data developed under this assistance agreement. ii. Where an invention is made with Project Funds, USEPA and the State Water Board retain the right to a worldwide, nonexclusive, nontransferable, irrevocable, paid-up license to practice the invention owned by the Recipient. The Recipient must utilize the Interagency Edison extramural invention reporting system at http://iEdison.gov and shall notify the Division when an invention report, patent report, or utilization report is filed. (f) Credit. The Recipient agrees that any reports, documents, publications or other materials developed for public distribution supported by this Agreement shall contain the following statement: “This project has been funded wholly or in part by the United States Environmental Protection Agency and the State Water Resources Control Board. The contents of this document do not necessarily reflect the views and policies of the Environmental Protection Agency or the State Water Resources Control Board, nor does the EPA or the Board endorse trade names or recommend the use of commercial products mentioned in this document.” (g) Electronic and Information Technology Accessibility. The Recipient is encouraged to follow guidelines established under Section 508 of the Rehabilitation Act, codified at 36 CFR Part 1194, with respect to enabling individuals with disabilities to participate in its programs supported by this Project. (h) Trafficking in Persons. The Recipient, its employees, contractors and subcontractors and their employees may not engage in severe forms of trafficking in persons, procure a commercial sex act during the term of this Agreement, or use forced labor in the performance of this Agreement. The Recipient must include this provision in its contracts and subcontracts under this Agreement. The Recipient must inform the State Water Board immediately of any information regarding a violation of the foregoing. The Recipient understands that failure to comply with this provision may subject the State Water Board to loss of federal funds. The Recipient agrees to compensate the State Water Board for any such funds lost due to its failure to comply with this condition, or the failure of its contractors or subcontractors to comply with this condition. The State Water Board may unilaterally terminate this Agreement if the Recipient that is a private entity is determined to have violated the foregoing. Trafficking Victims Protection Act of 2000. Packet Pg. 304 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 E-3 (B) Super Cross-Cutters - Civil Rights Obligations. The Recipient must comply with the following federal non-discrimination requirements: (1) Title VI of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, and national origin, including limited English proficiency (LEP). (2) Section 504 of the Rehabilitation Act of 1973, which prohibits discrimination against persons with disabilities. (3) The Age Discrimination Act of 1975, which prohibits age discrimination. (4) Section 13 of the Federal Water Pollution Control Act Amendments of 1972, which prohibits discrimination on the basis of sex. (5) 40 CFR Part 7, as it relates to the foregoing. (C) WRRDA Conditions (1) Architectural and engineering contracts. Where the Recipient contracts for program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, or architectural related services, the Recipient shall ensure that any such contract is negotiated in the same manner as a contract for architectural and engineering services is negotiated under chapter 11 of title 40, United States Code, or an equivalent State qualifications-based requirement as determined by the State Water Board. (2) Fiscal sustainability. The Recipient certifies that it has developed and is implementing a fiscal sustainability plan for the Project that includes an inventory of critical assets that are a part of the Project, an evaluation of the condition and performance of inventoried assets or asset groupings, a certification that the recipient has evaluated and will be implementing water and energy conservation efforts as part of the plan, and a plan for maintaining, repairing, and, as necessary, replacing the Project and a plan for funding such activities. (D) Cross-Cutters 1) Executive Order No. 11246. The Recipient shall include in its contracts and subcontracts related to the Project the following provisions: "During the performance of this contract, th e contractor agrees as follows:"(a) The contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin. Such action shall include, but not be limited to the following: emplo yment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause. "(b) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, or national origin. Packet Pg. 305 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 E-4 "(c) The contractor will send to each labor union or representative of workers with whic h he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or workers' representative of the contractor's commitments under Section 202 of Executive Order No. 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. "(d) The contractor will comply with all provisions of Executive Order No. 11246 of Sept. 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. "(e) The contractor will furnish all information and reports required by Executive Order No. 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of L abor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders. "(f) In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of such rules, regulations, or orders, this contract may be cancelled, terminated or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order No. 11246 of Sept 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order No. 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law. "(g) The contractor will include the provisions of Paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order No. 11246 of Sept. 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the contracting agency may direct as a means of enforcing such provisions including sanctions for noncompliance: Provided, however, That in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendo r as a result of such direction by the contracting agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States." (2) Disadvantaged Business Enterprises (40 CFR Part 33). The Recipient agrees to comply with the requirements of USEPA’s Program for Utilization of Small, Minority and Women’s Business Enterprises. The DBE rule can be accessed at www.epa.gov/osbp . The Recipient shall comply with, and agrees to require its prime contractors to comply with 40 CFR Section 33.301, and retain all records documenting compliance with the six good faith efforts. (IUP) (3) Procurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean Water Act, including Executive Order 11738, Administration of the Clean Air Act and the Federal Water Pollution Control Act with Respect to Federal Contracts, Grants, or Loans; 42 USC § 7606; 33 USC § 1368. Except where the purpose of this Agreement is to remedy the cause of the violation, the Recipient may not procure goods, services, or materials from suppliers excluded under the federal System for Award Management: http://www.sam.gov/ . (4) Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91-646, as amended; 42 USC §§4601-4655. The Recipient must comply with the Act’s implementing regulations at 49 CFR 24.101 through 24.105. (5) The Recipient agrees that if its network or information system is connected to USEPA networks to transfer data using systems other than the Environmental Information Packet Pg. 306 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 E-5 Exchange Network or USEPA’s Central Data Exchange, it will ensure that any connections are secure. (E) Geospatial Data Standards All geospatial data created pursuant to this Agreement that is submitted to the State Water Board for use by USEPA or that is submitted directly to USEPA must be consistent with Federal Geographic Data Committee endorsed standards. Information on these standards may be fou nd at www.fgdc.gov. Packet Pg. 307 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 F-1 EXHIBIT F – SCHEDULE OF SYSTEM OBLIGATIONS Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies that it has no outstanding System Obligations or Other Material Obligations, and that it is in compliance with all applicable additional debt provisions of the following: The following outstanding debt is senior to the Obligation: Title The following outstanding debt is on parity with the Obligation: Title I-Bank CIEDB-B08-087 USBancorp SunTrust-443-5006721-001 The following outstanding debt is subordinate to the Obligation: Title Packet Pg. 308 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-1 EXHIBIT G – DAVIS-BACON REQUIREMENTS For purposes of this Exhibit only, “subrecipient” or “sub recipient” means the Recipient as defined in this Agreement. For purposes of this Exhibit only, “recipient” or “State recipient” means the State Water Board. I. Requirements For Sub recipients That Are Governmental Entities: If a sub recipient has questions regarding when Davis-Bacon (DB) applies, obtaining the correct DB wage determinations, DB provisions, or compliance monitoring, it may contact the State Water Board at DavisBacon@waterboards.ca.gov or phone (916) 327-7323. The recipient or sub recipient may also obtain additional guidance from DOL’s web site at http://www.dol.gov/whd/ 1. Applicability of the Davis- Bacon (DB) prevailing wage requirements. DB prevailing wage requirements apply to the construction, alteration, and repair of treatment works carried out in whole or in part with assistance made available by a State water pollution control revolving fund and to any construction project carried out in whole or in part by assistance made available by a drinking water treatment revolving loan fund. If a sub recipient encounters a unique situation at a site that presents uncertainties regarding DB applicability, the sub recipient must discuss the situation with the recipient State before authorizing work on that site. 2. Obtaining Wage Determinations. (a) Sub recipients shall obtain the wage determination for the locality in which a covered activity subject to DB will take place prior to issuing requests for bids, proposals, quotes or other methods for soliciting contract s (solicitation) for activities subject to DB. These wage determinations shall be incorporated into solicitations and any subsequent contracts. Prime contracts must contain a provision requiring that subcontractors follow the wage determination incorporated into the prime contract. (i) While the solicitation remains open, the sub recipient shall monitor www.wdol.gov weekly to ensure that the wage determination contained in the solicitation remains current. The sub recipients shall amend the solicitation if DOL issues a modification more than 10 days prior to the closing date (i.e. bid opening) for the solicitation. If DOL modifies or supersedes the applicable wage determination less than 10 days prior to the closing date, the sub recipients may request a finding from the State recipient that there is not a reasonable time to notify interested contractors of the modification of the wage determination. The State recipient will provide a report of its findings to the sub recipient. (ii) If the sub recipient does not award the contract within 90 days of the closure of the solicitation, any modifications or supersedes DOL makes to the wage determination contained in the solicitation shall be effective unless the State recipient, at the request of the sub recipient, obtains an extension of the 90 day period from DOL pursuant to 29 CFR 1.6(c)(3)(iv). The sub recipient shall monitor www.wdol.gov on a weekly basis if it does not award the contract within 90 days of closure of the solicitation to ensure that wage determinations contained in the solicitation remain current. (b) If the sub recipient carries out activity subject to DB by issuing a task order, work assignment or similar instrument to an existing contractor (ordering instrument) rather than by publishing a solicitation, the sub recipient shall insert the appropriate DOL wage determination from www.wdol.gov into the ordering instrument. Packet Pg. 309 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-2 (c) Sub recipients shall review all subcontracts subject to DB entered into by prime contractors to verify that the prime contractor has required its subcontractors to include the applicable wage determinations. (d) As provided in 29 CFR 1.6(f), DOL may issue a revised wage determination applicable to a sub recipient’s contract after the award of a contract or the issuance of an ordering instrument if DOL determines that the sub recipient has failed to incorporate a wage determination or has used a wage determination that clearly does not apply to the contract or ordering instrument. If this occurs, the sub recipient shall either terminate the contract or ordering instrument and issue a revised solicitation or ordering instrument or incorporate DOL’s wage determination retroactive to the beginning of the contract or ordering instrument by change order. The sub recipient’s contractor must be compensated for any increases in wages resulting from the use of DOL’s revised wage determination. 3. Contract and Subcontract provisions. (a) The Recipient shall insure that the sub recipient(s) shall insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a treatment work under the CWSRF or a construction project under the DWSRF - financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of an y of the acts listed in 29 CFR § 5.1 or, for CWSRF projects, the FY 2015 Water Resource Reform and Development Act, or for DWSRF projects, the Consolidated Appropriations Act, 2017, the following clauses: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except s uch payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph (a)(1)(iv) of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in § 5.5(a)(4). Laborers or mechanics performing work in more than one classification may be compensat ed at the rate specified for each classification for the time actually worked therein: Provided that the employer's payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under paragraph (a)(1)(ii) of this section) and the Davis-Bacon poster (WH-1321) shall be posted at all times by the contractor and its subcontractors at the site of the work in a prominent and accessible place where it can be easily seen by the workers. Sub recipients may obtain wage determinations from the U.S. Department of Labor’s web site, www.dol.gov. (ii)(A) The sub recipient(s), on behalf of EPA, shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the contract shall be classified in conformance with the wage determination. The State award official shall approve a request for an additional classification and wage rate and fringe benefits therefore only when the following criteria have been met: Packet Pg. 310 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-3 (1) The work to be performed by the classification requested is not performed by a classification in the wage determination; and (2) The classification is utilized in the area by the construction industry; and (3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination. (B) If the contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the sub recipient(s) agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), documentation of the action taken and the request, including the local wage determination shall be sent by the sub recipient (s) to the State award official. The State award official will transmit the request, to the Administrator of the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Washington, DC 20210 and to the EPA DB Regional Coordinator concurrently. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification request within 30 days of receipt and so advise the State award official or will notify the State award official within the 30-day period that additional time is necessary. (C) In the event the contractor, the laborers or mechanics to be employed in the classification or their representatives, and the sub recipient(s) do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the award official shall refer the request and the local wage determination, including the views of all interested parties and the recommendation of the State award official, to the Administrator for determination. The request shall be sent to the EPA DB Regional Coordinator concurrently. The Administrator, or an authorized representative, will issue a determination within 30 days of receipt of the request and so advise the contracting officer or will notify the contracting officer within the 30 -day period that additional time is necessary. (D) The wage rate (including fringe benefits where appropriate) determined pursuant to paragraphs (a)(1)(ii)(B) or (C) of this section, shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification. (iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof. (iv) If the contractor does not make payments to a trustee or other third person, the contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, Provided, That the Secretary of Labor has found, upon the written request of the contractor, that the applicable standards of the Davis-Bacon Act have been met. The Secretary of Labor may require the contractor to set aside in a separate account assets for the meeting of obligations under the plan or program. (2) Withholding. The sub recipient(s), shall upon written request of the EPA Award Official or an authorized representative of the Department of Labor, withhold or cause to be withheld from the contractor under this contract or any other Federal contract with the same prime contractor, or any other federally -assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the contractor or any subcontractor th e full amount of wages required by the contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work, all or part of the wages required by the contract, the (Agency) may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased. Packet Pg. 311 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-4 (3) Payrolls and basic records. (i) Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work. Such records shall contain the name, address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in section 1(b)(2)(B) of the Davis-Bacon Act), daily and weekly number of hours worked, deductions made and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechan ic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(b)(2)(B) of the Davis - Bacon Act, the contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and t he ratios and wage rates prescribed in the applicable programs. (ii)(A) The contractor shall submit weekly, for each week in which any contract work is performed, a copy of all payrolls to the sub recipient, that is, the entity that receives the sub -grant or loan from the State capitalization grant recipient. Such documentation shall be available on request of the State recipient or EPA. As to each payroll copy received, the sub recipient shall provide written confirmation in a form satisfactory to the Sta te indicating whether or not the project is in compliance with the requirements of 29 CFR 5.5(a)(1) based on the most recent payroll copies for the specified week. The payrolls shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on the weekly payrolls. Instead the payrolls shall only need to include an individually identifying number for each employee (e.g., the last four digits of the employee's social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH-347 is available for this purpose from the Wage and Hour Division Web site at https://www.dol.gov/whd/forms/index.htm or its successor site. The prime contractor is responsible for the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the full social security number and current address of each covered worker, and shall provide them upon request to the sub recipient(s) for transmission to the State or EPA if requested by EPA, the State, the contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a subcontractor to provide addresses and social security numbers to the prime contractor for its own records, without weekly submission to the sub recipient(s). (B) Each payroll submitted shall be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following: (1) That the payroll for the payroll period contains the information required to be provided under § 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under § 5.5 (a)(3)(i) of Regulations, 29 CFR part 5, and that such information is correct and complete; (2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3; Packet Pg. 312 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-5 (3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. (C) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH- 347 shall satisfy the requirement for submission of the “Statement of Compliance” required by paragraph (a)(3)(ii)(B) of this section. (D) The falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under section 1001 of title 18 and section 231 of title 31 of the United States Code. (iii) The contractor or subcontractor shall make the records required under paragraph (a)(3)(i) of this section available for inspection, copying, or transcription by authorized representatives of the State, EPA or the Department of Labor, and shall permit such representatives to interview employees during working hours on the job. If the contractor or subcontractor fails to submit the required records or to make them available, the Federal agency or State may, after written notice to the contractor, sponsor, applicant, or owner, take such actio n as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR 5.12. (4) Apprentices and trainees (i) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the contractor as to the entire work force under the registered program. Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman's hourly rate) specified in the contractor's or subcontractor's registered program shall be observed. Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice's level of progress, expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the contractor will no longer be permitted to utilize a pprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be greater Packet Pg. 313 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-6 than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee's level of prog ress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In the event the Employment and Training Administration withdraws approval of a training program, the contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (iii) Equal employment opportunity. The utilization of apprentices, trainees and journeymen under this part shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended and 29 CFR part 30. (5) Compliance with Copeland Act requirements. The contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in this contract. (6) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses contained in 29 CFR 5.5(a)(1) through (10) and such other clauses as the EPA determines may by appropriate, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR 5.5. (7) Contract termination; debarment. A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.12. (8) Compliance with Davis-Bacon and Related Act requirements. All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are herein incorporated by reference in this contract. (9) Disputes concerning labor standards. Disputes arising out of the labor standards provision s of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and sub recipient(s), State, EPA, the U.S. Department of Labor, or the employees or their representatives. (10) Certification of eligibility. (i) By entering into this contract, the contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1). (ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1). (iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C. 1001. 4. Contract Provision for Contracts in Excess of $100,000. Packet Pg. 314 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-7 (a) Contract Work Hours and Safety Standards Act. The sub recipient shall insert the following clauses set forth in paragraphs (a)(1), (2), (3), and (4) of this section in full in any contract in an amount in excess of $100,000 and subject to the overtime provisions of the Contract Work Hours and Safety Standards Act. These clauses shall be inserted in addition to the clauses required by Item 3, above or 29 CFR 4.6. As used in this paragraph, the terms laborers and mechanics include watchmen and guards. (1) Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek. (2) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (a)(1) of this section the contractor and any subcontractor responsible therefore shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of th e clause set forth in paragraph (a)(1) of this section, in the sum of $25 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by t he clause set forth in paragraph (a)(1) of this section. (3) Withholding for unpaid wages and liquidated damages. The sub recipient , upon written request of the EPA Award Official or an authorized representative of the Department of Labor, shall withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally -assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (b)(2) of this section. (4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (a)(1) through (4) of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (a)(1) through (4) of this section. (b) In addition to the clauses contained in Item 3, above, in any contract subject only to the Contract Work Hours and Safety Standards Act and not to any of the other statutes cited in 29 CFR 5.1, the Sub recipient shall insert a clause requiring that the contractor or subcontractor shall maintain payrolls and basic payroll records during the course of the work and shall preserve them for a period of three years from the completion of the contract for all laborers and mechanics, including guards and watchmen, working on the contract. Such records shall contain the name and address of each such employee, social security number, correct classifications, hourly rates of wages paid, daily and weekly number of hours worked, deductions made, and actual wages paid. Further, the Sub recipient shall insert in any such contract a clause providing that the records to be maintained under this paragraph shall be made available by the contractor or subcontractor for inspection, copying, or transcription by authorized representatives of the USEPA and the Department of Labor and the State Water Board, and the contractor or subcontractor will permit such representatives to interview employees during working hours on the job. 5. Compliance Verification (a) The sub recipient shall periodically interview a sufficient number of employees entitled to DB prevailing wages (covered employees) to verify that contractors or subcontractors are paying the appropriate wage rates. As provided in 29 CFR 5.6(a)(3), all interviews must be conducted in confidence. The sub recipient must use Standard Packet Pg. 315 Item 14 City of San Luis Obispo Agreement No.: XX-XXX-550 Project No.: C-06-8029-110 G-8 Form 1445 (SF 1445) or equivalent documentation to memorialize the interviews. Copies of the SF 1445 are available from EPA on request. (b) The sub recipient shall establish and follow an interview schedule based on its assessment of the risks of noncompliance with DB posed by contractors or subcontractors and the duration of the contract or subcontract. Sub recipients must conduct more frequent interviews if the initial interviews or other information indicated that there is a risk that the contractor or subcontractor is not complying with DB. Sub recipients shall immediately conduct interviews in response to an alleged violation of the prevailing wage requirements. All interviews shall be conducted in confidence." (c) The sub recipient shall periodically conduct spot checks of a representative sample of weekly payroll data to verify that contractors or subcontractors are paying the appropriate wage rates. The sub recipient shall establish and follow a spot check schedule based on its assessment of the risks of noncompliance with DB posed by contractors or subcontractors and the duration of the contract or subcontract. At a minimum, if practicable, the sub recipient should spot check payroll data within two weeks of each contractor or subcontractor’s submission of its initial payroll data and two weeks prior to the completion date the contract or subcontract. Sub recipients must conduct more frequent spot checks if the initial spot check or other information indica tes that there is a risk that the contractor or subcontractor is not complying with DB. In addition, during the examinations the sub recipient shall verify evidence of fringe benefit plans and payments there under by contractors and subcontractors who claim credit for fringe benefit contributions. (d) The sub recipient shall periodically review contractors’ and subcontractors’ use of apprentices and trainees to verify registration and certification with respect to apprenticeship and training programs approved by either the U.S Department of Labor or a state, as appropriate, and that contractors and subcontractors are not using disproportionate numbers of, laborers, trainees and apprentices. These reviews shall be conducted in accordance with the schedules for spot checks and interviews described in Item 5(b) and (c) above. (e) Sub recipients must immediately report potential violations of the DB prevailing wage requirements to the EPA DB contact listed above and to the appropriate DOL Wage and Hour District Office listed at http://www.dol.gov/whd/america2.htm. Packet Pg. 316 Item 14 Name of Recipient Agreement No.: XX-XXX-550 Project No.: C-06-XXXX-XXX H-1 EXHIBIT H – COMPLIANCE WITH CROSS-CUTTING STATE AUTHORITIES 1. WATER CONSERVATION REGULATIONS The Recipient certifies that it complies with and shall continue to comply the requirements of Article 2 of Chapter 3.5 of Division 3 of Title 23 of the California Code of Regulations. The Recipient will include a discussion of its implementation of such requirements, as applicable, in reports submitted pursuant to Section 2.15 of this Agreement. 2. CALIFORNIA DEBT INVESTMENT ADVISORY COMMISSION (CDIAC) Where Recipient is a public entity, Recipient acknowledges its responsibility to file debt obligations wi th the CDIAC. Recipient understands that CDIAC has waived filing fees for State Water Board SRF debt. 3. COMPLIANCE WITH STATE REQUIREMENTS Recipient represents that it complies with the following conditions precedent and shall continue to maintain compliance: (a) Monthly Water Diversion Reporting If Recipient is a water diverter, Recipient must maintain compliance with Water Code section 5103, subdivision (e)(2)(A) by submitting monthly diversion reports to the Division of Water Rights of the State Water Resources Control Board. (b) Public Works Contractor Registration with Department Of Industrial Relations To bid for public works contracts, Recipient and Recipient’s subcontractors must register with the Department of Industrial Relations as required by Labor Code sections 1725.5 and 1771.1. (c) Volumetric Pricing & Water Meters If Recipient is an “urban water supplier” as defined by Water Code section 10617, Recipient must charge each customer for actual water volume measured by water meter according to the requirements of Water Code sections 526 and 527. Section 527 further requires that such suppliers not subject to section 526 install water meters on all municipal and industrial service connections within their service area by 2025. (d) Urban Water Management Plan If Recipient is an “urban water supplier” as defined by Water Code section 10617, the Recipient certifies that this Project complies with the Urban Water Management Planning Act (Water Code, § 10610 et seq.). This shall constitute a condition precedent to this Agreement. (e) Urban Water Demand Management If Recipient is an “urban water supplier” as defined by Water Code section 1061 7, Recipient must comply with water conservation measures established by SBx7-7. (Water Code, Sec. 10608.56.) (f) Delta Plan Consistency Findings If Recipient is a state or local public agency and the proposed action is covered by the Delta Plan, Recipient must submit certification of project consistency with the Delta Plan to the Delta Packet Pg. 317 Item 14 Name of Recipient Agreement No.: XX-XXX-550 Project No.: C-06-XXXX-XXX H-2 Stewardship Council according to the requirements of Water Code section 85225 and California Code of Regulations, title 23, section 5002. (g) Agricultural Water Management Plan Consistency If Recipient is an agricultural water supplier as defined by Water Code section 10608.12, Recipient must comply with Agricultural Water Management Planning requirements as mandated by Water Code section 10852. (h) Charter City Project Labor Requirements If Recipient is a charter city as defined in Labor Code section 1782, subdivision (d)(2), Recipient will comply with the requirements of Labor Code section 1782 and Public Contract Code section 2503 as discussed in the following subparts (1) and (2). (1) Prevailing Wage Recipient certifies that it is eligible for state funding assistance notwithstanding Labor Code section 1782. Specifically Recipient certifies that no charter provision nor ordinance authorizes a construction project contractor not to comply with Labor Code’s prevailing wage rate requirements, nor, within the prior two years (starting from January 1, 2015 or after) has the city awarded a public works contract without requiring the contractor to comply with such wage rate requirements according to Labor Code section 1782. (2) Labor Agreements Recipient certifies that no charter provision, initiative, or ordinance limits or constrains the city’s authority or discretion to adopt, require, or utilize project labor agreements that include all the taxpayer protection antidiscrimination provisions of Public Contract Code section 2500 in construction projects, and that Recipient is accordingly eligible for state funding or financial assistance pursuant to Public Contract Code section 2503. Packet Pg. 318 Item 14 Packet Pg. 319 Item 14 Page intentionally left blank. Packet Pg. 320 Item 14 Meeting Date: 9/4/2018 FROM: Daryl Grigsby, Public Works Director Prepared By: Jake Hudson, Transportation Manager Adam Fukushima, Active Transportation Manager SUBJECT: ANHOLM BIKEWAY & GENERAL PLAN AMENDMENTS RECOMMENDATIONS Planning Commission Recommendations: 1. Do not adopt a General Plan Amendment reclassifying neighborhood streets to accommodate volume shifts from traffic diversion. 2. Approve trial traffic calming in lieu of trial traffic diversion at Broad & Ramona/Meinecke with the same proposed monitoring program. Active Transportation Committee Recommendation: Adopt a resolution amending the Anholm Bikeway Plan to include Class IV protected bike lanes in place of on-street parking on one side of the street on Chorro from Lincoln to Mission and on Broad from Missio n to Ramona. Staff Recommendations: 1. Adopt a resolution amending the Anholm Bikeway Plan to define neighborhood wide traffic calming measures and a trial traffic diverter at the intersection of Broad and Ramona/Meinecke; and 2. Adopt a resolution, amending Figure 1 of the General Plan Circulation element reclassifying Chorro Street (Foothill to Palm) & Lincoln Street (Chorro to Broad) from Residential Collectors (major) to Residential Arterials and Meinecke & Murray (Broad to Santa Rosa) from Local to Residential Collector (minor), and approving an addendum to the General Plan Final Environmental Impact Report. REPORT-IN-BRIEF In April of 2018 the Council adopted the Anholm Bikeway Plan. This action included further evaluation of a shared bicycle/vehicle lanes with traffic diversion on Broad, between Ramona & Lincoln. In April and in prior Council discussions, this segment (the middle portion) of the plan area received the most public input regarding the type and intensity of traffic modifications envisioned to provide a safer crosstown bike connection. As a result of public comment, Council directed exploration of a plan which includes traffic calming and diversion to determine if that would be acceptable to the supporters and opponents of the original proje ct design. In addition, if a solution cannot be developed that achieves the multi-modal goals of the project, the adopted Plan calls for a return to the City Council with a recommendation for protected bikeways created in part by parking removal. Packet Pg. 321 Item 15 Staff has completed this evaluation as requested by the Council and developed for consideration a design that includes a single traffic diverter at Broad Street and neighborhood wide traffic calming. Staff has also prepared the corresponding General Plan amendment reclassifying four streets within the Anholm Neighborhood to be consistent with current and projected traffic conditions. Traffic diversion on Broad Street was one of the initial concepts considered at the beginning of this planning effort. It was, however, not pursed initially due to the projected volume increases on Chorro and other neighborhood streets. The volume increase would require corresponding street reclassifications for General Plan consistency. Class IV protected bike lanes created by street parking removal was reviewed by Council as the recommended alternative. Public concerns regarding parking loss and unfamiliarity with this new type of facility resulted in Council direction to staff to further explore a traffic calming -only concept. Staff developed a traffic calming-only plan. However, noting concerns that traffic calming alone could affect a bicycling mode shift, Council directed staff to revisit traffic diversion on Broad Street along with traffic calming in the corridor. The current proposal before Council is for consideration of that combination, diversion and calming, in addition to the recommendation of the Planning Commission and the recommendation of the Active Transportation Committee. DISCUSSION Background For at least 10 years citizens and city staff have identified the Broad Street area as an important active transportation corridor linking downtown and south-end neighborhoods with the schools, businesses and other destinations in the Foothill corridor and beyond. As a res ult, the most recent City Bicycle Transportation Plans have prioritized a project in this area. In addition, City Council Goals 15-17 Financial Plan identified the Broad Street Bike project as a priority. In fact, the two major bike priorities for the City is the 1) Railroad Safety Trail and the 2) Broad Street Bike Boulevard. The Railroad Safety Trail project has received the County’s only large State Active Transportation Grant and is moving forward with design and permitting. The Anholm Bikeway Plan has been in development for over two years to reduce bicycle/vehicular conflicts and create a low-stress route for bicyclists of all ages and ability levels between downtown and the Foothill Boulevard area. Plan recommendations focus on improving conditions t hrough physical separation between bicyclists and motor vehicles. In addition, in areas where bicyclists share travel lanes with drivers, the focus has been to reduce traffic volumes and speeds to a comfortable level, as established by National Association of City Transportation Officials (NACTO) and the Federal Highways Administration (FHWA). The proposed diverters on Broad Street are projected to reduce the volume to these levels. Based on the research behind the NACTO and FHWA guidelines this should attr act new riders and support the City’s goals to increase active transportation mode share. A Brief History Work first began on developing the Anholm Bikeway plans (originally called the Broad Street Bicycle Blvd.) when it was established as a priority pr oject under the City’s Multimodal Transportation Major City Goal and funded in the 2015 -17 Financial Plan. Initial Project development involved online forums, public opinion polling, public input meetings, public Packet Pg. 322 Item 15 design charettes, traffic studies, advisory body review, and Council Review. As it relates to the middle section of the bikeway, four concepts emerged: 1. Shared lanes with traffic diversion on Broad, 2. Shared lanes with traffic calming only, 3. Class IV protected bike lanes via converting Broad & Chorr o into one-way couplets, and 4. Class IV protected bike lanes via parking removal on one-side of the Street. Citywide opinion polling at the time indicated majority support (59%) for traffic diversion or protected bike lanes, and 41% support of traffic calming only or no changes. Opinion polling specific to Anholm neighborhood residents resulted in the opposite with majority (67%) in support of traffic calming or no changes and 33% in support of traffic diversion or protected bike lanes. Table 1 below summarizes the continued plan development thru the latest public hearing, Planning Commission on August 14th, 2018. A more through summary of the plan development history is provided in Attachment J. Table 1 – Project Public Meetings Meeting Outcome Project Kick off Community Meeting #1 March 24, 2016 Attendee input on overall project “wants” and “don’t wants” Community Design Charrette #1 June 9, 2016 Attendee input on Initial design concepts Community Meeting #2 March 23, 2017 Attendee input on refined project alternatives Active Transportation Committee July 20, 2017 ATC input on the refined project alternatives and recommend two-way couplet City Council Study Session August 15, 2017 Council directs staff to refine alternative for protected bikeways wi th removal on-street parking removal & a secondary alternative with traffic calming only. Community Meeting #3 December 11, 2017 Attendee input on the refined preferred alternative and the secondary alternative . Active Transportation Committee January 18, 2018 ATC input on the two alternatives and recommend adoption of the draft Plan with the preferred alternative of protected bikeways with parking removal City Council Hearing February 6, 2018 Council conceptually approves plans, with specific calls for the further development of the middle segment from Lincoln to Ramona with traffic calming only. City Council Hearing April 10, 2018 Council reaffirms adoption of Plan. Also, calls for further development of middle segment for a shared street with traffic calming & diversion. If a solution cannot be developed to achieve multimodal goals, return with a plan for protected bikeways. Community Design Charrette #2 May 10, 2018 Attendee input on alternatives for a shared street with traffic calming and diversion Active Transportation Committee (formerly the BAC) May 17, 2018 ATC reaffirms original recommendation of July 2017 for protected bike lanes on Chorro with additional consideration for protected bike lanes on Broad via parking removal Planning Commission August 14, 2018 Planning Commission recommends to not amend the Circulation Element to accommodate diversion but engage in pilot program of traffic calming only & improve pedestrian amenities. After plan concepts were further refined and analyzed another opinion poll was conducted prior to the February 6 th, 2018 Council meeting. This polling effectively yielded similar results as to the prior polling, at the Citywide level approximately 63% supported protected bike lanes and polling specific to the Anholm neighborhood resulted in the opposite with 74% opposing protected bike lanes primarily due to parking loss or changes in traffic patterns. Packet Pg. 323 Item 15 Each of the concepts and their numerous variations have been thoroughly studied under both current conditions a nd projected conditions assuming full buildout of all development in the City as anticipated under the General Plan. It is staff’s professional assessment that all viable options have been comprehensively vetted with the pros and cons identified for the co mmunity’s consideration. Anholm Bikeway Plan Alternatives Although the focus of plan alternatives has been related to bicycle facilities, it important to point out that all plan alternatives include extensive pedestrian improvements such as sidewalk connections, ADA sidewalk ramps, bulbouts, green street elements, and street lighting. Improvements for pedestrians is a key part of the Plan. The plan also calls for significant safety, lighting, and placemaking / public art enhancements at the Chorro street undercrossing. This focus on all active transportation modes, walking and cycling, is consistent with the City’s General Plan in improve healthy and safe transportation options. A. Broad Street Traffic Diversion & Traffic Calming (Council Direction - Staff Recommendation) This plan alternative is the concept that Council directed staff to further develop and analyze. Traffic diversion on Broad is one of the key elements of this alternative, with the goal of reducing vehicle volumes to acceptable levels for cyclists and vehicles to share travel lanes. During the public outreach activities, many residents voiced their concerns over traffic diversion. Responding to these concerns staff studied numerous diversion options and concluded that installation of a single traffic diverter at Broad & Ramona/Meinecke is a best first step in working towards Council’s direction for shared facilities. This provides the least amount of diversion effecting other streets while still achieving target vehicle volumes and spee ds on Broad Street that are appropriate for shared lanes. Figures A and B in this staff report illustrate the location and concept developed for the single diverter on Broad at Ramona/Meinecke. Figure B shows all the neighborhood traffic calming measures on area streets to help mitigate volume changes and potential speed issues resulting from diversion. Anticipated traffic diversion on Broad will result in volume increases on adjacent streets. The streets proposed for reclassification include Chorro, Linco ln, Meinecke, and Murray Streets to accommodate volume shifts pursuant to General Plan criteria. This traffic calming and diverter plan has been developed based on a combination of Council direction, input from the May 10, 2018 public workshop, proposals submitted by one resident group “Anholm Neighbors United”, input from the Active Transportation Committee, and coordination with the Police and Fire departments. Packet Pg. 324 Item 15 FIGURE A: BROAD & RAMONA/MEINECKE DIVERTER CONCEPT The traffic diverter is proposed as a trial measure with monitoring and reporting for 12 to 24 months; the Council would have the option of removing the diverter during that time under the proposed plan. The other key element of this plan is a package of traffic calming measures throughout the Anholm neighborhood. These measures include speed humps, speed cushions (accommodating emergency vehicles), and bulbouts/medians (often referred to as diffusers). In many ways, the traffic calming elements included in the plan proposed by staff are s imilar in concept to those proposed by the resident group “Anholm Neighbors United” (ANU). While the concepts were similar, staff did adjust the geometry of the ANU designs in order to function for turning radii, sight distance and drainage. The design of traffic calming features provided in ANU proposals would prevent access for larger vehicles such as garbage trucks, delivery trucks, and emergency response vehicles from accessing the neighborhoods. Packet Pg. 325 Item 15 FIGURE B: BROAD DIVERSION & TRAFFIC CALMING PLAN Packet Pg. 326 Item 15 A detailed traffic analysis was conducted for the proposed plan, including the diverter on Broad Street. The current volumes without diversion onto Chorro and Lincoln are already beyond the thresholds established under their General Plan street classifications. With the proposed diverter on Broad Street and the implementation of neighborhood -wide traffic calming measures, the worst -case forecasted volumes on Chorro (Foothill to Palm) are projected to increase by approximately 55%. On Lincoln (Broad to Chorro) the volumes are projected to increase by approximately 42%. On Murray & Meinecke (Broad to Santa Rosa) the volumes are projected to increase by approximately 15% to 20%. The plan would also result in the loss of 20 parking spaces on Chorro & 10 parking spaces on Broad in order to accommodate the proposed traffic calming features such as bulbouts. These forecasted volumes are beyond the threshold established under their General Plan Street Classifications. The proposed project, therefore, includes reclassification of these streets to reflect the anticipated volumes. Chorro (Foothill to Palm) and Lincoln (Chorro to Broad) are currently classified as residential collectors and proposed to be reclassified to residential arterials. Murray and Meinecke (Broad to Santa Rosa) are currently classified as local streets and proposed to be reclassified to residential collector minor streets. Table 2 to the right shows the target vehicle volumes and speeds for shared lanes and how the proposed project is projected to affect Chorro St. & Broad St. With traffic calming and diversion it is projected to narrowly meet target conditions. This should positively affect bicycle mode shift, however not to the same degree as protected or traditional bike lanes. B. Traff ic Calming Only (Planning Commission Recommendation) The Planning Commission recommended plan alternative is identical to the Broad Street Traffic Diversion and Traffic Calming alternative, except that the commission recommended traffic calming be used at Broad and Ramona/Meinecke intersection in lieu of a diverter as a trial measure with the same monitoring and reporting for 12 to 24 months; the Planning Commission & Council would have the option of revisiting the diverter & general plan amendments during that time under this proposed plan. A traffic analysis was conducted for this proposed plan which found insignificant shifts in traffic volumes as a result of the traffic calming features. The plan would also result in the loss of 20 parking spaces on Chorro & 10 parking spaces on Broad in order to accommodate the proposed traffic calming features such as bulbouts. Table 2: NACTO & FHWA Target Shared Lane Conditions Packet Pg. 327 Item 15 FIGURE C: TRAFFIC CALMING ONLY PLAN Packet Pg. 328 Item 15 Table 3 to the right shows the target vehicle volumes and speeds for shared lanes and how the proposed project is projected to affect Chorro St. & Broad St. With traffic calming only the plan is not expected to meet target conditions for shared lanes therefore not projected to affect bicycle mode shift. C. Protected Bike Lanes with Parking Removal (Active Transportation Committee Recommendation) The protected bike lanes with parking removal alternative is the Active Transportation Committee’s recommendation and the concept that Council requested be brought back if traffic diversion with traffic calming is not acceptable to the community. Figure C of this report illustrates the measures included in this plan alternative. Effectively this plan alternative calls for the removal of on-street parking on one-side of the street of Chorro (Lincoln to Mission) in order to accommodate a two -way cycle track, shared lanes on Mission (Chorro to Broad), and removal of on-street parking on one-side of the street of Broad (Mission to Ramona) in order to accommodate a protected bike lane in the SB direction and a shared lane in the NB (north- bound) direction. The Active Transportation Committee also recommends that Council consider removing parking on both sides of Broad (Mission to Ramona) in-lieu of just one side in order to accommodate a two-way cycle track inst ead of only a SB (south-bound) protected lane. A traffic analysis was conducted for this proposed plan which found insignificant shifts in traffic volumes as a result of the traffic calming features. The plan would result in the loss of 41 parking spaces on Chorro and 15 parking spaces on Broad in order to accommodate the protected lanes. An additional 33 parking spaces on Broad (Ramona to Mission) require removal to accommodate a two -way cycle track along that segment. In regard to traffic safety, drivewa y crossings would be engineered in accordance with adopted NACTO and FHWA design guidance. For delivery and maintenance vehicles, these activities occur during non-peak parking hours and can be accommodated by the on-street parking spaces that are not proposed to be removed in the vicinity. For trash pick-up, cans can be placed in the buffer area or parkway at gaps for driveways where both locations provide adequate access for garbage trucks. For ADA on-street parking, this plan is in full compliance with current ADA regulations and draft ADA regulations currently under consideration. Table 3: NACTO & FHWA Target Shared Lane Conditions Packet Pg. 329 Item 15 FIGURE D: PROTECTED BIKE LANE & PARKING REMOVAL ALTERNATIVE Packet Pg. 330 Item 15 Although the primary concerns with protected bike lanes been the loss of parking, there have been other co ncerns regarding perceived safety issues and lack of familiarity with Class IV protected bike lanes in a residential setting. If the Council shares these concerns a variant of this plan alternative is to install traditional class II bike lanes in lieu of c lass IV protected lanes using the same space providing by parking removal. This variant is shown below in Figure E. FIGURE E: CLASS II IN LIEU OF CLASS IV & PARKING REMOVAL VARIANT Of all the alternatives protected bike lanes have the highest potential to increase bicycle mode share. It ’s difficult to estimate how much shift this proposed project may result in, however other Cities have experienced increased ridership ranging from 20 % to 170%. This however comes at the cost of significant on-street parking removal. Neighborhood Group Coordination & Plan Assessment Council directed that staff continue to work on project options to see if consensus could be built for the project. Primarily two neighborhood resident groups have been actively engaging with City staff, SLO Streets for All (SSFA) & Anholm Neighbors United (ANU). It’s important to note that neither SSFA nor ANU represents all of the Anholm Neighborhood. Staff has worked with all parties and interests and provided fair and impartial consideration of proposals. Packet Pg. 331 Item 15 SLO Streets For All A group of San Luis Obispo residents called “SLO Streets for All” has provided formal comments to staff, the ATC and City Council to convey the ir shared interests and concerns regarding the Anholm Bikeway “middle segment” design. Prior to the May 17 th ATC meeting, SLO Streets for All submitted a letter signed by approximately 40 Anholm residents and approximately 30 residents of the northern neig hborhoods near Foothill Boulevard. Their concerns are noted below: • Based on the May 10th community design charrette, it was clear that many people in the Anholm neighborhood have concerns about unequal distribution of traffic within the neighborhood with addition of traffic diverters. Further, without diversion, it will not be possible to provide a Class III shared street (bicycle boulevard) with speeds and volumes low enough to attract new riders. • Because research shows that protected bike lanes have the greatest potential to increase ridership and create complete streets, the group recommends that the project proceed with protected bike lanes via either removal of street parking or the “one -way couplet” option. deferring to Council and staff to determine the best option among these alternatives. The preferred design should capture and enhance safety along existing “desire lines”. This includes the preferred safe routes to school route, via Chorro -Mission-Broad (or via the Almond Street “wiggle”), as well a s the popular route for Cal Poly students/employees via Chorro-Murray or Chorro -Foothill. • Protected bike lanes are safest when one-way lanes are provided on each side of the street matching the typical direction of travel. However, if space constraints ma ke this infeasible, two-way cycle tracks may be preferred over no protected bike lanes at all. Anholm Neighbors United: Traffic Diversion & Calming Plan Analysis A group of Anholm residents called “Anholm Neighbors United” (ANU) developed concepts in response to Council direction to consider a traffic calming with diversion plan. This is included in Attachment I of the report. As with the other recommendations a thorough traffic impact study of the ANU recommendation (Appendix B of Attachment D) was conduc ted. Although ANU’s first preference is for no traffic diversion, they have proposed a diversion plan for the purposes of following Council’s direction. The ANU alternative includes a half street diverter from SB Broad Street into the Foothill Plaza (at the southernmost driveway), a half street diverter from NB Broad onto Mountain view and full diverter for non-emergency vehicles on Chorro at Murray. This location of diversion would allow full access of the neighborhood to the shopping center but would also require SB traffic on Broad to divert into the center at the driveway diverter. The traffic study found that this proposal would also substantially affect area streets. NB Chorro Street traffic would shift to Broad Street at Mission and SB Chorro Street traffic would bypass the Murray diverter via Benton Way affecting each of these streets. This results in a 40% volume increase on Broad Street, a 35% decrease on Chorro Street, in additional to increases over 200% on Murray, Meinecke, and Benton Way with traffic needing to go around the Chorro Street Diverter at Murry. Reclassification of some streets may be necessary under this proposal. Packet Pg. 332 Item 15 Staff does not recommend the ANU diversion alternative because the volume increase on Broad far exceeds targets for shared lanes. This alternative is also not recommended due to the extent of projected volume increases on Benton/Murray/Meinecke. From an operation standpoint, half street diverters require heightened level of police enforcement for wrong way driving through the diverter, potential impacts to emergency services, and may require public access easements from the Foothill Plaza shopping center to allow for diversion onto their site. ANU subsequently revised their proposal to not include the diverter at Chorro a nd Murrary. This revision addresses the volume increase on Broad St. and along with the emergency response concerns. However, this revision still does not meet target vehicle volumes and speeds on Broad Streets and public access easements from Foothill Plaza would still be required. Emergency Services Review All the above three project concepts (A, B and C), were reviewed with City Fire and Police Department staff to assess potential concerns to emergency response providers. The configuration of the propo sed traffic diverter on Broad Street is acceptable, and the traffic calming measures will not negatively impact emergency vehicle access on Chorro Street . The installation of bollards that could be removed by emergency response personnel are recommended fo r roadway segments where secondary access may be necessary. The other traffic calming devices proposed, speed cushions/humps and bulbouts, did not present any significant concerns to Fire or Police at this time. If approved, those departments would be consulted prior to the selection of final design and/or construction documents. CONCURRENCES The Active Transportation Committee reviewed the proposed update to the Anholm Bikeway Plan on May 17th, 2018, and unanimously reconfirmed their recommendation from July 20, 2017. Their recommendation is that protected bike lanes on Chorro Street be installed with the additional consideration for protected bike lanes on Broad via on-street parking removal on both sides of the street . On August 5, 2018, the Planning Commission reviewed the proposed update to the Anholm proposed General Plan amendment and voted to not recommend reclassifying neighborhood streets to accommodate volume shifts from traffic (1 commissioner position was vacant, and 2 commissioners recused t hemselves). The Commission also approved a motion (3-1) to recommend trial traffic calming in lieu of trial traffic diversion at Broad and Ramona/Meinecke with the same proposed monitoring program as detailed in the proposed updated Plan. Packet Pg. 333 Item 15 ENVIRONMENTAL REVIEW A focused transportation impact study (TIS) was prepared to identify potential project -related impacts related to these changes since traffic diversion proposed for Broad Street is expected to modify existing traffic circulation and shift volumes to other routes—predominantly Chorro Street. The focused TIS is included in the appendix of the updated Anholm Bikeway Plan (Attachment D). The TIS includes the analysis of traffic operations at selected intersections and roadway segments that are most likely to experience shifts in traffic in conjunction with the project. Conditions were analyzed based on existing traffic levels and based on projected future (2035) traffic levels for conditions with and without the proposed project. The analysis included review of existing traffic patterns, forecasts developed with the City’s Travel Demand Forecasting Model, and engineering judgement . The Transportation Impact Study & LUCE EIR addendum found that the proposed Project would not trigger any significant transpo rtation impacts beyond what was already identified in the Final EIR of the Circulation Element . These findings are included in the Council Resolution. FISCAL IMPACT There is no immediate fiscal impact associated with any of the recommended actions. The estimated costs for the improvements identified in the proposed plan are detailed in the Anholm Bikeway Plan on Page 42 of Attachment D and amount to approximately $2 million. Approximately $1 million is funded from a combination of General Funds, SB 1 (Road Repair and Accountability Act of 2017), a Safe Routes to School Grant, and an Urban State Highway Account grant. These funds are currently programmed as part of the 2017 -19 financial plan for the phase 1 and phase 2 improvements. Funding for implementation of the remaining improvements will be requested incrementally in subsequent future Financial Plans as funding is available. ALTERNATIVES 1. Planning Commission Recommendation: As recommended by the Planning Commission the Council may choose to adopt an updated Anholm Bikeway plan that includes trial traffic calming at Broad & Ramona/Meinecke in lieu of trial traffic diversion with the same monitoring program. A version of the Anholm Bikeway Plan and resolution reflecting this recommendation are provided in Attachments E & F. Staff is not recommending this alternative because it does not achieve the target volumes and speeds for shared lanes. However, this alternative is supportable by staff as opposed to no changes and as an incremental step towards an improved bike route. Packet Pg. 334 Item 15 2. Active Transportation Committee Recommendation: As recommended by the Active Transportation Committee the Council may choose to adopt an updated Anholm Bikeway plan that includes Class IV protected bike lanes in place of on-street parking. A version of the Anholm Bikeway Plan and resolution reflecting this recommendation is provided in Attachments G & H. Staff is not recommending this alternative because it is not consistent with the concept Council requested. However, this alternative is supportable by staff since it would achieve the project goals. The Council may choose to adopt the variation of this alternative that includes Class II bike lanes in lieu of Class IV protected bike lanes. The Council may make this change by including this specific direction in its resolution and the final adopted plan will reflect this action. This action would not require additional analysis or review by the Council. During deliberations members of the ATC expressed support for this variation as well; this is also supportable by staff. 3. Proceed with Implementation of the Approved Northern and Southern Sections and Differ Decision on the Middle Section: The Council could choose not to modify the Anholm Plan at this time and direct staff to proceed with implementation of the improvements approved north of Ramona and south of Lincoln first along with augmentation of the existing class III signing and striping on the middle segment. Staff would then return to Council after implementation of the Northern and Southern sections for review of the middle segment from Ramona to Lincoln. This alternative is not recommended as it is not likely to increase the bicycle mode split consistent with the overall modal shift goals identified in the Circulation Element. Attachments: a - Resolution (traffic calm, diverter) GP amendment, EIR addendum b - Addendum to LUCE Final EIR c - Circulation Element Streets Classification Diagram Figure 1 d - Council Reading File - Anholm Bikeway Plan (diversion & traffic calming) e - Resolution Anholm Bikeway Plan (traffic calming only) f - Council Reading File - Anholm Bikeway Plan (traffic calming only) g - Resolution Anholm Bikeway Plan (protected bike lanes) h - Council Reading File - Anholm Bikeway Plan (protected bike lanes) i - Submitted Alternatives j - Anholm Bikeway Plan Project Background Packet Pg. 335 Item 15 RESOLUTION NO. _____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, TO APPROVE AN AMENDMENT TO THE CIRCULATION ELEMENT OF THE GENERAL PLAN, AN ADDENDUM TO THE GENERAL PLAN CIRCULATION ELEMENT FINAL ENVIRONMENTAL IMPACT REPORT AND AN AMENDMENT TO THE ANHOLM BIKEWAY PLAN WHEREAS, the Bicycle Transportation Plan and the Land Use and Circulation Elements to the General Plan support reducing use o f single-occupant motor vehicles by supporting alternatives, such as walking and bicycling ; and WHEREAS, the Circulation Element to the General Plan has modal split objectives of 20 percent for bicycles and 18 percent for walking, carpools, and other forms of transportation; and WHEREAS, the Anholm Bikeway Plan calls for implementation of bicycle facilities that have been shown in other communities to provide substantial benefits to bicycle safety and increase bicycle mode share ; and WHEREAS, the City has identified Multi-Modal Transportation as a Major City Goal, with the purpose of prioritizing implementation of the Bicycle Transportation Plan, pedestrian safety, and the Short -Range Transit Plan; and WHEREAS, the Bicycle Transportation Plan recommends development of a low-traffic route for bicyclists and pedestrians connecting the downtown core to Foothill Boulevard as a “first priority” project ; and WHEREAS, the City has adopted a Vision Zero policy to eliminate all fatal traffic deaths and severe injuries by 2030, with a focus on improving pedestrian and bicyclist safety; and WHEREAS, the City coordinated with neighbors and other community members on outreach and public input through community meetings and other methods; and WHEREAS, during the April 20, 2018 City Council meeting, the City Council adopted Resolution 10881 (2018 series) adopting the Anholm Bikeway Plan, which called to further evaluate Broad, Mission, Chorro and Lincoln Streets to determine if a Class III Shared Street with traffic calming and diversion on Broad, coupled with measures to mitigate impacts on Lincoln and other streets is acceptable to the community. WHEREAS, the City performed additional outreach to the community after April 20, 2018 on the “middle section” of the Anholm Bikeway Plan including a design charrette, meetings with community members, and public hearings before the Active Transportation Committee and Planning Commission Packet Pg. 336 Item 15 WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on September 4, 2018 for the purpose of considering General Plan Amendments proposed as part of the Circulation Element Amendment project including General Plan Circulation Element Streets Classification Diagram changes, an Addendum to the General Plan Circulation Element Final Environmental Impact Report and an Amendment to the Anholm Bikeway Plan; and, WHEREAS, notices of said public hearing were made at the time and in the manner required by law; and WHEREAS, the City Council has duly considered all evidence, including the testimony of interested parties, and the evaluation and recommendations by staff, presented at said hearing. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings a) Based upon all the evidence, the City Council makes the following findings in support of amending the General Plan to reclassify existing street classifications for the following streets: • Reclassify from existing Residential Collector to existing Residential Arterial: o Chorro (Foothill to Palm) o Lincoln (Chorro to Broad) • Reclassify from existing Local Street to existing Residential Collector (minor): o Meinecke (Broad to Santa Rosa) o Murray Street (Broad to Santa Rosa) i) The proposed General Plan Amendment is consistent with City’s General Plan Policies, Goals, and Objectives relating to Multimodal Transportation. ii) The proposed General Plan Amendment is consistent with the City’s Adopted Bicycle Transportation plan. iii) The proposed General Plan Amendment is consistent with the City’s Adopted Anholm Bikeway Plan. iv) The proposed General Plan Amendment will reclassify the above- mentioned streets to more appropriately reflect the current and forecasted character of residential streets serving residential and downtown commercial zones. v) On September 3, 2014, the City Council adopted an Environmental Impact Report (EIR) for the Land Use and Circulation Element Update which adequately addresses the potential significant environmental impacts of the classification of streets. The EIR, along with the prepared addendum adequately evaluate the potential environmental impacts associated with the streets reclassification and found no impacts. Packet Pg. 337 Item 15 b) Based upon all the evidence, the City Council makes the foregoing findings to amend the Anholm Bikeway Plan as adopted on April 11, 2018 to include establishment of: • A bicycle boulevard between Lincoln and Ramona streets with enhanced bikeway signage and markings • A traffic diverter at Broad/Ramona/Meinecke streets as a one-year pilot for testing prior to permanent installation • Traffic calming features on streets between Lincoln and Ramona SECTION 2. Environmental Review a) An addendum to the Land Use and Circulation Element Update Environmental Impact Report was prepared regarding the reclassification of Chorro, Lincoln, Meinecke, and Murray streets as described above. The addendum concluded the following: i) None of the following circumstances included in Section of 15162 of the CEQA Guidelines have occurred which require a subsequent EIR: a. The streets reclassification changes do not result in new or more severe environmental impacts. b. The circumstances under which the streets are reclassified will not require major changes to the EIR. c. The streets reclassification does not require any substantive changes to previously approved mitigation measures. ii) The streets reclassification would not result in a significant increase in future traffic on affected roadways such that the effect would result in an increase in the severity of any impact previously identified in the LUCE Update EIR, and the proposed street reclassification changes are minor and consistent with the scope of the approved Anholm Bikeway Plan. iii) The changes are consistent with City objectives to increase bicycle mode share to 20% of all transportation trips. SECTION 3. Action. a) The City Council does hereby approve the General Plan Amendment (GENP-1719- 2018) subject to the following conditions: (1) Circulation Element Figure 1 (Streets Classification Diagram) amendment as described as Exhibit A and attached hereto. b) The City Council does hereby approve the Addendum to the General Plan Circulation Element Final EIR (as described and included hereto as Exhibit B) c) The City Council does hereby approve the Addendum to the Anholm Bikeway Plan (as described within the Plan Executive Summary included hereto as Exhibit C) d) The City Council declares that should any provision, section, paragraph, sentence, or word of this Resolution be rendered or declared invalid by any court of competent jurisdiction, or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences and words of this Resolution shall remain in full force and effect . The recitals contained in this resolution are incorporated by reference. Packet Pg. 338 Item 15 Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this 4th day of September, 2018. ____________________________________ Mayor Heidi Harmon ATTEST: _________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this _______ day of ________________, _____________ ____________________________________ Teresa Purrington City Clerk Packet Pg. 339 Item 15 Addendum to the Land Use and Circulation Element Final Environmental Impact Report (SCH# 2013121019) Anholm Bikeway Plan & General Plan Circulation Element Amendments City File No: GENP-1719-2018 1. Project Title: Anholm Bikeway Plan and General Plan Circulation Element Amendments 2. Lead Agency Name and Address: City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401 3. Contact Person and Phone Number: Adam Fukushima, Active Transportation Manager 805-781-7590 4. Project Location: Area bound by Foothill Blvd., Chorro St. , Lincoln St., & Broad St. 5. Project Representative Name and Address: Adam Fukushima City of San Luis Obispo 919 Palm Street San Luis Obispo, CA 93401 6. General Plan Designation: Chorro Street – Residential Collector Major Broad Street – Residential Collector Minor Lincoln Street – Residential Collector Minor Packet Pg. 340 Item 15 7. Zoning: R-1 (Low Density Residential), R-2 (Medium Density Residential), R-4 (High Density Residential), C-D (Downtown Commercial), C-C (Community Commercial), public right- of-way 8. Description of the Project: Amendment to the Anholm Bikeway Plan specifying the neighborhood traffic calming plan with a vehicle diverter at Broad and Ramona/Meinecke and an amendment of the General Plan to change the following street classifications: • Reclassify from existing Residential Collector to existing Residential Arterial: o Chorro (Foothill to Palm) o Lincoln (Chorro to Broad) • Reclassify from existing Local Street to existing Residential Collector (minor): o Meinecke (Broad to Santa Rosa) o Murray Street (Broad to Santa Rosa) General Plan Circulation Element 1. Amend Figure 1: Street Classification Diagram Anholm Bikeway Plan 1. Amend designated Route 2. Amend measures designated for middle segment (Lincoln St to Ramona Dr) in project phases 2 and 3, which include a traffic calming plan and a diverter at Broad/Meinecke/Ramona 3. Amend related sections in plan document 9. Project Entitlements Requested: Anholm Bikeway Plan and General Plan Circulation Element Amendments. 10. Setting and Surrounding Land Uses: The setting for the segment of Chorro Street between Foothill Boulevard and US 101 is R-1 (Low Density Residential) with mostly single-family residences except for two properties fronting Foothill Boulevard which are C -C (Commercial Residential). Chorro Street between US 101 and Palm Street has a mix of land uses including R-4 (High Density Residential) apartment and other higher density residential uses, and C-D (Commercial Downtown) as it approaches the downtown area in the south. Meinecke Packet Pg. 341 Item 15 between Broad and Santa Rosa is primarily R-1 with single-family residences except for five properties that are O (Office ) near the Santa Rosa intersection. Murray Street between Chorro and Santa Rosa is primarily R-1 with single-family residences except for two properties that are O (Office) near the intersection of Santa Rosa. The setting for the segment of Lincoln Street from Chorro Street to Broad Street is R -1 consisting of single-family residences except for one parcel at the corner of Broad and Lincoln which is C-N (Neighborhood Commercial). 11. Other public agencies whose approval is required (e.g., permits, financing approval, or participation agreement.): No permits or approvals from other public agencies are required. 12. Previous Environmental Review On December 9, 2014, the City Council certified the Land Use and Circulation Element (LUCE) Update EIR, which evaluated the potential environmental effects of traffic and circulation city-wide as a result of the updated LUCE. Council Resolution No. 10586 is attached and includes all of the findings and mitigation measures that apply to the LUCE Update. All of these mitigation measures are still in effect and will apply to this project. Section 15164 of the State CEQA Guidelines allows a lead agency to prepare an addendum to a EIR when “minor technical changes or additions” have occurred in the project description since the EIR was certified. In addition, the lead agency is required to explain its decision not to prepare a subsequent EIR pursuant to State CEQA Guidelines Section 15162, which requires subsequent EIRs when proposed changes would require major revisions to the previous EIR “due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects.” The evaluation below discusses the circulation issue areas covered by the LUCE Update EIR and concludes that in each case no new environmental effects are created and that there is no increase in the severity of previously identified significant effects. CIRCULATION FACTORS POTENTIALLY AFFECTED: Environmental impacts associated with the 2014 Circulation Element update were evaluated in the LUCE Update EIR (SCH# 2013121019). As addressed below, the proposed amendment to the adopted Circulation Element would result in the reclassification of Chorro Street (Foothill Boulevard to Palm Street) & Lincoln Street (Broad Street to Chorro Street) from an existing Residential Collector to an existing Residential Arterial and the reclassification of Meinecke (Broad to Santa Rosa) & Murray (Broad to Santa Rosa) from local street to Residential Collectors (minor). These reclassifications would not result in any new impacts not previously disclosed in the certified EIR and would not increase the severity of any impact identified in the certified EIR. Packet Pg. 342 Item 15 Traffic and Circulation The Final EIR for the LUCE Update identified eight impacts relative to traffic and circulation. A Transportation Impact Study was prepared for th e Anholm Bikeway Plan amendment to analyze the future traffic conditions of the project site as well as identify potential impacts resulting from the project included in the appendix of the Anholm Bikeway Plan). Based on the Transportation Impact Study, the proposed amendment is consistent with the mitigation measures required to mitigate identified significant impacts that would occur because of build-out pursuant to the City’s Land Use and Circulation Element Update. As proposed , the project would not create any new or exacerbated impacts relative to traffic and circulation because the project proposes to maintain existing conditions. CIR Impact 1: Development and street network changes under the LUCE Update will cause roadways currently operating at LOS D or better to deteriorate to LOS E or F, in downtown San Luis Obispo, roadways operating at LOS E or better will deteriorate to LOS F, or will add additional traffic to roadways operating at LOS E (outside of downtown) or F (in downtown). This is considered a Class I, significant and unavoidable impact. The following mitigation measure was approved: 1) As future development under the LUCE Update is proposed, the City will be required to ensure consistency with the General Plan and the policies/programs listed above. However, with the incorporation of the Proposed Project, adherence to proposed and existi ng City policies and programs discussed above, and continued support of Caltrans’, SLOCOG’s and SLORTA’s efforts to address demand on US 101 in the vicinity of San Luis Obispo, these mitigation measures would not mitigate the impacts. Based on the Transportation Impact Study, implementation of the proposed amendment would not further reduce level of service (LOS), as identified above in CIR Impact 1. The impact identified in the LUCE Update EIR would remain significant and unavoidable, as documented in the CEQA Findings and Statement of Overriding Considerations for the LUCE Update and EIR. The City would continue to implement the required mitigation measure identifi ed above. CIR Impact 2: Development and street network changes under the LUCE Update will cause intersections currently operating at LOS D or better to deteriorate to LOS E or F, in downtown San Luis Obispo, intersections operating at LOS E or better will deteriorate to LOS F, or will add additional traffic to intersections operating at LOS E (outside of downtown) or F (in downtown). Impact is considered to be Class I, significant and unavoidable. The following mitigation measures were approved as options to mitigate impacts for these intersections to meet the LOS standard: 1) CIR‐1. Grand & Slack (#8) Install increased traffic control (traffic signal or roundabout). 2) CIR‐2. California & Taft (#12) Install increased traffic control (traffic signal or roundabout). Packet Pg. 343 Item 15 3) CIR‐3. Grand & US 101 SB on‐ramp (#13) Install dedicated WB right‐turn lane. 4) CIR‐4. San Luis & California (#55) Install increased traffic control (traffic signal or roundabout). 5) CIR‐5. Higuera & Tank Farm (#85) Add NB right‐turn lane, WB dual right‐turn lanes, two‐way left‐turn lane on Tank Farm between Higuera and Long. 6) CIR‐6. Broad & High (#89) Install increased traffic control (traffic signal or roundabout). Augment bicycle facilities and improve transit headways on Broad Street. 7) CIR‐7 Broad & Rockview (#94) Install downstream signal at Broad & Capitolio. Augment bicycle facilities and improve transit headways on Broad Street. 8) CIR‐8. Broad & Capitolio (#95) Install increased traffic control (traffic signal or roundabout). Augment bicycle facilities and improve transit headways on Broad Street. 9) CIR‐9. Johnson & Orcutt (#96) Install roundabout. 10) CIR‐10. Broad & Tank Farm (#98) Establish time‐of‐day timing plans. Add SB dual left‐turn lane, NB dedicated right‐turn lane and WB dedicated right‐turn lane. Augment Bicycle facilities and improve transit headways on Broad Street. 11) CIR‐11. Broad & Airport (#102) Install TWLTL north of intersection. Augment Bicycle facilities and improve transit headways on Broad Street. Based on the Transportation Impact Study, implementation of the proposed project would not further reduce level of service (LOS), as identified above in CIR Impact 2. The impact iden ti fied in the LUCE Update EIR would remain significant and unavoidable, as documented in the CEQA Findings and Statement of Overriding Considerations for the LUCE Update and EIR. The City would continue to implement the required mitigation measures identi fi ed above. CIR Impact 4: Development under the LUCE Update may increase traffic volumes or traffic speed in designated neighborhood traffic management areas. Impact is considered to be Class III, less than significant. As future development under the LUCE Update is proposed, the City will be required to ensure consistency with the General Plan and the policies/programs listed in the LUCE Update EIR. Therefore, mitigation measures are not required. The Circulation Element adopted in 2014 classified Chorro Street from Foothill Boulevard to Palm Street and Lincoln Street from Broad Street to Chorro as an existing Residential Collector Street. If approved, the Circulation Element would be ame nded to reclassify the segments of both of these streets to existing Residential Arterial as detailed on Figure 1. Packet Pg. 344 Item 15 Table 4 of the Circulation Element identifies maximum thresholds for street classification. The project (Anholm Plan Amendment and General Plan Amendment), if adopted, would be consistent with general plan policies. Broad, Chorro, Murray, Meinecke would operate within General Plan volume thresholds and not exceed roadway or intersection capacities. CIR Impact 5: Development under the LUCE Update may encourage increased heavy vehicle traffic on non‐designated truck routes. Impact is considered to be Class III, less than significant. As development is proposed per the LUCE standards, the City will be required to ensure consistency with the General Plan and the policies/programs listed in the LUCE Update EIR. Therefore, mitigation measures are not required. Based on the Transportation Impact Study, amending the existing street classifications for the given segments of Chorro, Lincoln, Meinecke, and Murray Streets would not increase the severity of this significant impact per the LUCE Update EIR. The street reclassification by itself would not require any major physical improvements or changes to the affected roadways and intersections. The proposed project includes minor traffic calming and pedestrian improvements within the City right-of-way, and not result in the encouragement of increased heavy vehicle traffic on non-designated truck routes. Conclusion Based on the Anholm Bikeway Plan Traffic Impact Study the proposed project would not result in additional impacts or increase the severity of other impacts already identified in the LUCE Update EIR. All mitigation measures approved in the LUCE Update EIR and associated CEQA findings are still in effect. No new mitigation is required. Other Resources Implementation of the proposed amendment to the Circulation Element would not result in any new physical changes that are not addressed and analyzed in the LUCE Update EIR because the project would be constructed on existing city streets within the public right of way and not require disturbance outside of the existing developed roadway . As noted above, compliance with all mitigation measures that are relevant to the propos ed reclassification would be required upon implementation of this proposed amendment to the Circulation Element. Packet Pg. 345 Item 15 DETERMINATION In accordance with Section 15164 of the State CEQA Guidelines, the City of San Luis Obispo has determined that this addendum to the LUCE Update EIR is necessary to document changes or additions that have occurred in the project description since the EIR was certified. The revisions to the project relate to discussions in the Traffic and Circulation sections of the EIR. No other issue areas are affected by the proposed project. The preparation of a subsequent EIR is not necessary because: 1. None of the following circumstances included in Section 15162 of the CEQA Guidelines have occurred which require a subsequent EIR: a. The project changes do not result in new or substantially more severe environmental impacts. b. The circumstances under which the project is undertaken will not require major changes to the EIR. c. The modified project does not require any substantive changes to previously approved mitigation measures. 2. The proposed project would not result in a significant increase in future traffic on affected roadways such that the effect would result in an increase in the severity of any impact previously identified in the LUCE Update EIR , and the proposed street reclassification changes are minor. 3. The changes are consistent with City objectives to achieve mode split objectives. Available Electronically: LUCE Update EIR (Final EIR): http://www.slocity.org/government/department -directory/community-development/planning- zoning/general -plan Packet Pg. 346 Item 15 o Santa Rosa NorthSantaRosa HigueraW estFoothillCalifornia Foothill SouthHigueraTank Farm LosOsosValley Br o a d Grand MontereyNor t hC h o rro Orcutt Or cutt M adonnaJohnson Joh n s onMarshHighlandCap itolioPrado IndustrialSouth Orcutt LaurelPismoChorro HighPalm Osos BuckleyJeffreyDelRio £¤101 L a guna La k e ¯Miles Source: City of San Luis Obispo, 2018 0 0.5 1 1.5 2 Figure 1Streets Classification Diagram Proposed Existing Arterial Commercial Collector Freeway/Ramp/Highway Residential Local Residential Collector (Major) Residential Collector (Minor) Regional Route/Parkway Arterial San Luis Ranch Specific Plan Avila RanchSpecific Plan Residential Arterial LUCE SOI Planning Subarea !!!!City Limits Urban Reserve Attachment c Packet Pg. 347 Item 15 Attachment e RESOLUTION NO. _____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, TO APPROVE AN AMENDMENT TO THE ANHOLM BIKEWAY PLAN WHEREAS, the Bicycle Transportation Plan and the Land Use and Circulation Elements to the General Plan support reducing use of single-occupant motor vehicles by supporting alternatives, such as walking and bicycling ; and WHEREAS, the Circulation Element to the General Plan has modal split objectives of 20 percent for bicycles and 18 percent for walking, carpools, and other forms of transportation ; and WHEREAS, the Anholm Bikeway Plan calls for implementation of bicycle facilities that have been shown in other communit ies to provide substantial benefits to bicycle safety and increase bicycle mode share ; and WHEREAS, the City has identified Multi-Modal Transportation as a Major City Goal, with the purpose of prioritizing implementation of the Bicycle Transportation Plan , pedestrian safety, and the Short -Range Transit Plan; and WHEREAS, the Bicycle Transportation Plan recommends development of a low -traffic route for bicyclists and pedestrians connecting the downtown core to Foothill Boulevard as a “first priority” project ; and WHEREAS, the City has adopted a Vision Zero policy to eliminate all fatal traffic deaths and severe injuries by 2030, with a focus on improving pedestrian and bicyclist safety; and WHEREAS, the City coordinated with neighbors and other community members on outreach and public input through community meetings and other methods; and WHEREAS, during the April 20, 2018 City Council meet ing, the City Council adopted Resolution 10881 (2018 series) adopting the Anholm Bikeway Plan, which called to further evaluate Broad, Mission, Chorro and Lincoln Streets to determine if a Class III Shared Street with traffic calming and diversion on Broad, coupled with measures to mitigate impacts on Lincoln and other streets is acceptable to the community; and WHEREAS, the City performed additional outreach to the community after April 20, 2018 on the “middle section” of the Anholm Bikeway Plan includin g a design charrette, meetings with community members, and public hearings before the Active Transportation Committee and Planning Commission; and WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber o f City Hall, 990 Palm Street, San Luis Obispo, California, on September 4, 2018 for the purpose of considering amendments to the Anholm Bikeway Plan; and, Packet Pg. 348 Item 15 Attachment e WHEREAS, notices of said public hearing were made at the time and in the manner required by law; and WHEREAS, the City Council has duly considered all evidence, including the testimony of interested parties, and the evaluation and recommendations by staff, presented at said hearing. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Action. Based upon all the evidence, consideration of staff recommendations, input from interested parties and public testimony, t he City Council does hereby adopt an amendment, in the form attached hereto as Exhibit A, to the Anholm Bikeway Plan (previously adopted on April 10, 2018) to include the following: • Installation of Class III Shared Street between Lincoln and Ramona with enhanced bikeway signage & bikeway markings • Implement primary features of neighborhood traffic calming package SECTION 2. Environmental Review. Per Section 15304 of the State California Environmental Quality Act (CEQA) Guidelines, the project is categorically exempt from CEQA under Class 1, Existing Facilities; Section 15301 and Class 4, Minor Alterations to Land, because the project would be constructed on existing city streets within the public right of way. The project will be constructed in an area that has no value as habitat for biological resources and would not be located in agricultural areas. The proposed street lights would be located in an urban area and would not significantly increase light or glare beyond existing conditions. The project has no potentially significant traffic impacts. The project is consistent with General Plan policies that promote an integrated system of bikeways, walkways, and traffic calming measures that promote a safe, multimodal transportation network. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this 4th day of September, 2018. ____________________________________ Mayor Heidi Harmon Planning Commission Packet Pg. 349 Item 15 Attachment e ATTEST: _________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: __________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this _______ day of ________________, _____________ ____________________________________ Teresa Purrington City Clerk Packet Pg. 350 Item 15 Attachment g RESOLUTION NO. _____ (2018 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, TO APPROVE AN AMENDMENT TO THE ANHOLM BIKEWAY PLAN WHEREAS, the Bicycle Transportation Plan and the Land Use and Circulation Elements to the General Plan support reducing use of single-occupant motor vehicles by supporting alternatives, such as walking and bicycling ; and WHEREAS, the Circulation Element to the General Plan has modal split objectives of 20 percent for bicycles and 18 percent for walking, carpools, and other forms of transportation ; and WHEREAS, the Anholm Bikeway Plan calls for implementation of bicycle facilities that have been shown in other communit ies to provide substantial benefits to bicycle safety and increase bicycle mode share ; and WHEREAS, the City has identified Multi-Modal Transportation as a Major City Goal, with the purpose of prioritizing implementation of the Bicycle Transportation Plan , pedestrian safety, and the Short -Range Transit Plan; and WHEREAS, the Bicycle Transportation Plan recommends development of a low -traffic route for bicyclists and pedestrians connecting the downtown core to Foothill Boulevard as a “first priority” project ; and WHEREAS, the City has adopted a Vision Zero policy to eliminate all fatal traffic deaths and severe injuries by 2030, with a focus on improving pedestrian and bicyclist safety; and WHEREAS, the City coordinated with neighbors and other community members on outreach and public input through community meetings and other methods; and WHEREAS, during the April 20, 2018 City Council meet ing, the City Council adopted Resolution 10881 (2018 series) adopting the Anholm Bikeway Plan, which called to further evaluate Broad, Mission, Chorro and Lincoln Streets to determine if a Class III Shared Street with traffic calming and diversion on Broad, coupled with measures to mitigate impacts on Lincoln and other streets is acceptable to the community; and WHEREAS, the City performed additional outreach to the community after April 20, 2018 on the “middle section” of the Anholm Bikeway Plan includin g a design charrette, meetings with community members, and public hearings before the Active Transportation Committee and Planning Commission; and WHEREAS, the City Council of the City of San Luis Obispo conducted a public hearing in the Council Chamber o f City Hall, 990 Palm Street, San Luis Obispo, California, on September 4, 2018 for the purpose of considering amendments to the Anholm Bikeway Plan; and Packet Pg. 351 Item 15 Attachment g WHEREAS, notices of said public hearing were made at the time and in the manner required by law; and WHEREAS, the City Council has duly considered all evidence, including the testimony of interested parties, and the evaluation and recommendations by staff, presented at said hearing ; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Action. Based upon all the evidence, consideration of staff recommendations, input from interested parties, and public testimony, t he City Council does hereby adopt an amendment , in the form attached hereto as Exhibit A, to the Anholm Bikeway Plan (previously adopted on April 10, 2018) to includethe following: • Installation of two-way protected bikeway on Chorro Street between Lincoln and Mission • Installation of southbound buffered/protected bike lane on Broad between Mission and Ramona. • Improved bikeway pavement markings and guide signage within Class III shared lane in northbound direction SECTION 2. Environmental Review. Per Section 15304 of the State California Environmental Quality Act (CEQA) Guidelines, the project is categorically exempt from CEQA under Class 1, Existing Facilities; Section 15301 and Class 4, Minor Alterations to Land, because the project would be constructed on existing city streets within the public right of way. The project will be constructed in an area that has no value as habitat for biological resources and would not be located in agricultural areas. The proposed street lights would be located in an urban area and would not significantly increase light or glare beyond existing conditio ns. The project has no potentially significant traffic impacts. The project is consistent with General Plan policies that promote an integrated system of bikeways, walkways, and traffic calming measures that promote a safe, multimodal transportation networ k. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this 4th day of September 2018. Packet Pg. 352 Item 15 Attachment g ____________________________________ Mayor Heidi Harmon ATTEST: _________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: __________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this _______ day of ________________, _____________ ____________________________________ Teresa Purrington City Clerk Packet Pg. 353 Item 15 D-1 D-2 D-3 Alternative Project - Diverters on Broad and Chorro Street Attachment i Packet Pg. 354 Item 15 Attachment i Packet Pg. 355 Item 15 D-1 Parklet Dive rter on Broad at Ramona Alternative Project - Diverters on Broad and Chorro Street Attachment i Packet Pg. 356 Item 15 D-2 Right Turn Only Traffic Circle on Broad at Mt. View Alternative Project - Diverters on Broad and Chorro Street Attachment i Packet Pg. 357 Item 15 D-3 Median Closure on Chorro at Murray Alternative Project - Diverters on Broad and Chorro Street Attachment i Packet Pg. 358 Item 15 Anholm Bikeway Project Timeline Developmental work on the Anholm Bikeway projects has been extensive over a multi-year period with many meetings with constituents and stakeholder. The following is a summary of work completed to dat e that inlcudes: • Five (5) Public Workshops • Three (3) Active Transportation Committee meetings • One (1) Planning Commission meeting • Three (3) City Council Meetings • A project webpage with Citywide opinion polling including 195 public comments and 1631 unique visitors (https://www.opentownhall.com/portals/189/Issue_3444) • Two opinion polls mailed to residents in the project area • Several informal field visits with residents, commuters, and other stakeholders Early Project Development Work first began on developing the Anholm Bikeway plans (originally called the Broad Street Bicycle Blvd.) when it was established as a priority project under the City’s Multimodal Transportation Major City Goal and funded in the 2015 -17 Financial Plan. Initial Project development involved online forums, public opinion polling, a public input meeting, a public design charette, traffic studies, and Bicycle Advisory Committee (now known as the Active Transportation Committee) review in July o f 2017. As it relates to the middle section of the bikeway, four concepts emerged: 1. Shared lanes with traffic diversion on Broad, 2. Shared lanes with traffic calming only, 3. Class IV protected bike lanes via converting Broad & Chorro into one-way couplets, and 4. Class IV protected bike lanes via parking removal on one -side of the Street. Citywide opinion polling at the time indicated majority support (59%) for traffic diversion or protected bike lanes, and 42% support of traffic calming only or no changes. Opinion polling specific to Anholm neighborhood residents resulted in the opposite with majority (67%) in support of traffic calming or no changes and 33% in support of traffic diversion or protected bike lanes. These options along with the opinion polling and the tradeoffs associated with each one, ranging from volume shifts to parking removal, were presented to Council at a study session on August 15th, 2017. At that time the Council directed staff to continue development of protected Class IV bike lane design using parking removal to provide space for the lane installations. Protected Bike Lane Alternative Staff continued refinement of the Protected Class IV Bike Lanes concept through an online input forum, more public opinion polling, a community input meeting, design modifications and an updated traffic impact study with draft CEQA findings. The Active Transportation Committee reviewed the proposal in January of 2018. Staff then returned to Council on February 6 th, 2018 with a final proposal that included an optional variation of traditional Class II bike lanes in lieu of Packet Pg. 359 Item 15 Table 1 - Project Timeline Meeting Date Outcome Project Kick off Community Meeting #1 March 24, 2016 Attendee input on overall project “wants” and “don’t wants” Community Design Charrette #1 June 9, 2016 Attendee input on Initial design concepts Community Meeting #2 March 23, 2017 Attendee input on refined project alternatives Bicycle Advisory Committee July 20, 2017 BAC input on the refined project alternatives and recommend two-way couplet City Council Study Session August 15, 2017 Council directs staff to refine alternative for protected bikeways with removal on-street parking removal & a secondary alternative of a bike blvd with traffic calming only Community Meeting #3 December 11, 2017 Attendee input on the refined preferred alternative and the secondary alternative Bicycle Advisory Committee January 18, 2018 BAC input on the two alternatives and recommend adoption of the draft Plan with the preferred alternative of protected bikeways with parking removal City Council Hearing February 6, 2018 Council adopts Plan, which calls for the further development of the middle segment from Lincoln to Ramona with traffic calming only City Council Hearing April 10, 2018 Council reaffirms adoption of Plan. Also, calls for further development of middle segment for a shared street with traffic calming & diversion. If a solution cannot be developed to achieve multimodal goals, return with a plan for protected bikeways. Community Design Charrette #2 May 10, 2018 Attendee input on alternatives for a shared street with traffic calming and diversion Active Transportation Committee (formerly the BAC) May 17, 2018 ATC reaffirms original recommendation of July 2017 for protected bike lanes on Chorro with additional consideration for protected bike lanes on Broad via parking removal Planning Commission August 14, 2018 PC recommends not to amend Circulation Element of General Plan to accommodate diversion but engage in pilot program of traffic calming only & improve pedestrian amenities. Packet Pg. 360 Item 15 Class IV protected bike lanes each utilizing the same space provided by removal of on-street parking. Opinion polling of this final concept effectively yielded similar results as the prior polling effort, at the Citywide level approximately 63% supported protected bike lanes and polling specific to Anholm residents resulted in the opposite with 74% opposing protected bike lanes. Most of the concerns with protected bike lanes was related to the scope of on-street parking removal estimated at 75 spaces. Other concerns were about public unfamiliarity with rules and usage of Class IV Bike Lanes and the perceived safety concerns regarding driveway interface with the bike lanes. In response to these concerns, Council directed staff to further explore the concept of shared lanes with traffic calming only. Plan Adoption and Further Development of “Middle Segment” Staff revised the draft Anholm Bikeway Plan to include traffic calming only on the middle segment (Ramona to Lincoln). This information, along, with updated the traffic studies and Draft CEQA findings, were presented to Council on April 10 th, 2018. Most of the concerns regarding this p lan were related to findings that indicated traffic calming alone would not be enough to achieve the target vehicle volume and speed reductions recommended by NACTO and FHWA for shared lanes. As a result, the project would not accomplish the desired bicycle mode split in the corridor. Responding to these concerns Council directed staff to revisit the concept of traffic diversion on Broad as a hybrid option coupled with traffic calming and to continue to work with area residents to refine their recommendations for potential alternatives. Staff has completed development and a thorough analysis of this concept which is now before Council for consideration. Packet Pg. 361 Item 15