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2019-05-06 City Council Agenda Packet
City Council 1 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Monday, May 6, 2019 Special Meeting Council Chambers 5:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 11 days preceding the meeting. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. Public comment may be addressed to the full City Council via email at City.Council@cityofpaloalto.org. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Special Orders of the Day 5:00-5:30 PM 1.Proclamation Recognizing Public Employees and Individual Service Accomplishments in Alignment With National Public Service Recognition Week, May 5-11, 2019 2.Adoption of a Resolution Expressing Appreciation to Mr. Menter "Bud" Starmer Upon his Retirement Study Session 5:30-7:30 PM 3.Joint Study Session of the City Councils of Palo Alto, Menlo Park and East Palo Alto Regarding Housing and Other 2019 State Legislation: (a) Update From Palo Alto’s State Lobbyist (b) Discussion of the Councils 7:30-8:30 PM 4.Joint Study Session With the Parks and Recreation Commission MEMO 2 May 6, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Agenda Changes, Additions and Deletions City Manager Comments 8:30-8:40 PM Oral Communications 8:40-8:55 PM Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Minutes Approval 8:55-9:00 PM 5.Approval of Action Minutes for the April 15 and April 22, 2019 Council Meetings Consent Calendar 9:00-9:05 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 6.Approval of Contract Number C19174560 With R&S Construction Management, Inc. in the Amount of $2,421,544 for the Fiscal Year (FY) 2019 Street Resurfacing Project, Capital Improvement Program Projects PE-86070, and PE-09003 7.Adoption of a Resolution Approving a Termination Agreement With Hecate Energy Palo Alto, LLC and Approving a Long-term Power Purchase Agreement With Golden Fields Solar III, LLC for the Purchase of Solar Electricity 8.Approval and Authorization for the City Manager or his Designee to Execute the Utility Program Services Contract, Number C19171513 With CLEAResult Consulting, Inc. for a Total Compensation of $737,000 and a Maximum Term of Five Years (Continued From April 15, 2019) 9.Approval of the Appointment of Kiely Nose as Director of Administrative Services (Chief Financial Officer), Dean Batchelor as Director of Utilities, and Kristen O'Kane as Director of Community Services 10.Approval of Amendment Number 1 to the Employment Agreement Between the City of Palo Alto and Police Chief Robert Jonsen 11.SECOND READING: Adoption of an Ordinance Amending Title 16 of the Palo Alto Municipal Code to Modify and Increase the Citywide Transportation Impact Fee (Chapter 16.59) and Suspend Application of the Existing Area Specific Transportation Impact Fees for the Stanford Research Park/El Camino Real CS Zone (Chapter 16.45) and the San Antonio/West Bayshore Area (Chapter 16.46), and Amending the Municipal Fee Schedule to Update the City’s Transportation Impact MEMO Q&A MEMO 3 May 6, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Fees in Accordance With These Changes, all in Furtherance of Implementation of the Comprehensive Plan. The Citywide Transportation Impact Fee is a one-Time fee on new Development and Redevelopment Throughout Palo Alto to Fund Transportation Improvements to Accommodate and Mitigate the Impacts of Future Development in the City. This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720 (FIRST READING: April 22, 2019, PASSED: 5-2 DuBois, Kou no) Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 9:05-9:45 PM 12. PUBLIC HEARING: Finance Committee Recommends Adoption of the Fiscal Year 2019-20 Action Plan and Associated 2019-20 Funding Allocations; and Adoption of a Resolution Approving the use of Community Development Block Grant Funds for Fiscal Year 2019-20 Consistent With the Human Relations Commission's Recommendation State/Federal Legislation Update/Action Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. 4 May 6, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Sp. Policy and Services Committee Meeting May 7, 2019 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Newell Road Bridge Project Informational Update City of Palo Alto Investment Activity Report for the Third Quarter, Fiscal Year 2019 Public Letters to Council Set 1 City of Palo Alto (ID # 10310) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Public Service Proclamation 2018 Title: Proclamation Recognizing Public Employees and Individual Service Accomplishments in Alignment With National Public Service Recognition Week- May 5-11, 2019 From: City Manager Lead Department: Human Resources Attachments: • Public Service Proclamation 2019 Proclamation PUBLIC SERVICE RECOGNITION WEEK May 5-11, 2019 WHEREAS, Americans are served every single day by public servants at the federal, state, county and city levels. These unsung heroes do the work that keeps our nation working; and across our nation, public employees take not only jobs, but oaths; and WHEREAS, many public servants risk their lives each day in service to the people of our communities, as well as provide safety inspections, operate our public facilities, and provide the diverse services demanded by the American people with integrity and efficiency; and WHEREAS, public servants provide the institutional knowledge, experience, and continuity that supports the long term sustainability of our community assets and organizational history; and WHEREAS, here in our city, our staff promotes and sustains the superior quality of life in Palo Alto, and in partnership with our community delivers cost-effective services in a personal, responsive, and innovative manner; and WHEREAS, over the past year alone, our City staff have: • Installed or replaced 40,000 linear feet of water, wastewater and gas mains and pipelines, including a major downtown infrastructure project. • Installed or replaced thousands of electric utilities customer service connections, system improvements and electric undergrounding. • Won the Voice of the People award from the National Research Center and International City/County Management Association (ICMA) for excellence in the natural environment. • Maintained and improved parks and trails and preserved more than 4,000 acres of open space. • Offered recreational classes and programs that support the well-being of residents of all-ages. • Conducted 234 public safety education sessions, trainings, inter-agency planning, and classes for our community. • After a 10-year absence, the police department reintroduce a very successful National Night Out program to encourage neighbors to socialize with each other and discuss safety, traffic and other topics. • Implemented the Courageous Heart Mindfulness Program for Public Safety and City Employees in an effort to improve our employee’s overall wellness and provide a higher level of service to our Community. NOW, THEREFORE, I, Eric Filseth, the Mayor of the City of Palo Alto do hereby proclaim that May 5, 2019 to May 11, 2019, is Public Service Recognition Week. All citizens are encouraged to recognize the accomplishments and contributions of government employees at all levels — federal, state, county and city – and especially our City of Palo Alto employees. Presented: May 6, 2019 ______________________________ Eric Filseth Mayor City of Palo Alto (ID # 10305) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Bud Starmer Proclamation Title: Adoption of a Resolution Expressing Appreciation to Mr. Menter "Bud" Starmer Upon his Retirement From: City Manager Lead Department: City Manager Attachments: Attachment A: Bud Starmer Resolution Resolution RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO EXPRESSING APPRECIAITON TO MR. MENTER “BUD” STARMER UPON HIS RETIREMENT WHEREAS, Mr. Menter “Bud” Starmer began his tenure of public service in Palo Alto in 1995, and has since become a leading figure in Development Services for customer service and life safety of our city for the last 24 years; and WHEREAS, Mr. Starmer worked diligently to facilitate code compliance for building projects while going above and beyond to communicate and build relationships with members of the community; and WHEREAS, as the Building Inspection Supervisor he developed Inspection Guidebooks in order to provide further clarity on the inspection process, which have since become known as “The Bud Books;” and WHEREAS, he was an instrumental part of developing and implementing the Development Services Blueprint to evolve the department into a higher performing, customer focused system; and WHEREAS, Mr. Starmer led the charge in 2015 to assist the City of Palo Alto in being recognized as a Building Code Effectiveness Grading Schedule (BCEGS) Class 1 rated community; an ISO award that recognizes the department’s efforts for improving its building code enforcement services; and WHEREAS, in 2016, he was nominated and received the American Construction Inspectors Association (ACIA) Industry of the Year Award for teamwork, advance planning, and proactive approach to improve the building and inspection industry, not only for the City, but statewide; and WHEREAS, Mr. Starmer continuously fostered a team environment through his leadership, generosity, and historical knowledge that he shared; and, WHEREAS, he devotes his free time to his family and farm where he grows walnuts, persimmons, and pomegranates which he generously shares with his friends, family, and coworkers every fall; and, WHEREAS, Mr. Starmer went out of his way to recognize and appreciate all staff for their contributions and service for the citizens of Palo Alto. NOW, THEREFORE I, Eric Filseth, Mayor of the City of Palo Alto, on behalf of the City Council, recognize Menter Starmer for his commitment to the City of Palo Alto and do hereby celebrate his achievements and years of service as Building Inspection Supervisor and congratulate him on his retirement on May 3, 2019. INTRODUCED AND PASSED: May 6, 2019 ATTEST: APPROVED: ______________________ _______________________ City Clerk Mayor APPROVED AS TO FORM: _____________________ _______________________ City Manager City Attorney TO: FROM: DATE: CITY OF PALO ALTO HONORABLE CITY COUNCIL ED SHIKADA, CITY MANAGER MAY 6, 2019 COUNCIL MEETING ~ ~--M-ay_6_,_2_01~9---3 lZIReceived Before Meeting SUBJECT: AGENDA ITEM NUMBER 3: JOINT STUDY SESSION OF THE CITY COUNCILS OF PALO ALTO, MENLO PARK AND EAST PALO ALTO REGARDING HOUSING AND OTHER 2019 STATE LEGISLATION To supplement the legislative update from the City of Palo Alto's state advocate, please find attached a brief summary and status update of priority housing legislation. A\.EhlliY' Heather Dauler Intergovernmental Affairs Officer Ed Shikada City Manager 1 of 1 I• Housing Priority Legislation 2019 5/6/2019 (Chiu D) Income taxes: credits low-income housing: farmworker housing. Status: 5/1/2019-Re-referred to Com. on REV. & TAX. Location: 12/3/2018-A. REV. & TAX Desk Polic Fiscal Floor Desk Polic Fiscal Floor CConf. Enrolled Vetoed Chaptered 1st House 2nd House one. Summary: Would, under the law governing the taxation of insurers, the Personal Income Tax Law, and the Corporation Tax Law, for the 2020 to 2024 calendar years, inclusive, would increase the aggregate housing credit dollar amount that may be allocated among low-income housing projects by an additional $500,000,000, as specified, and would allocate to farmworker housing projects $25,000,000 per year of that amount. The bill, under those laws, would modify the definition of applicable percentage relating to qualified low-income buildings to depend on whether the building is a new or existing building and federally subsidized, or a building that is, among other things, at least 15 years old, serving households of very low income or extremely low income, and will complete substantial rehabilitation, as specified. (Chiu D) Community Redevelopment Law of 2019. Status: 4/25/2019-From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 2.) (April 24). Re-referred to Com. on APPR. Location: 4/25/2019-A. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Conf. E 11 d V t d 1st House 2nd House Cone. nro e e oe Chaptered Summary: Current law dissolved redevelopment agencies as of February 1, 2012, and designates successor agencies to act as successor entities to the dissolved redevelopment agencies. This bill, the Community Redevelopment Law of 2019, would authorize a city or county, or two or more cities acting jointly, to propose the formation of an affordable housing and infrastructure agency by adoption of a resolution of intention that meets specified requirements, including that the resolution of intention include a passthrough provision and an override passthrough provision, as defined. (Bloom D) Residential tenancies: rent control. Status: 4/25/2019-Re-referred to Com. on RLS. pursuant to Assembly Rule 96. Location: 4/25/2019-A. RLS. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Conf · Enrolled Vetoed Chaptered 2nd House Cone. 1st House Summary: The Costa-Hawkins Rental Housing Act prescribes statewide limits on the application of local rent control with regard to certain properties. This bill would modify those provisions to authorize an owner of residential real property to establish the initial and all subsequent rental rates for a dwelling or unit that has been issued its first certificate of occupancy within 20 years of the date upon which the owner seeks to establish the initial or subsequent rental rate, or for a dwelling or unit that is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision and the owner is a natural person who owns 10 or fewer residential units within the same jurisdiction as the dwelling or unit for which the owner seeks to establish the initial or subsequent rental rate, subject to certain exceptions. (Ting D) Land use: accessory dwelling units. Status: 4/24/2019-In committee: Set, first hearing. Referred to APPR. suspense file. Location: 4/24/2019-A. APPR. SUSPENSE FILE Desk Polle Fiscal Floor Desk Polic Fiscal Floor Conf. Enrolled Vetoed 1st House 2nd House Cone. Chaptered Summary: The Planning and Zoning Law authorizes a local agency to provide, by ordinance, for the creation of accessory dwelling units in single-family and multifamily residential zones and sets forth required ordinance standards, including, among others, lot coverage. This bill would delete the provision authorizing the imposition of standards on lot coverage and would prohibit an ordinance from imposing requirements on minimum lot size. (Ting D) Land use: accessory dwelling units. Status: 4/24/2019-In committee: Set, first hearing. Referred to APPR. suspense file. Location: 4/24/2019-A. APPR. SUSPENSE FILE Desk Polic Fiscal Floor Desk Polic Fiscal Floor Conf. E 11 d V t d 1st House 2nd House Cone. nro e e oe Chaptered Summary: Current law requires the Department of Housing and Community Development to propose building standards to the California Building Standards Commission, and to adopt, amend, or repeal rules and regulations governing, among other things, apartment houses and dwellings, as specified. Page 115 This bill would require the department to propose small home building standards governing accessory dwelling units smaller than 800 square feet, junior accessory dwelling units, and detached dwelling units smaller than 800 square feet, as specified, and to submit the small home building standards to the California Building Standards Commission for adoption on or before January 1, 2021. AB 1481 (Bonta D) Tenancy termination: just cause. Status: 5/1/2019-Read second time. Ordered to third reading. Location: 5/1/2019-A. THIRD READING Desk Polic Fiscal Floor Desk Polic Fiscal Floor Conf. Enrolled Vetoed 1st House 2nd House Cone. Chaptered Summary: Would, with certain exceptions, prohibit a lessor of residential property from terminating the lease without just cause, as defined, stated in the written notice to terminate. AB 1482 (Chiu D) Tenancy: rent caps. Status: 4/25/2019-From committee: Do pass and re-refer to Com. on APPR. (Ayes 6. Noes 1.) (April 25). Re-referred to Com. on APPR. Location: 4/25/2019-A. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Conf. Enrolled Vetoed 1st House 2nd House Cone. Chaptered Summary: Would prohibit an owner of residential real property from increasing the rental rate for that property in an amount that is greater than 5% plus the percentage change in the cost of living, as defined, more than the lowest rental rate in effect for the immediately preceding 12 months, subject to specified conditions. The bill would exempt from these provisions deed-restricted affordable housing, dormitories, and housing subject to a local ordinance that imposes a more restrictive rent increase cap than these provisions. AB 1483 (Grayson D) Housing data: collection and reporting. Status: 4/30/2019-Re-referred to Com. on APPR. Location: 4/29/2019-A. APPR. Desk P~I~~ H:~:~al Floor Desk P;~~ H~~~=I Floor ~~~~·. Enrolled Vetoed Chaptered Summary: The Planning and Zoning Law requires the planning agency of a city or county to provide by April 1 of each year an annual report to, among other entities, the Department of Housing and Community Development (department) that includes, among other specified information, the number of net new units of housing that have been issued a completed entitlement, a building permit, or a certificate of occupancy, thus far in the housing element cycle, as provided. This bill would authorize the department to require a planning agency to include in that annual report specified additional information that this bill would require, as specified. AB 1484 (Grayson D) Mitigation Fee Act: housing developments. Status: 4/25/2019-From committee: Do pass and re-refer to Com. on APPR. (Ayes 8. Noes 0.) (April 24). Re-referred to Com. on APPR. Location: 4/25/2019-A. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Conf. Enrolled Vetoed 1st House 2nd House Cone. Chaptered Summary: The Mitigation Fee Act requires a local agency that establishes, increases, or imposes a fee as a condition of approval of a development project to, among other things, determine a reasonable relationship between the fee's use and the type of development project on which the fee is imposed.This bill would require each city, county, or city and county to post on its internet website the type and amount of each fee imposed on a housing development project, as defined. AB 1485 (Wicks D) Housing development: streamlining. Status: 4/29/2019-Read second time. Ordered to third reading. Location: 4/29/2019-A. THIRD READING Desk Polic Fiscal Floor Desk Polic Fiscal Floor Conf. Enrolled Vetoed Chaptered 1st House 2nd House Cone. Summary: The Planning and Zoning Law requires that a development be subject to a requirement mandating a minimum percentage of below market rate housing based on one of 3 specified conditions. Current law requires, among those conditions, a development to dedicate a minimum of 10% of the total number of units to housing affordable to households making below 80% of the area median income, if the project contains more than 10 units of housing and the locality did not timely submit its latest production report to the Department of Housing and Community Development, or that production report reflects that there were fewer units of above moderate-income housing issued building permits than were required for the regional housing needs assessment cycle for that reporting period. This bill would modify that condition to authorize a development to instead dedicate 20% of the total number of units to housing affordable to households making below 120% of the area median Page 2/5 income with the average income of the units at or below 100% of the area median income, except as provided. AB 1486 (Ting D) Local agencies: surplus land. Status: 4/25/2019-Coauthors revised. From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 1.) (April 24). Re-referred to Com. on APPR. Location: 4/24/2019-A. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor CConf. Enrolled Vetoed Chaptered 1st House 2nd House one. Summary: Current law prescribes requirements for the disposal of surplus land by a local agency. Current law defines "local agency" for these purposes as every city, county, city and county, and district, including school districts of any kind or class, empowered to acquire and hold real property. This bill would expand the definition of "local agency" to include sewer, water, utility, and local and regional park districts, joint powers authorities, successor agencies to former redevelopment agencies, housing authorities, and other political subdivisions of this state and any instrumentality thereof that is empowered to acquire and hold real property, thereby requiring these entities to comply with these requirements for the disposal of surplus land. The bill would specify that the term "district" includes all districts within the state, and that this change is declaratory of existing law. AB 1487 (Chiu D) San Francisco Bay area: housing development: financing. Status: 4/30/2019-Re-referred to Com. on APPR. Location: 4/29/2019-A. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor CConf. Enrolled Vetoed Chaptered 1st House 2nd House one. Summary: Current law provides for the establishment of various special districts that may support and finance housing development, including affordable housing special beneficiary districts that are authorized to promote affordable housing development with certain property tax revenues that a city or county would otherwise be entitled to receive. This bill, the San Francisco Bay Area Regional Housing Finance Act, would establish the Housing Alliance for the Bay Area (hereafter the entity) and would state that the entity's purpose is to increase affordable housing in the San Francisco Bay area, as defined, by providing for enhanced funding and technical assistance at a regional level for tenant protection, affordable housing preservation, and new affordable housing production. AB 1706 (Quirk D) Housing development: incentives. Status: 4/26/2019-Failed Deadline pursuant to Rule 61(a)(2). (Last location was H. & C.D. on 3/25/2019){May be acted upon Jan 2020) Location: 4/26/2019-A. 2 YEAR Desk 2 ear Fiscal Floor Desk Polic Fiscal Floor Conf 1st House 2nd House Cone·. Enrolled Vetoed Chaptered Summary: Would, until January 1, 2035, provide specified financial incentives that ensure financial feasibility to a development proponent of a residential housing development in the 9-county San Francisco Bay area region that dedicates at least 20% of the development's housing units to households making no more than 150% of the area median income. The Incentives provided to those developments include an exemption from the California Environmental Quality Act, a density bonus of 35%, a waiver of local parking requirements, and a waiver of physical building requirements imposed on development by the local agency, such as green building standards. (Aguiar-Currv D) Local government financing: affordable housing and public infrastructure: voter approval. Status: 4/24/2019-In committee: Set, first hearing. Referred to APPR. suspense file. Location: 4/24/2019-A. APPR. SUSPENSE FILE Desk Polle Fiscal Floor Desk Polic Fiscal Floor Conf. E 11 d V t d 1st House 2nd House Cone. nro e e oe Chaptered Summary: The California Constitution prohibits the ad valorem tax rate on real property from exceeding 1 % of the full cash value of the property, subject to certain exceptions. This measure would create an additional exception to the 1% limit that would authorize a city, county, city and county, or special district to levy an ad valorem tax to service bonded indebtedness Incurred to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure, affordable housing, or permanent supportive housing, or the acquisition or lease of real property for those purposes, if the proposition proposing that tax is approved by 55% of the voters of the city, county, or city and county, as applicable, and the proposition includes specified accountability requirements. SB 4 (McGuire D) Housing. Status: 4/26/2019-Failed Deadline pursuant to Rule 61(a)(2). (Last location was GOV. & F. on 4/2/2019) (May be acted upon Jan 2020) Location: 4/26/2019-S. 2 YEAR Page 3/5 SB 330 Desk 2 ear Fiscal Floor Desk Polic Fiscal Floor Conf. Enrolled Vetoed Cha tered 1st House 2nd House Cone. P Summary: Would authorize a development proponent of a neighborhood multifamily project or eligible transit-oriented development (TOD} project located on an eligible parcel to submit an application for a streamlined, ministerial approval process that is not subject to a conditional use permit. The bill would define a "neighborhood multifamily project" to mean a project to construct a multifamily unit of up to 2 residential dwelling units in a nonurban community, as defined, or up to 4 residential dwelling units in an urban community, as defined, that meets local height, setback, and lot coverage zoning requirements as they existed on July 1, 2019. (Beall D) Affordable Housing and Community Development Investment Program. Status: 4/29/2019-April 29 hearing: Placed on APPR. suspense file. Location: 4/29/2019-S. APPR. SUSPENSE FILE Desk Polic Fiscal Floor Desk Polic Fiscal Floor Cont. Enrolled Vetoed 1st House 2nd House Cone. Chaptered Summary: Would establish in state government the Affordable Housing and Community Development Investment Program, which would be administered by the Affordable Housing and Community Development Investment Committee. The bill would authorize a city, county, city and county, joint powers agency, enhanced infrastructure financing district, affordable housing authority, community revitalization and investment authority, transit village development district, or a combination of those entities, to apply to the Affordable Housing and Community Development Investment Committee to participate in the program and would authorize the committee to approve or deny plans for projects meeting specific criteria. (Wieckowski D) Accessory dwelling units. Status: 4/26/2019-Set for hearing May 6. Location: 4/10/2019-S. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Cont. Enrolled Vetoed Chaptered 1st House 2nd House Cone. Summary: Would authorize the creation of accessory dwelling units in areas zoned to allow single- family or multifamily dwelling use. The bill would also revise the requirements for an accessory dwelling unit by providing that the accessory dwelling unit may be attached to, or located within, an attached garage, storage area, or other structure, and that it does not exceed a specified amount of total floor area. (Skinner D) Keep Californians Housed Act. Status: 4/30/2019-Read second time and amended. Re-referred to Com. on APPR. Location: 4/30/2019-S. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Cont. Enrolled Vetoed Chaptered 1st House 2nd House Cone. Summary: Current law establishes the Department of Consumer Affairs (DCA) under the control of a civil executive officer known as the Director of Consumer Affairs. Current law requires, among other things, that the director provide for the establishment of a comprehensive library of books, documents, studies, and other materials relating to consumers and consumer problems. This bill, no later than January 1, 2021, would require DCA to publish on its internet website, and to biannually update, a guide to all state laws pertaining to landlords and the landlord-tenant relationship. (Wiener D) Planning and zoning: housing development: incentives. Status: 5/1/2019-Read second time and amended. Re-referred to Com. on APPR. Location: 4/24/2019-S. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Cont. Enrolled Vetoed Chaptered 1st House 2nd House Cone. Summary: Would authorize a development proponent of a neighborhood multifamily project located on an eligible parcel to submit an application for a streamlined, ministerial approval process that is not subject to a conditional use permit. The bill would define a "neighborhood multifamily project" to mean a project to construct a multifamily structure on vacant land, or to convert an existing structure that does not require substantial exterior alteration into a multifamily structure, consisting of up to 4 residential dwelling units and that meets local height, setback, and lot coverage zoning requirements as they existed on July 1, 2019. (Skinner D) Housing Crisis Act of 2019. Status: 4/24/2019-Read second time and amended. Re-referred to Com. on APPR. Location: 4/24/2019-S. APPR. Desk Polic Fiscal Floor Desk Polic Fiscal Floor Cont. Enrolled Vetoed Chaptered 1st House 2nd House Cone. Page 4/5 Summary: The The Housing Accountability Act requires a local agency that proposes to disapprove a housing development project that complies with applicable, objective general plan and zoning standards and criteria that were in effect at the time the application was deemed to be complete, or to approve it on the condition that it be developed at a lower density, to base its decision upon written findings supported by substantial evidence on the record that specified conditions exist, and places the burden of proof on the local agency to that effect. The act requires a court to impose a fine on a local agency under certain circumstances and requires that the fine be at least $10,000 per housing unit in the housing development project on the date the application was deemed complete. This bill would, until January 1, 2030, specify that an application is deemed complete for these purposes if a complete Initial application was submitted, as specified. Total Measures: 20 Total Tracking Forms: 380 Page 5/5 City of Palo Alto (ID # 10244) City Council Staff Report Report Type: Study Session Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Joint Study Session with the Parks and Recreation Commission Title: Joint Study Session with the Parks and Recreation Commission From: City Manager Lead Department: Community Services Below are the topics of discussion for the joint study session with the Parks and Recreation Commission. 1) 2018 Highlights and Accomplishments a. Recreation b. Parks c. Open Space d. Capital Improvement Projects e. Partnerships 2) 2019 Priorities a. Capital Improvement/Master Plan Projects b. Parks Projects c. Recreation Opportunities d. Community Services Department Projects 3) Challenges CITY OF PALO ALTO OFFICE OF THE CITY CLERK May 6, 2019 The Honorable City Council Attention: Finance Committee Palo Alto, California Approval of Action Minutes for the April 15 and April 22, 2019 Council Meetings Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS: • Attachment A: 04-15-2019 DRAFT Action Minutes (PDF) • Attachment B: 04-22-2019 DRAFT Action Minutes (PDF) Department Head: Beth Minor, City Clerk Page 2 CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 7 Special Meeting April 15, 2019 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:04 P.M. Present: Cormack, DuBois, Filseth, Fine, Kniss, Kou, Tanaka arrived at 5:21 P.M. Absent: Study Session 1. Annual Earth Day Report Study Session. NO ACTION TAKEN Agenda Changes, Additions and Deletions None. Minutes Approval 2. Approval of Action Minutes for the April 1, 2019 Council Meeting. MOTION: Council Member Kniss moved, seconded by Vice Mayor Fine to approve the Action Minutes for the April 1, 2019 Council Meeting. MOTION PASSED: 7-0 Consent Calendar MOTION: Council Member Kniss moved, seconded by Mayor Filseth to pull Agenda Item Number 5- “Approval and Authorization for the City Manager or his Designee to Execute Utility Program Services Contract…” to be heard on April 22, 2019. MOTION PASSED: 7-0 MOTION: Council Member DuBois moved, seconded by Council Member Kou, third by Council Member Cormack to pull Agenda Item Number 4- “Selection of Applicants to Interview on April 29, 2019 for one Position on the Architectural Review Board…” to be heard tonight as Agenda Item Number 5A. DRAFT ACTION MINUTES Page 2 of 7 City Council Meeting Draft Action Minutes: 04/15/2019 MOTION: Vice Mayor Fine moved, seconded by Mayor Filseth to approve Agenda Item Number 3. 3. Approval of a Professional Services Agreement With Professional Meters, Inc. in the Amount of $483,722 Over a 12-Month Period to Perform a Comprehensive Utility Meter Field Survey of all Electric, Gas, and Water Meters in the Field, Including $48,372 for Additional Services, for a Total Not-to-Exceed Amount of $532,094; and Approval of Budget Amendments in the Electric Fund, Gas Fund, and Water Fund. 4. Selection of Applicants to Interview on April 29, 2019 for one Position on the Architectural Review Board, two Positions on the Human Relations Commission, two Positions on the Library Advisory Commission, Three Positions on the Storm Water Management Oversight Committee, and Four Positions on the Utilities Advisory Commission. 5. Approval and Authorization for the City Manager or his Designee to Execute Utility Program Services Contract Number C19171513 With CLEAResult Consulting, Inc. for a Total Compensation of $737,000 and a Maximum Term of Five Years. MOTION PASSED FOR AGENDA ITEM NUMBER 3: 7-0 Action Items 5A. (Former Agenda Item Number 4) Selection of Applicants to Interview on April 29, 2019 for one Position on the Architectural Review Board, two Positions on the Human Relations Commission, two Positions on the Library Advisory Commission, Three Positions on the Storm Water Management Oversight Committee, and Four Positions on the Utilities Advisory Commission. MOTION: Council Member DuBois moved, seconded by Council Member Kou to: A. Interview all applicants, excluding the candidate for the Architectural Review Board (ARB); and B. Re-open the recruitment for the Architectural Review Board. MOTION PASSED: 7-0 6. PUBLIC HEARING / QUASI-JUDICIAL: 190 Channing Avenue [18PLN-00274]: Request for Approval of a Vesting Tentative Map to Allow for Four Residential Condominium Units and two Office Units on DRAFT ACTION MINUTES Page 3 of 7 City Council Meeting Draft Action Minutes: 04/15/2019 One Parcel. Environmental Assessment: The Project is Exempt From the California Environmental Quality Act (CEQA) in Accordance With CEQA Guidelines Section 15315 (Minor Land Divisions). Zoning District: RT-35 SOFA II CAP (Residential Transition). Public Hearing opened at 6:40 P.M. Public Hearing closed at 6:43 P.M. MOTION: Council Member Kniss moved, seconded by Council Member DuBois to: A. Find the project is exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15315, Minor Land Divisions; and B. Approve the Vesting Tentative Map based on findings and subject to conditions of approval in the Draft Record of Land Use Action (RLUA). MOTION PASSED: 7-0 Council took a break at 6:49 P.M. and returned at 7:17 P.M. 7. PUBLIC HEARING: Adoption of an Ordinance Amending Section 18.42.110 (Wireless Communication Facilities) of Chapter 18.42 (Standards for Special Uses) of Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC) to Update the Code to Reflect Recently Adopted Federal Communications Commission (FCC) Regulations. The Planning and Transportation Commission Recommended Approval of the Ordinance With Minor Modifications on March 27, 2019 (6-0 Roohparvar absent); and Adoption of a Resolution 9825 Entitled “Adopting Objective Aesthetic and Related Standards for Streetlight and Wood Utility Poles in the Public Rights of Way. Environmental Assessment: This Ordinance and Resolution are Exempt From Environmental Review Under the California Environmental Quality Act (CEQA) Guidelines Sections 15061(b)(3) and 15305.” Public Hearing opened at 7:38 P.M. Public Hearing closed at 8:40 P.M. MOTION: Council Member DuBois moved, seconded by Council Member Kniss to: A. Adopt the Staff recommendation to approve the Resolution and an interim Ordinance; DRAFT ACTION MINUTES Page 4 of 7 City Council Meeting Draft Action Minutes: 04/15/2019 B. Direct Staff to come back as soon as possible, but no more than six months, with an updated Ordinance that includes: i. An explicit hierarchy of preferred location and preferred type of installation. Applicants must use most preferred solution unless demonstrated to be infeasible. Preferred hierarchy should include: a. by zoning type; b. local context including characteristics such as visibility, street size and type, and existing foliage; c. by installation type; d. a clear definition infeasibility as suggested in the Staff Report; ii. Define objective standards for underground vaults and for buildings; iii. Create list of city-owned buildings that would be appropriate sites; iv. Identify any private buildings that are appropriate sites in the midst of residential neighborhoods and approach for willingness to be on recommended list; v. Architectural Review Board (ARB) and Staff to have workshop to create additional acceptable Wireless Communications Facilities (WCF) designs such as integrated street pole approaches; vi. Propose recommended distances from homes and schools and between installations to preserve aesthetics; vii. Add a maintenance clause that includes damage, changes to appearance, paint, graffiti, rust, etc.; viii. Strengthen the Replacement/Upgrade clause to include that replacement will be evaluated, at a minimum, when repairs are being made or a unit is being upgraded; ix. Specify a higher price for street poles if FCC regulations are invalidate; and C. Review the effectiveness of the Ordinance in one year with Council. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to remove from the Motion Parts B. ii., B. iv., B. v., B. vii., B. viii., and B. ix. DRAFT ACTION MINUTES Page 5 of 7 City Council Meeting Draft Action Minutes: 04/15/2019 MOTION AS AMENDED RESTATED: Council Member DuBois moved, seconded by Council Member Kniss to: A. Adopt the Staff recommendation to approve the Resolution and an interim Ordinance; B. Direct Staff to come back as soon as possible, but no more than six months, with an updated Ordinance that includes: i. An explicit hierarchy of preferred location and preferred type of installation. Applicants must use most preferred solution unless demonstrated to be infeasible. Preferred hierarchy should include: a. by zoning type; b. local context including characteristics such as visibility, street size and type, and existing foliage; c. by installation type; d. a clear definition infeasibility as suggested in the Staff Report; ii. Create list of city-owned buildings that would be appropriate sites; iii. Propose recommended distances from homes and schools and between installations to preserve aesthetics; C. Review the effectiveness of the Ordinance in one year with Council. AMENDMENT: Council Member Kou moved, seconded by Council Member DuBois to return to Council within six months with best practices regarding inspections of antennas. AMENDMENT PASSED: 5-1 Kniss no, Tanaka absent INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion “Direct Staff to do federal legislative advocacy related to wireless facilities regulations.” INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to make the word “hierarchy” plural in the Motion Part B. i. AMENDMENT: Vice Mayor Fine moved, seconded by Mayor Filseth to amend the timeline to return to Council within one year. DRAFT ACTION MINUTES Page 6 of 7 City Council Meeting Draft Action Minutes: 04/15/2019 AMENDMENT PASSED: 4-2 DuBois, Kou no, Tanaka absent INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to remove from the Motion Part A the word “interim,” and change the Motion Part B to state “…an updated Ordinance/Resolution that considers.” MOTION AS AMENDED RESTATED: Council Member DuBois moved, seconded by Council Member Kniss to: A. Adopt Staff recommendation to approve the Resolution and Ordinance; B. Direct Staff to come back as soon as possible, but no more than one year, with an updated Ordinance/Resolution that considers: i. Explicit hierarchies of preferred location and preferred type of installation. Applicants must use most preferred solution unless demonstrated to be infeasible. Preferred hierarchies should include: a. by zoning type; b. local context including characteristics such as visibility, street size and type, and existing foliage; c. by installation type; d. a clear definition infeasibility as suggested in Staff Report; ii. Create list of city-owned buildings that would be appropriate sites; iii. Propose recommended distances from homes and schools and between installations to preserve aesthetics; iv. Return to Council within one year with best practices regarding inspections of antennas; C. Review the effectiveness of the Ordinance in one year with Council; and D. Direct Staff to do federal legislative advocacy related to wireless facilities regulations. MOTION AS AMENDED PASSED: 6-0 Tanaka absent State/Federal Legislation Update/Action Council took a break at 10:12 P.M. and returned at 10:21 P.M. DRAFT ACTION MINUTES Page 7 of 7 City Council Meeting Draft Action Minutes: 04/15/2019 8. Colleagues Memo on the Santa Clara County Cities Association’s Position on Housing in Relation to State Legislative Initiatives. MOTION: Mayor Filseth moved, seconded by Council Member Kou to: A. Support the Santa Clara County Cities Association’s Position Paper on housing; and B. Communicate accordingly on legislation unless specified. MOTION PASSED: 4-2 Fine, Kniss no, Tanaka absent Adjournment: The meeting was adjourned at 11:07 P.M. CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 8 Special Meeting April 22, 2019 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:01 P.M. Present: Cormack, DuBois, Filseth, Fine, Kniss, Kou, Tanaka Absent: Closed Session 1. CONFERENCE WITH CITY ATTORNEY-EXISTING LITIGATION Santa Clara County Superior Court, Case No. 16CV300760 (One Case, as Defendant) –Miriam Green v. City of Palo Alto Authority: Government Code Section 54956.9(d)(1). MOTION: Council Member Cormack moved, seconded by Vice Mayor Fine to go into Closed Session. MOTION PASSED: 6-0 Kniss absent Council went into Closed Session at 5:02 P.M. Council returned from Closed Session at 6:00 P.M. Mayor Filseth announced no reportable action. Special Orders of the Day 2. Resolution 9826 Entitled “Resolution of the Council of the City of Palo Alto Expressing Appreciation to Stacey Henderson Upon her Retirement.” MOTION: Council Member Kniss moved, seconded by Council Member Cormack to approve a Resolution expressing appreciation to Stacey Henderson upon her retirement. MOTION PASSED: 7-0 DRAFT ACTION MINUTES Page 2 of 8 City Council Meeting Draft Action Minutes: 04//22/2019 Study Session 3. Presentation of the City Manager's Proposed Fiscal Year (FY) 2019/20 Budget NO ACTION TAKEN Agenda Changes, Additions and Deletions MOTION: Council Member Kniss moved, seconded by Vice Mayor Fine to move “State/Federal Legislation Update/Action” forward, to be heard at this time. MOTION PASSED: 7-0 State/Federal Legislation Update/Action NO ACTION TAKEN Minutes Approval 4. Approval of Action Minutes for the April 8, 2019 Council Meeting. MOTION: Vice Mayor Fine moved, seconded by Mayor Filseth to approve the Action Minutes for the April 8, 2019 Council Meeting. MOTION PASSED: 7-0 Consent Calendar Council Member Kou registered a no vote on Agenda Item Number 11. MOTION: Council Member Kniss moved, seconded by Mayor Filseth to approve Agenda Item Numbers 5-11. 5. Resolution 9827 Entitled, “Resolution of the Council of the City of Palo Alto Amending the City of Palo Alto's Deferred Compensation Plan for Regular Employees, and Incorporating an Employer Contribution Provision and Loan Provision by Adoption of the Amended Deferred Compensation Plan and Trust Document.” 6. Approval of Amendment Number 3 to Contract Number C16158064 With BKF Engineers to Extend the Term to June 30, 2019 and Increase Compensation by $44,885 for a Maximum Not-to-Exceed Amount of $583,432 for Additional Design Services Related to the Embarcadero Road at El Camino Real Intersection Improvements Project (PL-15001). DRAFT ACTION MINUTES Page 3 of 8 City Council Meeting Draft Action Minutes: 04//22/2019 7. Approval of Amendment Number 2 to Contract Number S17167994 With MuniServices, LLC for Sales Tax Consulting Services to Increase the Amount by $40,000 for a new Not-to-Exceed Amount of $125,000 and to Extend the Term Through August 31, 2019. 8. Adoption of a Memorandum of Agreement Between the City of Palo Alto and Service Employees International Union (SEIU) Local 521. 9. Finance Committee Recommends the City Council Approve the 2019 Workplan to Address the City Council Priority, “Fiscal Sustainability”; and Review an Update Regarding the Fiscal Year (FY) 2019 Adopted Budget Referral to Identify $4 Million in General Fund Savings. 10. Ordinance 5461 Entitled “Ordinance of the Council of the City of Palo Alto Amending the Setback Map of the City of Palo Alto to Eliminate the 50-foot Special Setback Along Hansen Way for 3200 El Camino Real.” (FIRST READING: April 1, 2019 PASSED: 7-0).” 11. Ordinance 5462 Entitled “Ordinance of the Council of the City of Palo Alto Amending Section 18.18.120 (Grandfathered Uses and Facilities) of the Palo Alto Municipal Code to Adjust Regulations Pertaining to Noncomplying Facilities. California Environmental Quality Act (CEQA): This Ordinance is Within the Scope of the Comprehensive Plan. Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720; the Ordinance is Also Exempt From Environmental Review Under CEQA Guidelines Sections 15061(b)(3) and 15305.” (FIRST READING: April 1, 2019 PASSED: 6-1 Kou no).” MOTION PASSED FOR AGENDA ITEM NUMBERS 5-10: 7-0 MOTION PASSED FOR AGENDA ITEM NUMBER 11: 6-1 Kou no Council took at break at 7:22 P.M. and returned at 7:33 P.M. Action Items 12. PUBLIC HEARING: Adoption of an Ordinance Amending Title 16 of the Palo Alto Municipal Code to Modify and Increase the Citywide Transportation Impact Fee (Chapter 16.59) and Suspend Application of the Existing Area-specific Transportation Impact Fees for the Stanford Research Park/El Camino Real CS Zone (Chapter 16.45) and the San Antonio/West Bayshore Area (Chapter 16.46), and Amending the Municipal Fee Schedule to Update the City’s Transportation Impact Fees in Accordance With These Changes, all in Furtherance of Implementation DRAFT ACTION MINUTES Page 4 of 8 City Council Meeting Draft Action Minutes: 04//22/2019 of the Comprehensive Plan. The Citywide Transportation Impact Fee is a One-time fee on new Development and Redevelopment Throughout Palo Alto to Fund Transportation Improvements to Accommodate and Mitigate the Impacts of Future Development in the City. This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720. Public Hearing opened and closed without public comment at 7:42 P.M. MOTION: Council Member DuBois moved, seconded by Council Member Kou to: A. Find the Ordinance to be within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution Number 9720; B. Accept the Transportation Impact Fee (TIF) Nexus Study and adopt the Ordinance modifying and increasing the Citywide Transportation Impact Fee, clarifying the updated TIF exemptions, suspending collection of two area-specific transportation impact fees, and amending the Fiscal Year 2019 Municipal Fee Schedule; and C. Direct Staff to evaluate changing the metric for the fee assessment to be charged based on square footage, add back exemption for City and Public buildings, and bring this back to Council. SUBSTITUTE MOTION: Vice Mayor Fine moved, seconded by Council Member Kniss to: A. Find the Ordinance to be within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution Number 9720; B. Accept the Transportation Impact Fee (TIF) Nexus Study and adopt the Ordinance modifying and increasing the Citywide Transportation Impact Fee, clarifying the updated TIF exemptions, including the addition of an exemption for public buildings, suspending collection of two area- specific transportation impact fees, and amending the Fiscal Year 2019 Municipal Fee Schedule. INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, Part B. “…schools and all ADUs…” DRAFT ACTION MINUTES Page 5 of 8 City Council Meeting Draft Action Minutes: 04//22/2019 INCORPORATED INTO THE SUBSTITUTE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “Amend the Ordinance Section 16.59.020 (h) to state ‘…gross floor area, or involves a change in use that requires a Use and Occupancy Permit.’” SUBSTITUTE MOTION AS AMENDED: Vice Mayor Fine moved, seconded by Council Member Kniss to: A. Find the Ordinance to be within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution Number 9720; B. Accept the Transportation Impact Fee (TIF) Nexus Study and adopt the Ordinance modifying and increasing the Citywide Transportation Impact Fee, clarifying the updated TIF exemptions, including the addition of an exemption for public buildings, schools and all ADUs, suspending collection of two area-specific transportation impact fees, and amending the Fiscal Year 2019 Municipal Fee Schedule; and C. Amend the Ordinance Section 16.59.020 (h) to state “…gross floor area, or involves a change in use that requires a Use and Occupancy Permit.” SUBSTITUTE MOTION AS AMENDED PASSED: 5-2 DuBois, Kou no 13. Approval of a Workplan for Potential Revenue Generating Proposals, Including Consideration of a Ballot Measure, in Support of the 2019 Fiscal Sustainability Council Priority. MOTION: Mayor Filseth moved, seconded by Vice Mayor Fine to approve the draft workplan for addressing elements M and N of the 2019 Fiscal Sustainability Workplan. AMENDMENT: Council Member Tanaka moved, seconded by Council Member XX to add to the Motion “The money from the business tax would go to solving transportation and parking issues.” AMENDMENT FAILED DUE TO THE LACK OF A SECOND AMENDMENT: Council Member Tanaka moved, seconded by Council Member XX to add to the Motion “Create a stakeholder group to be made up of primarily business owners.” AMENDMENT FAILED DUE TO THE LACK OF A SECOND MOTION PASSED: 6-1 Tanaka no DRAFT ACTION MINUTES Page 6 of 8 City Council Meeting Draft Action Minutes: 04//22/2019 Council took a break at 9:35 P.M. and returned at 9:44 P.M. 14. Connecting Palo Alto Work Plan for Selection of Preferred Solutions to Rail Grade Separation Needs: Approval of Structure and Membership of an Expanded Community Working Group, Work Plan, and Revisions to Alternatives for Further Study; and Direction to Staff to Return to Council With Associated AECOM Contract Amendment. Mayor Filseth advised he will not participate in this Agenda Item because he lives within 500 feet of the Caltrain right of way. He left the meeting at 9:35 P.M. Council Member Kniss advised she will not participate in this Agenda Item because she has a real property interest within 500 feet of Caltrain right of way. She left the meeting at 9:35 P.M. MOTION: Vice Mayor Fine moved, seconded by Council Member Cormack to: A. Approve the Rail Grade Separation Work Plan as a follow up to the March 18th Committee of the Whole recommendation including a timeline and process by which the City Council would select a preferred solution to begin environmental review; B. Approve Alternatives to be studied by the Community Working Group; and C. Direct Staff to return to Council with an amendment to contract C18171057 with AECOM to reflect scope changes and extension to October 2019 for Council selection of a preferred solution. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKOR AND SECONDER to add to the Motion: A. Add more check-ins with Council. Redefine the Working Group (WG) meetings to cover more ground; B. Alternatives: i. Allow the WG to brainstorm some alternatives such as Embarcadero, Palo Alto Avenue, Meadow and Charleston; ii. Remove city-wide tunnel; iii. Minimize viaducts/elevated trains located behind people’s homes; and DRAFT ACTION MINUTES Page 7 of 8 City Council Meeting Draft Action Minutes: 04//22/2019 iv. Consider the trench alternative minimizes construction impacts MOTION AS AMENDED RESTATED: Vice Mayor Fine moved, seconded by Council Member Cormack to: A. Approve the Rail Grade Separation Work Plan as a follow up to the March 18th Committee of the Whole recommendation including a timeline and process by which the City Council would select a preferred solution to begin environmental review; B. Add more check-ins with Council. Redefine the Working Group (WG) meetings to cover more ground; C. Approve Alternatives to be studied by the Community Working Group including: i. Allow the WG to brainstorm some alternatives such as Embarcadero, Palo Alto Avenue, Meadow and Charleston; ii. Remove city-wide tunnel; iii. Minimize viaducts/elevated trains located behind people’s homes; and iv. Consider the trench alternative minimizes construction impacts D. Direct Staff to return to Council with an amendment to contract C18171057 with AECOM to reflect scope changes and extension to October 2019 for Council selection of a preferred solution. INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND SECONDER to delete Part C. iii. from the Motion. INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND SECONDER to remove from the Motion Part C. i. “Palo Alto Avenue.” INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND SECONDER to remove from the Motion Part C. “…by the Community Working Group…” AMENDMENT: Council Member Tanaka moved, seconded by Council Member Kou to remove Part C. ii. from the Motion. DRAFT ACTION MINUTES Page 8 of 8 City Council Meeting Draft Action Minutes: 04//22/2019 INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND SECONDER to minimize viaducts/elevated trains located behind people’s homes. AMENDMENT WITHDRAWN BY THE MAKER INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND SECONDER to remove from the Motion Part C. ii and add to the Motion “Direct Staff to return to Council with an update on the city-wide tunnel.” INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND SECONDER to amend the Motion Part C. ii. to change the word “consider” to “ensure.” MOTION AS AMENDED: Vice Mayor Fine moved, seconded by Council Member Cormack to: A. Approve the Rail Grade Separation Work Plan as a follow up to the March 18th Committee of the Whole recommendation including a timeline and process by which the City Council would select a preferred solution to begin environmental review; B. Add more check-ins with Council. Redefine the Community Working Group (WG) meetings to cover more ground; C. Approve Additional Alternatives to be studied including: i. Allow WG to brainstorm some alternatives such as Embarcadero, Meadow and Charleston; ii. Ensure the trench alternative minimizes construction impacts; D. Direct Staff to return to Council with an amendment to contract C18171057 with AECOM to reflect scope changes and extension to October 2019 for Council selection of a preferred solution; and E. Direct Staff to return to Council with an update on the citywide tunnel. MOTION PASSED: 5-0 Filseth, Kniss recused Adjournment: The meeting was adjourned at 11:51 P.M. City of Palo Alto (ID # 10140) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: FY 2019 Street Resurfacing Project Title: Approval of Contract C19174560 with R&S Construction Management, Inc. in the Amount of $2,421,544 for the FY 2019 Street Resurfacing Project, Capital Improvements Program Projects PE-86070, and PE-09003 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract with R&S Construction Management, Inc. (Attachment A) in an amount not to exceed $2,421,544 for Palo Alto FY 2019 Street Resurfacing Project (PE-86070) and City Facility Parking Lot Maintenance Project (PE-09003); 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with R&S Construction Management, Inc. for related, additional but unforeseen work that may develop during the project, the total value of which shall not exceed $242,154 Background Public Works Engineering Services Division manages construction contracts for concrete repair, preventive maintenance, resurfacing and reconstruction of various City streets annually. In more recent years, additional Capital Improvement Program (CIP) projects are being built through the annualized resurfacing contracts due to the complexity of construction and benefit of being included in a larger project. The candidate streets are surveyed biennially by Public Works Engineering staff and rated by a computerized pavement maintenance management system (PMMS) and by the Metropolitan Transportation Commission’s (MTC) pavement analysis program. All streets have been coordinated with the City’s Utilities Department and Office of Transportation to minimize the cutting of newly resurfaced streets. Extensive public outreach will be conducted before and during the construction phase to keep the community informed CITY OF PALO ALTO City of Palo Alto Page 2 throughout the process, including flyers sent to adjacent residences and businesses and notices posted online at Nextdoor and the City’s website. Discussion Project Description Staff recommends approval of this street resurfacing contract and implementation this fiscal year as part of an enhanced program to maintain and improve the condition of Palo Alto’s streets. The $2,421,544 expenditure for this contract will be used to repave 3.8 lane miles (over 299,000 square feet) of arterial and residential streets with Pavement Condition Index (PCI) scores averaging 49.5. This will help maintain the City’s PCI average of 85, and will address many streets whose PCI falls below the City’s minimum goal of 60. The scope of work includes the replacement of approximately 3,100 lineal feet (0.59 miles) of curbs and gutters, nearly 4,650 square feet of driveways, and 5,200 square feet of sidewalks. Additionally, 18 new curb ramps will be installed, and 24 existing curb ramps will be retrofitted with truncated domes to conform to the Americans with Disabilities Act (ADA). Driveway repairs and parking lot paving improvements at Palo Alto Fire Station No. 1 are also part of this project. The streets being resurfaced in this contract are shown in Attachment B. One block of Chestnut Avenue between Ash and Birch Streets will be removed from the project pending the City’s potential purchase of the parcel near Boulware Park. Additional maps of the FY 2019 Street Resurfacing Program and current five-year plan for street repaving are available on the Street Maintenance Program homepage located at www.cityofpaloalto.org/streets. Bid Process On January 30, 2019, a notice inviting formal bids (IFB) for the Palo Alto FY 2019 Street Resurfacing Project was posted at the City’s website and sent to 760 builder’s exchanges, consultants, and contractors through the City’s eProcurement system. The bidding period was 20 calendar days. Bids were received from two contractors on February 20, 2019 as listed on the attached Bid Summary (Attachment C). Summary of Bid Process Bid Name/Number Palo Alto FY 2019 Street Resurfacing Project Proposed Length of Project 120 calendar days Number of Bid Packages Downloaded by Builder’s Exchanges 6 Number of Bid Packages Downloaded by Contractors 22 Total Days to Respond to Bid 20 City of Palo Alto Page 3 Pre-Bid Meeting? No Number of Bids Received: 2 Bid Price Range $2,421,544 - $2,544,116 A bid protest was submitted by O’Grady Paving claiming that the low bidder, R&S Construction Management’s bid was not complete. The Chief Procurement Officer reviewed the claim and deemed there was no merit to the claim and that R&S Construction Management’s bid was complete and responsive. Staff has reviewed the bid submitted and recommends the bid of $2,421,544 submitted by R&S Construction Management, Inc be accepted, and R&S Construction Management, Inc. be declared the lowest responsible bidder. The low bid is three percent lower than the engineer’s estimate of $2,494,419. Staff reviewed other similar projects performed by the lowest responsible bidder, R&S Construction Management, and did not find any significant complaints with their previous work. Staff also checked with the Contractor's State License Board and confirmed the contractor has an active license on file. Resource Impact Funding is available in the Street Maintenance Project (PE-86070) and City Facility Parking Lot Maintenance project (PE-09003). The funding allocation is as follows: Funding Source Contract Contingency Total Encumbrance PE-86070 $2,312,585 $231,258 $2,543,843 PE-09003 $108,959 $10,896 $119,855 Total $2,421,544 $242,154 $2,663,698 Policy Implications This project is in conformance with the City of Palo Alto’s Comprehensive Plan and does not represent any changes to existing City policies. Environmental Review Street resurfacing projects are categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301c of the CEQA Guidelines as repair, maintenance and/or minor alteration of existing facilities and no further environmental review is necessary. City of Palo Alto Page 4 Attachments: Attachment A: Contract Attachment B: FY 2019 Project Map Attachment C: Bid Summary Attachments: A: Construction contract B: Project maps C: Bid Summary Invitation for Bid (IFB) Package 1 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT Contract No. C19174560 City of Palo Alto FY 2019 Street Resurfacing Project (CIP: PE-86070) Attachment A CI TY OF PALO ALTO Invitation for Bid (IFB) Package 2 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS…………………………………….…………..6 1.1 Recitals…………………………………………………………………………………………………………………….6 1.2 Definitions……………………………………………………………………………………………………………….6 SECTION 2 THE PROJECT………………………………………………………………………………………………………...6 SECTION 3 THE CONTRACT DOCUMENTS………………………………………………………………………………..7 3.1 List of Documents…………………………………………………………………………………………….........7 3.2 Order of Precedence……………………………………………………………………………………………......7 SECTION 4 CONTRACTOR’S DUTY…………………………………………………………………………………………..8 4.1 Contractor's Duties…………………………………………………………………………………………………..8 SECTION 5 PROJECT TEAM……………………………………………………………………………………………………..8 5.1 Contractor's Co-operation………………………………………………………………………………………..8 SECTION 6 TIME OF COMPLETION…………………………………………………………………………………….......8 6.1 Time Is of Essence…………………………………………………………………………………………………….8 6.2 Commencement of Work…………………………………………………………………………………………8 6.3 Contract Time…………………………………………………………………………………………………………..8 6.4 Liquidated Damages…………………………………………………………………………………………………8 6.4.1 Other Remedies……………………………………………………………………………………………………..9 6.5 Adjustments to Contract Time………………………………………………………………………………….9 SECTION 7 COMPENSATION TO CONTRACTOR……………………………………………………………………….9 7.1 Contract Sum……………………………………………………………………………………………………………9 7.2 Full Compensation……………………………………………………………………………………………………9 SECTION 8 STANDARD OF CARE……………………………………………………………………………………………..9 8.1 Standard of Care…………………………………………………………………………………..…………………9 SECTION 9 INDEMNIFICATION…………………………………………………………………………………………..…10 9.1 Hold Harmless……………………………………………………………………………………………………….10 9.2 Survival…………………………………………………………………………………………………………………10 SECTION 10 NON-DISCRIMINATION……..………………………………………………………………………………10 10.1 Municipal Code Requirement…………….………………………………..……………………………….10 SECTION 11 INSURANCE AND BONDS.…………………………………………………………………………………10 Invitation for Bid (IFB) Package 3 Rev. March 17, 2017 CONSTRUCTION CONTRACT 11.1 Evidence of Coverage…………………………………………………………………………………………..10 SECTION 12 PROHIBITION AGAINST TRANSFERS…………………………………………………………….…11 12.1 Assignment………………………………………………………………………………………………………….11 12.2 Assignment by Law.………………………………………………………………………………………………11 SECTION 13 NOTICES …………………………………………………………………………………………………………….11 13.1 Method of Notice …………………………………………………………………………………………………11 13.2 Notice Recipents ………………………………………………………………………………………………….11 13.3 Change of Address……………………………………………………………………………………………….12 SECTION 14 DEFAULT…………………………………………………………………………………………………………...12 14.1 Notice of Default………………………………………………………………………………………………….12 14.2 Opportunity to Cure Default…………………………………………………………………………………12 SECTION 15 CITY'S RIGHTS AND REMEDIES…………………………………………………………………………..13 15.1 Remedies Upon Default……………………………………………………………………………………….13 15.1.1 Delete Certain Services…………………………………………………………………………………….13 15.1.2 Perform and Withhold……………………………………………………………………………………..13 15.1.3 Suspend The Construction Contract…………………………………………………………………13 15.1.4 Terminate the Construction Contract for Default………………………………………………13 15.1.5 Invoke the Performance Bond………………………………………………………………………….13 15.1.6 Additional Provisions……………………………………………………………………………………….13 15.2 Delays by Sureties……………………………………………………………………………………………….13 15.3 Damages to City…………………………………………………………………………………………………..14 15.3.1 For Contractor's Default…………………………………………………………………………………..14 15.3.2 Compensation for Losses…………………………………………………………………………………14 15.4 Suspension by City……………………………………………………………………………………………….14 15.4.1 Suspension for Convenience……………………………………………………………………………..14 15.4.2 Suspension for Cause………………………………………………………………………………………..14 15.5 Termination Without Cause…………………………………………………………………………………14 15.5.1 Compensation………………………………………………………………………………………………….15 15.5.2 Subcontractors………………………………………………………………………………………………..15 15.6 Contractor’s Duties Upon Termination………………………………………………………………...15 SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES……………………………………………………………16 16.1 Contractor’s Remedies……………………………………..………………………………..………………….16 Invitation for Bid (IFB) Package 4 Rev. March 17, 2017 CONSTRUCTION CONTRACT 16.1.1 For Work Stoppage……………………………………………………………………………………………16 16.1.2 For City's Non-Payment…………………………………………………………………………………….16 16.2 Damages to Contractor………………………………………………………………………………………..16 SECTION 17 ACCOUNTING RECORDS………………………………………………………………………………….…16 17.1 Financial Management and City Access………………………………………………………………..16 17.2 Compliance with City Requests…………………………………………………………………………….17 SECTION 18 INDEPENDENT PARTIES……………………………………………………………………………………..17 18.1 Status of Parties……………………………………………………………………………………………………17 SECTION 19 NUISANCE……………………………………………………………………………………………………….…17 19.1 Nuisance Prohibited……………………………………………………………………………………………..17 SECTION 20 PERMITS AND LICENSES…………………………………………………………………………………….17 20.1 Payment of Fees…………………………………………………………………………………………………..17 SECTION 21 WAIVER…………………………………………………………………………………………………………….17 21.1 Waiver………………………………………………………………………………………………………………….17 SECTION 22 GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS……………………………….18 22.1 Governing Law…………………………………………………………………………………………………….18 22.2 Compliance with Laws…………………………………………………………………………………………18 22.2.1 Palo Alto Minimum Wage Ordinance…………….………………………………………………….18 SECTION 23 COMPLETE AGREEMENT……………………………………………………………………………………18 23.1 Integration………………………………………………………………………………………………………….18 SECTION 24 SURVIVAL OF CONTRACT…………………………………………………………………………………..18 24.1 Survival of Provisions……………………………………………………………………………………………18 SECTION 25 PREVAILING WAGES………………………………………………………………………………………….18 SECTION 26 NON-APPROPRIATION……………………………………………………………………………………….19 26.1 Appropriation………………………………………………………………………………………………………19 SECTION 27 AUTHORITY……………………………………………………………………………………………………….19 27.1 Representation of Parties…………………………………………………………………………………….19 SECTION 28 COUNTERPARTS………………………………………………………………………………………………..19 28.1 Multiple Counterparts………………………………………………………………………………………….19 SECTION 29 SEVERABILITY……………………………………………………………………………………………………19 29.1 Severability………………………………………………………………………………………………………….19 SECTION 30 STATUTORY AND REGULATORY REFERENCES …………………………………………………..19 Invitation for Bid (IFB) Package 5 Rev. March 17, 2017 CONSTRUCTION CONTRACT 30.1 Amendments of Laws…………………………………………………………………………………………..19 SECTION 31 WORKERS’ COMPENSATION CERTIFICATION………………………………………………….….19 31.1 Workers Compensation…………………………………………………………………………………….19 SECTION 32 DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS………………………………..…20 32.1 General Notice to Contractor…………………………………………………………………………….20 32.2 Labor Code section 1771.1(a)…………………………………………………………………………….20 32.3 DIR Registration Required…………………………………………………………………………………20 32.4 Posting of Job Site Notices…………………………………………………………………………………20 32.5 Payroll Records…………………………………………………………………………………………………20 Invitation for Bid (IFB) Package 6 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on May 6, 2019 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and R&S CONSTRUCTION MANAGEMENT, INC. ("Contractor"), is made with reference to the following: R E C I T A L S: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a Corporation duly organized and in good standing in the State of California, Contractor’s License Number 992019 and Department of Industrial Relations Registration Number 1000014068. Contractor represents that it is duly licensed by the State of California and has the background, knowledge, experience and expertise to perform the obligations set forth in this Construction Contract. C. On January 30th, 2019, City issued an Invitation for Bids (IFB) to contractors for the FY 2019 Street Resurfacing Project (“Project”). In response to the IFB, Contractor submitted a Bid. D. City and Contractor desire to enter into this Construction Contract for the Project, and other services as identified in the Contract Documents for the Project upon the following terms and conditions. NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the undersigned parties as follows: SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. 1.1 Recitals. All of the recitals are incorporated herein by reference. 1.2 Definitions. Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General Conditions. If there is a conflict between the definitions in this Construction Contract and in the General Conditions, the definitions in this Construction Contract shall prevail. SECTION 2 THE PROJECT. The Project is the FY2019 Street Resurfacing Project, located at various streets, Palo Alto, CA. 94301 ("Project"). Invitation for Bid (IFB) Package 7 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist of the following documents which are on file with the Purchasing Division and are hereby incorporated by reference. 1) Change Orders 2) Field Orders 3) Contract 4) Bidding Addenda 5) Special Provisions 6) General Conditions 7) Project Plans and Drawings 8) Technical Specifications 9) Instructions to Bidders 10) Invitation for Bids 11) Contractor's Bid/Non-Collusion Declaration 12) Reports listed in the Contract Documents 13) Public Works Department’s Standard Drawings and Specifications (most current version at time of Bid) 14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current version at time of Bid) 15) City of Palo Alto Traffic Control Requirements 16) City of Palo Alto Truck Route Map and Regulations 17) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 18) Performance and Payment Bonds 3.2 Order of Precedence. For the purposes of construing, interpreting and resolving inconsistencies between and among the provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City shall have the sole power to decide which document or provision shall govern as may be in the best interests of the City. Invitation for Bid (IFB) Package 8 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 4 CONTRACTOR’S DUTY. 4.1 Contractor’s Duties Contractor agrees to perform all of the Work required for the Project, as specified in the Contract Documents, all of which are fully incorporated herein. Contractor shall provide, furnish, and supply all things necessary and incidental for the timely performance and completion of the Work, including, but not limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless otherwise specified in the Contract Documents. Contractor also agrees to use its best efforts to complete the Work in a professional and expeditious manner and to meet or exceed the performance standards required by the Contract Documents. SECTION 5 PROJECT TEAM. 5.1 Contractor’s Co-operation. In addition to Contractor, City has retained, or may retain, consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Contract requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of the Project Team and other contractors retained by City to construct other portions of the Project. SECTION 6 TIME OF COMPLETION. 6.1 Time Is of Essence. Time is of the essence with respect to all time limits set forth in the Contract Documents. 6.2 Commencement of Work. Contractor shall commence the Work on the date specified in City’s Notice to Proceed. 6.3 Contract Time. Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed not later than . within One hundred twenty calendar days (120) after the commencement date specified in City’s Notice to Proceed. By executing this Construction Contract, Contractor expressly waives any claim for delayed early completion. 6.4 Liquidated Damages. Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time, including any approved extensions thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in achieving Substantial Completion, based on the amount of One thousand dollars ($1,000) per day, or as otherwise specified in the Special Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial Completion. The assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. The City is entitled to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor, • ~ Invitation for Bid (IFB) Package 9 Rev. March 17, 2017 CONSTRUCTION CONTRACT including, but not limited to, setoff against release of retention. If the total amount of liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to recover the balance from Contractor or its sureties. Occupancy or use of the Project in whole or in part prior to Substantial Completion, shall not operate as a waiver of City’s right to assess liquidated damages. 6.4.1 Other Remedies. City is entitled to any and all available legal and equitable remedies City may have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.5 Adjustments to Contract Time. The Contract Time may only be adjusted for time extensions approved by City and memorialized in a Change Order approved in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of Two Million Four Hundred Twenty One Thousand Five Hundred Forty Four Dollars ($2,421,544.00). [This amount includes the Base Bid and Additive Alternates .] 7.2 Full Compensation. The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of the Work, except as expressly provided herein. The Contract Sum may only be adjusted for Change Orders approved in accordance with the requirements of the Contract Documents. SECTION 8 STANDARD OF CARE. 8.1 Standard of Care. Contractor agrees that the Work shall be performed by qualified, experienced and well-supervised personnel. All services performed in connection with this Construction Contract shall be performed in a manner consistent with the standard of care under California law applicable to those who specialize in providing such services for projects of the type, scope and complexity of the Project. • Invitation for Bid (IFB) Package 10 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 9 INDEMNIFICATION. 9.1 Hold Harmless. To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter individually referred to as an “Indemnitee” and collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and liability, loss, damage, claims, expenses (including, without limitation, attorney fees, expert witness fees, paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every nature arising out of or in connection with the acts or omissions of Contractor, its employees, Subcontractors, representatives, or agents, in performing the Work or its failure to comply with any of its obligations under the Contract, except such Liability caused by the active negligence, sole negligence, or willful misconduct of an Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. Except as provided in Section 9.2 below, nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against City or any other Indemnitee. Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of any third-party claim relating to the Contract. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NON-DISCRIMINATION. 10.1 Municipal Code Requirement. As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Contractor acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and will comply with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. 11.1 Evidence of coverage. Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Invitation for Bid (IFB) Package 11 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 12 PROHIBITION AGAINST TRANSFERS. 12.1 Assignment. City is entering into this Construction Contract in reliance upon the stated experience and qualifications of the Contractor and its Subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract and grounds for default in addition to any other legal or equitable remedy available to the City. 12.2 Assignment by Law. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor is a partnership or joint venture or syndicate or co-tenancy shall result in changing the control of Contractor, shall be construed as an assignment of this Construction Contract. Control means more than fifty percent (50%) of the voting power of the corporation or other entity. SECTION 13 NOTICES. 13.1 Method of Notice. All notices, demands, requests or approvals to be given under this Construction Contract shall be given in writing and shall be deemed served on the earlier of the following: (i) On the date delivered if delivered personally; (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and addressed as hereinafter provided; (iii) On the date sent if sent by facsimile transmission; (iv) On the date sent if delivered by electronic mail; or (v) On the date it is accepted or rejected if sent by certified mail. 13.2 Notice to Recipients. All notices, demands or requests (including, without limitation, Change Order Requests and Claims) from Contractor to City shall include the Project name and the number of this Construction Contract and shall be addressed to City at: To City: City of Palo Alto City Clerk 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Copy to: City of Palo Alto Public Works Administration 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Holly Boyd AND [Include Construction Manager, If Applicable.] Invitation for Bid (IFB) Package 12 Rev. March 17, 2017 CONSTRUCTION CONTRACT City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be sent by registered mail or certified mail with return receipt requested. All notices, demands, requests or approvals from City to Contractor shall be addressed to: R&S Construction Management,Inc. Attn: Matt Ramirez 1555 Burke Ave, Suite I San Francisco, CA 94124 13.3 Change of Address. In advance of any change of address, Contractor shall notify City of the change of address in writing. Each party may, by written notice only, add, delete or replace any individuals to whom and addresses to which notice shall be provided. SECTION 14 DEFAULT. 14.1 Notice of Default. In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract Documents, City may give written notice of default to Contractor in the manner specified for the giving of notices in the Construction Contract, with a copy to Contractor’s performance bond surety. 14.2 Opportunity to Cure Default. Except for emergencies, Contractor shall cure any default in performance of its obligations under the Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than ten (10) Days after receipt of such written notice. • Invitation for Bid (IFB) Package 13 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 15 CITY'S RIGHTS AND REMEDIES. 15.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 14, then City may pursue any remedies available under law or equity, including, without limitation, the following: 15.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete certain portions of the Work, reserving to itself all rights to Losses related thereto. 15.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage others to perform the Work or portion of the Work that has not been adequately performed by Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to itself all rights to Losses related thereto. 15.1.3 Suspend The Construction Contract. City may, without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this Construction Contract for as long a period of time as City determines, in its sole discretion, appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work. 15.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any default as required by Section 14. City’s election to terminate the Construction Contract for default shall be communicated by giving Contractor a written notice of termination in the manner specified for the giving of notices in the Construction Contract. Any notice of termination given to Contractor by City shall be effective immediately, unless otherwise provided therein. 15.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the Performance Bond. 15.1.6 Additional Provisions. All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity. Designation in the Contract Documents of certain breaches as material shall not waive the City’s authority to designate other breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the City from terminating the Agreement for breaches that are not material. City’s determination of whether there has been noncompliance with the Construction Contract so as to warrant exercise by City of its rights and remedies for default under the Construction Contract, shall be binding on all parties. No termination or action taken by City after such termination shall prejudice any other rights or remedies of City provided by law or equity or by the Contract Documents upon such termination; and City may proceed against Contractor to recover all liquidated damages and Losses suffered by City. 15.2 Delays by Sureties. Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for completion of the Work in accordance with the Performance Bond, within seven (7) calendar days from the date of the notice of termination, Contractor’s surety shall be deemed to have waived its right to complete the Work under the Contract, and City may immediately make arrangements for the completion of the Work through use of its own forces, by hiring a replacement contractor, or by any other means that City determines advisable under the circumstances. Contractor and its surety shall be jointly and severally Invitation for Bid (IFB) Package 14 Rev. March 17, 2017 CONSTRUCTION CONTRACT liable for any additional cost incurred by City to complete the Work following termination. In addition, City shall have the right to use any materials, supplies, and equipment belonging to Contractor and located at the Worksite for the purposes of completing the remaining Work. 15.3 Damages to City. 15.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s default under the Contract Documents. 15.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to deduct the cost of such Losses from monies otherwise payable to Contractor. If the Losses incurred by City exceed the amount payable, Contractor shall be liable to City for the difference and shall promptly remit same to City. 15.4 Suspension by City 15.4.1 Suspension for Convenience. City may, at any time and from time to time, without cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume and continue with the Work. A Change Order will be issued to cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order shall not be the exclusive method for City to stop the Work. 15.4.2 Suspension for Cause. In addition to all other remedies available to City, if Contractor fails to perform or correct work in accordance with the Contract Documents, City may immediately order the Work, or any portion thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction. Contractor shall not be entitled to an increase in Contract Time or Contract Price for a suspension occasioned by Contractor’s failure to comply with the Contract Documents. City’s right to suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure to suspend the Work shall not constitute a defense to Contractor’s failure to comply with the requirements of the Contract Documents. 15.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s expense, comply with the notice and take all reasonable steps to minimize costs to close out and demobilize. The compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole and exclusive compensation for such termination and Contractor waives any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect or incidental damages of any kind resulting from termination without cause. Termination pursuant to this provision does not relieve Contractor or its sureties from any of their obligations for Losses arising from or related to the Work performed by Contractor. Invitation for Bid (IFB) Package 15 Rev. March 17, 2017 CONSTRUCTION CONTRACT 15.5.1 Compensation. Following such termination and within forty-five (45) Days after receipt of a billing from Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the following to Contractor as Contractor’s sole compensation for performance of the Work : .1 For Work Performed. The amount of the Contract Sum allocable to the portion of the Work properly performed by Contractor as of the date of termination, less sums previously paid to Contractor. .2 For Close-out Costs. Reasonable costs of Contractor and its Subcontractors: (i) Demobilizing and (ii) Administering the close-out of its participation in the Project (including, without limitation, all billing and accounting functions, not including attorney or expert fees) for a period of no longer than thirty (30) Days after receipt of the notice of termination. .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. .4 Profit Allowance. An allowance for profit calculated as four percent (4%) of the sum of the above items, provided Contractor can prove a likelihood that it would have made a profit if the Construction Contract had not been terminated. 15.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Construction Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor against City under this Section. 15.6 Contractor’s Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice directs otherwise, do the following: (i) Immediately discontinue the Work to the extent specified in the notice; (ii) Place no further orders or subcontracts for materials, equipment, services or facilities, except as may be necessary for completion of such portion of the Work that is not discontinued; (iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the notice of termination, of all subcontracts, purchase orders and contracts that are outstanding, including, without limitation, the terms of the original price, any changes, payments, balance owing, the status of the portion of the Work covered and a copy of the subcontract, purchase order or contract and any written changes, amendments or modifications thereto, together with such other information as City may determine necessary in order to decide whether to accept assignment of or request Contractor to terminate the subcontract, purchase order or contract; (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions thereof, that City elects to accept by assignment and cancel, on the most favorable terms reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof, that City does not elect to accept by assignment; and (v) Thereafter do only such Work as may be necessary to preserve and protect Work already in progress and to protect materials, plants, and equipment on the Project Site or in transit thereto. Upon termination, whether for cause or for convenience, the provisions of the Contract Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees, Invitation for Bid (IFB) Package 16 Rev. March 17, 2017 CONSTRUCTION CONTRACT submittals of as-built drawings, instructions, or manuals, or other such rights and obligations arising prior to the termination date. SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES. 16.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 16.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of an order of a court or other public authority other than City having jurisdiction or due to an act of government, such as a declaration of a national emergency making material unavailable. This provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension notice issued either for cause or for convenience. 16.1.2 For City's Non-Payment. If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction Contract (30) days following a second notice to City of Contractor’s intention to terminate the Construction Contract. 16.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 15.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental damages, of any kind. SECTION 17 ACCOUNTING RECORDS. 17.1 Financial Management and City Access. Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Construction Contract in accordance with generally accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy Contractor's records, books, estimates, take-offs, cost reports, ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later of (i) Final Payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by law. Invitation for Bid (IFB) Package 17 Rev. March 17, 2017 CONSTRUCTION CONTRACT 17.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition precedent to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right to receive further payments under the Contract Documents. City many enforce Contractor’s obligation to provide access to City of its business and other records referred to in Section 17.1 for inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony. SECTION 18 INDEPENDENT PARTIES. 18.1 Status of parties. Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’ of the other party. City, its officers or employees shall have no control over the conduct of Contractor or its respective agents, employees, subconsultants, or subcontractors, except as herein set forth. SECTION 19 NUISANCE. 19.1 Nuisance Prohibited. Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in connection in the performance of services under this Construction Contract. SECTION 20 PERMITS AND LICENSES. 20.1 Payment of Fees. Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall provide, procure and pay for all licenses, permits, and fees, required by the City or other government jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall be paid to the Contractor for these items or for delays caused by non-City inspectors or conditions set forth in the licenses or permits issued by other agencies. SECTION 21 WAIVER. 21.1 Waiver. A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. Invitation for Bid (IFB) Package 18 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 22 GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS. 22.1 Governing Law. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no other place. 22.2 Compliance with Laws. Contractor shall comply with all applicable federal and California laws and city laws, including, without limitation, ordinances and resolutions, in the performance of work under this Construction Contract. 22.2.1 Palo Alto Minimum Wage Ordinance. Contractor shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, Contractor shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, Contractor shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 23 COMPLETE AGREEMENT. 23.1 Integration. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties. SECTION 24 SURVIVAL OF CONTRACT. 24.1 Survival of Provisions. The provisions of the Construction Contract which by their nature survive termination of the Construction Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect after Final Completion or any termination of the Construction Contract. SECTION 25 PREVAILING WAGES. This Project is not subject to prevailing wages. Contractor is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7, if the public works contract does not include a project of $25,000 or less, when the project is for construction work, or the contract does not include a project of $15,000 or less, when the project is for alteration, demolition, repair, or maintenance (collectively, ‘improvement’) work. Or Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work • Invitation for Bid (IFB) Package 19 Rev. March 17, 2017 CONSTRUCTION CONTRACT in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. SECTION 26 NON-APPROPRIATION. 26.1 Appropriations. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Construction Contract are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 27 AUTHORITY. 27.1 Representation of Parties. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. SECTION 28 COUNTERPARTS 28.1 Multiple Counterparts. This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. SECTION 29 SEVERABILITY. 29.1 Severability. In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected. SECTION 30 STATUTORY AND REGULATORY REFERENCES. 30.1 Amendments to Laws. With respect to any amendments to any statutes or regulations referenced in these Contract Documents, the reference is deemed to be the version in effect on the date that the Contract was awarded by City, unless otherwise required by law. SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. 31.1 Workers Compensation. Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: Invitation for Bid (IFB) Package 20 Rev. March 17, 2017 CONSTRUCTION CONTRACT “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.” SECTION 32 DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS. 32.1 General Notice to Contractor. City requires Contractor and its listed subcontractors to comply with the requirements of SB 854. 32.2 Labor Code section 1771.1(a) City provides notice to Contractor of the requirements of California Labor Code section 1771.1(a), which reads: “A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contactor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded.” 32.3 DIR Registration Required. City will not accept a bid proposal from or enter into this Construction Contract with Contractor without proof that Contractor and its listed subcontractors are registered with the California Department of Industrial Relations (“DIR”) to perform public work, subject to limited exceptions. 32.4 Posting of Job Site Notices. City gives notice to Contractor and its listed subcontractors that Contractor is required to post all job site notices prescribed by law or regulation and Contractor is subject to SB 854-compliance monitoring and enforcement by DIR. 32.5 Payroll Records. City requires Contractor and its listed subcontractors to comply with the requirements of Labor Code section 1776, including: (i) Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, Contractor and its listed subcontractors, in connection with the Project. (ii) The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of Contractor and its listed subcontractors, respectively. Invitation for Bid (IFB) Package 21 Rev. March 17, 2017 CONSTRUCTION CONTRACT (iii) At the request of City, acting by its project manager, Contractor and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the project manager within ten (10) days of receipt of City’s request. City requests Contractor and its listed subcontractors to submit the certified payroll records to the project manager at the end of each week during the Project. (iv) If the certified payroll records are not produced to the project manager within the 10-day period, then Contractor and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and City shall withhold the sum total of penalties from the progress payment(s) then due and payable to Contractor. This provision supplements the provisions of Section 15 hereof. (v)Inform the project manager of the location of contractor’s and its listed subcontractors’ payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the project manager within five (5) business days of any change of location of those payroll records. IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO ____________________________ Purchasing Manager City Manager APPROVED AS TO FORM: ____________________________ City Attorney or designee APPROVED: ____________________________ Public Works Director CONTRACTOR Officer 1 By:___________________________ Name:________________________ Title:__________________________ Date: _________________________ Officer 2 By:____________________________ Name:_________________________ Title:___________________________ Date:____________________________ • ~ This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. 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Legend abc Road Centerline Small Text (TC) Curb Face (RF) Curb Lip (RF) Curb Lip, Rolled (RF) 0'434' CITY O F PALO A L TO I N C O R PO RATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto tbotkin, 2019-04-10 13:01:34 (\\cc-maps\Encompass\Admin\Meta\View.mdb) FY 1 9 A S P H A L T PA V I N G P R O J E C T C E D AR ST REET D ANAA A A VE N UE D ANA A A VE N UE - ~. ' _) j_ , r _ __ .-l_ -_, /'·•·········~-.. __ _ F- I ..____ __ _____,L_____ ____ _,I.,,_ --- KIN G S L E Y A V E N U E ALMA STREET HIGHSTREET RAMONA STREET LIN C O L N A V E N U E LI N C O L N A V E N U E RAMONA STREET EMERSONSTREET HIGH STREET EMBARCADEROROAD EMERSONSTREETEMERSON STREET HOMERAVENUE EN UE BRYANT STREET PALO ALTO A VENUE PALO ALTOAVENUE HA W T H O R N E A V E N U E EMERSONSTREET RAMONASTREET EMERSONSTREET HA W T H O R N E A V E N U E HIGHSTREET EVERETTAVENUE EVERETTAVENUE HIGHSTREET ALMA STREET ALMA STREET ALMASTREET LYTTONAVENUE ALMASTREET EMERSONSTREET RAMONA STREET LYTTONAVENUE UNIVERSITYAVENUE RAMONASTREET BRYANTSTREET HIGH STREET EMERSONSTREET ALMASTREET EMERSON STREET HIGH STREET HIGH STREET HAMILTONAVENUE HAMILTONAVENUE EMERSONSTREET HAMILTONAVENUE GILMANSTREET WAVERLEYSTREET BRYANT STREET FORESTAVENUE FORESTAVENUE BRYANTSTREET RAMONASTREET RAMONA STREET BRYANTSTREET FLORENCESTREET KIPLINGSTREET LYTTONAVENUE WAVERLEY STREETWAVERLEY STREET EVERETTAVENUE EVERETTAVENUE BRYANT STREET WAVERLEY STREET HAWTHORNEAVENUE RAMONA STREET BRYANTSTREET LYTTONAVENUE UNIVERSITYAVENUE COWPER STREET KIPLING STREET UNIVERSITYAVENUE UNIVERSITYAVENUE COWPERSTREET WAVERLEYSTREET HAMILTONAVENUE MIDDLEFIELD ROAD RUTHVENAVENUE POESTREET TO AVENUE COWPERSTREET TASSOSTREET RUTHVENAVENUE WEBSTERSTREET BYRONSTREET HAWTHORNEAVENUE COWPER STREET COWPERSTREET WAVERLEYSTREET HAWTHORNEAVENUE HAWTHORNEAVENUE KIPLINGSTREET EVERETTAVENUE COWPERSTREET WEBSTERSTREET BYRON STREET FULTONSTREET EVERETTAVENUE MIDDLEFIELDROAD MIDDLEFIELD ROAD EVERETTAVENUE WEBSTERSTREET WEBSTERSTREET LYTTONAVENUE BYRONSTREET TASSO STREET MELVILLEAVENUE B EMBARCAD WAVERLEYSTREET MELVILLEAVENUE EMBARCADEROROAD EMERSONSTREET KINGSLEYAVENUE BRYANT STREETBRYANTSTREET SCOTTSTREET ADDISONAVENUE BRYANTSTREET BRYANTSTREET ADDISONAVENUE LINCOLNAVENUE HAMILTONAVENUE COWPER STREET FORESTAVENUE FORESTAVENUE WAVERLEYSTREET BRYANT STREET HOMERAVENUE WAVERLEYSTREET CHANNINGAVENUE RAMONASTREET RAMONASTREET WEBSTERSTREET WEBSTERSTREET COWPER STREET HOMERAVENUE HOMERAVENUE COWPER STREET KIPLINGSTREET CHANNINGAVENUE WAVERLEYSTREET ADDISONAVENUE FULTON STREET LYTTONAVENUE GUINDASTREET LYTTONAVENUE UNIVERSITYAVENUE UNIVERSITYAVENUE BYRONSTREET MIDDLEFIELDROAD FULTONSTREET MIDDLEFIELDROAD LYTTONAVENUE WEBSTER STREET GUINDASTREET GUINDA STREET FULTON STREET FULTON STREET MIDDLEFIELDROAD HAMILTONAVENUE HAMILTONAVENUE FORESTAVENUE MELVILLEAVENUE MELVILLEAVENUE WAVERLEYSTREET COWPER STREET KINGSLEYAVENUE KINGSLEYAVENUE WAVERLEYSTREET LINCOLNAVENUE COWPER STREET LINCOLNAVENUE ADDISONAVENUE WEBSTER STREET MIDDLEFIELD ROAD CHANNINGAVENUE GUINDA STREET ADDISONAVENUE COWPERSTREET WEBSTER STREET GUINDA STREET FORESTAVENUE MIDDLEFIELDROAD HOMERAVENUE HOMERAVENUE MIDDLEFIELDROAD WEBSTER STREET CHANNINGAVENUE CHANNINGAVENUE MIDDLEFIELDROAD MELVILLEAVENUE PAR KIN S O N A V E N U E FULTON STREET KINGSLEYAVENUE KINGSLEYAVENUE M E L VILL E A V E N UE GUINDASTREET MELVILLEAVENUE WEBSTER STREET KINGSLEYAVENUE KINGSLEYAVENUE BYRONSTREETBYRON STREET WEBSTER STREET LINCOLNAVENUE LINCOLNAVENUE FULTON STREETFULTON STREET MIDDLEFIELD ROADMIDDLEFIELDROAD ADDISONAVENUE GUINDA STREET C H GUINDA STREET COWPER STREET GUINDA STREET EVERETTCOURT LANE 39 LANE B EASTLANE 7 EASTLANE 5 EAST LANE 6 EAST LANE20EAST LANE30 LANE20WEST LANE21 LANE33 LANE 15 EAST BRYANTCOURT PAULSENLANE LANE 12 WEST LANE 11 WEST CENTENNIAL WALK LANE D EAST LANE D WEST LANE 59 EAST WHITMANCOURT DOWNINGLANE LANE56 ALMASTREET A L O A L T O AVEN U E P PA LO AL T O A V E N U E P A L O A LTO AV E NU E PALO ALTO AVENUE P A L O A L T O A V E N U E PENINSULA CORRIDOR JOINT POWERS BOARD PENINSULA CORRIDOR JOINT POWERS BOARDPENINSULA CORRIDOR JOINT POWERS BOARD EMERSONSTREET EMERSONSTREET HIGHSTREET HIGHSTREET HIGHSTREET ALMASTREET ALMASTREET ALMA STREET ALMASTREET ALMASTREET FORESTAVENUE CHANNINGAVENUE HOMERAVENUE ADDISONAVENUE LANE 7 WEST LANE8WEST LANEAWEST LANEBWEST CHANNINGAVENUE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc Road Centerline Small Text (TC) Curb Face (RF) Curb Lip (RF) Curb Lip, Rolled (RF) 0'416' CITY O F PALO A L TO I N C O R PO RATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto tbotkin, 2019-04-10 13:02:25 (\\cc-maps\Encompass\Admin\Meta\View.mdb) FY 1 9 A S P H A L T PA V I N G P R O J E C T HA WTH ORN E A VEN UE HAWTHORNRR EAVENUE HAWTHHO EVERERR TTAVENUE EVERERR TTAVENUE EVERETTAVENUE EVERETTAVENUE EVERETTAVENUE EVERERR TTAV EVERERR TTAVENUE EVERERR TTAVENUE EVERETTAVENUE EVERETTAVENUE VE EVERERR TTAVENUE LANA E30 REEET DOWNINGLANAAE EMERSONSTREETEMERSONSTREET J I • ' : :- 1 L _; 1 •--I J ; -- ~ , I I _)!_ -. -I JI -r I J_ I I Ji_ ~ ,It,._ ~. L A V E N U E COLERIDGE AVENUE BRYANT STREET ON AVENUE TENNYSON AVENUE BRYANT STREET BRYANT STREET VENUE SEALE AVENUE BRY LOWELLAVENUE WAVERLEY STREET LOWELL AVENUE WAVERLEY STREET TENNYSON AVENUE COWPER STREET SEALEAVENUE SEALE AVENUE AVENUE HILL AVENUE BRYANT STREET BRYANT STREET AVENUE CHURCHILLAVENUE WAVERLEY STREET CHURCHILLAVENUE CHURCHILL AVENUE WAVERLEY STREET KELLOGG AVENUE BRYANT STREET EM BARCADERO ROAD EMBARCADEROROAD COWPER STREET WEBSTER STREETWEBSTERSTREET KELLOGG AVENUE TASSO STREET EMBARCADEROROADTASSO STREET COWPER STREET SEA WEBSTER STREETWEBSTERSTREET LOWELL AVENUE COWPER STREET WEBSTER STREETWEBSTERSTREET E COWPER STREET WAVERLEY STREET TENNYSON AVENUE COLERIDGE AVENUE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc Road Centerline Small Text (TC) Curb Face (RF) Curb Lip (RF) Curb Lip, Rolled (RF) 0'205' CITY O F PALO A L TO I N C O R PO RATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto tbotkin, 2019-04-10 13:03:00 (\\cc-maps\Encompass\Admin\Meta\View.mdb) FY 1 9 A S P H A L T PA V I N G P R O J E C T WAVERLEY STREETWAVERLEYSTREET I I . i I I i I I I I -~ I I I I i I I -- ORINDA STREET MATADERO AVENUE MARGARITA AVENUE WILTON AVENUE MATADERO AVENUE FERNANDO AVENUE WILTON AVENUE E LAMBERT AVENUE ALM EL DO RADO A EL CARMEL LOMAVERDEAV MARGARITAA VENUE FERNANDO AVENUE LAMB ERT AVENUE CHESTNUT AVENUE ASH STREET BIRCHSTREET BIRCHSTREET PARK BOULEVARD ALMA STREET ALMA STREET PARK BOULEVARD PARK BOULEVARD CAC IA AV EN UE PORTAGE AVENUE OLIVE AVE ORINDA STREET LANE 66 LANE 66 PENINSULA CORRIDOR JOINT POWERS BOARD PENINSULA CORRIDOR JOINT POWERS BOARD This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend abc Road Centerline Small Text (TC) Curb Face (RF) Curb Lip (RF) Curb Lip, Rolled (RF) 0'177' CITY O F PALO A L TO I N C O R PO RATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto tbotkin, 2019-04-10 13:03:34 (\\cc-maps\Encompass\Admin\Meta\View.mdb) FY 1 9 A S P H A L T PA V I N G P R O J E C T CHESTNUT AVENUE CHESTNUT AVENUE @)) - i.? ~ ·-r, "' ' D fir ·-t,. 7 / / / r "'\ -- J --1 ~ ~ I "'\ -/ I I -- ' ,.,,------- I ,\ I ., ® } \.. ( \ \ ---\ JI I I \ I i \ ( I ATTACHMENT C FY2019 STREET RESURFACING PROJECT BID SUMMARY UNIT COST TOTAL COST UNIT COST TOTAL COST UNIT COST TOTAL COST 1 AC Overlay:3,061 TON $ 125.00 382,625.00$ $ 250.00 765,250.00$ $ 145.00 443,845.00$ 2 PCC Base Repair:34,946 SF $ 20.00 698,920.00$ $ 13.00 454,298.00$ $ 22.50 786,285.00$ 3 AC Base Repairs:36 TON $ 190.00 6,840.00$ $ 250.00 9,000.00$ $ 280.00 10,080.00$ 4 AC Milling: 244,991 SF $ 0.80 195,992.80$ $ 1.00 244,991.00$ $ 0.75 183,743.25$ 5 Crack Sealing:23,300 LF $ 0.75 17,475.00$ $ 1.10 25,630.00$ $ 0.75 17,475.00$ 6 Interlayer Membrane:12,000 LF $ 5.00 60,000.00$ $ 1.10 13,200.00$ $ 5.00 60,000.00$ 7 Reset Utility Box:117 EA $ 500.00 58,500.00$ $ 150.00 17,550.00$ $ 250.00 29,250.00$ 8 Reset Manhole:46 EA $ 1,000.00 46,000.00$ $ 350.00 16,100.00$ $ 500.00 23,000.00$ 9 Recycling of Inert Solid Materials:4,033 TON $ 8.00 32,264.00$ $ 15.00 60,495.00$ $ 6.00 24,198.00$ 10 Inert recycling containing petromat: 4,033 TON $ 8.00 32,264.00$ $ 15.00 60,495.00$ $ 1.00 4,033.00$ 11 Reset Catch Basin:1 EA $ 2,500.00 2,500.00$ $ 1,000.00 1,000.00$ $ 2,200.00 2,200.00$ 12 Type A vertical curb with 3' exposed 342 LF $ 140.00 47,880.00$ $ 65.00 22,230.00$ $ 155.00 53,010.00$ 13 Type A vertical curb with 1' exposed 1,141 LF $ 100.00 114,100.00$ $ 55.00 62,755.00$ $ 112.00 127,792.00$ 14 Type A vertical curb with 2' exposed 655 LF $ 120.00 78,600.00$ $ 60.00 39,300.00$ $ 130.00 85,150.00$ 15 10" Thick PCC w/No. 4 rebar 12" O.C.: 1,875 SF $ 40.00 75,000.00$ $ 20.00 37,500.00$ $ 33.00 61,875.00$ 16 Type A vertical curb with 1' burried 708 LF $ 100.00 70,800.00$ $ 60.00 42,480.00$ $ 100.00 70,800.00$ 17 Concrete Driveway:4,649 SF $ 21.00 97,629.00$ $ 16.00 74,384.00$ $ 20.00 92,980.00$ 18 Concrete Sidewalk:5,186 SF $ 19.00 98,534.00$ $ 12.50 64,825.00$ $ 18.00 93,348.00$ 19 Type A Curb Ramp:18EA $ 6,000.00 108,000.00$ $ 3,500.00 63,000.00$ $ 5,100.00 91,800.00$ 20 Detectable Warning Surface:288 SF $ 50.00 14,400.00$ $ 80.00 23,040.00$ $ 45.00 12,960.00$ 21 Brickwork/Pavers Specialty Finishes: 177 SF $ 60.00 10,620.00$ $ 35.00 6,195.00$ $ 27.00 4,779.00$ 22 Type B curb and gutter:256 LF $ 140.00 35,840.00$ $ 60.00 15,360.00$ $ 145.00 37,120.00$ 23 Thermoplastic Paving Legends:86 EA $ 35.00 3,010.00$ $ 103.00 8,858.00$ $ 50.00 4,300.00$ 24 Thermo Striping, 6" Yellow:256 LF $ 4.00 1,024.00$ $ 3.00 768.00$ $ 4.00 1,024.00$ 25 Thermo Striping, 12" White:534 LF $ 5.00 2,670.00$ $ 8.50 4,539.00$ $ 7.00 3,738.00$ 26 Blue Pavement Markers:21 EA $ 25.00 525.00$ $ 17.00 357.00$ $ 30.00 630.00$ 27 Thermo Striping, Caltrans Detail 21:192 LF $ 3.00 576.00$ $ 6.50 1,248.00$ $ 7.00 1,344.00$ 28 Thermo Striping, White Curb:50 LF $ 5.00 250.00$ $ 12.00 600.00$ $ 6.00 300.00$ 29 Thermo Striping, Red Curb:68 LF $ 5.00 340.00$ $ 12.00 816.00$ $ 6.00 408.00$ 30 Traffic Control:1 LS $ 111,000.00 111,000.00$ $ 205,000.00 205,000.00$ $ 126,000.00 126,000.00$ 31 Notices:1 LS $ 11,500.00 11,500.00$ $ 5,000.00 5,000.00$ $ 20,000.00 20,000.00$ 32 Utility Tie Out Drawings:1 LS $ 11,500.00 11,500.00$ $ 3,000.00 3,000.00$ $ 5,000.00 5,000.00$ 33 Tree Trimming:44 HRS $ 250.00 11,000.00$ $ 400.00 17,600.00$ $ 275.00 12,100.00$ 34 Hose Drying Concrete Pad Demo (See 312 SF $ 20.00 6,240.00$ $ 15.00 4,680.00$ $ 4.00 1,248.00$ 35 Misc. Transportation Improvements:1 LS $ 50,000.00 50,000.00$ $ 50,000.00 50,000.00$ $ 50,000.00 50,000.00$ 2,494,418.80$ 2,421,544.00$ 2,541,815.25$ UNIT ENGINEER'S ESTIMATE R&S Construction Management Inc. under over O'Grady Paving, Inc. Base Bid Total (Items 001 through 34)BASE BID OVER/UNDER -3%5% BID ITEM DESCRIPTION APPROX. QTY 1 of 1 Attachment C City of Palo Alto (ID # 10213) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/6/2019 City of Palo Alto Page 1 Council Priority: Climate/Sustainability and Climate Action Plan Summary Title: Hecate Energy Termination Agreement and Golden Fields Solar PPA Approval Title: Adoption of a Resolution Approving a Termination Agreement With Hecate Energy Palo Alto LLC and Approving a Long-term Power Purchase Agreement With Golden Fields Solar III, LLC for the Purchase of Solar Electricity From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council adopt the attached resolution (Attachment A) to: 1. Approve the attached Termination Agreement (Attachment B) under which the City and Hecate Energy Palo Alto LLC (Hecate) mutually agree to the termination of their Power Purchase Agreement (City/Hecate PPA) from 2016. 2. Approve the attached PPA with a subsidiary of Clearway Energy (formerly known as NRG Renewables), Golden Fields Solar III, LLC (City/Golden Fields PPA) (Attachment C), which is intended to replace the City/Hecate PPA, moving the project to a new location, extending the Commercial Operation Date deadline from June 1, 2021 to January 1, 2023, and making various other contractual changes in exchange for a contract price reduction of $2.74/MWh. 3. Waive the application of the investment-grade credit rating requirement of Section 2.30.340(c) of the Palo Alto Municipal Code, which applies to energy companies that do business with the City, as Golden Fields will provide a $5,200,000 letter of credit as a development assurance deposit, and a subsequent $2,600,000 letter of credit as a performance assurance deposit. 4. Delegate to the City Manager or his designee, the authority to execute on behalf of the City the Termination Agreement with Hecate, and the City/Golden Fields PPA, including City of Palo Alto Page 2 the three contract term extensions available to the City under the City/Golden Fields PPA, and any documents necessary to administer the agreements that are consistent with the Palo Alto Municipal Code and City Council approved policies. Executive Summary In March 2016, Council approved the City/Hecate PPA to obtain all of the electric output of a solar photovoltaic (PV) electric generating facility over a 25-year term, with three additional five-year extension term options available for the project. The City/Hecate PPA included a milestone pursuant to which the project was to achieve its commercial operation date (COD) by June 1, 2021, and a contract price of $36.76/MWh – which, at the time the City/Hecate PPA was executed, was the lowest known price for a solar contract in the US. Hecate, a wholly-owned subsidiary of Hecate Energy LLC, an independent power producer based in Chicago, originally planned to develop the 26-megawatt (MW) project that was the subject of the City/Hecate PPA at a site in Los Angeles County, near Palmdale. However, in the process of developing and seeking construction financing for the project, Hecate ultimately decided to assign the City/Hecate PPA to another developer, Clearway Energy. Pursuant to Section 10.2 of the City/Hecate PPA, the City’s consent is required for such an assignment of the PPA to occur, but the City may not unreasonably withhold or delay such consent. However, because the PPA which resulted from the negotiations between the City and Clearway, doing business as Golden Fields, is significantly different than the City/Hecate PPA which was to be assigned, rather than assigning the City/Hecate PPA to Clearway pursuant to Section 10.2 of the City/Hecate PPA, the Parties have mutually decided to terminate the City/Hecate PPA and to simultaneously enter into the City/Golden Fields PPA. The substantive differences between the City/Hecate PPA and the City/Golden Fields PPA, in addition to the counterparty, include the following: • Moving the project location from the original site, east of Palmdale, to a new site in Rosamond, about 50 miles away with a more robust, higher voltage transmission system and fully-built project substation; • Delaying the contract delivery start date from June 1, 2021 to January 1, 2023; • Applying a tax test to the City’s ability to trigger the second and third five-year extension term options; and • Reducing the contract price, from $36.76/MWh to $34.02/MWh. The contract price reduction is expected to result in supply cost savings to the City of approximately $4.8 million over the 25-year base term of the agreement. However, a portion of these savings may be offset by the expected lower value of the energy generated at the Rosamond site compared to the original site. The 26 MW solar PV facility dedicated to serve the City under the City/Golden Fields PPA, the Golden Fields Project, will represent a small slice of a larger (approximately 240 MW) project to City of Palo Alto Page 3 be developed by Clearway—the Rosamond Project. However, from an operational perspective, the Golden Fields Project will effectively be an independent project. As with the City/Hecate PPA, the replacement City/Golden Fields PPA will provide about 8 percent of the City’s total electric needs, replacing the Shiloh I wind contract, which is set to expire at the end of 2021. As provided for in the attached resolution and the transaction documents, staff recommends that the City condition the termination of the City/Hecate PPA on City Council’s approval of the City/Golden Fields PPA and the provision to the City of a $5.2 million Letter of Credit by Golden Fields as set forth in Section 9.3 of the City/Golden Fields PPA. Background As part of ongoing efforts to satisfy the state’s Renewable Portfolio Standard (RPS) mandate of providing at least 50 percent of electric sales from qualifying renewable resources by 2030,1 Council in March 2016 approved the City/Hecate PPA to acquire all of the electricity generated by a 26 MW solar PV facility sited near the Wilsona substation in Los Angeles County (Resolution 9578, Staff Report 6637). The City/Hecate PPA included several project development “milestones” and established deadlines for their completion. The milestones included: obtaining site control, obtaining all necessary permits, executing an interconnection agreement with the California Independent System Operator (CAISO) and the owner of the local transmission system, obtaining construction financing, starting construction, and achieving commercial operation. For this project—known as the Wilsona Solar project—the Commercial Operation Date (COD) deadline is June 1, 2021. Discussion Wilsona Solar Project Development Both before and after executing the City/Hecate PPA with the City in March 2016, the Hecate development team worked to complete many of the project development milestones specified in the PPA. To date, they have obtained site control, obtained a Conditional Use Permit from Los Angeles County, and executed an interconnection agreement both with CAISO and with the owner of the transmission system in the area (Southern California Edison Company—SCE). Hecate typically engages with partners to own and operate projects they develop; they began looking for a partner on Wilsona last year. PPA Assignment from Hecate to Clearway Early last year, Hecate informed the City that it had found such a company: Clearway Energy, a leading publicly-traded energy company with an asset portfolio of more than 7,000 MW of wind, solar and natural gas-fired power generation facilities across North America. However, instead of acquiring the Wilsona Project, Clearway preferred to assign the PPA to a more advanced, lower-risk project they had already begun developing. 1 The 50% by 2030 RPS requirement was established by SB 350 in 2015. In 2018, Governor Brown signed SB 100 into law, which raised the RPS requirement to 60% by 2030. City of Palo Alto Page 4 Replacement of City/Hecate PPA with City/Golden Fields PPA In acknowledgement of the significant differences between the two PPAs, staff requested that the City/Hecate PPA be replaced with the City/Golden Fields PPA, rather than assigning and amending the City/Hecate PPA. Staff made this request because terminating the City/Hecate PPA and entering into the City/Golden Fields PPA will facilitate the administration and management of the City/Golden Fields PPA. It is notable that many of the commercial and legal terms will remain the same as in the City/Hecate PPA—including the length of the contract term, the project size, and the development and performance assurance amounts. Just as under the City/Hecate PPA, the project will provide the City with both renewable energy and capacity rights. Differences between City/Hecate PPA and City/Golden Fields PPA There are four main differences between the City/Hecate PPA and the City/Golden Fields PPA: the project location, the contract price, a 19-month delay in the start date of the contract, and the introduction of a tax test that could prevent the City from exercising the second and third five-year contract term extension options. These differences are explained below. Location: The solar PV project to be developed pursuant to the City/Golden Fields PPA is in a different location than that which was in the City/Hecate PPA; it moves the project location from the original site, east of Palmdale, to a new site in Rosamond, about 50 miles away. Staff was concerned with the proposed change in project location; specifically, the possibility that the value of the energy at the new location (and hence the revenue the City would receive from CAISO for injecting that revenue into the grid) would likely be lower at the site proposed by Clearway (the Rosamond site) than at the site set forth in the City/Hecate PPA (the Wilsona site). To assess the value of the energy generated at the two development sites, staff contracted with a consultant (LCG Consulting) to produce a long-term forecast of the value of energy generated at the two sites, based on its modeling of electric grid conditions across the CAISO footprint. The consultant did find it likely that the value of energy generated at Clearway’s site (Rosamond) will be slightly lower than at Hecate’s site (Wilsona)—a finding that staff used to successfully negotiate a reduced contract price under the City/Golden Fields PPA. Contract Price: The City/Hecate PPA contract price is $36.76/MWh, while the City/Golden Fields contract price is $34.02/MWh—resulting in supply cost savings of approximately $4.8 million over the 25-year base term of the agreement. Delay in Contract Start Date: The City/Hecate PPA contract delivery start date was to be June 1, 2021; the City/Golden Fields PPA start date is January 1, 2023. The delayed contract start date resulted from staff’s determination that the City does not have a need for additional renewable energy in 2021 or 2022 for RPS purposes. Also, delaying the start of energy deliveries to the City allowed Clearway to accommodate the contract price reduction. City of Palo Alto Page 5 Introduction of Tax Test: New to the City/Golden Fields PPA is the inclusion of tax test language in the City/Golden Fields PPA which limits the City’s ability to trigger the second and third five-year extension term options. This tax test language resulted from Clearway’s tax counsel’s determination that without it, the City’s exercise of its second and third five-year extension term options could violate IRS rules related to the Investment Tax Credit (ITC), causing Golden Fields to have to repay the federal government the ITC monies it received during construction of the project after year 30 of the contract.2 An extension term option, particularly one that is at the City’s sole discretion, has real value to the City. Therefore, in exchange for agreeing to include contract language that could jeopardize these two five-year extension options, staff negotiated with Clearway to receive an additional contract price reduction. Waiver of PAMC Section 2.30.340(c) Investment-Grade Credit Rating Requirement The risks to the City of entering into the proposed City/Golden Fields PPA are that the supplier defaults or is unable to perform according to the terms of the contract. If this occurs, the City might need to buy renewable energy from another supplier in order to meet its RPS obligations under State law or to meet the City’s RPS goals. These risks are minimized by the terms of the City/Golden Fields PPA, all of which were also features of the City/Hecate PPA: • The City is not at risk for paying for output that is not delivered. • The development assurance deposit ($5.2 million, in the form of a letter of credit) provides significant assurance that the project will be completed. If it is not, then the City would be able to access these funds to help offset the cost of procuring replacement renewable energy. • Once the project becomes operational, the development assurance deposit will be returned to Golden Fields and a new performance assurance deposit ($2.6 million, also in the form of a letter of credit) will be posted by Golden Fields and can be used by the City to cover operational and performance risk. Staff believes this amount is sufficient to cover these risks. In general, businesses in the renewable industry lack extensive financial and operational track records, and because of the capital-intensive nature of these projects, they tend to be highly leveraged as well. The companies discussed here are not investment grade and have higher projected default rates than the City’s regular electric and gas suppliers. However, Clearway 2 IRS rules stipulate that the owner of the project for tax purposes is entitled to the ITC and depreciation benefits. To ensure that Golden Fields is the tax owner, the contract term with a buyer must not exceed 80% of the “useful life” of the facility. At this time, no one knows exactly how long this facility will remain operational, so it is unclear whether a 35-year or 40-year contract would violate the tax ownership rules. The tax test language in the contract requires that if the City wishes to exercise its options to extend the contract beyond 30 years, Golden Fields must determine (in consultation with tax counsel and/or consultants) whether such an extended contract delivery term would violate the tax ownership rules. City of Palo Alto Page 6 Energy has a projected default rate that is comparable to the City’s other renewable energy suppliers, all of whom the City has waived the investment-grade credit rating requirement for. However, under the terms of the City/Golden Fields PPA, as with the terms of the City/Hecate PPA, if the project does not come to fruition according to the construction start and commercial operation date milestones set forth in the PPA or if the supplier defaults at any time during the term of the agreement, the City can access the then current development assurance funds provided by the letter of credit. For these reasons, staff recommends that the Council waive the investment-grade credit requirement for public agency contracts required under Section 2.20.340(c) of the Palo Alto Municipal Code. This conforms to Council action on prior renewable resource contracts with similar characteristics (Staff Report 3223, Staff Report 3845, Staff Report 4671, Staff Report 4710, and Staff Report 6637). Conclusion If Council approves the attached Termination Agreement and the City/Golden Fields PPA, the City is highly likely to begin receiving renewable energy from the project in January 2023, which is a better start date for the City than the January 2021 start date of the City/Hecate PPA, and at a price that’s almost 10 percent lower than the then-record low price agreed to with Hecate in 2016, and approximately 50 percent lower than the City’s next lowest cost PPA. If Council approves the Termination Agreement, it will only become effective as of: (a) the execution of the City/Golden Fields PPA; and (b) Clearway posting the Development Assurance required pursuant to Section 9.3 of the City/Golden Fields PPA. If Council declines to approve the Termination Agreement and/or the City/Golden Fields PPA with Golden Fields, the higher-priced City/Hecate PPA will remain in full effect and Hecate would be obligated to continue to try to obtain construction financing or a new developer to take over the project. Resource Impact Approving the staff recommendation will result in a 7.5 percent decrease in the City’s total costs from the Council-approved City/Hecate PPA—a savings of approximately $4.8 million over the 25-year base term of the agreement. Part of this cost savings will dimish because the value of the energy at the new site is expected to be lower. Overall the value of the City/Golden Fields PPA is estimated to be approximately equivalent to the City/Hecate PPA. Policy Implications Approval of the Termination Agreement and the City/Golden Fields PPA is in conformance with the City’s Electric Integrated Resources Plan (EIRP), RPS Procurement Plan, Carbon Neutral Electric Supply Plan, and Sustainability/Climate Action Plan (S/CAP). City of Palo Alto Page 7 Environmental Review Approval of the Termination Agreement and the City/Golden Fields PPA does not meet the definition of a project under the California Environmental Quality Act (CEQA), pursuant to Public Resources Code Section 21065. However, the City intends to receive output from a project that will constitute a project for the purposes of CEQA. The City/Golden Fields PPA provides that the project developer is responsible for acquiring necessary environmental reviews and permits on the project to be developed. Attachments: • Attachment A: Resolution Approving Hecate Termination Agreement and Golden Fields Solar Power Purchase Agreement • Attachment B: Termination Agreement with Hecate Energy Palo Alto LLC • Attachment C: Power Purchase Agreement with Golden Fields Solar III, LLC * NOT YET APPROVED * {D0365802.DOCX / 1} Resolution No. _________ Resolution of the Council of the City of Palo Alto Approving a Termination Agreement with Hecate Energy Palo Alto LLC and Approving a Long Term Power Purchase Agreement with Golden Fields Solar III, LLC for the Purchase of Solar Electricity A.On April 16, 2012, the Council approved an update to the Long-term Electric Acquisition Plan’s (“LEAP”) strategy related to the Renewable Portfolio Standard (“RPS”). The updated strategy specifies that the City’s objective is to reduce the carbon intensity of the electric portfolio by pursuing a minimum level of renewable purchases of at least 33 percent of retail electricity sales by 2015 within a rate impact cap of 0.5 cents per kilowatt-hour. B.On March 4, 2013, the Council approved a Carbon Neutral Plan, which enabled the City to achieve a carbon neutral electric supply portfolio starting in calendar year 2013. C.On October 7, 2015, the Governor approved Senate Bill (“SB”) 350, which requires that all retail sellers of electricity in California, including publicly-owned utilities, serve 50 percent of their retail electricity sales with renewable energy by 2030. D.The City was interested in purchasing power generated by renewable resources for the benefit of its electric customers – to reduce the production of greenhouse gases, meet the City’s RPS requirements under SB 350 and LEAP, and meet its Carbon Neutral Plan goals – and issued Request for Proposals 156876 (“RFP”) in May 2015. E.Hecate Energy Palo Alto LLC (“HEPA”) through its parent company, Hecate Energy LLC, proposed its project, the Wilsona Solar project, in response to the City’s RFP, and its proposal was highly competitive with other RFP respondent proposals. F.Council approved a power purchase agreement (“PPA”) with HEPA on March 21, 2016, effective as of July 18, 2016 (as further amended, modified, supplemented and/or restated, and including all related agreements, instruments and documents, including a certain Letter Agreement, dated as of October 24, 2016, and also including Amendment No. 1 to Power Purchase Agreement, dated as of July 7, 2017) (the “City/Hecate PPA”) for the sale of energy to City from HEPA upon completion of an approximately 26 megawatt (“MW”) photovoltaic solar electric generating facility that was to be developed, financed, built and owned by HEPA. G.Prior to the development of the generating facility, HEPA desired to assign the City/Hecate PPA to Golden Fields Solar III LLC (“Golden Fields”) pursuant to Section 10.2 of the City/Hecate PPA, which provides that the City must consent in writing prior to any assignment of the rights and obligations of the City/Hecate PPA, and that consent must not be unreasonably withheld. Attachment A * NOT YET APPROVED * {D0365802.DOCX / 1} H. Pursuant to its obligations under Section 10.2 of the City/Hecate PPA, the City successfully negotiated an agreement with Golden Fields (the “City/Golden Fields PPA”). I. Pursuant to the City/Golden Fields PPA, Golden Fields intends to develop, finance, build, own and operate an approximately 240 MW solar photovoltaic electric generating project (the “Rosamond Project”) which will be divided electrically into separately metered solar photovoltaic electric generating facilities, one of which will be dedicated to serve the City under this Agreement (the “Plant”). J. The City wishes to purchase the output of the Plant to meet its needs at a known price and timing and intends to resell related energy to its residential and commercial customers. K. The City’s participation in the City/Golden Fields PPA may result in surplus electric purchases that are inconsistent with the anti-speculation requirement of section D.1 of the City’s existing Energy Risk Management Policy, due to variability of the City’s hydroelectric resources, and potential uncertainties associated with the timeliness and viability of the renewable energy projects in the City’s portfolio still under development. L. Because the PPA which resulted from the negotiations between City and Golden Fields (“City/Golden Fields PPA”) is significantly different than the City/Hecate PPA which was to be assigned, the City, HEPA and Golden Fields agreed to terminate the City/Hecate PPA and for the City to separately enter into the City/Golden Fields PPA, with certain conditions precedent on the termination of the City/Hecate PPA. The Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The Council approves the Termination Agreement under which the City and Hecate Energy Palo Alto LLC mutually agree to the termination of their Power Purchase Agreement (“PPA”) from 2016, known as the “City/Hecate PPA”. SECTION 2. The Council approves the PPA between Golden Fields Solar III, LLC, as seller, and the City of Palo Alto, as buyer (the “City/Golden Fields PPA”). The delivery term of the City/Golden Fields PPA is up to forty (40) years, commencing upon the commercial operation date of the planned electric generation facility, which date is expected to be no later than January 1, 2023. The City will receive a 26 MW share of the facility’s net output. Spending authority under the PPA shall not exceed one hundred one million dollars ($101,000,000). SECTION 3. The Council delegates to the City Manager, or his designee, the authority to (1) execute the Termination Agreement between the City and Hecate Energy Palo Alto LLC, on behalf of the City; and (2) execute the City/Golden Fields PPA with Golden Fields Solar III, LLC on behalf of the City, and the authority to execute any documents necessary to administer the City/Golden Fields PPA that are consistent with the Palo Alto Municipal Code and City Council approved policies. * NOT YET APPROVED * {D0365802.DOCX / 1} SECTION 4. As permitted by section 2.30.290 of the Palo Alto Municipal Code, the Council delegates to the City Manager, or his designee, the authority to exercise at his discretion any or all of the three extension term options included in the City/Golden Fields PPA, to extend the twenty-five year base contract up to a forty year contract term for the City. SECTION 5. With respect to the Council’s award of the City/Golden Fields PPA referred to in Section 2 above, the Council waives the creditworthiness requirements of Palo Alto Municipal Code section 2.30.340(c), as that requirement may apply to Golden Fields Solar III, LLC. SECTION 6. With respect to the Council’s award of the City/Golden Fields PPA referred to in Section 2 above, the Council waives the anti-speculation requirement of Section D.1 of the City’s existing Energy Risk Management Policy, as that requirement may apply to surplus electricity purchases caused by the City’s participation in the PPA with Golden Fields Solar III, LLC. // // // // // // // // // // // // // // // * NOT YET APPROVED * {D0365802.DOCX / 1} // // SECTION 7. The Council’s approval of the City/Golden Fields PPA does not meet the definition of a “project” under the California Environmental Quality Act (CEQA), pursuant to Public Resources Code Section 21065. However, the City does intend, pursuant to the City/Golden Fields PPA, to receive output from a project that will constitute a “project” for the purposes of CEQA. The project developer, Golden Fields, will be responsible for acquiring necessary environmental reviews and permits on the project to be developed, and the City/Golden Fields PPA provides for the City to receive confirmation that all CEQA requirements have been met as a condition precedent to the City’s purchase of any output from the project. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Deputy City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services {D0364032.DOCX / 1} TERMINATION AGREEMENT This TERMINATION AGREEMENT (the “Termination”) is made by and among the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”) and Hecate Energy Palo Alto LLC, a Delaware limited liability company (“Hecate”) (individually, a “Party” and, collectively, the “Parties”), in reference to the following facts and circumstances: RECITALS A. City and Hecate are Parties to a certain Power Purchase Agreement, dated as of July 18, 2016 (as further amended, modified, supplemented or restated, and as including all related agreements, instruments and documents, including a certain Letter Agreement, dated as of October 24, 2016, and also including Amendment No. 1 to Power Purchase Agreement, dated as of July 7, 2017) (the “City/Hecate PPA”); B. The City/Hecate PPA was entered into between the Parties for the sale of energy to City from Hecate upon completion of an approximately 26 MW photovoltaic solar electric generating facility that was to be developed, financed, built and owned by Hecate; C. Prior to the development of the generating facility, Hecate desired to assign the City/Hecate PPA pursuant to Section 10.2 of the City/Hecate PPA, which Section provides that the City must consent in writing prior to any assignment of the rights and obligations of the City/Hecate PPA, and which consent shall not be unreasonably withheld; D. Pursuant to Hecate’s desire to assign the City/Hecate PPA to Golden Fields Solar III (“Golden Fields”), LLC pursuant to Section 10.2 of the City/Hecate PPA, the City entered into good faith negotiations with Golden Fields; E. Because the PPA which resulted from the negotiations between City and Golden Fields (“City/Golden Fields PPA”) is significantly different than the City/Hecate PPA which was to be assigned, the Parties have mutually decided to terminate the City/Hecate PPA and for the City to separately and simultaneously enter into the City/Golden Fields PPA, with certain conditions precedent on the termination of the City/Hecate PPA. NOW THEREFORE, the Parties further agree as follows: 1. Definitions and Interpretation. (a) The Parties intend that this Termination Agreement be read together with and as part of the City/Hecate PPA. To the extent that there is any conflict of, or inconsistency in, interpretation between this Termination Agreement and the other parts of the City/Hecate PPA, then this Termination Agreement is to be given interpretive priority. (b) Unless otherwise specifically defined in this Termination Agreement, terms with the initial letter capitalized have the specific meaning defined in the City/Hecate PPA, including but not limited to those set forth in Article I (Definitions; Rules of Interpretation). 2. Agreement to Terminate and Conditions Precedent to Effective Date of Termination. {D0364032.DOCX / 1} (a) The Parties hereby agree to terminate the City/Hecate PPA. (b) The Parties agree that the City/Hecate PPA is not being terminated pursuant to an express provision of the City/Hecate PPA, including but not limited to Section 2.1(b) (Failure to Meet All Conditions Precedent), Section 2.9(d) (CEQA Buyer Termination of Agreement) Section 6.3 (Termination Due To Force Majeure Event) or Section 7.3 (Termination for Default), and is instead being terminated by mutual agreement of the Parties. (c) The Effective Date of this Termination Agreement shall not be effective until the occurrence of all of the following: (i) Execution of this Termination Agreement by both the City and Hecate; (ii) Palo Alto City Council approval of both this Termination Agreement and the City/Golden Fields PPA; (iii) Execution of the City/Golden Fields PPA by both City and Golden Fields; and (iv) Provision to the City of a Letter of Credit by Golden Fields as set forth in Section 9.3 of the City/Golden Fields PPA. 3. Return of Development Assurance to Hecate. The Development Assurance provided by Hecate to City pursuant to Section 9.2(a)(i) of the City/Hecate PPA, in the amount of $5,200,000.00, will be returned to Hecate by wire transfer within ten (10) business days of the Effective Date of this Termination Agreement. 4. General Provisions. (a) Counterparts. This Termination Agreement may be signed in multiple counterparts, which shall, when executed by both Parties, constitute a single binding agreement. (b) Authority. The individuals executing this Termination Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. In WITNESS WHEREOF, the Parties have executed this Termination Agreement as of the Effective Date. Hecate Energy Palo Alto LLC By: __________________________________ Name: Title: CITY OF PALO ALTO _________________________________ ED SHIKADA, City Manager APPROVED AS TO FORM: {D0364032.DOCX / 1} _________________________________ Senior Deputy City Attorney APPROVED: _________________________________ Dean Batchelor, Interim Director of Utilities 4124-1165-3657.19 Execution Version POWER PURCHASE AGREEMENT Between The City of Palo Alto (as “Buyer”) and Golden Fields Solar III, LLC (as “Seller”) Dated as of May __, 2019 TABLE OF CONTENTS – Page i 4124-1165-3657.19 TABLE OF CONTENTS PREAMBLE 1 RECITALS 1 GENERAL TERMS AND CONDITIONS .......................................................................... 2 ARTICLE I: DEFINITIONS; RULES OF INTERPRETATION ........................................... 2 1.1 Definitions. ................................................................................................. 2 1.2 Rules of Interpretation. .............................................................................. 18 ARTICLE II TERM, PURCHASE AND SALE ................................................................. 19 2.1 Conditions Precedent to Commencement of Term of Agreement .................... 19 2.2 Agreement Term, Delivery Term, Acceleration and Extension ....................... 19 2.3 Purchase and Sale of the Output .................................................................. 21 2.4 Price. ....................................................................................................... 22 2.5 Test Energy .............................................................................................. 23 2.6 Environmental Attributes ........................................................................... 23 2.7 Resource Adequacy. .................................................................................. 24 2.8 Tax Credits and Incentives. ........................................................................ 25 2.9 CEQA. ..................................................................................................... 25 2.10 Right of First Refusal for Expansion Plant and Expansion Plant Output. ......... 25 2.11 Refurbishment of Plant. ............................................................................. 27 ARTICLE III METERING AND BILLING ...................................................................... 28 3.1 Metering Requirements. ............................................................................. 28 3.2 Billing. ..................................................................................................... 29 3.3 Payment ................................................................................................... 29 3.4 Billing Agent. ........................................................................................... 29 ARTICLE IV SELLER'S OBLIGATIONS ........................................................................ 30 4.1 Development, Finance, Construction and Operation of the Plant. .................... 30 4.2 General Obligations. .................................................................................. 32 4.3 Construction Milestones. ............................................................................ 34 4.4 Milestone Excused Delay and Liquidated Damages ...................................... 36 4.5 Obligation to Schedule and Deliver. ............................................................ 38 4.6 Output Obligations, Performance LDs and Buyer’s Right to Operate. ............. 42 ARTICLE V BUYER’S OBLIGATIONS ......................................................................... 43 5.1 Delivery and Transmission. ........................................................................ 43 5.2 Taxes. ...................................................................................................... 43 ARTICLE VI FORCE MAJEURE .................................................................................... 44 6.1 Remedial Action. ...................................................................................... 44 6.2 Notice. ..................................................................................................... 44 6.3 Termination Due To Force Majeure Event. .................................................. 44 TABLE OF CONTENTS – Page ii 4124-1165-3657.19 ARTICLE VII DEFAULT, REMEDIES AND TERMINATION ........................................ 45 7.1 Events of Default by Buyer. ....................................................................... 45 7.2 Events of Default by Seller. ........................................................................ 45 7.3 Termination for Default. ............................................................................ 46 7.4 Limitation of: Remedies, Liability and Damages........................................... 48 ARTICLE VIII REPRESENTATIONS AND WARRANTIES ............................................ 49 8.1 Seller’s Representations and Warranties. ...................................................... 49 8.2 Buyer Representations and Warranties. ........................................................ 51 8.3 Covenants ................................................................................................. 51 ARTICLE IX DEVELOPMENT, INTERIM AND PERFORMANCE ASSURANCE ........... 52 9.1 Grant of Security Interest/Remedies. ........................................................... 52 9.2 Development Assurance, Interim Assurance and Performance Assurance. ....... 53 9.3 Letter of Credit. ......................................................................................... 55 ARTICLE X MISCELLANEOUS .................................................................................... 57 10.1 Indemnification. ........................................................................................ 57 10.2 Assignment. .............................................................................................. 58 10.3 Notices. .................................................................................................... 59 10.4 Electronic Transmission ............................................................................. 60 10.5 Captions. .................................................................................................. 60 10.6 No Third Party Beneficiary. ........................................................................ 60 10.7 No Dedication ........................................................................................... 60 10.8 Entire Agreement; Integration; Amendments. ............................................... 60 10.9 Applicable Law. ........................................................................................ 61 10.10 Venue. ..................................................................................................... 61 10.11 Rule of Construction. ................................................................................. 61 10.12 Attorneys’ Fees and Costs. ......................................................................... 61 10.13 Nature of Relationship. .............................................................................. 62 10.14 Good Faith and Fair Dealing; Reasonableness. ............................................. 62 10.15 Severability............................................................................................... 62 10.16 Confidentiality. ......................................................................................... 62 10.17 Cooperation. ............................................................................................. 64 10.18 Audit. ....................................................................................................... 64 10.19 Mobile Sierra Doctrine. .............................................................................. 64 10.20 Counterparts. ............................................................................................ 64 10.21 Debt Liability Disclaimer. .......................................................................... 64 10.22 No Implied Waiver of Breach. .................................................................... 65 SIGNATURE PAGE ....................................................................................................... 66 TABLE OF CONTENTS – Page iii 4124-1165-3657.19 EXHIBITS The following Exhibits constitute a part of this Agreement and are incorporated into this Agreement by reference: EXHIBIT A PLANT DESCRIPTION AND SITE DRAWINGS EXHIBIT B ENVIRONMENTAL ATTRIBUTE TRANSFER FROM SELLER TO BUYER EXHIBIT C INSURANCE COVERAGES EXHIBIT D SCHEDULING PROTOCOLS EXHIBIT E-1 FORM OF MONTHLY PROGRESS REPORT EXHIBIT E-2 COD CERTIFICATION EXHIBIT F-1 FORM OF LETTER OF CREDIT EXHIBIT F-2 FORM OF LENDER CONSENT AGREEMENT EXHIIBT G EXPECTED ANNUAL ENERGY PRODUCTION EXHIBIT H SELLER DOCUMENTATION CONDITIONS PRECEDENT POWER PURCHASE AGREEMENT - Page 1 of 65 4124-1165-3657.19 POWER PURCHASE AGREEMENT PREAMBLE This Power Purchase Agreement, together with the exhibits referenced herein, is made and entered into as of the Execution Date, by and between the City of Palo Alto, a California chartered municipal corporation (“Buyer”), and Golden Fields Solar III, LLC, a Delaware limited liability company (“Seller”). RECITALS 1. Seller intends to develop, finance, build, own and operate an approximately 240 MW solar photovoltaic electric generating project (the “Rosamond Project”) which will be divided electrically into separately metered solar photovoltaic electric generating facilities. 2. One of the separately metered solar photovoltaic electric generating facilities of the Rosamond Project will be dedicated to serve Buyer under this Agreement (the “Plant”) and shall obtain a Full Capacity Deliverability Status Finding from the CAISO as described herein and be located at the Site. 3. Buyer is a municipal utility governed by the City of Palo Alto, by and through its Council, which has all powers necessary and appropriate to a municipal corporation, including but not limited to the authority granted by the City Charter, Article XI, Section 9(a) of the California Constitution, California Government Code Section 39732 and California Public Utilities Code Section 10002, to establish, purchase, and operate public works to furnish its inhabitants with electrical power. Under this authority, Buyer is engaged in the business of delivering electricity to its residential and commercial customers in Palo Alto, California, and buying electricity with the intention of routinely taking physical delivery. 4. Buyer wishes to purchase the Output of the Plant to meet Buyer’s needs at a known price and timing and intends to resell related Energy to its residential and commercial customers. 5. Buyer is willing to purchase, and Seller is willing to sell, the Output of the Plant on the terms and conditions and at the prices set forth in this Agreement. NOW THEREFORE, in consideration of the recitals above and the following covenants, terms and conditions, the Parties agree: POWER PURCHASE AGREEMENT - Page 2 of 65 4124-1165-3657.19 GENERAL TERMS AND CONDITIONS ARTICLE I DEFINITIONS; RULES OF INTERPRETATION 1.1 Definitions. The following initially capitalized terms, whenever used in this Agreement, have the meanings set forth below unless the context of their use otherwise indicates or they are otherwise defined in other sections of this Agreement. AC: Alternating current. Affiliate: Means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Person. For purposes of this definition, “control” means the direct or indirect ownership of more than 50% of the outstanding equity securities of such Person having ordinary voting power or the right to direct and manage the business and affairs of such Person. Agreement: Means this Power Purchase Agreement between Buyer and Seller, which is comprised of the Preamble, Recitals, these General Terms and Conditions, and all appendices, schedules, exhibits and any written supplements attached hereto and incorporated herein by reference, as well as all written and signed amendments and modifications thereto. Ancillary Services: Has the meaning set forth in the CAISO Tariff. Attorneys’ Fees: Means reasonable attorneys’ fees and costs, including at trial and on appeal, including an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. Availability Standards: Means the program set forth in Section 40.9 of the CAISO Tariff, as it may be amended, supplemented or replaced (in whole or in part) from time to time, setting forth certain standards regarding the desired level of availability for Resource Adequacy resources and possible charges and incentive payments for performance thereunder. Bankrupt: Means with respect to any entity, such entity (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, or has any such petition filed or commenced against it and such case filed against it is not dismissed in sixty (60) calendar days, (b) makes an assignment or any general arrangement for the benefit of creditors, (c) otherwise becomes bankrupt or insolvent (however evidenced), (d) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (e) is generally unable to pay its debts as they fall due. Battery Storage Facility: Has the meaning set forth in Section 2.12. Battery Storage Facility Request: Has the meaning set forth in Section 2.12. POWER PURCHASE AGREEMENT - Page 3 of 65 4124-1165-3657.19 Business Day: Means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday and shall be between the hours of 8:00 a.m. and 5:00 p.m. local time for the relevant Party’s principal place of business where the relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be received. Buyer: Has the meaning in the Preamble, and any successor or permitted assignee. CAISO: The California Independent System Operator Corporation, or its functional successor. CAISO Resource ID: As defined in the CAISO Tariff, identification characters assigned by the CAISO to, among other things, generating units. CAISO Tariff: The California Independent System Operator Corporation, Fifth Replacement FERC Electric Tariff, as it may be amended, supplemented or replaced (in whole or in part) from time to time. Calculation Period: Means successive periods consisting of two (2) consecutive Contract Years with the first Calculation Period commencing on the Contract Delivery Start Date, and with each subsequent Calculation Period commencing on the twelve (12) month anniversary of the commencement of the prior Calculation Period. Calculation Period Deemed Delivered Energy Production: For each Calculation Period, an amount expressed in MWh equal to the sum of (i) the total Output delivered by Seller to the Point of Interconnection in such Calculation Period, plus (ii) the Seller Excused Energy Amount for such Calculation Period. Calculation Period Expected Energy Production: Means an amount expressed as MWh equal to the sum of the Expected Annual Energy Production for the relevant two Contract Years during each Calculation Period. Capacity Attributes: Means any current or future defined characteristic (including the ability to generate at a given capacity level, provide Ancillary Services, and ramp up or ramp down at a given rate), certificate, tag, credit, flexibility, or dispatchability attribute, whether general in nature or specific as to the location or any other attribute of the Plant, intended to value any aspect of the capacity of the Plant to produce any and all Output, including any accounting construct so that the maximum amount of Initial Plant Capacity may be counted toward Resource Adequacy Requirements or any other measure by the CPUC, the CAISO, the FERC, or any other entity invested with the authority under federal or state Law, to require Buyer to procure, or to procure at Buyer’s expense, Resource Adequacy or other such Output. CARB: Means the California Air Resources Board or any successor agency. CEC: Means the California Energy Resources Conservation and Development Commission or any successor agency. CEC Certification and Verification: Means that the CEC has certified (or, with respect to periods before 180 days after the Plant has commenced commercial operation (as such term is POWER PURCHASE AGREEMENT - Page 4 of 65 4124-1165-3657.19 defined by and according to the CEC), that the CEC has pre-certified) that the Plant is an ERR for purposes of the California Renewables Portfolio Standard and that all Output produced by the Plant qualifies as generation from an ERR for purposes of the Plant. CEQA: The California Environmental Quality Act, as it may be amended from time to time. Change in Law: The enactment or issuance of any new Law, the amendment, alteration, modification or repeal of any existing Law or any authoritative interpretation of any existing Law issued by a competent court, tribunal or Governmental Authority contrary to the existing official interpretation thereof, in each case coming into effect after the Execution Date and which must be complied with in order for the Plant to be constructed and operated lawfully. COD Certification: Seller’s certification of Commercial Operation in the form set forth as Exhibit E-2, duly executed by Seller and its Licensed Professional Engineer. Commercial Operation: The condition of the Plant whereby it is operating and able to produce and deliver the Output to Buyer pursuant to the terms of this Agreement. Commercial Operation Date: The date upon which Seller delivers the COD Certification to Buyer in accordance with Section 4.3(d) and thereby notifies Buyer that Commercial Operation has commenced. Commercial Operation Milestone: Has the meaning set forth in Section 4.3(b)(vi). Condition Precedent: Means each of, or one of, the conditions set forth in Section 2.1(a)(i) through (iii), and “Conditions Precedent” shall refer to all of the conditions set forth in Section 2.1(a)(i) through (iii). Conditional Use Permit: Means a permit approving (either separately or together with other parts of the Rosamond Project) the conditional use for the development, construction and operation of the Plant required and by any Governmental Authority. Conditional Use Permitting Milestone: Has the meaning set forth in Section 4.3(b)(ii). Confidential Information: Has the meaning set forth in Section 10.16(a). Construction Milestone: Has the meaning set forth in Section 4.3(b)(v). Construction Start Date: The date on which Seller delivers to Buyer a copy of the Notice to Proceed that Seller has delivered to the EPC Contractor for the Plant. Contract Delivery Start Date: Has the meaning set forth in Section 2.2(b)(i), or, if accelerated, the meaning set forth in Section 2.2(c). Contract Year: A period of twelve (12) consecutive months, with the first Contract Year commencing at 12:00 a.m. on the Contract Delivery Start Date, and each subsequent Contract Year commencing on the twelve (12) month anniversary of the Contract Delivery Start Date. POWER PURCHASE AGREEMENT - Page 5 of 65 4124-1165-3657.19 Contractual Obligations: As to Seller, any material agreement, instrument or undertaking to which Seller is a party or by which it or any of its Plant property is bound. Costs: With respect to a Non-Defaulting Party, (a) brokerage fees, commissions and other similar third party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement entered into pursuant to this Agreement or entering into new arrangements which replace this Agreement and (b) all Attorneys’ Fees incurred by the Non-Defaulting Party in connection with the termination of this Agreement. CPRA: Has the meaning set forth in Section 10.16(a). CPUC: Means the California Public Utilities Commission or any successor entity. Credit Rating: Means, with respect to any entity, (a) the rating then assigned to such entity’s unsecured senior long-term debt obligations (not supported by third party credit enhancements) or (b) if such entity does not have a rating for its unsecured senior long-term debt obligations, then the rating assigned to such entity as an issuer rating by S&P and/or Moody’s. If the entity is rated by both S&P and Moody’s and such ratings are not equivalent, the lower of the two ratings shall determine the Credit Rating. If the entity is rated by either S&P or Moody’s, but not both, then the available rating shall determine the Credit Rating. Cure: Has the meaning set forth in Section 9.3(b). DA Price: The resource specific locational marginal price (“LMP”) applied to the PNode applicable to the Plant in the CAISO Day-Ahead Market. Daily LD Amount: For each day or portion of a day for which delay liquidated damages are payable under Section 4.4(b), an amount equal to the total amount of Development Assurance required hereunder divided by 365. Damage Payment: Means (a) the dollar amount to be posted as Development Assurance pursuant to Section 9.2(a)(i) hereof, less (b) amounts collected by Buyer as the Daily LD Amount pursuant to Section 4.4(b), if any. Day-Ahead Market: Has the meaning set forth in the CAISO Tariff. Defaulting Party: Means the Party that is subject to an Event of Default. Delivery Term: Has the meaning set forth in Section 2.2(b)(i), or if extended, the meaning set forth in Section 2.2(d). Development Assurance: Means the collateral provided by Seller to Buyer to secure Seller’s obligations hereunder in accordance with Section 9.2(a)(i) of this Agreement. Development Progress Report: Means the report similar in form and content attached hereto as Exhibit E-1. Discretionary Curtailment: Has the meaning set forth in Section 4.5(c)(ii)(A). POWER PURCHASE AGREEMENT - Page 6 of 65 4124-1165-3657.19 Dispatch Down Period: The period of curtailment of delivery of Output from the Plant that is not Discretionary Curtailment and results from: (a) A curtailment ordered by the CAISO (whether directly or through a Scheduling Coordinator or the Participating Transmission Owner), for any reason, including, but not limited to, any System Emergency, any warning of an anticipated System Emergency, or any warning of an imminent condition or situation which could jeopardize the CAISO’s or Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the CAISO or the Participating Transmission Owner is connected; (b) A curtailment ordered by the Participating Transmission Owner or distribution operator (if interconnected to distribution or sub-transmission system) for any reason, including but not limited to, (i) any situation that affects normal function of the electric system including, but not limited to any abnormal condition that requires action to prevent circumstances such as equipment damage, loss of load, or abnormal voltage conditions, (ii) any warning, forecast or anticipation of conditions or situations that jeopardize the Participating Transmission Owner’s electric system integrity or the integrity of other systems to which the Participating Transmission Owner is connected; or (iii) as a result of scheduled or unscheduled maintenance or construction on the Participating Transmission Owner’s transmission facilities or distribution operator’s facilities that prevents the delivery or receipt of Output to or at the Point of Interconnection; or (c) A curtailment in accordance with Seller’s obligations under its Interconnection Agreement with the Participating Transmission Owner or distribution operator; provided, that any of the foregoing events (a) through (c) shall not have been solely caused by the acts or omissions of Buyer. Distribution Upgrades: Has the meaning set forth in the CAISO Tariff. EA Agency: Any local, state or federal entity, or any other Person, that has responsibility for or jurisdiction over a program involving transferability of Environmental Attributes, including, without limitation, the Clean Air Markets Division of the United States Environmental Protection Agency (together with any successor agency, the “EPA”), the CEC, the CPUC, CARB, and any successor commission or agency thereto. Early Termination Date: Has the meaning set forth in Section 7.3(a)(i). Electric System Upgrades: Means any Network Upgrades, Distribution Upgrades, or Interconnection Facilities that are determined to be necessary by the CAISO or Participating Transmission Owner, as applicable, to physically and electrically interconnect the Plant to the Participating Transmission Owner’s electric system for receipt of Energy at the Point of Interconnection. Eligible Intermittent Resource: Has the meaning set forth in the CAISO Tariff. POWER PURCHASE AGREEMENT - Page 7 of 65 4124-1165-3657.19 Eligible Intermittent Resource Protocols or EIRP: Has the meaning set forth in the CAISO Tariff, including but not limited to Appendix Q attached thereto. Eligible LC Bank: Means either a U.S. commercial bank, or a foreign bank issuing a Letter of Credit through its U.S. branch; and in each case the issuing U.S. commercial bank or foreign bank must either be acceptable to Buyer in its sole discretion or must have a Credit Rating of at least: (a) “A-, with a stable designation” from S&P and “A3, with a stable designation” from Moody’s, if such bank is rated by both S&P and Moody’s; or (b) “A-, with a stable designation” from S&P or “A3, with a stable designation” from Moody’s, if such bank is rated by either S&P or Moody’s, but not both, even if such bank was rated by both S&P and Moody’s as of the date of issuance of the Letter of Credit but ceases to be rated by either, but not both of those ratings agencies. Eligible Renewable Energy Resource: Has the meaning set forth in California Public Utilities Code Section 399.12 and California Public Resources Code Section 25741, as either code provision is amended or supplemented from time to time. Energy: Means three-phase, 60-cycle alternating current electric energy measured in MWh and net of auxiliary loads and station electrical uses (unless otherwise specified). For purposes of the definition of “Environmental Attributes”, the word “energy” shall have the meaning set forth in this definition. Environmental Attributes: Any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the generation from the Plant or Expansion Plant(s) (to the extent of sales to Buyer of Expansion Plant Output pursuant to Section 2.10), and its displacement of conventional energy generation. Environmental Attributes include, without limitation, Renewable Energy Credits, and all of the following: (a) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (b) any avoided emissions of carbon dioxide (CO2), methane (CH4) and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the atmosphere; and (c) the reporting rights to these avoided emissions such as Environmental Attributes Reporting Rights. Environmental Attributes Reporting Rights: The rights of a purchaser of Environmental Attributes to report the ownership of accumulated Environmental Attributes in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the discretion of the Environmental Attributes’ purchaser, and include without limitation those Environmental Attribute Reporting Rights accruing under Section 1605(b) of the Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Environmental Attributes are accumulated on a kWh basis and one Environmental Attribute represents the amount of Environmental Attributes associated with one (1) MWh of Energy. Environmental Attributes do not include (i) any Energy, capacity, reliability or other power attributes from the Plant or Expansion Plant(s), if any, or (ii) tax credits associated with the construction or operation of the Plant, Expansion Plant(s), if any, or any other associated contract or right, and other financial incentives in the form of credits, rebates, reductions, or allowances associated with the Plant, Expansion Plant(s), if any, or any other associated contract or right, that are applicable to a state or federal income taxation obligation. POWER PURCHASE AGREEMENT - Page 8 of 65 4124-1165-3657.19 Environmental Laws: Any and all federal, state and local laws, including statutes, regulations, rulings, orders, administrative interpretations and other governmental restrictions and requirements relating to the discharge of air pollutants, water pollutants or process waste water or otherwise relating to the environment or hazardous substances, as amended from time to time. EPA: Has the meaning set forth in the definition of EA Agency. EPC Contract: The Seller’s engineering, procurement and construction contract with the EPC Contractor. EPC Contractor: An engineering, procurement, and construction contractor, or if not utilizing an engineering, procurement, and construction contractor, the entity having lead responsibility for the management of overall construction activities, selected by Seller, with substantial experience in the engineering, procurement, and construction of utility-scale solar photovoltaic power plants. ERR: Has the meaning set forth in the definition of Eligible Renewable Energy Resource. Event of Default: Has the meanings set forth in Section 7.1 as to Buyer, and Section 7.2 as to Seller. Execution Date: Means the date on which all of the Conditions Precedent set forth in Section 2.1(a) have been satisfied or waived in writing by both Parties. Expansion Plant: Any expansion of the Plant from its Initial Plant Capacity or expansion of the Rosamond Project from the Initial Rosamond Project Capacity, or any other electricity generating facility owned or controlled by Seller or its Affiliates, where the generating equipment (solar modules and inverters) for such electric generating facility is located within the Site. Each such expansion of the Plant, expansion of the Rosamond Project or additional facility within the Site other than the Rosamond Project shall be deemed to be an “Expansion Plant.” For the avoidance of doubt, none of the Initial Rosamond Project Capacity shall be an Expansion Plant or part thereof, and the use of or ownership of an interest in any shared interconnection or transmission facilities or any other shared rights or facilities of any kind shall not cause a generating facility to be or become an Expansion Plant. Expansion Plant Output: All capacity, Output, associated Environmental Attributes, Ancillary Services, contributions towards Resource Adequacy or reserve requirements (if any) and any other reliability or power attributes produced by Seller at any Expansion Plant. Expected Annual Energy Production: Means an amount expressed as MWh equal to the expected Energy associated with the Output to be produced by the Plant based on its Expected Initial Plant Capacity for each Contract Year during the Delivery Term, including degradation, as set forth on Exhibit G. Expected Initial Plant Capacity: Has the meaning set forth in Section 2.3(c)(i). Extended Delivery Term: Has the meaning set forth in Section 2.2(d). Extended Delivery Term Option Exercise Notice: Has the meaning set forth in Section 2.2(d). POWER PURCHASE AGREEMENT - Page 9 of 65 4124-1165-3657.19 FCDS Finding Milestone: Has the meaning set forth in Section 4.3(b)(vii). FERC: The Federal Energy Regulatory Commission and any successor organization. Financing Milestone: Has the meaning set forth in Section 4.3(b)(iv). Force Majeure Event: Any act, event or circumstance that wholly or partly delays or prevents a Party from timely performing obligations under this Agreement or from complying with conditions required under this Agreement, only to the extent that such act, event or circumstance is (x) reasonably unforeseeable, (y) directly or indirectly beyond the reasonable control of and without the fault or negligence of, or caused by, the Party relying thereon as justification for such delay, nonperformance, or noncompliance, and (z) the Party seeking to have its performance obligation(s) excused thereby has taken all reasonable precautions and measures in order to prevent or avoid such event or mitigate the effect of such event on such Party’s ability to perform its obligations under this Agreement and which by the exercise of due diligence such Party could not reasonably have been expected to avoid and has been unable to overcome. (a) Subject to the foregoing, events that could qualify as Force Majeure Events include the following: (i) acts of God or the elements, extreme or severe weather conditions, explosion, fire, epidemic, landslide, mudslide, sabotage, lightning, earthquake, flood or similar cataclysmic event; (ii) war (declared or undeclared), blockade, civil insurrection, riot, civil disturbance, acts of the public enemy (including acts of terrorism), sabotage, revolution, expropriation or confiscation; (iii) except in the case of (b)(vii) below, strike, work stoppage or other labor dispute or difficulty caused or suffered by a Party (in which case the affected Party shall have no obligation to settle the strike or labor dispute on terms it deems unreasonable); (iv) any restraint or restriction imposed by Law or other acts or omissions of Governmental Authorities, whether federal, state or local, which by the exercise of due diligence and in compliance with applicable Law a Party could not reasonably have been expected to avoid and to the extent which, by exercise of due diligence and in compliance with applicable Law, such Party has been unable to overcome (so long as the affected Party has not applied for or assisted such act by a Governmental Authority); (v) emergencies declared by the Transmission Provider or any other authorized successor or regional transmission organization or any state or federal regulator or legislature requiring a forced curtailment of the Plant or making it impossible for the Transmission Provider to transmit Energy, including Energy to be delivered pursuant to this Agreement; provided that, if a curtailment of the Plant pursuant to this subsection (a)(v) would also meet POWER PURCHASE AGREEMENT - Page 10 of 65 4124-1165-3657.19 the definition of a Dispatch Down Period, then it shall be treated as a Dispatch Down Period for purposes of this Agreement; or (b) A “Force Majeure Event” shall not include: (i) economic conditions that render a Party’s performance of this Agreement at the Price unprofitable or otherwise uneconomic (including Buyer’s ability to buy Energy or Environmental Attributes at a lower price, or Seller’s ability to sell Energy or Environmental Attributes at a higher price, than the Price); (ii) a governmental act by Buyer that delays or prevents Buyer from timely performing its obligations under this Agreement; (iii) a Plant equipment failure, except where such failure is caused by a Force Majeure Event of the specific type described in any of subsections (a)(i) through (a)(v) above; (iv) failure or delay in grant of Permits or approvals of any type for the construction, operation or maintenance of the Plant, except where such failure is caused by a Force Majeure Event of the specific type described in any of subsections (a)(i) through (a)(v) above; (v) Discretionary Curtailment; (vi) failures or delays by the Participating TO and/or the CAISO in entering into, or performing under, any agreements with Seller contemplated by this Agreement; (vii) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, the EPC Contractor or subcontractors thereof or any other third party employed by Seller to work on the Plant; (viii) a Party’s inability to pay amounts due to the other Party under this Agreement, except if such inability is caused solely by a Force Majeure event that disables physical or electronic facilities necessary to transfer funds to the payee Party; (ix) Seller’s failure to obtain additional funds, including funds authorized by a state or the federal government or agencies thereof, to supplement the payments made by Buyer pursuant to this Agreement; (x) Seller’s inability to obtain sufficient fuel, power or materials to operate the Plant, except where such failure is caused by a Force Majeure Event of the specific type described in any of subsections (a)(i) through (a)(v) above; POWER PURCHASE AGREEMENT - Page 11 of 65 4124-1165-3657.19 (xi) a Forced Outage except where such Forced Outage is caused by an event of Force Majeure of the specific type described in any of subsections (a)(i) through (a)(v) above; or (xii) a failure to complete, or a delay in completing, interconnection or Electric System Upgrades by the Commercial Operation Milestone, including by any third party. Forecasting Service: Has the meaning set forth in Section 4.5(d). Forced Outage: Means any unplanned reduction or suspension of the electrical output from the Plant or unavailability of the Output in whole or in part from a unit in response to a mechanical, electrical, or hydraulic control system trip or operator-initiated trip in response to an alarm or equipment malfunction and any other unavailability of a unit for operation, in whole or in part, for maintenance or repair that is not a Planned Outage and not the result of Force Majeure. FPA: Has the meaning set forth in Section 8.1(c)(i). Full Capacity Deliverability Status or FCDS: Has the meaning set forth in the CAISO Tariff. Full Capacity Deliverability Status Finding or FCDS Finding: A written confirmation from the CAISO that the Plant is eligible for FCDS. GAAP or Generally Accepted Accounting Principles: Means the standards for accounting and preparation of financial statements established by the Federal Accounting Standards Advisory Board (or its successor agency) or any successor standards adopted pursuant to relevant Securities Exchange Commission rule. Gains: With respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of the Agreement for the remainder of the Term, determined in a commercially reasonable manner, subject to Section 7.3 hereof. Factors used in determining economic benefit may include reference to information either available to it internally or supplied by one or more third parties, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, market price referent, market prices for a comparable transaction, forward price curves based on economic analysis of the relevant markets, settlement prices for a comparable transaction at liquid trading hubs (e.g., NYMEX), all of which should be calculated for the remainder of the Term to determine the value of the Output. Governmental Authority: Any federal or state government, or political subdivision thereof, including, without limitation, any municipality, township or county, or any entity or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any corporation or other entity owned or controlled by any of the foregoing. Incentives: Any and all tax credits, including Section 45 Credits and Section 48 Credits, deductions, allowances, depreciation and exemptions applicable to federal, state and local taxes and any other payment, credit, deduction, benefit, grant or monetary incentive provided by any POWER PURCHASE AGREEMENT - Page 12 of 65 4124-1165-3657.19 federal, state or local Governmental Authority or any Person, whether now in effect or arising in the future, in each case arising from the activities contemplated by this Agreement, including any “Renewable Energy Production Incentive Payments” from the U.S. Department of Energy and any “Energy Investment Tax Credit” described in Section 48 of the Internal Revenue Code of 1986, as it may be amended or supplemented from time to time. Notwithstanding the foregoing, Incentives shall not include anything that qualifies as Output (including any Environmental Attributes). Indemnified Party: Has the meaning set forth in Section 10.1(b). Indemnifying Party: Has the meaning set forth in Section 10.1(b). Ineligible LC Bank: Has the meaning set forth in Section 9.3(c)(i)(A). Ineligible LC Bank Notice Period: Has the meaning set forth in Section 9.3(c)(i). Initial Plant Capacity: Has the meaning set forth in Section 2.3(c)(ii). Initial Rosamond Project Capacity: Means 240 MW. Interconnection Agreement: The agreement and associated documents (or any successor agreement and associated documentation) by and among Seller, the Participating TO and the CAISO governing the terms and conditions of Seller’s interconnection with the CAISO grid, including any description of the plan for interconnection of the Plant to the Participating TO’s system. Interconnection Agreement Milestone: Has the meaning set forth in Section 4.3(b)(i). Interconnection Facilities: Has the meaning set forth in the CAISO Tariff. Interim Assurance: The collateral provided by Seller to Buyer to secure Seller’s obligations hereunder in accordance with Section 9.2(a)(ii) of this Agreement. kWh: Means kilowatt-hour (AC). Law: Means any statute, law, treaty, rule, regulation, CEC guidance document, ordinance, code, permit, enactment, injunction, order, writ, decision, authorization, judgment, decree or other legal or regulatory determination or restriction by a court or Governmental Authority of competent jurisdiction, including any of the foregoing that are enacted, amended, or issued after the Execution Date, and which becomes effective after the Execution Date; or any binding interpretation of the foregoing. LC Notice: Has the meaning set forth in Section 9.3(c). Local Capacity Area: Has the meaning set forth in the CAISO Tariff. Lender(s): Any Person(s) providing money or extending credit (including any capital lease) to Seller, including in the form of debt or tax equity, for (a) the construction of the Plant, (b) the term POWER PURCHASE AGREEMENT - Page 13 of 65 4124-1165-3657.19 or permanent financing of the Plant, or (c) working capital or other ordinary business requirements for the Plant. “Lender(s)” shall not include any trade creditor(s) of Seller. Letter of Credit: Means an irrevocable, non-transferable standby letter of credit issued by Wells Fargo, N.A., an Eligible LC Bank or other banking institution acceptable to Buyer in its sole discretion, the form of which must be substantially as contained in Exhibit F-1 to this Agreement; provided, that, if the issuer is a U.S. branch of a foreign commercial bank, Buyer may require changes to such form, the issuer must be an Eligible LC Bank on the date of Transfer, and the issuing Letter of Credit amount may not be greater than the Maximum Issuing Amount if the total amount of collateral posted by the Seller in the form of Letter of Credit exceeds ten million dollars ($10,000,000.00) on the date of Transfer. Licensed Professional Engineer: Means a Person acceptable to Buyer in its reasonable judgment who (a) is licensed to practice engineering in California, (b) has training and experience in the power industry specific to the technology of the Plant, (c) has no economic relationship, association, or nexus with Seller or Buyer, other than to meet the obligations of Seller pursuant to this Agreement, (d) is not a representative of a consultant, engineer, contractor, designer or other individual involved in the development of the Plant or of a manufacturer or supplier of any equipment installed at the Plant, and (e) is licensed in an appropriate engineering discipline for the required certification being made. LMP: Has the meaning set forth in the definition of DA Price. Losses: With respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from the termination of this Agreement for the remainder of the Term, determined in a commercially reasonable manner, subject to Section 7.3 hereof. Factors used in determining the loss of economic benefit may include reference to information either available to it internally or supplied by one or more third parties, including quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, market price referent, market prices for a comparable transaction, forward price curves based on economic analysis of the relevant markets, settlement prices for a comparable transaction at liquid trading hubs (e.g. NYMEX), all of which should be calculated for the remainder of the Term to determine the value of the Output. If the Non-Defaulting Party is the Seller, “Losses” shall exclude any associated loss of investment tax credits and other lost tax benefits. Maximum Issuing Amount: Means the amount of a Letter of Credit to be issued by an Eligible LC Bank, which cannot exceed the lesser of (a) sixty percent (60%) of the total collateral posted by Seller in the form of Letter of Credit including the Letter of Credit to be issued or (b) twenty-five million dollars ($25,000,000.00), without Buyer’s prior written consent. Milestones: Means the key development activities required for the construction and operation of the Plant, as set forth more particularly in Section 4.3(a). MW: Megawatt (AC). MWh: Megawatt-hour (AC). POWER PURCHASE AGREEMENT - Page 14 of 65 4124-1165-3657.19 Network Upgrades: Has the meaning set forth in the CAISO Tariff. Non-Defaulting Party: Has the meaning set forth in Section 7.3(a). Notice to Proceed: The full notice to proceed provided by Seller to the EPC Contractor following execution of the EPC Contract between Seller and such EPC Contractor and satisfaction of all conditions to performance of such contract, by which Seller authorizes such EPC Contractor to begin construction of the Plant without any delay or waiting periods. Output: The capacity, Energy, Environmental Attributes, Ancillary Services, contributions towards Resource Adequacy, reserve requirements (if any), and any and all other reliability or power attributes which are or can be produced by or associated with the Plant. Overproduction Energy Price: Has the meaning set forth in Section 2.4(a). Participating Intermittent Resource: Has the meaning set forth in the CAISO Tariff. Participating TO or Participating Transmission Owner: An entity that (a) owns, operates and maintains transmission lines and associated facilities and/or has entitlements to use certain transmission lines and associated facilities, and (b) has transferred to the CAISO operational control of such facilities and/or entitlements to be made of the CAISO Grid. For purposes of this Agreement, the Participating TO is Southern California Edison. Participating TO System: The transmission system owned by the Participating TO. Parties: Buyer and Seller, and their respective successors and permitted assignees. Party: Buyer or Seller, and each such Party’s respective successors and permitted assignees. Performance Assurance: The collateral provided by Seller to Buyer to secure Seller’s obligations hereunder in accordance with Section 9.2(a)(iii) of this Agreement. Performance LDs: Has the meaning set forth in Section 4.6(b). Permits: All material federal, state or local authorizations, certificates, certifications, pre-certifications, permits, licenses and approvals required by any Governmental Authority for the construction, ownership, operation and maintenance of the Plant, other than the Conditional Use Permit. Permitting Milestone: Has the meaning set forth in Section 4.3(b)(iii). Person: An individual, partnership, corporation, business trust, limited liability company, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity. Planned Outage: Means the removal of equipment from service availability for inspection and/or general overhaul of one or more major equipment groups. To qualify as a Planned Outage, the maintenance (a) must actually be conducted during the Planned Outage, and in Seller’s sole POWER PURCHASE AGREEMENT - Page 15 of 65 4124-1165-3657.19 discretion must be of the type that is necessary to reliably maintain the Plant, (b) cannot be reasonably conducted during Plant operations, and (c) causes the generation level of the Plant to be reduced by at least ten percent (10%) of the Initial Plant Capacity. Plant: The approximately 26 MW photovoltaic solar power generation facility described on Exhibit A hereto to be constructed, owned and operated by Seller located on the Site for the generation and delivery of electricity, including the step-up transformer (or the portion thereof allocated to the Plant), revenue quality meter and all other facilities (or the portion thereof allocated to the Plant, in the case of shared facilities) up to the Point of Interconnection, but not including any other part of the Rosamond Project or any Expansion Plant. PNode: Has the meaning set forth in the CAISO Tariff. Point of Interconnection: The point on the electrical system where the Plant is physically interconnected with the Participating TO System, which is anticipated to be at the Teddy Substation. Pre-FCDS Energy Price: Has the meaning set forth in Section 2.4(b). Price: The price set forth in Section 2.4. Prudent Utility Practice: Has the meaning in the CAISO Tariff. QF: Has the meaning set forth in Section 8.1(c)(1). Qualified Transferee: Means a Person that (a) has, or whose direct or indirect parent has, (i) a Credit Rating of at least BBB with stable designation by S&P or Baa2 with stable designation by Moody’s, or (ii) a net worth (determined in accordance with GAAP) of at least $200,000,000, and (b) has, either itself, through its Affiliates or by contracting with a Person that has, at least three (5) years of experience operating utility-scale photovoltaic solar energy projects. Real-Time Market: Has the meaning set forth in the CAISO Tariff. REC or Renewable Energy Credit: Has the meaning set forth in California Public Utilities Code Section 399.12(h) and CPUC Decision 08-08-028, as may be amended from time to time or as further defined or supplemented by applicable law. Report Period means the interval between dates when Seller must deliver each Development Progress Report to Buyer according to Section 4.3(c)(i)-(iii), as applicable. Requirements of Laws: Collectively, any federal, state or local law, treaty, franchise, rule or regulation, or any order, writ, judgment, injunction, decree, award or determination of any arbitrator or court or other Governmental Authority, in each case applicable to or binding upon Seller or Buyer or any of its property or to which Seller or Buyer or any of its respective properties are subject. Residual Test: Means the requirements that (i) the Extended Delivery Term(s) to be exercised would not cause the Delivery Term, as extended, to exceed 80% of the Plant’s “useful life” for POWER PURCHASE AGREEMENT - Page 16 of 65 4124-1165-3657.19 federal income tax purposes, and (ii) the estimated value of the Facility (determined in compliance with federal income tax Laws) at the end of the Delivery Term, as extended, is at least 20% of the original cost of the Plant. Resource Adequacy: Means an obligation of load serving entities, including Buyer, that requires Buyer to procure a certain amount of electric generating capacity. Resource Adequacy Requirements: Has the meaning set forth in Section 2.7(a). Rosamond Project: Has the meaning set forth in Recital 1. SCADA: Has the meaning set forth in Section 3.1. Scheduling Coordinator: Means a qualified entity designated by Buyer to provide the Scheduling Coordinator Functions for the Plant pursuant to this Agreement. Scheduling Coordinator Functions: Means the functions specified in “Responsibilities of a Scheduling Coordinator” of the CAISO Tariff undertaken by an entity certified by the CAISO as qualifying as a Scheduling Coordinator pursuant to the CAISO Tariff. Section 45 Credits: Those tax credits available under Section 45 of Subtitle A, Chap. 1A, Part IV of the Internal Revenue Code of 1986, as amended, or any other similar state, federal or local tax credits, deductions, payments or benefits arising from the generation and sale of electricity using qualifying renewable resources, not including any Environmental Attributes. Section 48 Credits: Those tax credits available under Section 48(a)(3)(A)(i) and 48(a)(5) of the Internal Revenue Code of 1986, as amended, or any other similar state, federal or local tax credits, deductions, payments or benefits arising from the investment in qualifying energy properties, not including any Environmental Attributes. Seller: Has the meaning in the Preamble, and any successor or permitted assignee. Seller Excused Energy Amount: Means, for each Calculation Period, an amount expressed in MWh, equal to the aggregate amount of reduction(s) in delivered Output during such Calculation Period as a result of Dispatch Down Periods, Discretionary Curtailment, Force Majeure Events, Buyer’s breach or default hereunder or failure to accept delivered Output, or outages of the local transmission or distribution system. Seller Execution: Means the date an authorized representative of Seller duly executes this Agreement as evidenced by the date set forth next to its signature on the Signature Page hereof. Seller’s Parent: Means Clearway Renew LLC Settlement Amount: Means the Non-Defaulting Party’s Losses and Costs, minus Gains, which the Non-Defaulting Party incurs as a result of the termination of this Agreement pursuant to Section 7.3; provided that the Settlement Amount shall not be less than zero. Shortfall: Has the meaning set forth in Section 4.6(b). POWER PURCHASE AGREEMENT - Page 17 of 65 4124-1165-3657.19 Site: The area on which the Plant and the rest of the Rosamond Project are or will be located as shown by the Site Drawings as described on Exhibit A. Site Drawings: Has the meaning set forth on Exhibit A. Substitute Bank Period: Has the meaning set forth in Section 9.3(c). Substitute Letter of Credit: Has the meaning set forth in Section 9.3(c). System Emergency: Has the meaning set forth in the CAISO Tariff. Term: Has the meaning set forth in Section 2.2(a). Termination Payment: Means, with respect to the Non-Defaulting Party, the sum of (a) the Settlement Amount, if any, payable by the Defaulting Party to the Non-Defaulting Party, plus (b) the net sum (which may be positive or negative) of all amounts (other than the Settlement Amount and the amounts represented thereby) then accrued and owed to either Party by the other Party determined as of the Early Termination Date. Test Energy: Output (to the extent available) generated by the Plant and delivered to the Point of Interconnection for purchase by Buyer during the Test Energy Period prior to the Contract Delivery Start Date. Test Energy Period: Has the meaning set forth in Section 2.5. Transfer: Means with respect to Letters of Credit the delivery of the Letter of Credit conforming to the requirements of this Agreement, by Seller or an Eligible LC Bank to Buyer or delivery of an executed amendment to such Letter of Credit (extending the term or varying the amount available to Buyer thereunder, if acceptable to Buyer) by Seller or Eligible LC Bank to Buyer. Two Year Minimum Production Threshold: For each Calculation Period, an amount expressed in MWhs equal to eighty percent (80%) of the Calculation Period Expected Energy Production for such Calculation Period. For the avoidance of doubt, an example of the Two Year Minimum Production Threshold is the sum of 80% of the Calculation Period Expected Energy Production for the first Contract Year of such Calculation Period plus 80% of the Calculation Period Expected Annual Energy Production for the second Contract Year of such Calculation Period. Watch: Has the meaning set forth in Section 9.3(c). WREGIS: The Western Renewable Energy Generation Information System, or any successor renewable energy tracking program. POWER PURCHASE AGREEMENT - Page 18 of 65 4124-1165-3657.19 1.2 Rules of Interpretation. The following rules of interpretation shall apply in addition to those set forth in Sections 10.3, 10.4, 10.5, 10.6, 10.8, 10.11, 10.13, 10.14, 10.15, 10.17, 10.20 and 10.22: (a) The term “month” shall mean a calendar month unless otherwise indicated, and a “day” shall be a 24-hour period beginning at 12:00:01 a.m. Pacific Prevailing Time and ending at 12:00:00 midnight Pacific Prevailing Time; provided that a “day” may be 23 or 25 hours on those days on which daylight savings time begins and ends. (b) Unless otherwise specified herein, all references to any agreement or other document of any description shall be construed to give effect to amendments, supplements, modifications or any superseding agreement or document as then existing at the applicable time to which such construction applies. (c) Capitalized terms used in this Agreement, including the exhibits hereto, shall have the meaning set forth in Section 1.1, unless otherwise specified. (d) Unless otherwise specified herein, references in the singular shall include references in the plural and vice versa, pronouns having masculine or feminine gender shall be deemed to include the other, and words denoting natural persons shall include partnerships, firms, companies, corporations, joint ventures, trusts, associations, organizations or other entities (whether or not having a separate legal personality). Other grammatical forms of defined words or phrases have corresponding meanings. (e) References to a particular article, section, subsection, paragraph, subparagraph, appendix or attachment shall, unless specified otherwise, be a reference to that article, section, subsection, paragraph, subparagraph, appendix or attachment in or to this Agreement. (f) Any reference in this Agreement to any natural person, Governmental Authority, joint powers agency, corporation, partnership or other legal entity includes its permitted successors or assigns or to any natural person, Governmental Authority, joint powers agency, corporation, partnership or other legal entity succeeding to its functions. (g) All references to dollars are to U.S. dollars. (h) The term “includes” and “including” when used in this Agreement shall be by way of example only and shall not be considered in any way to be in limitation, whether or not so specified. POWER PURCHASE AGREEMENT - Page 19 of 65 4124-1165-3657.19 ARTICLE II TERM, PURCHASE AND SALE 2.1 Conditions Precedent to Commencement of Term of Agreement. (a) Conditions Precedent. The Term of this Agreement shall not commence until the occurrence of all of the following: (i) Seller Execution; (ii) At least five (5) Business Days before Seller Execution, Buyer receives from Seller the conditions precedent documentation listed in Exhibit H; and (iii) This Agreement has been approved by the Palo Alto City Council, and duly executed by the authorized representatives of Buyer. (b) Failure to Meet All Conditions Precedent. If the Conditions Precedent set forth in Sections 2.1(a) are not satisfied or waived in writing by both Parties, then either Party may terminate this Agreement effective upon receipt of notice by the other Party. Neither Party shall have any obligation or liability to the other, including for a Termination Payment or otherwise, by reason of such termination. 2.2 Agreement Term, Delivery Term, Acceleration and Extension. (a) Agreement Term. The term of this Agreement shall commence, and this Agreement shall be effective, upon the satisfaction or written waiver of the Conditions Precedent set forth in Section 2.1(a) of this Agreement and, unless earlier terminated pursuant to an express provision of this Agreement, shall remain in effect until the conclusion of the Delivery Term (the “Term”). (b) Delivery Term. (i) The Parties agree that the delivery term shall mean a period of delivery of Output of twenty-five (25) Contract Years beginning on the later of January 1, 2023 or the date the items listed in Section 2.2(b)(ii) have been satisfied (the “Contract Delivery Start Date”), and continuing until the end of the twenty-fifth (25th) Contract Year (“Delivery Term”), unless terminated as provided by the terms of this Agreement; provided that (x) the Contract Delivery Start Date may be accelerated pursuant to Section 2.2(c), and (y) the Delivery Term shall end on December 31, 2047 (or 25 years after the Contract Delivery Start Date, if accelerated), which may be extended pursuant to Section 2.2(d). For the avoidance of doubt, the maximum Delivery Term shall not extend past the fortieth (40th) anniversary of the Contract Delivery Start Date. (ii) The Contract Delivery Start Date shall not occur until all of the following have been satisfied: POWER PURCHASE AGREEMENT - Page 20 of 65 4124-1165-3657.19 (aa) Seller delivers the COD Certification set forth at Exhibit E-2 to Buyer and, if applicable, an Expected Annual Energy Production table in the form attached hereto as Exhibit G updating the Expected Annual Energy Production originally calculated based on the Expected Initial Plant Capacity and provided pursuant to Section 2.1(a)(ii) for its Initial Plant Capacity (which shall remain subject to the limits set forth in Section 2.3(b)(ii)); (bb) Buyer shall have received and accepted the Performance Assurance in accordance with the relevant provisions of Article 9.2(a)(iii) of the Agreement; (cc) Seller shall have obtained the requisite CEC Certification and Verification for the Plant and delivered a copy of same to Buyer; (dd) all of the applicable Conditions Precedent in Section 2.1(a) have been satisfied or waived in writing; (ee) Seller shall have certified that it has achieved, or shall have otherwise demonstrated, satisfaction of Seller’s other obligations under this Agreement that commence prior to or as of the Delivery Term, including taking all necessary steps to allow the RECs transferred to Buyer to be tracked in WREGIS; (ff) Seller shall have provided Buyer with a copy of the notice letter from the Participating Transmission Owner authorizing the Plant to commence commercial operation; and (gg) unless Seller has been directed by Buyer not to participate in the Participating Intermittent Resource program or a Battery Storage Facility has been or is in the process of being added to the Plant, Buyer shall have received written notice from the CAISO that the Plant is certified as a Participating Intermittent Resource to the extent such Participating Intermittent Resource status exists and is available at such time as the conditions in subsections (aa) through (ff) of this Section 2.2(b)(ii) are satisfied. (c) Mutual Acceleration of Contract Delivery Start Date. Seller and Buyer may at any time mutually agree in writing to accelerate the Contract Delivery Start Date to a date earlier than the Contract Delivery Start Date. (d) Extension of End of Delivery Term. Buyer may, in its sole discretion, extend the end of the Delivery Term by up to an additional fifteen (15) years, in one or more five (5)-year increments each and all at the same Price set forth in Section 2.6 (each, an “Extended Delivery Term”); Subject to this Section 2.2(d), if Buyer desires so to extend the Delivery Term, it shall deliver a written notice (“Extended Delivery Term Option Exercise Notice”) to Seller by not later than three hundred sixty-five POWER PURCHASE AGREEMENT - Page 21 of 65 4124-1165-3657.19 (365) calendar days prior to the end of the Delivery Term specifying the Extended Delivery Term, which shall thereafter for all purposes be deemed to be the “Delivery Term”; provided, however, that promptly following Buyer’s election to extend the Delivery Term by more than one Extended Delivery Terms or to further extend the Delivery Term after it has already extended the Delivery Term by one or more Extended Delivery Terms, the Parties shall confer regarding whether Seller, acting in good faith and after consulting with tax counsel and/or consultants, believes that such extension would violate the Residual Test. If Seller, in its sole discretion but acting in good faith, concludes (after consulting with tax counsel and/or consultants) that such extension violates the Residual Test, Seller may at any time within six (6) months after receipt of Buyer’s Extended Delivery Term Option Exercise Notice, elect to terminate and rescind the Extended Delivery Term Exercise Notice with respect to any Extended Delivery Term other than the first Extended Delivery Term, in which event this Agreement shall expire at the end of the first Extended Delivery Term or, if applicable, any previously exercised Extended Delivery Term. 2.3 Purchase and Sale of the Output. (a) Purchase and Sale of Output. During the Delivery Term, Seller shall sell and deliver, or cause to be delivered, and Buyer shall purchase and receive, or cause to be received, the Output (subject to Section 2.4(a)) at the Point of Interconnection, and Buyer shall pay Seller the Price in accordance with the terms of this Agreement, unless specifically excused by the terms of this Agreement. In no event shall Seller have the right to procure any element of the Output from sources other than the Plant for sale or delivery to Buyer under this Agreement or sell Output from the Plant to a third party. Buyer shall be the only party that may claim credit for the Output (subject to Section 2.4(a)), as may be available to Buyer from time to time. Buyer shall have no obligation to receive or purchase Output from Seller prior to or after the Delivery Term, except for Test Energy (if Seller has requested that Buyer purchase Test Energy pursuant to Section 2.5). Seller shall be responsible for any costs or charges associated with the Output or its delivery of the Output up to the Point of Interconnection. Buyer shall be responsible for any costs or charges imposed on or associated with the Output after its receipt at and from the Point of Interconnection. (b) Title and Risk of Loss. As between the Parties, Seller shall be deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of all Output purchased by Buyer prior to the Point of Interconnection, and Buyer shall be deemed to be in exclusive control (and responsible for any damages or injury caused thereby) of all Output purchased by Buyer at and from the Point of Interconnection. Title to and risk of loss as to all Output purchased by Buyer shall pass from Seller to Buyer at the Point of Interconnection. Seller warrants that it shall deliver all Output to Buyer free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto created by any Person other than Buyer. POWER PURCHASE AGREEMENT - Page 22 of 65 4124-1165-3657.19 (c) Capacity of Plant. (i) Expected Initial Plant Capacity. Seller and Buyer each acknowledge and agree that as of the Execution Date the Parties expect that the generation capability of the Plant as of the Commercial Operation Date shall be 26 MW AC, net of all auxiliary loads, station electrical uses, and electrical losses (the “Expected Initial Plant Capacity”). Seller shall complete and deliver to Buyer the Expected Annual Energy Production table in the form attached hereto as Exhibit G based on the Expected Initial Plant Capacity pursuant to Section 2.1(a)(ii). (ii) Actual Initial Plant Capacity. Seller shall use commercially reasonable efforts to ensure that the installed capacity of the Plant determined as of the Commercial Operation Date (the “Initial Plant Capacity”) is same as the Expected Initial Plant Capacity, but in no event shall be less than 25 MW AC or more than 27 MW AC, net of all auxiliary loads, station electrical uses, and electrical losses, as measured at the Point of Interconnection, . If applicable, Seller shall update the Expected Annual Energy Production table it delivered to Buyer pursuant to Section 2.1(a)(ii) and 2.3(c)(i) above, to reflect the Initial Plant Capacity (which shall remain subject to the installed capacity limitations set forth in this sub-section) and deliver such revised table to Buyer pursuant to Section 2.2(b)(ii)(aa). 2.4 Price. Subject to the adjustments described in Sections 2.4(a) and (b) and related to Performance LDs under the provisions of Section 4.6, during the period of delivery of any Test Energy that Seller has requested Buyer purchase pursuant to Section 2.5 and during the Delivery Term, for Output delivered or tendered to Buyer at the Point of Interconnection, Buyer shall pay Seller a price per MWh of Output equal to Thirty-Four Dollars and Two Cents ($34.02) per MWh (“Price”). The Price shall be the total compensation owed by Buyer for the Output delivered or tendered to Buyer during the period of delivery of any Test Energy and during the Delivery Term, as adjusted as follows: (a) Overproduction Output Price. For any and all Output in excess of one hundred five percent (105%) of the Expected Annual Energy Production for the then-current Contract Year, if any, Buyer shall pay Seller a price per MWh of Output that is the lesser of (i) ninety percent (90%) of the Price or (ii) the hourly DA Price at the Point of Interconnection (either (i) or (ii) being referred to as the “Overproduction Energy Price”), subject to: (i) Buyer shall be obligated to purchase any and all Output delivered or tendered to Buyer in excess of one hundred five percent (105%) up to and including one hundred twenty percent (120%) of the Expected Annual Energy Production for the then-current Contract Year and (ii) Buyer shall have the right, but not the obligation to purchase, Output in excess of one hundred twenty percent (120%) or more of the Expected Annual Energy Production for the then-current Contract Year, and, if applicable, subject to Section 2.4(b). If Buyer chooses not to exercise this right of first refusal in sub-section (ii) above, Seller may sell such Output to a third party so long as such third party sale does not affect POWER PURCHASE AGREEMENT - Page 23 of 65 4124-1165-3657.19 or impair in any material way Seller’s ability to meet its obligations or Buyer’s rights with respect to this Agreement as determined by Buyer in its reasonable discretion; and/or (b) Pre-FCDS Energy Price. For any and all Output delivered or tendered to Buyer prior to the date on which Seller has obtained a Full Capacity Deliverability Status Finding from the CAISO, if any, Buyer shall pay Seller a price per MWh of Output equal to ninety percent (90%) of the Price (“Pre-FCDS Energy Price”) and, if applicable, subject to Section 2.4(a). For the avoidance of doubt, if both conditions (a) and (b) above occur, then Buyer shall pay Seller the Price adjusted by both (a) and (b), and if only one condition (a) or (b) above occurs, then Buyer shall pay Seller the Price adjusted by either (a) or (b), as applicable. 2.5 Test Energy. For a period of up to ninety (90) days prior to the commencement of the Delivery Term (the “Test Energy Period”), if requested by Seller at least thirty (30) days before the beginning of the Test Energy Period, Buyer shall purchase and accept from Seller at the Point of Interconnection and pay for as described in Section 2.4, the Output relating to any Test Energy pursuant to the terms of this Agreement; provided that the decision to produce and deliver Test Energy hereunder shall be at the sole discretion of Seller. All Test Energy shall be scheduled in accordance with the scheduling protocols set forth in Exhibit D, as may be modified by the Parties pursuant to Section 4.1(g). Prior to the Contract Delivery Start Date, or, if Seller has requested that Buyer purchase Test Energy, the Test Energy Period, Seller may sell the Output to third parties, so long as any third party rights to the Output must terminate on or before the Contract Delivery Start Date or, if applicable, the beginning of the Test Energy Period. 2.6 Environmental Attributes. (a) Purchase and Sale of Environmental Attributes. During the Term, Seller shall sell and transfer to Buyer, and Buyer shall purchase and receive from Seller, all right, title and interest in and to the Environmental Attributes associated with the Output, if any, whether now existing or subsequently generated or acquired (other than by direct purchase from a third party) by Seller, or that hereafter come into existence, during the Term, as a component of the Output purchased by Buyer from Seller hereunder; provided, however, that Seller shall not be required to modify the Plant to provide any Environmental Attributes not existing as of the Effective Date. Subject to Section 2.6(c), Seller agrees to transfer and make such Environmental Attributes available to Buyer immediately to the fullest extent allowed by applicable Law upon Seller’s production or acquisition of the Environmental Attributes. Seller agrees to convey and hereby conveys all such Environmental Attributes to Buyer as included in the delivery of the Output from the Plant. Seller shall not assign, transfer, convey, encumber, sell or otherwise dispose of all or any portion of the Environmental Attributes to any Person other than Buyer. As of the POWER PURCHASE AGREEMENT - Page 24 of 65 4124-1165-3657.19 Effective Date and continuing throughout the Term, Seller represents and warrants that Seller holds the rights to all Environmental Attributes from the Plant, the Plant qualifies and is certified by the CEC as an ERR and the Plant’s Output qualifies under the California Renewable Portfolio Standards requirements. To the extent that a Change in Law occurs after the Effective Date that causes this representation and warranty to be false or misleading, it shall not be an Event of Default if Seller has used commercially reasonable efforts to comply with such Change in Law and takes all commercially reasonable actions to implement any change or improvement to the Plant to maintain such certification or qualification. (b) Buyer’s Right to Report Ownership of Environmental Attributes. During the Term, Seller shall not report to any Person or entity that the Environmental Attributes granted hereunder to Buyer belong to anyone other than Buyer, and Buyer may report under any program that such Environmental Attributes purchased hereunder belong to it. (c) Documentation of Environmental Attributes. Seller shall document the production of Environmental Attributes under this Agreement by delivering with each invoice to Buyer such attestations or other documents as may be required by Exhibit B. Seller agrees to promptly and cooperatively update or modify Exhibit B, as necessary, to ensure that Buyer receives full and complete title to, and the ability to record with any EA Agency as its own, all of the Environmental Attributes purchased hereunder. At Buyer’s request, the Parties, each at their own expense, shall execute all such documents and instruments in order to transfer the Environmental Attributes specified in this Agreement, to Buyer or its designees, as Buyer may reasonably request. In the event of the promulgation of a scheme involving Environmental Attributes administered by an EA Agency, upon notification by an EA Agency that any transfers contemplated by this Agreement shall not be recorded, the Parties shall promptly cooperate in taking all reasonable actions necessary so that such transfer can be recorded. Each Party shall promptly give the other Party copies of all documents it submits to the EA Agency to effectuate any transfers. 2.7 Resource Adequacy. (a) Resource Adequacy Requirements. During the Delivery Term, Seller grants, pledges, assigns and otherwise commits to Buyer all of the Plant’s Initial Plant Capacity, including Capacity Attributes from the Plant, to enable Buyer to meet its Resource Adequacy or successor program requirements, as the CPUC, CAISO and/or other regional entity may prescribe, including submission of a supply plan or Resource Adequacy plan (“Resource Adequacy Requirements”). From the Execution Date, and for the duration of the Delivery Term, Seller shall take all commercially reasonable actions, including complying with all applicable registration and reporting requirements, and executing any and all documents or instruments necessary to enable Buyer to use all of the capacity of the Plant, including Capacity Attributes, to be committed by Seller to Buyer pursuant to this POWER PURCHASE AGREEMENT - Page 25 of 65 4124-1165-3657.19 Agreement to meet Buyer’s Resource Adequacy Requirements during the Delivery Term. (b) Availability Standards. Seller shall be responsible for all costs, charges, expenses, penalties, and obligations resulting from Availability Standards, if applicable, and Seller shall be entitled to retain all credits, payments, and revenues, if any, resulting from Seller achieving or exceeding Availability Standards, if applicable. 2.8 Tax Credits and Incentives. Buyer acknowledges and agrees that all Incentives shall be owned by Seller, and that Buyer shall not claim Incentives. Buyer agrees to cooperate with Seller, as may be necessary, to allow maximization of the value of, and realization of, all Incentives; provided that Buyer shall not be required to incur additional costs or accept any diminution in value of its rights under this Agreement or of the Output purchased hereunder. In addition, Buyer shall not take any action (except as otherwise permitted under this Agreement), that would in any way reduce or eliminate the availability to Seller of any Incentives, including the Section 45 Credits and the Section 48 Credits, and Buyer shall forego any credits or benefits available to it (other than Environmental Attributes), including rights to purchase of Test Energy, to the extent necessary to allow Seller to obtain the full benefit of the Incentives, but in no event shall Buyer be required to forego receipt of Output after the Contract Delivery Start Date. 2.9 CEQA. (a) CEQA Determinations. Any and all CEQA requirements for or related to the development of the Plant shall be the responsibility of Seller. (b) Seller’s Responsibility to Provide CEQA Documents. Seller shall be required to provide to Buyer final (and executed, if applicable) copies of all CEQA documents within ten (10) days of their approval by the CEQA lead agency. (c) Conditions Precedent to Buyer Purchase. The Parties therefore acknowledge and agree that Buyer has no obligation to purchase the Output under this Agreement until all of the following have occurred: (i) Seller has complied with all applicable CEQA requirements in connection with its permitting, construction and operation of the Plant; and (ii) the applicable period for any legal challenges under CEQA relating to the Plant has expired without any such challenge having been filed or, in the event of any such challenge, the challenge has been determined adversely to the challenger by final judgment or settlement. 2.10 Right of First Refusal for Expansion Plant and Expansion Plant Output. (a) Buyer’s Right of First Refusal for Development of Expansion Plant. During the Term, Seller may, in exercising its sole discretion, determine, from time to time, to develop, finance, construct and/or operate an Expansion Plant. Each time such a POWER PURCHASE AGREEMENT - Page 26 of 65 4124-1165-3657.19 determination is made, Seller shall notify Buyer of such determination and shall offer, in writing, to sell the Expansion Plant Output to Buyer. The offer shall include the price to be paid by Buyer for the Expansion Plant Output, the term, and other principal terms and conditions of the proposed sale. If Buyer wishes to accept such offer to purchase all (but not less than all) of the Expansion Plant Output, Buyer shall so notify Seller within ninety (90) calendar days of its receipt of such offer. Buyer and Seller shall promptly thereafter enter into good faith negotiation of commercial modifications to this Agreement incorporating such Expansion Plant Output offer. Until the revised Agreement incorporating an Expansion Plant is executed, Seller’s proposal, accepted by Buyer (including any modifications agreed upon in writing by both Parties), shall control all dealings between the Parties relating to the Expansion Plant. Should any issue arise that is not covered by such documentation, the terms of this Agreement (prior to amendment for the Expansion Plant or Expansion Plant Output) shall apply. (b) Buyer’s Right to Purchase Expansion Plant Output. If Buyer does not accept Seller’s offer to purchase the Expansion Plant Output within ninety (90) calendar days of receipt of Seller’s offer, Seller shall be deemed authorized to offer to sell that portion of the Expansion Plant Output to one or more third parties at a price and on other terms and conditions which, taken as a whole, are at least as favorable to Seller as the price and other terms and conditions set forth in Seller’s offer to Buyer. If Seller offers to disaggregate the Expansion Plant Output for the purpose of selling the same to multiple independent buyers, Seller shall notify Buyer, in writing, of the terms and conditions of such offers, and Buyer shall again have the right of first refusal consistent with the terms set forth above for each of the lesser amounts being offered to the third parties. If Buyer does not purchase the Expansion Plant Output and Seller sells such Expansion Plant Output to a third party, Seller shall promptly certify, in writing, to Buyer that the terms and conditions of sale of such Expansion Plant Output to such third party, taken as a whole, are at least as favorable to Seller as the price and other terms and conditions set forth in Seller’s offer to Buyer, and, Seller shall provide the relevant final contract and any other supporting documentation for such certification by Buyer. Upon the sale of such Expansion Plant Output in compliance with this Agreement, Buyer shall have no further rights to be offered or to purchase such Expansion Plant Output. Buyer’s refusal, in writing, of the Expansion Plant Output from one Expansion Plant shall not affect Buyer’s right to purchase the Expansion Plant Output from a subsequently developed Expansion Plant under the terms of this Agreement. Notwithstanding any provision to the contrary herein, Seller shall not sell or provide the Expansion Plant Output to any third party, unless Seller can do so without compromising in any material way its ability to provide the Output or Expansion Plant Output, if any, to Buyer hereunder. The materiality of any such impact shall be determined by Buyer, acting in its reasonable discretion. Furthermore, notwithstanding any provision to the contrary herein, Seller hereby agrees that Buyer’s right of first refusal under this Section 2.10 shall be first in priority over any right of first refusal or other purchase rights that any third party buyer or all third party buyers of any Expansion Plant or Expansion Plant Output or POWER PURCHASE AGREEMENT - Page 27 of 65 4124-1165-3657.19 a portion thereof may have to purchase any Expansion Plant or Expansion Plant Output. Seller further agrees that any power purchase agreement, or related agreements, instruments or documents, that it or any of its Affiliates executes for the purchase of any Expansion Plant or Expansion Plant Output or a portion thereof by any third party buyer or all third party buyers shall expressly state that Buyer’s right of first refusal shall be senior to any right of first refusal to purchase any Expansion Plant or Expansion Plant Output or a portion thereof held by such third party buyer or buyers. Seller hereby agrees that any breach of this priority right of first refusal covenant by Seller or any of its Affiliates shall be a material breach for purposes of Section 7.1(a) of the Agreement. (c) Other Adjacent Development. The Parties acknowledge and agree that Seller intends to develop and is developing additional energy generation and/or storage facilities in the vicinity of the Site, including certain facilities that will be constructed immediately adjacent to the Site, and that such additional energy generation and/or storage facilities do not constitute Expansion Plants, it being understood and agreed that only energy generation and/or storage facilities constructed within the Site will be considered Expansion Plants. 2.11 Refurbishment of Plant. During the Term, Seller may refurbish the Plant, alter components of the Plant, replace components of the Plant, add additional solar modules or inverters, or replace solar modules or inverters with more powerful solar modules or inverters, in order to increase the Plant estimated peak AC capability up to the lesser of the Initial Plant Capacity or to the amount allowed by the Interconnection Agreement; provided, however, that Seller may not perform any refurbishment to increase capacity higher than the Initial Plant Capacity without the prior written consent of Buyer, and Buyer shall have the right, in its sole discretion, to accept or decline to permit any such refurbishment that may increase the Initial Plant Capacity. 2.12 Optional Battery Storage at the Site. At any time and multiple times during the Term, Buyer may, upon written request (“Battery Storage Facility Request”), ask Seller to add to the Plant a battery storage facility or facilities capable of storing up to 25 MWh located at or near the Site (“Battery Storage Facility”). The Battery Storage Facility Request may ask Seller to develop a detailed proposal or may include a detailed proposal (or a combination thereof) for the development of the Battery Storage Facility. Seller hereby agrees to review, develop and/or evaluate the Battery Storage Facility Request in good faith. Within sixty (60) days of receipt of any Battery Storage Facility Request, Seller shall provide a written response to Buyer describing one or more detailed proposals for adding a Battery Storage Facility to the Plant and/or responding to Buyer’s proposal, as applicable, and including supporting documentation and such other information as Buyer may reasonably request. Seller agrees to negotiate the terms and conditions for the addition of such Battery Storage Facility in good faith; provided, however, that Seller shall not be required to add any such storage unit(s) to the Plant unless and until Seller, Buyer and any Lenders each (in their sole and POWER PURCHASE AGREEMENT - Page 28 of 65 4124-1165-3657.19 absolute discretion) approves the technical details of such unit(s) and appropriate amendments to this Agreement or negotiation of a separate battery storage agreement, including additional compensation related to such unit(s). ARTICLE III METERING AND BILLING 3.1 Metering Requirements. The transfer of Output from Seller to Buyer shall be measured by revenue quality metering equipment at the Point of Interconnection or another nearby location reasonably acceptable to Buyer. Such metering equipment, including any equipment required for communicating meter data (e.g., a dedicated data line) to Buyer or the CAISO, shall be selected, provided, installed, owned, maintained and operated, at Seller’s sole cost and expense, by Seller or its designee in accordance with applicable CAISO rules. Buyer acknowledges and agrees that such metering equipment may be part of equipment and facilities that will be shared by the Plant and other energy generation and/or storage projects which Seller is developing or may develop in the vicinity of the Plant, but that the Plant will have its own separate CAISO Resource ID. Seller shall exercise reasonable care consistent with Prudent Utility Practice in the maintenance and operation of any such metering equipment and shall test and verify the accuracy of each meter at least annually. Seller shall inform Buyer sufficiently in advance of the time and date of these tests to permit Buyer to be present, and shall permit Buyer to be present, at such tests and to receive the results of such tests. Subject to Buyer paying the cost of any update or upgrade to such metering equipment pursuant to a new requirement of the CAISO, the Participating TO or any other Governmental Authority, adopted after the Contract Delivery Start Date, each of Seller’s meters shall be accurate to the metering specifications then in effect for CAISO meter accuracy. Seller shall further install and maintain all equipment and data circuits necessary to transmit all monitored real time supervisory control and data acquisition (“SCADA”) system data and real time data from the CAISO meter to the CAISO and, if applicable, the Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a), while adhering to both CAISO and, if applicable, such Scheduling Coordinator’s communications protocols. Seller shall provide Buyer with a copy of each certificate of compliance issued by CAISO, if any. Seller shall provide Buyer and, if applicable, the Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a), access to all monitored SCADA points to be used at their discretion in real time monitoring. Buyer, at its sole cost and expense, may install and maintain check meters and all associated measuring equipment necessary to permit an accurate determination of the quantities of Output delivered under this Agreement, provided the referenced equipment does not interfere with Seller’s metering equipment. Seller shall permit Buyer or a Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a) access to Seller’s Plant for the purpose of installing and maintaining such check meters. Seller shall submit to the CAISO, or allow the CAISO to retrieve, any meter data required by the CAISO related to the Plant output in accordance with the CAISO’s settlement and billing protocol and meter data tariffs. Buyer shall have reasonable access POWER PURCHASE AGREEMENT - Page 29 of 65 4124-1165-3657.19 to relevant meters and associated facilities, as well as real time access to all meter data, as is necessary for Buyer or, if applicable, a Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a) to perform its duties as scheduling coordinator and comply with the requirements of the CAISO Tariff. 3.2 Billing. Seller shall provide to Buyer on or before the tenth (10th) day of each month an invoice for the Output for the prior month based upon meter data for Output delivered in such calendar month (taking into account any line losses to the Point of Interconnection), enclosing reasonably appropriate supporting CAISO documentation and any corresponding attestation that may be required pursuant to Section 2.6(c). Such invoice may be transmitted by e-mail to UtilityCommoditySettlements@cityofpaloalto.org, or to any other e-mail address designated, in writing by Buyer. Should either Seller or Buyer determine at a later date, but in no event later than two (2) years after the original invoice date, that the invoice amount was incorrect, that Party shall promptly notify, in writing, the other Party of the error. If the amount invoiced was lower than the amount that should have been invoiced, then Buyer shall, upon receiving verification of the error and supporting documentation from Seller, pay any undisputed portion of the difference within thirty (30) calendar days of receipt of verification. If the amount invoiced was higher than the amount that should have been invoiced, then Seller shall, upon receiving verification of the error and supporting documentation from Buyer, pay any undisputed portion of the difference within thirty (30) calendar days of receipt of verification. Any such adjusted amount owing by Seller or Buyer shall be subject to the interest rate as designated in Section 3.3, running from the original due date of payment. 3.3 Payment. For Output delivered to Buyer pursuant to this Agreement, Buyer or its agent shall pay Seller by electronic transfer of funds by the later of the twentieth (20th) day of the month or the tenth (10th) Business Day after the invoice is received in accordance with Section 3.2, subject to Buyer’s right to set-off any Daily LD Amount or Performance LDs owed by Seller to Buyer as described in Sections 4.4(b)(iii) or 4.6(b)(iii), respectively. Payments made after the due date shall be considered late and shall bear interest on the unpaid balance at an annual rate equal to two percent (2%) plus the average daily prime rate as determined from the "Money Rates" section of The Wall Street Journal for the days of the late payment period multiplied by the number of calendar days elapsed from and including the day after the due date, to and including the payment date. Interest shall be computed on the basis of a 365-day year. In the event this index is discontinued or its basis is substantially modified, the Parties shall agree on a substitute equivalent index. Should Buyer in good faith dispute the amount of an invoice, Buyer or its agent may withhold such disputed amounts until the dispute is resolved in accordance with Section 10.10. Such disputed amounts shall bear interest at the interest rate described above. Failure of Buyer or its agent to withhold any amount shall not constitute a waiver of Buyer’s right to challenge such amount. 3.4 Billing Agent. POWER PURCHASE AGREEMENT - Page 30 of 65 4124-1165-3657.19 Seller agrees Buyer may designate an agent to act on its behalf for billing purposes, so long as Buyer remains liable for its obligations under this Agreement. ARTICLE IV SELLER'S OBLIGATIONS 4.1 Development, Finance, Construction and Operation of the Plant. During the Term, Seller covenants that at no cost to Buyer, unless otherwise specifically stated in this Agreement, it shall: (a) Develop, Finance and Construct the Plant. Design, develop, finance and construct the Plant; (b) Real-time Monitoring. Provide Buyer with access to a “real time” Plant monitoring system (which, at a minimum, shall provide “real time” information regarding the net output of the Plant) that is anticipated to be internet protocol-based and include any applicable alarms required by Prudent Utility Practice; (c) Permits. Seek, obtain, maintain, comply with and, as necessary, renew and modify from time to time, all Permits, certificates or other authorizations or approvals, including comply with any and all CEQA requirements for or related to the development of the Plant and prepare any and all necessary CEQA documentation, including any environmental impact studies, as described more specifically in Section 2.9, which are necessary for the construction, operation and maintenance of the Plant or required by any Requirements of Laws or Governmental Authority as prerequisites to Seller’s performance of this Agreement; (d) Operation and Maintenance - Compliance. Operate, maintain, and repair the Plant in accordance with this Agreement, all Requirements of Laws applicable to Seller or the Plant, all Contractual Obligations and Permits, and in accordance with Prudent Utility Practice, including with respect to efforts to maintain availability of the Expected Annual Energy Production subject to normal system wear-and-tear and the panel degradation factor set forth on Exhibit G. Seller shall obtain in its own name and at its own expense any and all pollution or environmental credits or offsets necessary to operate the Plant in compliance with the Environmental Laws; (e) Operation and Maintenance – Prudent Utility Practice. Operate and maintain in a manner consistent with Prudent Utility Practice the facilities it will own and otherwise cooperate with the Participating TO in the physical interconnection of the Plant to the Participating TO System in accordance with the Interconnection Agreement; (f) Insurance. Obtain and maintain the policies of insurance in the amounts and with the coverages as set forth on Exhibit C; POWER PURCHASE AGREEMENT - Page 31 of 65 4124-1165-3657.19 (g) Outages. By October 1st of each year of the Delivery Term, provide each of Buyer and, if applicable, a Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a) with an annual projection of scheduled Planned Outages for the following calendar year. Should Seller make any changes to such projection, it shall notify Buyer and, if applicable, a Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a) of such changes at least fourteen (14) calendar days in advance of any newly scheduled or rescheduled Planned Outage. If Buyer requests a change to the scheduled date of any Planned Outage (including to a date set forth in a change notice from Seller), Seller shall consider such request in good faith and notify Buyer of its decision within seven (7) calendar days of receipt of Buyer’s request. In no instance other than Saturdays, Sundays and federal holidays during the period of reliability accounting (initially the period between June 1st and September 30th, but subject to changes selected at Buyer’s discretion for conforming to CAISO availability assessment) shall Seller schedule Planned Outages of more than twenty-four (24) hours during the Delivery Term. In connection with any Planned Outage or Forced Outage in excess of one (1) MW of Plant capacity, Seller shall notify Buyer and, if applicable, the Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a), as soon as practicable, of the percentage of Plant (based on percentage of Output loss) expected to be out of service and how long the Planned Outage or Forced Outage is expected to last. If the Planned Outage or Forced Outage is total and is due to failure of the Plant rather than the transmission and distribution system beyond the Point of Interconnection, Seller shall give Buyer and, if applicable, the Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a), at least four (4) hours’ prior notice before re-energizing the Plant. In addition, Seller shall comply with the scheduling protocols agreed by the Parties, as may be changed from time to time. A copy of such scheduling protocols prepared jointly by the Parties as of the Execution Date and then-anticipated to be appropriate as of the Commercial Operation Date is attached as Exhibit D. The Parties agree, within thirty (30) days after achievement of the Construction Milestone to commence reviewing the appropriateness of such scheduling protocols and work together (including meeting in-person) and, if applicable, with the Scheduling Coordinator designated by Buyer pursuant to Section 4.5(a), to make and complete, prior to the Contract Delivery Start Date or, if Seller has requested that Buyer purchase Test Energy as provided in Section 2.5, the delivery of Test Energy under Section 2.5, any modifications necessary to ensure the scheduling protocols’ consistency with the CAISO Tariff, its Operating Procedures and Business Practice Manuals, and the then-planned operating procedures for the Plant; (h) Interconnection. Perform all studies, pay all fees, obtain all necessary approvals and execute all necessary agreements to secure the interconnection, distribution and/or transmission arrangements, including negotiate and enter into an Interconnection Agreement sufficient to allow Seller to deliver the Output to the Point of Interconnection and into the CAISO-controlled grid for sale to Buyer pursuant to the terms of this Agreement; POWER PURCHASE AGREEMENT - Page 32 of 65 4124-1165-3657.19 (i) FCDS Status and Copy of Finding. Ensure that its interconnection, distribution and/or transmission arrangements shall provide for Full Capacity Deliverability Status as of the FCDS Finding Milestone (unless extended pursuant to Section 4.4) and throughout the remainder of the Delivery Term. Seller shall provide to Buyer a copy of the FCDS Finding within fifteen (15) days of such finding having been obtained from the CAISO. All costs or amounts designated in the Plant’s full capacity deliverability study to obtain FCDS or any costs and expenses incurred by Seller for FCDS studies shall be Seller’s sole responsibility; (j) Participating Generator Agreement and Meter Service Agreement. Negotiate and enter into a Participating Generator Agreement and a Meter Service Agreement for CAISO Metered Entities with the CAISO, the load control area operator for the Participating TO System, to which the Plant is interconnected. Buyer shall pay for or reimburse Seller for any such costs or charges associated with these agreements, except to the extent such cost or charge is required to be paid by Seller under this Agreement in Sections 3.1 and 4.1(h). Seller shall cooperate with Buyer to minimize any such costs as are to be reimbursed by Buyer; (k) Start-ups and Shut-downs. Coordinate all Plant start-ups and shut-downs, in whole or in part, with Buyer in accordance with CAISO scheduling protocols and the reasonable protocols established by Buyer that are not inconsistent with the CAISO Tariff and CAISO procedures; and (l) Development Assurance, Interim Assurance and Performance Assurance. Fund and maintain the Development Assurance and Interim Assurance, as applicable, to assure Seller’s timely development of the Plant and achievement of Commercial Operation and the Contract Delivery Start Date, including the performance of all construction tasks; and fund and maintain the Performance Assurance to assure Seller’s delivery of the Output to Buyer, all in accordance with Article IX. 4.2 General Obligations. (a) Records. Seller shall keep complete and accurate operating and other records and all other data for the purposes of proper administration of the Agreement, including such records as may be required by any Governmental Authority or Prudent Utility Practice; (b) Organizational Good Standing and Compliance with Laws and Agreement. During the Term of this Agreement, Seller shall continue to (i) preserve, renew and keep in full force and effect its organizational existence and good standing, and take all reasonable action to maintain all applicable Permits, rights, privileges, licenses and franchises necessary or desirable in the ordinary course of its business; (ii) comply with all Requirements of Laws, including Environmental Laws, applicable to Seller or the Plant; and (iii) comply with all Contractual Obligations related to the operation and maintenance of the Plant; POWER PURCHASE AGREEMENT - Page 33 of 65 4124-1165-3657.19 (c) Further Development Information. Seller shall provide to Buyer such other information regarding the permitting, engineering, construction or operations of the Plant as Buyer may from time to time reasonably request, subject to licensing or other restrictions of Seller or a third party with respect to confidentiality, disclosure or use; provided, nothing herein shall limit Buyer’s right to agree to confidentiality or sign a confidentiality agreement in connection therewith before acquiring knowledge of such information; (d) CAISO Agreements. Seller shall enter into any agreements with the CAISO required by the CAISO for generators delivering power into the CAISO-controlled grid. Except for such costs and charges as are expressly identified in this Agreement as Seller’s costs, Buyer shall reimburse Seller for all costs and charges under such agreements. Seller shall cooperate with Buyer to minimize any such costs as are to be reimbursed by Buyer; (e) Financial Statements. If requested by Buyer, Seller shall deliver to Buyer (a) within four (4) months following the end of each fiscal year, a copy of Seller’s and Seller’s Parent’s annual report containing audited consolidated financial statements for such fiscal year (or if not available, unaudited consolidated financial statements for such fiscal year) and (b) within forty-five (45) calendar days after the end of each of its first three (3) fiscal quarters of each fiscal year, a copy of Seller’s and Seller’s Parent’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter. In all cases, the statements shall be for the most recent accounting period and shall be prepared in accordance with GAAP and shall be certified by the Chief Financial Officer or equivalent officer of Seller on behalf of Seller and of Seller’s Parent on behalf of Seller’s Parent, dated no earlier than ten (10) Business Days prior to delivery to Buyer (i) as fairly presenting the financial condition of Seller and Seller’s Parent, as applicable, subject only to what would typically be included in year-end audit adjustments and footnotes; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not constitute an Event of Default so long as Seller diligently pursues the preparation, certification and delivery of the statements; (f) Notice of Expected Initial Plant Capacity. Within fifteen (15) calendar days of the later of (i) obtaining the authority to construct for the Plant from the applicable Governmental Authority or (ii) Seller’s receipt of the system impact and facility cost studies from the Participating TO, Seller shall provide written notice to Buyer stating the then-expected Initial Plant Capacity in MW AC (which shall be subject to the Initial Plant Capacity limits described in Section 2.3(c)(ii)) and specifying other material key Plant design details; (g) Site Size Requirement. Seller agrees and hereby certifies to Buyer that the Site (including any proposed modification to the Site described in Section 4.2(h)) shall be sufficient in size and scope to accommodate both the Plant and the potential future build out of a Battery Storage Facility (whether the Parties agree to develop the battery storage facilities or not). Seller acknowledges and agrees that Buyer’s POWER PURCHASE AGREEMENT - Page 34 of 65 4124-1165-3657.19 potential ability to add a Battery Storage Facility under Section 2.12 and the obligation to size the Site accordingly in this Section 4.2(g) are material inducements to Buyer to enter into this Agreement. (h) Modification of Site. Seller shall not modify the Site in a manner that would reasonably be expected to have a material adverse effect on the Plant or Buyer’s rights hereunder without the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed. Without limiting the foregoing, Seller shall have the right to locate and configure the Rosamond Project on the Site as it may determine in its discretion, so long as such location and configuration would not reasonably be expected to have a material adverse effect on the Plant or Buyer’s rights hereunder. With respect to any proposed Site modification requiring Buyer’s consent, Seller shall provide written notice to Buyer describing the proposed Site modification, the reasons therefor, and the extent of any impact such modification would have upon any and all of the Milestones and including a revised Exhibit A reflective of the proposed modification. Seller shall provide Buyer with other relevant information reasonably requested by Buyer regarding the proposed Site modification. At all times during this Agreement, Seller covenants that the Site (and any proposed Site modification) shall be sufficient in size and scope to accommodate both the Plant and a potential future build out the Battery Storage Facility as contemplated by Section 2.12 (whether the Parties agree to develop the battery storage facilities or not). Notwithstanding any provision to the contrary, any fees and costs related to modifications contemplated by this Section 4.2(h) shall be subject to Section 10.12(a). (i) Final Site Drawings. Seller shall provide to Buyer final Site Drawings ninety (90) days prior to the Commercial Operation Date. 4.3 Construction Milestones. (a) Seller Pursuit of Milestones. The Parties agree that time is of the essence in the performance of Seller’s obligations under this Agreement. The Parties further agree that the Milestones must be achieved in a timely fashion or Buyer shall suffer damages which are difficult to estimate with reasonable certainty. Upon request, Seller shall promptly provide Buyer with documentation satisfactory to Buyer, acting in the reasonable exercise of Buyer’s discretion, to support the progress, status and achievement of the Milestones by the dates set forth below (in addition to the reports, notices, updates, certifications, documentation and materials described in this Section 4.3 below). (b) Individual Milestones. Seller covenants that it shall diligently pursue to completion each of the following Milestones: (i) The Parties acknowledge and agree that Seller has executed and delivered to Buyer the Interconnection Agreement for the Plant (the “Interconnection Agreement Milestone”) and the Interconnection Agreement Milestone has been satisfied; POWER PURCHASE AGREEMENT - Page 35 of 65 4124-1165-3657.19 (ii) By March 31, 2021, Seller shall have obtained the Conditional Use Permit necessary, in final form, to commence construction of the Plant (the “Conditional Use Permitting Milestone”); (iii) By January 1, 2022, Seller shall have obtained all Permits necessary, in final form, to commence construction of the Plant (the “Permitting Milestone”); (iv) By March 3, 2022, Seller shall have arranged for the financing of the construction of the Plant or otherwise make funds available to commence and complete construction (the “Financing Milestone”); (v) By March 3, 2022, Seller shall have commenced construction of the Plant (the “Construction Milestone”); (vi) By January 1, 2023, Seller shall deliver the COD Certification to Buyer (the “Commercial Operation Milestone”); and (vii) By March 1, 2023, Seller shall have obtained a Full Capacity Deliverability Status Finding from the CAISO (the “FCDS Finding Milestone”). (c) Development Progress Reports. Seller shall regularly provide to Buyer Development Progress Reports concerning the progress towards construction and completion of each of the Milestones (including whether Seller has met or is on target to meet each of the Milestones), which shall be substantially similar in form and substance to that attached as Exhibit E and include such additional information as reasonably required by Buyer in its sole discretion. Seller shall also agree to meetings between representatives of Buyer and Seller to review such monthly reports and discuss Seller’s construction progress, as Buyer may request from time to time. Seller shall deliver the Development Progress Report to Buyer describing activities for the applicable Report Period no less frequently than: (i) From the Execution Date until completion of the Interconnection Agreement Milestone, on a bi-annual basis, with the first Development Progress Report due under this Section 4.3(c)(i) on the date that is six (6) months after the Execution Date and with each subsequent Development Progress Report due under this Section 4.3(c)(i) on the date that is the six (6) calendar month anniversary of the prior due date; (ii) From the Interconnection Agreement Milestone until Seller delivers the Notice to Proceed to the EPC Contractor for the Plant, on a quarterly basis, with the first Development Progress Report due under this Section 4.3(c)(ii) on the date that is fifteen (15) days after the close of the first full calendar quarter following Seller’s achievement of the Interconnection Agreement Milestone and with each subsequent Development Progress Report due under this Section 4.3(c)(ii) on the date that is fifteen (15) days after the close of each calendar quarter thereafter; POWER PURCHASE AGREEMENT - Page 36 of 65 4124-1165-3657.19 (iii) From the date Seller delivers the Notice to Proceed to the EPC Contractor for the Plant until achievement of all Milestones, on a monthly basis, with the first Development Progress Report due under this Section 4.3(c)(iii) on the date that is fifteen (15) days after the close of the first full calendar month following Seller’s delivery of the Notice to Proceed to the EPC Contractor for the Plant and with each subsequent Development Progress Report due under this Section 4.3(c)(iii) on the date that is fifteen (15) days after the close of each month thereafter. (d) Notice of Commercial Operation Date and COD Certification. Seller shall provide written notice to Buyer thirty (30) calendar days in advance of the anticipated Commercial Operation Date, and shall provide Buyer with written weekly updates thereafter detailing the status of Seller’s progress in achieving Commercial Operation until the week preceding the Commercial Operation Date. Once Commercial Operation of the Plant has commenced, Seller shall deliver to Buyer by electronic mail or facsimile, with originals to follow by hand-delivery, courier or mail service, the COD Certification in the form attached hereto as Exhibit E-2, which date of delivery shall establish the Commercial Operation Date as described in the COD Certification. (e) Certification of Completion of Milestone. Within five (5) Business Days of the completion of each Milestone (except for the Commercial Operation Milestone which certification is described in subsection (d) above), Seller shall provide a certification to Buyer (along with any relevant supporting documentation), stating Seller’s achievement or satisfaction of each such Milestone. In addition, Seller shall provide to Buyer additional information concerning Seller’s progress towards, or confirmation of, achievement of the Milestones, as Buyer may reasonably request from time to time. (f) Notice of Failure to Achieve Milestone. Upon becoming aware that it shall, or is reasonably likely to, fail to achieve any Milestone by the required date, for any reason including a Force Majeure Event, Seller shall so notify Buyer, in writing, as soon as is reasonably practical. Such notice shall provide information regarding the cause of the delay, provide a revised estimated date for achievement of the Milestone(s), and otherwise describe Seller’s plan for meeting the Milestone(s). Seller’s notice shall also explain any impact such delay may or shall have on any other Milestone, and measures to be taken to mitigate such impact. 4.4 Milestone Excused Delay and Liquidated Damages. (a) Permitted Extensions to Milestones. In the event that a Force Majeure Event causes a delay to the achievement of any Milestone then, and in each such case, each Milestone deadline may be extended by that number of calendar days the applicable Force Majeure Event actually delays completion of such Milestone. For the avoidance of doubt, any extension of the deadline for one Milestone shall not extend the deadline for completion of any other Milestones. Notwithstanding the foregoing, (i) in no event shall the combined extensions under this Section 4.4(a) for any POWER PURCHASE AGREEMENT - Page 37 of 65 4124-1165-3657.19 individual Milestone arising from Force Majeure Events exceed six (6) months in the aggregate; (ii) in no event shall the combined extensions under this Section 4.4(a) for all Milestones combined arising from Force Majeure Events exceed twelve (12) months in the aggregate; and (iii) if on any given day two or more events cause delay to a Milestone at the same time (i.e., occur concurrently), Seller shall only be entitled to one (1) day of delay for such day. (b) More Than Six (6) Months Excused Extensions; Daily LD Amount. If the combined excused extensions for any individual Milestone exceed six (6) months in the aggregate as set forth in Section 4.4(a)(i), Seller shall be liable to Buyer for liquidated damages for each day or portion of a day of unexcused delay in an amount equal to the Daily LD Amount. In Buyer’s sole discretion, Buyer shall be entitled to collect the Daily LD Amount for the relevant number of unexcused days of delay on a monthly basis within ten (10) days of Seller’s receipt of an invoice from Buyer therefor by one or more of the following: (i) drawing upon the Development Assurance or Interim Assurance, as applicable (which shall be subject to the replenishment provisions set forth in Section 9.2(a)(i) or (ii), respectively); (ii) receiving payments from Seller; and/or (iii) setting off against any amounts owed to Seller by Buyer for the purchase of Output hereunder under Section 3.3. So long as Seller timely pays and continues to pay any and all of the Daily LD Amount when due, Buyer shall not be permitted to terminate this Agreement for up to twelve (12) months. The Parties agree that Buyer’s receipt of the Daily LD Amount shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Article VII and (y) not limit Buyer’s right to receive a Termination Payment or Damage Payment, as applicable, upon exercise of Buyer’s default right pursuant to Article VII. Each Party agrees and acknowledges that (I) the damages that Buyer would incur due to Seller’s delay in achieving the Milestones would be difficult or impossible to predict with certainty and (II) the Daily LD Amount is an appropriate approximation of such damages. (c) More than Twelve (12) Months Excused Extensions or Non-Payment of Daily LD Amount; Termination of Agreement. If for all Milestones the combined excused extensions exceed twelve (12) months in the aggregate as described in Section 4.4(a)(ii), or if for any reason Seller fails to pay, or discontinues paying, any or all of the Daily LD Amount when due, Buyer may terminate this Agreement by written notice to Seller. This twelve (12) month period shall not be further extended as a result of a Force Majeure Event, including a Force Majeure Event as POWER PURCHASE AGREEMENT - Page 38 of 65 4124-1165-3657.19 contemplated by Section 6.3. In Buyer’s sole discretion, Buyer shall be entitled to collect the Damage Payment within ten (10) days of Seller’s receipt of an invoice from Buyer therefor by one or more of the following: (i) drawing upon the Development Assurance (which shall be subject to the replenishment provision set forth in Section 9.2(a)(i)); (ii) receiving payments from Seller within ten (10) days of receipt of an invoice from Buyer therefor; and/or (iii) setting off against any amounts owed to Seller by Buyer for the purchase of Output hereunder as set forth in Section 3.3. If Seller fails to achieve the Milestones, including the Construction Milestone and Commercial Operation Milestone, as permitted in and limited by the performance excuse provisions set forth in this Section 4.4, only the damages or remedy set forth in this Section 4.4(c), and no other, shall be available to Buyer; provided that, the Parties agree that the prior sentence shall not in any way limit Buyer’s right to receive a Damage Payment or Termination Payment, as applicable, including for failure to achieve the Construction Milestone or Commercial Operation Milestone, for any reason other than as described in this Section 4.4, including exercise of Buyer’s default right pursuant to Article VII. 4.5 Obligation to Schedule and Deliver. (a) Appointment of Scheduling Coordinator. Seller shall be the Scheduling Coordinator for the Plant and shall schedule the Output from the Plant in accordance with all applicable CAISO and related rules and protocols; provided that Seller may designate a Person certified by the CAISO to act as a Scheduling Coordinator to perform some or all of such functions for Seller. Such designation by Seller shall not relieve Seller of its obligation to ensure that all Scheduling Coordinator Functions are performed in accordance with all applicable CAISO and related rules and protocols. At least ninety (90) days before the Contract Delivery Start Date or, if Seller has requested that Buyer purchase Test Energy pursuant to Section 2.5, the beginning of delivery of Test Energy, Seller shall take all actions and execute and deliver to the CAISO all documents necessary to become and act as Scheduling Coordinator for the Plant. Seller as Scheduling Coordinator shall do all things reasonably needed to comply with any obligations under the CAISO Tariff and will use commercially reasonable efforts to minimize liabilities thereunder. Seller represents, warrants and certifies that Seller shall be certified by the CAISO as a Scheduling Coordinator or that it will retain, at its own expense, a Person that is so certified, so long as that Person provides Scheduling Coordinator Functions on behalf of Buyer for the Plant in accordance with all applicable CAISO and related rules and protocols. Seller (or Seller’s designee) as Scheduling Coordinator for the Plant shall comply with all Scheduling Coordinator Functions under the CAISO Tariff and shall conduct all scheduling for the Plant in full compliance with the terms and conditions of this Agreement and the applicable POWER PURCHASE AGREEMENT - Page 39 of 65 4124-1165-3657.19 CAISO Tariff, all requirements of EIRP (if applicable) and protocols and scheduling practices for Energy on a Day-Ahead basis, pursuant to the Hour-Ahead Scheduling Process, or in the Real Time Market, as such terms are defined in the CAISO Tariff, and the scheduling protocols attached hereto as Exhibit D. Commercial arrangements for such transmission and delivery services shall be coordinated and settled by the Scheduling Coordinator directly with the CAISO or other third parties. Seller (or Seller’s designee) shall act as Scheduling Coordinator, and perform any and all duties and responsibilities related thereto, at Seller’s own expense and at no charge to Buyer at all time during its appointment as Scheduling Coordinator hereunder; provided, however, that Buyer will be responsible for imbalance energy costs and CAISO charges and penalties to the extent Seller reasonably demonstrates that such costs, charges and penalties were caused by Buyer’s failure to perform its obligations hereunder. At any time during the Term, Buyer may, in its sole discretion and for any reason, replace Seller (or Seller’s designee) as Scheduling Coordinator for the Plant upon not less than thirty (30) days (or such longer period as may be necessary in order to comply with the CAISO Tariff) advance written notice and assume all of the obligations of the Scheduling Coordinator under this Agreement and the CAISO Tariff, so long as (i) Buyer (or Buyer’s designee) is qualified and certified by the CAISO to be a Scheduling Coordinator, (ii) all documentation necessary to transfer the Scheduling Coordinator role from Seller to Buyer has been executed, delivered and accepted by the CAISO, and (iii) this Agreement has been amended to require Buyer to perform the obligations and bear the risks of being the Scheduling Coordinator in the same manner as those obligations are currently being performed and those risks are currently being borne hereunder by Seller as Scheduling Coordinator, except that Seller will be responsible for imbalance energy costs and CAISO charges and penalties to the extent such costs, charges and penalties are caused by Seller’s failure to perform its obligations hereunder. In such event, Seller shall, within fifteen (15) days of receipt of such notice provide copies of all scheduling-related records, data, history and information to Buyer. (b) General Confirmations. The Parties acknowledge their general understanding and intent, subject to the terms and conditions of this Agreement, as follows: (i) Seller shall use all reasonable efforts consistent with Prudent Utility Practice to maximize the Output; (ii) Seller shall be responsible to arrange for, and shall bear all risks associated with, delivery of all Output to the Point of Interconnection; (iii) Buyer shall be obligated to pay for all Output delivered to the Point of Interconnection (subject to Section 2.4(a)); and (iv) Buyer shall be responsible to arrange for, and shall bear all risks associated with, acceptance and transmission of Output at and from the Point of Interconnection. POWER PURCHASE AGREEMENT - Page 40 of 65 4124-1165-3657.19 (c) Curtailment Rights. (i) Mandatory Dispatch Down Periods. Seller shall reduce delivery amounts as directed by the CAISO, Participating TO, or any successor thereof during any Dispatch Down Period. For the avoidance of doubt, Buyer shall not be required to pay Seller for the Output that Seller could have delivered to Buyer but for such order. (ii) Discretionary Curtailment. (A) Buyer may require Seller to curtail deliveries of Output from the Plant to the Point of Interconnection for any reason in Buyer’s sole discretion (a “Discretionary Curtailment”) by delivering a dispatch notice (which may include an update to bid prices) to Seller at least one (1) hour before the Day Ahead bid deadline under the CAISO Tariff, provided that (1) if, for any day, Seller has not scheduled any Output on a Day-Ahead basis, Buyer may deliver a Discretionary Curtailment dispatch notice to Seller up to one (1) hour before the Real Time bid deadline under the CAISO Tariff, (2) such Discretionary Curtailments shall be limited to a total of not more than fifty percent (50%) of the Expected Annual Energy Production, with the first fifty (50) hours of such amount in each Contract Year at no charge to Buyer, and (3) the dispatch notices shall be consistent with the operational characteristics set forth in Exhibit D. Seller shall reduce the Plant’s delivered Output by the amount and for the period set forth in each dispatch notice. (B) In addition to paying Seller for all Output actually delivered and not curtailed hereunder (subject to Section 2.4 and the adjustments in (a) and/or (b)), Buyer shall pay Seller, on the date payment would otherwise be due in respect of each month in which any Discretionary Curtailment occurred after giving effect to the maximum of fifty (50) hours of no-charge curtailment specified in Section 4.5(c)(ii)(A)(1), an amount equal to (1) the amount of Output that Seller could reasonably have delivered to Buyer but for such Discretionary Curtailment multiplied by (2) the Price, the Over-Production Energy Price and/or the Pre-FCDS Price, as applicable. (iii) Failure to Comply. If Seller fails to comply with a dispatch notice that meets the requirements for a Discretionary Curtailment, then, for the amount of Output (measured in MWhs of Output) that the Plant delivered in contradiction to the dispatch notice, Seller shall pay Buyer the greater of: (A) Two hundred percent (200%) of the aggregate Price for such MWhs plus any penalties or other charges actually incurred resulting from Seller’s failure to comply with the dispatch notice; and POWER PURCHASE AGREEMENT - Page 41 of 65 4124-1165-3657.19 (B) the CAISO’s Real-Time Market price for the applicable PNode for such MWhs plus any penalties or other charges actually incurred resulting from Seller’s failure to comply with the dispatch notice. (d) Eligible Intermittent Resource; Participating Intermittent Resource; and Forecast Fee. (i) EIRP. Unless the Plant is not EIRP-eligible or as otherwise directed by Buyer pursuant to Section 2.2(b)(ii)(gg), (i) Seller shall provide Buyer with a copy of the notice from CAISO certifying the Plant as a Participating Intermittent Resource as soon as practicable after Seller’s receipt of such notice of certification, (ii) as of the Contract Delivery Start Date or, if Seller has requested that Buyer purchase Test Energy pursuant to Section 2.5, the first date of delivery of Test Energy and until the Plant receives certification as a Participating Intermittent Resource, Seller, at its sole cost, shall comply with EIRP and additional protocols issued by the CAISO for Eligible Intermittent Resources, and (iii) throughout the Delivery Term, Seller, at its sole cost, shall participate in and comply with EIRP and all additional protocols issued by the CAISO for a Participating Intermittent Resource. If the EIRP is no longer made available by the CAISO or if Buyer directs Seller not to participate in such program, then throughout the Delivery Term, Seller, at its sole cost, shall participate in and comply with all other protocols, rules or regulations issued by the CAISO for generating facilities providing energy on an intermittent basis. Throughout the Delivery Term, Seller in its capacity as Scheduling Coordinator for the output of the Plant shall facilitate communication with the CAISO and provide other administrative materials to CAISO as necessary to satisfy Seller’s obligations under EIRP and additional protocols issued by the CAISO for Eligible Intermittent Resources and, if applicable, Participating Intermittent Resources. (ii) Forecast Fee. As an Eligible Intermittent Resource, the Scheduling Coordinator shall schedule Plant Output based upon a day-ahead and hour-ahead forecast developed by the CAISO (the “Forecasting Service”). Seller shall bear all forecast fees imposed by the CAISO for use of the Forecasting Service or any successor CAISO forecasting service up to and including $0.10/MWh (irrespective of whether Seller uses its own forecasting service in addition to the Forecasting Service). If such fees exceed this amount, the Parties shall each be responsible for, and each agrees to pay, fifty percent (50%) of such excess. Seller agrees to provide the Forecasting Service with sufficient data to support a reasonably accurate and unbiased forecast with respect to the Output to be sold by Seller to Buyer. To the extent the CAISO no longer provides the Forecasting Service (or a successor Forecasting Service) for the Plant Output, Seller and Buyer shall promptly coordinate to develop an alternative source for day-ahead and hour-ahead forecast information to be used by the Scheduling Coordinator for scheduling Plant Output. POWER PURCHASE AGREEMENT - Page 42 of 65 4124-1165-3657.19 4.6 Output Obligations, Performance LDs and Buyer’s Right to Operate. (a) Two (2) Year Minimum Production Threshold. Seller guarantees that the Calculation Period Deemed Delivered Energy Production for each Calculation Period shall be no less than the Two (2) Year Minimum Production Threshold for such Calculation Period in accordance with this Section 4.6. No less frequently than quarterly during each year, Seller shall calculate and provide notice to Buyer of the then-cumulative amount of the Seller Excused Energy Amount for such year, along with an explanation in reasonable detail of the calculation thereof based on historical Plant data, meteorological data, Output projections (including by the CAISO, if applicable) and other relevant data. The calculation shall be subject to review and approval by Buyer. (b) Performance LDs. If, for any Calculation Period, the Calculation Period Deemed Delivered Energy Production is less than the Two (2) Year Minimum Production Threshold (any such shortfall, in MWh, a “Shortfall”), then Seller may cure such Shortfall by paying or crediting Buyer liquidated damages based on the amount of such Shortfall in an amount equal to (i) the amount of such Shortfall multiplied by (ii) the per MWh Price in this Agreement multiplied by (iii) a factor of 1.2 (“Performance LDs”). In Buyer’s sole discretion, Buyer shall be entitled to collect Performance LDs within ten (10) days of Seller’s receipt of an invoice from Buyer therefor by one or more of the following: (i) drawing upon the Performance Assurance (which shall be subject to the replenishment provision set forth in Section 9.2(a)(iii); (ii) receiving payments from Seller on a monthly basis within ten (10) days of receipt of an invoice from Buyer therefor; and/or (iii) setting off against any amounts owed to Seller by Buyer for the purchase of Output hereunder as set forth in Section 3.3. If for any Calculation Period Seller is obligated to pay or credit any Shortfall damages hereunder, then, for purposes of calculating the Calculation Period Deemed Delivered Energy Production for the immediately succeeding Calculation Period, the amount of the Calculation Period Deemed Delivered Energy Production for the first year in such succeeding Calculation Period shall be deemed to be equal to the greater of (a) the actual Calculation Period Deemed Delivered Energy Amount for such first year, or (b) eighty percent (80%) of the Calculation Period Expected Annual Energy Production for such first year. Except as otherwise expressly stated in this Section 4.6(b), the Performance LDs shall be Buyer’s sole monetary remedy for any Shortfall or failure to produce the Output or failure to maintain any specified Two Year Minimum Production Threshold (subject to Buyer’s right to operate in Section 4.6(c)). The Parties agree POWER PURCHASE AGREEMENT - Page 43 of 65 4124-1165-3657.19 that Buyer’s receipt of the Performance LDs shall (x) not be construed as Buyer’s declaration that an Event of Default has occurred under any provision of Article VII and (y) not limit Buyer’s right to receive a Termination Payment upon exercise of Buyer’s default right pursuant to Article VII. Each Party agrees and acknowledges that (I) the damages that Buyer would incur due to Shortfall would be difficult or impossible to predict with certainty and (II) the Performance LDs are an appropriate approximation of such damages. ARTICLE V BUYER’S OBLIGATIONS 5.1 Delivery and Transmission. Except for Seller’s obligations pursuant to Sections 3.1, 4.1(h), 4.1(i), 4.5(a) and 4.5(d), Buyer shall be solely responsible for paying costs and charges associated with the delivery and receipt of the Output under this Agreement at the Point of Interconnection and for the transmission and delivery of the Output from the Point of Interconnection to any other point downstream of the Point of Interconnection (including, without limitation, transmission costs and charges, competition transition charges, applicable control area service charges, transmission congestion charges, inadvertent energy flows, any other CAISO charges related to the transmission of such Output by the CAISO and any charge assessed or collected in the future pursuant to any utility tariff or rate schedule, however defined, for transmission or transmission-related service rendered by or for any transmission-owning or operating entity). If and to the extent that Seller fails to comply with the notice provisions in Section 4.1(g) concerning Forced Outages or with its obligations as outlined in the previous sentence, Seller shall be wholly responsible for all imbalances, deviations, or any other CAISO charges or penalties associated with such Forced Outage or CAISO Tariff obligation (it being understood, however, that all such charges and penalties (if any) shall be borne by Buyer if Seller has not failed to comply with such provisions or obligations). 5.2 Taxes. Buyer shall pay and be fully responsible for any sales, use, gross receipts, utility or other taxes, assessments or fees, if any, incurred or imposed on the sale or transfer of Output from Seller to Buyer under this Agreement. Buyer shall not be responsible for any taxes measured on the net income of Seller, ad valorem taxes paid by Seller that are associated with Seller’s rights and privileges relating to the Site or any taxes imposed as a result of Seller’s corporate structure, including, without limitation, limited liability company or other entity fees and taxes. POWER PURCHASE AGREEMENT - Page 44 of 65 4124-1165-3657.19 ARTICLE VI FORCE MAJEURE 6.1 Remedial Action. Subject to the limitation on extensions of Milestones set forth in Section 4.4(a), a Party shall not be liable to the other Party if the Party is prevented from performing its obligations hereunder due to a Force Majeure Event. The Party rendered unable to fulfill an obligation by reason of a Force Majeure Event shall take all action necessary to remove such inability with all due speed and diligence. The non-performing Party shall be prompt and diligent in attempting to mitigate the effects of and to remove the cause of its failure to perform, and nothing herein shall be construed as permitting that Party to continue to fail to perform after said cause has been removed. Notwithstanding the foregoing, the existence of a Force Majeure Event shall not excuse any Party from its obligations to make payment of amounts due hereunder. 6.2 Notice. In the event of any delay or nonperformance resulting from a Force Majeure Event, the Party suffering the Force Majeure Event shall, as soon as practicable under the circumstances, notify the other Party, in writing, of the nature, cause, date of commencement thereof and the anticipated extent of any delay or interruption in performance. 6.3 Termination Due To Force Majeure Event. If a Party is prevented in any material respect from performing any material obligations under this Agreement solely due to a Force Majeure Event lasting for a period of twelve (12) consecutive months or longer, the unaffected Party may terminate this Agreement, without liability of either Party to the other, upon thirty (30) calendar days’ prior written notice at any time following expiration of such period of twelve (12) consecutive months. In such event, Buyer shall promptly return to Seller all Development Assurance, Interim Assurance or Performance Assurance, as applicable, less any LD Amount paid by or due and payable by Seller prior to the date of such termination for reasons unrelated to this Section 6.3. For the avoidance of doubt, this Section 6.3 shall not affect the rights and remedies associated with any other termination rights set forth in this Agreement. POWER PURCHASE AGREEMENT - Page 45 of 65 4124-1165-3657.19 ARTICLE VII DEFAULT, REMEDIES AND TERMINATION 7.1 Events of Default by Buyer. The following shall each constitute an “Event of Default” by Buyer: (a) Buyer breaches any material obligation or covenant (other than one covered by Section 7.1(b) or (c) of this Agreement) and fails to cure such breach within thirty (30) calendar days after written notification of breach by Seller or, if the breach cannot be cured within thirty (30) calendar days, such longer period as may be necessary to cure such breach as long as Buyer is exercising diligent efforts to cure such breach; (b) Buyer fails to make any payment when due under this Agreement within thirty (30) calendar days after written notice that such payment is due; or (c) Buyer becomes Bankrupt. 7.2 Events of Default by Seller. The following shall each constitute an “Event of Default” by Seller: (a) Seller breaches any material obligation or covenant (other than ones covered by Sections 7.2(b) through and including (k) of this Agreement or for which a remedy is specified) and fails to cure such breach within thirty (30) calendar days after written notification of breach by Buyer or, if the breach cannot be cured within thirty (30) calendar days, such longer period as may be necessary to cure such breach as long as Seller is exercising diligent efforts to cure such breach; (b) Seller fails to make any payment when due under this Agreement within fifteen (15) calendar days after written notice that such payment is due; (c) Seller becomes Bankrupt; (d) Seller consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of Seller under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to Buyer; (e) Seller sells or transfers the Output (or any individual component thereof), Expansion Plant Output (or any individual component thereof), if any, the right to the Output (or any individual component thereof), or the right to the Expansion Plant Output (or any individual component thereof) to the extent that such Expansion Plant Output is purchased by Buyer, to any Person other than Buyer. POWER PURCHASE AGREEMENT - Page 46 of 65 4124-1165-3657.19 (f) Seller fails to comply with the terms of Buyer’s right of first refusal as described in Section 2.4(a) or 2.10 of this Agreement; (g) Subject to Section 4.4, Seller fails, for any reason other than an unauthorized act or omission by Buyer, to achieve the Construction Milestone; (h) Subject to Section 4.4, Seller fails, for any reason other than an unauthorized act or omission by Buyer, to achieve the Commercial Operation Milestone; (i) If at any time during the Term of this Agreement, Seller delivers or attempts to deliver to the Point of Interconnection for sale under this Agreement Output that was not generated by the Plant; (j) Failure by Seller to satisfy the creditworthiness or collateral requirements agreed to pursuant to Sections 9.1, 9.2 or 9.3 of this Agreement; or (k) Failure by Seller to achieve the Contract Delivery Start Date. 7.3 Termination for Default. (a) Declaration of Early Termination Date. If an Event of Default with respect to a defaulting Party shall have occurred, is continuing and has not been cured, the other Party (the “Non-Defaulting Party”) shall have the right to: (i) send notice, designating a day, no earlier than ten (10) calendar days after the day such notice is deemed to be received as an early termination date of this Agreement (“Early Termination Date”) on which to (A) collect the Damage Payment if any Event of Default arose at any time prior to the commencement of the Delivery Term, including an Event of Default pursuant to Section 7.2(j), or (B) collect the Termination Payment (which shall be calculated in accordance with Section 7.3(b)) if any Event of Default arose during the Delivery Term; (ii) accelerate all amounts owing between the Parties, terminate this Agreement and end the Delivery Term effective as of the Early Termination Date; (iii) withhold any payments due to the Defaulting Party under this Agreement; (iv) suspend performance; (v) exercise its rights pursuant to Section 9.1 of this Agreement to draw upon and retain Development Assurance, Interim Assurance or Performance Assurance, as applicable; and (vi) exercise any other right or remedy available at Law or in equity to the extent otherwise permitted under this Agreement. (b) Calculation of Termination Payment. POWER PURCHASE AGREEMENT - Page 47 of 65 4124-1165-3657.19 (i) The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount as of the Early Termination Date, which shall be used in the calculation of the Termination Payment. Third parties supplying information for purposes of the calculation of Gains or Losses may include dealers in the relevant markets, end-users of relevant output, information vendors and other sources of market information. If the Non-Defaulting Party uses the market price for a comparable transaction to determine the Gains or Losses, such price should be determined by using the average of market quotations provided by three (3) or more bona fide unaffiliated market participants. If the number of available quotes is three, then the average of the three quotes shall be deemed to be the market price. Where a quote is in the form of bid and ask prices, the price that is to be used in the averaging is the midpoint between the bid and ask price. The quotes obtained shall be: (i) for a like amount, (ii) of the same Output, (iii) at the same (or a reasonably equivalent) PNode, and (iv) for the remainder of the Delivery Term, or in any other commercially reasonable manner. (ii) If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from such termination of this Agreement, the amount of the Settlement Amount shall be zero. (iii) The Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. (iv) The Termination Payment shall be the sole and exclusive remedy available to the Non-Defaulting Party in connection with its termination of this Agreement if any Event of Default arose during the Delivery Term, and shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. (c) Notice of Termination Payment. As soon as practicable after notice of termination, notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment due from the Defaulting Party to the Non-Defaulting Party, if any. The notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation. The Termination Payment shall be made to the Non-Defaulting Party fifteen (15) calendar days after such termination payment notice is effective. (d) Disputes Regarding Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within ten (10) calendar days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Following delivery of such a notice, disputes regarding the Termination Payment shall be resolved in accordance with Section 10.10. POWER PURCHASE AGREEMENT - Page 48 of 65 4124-1165-3657.19 (e) Damage Payment. The Parties agree that the Damage Payment to be paid by Seller for any Event of Default arising prior to the commencement of the Delivery Term shall be considered liquidated damages and not a penalty, in accordance with Section 7.4(D) and subject to Section 7.4(B). 7.4 Limitation of: Remedies, Liability and Damages. (A) THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. (B) EXCEPT AS OTHERWISE PROVIDED HEREIN, THE RIGHTS AND REMEDIES OF A PARTY PURSUANT TO THIS ARTICLE VII SHALL BE CUMULATIVE AND IN ADDITION TO THE RIGHTS OF THE PARTIES OTHERWISE PROVIDED IN THIS AGREEMENT. (C) FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED, UNLESS THE PROVISION PROVIDES THAT THE EXPRESS REMEDIES ARE IN ADDITION TO OTHER REMEDIES THAT MAY BE AVAILABLE. (D) IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL SUCH OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED UNLESS EXPRESSLY HEREIN PROVIDED. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF USE, LOSS OF REVENUES, LOSS OF PROFIT, OR OTHER BUSINESS INTERRUPTION DAMAGES, INTEREST CHARGES, COST OF CAPITAL OR CLAIMS OF ITS CUSTOMERS OR MEMBERS TO WHICH SERVICE IS MADE, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE EXCEPT TO THE EXTENT PART OF AN EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN. EXCEPT AS SET FORTH IN ARTICLE IX AND EXCEPT TO THE EXTENT SELLER VIOLATES ITS UNDERTAKING NOT TO PROVIDE OR SELL RIGHTS TO PART OR ALL OF THE OUTPUT OR EXPANSION PLANT OUTPUT, IF ANY, TO A PARTY OTHER THAN BUYER (EXCEPT AS SET FORTH IN SECTION 2.4(A)), SELLER SHALL NOT BE LIABLE TO BUYER FOR FAILURE TO PROVIDE ANY SPECIFIC AMOUNT OF OUTPUT HEREUNDER. POWER PURCHASE AGREEMENT - Page 49 of 65 4124-1165-3657.19 (E) THE PARTIES ACKNOWLEDGE AND AGREE THAT THE (I) THE DAILY LD AMOUNT SET FORTH IN SECTION 4.4(b), (II) THE DAMAGE PAYMENT SET FORTH IN SECTION 4.4(c), (III) THE DAMAGE PAYMENT SET FORTH IN SECTION 7.3(a)(i)(B), AND (IV) THE PERFORMANCE LDS SET FORTH IN SECTION 4.6(b) ARE EACH REASONABLE AND REPRESENT A FAIR AND GENUINE ESTIMATE OF THE DAMAGES THAT WOULD OCCUR RELATED TO THE EVENTS DESCRIBED THEREIN. THE PARTIES ACKNOWLEDGE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX ACTUAL DAMAGES IN SUCH CIRCUMSTANCES, AND THEREFORE THEY HAVE DEEMED THE LIQUIDATED DAMAGES SET FORTH ABOVE TO BE THE AMOUNT OF DAMAGE SUSTAINED BY BUYER OR SELLER UPON THE OCCURRENCE OF SUCH CIRCUMSTANCES. THE PARTIES FURTHER AGREE THAT PAYMENT OF SUCH AMOUNTS SHALL BE AS AND FOR LIQUIDATED DAMAGES AND NOT AS A PENALTY AND ARE THEREFORE NOT SUBJECT TO AVOIDANCE UNDER CALIFORNIA CIVIL CODE SECTION 1671. ARTICLE VIII REPRESENTATIONS AND WARRANTIES 8.1 Seller’s Representations and Warranties. In addition to the representations and warranties set forth in other sections of this Agreement, Seller represents and warrants to Buyer that as of Seller Execution: (a) Seller is duly organized and validly existing as a limited liability company under the laws of Delaware, and has the lawful power to engage in the business it presently conducts and contemplates conducting in this Agreement, and Seller is duly qualified in California and each jurisdiction wherein the nature of the business transacted by it makes such qualification necessary; (b) Seller has the legal power and authority to make and carry out this Agreement and to perform its obligations hereunder; all such actions have been duly authorized by all necessary proceedings on its part; (c) Either: (1) the Plant shall on the Commercial Operation Date be a "qualifying small power production facility" (“QF”) as that term is defined in Section 3(17)(C) of the Federal Power Act (“FPA”) and shall be entitled to all of the exemptions from regulation provided in 18 CFR §§ 292.601(c) and 292.602 applicable to a QF with the capacity of the Plant; and (B) no approval (except with respect to "qualifying small power production facility" status and market-based rate authorization under Section 205 of the FPA) with respect to this Agreement is required from FERC; or POWER PURCHASE AGREEMENT - Page 50 of 65 4124-1165-3657.19 (2) Seller shall on the Commercial Operation Date be an "exempt wholesale generator" as that term is defined in Section 1262(6) of the Public Utility Holding Company Act of 2005, and (B) no approval (except with respect to “exempt wholesale generator" status and market based rate authorization under Section 205 of the FPA) with respect to this Agreement is required from FERC. In the event that the Plant is not a "qualifying small power production facility" that is exempt from Sections 205 and 206 of the FPA on the Commercial Operation Date or any date thereafter, Seller shall make appropriate filings under the Federal Power Act within sixty (60) calendar days so as to comply with applicable law, subject at all times to the provisions of Section 10.19 of this Agreement; (d) The execution, delivery and performance of this Agreement by Seller shall not conflict with its governing documents, any applicable laws, or any covenant, agreement, understanding, decree or order to which Seller is a party or by which it is bound or affected; (e) This Agreement has been duly and validly executed and delivered by Seller and, as of Seller Execution, constitutes a legal, valid and binding obligation of Seller, enforceable in accordance with its terms against Seller, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity; (f) There are no actions, suits, proceedings or investigations pending or, to the knowledge of Seller, threatened, in writing, against Seller or any of its Affiliates, at law or in equity, before any Governmental Authority, which individually or in the aggregate are reasonably likely to have a materially adverse effect on the business, properties or assets or the condition, financial or otherwise, of Seller, or to result in any impairment of Seller’s ability to perform its obligations under this Agreement; (g) It is not Bankrupt and there are no proceedings pending or being contemplated by it or any of its Affiliates, or, to its knowledge, threatened against it or its Affiliates which would result in it being or becoming Bankrupt; and (h) It is, or shall be deemed for all purposes to be, a forward contract merchant within the meaning of the U.S. Bankruptcy Code (as in effect as of the Execution Date of this Agreement). POWER PURCHASE AGREEMENT - Page 51 of 65 4124-1165-3657.19 8.2 Buyer Representations and Warranties. Buyer represents and warrants to Seller that as of the Execution Date: (a) Buyer is a municipal corporation, duly organized and validly existing, and has the lawful power to engage in the business it presently conducts and contemplates conducting in this Agreement; (b) Buyer has the legal power and authority to make and carry out this Agreement and to perform its obligations hereunder and all such actions have been duly authorized by all necessary proceedings on its part; (c) The execution, delivery and performance of this Agreement by Buyer shall not conflict with its governing documents, any applicable laws or any covenant, agreement, understanding, decree or order to which Buyer is a party or by which it is bound or affected; (d) This Agreement has been duly and validly executed and delivered by Buyer and, as of the Execution Date, constitutes a legal, valid and binding obligation of Buyer, enforceable in accordance with its terms against Buyer, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity; (e) There are no actions, suits, proceedings or investigations pending or, to the knowledge of Buyer, threatened, in writing, against Buyer, at law or in equity, before any Governmental Authority, which individually or in the aggregate are reasonably likely to have a materially adverse effect on the business, properties or assets or the condition, financial or otherwise, of Buyer, or to result in any impairment of Buyer’s ability to perform its obligations under this Agreement; (f) It is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt; (g) It is, or shall be deemed for all purposes to be, a forward contract merchant within the meaning of the U.S. Bankruptcy Code (as in effect as of the Execution Date of this Agreement). 8.3 Covenants. (a) General Covenants. In addition to other covenants in this Agreement, each Party covenants that throughout the Delivery Term: (i) it shall continue to be duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation; POWER PURCHASE AGREEMENT - Page 52 of 65 4124-1165-3657.19 (ii) it shall maintain (or obtain from time to time as required, including through renewal, as applicable) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and (iii) it shall perform its obligations under this Agreement in a manner that does not violate any of the terms and conditions in its governing documents, any material contracts to which it is a party or any Law, rule, regulation or order (b) Seller Covenants. In addition to other covenants in this Agreement, Seller covenants that: (i) Throughout the Delivery Term that it shall take no action or permit any other Person or entity (other than Buyer) to take any action that would impair in any way Buyer’s ability to rely on the Plant in order to satisfy its Resource Adequacy Requirements; and (ii) It shall comply with all CAISO Tariff requirements applicable to an Interconnection Customer (as defined in the CAISO Tariff) and shall take any other necessary action, including payment of fees and submission of requests, applications or other documentation, to promote the completion of the Electric System Upgrades prior to the Commercial Operation Date. ARTICLE IX DEVELOPMENT, INTERIM AND PERFORMANCE ASSURANCE 9.1 Grant of Security Interest/Remedies. To secure its obligations under this Agreement and to the extent Seller delivers the Development Assurance, Interim Assurance and/or Performance Assurance, as applicable, hereunder, Seller hereby grants to Buyer, as the secured party, a first priority security interest in, and lien on (and right of setoff against), and assignment of, all such Development Assurance, Interim Assurance and/or Performance Assurance posted with Buyer in the form of cash collateral and cash equivalent collateral and any and all proceeds resulting therefrom or the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of, Buyer. Within thirty (30) calendar days of the delivery of the Development Assurance, Interim Assurance or Performance Assurance, as applicable, Seller agrees to take such action as Buyer reasonably requires in order to perfect a first-priority security interest in, and lien on (and right of setoff against), such Development Assurance, Interim Assurance or Performance Assurance and any and all proceeds resulting therefrom or from the liquidation thereof, respectively. Upon or any time after the occurrence or deemed occurrence and during the continuation of an Event of Default or an Early Termination Date, Buyer, as the Non-Defaulting Party, may do any one or more of the following: (a) exercise any of the rights and remedies of a secured party with respect to all POWER PURCHASE AGREEMENT - Page 53 of 65 4124-1165-3657.19 Development Assurance, Interim Assurance or Performance Assurance, as applicable, including any such rights and remedies under the law then in effect; (b) exercise its rights of setoff against any and all property of Seller, as the Defaulting Party, in the possession of the Buyer or Buyer’s agent; (c) draw on any outstanding Letter of Credit issued for its benefit; and (d) liquidate all Development Assurance, Interim Assurance or Performance Assurance, as applicable, then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller. Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under the Agreement (Seller remaining liable for any amounts owing to Buyer after such application), subject to the Buyer’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full. 9.2 Development Assurance, Interim Assurance and Performance Assurance. (a) Provision of Security by Seller. Except as set forth in Section 2.1(b), Seller agrees to deliver to Buyer collateral to secure its obligations under this Agreement which Seller shall maintain in full force and effect for the period posted with Buyer, as follows: (i) Development Assurance. Development Assurance pursuant to this Section 9.2(a)(i) in the amount of Five Million Two Hundred Thousand Dollars ($5,200,000.00) (equal to $200 per kW AC multiplied by the Expected Initial Plant Capacity) and in the form of cash or a Letter of Credit within ten (10) calendar days following the Execution Date until Seller posts the Interim Assurance or Performance Assurance pursuant to Section 9.2(a)(ii) or (iii) below with Buyer, as applicable; provided that, if Buyer collects or is entitled to collect a Daily LD Amount by drawing upon the Development Assurance pursuant in Section 4.4(b)(i), Seller agrees that within ten (10) Business Days following written notice from Buyer related thereto, Seller shall replenish the Development Assurance by an amount equal to the encumbered Development Assurance; (ii) Interim Assurance. Interim Assurance pursuant to this Section 9.2(a)(ii) in the amount of Two Million Six Hundred Thousand Dollars ($2,600,000,00) and in the form of cash or a Letter of Credit from the Commercial Operation Date until the Seller posts Performance Assurance pursuant to Section 9.2(a)(iii) below; provided that, (A) with Buyer’s consent, Seller may elect to apply a portion of the Development Assurance posted pursuant to Section 9.2(a)(i) toward the Interim Assurance posted pursuant to this Section 9.2(a)(ii); and (B) Seller shall not be required to deliver to Buyer the Interim POWER PURCHASE AGREEMENT - Page 54 of 65 4124-1165-3657.19 Assurance if the Commercial Operation Date occurs on the same date as the Contract Delivery Start Date; and (C) if Buyer collects (or is entitled to collect) a Daily LD Amount for failure to achieve the Milestones by drawing upon the Interim Assurance pursuant to Section 4.4(b), Seller agrees that within ten (10) Business Days following written notice from Buyer related thereto, Seller shall replenish the Interim Assurance by an amount equal to the encumbered Interim Assurance; and (iii) Performance Assurance. Performance Assurance pursuant to this Section 9.2(a)(iii) in the amount of Two Million Six Hundred Thousand ($2,600,000.00) (equal to $100 per kW AC multiplied by the Expected Initial Plant Capacity) and in the form of cash or a Letter of Credit from the Contract Delivery Start Date and ending at the expiration of the Delivery Term; provided that, (A) with Buyer’s consent, Seller may elect to apply a portion of the Development Assurance or Interim Assurance posted pursuant to Section 9.2(a)(i) or 9.2(a)(ii) toward the Performance Assurance posted pursuant to this Section 9.2(a)(iii), as applicable; and (B) if Buyer collects or is entitled to collect Performance LDs by drawing upon the Performance Assurance pursuant in Section 4.6(b), Seller agrees that within ten (10) Business Days following written notice from Buyer related thereto, Seller shall replenish the Performance Assurance by an amount equal to the encumbered Performance Assurance. The amount of Development Assurance, Interim Assurance and Performance Assurance required under this Agreement shall not be deemed a limitation of damages. (b) Use of Development Assurance. Buyer shall be entitled to draw upon the Development Assurance posted by Seller for its Daily LD Amount until the Development Assurance is exhausted, subject to the provision for replenishment set forth in Section 9(a)(1). Buyer shall also be entitled to draw upon the Development Assurance for any damages arising upon Buyer’s declaration of an Early Termination Date. (c) Termination of Development Assurance. If (i) Buyer terminates this Agreement pursuant to Section 2.1(b) or 2.9(c), or (ii) after the Commercial Operation Date (as extended pursuant to Section 4.4(a)), no damages are due and owing to Buyer under this Agreement; then in either case Seller shall no longer be required to maintain the Development Assurance, and Buyer shall return to Seller the Development Assurance, plus interest under the applicable account, less the undisputed amounts drawn in accordance with Section 9.2(b), if any. The Development Assurance (or portion thereof) shall be returned within thirty (30) calendar days of Seller’s provision of the Interim Assurance or Performance Assurance unless, with Buyer’s consent, Seller elects to apply the POWER PURCHASE AGREEMENT - Page 55 of 65 4124-1165-3657.19 Development Assurance (or a portion thereof) toward the Interim Assurance or Performance Assurance posted pursuant to Section 9.2(a)(ii) or (iii), as applicable. (d) Use of Interim Assurance. Buyer shall be entitled to draw upon the Interim Assurance posted by Seller for any damages arising in or during the time period from the Commercial Operation Date until the Contract Delivery Start Date upon Buyer’s declaration of an Early Termination Date. (e) Termination of Interim Assurance. If after the Contract Delivery Start Date, no damages are due and owing to Buyer under this Agreement, then Seller shall no longer be required to maintain the Interim Assurance, and Buyer shall return to Seller the Interim Assurance, plus interest under the applicable account, less the amounts drawn in accordance with Section 9.2(d). The Interim Assurance (or portion thereof) shall be returned to Seller within thirty (30) calendar days of Seller’s provision of the Performance Assurance unless, with Buyer’s consent, Seller elects to apply the Interim Assurance posted pursuant to Section 9.2(a)(ii) toward the Performance Assurance posted pursuant to Section 9.2(a)(iii), as applicable. (f) Return of Performance Assurance and Interest. Buyer shall return the unused portion of Development Assurance, Interim Assurance or Performance Assurance, as applicable, including the payment of any interest due thereon to Seller within thirty (30) days after the following has occurred: (i) the Term of the Agreement has ended, or subject to Section 7.3, an Early Termination Date has occurred, as applicable; and (ii) all payment obligations of the Seller arising under this Agreement, including payments pursuant to a Damage Payment, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). 9.3 Letter of Credit. Development Assurance, Interim Assurance or Performance Assurance provided in the form of a Letter of Credit shall be subject to the following provisions: (a) Renewal of Letter of Credit. If Seller has provided a Letter of Credit pursuant to any of the applicable provisions in this Article Nine, then Seller shall renew or cause the renewal of each outstanding Letter of Credit on a timely basis in accordance with this Agreement. (b) Failure of Letter of Credit and Cure. In the event the issuer of such Letter of Credit at any time (i) fails to maintain the requirements of an Eligible LC Bank or Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit, Seller POWER PURCHASE AGREEMENT - Page 56 of 65 4124-1165-3657.19 shall cure such occurrence by complying with either (A) or (B) below in an amount equal to the outstanding Letter of Credit, and by completing the action within five (5) Business Days after the date of Buyer’s notice to Seller of an occurrence listed in this subsection (Seller’s compliance with either (A) or (B) below is considered the “Cure”): (A) providing a substitute Letter of Credit that is issued by an Eligible LC Bank, other than the bank which is the subject of Buyer’s notice to Seller in Section 9.3(b) above, or (B) posting cash. If Seller fails to cure or if such Letter of Credit expires or terminates without a full draw thereon by Buyer, or fails or ceases to be in full force and effect at any time that such Letter of Credit is required pursuant to the terms of this Agreement, then Seller shall have failed to meet the creditworthiness or collateral requirements of Section 9.2. (c) Substitute Letter of Credit. Notwithstanding the foregoing in Section 9.3(b), if, at any time, the issuer of such Letter of Credit has a Credit Rating on “credit watch” negative or developing by S&P, or is on Moody’s “watch list” under review for downgrade or uncertain ratings action (either a “Watch”), then Buyer may make a demand to Seller by notice (“LC Notice”) to provide a substitute Letter of Credit that is issued by an Eligible LC Bank, other than the bank on a Watch (“Substitute Letter of Credit”). The Parties shall have thirty (30) Business Days from the LC Notice to negotiate a Substitute Letter of Credit (“Substitute Bank Period”). (i) If the Parties do not agree to a Substitute Letter of Credit by the end of the Substitute Bank Period, then Buyer shall provide Seller with Notice within five (5) Business Days following the expiration of the Substitute Bank Period (“Ineligible LC Bank Notice Period”) that either: (A) Buyer agrees to continue accepting the then currently outstanding Letter of Credit from the bank that is the subject of the LC Notice, but such bank shall no longer be an Eligible LC Bank (“Ineligible LC Bank”) and Buyer shall not accept future or renewals of Letters of Credit from the Ineligible LC Bank; or (B) the bank that is the subject of the LC Notice is an Ineligible LC Bank and Seller shall then have thirty (30) days from the date of Buyer’s Notice to Cure pursuant to Section 8.5(b) and, if Seller fails to Cure, then the last paragraph in Section 9.3(b) shall apply to Seller. (ii) If the Parties have not agreed to a Substitute Letter of Credit and Buyer fails to provide a Notice during the Ineligible LC Bank Notice Period above, POWER PURCHASE AGREEMENT - Page 57 of 65 4124-1165-3657.19 then Seller may continue providing the Letter of Credit posted immediately prior to the LC Notice. (d) Letter of Credit Costs. In all cases, the reasonable costs and expenses of establishing, renewing, substituting, canceling, increasing, reducing, or otherwise administering the Letter of Credit shall be borne by Seller. ARTICLE X MISCELLANEOUS 10.1 Indemnification. (a) Seller Indemnification Prior to Commercial Operation Date. Up to and including the Contract Delivery Start Date, Seller shall indemnify, defend, and hold harmless Buyer, and its City Council members, officers, agents and employees, from any claim, liability, loss, injury or damage arising out of, or in connection with, the negligence, willful misconduct or violation of applicable law by Seller and/or its agents, employees or sub-contractors, excepting only loss, injury or damage caused by the negligence, willful misconduct or violation of applicable law of personnel employed by Buyer to the extent caused by such negligence, willful misconduct or violation of applicable law of Buyer’s employed personnel. If an Indemnified Party determines that it is entitled to defense and indemnification under this Section 10.1, such Indemnified Party shall promptly notify the Indemnifying Party in writing of the losses, and provide all reasonably necessary or useful information, and authority to settle and/or defend the losses. No settlement that would impose costs or expense upon the Indemnified Party shall be made without such Party’s prior written consent. (b) Seller and Buyer Indemnification after Commercial Operation Date. After the Contract Delivery Start Date, each Party (“Indemnifying Party”) shall defend, indemnify and hold harmless the other Party and its officers, directors, employees, agents, Affiliates and representatives and, in the case of Buyer, its City Council members (each, an “Indemnified Party”) from and against any and all losses, including but not limited to losses arising from personal injury or death, or damage to property, but only to the extent such losses result from or arise out of the negligence, willful misconduct or violation of applicable law by the Indemnifying Party, its employees, subcontractors or agents. If an Indemnified Party determines that it is entitled to defense and indemnification under this Section 10.1, such Indemnified Party shall promptly notify the Indemnifying Party in writing of the losses, and provide all reasonably necessary or useful information, and authority to settle and/or defend the losses. No settlement that would impose costs or expense upon the Indemnified Party shall be made without such Party’s prior written consent. POWER PURCHASE AGREEMENT - Page 58 of 65 4124-1165-3657.19 10.2 Assignment. (a) General Assignment. Except as provided in Sections 10.2 (b) and (c), neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, so long as among other things (i) the assignee assumes the transferring Party’s payment and performance obligations under this Agreement, (ii) the assignee agrees in writing to be bound by the terms and conditions hereof, (iii) the transferring Party delivers financial statements, information and other evidence reasonably satisfactory to the non-transferring Party of the proposed assignee’s technical and financial capability to fulfill the assigning Party’s obligations hereunder and (iv) the transferring Party delivers such tax and enforceability assurance as the other Party may reasonably request; provided that Buyer’s consent shall not be required for Seller’s assignment of this Agreement to an Affiliate, so long as such Affiliate satisfies the requirements of clauses (i), (ii), (iii) and (iv). Seller shall be responsible for reimbursement of Buyer’s Attorneys’ Fees related to this Section 10.2(a) as described in Section 10.12(a). (b) Assignment to Financing Providers. Notwithstanding any provision to the contrary in this Section 10.2, Seller shall be permitted to assign this Agreement as collateral for any financing or refinancing of the Plant with the prior written consent of the Buyer, which consent shall not be unreasonably withheld, conditioned or delayed. If Buyer gives its consent, then such consent shall be in a form substantially similar to the Form of Lender Agreement attached hereto as Exhibit F-2, together with such changes as may be reasonably requested by the financing providers; provided that (i) Buyer shall negotiate with the financing providers in good faith with respect to any additional terms or conditions requested by the financing providers beyond those contained in Exhibit F-2, including extension of any cure periods or additional remedies for financing providers, but shall not be required to consent to any term or condition that increases Buyer’s cost of performance hereunder, and (ii) Seller shall be responsible for reimbursement of Buyer’s Attorneys’ Fees as described in Section 10.12(a). (c) Assignment in Connection with a Change in Control. Notwithstanding any provision to the contrary in this Section 10.2, except as provided below, any direct or indirect change of control of Seller (whether voluntary or by operation of Law) shall be deemed an assignment and shall require the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that (i) a change in control that results in Seller being owned, directly or indirectly, by a Qualified Transferee or an Affiliate of Seller shall not be considered an assignment or require Buyer’s consent, and (ii) neither the foreclosure or transfer in lieu of foreclosures of the direct or indirect ownership interests in Seller nor the transfer of direct or indirect ownership interests in Seller to one or more tax equity investors shall be considered to be, or be included in determining whether there has been, a direct or indirect change of control. At Buyer’s request, Seller shall promptly deliver financial statements, information and other evidence satisfactory to Buyer regarding the proposed change of control of POWER PURCHASE AGREEMENT - Page 59 of 65 4124-1165-3657.19 Seller. Seller shall be responsible for reimbursement of Buyer’s Attorneys’ Fees and any other costs related to this Section 10.2(c) as described in Section 10.12(a). (d) Unauthorized Assignment. Any assignment or purported assignment in violation of this Section 10.2 is void. 10.3 Notices. Unless otherwise expressly allowed hereunder, any notice, demand, request, or communication required or authorized by this Agreement shall be delivered either by hand, facsimile, electronic mail, overnight courier or mailed by certified mail, return receipt requested with postage prepaid, to: Buyer: City of Palo Alto 250 Hamilton Avenue, 8th Floor Palo Alto, CA 94301 Attention: Assistant City Attorney Fax: (650) 329-2646 Email: AmyBartell@cityofpaloalto.org with a copy to: City of Palo Alto 250 Hamilton Avenue, 3rd Floor Palo Alto, CA 94301 Attention: Director of Utilities Fax: (650) 329-2946 Email: DeanBatchelor@cityofpaloalto.org Seller: Golden Fields Solar III, LLC c/o Solar Asset Management LLC 4900 Scottsdale Road, Suite 5000 Scottsdale, AZ 85251 Attention: Monique Menconi, VP Asset Management Telephone: (480) 424-1240 Email: Monique.menconi@clearwayenergy.com with a copy to: Golden Fields Solar III, LLC c/o Clearway Energy Group, Legal Department 5790 Fleet Street, Suite 200 Carlsbad, CA 92008 Attention: Jennifer Hein, General Counsel Telephone: (760) 710-2187 Email: Jennifer.hein@clearwayenergy.com The designation and titles of the person to be notified or the address of such person may be changed at any time by written notice delivered in the manner set forth in this Section 10.3. Whenever this Agreement requires or permits delivery of a “notice” (or requires a Party to “notify”), the Party with such right or obligation shall provide a written communication in the manner specified herein. Any such notice, demand, request, or communication shall be POWER PURCHASE AGREEMENT - Page 60 of 65 4124-1165-3657.19 deemed received (i) if delivered by the delivering Party by hand, facsimile or electronic mail on the Business Day on which such notice was transmitted if received before 5:00 p.m. (and if received after 5:00 p.m., on the next Business Day) at the receiving party’s notice address specified in this Section 10.3; or (ii) upon receipt by the receiving Party if sent by overnight courier or mailed by certified mail, return receipt requested with postage prepaid; or (iii) if notice is required in the form of sub-sections (i) and (ii), then on the earlier of (i) or (iii). 10.4 Electronic Transmission. Facsimile or electronic or PDF transmission shall be the same as delivery of an original document; provided that, at the request of either Party, the other Party shall confirm facsimile or electronic or PDF signatures by signing and delivering an original document; provided further, however, that the execution and delivery of this Agreement and its counterparts shall be subject to Section 10.20. 10.5 Captions. All titles, subject headings, section titles and similar items are provided for the purpose of reference and convenience and are not intended to be inclusive, definitive or to affect the meaning of the contents or scope of the Agreement. 10.6 No Third Party Beneficiary. No provision of the Agreement is intended to, nor shall it in any way, inure to the benefit of any customer, property owner or any other third party, so as to constitute any such Person a third party beneficiary under the Agreement, or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any Person not a Party hereto. 10.7 No Dedication. No undertaking by one Party to the other under any provision of the Agreement shall constitute the dedication of that Party's system or any portion thereof to the other Party or to the public or affect Seller as an independent entity and not a public utility. 10.8 Entire Agreement; Integration; Amendments. This Agreement, together with the Preamble and each and every exhibit, appendix, attachment, amendment, schedule and any written supplements hereto, if any, constitutes the entire, integrated agreement between the Parties and supersedes any and all prior oral or written understandings. No amendment, addition to or modification of any provision hereof shall be binding upon the Parties, and neither Party shall be deemed to have waived any provision or any remedy available to it, unless such amendment, addition, modification or waiver is made, in writing, and signed by a duly authorized officer or representative of the Parties. POWER PURCHASE AGREEMENT - Page 61 of 65 4124-1165-3657.19 10.9 Applicable Law. This Agreement and the rights and duties of the Parties hereunder shall be construed, enforced and performed in accordance with the laws of the state of California, and/or the laws of the United States, as applicable, without regard to principles of conflicts of law which may direct the application of the laws of another jurisdiction. 10.10 Venue. The Parties hereby submit to the exclusive jurisdiction of the federal courts for the Northern District of the State of California; provided, however, that if such federal courts sitting in the Northern District of the State of California refuse jurisdiction, the Parties agree to the exclusive jurisdiction of the state courts sitting in the County of Santa Clara, State of California. 10.11 Rule of Construction. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof. 10.12 Attorneys’ Fees and Costs. (a) Buyer’s Costs Due to Seller’s Change. Notwithstanding any provision to the contrary herein, Buyer shall be entitled to recover from Seller, upon Buyer’s request, Buyer’s Attorneys’ Fees and any other costs associated with the review, evaluation, negotiation, execution and/or delivery of any and all documents, consents, amendments, modifications or restatements related to this Agreement pursuant to Sections 4.2(h), 10.2(a), 10.2(b), and 10.2(c) and, if such actions require any actions beyond the giving of notice by Buyer, any and all other Seller-initiated proposed modifications (whether agreed to or not) of any and all terms or conditions of this Agreement which include, by way of illustration, but not of limitation: Milestones, Price, Capacity, quantity of Output, Point of Interconnection, FCDS Finding and/or Discretionary Curtailment. The Parties agree that this Section 10.12(a) shall be interpreted inclusively and broadly, with the intention of reimbursing Buyer for its legal fees, expenses and costs rather than not. (b) Judicial Action. If a suit or action is instituted to enforce or interpret any term of this Agreement, the prevailing party in any suit or action brought to enforce or interpret the provisions of this Agreement shall be entitled to recover its Attorneys’ Fees at any hearing, any trial, on appeal, and on any petition for review or other trial court or appellate proceeding. In addition, the prevailing party shall be entitled to recover its Attorneys’ Fees incurred in enforcing its rights under this Agreement in connection with any nonjudicial action or the exercise of nonjudicial remedies, and POWER PURCHASE AGREEMENT - Page 62 of 65 4124-1165-3657.19 in any administration, arbitrative, mediation or dispute resolution process or proceeding. 10.13 Nature of Relationship. The duties, obligations and liabilities of the Parties are intended to be several and not joint or collective. The Agreement shall not be interpreted or construed to create an association, joint venture, fiduciary relationship or partnership between Seller and Buyer or to impose any partnership obligation or liability or any trust or agency obligation or relationship upon either Party. Seller and Buyer shall not have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or act as or be an agent or representative of or otherwise bind the other Party. 10.14 Good Faith and Fair Dealing; Reasonableness. The Parties agree to act reasonably and in accordance with the principles of good faith and fair dealing in the performance of this Agreement. Unless expressly provided otherwise in this Agreement, (i) wherever the Agreement requires the consent, approval or similar action by a Party, such consent, approval or similar action shall not be unreasonably withheld, conditioned or delayed, and (ii) wherever the Agreement gives a Party a right to determine, require, specify or take similar action with respect to matters, such determination, requirement, specification or similar action shall be reasonable, unless a different standard is otherwise specified in this Agreement. 10.15 Severability. Should any provision of the Agreement be or become void, illegal or unenforceable, the validity or enforceability of the other provisions of the Agreement shall not be affected and shall continue in full force and effect. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal, or unenforceable provision(s) with legally acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision. 10.16 Confidentiality. (a) Public Records Act and Confidential Information Designated by Seller. Seller acknowledges that Buyer is a public agency subject to the disclosure requirements of the California Public Records Act, Cal. Gov. Code § 6250 et seq. (“CPRA”). If documents or information submitted to Buyer contain Seller’s proprietary and confidential information and Seller claims that such information falls within one or more CPRA exemptions, Seller must clearly mark such information “CONFIDENTIAL AND PROPRIETARY”, and identify the specific lines containing such information (the “Confidential Information”). Buyer shall disclose such Confidential Information to third parties only to the extent required by California law (including, without limitation, the California Constitution, the CPRA and the Brown Act) as set forth in this Section 10.16. POWER PURCHASE AGREEMENT - Page 63 of 65 4124-1165-3657.19 (b) Disclosure of Confidential Information by Buyer. In the event of a third party request for Buyer to disclose such Confidential Information, Buyer shall make reasonable efforts to provide notice to Seller prior to disclosure. If Seller contends that any Confidential Information is exempt from the CPRA and wishes to prevent disclosure, Seller shall obtain a protective order, injunctive relief or other appropriate remedy from a court of law in Santa Clara County before Buyer’s deadline for responding to the CPRA request. If Seller fails to obtain such remedy prior to Buyer’s deadline for responding to the CPRA request, Seller agrees that Buyer may disclose the requested Confidential Information. Seller further agrees that Buyer shall have no liability to Seller arising out of any disclosure by Buyer of any Seller Confidential Information before Seller has timely obtained an order, injunctive relief or other appropriate remedy to prevent Buyer from making the requested third party disclosure. Each Party shall be bound by its obligations of confidentiality hereunder for a period of two (2) years from the expiration or earlier termination of this Agreement. (c) Non-Confidential Information. Notwithstanding anything to the contrary in this Section 10.16, nothing shall restrict any Party from using or disclosing confidential information in any manner it chooses which (i) is or becomes generally available to the public other than as a result of a disclosure directly or indirectly by the disclosing Party or its representative(s); (ii) was within the using or disclosing Party’s possession prior to it being furnished hereunder, provided that such information is not subject to another confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, any other party with respect to such information; (iii) is rightfully obtained by a Party from third parties authorized to make such disclosure without restriction; (iv) is legally required to be disclosed by judicial or other governmental action as determined by such Party’s attorney acting in good faith (including, but not limited to, the California Constitution, the CPRA and the Brown Act); or (v) is disclosed without a duty of confidentiality to a third party by, or with the authorization of, the disclosing Party; or (vi) is independently developed by the recipient. (d) Disclosure to the City Council of Palo Alto. Notwithstanding any provision to the contrary in this Section 10.16, Buyer shall be permitted to disclose this Agreement and related information to the City Council of Palo Alto for the express purpose of obtaining approval to execute this Agreement, including any written amendment or modification thereto. POWER PURCHASE AGREEMENT - Page 64 of 65 4124-1165-3657.19 10.17 Cooperation. The Parties agree to reasonably cooperate with each other in the implementation and performance of the Agreement. Such duty to cooperate shall not require either Party to act in a manner inconsistent with its rights under the Agreement. 10.18 Audit. Both Parties shall maintain all records relating to the other Party or this Agreement for a minimum of two (2) years after the expiration or earlier termination of the Term and shall permit the other Party, upon reasonable notice, at its sole expense and during normal working hours, to examine such records as the requesting Party deems reasonably necessary to protect its rights. 10.19 Mobile Sierra Doctrine. Notwithstanding any provision of this Agreement, the Parties intend that the standard of review for changes to any rate, charge, classification, term or condition of this Agreement proposed by a Party shall be the “Mobile-Sierra public interest” standard of review, as stated by the United States Supreme Court in Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County, 554 U.S. 1164 (2008) and consistent with the order of the Supreme Court in NRG Power Marketing LLC, et al. v. Maine Public Utilities Commission et al., No. 08-674, 130 S.Ct 693 (2010). Any modifications proposed by a non-contracting third party or FERC acting sua sponte shall be the most stringent standard permissible under applicable law. 10.20 Counterparts. This Agreement may be executed in one or more counterparts and by different Parties on separate counterparts, all of which shall be deemed one and the same agreement and each of which shall be deemed an original. Delivery of an executed counterpart of this Agreement by fax or other electronic means shall be deemed as effective as delivery of an originally executed counterpart. Any Party delivering an executed counterpart of this Agreement by facsimile or other electronic means shall also deliver an originally executed counterpart, but the failure of any Party to deliver an originally executed counterpart of this Agreement shall not affect the validity or effectiveness of this Agreement. 10.21 Debt Liability Disclaimer. For the avoidance of doubt, the Buyer, including, but not limited to, any source of funding for Buyer, any General Fund of Buyer or any special self-insurance program, is not liable for any debts, liabilities, settlements, liens, or any other obligations of the Seller or its heirs, successors or assigns. Buyer shall not be liable for and shall be held harmless and indemnified by Seller for (a) any claims or damages arising out of any other contract to which Seller is a party, and (b) subject to Section 10.1(b), any tortious action or inaction, negligent error in judgment, act of negligence, intentional tort, negligent mistakes or other POWER PURCHASE AGREEMENT - Page 65 of 65 4124-1165-3657.19 acts taken or not taken by the Seller, its employees, agents, servants, invitees, guests or anyone acting in concert with or on behalf of the Seller. 10.22 No Implied Waiver of Breach. Waiver by a Party of any breach of a specific provision of this Agreement shall not be construed as a waiver of any other breach of that term or any other term of this Agreement. [SIGNATURE PAGE ON NEXT PAGE] POWER PURCHASE AGREEMENT - Page 66 of 65 4124-1165-3657.19 SIGNATURE PAGE IN WITNESS WHEREOF, each of the Parties have caused this Agreement to be duly executed as of the day, month and year set forth next to each of the Parties’ signatures below. SELLER: GOLDEN FIELDS SOLAR III, LLC By: Name: Craig Cornelius Title: President Date: BUYER: CITY OF PALO ALTO APPROVAL AS TO FORM: By: Name: Title: Senior Deputy City Attorney Date: CITY OF PALO ALTO APPROVAL BY ADMINISTRATIVE SERVICES DIRECTOR By: Name: Kiely Nose Title: Administrative Services Director Date: CITY OF PALO ALTO APPROVAL BY UTILITIES DIRECTOR By: Name: Dean Batchelor Title: Utilities Director Date: CITY OF PALO ALTO APPROVAL BY CITY MANAGER By: Name: Ed Shikada Title: City Manager Date: CITY OF PALO ALTO APPROVAL BY MAYOR By: Name: Eric Filseth Title: Mayor Date: EXHIBIT A – Page 1 4124-1165-3657.19 EXHIBIT A PLANT DESCRIPTION AND SITE DRAWINGS Plant Description Plant name: [to be determined] Plant physical address: Near Holiday Avenue and 140th Street, Rosamond, California Total number of units at the Plant: [to be determined no later than the Construction Milestone] Technology type (including any applicable model): PV solar modules connected to solar inverters that connect to the grid via transformers Interconnection Point of Plant: Teddy Substation Local Capacity Area: N/A Nameplate capacity of the Plant: [26 MWac] Description of units: Photovoltaic solar modules mounted on trackers and connected to inverters that convert DC power to AC Power. The inverters are connected to the grid via transformers. Subject to Section 2.3(c)(ii), the specific nameplate capacity of the Plant, the number and size of inverters, and the number of solar panels will be determined no later than the Construction Milestone. Site Drawings Site Map: The term, “Site” as defined in the Agreement means the area where the Plant and the Rosamond Project, are or will be located which is generally shown on the following topographical map. The parcel description and specific Assessed Parcel Numbers constituting the Plant shall be identified no later than the Construction Milestone, and the Interconnection Facilities and metering configuration generally as evidenced in the related diagram (collectively, the “Site Drawings”): EXHIBIT A – Page 2 4124-1165-3657.19 Assessed Parcels No(s).: 359-350-21 (portion), 359-121-54, 359-020-07, 369-332-32, 369-332-33, 359-121-07, 359-121-08, 359-121-09, 359-121-10, 359-332-37, 359-162-11, 359-332-26, 359-332-28, 359-121-06, 359-332-36., 359-121-25, 359-020-05 Interconnection Facilities and metering diagram: The Plant shall use the Interconnection Facilities and metering configuration generally similar to this one-line diagram included in this Exhibit A: [INSERT ONE-LINE DIAGRAM FOR INTERCONNECTION FACILITIES AND METERING NO LATER THAN THE CONSTRUCTION MILESTONE] EXHIBIT B - Page 1 4124-1165-3657.19 EXHIBIT B ENVIRONMENTAL ATTRIBUTE TRANSFER FROM SELLER TO BUYER Participation in the Western Renewable Energy Generation Information System. Seller shall, at its sole expense take all actions and execute all documents or instruments necessary to ensure that all WREGIS Certificates associated with all Renewable Energy Credits corresponding to all delivered Output are issued and tracked for purposes of satisfying the applicable requirements of the California Renewables Portfolio Standard and transferred in a timely manner to Buyer for Buyer’s sole benefit. Seller shall comply with all applicable laws, including, without limitation, the WREGIS Operating Rules, regarding the certification and transfer of such WREGIS Certificates to Buyer and Buyer shall be given sole title to all such WREGIS Certificates. Seller shall be deemed to have satisfied the warranty in this EXHIBIT B, paragraph (h) provided that Seller fulfills its obligations under this EXHIBIT B, paragraphs (a) through (h) below. In addition: (a) Prior to the Contract Delivery Start Date, Seller shall register the Plant with WREGIS and establish an account with WREGIS (“Seller’s WREGIS Account”), which Seller shall maintain until the end of the Delivery Term. Seller shall transfer the WREGIS Certificates using “Forward Certificate Transfers” (as described in the WREGIS Operating Rules) from Seller’s WREGIS Account to the WREGIS account(s) of Buyer or the account(s) of a designee that Buyer identifies by Notice to Seller (“Buyer’s WREGIS Account”). Seller shall be responsible for all expenses associated with registering the Plant with WREGIS, establishing and maintaining Seller’s WREGIS Account, paying WREGIS Certificate issuance and transfer fees, and transferring WREGIS Certificates from Seller’s WREGIS Account to Buyer’s WREGIS Account. (b) Seller shall cause Forward Certificate Transfers to occur on a monthly basis in accordance with the certification procedure established by the WREGIS Operating Rules. Since WREGIS Certificates shall only be created for whole MWh amounts of Energy generated, any fractional MWh amounts (i.e., kWh) shall be carried forward until sufficient generation is accumulated for the creation of a WREGIS Certificate. (c) Seller shall, at its sole expense, ensure that the WREGIS Certificates for a given calendar month correspond with the Energy corresponding to delivered Output for such calendar month as evidenced by the Plant’s metered data. (d) Due to the ninety (90) day delay in the creation of WREGIS Certificates relative to the timing of invoice payment under Section 3.3, Buyer shall make an invoice payment for a given month in accordance with Section 3.3 before the WREGIS Certificates for such month are formally transferred to Buyer in accordance with the WREGIS Operating Rules and this EXHIBIT B. Notwithstanding this delay, Buyer shall have all right and title to all such WREGIS Certificates upon payment to Seller in accordance with Section 3.3. (e) A “WREGIS Certificate Deficit” means any deficit or shortfall in WREGIS Certificates delivered to Buyer for a calendar month as compared to the delivered Energy for the same calendar month (“Deficient Month”), after taking into account applicable delays in the issuance of WREGIS Certificates referenced in the prior paragraph or otherwise arising under WREGIS Operating Rules. If any WREGIS Certificate Deficit is caused, or the EXHIBIT B - Page 2 4124-1165-3657.19 result of any action or inaction, by Seller, then Seller shall take all actions reasonably necessary to remedy such circumstances (or to compensate Buyer in the amount of the deficiency if it is unable, despite using commercially reasonable efforts, to do so) and failure to do so shall be a breach hereunder by Seller. (f) Without limiting Seller’s obligations under this EXHIBIT B, to the extent a WREGIS Certificate Deficit is caused by an error or omission of WREGIS, the Parties shall cooperate in good faith to cause WREGIS to correct its error or omission. (g) If WREGIS changes the WREGIS Operating Rules after the Execution Date or applies the WREGIS Operating Rules in a manner inconsistent with this EXHIBIT B after the Execution Date, the Parties promptly shall modify this EXHIBIT B as reasonably required (i) to cause and enable Seller to transfer to Buyer’s WREGIS Account a quantity of WREGIS Certificates for each given calendar month that corresponds to the delivered Energy in the same calendar month or (ii) as may otherwise be reasonably appropriate to address such inconsistency. (h) Seller warrants that all necessary steps to allow the Renewable Energy Credits transferred to Buyer to be tracked in the Western Renewable Energy Generation Information System shall be taken prior to the first delivery under this Agreement. EXHIBIT C – Page 1 4124-1165-3657.19 EXHIBIT C INSURANCE COVERAGES At its own expense, Seller shall secure and maintain during the Term the following insurance with the coverage amounts indicated for occurrences during and arising out of Seller’s performance of this Agreement. Such insurance shall be placed with responsible and reputable insurance companies as determined by Buyer in its reasonable discretion in compliance with Requirements of Laws applicable to Seller. (a) Workers’ Compensation/Employer’s Liability. Seller shall maintain Workers’ Compensation Insurance and Employer’s Liability Insurance which comply with Requirements of Laws applicable to Seller. (b) Automobile Liability. Seller shall maintain Automobile Liability Insurance in compliance with Requirements of Laws applicable to Seller, including coverage for owned, non-owned and hired automobiles for both bodily injury (including death) and property damage, including automobile liability contractual endorsement and uninsured/underinsured motorist protection endorsements. (c) Third Party Liability. Seller shall maintain third party liability insurance in compliance with Requirements of Laws applicable to Seller on a project-specific basis covering against legal responsibility to others as a result of bodily injury, property damage and personal injury arising from the operation and maintenance of the Plant. Such policy shall be written with a limit of liability not less than $10,000,000 and a deductible not to exceed $10,000. Such liability may be in any combination of primary and excess/umbrella. Coverage shall include, but not be limited to, premises/operations, explosion, collapse, underground hazards, broad form property damage and personal injury liability. Such coverage shall not contain exclusions for punitive or exemplary damages. (d) Property Insurance. Seller shall maintain third party property insurance on a project-specific basis covering cost of repairing Plant and or interconnection equipment to operational condition. Such policy shall be written with coverage sufficient to replace and rebuild the Plant. Coverage shall include, but not be limited to, fire, storm damage, equipment failure, damage to equipment precluding operation under prudent utility practice, premises/operations, explosion, collapse, underground hazards, broad form property damage. Upon the request from Buyer, Seller shall promptly provide Buyer with applicable insurance certificates confirming the insurance coverages required above. EXHIBIT D – Page 1 4124-1165-3657.19 EXHIBIT D SCHEDULING PROTOCOLS Dated: May __, 2019 The following scheduling protocols shall govern the scheduling of Output from the Plant pursuant to that certain Power Purchase Agreement dated as of May __, 2019, by and between the City of Palo Alto and Golden Fields Solar III, LLC (the “Agreement”). Capitalized terms not defined herein have the meanings set forth in the Agreement. 1. Test Energy Pursuant to Section 2.5 of the Agreement, if Seller has requested that Buyer purchase Test Energy, all Test Energy shall be scheduled in accordance with the following procedure: All Test Energy produced by the Plant will be scheduled in accordance with CAISO Operating Procedure No. 5320 (Resource Trial Operation and Test Energy Process), as such may be amended from time to time. Pursuant to CAISO Operating Procedure No. 5320, pre-commercial resources are required to make arrangements with the CAISO for executing Trial Operations. I. At least ten (10) calendar days prior to the first planned Trial Operation date Seller shall provide Buyer a Test Energy schedule for the Plant. The Test Energy schedule shall include the following information: a. Expected MW output for each hour during the testing period; b. Start and Stop times of the test; c. NRI Test Energy Template; and d. Any operating constraints or testing limits that may impact the testing process. II. At least seven (7) calendar days prior to the first planned Trial Operation date (not including the submittal date and the date the test is requested to begin), the Scheduling Coordinator shall submit an outage request to the CAISO for the Test Energy schedule provided by Seller. III. Pending CAISO’s approval of the outage request for Trial Operations and testing, the Scheduling Coordinator shall coordinate with Seller and CAISO to perform Plant testing. 2. Scheduling Protocols The Scheduling Coordinator shall submit Bids for forecasted Plant Output to the CAISO in accordance with the CAISO Tariff and Business Practice Manuals, as the same may be amended or revised from time to time. EXHIBIT D – Page 2 4124-1165-3657.19 I. Forecasts Plant Output shall be scheduled according to Section 4.5(a) of the Agreement. II. Submission of Bids For each trade date, Scheduling Coordinator will develop and submit Bids for Plant Output into the CAISO markets in accordance with the CAISO market timelines and will use commercially reasonable efforts to minimize imbalance energy costs and other liabilities in doing so. Day-ahead and real-time Bids for Plant Output shall be consistent with the CAISO forecast. Bids may consist of Self-Schedules, economic Bids, or a combination of Self-Schedules and economic Bids. Self-Schedule Bids shall be equal to the applicable CAISO forecasted Output, and economic Bids shall be limited to an amount not to exceed the applicable CAISO forecasted Output. III. Dispatch Notices Scheduling Coordinator shall provide dispatch notices to Buyer to communicate CAISO day-ahead and real-time market awards. Dispatch notices may include, but are not limited to, the following information: (i) scheduled Plant output by applicable operating interval, (ii) start-up instructions, (iii) shut-down instructions, (iv) ramping instructions, and (v) other information that may be relevant to the scheduled operations of the Plant. a. Day-Ahead Dispatch Notices. Dispatch Notices for Day-Ahead market awards will be provided to Buyer through a form of electronic communication as mutually agreed upon by Buyer, Seller and Scheduling Coordinator. b. Real-Time Dispatch Notices. Dispatch Notices for Real-Time market awards will be provided to Buyer through a form of electronic communication as mutually agreed upon by Buyer, Seller and Scheduling Coordinator. 3. Outage Coordination Pursuant to the Agreement, Seller shall provide Scheduling Coordinator with all information required to submit timely outages to the CAISO in accordance with the CAISO Tariff and outage coordination procedures. Scheduling Coordinator shall perform all outage coordination activities on behalf of the Plant, including but not limited to, submission of planned and forced outages to the CAISO through use of CAISO’s Outage Management System (OMS), in accordance with the CAISO Tariff and outage coordination procedures. I. Communicating Outages to Scheduling Coordinator a. Required Information EXHIBIT D – Page 3 4124-1165-3657.19 Seller shall provide the following information to Scheduling Coordinator at the time Seller submits a request for a planned or forced outage: • Name of Facility • CAISO Resource ID • Start Date/Time of the Outage • End Date/Time of the Outage • Explanation for Reason of Outage • Unit Availability During the Outage • Emergency Return to Service Time (if called upon by the CAISO) II. Outage Submission Timeline Planned Outage requests must be submitted to Scheduling Coordinator at least seven (7) Business Days in advance of the start date of the outage; whereby the seven (7) Business Day period shall not include the date on which the request is submitted, or the start date of outage. Outage requests submitted less than seven (7) Business Days in advance of the start date of the outage will automatically be designated by the CAISO as a Forced Outage (unless otherwise approved by the CAISO as a Planned Outage). Outages that occur in the active day (or real-time) must be reported to Scheduling Coordinator as soon as possible. 4. Discretionary Curtailment Pursuant to Section 4.4(c), Buyer may require Seller to curtail deliveries of Energy from the Plant for any reason in Buyer’s reasonable discretion by delivering a dispatch notice to the Scheduling Coordinator. Scheduling Coordinator shall provide dispatch notices for discretionary curtailments to Seller in accordance with the procedure described in Section 2(III) of this Exhibit D. EXHIBIT E-1 – Page 1 4124-1165-3657.19 EXHIBIT E-1 FORM OF DEVELOPMENT PROGRESS REPORT Development Progress Report [Plant Name] Plant [Report Month and Year] [Date of Report] This Development Progress Report describes the construction and status and progress toward the achievement of each of the Milestones of the [Plant Name] Plant, which guaranteed Commercial Operation Milestone is _____, for the _____ [insert period that report is due as required under Section 4.3(c)] and year of ____________ (“Report Period”) as required pursuant to Section 4.3(c) of that certain Power Purchase Agreement by and between Golden Fields Solar III, LLC (“Seller”), and the City of Palo Alto (“Buyer”), dated ____________ (the “Agreement”). (Capitalized terms used in this report but not defined herein shall have the meanings set forth in the Agreement.) This report shall be completed and delivered by Seller to ___________________ at Buyer, together with all attachments and exhibits. Buyer should direct any questions about this report to _______________ at Seller. 1. General Plant Description Please provide a general description of the Plant, including its location, Site size, technology type, nameplate capacity, interconnection point, ownership, and any other information relevant to a general description of the Plant. 2. Property Acquisition Activities and Site Control In this section, please include information on property acquisition or site control activities for the Plant, including the date of execution of significant documents, and information on the expecting timing of future significant activities. a. Prior Period’s Activities Please provide a description and dates of all major Site acquisition or control related activities completed prior to the Report Period. b. Report Period’s Activities Please describe in detail the Site acquisition or control related activities that occurred during the Report Period. EXHIBIT E-1 – Page 2 4124-1165-3657.19 c. Next Period’s Activities Please describe the Site acquisition or control related activities that are expected to be performed during the period following the Report Period. 3. Permitting In this section, please provide information on each of the Conditional Use Permit and other Permits required for the construction of the Plant and the status thereof. List the applicable governmental agency, the type of application/approval requested, and the dates (expected or actual) of significant activity. Significant activity includes, but is not limited to, application submission, notice of complete application, notice of preparation, public hearing or comment period, draft documents and/or approvals, final documents and/or approvals, notice of determination and/or issuance of permit. If the government agency maintains a website with information on the approval process for the Plant, please provide a link. a. Prior Period’s Activities Please provide a description of all major activities related to the Conditional Use Permit and other Permits completed prior to the Report Period. b. Report Period’s Activities Please describe in detail the activities related to Permits that occurred during the Report Period. c. Next Period’s Activities Please list the activities related to Permits that are expected to be performed during the period following the Report Period. 4. Interconnection EXHIBIT E-1 – Page 3 4124-1165-3657.19 In this section, please provide a description of all major interconnection related activities, dates of completion of significant activities and the expected timing of future significant activities including, but not limited to, information on the status of interconnection studies, Interconnection Agreements, design and construction of Interconnection facilities (e.g., substations, switchyards, gen-ties, system protection schemes, telecommunications equipment to the extent not already covered in the Plant construction information in Section 8), network upgrades, and grid outage and/or interconnection schedules, and information related to Full Capacity Deliverability Status Finding applications, studies, timing, correspondence and . Describe any and all factors that may affect the ability of the Plant to deliver Energy to the Buyer. a. Prior Period’s Activities Please provide a description of all major interconnection related activities completed prior to the Report Period. b. Report Period’s Activities Please describe in detail the Interconnection related activities that occurred during the Report Period. c. Current Period’s Activities Please list the Interconnection related activities that are expected to be performed during the period following the Report Period. 5. Design and Engineering In this section, please provide information on the design and engineering of the Plant. a. Prior Period’s Activities Please provide a description and dates of all major design and engineering related activities, including dates of completion of significant activities and expected timing of future activities. b. Report Period’s Activities Please describe in detail the design and engineering related activities that occurred during the Report Period. c. Current Period’s Activities Please list the design and engineering related activities that are expected to be performed during the period following the Report Period. 6. Financing EXHIBIT E-1 – Page 4 4124-1165-3657.19 In this section, please include information on each separate phase of financing for the Plant. Include information on debt, equity and/or federal or state loans or grant. b. Report Period’s Activities Please describe in detail the financing related activities that occurred during the Report Period. c. Current Period’s Activities Please list the financing related activities that are expected to be performed during the period following the Report Period. 7. Major Equipment Procurement In this section, please include information on all major equipment to be procured for all portions of the Plant to be completed by Seller, including switchyards, substations and any other interconnection equipment, in addition to generating and auxiliary equipment. a. Prior Period’s Activities Please provide a description and dates of all major equipment procurement related activities completed prior to the Report Period, including the date of execution of significant documents, and information on the expected timing of future significant activities. b. Report Period’s Activities Please describe in detail the Major Equipment Procurement related activities that occurred during the Report Period. c. Next Period’s Activities Please list the Major Equipment Procurement related activities that are expected to be performed during the period following the Report Period. 8. Construction In this section, please include information on the status of any construction-related factors that may affect the ability of the Plant to deliver the Output to the Buyer. Include information on the Plant infrastructure, generating equipment, and major auxiliary equipment. Also include information on the substations, switchyards, gen-ties, telecommunications equipment or other interconnection facilities that are the direct responsibility of the Plant. a. Prior Period’s Activities EXHIBIT E-1 – Page 5 4124-1165-3657.19 Please provide a summary of the status and progress of each major construction activity for all portions of the Plant, including a schedule showing expected or actual dates as applicable. Provide the name of the EPC Contractor, the date of execution of the EPC Contract, and the date of issuance of a full notice to proceed (or equivalent). For each major type of equipment, break out the number of each item (to be) installed and/or commissioned in each period. Please attach a copy of the all of the progress reports received during the previous Report Period from the EPC Contractor pursuant to the construction contract between Seller and EPC Contractor. b. Report Period’s Activities Please describe in detail the Construction related activities that occurred during the Report Period. c. Current Period’s Activities Please list the Construction related activities that are expected to be performed during the period following the Report Period. 9. Startup and Commissioning In this section, please include information on the status of activities related to preparation for Commercial Operation, including equipment testing, commissioning, release to operations, requirements of the grid operator, and any other activities that must be conducted before the Plant may deliver Output to the grid and/or declare Commercial Operation (as evidenced by delivery of the COD Certification). a. Prior Period’s Activities Please provide a description of all major startup and commissioning activities related to preparation for Commercial Operation completed prior to the Report Period. b. Report Period’s Activities Please describe in detail the Startup and Commissioning related activities that occurred during the Report Period. c. Current Period’s Activities Please list the Startup and Commissioning related activities that are expected to be performed during the period following the Report Period. 10. Milestones Schedule EXHIBIT E-1 – Page 6 4124-1165-3657.19 a. [Insert Gantt chart] b. Milestone Schedule a. Please describe the status and progress toward or achievement of each Milestone in the construction schedule for the Plant, including dates of completion of completed Milestone(s) and the expected date of completion of uncompleted Milestone(s). The expected date is the current best estimate, and may change from time to time as better information becomes available. c. Remedial Action Plan Please describe any issues which Seller expects in its reasonable judgment may adversely affect the schedule, including the cause of the delay and what remedial actions Seller intends to take to ensure that each of the Milestones shall be attained by their required dates. III. Pictures If available, please provide pictures documenting construction and startup progress of the Plant. The information contained in this Seller’s Development Progress Report is true and accurate and reflects, to the best of Seller’s knowledge, the current status of the construction of the Plant as of the date specified below. Seller: Golden Fields Solar III, LLC By:_______________________________ Name:_____________________________ Title:______________________________ Date:______________________________ EXHIBIT E-2 – Page 1 4124-1165-3657.19 EXHIBIT E-2 COD CERTIFICATION This COD Certification (“Certification”) is delivered by Golden Fields Solar III, LLC (“Seller”) to The City of Palo Alto (“Buyer”) in accordance with the terms of that certain Power Purchase Agreement dated as of the Execution Date (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement. Seller hereby certifies and represents to Buyer the following: 1. Commercial Operation occurred on: __________ [date] 2. The Plant equipment representing _________ MW AC of Initial Plant Capacity has been installed, tested and is capable of generating Output in accordance with the manufacturer’s specifications. 3. The Plant is substantially complete and capable of delivering Output as described in the Agreement. 4. The CAISO has provided notification of Commercial Operation in accordance with the CAISO Tariff, and documentation of such notification is attached hereto or shall be provided to Buyer promptly upon Seller’s receipt thereof. EXECUTED by Seller this ______ day of _____________, 20__. By: _________________________________ Name: ______________________________ Title: _______________________________ The undersigned, a licensed professional engineer, hereby certifies that, to its current knowledge, the foregoing is substantially true and correct. [LICENSED PROFESSIONAL ENGINEER] By: _________________________________ Name: ______________________________ Title: _______________________________ EXHIBIT E-2 – Page 2 4124-1165-3657.19 RECEIVED by Buyer this ____ date of ______________, 20__ which date shall be the Commercial Operation Date. By: _________________________________ Name: ______________________________ Title: _______________________________ EXHIBIT F-1 – Page 1 4124-1165-3657.19 EXHIBIT F-1 FORM OF LETTER OF CREDIT Issuing Bank Letterhead and Address STANDBY LETTER OF CREDIT NO. XXXXXXXX Date: [Insert issue date] Beneficiary: City of Palo Alto Applicant: [Insert name and address of Applicant] 250 Hamilton Avenue Palo Alto, CA 94301 Attention: Credit Risk Management Letter of Credit Amount: [insert amount] Expiry Date: [insert expiry date] Ladies and Gentlemen: By order of [insert name of Applicant] (“Applicant”), we hereby issue in favor of the City of Palo Alto (the “Beneficiary”) our irrevocable standby letter of credit No. [insert number of letter of credit] (“Letter of Credit”), for the account of Applicant, for drawings up to but not to exceed the aggregate sum of U.S. $ [insert amount in figures followed by (amount in words)] (“Letter of Credit Amount”). This Letter of Credit is available with [insert name of issuing bank, and the city and state in which it is located] by sight payment, at our offices located at the address stated below, effective immediately, and it shall expire at our close of business on [insert expiry date] (the “Expiry Date”). Funds under this Letter of Credit are available to the Beneficiary against presentation of the following documents: 1. Beneficiary’s signed and dated sight draft in the form of Exhibit A hereto, referencing this Letter of Credit No. [insert number] and stating the amount of the demand; and 2. One of the following statements signed by an authorized representative or officer of Beneficiary: EXHIBIT F-1 – Page 2 4124-1165-3657.19 A. “Pursuant to the terms of that certain Power Purchase Agreement (the “Agreement”), dated [insert date of the Agreement], between Beneficiary and Golden Fields Solar III, LLC, Beneficiary is entitled to draw under Letter of Credit No. [insert number] amounts owed by Golden Fields Solar III, LLC under the Agreement; or B. “Letter of Credit No. [insert number] shall expire in thirty (30) days or less and [Golden Fields Solar III, LLC has not provided replacement security acceptable to Beneficiary. Special Conditions: 1. Partial and multiple drawings under this Letter of Credit are allowed; 2. All banking charges associated with this Letter of Credit are for the account of the Applicant; 3. This Letter of Credit is not transferable; and 4. The Expiry Date of this Letter of Credit shall be automatically extended without a written amendment for a period of one year and on each successive Expiry Date, unless at least sixty (60) days before the then current Expiry Date, we notify you by registered mail or courier that we elect not to extend the Expiry Date of this Letter of Credit for such additional period. We engage with you that drafts drawn under and in compliance with the terms of this Letter of Credit shall be duly honored upon presentation, on or before the Expiry Date (or after the Expiry Date as provided below), at our offices at [insert issuing bank’s address for drawings]. All demands for payment shall be made by presentation of originals or copies of documents; or by facsimile transmission of documents to [insert fax number], Attention: [insert name of issuing bank’s receiving department], with originals or copies of documents to follow by overnight mail. If presentation is made by facsimile transmission, you may contact us at [insert phone number] to confirm our receipt of the transmission. Your failure to seek such a telephone confirmation does not affect our obligation to honor such a presentation. Our payments against complying presentations under this Letter of Credit shall be made no later than on the sixth (6th) banking day following a complying presentation. Except as stated herein, this Letter of Credit is not subject to any condition or qualification. It is our individual obligation, which is not contingent upon reimbursement and is not affected by any agreement, document, or instrument between us and the Applicant or between the Beneficiary and the Applicant or any other party. Except as otherwise specifically stated herein, this Letter of Credit is subject to and governed by the Uniform Customs and Practice for Documentary Credits, 2007 Revision, International Chamber of Commerce (ICC) Publication No. 600 (the “UCP 600”); provided that, if this Letter of Credit expires during an interruption of our business as described in Article 36 of the UCP 600, we shall honor drafts presented in compliance with this Letter of Credit within thirty (30) days after the resumption of our business and effect payment accordingly. The law of the State of New York shall apply to any matters not covered by the UCP 600. EXHIBIT F-1 – Page 3 4124-1165-3657.19 For telephone assistance regarding this Letter of Credit, please contact us at [insert number and any other necessary details]. Very truly yours, [insert name of issuing bank] By: Authorized Signature Name: [print or type name] Title: EXHIBIT F-1 – Page 4 4124-1165-3657.19 Attachment 1 to Exhibit F-1 SIGHT DRAFT TO: [INSERT NAME AND ADDRESS OF PAYING BANK] AMOUNT: $________________________ DATE: __________________________ AT SIGHT OF THIS DEMAND PAY TO THE ORDER OF THE CITY OF PALO ALTO THE AMOUNT OF U.S.$________(______________ U.S. DOLLARS) DRAWN UNDER [INSERT NAME OF ISSUING BANK] LETTER OF CREDIT NO. XXXXXX. REMIT FUNDS AS FOLLOWS: [INSERT PAYMENT INSTRUCTIONS] DRAWER BY:___________________________ NAME AND TITLE EXHIBIT F-2 – Page 1 4124-1165-3657.19 EXHIBIT F-2 FORM OF LENDER CONSENT AGREEMENT CONSENT AND AGREEMENT This CONSENT AND AGREEMENT (“Consent and Agreement”) is entered into as of ____________________, between the City of Palo Alto (“Buyer”), and _________________, as collateral agent1 (in such capacity, “Financing Provider”), for the benefit of various financial institutions (collectively, the “Secured Parties”) providing financing to Golden Fields Solar III, LLC (“Seller”). Buyer, Seller, and the Financing Provider shall each individually be referred to as a “Party” and collectively as the “Parties”. Recitals A. Pursuant to that certain Power Purchase Agreement dated as of ________________ (as amended, modified, supplemented or restated from time to time, as including all related agreements, instruments and documents, collectively, the “Assigned Agreement”) between Buyer and Seller, Buyer has agreed to purchase energy from Seller. B. The Secured Parties have provided, or have agreed to provide, to Seller financing (including a financing lease) pursuant to one or more agreements (the “Financing Documents”), and require that Financing Provider be provided certain rights with respect to the “Assigned Agreement” and the “Assigned Agreement Accounts,” each as defined below, in connection with such financing. C. In consideration for the execution and delivery of the Assigned Agreement, Buyer has agreed to enter into this Consent and Agreement for the benefit of Seller. Agreement 1. Definitions. Any capitalized term used but not defined herein shall have the meaning specified for such term in the Assigned Agreement. 2. Consent. Subject to the terms and conditions below, Buyer consents to and approves the pledge and assignment by Seller to Financing Provider pursuant to the [Security Agreement] of (a) the Assigned Agreement, and (b) the accounts, revenues and proceeds of the Assigned Agreement (collectively, the “Assigned Agreement Accounts”). 1 This form assumes that a collateral agent will hold the security on behalf of a syndicate of lenders and therefore, the consent would be signed by the collateral agent in such capacity for the benefit of the secured parties. If that is not the case, please modify. EXHIBIT F-2 – Page 2 4124-1165-3657.19 3. Limitations on Assignment. Financing Provider acknowledges and confirms that, notwithstanding any provision to the contrary under applicable law or in any Financing Document executed by Seller, Financing Provider shall not assume, sell or otherwise dispose of the Assigned Agreement or any of Financing Provider’s rights under the Assigned Agreement (whether by foreclosure sale or other liquidation sale, conveyance in lieu of foreclosure or otherwise) unless, on or before the date of any such assumption, sale or disposition, Financing Provider or any third party, as the case may be, assuming, purchasing or otherwise acquiring the Assigned Agreement (a) cures any and all defaults of Seller under the Assigned Agreement which are capable of being cured and which are not personal to the Seller, (b) executes and delivers to Buyer a written assumption of all of Seller’s rights and obligations under the Assigned Agreement in form and substance reasonably satisfactory to Buyer, (c) otherwise satisfies and complies with all requirements of the Assigned Agreement, (d) provides such tax and enforceability assurance as Buyer may reasonably request, and (e) is a Permitted Transferee (as defined below). Financing Provider further acknowledges that the assignment of the Assigned Agreement and the Assigned Agreement Accounts is for security purposes only and that Financing Provider has no rights under the Assigned Agreement or the Assigned Agreement Accounts to enforce the provisions of the Assigned Agreement or the Assigned Agreement Accounts unless and until an event of default has occurred and is continuing under the Financing Documents between Seller and Financing Provider (a “Financing Default”), in which case Financing Provider shall be entitled to all of the rights and benefits and subject to all of the obligations which Seller then has or may have under the Assigned Agreement to the same extent and in the same manner as if Financing Provider were an original party to the Assigned Agreement. “Permitted Transferee” means any person or entity who is reasonably acceptable to Buyer. Financing Provider may from time to time, following the occurrence of a Financing Default, notify Buyer in writing of the identity of a proposed transferee of the Assigned Agreement, which proposed transferee may include Financing Provider, in connection with the enforcement of Financing Provider’s rights under the Financing Documents, and Financing Provider shall deliver to Buyer financial statements, information and other evidence satisfactory to Buyer of the proposed transferee’s technical and financial capability to fulfill the Seller’s obligations under the Assigned Agreement. Buyer shall, within thirty (30) Business Days of the later of its receipt of such written notice and delivery of such financial statements, information and other evidence, confirm to Financing Provider whether or not such proposed transferee is a “Permitted Transferee” (together with a written statement of the reason(s) for any negative determination) it being understood that if Buyer shall fail to so respond within such thirty (30) Business Days period such proposed transferee shall be deemed to be a “Permitted Transferee”. 4. Cure Rights. (a) Notice to Financing Provider by Buyer. Buyer shall, concurrently with the delivery of any notice of an event of default under the Assigned Agreement (each, an “Event of Default”) to Seller (a “Default Notice”), provide a copy of such Default Notice to Financing Provider pursuant to Section 9(a) of this Consent and Agreement. In addition, Seller shall provide a copy of the Default Notice to Financing Provider the next Business Day after receipt from Buyer, independent of any agreement of Buyer to deliver such Default Notice. EXHIBIT F-2 – Page 3 4124-1165-3657.19 (b) Cure Period Available to Financing Provider Prior to Any Termination by Buyer. Upon the occurrence of an Event of Default, subject to (i) the expiration of the relevant cure periods provided to Seller under the Assigned Agreement, and (ii) Section 4(a) above, Buyer shall not terminate the Assigned Agreement unless it or Seller provides Financing Provider with notice of the Event of Default and affords Financing Provider an Additional Cure Period (as defined below) to cure such Event of Default. For purposes of this Agreement “Additional Cure Period” means (i) with respect to a monetary default, twenty (20) calendar days in addition to the cure period (if any) provided to Seller in the Assigned Agreement, and (ii) with respect to a non-monetary default, forty-five (45) calendar days in addition to the cure period (if any) provided to Seller in the Assigned Agreement. (c) Failure by Buyer to Deliver Default Notice. If neither Buyer nor Seller delivers a Default Notice to Financing Provider as provided in Section 4(a), the Financing Provider’s applicable cure period shall begin on the date on which notice of an Event of Default is delivered to Financing Provider by either Buyer or Seller. Except for a delay in the commencement of the cure period for Financing Provider and a delay in Buyer’s ability to terminate the Assigned Agreement (in each case only if both Buyer and Seller fail to deliver notice of an Event of Default to Financing Provider), failure of Buyer to deliver any Default Notice shall not waive Buyer’s right to take any action under the Assigned Agreement and shall not subject Buyer to any damages or liability for failure to provide such notice. (d) Extension for Foreclosure Proceedings. If possession of the Plant (as defined in the Assigned Agreement) is necessary for Financing Provider to cure an Event of Default and Financing Provider commences foreclosure proceedings against Seller within thirty (30) calendar days of receiving notice of an Event of Default from Buyer or Seller, whichever is received first, Financing Provider shall be allowed a reasonable additional period to complete such foreclosure proceedings, such period not to exceed ninety (90) calendar days; provided, however, that Financing Provider shall provide a written notice to Buyer that it intends to commence foreclosure proceedings with respect to Seller within ten (10) Business Days of receiving a notice of such Event of Default from Buyer or Seller, whichever is received first. In the event Financing Provider succeeds to Seller’s interest in the Plant as a result of foreclosure proceedings, the Financing Provider or a purchaser or grantee pursuant to such foreclosure shall be subject to the requirements of Section 3 of this Consent and Agreement. 5. Setoffs and Deductions. Each of Seller and Financing Provider agrees that Buyer shall have the right to set off or deduct from payments due to Seller each and every amount due Buyer from Seller whether or not arising out of or in connection with the Assigned Agreement. Financing Provider further agrees that it takes the assignment for security purposes of the Assigned Agreement and the Assigned Agreement Accounts subject to any defenses or causes of action Buyer may have against Seller. 6. No Representation or Warranty. Seller and Financing Provider each recognizes and acknowledges that Buyer makes no representation or warranty, express or implied, that Seller has any right, title, or interest in the Assigned Agreement or as to the priority of the assignment for security purposes of the Assigned Agreement or the Assigned Agreement Accounts. Financing Provider further recognizes and acknowledges that it has relied exclusively on its own investigation and due diligence with respect to and is responsible for satisfying itself as to the EXHIBIT F-2 – Page 4 4124-1165-3657.19 existence and extent of Seller’s right, title, and interest in the Assigned Agreement, and Financing Provider hereby releases Buyer from any liability resulting from the assignment for security purposes of the Assigned Agreement and the Assigned Agreement Accounts. 7. Amendment to Assigned Agreement. Financing Provider acknowledges and agrees that Buyer may agree with Seller to modify or amend the Assigned Agreement, and that Buyer is not obligated to notify Financing Provider of any such amendment or modification to the Assigned Agreement. Financing Provider hereby releases Buyer from all liability arising out of or in connection with the making of any amendment or modification to the Assigned Agreement. 8. Payments under Assigned Agreement. Buyer shall make all payments due to Seller under the Assigned Agreement from and after the date hereof to __________, as depositary agent, to ABA No. __________, Account No. __________, and Seller hereby consents to any and all such payments being made in such manner. Each of Seller, Buyer and Financing Provider agrees that each such payment by Buyer to such depositary agent of amounts due to Seller from Buyer under the Assigned Agreement shall satisfy Buyer’s corresponding payment obligation under the Assigned Agreement. 9. Miscellaneous. (a) Notices. All notices hereunder shall be in writing and shall be deemed received (i) at the close of business of the date of receipt, if delivered by hand or by facsimile or other electronic means, or (ii) when signed for by recipient, if sent registered or certified mail, postage prepaid, provided such notice was properly addressed to the appropriate address indicated on the signature page hereof or to such other address as a party may designate by prior written notice to the other parties, at the address set forth below: If to Financing Provider: Name: Address: Attn: Telephone: Facsimile: Email: If to Buyer: Name: Address: EXHIBIT F-2 – Page 5 4124-1165-3657.19 Attn: Telephone: Facsimile: Email: (b) No Assignment. This Consent and Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of Buyer, and shall be binding on and inure to the benefit of the Financing Provider, the Secured Parties and their respective successors and permitted transferees and assigns under the [loan agreement] and [security agreement]. (c) No Modification. This Consent and Agreement is neither a modification of nor an amendment to the Assigned Agreement. (d) Choice of Law. The parties hereto agree that this Consent and Agreement shall be construed and interpreted in accordance with the laws of the State of California, excluding any choice of law rules which may direct the application of the laws of another jurisdiction. (e) No Waiver. No term, covenant or condition hereof shall be deemed waived and no breach excused unless such waiver or excuse shall be in writing and signed by the party claimed to have so waived or excused. (f) Counterparts. This Consent and Agreement may be executed in one or more duplicate counterparts, and when executed and delivered by all the parties listed below, shall constitute a single binding agreement. (g) No Third Party Beneficiaries. There are no third party beneficiaries to this Consent and Agreement. (h) Severability. The invalidity or unenforceability of any provision of this Consent and Agreement shall not affect the validity or enforceability of any other provision of this Consent and Agreement, which shall remain in full force and effect. (i) Amendments. This Consent and Agreement may be modified, amended, or rescinded only by writing expressly referring to this Consent and Agreement and signed by all parties hereto. (j) Attorneys’ Fees. If a suit or action is instituted to enforce or interpret any term of this Consent and Agreement, the prevailing party in any suit or action brought to enforce or interpret the provisions of this Agreement shall be entitled to recover its reasonable costs and attorneys' fees at any hearing, any trial, on appeal, and on any petition for review or other trial court or appellate proceeding. In addition, the prevailing party shall be entitled to recover its reasonable costs and attorneys’ fees incurred in enforcing its rights under this Consent and Agreement in connection with any nonjudicial action or the exercise of nonjudicial remedies, and EXHIBIT F-2 – Page 6 4124-1165-3657.19 in any administration, arbitrative, mediation or dispute resolution process or proceeding. In addition, the prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. (k) Rule of Construction. It is understood and agreed that the rule of construction that a written agreement is to be construed against the party preparing or drafting such agreement shall not be applicable to the interpretation of this Consent and Agreement, it being recognized that each of Buyer and Financing Provider has contributed substantially and materially to the preparation of this Consent and Agreement. IN WITNESS WHEREOF, each of Buyer and Financing Provider has duly executed this Consent and Agreement as of the date first written above. [SIGNATURE BLOCKS] ACKNOWLEDGEMENT The undersigned hereby acknowledges the Consent and Agreement set forth above, makes the agreements set forth therein as applicable to Seller, including the obligation of Seller to provide a copy of any Default Notice it receives from Buyer to Financing Provider the next Business Day after receipt by Seller, and confirms that the Financing Provider identified above and the Secured Parties have provided or are providing financing to the undersigned. GOLDEN FIELDS SOLAR III, LLC By: _________________________________ Name: _______________________________ Title: ________________________________ EXHIBIT G – Page 1 4124-1165-3657.19 EXHIBIT G EXPECTED ANNUAL ENERGY PRODUCTION Contract Year Expected Annual Energy Production (in MWh) 1 75,000 2 74,625 3 74,252 4 73,881 5 73,511 6 73,144 7 72,778 8 72,414 9 72,052 10 71,692 11 71,333 12 70,977 13 70,622 14 70,269 15 69,917 16 69,568 17 69,220 18 68,874 19 68,529 20 68,187 21 67,846 22 67,507 23 67,169 24 66,833 25 66,499 26 66,167 27 65,836 28 65,507 29 65,179 30 64,853 31 64,529 32 64,206 33 63,885 34 63,566 35 63,248 36 62,932 37 62,617 38 62,304 39 61,992 40 61,682 EXHIBIT G – Page 2 4124-1165-3657.19 ___ Dated as of Seller Execution, with the Expected Annual Energy Production for Contract Year 1 based on the Expected Initial Plant Capacity of 26 MW AC and each subsequent Contract Year reduced by a degradation factor of 0.5%. ___ Dated as of Commercial Operation Date, with the Expected Annual Energy Production for Contract Year 1 based on the Initial Plant Capacity of ___ MW AC (subject to the Initial Plant Capacity limitations described in Section 2.3(c)(2) of the Agreement and each subsequent Contract Year reduced by a degradation factor of ___%. Capitalized terms have the meanings set forth in that certain Power Purchase Agreement dated ___, by and between the City of Palo Alto, as Buyer, and Golden Fields Solar III, LLC, as Seller. EXHIBIT H – Page 1 4124-1165-3657.19 EXHIBIT H SELLER DOCUMENTATION CONDITION PRECEDENT Seller shall provide to Buyer all of the following documentation at least five (5) Business Days prior to the Seller Execution: 1. A copy of each of (A) the articles of incorporation, certificate of incorporation, operating agreement or similar applicable organizational document of Seller and (B) the by-laws or other similar document of Seller (collectively, “Charter Documents”) as in effect, or anticipated to be in effect, on the Seller Execution. 2. A certificate signed by an authorized officer of Seller, dated no earlier than ten (10) Business Days prior to the Seller Execution, certifying (A) that attached thereto is a true and complete copy of the Charter Documents of the Seller, as in effect at all times from the date on which the resolutions referred to in clause (B) below were adopted to and including the date of such certificate; (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or other equivalent body) or evidence of all corporate or limited liability company action, as the case may be, of Seller, authorizing the execution, delivery and performance of this Agreement, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, and (C) as to the name, incumbency and specimen signature of each officer of Seller executing this Agreement. 3. A certificate from the jurisdiction of Seller’s incorporation or organization certifying that Seller is duly organized, validly existing and in good standing under the laws of such jurisdiction. 4. Evidence of Site control (e.g. lease with redacted price terms) satisfactory to Buyer. 5. A copy of the most recent financial statements (which may be unaudited) from Seller and Seller’s Parent together with a certificate from the Chief Financial or equivalent officer of Seller, dated no earlier than ten (10) Business Days prior to the Seller Execution, to the effect that, to the best of such officer’s knowledge, (A) such financial statements are true, complete and correct in all material respects and (B) there has been no material adverse change in the financial condition, operations, Properties, business or prospects of Seller since the date of such financial statements. 6. A completed Expected Annual Energy Production table based on the Plant’s Expected Initial Plant Capacity in the form set forth at Exhibit G. City of Palo Alto (ID # 10287) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Utilities Department Electric Vehicle Solutions Contract Title: Approval and Authorization for the City Manager or Designee to Execute a Utility Program Services Contract with CLEAResult Consulting, Inc. C19171513 with Total Compensation of $737,000 and a Maximum Term of Five Years (Continued From April 15, 2019) From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council approve and authorize the City Manager, or his designee, to execute the attached third-party electric vehicle (EV) program contract with CLEAResult Consulting, Inc. with a total not-to-exceed compensation amount of $737,000 and a contract term through April 15, 2024. Executive Summary Staff recommends approval of this contract to provide residential and commercial customer programs to facilitate the installation of EV chargers and related services for customer types and in locations where EV charger installation is particularly challenging. Customer engagement will be a significant component of this program. This program will be funded through Low Carbon Fuel Standard funds (LCFS).1 This contract is part of a broader program to increase electric vehicle charger penetration in Palo Alto, a goal that was set as part of the City’s Sustainability and Climate Action Plan (S/CAP) implementation plan. 1 The LCFS program is administered by the California Air Resources Board (CARB) with the objective of reducing the carbon intensity of vehicular fuels. The program provides LCFS carbon credits to electric utilities in recognition of electricity supplied to charge electric vehicles. These carbon credits are monetized by the electric utility and is required to “use all proceeds to the benefit of current or future EV customers” 17 CRR 95483(e)(1)(A). City of Palo Alto Page 2 Table 1: Summary of proposed contract terms Contract Name Company and Contract Number End of Term (Total Term) Not-to Exceed Budget over contract term EV Solutions and Technical Assistance Program CLEAResult Consulting, Inc. C19171513 5 Years from the date of execution $737,000 Background City Council adopted the Sustainability and Climate Action Plan (S/CAP) (Staff Report ID # 7304) in November 2016. This framework serves as a roadmap for achieving Palo Alto’s 80% by 2030 greenhouse gas reduction goal and for developing the Sustainability Implementation Plan (SIP) (Staff Report ID # 8487). On October 24, 2016 Council also approved the LCFS Program (Staff Report ID # 7301) to facilitate funding of EV related programs. This contract is aligned with helping the City towards achieving its goals set forth in the SIP, including all goals from the S/CAP Framework in four key areas of activity: Energy, Mobility, Water, and Electric Vehicles. Request for Proposals (RFP) Process Table 2: Summary of Solicitation Process Proposal Description/ Number EV Solutions and Technical Assistance Program / RFP 171513 Number of websites 1 (PlanetBids) Number of days to respond 33 (July 25, 2018 - August 28, 2018) Number of Proposal received 5 Company Name Location Selected for Interview? ChargePoint, Inc. Campbell, CA No CLEAResult Consulting, Inc. Burlingame, CA Yes EV Connect, Inc. El Segundo, CA Yes Evolvelectric, Inc. San Rafael, CA Yes Envoy Technologies, Inc. Culver City, CA Yes Submitted Fee Range: $321,162 to $4,129,220 On July 25, 2018, the City released a Request for Proposal (RFP No. 171513) for Professional Services. Five proposals were submitted for Task 5: EV Solutions and Technical Assistance. City City of Palo Alto Page 3 of Palo Alto Utilities, Resource Management Division staff reviewed each firm’s submittal in response to the criteria identified in the RFP. On October 4, 2018, the four top‐scoring firms made presentations to the evaluation committee. CLEAResult Consulting, Inc. was selected as the top candidate. Staff recommends awarding the contract to CLEAResult based on their experience designing EV Charging infrastructure and working in the Palo Alto community, the overall strength of their project team including multiple subconsultants, their understanding of the project scope and their construction administration experience. Discussion The City relies on partnerships with third party contractors to deliver targeted programs to utility customers. Such program delivery services have played an important role in meeting mandated state and local goals and objectives. These programs are also popular with customers, since they often provide turn-key service and require minimal effort to participate. This new contract will expedite the building of EV charging infrastructure in harder to reach segments of the market while supporting efforts by the City to meet its aggressive greenhouse gas reduction goals. EV Solutions and Technical Assistance Program The City of Palo Alto has aggressive carbon reduction goals, and a key strategy in lowering emissions is to electrify vehicles. It is estimated that there are 4,000 registered EVs in Palo Alto, most of which are owned by residents in single family (SF) homes. Although the EV adoption rate among the 15,000 Palo Alto residents in SF homes is high, the adoption rate among the 10,000 residents living in multi-unit dwellings (MUD) or multifamily (MF) properties is relatively low. The high cost of installing EV chargers at MUD/MF properties, as well as navigating the technical challenges, are a couple of reasons attributed to the disparity in adoption rates. This disparity is prevalent throughout the state. In recognition of this disparity, CPAU launched an EV Charger Rebate Program in January 2017. The program currently offers incentives of up to $18,000 for MUDs and up to $30,000 for schools and nonprofits to upgrade electrical infrastructure and install EV chargers also known as Electric Vehicle Supply Equipment (EVSEs) for communal use. To date, 28 properties have applied to participate in the EV Charger Rebate Program, yet only 7 sites have successfully completed EVSE installations (3 projects at MUDs and 4 projects at non-profits). Despite many interested properties, participation in this program has been low, as the majority become overwhelmed due to the lack of knowledge about EVSE’s as well as the multi-step process involved in installing commercial EVSEs. Under this new program, CPAU’s goal is to use LCFS funds to make the process as easy as possible for Palo Alto customers to install EVSE’s. CLEAResult will provide expert technical support for EV solutions focused on MUDs, schools and local nonprofits. CLEAResult’s end-to- end services would include providing education, review, design, and installation management services for qualifying locations in Palo Alto. Customers will learn about the benefits of installing EVSE’s as well as learn about the requirements and steps for installing EVSE City of Palo Alto Page 4 equipment. The Consultant will recruit properties to participate in the City’s EV Charger Rebate Program as well as administer, manage and oversee installation of EV Chargers. This new EV Solutions and Technical Assistance Program will accelerate the installation of EVSE’s for our many residents living at MUDs, with top priority given to low income properties, followed by other MF properties, schools and other nonprofits and potentially small to medium sized businesses (SMB). The annual EVSE installation targets are included in this table: Table 2: EVSE Installation Targets Term Estimated Number of Sites with Completed EVSE Installations Estimated Number of Ports Total Estimated Budget for EVSE Installations Year 1 of Contract 10-15 30-60 $157,500 Year 2 of Contract 20-30 60-120 $185,000 Year 3 of Contract 30-45 90-180 $244,500 Total 60-90* 180-360** $587,000 Additional Services $150,000 MAXIMUM TOTAL COMPENSATION (Not to Exceed) $737,000 * This agreement has included latitude for more installations if program participation is at the high end of the range. **To help put this number into perspective: At the end of 2018, there were a total of 750 ChargePoint™ ports in Palo Alto. This includes City owned public EVSE’s as well as ChargePoint™ chargers on private property. Through this contract, CPAU will pay for the consultant who will oversee each project. However, ultimately the customer will be responsible for purchasing the EVSE and hiring a contractor to do the actual installation. The charging equipment will be owned and maintained by the property owner and it will be the customer’s choice to apply for CPAU’s EV Charger rebates to offset construction costs. There are 821 apartment complexes in Palo Alto, housing approximately 42%2 of our residents in 10,000 MUD units. In addition to non-profits and schools, any MUD with 4 or more units can potentially participate in this program. CPAU estimates that 60 to 90 locations could be served by this program in the first three years of the program, culminating in 180 to 360 charge ports, with an average of 3 to 4 charge ports per location. At an estimated total contract cost of $737,000, the cost for EV technical assistance and facilitation per charge port will range between $2,000 to $3,000. 2 https://www.cityofpaloalto.org/civicax/filebank/documents/68528 Percentage of residents who live in attached units was weighted to 42% for use in the Auditor’s report for 2018. City of Palo Alto Page 5 In addition to bearing this expense on behalf of the customer, CPAU will also continue to support covering the equipment/installation costs through the existing customer rebate program as well as any additional utility service connection costs. In total, the average cost of installing each charging port could be highly variable, perhaps in the range of $8,000 to $15,000 per port. Although this cost could be considered high, it is in line with industry estimates and experience.3 With an expected total LCFS revenue of $6 to 7 million through year 2021 that is available for the benefit of current or future EV customers, this expenditure of up to $737,000 under this contract and $3 to $4 million over the next three years for equipment and installation services, these funds will be providing the backbone of CPAU’s effort to encourage EV adoption at MUDs, with priority on low income residents4. A full list of other programs to encourage overall EV adoption in Palo Alto is also footnoted below5. RESOURCE IMPACT The funds to support this contract are available through LCFS funds. The California Air Resources Board (CARB) developed the Low Carbon Fuel Standard (LCFS) program in compliance with AB 32 (the Global Warming Solutions Act of 2006) to reduce the carbon intensity of transportation fuels used in California by 10% by 2020. Electric utilities that provide electricity to charge EVs are eligible to receive LCFS credits based on the number of EVs in their service territory. The regulation required the value of these credits to be used for the benefit of current and future electric vehicles owners. Since 2014 Palo Alto has monetized the credits and has $3 million in funds available for use for the benefit of electric vehicle owners. Additional revenues of $1M per year is anticipated through year 2030. POLICY IMPLICATIONS The proposed contract supports the Council-approved Gas Utility Long-term Plan, the Long- term Electric Acquisition Plan, the Utilities Strategic Plan, and Comprehensive Plan Goal N-9. Implementation of EE programs also support greenhouse gas reduction goals identified in 3 The California Public Utilities Commission’s 12/15/2016 decision directed Pacific Gas and Electric to establish an Electric Vehicle Charging Infrastructure and Education Program and authorized 7,500 charging ports at a cost not to exceed $130 million. This is equivalent to $17,333 per charging port. www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442451968 4 CPAU currently has 411 (2%) residential customers on the Rate Assistance Program (RAP) of which approximately 83% are on financial rate assistance and 17% are on medical rate assistance. Additionally, it’s important to note that 20% of Palo Alto households earn under $50,000/year (We use the 2017 American Community Survey Demographic and Housing Estimates used in the City of Palo Alto 2017 Official Data Set. ACS is the US Census Bureau American Community Survey). 5 Existing Palo Alto programs for EVs – Online EV calculator, transformer upgrades, point of sale EV rebates in partnership with CARB, group buy discounts through Sunshares. CPAU is also exploring programs such as EV charger rebates for residents, expansion of public charging, time-of-use rates, and the potential for an all-electric adjustment to the City’s tiered electric rate. City of Palo Alto Page 6 Palo Alto’s Climate Protection Plan and in the California Global Warming Solutions Act of 2006 (AB 32). ENVIRONMENTAL REVIEW Approval of the third-party agreement proposed in this staff report does not meet the definition of a project pursuant to Section 21065 of the California Public Resources Code, thus no environmental review under the California Environmental Quality Act (CEQA) is required and the work performed by consultants and staff in connection with these programs is categorically exempt from CEQA pursuant to section 15301 of Title 14 of the California Code of Regulations. Attachments: • Attachment A: Contract - C19171513 • Attachment B: Response to Council Member Tanaka’s Questions Submitted April 15, 2019 CITY OF PALO ALTO CONTRACT NO. C19171513 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND CLEARESULT CONSULTING, INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this 15th day of April 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and CLEARESULT CONSULTING, INC., a Texas corporation, located at 4301 Westbank Dr., Bldg. A, Suite 300 Austin, TX 78746 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to offer Electric Vehicle (EV) Solutions and Electric Vehicle Service Equipment (EVSE) related technical assistance to qualifying commercial customers (“Project”) and desires to engage a consultant to administer, manage and install EV Chargers in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A- 1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through April 15, 2024 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall, for the Expected Scenario, not exceed Four Hundred Fifty- Two Thousand Dollars ($452,000), or, if the Optimistic Scenario is achieved, shall not exceed Five Hundred Eighty-Seven Thousand Dollars ($587,000). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed Seven Hundred Thirty Seven Thousand Dollars ($737,000). The applicable rates and schedule of payment are set out in Table C.1 in Exhibit “C”, entitled “COMPENSATION,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Table C.1). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. Option B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: As set forth in Exhibit “A” attached to this Agreement. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign James Russell as the Program Portfolio Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Peter Yeh as the Program Manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the Program Portfolio Manager, Program Manager, or any other key personnel for any reason, the appointment of a substitute project supervisor and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Bruce Lesch, Manager, Utilities Program Services or his designee, Utilities Department, Utilities Program Services Division, 250 Hamilton Ave, Palo Alto, CA 94301, Telephone: 650-329-2241. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) exhibits after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorney’s fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: CLEAResult Attn: Legal Department 100 SW Main St #1500 Portland, OR 97204 SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. 26.2 CONSULTANT shall comply with the requirements of Exhibit “D” for any contract for public works construction, alteration, demolition, repair or maintenance. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this Agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E CONTRACT No. S19XXXXXX SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: __________________________ City Attorney or designee CONSULTANT Officer 1 By: Name: Victor Pisani Title: Senior Vice President Officer 2 By: Name: Trent Brackenridge Title: Vice President Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “D”: INSURANCE REQUIREMENTS EXHIBIT “E”: SOFTWARE AS A SERVICE SECURITY AND PRIVACY EXHIBIT “F”: VISA EXHIBIT “G”: INFORMATION PRIVACY POLICY DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E EXHIBIT “A” SCOPE OF SERVICES CONSULTANT will leverage its distributed energy resources program implementation and Electric Vehicle (EV) expertise to offer EV Solutions and Electric Vehicle Service Equipment (EVSE) related technical assistance to qualifying commercial customers (“PROGRAM”) on behalf of the City of Palo Alto Utilities (“CITY”). CONSULTANT will provide CITY with EVSE installation experts with a strong command of technical building knowledge, electrification and electrical engineering knowledge, sales and excellent customer service skills. CONSULTANT will provide both field-based and phone-based services to support customers as part of the PROGRAM. A. PROGRAM OVERVIEW Name EV Solutions and EV Charger Technical Assistance Program Brief Program Description The City of Palo Alto has the most aggressive carbon reduction goals in the country: Cut carbon emissions to 80% below 1990 levels by 2030. Transportation currently accounts for roughly 65% of our emissions. As a result, building EV infrastructure is a top priority. The adoption rate of Electric Vehicles (EVs) in Palo Alto is one of the highest in the country. A recent report1 shows that in 2017, one in three new vehicles in our community of approximately 68,000 residents, was an EV. Although EV adoption amongst Palo Alto residents in single family homes is rigorous, the lack of EV charging infrastructure at multifamily (MF) residential properties makes it prohibitive for MF dwellers to switch from an ICE (internal combustion engine) vehicle to an EV. Half of the CITY’s residents live in MF properties – the majority being renters. The CITY currently offers an incentive of up to $18,000 for MF properties and up to $30,000 for schools and nonprofits to upgrade infrastructure and install Electric Vehicle Service Equipment (EVSE) or charging equipment for communal use. The CITY seeks to make EV charging accessible for our many residents living at MF properties as well as, at other harder to reach segments of the market such as schools, nonprofits and small to medium sized businesses (SMB). CONSULTANT will provide expert technical support and EV solutions focused on MF properties, schools and local nonprofits. This would include providing education, consulting and design services for qualifying commercial sites in Palo Alto. Customers will learn about the benefits of installing EVSE’s as well as understanding the requirements and steps for installing EVSE equipment. CONSULTANT will recruit properties to participate in the CITY’s EV Charger Rebate Program as well as administer, manage and oversee installation of EV Chargers in connection with the PROGRAM. Customers are ultimately responsible for the cost of purchasing and installing EVSE. 1 May 2018 ICCT (The International Council on Clean Transportation) Briefing – California’s continued electric vehicle market development DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E This PROGRAM will be operated on a first-come, first-served basis, with consideration given to ensure geographic distribution of services and incentives across Palo Alto with top priority given to low income MF properties, followed by other MF properties, schools and other nonprofits and potentially some SMB sites. The CITY is also eager to learn about emerging technologies and is amenable to integrating innovative solutions for Demand Response (DR) and Distributed Energy Resource (DER) capabilities, as it relates to EVSE installations in the PROGRAM. Annual Installation Target CONSULTANT’s EVSE installation targets for the term of the Agreement are provided in Table A.1 Table A.1 - PROGRAM EVSE Installation Targets Term Estimated Number of Sites with Completed EVSE Installations Estimated Number of Ports Total Estimated Budget for EVSE Installations Year 1 of Contract 10-15 30-60 $157,500 Year 2 of Contract 20-30 60-120 $185,000 Year 3 of Contract 30-45 90-180 $244,500 Total 60-90* 180-360** $587,000 Additional Services $150,000 MAXIMUM TOTAL COMPENSATION (Not to Exceed) $737,000 * This agreement has included latitude for more installations if PROGRAM participation is more vigorous than anticipated. **To help put this number into perspective: At the end of 2018, there were a total of 750 ChargePoint™ ports in Palo Alto. This includes City owned public EVSE’s as well as chargers on private property. In addition to the specific project components identified in Section B “PROGRAM Implementation and Delivery”, CONSULTANT will develop and implement a Quality Assurance Plan and Staffing Plan. Quality Assurance Plan CONSULTANT will emphasize superior customer service and customer satisfaction. CONSULTANT will manage projects according to a quality assurance plan that emphasizes transparent and efficient procedures, accurate electrical load calculations and EVSE layout designs by a licensed electrician and oversee quality installation of EVSE’s. CONSULTANT will supervise and manage relationships with contractors that CONSULTANT recommends to customers for completing EVSE installations. CONSULTANT will ensure high quality work is performed by contractors through vetting contractor credentials and licensing. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E CONSULTANT will obtain necessary CITY permits and review EV Charger Rebate applications and associated contractor invoices. CONSULTANT will also contact customers to ensure EVSE installations were installed and final inspections are passed by the CITY’s Development Center. CONSULTANT agrees to ensure that all manufacturer product warranties held either by CONSULTANT or contractors recommended by CONSULTANT to customer, will be transferred to the customer in connection with EVSE installation; and that CONSULTANT will be available for a period of one year to support customers replacing defective EVSE under the terms of the warranty. Without limiting Section 16 (Indemnity) of the Agreement, CONSULTANT agrees and understands it is responsible for all costs and damages associated with any theft, vandalism, damage or criminal acts involving or committed by CONSULTANT staff, contractors or agents involving a customer or customer premises, including issues related to workmanship or damage caused by contractors recommended by CONSULTANT to customers. Staffing Plan CONSULTANT agrees to staff the PROGRAM in accordance with the Staffing Plan set forth below. CONSULTANT shall notify the CITY concerning potential changes to the plan, and all such changes require prior written consent of the CITY. CITY reserves the right to (i) request CONSULTANT conduct criminal background checks to CITY’s satisfaction on all CONSULTANT’s staff, contractors or agents that may enter customer property, and (ii) require that any staff, contractor or agent of CONSULTANT that fails the background check shall not be permitted to enter any customer premises. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E CONSULTANT’s Staff Members Name Title Phone Email James Russell Program Portfolio Manager (415) 963-9864 jrussell@clearesult.com Mr. Russell is responsible for overseeing the portfolio of energy advising programs in California and will engage with the CITY and the CONSULTANT team to ensure the PROGRAM is delivered within budget to meet PROGRAM goals. Peter Yeh Program Manager (415) 848-1281 peter.yeh@clearesult.com Mr. Yeh will serve as Program Manager and primary point of contact for the CITY. Mr. Yeh is responsible for ensuring the PROGRAM is delivered within budget and for managing, training, and mentoring the implementation team. Michael Martin Sr. Energy Advisor (510) 279-4793 michael.martin@clearesult.com Mr. Mr. Martin will serve as Sr. Energy Advisor and provide outreach support, key account advising and educational workshops. Lauren Hubbert Sr. Energy Advisor (650) 297-2839 lauren.hubbert@clearesult.com Ms. Hubbert will serve as Sr. Energy Advisor and provide phone based customer support and advising. Rebecca Lostia Operations Specialist (925) 586-9864 rebecca.lostia@clearesult.com Ms. Lostia will serve as Operations Specialist and provide project coordination and support for vendor management, load studies, educational workshops, and installation management. Janak Ghalot Engineering Manager (650) 726-7772 janak.ghalot@clearesult.com Mr. Ghalot is an Engineering Manager and will review load studies and EVSE installation specifications. Ashley Tackitt Marketing Account Project Manager (503) 688-1557 ashley.tackitt@clearesult.com Ms. Tackitt will serve as Marketing Account Project Manager and provide marketing strategy and coordination to ensure client goals are met. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E B. PROGRAM IMPLEMENTATION AND DELIVERY The following outlines the Program design and implementation plan applicable to CONSULTANT including but not limited to: Task 1- PROGRAM RAMP-UP Task 1.1 Marketing Material Development: To generate leads for the PROGRAM, CONSULANT will conduct marketing, education and outreach (ME&O) through a variety of channels, targeting property owners, facility managers, property management companies and local businesses among others.. CONSULTANT will customize an EV Solutions and Technical Assistance Action Plan for the CITY. CONSULTANT and CITY will work together to develop and launch PROGRAM webpages with PROGRAM description and CITY hosted customer sign-up web-to-lead HTML form. CONSULTANT and CITY will work together to develop marketing brochure for use by CITY and CONSULTANT to promote PROGRAM. CONSULTANT will submit to CITY all marketing materials, including websites, press releases, brochures, social media posts and any other content mentioning PROGRAM in any capacity for approval prior to publishing said PROGRAM materials. In all communications, the PROGRAM will be represented as a CITY program, including use of the CITY approved logo. CITY at its discretion may provide a PROGRAM name. Task 1.2 PROGRAM Development CONSULTANT will assign a Program Manager to manage the day to day operations of the PROGRAM to ensure its success and serve as the primary point of contact for the CITY. CONSULTANT will host a PROGRAM kick-off meeting, to finalize PROGRAM workflow chart with CITY. CONSULTANT will finalize the schedule of activities that provides a monthly work plan and implementation timeline and submit the plan to CITY for review and approval. Define ME&O plan, including identification of outreach activities, workshops, locations and frequency for CITY’s review and approval. CONSULTANT will create agenda for PROGRAM workshops for CITY’s review and approval. Task 1.3 Customer Relationship Management and Data Tracking CONSULTANT will work with CITY to finalize performance metrics, customize Customer Relationship Management (CRM) system to meet CITY’s requirements and launch CRM system within two weeks of finalizing metrics. Customization of the DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E CONSULTANT’s CRM system includes setting up fields for specific PROGRAM metrics for detailed tracking, reporting and billing. TASK 2 – PROGRAM LAUNCH Task 2.1 Initial Marketing, Education and Outreach CONSULTANT will begin an initial ME&O campaign to potential organizations to introduce the PROGRAM, establish relationships and discuss the services offered through the PROGRAM. This campaign includes: Outreach to contacts provided by the CITY. Outreach to local contractors to establish a pool of participating electricians. Assist CITY to directly promote the PROGRAM through bill inserts, email communications, direct mail postcards and other relevant marketing channels. Assist CITY to launch PROGRAM webpages with web-to-lead forms for customer sign- ups which are directly linked to CONSULTANT and CITY’s data management system. Provide CITY Account Management team with PROGRAM training. CITY will be included in all correspondence unless otherwise specified. Task 2.2 Workshops Conduct workshops for building owners, facility managers and property management companies. Anticipate 10 events/workshops, over three years. CITY will provide venue rental. CONSULTANT will provide Presenters/Speakers, workshop materials, event signage, and support personnel. Outreach for the workshops will include coordination with CITY and its partners and include Low-Income housing providers. TASK 3 – PROGRAM IMPLEMENTATION Task 3.1 PROGRAM Enrollment CONSULTANT will implement the marketing plan and speak to all customers interested in participating in the PROGRAM. CONSULTANT will encourage and track progress of all interested participants. Communicate PROGRAM details to customers and educate them on the process of installing EVSE’s. Schedule and conduct site visits to determine eligibility. Enroll sites that have been screened and identified as eligible. Task 3.2 Phone Advisory Service The majority of Customers participating in this PROGRAM do not have experience with EVSE installations. CITY expects that in most cases, multiple touch points will be necessary for a successful installation. CONSULTANT will set up a dedicated phone line with a (650) area code for phone DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E based advising. Through phone-based services, CONSULTANT will provide proactive, individualized and ongoing assistance with regards to EVSE installations and when appropriate, educate customers about potential other electrification opportunities. Task 3.3 Site Visits Customer enrollment occurs when CONSULTANT gains the customer’s signature on the Program Participation Agreement between CONSULTANT and customer. CONSULTANT will schedule and conduct site visits to determine PROGRAM eligibility. Site visit will be conducted by CONSULTANT staff capable of determining whether the property, its layout and infrastructure are suitable for CITY’s PROGRAM. At this site visit, data will be collected in order for a licensed electrician to be able to conduct an electrical load calculation in Task 3.4. Task 3.4 Assessment Reports Post site visit, CONSULTANT will create a customized assessment visit report. Assessment report will include pictures of the property, details regarding the property including but not limited to, the number of units, number of parking spaces, maximum electrical current in Amperage (AMP) available at property, current electrical load, simple sketch of building(s), specifying location of parking spaces and electricity sources. Also collect information on current solar, heating/cooling and water heating systems. For each site visited, a copy of this report will be shared with the CITY. Task 3.5 Post Site Visit Support During the site visit, the CONSULTANT will introduce the availability of a phone-based advisor, who will follow-up with the customer to guide them through the process of installing EVSE’s, including but not limited to completing an electrical load calculation, when necessary have conversations about panel upgrades, designing an EV charging system, hardware selection, contractor–bidding, selection process, permitting, applying for the CITY’s EV Charger Rebate, EVSE installation and final inspection. CONSULTANT will customize the customer experience and answer questions to help pave the way to a successful EVSE installation. Task 3.6 Design For all properties eligible for an EVSE installation, CONSULTANT - with support from subcontractors, including but not limited to electricians and engineers will design an EV Charging system for customers. CONSULTANT will confer with CITY if and when properties may require a transformer upgrade to accommodate EVSE’s. CONSULTANT will share the final design and assessment report with customers and the CITY. CONSULTANT will provide referrals to relevant and complementary CITY sustainability and electrification programs. CONSULTANT can drive participation in DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E solar, electrification and Multifamily Plus programs. CONSULTANT systematically tracks customer referrals to complementary programs. Task 3.7 Oversee EVSE Installation Once a customer has decided to move forward with an EVSE installation, CONSULTANT will act as Project Manager and oversee the project through completion. Oversee EVSE installation until project passes final inspection. This includes but is not restricted to: - Provide expert support for hardware selection and installation of EVSEs. - Provide a list of qualified, pre-screened contractors for EV charger installations. A trade ally/contractor list will be maintained by the Proposer. - Provide assistance in reviewing and comparing bids from contractors - Assist customer or contractor applying for Commercial EVSE permit with the CITY’s Development Center. - Assist customer in applying for CITY’s EV Charger Rebates2. Help provide all necessary invoices, permits, proof of final inspection by the CITY’s Development Services and support customer through process of applying and receiving CITY rebates. Customers shall be able to choose to have completed installations by the participating PROGRAM vendor or contractor, which will likely be an EVSE manufacturer, network/software provider, and/or installer. Each type of vendor and contactor has its own warranty and post-installation service level agreements. Descriptions of these warranty and service levels shall be provided during PROGRAM onboarding and are a major component of the Program Participation Agreement. CONSULTANT will provide post-installation guidance and support for customers, however, the customers are purchasing EVSE products, services, and warranties directly from qualified PROGRAM vendors and installers, therefore customers will be guided to contact their service provider should there be maintenance, service, or warranty needs. Associated costs will be described in their executed agreement. Task 3.8 Meetings CONSULTANT’S Program Manager will meet with the CITY team on a quarterly basis and will also be available for a weekly check-in phone call with the CITY team. CONSULTANT will be available as necessary to ensure effective PROGRAM implementation. Deliver monthly reports to CITY with details of efforts, results and recommendations for future program elements and scaling. The report will also include a characterization of said properties in CITY including, 2 A cap of reimbursement for any given site will be determined by CPAU annually. Currently, for MF properties, CPAU will cover 75% of construction costs for each site for a maximum rebate of up to $18,000, for the installation of six EVSE’s or EVSE ready parking spaces. CPAU will cover 100% of construction costs if the site is a non-profit entity or a low-income MF property. Currently, for these properties, the rebate is capped at $30,000 for the installation of six EVSE’s or EVSE ready parking spaces. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E but not limited to segmentation information, such as ownership type, major real estate holders, parking types, age, electrical condition and other factors significantly affecting potential EV infrastructure and other future electrification measures as feasible. TASK 4 – INVOICING AND REPORTING Task 4.1 Data Management CONSULTANT will utilize its data management system to provide data tracking, analysis and reporting as well as actionable insights regarding real-time PROGRAM performance. In addition to tracking PROGRAM progress, CONSULTANT will track detailed customer information such as barriers and motivations as well as planned future upgrades. Task 4.2 Reporting In addition to the requirements for invoices set forth in Section 5 of the Agreement, CONSULTANT will upload reports into CITY’s reporting database on a monthly basis in order to complete invoicing. 1. CONSULTANT will provide CITY with monthly and annual reports in the form of spreadsheets and/or dashboard summary charts as desired by CITY. PROGRAM reports may include information on PROGRAM participation, cost expenditure and budget remaining, commodity savings, status of outlined goals, customer touch points and level of additional PROGRAM participation propensity attributable to the PROGRAM’S phone advisors. 2. Basic data points to be included in reports, but not limited to: site address, name of facility, contact information (phone, email, website), number of units, number and description of parking location, notes related to feasibility of site such as: electrical panel capacity and panel capacity available, distance of EVSE location from electrical service panel and CPAU’s distribution transformer, potential number of EVSE make-ready parking spots and relevant photographs. Note: CPAU will provide information on the transformer serving the site. 3. Other data points CPAU is interested in, related to assessing future electrification potential: electrical panel size (Amps) for each unit, main breaker size for each building, and type of water heating and space heating equipment in each unit. CONSULTANT will respond to ad-hoc data requests by CITY. CONSULTANT agrees to work with CITY to respond to CPUC, NCPA, CARB, CEC or other Federal, State or local data requests or reporting requirements. CONSULTANT will interface with CITY’s contracted evaluation, measurement and verification firms as necessary. CONSULTANT will evaluate PROGRAM efficacy for participating customers and conduct follow up surveys. Whenever possible: especially when networked EV Chargers are installed, usage data will be collected and shared in annual reports. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E CONSULTANT will propose concepts for ways including but not limited to income qualified EVSE initiatives, improving CITY processes, and managing CITY solutions for EV fleet, DER and other emerging technologies. Task 4.3 Invoicing CONSULTANT will invoice CITY on a monthly basis consistent with Section 5 of the Agreement and in accordance to the more specific guidelines set forth in this Exhibit “A” and in Exhibit “C”, “Compensation”. TASK 5 – CUSTOMER FEEDBACK Task 5.1 Perform Customer Feedback Surveys: CONSULTANT will address and resolve all customer issues discovered through either survey feedback or other means of customer contact. CONSULTANT will pursue continuous improvements to promote complete customer satisfaction. Customer feedback issues will be tracked by CONSULTANT using the monthly reports, as well as a completed complaint form. CITY retains the right to separately survey PROGRAM participants. Task 5.2 If any issues cannot be resolved to the satisfaction of the customer by CONSULTANT within five business days, CONSULTANT shall immediately provide CITY with a detailed description of any such complaint which will include the name and contact information of the customer and any other information requested by CITY. TASK 6 – PROGRAM TERMINATION Task 6.1 The CONSULTANT will resolve all outstanding jobs in progress, as well as customer complaints. TASK 7 – SUBMIT FINAL PROGRAM REPORT Task 7.1 CONSULTANT will submit a final report which includes a narrative with an overview of the PROGRAM and spreadsheet detailing the budget and actual PROGRAM cost. The final report will include PROGRAM Achievements, challenges, goals and lessons learned. CONSULTANT agrees to deliver the final report within 30 days of the end of the Term as such date may be extended at the sole discretion of CITY. Task 7.2 CONSULTANT will maintain electronic copies of invoices for two years as required by the CITY. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Task Timing (Due Date) TASK 1 - PROGRAM RAMP UP Task 1.1 Within 60 days after contract execution, and ongoing as needed Task 1.2 Within 30 days after contract execution Task 1.3 Within 30 days after contract execution TASK 2 – PROGRAM LAUNCH Task 2.1 Within 60 days after contract execution and ongoing as needed Task 2.2 Within 90 days after contract execution and ongoing as needed TASK 3 – PROGRAM IMPLEMENTATION Task 3.1 Ongoing Task 3.2 Ongoing Task 3.3 Ongoing Task 3.4 Ongoing Task 3.5 Ongoing Task 3.6 Ongoing Task 3.7 Ongoing Task 3.8 Ongoing and as needed TASK 4 – INVOICING AND REPORTING Task 4.1 Ongoing and as needed Task 4.2 Ongoing and as needed Task 4.3 Ongoing and as needed TASK 5 – CUSTOMER FEEDBACK Task 5.1 Ongoing and as needed Task 5.2 Ongoing and as needed TASK 6 – PROGRAM TERMINATION Task 6.1 30 days Prior to contract expiration TASK 7 - SUBMIT FINAL PROGRAM REPORT Task 7.1 Within 30 days after contract expiration Task 7.2 For 2 years after contract expiration DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the rate schedule attached as Table C.1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. Table C.1: PROGRAM Budget DESCRIPTION TASKS AFFECTED Rate/Unit ESTIMATED BUDGET YEAR 1 ESTIMATED BUDGET YEAR 2 ESTIMATED BUDGET YEAR 3 TOTAL EXPECTED SCENARIO (60 Sites) Start-up fee: Total payable during first three months of contract to cover PROGRAM, marketing, and data tracking development 1.1 – 1.3, 2.1 Fixed Cost $50,000 N/A N/A $50,000 Management Fee: Assessed from month 4 - 36. $5,000/month 3.1 – 3.3, 3.8, 4.1 – 4.3, 5.1 – 5.2, 6.1, 7.1 – 7.2 Fixed Cost $45,000 $60,000 $60,000 $165,000 Workshops: Pay for Performance (P4P) 2.2 $1,500/ event $3,000 $6,000 $6,000 $15,000 Assessment & Electrical Load Report P4P 3.4 $1,600/ report $16,000 $32,000 $48,000 $96,000 EVSE Installation Project Management 3.5 – 3.7 $2,100/ site $21,000 $42,000 $63,000 $126,000 EXPECTED SCENARIO SUBTOTAL $135,000 10 sites $140,000 20 sites $177,000 30 sites $452,000 60 sites HIGH COST OPTIMISTIC INSTALLATION SCENARIO (Up to 90 sites) Additional Initial Site Visit for contingency purposes, assessed after 20th site visit/year 3.3 Site visits beyond 20/year: $800/site $4,000 (5 extra site visits) $8,000 (10 extra site visits) $12,000 (15 extra site visits) $24,000 (up to 30 extra site visits) DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E Additional Assessment & Electrical Load Report and EVSE Installation Project Management for contingency purposes 3.4, 3.5 – 3.7 $3,700 ($1,600/ report + $2,100/ site) $18,500 (for 5 extra assessments) $37,000 (for 5 extra assessments) $55,500 (for 15 extra assessments) $111,000 (up to 30 extra assessments) OPTIMISTIC INSTALLATION SCENARIO SUBTOTAL $22,500 (5 extra site installations) $45,000 (10 extra site installations) $67,500 (15 extra site installations) $135,000 (30 extra site installations) TOTAL EVSE INSTALLATION SERVICES $157,500 Up to 15 sites $185,000 Up to 30 sites $244,500 Up to 45 sites $587,000 Up to 90 sites Additional Services $97- $146/hour $50,000 $50,000 $50,000 $150,000 MAXIMUM TOTAL COMPENSATION (Not to Exceed) $207,500 $235,000 $294,500 $737,000 DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E Table C.2: PROGRAM Process & Responsibilities PROCESS STEPS CO N S U L T A N T CO N T RAC T O R QU L A I F Y I N G CO M M E R C I A L CU S O T M E R CP A U CONSULTANT COST PROPOSAL NOTES PROGRAM RAMP-UP AND LAUNCH 1. Tasks 1.1-1.3 Start-up, including kick off meetings, data analysis for customer list, PROGRAM design, contractor/vendor/pr oduct qualification, workshop curriculum, and marketing L S $50,000 Cost over first three months of PROGRAM 2. Tasks 2.1, 3.1, 3.2 Make contact with MF property owner, school or nonprofit management to schedule a site visit L S $5,000/ month* Cost proposal for Steps 1, 2, 3 - Management fee paid/month – Only paid AFTER Start Up period 3. Task 3.3 Evaluate availability to draw electricity from electrical panel capacity L S S 4. Task 3.3 Identify EVSE and/or EVSE make- ready locations L S S 5. Task 2.2 Host EV/SE workshops L S S $1,500/event Cost/event SITE VISITS AND DESIGN 6. Task 3.4 Conduct electrical load calculations with a licensed electrician L S $1,600/site Cost/site 7. Task 3.4, 3.5 Provide project bid documents, including load calculation, site plan, and preliminary layout** L S 8. Task 3.4, 3.5 Facilitate electrical contractor site walk and bids L S S 9. Task 3.6 Finalize site plan, contractor selection, hardware selection, and contract execution with customer L S S DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E OVERSEE EVSE INSTALLATION 10. Task 3.7 Facilitate permitting process for EVSE S L S $2,100/site Cost/site 11. Task 3.7 Facilitate EVSE construction contractor to start work in coordination with property owner S L S 12. Task 3.7 Oversee provisioning of equipment and EVSE related construction and installation S L 13. Task 3.7 Provide all required documentation for EV Charger rebate, which will be paid by CPAU*** S S L 14. Task 3.7 Facilitate payment for the construction contractor from CPAU rebates and from site owner; closing of project L Note: L - Lead role, S - Support role * Additional site evaluations beyond 20 per year to be priced at $800/site **If the site requires a utility transformer upgrade, it may be possible for CPAU to undertake this work at no additional cost to the property owner. This could include all CPAU costs if a new CPAU service point is logistically feasible and economically practical to make a site eligible for EVSE installations. *** CPAU will cover 75% of construction cost for each site. A cap of reimbursement for any given site will be determined by CPAU annually. Currently, for MF properties, the rebate is capped at $18,000, for the installation of six EVSE’s or EVSE ready parking spaces. For a non-profit entity or a low-income MF property, CPAU will cover 100% of construction costs. Currently, for these properties, the rebate is capped at $30,000 for the installation of six EVSE’s or EVSE ready parking spaces. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. There are no reimbursable expenses authorized in this Agreement. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Table C.3. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: Pilot promoting Low to Moderate Income access to EVs City EVSE implementation process improvements City EV fleet consulting EVSE Distributed Energy Resources (DER) and Emerging Technology consulting Table C.3: Hourly Rates Position Hourly Rate Sr. Program Manager $146 Program Manager $125 Engineer II $146 Marketing Manager $110 Program Analyst $97 DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. B. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. CONTRACTOR SHALL PROVIDE AT LEAST THIRTY (30) DAYS ADVANCE WRITTEN NOTICE TO CITY OF MATERIALS CHANE IN COVERAGE OR OF COVERAGE CANCELLATIONS. IV.ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A.PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: V2.5 [11/01/2012] Doc: InfoSec 110 Page 1 of 3 EXHIBIT E SOFTWARE AS A SERVICE SECURITY AND PRIVACY TERMS AND CONDITIONS This Exhibit shall be made a part of the City of Palo Alto’s Professional Services Agreement or any other contract entered into by and between the City of Palo Alto (the “City”) and __CLEAResult, Inc.__________________________________ (the “Consultant”) for the provision of Software as a Service services to the City (the “Agreement”). In order to assure the privacy and security of the personal information of the City’s customers and people who do business with the City, including, without limitation, vendors, utility customers, library patrons and other individuals and businesses, who are required to share such information with the City, as a condition of receiving services from the City or selling goods and services to the City, including, without limitation, the Software as a Service services provider (the “Consultant”) and its subcontractors, if any, including, without limitation, any Information Technology (“IT”) infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, described below, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit B, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City’s customers. The Consultant shall fulfill the data and information security requirements (the “Requirements”) set forth in Part A below. A “secure IT environment” includes: (a) the IT infrastructure, by which the Services are provided to the City, including connection to the City's IT systems; (b) the Consultant’s operations and maintenance processes needed to support the environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. “IT infrastructure” refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. In the event that, after the Effective Date, the Consultant reasonably determines that it cannot fulfill the Requirements, the Consultant shall promptly inform the City of its determination and submit, in writing, one or more alternate countermeasure options to the Requirements (the “Alternate Requirements” as set forth in Part B), which may be accepted or rejected in the reasonable satisfaction of the Information Security Manager (the “ISM”). Part A. Requirements: The Consultant shall at all times during the term of any contract between the City and the Consultant: (a) Appoint or designate an employee, preferably an executive officer, as the security liaison to DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: V2.5 [11/01/2012] Doc: InfoSec 110 Page 2 of 3 the City with respect to the Services to be performed under this Agreement. (b) Comply with the City’s Information Privacy Policy: (c) Have adopted and implemented information security and privacy policies that are documented, are accessible to the City and conform to ISO 27001/2 – Information Security Management Systems (ISMS) Standards. See the following: http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=42103 http://www.iso.org/iso/iso_catalogue/catalogue_tc/catalogue_detail.htm?csnumber=50297 (d) Conduct routine data and information security compliance training of its personnel that is appropriate to their role. (e) Develop and maintain detailed documentation of the IT infrastructure, including software versions and patch levels. (f) Develop an independently verifiable process, consistent with industry standards, for performing professional and criminal background checks of its employees that (1) would permit verification of employees’ personal identity and employment status, and (2) would enable the immediate denial of access to the City's confidential data and information by any of its employees who no longer would require access to that information or who are terminated. (g) Provide a list identifying all Salesforce instances used to support Client’s engagement with the City. (h) Implement access accountability (identification and authentication) architecture and support role-base access control (“RBAC”) and segregation of duties (“SoD”) mechanisms for all personnel, systems and software used to provide the Services. “RBAC” refers to a computer systems security approach to restricting access only to authorized users. “SoD” is an approach that would require more than one individual to complete a security task in order to promote the detection and prevention of fraud and errors. (i) Assist the City in undertaking annually an assessment to assure that: (1) all in-scope Salesforce instances have been identified and (2) Consultant has implemented measures in accordance with industry best practices applicable to secure coding and secure IT architecture. (j) Provide and maintain secure intersystem communication paths that would ensure the confidentiality, integrity and availability of the City's information. (k) Deploy and maintain IT system upgrades, patches and configurations conforming to current patch and/or release levels by not later than thirty (30) days after its date of release. Emergency security patches must be installed within 24 hours after its date of release. (l) Provide for the timely detection of, response to, and the reporting of security incidents, including on-going incident monitoring with logging. (m) Notify the City within 48 hours of detecting a security incident that results in the unauthorized access to or the misuse of the City's confidential data and information. (n) Inform the City thirty days prior to any change in third party service provider(s). (o) Perform robust security self-audits on a regular basis and not less frequently than on an annual basis on an annual basis, and provide the required summary reports of those self- audits to the ISM. (p) Consultant will, upon the City’s written request, provide the results of any audit of Consultant’s information security controls relevant to the services Consultant provides for the City. Alternatively, if Consultant is unable to provide an audit report, the City, at its sole DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: V2.5 [11/01/2012] Doc: InfoSec 110 Page 3 of 3 expense, may inspect, on Consultant’s premises, Consultant’s information security practices and procedures relevant to the Services provided to the City. Due to the confidential and proprietary nature of Consultant’s operations and to protect the integrity and security of its operations and the shared nature of systems which may be used to provide the Services under the Agreement, Consultant reserves the right to reasonably limit the scope of such security reviews or inspections, and require that such inspections a.Must be preceded by advance written request of no less than 30 days prior to the anticipated start date and may occur no more than once in any twelve (12) month period, barring exigent circumstances, such as the City’s reasonable concern of an actual breach or imminent material breach of security, in which case an inspection may be performed in response to such circumstance or concern, and at a time mutually agreed by the Consultant and the City; and b.If to be conducted by a third party, the third party must be a mutually agreed upon security assessment specialist, where such agreement by Consultant shall not be unreasonably withheld; and c.Are subject to appropriate confidentiality and non-disclosure provisions; and d.May not disrupt Consultant’s normal business or IT operations. (q) Cooperate with the City to ensure that to the extent required by applicable laws, rules and regulations, the Confidential Information will be accessible only by the Consultant and any authorized third party service provider’s personnel. (r) Perform regular, reliable secured backups of all data needed to maximize availability of the Services. (s) Maintain records relating to the Services for a period of three (3) years after the expiration or earlier termination of this Agreement and in a mutually agreeable storage medium. Within thirty (30) days after the effective date of expiration or earlier termination of this Agreement, all of those records relating to the performance of the Services shall be provided to the ISM. (t) Maintain the Confidential Information in accordance with applicable federal, state and local data and information privacy laws, rules and regulations. (u) Deliver confidential information over a Sharepoint site. (v) Unless otherwise addressed in the Agreement, shall not hold the City liable for any direct, indirect or punitive damages whatsoever including, without limitation, damages for loss of use, data or profits, arising out of or in any way connected with the City’s IT environment, including, without limitation, IT infrastructure communications. Part B. Alternate Requirements: DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 1 of 15 Version 2.0 18 March 2019 Vendor Information Security Assessment (VISA) Questionnaire Purpose: This Vendor Information Security Assessment (VISA) Questionnaire requests information concerning a Cloud Service Provider (the Vendor), which intends to provide to the City of Palo Alto (the City) any or all of the following services: Software as a Service (SaaS); Platform as a Service (PaaS); and Infrastructure as a Service (IaaS). Note/Instructions: SaaS, PaaS and IaaS are each a ‘cloud’ servicing model, in which software and database applications, computer network infrastructure and/or computer hardware/software platforms is/are hosted by the Vendor and made available to customers interconnected to a network, typically to the Internet. This Questionnaire is for the sole use of the intended Vendor and may contain confidential information of individuals and businesses collected, stored, and used the City. Any unauthorized collection, storage, use, review or distribution may be prohibited by California and/or Federal laws. If you are not the intended recipient of this Questionnaire, please contact the sender by e-mail and destroy all copies of the Questionnaire. The Vendor shall provide answers to the questions or information to the requests provided below. In the event that the Vendor determines that it cannot meet the City’s security and or privacy requirements, the Vendor may submit a request for an exception to the City’s requirements and propose alternative countermeasures to address the risks addressed in this Questionnaire. The City’s Information Security Manager (ISM) may approve or reject the exception request, depending on the risks associated with the exception request. Upon receipt of the Vendor’s response, the ISM will conduct a security risk assessment, using the following scoring methodology: A = Meets completely. B = Partially meets. The Vendor may be required to provide additional requested information. C = Doesn’t meet. The Vendor may be required to provide missing/additional detail. Vendor Information: Vendor Organization Name CLEAResult Address 4301 Westbank Drive, Building A, Suite 250 • Austin, TX 78746 Information Security Contact Person Name Chad Brustin, Information Security, Principal Engineer Email cbrustin@clearesult.com Phone 512.416.5971 Date this Questionnaire Completed 2/6/2019 1.0 BUSINESS PROCESS AND DATA EXCHANGE REQUIREMENTS EXHIBIT F DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 2 of 15 Version 2.0 18 March 2019 # Question Response from the Vendor Score Additional Information/Clarification Required from the Vendor 1.1 Please provide a detailed description of the Vendor’s business process that will be supported by it, as this relates to the proposed requirements of the City’s RFP or other Business Requirements Document (BRD) CLEAResult manages a residential audit program called Home Efficiency Genie on behalf of the City of Palo Alto This residential audit program provides customers with over the phone consultations and a home energy assessment. CLEAResult uses a custom Salesforce Platform as a Service (PAAS) to document customer energy efficiency project details including: customer interactions and installed energy efficiency measures (showerheads, advanced power strips, LEDs, and faucet aerators) that provide the customer with energy savings. 1.2 Has the Vendor adopted and implemented information security and privacy policies that are documented, are accessible to the City, and conform to ISO 27001/2 – Information Security Management Systems (ISMS) Standards? CLEAResult has an Information Security Policy and Acceptable Use Policy, which contains the CLEAResult guidelines for handling and protecting Privately Identifiable Information (PII). Policies were reviewed and approved on July 1, 2018. The policies will ultimately meet or exceed ISO 27002 standards. 1.3 What data exchange will occur between the City and the Vendor? What data will be stored at the Vendor’s or other third party’s data storage location? (Provide data attributes with examples) Example: (Payment Card Information, Social Security Number, Driving License number Patrons Name, Address, telephone etc.), which are examples of personal information, the privacy of which are protected by California constitutional and statutory law. Reports will be generated on excel spreadsheets. Data will be exchanged via sFTP. Account Number, Name, Address, Telephone Number will be stored. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 3 of 15 Version 2.0 18 March 2019 1.4 In the event that the Vendor is required to store Private Information (PI), Personally Identifiable Information (PII), or Sensitive Information (SI) (collectively, the Information) about individuals in the service provider’s business systems, how does the Vendor maintain the confidentiality of the Information in accordance with applicable federal, state and local data and information privacy laws, rules and regulations? Privacy function is part of the Information Security Program and is included in employee training and awareness. Underneath the Information Security Policy are two supporting policies that speak to privacy. The PII Policy and the Data Classification Policy. In addition, privacy and customer data protection policies are also contained in the end user Acceptable Use and Mobile Device Policy. Data is stored on SalesForce.com. SalesForce.com hardware and software configurations are designed to provide secure logical separations of customer data. Connection to the Salesforce environment is via TLS 1.2, using global step-up certificates from Verisign, ensuring that our users have a secure connection from their browsers to our service Individual user sessions are identified and re-verified with each transaction, using a unique token created at login 1.5 What mechanism and/or what types of tool(s) will be used to exchange data between the City and The Vendor? Example: (VPN, Data Link, Frame Relay, HTTP, HTTPS, FTP, FTPS, etc.) sFTP. 1.6 What types of data storage (work in progress storage and backup storage) are present or will be required at the Vendor’s site? Example: (PCI Credit Card Info, SSN, DLN, Patrons Name, Address, telephone etc.) No data will be hosted at the CLEAResult site. All data will be hosted via Salesforce.com. Name, address, and account number will be stored on Salesforce.com. 1.7 Is e-mail integration required between the City and the Vendor? No DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 4 of 15 Version 2.0 18 March 2019 Example: The provision of services may require the City to provide the Vendor with an e-mail account on the City’s e–mail server. 1.8 Has the Vendor ever been subjected to either an electronic or physical security breach? Please describe the event(s) and the steps taken to mitigate the breach(es). What damages or exposure resulted? Are records of breaches and issues maintained and will these records be available for inspection by the City? No 1.9 Does the Vendor maintain formal security policies and procedures to comply with applicable statutory or industry practice requirements/standards? Are records maintained to demonstrate compliance or certification? Does the Vendor allow client audit of these records? NOTE: PLEASE PROVIDE SUPPORTING DOCUMENTATION. Yes 2.0 What are the internet and the browser security configurations for the cloud application? What security standards and requirements does the Vendor maintain to ensure application security at the user interface? (A set of detailed documentation should be provided to support the compliance. Secure transmission and sessions Connection to the Salesforce environment is viaTLS 1.2, using global step-up certificates from Verisign, ensuring that users have a secure connection from their browsers to our service Individual user sessions are identified and re-verified with each transaction, using a unique token created at login Network protection DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 5 of 15 Version 2.0 18 March 2019 Perimeter firewalls and edge routers block unused protocols Internal firewalls segregate traffic between the application and database tiers Intrusion detection sensors throughout the internal network report events to a security event management system for logging, alerts, and reports A third-party service provider continuously scans the network externally and alerts changes in baseline configuration 2.0 APPLICATION/SOLUTION CONFIGURATION # Question Response from The Vendor Score Additional Information/Clafication Required from The Vendor 2.1 What is the name of the application(s) that the Vendor will host in order to provide services to the City? (List all) The vendor will not host any applications. The vendor will use Salesforce.com. 2.2 What functionality will be provided to the City’s employees or the City’s customers or other recipient of City services through the application? The vendor will not provide any direct access to the City of Palo Alto. Salesforce.com will be used by CLEAResult to run rebate and/or marketing campaigns for the City of Palo Alto. 2.3 Will the Vendor use a subcontractor and/or a third party service provider? (List all). If yes, then what data privacy and information security agreements are in place between the Vendor and any subcontractor/third party to ensure appropriate and accountable treatment of information? Note the No third party contractors will be used on this engagement. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 6 of 15 Version 2.0 18 March 2019 City requires each subcontractor and/or third party to complete this Questionnaire. 2.4 What is the Vendor's application(s) hosting hardware and software platform? Provide a detailed description, including SP [what’s this, Raj?] and a patch or security applications in use. Example: Windows or Unix Operating System (OS) and other detail. This is unknown to CLEAResult. That information is unavailable from Salesforce.com. 2.5 How does the Vendor’s application and database architecture manage or promote segregation of the City's data (related to its function as a local government agency) from the data of individuals providing services to or receiving services from the City? All Force.com data, metadata, and pivot table structures, including underlying database indexes, are physically partitioned by OrgID (by tenant) using native database partitioning mechanisms. Data partitioning is a proven technique that database systems provide to physically divide large logical data structures into smaller, more manageable pieces. Partitioning can also help to improve the performance, scalability, and availability of a large database system, such as a multitenant environment. By definition, every Force.com query targets a specific tenant’s information, so the query optimizer need only consider accessing data partitions that contain a tenant’s data, rather than an entire table or index. This common optimization is sometimes referred to as “partition pruning.” 2.6 Describe the Vendor’s server and network infrastructure. Please provide server and network infrastructure deployment topology, including data flow architecture including but not limited to security management applications, firewalls, Internal details are not available as they are proprietary to Force.com. However, high level diagrams are available on their website. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 7 of 15 Version 2.0 18 March 2019 etc. 2.7 Please provide a detail proposed solution that will be developed as a part of the Vendor’s implementation to support this project. (For example detailed solution architecture, secured data flow to support business processes, etc.). CLEAResult has developed a custom Platform as a Service (PAAS) to manage an Energy Efficiency residential audit program on behalf of the City of Palo Alto. This custom Salesforce application tracks all customer interactions. Moreover, Salesforce houses all data collected at the customer’s residence which is used to calculate energy savings associated with a project’s energy efficiency measures. 3.0 DATA PROTECTION # Question Response from the Vendor Score Additional Information/Clafication Required the Vendor 3.1 What will be the medium of data exchange between the City and Vendor? sFTP 3.2 . How will the data be kept secure during the data exchange process? Example: (VPN, Data Link, Frame Relay, HTTP, HTTPS, FTP, FTPS, Data is entered directly into Salesforce via Force.com. SSL/TLS site. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 8 of 15 Version 2.0 18 March 2019 etc.) 3.3 How will the City’s data be kept physically and logically secure at the Vendor’s preferred storage location? Example: Locked storage, Digitally, Encrypted etc. The physical security of each salesforce.com facility is comparable to the best civilian data centers in the world. The exterior perimeter of each anonymous building is bullet resistant, has concrete vehicle barriers, closed-circuit television coverage, alarm systems, and manned guard stations, all of which help defend against non-entrance attack points. Inside each building, multiple biometric scans and guards limit access through interior doors and cages at all times. 3.4 What application level protections are in place to prevent the Vendor’s or a subcontractor/third party’s staff member from viewing unauthorized confidential information? For example, encryption, masking, etc. Force.com lets CLEAResult declare encrypted custom fields so that concerns over data like social security and credit card numbers can be afforded additional protection. After creating an encrypted custom field, Force.com automatically encrypts this data using AES 128. It then uses key splitting to separate the keying material between application server and database so that no single salesforce.com administrator can recover both parts of the key. 3.5 What controls does the Vendor exercise over the qualification and performance of its team? Of their subcontractor/third party’s team(s)? (For example criminal background verification prior to employment, providing security training after employment and managing Role Based Access Control (RBAC) during employment and network and application access termination upon employment termination. CLEAResult conducts reference and background checks on all job applicants. Our process includes, but is not limited to, collection and verification an applicant’s past employment, education, character, finances, reputation, etc. Information is collected from credit reporting agencies, state motor vehicle records, criminal background information from federal, state or local governments, or other sources as needed. CLEAResult’s drug, alcohol and substance abuse policy prohibits the use and possession of alcohol and illegal substances and drugs in all places or situations where employees or subcontractors are performing work for CLEAResult. All employees must comply with this policy as a condition of continued employment. We require drug screening for those employees or subcontractors that are required to be tested to comply with the terms of a client contract. These policies are currently in place for several utility clients. Employees and subcontractors sign the DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 9 of 15 Version 2.0 18 March 2019 company policy upon employment and must pass the drug test in order to work on client contracts when so specified. CLEAResult adheres to the principles of least privilege. Users are granted administrator rights to Salesforce only when necessary. 4.0 DATA BACK-UP # Question Response Score COPA’s Security Assessment 4.1 What are the Vendor’s method(s) used to keep data secured during the data backup process? All data are backed up to tape at each data center, on a rotating schedule of incremental and full backups The backups are cloned over secure links to a secure tape archive Tapes are not transported offsite and are securely destroyed when retired 4.2 . Is the Vendor’s encryption technology used to encrypt whole or selective data? Selective data. See 3.4. 4.3 What types of storage media will the Vendor use for data backup purposes? For example, Tape, Hard Disk Drive or any other devices. Backups are cloned over secure links to a secure tape archive. 4.4 Are the Vendor’s backup storage devices encrypted? If ‘yes,’ please provide encryption specification, with type of encryption algorithm and detail process of encryption handling. If ‘no,’ provide a detailed description (with process, tools and technology) to keep data secured during the back-up Only selected data is encrypted. The tapes never leave the datacenters. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 10 of 15 Version 2.0 18 March 2019 process. 5.0 DATA RETENTION # Question Response from the Vendor Score Additional Information/Clafication Required from the Vendor 5.1 What is the Vendor’s retention period of the backed up data? The data retention process shall comply with the City’s data retention policy. [does the Vendor know what this is?] CLEAResult will retain the City’s customer data in accordance with the terms of our contract. 5.2 Are the data back-up storage media at the Vendor’s location or other third party location? At Salesforce.com data center. 5.3 If the Vendor’s backup storage devices are stored with another company, please provide: a. Company Name: b. Address: c. Contact person detail (Phone and Email): d. What contractual commitments are in place to guarantee security Salesforce.com is a multitenant PaaS environment. Backup data maintains logical separation. Details of additional companies are not known by CLEAResult. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 11 of 15 Version 2.0 18 March 2019 performance from these vendors 5.5 What is the media transfer process (I.e. The lock box process used to send tapes off-site)? The Salesforce service performs real-time replication to disk at each data center, and near real-time data replication between the production data center and the disaster recovery center Data are transmitted across encrypted links Disaster recovery tests verify our projected recovery times and the integrity of the customer data 5.6 Who has access to the data storage media lockbox(es)? (Provide Name and Role) Only salesforce.com personnel. 5.7 Who on the Vendor’s staff or subcontractor/third party’s staff is/are authorized to access backup data storage media? (Provide Name and Role) Only salesforce.com personnel. 5.8 What is the backup data storage media receipt and release authorization process(es)? (Please submit a soft copy of the process) Unknown 6.0 ACCOUNT PROVISIONING AND DE-PROVISIONING (The Vendor must receive formal pre-authorization from the City’s Information Security Manager prior to provisioning and de-provisioning of application access account). # Question Response from the Vendor Score Additional Information/Clafication Required from the Vendor 6.1 What is the account provisioning/removal process? CLEAResult has newhire and termination checklists that includes notification of administrators of all applications not directly controlled by Support Services. Those admins will add new users in accordance with DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 12 of 15 Version 2.0 18 March 2019 Example: how are users accounts created and managed?) instructions from the hiring manager or remove access in the event of a termination. 6.2 . What is the account deprovisioning/removal process? Example: how are users accounts created and managed?) CLEAResult has newhire and termination checklists that includes notification of administrators of all applications not directly controlled by Support Services. Those admins will add new users in accordance with instructions from the hiring manager or remove access in the event of a termination. 6.3 How will the City’s employees gain access to required application(s)? The city of Palo Alto will not have access to Salesforce.com. CLEAResult will provide reports and/or data in accordance with the Statement of Work. 6.4 Does the application(s) have the capability to restrict access only from the City’s WAN (Wide Area Network)? N/A 7.0 PASSWORD MANAGEMENT # Question Response from the Vendor Score Additional Information/Clafication Required from the Vendor 7.1 What will be the policy and/or procedures for the logging, authentication, authorization and password management scheme? (Please provide a soft copy of the process) CLEAResult Password Policy, adopted in 2016, covers scope and procedures for password management. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 13 of 15 Version 2.0 18 March 2019 7.2 . Where will the login and password credentials be stored? The login and password credentials are stored at Salesforce. Salesforce does not have access to those credentials. 7.3 Are the password credentials stored with encryption? If ‘yes,’ please provide encryption scheme detail. User passwords are stored in the RDBMS via a salted SHA2 algorithm with a 256-bit hash 7.4 The Vendor’s application must comply with the following password requirements. Does the Vendor’s application meet these requirements? 1. First time password must be unique to an individual and require the user to change it upon initial login. 2. If the password is sent via plain text e-mail to the City employee to mitigate security exposure. 3. The City requires first time password to have a time-out capability of no more than 7 days. 4. The e-mail notification must not be copied to anyone except the user. 5. The permanent/long term password must CLEAResult uses the inherent password security built into Salesforce. City employees will not be given accounts to Salesforce. 1. Salesforce accounts are added and a unique password is set. The user is required to set a new password at initial login. 2. N/A 3. The Salesforce timeout period for first time passwords is unknown. 4. N/A 5. Passwords must be changed every 90 days. 6. This capability does not exist within Salesforce, but no City employees will use Salesforce. 7. This capability does not exist within Salesforce. 8. N/A 9. Passwords meet City’s complexity requirements, but again, no City employees will be using the Salesforce portal. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 14 of 15 Version 2.0 18 March 2019 be changed frequently (at least TWICE a year) 6.E-mail notification must be sent to the user whenever the password has been updated. 7.User should not be able to view data or conduct business unless an initial password has been updated with a different password. 8.The Vendor shall inform the City’s users that, when a new password is created, the user shall not use the City’s LDAP password. [what’s LDP? Spell out, don’t use acronyms] 9.The password must have 8 or more alphanumeric (/) characters and it must contain at least one character from each of the bullets noted below (i.e. each line shall contribute at least one character): abcdefghijklmnopqrstu DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Security Document Version: v2.3 Form: InfoSec 100 VISA Questionnaire Page 15 of 15 Version 2.0 18 March 2019 vwxyz ABCDEFGHIJKLMNO PQRSTUVWXYZ 0123456789 !@#$%^&*()- +=`~,></\"'?;:{[}] --------------------------------------------------- End Of Document -------------------------------------------------- DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E Information Privacy Policy Release and Version: 1st Release, Version 2.2 Release Date: 31 January, 2013 Document Classification: Need to Know EXHIBIT G DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Technology Information Security Services Information Privacy Policy Page 1 of 8 Version 2.2 31 January, 2013 CONTENTS DOCUMENT CONTROLS........................................................................................................................................... 2 CHANGE RECORD .................................................................................................................................................. 2 APPROVAL ............................................................................................................................................................. 2 DISTRIBUTION ........................................................................................................................................................ 2 1.OBJECTIVE ................................................................................................................................................... 3 A)INTENT .......................................................................................................................................................... 3 B)SCOPE .......................................................................................................................................................... 3 C)CONSEQUENCES............................................................................................................................................ 3 D)EXCEPTIONS.................................................................................................................................................. 3 E)MUNICIPAL ORDINANCE .................................................................................................................................. 4 2.RESPONSIBILITIES OF CITY STAFF ................................................................................................................. 4 A)RESPONSIBILITY OF CIO AND ISM .................................................................................................................. 4 B)RESPONSIBILITY OF INFORMATION SECURITY STEERING COMMITTEE ............................................................... 4 C)RESPONSIBILITY OF USERS ............................................................................................................................ 4 D)RESPONSIBILITY OF INFORMATION TECHNOLOGY (IT) MANAGERS .................................................................... 5 E)RESPONSIBILITY OF AUTHORIZATION COORDINATION ...................................................................................... 5 3.PRIVACY POLICY .......................................................................................................................................... 5 A)OVERVIEW..................................................................................................................................................... 5 B)PERSONAL INFORMATION AND CHOICE ............................................................................................................ 5 C)METHODS OF COLLECTION OF PERSONAL INFORMATION .................................................................................. 5 D)UTILITIES SERVICE ......................................................................................................................................... 6 E)PUBLIC DISCLOSURE ...................................................................................................................................... 6 F)ACCESS TO PERSONAL INFORMATION ............................................................................................................. 6 G)SECURITY, CONFIDENTIALITY AND NON-DISCLOSURE ...................................................................................... 6 H)DATA RETENTION / INFORMATION RETENTION ................................................................................................. 7 I)SOFTWARE AS A SERVICE (SAAS) OVERSIGHT ................................................................................................ 7 J)FAIR AND ACCURATE CREDIT TRANSACTION ACT OF 2003 (FACT) .................................................................. 7 4.CONTACTS ................................................................................................................................................... 8 DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Technology Information Security Services Information Privacy Policy Page 2 of 8 Version 2.2 31 January, 2013 DOCUMENT CONTROLS Document Title Information Privacy Policy Location City of Palo Alto Website and SharePoint Document Author Raj Patel Document Manager Raj Patel Contributors Jonathan Reichental, Shiva Swaminathan, Tom Auzenne, Joe Blackwell, Grant Kolling CHANGE RECORD Date Author Version Change Reference 12-Jul-12 Raj Patel 0.01 First draft developed 26-Sep-12 Raj Patel 1.0 First draft released for review 09-Nov-12 Raj Patel 1.5 Updated first draft for review 19-Nov-12 Raj Patel 1.6 Additional updates as identified 22-Nov-12 Raj Patel 1.7 Revised table of content 26-Nov-12 Raj Patel 1.8 Revised followed by review from Jonathan Reichental and Tom Auzenne 6-Dec-12 Raj Patel 1.92 Revised according to comments from Jonathan Reichental 14-Jan-13 Raj Patel 2.0 Revised according to comments from Grant Kolling 31-Jan-13 Raj Patel 2.2 Revised according to recommendations from Information Security Steering Committee APPROVAL Date Name Role Comments 06-Dec-12 Raj Patel Information Security Manager; Information Technology Department Approved 06-Dec-12 Jonathan Reichental CIO; Information Technology Department Approved 06-Dec-12 Tom Auzenne Assistant Director, Utilities Department Approved 14-Jan-13 Grant Kolling Senior Assistant City Attorney; City Attorney’s Office Approved 31-Jan-13 Information Security Steering Committee Sponsor Approved DISTRIBUTION Name Location City of Palo Alto Employees, Service Providers, Residents and Businesses City of Palo Alto Website and SharePoint DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Technology Information Security Services Information Privacy Policy Page 3 of 8 Version 2.2 31 January, 2013 1. Objective The City of Palo Alto (the “City”) strives to promote and sustain a superior quality of life for persons in Palo Alto. In promoting the quality of life of these persons, it is the policy of the City, consistent with the provisions of the California Public Records Act, California Government Code §§ 6250 – 6270, to take appropriate measures to safeguard the security and privacy of the personal (including, without limitation, financial) information of persons, collected in the ordinary course and scope of conducting the City’s business as a local government agency. These measures are generally observed by federal, state and local authorities and reflected in federal and California laws, the City’s rules and regulations, and industry best practices, including, without limitation, the provisions of California Civil Code §§ 1798.3(a), 1798.24, 1798.79.8(b), 1798.80(e), 1798.81.5, 1798.82(e), 1798.83(e)(7), and 1798.92(c). Though some of these provisions do not apply to local government agencies like the City, the City will conduct business in a manner which promotes the privacy of personal information, as reflected in federal and California laws. The objective of this Policy is to describe the City’s data security goals and objectives, to ensure the ongoing protection of the Personal Information, Personally Identifiable Information, Protected Critical Infrastructure Informationand Personally Identifying Information of persons doing business with the City and receiving services from the City or a third party under contract to the City to provide services. The terms “Personal Information,” “Protected Critical Infrastructure Information”, “Personally Identifiable Information” and “Personally Identifying Information” (collectively, the “Information”) are defined in the California Civil Code sections, referred to above, and are incorporated in this Policy by reference. A) INTENT The City, acting in its governmental and proprietary capacities, collects the Information pertaining to persons who do business with or receive services from the City. The Information is collected by a variety of means, including, without limitation, from persons applying to receive services provided by the City, persons accessing the City’s website, and persons who access other information portals maintained by the City’s staff and/or authorized third-party contractors. The City is committed to protecting the privacy and security of the Information collected by the City. The City acknowledges federal and California laws, policies, rules, regulations and procedures, and industry best practices are dedicated to ensuring the Information is collected, stored and utilized in compliance with applicable laws. The goals and objectives of the Policy are: (a) a safe, productive, and inoffensive work environment for all users having access to the City’s applications and databases; (b) the appropriate maintenance and security of database information assets owned by, or entrusted to, the City; (c) the controlled access and security of the Information provided to the City’s staff and third party contractors; and (d) faithful compliance with legal and regulatory requirements. B) SCOPE The Policy will guide the City’s staff and, indirectly, third party contractors, which are by contract required to protect the confidentiality and privacy of the Information of the persons whose personal information data are intended to be covered by the Policy and which will be advised by City staff to conform their performances to the Policy should they enjoy conditional access to that information. C) CONSEQUENCES The City’s employees shall comply with the Policy in the execution of their official duties to the extent their work implicates access to the Information referred to in this Policy. A failure to comply may result in DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Technology Information Security Services Information Privacy Policy Page 4 of 8 Version 2.2 31 January, 2013 employment and/or legal consequences. D) EXCEPTIONS In the event that a City employee cannot fully comply with one or more element(s) described in this Policy, the employee may request an exception from the application of the Policy. The request form will be developed, reviewed and administered by the City’s Information Security Manager (the “ISM”). The employee, with the approval of his or her supervisor, will provide any additional information as may be requested by the ISM. The ISM will conduct a risk assessment of the requested exception in accordance with guidelines approved by the City’s Chief Information Officer (“CIO”) and approved as to form by the City Attorney. The Policy’s guidelines will include at a minimum: purpose, source, collection, storage, access, retention, usage, and protection of the Information identified in the request. The ISM will consult with the CIO to approve or deny the exception request. After due consideration is given to the request, the exception request disposition will be communicated, in writing, to the City employee and his or her supervisor. The approval of any request may be subject to countermeasures established by the CIO, acting by the ISM. E) MUNICIPAL ORDINANCE This Policy will supersede any City policy, rule, regulation or procedure regarding information privacy. 2. RESPONSIBILITIES OF CITY STAFF A) RESPONSIBILITY OF CIO AND ISM The CIO, acting by the ISM, will establish an information security management framework to initiate and coordinate the implementation of information security measures by the City’s government. The City’s employees, in particular, software application users and database users, and, indirectly, third party contractors under contract to the City to provide services, shall by guided by this Policy in the performance of their job responsibilities. The ISM will be responsible for: (a) developing and updating the Policy, (b) enforcing compliance with and the effectiveness of the Policy; (c) the development of privacy standards that will manifest the Policy in detailed, auditable technical requirements, which will be designed and maintained by the persons responsible for the City’s IT environments; (d) assisting the City’s staff in evaluating security and privacy incidents that arise in regard to potential violations of the Policy; (e) reviewing and approving department-specific policies and procedures which fall under the purview of this Policy; and (f) reviewing Non-Disclosure Agreements (NDAs) signed by third party contractors, which will provide services, including, without limitation, local or ‘cloud-based’ software services to the City. B) RESPONSIBILITY OF INFORMATION SECURITY STEERING COMMITTEE The Information Security Steering Committee (the “ISSC”), which is comprised of the City’s employees, drawn from the various City departments, will provide the primary direction, prioritization and approval for all information security efforts, including key information security and privacy risks, programs, initiatives and activities. The ISSC will provide input to the information security and privacy strategic planning processes to ensure that information security risks are adequately considered, assessed and addressed at the appropriate City department level. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Technology Information Security Services Information Privacy Policy Page 5 of 8 Version 2.2 31 January, 2013 C) RESPONSIBILITY OF USERS All authorized users of the Information will be responsible for complying with information privacy processes and technologies within the scope of responsibility of each user. D) RESPONSIBILITY OF INFORMATION TECHNOLOGY (IT) MANAGERS The City’s IT Managers, who are responsible for internal, external, direct and indirect connections to the City’s networks, will be responsible for configuring, maintaining and securing the City’s IT networks in compliance with the City’s information security and privacy policies. They are also responsible for timely internal reporting of events that may have compromised network, system or data security. E) RESPONSIBILITY OF AUTHORIZATION COORDINATION The ISM will ensure that the City’s employees secure the execution of Non-Disclosure Agreements (NDA), whenever access to the Information will be granted to third party contractors, in conjunction with the Software as a Service (SaaS) Security and Privacy Terms and Conditions. An NDA must be executed prior to the sharing of the Information of persons covered by this Policy with third party contractors. The City’s approach to managing information security and its implementation (i.e. objectives, policies, processes, and procedures for information security) will be reviewed independently by the ISM at planned intervals, or whenever significant changes to security implementation have occurred. The CIO, acting by the ISM, will review and recommend changes to the Policy annually, or as appropriate, commencing from the date of its adoption. 3. PRIVACY POLICY A) OVERVIEW The Policy applies to activities that involve the use of the City’s information assets, namely, the Information of persons doing business with the City or receiving services from the City, which are owned by, or entrusted to, the City and will be made available to the City’s employees and third party contractors under contract to the City to provide Software as a Service consulting services. These activities include, without limitation, accessing the Internet, using e-mail, accessing the City’s intranet or other networks, systems, or devices. The term “information assets” also includes the personal information of the City’s employees and any other related organizations while those assets are under the City’s control. Security measures will be designed, implemented, and maintained to ensure that only authorized persons will enjoy access to the information assets. The City’s staff will act to protect its information assets from theft, damage, loss, compromise, and inappropriate disclosure or alteration. The City will plan, design, implement and maintain information management systems, networks and processes in order to assure the appropriate confidentiality, integrity, and availability of its information assets to the City’s employees and authorized third parties. B) PERSONAL INFORMATION AND CHOICE Except as permitted or provided by applicable laws, the City will not share the Information of any person doing business with the City, or receiving services from the City, in violation of this Policy, unless that person has consented to the City’s sharing of such information during the conduct of the City’s business as a local government agency with third parties under contract to the City to provide services. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Technology Information Security Services Information Privacy Policy Page 6 of 8 Version 2.2 31 January, 2013 C) METHODS OF COLLECTION OF PERSONAL INFORMATION The City may gather the Information from a variety of sources and resources, provided that the collection of such information is both necessary and appropriate in order for the City to conduct business as a local government agency in its governmental and proprietary capacities. That information may be gathered at service windows and contact centers as well as at web sites, by mobile applications, and with other technologies, wherever the City may interact with persons who need to share such formation in order to secure the City’s services. The City’s staff will inform the persons whose Information are covered by this Policy that the City’s web site may use “cookies” to customize the browsing experience with the City of Palo Alto web site. The City will note that a cookie contains unique information that a web site can use to track, among others, the Internet Protocol address of the computer used to access the City’s web sites, the identification of the browser software and operating systems used, the date and time a user accessed the site, and the Internet address of the website from which the user linked to the City’s web sites. Cookies created on the user’s computer by using the City’s web site do not contain the Information, and thus do not compromise the user’s privacy or security. Users can refuse the cookies or delete the cookie files from their computers by using any of the widely available methods. If the user chooses not to accept a cookie on his or her computer, it will not prevent or prohibit the user from gaining access to or using the City’s sites. D) UTILITIES SERVICE In the provision of utility services to persons located within Palo Alto, the City of Palo Alto Utilities Department (“CPAU”) will collect the Information in order to initiate and manage utility services to customers. To the extent the management of that information is not specifically addressed in the Utilities Rules and Regulations or other ordinances, rules, regulations or procedures, this Policy will apply; provided, however, any such Rules and Regulations must conform to this Policy, unless otherwise directed or approved by the Council. This includes the sharing of CPAU-collected Information with other City departments except as may be required by law. Businesses and residents with standard utility meters and/or having non-metered monthly services will have secure access through a CPAU website to their Information, including, without limitation, their monthly utility usage and billing data. In addition to their regular monthly utilities billing, businesses and residents with non-standard or experimental electric, water or natural gas meters may have their usage and/or billing data provided to them through non-City electronic portals at different intervals than with the standard monthly billing. Businesses and residents with such non-standard or experimental metering will have their Information covered by the same privacy protections and personal information exchange rules applicable to Information under applicable federal and California laws. E) PUBLIC DISCLOSURE The Information that is collected by the City in the ordinary course and scope of conducting its business could be incorporated in a public record that may be subject to inspection and copying by the public, unless such information is exempt from disclosure to the public by California law. F) ACCESS TO PERSONAL INFORMATION The City will take reasonable steps to verify a person’s identity before the City will grant anyone online access to that person’s Information. Each City department that collects Information will afford access to affected persons who can review and update that information at reasonable times. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E City of Palo Alto Information Technology Information Security Services Information Privacy Policy Page 7 of 8 Version 2.2 31 January, 2013 G) SECURITY, CONFIDENTIALITY AND NON-DISCLOSURE Except as otherwise provided by applicable law or this Policy, the City will treat the Information of persons covered by this Policy as confidential and will not disclose it, or permit it to be disclosed, to third parties without the express written consent of the person affected. The City will develop and maintain reasonable controls that are designed to protect the confidentiality and security of the Information of persons covered by this Policy. The City may authorize the City’s employee and or third party contractors to access and/or use the Information of persons who do business with the City or receive services from the City. In those instances, the City will require the City’s employee and/or the third party contractors to agree to use such Information only in furtherance of City-related business and in accordance with the Policy. If the City becomes aware of a breach, or has reasonable grounds to believe that a security breach has occurred, with respect to the Information of a person, the City will notify the affected person of such breach in accordance with applicable laws. The notice of breach will include the date(s) or estimated date(s) of the known or suspected breach, the nature of the Information that is the subject of the breach, and the proposed action to be taken or the responsive action taken by the City. H) DATA RETENTION / INFORMATION RETENTION The City will store and secure all Information for a period of time as may be required by law, or if no period is established by law, for seven (7) years, and thereafter such information will be scheduled for destruction. I) SOFTWARE AS A SERVICE (SAAS) OVERSIGHT The City may engage third party contractors and vendors to provide software application and database services, commonly known as Software-as-a-Service (SaaS). In order to assure the privacy and security of the Information of those who do business with the City and those who received services from the City, as a condition of selling goods and/or services to the City, the SaaS services provider and its subcontractors, if any, including any IT infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, while it performs such services and/or furnishes goods to the City, to the extent any scope of work or services implicates the confidentiality and privacy of the Information. These requirements include information security directives pertaining to: (a) the IT infrastructure, by which the services are provided to the City, including connection to the City's IT systems; (b) the SaaS services provider’s operations and maintenance processes needed to support the IT environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. The term “IT infrastructure” refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. Prior to entering into an agreement to provide services to the City, the City’s staff will require the SaaS services provider to complete and submit an Information Security and Privacy Questionnaire. In the event that the SaaS services provider reasonably determines that it cannot fulfill the information security requirements during the course of providing services, the City will require the SaaS services provider to promptly inform the ISM. J) FAIR AND ACCURATE CREDIT TRANSACTION ACT OF 2003 CPAU will require utility customers to provide their Information in order for the City to initiate and manage utility services to them. DocuSign Envelope ID: 7D3E0171-D83E-471D-8079-07019CE72A6E Interim Chief Information Officer: Numoto, Darren <Darren.Numoto@CityofPaloAlto.org> Deputy City Attorney: Bartell, Amy <Amy.Bartell@CityofPaloAlto.org> Attachment A Response to Council Member Tanaka’s Questions Submitted April 15, 2019 Some additional background / clarification with respect to the questions: this program is designed for Multi-Unit Dwelling (MUD) properties and not for single family homes. 42% of residents are renters. Surveys show about 80% of people charge at home. To positively impact the numbers of EV owners in Palo Alto among the renter population, the City needs to demonstrate to property owners of rental properties (as opposed to the residents of those properties) the benefits of installing EV chargers. And given the complexity of MUD installations, providing installation assistance will also help. The average cost of installing a commercial use grade EV charger ranges from about $10,000-$15,000 per charging port. Staff expects each property on average to install 4 ports which would typically cost about $40,000 to $60,000 (assuming no electrical panel or transformer upgrades are required). The services provided by CLEAResult are projected to lower installation related costs by $4,000-$6,000/site by providing electrical load calculations, EV charging installation design and permit assistance. There is an industry-recognized need that this market segment needs additional encouragement and assistance. The investor-owned utilities like PG&E and the Community Choice Aggregators (CCAs) are also developing similar MUD focused programs for their service territories. This contract is being paid for completely from Low Carbon Fuel Standard (LCFS) funding, which is money that the City received from the California Air Resources Board for the sole purpose of helping to expand the use of EVs and EV infrastructure. Questions and Answers Question 1: As all of the contractors are very experienced, wouldn’t it make sense to select the cheaper option? As noted above, MUD installations are much more complex than single-family installations, and require strong customer and governmental relationship skills as well as technical skills. Clearesult’s proposal provided all the services staff requested, and at a moderate cost. The lowest cost proposers either did not propose on the full range of services staff wanted them to provide, or conditioned their proposal on customer participation in data aggregation services. Staff did not believe we could require our customers to participate in these services as a condition of participation in the program. Question 2: Given the low difficulty of the work, what difference does hiring a more experienced contractor make? As noted above, MUD installations are much more complex and costly than single family installations. The process requires engineers to do load calculations and site designs. The City permitting process is, by necessity, more complex for these projects as well. Staff has not seen that many MUDs participate in its existing EV charger rebate program despite the fact that the City offers rebates up to $18,000. The average property owner, although interested in installing EV chargers, can find it overwhelming to navigate the process. Staff saw a need for a service provider like CLEAResult to offer assistance and advice throughout the process. Attachment A Question 3: Why was Chargepoint technologies excluded, especially when they are providing the chargers? The program does not specify hardware and does not preclude Chargepoint. It will be up to the property owner to select the brand of EV charger. Chargepoint did respond to the RFP but their proposal was incomplete and did not meet the minimum requirements. Question 4: What is the point of education, consultation, and management, when these people already want chargers for their residences? This is a program for MUDs and non-profits. The educational component will be targeted to the property owners, HOAs, and property management companies rather than the residents themselves. Where there is interest from the property owners/managers, the consultant will focus mainly on process assistance. Where there is interest from residents, but the property owner/manager is unsure or needs to learn more, education and consultation would be appropriate. The program is intended to demonstrate to property owners that there are benefits to having EV chargers at their facilities and that assistance from the City’s consultant can make the learning curve much quicker and the out of pocket expense much smaller. There is an industry recognized need that this market segment needs additional encouragement and assistance. For example, the educational component of this contract was inspired by an educational program offered to MUDs by a neighboring Community Choice Aggregator, Peninsula Clean Energy, in San Mateo County. Question 5: Of the chargers that are being built, how many are low income, especially given how low income residents are only 2%, and from within that 2%, an even smaller subset that has to both own electric vehicles and live in these multifamily residences that have applied for this program are affected? Staff estimates there are 41 low income MUDs in Palo Alto with 1,800+ units. Staff is hoping to reach at least 10 of these properties. Parking regulations are a significant barrier for these properties, but the Department of Planning and Community Environment is looking into ways to accommodate EV chargers in the parking regulations more effectively. At least one affordable housing property manager with multiple properties has expressed interest in this program. Question 6: A level two charger in a home costs $1,000 dollars to put in place for a single family residence. Why are we paying $1,630 dollars (at best), and at worst, $3,261 dollars per charger, just for advice? There is a much higher cost for installations at MUDs, as noted above. Question 7: Where does the $150 thousand dollars in extra cost go to? This is a $150,000 enabling agreement to allow for future additional EV-related consulting services if needed. Projects could include: • A pilot program promoting Low to Moderate Income access to EVs • City EVSE permitting and interconnection approval process improvements • Consulting related to expanding the City’s EV fleet • Consulting related to ensuring that new EVSE is configured to enable services like demand response that could help with grid operation. These additional services would be funded from existing EV-related budgets. If any new funding sources were required (which would impact electric rates), it would require Council approval before any actual spending occurred. Attachment A Question 8: Even after addressing some of the challenges that result in adoption of EV charging ports in these MUDs through this plan, and the rebate program, what else is being done? In addition to this program with CLEAResult, the City currently has a direct rebate program offering up to $18,000 for MUDs and $30,000 to non-profits to upgrade infrastructure and install EV chargers in shared parking spaces. Staff is working on a point of sale EV rebate for residents through a statewide program using the City’s Low Carbon Fuels Standard Funds. Staff is exploring several other programs including Council Member Tanaka’s recent suggestions to encourage the adoption of E-scooters and E-bikes. City of Palo Alto (ID # 10289) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Department Director Appointments Title: Approval of the Appointment of Kiely Nose as Director of Administrative Services (Chief Financial Officer,) Dean Batchelor as Director of Utilities, and Kristen O'Kane as Director of Community Service s From: City Manager Lead Department: Human Resources Recommendation The City Manager recommends that Council approve the appointments of (1) Kiely Nose as Director of Administrative Services (Chief Financial Officer); (2) Dean Batchelor as Director of Utilities; and (3) Kristen O’Kane as Director of Community Services. Background The Palo Alto Charter and Municipal Code establish the City Manager as the appointing authority for all officers, department directors, and employees under the City Manager’s control. The Charter and Municipal Code additionally specify that appointments of department heads are subject to the approval of the Council. As such, the City Manager is requesting that Council approve his selections to the positions of Director of Administrative Services (Chief Financial Officer), Director of Utilities, and Director of Community Services. These positions became vacant as a result of a retirement and other internal promotions. Discussion The City Manager requests approval of appointments to the following director positions1: • Kiely Nose to Administrative Services Director (Chief Financial Officer); • Dean Batchelor to Utilities Director; and • Kristen O’Kane to Community Services Director. 1 Department Director responsibilities are specified in Palo Alto Municipal Code as follows: 2.08.150 Administrative Services (Chief Financial Officer); 2.08.200 Utilities; and 2.08.210 Community Services. City of Palo Alto Page 2 Each of the employees listed above have proven their ability to successfully fulfill higher level duties. The City Manager’s selections are based upon each employee’s efficacy, excellent managerial abilities, quality work product, and alignment to City values and principles. In regard to these promotional appointments: • Kiely Nose joined the City of Palo Alto in October 2015 with the Office of Management and Budget (OMB) and has served as the Director of OMB since 2016. Kiely was appointed Interim Director of Administrative Services (Chief Financial Officer) in July 2018. Kiely earned her degree in Political Science and Economics from Santa Clara University and has held positions with the City of San Jose and OpenGov (a government sector start-up) prior to her arrival at Palo Alto. She has 10 years of experience and expertise in governmental budgeting and management practices. • Dean Batchelor has served in Palo Alto’s Utilities Department for approximately 10 years. Dean promoted from Assistant Director of Utilities to Chief Operating Officer in October 2016. In January of this year, Dean was appointed to Acting Utilities Director when the Director position became vacant. Dean earned his degree in Business Administration at Cal State Long Beach and has over 35 years of experience in power, water, gas, wastewater and telecommunications in both investor-owned and municipal environments. Dean’s experience includes 15 years with PG&E, where he served as the Corporate Director for Field Services Training. After PG&E, Dean worked with Alameda Power and Telecom, where he was the Assistant General Manager of Operations. • Kristen O’Kane joined Palo Alto in 2015 as the Assistant Director of Community Services and has served as the Chief Operating Officer (COO) since April 2018. As COO of Community Services, Kristen has worked with the Interim Community Services Director/Library Director Monique leConge Ziesenhenne in a collaborative effort to better coordinate services between Community Services and Libraries. Kristen came to Palo Alto following more than 11 years with the Santa Clara Valley Water District, where she managed watershed field operations and environmental regulatory programs. Kristen served on the City of San Jose’s Parks and Recreation Commission/Parks and Recreation Bond Oversight Committee from 2011-2013. Kristen’s educational background includes a bachelor’s degree in Nuclear Medicine and a master’s degree in Environmental Studies from San Jose State. These internal promotions are a testament to the strong culture of professional development and succession planning in the Palo Alto workforce. In addition to bringing strong skills to their interim assignments, Kiely, Dean and Kristen participated as a cohort in an accelerated executive development program hosted by former City Manager James Keene and current City Manager Ed Shikada. The executive development program is an intensive 12-week series and the first of its kind in this region. The program includes conversational leadership lessons, an executive book club, tactical skill-building and personalized executive feedback, coaching and mentoring. City of Palo Alto Page 3 These internal promotions will provide stability and leadership to the organization, as the Executive Leadership Team has experienced high turnover in the past year due to retirements, departures to private sector and other agencies. Once these appointments are made, the City Manager will focus on filling four additional vacancies on the Executive Leadership Team. The appointee salaries are as follows: Salary Upon Appointment Maximum Salary for the Position Utilities Director Dean Batchelor $268,225 $322,755 Administrative Services Director (CFO) Kiely Nose $230,000 $246,210 Community Services Director Kristen O’Kane $216,000 $248,102 Resource Impact Each of these positions is included in both the current FY 2019 Budget and the Proposed FY 2020 Budget. Therefore, no budget modifications or additional funding are necessary. Attachments: • Attachment A: Director Duties (ASD, UTL and CSD) City of Palo Alto (ID # 10290) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Employment Agreement Amendment Title: Approval of Amendment Number 1 to the Employment Agreement Between the City of Palo Alto and Police Chief Robert Jonsen From: City Manager Lead Department: Human Resources Recommendation The City Manager recommends that Council approve Amendment One to the Employment Agreement by and between the City of Palo Alto and Police Chief Robert Jonsen. Discussion The City’s Police Chief was hired in January 2018 under an employment agreement that includes an 18-month housing stipend of $3,000 per month. The Police Chief applies the housing stipend toward a rental apartment within Palo Alto city limits. The City Manager included the housing stipend for Chief Jonsen to live and fully immerse himself in the city of Palo Alto. This residency allows the Police Chief to attend late meetings, be more available to his staff, participate in community events and to be accessible in the event of an emergency. The housing stipend is due to end in June 2019. Upon evaluation of this arrangement, the City Manager requests to continue the housing stipend, as there is benefit to the organization and community to have the Police Chief live in Palo Alto. The housing stipend is a taxable benefit. The Chief is responsible to pay the taxes on the stipend and to cover the remaining balance of the apartment rental, plus utilities and related expenses. Chief Jonsen is agreeable to maintaining residency in Palo Alto and he has not requested an increase in the stipend. The housing stipend will continue at a flat rate of $3,000 per month as a taxable amount. Fiscal Implications The housing stipend of $3,000 per month ($36,000 per year) is not included in current financial planning for FY 2020 or beyond. It is recommended that the Police Department absorb these costs in FY 2020 operating budget and future financial planning such as the FY 2021-2030 Long Range Financial Forecast will factor in an annual expense of $36,000. Attachments: City of Palo Alto Page 2 • Attachment A: Jonsen Employment Agreement Amendment One AMENDMENT NO. ONE TO EMPLOYMENT AGREEMENT BETWEEN CITY OF PALO ALTO AND ROBERT JONSEN THIS AMENDMENT NO. ONE TO THE EMPLOYMENT AGREEMENT is entered into on May 7, 2019 by and between the City of Palo Alto, a municipal corporation and chartered city ("City") and Robert Jonsen ("Jonsen”). RECITALS WHEREAS, the original EMPLOYMENT AGREEMENT between the City of Palo Alto and Robert Johnson, attached hereto and incorporated as Exhibit “A” was entered into between the parties for the services of Police Chief on or about 1, 09, 2018. WHEREAS, the parties wish to amend the Agreement by removing the end date of the Housing Stipend, so that the Housing Stipend continues through the term of the Agreement. NOW, THEREFORE, in consideration of the covenants, terms, conditions and provisions of this Amendment, the parties agree: SECTION 1: Section 5.2 of the Agreement, Housing Stipend, is hereby amended to read as follows: 5.2. Housing Stipend. So long as Jonsen resides in Palo Alto, the City will provide Jonsen with a total amount of three thousand dollars ($3,000.00) per month for eighteen (18) months, subject to authorized or required deductions and withholding, as a housing stipend. JONSEN ___________________________ Robert Jonsen Date: _____________ CITY OF PALO ALTO ___________________________ City Manager Date: _____________ APPROVED AS TO FORM: ___________________________ Chief Assistant City Attorney CITY OF PALO ALTO CITY OF PALO ALTO Memorandum COUNCIL MEETING ~ May 6, 2019 1 Q -IZl-R-ec-e-iv-e"""'d-B .... ef-o-re-M-ee-t-in-g TO: HONORABLE CITY COUNCIL FROM: DATE: SUBJECT: CITY MANAGER DEPARTMENT: CITY MANAGER May6, 2019 ID# 10290 Item # 10: Approval of Amendment 1 to the Employment Agreement Between the City of Palo Alto and Police Chief Robert Jonsen Staff recommends a revision to the recommended Amendment 1 to the Employment Agreement. This Amendment relates to a larger City interest in workforce retention strategies applicable to various categories of employees. In order to complete a more comprehensive review of options and development of additional strategies,.including possible subsequent Council action, it would be appropriate to continue the Housing Stipend for a limited period. The Amendment will therefore be revised to extend the Housing Stipend for one additional year, through June 2020. ED SHIKADA City Manager City of Palo Alto (ID # 10321) City Council Staff Report Report Type: Consent Calendar Meeting Date: 5/6/2019 City of Palo Alto Page 1 Council Priority: Transportation and Traffic Summary Title: 2nd Reading - TIF Ordinance Update Title: SECOND READING: Adoption of an Ordinance Amending Title 16 of the Palo Alto Municipal Code to Modify and Increase the Citywide Transportation Impact Fee (Chapter 16.59) and Suspend Application of the Existing Area Specific Transportation Impact Fees for the Stanford Research Park/El Camino Real CS Zone (Chapter 16.45) and the San Antonio/West Bayshore Area (Chapter 16.46), and Amending the Municipal Fee Schedule to Update the City’s Transportation Impact Fees in Accordance With These Changes, all in Furtherance of Implementation of the Comprehensive Plan. The Citywide Transportation Impact Fee is a one-Time fee on new Development and Redevelopment Throughout Palo Alto to Fund Transportation Improvements to Accommodate and Mitigate the Impacts of Future Development in the City. This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720 (FIRST READING: April 22, 2019, PASSED: 5-2 DuBois, Kou no) From: City Manager Lead Department: Transportation Recommendation Staff recommends that Council conduct a second reading and adopt the attached ordinance (Attachment A). Background This ordinance amending Title 16 of the Palo Alto Municipal Code (PAMC) and amending the Municipal Fee Schedule to update the City’s Transportation Impact Fees was first heard by Council on April 22, 2019, and approved with three amendments (Staff Report #9531). The ordinance amends Title 16 of the PAMC to modify and increase the Citywide City of Palo Alto Page 2 Transportation Impact Fee and to suspend application of two area-specific fees, the Stanford Research Park/El Camino Real CS Zone and the San Antonio/West Bayshore Area. The ordinance also amends the Municipal Fee Schedule to align it with these changes. Below is a summary of the changes made for the second reading: • Per item B of the adopted motion, restored the following exemptions in existing PAMC Section 16.59.040 (Exemptions): (a) City buildings or structures, and (b) Public school buildings or structures; and re-numbered the following exemptions. • Per item B of the adopted motion, revised the exemption for Accessory Dwelling Units (ADU) to apply to all ADUs. (See revised PAMC Section 16.59.040(e).) • Per item C of the adopted motion, revised the new language in PAMC Section 16.59.020(h) to state: "New development" shall mean the construction of new structures or additions to existing structures in the city and, with respect to residential development, any development project that creates additional residential units. "New development" shall not mean replacement or expansion of an existing residential unit. With respect to nonresidential development, "new development" shall also mean any development project that creates additional gross floor area, or involves a change in use that requires a use permit or other planning approval. • Revised SECTION 5 and SECTION 8 of the Ordinance to remove the specific anticipated date that the Ordinance will become effective and to instead simply state that the Ordinance will become effective on the 60th day after its adoption under existing law. The revised language is standard language for ordinances adopting or increasing development impact fees like the Citywide Transportation Impact Fee. The adopted motion is below. SUBSTITUTE MOTION: Vice Mayor Fine moved, seconded by Council Member Kniss to: A. Find the Ordinance to be within the scope of the Comprehensive Plan Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution Number 9720; B. Accept the Transportation Impact Fee Nexus Study and adopt the Ordinance modifying and increasing the Citywide Transportation Impact Fee, clarifying the updated TIF exemptions, including the addition of an exemption for public buildings, schools and all ADUs, suspending collection of two area-specific transportation impact fees, and amending the FY 2019 Municipal Fee Schedule; and City of Palo Alto Page 3 C. Amend the Ordinance Section 16.59.020 (h) to state “…gross floor area, or involves a change in use that requires a use and occupancy permit.” MOTION PASSED: 5-2 DuBois, Kou no ATTACHMENT Ordinance Attachments: • Attachment A: Transportation Impact Fee TIF Ordinance Not Yet Adopted SL(ts)/ ORD Transportation Impact Fee Ordinance version 4-9-19 1 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Title 16 of the Palo Alto Municipal Code By Establishing an Updated Citywide Transportation Impact Fee and Indefinitely Suspending Application of the Existing Area- Specific Transportation Impact Fees for the Stanford Research Park/El Camino Real CS Zone and the San Antonio/West Bayshore Area, and Amending the Municipal Fee Schedule to Update the City’s Transportation Impact Fees in Accordance with these Changes, All in Furtherance of Implementation of the Comprehensive Plan, Including Policy T-1.25 and Programs T1.2.2 and T1.25.1 The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. On November 13, 2017, the City Council adopted an update to the City of Palo Alto Comprehensive Plan to guide projected growth and development within the City through 2030. As described in the certified Final Environmental Impact Report (EIR) for the Comprehensive Plan Update, new development would worsen traffic congestion and result in significant environmental impacts related to transportation. The Final EIR also identified mitigation measures to address those impacts, which were adopted by the Council and are reflected in the Comprehensive Plan’s policies and programs as well as the adopted Mitigation Monitoring and Reporting Program. B. The Comprehensive Plan includes a policy (T-1.25) to pursue funding opportunities for ongoing transportation improvements that will help mitigate impacts of future development and protect residents’ quality of life. To implement that policy, the Comprehensive Plan includes a program (T1.25.1) to regularly evaluate the City’s existing transportation impact fee and modify it as needed to implement transportation infrastructure improvements. This program provides that “[m]odifications to the impact fee program should be structured in keeping with the City’s desire to require new development to reduce peak hour motor vehicle trips to the extent feasible through TDM plans and by contributions to the provision of transit services, shuttles, carpool/rideshare incentives and similar programs.” C. The Comprehensive Plan also includes a program (T1.2.2) to require new developments to implement transportation demand management (TDM) plans to achieve identified targets in vehicle trip generation, and to require payment of a transportation impact fee for those peak hour vehicle trips that cannot be reduced through TDM measures. D. Consistent with the Comprehensive Plan, the Council desires to implement the identified policy and programs and adopt an updated citywide transportation impact fee to offset the traffic impacts from new development throughout Palo Alto. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 2 E. The City has prepared a study entitled “City of Palo Alto Transportation Fee Nexus Study” dated April 9, 2019 and accepted by the City Council on April 22, 2019 (hereinafter the “Nexus Study”), which specifies transportation improvements required to serve future development and recommends the amount of the impact fee on new development. The Nexus Study is available for public inspection during normal business hours at the Office of the City Clerk at 250 Hamilton Avenue, 1st Floor, Palo Alto, California, and the Planning & Community Environment Department at 250 Hamilton Avenue, 5th Floor, Palo Alto, California. The City Council has reviewed the Nexus Study and accepts the findings and conclusions of the study. F. The Nexus Study concluded that all new land uses in Palo Alto will generate an increased demand for transportation infrastructure and services, and recommended that the citywide transportation impact fee apply to both residential and non-residential development in the city. While the Nexus Study found that all new land uses will generate this increased demand for transportation, the Council finds that it is in the public interest to exempt some uses from payment of the fee, in order to promote other important City policies and priorities, such as 100% affordable housing developments. G. The improvements specified in the Nexus Study are intended to mitigate those traffic impacts identified in the Final EIR for the Comprehensive Plan and other recent traffic studies, and achieve a balanced transportation network. The range of improvements includes bicycle and pedestrian facilities, as well as intersection and roadway improvements, and is rooted in the City’s policies of encouraging alternative mode use, discouraging single-occupant vehicle trips, improving traffic flow without major capacity enhancements, and encouraging motorists to use arterials rather than local residential streets. The cost estimates for the improvements in the Nexus Study are planning-level estimates and will be adjusted over time as more detailed engineering, design and other project-level work is completed. H. The fee rates charged herein are no higher than necessary to cover the reasonable costs of providing transportation infrastructure to the population associated with new development, such as residents, visitors, employees and customers. The impact fees shall be used in accordance with the Planning and Zoning Law, California Government Code Section 65913.8 and the Mitigation Fee Act, California Government Code Section 66001, et seq. I. Based on the above findings and the Nexus Study, the City determines that the Citywide Transportation Impact Fee satisfies the requirements of the Mitigation Fee Act, California Government Code Section 66001, et seq. as follows: (1) The purpose of the fee is to help meet the demands imposed on the City’s transportation network by new development projects. (2) Funds from the collection of the fee will be used to meet the demand for pedestrian and bicycle infrastructure, as well as roadway and intersection improvements, generated by new development. (3) There is a reasonable relationship between the proposed uses of the fee and the impacts of the development projects subject to the fee on the transportation network in the city. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 3 (4) There is a reasonable relationship between the types of development projects on which the fee will be imposed and the need to fund transportation network improvements. (5) There is a reasonable relationship between the amount of the fee to be imposed on the development projects and the impact on the transportation network resulting from such projects. J. The City currently has several transportation impact fees – one citywide fee, and three that are specific to certain geographical areas of the city – which were adopted over time to fund different sets of improvements. The Council desires to transition to a single citywide transportation impact fee, and cease collection of the fees established in Chapters 16.45 (Stanford Research Park/El Camino Real CS Zone) and 16.46 (San Antonio/West Bayshore Area) of the Code with the remaining funds to be applied to planned improvements in the covered geographical areas as identified by the Chief Transportation Official and subject to approval of the Council, as provided for in the Municipal Code. One area-specific fee, for Charleston- Arastradero Corridor Pedestrian and Bicyclist Safety improvements, would remain in effect until the identified improvements are constructed. This Ordinance amends and updates the existing citywide transportation impact fee consistent with the Comprehensive Plan and the Nexus Study. SECTION 2. Chapter 16.59 (Citywide Transportation Impact Fee) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby amended to read as follows: 16.59.010 Short title. This chapter may be referred to as the "Citywide Transportation Impact Fee Ordinance." 16.59.020 Definitions. For the purposes of this chapter, the following definitions shall apply: (a) "Affordable unithousing" shall have the meaning provided in Section 16.65.020 of this Title mean housing with a purchase price or rent that is affordable to a "moderate," "low" or "very low" income household, as those terms are defined by the California Department of Housing and Community Development, as applicable to Santa Clara County. (b) "Citywide transportation capacity enhancements" shall mean public facilities and services that relieve citywide traffic congestion caused by new development projects. Citywide transportation capacity enhancements include, but are not limited to, advanced transportation management and information systems, expanded shuttle transit services, and bicycle and pedestrian improvements, and roadway and intersection improvements. Citywide transportation capacity enhancements do not include (i) intersection improvements designed primarily to accommodate increased traffic generated by a specific development or (ii) the addition of through-traffic lanes designed for primary use by private motorized vehicles. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 4 (c) "Construction cost index" shall mean the construction cost index for the San Francisco Bay Area set forth in the Engineering News Record published by McGraw Hill and Associates. In the event the Engineering News Record ceases to calculate and publish this index, then the city manager may designate a comparable, alternative index to serve as the construction cost index. (d) "Eligible citywide transportation capacity enhancements" shall mean (i) the citywide transportation capacity enhancements identified in the most recent citywide transportation impact fee nexus study approved by the city council, and (ii) other citywide transportation capacity enhancements that are approved by the city council that may be substituted for an identified improvement or service because they will mitigate similar congestion. (e) "Existing development" shall mean structures present (at the time the amount of the fee is calculated) and in use (within the two years prior to the time the amount of the fee is calculated) on parcels upon which new development is planned to occur. Where it is necessary to project PM peak hour vehicle trips generated by existing development, such projection shall be made based on either (i) the trip generation estimates used to determine the fee owed with respect to such existing development when the fee was last paid with respect to such existing development or (ii) if the fee has not been paid with respect to such existing development (or any portion thereof), the most recent use of the existing development. (f) "Fee" shall mean the citywide transportation impact fee imposed pursuant to this chapter. (g) Any reference in this chapter to the "Government Code" or to a section of the "Government Code" shall refer to the California Government Code as it exists at the time this ordinance chapter is applied and shall include amendments to that codethe Government Code made subsequently to the adoption of this chapter, it being the intent of the city to maintain the fee in compliance with applicable law. (h) "New development" shall mean the construction of new structures or additions to existing structures in the city and, with respect to residential development, any development project that creates additional residential units. "New development" shall not mean replacement or expansion of an existing residential unit. With respect to nonresidential development, "new development" shall also mean any development project that creates additional square footage of useful areagross floor area or involves a change in use that requires a use permit or other planning approval. (i) "Transportation Impact Analysis Guidelines" shall mean the most recent edition of the "Transportation Impact Analysis Guidelines" promulgated by the Valley Transportation Authority or such other trip projection methodology adopted by the city for the purpose of traffic impact analysis reports. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 5 16.59.030 Fee imposed. The fee is hereby imposed as a condition of the issuance of any permit for any new development, unless expressly exempted by this chapter. 16.59.040 Exemptions. The provisions of this chapter shall not apply to: (a) City buildings or structures. (b) Public school buildings or structures. (c) Affordable housing units, either for sale or rental, that exceed the minimum number required for projects under the city’s below market rate (BMR) housing program or other provisions of this code, which units are, by recordable means, is permanently obligated to be and remain 100% affordable units for a period consistent with the requirements of Section 16.65.075(c) of this code. (d) Retail service, eating and drinking service, personal service, or automotive service when the total square footage (including new development) is 1,500 square feet or less. (ed) Day care centers used for childcare, nursery school or preschool education. (f) Below market rate housing units above and beyond the minimum number required for projects subject to the city's below market rate (BMR) housing program. The additional units must be offered and constructed consistently with the requirements of the BMR program. (ge) Accessory dwelling units (ADU) established by the conversion of an existing garage or carport, provided that the existing garage or carport was legally constructed, or received building permits, as of January 1, 2017, and is converted to an ADU with no expansion of the existing building envelope. (hf) Junior accessory dwelling units (JADU). (i) A change in tenancy that does not result in a change in use and which does not involve either (i) a demolition of an existing structure or (ii) an expansion of square footage of useful area. (jg) New development which is exempt from the fee by virtue of the Constitutions of the United States and or California or by virtue of other applicable state or federal law. 16.59.045 Application of fee to projects in the approval process at effective date. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 6 The fee shall apply to development projects that are in the approval process at the effective date of this Section, except as modified herein. A project that has its final planning permit before the effective date of this Section and was exempt from the fee at the time of that permit’s issuance shall not be subject to the fee. 16.59.050 Timing of payment. (a) The fee shall be paid as set forth in Chapter 16.64 of this code. (b) A credit against the fee may be given for dedications of eligible citywide transportation capacity enhancements constructed or provided at private expense and for the value of land dedicated to the city that is necessary or useful to an eligible citywide transportation capacity enhancement. Such credit will be granted only if the city council determines that: (i) the city will experience a substantial cost savings or service quality improvement as a result of private construction or provision of the capacity enhancement or the dedication of land, (ii) the capacity enhancement can be expected to immediately and significantly relieve citywide traffic congestion, and (iii) the grant of the credit, in lieu of the fee, will not cause the city to delay the implementation of elements of the city’s transportation plan that are of higher priority, in the judgment of the city council, than the land or capacity enhancement that will be dedicated. The credit shall be applied at the time the city accepts the land or capacity enhancement. Where the city council has made the determinations required by this subdivision, payment of a portion of the fee equal to the amount of an expected credit against the fee may be deferred to the date of final building inspection approval of the development, provided the owner of the real property for which the fees are required enters into a recordable agreement with the city prior to issuance of the building permit for the development, which from the date of recordation, shall constitute a lien on the property and shall be enforceable against successors in interest to the property owner. The agreement shall provide that final occupancy approval shall not be given until the credit is applied and any remainingthe fees are paid or the credit issued. The agreement shall also provide that, in any action to collect the fees or any portion thereof, the city shall be entitled to all of its costs of enforcement and collection, including reasonable attorney’s fees. The director of planning and community environment may execute the agreement on behalf of the city in a form acceptable to the city attorney. Any deferral granted pursuant to this paragraph (b) shall be consistent with the requirements of Government Code Section 66007. Where a credit is given for the provision of a service that is an eligible capacity enhancement, the deferral of the fee, and the application of the credit, may be according to a schedule set forth in the recorded agreement, which schedule shall be designed to ensure that no credit is applied in advance of the provision of services for which the credit is made.In no event shall a credit exceed the amount of the fee, and the city shall have no obligation to make payment to or otherwise compensate a developer or applicant if the value of the dedication exceeds the fee amount. 16.59.060 Calculation of fee. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 7 (a) The fee imposed upon a new development shall be calculated by multiplying (i) the number of net new PM peak hour vehicle trips projected to be generated by a new development by (ii) the current fee rate. (b) The number of net new PM peak hour vehicle trips projected to be generated by a new development shall be calculated by subtracting the projected PM peak hour vehicle trips generated by existing development on the parcel(s) to contain the new development from the projected PM peak hour vehicle trips generated by the new development (including any existing structures to remain on the parcel after the construction of the new development). In no event shall a new development be projected to generate less than zero new PM peak hour vehicle trips as a result of this calculation. (c) For purposes of subsection (b), the number of PM peak hour vehicle trips projected to be generated by a new development shall be calculated pursuant to the transportation impact analysis guidelines. For development projects required to prepare, receive approval of, implement and monitor a transportation demand management (TDM) plan consistent with Comprehensive Plan Program T1.2.2, a target-based trip reduction approach allowed under the transportation impact analysis guidelines may be used, provided that the TDM plan is subject to an enforceable agreement approved by the city. (d) To the extent existing development on a parcel qualified qualifies as new development after the effective date of the most recent ordinance amending this section, but was exempt from the fee by virtue of Section 16.59.040 of this code in effect at the time the existing development was permitted, the PM peak hour vehicle trips projected to be generated by that existing development, shall not be subtracted (as otherwise required by subdivision (b) of this section) from the projected PM peak hour vehicle trips generated by the new development. (e) The rate of the fee shall be established from time to time by resolution or ordinance of the city council in the manner required by Government Code Sections 66004 and 66018. (f) The rate of the fee shall be subject to annual adjustment for inflation pursuant to Section 16.64.110. (g) The department of planning and community environment shall be responsible for the calculation of the fee at the time of plan review or when the fee is due, whichever is earlier. Applicants shall supply the city with the necessary information to calculate the fee in a format acceptable to the city. (h) The number of net new PM peak hour vehicle trips projected to be generated by a new development shall be calculated in a manner that accounts for peak hour vehicle trips expected to be reduced by any Transportation Demand Management (TDM) Plan approved or required by the city. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 8 (i) New retail service developments, as defined in Section 18.04.030(a)(125) of this code, shall be charged a fee at 50% of the ordinary rate set under subdivision (e) of this section. 16.59.070 Special fund. (a) There is hereby established a special fund, entitled the "Citywide Transportation Impact Mitigation Fund", into which all fee proceeds and any interest thereon shall be deposited. The fund shall be maintained as required by Government Code Section 66006. (b) Moneys in the fund shall be expended only on the installation, acquisition, and construction, maintenance and operation of eligible citywide transportation capacity enhancements. 16.59.080 Accountability measures. (a) At least annually and as required by Government Code Section 66006, the city manager, or his or her designee, shall review the estimated cost of the public improvements to be funded by the fee, the continued need for those improvements and the reasonable relationship between such need and the impacts of pending or anticipated new developments. The city manager, or his or her designee, shall report his or her findings to the city council at a noticed public hearing and recommend any adjustment to the fee or other action as may be needed. (b) The city council shall review such report in the manner required by Government Code Section 66006(b)(2). (c) To the extent required by Government Code Section 66001(d), the city council shall make the findings required by that section. 16.59.090 Enforcement and pPenalties. (a) Any person violating or failing to comply with any of the requirements of this chapter shall be subject to an administrative penalty or administrative compliance order as set forth in Chapters 1.12 and 1.16 of this code. (b) The city attorney shall be authorized to enforce the provisions of this chapter and all agreements entered into in accordance with this chapter, by civil action and any other proceeding or method permitted by law. (c) Each person is guilty of a separate offense for each and every day during any portion of which any violation of any provision of this chapter is committed, continued or permitted by such person. Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 9 (d) All remedies provided for in this section shall be cumulative and not exclusive and shall not preclude the city from any other remedy or relief to which it otherwise would be entitled under law or equity. (e) Failure of any official to fulfill the requirements of this chapter shall not excuse any person from the requirements of this chapter. (a) All remedies provided for in this chapter shall be cumulative and not exclusive. (b) Violation of any provision of this chapter, including, but not limited to, converting an exempt use to a use to which this chapter applies without paying the fee, is a misdemeanor punishable as provided in this code. (c) Each person is guilty of a separate offense for each and every day during any portion of which any violation of any provision of this chapter is committed, continued or permitted by such person. (d) Any person violating any provision of this chapter, including, but not limited to, converting an exempt use to a use to which this chapter applies, without paying the fee, shall be liable civilly to the city in a sum not to exceed five hundred dollars for each day in which such violation occurs. (e) Persons employed in the following designated employee positions are authorized to exercise the authority provided in the California Penal Code Section 836.5 and are authorized to issue citation for violations of this chapter: development services director, director of planning and community environment and their designee. SECTION 3. Collection of the fee established in Chapter 16.45 (Transportation Impact Fee for New Nonresidential Development in the Stanford Research Park/El Camino Real CS Zone) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby suspended. It is the Council’s intent to take further action to repeal the provisions of Chapter 16.45 upon expenditure of the collected funds. SECTION 4. Collection of the fee established in Chapter 16.46 (Approval of Projects with Impacts on Traffic in the San Antonio/West Bayshore Area) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby suspended. It is the Council’s intent to take further action to repeal the provisions of Chapter 16.46 upon expenditure of the collected funds. SECTION 5. The City Council hereby amends the Municipal Fee Schedule by amending the Citywide Transportation Impact Fee and deleting the Stanford Research Park/El Camino Real CS Zone and San Antonio/West Bayshore Area traffic impact fees, as shown in Exhibit "A", attached hereto and incorporated herein by reference. When effective, the fees as amended by this Ordinance shall supersede any prior inconsistent fees charged by the Department of Planning and Community Environment. The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 10 the payer’s burden on, or benefits received from, the governmental activity. Pursuant to Government Code Section 66017, these changes shall become effective sixty (60) days from the date of adoption. SECTION 6. The Council finds that the potential environmental impacts related to this Ordinance were analyzed in the Final EIR for the Comprehensive Plan Update, which was certified and adopted by the Council by Resolution No. 9720 on November 13, 2017. The Ordinance is consistent with and implements the program evaluated in the EIR. SECTION 7. Severability. If any section, subsection, sentence, clause, phrase or word of this Ordinance is for any reason held to be invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed and adopted this Ordinance, and each and all provisions hereof, irrespective of the fact that one or more provisions may be declared invalid. SECTION 8. This Ordinance shall be effective on the sixtieth (60th) day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Director of Planning and Community Environment ____________________________ Chief Transportation Official Not Yet Adopted 2019042302 TIF Ordinance – Second Reading 11 EXHIBIT A Municipal Fee Schedule Planning and Community Environment Traffic Impact Fees Stanford Research Park/El Camino Real CS Zone $12.42 per net sq. ft. San Antonio/West Bayshore area $2.56 per sq. ft. Citywide Transportation Impact Fee $3,575.007,886.00 per net new PM peak hour trip TO: FROM: DATE: CITY OF PALO ALTO HONORABLE CITY COUNCIL MOLLY STUMP, CITY ATTORNEY APRIL 25, 2019 STAFF REPORT #10321 11 SUBJECT: SECOND READING: ADOPTION OF AN ORDINANCE AMENDING TITLE 16 OF THE PALO ALTO MUNICIPAL CODE TO MODIFY AND INCREASE THE CITYWIDE TRANSPORTATION IMPACT FEE (CHAPTER 16.59} AND SUSPEND APPLICATION OF THE EXISTING AREA SPECIFIC TRANSPORTATION IMPACT FEES FOR THE STANFORD RESEARCH PARK/EL CAMINO REAL CS ZONE (CHAPTER 16.45} AND THE SAN ANTONIO/WEST BAYSHORE AREA (CHAPTER 16.46), AND AMENDING THE MUNICIPAL FEE SCHEDULE TO UPDATE THE CITY'S TRANSPORTATION IMPACT FEES IN ACCORDANCE WITH THESE CHANGES, ALL IN FURTHERANCE OF IMPLEMENTATION OF THE COMPREHENSIVE PLAN. THE CITYWIDE TRANSPORTATION IMPACT FEE IS A ONE-TIME FEE ON NEW DEVELOPMENT AND REDEVELOPMENT THROUGHOUT PALO ALTO TO FUND TRANSPORTATION IMPROVEMENTS TO ACCOMMODATE AND MITIGATE THE IMPACTS OF FUTURE DEVELOPMENT IN THE CITY. THIS ORDINANCE IS WITHIN THE SCOPE OF THE COMPREHENSIVE PLAN ENVIRONMENTAL IMPACT REPORT (EIR} CERTIFIED AND ADOPTED ON NOVEMBER 13, 2017 BY COUNCIL RESOLUTION NO. 9720 (FIRST READING: APRIL 22, 2019, PASSED: 5-2 DUBOIS, KOU NO} The ordinance attached to this memo replaces the ordinance included with the original packet for the second reading. Both the staff report and the ordinance attached to the staff report contained an error regarding the amendment to Palo Alto Municipal Code Section 16.59.020(h). The corrected ordinance reflects the language in the Council's approved motion (item C) to revise Section 16.59.020{h) to state: 1 of2 STAFF REPORT #10321 CI TY 0 F PALO ALTO "New development" shall mean the construction of new structures or additions to existing structures in the city and, with respect to residential development, any development project that creates additional residential units. "New development" shall not mean replacement or expansion of an existing residential unit. With respect to nonresidential development, "new development" shall also mean any development project that creates additional gross floor area. or involves a change in use that requires a use and occupancy permit. Sandra Lee Assistant City Attorney Attachment A: Revise Ordinance 2 of2 Not Yet Adopted Ordinance No. Ordinance of the Council of the City of Palo Alto Amending Title 16 of the Palo Alto Municipal Code By Establishing an Updated Citywide Transportation Impact Fee and Indefinitely Suspending Application of the Existing Area- Specific Transportation Impact Fees for the Stanford Research Park/El Camino Real CS Zone and the San Antonio/West Bayshore Area, and Amending the Municipal Fee Schedule to Update the City's Transportation Impact Fees in Accordance with these Changes, All in Furtherance of Implementation of the Comprehensive Plan, Including Policy T-1.25 and Programs Tl.2.2 and Tl.25.1 The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. On November 13, 2017, the City Council adopted an update to the City of Palo Alto Comprehensive Plan to guide projected growth and development within the City through 2030. As described in the certified Final Environmental Impact Report (EIR) for the Comprehensive Plan Update, new development would worsen traffic congestion and result in significant environmental impacts related to transportation. The Final EIR also identified mitigation measures to address those impacts, which were adopted by the Council and are reflected in the Comprehensive Plan's policies and programs as well as the adopted Mitigation Monitoring and Reporting Program. B. The Comprehensive Plan includes a policy (T-1.25) to pursue funding opportunities for ongoing transportation improvements that will help mitigate impacts of future development and protect residents' quality of life. To implement that policy, the Comprehensive Plan includes a program (Tl.25.1) to regularly evaluate the City's existing transportation impact fee and modify it as needed to implement transportation infrastructure improvements. This program provides that "[m]odifications to the impact fee program should be structured in keeping with the City's desire to require new development to reduce peak hour motor vehicle trips to the extent feasible through TOM plans and by contributions to the provision of transit services, shuttles, carpool/rideshare incentives and similar programs." C. The Comprehensive Plan also includes a program (Tl.2.2) to require new developments to implement transportation demand management (TDM) plans to achieve identified targets in vehicle trip generation, and to require payment of a transportation impact fee for those peak hour vehicle trips that cannot be reduced through TOM measures. D. Consistent with the Comprehensive Plan, the Council desires to implement the identified policy and programs and adopt an updated citywide transportation impact fee to offset the traffic impacts from new development throughout Palo Alto. SL(ts)/ ORD Transportation Impact Fee Ordinance version 4-9-19 1 Not Yet Adopted E. The City has prepared a study entitled "City of Palo Alto Transportation Fee Nexus Study" dated April 9, 2019 and accepted by the City Council on April 22, 2019 (hereinafter the "Nexus Study"), which specifies transportation improvements required to serve future development and recommends the amount of the impact fee on new development. The Nexus Study is available for public inspection during normal business hours at the Office of the City Clerk at 250 Hamilton Avenue, ist Floor, Palo Alto, California, and the Planning & Community Environment Department at 250 Hamilton Avenue, 5th Floor, Palo Alto, California. The City Council has reviewed the Nexus Study and accepts the findings and conclusions of the study. F. The Nexus Study concluded that all new land uses in Palo Alto will generate an increased demand for transportation infrastructure and services, and recommended that the citywide transportation impact fee apply to both residential and non-residential development in the city. While the Nexus Study found that all new land uses will generate this increased demand for transportation, the Council finds that it is in the public interest to exempt some uses from payment of the fee, in order to promote other important City policies and priorities, such as 100% affordable housing developments. G. The improvements specified in the Nexus Study are intended to mitigate those traffic impacts identified in the Final EIR for the Comprehensive Plan and other recent traffic studies, and achieve a balanced transportation network. The range of improvements includes bicycle and pedestrian facilities, as well as intersection and roadway improvements, and is rooted in the City's policies of encouraging alternative mode use, discouraging single-occupant vehicle trips, improving traffic flow without major capacity enhancements, and encouraging motorists to use arterials rather than local residential streets. The cost estimates for the improvements in the Nexus Study are planning-level estimates and will be adjusted over time as more detailed engineering, design and other project-level work is completed. H. The fee rates charged herein are no higher than necessary to cover the reasonable costs of providing transportation infrastructure to the population associated with new development, such as residents, visitors, employees and customers. The impact fees shall be used in accordance with the Planning and Zoning Law, California Government Code Section 65913.8 and the Mitigation Fee Act, California Government Code Section 66001, et seq. I. Based on the above findings and the Nexus Study, the City determines that the Citywide Transportation Impact Fee satisfies the requirements of the Mitigation Fee Act, California Government Code Section 66001, et seq. as follows: (1) The purpose of the fee is to help meet the demands imposed on the City's transportation network by new development projects. (2) Funds from the collection of the fee will be used to meet the demand for pedestrian and bicycle infrastructure, as well as roadway and intersection improvements, generated by new development. 2019042302 TIF Ordinance -Second Reading 2 Not Yet Adopted (3) There is a reasonable relationship between the proposed uses of the fee and the impacts of the development projects subject to the fee on the transportation network in the city. (4) There is a reasonable relationship between the types of development projects on which the fee will be imposed and the need to fund transportation network improvements. (5) There is a reasonable relationship between the amount of the fee to be imposed on the development projects and the impact on the transportation network resulting from such projects. J. The City currently has several transportation impact fees -one citywide fee, and three that are specific· to certain geographical areas of the city-which were adopted over time to fund different sets of improvements. The Council desires to transition to a single citywide transportation impact fee, and cease collection of the fees established in Chapters 16.45 (Stanford Research Park/El Camino Real CS Zone) and 16.46 (San Antonio/West Bayshore Area) of the Code with the remaining funds to be applied to planned improvements in the covered geographical areas as identified by the Chief Transportation Official and subject to approval of the Council, as provided for in the Municipal Code. One area-specific fee, for Charleston- Arastradero Corridor Pedestrian and Bicyclist Safety improvements, would remain in effect until the identified improvements are constructed. This Ordinance amends and updates the existing citywide transportation impact fee consistent with the Comprehensive Plan and the Nexus Study. SECTION 2. Chapter 16.59 (Citywide Transportation Impact Fee) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby amended to read as follows: 16.59.010 Short title. This chapter may be referred to as the "Citywide Transportation Impact Fee Ordinance." 16.59.020 Definitions. For the purposes of this chapter, the following definitions shall apply: (a) "Affordable unitl:ie1:JsiAg11 shall have the meaning provided in Section 16.65.020 of this Title meaA l:ie1:JsiAg witl:i a p1:Jrel:iase priee er reAt tl:iat is affereaele te a "me aerate," "lew" er "ver'( lew" iAeeme l:ie1:Jsel:iele, as tl:iese terms are eefiAee B'f tl:ie CaliferAia QepartmeAt ef Me1:JsiAg aAe Cemm1:JRit'( QevelepmeAt, as applieaele te SaAta Clara CeblRty. (b) "Citywide transportation eapaeit'( enhancements" shall mean public facilities a.A& serviees that relieve citywide traffic congestion caused by new development projects. Citywide transportation eapaeit'( enhancements include, but are not limited to, aevaAeee traAspertatieA maAagemeAt aAe iAfermatieA S'/stems, e><paAeee sl:i1:Jttle traAsit serviees, aAe bicycle and pedestrian improvements. and roadway and intersection improvements. Citywide transportation eapaeit•1 enhancements do not 2019042302 TIF Ordinance -Second Reading 3 Not Yet Adopted include (i) intersection improvements designed primarily to accommodate increased traffic generated by a specific development or (ii) the addition of through-traffic lanes designed for primary use by private motorized vehicles. (c) "Construction cost index" shall mean the construction cost index for the San Francisco Bay Area set forth in the Engineering News Record published by McGraw Hill and Associates. In the event the Engineering News Record ceases to calculate and publish this index, then the city manager may designate a comparable, alternative index to serve as the construction cost index. (d) "Eligible citywide transportation ea~aeity enhancements" shall mean (i) the citywide transportation ea~aeity enhancements identified in the most recent citywide transportation impact fee nexus study approved by the city council, and (ii) other citywide transportation ea~aeity enhancements that are approved by the city council that may be substituted for an identified improvement or service because they will mitigate similar congestion. (e) "Existing development" shall mean structures present (at the time the amount of the fee is calculated) and in use (within the two years prior to the time the amount of the fee is calculated) on parcels upon which new development is planned to occur. Where it is necessary to project PM peak hour vehicle trips generated by existing development, such projection shall be made based on either (i) the trip generation estimates used to determine the fee owed with respect to such existing development when the fee was last paid with respect to such existing development or (ii) if the fee has not been paid with respect to such existing development (or any portion thereof), the most recent use of the existing development. (f) "Fee" shall mean the citywide transportation impact fee imposed pursuant to this chapter. (g) Any reference in this chapter to the "Government Code" or to a section of the "Government Code" shall refer to the California Government Code as it exists at the time this ereliRaRee chapter is applied and shall include amendments to tt;Jat eeelethe Government Code made subsequently to the adoption of this chapter, it being the intent of the city to maintain the fee in compliance with applicable law. (h) "New development" shall mean the construction of new structures or additions to existing structures in the city and, with respect to residential development, any development project that creates additional residential units. "New development" shall not mean replacement or expansion of an existing residential unit. With respect to nonresidential development, "new development" shall also mean any development project that creates additional s1:11:1are feetage ef 1:1sef1:1I areagross floor area, or involves a change in use that requires a use and occupancy permit. (i) "Transportation Impact Analysis Guidelines" shall mean the most recent edition of the "Transportation Impact Analysis Guidelines" promulgated by the Valley Transportation 2019042302 TIF Ordinance -Second Reading 4 Not Yet Adopted Authority or such other trip projection methodology adopted by the city for the purpose of traffic impact analysis reports. 16.59.030 Fee imposed. The fee is hereby imposed as a condition of the issuance of any permit for any new development, unless expressly exempted by this chapter. 16.59.040 Exemptions. The provisions of this chapter shall not apply to: (a) City buildings or structures. (b) Public school buildings or structures. (c) Affordable l=le1::1sing units, either for sale or rental, that exceed the minimum number required for projects under the city's below market rate (BMR) housing program or other provisions of this code, which units are, by recordable means, is 13ern::ianentl'( obligated to be and remain 1QQ% affordable units for a period consistent with the requirements of Section 16.65.07S(c) of this code. {et Retail serviee, eating ans srinking serviee, 13ersenal serviee, er a1::1ten::ieti'a1e serviee wl=len tl=le tetal sei1::1are feetage (inel1::1sing new se·;ele13n::ient) is l,SQQ sei1::1are feet er less. (eQ.) Day care centers used for childcare, nursery school or preschool education. ff} Belew n::iarket rate l=le1::1sing 1::1nits aee·;e ans 8e·;ens tl=le n::iinin::11::1n::1 n1::1n::18er reei1::1ires fer 13rejeets s1::18jeet ta tl=le eit'('s 8elew market rate (8MR) he1::1sing 13regrarn. The assitienal 1::1nits n::11::1st 8e efferes ans eenstr1::1etes eensistentl'( with the reei1:1iren::ients ef the 8MR 13regran::1. (gg_) Accessory dwelling units (ADU) establishes 8•; tf:ie eenversien ef an eMisting garage er ear130rt, 13re·;ises tf:iat the eKisting garage er ear13ert was legall'( e0nstr1::1etes, er reeeives 81::1ilsing 13ern::iits, as ef Jan1::1ar'( 1, 2Ql7, ans is een·;ertes te an AQY witf:i ne eM13ansien ef tf:ie eMisting 81::1ilsing envel013e. (~f) Junior accessory dwelling units (JADU). {+}--A ef:iange in tenane'( that sees net res1::1lt in a ehange in 1::1se ans whief:i sees net involve either (i) a sen::ielitien ef an eKisting str1::1et1:1re er (ii) an eK13ansien ef sq1::1are feetage ef 1::1sef1::1I area. (fg) New development which is exempt from the fee by virtue of the Constitutions of the United States ~r California or by virtue of other applicable state or federal law. 2019042302 TIF Ordinance -Second Reading 5 Not Yet Adopted 16.59.045 Application of fee to projects in the approval process at effective date. The fee shall apply to development projects that are in the approval process at the effective date of this Section. except as modified herein. A project that has its final planning permit before the effective date of this Section and was exempt from the fee at the time of that permit's issuance shall not be subject to the fee. 16.59.050 Timing of payment. (a) The fee shall be paid as set forth in Chapter 16.64 of this code. (b) A credit against the fee may be given for dedications of eligible citywide transportation eai;iaeity enhancements constructed or provided at private expense and for the value of land dedicated to the city that is necessary or useful to an eligible citywide transportation eai;iaeity enhancement. Such credit will be granted only if the city council determines that: (i) the city will experience a substantial cost savings or service quality improvement as a result of private construction or provision of the eai;iaeity enhancement or the dedication of land, (ii) the eai;iaeity enhancement can be expected to immediately and significantly relieve citywide traffic congestion, and (iii) the grant of the credit, iR lie1:1 ef tRe fee, will not cause the city to delay the implementation of elements of the city's transportation plan that are of higher priority, in the judgment of the city council, than the land or eai;iaeity enhancement that will be dedicated. The credit shall be applied at the time the city accepts the land or eai;iaeity enhancement. Where the city council has made the determinations required by this subdivision, payment of a portion of the fee equal to the amount of an expected credit against the fee may be deferred to the date of final building inspection approval of the development, provided the owner of the real property for which the fees are required enters into a recordable agreement with the city prior to issuance of the building permit for the development, which from the date of recordation, shall constitute a lien on the property and shall be enforceable against successors in interest to the property owner. The agreement shall provide that final occupancy approval shall not be given until the credit is applied and any remainingthe fees are paid er tRe ereelit iss1:1eel. The agreement shall also provide that, in any action to collect the fees or any portion thereof, the city shall be entitled to all of its costs of enforcement and collection, including reasonable attorney's fees. The director of planning and community environment may execute the agreement on behalf of the city in a form acceptable to the city attorney. Any deferral granted pursuant to this paragraph (b) shall be consistent with the requirements of Government Code Section 66007. WRere a ereelit is giveR fer tRe i;irevisieR ef a serviee tRat is aR eligiele eai;iaeity eRRaReeFReRt, tRe eleferral ef tRe fee, aRel tRe a13131ieatieR ef tRe ereelit, FRa'{ ee aeeereliRg te a seReel1:1le set fertR iR tRe reeereleel agreeFReRt, WRieR seReel1:1le sRall ee elesigReel te eRs1:1re tRat Re ereelit is a13131ieel iR a Elva Ree ef tRe i;irevisieR ef seF\1iees fer WRieR tRe ereelit is FRaele.ln no event shall a credit exceed the amount of the fee. and the city shall have no obligation to make payment to or otherwise compensate a developer or applicant if the value of the dedication exceeds the fee amount. 2019042302 TIF Ordinance -Second Reading 6 Not Yet Adopted 16.59.060 Calculation of fee. (a) The fee imposed upon a new development shall be calculated by multiplying (i) the number of net new PM peak hour vehicle trips projected to be generated by a new development by (ii) the current fee rate. (b) The number of net new PM peak hour vehicle trips projected to be generated by a new development shall be calculated by subtracting the projected PM peak hour vehicle trips generated by existing development on the parcel(s) to contain the new development from the projected PM peak hour vehicle trips generated by the new development (including any existing structures to remain on the parcel after the construction of the new development). In no event shall a new development be projected to generate less than zero new PM peak hour vehicle trips as a result of this calculation. (c) For purposes of subsection (b), the number of PM peak hour vehicle trips projected to be generated by a new development shall be calculated pursuant to the transportation impact analysis guidelines. For development projects required to prepare. receive approval of, implement and monitor a transportation demand management (TOM) plan consistent with Comprehensive Plan Program Tl.2.2, a target-based trip reduction approach allowed under the transportation impact analysis guidelines may be used, provided that the TDM plan is subject to an enforceable agreement approved by the city. (d) To the extent existing development on a parcel ~1:1alifiea qualifies as new development after the effective date of the most recent ordinance amending this section, but was exempt from the fee by virtue of Section 16.59.040 of this code in effect at the time the existing development was permitted, the PM peak hour vehicle trips projected to be generated by that existing development, shall not be subtracted (as otherwise required by subdivision (b) of this section) from the projected PM peak hour vehicle trips generated by the new development. (e) The rate of the fee shall be established from time to time by resolution or ordinance of the city council in the manner required by Government Code Sections 66004 and 66018. (f) The rate of the fee shall be subject to ann-ual adjustment for inflation pursuant to Section 16.64.110. (g) The department of planning and community environment shall be responsible for the calculation of the fee at tl:ie tiR-le ef ~laR review er when the fee is due, wl:iiel:iever is earlier. Applicants shall supply the city with the necessary information to calculate the fee in a format acceptable to the city. !bl... The number of net new PM peak hour vehicle trips projected to be generated by a new development shall be calculated in a manner that accounts for peak hour vehicle trips expected to be reduced by any Transportation Demand Management (TOM) Plan approved or required by the city. 2019042302 TIF Ordinance -Second Reading 7 Not Yet Adopted ill_ New retail service developments, as defined in Section 18.04.030(a)(125) of this code, shall be charged a fee at 50% of the ordinary rate set under subdivision (e) of this section. 16.59.070 Special fund. (a) There is hereby established a special fund, entitled the "Citywide Transportation Impact Mitigation Fund", into which all fee proceeds and any interest thereon shall be deposited. The fund shall be maintained as required by Government Code Section 66006. (b) Moneys in the fund shall be expended only on the installation, acquisition, and construction; maintenanee anEI e~eratien of eligible citywide transportation ea~aeity enhancements. 16.59.080 Accountability measures. (a) At least annually and as required by Government Code Section 66006, the city manager, or his or her designee, shall review the estimated cost of the public improvements to be funded by the fee, the continued need for those improvements and the reasonable relationship between such need and the impacts of pending or anticipated new developments. The city manager, or his or her designeeL shall report his or her findings to the city council at a noticed public hearing and recommend any adjustment to the fee or other action as may be needed. (b) The city council shall review such report in the manner required by Government Code Section 66006(b )(2). (c) To the extent required by Government Code Section 66001(d), the city council shall make the findings required by that section. 16.59.090 Enforcement and pPenalties. (a) Any person violating or failing to comply with any of the requirements of this chapter shall be subject to an administrative penalty or administrative compliance order as set forth in Chapters 1.12 and 1.16 of this code. (b) The city attorney shall be authorized to enforce the provisions of this chapter and all agreements entered into in accordance with this chapter, by civil action and any other proceeding or method permitted by law. (c) Each person is guilty of a separate offense for each and every day during any portion of which any violation of any prov1s1on of this chapter is committed, continued or permitted by such person. 2019042302 TIF Ordinance -Second Reading 8 Not Yet Adopted (d) All remedies provided for in this section shall be cumulative and not exclusive and shall not preclude the city from any other remedy or relief to which it otherwise would be entitled under law or equity. (e) Failure of any official to fulfill the requirements of this chapter shall not excuse any person from the requirements of this chapter. fat-All reFRedies pravided far iR tl=lis el:lapter sl:lall ee e1:1FR1:1lative aRd Rat exel1:1sive. {&}-VialatiaR af aRy 13ravisiaR af tl=lis el:la13ter, iRel1:1diRg, 81:1t Rat liFRited ta, eaRvertiRg aR exeFR13t 1:1se ta a 1:1se ta 'Nl:liel:I tl:lis el:la13ter a1313lies witl:la1:1t payiRg tl=le fee, is a FRisdeFReaRar 131:1Risl=laele as pravided iR tl=lis eade. f4-~ael=I persaR is g1:1ilty af a separate affeRse far eael:I aRd every day d1:1riRg aRy partiaR af wl:liel:I aR'f vialatiaR af aR't' pravisiaR af tl=lis el:lapter is eaFRFRitted, eaRtiR1:1ed er perFRitted ey s1:1el:I persoR. ~ ARy persaR vialatiRg aRy prav1s10R af tl=lis el=lapter, iRel1:1diRg, 81:1t Rat liFRited ta, eaRvertiRg aR exeFRpt 1:1se ta a 1:1se ta wl=liel=I tl=lis el=lapter applies, witl=lo1:1t 13ayiRg tl=le fee, sl:lall ee liaele eivilly ta tl:le eity iR a s1:1FR Rot ta exeeed five l:l1:1Rdred dallars for eael=I day iR wl:liel:I Sl:IER vialatioR aee1:1rs. fet-PersaRs eFRplayed iR tl:le follawiRg desigRated eFRplayee pasitiaRs are a1:1tl=lorized ta exereise tl:le a1:1tl:lority pravided iR tl:le California PeRal Cade ~eetioR 8~e.S aRd are a1:1tl:larized ta iss1:1e eitatiaR for vialatiaRs af tl:lis el:lapter: develapFReRt serviees direetar, direetor af plaRRiRg aRd E0FRFRl:IRity eRviraRFReRt aRd tl:leir desigRee. SECTION 3. Collection of the fee established in Chapter 16.45 (Transportation Impact Fee for New Nonresidential Development in the Stanford Research Park/El Camino Real CS Zone) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby suspended. It is the Council's intent to take further action to repeal the provisions of Chapter 16.45 upon expenditure of the collected funds. SECTION 4. Collection of the fee established in Chapter 16.46 (Approval of Projects with Impacts on Traffic in the San Antonio/West Bayshore Area) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby suspended. It is the Council's intent to take further action to repeal the provisions of Chapter 16.46 upon expenditure of the collected funds. SECTION 5. The City Council hereby amends the Municipal Fee Schedule by amending the Citywide Transportation Impact Fee and deleting the Stanford Research Park/El Camino Real CS Zone and San Antonio/West Bayshore Area traffic impact fees, as shown in Exhibit "A", attached hereto and incorporated herein by reference. When effective, the fees as amended by this Ordinance shall supersede any prior inconsistent fees charged by the Department of Planning and Community Environment. The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to 2019042302 TIF Ordinance -Second Reading 9 Not Yet Adopted the payer's burden on, or benefits received from, the governmental activity. Pursuant to Government Code Section 66017, these changes shall become effective sixty (60) days from the date of adoption. SECTION 6. The Council finds that the potential environmental impacts related to this Ordinance were analyzed in the Final EIR for the Comprehensive Plan Update, which was certified and adopted by the Council by Resolution No. 9720 on November 13, 2017. The Ordinance is consistent with and implements the program evaluated in the EIR. SECTION 7. Severability. If any section, subsection, sentence, clause, phrase or word of this Ordinance is for any reason held to be invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed and adopted this Ordinance, and each and all provisions hereof, irrespective of the fact that one or more provisions may be declared invalid. SECTION 8. This Ordinance shall be effective on the sixtieth (Goth) day after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney 2019042302 TIF Ordinance -Second Reading 10 Mayor APPROVED: City Manager Director of Planning and Community Environment Chief Transportation Official Not Yet Adopted EXHIBIT A Municipal Fee Schedule Planning and Community Environment Traffic Impact Fees StaAfora Researe"1 Park/El CaFAiAo Real CS ZoAe SaA AAtoAio/West 8ays"1ore area Citywide Transportation Impact Fee 2019042302 TIF Ordinance -Second Reading 11 $12.42 13er Aet sq. ft . $2.56 13er sq. ft. $3,575.007,886.00 per net new PM peak hour trip City of Palo Alto (ID # 10192) City Council Staff Report Report Type: Action Items Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Fiscal Year 2019-20 CDBG Allocations Title: PUBLIC HEARING: Finance Committee Recommends Adoption of the Fiscal Year 2019-20 Action Plan and Associated 2019-20 Funding Allocations and Adoption of a Resolution Approving the Use of Community Development Block Grant Funds for Fiscal Year 2019-20 Consistent With the Human Relations Commission's Recommendation From: City Manager Lead Department: Planning and Community Environment Recommendation Staff and the Finance Committee recommend that the City Council hold a public hearing and take the following actions: 1. Adopt the resolution (Attachment A) allocating CDBG funding as recommended in the draft Fiscal Year 2019-2020 Action Plan and as described in this report including the contingency plan policies recommended by the Finance Committee; 2. Authorize the City Manager to execute the Fiscal Year 2019-2020 CDBG application and Fiscal Year 2019-2020 Action Plan for CDBG funds, any other necessary documents concerning the application, and to otherwise bind the City with respect to the applications and commitment of funds; and 3. Authorize staff to submit the Fiscal Year 2019-2020 Action Plan to HUD by the May 15, 2019 deadline. Executive Summary The City of Palo Alto receives funds annually from the U.S. Department of Housing and Urban Development (HUD) as an entitlement city under the Community Development Block Grant City of Palo Alto Page 2 (CDBG) Program. It is the principal Federal program providing localities with grants to devise innovative neighborhood approaches to assist persons of low and moderate income. CDBG federal appropriations for Fiscal Year (FY) 2019-2020 have not yet been determined. For budgeting purposes, City staff has estimated the City’s HUD Entitlement Grant for Fiscal Year 2019-20 will be reduced by 10 percent compared to FY 2018-19. Staff estimates this amount to be $436,335. Adding estimated re-appropriated funds from prior years, in the amount of $88,661 and estimated program income of $136,049, results in an estimated budget of $661,045. HUD requirements include preparation of a five-year strategic plan of action, referred to as a Consolidated Plan, to address priority housing and community development needs and to set goals for attaining identified objectives. An Action Plan is prepared annually to identify specific projects to be funded in that year that implement the strategies identified in the Consolidated Plan. Currently, Palo Alto’s CDBG program is guided by the 2015-2020 Consolidated Plan adopted by Council May 4, 2015. The draft 2019-20 Action Plan (Attachment B) was made available for Public review from March 15, 2019 through April 15, 2019. The Council is being asked to review the draft 2019-20 Action Plan and recommend funding allocations. The City plans to submit its Annual Action Plan no later than the May 15, 2019 deadline. Background The CDBG program is authorized under Title I of the Housing and Community Development Act of 1974, as amended. As an entitlement city under the CDBG program, the City of Palo Alto receives funds annually on a formula grant basis. Palo Alto has historically expended all of its CDBG funds on projects benefiting low- and very-low income persons. HUD regulations require all CDBG funded activities meet one of the three national objectives: • Benefit low-and very-low-income persons; • Aid in the prevention or elimination of slums or blight; or • Meet other community development needs having a particular urgency, or posing a serious and immediate threat to the health or welfare of the community. All of the funded projects in Palo Alto meet the first objective of benefiting low-and very-low- income persons. Palo Alto has five primary CDBG program activity areas in which to allocate funds: public services, planning and administration, economic development, housing, and public facilities. Federal regulations limit the amount that can be spent on planning and City of Palo Alto Page 3 administration and public services. The allocation for planning and administration is proposed to be at the maximum 20 percent spending cap in Fiscal Year 2019-2020, approximately $114,476. Similarly, Federal law places a maximum spending cap of 15 percent of the grant allocation and 15 percent of any program income received during the previous fiscal year on public services. It is estimated that $80,874 will be available for public service activities for FY 2019-2020. Public service activities include services for homeless persons, housing and emergency services to low income individuals with disabilities, and services to victims of domestic violence. Consolidated Plan Per HUD requirements, the City is required to prepare a Consolidated Plan every five years. The 2015-2020 Consolidated Plan addresses priority housing and community development needs. It also sets specific goals for attaining identified objectives. The 2015-2020 Consolidated Plan outlines the following six specific goals • Affordable Housing: Assist in the creation and preservation of affordable housing for low income and special needs households. • Homelessness: Support activities to end homelessness. • Community Services: Support activities that provide community services to low income and special needs households. • Strengthen Neighborhoods: Support activities that strengthen neighborhoods. • Fair Housing: Promote fair housing choice. • Economic Development: Expand economic opportunities for low income households. The Consolidated Plan is available on the City website: https://www.cityofpaloalto.org/civicax/filebank/documents/49948. Action Plan Each year, an Annual Action Plan is prepared to identify specific projects to be funded to implement the Consolidated Plan. HUD requires submittal of an Annual Action Plan no later than 45 days prior to the start of the program year, or May 15th of every year. Review by Human Relations Commission and Finance Committee The CDBG selection committee, comprised of three members of the Human Relations Commission (HRC) and staff, met on February 25, 2019 to discuss the applications and make recommendations for funding for FY 2019-2020. On March 14, 2019 the HRC considered the funding recommendations of the selection committee at a public hearing. Staff and the HRC’s CDBG funding recommendations, as outlined in Staff Report 10141 available online at: https://www.cityofpaloalto.org/civicax/filebank/documents/69726, were presented at a public City of Palo Alto Page 4 hearing before the Finance Committee on April 2, 2019. The Finance Committee voted 3-0 to recommend to Council adoption of the recommendations, as recorded in the Finance Committee meeting minutes: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=59745.97&BlobID=70457 CDBG Applications Currently, the CDBG program operates under a two-year funding request cycle. Applications for Fiscal Years 2019-2020 and 2020-2021 were made available in November 2018. A notice of CDBG funding availability was published in the Daily Post on November 16, 2018 with completed applications due January 10, 2019. Mandatory pre-proposal conferences were conducted on November 28, 2018 and December 5, 2018 to assist applicants with program regulations and project eligibility questions. Because the City did not receive sufficient funding applications for the housing and public facilities rehabilitation categories, the City reopened the Notice of Funding Availability for multi-family housing and public facilities rehabilitation projects in January 2019. A notice of CDBG funding availability was published in the Daily Post on January 30, 2019 with completed applications due February 11, 2019. The CDBG applications considered for funding for Fiscal Year 2019-2020 are identified on the attached chart (Attachment C). Discussion All of the proposed projects for CDBG funding for Fiscal Year 2019-20, as presented in the draft 2019-20 Action Plan, address the priority housing and community development needs identified in the draft Consolidated Plan. Finance Committee Recommendation: Contingency Plan The amount of CDBG funding for Fiscal Year 2019-20 is still unknown, the Finance Committee has made recommendations for a contingency plan in case of an increase in funding, as well as if there is a decrease in funding. It is recommended that Council approve this contingency plan. In the case of funding increase, the following plan is recommended: • Public Services: Maintain recommended funding levels for Catholic Charities and YWCA. Prioritize funding for Silicon Valley Independent Living (SVILC) from the recommended $6,000 to $12,000. Once SVILC is at $12,000, distribute the additional available amount between Life Moves and Palo Alto Housing Corporation equally. • Planning and Administration: Distribute the additional available amount equally between Project Sentinel and City of Palo Alto for CDBG administration. • Economic Development & Public Facilities Rehabilitation: Three parts of the additional available funding will be provided to Downtown Streets Team and one part of the additional funding to May View Community Health. City of Palo Alto Page 5 In the case of a decrease in funding, the following plan is recommended: • Public Services: In case of a further decrease, it is recommended not to fund YWCA. Distribute any funding decrease proportionately among the remaining four public service applicants, but maintain a minimum funding allocation of $5,000 for any applicant. • Planning and Administration, Economic Development & Public Facilities Rehabilitation: Distribute any funding decrease proportionately among the remaining three categories. Table 1: Fiscal Year 2019-2020 Funding Recommendations Applicant Agency Final Allocation FY2018-19 Funding Request FY2019-20 Finance Committee Recommendations FY2019-20 Public Services LifeMoves (formerly InnVision Shelter Network)-Opportunity Services Center $44,933 $ 46,575 $29,937 Palo Alto Housing Corporation – SRO Hotels Supportive Services $30,933 $ 48,283 $29,937 Catholic Charities of Santa Clara County – Long Term Care Ombudsman $10,000 $10,000 $10,000 Silicon Valley Independent Living Center – Housing and Emergency Services $5,032 $28,826 $6,000 YWCA/Support Network – Domestic Violence Services $10,000 $10,000 $5,000 Sub-total $100,898 $143,684 $ 80,874 Admin/Fair Housing Services Project Sentinel – Fair Housing Services $33,698 $ 33,698 $31,587 City of Palo Alto - CDBG Administration $85,000 $ 85,000 $82,889 Sub-total $118,698 $118,698 $114,476 Economic Development Downtown Streets Inc. – Workforce Development Program $336,400 $336,400 $330,695 Sub-total $336,400 $336,400 $330,695 Housing/Public Facilities Rehabilitation City of Palo Alto Page 6 Timeline The funding recommendation made by the City Council will be incorporated into the final Fiscal Year 2019-20 Action Plan. Subsequently, the adopted Action Plan will be submitted to HUD by May 15, 2019. Resource Impact Several measures have been taken to minimize any General Fund impact for the administration of the CDBG Program. This includes streamlining the program to reduce staffing needs and revised monitoring guidelines to improve efficiency of the program. Currently, CDBG funding covers the cost of 0.48 FTE hourly Staff Specialist, 0.10 FTE Senior Planner, and consultant costs for CDBG administration. On April 2, 2019 the Finance Committee approved the Fiscal Year 2019-20 CDBG budget, which included a preliminary estimate of $661,045. Contingent upon City Council review of the Action Plan, staff will make corresponding adjustments to the Fiscal Year 2019-20 Operating Budget. Policy Implications All of the applications recommended for funding in Fiscal Year 2019-2020 are consistent with the priorities established in the City’s adopted 2015-2020 Consolidated Plan. Moreover, they are consistent with the housing programs and policies in the adopted Comprehensive Plan. Environmental Review For purposes of the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA), budgeting in itself is not a project. Prior to commitment or release of funds for each of the proposed projects, staff will carry out the required environmental reviews or assessments and certify that the review procedures under CEQA, HUD and NEPA regulations have been satisfied for each particular project. Attachments: Attachment A - Fiscal Year 2019-20 CDBG Resolution (PDF) Attachment B - Fiscal Year 2019-20 Draft Action Plan (PDF) MayView Community Health Center – Establishment of Dental Program & Renovation N/A $150,000 $135,000 Sub-total N/A $150,000 $135,000 Grand Total $670,434* $748,782 $661,045 *Note: Includes $114,438 allocation to Minor Home Repair Program for FY 2018-19 City of Palo Alto Page 7 Attachment C - Fiscal Year 2019-20 CDBG Funding Recommendations (PDF) ATTACHMENT A 1 2019041701 Not Yet Approved Resolution No. ______ Resolution of the Council of the City of Palo Alto Approving the Use of Community Development Block Grant Funds for Fiscal Year 2019-2020 RECITALS A. On May 4, 2015, the Palo Alto City Council approved and adopted a document entitled “Consolidated Plan” which identified and established the Palo Alto housing and non-housing community development needs, objectives and priorities for the period July 1, 2015 to June 30, 2020. B. The Fiscal Year 2019-2020 Action Plan, the annual funding update to the Consolidated Plan, was subjected to public review and commentary during the period from March 15, 2019 through April 15, 2019. C. The potential uses of Community Development Block Grant (CDBG) funds were evaluated in light of the needs and objectives identified in the Consolidated Plan and reflected in the recommendations and comments of the Human Relations Commission and other interested citizens. D. Under the CDBG program, the highest priority is given to activities which will benefit persons with low and moderate incomes. E. The City Council and the Finance Committee of the City Council have held publicly noticed public hearings on the proposed uses of the CDBG funds for Fiscal Year 2019-2020. F. CDBG funds allocated to the City for Fiscal Year 2019-2020 are proposed to implement the programs described in this Resolution. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The uses of CDBG funds for Fiscal Year 2019-2020 are hereby approved and authorized for the following programs: Name of Program Amount 1. Catholic Charities of Santa Clara County – Long Term Care Ombudsman Program. Advocate for the rights of seniors and disabled residents in long term care facilities. $ 10,000 2. LifeMoves – Opportunity Services Center. Provide comprehensive, one-stop, multi-service day drop-in center for critical homeless services. $ 29,937 3. Palo Alto Housing Corporation – SRO Resident Support. Provide in-house SRO Service Coordinator for support $ 29,937 ATTACHMENT A 2 2019041701 counseling, employment assistance and crisis intervention. 4. Silicon Valley Independent Living Center – Housing and Emergency Services. Assist low-income individuals and families in search for affordable, accessible housing. $ 6,000 5. YWCA of Silicon Valley – Domestic Violence Services. Provide crisis intervention, emergency shelter, comprehensive case management, counseling/ therapy, children’s play therapy and legal services $ 5,000 6. Project Sentinel – Fair Housing Services. Provide fair housing services including complaint investigation, counseling, advocacy and community education $ 31,587 7. City of Palo Alto Department of Planning and Community Environment – CDBG Program Administration. $ 82,889 8. Downtown Streets – Workforce Development Program. Provide comprehensive support services for homeless/ unemployed to secure employment. $ 330,695 9. May View Community Health – Establishment of Dental Program and Renovation at May View Community Health Palo Alto Clinic. $ 135,000 TOTAL $ 661,045 SECTION 2. The total amount set forth under Section 1 of this Resolution represents the proposed estimated allocation of $436,335, in CDBG funds from the United States Department of Housing and Urban Development (HUD) for Fiscal Year 2019-2020, $136,049 in anticipated program income for Fiscal Year 2019-2020 from Palo Alto Housing Corporation, and a total of $88,661 in prior year resources (Catholic Charities, YWCA and Project Sentinel FY 2017 - $7,809 and $80,852 in FY 2017- 18 excess program income). SECTION 3. The City staff is hereby authorized to submit the Fiscal Year 2019-2020 annual Action Plan, update and appropriate application forms to HUD for the Fiscal Year 2019-2020 CDBG funds, and such money shall be spent as set forth in this Resolution. The Mayor, City Manager and any other designated City staff or officials are hereby authorized to execute such application forms and any other necessary documents to secure these funds. The City Manager or designee is authorized to sign all necessary grant agreements with the program providers set forth in Section 1. ATTACHMENT A 3 2019041701 SECTION 4. The funding amounts set forth in Section 1 of this Resolution are based on estimated allocation amounts from the Federal Fiscal Year 2018-19 HUD appropriations; City Staff is authorized to make adjustments increasing or decreasing the funding amounts set forth herein as consistent with the adopted Citizen Participation Plan. SECTION 5. The City Council hereby finds that the Fiscal Year 2019-2020 CDBG program authorized under Section 1 of this Resolution is not a project under the California Environmental Quality Act (CEQA). However, the Council further authorizes and directs City staff to prepare certifications that may be required, under CEQA and the National Environmental Policy Act (NEPA), for each project under the Fiscal Year 2019-2020 CDBG program prior to the release of funds for any such project. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager Assistant City Attorney Director of Planning and Community Environment APPROVED AS TO CONTENT: Director of Administrative Services CDBG Coordinator Annual Action Plan 2020 1 Annual Action Plan 2020 2 Executive Summary AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b) 1. Introduction The Department of Housing & Urban Development (HUD) requires that entitlement jurisdictions complete a Consolidated Plan every five years. Additionally, entitlement jurisdictions must submit an Annual Action Plan. The City’s 2015-2020 Consolidated Plan was approved by Council on May 4, 2015. The five-year goals from the City’s Consolidated Plan include: - Assist in the creation & preservation of affordable housing for low income & special needs households. - Support activities to end homelessness. - Support activities that strengthen neighborhoods through the provision of community services & public improvements to benefit low income & special needs households. - Promote fair housing choice. - Expand economic opportunities for low income households. The City of Palo Alto is an entitlement jurisdiction that receives federal funding from HUD through the Community Development Block Grant (CDBG) Program. The purpose of CDBG funding is to help jurisdictions address their community development needs. CDBG grantees are eligible to use the resources they receive for Public Services, Community and Economic Development, Capital Improvement Projects (CIP) Public Facilities/Infrastructure, and CIP Housing Rehabilitation. Public Service projects provide social services and/or other direct support to individuals and households in need of assistance. Community and Economic Development projects are focused on assisting businesses and organizations with small business loans, façade improvements, and other initiatives. CIP Public Facilities/Infrastructure projects are those which aim to improve public facilities and infrastructure. CIP Housing Rehabilitation projects are for housing rehabilitation improvements of single and multi-unit housing. A total of $661,045 is available for funding projects & programs during the 2019-20 Program Year. The City received $436,335 from the federal CDBG program, approximately $136,049 in program income and $88,661 in reallocated funds from previous fiscal years. Please see “Table 1, Fiscal Year 2020 CDBG Budget” below which summarizes the uses of the funds proposed during Fiscal Year 2019-20. Annual Action Plan 2020 3 2. Summarize the objectives and outcomes identified in the Plan The City is part of the San Francisco Metropolitan Bay Area, located 35 miles south of San Francisco and 14 miles north of San José. The City is located within the County of Santa Clara, borders San Mateo County, and encompasses an area of approximately 26 square miles, one-third of which consists of open space. According to Quickfacts data provided by the U.S. Census Bureau https://www.census.gov/quickfacts/fact/table/paloaltocitycalifornia/PST045216, the City's total resident population is 67,178. The City has the most educated residents in the Country and is one of the most expensive cities to live in. In Silicon Valley, the City is considered a central economic focal point and is home to over 7,000 businesses while providing employment to more than 98,000 people. See Attachment 1 for a summary of the Needs Assessment in the 2015-2020 Consolidated Plan. 3. Evaluation of past performance The City recognizes that the evaluation of past performance is critical to ensure the City and its sub recipients are implementing activities effectively and that those activities align with the City’s overall strategies and goals. The performance of programs and systems are evaluated to ensure the goals and projects are addressing critical needs in the community. Palo Alto has historically allocated CDBG funds to activities that benefit LMI persons, with a top priority to increase affordable housing opportunities in the City. However, due to Palo Alto’s expensive housing market coupled with a decrease in CDBG entitlement funds, it is becoming more difficult to create opportunities for affordable housing. As such, during this Consolidated Planning period the City will be focusing on rehabilitating existing affordable housing stock that is in need of repair. Planning Staff works closely with sub recipients to leverage resources and create opportunities for partnership and collaboration. The City’s sub recipients are challenged to think creatively about working together to address the needs in our community. 4. Summary of Citizen Participation Process and consultation process Palo Alto encourages citizen participation through the Action Plan process. This includes consulting local organizations, holding public meetings, and encouraging public comment during the public review period. A total of four public hearings were planned in order to allow for public input. The City actively reached out to all applicants and posted updates on the CDBG website. A 30-day comment period from March 15, 2019 through April 15, 2019 gave citizens an opportunity to offer comments on the draft Action Plan. The draft was posted on the City’s CDBG website and copies were made available to the public at the Planning and Community Environment Department at Palo Alto City Hall. 5. Summary of public comments Annual Action Plan 2020 4 6. Summary of comments or views not accepted and the reasons for not accepting them There were no public comments received during the public review period. 7. Summary Table 1, Fiscal Year 2020 CDBG Budget, summarized the uses of the funds proposed during Fiscal Year 2019-20. Specific funding resources will be utilized based on the opportunities and constraints of each particular project or program. Applicant Agency Budget Public Services Palo Alto Housing Corporation - SRO Resident Supportive Services $29,937 Catholic Charities of Santa Clara County – Long Term Care Ombudsman $10,000 LifeMoves (Formerly InnVision) - Opportunity Center - Drop-In Center $29,937 YWCA/Support Network - Domestic Violence Services $5,000 Silicon Valley Independent Living Center – Housing and Emergency $6,000 Sub-total $80,874 Planning and Administration Project Sentinel – Fair Housing Services $31,587 City of Palo Alto Administration $82,889 Sub-total $114,476 Economic Development Downtown Streets – Workforce Development Program $330,695 Sub-total $330,695 Housing Minor Home Repair Program – City of Palo Alto $135,000 Sub-total $135,000 Grand Total $661,045 Table 1. Fiscal Year 2020 Budget Annual Action Plan 2020 5 Annual Action Plan 2020 6 PR-05 Lead & Responsible Agencies – 91.200(b) 1. Agency/entity responsible for preparing/administering the Consolidated Plan Describe the agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source. Agency Role Name Department/Agency Lead Agency PALO ALTO CDBG Administrator PALO ALTO Planning and Community Environment Department HOPWA Administrator HOME Administrator HOPWA-C Administrator Table 2 – Responsible Agencies Narrative (optional) The City of Palo Alto (City) is the Lead Agency for the United States Department of Housing and Urban Development (HUD) entitlement programs. The City’s CDBG Staff Specialist is responsible for the administration of HUD entitlements, which include the Community Development Block Grant Program (CDBG). By federal law, each jurisdiction is required to submit to HUD a five-year Consolidated Plan and Annual Action Plans listing priorities and strategies for the use of federal funds. The Consolidated Plan is a guide for how the City will use its federal funds to meet the housing and community development needs of its populations. For the 2015-2020 Consolidated Plan process, the City worked collaboratively with the County of Santa Clara (County) and other entitlement jurisdictions in the County to identify and prioritize housing and housing-related needs across the region, and strategies to meet those needs. The fiscal year 2019/20 Annual Action Plan represents the fifth and the final year of CDBG funding of the 2015-2020 Consolidated Plan. Annual Action Plan 2020 7 Consolidated Plan Public Contact Information Erum Maqbool, CDBG Staff Specialist City of Palo Alto Department of Planning and Community Environment 250 Hamilton Avenue, 5th Floor Palo Alto, CA 94301 E-mail: erum.maqbool@cityofpaloalto.org Phone: (650) 329-2660 Annual Action Plan 2020 8 AP-10 Consultation – 91.100, 91.200(b), 91.215(l) 1. Introduction During Fiscal Year 2019-20, the City will continue to work with non-profit organizations to provide programs and services for low-income households; private industry, including financial and housing development groups, to encourage the development of affordable housing opportunities regionally and within the City; and other local jurisdictions, including the County of Santa Clara, in carrying out and monitoring regional projects in a coordinated and cost-effective manner. The City will provide technical assistance to the public service agencies it funds with CDBG dollars and will continue to attend the Regional CDBG/Housing Coordinators meetings. Provide a concise summary of the jurisdiction’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(l)) Describe coordination with the Continuum of Care and efforts to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness. The Santa Clara County Continuum of Care (CoC) is a multi-sector group of stakeholders dedicated to ending and preventing homelessness in the County. The CoC's primary responsibilities are to coordinate large-scale implementation of efforts to prevent and end homelessness in the County. The CoC is governed by the Santa Clara CoC Board (CoC Board), which stands as the driving force committed to supporting and promoting a systems change approach to preventing and ending homelessness in the County. The CoC Board is comprised of the same individuals who serve on the Destination: Home Leadership Board. Destination: Home is a public-private partnership committed to collective impact strategies to end chronic homelessness, and leads the development of community-wide strategy related to the CoC's work. The County's Office of Supportive Housing serves as the Collaborative Applicant for the CoC, and is responsible for implementing by-laws and protocols that govern the operations of the CoC. The Office of Supportive Housing is also responsible for ensuring that the CoC meets the requirements outlined under the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 (HEARTH). In the winter of 2015, Destination: Home and the CoC released a Community Plan to End Homelessness in Santa Clara County (the Plan), which outlines a roadmap for community-wide efforts to end homelessness in the County by 2020. The strategies and action steps included in the plan were informed Annual Action Plan 2020 9 by members who participated in a series of community summits designed to address the needs of homeless populations from April to August 2014. The Plan identifies strategies to address the needs of homeless persons in the County, including chronically homeless individuals and families, families with children, veterans, and unaccompanied youth. Additionally, it also intended to address the needs of persons at risk of homelessness. The City is represented on the CoC by its Human Services Manager. Members of the CoC meet on a monthly basis in various work groups to ensure successful implementation components of the Plan action steps. A Community Plan Implementation Team, which includes members of the CoC and other community stakeholders, meets quarterly to evaluate progress toward the Plan's goals, identify gaps in homeless services, establish funding priorities, and pursue an overall systematic approach to address homelessness. Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards for and evaluate outcomes of projects and activities assisted by ESG funds, and develop funding, policies and procedures for the operation and administration of HMIS The City of Palo Alto does not receive ESG funds. 2. Describe Agencies, groups, organizations and others who participated in the process and describe the jurisdiction’s consultations with housing, social service agencies and other entities Annual Action Plan 2020 10 Table 3 – Agencies, groups, organizations who participated 1 Agency/Group/Organization Abilities United Agency/Group/Organization Type Services-Persons with Disabilities What section of the Plan was addressed by Consultation? Non-Homeless Special Needs Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 2 Agency/Group/Organization Afghan Center Agency/Group/Organization Type Cultural Organization What section of the Plan was addressed by Consultation? Needs Assessment and Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 3 Agency/Group/Organization Aging Services Collaborative of Santa Clara County Agency/Group/Organization Type Services-Elderly Persons What section of the Plan was addressed by Consultation? Needs Assessment & Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 4 Agency/Group/Organization California Housing Odd Fellows Foundation Agency/Group/Organization Type Housing Services-Children Community/Family Services Organization What section of the Plan was addressed by Consultation? Needs Assessment & Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. Annual Action Plan 2020 11 5 Agency/Group/Organization Casa de Clara San Jose Catholic Worker Agency/Group/Organization Type Services-homeless Services-Health What section of the Plan was addressed by Consultation? Needs Assessment & Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 6 Agency/Group/Organization CATHOLIC CHARITIES OF SANTA CLARA COUNTY Agency/Group/Organization Type Services-Elderly Persons What section of the Plan was addressed by Consultation? Needs Assessment & Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 7 Agency/Group/Organization CITY OF CAMPBELL Agency/Group/Organization Type Other government - Local What section of the Plan was addressed by Consultation? Strategic Plan and Needs Assessment Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 8 Agency/Group/Organization City of Cupertino Agency/Group/Organization Type Other government - Local What section of the Plan was addressed by Consultation? Strategic Plan & Needs Assessment Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 9 Agency/Group/Organization City of Gilroy Agency/Group/Organization Type Other government - Local Annual Action Plan 2020 12 What section of the Plan was addressed by Consultation? Strategic Plan & Needs Assessment Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 10 Agency/Group/Organization City of Mountain View Agency/Group/Organization Type Other government - Local What section of the Plan was addressed by Consultation? Strategic Plan & Needs Assessment Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 11 Agency/Group/Organization BILL WILSON CENTER Agency/Group/Organization Type Services-Children What section of the Plan was addressed by Consultation? Strategic Plan & Needs Assessment Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 12 Agency/Group/Organization City of Palo Alto - Human Relations Commission Agency/Group/Organization Type Other government - Local Civic Leaders What section of the Plan was addressed by Consultation? Needs Assessment & Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 13 Agency/Group/Organization City of San Jose Agency/Group/Organization Type Other government - Local What section of the Plan was addressed by Consultation? Needs Assessment and Strategic Plan Annual Action Plan 2020 13 Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 14 Agency/Group/Organization City of Santa Clara Agency/Group/Organization Type Other government - Local What section of the Plan was addressed by Consultation? Needs Assessment and Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 15 Agency/Group/Organization City of Sunnyvale Agency/Group/Organization Type Other government - Local What section of the Plan was addressed by Consultation? Needs Assessment and Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 16 Agency/Group/Organization Coldwell Banker Agency/Group/Organization Type Business Leaders What section of the Plan was addressed by Consultation? Needs Assessment and Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. 17 Agency/Group/Organization Community School of Music and Arts Agency/Group/Organization Type Community Family Services and Organizations What section of the Plan was addressed by Consultation? Needs Assessment and Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. Annual Action Plan 2020 14 18 Agency/Group/Organization COMMUNITY SERVICES AGENCY OF MOUNTAIN VIEW AND LOS ALTOS Agency/Group/Organization Type Services-Elderly Persons What section of the Plan was addressed by Consultation? Needs Assessment and Strategic Plan Briefly describe how the Agency/Group/Organization was consulted. What are the anticipated outcomes of the consultation or areas for improved coordination? Agency attended Community Forum as part of the 2015-2020 Consolidated Plan process. Identify any Agency Types not consulted and provide rationale for not consulting There were no agency types that were not consulted during the Consolidated Plan process. Other local/regional/state/federal planning efforts considered when preparing the Plan Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan? Continuum of Care Regional Continuum of Care Council The CoC works to alleviate the impact of homelessness in the community through the cooperation and collaboration of social service providers. This effort aligns with the Strategic goal to support activities to end homelessness. City of Palo Alto Housing Element (2015-2023) City of Palo Alto The Housing Element serves as a policy guide to help the City meet its existing and future housing needs. This effort aligns with the Strategic Plan's goal to assist in the creation and preservation of affordable housing. 2012-2014 Comprehensive HIV Prevention & Care Santa Clara County HIV Planning Council for Prevention and Care This plan provides a roadmap for the Santa Clara County HIV Planning Council for Prevention and Care to provide a comprehensive and compassionate system of HIV prevention and care services for the County. This effort aligns with the Strategic Plan's goal to support activities that strengthen neighborhoods through the provision of community services and public improvements. Annual Action Plan 2020 15 Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan? Affordable Housing Funding Landscape & Local Best Cities Association of Santa Clara County and Housing Trust Silicon Valley This report provides a comparison of the different funding strategies available for affordable housing in the County, and the best practices for funding new affordable housing. This effort aligns with the Strategic Plan's goal to assist in the creation and preservation of affordable housing. Regional Housing Need Plan for the San Francisco B Association of Bay Area Governments This plan analyzes the total regional housing need for the County and all of the Bay Area. This effort aligns with the Strategic Plan's goal to assist in the creation and preservation of affordable housing Community Plan to End Homelessness in Santa Clara Destination: Home The Community Plan to End Homelessness in the County is a five-year plan to guide governmental actors, nonprofits, and other community members as they make decisions about funding, programs, priorities and needs. This effort aligns with the Strategic Plan's goal to support activities to end homelessness. Palo Alto's Infrastructure: Catching Up, Keeping U City of Palo Alto Infrastructure Blue Ribbon Plan This plan details recommendations for infrastructure maintenance and replace, as well as identifies potential sources of funding. This effort aligns with the Strategic Plan's goal to support activities that strengthen neighborhoods through the provision of community services and public improvements. City of Palo Alto Comprehensive Plan (2030) City of Palo Alto This plan is the primary tool for guiding future development in Palo Alto. It provides a guide for long term choices and goals for the City future. This effort aligns with the Strategic Plan's goal to support activities that strengthen neighborhoods through the provision of community services and public improvements. Table 4 – Other local / regional / federal planning efforts Table 4 – Other local / regional / federal planning efforts Narrative (optional) Annual Action Plan 2020 16 The Entitlement Jurisdictions in Santa Clara County collaborated on preparation of their 2015- 2020 Consolidated Plans. The outreach and the regional needs assessment for these jurisdictions was a coordinated effort. The CoC and the County were involved in the formation of the Consolidated Plan and will be integral in its implementation. As standard practice, CDBG entitlement jurisdictions from throughout the County hold quarterly meetings known as the CDBG Coordinators Group. These meetings are often attended by HUD representatives and their purpose is to share information, best practices, new developments, and federal policy and appropriations updates among the local grantee staff, as well as to offer a convenient forum for HUD to provide ad-hoc technical assistance related to federal grant management. Meeting agendas cover such topics as projects receiving multi- jurisdictional funding, performance levels and costs for contracted public services, proposed annual funding plans, HUD program administration requirements, and other topics of mutual concern. These quarterly meetings provide the opportunity for the City to consult with other jurisdictions on its proposed use of federal funds for the upcoming Program Year. The CDBG Coordinators Group meetings are often followed by a Regional Housing Working Group meeting, which is open to staff of entitlement and non-entitlement jurisdictions. The Working Group provides a forum for jurisdictions to develop coordinated responses to regional housing challenges. Annual Action Plan 2020 17 AP-12 Participation – 91.105, 91.200(c) 1. Summary of citizen participation process/Efforts made to broaden citizen participation Summarize citizen participation process and how it impacted goal-setting On October 18, 2010, the Palo Alto City Council adopted an amended Citizen Participation Plan that utilizes the Human Relations Commission (HRC), rather than a separate Citizen Advisory Committee, to promote and encourage citizen participation in the planning, implementation and assessment of the CDBG Program. The HRC is uniquely positioned to understand and consider the needs of low and very low- income persons, members of minority groups, the elderly, persons with disabilities, and residents of neighborhoods where CDBG activities may be undertaken. Thus far the revisions to the Citizen Participation Plan have promoted a more coordinate and effective response by the City to the human service needs in the community. A summary of public participation is outlined in Table 5, Citizen Participation Outreach. The Draft Action Plan is available for a 30-day comment period to give citizens an opportunity to offer comments. Annual Action Plan 2020 18 Citizen Participation Outreach Sort Order Mode of Outreach Target of Outreach Summary of response/attendance Summary of comments received Summary of comments not accepted and reasons URL (If applicable) 1 Public Meeting Non- targeted/broad community The Human Relations Commission – Selection Committee met on February 25, 2019 to discuss the FY 19/20 funding allocations. Representative from one agency requesting CDBG funds for FY 19/20 was present. 2 Public Hearing Non- targeted/broad community The Human Relations Commission met on March 14, 2019 to discuss the FY 19/20 funding allocations. Representatives from Catholic Charities, SVILC, LifeMoves, Downtown Streets Team, Project Sentinel and May View Community Health were present. Annual Action Plan 2020 19 Sort Order Mode of Outreach Target of Outreach Summary of response/attendance Summary of comments received Summary of comments not accepted and reasons URL (If applicable) 3 Public Hearing Non- targeted/broad community The Finance Committee held a public hearing on April 2, 2019 to discuss the FY 19/20 funding allocations. Representative from one agency requesting CDBG funds for FY 19/20 was present. 4 Public Hearing Non- targeted/broad community The City Council is holding a public hearing on May 6, 2019 to discuss the FY 19/20 funding allocations. 5 Newspaper Ad Non- targeted/broad community Two public hearing notices were published in the Daily Post on February 7, 2019 and March 26, 2019 Table 5 – Citizen Participation Outreach Annual Action Plan 2020 20 Expected Resources AP-15 Expected Resources – 91.220(c)(1,2) Introduction In Fiscal Year 2019-20, Palo Alto will allocate approximately $661,045 to eligible activities that address the needs identified in the Consolidated Plan. Anticipated Resources Program Source of Funds Uses of Funds Expected Amount Available Year 1 Expected Amount Available Remainder of ConPlan $ Narrative Description Annual Allocation: $ Program Income: $ Prior Year Resources: $ Total: $ CDBG public - federal Acquisition Admin and Planning Economic Development Housing Public Improvements Public Services 436,335 136,049 88,661 661,045 0 CDBG funds will be used for improvements in lower income neighborhoods, and public services that benefit low income and special needs households. Table 6 - Expected Resources – Priority Table Annual Action Plan 2020 21 Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied Leverage, in the context of the CDBG and HOME, means bringing other local, state, and federal financial resources to maximize the reach and impact of the City’s HUD Programs. HUD, like many other federal agencies, encourages the recipients of federal monies to demonstrate that efforts are being made to strategically leverage additional funds in order to achieve greater results. Leverage is also a way to increase project efficiencies and benefit from economies of scale that often come with combining sources of funding for similar or expanded scopes. Funds will be leveraged if financial commitments toward the costs of a project from a source other than the originating HUD program are documented. The City joined the Santa Clara County's HOME Consortium in 2015 and does not receive federal HOME funds on an entitlement basis from HUD. HOME funds can be used to fund eligible affordable housing projects for acquisition, construction and rehabilitation. Starting in FY 2015-2016 developers of affordable housing projects were eligible to competitively apply through an annual RFP process directly to the County for HOME funds to help subsidize affordable housing projects in Palo Alto. Participation in the HOME consortium does not guarantee the City a direct allocation of HOME funds. Instead, through this effort the City of Palo Alto has become a participating jurisdiction and serves as a partner in bringing in additional funding into the County to help address regional affordable housing needs. Applications will be directly submitted through the County's request for proposal process for available HOME funds. Certain nonprofit organizations known as Community Housing Development Organizations (CHDOs) may also apply for funding from State HCD for housing projects located within Palo Alto. The City received one HOME grant from 1992 HOME funding for the Barker Hotel project. Proceeds from HOME loan repayments must be deposited into a HOME Program Income Fund and used in accordance with the HOME program regulations. In addition, the County will only fund a project that has the local support of the City. If the City receives HOME dollars from its participation in the HOME consortium, the required 25 percent matching funds will be provided from the City’s Affordable Housing Fund, which is comprised of two sub-funds: the Commercial Housing Fund and the Residential Housing Fund Therefore, before a project can be considered by the County for funding under the SCCHC, staff will present the proposed project as part of the CDBG annual action plan and budget. This will provide the City Council with the opportunity to determine local support. . To date, no projects within the City have been funded through the HOME Consortium. Moving forward, the City plans to increase outreach to developers in the City to provide additional information on the HOME Consortium and available funding. Annual Action Plan 2020 22 Other Federal Grant Programs In addition to the entitlement dollars listed above, the federal government has several other funding programs for community development and affordable housing activities. These include: Section 8 Housing Choice Voucher Program, Section 202, Section 811, the Affordable Housing Program (AHP) through the Federal Home Loan Bank, and others. It should be noted that the City would not be the applicant for these funding sources as many of these programs offer assistance to affordable housing developers rather than local jurisdictions. County and Local Housing and Community Development Sources There are a variety of countywide and local resources that support housing and community development programs. Some of these programs offer assistance to local affordable housing developers and community organizations while others provide assistance directly to individuals. These resources are discussed below: Palo Alto Commercial Housing Fund: The Commercial Housing fund is used primarily to increase the number of new affordable housing units for Palo Alto’s work force. It is funded with mitigation fees required from developers of commercial and industrial projects. As of January, 2019 the Commercial In-Lieu Fund had an available balance of approximately $9,600,000. Palo Alto Residential Housing Fund: The Residential Housing Fund is funded with mitigation fees provided under Palo Alto's Below Market Rate (BMR) housing program from residential developers and money from other miscellaneous sources, such as proceeds from the sale or lease of City property. As of January, 2019 the Residential Housing In-Lieu Fund had an available balance of $4,900,000. Annual Action Plan 2020 23 If appropriate, describe publically owned land or property located within the jurisdiction that may be used to address the needs identified in the plan The City has no surplus vacant land that would be available for the development of housing or services. Sixty-five percent of land in the City is open space. Discussion The City of Palo Alto’s (City) Fiscal Year (FY) 2019-2020 Action Plan covers the time period from July 1, 2019 to June 30 2020 (HUD Program Year 2019). The City’s FY 2019-20 entitlement amount is $436,335. Additionally, the City estimates approximately $136,049 in program income and an estimated $88,661 in available uncommitted funds from the prior program year, bringing the total estimated budget for FY 2019-2020 to $661,045. The U.S. Department of Housing and Urban Development (HUD) allocations are critical, however, the allocations are not sufficient to overcome all barriers and address all of the needs that low-income individuals and families face in attaining self-sufficiency. The City will continue to leverage additional resources to successfully provide support and services to the populations in need. Currently, the City is not eligible to receive direct funding under the HOME Investment Partnership Act (HOME), Emergency Solutions Grant (ESG), or Housing Opportunities for Persons with AIDS (HOWPA). Annual Action Plan 2020 24 Annual Goals and Objectives AP-20 Annual Goals and Objectives Goals Summary Information Sort Order Goal Name Start Year End Year Category Geographic Area Needs Addressed Funding Goal Outcome Indicator 1 Homelessness 2015 2020 Homeless CDBG: $59,874 Public service activities for Low/Moderate Income Housing Benefit: 179 Persons Assisted 2 Affordable Housing 2015 2020 Affordable Housing CDBG: Homeowner Housing Rehabilitated: Household Housing Unit 3 Strengthen Neighborhoods 2015 2020 Non-Homeless Special Needs Non-Housing Community Development CDBG: $156,000 Public service activities other than Low/Moderate Income Housing Benefit: 649 Persons Assisted 4 Fair Housing 2015 2020 Non-Housing Community Development CDBG: $31,587 Public service activities other than Low/Moderate Income Housing Benefit: 15 Persons Assisted 5 Economic Development 2015 2020 Non-Housing Community Development CDBG: $330,695 Jobs created/retained: 30 Jobs Table 7 – Goals Summary Annual Action Plan 2020 25 Goal Descriptions 1 Goal Name Homelessness Goal Description Support activities to end homelessness. 2 Goal Name Affordable Housing Goal Description Assist in the creation and preservation of affordable housing for low income and special needs households. 3 Goal Name Strengthen Neighborhoods Goal Description Support activities that strengthen neighborhoods through the provision of community services and public improvements to benefit low income and special needs households. 4 Goal Name Fair Housing Goal Description Promote fair housing choices. 5 Goal Name Economic Development Goal Description Expanded economic opportunities for low income households. Annual Action Plan 2020 26 Projects AP-35 Projects – 91.220(d) Introduction The Consolidated Plan goals below represent high priority needs for the City of Palo Alto and serve as the basis for the strategic actions the City will use to meet these needs. The goals, listed in no particular order, are: - Assist in the creation and preservation of affordable housing for low income and special needs households. - Support activities to end homelessness. - Support activities that strengthen neighborhoods through the provision of community services and public improvements to benefit low income and special needs households. - Promote fair housing choice. - Expand economic opportunities for low income households. Projects Table 8 - Project Information # Project Name 1 Silicon Valley Independent Living Center 2 Catholic Charities 3 LifeMoves 4 PAHC Management & Services Corporation 5 YWCA of Silicon Valley 6 Project Sentinel 7 City of Palo Alto 8 Downtown Streets Inc. 9 MayView Community Health Describe the reasons for allocation priorities and any obstacles to addressing underserved needs The City awards CDBG funding to nonprofit agencies to provide public services and housing for low income and special needs households. The City operates on a two-year grant funding cycle for CDBG Annual Action Plan 2020 27 grants. The City allocates its CDBG funds to projects and programs that will primarily benefit 0-50% AMI households, the homeless and special needs populations. The allocation of funds is made based on the needs identified in the 2015-2020 Consolidated Plan. Annual Action Plan 2020 28 AP-38 Project Summary Project Summary Information Annual Action Plan 2020 29 1 Project Name Silicon Valley Independent Living Center Target Area Goals Supported Strengthen Neighborhoods Needs Addressed Community Services and Public Improvements Funding CDBG: $6,000 Description Housing and Emergency Housing Services Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities 24 persons will be assisted. Location Description Citywide. Planned Activities Silicon Valley Independent Living Center provides assistance for individuals with disabilities and their families to transition from homelessness, health care facilities, unstable or temporary housing to permanent affordable, accessible, integrated housing with emergency assistance, security deposits, rent, information, & referral, and other basic essentials. 2 Project Name Catholic Charities Target Area Goals Supported Strengthen Neighborhoods Needs Addressed Community Services and Public Improvements Funding CDBG: $10,000 Description Long-Term Care Ombudsman Program Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities 260 persons will be assisted. Location Description Long-term care and skilled nursing facilities throughout the City. Annual Action Plan 2020 30 Planned Activities Catholic Charities assists in problem resolution and advocates for the rights of residents of long term care facilities in Palo Alto. The majority of the clients assisted are low-income, frail, elderly, and chronically ill. This program assists these vulnerable, dependent and socially isolated residents receive the care and placement to which they are entitled. 3 Project Name LifeMoves Target Area Goals Supported Homelessness Needs Addressed Homelessness Funding CDBG: $29,937 Description Opportunity Services Center Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities 48 persons will be assisted. Location Description 33 Encina Way, Palo Alto, CA 94301 Planned Activities LifeMoves provides basic necessities for persons who are homeless or at-risk of becoming homeless. The Opportunity Services Center is a comprehensive, one-stop, multi-service, day drop-in center that provides critical services for homeless Palo Alto residents. Specifically, the facility provides showers, laundry, clothing, snacks, case management, and shelter/housing referral services. 4 Project Name PAHC Management & Services Corporation Target Area Goals Supported Homelessness Needs Addressed Homelessness Funding CDBG: $29,937 Description SRO Resident Support Services Target Date 6/30/2020 Annual Action Plan 2020 31 Estimate the number and type of families that will benefit from the proposed activities 131 persons will be assisted Location Description 439 Emerson Street and 735 Alma Street Palo Alto, CA 94301 Planned Activities Palo Alto Housing Corporation will provide counseling and supportive case management services for low-income residents of single room occupancy facilities in order to help them maintain housing stability. Activities include financial counseling, health maintenance, information and referral, problem solving, employment assistance, crisis intervention and case management. 5 Project Name YWCA of Silicon Valley Target Area Goals Supported Strengthen Neighborhoods Needs Addressed Community Services and Public Improvements Funding CDBG: $5,000 Description Domestic Violence Services Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities 15 persons will be assisted Location Description Citywide Planned Activities Support Network for Battered Women, a Division of YWCA will provide individuals and families experiencing domestic violence, the program provides a bilingual domestic violence hotline, an emergency shelter, crisis counseling, legal assistance, court accompaniment, individual and group therapy, support groups, children’s therapy groups, preventative education, safety planning and community referrals. 6 Project Name Project Sentinel Target Area Goals Supported Fair Housing Needs Addressed Fair Housing Annual Action Plan 2020 32 Funding CDBG: $31,587 Description Fair Housing Services Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities 15 persons will be assisted Location Description Citywide Planned Activities Project Sentinel will provide community education and outreach regarding fair housing law and practices, investigation, counseling and legal referral for victims of housing discrimination, and analyses for City staff and officials regarding fair housing practices. California and federal fair housing laws assure specific protected classes the right to be treated in terms of their individual merits and qualifications in seeking housing. Unfortunately, some people are not aware of the law or their rights. 7 Project Name City of Palo Alto Target Area Goals Supported Homelessness Affordable Housing Strengthen Neighborhoods Fair Housing Economic Development Needs Addressed Community Services and Public Improvements Homelessness Affordable Housing Fair Housing Economic Development Funding CDBG: $82,889 Description Planning and Administration Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities The City will provide general administrative support to the CDBG program. Location Description Citywide Annual Action Plan 2020 33 Planned Activities Administer the Administrative costs for the overall management, coordination, and evaluation of the CDBG program, and the project delivery costs associated with bringing projects to completion. 8 Project Name Downtown Streets Inc. Target Area Goals Supported Economic Development Needs Addressed Economic Development Funding CDBG: $330,695 Description Workforce Development Program Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities 30 jobs will be created for very low income and low-income individuals. Location Description Citywide. Planned Activities The Workforce Development Program will provide a transition from unemployment and homelessness to regular employment and housing through case management, job training, mentoring, housing, and transportation assistance. Downtown Streets Team will screen and prepare applicants and will use their community connections to provide training and job opportunities. 9 Project Name May View Community Health Target Area Goals Supported Strengthen Neighborhoods Needs Addressed Strengthen Neighborhoods Funding CDBG: $135,000 Description Establishment of Dental Program & Renovation Target Date 6/30/2020 Estimate the number and type of families that will benefit from the proposed activities 350 persons will be assisted. Annual Action Plan 2020 34 Location Description City wide. Program will be administered by a non-profit partner. Planned Activities May View will be able to provide up to 50 dental visits a day, for a total of 12,000 visits per year through this rehabilitation project. It is anticipated that this project will expand access to dental care for 900 local low and moderate-income residents. Annual Action Plan 2020 35 AP-50 Geographic Distribution – 91.220(f) Description of the geographic areas of the entitlement (including areas of low-income and minority concentration) where assistance will be directed Not applicable. The City has not established specific target areas to focus the investment of CDBG funds. Geographic Distribution Target Area Percentage of Funds N/A N/A Table 9 - Geographic Distribution Rationale for the priorities for allocating investments geographically Not applicable. Discussion See discussion above. Annual Action Plan 2020 36 AP-75 Barriers to affordable housing – 91.220(j) Introduction: The incorporated and unincorporated jurisdictions within the County face barriers to affordable housing that are common throughout the Bay Area. High on the list is the lack of developable land, which increases the cost of available lands and increases housing development costs. Local opposition is another common obstacle as many neighbors have strong reactions to infill and affordable housing developments. Their opposition is often based on misconceptions, such as a foreseen increase in crime; erosion of property values; increase in parking and traffic congestion; and overwhelmed schools. However, to ensure a healthy economy the region must focus on strategies and investment that provide housing for much of the region’s workforce – for example, sales clerks, secretaries, firefighters, police, teachers, and health service workers – whose incomes significantly limit their housing choices. It should be noted that in a constrained housing supply market, when housing developments produce housing that is relatively affordable, higher income buyers and renters generally outbid lower income households. A home’s final sale or rental price will typically exceed the projected sales or rental costs. Public subsidies are often needed to guarantee affordable homes for LMI households. Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment Palo Alto is addressing the barriers to affordable housing through the following programs and ordinances: Context-Based Design Codes The City adopted form-based codes in 2006 to ensure and encourage residential development by following context-based design guidelines to meet increased density needs. The code encourages the creation of walkable, pedestrian-oriented neighborhoods, following green building design principles, and increasing density along transit corridors and in mixed-use neighborhoods. The Context-Based Design Code allows for increased density and mixed-use buildings in a way that enhances neighborhood character and walkability. Density Bonus Ordinance Density bonus provisions are a tool for attracting and assisting developers in constructing affordable housing. Density bonuses allow a developer to increase the density of a development above what is allowed under standard zoning regulations and provides regulatory relief in the form of concessions. In Annual Action Plan 2020 37 exchange, a developer provides affordable units in the development. In 2004, the California State Legislature lowered the thresholds required to receive a density bonus and increased the number of concessions a developer can receive. The City adopted a Density Bonus Ordinance in January 2014. The density bonus regulations allow for bonuses of 20 to 35 percent, depending on the amount and type of affordable housing provided. As required by state law, the regulations also allow for exceptions to applicable zoning and other development standards, to further encourage development of affordable housing. Below Market Rate Housing Program Established in 1974, the City’s BMR Housing Program has been instrumental in the production of affordable housing by requiring developers to provide a certain percentage of units as BMR in every approved project of three units or more. The program originally required that for developments on sites of less than five acres, the developer must provide 15 percent of the total housing units as BMR housing units. If the site was larger than five acres, the developer was required to provide 20 percent of the units as BMR housing. Several court cases have challenged the BMR, or “inclusionary zoning” ordinances in California. Two factors that have received recent attention by the courts include whether inclusionary housing is considered rent control, and whether inclusionary housing and related housing mitigation fees are considered exactions. One housing bill, was AB 1505, are commonly known as the “Palmer Fix.” AB 1505 restored the authority to cities and county with the ability to require inclusionary affordable housing in new rental housing projects, in lieu of just requiring fees. The City of Palo Alto have historically used in-lieu fees and the use of development impact fees charged on new, market-rate housing and/or commercial development. Known as “Housing Impact Fees” and “Commercial Linkage Fees,” these fees are based on an assessment of the extent to which the development of new market-rate housing or commercial uses, respectively, generates additional demand for affordable housing. The City recently updated its Commercial and Residential Impact Fee Nexus Studies and adopted two ordinances to make changes to its BMR program and adopted a new fee structure. The ordinances became effective on June 19, 2017. Fair Housing The City provides funding to Project Sentinel. Project Sentinel is a reputable organization that provides expertise in fair housing and tenant-landlord dispute. Services include information, referrals, community outreach and education. In addition, Project Sentinel resolve fair housing complaints via investigation Annual Action Plan 2020 38 and mediation and education and outreach to both property owners and tenants about housing policies. Housing Implementation Ordinance (HIP) The City Council recently adopted the Housing Implementation Ordinance that would be reflected in the Palo Alto Municipal Code, Chapter 18. The Housing Implementation Ordinance (HIP) adopted changes to the following zoning districts: Citywide – where multifamily uses are permitted, Multifamily Residential Districts (RM), Downtown (CD-C), California Avenue (CC ((2)), and El Camino Real (CS and CN). The Ordinance focused on these districts to encourage a shift of redevelopment and production towards housing. The Ordinance amended various sections of the to the development standards including but not limited to increasing maximum density to 20 dwelling units per acre, exemption of retail preservation requirement for 100% affordable projects, increase of floor area ratio to certain zoning districts, and to allow applicant to fulfill usable open space requirement via rooftop if certain requirements are fulfilled. The Ordinance will be effective May 2, 2019. Affordable Housing (AH) Combining District The City Council adopted the Affordable Housing Combining District to provide flexible development standards beyond the State Density Bonus Law to allow 100% affordable housing projects located in a commercial zoned area to incorporate the overlay. The overlay is applicable to be combined with the following districts: Downtown Commercial (CD), Neighborhood Commercial (CN), Service Commercial (CS) and Community Commercial (CC). The combining districts is intended to promote the development of 100% affordable rental housing located within one-half mile of major transit stop or a one-quarter mile of high-quality transit corridor. The Affordable Housing Combining District became effective in 2018. Workforce Housing (WH) Combining District The City Council also adopted in 2018 the Workforce Housing Combining District to encourage the development of housing within half-mile of major fixed rail transit by modifying flexible development standards for the public facilities (PF) zoning district. The overlay can be combined only with the PF zoning districts. The project would provide at least 20% of the total units for households earning no more than 120% of the area median income (AMI) and up to 150% of AMI. In addition, the Workforce Housing Combining District could utilize the State Density Bonus Law to increase density. Discussion: Please see above. Annual Action Plan 2020 39 AP-85 Other Actions – 91.220(k) Introduction: This section discusses the City’s efforts in addressing the underserved needs, expanding and preserving affordable housing, reducing lead-based paint hazards, and developing institutional structure for delivering housing and community development activities. Actions planned to address obstacles to meeting underserved needs The diminishing amount of available funds continues to be an obstacle to addressing the needs of underserved populations. To address this, the City supplements its CDBG funding with other resources and funds, including: • The City’s Human Service Resource Allocation Process (HSRAP) provides approximately $1,500,749 from the General Fund in support of human services. The HSRAP funds, in conjunction with the CDBG public service funds, are distributed to local non-profit agencies. • The Palo Alto Commercial Housing Fund is utilized to increase the number of new affordable housing units for Palo Alto’s work force. It is funded with mitigation fees required from developers of commercial and industrial projects. • The Palo Alto Residential Housing Fund is funded with mitigation fees provided under Palo Alto’s BMR housing program from residential developers and monies from other miscellaneous sources, such as proceeds from the sale or lease of City property. • The City’s Below Market Rate Emergency Fund was authorized in 2002 to provide funding on an ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s stock of BMR ownership units. • HOME Program funds are available on an annual competitive basis through the State of California HOME program, and the County’s HOME Consortium. • The Citywide Affordable Housing Impact Fee and In-Lieu Fees was adopted in 2016 to mitigate the impact of mixed-use, nonresidential and residential rental projects. Actions planned to foster and maintain affordable housing The City will foster and maintain affordable housing by continuing the following programs and ordinances: • The Below Market Rate Emergency Fund which provides funding on an ongoing basis for loans to BMR owners for special assessment loans and for rehabilitation and preservation of the City’s stock of BMR ownership units. • The Commercial Housing Fund is utilized to increase the number of new affordable housing units for Palo Alto’s work force. • The Residential Housing Fund is used to assist new housing development and/or the acquisition, Annual Action Plan 2020 40 rehabilitation or the preservation of existing housing for affordable housing. • The Housing Impact Fee and In-Lieu shall be expended exclusively to provide affordable housing to very low income, low income and moderate income households. • The Density Bonus Ordinance, adopted by the City Council in January 2014, allows for bonuses of 20 to 35 percent, depending on the amount and type of affordable housing provided. The City’s participation in the County's HOME Consortium allows developers of affordable housing projects in Palo Alto to be eligible to competitively apply through an annual RFP process directly to the County for HOME funds to help subsidize the cost of constructing an affordable housing project. Actions planned to reduce lead-based paint hazards The City’s housing and CDBG staff provides information and referral to property owners, developers, and non-profit organizations rehabilitating older housing about lead-based paint (LBP) hazards. Any house to be rehabilitated with City financial assistance is required to be inspected for the existence of LBP and LBP hazards. The City provides financial assistance for the abatement of LBP hazards in units rehabilitated with City funding. The City also requires that contractors are trained and certified in an effort to decrease the risk of potential use of LBP in new units. All development and rehabilitation projects must be evaluated according to HUD’s Lead Safe Housing Rule 24 CFR Part 35. Actions planned to reduce the number of poverty-level families The City, in its continuing effort to reduce poverty, will prioritize funding agencies that provide direct assistance to the homeless and those in danger of becoming homeless. In FY 2019-2020, these programs will include the following: Downtown Streets Team is a nonprofit in the City that works to reduce homelessness through a “work first” model. Downtown Streets Team uses their community connections to provide training and job opportunities to homeless people, specifically in the downtown area. The Downtown Streets Team has helped 888 people find housing and 925 find jobs since its inception in 2005. The Downtown Streets Team has initiatives in Palo Alto, San Jose, Sunnyvale, San Francisco, Santa Cruz, San Rafael, Novato, Sacramento, West Sacramento, Modesto, Oakland, Berkeley and Hayward Actions planned to develop institutional structure The City is striving to improve intergovernmental and private sector cooperation to synergize efforts and resources and develop new revenues for community service needs and the production of affordable housing. Collaborative efforts include: • Regular quarterly meetings between entitlement jurisdictions at the CDBG Coordinators Annual Action Plan 2020 41 Meeting and Regional Housing Working Group. • Joint jurisdiction Request for Proposals and project review committees • Coordination on project management for projects funded by multiple jurisdictions • The established of the HOME Consortium with the county of Santa Clara and the cities of Gilroy and Cupertino to provide additional funding opportunities for affordable housing projects. Recent examples include the effort by the County to create a regional affordable housing fund, using former redevelopment funds that could be returned to the County to use for affordable housing. Another effort underway involves the possible use of former redevelopment funds to create a countywide pool for homeless shelters and transitional housing. These interactions among agencies generate cohesive discussion and forums for bridging funding and service gaps on a regional scale. Actions planned to enhance coordination between public and private housing and social service agencies The City benefits from region-wide network of housing and community development partners, such as the County and the CoC. To improve intergovernmental and private sector cooperation, the City will continue to participate with other local jurisdictions and developers in sharing information and resources. In addition to the actions listed above, the City will continue to coordinate with the City’s human services funding efforts to comprehensively address its community needs. Discussion: Please see discussions above. Annual Action Plan 2020 42 Program Specific Requirements AP-90 Program Specific Requirements – 91.220(l)(1,2,4) Introduction: The charts below provide additional information regarding the CDBG program income and other CDBG program requirements. Community Development Block Grant Program (CDBG) Reference 24 CFR 91.220(l)(1) Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out. 1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed 136,049 2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan. 0 3. The amount of surplus funds from urban renewal settlements 0 4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0 5. The amount of income from float-funded activities 0 Total Program Income: 136,049 Other CDBG Requirements 1. The amount of urgent need activities 0 2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income. Specify the years covered that include this Annual Action Plan. 100.00% Annual Action Plan 2020 43 Annual Action Plan 2020 44 Attachments Annual Action Plan 2020 45 Citizen Participation Comments Annual Action Plan 2020 46 NO PUBLIC COMMENTS RECEIVED DURING THE 30 DAYS PUBLIC REVIEW PERIOD OF THE DRAFT ACTION PLAN FROM MARCH 15TH, 2019 TILL APRIL 15TH, 2019 Annual Action Plan 2020 47 Grantee Unique Appendices Annual Action Plan 2020 48 Annual Action Plan 2020 49 CITY OF PALO ALTO CDBG APPLICATIONS (FISCAL YEAR 2019-20) AGENCY PROGRAM NAME FY 2018-19 FINAL ALLOCATIONS FY 2019-20 REQUEST FINNACE COMMITTEE RECOMMENDATION Public Services (15% CAP = $80,874) Palo Alto Housing Corp. SRO Resident Support $30,933 $ 48,283 $ 29,937 Catholic Charities Ombudsman $10,000 $10,000 $10,000 LifeMoves (formerly Inn Vision) Opportunity Center $44,933 $ 46,575 $ 29,937 YWCA/Support Network Domestic Violence Services $10,000 $10,000 $5,000 Silicon Valley Independent Living Center Housing and Emergency Services $5,032 $ 28,826 $6,000 Public Service Total $100,898 $ 143,684 $80,874 Planning & Administration (20% CAP = $ 114,476) Project Sentinel Fair Housing Services $33,698 $33,698 $31,587 City of Palo Alto CDBG Administration $85,000 $85,000 $82,889 Planning & Administration Total $118,698 $118,698 $ 114,476 Economic Development Downtown Streets Workforce Development Program $ 336,400 $336,400 $330,695 Economic Development Total $ 336,400 $336,400 $330,695 Housing/Public Facilities Rehabilitation May View Community Health Establishment of Dental Program & Renovation N/A $150,000 $135,000 Rehab Total N/A $ 150,000 $135,000 GRAND TOTAL $670,434* $748,782 $ 661,045 *Includes $114,438 allocation to Minor Home Repair Program for FY 2018-19 Funds Available $ 661,045 Available for Public Service (15% Cap) $ 80,874 Available for Planning/Admin (20% Cap) $ 114,476 Available for Economic Development/Public Facilities $ 465,695 City of Palo Alto (ID # 9819) City Council Staff Report Report Type: Informational Report Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Status Update On Newell Road Bridge Project Title: Newell Road Bridge Project Informational Update From: City Manager Lead Department: Public Works Executive Summary The City of Palo Alto and Caltrans as the lead agencies under California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEPA), respectively, and in coordination with the City of East Palo Alto, a responsible agency, are preparing to release a Draft Environmental Impact Report (EIR)/Environmental Assessment (EA) for the Newell Road Bridge Project in spring 2019. The purpose of this informational report is to provide Council with a brief history of the project, including the community engagement and screening process that was used to select the alternatives for full analysis, in advance of the release of the Draft EIR/EA. Background Constructed in 1911, the existing Newell Road Bridge is a 76 foot long, reinforced concrete girder structure spanning 22 feet. It functions as a two-lane bridge; however, since the curb to curb width is only 18 feet, this two-lane bridge is considered substandard. There are no sidewalks for pedestrian access, and there are no dedicated bicycle lanes or signage on the bridge. The California Department of Transportation (Caltrans) inspected the bridge (bridge number 37C-0223) as part of their statewide local bridge inspection program and determined that it does not meet current state standards for vehicle access or multi-modal access. Specifically, the existing bridge does not comply with the following geometric design standards: Roadway Section: The standard minimum width configuration is two 11-foot wide lanes plus separate 5-foot bicycle lanes or two 14-foot “sharrow” lanes (shared bicycle/vehicle lanes). Vertical Alignment: Current standards require smooth, gradual vertical curves between grade differences. The bridge approach has a steep grade (up to seven percent) that CITY OF PALO ALTO City of Palo Alto Page 2 reduces the length of roadway a driver can see entering or leaving the bridge and reduces the response time for drivers to respond to conditions in front of their vehicle. Stopping Sight Distance: At the intersection of Newell Road and Woodland Avenue, the sight distance is limited by the existing bridge barriers and flood walls. Under existing conditions, the stopping sight distance can only accommodate a speed of 15 miles per hour. As a result, Caltrans deemed the bridge functionally obsolete and added the bridge to the Federal State Transportation Improvement Program (FTIP) on April 18, 2011. Once a project is placed on the FTIP it becomes eligible to receive federal funding and subject to federally required action. The project description in the FTIP for this bridge is to “replace [an] existing two-lane bridge with a new two-lane bridge conforming to current standards.” In addition to providing a new bridge that conforms to current Caltrans standards for vehicle access and multi-modal access, this bridge replacement project would provide natural flood protection for residents, businesses, and visitors, preserve flood capacity, and reduce flood risks in flood-prone areas as set out in Santa Clara Valley Water District (SCVWD) Governance Policies 1.4 and E-3. Specifically, the existing Newell Road Bridge abutments encroach into the creek bed and create a flow constriction in the channel. The redesign would place the supports outside of the creek channel, thus increasing the hydraulic creek capacity in this area. For these reasons, the SCVWD agreed to provide the remaining funding for the bridge design, as discussed further below. Discussion Following is a summary of the project timeline following Caltrans’ initial action of adding the bridge to the FTIP. This discussion also summarizes the Alternatives Screening Analysis process, community engagement process, and technical report preparation process, which have been ongoing since 2013. Project Timeline Table 1 summarizes the project timeline, including milestones and Council actions since 2011. Although the Newell Road Bridge Replacement Project has taken several years to advance, staff notes that the San Francisquito Creek Flood Reduction, Ecosystem Restoration, and Recreation San Francisco Bay to Highway 101 Project was completed on October 16, 2018. This downstream project increased the creek capacity, allowing upstream projects (such as the Newell Road Bridge Replacement Project) to move forward. City of Palo Alto Page 3 Table 1: Summary of Project Milestones and Council Actions for the Newell Road Bridge Project Milestone/Action Timeline City Council approved a budget appropriation for a new capital improvement project to replace the Newell Road Bridge and authorized staff to accept the Caltrans Highway Bridge Program grant funds to pay for the majority of the project design costs. July 11, 2011 City Council approved a cost-sharing agreement between the SCVWD and the City of Palo Alto for the SCVWD to provide local matching funds to supplement the Caltrans funding in order to cover the cost of the new bridge design. Council also approved contract C12142825 with Nolte Associates, Inc. (now known as NV5, Inc.) to design the bridge as well as the funds for preparation of the environmental analysis for the bridge replacement. April 9, 2012 The City held a community meeting to identify initial potential alternatives to the proposed project and committed to formally evaluate a reasonable range of alternatives through an EIR process. January 8, 2013 The City held a community meeting to present a broader range of potential design alternatives to be reviewed and to identify screening criteria for these alternatives. October 17, 2013 The City held a community meeting to present the completed Alternatives Screening Analysis Report February 27, 2014 The City attended a meeting of the Crescent Park Neighborhood Association (CPNA) to make them aware of the 5 alternatives that would be analyized as part of the Environmental Impact Report (EIR) and to let them know they would have opportunities to provide public input during the release of the EIR. June 25, 2015 The City filed a Notice of Preparation (NOP) of an Environmental Impact Report/Environmental Assessment with the State Clearinghouse and County of Santa Clara August 2015 The City held an EIR Scoping meeting September 3, 2015 The City worked with consultants to conduct necessary site surveys, prepare technical reports, and obtain Caltrans approval of all technical reports to be used in the environmental analysis September 2015 through April 25, 2018 Preparation of the Draft EIR/EA Ongoing; anticipated to be released in spring 2019 City of Palo Alto Page 4 Alternatives Screening Analysis and Public Engagement Early in the process, the public expressed an interest in the various alternatives that may be considered for the Newell Road Bridge Replacement Project. In response to that interest, the City involved the public through community meetings during the alternatives screening process, which was intended to reduce the number of alternatives that would be carried forward in the environmental analysis. The first community meeting was held on January 8, 2013, at which the City committed to evaluate a reasonable range of alternatives through an EIR process. At this meeting, the City presented five potential alternatives that could be considered as part of the environmental analysis. These alternatives included: 1. Removal of the existing bridge without replacement; 2. Replacement of the existing bridge with a bicycle/pedestrian bridge; 3. Replacement of the existing bridge with a bridge on the existing alignment; 4. Replacement of the existing bridge with a bridge with a partial realignment; 5. Replacement of the existing bridge with a bridge aligned with Newell Road in East Palo Alto. On October 17, 2013, the City hosted another community meeting to further discuss the design alternatives to be reviewed and to identify screening criteria that these alternatives would be compared against. At this meeting, eight alternatives were presented for the public’s consideration. Following this meeting, the City prepared an Alternatives Screening Analysis report and presented it to the community on February 27, 2014. The eight alternatives in this screening analysis included: 1. No Build (keep existing bridge); 2. Remove Existing Bridge; 3. Bicycle/Pedestrian Bridge; 4. Bicycle/Pedestrian Bridge with Emergency Vehicle Access; 5. One-Lane Bridge with Bi-directional traffic; 6. Two-lane Bridge with on Existing Alignment; 7. Two-lane Bridge with Partial Realignment of Newell Road; 8. Two-lane Bridge with Full Realignment of Newell Road. These alternatives were evaluated under four basic screening criteria: 1) Accommodate the 100-year storm flow of San Francisquito Creek; 2) Maintain existing traffic volumes and speeds; 3) Not increase traffic on surrounding residential streets; and 4) Safely accommodate multi- modal traffic. The results from the alternatives screening are shown below. The screening process was then used to narrow the initial eight project alternatives to those that met most of the basic screening criteria in order to fully analyze those alternatives in the environmental analysis. City of Palo Alto Page 5 Alternatives Screening: Summary of Results Alternative Description Does alternative accommodate a 100-year storm flow event? Does alternative have a negative effect on LOS? Does alternative increase the TIRE index on any residential street by 0.1 or more? How does alternative accommodate multi-modal traffic (0-3)? Advance or eliminate? 1 No Build (keep existing bridge)* No No No 2 Advance 2 Remove existing bridge Yes Yes Yes 0 Eliminate 3 Bicycle/pedestrian bridge Yes Yes Yes 1 Eliminate 4 Bicycle/pedestrian bridge with emergency access Yes Yes Yes 1 Eliminate 5 One lane bridge with bi-directional traffic Yes Yes No 2 Advance 6 Two-lane bridge on existing alignment Yes No No 3 Advance 7 Two-lane bridge with partial realignment of Newell Road Yes No No 3 Advance 8 Two-lane bridge with partial realignment of Newell Road Yes No Yes 3 Advance *The EIR always includes an assessment of the No Project Alternative As summarized in the table above, the five alternatives carried forward for full analysis in the EIR/EA are as follows: Alternative 1: A one-lane bridge with two-way traffic (under signal control) on the existing alignment. Alternative 2: A two-lane bridge on the existing alignment. Alternative 3: A two-lane bridge on a partial realignment of Newell Road. Alternative 4: A two-lane bridge on a full realignment of Newell Road. Alternative 5: No Build/No Action Alternative (As required in accordance with CEQA and NEPA) The City formally began the EIR process in August 2015 by filing the Notice of Preparation of a Draft EIR/EA in accordance with CEQA and NEPA. The City held a scoping meeting on September 3, 2015. Verbal and written comments were collected from the meeting attendees and will be summarized in the Draft EIR/EA. City of Palo Alto Page 6 Preparation of Technical Reports In addition to these initial alternatives screening process with the public, once the NOP was issued, staff along with qualified consultants began to work on the 10 Technical Reports and associated documents required for the environmental analysis. These included: Air Quality Technical Memorandum, Community Impact Assessment, Final Supplemental Traffic Evaluation Report, Hazardous Materials Technical Memorandum Update, Historic Property Survey Report, Location Hydraulics Study, Natural Environment Study, Noise Study Report, Visual Impact Assessment, and Water Quality Assessment Report. Staff from both the City of Palo Alto, as the lead agency under CEQA, and the City of East Palo Alto, as a responsible agency, reviewed and commented on each of these reports internally before submitting draft reports to Caltrans for review and approval. In addition, staff from both Palo Alto and East Palo Alto evaluated the five project alternatives to discuss and determine the Locally Preferred Alternative (LPA) that would be identified as the proposed project in the Draft EIR/EA for the purposes of CEQA. Alternative 2, a two-lane bridge on the existing alignment will be identified as the proposed project for the purposes of CEQA in the environmental document. The LPA was identified based on several factors, including: less impact to the environmentally sensitive areas, lower retaining walls on adjacent parcels, minimized utility relocations, maintenance of as many of the existing parking spaces during and post construction, and overall cost associated with the project. Timeline In preparation for the release of the Draft EIR/EA, the City of Palo Alto has been coordinating with private property owners within Palo Alto and East Palo Alto whose property may be affected by the proposed project. City staff has also been refining the formal project plans for the planning entitlement process. Once the draft EIR/EA is released, there will be a 45 day public review period. During the public review period, the Architectural Review Board (ARB) will hold a public hearing to allow for comments on the public document and to review/make a recommendation on the proposed project. At least one additional community meeting will be conducted within the project area to encourage public engagement during this public review period. Staff will also bring the project to the Planning and Transportation Commission in order to obtain their input though their formal recommendation is not required for this Architectural Review application. Following the public review period, staff will return to City Council to certify the EIR and to make a decision on the proposed project. Once certified by the City, the Caltrans Director will certify the EA. Resource Impact As discussed above, the City applied for and obtained a Caltrans Highway Bridge Program (HBP) City of Palo Alto Page 7 grant in 2011 to pay for approximately 88.5 percent of the design, planning, of the bridge. The City subsequently entered into an agreement with the SCVWD for the SCVWD to contribute the remaining funds (approximately 11.5 percent) for the design of the new bridge. Due to the unforeseeable project delays and changes to requirements and consultants’ pay rate schedule over time, the original approved funds do not cover a portion of environmental permitting process or account for the pay rate changes associated with the design of the project. Staff will be requesting additional funds from Caltrans and SCVWD to complete the planning entitlements and design. We have brought this to the attention of both agencies and anticipate that they will approve and fund the necessary adjustment. Once approved, staff intends to bring a contract amendment to City Council in the fall of 2019. Based on Caltrans’ protocol, construction funds are not approved and allocated until the planning entitlements and environmental review process is complete. Staff intends to submit the funding application to Caltrans for the 88.5 percent of the construction costs of the bridge once the EIR is adopted and the project is approved. A separate application will be submitted to SCVWD for the 11.5 percent associated with construction costs. Thus far, the typical payment process has been to utilize City funds temporarily to cover the consultant’s costs. Concurrently, staff sends copies of the consultant’s invoice to Caltrans and SCVWD requesting their respective payment of 88.5 and 11.5 percent. This allows us to advance the project and Palo Alto is then reimbursed for project expenses. Policy Implications This is an informational report; therefore, no action is requested at this time which could have policy implications for the City. However, overall the project will improve safety, provide multi- modal transportation options across San Francisquito Creek, and increase the storm flow capacity under the bridge. These improvements are consistent with city policies. A complete analysis of the project’s consistency with City policies will be provided when the formal project is brought forth to the Council for review. Environmental Review No formal action is requested at this time; provision of this informational report is not a project requiring environmental review under the California Environmental Quality Act (CEQA) or National Environmental Policy Act (NEPA). An Environmental Impact Report/Environmental Assessment (EIR/EA) is currently being prepared in accordance with CEQA and NEPA for the Newell Road Bridge Replacement Project. The City of Palo Alto and Caltrans will serve as the lead agencies in accordance with CEQA and NEPA, respectively. City of Palo Alto (ID # 10080) City Council Staff Report Report Type: Informational Report Meeting Date: 5/6/2019 City of Palo Alto Page 1 Summary Title: Investment Activity Report Title: City of Palo Alto Investment Activity Report for the Third Quarter, Fiscal Year 2019 From: City Manager Lead Department: Administrative Services Background The City’s investment policy requires that staff report to Council quarterly on the City’s portfolio composition and performance compared to the Council-adopted policy; discuss overall compliance with the City’s Investment Policy; and provide recommendations, if any, for policy changes. In addition, staff will also provide a detailed list of all securities and report on the City’s ability to meet expenditure requirements over the next six months. This report is to inform Council of the City’s investment portfolio performance as of the third quarter ending March 31, 2019 and to disclose staff’s cash flow projections for the next six months. Discussion The City’s investment portfolio is summarized in Graph 1 and detailed in the Investments by Fund report (Attachment B). The Investments by Fund report groups the portfolio’s securities by investment type and includes details of the investment issuer, date of maturity, current market value, the book and face (par) value, and the weighted average maturity of each type of investment and of the entire portfolio. City of Palo Alto Page 2 U.S. Treasury 3.3% U.S. Agency 55.2% U.S. Municipal/State 19.7% Negotiable CD 9.2% U.S. Corporate 3.7% Supranational 2.7% Liquid Accts. 6.2% Graph 1: Investments by Type -$540M (Par Value) The par value of the City’s portfolio is $540.0 million; in comparison, last quarter it was $527.1 million. The $12.9 million portfolio growth since the last quarter primarily results from timing of cash flows. Contributing factors include lower payroll costs in the third quarter due to an extra pay period in the second quarter and higher revenue receipts in the second quarter, such as property taxes and interest earnings. The portfolio consists of $33.5 million in liquid accounts and $506.5 million in various investment types as detailed in the below Table 1. The investment policy requires that at least $50 million be maintained in securities maturing in less than two years. The portfolio includes $135.6 million in investments maturing in less than two years, comprising 25.1 percent of the City’s investment portfolio. In addition, the Investment Policy allows up to 30 percent of the portfolio can be invested in securities with maturities beyond five years; actual at the end of the second quarter is 29.3 percent of the portfolio. City of Palo Alto Page 3 Table 1: Up to 1 Year 1 to 2 Years 2 to 3 Years 3 to 5 Years Over 5 Years Portfolio Total * % of Portfolio U.S. Treasury 7.5$ -$ 1.5$ 9.0$ -$ 18.0$ 3.3% U.S. Agency Bonds 43.6 39.4 28.4 71.5 115.4 298.3 55.2% U.S. Municipal/ State Bonds 5.6 6.8 26.4 27.3 40.0 106.1 19.7% Negotiable Certificates of Deposits (NCD)11.8 6.1 10.6 19.8 1.5 49.8 9.2% U.S. Corporate Bonds 8.3 6.5 5.0 - - 19.8 3.7% Supranational Organizations Bonds - - 1.0 12.0 1.5 14.5 2.7% Liquid Accounts (LAIF & Fidelity)33.5 - - - - 33.5 6.2% Grand Total 110.3$ 58.8$ 72.9$ 139.6$ 158.4$ 540.0$ 100% % of Portfolio 20.4%10.9%13.5%25.9%29.3%100.0% * $27.4 million or 5.1 percent are in investments that support Environmental, Social, and Governace (ESG) Activities (aka "Green" and Supranational Bonds) Maturities - Par Value (millions) Investment Type The current market value of the portfolio is 99.4 percent of the book value. The market value of securities fluctuates, depending on how interest rates perform. When interest rates decrease, the market value of the securities in the City’s portfolio will likely increase; likewise, when interest rates increase, the market value of the securities will likely decrease. Understanding and showing market values is not only a reporting requirement, but essential to knowing the principal risks in actively buying and selling securities. It is important to note, however, that the City’s practice is to buy and hold investments until they mature so changes in market price do not affect the City’s investment principal. The market valuation is provided by Union Bank of California, which is the City’s safekeeping agent. The average life to maturity of the investment portfolio is 3.63 years compared to 3.71 years last quarter. Investments Made During the Third Quarter During the third quarter, $22.4 million of securities with an average yield of 2.1 percent matured. During the same period, per Table 2 below, government securities totaling $27.5 million with an average yield of 3.2 percent were purchased. The expectation is interest rates and City’s portfolio’s average yield will continue to rise. The City’s short-term money market and pool account increased by $7.9 million compared to the second quarter. Investment staff continually monitors the City’s short-term cash flow needs and adjusts liquid funds to meet them. City of Palo Alto Page 4 Table 2: Up to 1 Year 1 to 2 Years 2 to 3 Years 3 to 5 Years Over 5 Years Portfolio Total * % of Purchase U.S. Agency Bonds -$ -$ -$ 1.2$ 10.0$ 11.2$ 40.7% U.S. Municipal/ State Bonds - - 1.9 3.2$ 3.3 8.4 30.5% Negotiable Certificates of Deposits (NCD)- - 0.2 0.5$ 0.2 0.9 3.3% Supranational Organizations Bonds - - - 5.5$ 1.5 7.0 25.5% Grand Total -$ -$ 2.1$ 10.4$ 15.0$ 27.5$ 100% % of Purchase 0.0%0.0%7.6%37.8%54.6%100.0% * $8.1 million or 29.4 percent are in investments that support Environmental, Social, and Governace (ESG) Activities (aka "Green" and Supranational Bonds) Investment Type 2019 Q3 Security Purchases - Par Value (millions) Availability of Funds for the Next Six Months Normally, the flow of revenues from the City’s utility billings and General Fund sources is sufficient to provide funds for ongoing expenditures in those respective funds. Projections indicate receipts will be $280.4 million and expenditures will be $271.3 million over the next six months, indicating an overall growth in the portfolio of $9.1 million. As of March 31, 2019, the City had $33.5 million deposited in the Local Agency Investment Fund (LAIF) and a money market account that could be withdrawn on a daily basis. In addition, investments totaling $41.9 million will mature between April 1, 2019 and September 30, 2019. Based on the above and staff’s revenue and expenditure forecast for the next six months, staff is confident that the City will have more than sufficient funds or liquidity to meet expenditure requirements for the next six months. Compliance with City Investment Policy During the third quarter, staff complied with all aspects of the investment policy. Attachment C lists the major restrictions in the City’s investment policy compared with the portfolio’s actual performance. Investment Yields Interest income on an accrual basis for the third quarter was $3.2 million which is $0.43 million or 15.5 percent higher over the same period last year. As of March 31, 2019, the yield to maturity of the City’s portfolio was 2.36 percent. In the third quarter, LAIF’s average yield was 2.39 percent while the average yield on the two-year and five-year Treasury bonds was approximately 2.49 percent and 2.47 percent, respectively. The rising interest rate is expected to increase the portfolio’s yields. Historically, the City’s portfolio yield has outperformed the two-year and five-year Treasury bond rates, however with the recent rapid interest rate rise that is no longer the case; this is an expected occurrence. As the City’s laddered portfolio City of Palo Alto Page 5 investments mature in the next year or two, funds are expected to be reinvested in higher yielding securities. Graph 2 shows the City’s yields and interest earnings for the past 17.5 years. City’s portfolio duration is 3.63 years. Yield Trends The Federal Open Market Committee (FOMC) maintained the federal funds and discount rates to 2.25 and 3.0 percent in March 2019, respectively. In calendar year 2018, both rates have risen by 0.75 percent. The FOMC views economic activity slowing down, job gains remaining strong and low unemployment and inflation rate. The FOMC expects the federal funds rate to remain the same to end of 2019 with rate increase beyond that being limited. Funds Held by the City or Managed Under Contract Attachment A is a consolidated report of all City investment funds, including those not held directly in the investment portfolio. These include cash in the City’s regular bank account with US Bank and Wells Fargo. A description of the City’s banking relationships can be found in City Council Staff Report ID # 7858. The bond proceeds, reserves, and debt service payments being held by the City’s fiscal agents are subject to the requirements of the underlying debt indenture. The trustees for the bond funds are U.S. Bank and California Asset Management Program (CAMP). Bond funds with U.S. Bank are invested in federal agency and money market City of Palo Alto Page 6 mutual funds that consist exclusively of U.S. Treasury securities. Bond funds in CAMP are invested in banker’s acceptance notes, certificates of deposit, commercial paper, federal agency securities, and repurchase agreements. The most recent data on funds held by the fiscal agent is as of March 31, 2019. In January 2017, the City established a Section 115 Irrevocable Trust (Public Agencies Post- Employment Benefits Trust) administered by Public Agency Retirement Services (PARS). This fund it not governed by the City’s Investment Policy, however, is discussed in this report for administrative ease. It is the City’s intent to prefund pension costs and began to address the Net Pension Liabilities (NPL) as calculated by Governmental Accounting Standards Board Pronouncement No. 68 (GASB 68). The Section 115 Trust offered by PARS has five portfolios from which to choose in making investments of City funds. The City has selected the “Moderately Conservative” portfolio which is the second most conservative. Additional information on this trust can be found in City Council Staff Report ID # 7553. Through March 31, 2019 principal investment contributions of $13.5 million have grown to $13.7 million. As of March 31, 2019, the net return for one year has been 4.08 percent. Fiscal Impact This is an information report. Environmental Review This information report is not a project under the California Environmental Quality Act; therefore, an environmental review is not required. Attachments: • Attachment A: Consolidated Report of Cash Management • Attachment B: Investment Portfolio • Attachment C: Investment Policy Compliance Book Value Market Value City Investment Portfolio (see Attachment B)544,891,569$ 541,844,452$ Other Funds Held by the City Cash with Wells Fargo Bank 185,382 185,382 (includes general and imprest accounts) Cash with US Bank 5,015,508 5,015,508 (includes general and imprest accounts) Petty/Working Cash 12,478 12,478 Total - Other Funds Held By City 5,213,368 5,213,368 Funds Under Management of Third Party Trustees * Debt Service Proceeds US Bank Trust Services ** 1995 Utility Revenue Bonds Debt Service Fund 187 187 1999 Utility Revenue Bonds Debt Service Fund 71 71 2007 Utility Revenue Bonds Debt Service Fund 18 18 2009 Water Revenue Bonds (Build America Bonds) Debt Service and Reserve Funds 2,585,502 2,585,502 2010 General Obligation (Library) Bond Debt Service and Escrow Funds 2,444,822 2,444,822 2011 Utility Revenue Refunding Bonds Debt Service and Reserve Funds 1,461,649 1,461,649 2012 University Ave. Parking Refunding Bonds Reserve and Escrow Funds 1,839,346 1,839,346 2013 General Obligation (Library) Bond Escrow Funds 3,127,560 3,127,560 2018 Capital Improvement (Golf Course & 2002B COP Refinance) (Taxable- Green Bond) Certificates of Participation Debt Service and Cost of Issuance Funds 17,837 17,837 2019 California Avenue Parking Garage Certificates of Participation (Tax-Exempt and Taxable Bonds) Construction and Cost of Issuance Funds 42,020,625 42,020,625 California Asset Management Program (CAMP) *** 2012 University Ave. Parking Refunding Bonds Reserve Fund 2,640,148 2,640,148 2013 General Obligation (Library) Bond Reserve Fund 584,316 584,316 Public Agencies Post-Employment Benefits Trust **** Public Agency Retirement Services (PARS) 13,720,836 13,720,836 Total Under Trustee Management 70,442,917 70,442,917 GRAND TOTAL 620,547,854$ 617,500,737$ * These funds are subject to the requirements of the underlying debt indenture. ** U.S. Bank investments are in money market mutual funds that exclusively invest in U.S. Treasury securities. *** CAMP investments are in money market mutual fund which invest in bankers acceptance, certificate of deposit, commercial paper, federal agency securities, and repurchase agreements. **** PARS investments are in moderately conservative index plus funds Third Quarter, Fiscal Year 2018-19 (Unaudited) Attachment A Consolidated Report of Cash Management City of Palo Alto Cash and Investments City of Palo Alto City of Palo Alto Administration Svcs. Dept. 250 Hamilton Ave., 4th Floor Palo Alto, CA 94301 (650)329-2362 March 31, 2019 Fund ALL - Portfolio Listings Investments by Fund Par Value Days ToMaturityMaturityDateCurrentRateMarket ValueCUSIPInvestment # Issuer Purchase Date Book Value YTM 360 YTM 365 LAIF & Fidelity Cash Accounts Fidelity Investments158 3,052,066.58SYS158 12.26007/01/2018 3,052,066.58 2.229 2.2603,052,066.58 Local Agency Investment Fund159 30,435,932.35SYS159 12.44007/01/2018 30,440,405.03 2.406 2.44030,435,932.35 Subtotal and Average 33,487,998.93 33,487,998.93 33,492,471.61 2.390 2.424 1 Negotiable Certificates of Deposits Comenity Capital Bank1959 NCD 245,000.0020033AM86 10/30/2023 1,6733.45010/30/2018 250,556.60 3.404 3.451245,000.00 American Federal Bank1476 NCD 245,000.0002600ADE4 09/30/2022 1,2782.45009/30/2015 242,013.45 2.418 2.451245,000.00 Allegiance Bank - Texas1844 NCD 245,000.0001748DAW6 09/29/2022 1,2772.05009/29/2017 238,750.05 2.022 2.051245,000.00 Alpine Bank1525 NCD 245,000.0002082CBG4 08/16/2023 1,5982.40002/16/2016 239,894.20 2.367 2.400245,000.00 American City Bank1692 NCD 245,000.00025140BC7 03/30/2021 7291.45009/30/2016 239,977.50 1.429 1.449245,000.00 American Eagle Bank1371 NCD 245,000.0002554BCE9 05/28/2019 571.85008/26/2014 244,826.05 1.825 1.850245,000.00 American National Bank1766 NCD 245,000.0002772JAC4 08/04/2021 8562.05004/04/2017 242,180.05 2.023 2.051245,000.00 American State Bank OSCE1805 NCD 245,000.00029733BX9 05/30/2024 1,8862.30005/30/2017 237,125.70 2.270 2.301245,000.00 American Express Centurion Bk1333 NCD 245,000.0002587CAC4 07/10/2019 1001.95007/10/2014 244,737.85 1.923 1.950245,000.00 American Express Centurion Bk1986 NCD 245,000.0002589AA28 12/04/2023 1,7083.55012/04/2018 251,619.90 3.501 3.550245,000.00 Bankers Bank1776 NCD 245,000.0006610RAM1 04/19/2021 7491.90004/19/2017 242,214.35 1.875 1.901245,000.00 Bank of Wisconsin Dells1696 NCD 245,000.00065847DH5 10/12/2021 9251.50010/12/2016 238,316.40 1.480 1.500245,000.00 Bank of Grove1821 NCD 245,000.0006246PBP9 12/29/2021 1,0032.00006/29/2017 240,607.15 1.974 2.001245,000.00 Bankers Bank of the West1421 NCD 245,000.0006610TDB8 12/30/2019 2731.85012/29/2014 244,345.85 1.824 1.850245,000.00 Bar Harbor Bank & Trust1377 NCD 245,000.00066851SG2 08/27/2019 1481.75008/27/2014 244,360.55 1.726 1.750245,000.00 Bank Champaign1477 NCD 245,000.0006607ABD2 09/30/2022 1,2782.50009/30/2015 242,410.35 2.467 2.501245,000.00 Texas Exchange Bank1796 NCD 245,000.0088241TBM1 05/20/2022 1,1452.25005/22/2017 241,190.25 2.220 2.251245,000.00 Bank of Deerfield1396 NCD 245,000.00061785CM1 09/30/2020 5482.20009/30/2014 244,039.60 2.171 2.201245,000.00 Bank of Holland Michigan1302 NCD 245,000.00062649ZV3 05/21/2019 501.70005/21/2014 244,892.20 1.677 1.701245,000.00 Frontier Bank Madison NE1498 NCD 245,000.0035907XCL9 11/22/2021 9662.00011/20/2015 240,964.85 1.974 2.001245,000.00 Bank West1472 NCD 245,000.00063615AX6 09/16/2022 1,2642.25009/16/2015 240,465.05 2.220 2.251245,000.00 Apex Bank1693 NCD 245,000.0003753XAN0 09/30/2022 1,2781.70009/30/2016 235,890.90 1.676 1.700245,000.00 BMO Harris Bank1783 NCD 245,000.0005581WNY7 10/28/2022 1,3062.25004/28/2017 240,222.50 2.220 2.251245,000.00 BMW Bank of North America1807 NCD 245,000.0005580AJK1 06/16/2020 4421.85006/16/2017 243,164.95 1.824 1.850245,000.00 Beneficial Bank1680 NCD 245,000.0008173QBR6 09/13/2021 8961.50009/12/2016 238,497.70 1.479 1.500245,000.00 BankFirst1767 NCD 245,000.0006644QAA9 04/13/2022 1,1082.00004/13/2017 239,607.55 1.973 2.001245,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a ATTACHMENT B March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 2 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Negotiable Certificates of Deposits BankWest, Inc.1380 NCD 150,000.0006652CEY3 09/16/2019 1681.90009/15/2014 149,655.00 1.873 1.900150,000.00 Bofi Federal Bank1381 NCD 50,000.0009710LAF2 08/30/2022 1,2472.25008/25/2014 48,931.50 2.493 2.52749,573.97 Bofi Federal Bank1382 NCD 100,000.0009710LAE5 08/08/2022 1,2252.35008/25/2014 98,257.00 2.592 2.62899,156.63 Bofi Federal Bank1402 NCD 100,000.0009710LAF2 08/30/2022 1,2472.25010/21/2014 97,863.00 2.462 2.49699,239.63 Banco Poplar North America1478 NCD 245,000.0005965GVP8 10/07/2020 5552.25010/07/2015 244,213.55 2.219 2.250245,000.00 Bridgewater Bank Bloom MN1393 NCD 245,000.00108622EA5 09/24/2019 1761.85009/24/2014 244,345.85 1.825 1.850245,000.00 Balboa Thrift & Loan1984 NCD 245,000.0005765LAW7 11/30/2022 1,3393.25011/30/2018 248,515.75 3.207 3.252245,000.00 Business Bank1531 NCD 245,000.0012325EHA3 02/10/2021 6811.55002/10/2016 240,962.40 1.530 1.551245,000.00 Citigroup1950 NCD 245,000.0017312QJ67 04/22/2023 1,4823.00004/24/2018 246,073.10245,000.00 Worlds Foremost Bank1387 NCD 200,000.00981571AT9 09/04/2019 1562.10009/04/2014 199,666.00 2.072 2.101200,000.00 Campbell County Bank1307 NCD 245,000.00134204BZ8 05/30/2019 591.65005/30/2014 244,870.15 1.628 1.650245,000.00 Commercial Bank - Alma1772 NCD 245,000.00201282HM5 04/21/2022 1,1162.05004/21/2017 239,908.90 2.023 2.051245,000.00 CBC National Bank1571 NCD 245,000.0012480LDV6 04/15/2021 7451.50004/15/2016 240,313.15 1.479 1.500245,000.00 Celtic Bank1362 NCD 245,000.0015118RJW8 08/20/2019 1411.90008/20/2014 244,625.15 1.875 1.901245,000.00 Central State Bank1538 NCD 245,000.0015524EAA2 02/16/2022 1,0521.70002/16/2016 238,103.25 1.678 1.701245,000.00 First Iowa State Bank1840 NCD 245,000.00320636AC7 01/31/2022 1,0361.90007/31/2017 239,629.60 1.876 1.902245,000.00 Choice Bank - Oshkosh WI1884 NCD 245,000.0017037VBT8 12/29/2022 1,3682.35012/29/2017 240,663.50 2.317 2.350245,000.00 Charter Bank Eau Claire1811 NCD 245,000.0016116PHU8 06/13/2022 1,1692.10006/13/2017 239,943.20 2.071 2.100245,000.00 CIBM Bank1809 NCD 245,000.0012545JAM7 06/16/2022 1,1722.10006/16/2017 239,911.35 2.072 2.101245,000.00 Citizens Deposit Bank1677 NCD 245,000.0017453FBP6 08/24/2021 8761.40008/24/2016 238,607.95 1.380 1.400245,000.00 Citizens State Bank1541 NCD 250,000.0017670BAQ1 02/17/2023 1,4181.75002/19/2016 239,747.50 1.727 1.751250,000.00 Cumberland Federal Bank FSB1813 NCD 245,000.0023062KBH4 07/07/2022 1,1932.10007/07/2017 239,761.90 2.072 2.101245,000.00 Commercial Savings Bank1868 NCD 245,000.00202291AD2 10/18/2022 1,2962.10010/18/2017 239,051.40 2.071 2.100245,000.00 Enerbank USA1246 NCD 245,000.0029266NYZ4 01/30/2020 3042.05001/30/2014 244,167.00 2.021 2.050245,000.00 City National Bk of Metropolis1791 NCD 245,000.0017801GBQ1 05/16/2022 1,1412.00005/15/2017 239,365.00 1.972 2.000245,000.00 Community State Bank1536 NCD 245,000.0020404YBQ7 02/24/2022 1,0601.95002/24/2016 239,725.15 1.924 1.951245,000.00 Country Bank of New York1799 NCD 245,000.0022230PBN9 05/26/2022 1,1512.10005/26/2017 240,043.65 2.072 2.101245,000.00 Capital One Bank USA NA1384 NCD 250,000.00140420NR7 09/04/2019 1561.80009/04/2014 249,562.50 1.775 1.800250,000.00 Capital One Bank USA NA1457 NCD 245,000.0014042E5M8 08/12/2020 4992.30008/12/2015 244,434.05 2.268 2.300245,000.00 Community Bank Pasadena1627 NCD 245,000.00203507BA5 06/15/2021 8061.55006/16/2016 240,178.40 1.529 1.550245,000.00 Commuincity Finl Svcs Bank1530 NCD 245,000.0020364ABA2 02/17/2021 6881.60002/17/2016 241,148.60 1.579 1.601245,000.00 Commerce Bank - Geneva1816 NCD 245,000.0020056QQK2 06/21/2021 8122.00006/21/2017 242,246.20 1.973 2.001245,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 3 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Negotiable Certificates of Deposits Commercial Bank1369 NCD 245,000.0020143PDB3 05/20/2019 491.85008/19/2014 244,855.45 1.824 1.850245,000.00 Commerce State Bank1797 NCD 245,000.0020070PJA6 05/23/2022 1,1482.00005/22/2017 239,313.55 1.972 2.000245,000.00 Community State Bank, IA1471 NCD 245,000.0020404MAN1 09/12/2022 1,2602.25009/11/2015 240,492.00 2.224 2.255245,000.00 Cornerstone Bank1757 NCD 245,000.00219232CN3 03/10/2022 1,0742.10003/10/2017 240,602.25 2.072 2.101245,000.00 Discover Bank / Delaware1956 NCD 245,000.00254673VJ2 10/24/2023 1,6673.35010/24/2018 249,473.70 3.304 3.350245,000.00 Dollar Bank FSB1756 NCD 245,000.0025665QAV7 03/08/2022 1,0722.05003/08/2017 240,283.75 2.021 2.050245,000.00 East Boston Savings Bank1463 NCD 245,000.0027113PAL5 08/24/2020 5111.90008/24/2015 243,074.30 1.876 1.902245,000.00 TBK Bank SSB1812 NCD 245,000.0087219RBK9 06/23/2022 1,1792.10006/23/2017 239,850.10 2.072 2.101245,000.00 Ever Bank1454 NCD 245,000.0029976DZK9 07/30/2020 4862.00007/30/2015 243,481.00 1.972 2.000245,000.00 Farmer's and Merchants Bank1360 NCD 250,000.00308702BQ1 02/16/2021 6872.20008/15/2014 248,832.50 2.169 2.200250,000.00 First Bank of Highland1330 NCD 245,000.00319141BV8 07/03/2019 931.85007/03/2014 244,608.00 1.824 1.850245,000.00 First Business Bank1250 NCD 245,000.0031938QF25 02/19/2020 3242.00002/19/2014 243,988.15 1.972 2.000245,000.00 FirstBank Puerto Rico1768 NCD 245,000.0033767A2C4 04/07/2022 1,1022.10004/07/2017 240,359.70 2.072 2.101245,000.00 First Choice Bank / NJ1297 NCD 245,000.00319464AR4 05/28/2019 571.70005/28/2014 244,875.05 1.677 1.701245,000.00 First Federal S&L Bank1626 NCD 245,000.0032018YAW8 06/22/2023 1,5431.80006/22/2016 235,266.15 1.776 1.800245,000.00 1st Financial Bank1485 NCD 245,000.0032022RFD4 03/16/2022 1,0802.10010/19/2015 240,541.00 2.120 2.150244,660.77 First Internet Bank1834 NCD 245,000.0032056GCQ1 07/14/2022 1,2002.05007/14/2017 239,313.55 2.023 2.051245,000.00 First Eagle National Bank1400 NCD 245,000.0032008JAG8 10/15/2021 9282.45010/17/2014 245,453.25 2.416 2.449245,000.00 First Oklahoma Bank1838 NCD 245,000.00335857BF4 07/26/2022 1,2122.10007/26/2017 239,629.60 2.072 2.101245,000.00 Farmers & Merchant Bank1735 NCD 245,000.0030781TBD9 01/18/2022 1,0232.05001/18/2017 240,766.40 2.021 2.050245,000.00 First National Bank of America1391 NCD 240,000.0032110YEF8 08/03/2022 1,2202.35009/09/2014 236,613.60 2.665 2.703237,462.74 FNB Bank Inc.1863 NCD 245,000.00330459CB2 10/13/2023 1,6562.25010/13/2017 238,046.90 2.220 2.251245,000.00 First Nationnal Bank / KS1537 NCD 245,000.00334342BU5 02/26/2021 6971.55002/26/2016 240,876.65 1.530 1.551245,000.00 The FNB of Mcgregor1480 NCD 245,000.0032112UBW0 09/30/2021 9132.00010/01/2015 241,430.35 1.972 1.999245,000.00 First Nat. Bank of Park Falls1473 NCD 245,000.0032114RAQ9 09/17/2021 9002.20009/17/2015 242,716.60 2.171 2.201245,000.00 First National Bank2026 NCD 245,000.0032117BCS5 02/14/2024 1,7803.25002/14/2019 246,798.30 3.206 3.251245,000.00 First Premier Bank1255 NCD 245,000.0033610RNX7 03/08/2021 7072.50003/07/2014 245,220.50 2.465 2.500245,000.00 Franklin Synergy Bank1771 NCD 103,000.0035471TCV2 01/31/2022 1,0362.00004/04/2017 101,023.43 1.972 1.999103,000.00 First Merchants Bank1351 NCD 245,000.0032082BDH9 08/06/2019 1271.90008/06/2014 244,666.80 1.873 1.900245,000.00 Community First Bank1555 NCD 250,000.0020369JAA9 03/17/2022 1,0811.70003/17/2016 242,600.00 1.677 1.700250,000.00 Farmer's & Merchant's SVG Bank1551 NCD 245,000.00308863AH2 02/26/2021 6971.55002/29/2016 242,635.75 1.528 1.550245,000.00 First Neighbor Bank, NA1469 NCD 245,000.0033581VAF6 09/03/2021 8862.40009/03/2015 244,536.95 2.367 2.400245,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 4 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Negotiable Certificates of Deposits First Savings Bank Northwest1335 NCD 245,000.0033621JAB4 07/18/2019 1081.80007/18/2014 244,581.05 1.776 1.801245,000.00 First National Bank of Elkhart1801 NCD 245,000.00321130AB2 05/31/2022 1,1562.10005/31/2017 239,916.25 2.072 2.101245,000.00 First Northeast Bank1779 NCD 245,000.0033583FAA0 10/19/2022 1,2972.10004/19/2017 239,024.45 2.072 2.101245,000.00 First State Bank1366 NCD 245,000.0033648RAT6 08/20/2019 1411.85008/20/2014 244,634.95 1.825 1.851245,000.00 First State Bank - Dequeen1824 NCD 245,000.00336460CH1 04/29/2022 1,1242.00006/30/2017 239,489.95 1.973 2.000245,000.00 First State Bank of Purdy1475 NCD 248,000.0033646TAE7 04/13/2022 1,1082.35009/25/2015 245,088.48 2.321 2.353247,988.51 First State Community Bank1819 NCD 245,000.0033708UCF4 06/30/2022 1,1862.10006/30/2017 239,820.70 2.071 2.100245,000.00 First Technology Federal Credi1955 NCD 245,000.0033715LCM0 10/17/2023 1,6603.40010/17/2018 250,020.05 3.355 3.401245,000.00 Firstier Bank1994 NCD 245,000.0033766LAF5 12/11/2023 1,7153.55012/11/2018 245,607.60 3.503 3.551245,000.00 First Kentucky Bank1856 NCD 245,000.0032065TAW1 10/06/2022 1,2842.10010/06/2017 239,107.75 2.072 2.101245,000.00 First Western Bank & Trust1770 NCD 245,000.0033749VAM0 04/07/2022 1,1022.00004/07/2017 239,649.20 1.973 2.001245,000.00 Fox Chase Bank1305 NCD 245,000.0035137QAV6 06/06/2019 661.70006/06/2014 244,853.00 1.677 1.700245,000.00 Gulf Coast Bank & Trust1920 NCD 245,000.00402194FJ8 07/26/2024 1,9432.65001/26/2018 240,908.50 2.614 2.650245,000.00 Gold Coast Bank1375 NCD 245,000.0038058KDA1 08/05/2019 1261.80009/04/2014 244,644.75 1.775 1.800245,000.00 GE Capital Bank1262 NCD 245,000.0036157PXV6 03/22/2021 7212.65003/21/2014 245,943.25 2.613 2.650245,000.00 Ally Bank1882 NCD 245,000.0002007GAF0 01/04/2021 6442.25001/04/2018 244,120.45 2.219 2.250245,000.00 Great Plains Bank1865 NCD 245,000.0039115UBB8 07/25/2022 1,2112.00010/25/2017 238,845.60 1.972 2.000245,000.00 Grant County Bank1864 NCD 175,000.0038762PCB6 10/18/2023 1,6612.20010/18/2017 169,657.25 2.170 2.201175,000.00 Goldman Sachs Bank USA / NY1951 NCD 245,000.0038148PJ81 05/09/2023 1,4993.15005/09/2018 247,469.60 3.106 3.150245,000.00 Happy State Bank1683 NCD 245,000.00411394AN9 09/16/2021 8991.50009/16/2016 238,512.40 1.500 1.520245,000.00 HSBC Bank1564 NCD 245,000.0040434AR84 10/07/2021 9202.00004/07/2016 241,271.10245,000.00 Dubuque Bank & Trust1372 NCD 245,000.00263849BD2 08/21/2019 1421.90008/21/2014 244,612.90 1.873 1.900245,000.00 Investors Community Bank1765 NCD 245,000.0046147USQ4 09/23/2022 1,2712.20003/24/2017 240,011.80 2.172 2.202245,000.00 International Bank1841 NCD 245,000.0045906ABP1 07/29/2022 1,2152.10007/31/2017 239,509.55 2.072 2.101245,000.00 Industrial & Com Bk of China1773 NCD 245,000.0045581EAC5 04/12/2022 1,1072.15004/12/2017 240,683.10 2.121 2.151245,000.00 Interaudi Bank1808 NCD 245,000.0045842PAK7 06/10/2024 1,8972.50006/09/2017 239,440.95 2.465 2.500245,000.00 Iroquois Federal Sav Loan Asso1535 NCD 245,000.0046355PBV9 08/12/2020 4991.60002/12/2016 242,126.15 1.578 1.600245,000.00 Investors Bank1460 NCD 245,000.0046176PEJ0 08/25/2020 5122.00008/25/2015 244,421.80 1.972 2.000245,000.00 Inst. for Sav in Newburyport1455 NCD 245,000.0045780PAN5 07/30/2021 8512.30007/31/2015 244,436.50 2.269 2.301245,000.00 Iowa State Bank1343 NCD 250,000.0046256YAB5 07/23/2019 1131.80007/23/2014 249,695.00 1.775 1.800250,000.00 JP Morgan Chase BAnk NA2021 NCD 245,000.0048128HBS6 01/31/2025 2,1323.40001/31/2019 246,982.05 3.353 3.400245,000.00 Kansas State Bank Manhattan1798 NCD 245,000.0050116CAX7 05/31/2024 1,8872.50005/31/2017 239,465.45 2.465 2.500245,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 5 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Negotiable Certificates of Deposits Keesler Federal Credit Union2027 NCD 245,000.0049254FAP1 08/30/2021 8823.05002/28/2019 247,721.95 3.008 3.050245,000.00 Key Bank1785 NCD 245,000.0049306SYB6 05/18/2020 4131.75005/17/2017 243,005.70 1.726 1.750245,000.00 Lakeside Bank1686 NCD 245,000.0051210SLR6 09/18/2023 1,6311.80009/16/2016 233,683.45 1.775 1.800245,000.00 LCA Bank Corporation1306 NCD 245,000.00501798FJ6 05/30/2019 591.65005/30/2014 244,865.25 1.627 1.650245,000.00 Leader Bank1364 NCD 245,000.0052168UCN0 08/22/2019 1432.00008/22/2014 244,627.60 1.973 2.001245,000.00 Legends Bank1533 NCD 245,000.0052465JGM3 02/11/2022 1,0471.70002/12/2016 242,594.10 1.678 1.701245,000.00 Live Oak Banking Company1671 NCD 245,000.00538036CH5 08/19/2021 8711.40008/19/2016 238,708.40 1.381 1.400245,000.00 Luana Savings Bank1367 NCD 245,000.00549103QA0 09/07/2021 8902.25009/05/2014 243,071.85 2.219 2.250245,000.00 Machias Savings Bank1358 NCD 245,000.00554479DN2 08/28/2019 1491.80008/28/2014 244,620.25 1.776 1.801245,000.00 Marathon Savings Bank1818 NCD 245,000.0056585YAA8 06/28/2022 1,1842.05006/28/2017 239,431.15 2.023 2.051245,000.00 MB Financial Bank NA1730 NCD 245,000.0055266CUF1 01/13/2022 1,0182.10001/13/2017 241,126.55 2.072 2.101245,000.00 Mercantile Bank of Michigan1793 NCD 245,000.0058740XZF0 05/12/2022 1,1372.10005/12/2017 240,151.45 2.071 2.100245,000.00 Mechanics Coop Bank1803 NCD 245,000.00583626AC0 05/26/2022 1,1512.05005/26/2017 239,661.45 2.023 2.051245,000.00 Medallion Bank - Salt Lake2010 NCD 245,000.0058404DDB4 01/03/2024 1,7383.30001/10/2019 248,986.15 3.254 3.299245,000.00 Merrick Bank1464 NCD 245,000.0059013JHE2 08/20/2020 5071.90008/20/2015 243,086.55 1.876 1.902245,000.00 Merchants National Bank OH1534 NCD 245,000.00588806AV1 02/17/2022 1,0531.80002/17/2016 242,145.75 1.776 1.801245,000.00 Mid-Country Bank1810 NCD 245,000.0059565QCG8 06/14/2022 1,1702.05006/14/2017 239,543.85 2.023 2.051245,000.00 Mid-Missouri Bank1806 NCD 245,000.0059541KBL0 06/10/2022 1,1662.05006/12/2017 239,556.10 2.023 2.051245,000.00 Mifflinburg Bank & Trust Co.1321 NCD 132,000.00598580AB4 04/30/2019 291.65006/20/2014 131,969.64 1.627 1.649132,000.00 Marlin Business Bank1483 NCD 245,000.0057116AKU1 10/21/2020 5691.75010/21/2015 244,191.50 1.727 1.751245,000.00 Morgan Stanley Bank NA1890 NCD 245,000.0061747MF63 01/11/2023 1,3812.65001/11/2018 243,223.75 2.613 2.650245,000.00 Morgan Stanley Bank NA1993 NCD 245,000.0061760ASZ3 12/06/2023 1,7103.55012/06/2018 251,624.80 3.501 3.550245,000.00 Municipal Trust and Savings1800 NCD 245,000.00625925AP7 05/02/2024 1,8582.35005/22/2017 237,921.95 2.317 2.349245,000.00 Mutual One Bank1407 NCD 250,000.0062847HAA7 11/21/2019 2341.85011/21/2014 249,457.50 1.825 1.850250,000.00 MY Safra Bank FSB1467 NCD 245,000.0055406JAL6 09/03/2020 5211.90009/03/2015 244,448.75 1.873 1.900245,000.00 NBT Bank1322 NCD 156,000.00628779FJ4 06/06/2019 661.80006/20/2014 155,898.60 1.775 1.799156,000.00 NBT Bank1373 NCD 94,000.00628779FN5 08/20/2019 1412.10008/20/2014 93,852.42 2.071 2.10094,000.00 Customers Bank1388 NCD 250,000.0023204HCA4 09/10/2019 1622.10009/10/2014 249,542.50 2.071 2.100250,000.00 NCB Savings Bank1344 NCD 245,000.00628825JL6 07/25/2019 1151.80007/25/2014 244,541.85 1.775 1.800245,000.00 National Bank Commerce1607 NCD 245,000.00633368DY8 05/11/2023 1,5011.80005/11/2016 237,664.70 1.776 1.800245,000.00 Nebraska State Bank & Trust1466 NCD 245,000.0063969ABL7 08/26/2022 1,2432.25008/26/2015 244,169.45 2.220 2.251245,000.00 Lake Sunapee Bank FSB1309 NCD 245,000.00510868AG7 06/05/2019 651.75006/05/2014 244,855.45 1.727 1.750245,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 6 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Negotiable Certificates of Deposits Northern Bank & Trust MA1814 NCD 245,000.0066476QBX5 06/29/2022 1,1852.10006/29/2017 239,803.55 2.072 2.101245,000.00 Connectone Bank1355 NCD 245,000.0020786AAT2 08/13/2019 1341.85008/13/2014 244,647.20 1.824 1.850245,000.00 Bank of Northern Michigan1298 NCD 245,000.0006414TNW9 05/21/2020 4162.00005/21/2014 244,394.85 1.972 2.000245,000.00 Northfield Bank1365 NCD 245,000.0066612AAA6 08/12/2019 1331.85008/13/2014 244,627.60 1.824 1.850245,000.00 Northstar Bank1326 NCD 245,000.0066704MEG2 07/18/2019 1081.75007/18/2014 244,730.50 1.727 1.751245,000.00 National Bank of NY City1312 NCD 245,000.00634116CB1 06/18/2019 781.65006/18/2014 244,804.00 1.627 1.650245,000.00 Numerica Credit Union1991 NCD 245,000.0067054NAN3 11/28/2023 1,7023.55011/28/2018 251,651.75 3.503 3.551245,000.00 Oostburg State Bank1532 NCD 245,000.00683430BU5 02/09/2021 6801.55002/09/2016 243,412.40 1.530 1.551245,000.00 Williamette Valley Bank1524 NCD 245,000.00969294BY2 02/06/2023 1,4072.10002/04/2016 242,282.95 2.072 2.101245,000.00 Orrstown Bank1465 NCD 245,000.00687377DR9 08/20/2020 5072.00008/20/2015 243,424.65 1.974 2.002245,000.00 South Ottumwa Savings Bank1851 NCD 245,000.00839145AA7 09/29/2022 1,2772.05009/29/2017 238,750.05 2.022 2.051245,000.00 Ottawa Savings Bank1892 NCD 245,000.0068956HAC7 01/19/2023 1,3892.40001/19/2018 240,977.10 2.368 2.401245,000.00 Peoples United Bank1378 NCD 245,000.0071270QGB6 08/27/2019 1481.95008/27/2014 244,595.75 1.923 1.950245,000.00 Ponce De Leon Federal Bank1795 NCD 245,000.00732333AH2 05/26/2022 1,1512.10005/26/2017 240,031.40 2.072 2.101245,000.00 Parkside Financial Bank1833 NCD 245,000.0070147ACE2 03/15/2023 1,4442.10007/19/2017 237,904.80 2.072 2.101245,000.00 Peapack-Gladstone Bank1275 NCD 245,000.00704692AK8 04/17/2019 161.80004/17/2014 244,965.70 1.776 1.801245,000.00 Planters Bank1363 NCD 245,000.0072741PCU9 08/20/2021 8722.50008/20/2014 238,838.25 2.467 2.501245,000.00 Prime Alliance Bank1331 NCD 245,000.0074160NED8 07/11/2019 1011.70007/11/2014 244,742.75 1.677 1.701245,000.00 Providence Bank1445 NCD 245,000.00743738BQ8 02/25/2022 1,0612.10002/26/2015 244,559.00 2.072 2.101245,000.00 Providence Bank Columbia, MO1989 NCD 245,000.0074374MAM6 12/19/2023 1,7233.50012/19/2018 245,639.45 3.453 3.501245,000.00 Peoples State Bank, WI1304 NCD 245,000.00712515GY5 05/23/2019 521.70005/23/2014 244,882.40 1.676 1.700245,000.00 Ohio Valley Bank1338 NCD 250,000.00677721CE0 07/23/2019 1131.80007/23/2014 249,710.00 1.776 1.801250,000.00 RCB Bank1869 NCD 245,000.0074934YAG6 10/27/2022 1,3052.20010/27/2017 239,803.55 2.171 2.201245,000.00 Reliance Savings Bank1636 NCD 245,000.0075950XAD1 06/22/2021 8131.45006/22/2016 240,102.45 1.430 1.450245,000.00 Sallie Mae Bank1350 NCD 245,000.00795450SC0 07/30/2019 1202.05007/30/2014 244,686.40 2.021 2.050245,000.00 State Bank of India1390 NCD 245,000.00856284Z98 09/11/2019 1632.15009/11/2014 244,559.00 2.120 2.150245,000.00 Security National Bank1499 NCD 245,000.00814414AC2 11/19/2021 9632.00011/19/2015 240,999.15 1.974 2.001245,000.00 Security State Bank1774 NCD 245,000.0081489TAS5 04/07/2022 1,1022.10004/07/2017 240,364.60 2.072 2.101245,000.00 Stifel Bank & Trust1953 NCD 245,000.0086063QAK1 05/15/2023 1,5052.95005/15/2018 245,580.65 2.911 2.951245,000.00 Summit Community Bank1888 NCD 245,000.0086604XMN3 01/26/2022 1,0312.25001/26/2018 242,008.55 2.220 2.251245,000.00 Somerset Trust Company Bank1616 NCD 245,000.00835104BL3 06/12/2023 1,5331.80006/10/2016 235,344.55 1.776 1.800245,000.00 Bank of New England1704 NCD 245,000.00063847AW7 10/19/2021 9321.50010/19/2016 237,931.75 1.480 1.500245,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 7 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Negotiable Certificates of Deposits Slovak Savings Bank1872 NCD 245,000.0083158TAA0 10/20/2022 1,2982.10010/20/2017 239,004.85 2.072 2.101245,000.00 Security Bank1777 NCD 245,000.00814107AQ1 04/19/2022 1,1142.00004/19/2017 239,563.45 1.973 2.001245,000.00 Stockman Bank1557 NCD 245,000.0086128QBX5 03/30/2023 1,4592.00003/30/2016 239,406.65 1.973 2.000245,000.00 Thomasville Natl Bank1266 NCD 245,000.00884693BJ0 04/12/2021 7422.40004/11/2014 245,918.75 2.367 2.400245,000.00 Crossfirst Bank of Leawood1804 NCD 245,000.0022766ABF1 06/09/2023 1,5302.15006/09/2017 237,806.80 2.121 2.151245,000.00 Toyota Financial Savings Bank1740 NCD 245,000.0089235MHU8 02/12/2024 1,7782.65002/10/2017 241,815.00245,000.00 Traverse City State Bank1820 NCD 245,000.00894333FF5 06/28/2022 1,1842.00006/28/2017 239,073.45 1.972 2.000245,000.00 UBS Bank USA1815 NCD 250,000.0090348JBR0 01/20/2022 1,0252.25006/15/2017 246,997.50 2.219 2.249250,000.00 United Community Bank GA1749 NCD 245,000.0090984P5A9 03/01/2022 1,0652.05003/01/2017 240,352.35 2.021 2.050245,000.00 Uinta Bank1639 NCD 245,000.00903572BC8 12/26/2023 1,7301.70006/24/2016 234,337.60 1.676 1.700245,000.00 United Bankers' Bank1379 NCD 245,000.00909557EA4 04/29/2019 281.80008/29/2014 244,911.80 1.776 1.800245,000.00 United Community Bank1694 NCD 245,000.0090983WBD2 03/28/2022 1,0921.60009/29/2016 237,390.30 1.577 1.599245,000.00 Unity Bank1529 NCD 245,000.0091330ABF3 02/26/2021 6971.60002/26/2016 243,424.65 1.579 1.601245,000.00 Valley Central Savings Bank1422 NCD 245,000.0091944RAF5 12/30/2019 2731.85012/29/2014 244,345.85 1.824 1.850245,000.00 Washington Trst Westerly1345 NCD 245,000.00940637GJ4 07/31/2019 1211.90007/31/2014 244,683.95 1.873 1.900245,000.00 Northwest Bank1308 NCD 245,000.0066736AAK5 05/29/2019 581.65005/29/2014 244,872.60 1.628 1.650245,000.00 Western State Bank1392 NCD 245,000.0095960NJA6 03/26/2020 3602.10009/26/2014 244,078.80 2.071 2.100245,000.00 Washington First Bank1745 NCD 245,000.00940727AH3 02/23/2022 1,0592.05002/23/2017 240,423.40 2.021 2.050245,000.00 Wells Fargo Bank1656 NCD 245,000.009497486H5 06/30/2021 8211.60006/30/2016 240,033.85 1.578 1.600245,000.00 Woodford State Bank1459 NCD 245,000.00979424AA6 07/29/2022 1,2152.35008/12/2015 243,875.45 2.317 2.349245,000.00 Washington County Bank1842 NCD 245,000.0093754PAN7 05/11/2022 1,1362.05008/11/2017 239,766.80 2.021 2.050245,000.00 Zions First National Bank1417 NCD 250,000.0098970TU79 12/10/2019 2531.90012/08/2014 249,067.50 1.873 1.899250,000.00 Subtotal and Average 49,813,082.25 49,818,000.00 49,245,997.62 2.030 2.059 895 Corporate Medium Term Bonds Apple, Inc.1342 MTN 2,000,000.00037833AQ3 05/06/2019 352.10007/15/2014 1,999,020.00 1.982 2.0102,000,165.40 Apple, Inc.1461 MTN 750,000.00037833AX8 02/07/2020 3121.55008/13/2015 744,202.50 1.980 2.008747,218.70 Apple, Inc.1497 MTN 1,500,000.00037833BD1 05/06/2020 4012.00011/05/2015 1,492,815.00 1.854 1.8791,501,886.06 Apple, Inc.1543 MTN 700,000.00037833BS8 02/23/2021 6942.25002/23/2016 697,480.00 2.140 2.169700,986.63 Alphabet (Google) Inc.1657 MTN 100,000.0002079KAA5 05/19/2021 7793.62507/11/2016 102,532.00 1.271 1.288104,815.38 Alphabet (Google) Inc.1658 MTN 946,000.0038259PAB8 05/19/2021 7793.62507/11/2016 969,952.72 1.271 1.288991,553.47 Alphabet (Google) Inc.1660 MTN 1,500,000.0002079KAA5 05/19/2021 7793.62507/12/2016 1,537,980.00 1.238 1.2551,573,313.89 Alphabet (Google) Inc.1734 MTN 871,000.0002079KAA5 05/19/2021 7793.62501/11/2017 893,053.72 2.012 2.040899,036.10 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 8 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Corporate Medium Term Bonds Alphabet (Google) Inc.1895 MTN 1,000,000.0002079KAA5 05/19/2021 7793.62501/10/2018 1,025,320.00 2.189 2.2191,028,722.76 Alphabet (Google) Inc.1931 MTN 382,000.0002079KAA5 05/19/2021 7793.62502/14/2018 391,672.24 2.377 2.410391,460.44 Johnson & Johnson1411 MTN 2,000,000.00478160BM5 12/05/2019 2481.87511/24/2014 1,989,360.00 1.874 1.9001,999,676.64 Johnson & Johnson1418 MTN 1,500,000.00478160BM5 12/05/2019 2481.87512/08/2014 1,492,020.00 1.824 1.8501,500,240.13 Johnson & Johnson1624 MTN 1,000,000.00478160BS2 03/01/2021 7001.65006/07/2016 983,990.00 1.530 1.5511,001,773.59 Johnson & Johnson1900 MTN 500,000.00478160BS2 03/01/2021 7001.65001/12/2018 491,995.00 2.179 2.210494,839.81 Microsoft Corporation1448 MTN 2,000,000.00594918AY0 02/12/2020 3171.85002/12/2015 1,990,480.00 1.785 1.8102,000,649.27 Microsoft Corporation1496 MTN 2,000,000.00594918BG8 11/03/2020 5822.00011/05/2015 1,986,700.00 1.913 1.9402,001,781.54 Microsoft Corporation1515 MTN 900,000.00594918BG8 11/03/2020 5822.00001/07/2016 894,015.00 1.887 1.913901,174.31 Microsoft Corporation1878 MTN 100,000.00594918BW3 02/06/2022 1,0422.40012/11/2017 99,857.00 2.292 2.324100,203.63 Subtotal and Average 19,939,497.75 19,749,000.00 19,782,445.18 1.830 1.856 482 Federal Agency Bonds Federal Agricultural Mortgage1052 1,500,000.0031315PTW9 04/10/2019 91.87004/10/2012 1,499,805.00 1.844 1.8701,500,000.00 Federal Agricultural Mortgage1123 Call 1,500,000.0031315PQL6 11/29/2021 9732.00011/29/2012 1,486,485.00 1.972 2.0001,500,000.00 Federal Agricultural Mortgage1130 1,500,000.0031315PPX1 07/05/2022 1,1912.20012/13/2012 1,493,805.00 1.930 1.9571,510,789.58 Federal Agricultural Mortgage1134 750,000.0031315PB32 11/21/2022 1,3302.00012/19/2012 740,745.00 2.081 2.110747,301.70 Federal Agricultural Mortgage1136 1,500,000.0031315PTY5 12/27/2019 2701.48012/27/2012 1,489,950.00 1.395 1.4151,500,682.42 Federal Agricultural Mortgage1137 1,500,000.0031315PUE7 12/27/2022 1,3662.18001/04/2013 1,490,295.00 2.165 2.1961,499,195.88 Federal Agricultural Mortgage1138 740,000.0031315PEY1 12/30/2019 2734.50001/04/2013 751,455.20 1.514 1.535755,486.49 Federal Agricultural Mortgage1139 500,000.0031315PWN5 06/01/2021 7923.84001/04/2013 515,535.00 1.946 1.973518,549.16 Federal Agricultural Mortgage1141 1,500,000.0031315PUE7 12/27/2022 1,3662.18001/08/2013 1,490,295.00 2.195 2.2251,497,716.04 Federal Agricultural Mortgage1142 1,200,000.0031315PTW9 04/10/2019 91.87001/09/2013 1,199,844.00 1.400 1.4201,200,128.70 Federal Agricultural Mortgage1144 1,500,000.0031315PUE7 12/27/2022 1,3662.18001/23/2013 1,490,295.00 2.111 2.1411,501,954.60 Federal Agricultural Mortgage1147 2,595,000.0031315PUE7 12/27/2022 1,3662.18001/28/2013 2,578,210.35 2.199 2.2292,590,664.50 Federal Agricultural Mortgage1243 1,500,000.0031315PQT9 03/06/2020 3401.41001/15/2014 1,485,765.00 2.462 2.4961,486,015.91 Federal Agricultural Mortgage1244 1,500,000.0031315P3G2 09/09/2020 5272.80001/15/2014 1,508,805.00 2.635 2.6721,502,508.86 Federal Agricultural Mortgage1257 300,000.0031315PTU3 03/09/2021 7084.16003/06/2014 310,149.00 2.574 2.609308,191.33 Federal Agricultural Mortgage1264 1,500,000.0031315PK40 03/26/2021 7252.50003/26/2014 1,503,735.00 2.495 2.5301,499,170.09 Federal Agricultural Mortgage1279 1,250,000.0031315PPX1 07/05/2022 1,1912.20004/23/2014 1,244,837.50 2.889 2.9301,223,707.62 Federal Agricultural Mortgage1399 500,000.0031315PVF3 04/03/2020 3681.47510/15/2014 495,100.00 1.857 1.882498,059.40 Federal Agricultural Mortgage1406 1,500,000.0031315PA58 11/20/2019 2331.31011/07/2014 1,489,905.00 1.854 1.8801,494,833.29 Federal Agricultural Mortgage1408 2,000,000.0031315PM22 11/20/2019 2331.84011/20/2014 1,993,200.00 1.814 1.8402,000,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 9 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Federal Agricultural Mortgage1410 1,500,000.0031315PM22 11/20/2019 2331.84011/20/2014 1,494,900.00 1.848 1.8731,499,694.67 Federal Agricultural Mortgage1423 1,500,000.0031315PZ85 12/23/2019 2661.85012/23/2014 1,494,090.00 1.851 1.8761,499,722.72 Federal Agricultural Mortgage1427 675,000.0031315P2C2 05/05/2021 7652.51001/09/2015 676,977.75 2.110 2.140679,863.65 Federal Agricultural Mortgage1428 404,000.0031315PL23 03/27/2024 1,8223.33001/09/2015 421,557.84 2.540 2.575417,448.89 Federal Agricultural Mortgage1433 1,604,000.0031315PD89 06/12/2023 1,5332.61001/22/2015 1,620,633.48 2.269 2.3011,622,809.72 Federal Agricultural Mortgage1447 1,450,000.0031315PD89 06/12/2023 1,5332.61002/09/2015 1,465,036.50 2.377 2.4101,460,951.10 Federal Agricultural Mortgage1452 1,000,000.003130H0AJ2 03/01/2022 1,0652.15003/05/2015 994,750.00 2.120 2.1501,000,000.00 Federal Agricultural Mortgage1552 Call 1,500,000.003132X0EU1 01/27/2026 2,4932.93002/26/2016 1,501,155.00 2.831 2.8701,505,220.12 Federal Agricultural Mortgage1554 Call 1,500,000.003132X0EU1 01/27/2026 2,4932.93003/02/2016 1,501,155.00 2.878 2.9181,501,033.38 Federal Agricultural Mortgage1576 1,000,000.0031315PZS1 01/24/2023 1,3942.13004/06/2016 992,770.00 1.839 1.8641,009,444.42 Federal Agricultural Mortgage1580 474,000.0031315PEM7 08/04/2025 2,3174.35004/08/2016 524,419.38 2.296 2.328528,342.49 Federal Agricultural Mortgage1595 1,500,000.0031315P2J7 05/01/2024 1,8573.30004/21/2016 1,563,585.00 2.084 2.1121,582,843.91 Federal Agricultural Mortgage1604 1,500,000.0031315P2J7 05/01/2024 1,8573.30004/26/2016 1,563,585.00 2.159 2.1891,577,240.59 Federal Agricultural Mortgage1617 500,000.0031315PUE7 12/27/2022 1,3662.18005/26/2016 496,765.00 1.844 1.870505,415.79 Federal Agricultural Mortgage1655 1,500,000.0031315PQT9 03/06/2020 3401.41007/01/2016 1,485,765.00 0.992 1.0051,505,523.71 Federal Agricultural Mortgage1663 510,000.0031315PQT9 03/06/2020 3401.41007/21/2016 505,160.10 1.135 1.150511,200.14 Federal Agricultural Mortgage1665 2,000,000.003132X0BH3 07/15/2022 1,2012.38007/25/2016 2,002,900.00 1.499 1.5202,053,869.25 Federal Agricultural Mortgage1681 1,750,000.003132X0BG5 06/15/2020 4411.75008/24/2016 1,737,400.00 1.136 1.1521,762,305.45 Federal Agricultural Mortgage1698 1,500,000.003132X0EQ0 01/25/2021 6651.55010/03/2016 1,478,115.00 1.256 1.2741,507,287.97 Federal Agricultural Mortgage1710 1,500,000.0031315PRA9 02/03/2026 2,5004.81010/18/2016 1,710,090.00 2.131 2.1601,744,985.56 Federal Agricultural Mortgage1736 Call 1,000,000.003130H0BL6 01/01/2027 2,8323.20001/19/2017 1,000,980.00 3.156 3.2001,000,000.00 Federal Agricultural Mortgage1755 1,000,000.003132X0PX3 02/23/2022 1,0592.10002/23/2017 993,380.00 2.034 2.0631,001,010.16 Federal Agricultural Mortgage1758 1,500,000.003132X0PX3 02/23/2022 1,0592.10003/02/2017 1,490,070.00 2.085 2.1141,499,389.11 Federal Agricultural Mortgage1769 1,500,000.003132X0RS2 04/06/2022 1,1012.07504/06/2017 1,488,990.00 2.046 2.0751,500,000.00 Federal Agricultural Mortgage1781 1,000,000.003132X0QG9 02/22/2021 6931.90004/12/2017 991,340.00 1.781 1.8051,001,707.89 Federal Agricultural Mortgage1784 Call 1,500,000.003132X0QC8 02/23/2027 2,8853.25004/27/2017 1,502,550.00 3.200 3.2451,500,449.69 Federal Agricultural Mortgage1788 1,000,000.003132X0NZ0 01/03/2022 1,0082.10005/04/2017 993,570.00 1.938 1.9651,003,533.15 Federal Agricultural Mortgage1789 Call 1,000,000.003130H0BN2 05/01/2027 2,9523.20005/11/2017 1,000,280.00 3.156 3.2001,000,000.00 Federal Agricultural Mortgage1792 Call 1,500,000.003132X0QC8 02/23/2027 2,8853.25005/09/2017 1,502,550.00 3.201 3.2451,500,000.00 Federal Agricultural Mortgage1817 1,000,000.0031315PPX1 07/05/2022 1,1912.20006/14/2017 995,870.00 1.908 1.9341,008,200.59 Federal Agricultural Mortgage1830 1,500,000.003132X0UA7 06/29/2022 1,1851.88006/29/2017 1,478,955.00 1.903 1.9301,497,683.47 Federal Agricultural Mortgage1831 1,000,000.003132X0UA7 06/29/2022 1,1851.88006/29/2017 985,970.00 1.923 1.949997,846.34 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 10 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Federal Agricultural Mortgage1850 Call 1,500,000.003130H0BR3 09/01/2027 3,0753.05009/28/2017 1,501,050.00 3.008 3.0501,500,000.00 Federal Agricultural Mortgage1867 1,000,000.003132X0WL1 08/23/2024 1,9712.25010/06/2017 986,610.00 2.332 2.365994,292.39 Federal Agricultural Mortgage1877 1,500,000.003132X0ZZ7 12/12/2022 1,3512.26012/12/2017 1,494,765.00 2.229 2.2601,500,000.00 Federal Agricultural Mortgage1889 2,000,000.003132X0D57 01/08/2021 6482.12001/08/2018 1,991,240.00 2.090 2.1202,000,000.00 Federal Agricultural Mortgage1891 Call 1,000,000.003132X0E49 01/10/2028 3,2063.28001/10/2018 1,000,880.00 3.235 3.2801,000,000.00 Federal Agricultural Mortgage1893 1,000,000.003130H0AU7 08/01/2024 1,9492.62501/09/2018 1,009,550.00 2.546 2.5811,002,105.33 Federal Agricultural Mortgage1901 1,500,000.003130H0AU7 08/01/2024 1,9492.62501/11/2018 1,514,325.00 2.623 2.6601,497,435.58 Federal Agricultural Mortgage1911 1,500,000.003132X0G21 02/03/2020 3082.10002/02/2018 1,496,040.00 2.093 2.1231,499,717.27 Federal Agricultural Mortgage1912 2,000,000.003132X0G39 01/30/2023 1,4002.50001/30/2018 2,012,500.00 2.472 2.5071,999,479.04 Federal Agricultural Mortgage1915 1,500,000.003132X0G39 01/30/2023 1,4002.50001/30/2018 1,509,375.00 2.481 2.5151,499,147.32 Federal Agricultural Mortgage1921 2,000,000.003132X0G39 01/30/2023 1,4002.50001/31/2018 2,012,500.00 2.556 2.5921,993,420.64 Federal Agricultural Mortgage1924 1,100,000.0031315PZS1 01/24/2023 1,3942.13002/08/2018 1,092,047.00 2.578 2.6141,081,057.83 Federal Agricultural Mortgage1927 1,000,000.003132X0H79 02/22/2021 6932.35002/22/2018 999,630.00 2.327 2.360999,817.14 Federal Agricultural Mortgage1928 1,500,000.003132X0H87 02/22/2023 1,4232.60002/22/2018 1,514,865.00 2.564 2.6001,500,000.00 Federal Agricultural Mortgage1930 1,000,000.003132X0G21 02/03/2020 3082.10002/09/2018 997,360.00 2.174 2.205999,141.72 Federal Agricultural Mortgage1935 1,000,000.003132X0G21 02/03/2020 3082.10002/15/2018 997,360.00 2.238 2.269998,613.70 Federal Agricultural Mortgage1936 1,500,000.003132X0L33 02/21/2023 1,4222.77002/23/2018 1,524,525.00 2.732 2.7701,500,000.00 Federal Agricultural Mortgage1957 Call 1,000,000.003130H0CB7 10/01/2028 3,4714.00010/25/2018 1,003,160.00 3.945 4.0001,000,000.00 Federal Agricultural Mortgage1963 Call 1,500,000.003132X06X4 11/01/2023 1,6753.50011/01/2018 1,506,180.00 3.452 3.5001,500,000.00 Federal Agricultural Mortgage1999 549,000.0031315P4B2 01/30/2024 1,7653.46012/14/2018 575,703.36 3.018 3.060558,735.88 Federal Agricultural Mortgage2020 Call 1,500,000.0031422BBN9 01/22/2029 3,5843.87501/22/2019 1,502,955.00 3.821 3.8751,500,000.00 Federal Farm Credit Bank1092 1,500,000.003133EAUF3 06/14/2019 741.50006/14/2012 1,497,405.00 1.479 1.5001,500,000.00 Federal Farm Credit Bank903 1,000,000.0031331JN90 09/29/2020 5472.87509/29/2010 1,007,950.00 2.835 2.8751,000,000.00 Federal Farm Credit Bank .1241 500,000.003133ECRH9 06/06/2023 1,5272.45001/09/2014 502,325.00 3.383 3.430482,612.74 Federal Farm Credit Bank .1526 625,000.003133EAA65 07/26/2023 1,5772.12501/27/2016 619,631.25 2.024 2.052626,814.84 Federal Farm Credit Bank .1563 500,000.0031331XSS2 03/14/2022 1,0785.16003/17/2016 540,400.00 1.876 1.902545,247.97 Federal Farm Credit Bank .1565 Call 1,000,000.003133EFT98 03/28/2025 2,1882.62003/28/2016 989,200.00 2.596 2.632999,334.26 Federal Farm Credit Bank .1582 Call 1,500,000.003133EF3D7 04/21/2025 2,2122.54004/21/2016 1,482,510.00 2.505 2.5401,500,000.00 Federal Farm Credit Bank .1584 Call 1,500,000.003133EF3D7 04/21/2025 2,2122.54004/21/2016 1,482,510.00 2.505 2.5401,500,000.00 Federal Farm Credit Bank .1585 Call 1,500,000.003133EF4A2 04/19/2022 1,1141.92004/19/2016 1,482,765.00 1.893 1.9201,500,000.00 Federal Farm Credit Bank .1591 Call 1,500,000.003133EF2D8 04/13/2026 2,5692.64004/19/2016 1,470,390.00 2.603 2.6391,500,000.00 Federal Farm Credit Bank .1593 250,000.003133EC4L5 11/23/2021 9671.61004/21/2016 245,422.50 1.558 1.580250,188.08 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 11 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Federal Farm Credit Bank .1596 1,000,000.003133ECPF5 05/13/2022 1,1381.87504/21/2016 986,880.00 1.578 1.6001,008,134.76 Federal Farm Credit Bank .1598 Call 1,000,000.003133EFX44 10/05/2022 1,2832.05004/22/2016 989,020.00 2.021 2.0491,000,000.00 Federal Farm Credit Bank .1603 Call 1,930,000.003133EFYV3 02/17/2026 2,5142.82004/26/2016 1,918,034.00 2.722 2.7601,936,902.09 Federal Farm Credit Bank .1606 Call 1,605,000.003133EFYF8 02/10/2025 2,1422.73004/28/2016 1,589,880.90 2.621 2.6571,610,994.84 Federal Farm Credit Bank .1609 Call 1,000,000.003133EF6T9 05/12/2025 2,2332.47005/12/2016 986,120.00 2.436 2.4701,000,000.00 Federal Farm Credit Bank .1615 1,000,000.003133EC7D0 12/13/2024 2,0832.12505/13/2016 985,180.00 1.930 1.9561,008,779.11 Federal Farm Credit Bank .1623 Call 1,500,000.003133EGEB7 06/09/2026 2,6262.57006/09/2016 1,459,155.00 2.534 2.5701,500,000.00 Federal Farm Credit Bank .1630 Call 1,000,000.003133EF2D8 04/13/2026 2,5692.64006/13/2016 980,260.00 2.522 2.5571,005,078.31 Federal Farm Credit Bank .1634 Call 1,000,000.003133EF2D8 04/13/2026 2,5692.64006/16/2016 980,260.00 2.489 2.5241,007,158.61 Federal Farm Credit Bank .1638 Call 2,000,000.003133EGGR0 06/22/2026 2,6392.50006/22/2016 1,943,160.00 2.582 2.6182,000,000.00 Federal Farm Credit Bank .1641 Call 1,500,000.003133EGHN8 06/30/2025 2,2822.42006/30/2016 1,468,980.00 2.386 2.4201,500,000.00 Federal Farm Credit Bank .1647 Call 1,500,000.003133EGJH9 01/06/2025 2,1072.24007/06/2016 1,464,540.00 2.209 2.2401,500,000.00 Federal Farm Credit Bank .1650 1,500,000.003133EGKM6 07/06/2020 4621.00007/06/2016 1,474,635.00 0.986 1.0001,500,000.00 Federal Farm Credit Bank .1659 500,000.0031331XSS2 03/14/2022 1,0785.16007/08/2016 540,400.00 1.215 1.232555,836.08 Federal Farm Credit Bank .1664 Call 1,500,000.003133EGFB6 06/16/2025 2,2682.36007/25/2016 1,464,780.00 2.309 2.3411,501,570.99 Federal Farm Credit Bank .1675 Call 1,500,000.003133EGQA6 11/08/2023 1,6821.85008/09/2016 1,468,050.00 1.859 1.8851,497,761.24 Federal Farm Credit Bank .1679 Call 1,350,000.003133EGQH1 08/10/2026 2,6882.14008/18/2016 1,310,998.50 2.110 2.1391,350,000.00 Federal Farm Credit Bank .1701 Call 1,625,000.003133EGXB6 10/05/2026 2,7442.14010/06/2016 1,575,177.50 2.154 2.1841,620,116.42 Federal Farm Credit Bank .1705 Call 1,000,000.003133EGYL3 10/17/2025 2,3912.09010/17/2016 975,140.00 2.061 2.0901,000,000.00 Federal Farm Credit Bank .1782 500,000.0031331XHX3 12/21/2021 9955.05004/12/2017 535,735.00 1.884 1.910540,682.76 Federal Farm Credit Bank .1787 900,000.003133EEVD9 03/25/2024 1,8202.30005/04/2017 897,975.00 2.274 2.306899,733.18 Federal Farm Credit Bank .1822 500,000.003133EDWX6 10/07/2024 2,0162.91006/21/2017 513,615.00 2.143 2.172518,699.11 Federal Farm Credit Bank .1826 Call 1,000,000.003133EHGK3 04/24/2025 2,2152.85006/22/2017 1,000,000.00 2.798 2.8361,000,000.00 Federal Farm Credit Bank .1843 445,000.003133ED6R8 11/07/2022 1,3162.93009/14/2017 454,269.35 1.870 1.896460,692.51 Federal Farm Credit Bank .1845 Call 506,000.003133EFYK7 02/08/2023 1,4092.29009/14/2017 501,182.88 2.260 2.291505,963.90 Federal Farm Credit Bank .1846 Call 1,500,000.003133EHZL0 09/20/2027 3,0942.92009/20/2017 1,489,125.00 2.880 2.9201,500,000.00 Federal Farm Credit Bank .1848 Call 1,000,000.003133EGCR4 06/01/2023 1,5222.07009/18/2017 989,640.00 2.135 2.165996,281.05 Federal Farm Credit Bank .1849 Call 1,000,000.003133EHTZ6 08/09/2027 3,0522.95009/18/2017 995,040.00 2.909 2.9491,000,000.00 Federal Farm Credit Bank .1859 Call 1,000,000.003133EHD59 04/10/2026 2,5662.90010/10/2017 994,170.00 2.860 2.9001,000,000.00 Federal Farm Credit Bank .1870 Call 1,000,000.003133EHG31 04/19/2027 2,9403.00010/19/2017 990,600.00 2.958 3.0001,000,000.00 Federal Farm Credit Bank .1871 Call 1,000,000.003133EHG72 10/18/2027 3,1223.08010/18/2017 997,050.00 3.037 3.0801,000,000.00 Federal Farm Credit Bank .1874 Call 1,500,000.003133EHJ20 10/23/2024 2,0322.68010/23/2017 1,500,000.00 2.643 2.6801,500,000.00 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 12 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Federal Farm Credit Bank .1875 Call 675,000.003133EHZL0 09/20/2027 3,0942.92010/18/2017 670,106.25 2.958 3.000671,061.31 Federal Farm Credit Bank .1885 600,000.003133EC2B9 11/09/2021 9531.70012/29/2017 590,502.00 2.161 2.191592,671.45 Federal Farm Credit Bank .1887 Call 1,500,000.003133EH3K7 06/21/2027 3,0033.10001/03/2018 1,491,885.00 3.102 3.1461,495,114.44 Federal Farm Credit Bank .1932 1,500,000.003133EJDE6 02/16/2023 1,4172.57002/16/2018 1,513,440.00 2.605 2.6421,496,103.66 Federal Farm Credit Bank .1954 Call 1,500,000.003133EJNJ4 05/07/2024 1,8633.47005/07/2018 1,501,260.00 3.422 3.4701,500,000.00 Federal Farm Credit Bank .1977 Call 1,000,000.003133EJMY2 05/01/2028 3,3183.87511/08/2018 1,000,190.00 3.910 3.965993,233.89 Federal Farm Credit Bank .1997 Call 1,500,000.003133EJZ93 12/05/2028 3,5364.07012/10/2018 1,508,985.00 3.946 4.0011,508,183.03 Federal Farm Credit Bank .2004 1,500,000.003133EJ2R9 12/14/2020 6232.75012/20/2018 1,510,230.00 2.663 2.7001,501,223.42 Federal Farm Credit Bank .2009 Call 1,500,000.003133EJG78 10/16/2024 2,0253.64001/04/2019 1,505,625.00 3.496 3.5451,507,021.31 Federal Farm Credit Bank .2016 500,000.003133EEG79 09/07/2023 1,6202.15001/15/2019 496,075.00 2.656 2.693488,734.93 Federal Farm Credit Bank .2017 650,000.003133EC2C7 11/09/2023 1,6832.13001/15/2019 644,046.00 2.662 2.699634,102.37 Federal Farm Credit Bank .2030 Call 1,500,000.003133EKBT2 02/28/2029 3,6213.62503/01/2019 1,500,645.00 3.604 3.6551,496,281.28 Federal Farm Credit Bank .2033 Call 1,000,000.003133EKEK8 03/26/2029 3,6473.52003/26/2019 1,000,360.00 3.471 3.5201,000,000.00 Federal Home Loan Bank1041 1,500,000.00313378LA7 02/25/2022 1,0612.33003/20/2012 1,501,485.00 2.298 2.3301,500,000.00 Federal Home Loan Bank1049 1,500,000.00313378VG3 05/22/2019 511.85004/09/2012 1,498,815.00 1.824 1.8501,500,000.00 Federal Home Loan Bank1073 2,000,000.00313379EC9 11/18/2020 5972.00005/18/2012 1,986,800.00 1.972 2.0002,000,000.00 Federal Home Loan Bank1125 1,500,000.00313381C94 12/13/2019 2561.25011/30/2012 1,488,105.00 1.196 1.2121,500,373.57 Federal Home Loan Bank1126 Call 750,000.00313381DA0 12/05/2022 1,3442.19012/05/2012 744,255.00 2.165 2.195749,862.08 Federal Home Loan Bank1131 1,500,000.00313381C94 12/13/2019 2561.25012/13/2012 1,488,105.00 1.232 1.2491,500,000.00 Federal Home Loan Bank1146 Call 212,500.00313381DA0 12/05/2022 1,3442.19001/25/2013 210,872.25 2.201 2.232212,202.80 Federal Home Loan Bank1156 1,315,000.003133XHRJ3 12/10/2021 9845.00002/25/2013 1,406,471.40 1.825 1.8501,417,434.00 Federal Home Loan Bank1240 1,500,000.00313371U79 12/11/2020 6203.12501/09/2014 1,518,090.00 2.615 2.6511,510,912.44 Federal Home Loan Bank1248 1,500,000.003130A0J27 01/07/2020 2812.22001/23/2014 1,497,060.00 2.194 2.2251,499,944.00 Federal Home Loan Bank1253 1,500,000.003130A12B3 03/13/2020 3472.12502/24/2014 1,495,275.00 2.095 2.1241,500,000.00 Federal Home Loan Bank1261 1,500,000.00313382K69 03/12/2021 7111.75003/13/2014 1,483,350.00 2.418 2.4511,481,270.03 Federal Home Loan Bank1267 1,500,000.00313370US5 09/11/2020 5292.87504/02/2014 1,509,930.00 2.271 2.3031,511,452.78 Federal Home Loan Bank1270 200,000.00313379EC9 11/18/2020 5972.00004/08/2014 198,680.00 2.263 2.295199,111.61 Federal Home Loan Bank1272 550,000.00313379EC9 11/18/2020 5972.00004/09/2014 546,370.00 2.263 2.295547,555.89 Federal Home Loan Bank1278 325,000.003133XTYY6 06/14/2019 744.37504/22/2014 326,274.00 1.889 1.916326,535.95 Federal Home Loan Bank1314 1,500,000.00313379EE5 06/14/2019 741.62506/04/2014 1,497,630.00 1.700 1.7241,499,711.43 Federal Home Loan Bank1318 1,500,000.00313379EE5 06/14/2019 741.62506/16/2014 1,497,630.00 1.774 1.7991,499,495.97 Federal Home Loan Bank1324 Call 1,250,000.003133836A4 05/22/2019 510.80006/24/2014 1,247,175.00 1.766 1.7911,248,323.32 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 13 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Federal Home Loan Bank1332 1,500,000.003130A2FH4 06/14/2019 741.75007/02/2014 1,498,020.00 1.686 1.7101,500,115.52 Federal Home Loan Bank1577 1,500,000.003130A7Q73 12/08/2021 9821.53004/08/2016 1,469,685.00 1.450 1.4701,502,300.89 Federal Home Loan Bank1583 Call 1,690,000.003130A7RS6 04/27/2026 2,5832.65004/27/2016 1,667,083.60 2.619 2.6551,689,402.40 Federal Home Loan Bank1587 Call 1,500,000.003130A7TA3 04/28/2023 1,4882.07004/28/2016 1,482,525.00 2.041 2.0701,500,000.00 Federal Home Loan Bank1605 1,000,000.00313382K69 03/12/2021 7111.75004/27/2016 988,900.00 1.490 1.5111,004,457.64 Federal Home Loan Bank1619 500,000.003133827D9 02/08/2021 6791.75006/02/2016 494,410.00 1.476 1.496502,258.34 Federal Home Loan Bank1620 400,000.003133XDVS7 12/11/2020 6205.25006/02/2016 418,888.00 1.461 1.481424,616.89 Federal Home Loan Bank1628 Call 1,500,000.003130A8F99 06/15/2026 2,6322.58006/15/2016 1,469,550.00 2.544 2.5801,500,000.00 Federal Home Loan Bank1632 Call 2,000,000.003130A8J46 06/29/2026 2,6462.52006/29/2016 1,958,800.00 2.485 2.5202,000,000.00 Federal Home Loan Bank1633 Call 1,363,636.273130A8J79 12/27/2024 2,0972.35006/27/2016 1,335,736.27 2.317 2.3501,363,636.27 Federal Home Loan Bank1635 Call 1,500,000.003130A8JG9 06/22/2023 1,5432.07006/22/2016 1,481,790.00 2.041 2.0701,500,000.00 Federal Home Loan Bank1637 Call 909,091.003130A8J79 12/27/2024 2,0972.35006/27/2016 890,491.00 2.317 2.350909,091.00 Federal Home Loan Bank1640 Call 1,500,000.003130A8JX2 06/29/2026 2,6462.54006/29/2016 1,463,610.00 2.505 2.5401,500,000.00 Federal Home Loan Bank1643 Call 1,500,000.003130A8HF3 09/23/2025 2,3672.44006/23/2016 1,462,545.00 2.430 2.4641,497,899.10 Federal Home Loan Bank1644 Call 1,500,000.003130A8HT3 12/29/2025 2,4642.47006/29/2016 1,450,605.00 2.451 2.4851,498,647.56 Federal Home Loan Bank1648 Call 1,500,000.003130A8J46 06/29/2026 2,6462.52006/29/2016 1,469,100.00 2.425 2.4591,500,326.00 Federal Home Loan Bank1649 250,000.003130A0EN6 12/10/2021 9842.87506/28/2016 253,407.50 1.232 1.249260,540.10 Federal Home Loan Bank1651 Call 1,500,000.003130A8MQ3 10/12/2022 1,2901.87507/12/2016 1,474,335.00 1.849 1.8751,500,000.00 Federal Home Loan Bank1652 Call 980,000.003130A8F99 06/15/2026 2,6322.58006/29/2016 960,106.00 2.524 2.560981,234.91 Federal Home Loan Bank1661 Call 1,000,000.003130A8SJ3 11/01/2024 2,0412.15008/01/2016 978,940.00 2.120 2.1501,000,000.00 Federal Home Loan Bank1662 Call 1,500,000.003130A8R54 07/28/2023 1,5791.80007/28/2016 1,444,410.00 1.795 1.8201,498,786.84 Federal Home Loan Bank1667 Call 1,500,000.003130A8VP5 08/23/2024 1,9712.00008/23/2016 1,451,790.00 1.972 2.0001,500,000.00 Federal Home Loan Bank1668 Call 1,500,000.003130A8VN0 11/17/2023 1,6911.94008/17/2016 1,473,150.00 1.913 1.9401,500,000.00 Federal Home Loan Bank1690 Call 1,000,000.003130A94L2 09/02/2026 2,7112.12509/15/2016 955,110.00 2.129 2.158997,766.10 Federal Home Loan Bank1695 Call 1,500,000.003130A9N64 10/06/2026 2,7452.15010/06/2016 1,437,660.00 2.120 2.1501,500,000.00 Federal Home Loan Bank1697 Call 1,000,000.003130A9N64 10/06/2026 2,7452.15010/06/2016 958,440.00 2.131 2.161999,248.61 Federal Home Loan Bank1699 500,000.003133827E7 02/06/2023 1,4072.13010/05/2016 497,020.00 1.578 1.600509,654.32 Federal Home Loan Bank1700 Call 1,500,000.003130A9P62 10/13/2026 2,7522.20010/13/2016 1,438,815.00 2.169 2.2001,500,000.00 Federal Home Loan Bank1702 Call 2,000,000.003130A9PT2 10/26/2026 2,7652.23010/26/2016 1,916,220.00 2.199 2.2302,000,000.00 Federal Home Loan Bank1706 Call 310,000.003130A9PT2 10/26/2026 2,7652.23010/26/2016 297,014.10 2.214 2.245309,685.57 Federal Home Loan Bank1707 Call 1,000,000.003130A9RH6 10/20/2026 2,7592.30010/20/2016 963,130.00 2.270 2.302999,848.94 Federal Home Loan Bank1709 Call 1,000,000.003130A9RH6 10/20/2026 2,7592.30010/20/2016 963,130.00 2.271 2.302999,811.18 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 14 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Federal Home Loan Bank1713 Call 2,000,000.003130A9XC0 11/17/2026 2,7872.36011/17/2016 1,941,520.00 2.327 2.3602,000,000.00 Federal Home Loan Bank1716 Call 1,500,000.003130A9XC0 11/17/2026 2,7872.36011/17/2016 1,456,140.00 2.361 2.3931,496,567.50 Federal Home Loan Bank1717 Call 1,500,000.003130AA2Z0 11/23/2026 2,7932.69011/23/2016 1,461,240.00 2.653 2.6901,500,000.00 Federal Home Loan Bank1718 Call 205,000.003130AA2Z0 11/23/2026 2,7932.69011/23/2016 199,702.80 2.682 2.720204,589.42 Federal Home Loan Bank1719 Call 1,500,000.003130A7C29 02/24/2026 2,5212.75011/16/2016 1,493,985.00 2.712 2.7491,500,000.00 Federal Home Loan Bank1720 Call 1,500,000.003130AAAZ1 12/14/2026 2,8142.90012/14/2016 1,489,095.00 2.860 2.9001,500,000.00 Federal Home Loan Bank1724 Call 800,000.003130AAEX2 12/28/2021 1,0022.15012/28/2016 794,760.00 2.120 2.150800,000.00 Federal Home Loan Bank1727 1,000,000.003130AABG2 11/29/2021 9731.87512/16/2016 989,360.00 2.168 2.198991,845.99 Federal Home Loan Bank1741 Call 315,000.003130AAAZ1 12/14/2026 2,8142.90001/27/2017 312,709.95 3.008 3.050311,868.97 Federal Home Loan Bank1751 Call 325,000.003130A8HF3 09/23/2025 2,3672.44002/15/2017 316,884.75 2.836 2.875316,926.82 Federal Home Loan Bank1752 Call 250,000.003130A7C29 02/24/2026 2,5212.75002/15/2017 248,997.50 2.958 3.000246,245.69 Federal Home Loan Bank1763 1,910,000.003133XHRJ3 12/10/2021 9845.00003/10/2017 2,042,859.60 2.150 2.1802,046,980.11 Federal Home Loan Bank1780 1,000,000.00313378CR0 03/11/2022 1,0752.25004/12/2017 998,080.00 1.903 1.9301,008,934.20 Federal Home Loan Bank1823 Call 1,500,000.003130ABJW7 06/27/2024 1,9142.55006/27/2017 1,497,975.00 2.515 2.5501,500,000.00 Federal Home Loan Bank1847 Call 500,000.003130A7TA3 04/28/2023 1,4882.07009/18/2017 494,175.00 2.131 2.161498,257.03 Federal Home Loan Bank1854 Call 1,500,000.003130ACH64 10/26/2022 1,3042.25010/26/2017 1,492,125.00 2.219 2.2501,500,000.00 Federal Home Loan Bank1860 Call 500,000.003130AAWE4 03/08/2022 1,0722.22009/28/2017 497,585.00 2.116 2.146501,027.27 Federal Home Loan Bank1861 Call 800,000.003130ABAF3 05/11/2027 2,9623.00009/29/2017 800,008.00 2.958 2.999800,000.00 Federal Home Loan Bank1862 Call 1,000,000.003130ACK94 10/10/2024 2,0192.53010/10/2017 994,070.00 2.495 2.5301,000,000.00 Federal Home Loan Bank1873 Call 1,500,000.003130ACMH4 10/16/2024 2,0252.50010/16/2017 1,493,625.00 2.465 2.5001,500,000.00 Federal Home Loan Bank1886 1,000,000.003130A3VC5 12/08/2023 1,7122.25001/03/2018 996,640.00 2.359 2.392993,805.11 Federal Home Loan Bank1896 1,000,000.003130A3DL5 09/08/2023 1,6212.37501/09/2018 1,002,360.00 2.376 2.409998,584.32 Federal Home Loan Bank1903 500,000.003130ADEV0 01/17/2023 1,3872.38001/18/2018 501,575.00 2.385 2.418499,316.62 Federal Home Loan Bank1918 1,000,000.003130ADJH6 01/29/2020 3032.10001/29/2018 997,180.00 2.083 2.112999,903.15 Federal Home Loan Bank1971 Call 1,000,000.003130AELU2 07/16/2027 3,0283.84011/01/2018 1,000,990.00 3.847 3.900995,715.31 Federal Home Loan Bank1979 Call 1,500,000.003130AFFJ1 11/21/2028 3,5224.08011/21/2018 1,506,225.00 4.024 4.0801,500,000.00 Federal Home Loan Bank1996 Call 1,000,000.003130AFG84 11/29/2028 3,5303.87512/06/2018 1,014,860.00 3.823 3.876999,903.20 Fed. Home Loan Mortgage Corp.1106 1,500,000.003134G3A91 08/22/2019 1431.40008/22/2012 1,494,000.00 1.380 1.4001,500,000.00 Fed. Home Loan Mortgage Corp.1113 1,500,000.003134G3L73 12/26/2019 2691.50009/26/2012 1,488,945.00 1.479 1.5001,500,000.00 Fed. Home Loan Mortgage Corp.1273 2,000,000.003134G45T1 12/10/2021 9842.00004/10/2014 1,985,120.00 2.564 2.6001,970,873.83 Fed. Home Loan Mortgage Corp.1277 1,000,000.003134G45T1 12/10/2021 9842.00004/22/2014 992,560.00 2.643 2.680983,539.69 Fed. Home Loan Mortgage Corp.1282 300,000.003134G3A91 08/22/2019 1431.40005/01/2014 298,800.00 1.914 1.941299,397.93 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 15 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Fed. Home Loan Mortgage Corp.1286 300,000.003134G35V8 03/13/2020 3471.65005/02/2014 297,798.00 2.053 2.082298,845.20 Fed. Home Loan Mortgage Corp.1287 300,000.003134G3U40 11/21/2019 2341.45005/02/2014 297,981.00 1.938 1.965299,068.03 Fed. Home Loan Mortgage Corp.1291 1,000,000.003134G3K58 03/19/2020 3531.50005/06/2014 991,120.00 2.041 2.070994,835.17 Fed. Home Loan Mortgage Corp.1292 1,000,000.003134G44G0 05/22/2020 4171.50005/06/2014 989,870.00 2.091 2.120993,387.36 Fed. Home Loan Mortgage Corp.1301 1,000,000.003134G3L73 12/26/2019 2691.50005/13/2014 992,630.00 1.945 1.972996,725.16 Fed. Home Loan Mortgage Corp.1352 1,000,000.003134G43G1 05/07/2019 361.20007/25/2014 998,760.00 1.765 1.790999,436.83 Fed. Home Loan Mortgage Corp.1678 Call 1,000,000.003134GAEF7 09/29/2021 9121.65009/29/2016 983,020.00 1.627 1.6501,000,000.00 Fed. Home Loan Mortgage Corp.1828 Call 1,500,000.003134GBNX6 05/28/2021 7882.00006/28/2017 1,488,195.00 1.969 1.9961,500,000.00 Fed. Home Loan Mortgage Corp.1835 Call 1,500,000.003134GBXU1 07/27/2022 1,2132.25007/27/2017 1,485,015.00 2.219 2.2501,500,000.00 Fed. Home Loan Mortgage Corp.1836 Call 1,000,000.003134GBXU1 07/27/2022 1,2132.25007/27/2017 990,010.00 2.219 2.2501,000,000.00 Fed. Home Loan Mortgage Corp.1837 Call 1,000,000.003134GBXU1 07/27/2022 1,2132.25007/27/2017 990,010.00 2.234 2.265999,501.67 Fed. Home Loan Mortgage Corp.1853 Call 660,000.003134GBK92 10/12/2022 1,2902.20010/12/2017 656,251.20 2.169 2.200660,000.00 Federal National Mortgage Asso1048 2,000,000.003136G0AW1 10/16/2020 5642.35004/16/2012 1,998,920.00 2.317 2.3502,000,000.00 Federal National Mortgage Asso1059 2,000,000.003136G0DU2 04/30/2020 3952.00004/30/2012 1,990,520.00 1.972 2.0002,000,000.00 Federal National Mortgage Asso1061 1,500,000.003136G0EC1 04/30/2020 3952.05004/30/2012 1,493,820.00 2.021 2.0501,500,000.00 Federal National Mortgage Asso1066 2,000,000.003136G0FJ5 10/30/2020 5782.00004/30/2012 1,987,940.00 1.972 2.0002,000,000.00 Federal National Mortgage Asso1268 1,500,000.003136FTR43 08/28/2020 5152.00004/08/2014 1,492,290.00 2.172 2.2021,496,028.87 Federal National Mortgage Asso1276 1,000,000.003136G0U58 04/30/2021 7601.75004/16/2014 987,240.00 2.364 2.397987,674.31 Federal National Mortgage Asso1288 250,000.003136G0M57 04/09/2021 7391.75005/02/2014 246,977.50 2.452 2.486246,597.61 Federal National Mortgage Asso1315 1,200,000.003136G0YK1 08/28/2019 1491.50006/05/2014 1,195,248.00 1.815 1.8401,198,416.80 Federal National Mortgage Asso1317 1,000,000.003136G02P5 04/29/2019 281.20006/12/2014 999,020.00 1.765 1.790999,562.38 Federal National Mortgage Asso1546 Call 1,000,000.003136G3AN5 03/16/2021 7151.75003/16/2016 997,690.00 1.578 1.6001,000,000.00 Federal National Mortgage Asso1654 1,000,000.003136G0EG2 04/23/2021 7532.28006/30/2016 998,420.00 1.171 1.1871,021,822.42 Federal National Mortgage Asso1669 Call 1,350,000.003136G3XZ3 07/28/2021 8491.50007/28/2016 1,326,267.00 1.505 1.5261,349,215.31 Federal National Mortgage Asso1687 Call 1,050,000.003136G36A8 09/27/2024 2,0062.00009/27/2016 1,030,302.00 1.972 2.0001,050,000.00 Federal National Mortgage Asso1715 500,000.0031364CCC0 04/30/2026 2,5867.12511/10/2016 649,470.00 2.367 2.400648,828.78 Federal National Mortgage Asso1883 500,000.003136G05L1 08/26/2022 1,2432.00012/29/2017 495,015.00 2.238 2.270495,659.54 Federal National Mortgage Asso1894 1,000,000.003135G0T78 10/05/2022 1,2832.00001/09/2018 990,570.00 2.288 2.320989,404.92 Federal National Mortgage Asso1904 1,000,000.003135G0T78 10/05/2022 1,2832.00001/19/2018 990,570.00 2.409 2.443985,380.68 Federal National Mortgage Asso1922 1,000,000.003136G0P62 10/15/2020 5631.50002/05/2018 985,450.00 2.268 2.300988,122.70 Federal National Mortgage Asso1926 1,500,000.003135G0T94 01/19/2023 1,3892.37502/08/2018 1,504,035.00 2.574 2.6101,487,505.08 Federal National Mortgage Asso1960 250,000.003136G33H6 08/24/2026 2,7022.10010/24/2018 242,605.00 3.603 3.653225,211.44 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 16 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Federal Agency Bonds Tennessee Valley Authority1132 500,000.00880591EL2 02/15/2021 6863.87512/14/2012 513,490.00 1.596 1.618519,711.23 Tennessee Valley Authority1133 1,010,000.00880591EN8 08/15/2022 1,2321.87512/14/2012 993,537.00 1.893 1.9201,008,603.37 Tennessee Valley Authority1145 1,500,000.00880591EL2 02/15/2021 6863.87501/23/2013 1,540,470.00 1.647 1.6691,557,709.22 Tennessee Valley Authority1260 1,160,000.00880591EL2 02/15/2021 6863.87503/12/2014 1,191,296.80 2.427 2.4611,188,068.46 Tennessee Valley Authority1508 1,000,000.00880591CJ9 11/01/2025 2,4066.75011/20/2015 1,247,150.00 2.807 2.8461,222,419.97 Tennessee Valley Authority1519 750,000.00880591ER9 09/15/2024 1,9942.87501/15/2016 767,580.00 2.564 2.600760,004.12 Tennessee Valley Authority1589 775,000.00880591CJ9 11/01/2025 2,4066.75004/18/2016 966,541.25 2.337 2.370973,960.74 Tennessee Valley Authority1703 1,490,000.00880591EN8 08/15/2022 1,2321.87510/07/2016 1,465,713.00 1.538 1.5601,505,059.53 Tennessee Valley Authority1714 1,250,000.00880591CJ9 11/01/2025 2,4066.75011/10/2016 1,558,937.50 2.317 2.3501,574,728.88 Subtotal and Average 299,094,549.27 297,217,227.27 296,737,749.56 2.277 2.308 1,527 Treasury Securities (Notes) U.S. Treasury1284 TB 1,500,000.00912828TH3 07/31/2019 1210.87505/02/2014 1,491,975.00 1.726 1.7501,495,860.18 U.S. Treasury1285 TB 1,500,000.00912828TN0 08/31/2019 1521.00005/02/2014 1,490,805.00 1.755 1.7801,495,375.36 U.S. Treasury1289 TB 1,500,000.00912828SX9 05/31/2019 601.12505/05/2014 1,496,685.00 1.692 1.7161,498,610.46 U.S. Treasury1299 TB 1,500,000.00912828SX9 05/31/2019 601.12505/13/2014 1,496,685.00 1.654 1.6771,498,699.75 U.S. Treasury1316 TB 1,500,000.00912828TC4 06/30/2019 901.00006/10/2014 1,494,375.00 1.687 1.7111,497,491.83 U.S. Treasury1761 TB 1,500,000.00912828J43 02/28/2022 1,0641.75003/09/2017 1,479,255.00 2.071 2.1001,485,545.70 U.S. Treasury1866 TB 1,500,000.00912828L57 09/30/2022 1,2781.75010/06/2017 1,475,505.00 1.914 1.9411,490,485.57 U.S. Treasury1898 TB 1,500,000.00912828P38 01/31/2023 1,4011.75001/11/2018 1,473,225.00 2.308 2.3401,468,147.36 U.S. Treasury1905 TB 1,500,000.00912828N30 12/31/2022 1,3702.12501/22/2018 1,493,850.00 2.387 2.4201,484,425.89 U.S. Treasury1923 TB 1,500,000.00912828P38 01/31/2023 1,4011.75002/05/2018 1,473,225.00 2.560 2.5961,454,610.60 U.S. Treasury1925 TB 1,000,000.00912828P38 01/31/2023 1,4011.75002/08/2018 982,150.00 2.487 2.521972,335.69 U.S. Treasury1929 TB 1,000,000.00912828P79 02/28/2023 1,4291.50002/09/2018 972,500.00 2.534 2.570960,963.13 U.S. Treasury1934 TB 1,000,000.00912828P79 02/28/2023 1,4291.50002/15/2018 972,500.00 2.601 2.638958,551.23 Subtotal and Average 17,761,102.75 18,000,000.00 17,792,735.00 2.065 2.094 813 Municipal Bonds Acalanes Union High School Dis1494 MUN 1,000,000.00004284B38 08/01/2021 8532.38110/30/2015 998,530.00 2.120 2.1501,005,037.57 Alameda County Joint Pws Auth.2005 MUN 505,000.00010831DS1 06/01/2025 2,2533.36512/24/2018 522,240.70 3.175 3.220509,040.22 Antelope Valley Community Coll1790 MUN 220,000.0003667PFL1 08/01/2022 1,2182.60805/09/2017 220,475.20 2.266 2.298222,113.96 State of Arkansas1913 MUN 320,000.00041042ZW5 06/01/2022 1,1572.87501/26/2018 324,080.00 2.486 2.520323,385.12 Burlingame School District1548 MUN 730,000.00121457EQ4 08/01/2025 2,3146.23802/24/2016 819,746.20 3.557 3.606832,372.81 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 17 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Municipal Bonds Carlsbad Unified School Dist .1547 MUN 300,000.00142665DH8 08/01/2021 8534.58402/24/2016 312,771.00 2.130 2.159315,944.44 Carlsbad Unified School Dist .1556 MUN 1,250,000.00142665DH8 08/01/2021 8534.58403/04/2016 1,303,212.50 2.138 2.1681,316,122.61 Carlsbad Unified School Dist .1753 MUN 350,000.00142665DH8 08/01/2021 8534.58402/17/2017 364,899.50 2.317 2.350367,252.00 Carlsbad Unified School Dist .1857 MUN 305,000.00142665DJ4 08/01/2026 2,6795.23409/27/2017 348,233.75 2.850 2.890350,960.13 Cerritos Community College Dis1523 MUN 500,000.00156792GV9 08/01/2021 8532.78101/27/2016 502,295.00 2.012 2.040508,135.38 Cerritos Community College Dis1876 MUN 55,000.00156792GW7 08/01/2022 1,2182.97111/30/2017 55,682.00 2.416 2.45055,896.36 State of Delaware1952 MUN 1,500,000.002463807H6 07/01/2022 1,1873.50005/03/2018 1,549,740.00 2.927 2.9671,524,204.47 State of Delaware1970 MUN 500,000.002463804C0 10/01/2020 5494.60011/02/2018 504,935.00 3.668 3.719506,309.14 Federal Home Loan Bank2032 Call 1,095,000.003130AFYF8 03/06/2026 2,5313.35003/14/2019 1,095,295.65 3.301 3.3471,095,000.00 Fremon Union High School Distr1646 MUN 525,000.00357172VA0 02/01/2026 2,4986.08006/28/2016 606,900.00 2.994 3.035620,375.76 Fullerton School District1916 MUN 995,000.00359819DN6 08/01/2026 2,6793.16002/14/2018 1,018,561.60 3.028 3.0701,000,732.92 Fullerton School District1917 MUN 750,000.00359819DM8 08/01/2025 2,3143.04002/14/2018 763,567.50 2.959 3.000751,680.09 State of Georgia1613 MUN 500,000.00373384RU2 10/01/2022 1,2793.57005/17/2016 516,840.00 1.878 1.904527,397.04 State of Georgia1645 MUN 365,000.00373384W69 02/01/2023 1,4023.25006/27/2016 374,172.45 1.898 1.925382,328.21 State of Georgia1666 MUN 1,825,000.003733844V5 02/01/2025 2,1332.37507/29/2016 1,798,738.25 1.972 1.9991,861,535.16 State of Georgia1691 MUN 385,000.00373384RU2 10/01/2022 1,2793.57009/26/2016 397,966.80 1.630 1.653409,532.84 State of Georgia1775 MUN 250,000.00373384RX6 10/01/2025 2,3754.00004/10/2017 267,487.50 2.739 2.777267,597.94 State of Georgia1919 MUN 1,095,000.00373384RY4 10/01/2026 2,7404.31001/26/2018 1,197,886.20 2.979 3.0201,187,583.39 State of Georgia1945 MUN 200,000.00373384RY4 10/01/2026 2,7404.31003/19/2018 218,792.00 3.204 3.248213,784.36 State of Georgia1962 MUN 390,000.00373384SP2 10/01/2023 1,6443.74010/25/2018 410,478.90 3.093 3.136399,743.81 State of Georgia1967 MUN 350,000.00373385BU6 02/01/2027 2,8632.72010/31/2018 344,694.00 3.412 3.460332,469.95 State of Georgia1980 MUN 1,200,000.00373384PB6 11/01/2027 3,1365.01411/30/2018 1,377,672.00 3.649 3.7001,314,346.36 State of Hawaii1685 MUN 1,045,000.00419792DA1 10/01/2026 2,7403.15010/19/2016 1,061,228.85 2.431 2.4651,092,316.44 State of Hawaii1852 MUN 225,000.00419791YP7 02/01/2022 1,0374.80009/21/2017 237,503.25 2.071 2.100241,361.74 State of Hawaii1944 MUN 1,000,000.00419792NH5 10/01/2022 1,2791.92103/20/2018 978,520.00 2.584 2.620977,063.52 State of Hawaii1946 MUN 355,000.00419791YP7 02/01/2022 1,0374.80003/21/2018 374,727.35 2.761 2.800373,933.40 State of Hawaii1947 MUN 1,500,000.00419792NH5 10/01/2022 1,2791.92103/29/2018 1,467,780.00 2.663 2.7001,461,722.26 State of Hawaii1961 MUN 250,000.00419791YS1 02/01/2025 2,1335.23010/25/2018 281,277.50 3.363 3.410273,701.80 State of Hawaii1981 MUN 500,000.00419791YV4 02/01/2028 3,2285.48011/30/2018 588,880.00 3.687 3.739564,563.34 State of Hawaii1995 MUN 800,000.00419791YT9 02/01/2026 2,4985.33012/06/2018 916,456.00 3.304 3.350895,503.41 State of Hawaii2019 MUN 750,000.00419792NH5 10/01/2022 1,2791.92101/17/2019 733,890.00 2.613 2.650731,872.15 City of Los Angeles1748 MUN 1,000,000.00544351KS7 09/01/2023 1,6142.64002/14/2017 1,000,980.00 2.784 2.8231,001,200.76 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 18 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Municipal Bonds City of Los Angeles1879 MUN 1,090,000.00544351KR9 09/01/2022 1,2492.44012/11/2017 1,086,163.20 2.355 2.3881,091,806.00 City of Los Angeles1969 MUN 295,000.00544351NP0 09/01/2026 2,7103.30011/02/2018 303,150.85 3.530 3.579289,688.46 City of Los Angeles2008 MUN 1,000,000.00544351MS5 09/01/2026 2,7103.50001/07/2019 1,040,890.00 3.077 3.1191,024,867.65 Los Angeles Dept. of WTR & PWR1949 MUN 1,500,000.00544495VX9 07/01/2027 3,0135.51603/29/2018 1,768,965.00 3.254 3.3001,734,569.39 Los Angeles Dept. of WTR & PWR1965 MUN 425,000.00544495VX9 07/01/2027 3,0135.51610/29/2018 501,206.75 3.600 3.650480,628.76 Los Angeles Dept. of WTR & PWR1975 MUN 300,000.00544525NW4 07/01/2022 1,1875.18111/07/2018 323,940.00 3.166 3.210317,985.41 State of Maryland1689 MUN 485,000.005741925C0 03/01/2022 1,0654.30009/16/2016 506,572.80 1.534 1.555522,161.00 State of Maryland1762 MUN 1,000,000.00574193NC8 03/15/2022 1,0792.25003/22/2017 991,790.00 2.219 2.2501,000,000.00 State of Maryland1941 MUN 1,500,000.00574193PU6 03/15/2021 7142.48003/21/2018 1,496,895.00 2.406 2.4401,501,120.89 State of Maryland1943 MUN 1,280,000.005741925D8 03/01/2023 1,4304.40003/20/2018 1,359,936.00 2.633 2.6701,360,724.52 State of Maryland1958 MUN 1,690,000.005741926L9 08/01/2024 1,9494.20010/19/2018 1,820,299.00 3.413 3.4611,749,859.11 State of Michigan2002 MUN 825,000.005946108C4 05/15/2026 2,6013.85012/21/2018 853,140.75 3.452 3.500842,953.05 Mtn. View-Whisman School Dist.1348 MUN 500,000.0062451FFK1 08/01/2021 8532.97307/24/2014 503,215.00 2.893 2.933502,350.14 Marin Community College Dist.1858 MUN 500,000.0056781RGU5 08/01/2027 3,0443.27209/28/2017 512,425.00 2.791 2.830515,965.28 Marin Community College Dist.1973 MUN 120,000.0056781RGT8 08/01/2026 2,6793.17211/05/2018 122,696.40 3.452 3.500117,485.84 Mt. San Antonio Community Coll1489 MUN 1,335,000.00623040GX4 08/01/2023 1,5834.10310/26/2015 1,419,238.50 2.490 2.5251,417,402.41 State of Mississippi1968 MUN 1,500,000.00605581LM7 11/01/2026 2,7713.75111/07/2018 1,586,355.00 3.378 3.4251,532,187.21 State of Mississippi1972 MUN 500,000.00605581LM7 11/01/2026 2,7713.75111/07/2018 528,785.00 3.402 3.450509,897.91 State of New Hampshire1948 MUN 1,500,000.00644682M37 06/01/2021 7923.50003/22/2018 1,533,615.00 2.544 2.5801,528,491.38 New York St Envrnmntl Facs1942 MUN 1,000,000.0064985HWN3 07/15/2020 4711.43103/15/2018 985,730.00 2.377 2.410987,792.38 New York St Envrnmntl Facs2007 MUN 450,000.0064985HWS2 07/15/2024 1,9322.12001/04/2019 441,193.50 2.860 2.900432,958.67 New York State Envrnmntl Corp1933 MUN 2,000,000.0064986DEE1 06/15/2022 1,1712.43802/15/2018 1,991,160.00 2.624 2.6611,986,519.80 New York State Envrnmntl Corp2022 MUN 1,000,000.00649791CN8 03/01/2023 1,4304.69001/22/2019 1,081,270.00 2.752 2.7911,069,784.99 New York State Envrnmntl Corp2024 MUN 1,000,000.00649791CN8 03/01/2023 1,4304.69002/08/2019 1,081,270.00 2.751 2.7901,069,873.55 State of Ohio1550 MUN 1,500,000.00677522HZ0 05/01/2021 7611.57003/09/2016 1,475,865.00 1.548 1.5691,500,000.00 State of Ohio1688 MUN 800,000.00677522JB1 05/01/2023 1,4912.11009/13/2016 785,240.00 1.764 1.788809,849.25 State of Ohio1742 MUN 2,000,000.00677522JB1 05/01/2023 1,4912.11001/31/2017 1,963,100.00 2.485 2.5201,969,175.73 State of Ohio1832 MUN 900,000.006775207G7 04/01/2024 1,8274.97106/30/2017 997,371.00 2.416 2.4501,003,943.89 State of Ohio1881 MUN 200,000.00677521GP5 11/01/2020 5803.62512/21/2017 203,746.00 2.179 2.210204,316.50 Orchard School District1910 MUN 200,000.00685585FD8 08/01/2027 3,0443.12501/25/2018 199,672.00 3.208 3.253198,218.27 State of Oregon1682 MUN 570,000.0068609BGH4 05/01/2022 1,1262.50008/29/2016 569,903.10 1.528 1.550585,919.75 State of Oregon1974 MUN 500,000.0068607LXQ5 06/01/2027 2,9835.89211/06/2018 593,050.00 3.516 3.565569,496.34 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 19 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Municipal Bonds State of Oregon2003 MUN 300,000.0068608USE7 08/01/2025 2,3142.87712/21/2018 302,193.00 3.156 3.200294,502.13 State of Oregon2015 MUN 445,000.0068607LXQ5 06/01/2027 2,9835.89201/16/2019 527,814.50 3.537 3.587516,780.76 Pasadena CA Public Finance Aut1985 MUN 665,000.00702274CP4 12/01/2023 1,7053.43812/06/2018 688,321.55 3.205 3.250670,340.15 Palo Alto Unified School Dist.1192 MUN 2,000,000.00697379UE3 08/01/2021 8532.44105/10/2013 2,002,000.00 2.031 2.0602,016,266.67 Palo Alto Unified School Dist.1193 MUN 1,800,000.00697379UE3 08/01/2021 8532.44105/13/2013 1,801,800.00 2.031 2.0601,814,639.51 Palo Alto Unified School Dist.1195 MUN 1,990,000.00697379UE3 08/01/2021 8532.44105/15/2013 1,991,990.00 2.051 2.0802,005,324.88 Palo Alto Unified School Dist.1437 MUN 200,000.00697379UE3 08/01/2021 8532.44101/27/2015 200,200.00 2.041 2.070201,611.19 Palo Alto Unified School Dist.1610 MUN 1,000,000.00697379UE3 08/01/2021 8532.44105/12/2016 1,001,000.00 1.528 1.5501,019,889.09 Palo Alto Unified School Dist.1684 MUN 600,000.00697379UD5 08/01/2020 4882.29109/02/2016 598,752.00 1.290 1.308607,640.48 Palo Alto Unified School Dist.1880 MUN 1,025,000.00697379UD5 08/01/2020 4882.29112/20/2017 1,022,868.00 1.923 1.9501,029,512.18 Rancho Water Dist. Fin. Auth.1992 MUN 430,000.00752111KB9 08/01/2026 2,6792.48911/30/2018 416,179.80 3.318 3.365405,819.95 County of Santa Clara1897 MUN 1,340,000.00801546PH9 08/01/2023 1,5832.50001/11/2018 1,338,673.40 2.436 2.4701,341,609.61 County of Santa Clara1899 MUN 1,460,000.00801546PJ5 08/01/2024 1,9492.68001/12/2018 1,470,147.00 2.643 2.6801,460,000.00 Santa Clara Vly Transportation1964 MUN 1,400,000.0080168NEL9 04/01/2021 7314.64910/29/2018 1,457,848.00 3.008 3.0501,442,816.88 Santa Cruz County Capital Fin.1906 MUN 465,000.0080181PCT2 06/01/2024 1,8882.50001/25/2018 460,266.30 2.968 3.010453,914.45 Santa Cruz County Capital Fin.1907 MUN 465,000.0080181PCU9 06/01/2025 2,2532.75001/25/2018 462,940.05 3.008 3.050457,333.83 Santa Cruz County Capital Fin.1908 MUN 470,000.0080181PCV7 06/01/2026 2,6183.00001/25/2018 472,298.30 3.107 3.150465,574.78 Santa Cruz County Capital Fin.1909 MUN 280,000.0080181PCW5 06/01/2027 2,9833.00001/25/2018 279,624.80 3.205 3.250275,096.51 City & County of San Francisco1441 MUN 360,000.00797646NL6 06/15/2022 1,1714.95002/09/2015 384,771.60 2.416 2.450386,249.97 City & County of San Francisco1509 MUN 1,000,000.00797646NC6 06/15/2025 2,2675.45011/27/2015 1,138,870.00 3.067 3.1101,124,786.90 City & County of San Francisco1711 MUN 2,105,000.00797646T48 06/15/2025 2,2672.29011/01/2016 2,052,753.90 2.219 2.2492,109,696.51 City & County of San Francisco1712 MUN 245,000.00797646T55 06/15/2026 2,6322.39011/01/2016 237,946.45 2.376 2.410244,682.60 City & County of San Francisco1839 MUN 230,000.00797646T48 06/15/2025 2,2672.29007/14/2017 224,291.40 2.682 2.720224,508.56 City & County of San Francisco2014 MUN 1,420,000.00797646ND4 06/15/2026 2,6325.60001/16/2019 1,650,991.40 3.304 3.3501,622,308.48 San Francisco Cmnty Facs Dist1937 MUN 680,000.0079772EBC2 09/01/2027 3,0753.25003/02/2018 687,208.00 3.451 3.499667,948.13 SF Bay Area Rapid Transit Dist1938 MUN 2,100,000.00797669XU7 07/01/2021 8222.38703/07/2018 2,094,687.00 2.494 2.5282,093,590.84 SF Bay Area Rapid Transit Dist1939 MUN 1,500,000.00797669XU7 07/01/2021 8222.38703/07/2018 1,496,205.00 2.497 2.5311,495,320.30 SF Bay Area Rapid Transit Dist2018 MUN 875,000.00797669XU7 07/01/2021 8222.38701/17/2019 872,786.25 2.544 2.579871,331.50 SF Bay Area Rapid Transit Dist2029 MUN 200,000.00797669XW3 07/01/2023 1,5522.62102/25/2019 200,628.00 2.672 2.710199,286.78 San Jose Evergreen Cmnty Colll1966 MUN 315,000.00798189PK6 09/01/2027 3,0753.72810/29/2018 329,801.85 3.676 3.727315,000.00 San Jose Unified School Dist.1435 MUN 580,000.00798186C83 08/01/2023 1,5832.50001/29/2015 573,312.60 2.663 2.700575,535.10 Santa Monica Cmnty College Dis2025 MUN 215,000.00802385QW7 08/01/2022 1,2182.90802/19/2019 217,442.40 2.714 2.752216,069.81 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 20 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Municipal Bonds San Mateo Union High School Dt1516 MUN 245,000.00799017KT4 09/01/2019 1532.19301/08/2016 244,524.70 1.775 1.800245,386.25 San Mateo Union High School Dt1518 MUN 180,000.00799017KV9 09/01/2021 8842.72001/19/2016 181,006.20 2.046 2.075182,634.01 San Mateo Union High School Dt1902 MUN 1,000,000.00799017UW6 09/01/2025 2,3452.69901/16/2018 992,320.00 2.786 2.825992,754.43 San Mateo Union High School Dt1940 MUN 1,000,000.00799017UW6 09/01/2025 2,3452.69903/09/2018 992,320.00 2.959 3.000982,803.71 South Pasadena Unified School1914 MUN 180,000.00839278JM1 08/01/2027 3,0443.00002/15/2018 181,942.20 3.057 3.100178,705.55 State of Tennessee1673 MUN 1,000,000.00880541XY8 08/01/2026 2,6792.11608/25/2016 954,290.00 1.923 1.9501,011,007.38 State of Tennessee1674 MUN 1,650,000.00880541XX0 08/01/2025 2,3142.06608/25/2016 1,591,672.50 1.893 1.9201,663,947.82 State of Tennessee1676 MUN 700,000.00880541XX0 08/01/2025 2,3142.06608/25/2016 675,255.00 1.893 1.920705,917.26 State of Tennessee2001 MUN 205,000.00880541QU4 08/01/2024 1,9493.72812/20/2018 216,652.20 2.860 2.900213,292.67 State of Texas1482 MUN 920,000.00882723PP8 10/01/2021 9142.58910/14/2015 925,437.20 1.864 1.890935,133.08 State of Texas1586 MUN 1,000,000.00882722KA8 10/01/2023 1,6445.64304/19/2016 1,015,150.00 3.339 3.3851,089,100.00 State of Texas1592 MUN 235,000.00882722JZ5 10/01/2022 1,2795.50304/21/2016 238,398.10 3.047 3.090252,868.10 State of Texas1621 MUN 500,000.00882723A41 10/01/2020 5491.77706/07/2016 495,015.00 1.450 1.470502,220.46 State of Texas1625 MUN 485,000.00882722KC4 10/01/2025 2,3755.91306/09/2016 492,992.80 3.831 3.885538,193.36 State of Texas1708 MUN 110,000.00882722VJ7 04/01/2022 1,0963.67310/19/2016 113,677.30 1.825 1.850115,696.59 State of Texas1855 MUN 250,000.00882723EN5 08/01/2025 2,3143.83209/22/2017 260,192.50 2.747 2.785264,778.90 State of Texas2013 MUN 1,000,000.00882722VH1 04/01/2021 7313.52301/11/2019 1,019,720.00 3.503 3.5521,014,283.00 University of California1340 MUN 1,875,000.0091412GSB2 07/01/2019 911.79607/14/2014 1,871,718.75 2.007 2.0351,873,938.58 University of California1356 MUN 425,000.0091412GGU3 05/15/2020 4103.34807/31/2014 429,152.25 2.281 2.313429,593.22 University of California1368 MUN 250,000.0091412GGT6 05/15/2019 443.04808/08/2014 250,152.50 1.982 2.010250,300.85 University of California1383 MUN 955,000.0091412GSB2 07/01/2019 911.79608/27/2014 953,328.75 1.972 2.000954,536.74 University of California1414 MUN 750,000.0091412GSB2 07/01/2019 911.79611/28/2014 748,687.50 1.923 1.950749,724.77 University of California1420 MUN 1,500,000.0091412GSB2 07/01/2019 911.79612/12/2014 1,497,375.00 1.943 1.9701,499,378.13 University of California1481 MUN 260,000.0091412GQB4 05/15/2020 4101.99510/08/2015 258,681.80 1.824 1.850260,403.17 State of Utah1622 MUN 750,000.00917542QT2 07/01/2020 4573.28906/07/2016 757,387.50 1.430 1.450766,681.35 State of Utah1731 MUN 770,000.00917542QR6 07/01/2024 1,9184.55401/04/2017 814,490.60 2.904 2.944827,990.76 State of Utah1990 MUN 1,000,000.00917542QU9 07/01/2021 8223.36911/29/2018 1,019,020.00 2.959 3.0001,007,908.80 State of Vermont1456 MUN 2,000,000.00924258TT3 08/15/2023 1,5974.25008/06/2015 2,016,600.00 3.275 3.3202,070,805.48 State of Washington1672 MUN 250,000.0093974DHW1 08/01/2022 1,2182.74008/08/2016 251,747.50 1.504 1.524259,646.68 State of Washington1721 MUN 515,000.0093974CPH7 08/01/2022 1,2184.63612/05/2016 551,472.30 2.465 2.500548,986.96 State of Washington1778 MUN 1,500,000.0093974CPG9 08/01/2021 8534.58604/12/2017 1,573,650.00 2.081 2.1101,582,400.26 State of Washington1802 MUN 485,000.0093974CRC6 08/01/2024 1,9494.66905/23/2017 536,938.65 2.416 2.450537,320.63 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a March 31, 2019 Par Value Days To Maturity Maturity Date Current RateMarket Value Fund ALL - Portfolio Listings Investments by Fund Page 21 CUSIP Investment #Issuer PurchaseDate Book Value YTM360 YTM365 Municipal Bonds State of Wisconsin2000 MUN 500,000.0097705LA49 05/01/2022 1,1263.80012/19/2018 513,340.00 3.076 3.119509,872.77 West Valley-Mission Community1479 MUN 250,000.0095640HBT4 08/01/2024 1,9496.09010/01/2015 252,795.00 4.030 4.086272,220.38 Subtotal and Average 110,157,535.02 107,205,000.00 110,028,702.85 2.602 2.638 1,569 Supranationals (World Bank) Bonds Inter-American Dev. Bank1978 IADB 1,500,000.004581X0CZ9 09/14/2022 1,2621.75011/09/2018 1,471,440.00 3.106 3.1501,432,194.13 Intl Bk Recon & Development1976 IBRD 1,500,000.00459056LD7 01/19/2023 1,3897.62511/08/2018 1,783,050.00 3.111 3.1551,736,800.85 Intl Bk Recon & Development1982 IBRD 1,000,000.00459058GL1 09/27/2023 1,6403.00011/27/2018 1,030,310.00 3.018 3.060997,490.49 Intl Bk Recon & Development1983 IBRD 1,000,000.0045905U6K5 11/15/2023 1,6893.00011/27/2018 1,004,530.00 3.404 3.4511,000,000.00 Intl Bk Recon & Development1998 IBRD 1,000,000.0045905UZT4 11/22/2021 9661.75012/12/2018 983,190.00 2.850 2.890971,317.48 Intl Bk Recon & Development2028 IBRD 1,500,000.0045905U2D5 02/15/2024 1,7812.50002/28/2019 1,490,850.00 2.990 3.0311,500,000.00 Intl Bk Recon & Development2031 IBRD 2,000,000.0045905U2L7 03/15/2024 1,8102.50003/22/2019 2,003,440.00 3.261 3.3062,000,000.00 International Finance Corp.1988 IFC 1,500,000.0045950VMW3 12/15/2023 1,7193.00012/06/2018 1,503,225.00 3.328 3.3741,500,000.00 International Finance Corp.2012 IFC 2,000,000.0045950VMY9 01/15/2024 1,7502.50001/23/2019 1,996,100.00 3.103 3.1472,000,000.00 International Finance Corp.2023 IFC 1,500,000.0045950VNC6 05/15/2024 1,8712.62502/15/2019 1,498,215.00 3.054 3.0971,500,000.00 Subtotal and Average 14,637,802.95 14,500,000.00 14,764,350.00 3.131 3.174 1,616 Total Investments and Average 544,891,568.92 539,977,226.20 541,844,451.82 2.327 2.359 1,325 Portfolio CPA AP Run Date: 04/18/2019 - 17:11 FI (PRF_FI) 7.1.1 Report Ver. 7.3.3a 1 General Investment Guidelines: a) The max. stated final maturity of individual securities in the portfolio should be 10 years.Full Compliance b) A max. of 30 percent of the par value of the portfolio shall be invested in securities with maturities beyond 5 years.29.3% c) The City shall maintain a minimum of one month's cash needs in short term investments.Full Compliance d) At least $50 million shall be maintained in securities maturing in less than 2 years. Plus two managed pool accounts which provide instant liquidity: - Local Agency Investment Fund (LAIF) - maximum investment limit i $65 million $30.4 million - Fidelity Investments $3.1 million e) Should market value of the portfolio fall below 95 percent of the book value, report this fact within a reasonable time to the City Council and evaluate if there are risk of holding securities to maturity.99.43% d) Commitments to purchase securities newly introduced on the market shall be made no more than three (3) working days before pricing.Full Compliance f) Whenever possible, the City will obtain three or more quotations on the purchase or sale of comparable securities (excludes new issues, LAIF, City of Palo Alto bonds, money market accounts, and mutual funds).Full Compliance 2 U.S. Government Securities:Full Compliance a) There is no limit on purchase of these securities. b) Securities will not exceed 10 years maturity. 3 U.S. Government Agency Securities:Full Compliance a) There is no limit on purchase of these securities except for: Callable and Multi-step-up securities provided that: - The potential call dates are known at the time of purchase; - the interest rates at which they "step-up" are known at the time of purchase; and - the entire face value of the security is redeemed at the call date. - No more than 25 percent of the par value of portfolio.24.35% b) Securities will not exceed 10 years maturity. 4 Bonds of the State of California Local Government Agencies Full Compliance a)Having at time of investment a minimum Double A (AA/AA2) rating as provided by a nationally recognized rating service (e.g., Moody’s, Fitch, and/or Standard and Poor’s). b)May not exceed 20 percent of the par value of the portfolio.19.65% 5 Certificates of Deposit:Full Compliance a) May not exceed 20 percent of the par value of the portfolio; b) No more than 10 percent of the par value of the portfolio in collateralized CDs in any institution. c) Purchase collateralized deposits only from federally insured large banks that are rated by a nationally recognized rating agency (e.g. Moody's, Fitch, and/or Standard & Poor's, etc.). d) For non-rated banks, deposit should be limited to amounts federally insured (FDIC) e) Rollovers are not permitted without specific instruction from authorized City staff. 6 Banker's Acceptance Notes:Full Compliance a) No more than 30 percent of the par value of the portfolio.None Held b) Not to exceed 180 days maturity. c) No more than $5 million with any one institution. Attachment C Investment Policy Compliance As of March 31, 2019 Investment Policy Requirements Compliance Check / Actual $135.6 million 3.33% Attachment C Investment Policy Compliance As of March 31, 2019 Investment Policy Requirements Compliance Check / Actual 7 Commercial Paper:Full Compliance a) No more than 15 percent of the par value of the portfolio.None Held b) Having highest letter or numerical rating from a nationally recognized rating service. c) Not to exceed 270 days maturity. d) No more than $3 million or 10 percent of the outstanding commercial paper of any one institution, whichever is lesser. 8 Short-Term Repurchase Agreement (REPO):Full Compliance a) Not to exceed 1 year.None Held b) Market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities. 9 Money Market Deposit Accounts Full Compliance a) Liquid bank accounts which seek to maintain a net asset value of $1.00. 10 Mutual Funds:Full Compliance a) No more than 20 percent of the par value of the portfolio.None Held b) No more than 10 percent of the par value with any one institution. 11 Negotiable Certificates of Deposit (NCD):Full Compliance a) No more than 20 percent of the par value of the portfolio.9.22% b) No more than $5 million in any one institution.Federally Insured 12 Medium-Term Corporate Notes:Full Compliance a) No more than 10 percent of the par value of the portfolio.3.65% b) Not to exceed 5 years maturity. c) Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally recognized rating service. d) No more than $5 million of the par value may be invested in securities of any single issuer, other than the U.S. Government, its agencies and instrumentality. e) If securities owned by the City are downgraded by either rating agencies to a level below AA it shall be the City's policy to review the credit situation and make a determination as to whether to sell or retain such securities. 13 Supranational Organizations Securities Full Compliance a) No more than 20 percent of the par value of the portfolio.2.69% b) No more than 10 percent in any one institution. c) Securities eligible for investment shall have a minimum rating of AA or Aa2 from a nationally recognized rating service. 14 Prohibited Investments: a) Reverse Repurchase Agreements b) Derivatives as defined in Appendix B of the Investment Policy 15 All securities shall be delivered to the City's safekeeping custodian, and held in the name of the City, with the exception of : - Certificates of Deposit, Mutual Funds, and LAIF Full Compliance None Held Full Compliance