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2012-02-06 City Council Agenda Packet
CITY OF PALO ALTO CITY COUNCIL Regular Meeting Council Chambers February 6, 2012 7:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday preceding the meeting. 1 February 6, 2012 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. Call to Order Special Orders of the Day 1.Proclamation Expressing Congratulations to the Palo Alto High School Girls Volleyball Team State Champions for 2010 and 2011 City Manager Comments Oral Communications Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration of Oral Communications period to 30 minutes. Consent Calendar Items will be voted on in one motion unless removed from the calendar by two Council Members. 2.Resolution Setting Council Vacation for 2012 3.2nd READING: Adoption of an Ordinance Approving and Adopting a Plan for Improvement to Juana Briones Park and Authorizing the Additon of a Park Restroom Located Adjacent to Fire Station Number 5 and Clemo Avenue (1st Reading January 23, 2012 Passed 9-0) 4.Adoption of an Ordinance Amending the Fiscal Year 2012 Budget in the Amount of $825,000 and Approval of a Construction Contract with PAR Electrical Contractors, Inc. in the Amount of $1,512,636 to Rebuild a Portion of the 60kV Overhead Transmission System 2 February 6, 2012 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. 5.Approval of an agreement for Professional Services with SAIC Energy, Environment & Infrastructure, LLC in the amount of Two Hundred and Twenty Five Thousand dollars ($225,000) for an Organizational Assessment of the Palo Alto Utilities Department 6.Award of Contract with Ross McDonald Company, Inc., in the Amount of $648,412 for Custom Casework for the Mitchell Park Library and Community Center (CIP PE-09006) 7.Approval of Lease Agreement Between the City of Palo Alto and Ada’s Cafe’, Inc. for a Portion of the new Mitchell Park Library and Community Center, 3700 Middlefield Road for a Five Year Term with One Five Year Option to Extend 8.Approve and Authorize the City Manager to Enter into a Memorandum of Understanding with WeCARE (Community Alliance to Reduce Euthanasia) 9.Approval of a Contract with Golder Associates, Inc in the Amount of $227,136 to Assist with New Sewage Sludge Incinerator Air Regulations at the Regional Water Quality Control Plant 10.Approval of a Contract with Life Insurance Company of North America for Underwriting of the City's Group Life, Accidental Death and Dismemberment (AD&D), and Long Term Disability Insurance (LTD) Plans for Up to Three Years for a Total Amount Not to Exceed $597,156 Per Year Agenda Changes, Additions and Deletions HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of three minutes per speaker. 3 February 6, 2012 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. Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 11.Approval of Amendment No.1 to Contract C11136602 with Alternative Resources, Inc. in the Amount of $29,700 for a Total Not to Exceed Amount of $227,758 for Assistance in Developing a Process and Timeline for Energy/Compost Facility Consideration; Approval of Contract C12143502 with Golder Associates, Inc. in the Amount of $193,713 for a Total Not to Exceed Amount of $213,113 for Final Landfill Cap Design and Landfill Capping-Related Services (CIP RF-11001); and Temporary Suspension of Landfill Capping and Compost Termination to Allow for the Establishment of a Process and Timeline for Consideration of an Energy/Compost Facility 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. PUBLIC COMMENT Members of the Public are entitled to directly address the City Council/Committee concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council/Committee 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/Committee, but it is very helpful. 4 February 6, 2012 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 Supplemental Information Standing Committee Meetings Finance Committee Agenda Packet Rail Committee Agenda Packet Action Agenda Action Agendas Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Finance Committee Tentative Agenda Informational Report Review of the Revised Draft East Meadow Circle/Fabian Way Area Concept Plan for Inclusion in the Draft Comprehensive Plan Update. Public Letters to Council CITY OF PALO ALTO PROCLAMATION EXPRESSING CONGRATULATIONS TO THE PALO ALTO HIGH SCHOOL GIRLS VARSITY VOLLEYBALL TEAM, STATE CHAMPIONS OF 2010 AND 2011 WHEREAS, the Paly Girls Volleyball team won the Division 1 State Championship Title on December 3, 2010 at San Jose State University, and again on December 4, 2011 at Concordia University; and WHEREAS, these two teams made Palo Alto history by being the first high school team ever in the city to win back to back State Championships; and WHEREAS, the coaches of these teams were; Head Coach, Dave Winn and Assistant Coaches, Greg Lara, Jason Bloomgren, and Andrew Lin; and WHEREAS, the Lady Vikings were the 2010 and 2011 Division 1 CCS Champions, the 2010 and 2011 Norcal Champions, and were awarded in 2011 by Maxpreps as the #1 National Ranking Team out of 17,000 high schools and was recognized at the Tour of Champions Ceremony on January 9, 2012. WHEREAS, the 16 student athletes on the 2011 team were; Charlotte Allipate, Sophia Bono, Megan Coleman, Keri Gee, Jackie Koenig, Shelby Knowles, Ally Kron, Maddie Kuppe, Nira Krasnow, Caroline Martin, Trina Olmes, Haley Owens, Savanaugh Owens, Becca Raffel, Tiffany Tsung, Melanie Wade, and Kimmy Whitson; and WHEREAS, the 17 student athletes on the 2010 team were; Sophia Bono, Keri Gee, Bella Graves, Lauren Kerr, Jackie Koenig, Shelby Knowles, Ally Kron, Maddie Kuppe, Caroline Martin, Haley Owens, Savanaugh Owens, Becca Raffel, Ashley Shin, Tiffany Tsung, Melanie Wade, and Kimmy Whitsone; and NOW, THEREFORE, I, Yiaway Yeh, Mayor of the City of Palo Alto, on behalf of the City Council do hereby proclaim today as a day of celebration for the unprecedented success of the Palo Alto High School Girls 2010 and 2011 Volleyball Teams. Presented: February 6, 2012 ______________________________ Yiaway Yeh Mayor CITY OF PALO ALTO OFFICE OF THE CITY CLERK February 6, 2012 The Honorable City Council Palo Alto, California Resolution Setting Council Vacation for 2012 RECOMMENDATION: Approval of Resolution Scheduling the City Council Vacation and Winter Closure in Calendar Year 2012. BACKGROUND Pursuant to the Municipal Code Section 2.04.010, the City Council must schedule its annual vacation for each calendar year no later that the third meeting in February. During said scheduled annual vacation, there shall be no regular meetings of the City Council nor of the Council standing committees. The Mayor or a majority of the Council may call a special meeting during the scheduled vacation if necessary. Please note that the Palo Alto Unified School District students begin classes on Thursday, August 16, 2012 and Labor Day this year falls on Monday, September 3, 2012. Included in this resolution is the cancellation of Council meetings due to the winter closure. The suggested dates for the Council vacation and winter closure: · Tuesday, July 24, 2012 through Friday, August 24, 2012 -Summer Recess. The City Council would have a Special Council meeting on Monday, August 27, 2012. · Monday, December 24, 2012 through Friday, January 4, 2013 -Winter Closure. The City Council would have their first meeting in 2013 on Monday, January 7, 2013. ATTACHMENTS: ·VacaRptReso2012 (DOC) Department Head:Donna Grider, City Clerk Updated: 1/31/2012 4:25 PM by Donna Grider Page 2 RESOLUTION NO. RESOLUTION OF THE CITY OF PALO ALTO SCHEDULING THE CITY COUNCIL VACATION AND WINTER CLOSURE FOR CALENDAR YEAR 2012 WHEREAS, pursuant to Section 2.04.010 of the Municipal Code, the City Council must schedule its annual vacation for each calendar year no later than the third meeting in February; and WHEREAS, the City Council desires to set its annual vacation for 2012. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: The City Council sets their vacation for calendar year 2012, from Tuesday July 24, 2012 through Friday August 24, 2012 and winter closure from Monday,December 24, 2012 through Friday, January 4, 2013. INTRODUCED AND PASSED: AYES: NOES: ABSENTIONS: ABSENT: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Attorney City Manager CITY OF PALO ALTO OFFICE OF THE CITY CLERK February 6, 2012 The Honorable City Council Palo Alto, California 2nd READING: Adoption of an Ordinance Approving and Adopting a Plan for Improvement to Juana Briones Park and Authorizing the Additon of a Park Restroom Located Adjacent to Fire Station Number 5 and Clemo Avenue (1st Reading January 23, 2012 Passed 9-0) This is a second reading with no changes to the Ordinance, no paper required. Department Head:Donna Grider, City Clerk Updated: 1/27/2012 3:09 PM by Beth Minor Page 2 City of Palo Alto (ID # 2373) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/6/2012 February 06, 2012 Page 1 of 4 (ID # 2373) Summary Title: 60kV Reconductoring and Pole Installation Title: Adoption of an Ordinance Amending the Fiscal Year 2012 Budget in the Amount of $825,000 and Approval of a Construction Contract with PAR Electrical Contractors, Inc. in the Amount of $1,512,636 to Rebuild a Portion of the 60kV Overhead Transmission System From:City Manager Lead Department: Utilities Recommendation Staff recommends that Council adopts a Budget Amendment Ordinance (BAO) in the amount of $825,000, transferring $825,000 from the Electric Distribution Rate Stabilization Reserve to the existing Capital Improvement Project (CIP) EL-11015 (Reconductor 60kV Overhead Transmission System), resulting in a total CIP budget of $1,975,000. Staff recommends that Council approve and authorize the City Manager or his designee to execute the attached construction contract with PAR Electrical Contractors, Inc., in the amount of $1,512,636 to rebuild the 60kV overhead electric conductor system from the Park Boulevard Electric Substation to Encina Avenue. Staff recommends that Council approve and authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with PAR Electrical Contractors, Inc., for related, additional but unforeseen, work which may develop during the project; the total of which shall not exceed $151,264. Background This is the first phase of a multiyear CIP project, EL-11015, to rebuild a section of the 60kV electric system. This project will install higher capacity conductor in a section of the 60kV system and eliminate an existing emergency capacity deficiency. Discussion The work to be performed under this contract involves the replacement of 10,000 feet of transmission circuit from Park Boulevard Substation to Encina Avenue, mostly on Alma Street. It encompasses the first phase and half of the second phase of the 60kV Line rebuild project, as a catch-up provision for work that was not accomplished during the last fiscal year. Removing the existing conductor and installing a new lightweight conductor, ACCR (Aluminum Conductor February 06, 2012 Page 2 of 4 (ID # 2373) Composite Reinforcement) will increase the transmission line capacity without requiring the replacement of 51 of the 59 poles in this section of the circuit. Reuse of the existing poles reduces the cost of the work. The current phase of the CIP also includes the replacement of 8 electric 60kV poles in various locations. These poles are being replaced due to reliability and safety concerns. New poles will be installed and built to current City standards. This current phase also includes the installation of one new steel pole to accommodate the new conductor configuration. Included in the contract are the construction activities necessary to replace poles and install the new conductors and associated hardware, and includes: labor, equipment, material and management of all field activities in coordination with the City’s Electric Operation’s staff, Transportation Division due to high traffic on Alma, and Cal Train. This construction portion of the project is being contracted out as there are insufficient resources within the Utilities Department to staff these larger projects. Project costs estimated at the time the budget for FY2012 was proposed are lower than the bids received due to the following: ·Construction costs have risen more quickly than anticipated since the budget was last visited in 2010. ·The area that was going to be rebuilt in the current year was changed midway into the design process to accommodate the reconfiguration that will be needed for a potential development adjacent to El Camino Park. The change caused a delay in the schedule and increased costs. This also resulted in an increased scope for the project consisting of replacement and installation of 8 –60kV poles and the installation of a specially designed steel pole. ·The size of the 60kV transmission conductor was increased from the original proposal to accommodate the potential future 230kV transmission line extension to Stanford Linear Accelerator Center (SLAC). This change increased the material costs. The phasing of the original project scope has changed (see attachment F). Phase one will now rebuild the Park Boulevard Substation to Encina Avenue portion. Phase two will rebuild the Encina Avenue to Quarry Substation and the former Alma Substation site to Quarry Substation portion. The modification to the project scope and increasing construction costs require the BAO. The following table is a summary of the bid process: Bid Name / Number 60kV Reconductoring With ACCR on City’s Overhead Electric Sub-Transmission System/ Pole Installation IFB –142966 Proposed Length of Project 3 months Number of Bids Mailed to Contractors 8 February 06, 2012 Page 3 of 4 (ID # 2373) Number of Bids Mailed to Builder’s Exchanges 12 Total Days to Respond to Bid 14 Pre-Bid Meeting Yes Dec. 6, 2011 Number of Company Attendees at Pre-Bid Meeting 8 Number of Bids Received 4 Bid Price Range From $1,322,000 to $2,521,541 * Bid summary provided as attachment. As shown in the bid summary, Staff has reviewed all bids submitted and recommends that the bid of $1,512,636 submitted by PAR Electrical Contractors, Inc. be accepted and that PAR Electrical Contractors, Inc. be declared the lowest responsible bidder by Council. The bid is 50 percent above the staff engineer’s estimate of $1,000,000. The contingency amount of $151,264, which equals 10% of the total contract, is requested for additional unforeseen work that may develop during the project. The lowest bidder, bidding $1,322,000, was disqualified for not meeting the applicable ACCR installation experience requirement. Staff confirmed with the Contractor’s State License Board that the recommended contractor has an active license on file. Staff checked references supplied by the contractor for previous work performed and found all to be satisfactory. Timeline Construction is scheduled to begin the week of May 1, 2012 and is to be completed within 90 days. Resource Impact A BAO is required in the amount of $825,000 to add funds to the existing CIP, EL-11015 (Reconductor 60kV Line). With the addition of the $825,000, the original budget for this project increases to $1,975,000. To fund this amendment, $825,000 will be transferred from the Electric Distribution Rate Stabilization Reserve. Policy Implications The approval of this contract is consistent with existing City policies, including the Council approved Utilities Strategic Plan Key Strategy No. 1 to ensure a high level of system reliability in a cost effective and timely manner and, Objective No. 1, to enhance customer satisfaction and utility infrastructure. Environmental Review This project is categorically exempt from California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15302, (replacement or reconstruction of existing utility systems and/or facilities involving negligible or no expansion of capacity). February 06, 2012 Page 4 of 4 (ID # 2373) Attachments: ·Attachment A: Contract (PDF) ·Attachment B: Bid Summary (PDF) ·Attachment C: Budget Amendment Ordiance (PDF) ·Attachment D: EL-11015 (PDF) ·Attachment E: Map 1 (PDF) ·Attachment F: Map 2 (PDF) Prepared By:Jim Bujtor, Manager Department Head:Valerie Fong, Director City Manager Approval: ____________________________________ James Keene, City Manager Rev. August 3, 2010 CONSTRUCTION CONTRACT Contract No. C12142966 City of Palo Alto and PAR Electrical Contractors, Inc. PROJECT “60 kV RECONDUCTORING WITH ACCR ON CITY’S OVERHEAD ELECTRIC TRANSMISSION SYSTEM / POLE REPLACEMENT” Rev. August 3, 2010 FILENAME C12142966 Final Contract.DOC i CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1. INCORPORATION OF RECITALS AND DEFINITIONS....................................1 1.1 Recitals................................................................................................................................1 1.2 Definitions ...........................................................................................................................1 SECTION 2. THE PROJECT ...................................................................................................1 SECTION 3. THE CONTRACT DOCUMENTS........................................................................1 LIST OF DOCUMENTS.....................................................................................................................1 3.2 ORDER OF PRECEDENCE ...............................................................................2 SECTION 4. THE WORK.........................................................................................................2 SECTION 5. PROJECT TEAM ................................................................................................2 SECTION 6. TIME OF COMPLETION.....................................................................................3 6.1 Time Is of Essence .............................................................................................................3 6.2 Commencement of Work ...................................................................................................3 6.3 Contract Time......................................................................................................................3 6.4 Liquidated Damages...........................................................................................................3 6.4.1 Entitlement...................................................................................................................3 6.4.2 Daily Amount................................................................................................................3 6.4.3 Exclusive Remedy........................................................................................................3 6.4.4 Other Remedies...........................................................................................................3 6.5 Adjustments to Contract Time ..........................................................................................3 SECTION 7. COMPENSATION TO CONTRACTOR ..............................................................3 7.1 Contract Sum ......................................................................................................................3 7.2 Full Compensation..............................................................................................................4 7.3 Compensation for Extra or Deleted Work ........................................................................4 7.3.1 Self Performed Work....................................................................................................4 7.3.2 Subcontractors.............................................................................................................4 Rev. August 3, 2010 C12142966 Final Contract.DOC ii SECTION 8. STANDARD OF CARE.......................................................................................4 SECTION 9. INDEMNIFICATION ............................................................................................4 9.1 Hold Harmless.....................................................................................................................4 9.2 Survival................................................................................................................................5 SECTION 10 NONDISCRIMINATION ......................................................................................5 SECTION 11. INSURANCE AND BONDS................................................................................5 SECTION 12. PROHIBITION AGAINST TRANSFERS.............................................................5 SECTION 13. NOTICES ............................................................................................................6 13.1 Method of Notice.................................................................................................................6 13.2 Notice Recipients................................................................................................................6 13.3 Change of Address.............................................................................................................6 14.1 Resolution of Contract Disputes.......................................................................................7 14.2 Resolution of Other Disputes............................................................................................7 14.2.1 Non-Contract Disputes.................................................................................................7 14.2.2 Litigation, City Election.................................................................................................7 14.3 Submission of Contract Dispute.......................................................................................7 14.3.1 By Contractor...............................................................................................................7 14.3.2 By City..........................................................................................................................8 14.4 Contract Dispute Resolution Process ..............................................................................8 14.4.1 Direct Negotiations.......................................................................................................8 14.4.2 Deferral of Contract Disputes.......................................................................................8 14.4.3 Mediation......................................................................................................................8 14.4.4 Binding Arbitration........................................................................................................9 14.5 Non-Waiver........................................................................................................................10 SECTION 15. DEFAULT..........................................................................................................10 15.1 Notice of Default ...............................................................................................................10 15.2 Opportunity to Cure Default.............................................................................................10 SECTION 16. CITY'S RIGHTS AND REMEDIES....................................................................10 16.1 Remedies Upon Default ...................................................................................................10 16.1.1 Delete Certain Services .............................................................................................11 16.1.2 Perform and Withhold ................................................................................................11 Rev. August 3, 2010 C12142966 Final Contract.DOC iii 16.1.3 Suspend The Construction Contract..........................................................................11 16.1.4 Terminate the Construction Contract for Default........................................................11 16.1.5 Invoke the Performance Bond....................................................................................11 16.1.6 Additional Provisions..................................................................................................11 16.2 Delays by Sureties............................................................................................................11 16.3 Damages to City................................................................................................................12 16.3.1 For Contractor's Default.............................................................................................12 16.3.2 Compensation for Losses ..........................................................................................12 16.5 Suspension by City for Convenience .............................................................................12 16.6 Termination Without Cause.............................................................................................12 16.6.1 Compensation............................................................................................................12 16.6.2 Subcontractors...........................................................................................................13 16.7 Contractor’s Duties Upon Termination...........................................................................13 SECTION 17. CONTRACTOR'S RIGHTS AND REMEDIES ..................................................13 17.1 Contractor’s Remedies ....................................................................................................13 17.1.1 For Work Stoppage....................................................................................................13 17.1.2. For City's Non-Payment.............................................................................................13 17.2 Damages to Contractor....................................................................................................14 SECTION 18. ACCOUNTING RECORDS...............................................................................14 18.1 Financial Management and City Access.........................................................................14 18.2 Compliance with City Requests ......................................................................................14 SECTION 19. INDEPENDENT PARTIES................................................................................14 SECTION 20. NUISANCE........................................................................................................14 SECTION 21. PERMITS AND LICENSES...............................................................................14 SECTION 22. WAIVER............................................................................................................14 SECTION 23 GOVERNING LAW ...........................................................................................15 SECTION 24 COMPLETE AGREEMENT ..............................................................................15 SECTION 25 SURVIVAL OF CONTRACT.............................................................................15 SECTION 26 PREVAILING WAGES......................................................................................15 Rev. August 3, 2010 C12142966 Final Contract.DOC iv SECTION 27 NON APPROPRIATION ...................................................................................15 SECTION 28 GOVERNMENTAL POWERS...........................................................................15 SECTION 29 ATTORNEY FEES ............................................................................................15 SECTION 30 SEVERABILITY ................................................................................................15 1 Rev. August 3, 2010 C12142966 Final Contract.DOC CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on January 30, 2012 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and PAR Electrical Contractors, 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 Class A General Engineer duly organized and in good standing in the State of California, Contractor’s License Number 687343. 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 November 29, 2011, City issued an Invitation for Bids (IFB) to contractors for the “60 kV Reconductoring with ACCR on City’s Overhead Electric Transmission System / Pole Replacement” (“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 Bid 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 construction of the “60 kV Reconductoring with ACCR on City’s Overhead Electric Transmission System / Pole Replacement” (“Project”). 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 Change Orders 3) Contract 4) Project Plans and Drawings Rev. August 3, 2010 C12142966 Final Contract.DOC 2 5) Technical Specifications 6) Special Provisions 7) Notice Inviting Bids 8) Instructions to Bidders 9) General Conditions 10) Bidding Addenda 11) Invitation for Bids 12) Contractor's Bid/Non-Collusion Affidavit 13) Reports listed in the Bidding Documents 14) Public Works Department’s Standard Drawings and Specifications dated 2007 and updated from time to time 15) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards dated 2005 and updated from time to time 16) City of Palo Alto Traffic Control Requirements 17) City of Palo Alto Truck Route Map and Regulations 18) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 19) Performance and Payment Bonds 20) Insurance Forms 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. SECTION 4 THE WORK. The Work includes all labor, materials, equipment, services, permits, fees, licenses and taxes, and all other things necessary for Contractor to perform its obligations and complete the Project, including, without limitation, any Changes approved by City, in accordance with the Contract Documents and all Applicable Code Requirements. SECTION 5 PROJECT TEAM. 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 Project 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. Rev. August 3, 2010 C12142966 Final Contract.DOC 3 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 May 30, 2012. 6.4 Liquidated Damages. 6.4.1 Entitlement. City and Contractor acknowledge and agree that if Contractor fails to fully and satisfactorily complete the Work within the Contract Time, City will suffer, as a result of Contractor’s failure, substantial damages which are both extremely difficult and impracticable to ascertain. Such damages may include, but are not limited to: (i) Loss of public confidence in City and its contractors and consultants. (ii) Loss of public use of public facilities. (iii) Extended disruption to public. 6.4.2 Daily Amount. City and Contractor have reasonably endeavored, but failed, to ascertain the actual damage that City will incur if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time. Therefore, the parties agree that in addition to all other damages to which City may be entitled other than delay damages, in the event Contractor shall fail to achieve Substantial Completion of the entire Work within the Contract Time, Contractor shall pay City as liquidated damages the amount of $500 per day for each Day occurring after the expiration of the Contract Time until Contractor achieves Substantial Completion of the entire Work. The liquidated damages amount 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. 6.4.3 Exclusive Remedy. City and Contractor acknowledge and agree that this liquidated damages provision shall be City’s only remedy for delay damages caused by Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.4.4 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 agreed to by Change Order executed by City and Contractor 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 One Million Five Hundred Twelve Thousand Six Hundred Thirty Six Dollars ($1,512,636). 4 Rev. August 3, 2010 C12142966 Final Contract.DOC 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. The Contract Sum may only be adjusted for Change Orders issued, executed and satisfactorily performed in accordance with the requirements of the Contract Documents. 7.3 Compensation for Extra or Deleted Work. The Contract Sum shall be adjusted (either by addition or credit) for Changes in the Work involving Extra Work or Deleted Work based on one or more of the following methods to be selected by City: 1. Unit prices stated in the Contract Documents or agreed upon by City and Contractor, which unit prices shall be deemed to include Contractor Markup and Subcontractor/Sub-subcontractor Markups permitted by this Section. 2. A lump sum agreed upon by City and Contractor, based on the estimated Allowable Costs and Contractor Markup and Subcontractor Markup computed in accordance with this Section. 3. Contractor’s Allowable Costs, plus Contractor Markup and Subcontractor Markups applicable to such Extra Work computed in accordance with this Section. Contractor Markup and Subcontractor/Sub-subcontractor Markups set forth herein are the full amount of compensation to be added for Extra Work or to be subtracted for Deleted Work that is attributable to overhead (direct and indirect) and profit of Contractor and of its Subcontractors and Sub-subcontractors, of every Tier. When using this payment methodology, Contractor Markup and Subcontractor/Sub-subcontractor Markups, which shall not be compounded, shall be computed as follows: 7.3.1 Markup Self-Performed Work. 10% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by Contractor with its own forces. 7.3.2 Markup for Work Performed by Subcontractors. 15% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by a first Tier Subcontractor. SECTION 8 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. 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 collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and all Losses arising directly or indirectly from, or in any manner relating to any of, the following: (i) Performance or nonperformance of the Work by Contractor or its Subcontractors or Sub-subcontractors, of any tier; Rev. August 3, 2010 C12142966 Final Contract.DOC 5 (ii) Performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of any of the obligations under the Contract Documents; (iii) The construction activities of Contractor or its Subcontractors or Sub-subcontractors, of any tier, either on the Site or on other properties; (iv) The payment or nonpayment by Contractor to any of its employees, Subcontractors or Sub-subcontractors of any tier, for Work performed on or off the Site for the Project; and (v) Any personal injury, property damage or economic loss to third persons associated with the performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of the Work. However, nothing herein shall obligate Contractor to indemnify any Indemnitee for Losses resulting from the sole or active negligence or willful misconduct of the Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. 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. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NONDISCRIMINATION. 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. On or before the Execution Date, Contractor shall provide City with evidence that it has obtained insurance and Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Failure to do so shall be deemed a material breach of this Construction Contract. SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Construction Contract based 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. 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. Rev. August 3, 2010 C12142966 Final Contract.DOC 6 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 (iv) On the date it is accepted or rejected if sent by certified mail. 13.2 Notice Recipients. All notices, demands or requests (including, without limitation, 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: Or City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Ramandeep Kaur 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 delivered personally or sent by certified mail. All notices, demands, requests or approvals from City to Contractor shall be addressed to: Ramandeep Kaur 13.3 Change of Address. In the event of any change of address, the moving party shall notify the other party 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. Rev. August 3, 2010 C12142966 Final Contract.DOC 7 SECTION 14 DISPUTE RESOLUTION. 14.1 Resolution of Contract Disputes. Contract Disputes shall be resolved by the parties in accordance with the provisions of this Section 14, in lieu of any and all rights under the law that either party have its rights adjudged by a trial court or jury. All Contract Disputes shall be subject to the Contract Dispute Resolution Process set forth in this Section 14, which shall be the exclusive recourse of Contractor and City for such Contract Disputes. 14.2 Resolution of Other Disputes. 14.2.1 Non-Contract Disputes. Contract Disputes shall not include any of the following: (i) Penalties or forfeitures prescribed by statute or regulation imposed by a governmental agency; (ii) Third party tort claims for personal injury, property damage or death relating to any Work performed by Contractor or its Subcontractors or Sub- subcontractors of any tier; (iii) False claims liability under California Government Code Section 12650, et. seq.; (iv) Defects in the Work first discovered by City after Final Payment by City to Contractor; (v) Stop notices; or (vi) The right of City to specific performance or injunctive relief to compel performance of any provision of the Contract Documents. 14.2.2 Litigation, City Election. Matters that do not constitute Contract Disputes shall be resolved by way of an action filed in the Superior Court of the State of California, County of Santa Clara, and shall not be subject to the Contract Dispute Resolution Process. However, the City reserves the right, in its sole and absolute discretion, to treat such disputes as Contract Disputes. Upon written notice by City of its election as provided in the preceding sentence, such dispute shall be submitted by the parties and finally decided pursuant to the Contract Dispute Resolution Process in the manner as required for Contract Disputes, including, without limitation, City’s right under Paragraph 14.4.2 to defer resolution and final determination until after Final Completion of the Work. 14.3 Submission of Contract Dispute. 14.3.1 By Contractor. Contractors may commence the Contract Dispute Resolution Process upon City's written response denying all or part of a Claim pursuant to Paragraph 4.2.9 or 4.2.10 of the General Conditions. Contractor shall submit a written Statement of Contract Dispute (as set forth below) to City within seven (7) Days after City rejects all or a portion of Contractor's Claim. Failure by Contractor to submit its Statement of Contract Dispute in a timely manner shall result in City’s decision by City on the Claim becoming final and binding. Contractor’s Statement of Contract Dispute shall be signed under penalty of perjury and shall state with specificity the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the asserted effect on the Contract Sum and the Contract Time. The Statement of Contract Dispute shall include adequate supporting data to substantiate the disputed Claim. Adequate supporting data for a Contract Dispute relating to an adjustment of the Contract Time shall include both of the following: (i) All of the scheduling data required to be submitted by Contractor under the Contract Documents to obtain extensions of time and adjustments to the Contract Time and (ii) A detailed, event-by-event description of the impact of each event on completion of Work. Adequate data to support a Statement of Contract Rev. August 3, 2010 C12142966 Final Contract.DOC 8 Dispute involving an adjustment of the Contract Sum must include both of the following: (a) A detailed cost breakdown and (b) Supporting cost data in such form and including such information and other supporting data as required under the Contract Documents for submission of Change Order Requests and Claims. 14.3.2 By City. City's right to commence the Contract Dispute Resolution Process shall arise at any time following City's actual discovery of the circumstances giving rise to the Contract Dispute. City asserts Contract Disputes in response to a Contract Dispute asserted by Contractor. A Statement of Contract Dispute submitted by City shall state the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the damages or other relief claimed by City as a result of such events. 14.4 Contract Dispute Resolution Process. The parties shall utilize each of the following steps in the Contract Dispute Resolution Process in the sequence they appear below. Each party shall participate fully and in good faith in each step in the Contract Dispute Resolution Process, and good faith effort shall be a condition precedent to the right of each party to proceed to the next step in the process. 14.4.1 Direct Negotiations. Designated representatives of City and Contractor shall meet as soon as possible (but not later than ten (10) Days after receipt of the Statement of Contract Dispute) in a good faith effort to negotiate a resolution to the Contract Dispute. Each party shall be represented in such negotiations by an authorized representative with full knowledge of the details of the Claims or defenses being asserted by such party in the negotiations, and with full authority to resolve such Contract Dispute then and there, subject only to City’s obligation to obtain administrative and/or City Council approval of any agreed settlement or resolution. If the Contract Dispute involves the assertion of a right or claim by a Subcontractor or Sub-subcontractor, of any tier, against Contractor that is in turn being asserted by Contractor against City (“Pass-Through Claim”), then the Subcontractor or Sub-Subcontractor shall also have a representative attend the negotiations, with the same authority and knowledge as described above. Upon completion of the meeting, if the Contract Dispute is not resolved, the parties may either continue the negotiations or any party may declare negotiations ended. All discussions that occur during such negotiations and all documents prepared solely for the purpose of such negotiations shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.2 Deferral of Contract Disputes. Following the completion of the negotiations required by Paragraph 14.4.1, all unresolved Contract Disputes shall be deferred pending Final Completion of the Project, subject to City’s right, in its sole and absolute discretion, to require that the Contract Dispute Resolution Process proceed prior to Final Completion. All Contract Disputes that have been deferred until Final Completion shall be consolidated within a reasonable time after Final Completion and thereafter pursued to resolution pursuant to this Contract Dispute Resolution Process. The parties can continue informal negotiations of Contract Disputes; provided, however, that such informal negotiations shall not be alter the provisions of the Agreement deferring final determination and resolution of unresolved Contract Disputes until after Final Completion. 14.4.3 Mediation. If the Contract Dispute remains unresolved after negotiations pursuant to Paragraph 14.4.1, the parties shall submit the Contract Dispute to non-binding mediation before a mutually acceptable third party mediator. Rev. August 3, 2010 C12142966 Final Contract.DOC 9 .1 Qualifications of Mediator. The parties shall endeavor to select a mediator who is a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in mediating public works construction disputes. In addition, the mediator shall have at least twenty (20) hours of formal training in mediation skills. .2 Submission to Mediation and Selection of Mediator. The party initiating mediation of a Contract Dispute shall provide written notice to the other party of its decision to mediate. In the event the parties are unable to agree upon a mediator within fifteen (15) Days after the receipt of such written notice, then the parties shall submit the matter to the American Arbitration Association (AAA) at its San Francisco Regional Office for selection of a mediator in accordance with the AAA Construction Industry Mediation Rules. .3 Mediation Process. The location of the mediation shall be at the offices of City. The costs of mediation shall be shared equally by both parties. The mediator shall provide an independent assessment on the merits of the Contract Dispute and recommendations for resolution. All discussions that occur during the mediation and all documents prepared solely for the purpose of the mediation shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.4 Binding Arbitration. If the Contract Dispute is not resolved by mediation, then any party may submit the Contract Dispute for final and binding arbitration pursuant to the provisions of California Public Contract Code Sections 10240, et seq. The award of the arbitrator therein shall be final and may be entered as a judgment by any court of competent jurisdiction. Such arbitration shall be conducted in accordance with the following: .1 Arbitration Initiation. The arbitration shall be initiated by filing a complaint in arbitration in accordance with the regulations promulgated pursuant to California Public Contract Code Section 10240.5. .2 Qualifications of the Arbitrator. The arbitrator shall be approved by all parties. The arbitrator shall be a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in arbitrating public works construction disputes. In addition, the arbitrator shall have at least twenty (20) hours of formal training in arbitration skills. In the event the parties cannot agree upon an arbitrator, the provisions of California Public Contract Code Section 10240.3 shall be followed in selecting an arbitrator possessing the qualifications required herein. .3 Hearing Days and Location. Arbitration hearings shall be held at the offices of City and shall, except for good cause shown to and determined by the arbitrator, be conducted on consecutive business days, without interruption or continuance. .4 Hearing Delays. Arbitration hearings shall not be delayed except upon good cause shown. .5 Recording Hearings. All hearings to receive evidence shall be recorded by a certified stenographic reporter, with the costs thereof borne equally by City and Contractor and allocated by the arbitrator in the final award. Rev. August 3, 2010 C12142966 Final Contract.DOC 10 .6 Limitation of Depositions. The parties may conduct discovery in accordance with the provisions of section 10240.11 of the Public Contract Code; provided, however, that depositions shall be limited to both of the following: (i) Ten (10) percipient witnesses for each party and 5 expert witnesses per party. Upon a showing of good cause, the arbitrator may increase the number of permitted depositions. An individual who is both percipient and expert shall, for purposes of applying the foregoing numerical limitation only, be deemed an expert. Expert reports shall be exchanged prior to receipt of evidence, in accordance with the direction of the arbitrator, and expert reports (including initial and rebuttal reports) not so submitted shall not be admissible as evidence. .7 Authority of the Arbitrator. The arbitrator shall have the authority to hear dispositive motions and issue interim orders and interim or executory awards. .8 Waiver of Jury Trial. Contractor and City each voluntarily waives its right to a jury trial with respect to any Contract Dispute that is subject to binding arbitration in accordance with the provisions of this Paragraph 14.4.4. Contractor shall include this provision in its contracts with its Subcontractors who provide any portion of the Work. 14.5 Non-Waiver. Participation in the Contract Dispute Resolution Process shall not waive, release or compromise any defense of City, including, without limitation, any defense based on the assertion that the rights or Claims of Contractor that are the basis of a Contract Dispute were previously waived by Contractor due to Contractor’s failure to comply with the Contract Documents, including, without limitation, Contractor’s failure to comply with any time periods for providing notice of requests for adjustments of the Contract Sum or Contract Time or for submission of Claims or supporting documentation of Claims. SECTION 15 DEFAULT. 15.1 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. 15.2 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. SECTION 16 CITY'S RIGHTS AND REMEDIES. 16.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 15, then City may pursue any remedies available under law or equity, including, without limitation, the following: Rev. August 3, 2010 C12142966 Final Contract.DOC 11 16.1.1 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. 16.1.2 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. 16.1.3 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. 16.1.4 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 15. 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. 16.1.5 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. 16.1.6 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. 16.2 Delays by Sureties. Without limiting to any of City’s other rights or remedies, City has the right to suspend the performance of the Work by Contractor’s sureties in the event of any of the following: (i) The sureties’ failure to begin Work within a reasonable time in such manner as to insure full compliance with the Construction Contract within the Contract Time; (ii) The sureties’ abandonment of the Work; (iii) If at any time City is of the opinion the sureties’ Work is unnecessarily or unreasonably delaying the Work; (iv) The sureties’ violation of any terms of the Construction Contract; (v) The sureties’ failure to perform according to the Contract Documents; or (vi) The sureties’ failure to follow City’s instructions for completion of the Work within the Contract Time. Rev. August 3, 2010 C12142966 Final Contract.DOC 12 16.3 Damages to City. 16.3.1 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. 16.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to withhold monies otherwise payable to Contractor until Final Completion of the Project. If City incurs Losses due to Contractor’s default, then the amount of Losses shall be deducted from the amounts withheld. Should the amount withheld exceed the amount deducted, the balance will be paid to Contractor or its designee upon Final Completion of the Project. If the Losses incurred by City exceed the amount withheld, Contractor shall be liable to City for the difference and shall promptly remit same to City. 16.4 Suspension by City 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. 16.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole by giving thirty (30) Days written notice to Contractor. The compensation allowed under this Paragraph 16.5 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. 16.5.1 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 16.5, 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 and Sub-subcontractors for: (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. Rev. August 3, 2010 C12142966 Final Contract.DOC 13 .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. 16.5.2 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. 16.6 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. SECTION 17 CONTRACTOR'S RIGHTS AND REMEDIES. 17.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 17.1.1 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. 17.1.2 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. Rev. August 3, 2010 C12142966 Final Contract.DOC 14 17.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 16.5.1 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 18 ACCOUNTING RECORDS. 18.1 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. 18.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 18 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 18.1 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 19 INDEPENDENT PARTIES. Each party is acting in its independent capacity and not as agents, employees, partners, or joint venturers 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 20 NUISANCE. 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 21 PERMITS AND LICENSES. 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 22 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. Rev. August 3, 2010 C12142966 Final Contract.DOC 15 SECTION 23 GOVERNING LAW. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California. SECTION 24 COMPLETE AGREEMENT. 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 25 SURVIVAL OF CONTRACT. 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 26 PREVAILING WAGES. This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the performance and implementation of the Project, because the City, pursuant to its authority as a chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the exemption from the state prevailing wage requirement for this Project and declares that the Project is funded one hundred percent (100%) by the City of Palo Alto. SECTION 27 NON APPROPRIATION. 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 28 AUTHORITY. 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 29 ATTORNEY FEES. Each Party shall bear its own costs, including attorney’s fees through the completion of mediation. If the claim or dispute is not resolved through mediation and in any dispute described in Paragraph 14.2, the prevailing party in any action brought to enforce the provision of this Agreement may recover its reasonable costs and attorney’s fees expended in connection with that action. 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 attorney’s’ fees paid to third parties. SECTION 30 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. Rev. August 3, 2010 C12142966 Final Contract.DOC 17 IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO ____________________________ City Manager APPROVED AS TO FORM: ___________________________ Senior Deputy City Attorney PAR ELECTRICAL CONTRACTORS, INC. By:___________________________ Name:_________________________ Title:________________________ BID SUMMARY Invitation For Bid 142966 Title 60kV Reconductoring with ACCR Date Dec. 22, 2012 List of Bidders (Company Name) Bid Total 1. Cupertino Electric 2,240,317.00$ 2. Cal Electro, Inc.1,322,000.00$ disqualified - No applicable ACCR experience * 3. Wilson Construction Company 2,521,542.00$ disqualified - No applicable ACCR experience *** 4. PAR Electrical Contractors, Inc.1,512,636.00$ * Telephone call with company president on 12/22/2011 revealed that Pacheco would be their subcontractor to do the work and they have yet to name the party that has the experience with ACCR. *** Telephone call with Project Manager on 12/22/2011 confirmed that they don't have in-house experience with ACCR, even though they have recently hired an individual with some experience. However, that individual will not be assigned to this job, but is only available on a limited basis for consultation. Information is not available for us to confirm that individual's experience even if he were directly assigned to this job and the company can claim his experience as their own. City of Palo Alto Capital Budget FY 2012162 EL-11015Reconductor 60kV Overhead Transmission System RECONDUCTOR 60KV OVERHEAD TRANSMISSION SYSTEM (EL-11015) CIP FACTS: • Continuing • Project Status: Pre-Design • Timeline: FY 2011-2014 • Overall Project Completion: 0% • Percent Spent: 0.33% • Managing Department: Utilities • Comprehensive Plan: Policy L-79 • Potential Board/Commission Review: UAC IMPACT ANALYSIS: • Environmental: This project is categorically exempt from CEQA under Section 15302. • Design Elements: This project may be subject to ARB review. • Operating: This project will enhance the reliabil- ity to Quarry Substation and will reduce operating expenses involved in switching and maitaining additional feeders from other stations to provide service in the downtown and Stanford area. Description: This project will reconductor existing 556 AL 60kV transmission lines with 634 ACCR (Aluminum Conductor Composite Reinforced) conductor to prevent overloads in the event of single contingency line outages and to prepare for a future 230kV transmission line extension. The ACCR has an emergency rating of over 1300 amps compared with 650 amps for the existing 556 AL conductor and can be strung on existing poles designed for 556 AL conductor. The projects will be completed in two phases as outlined in the supplemental information. Justification: Project Justification: Using Summer 2009 actual loads, an outage of the PB-PBS 60kV line will result in an emergency load of 650 amps on the HO-QR 60kV line. This load is right at the thermal limit of 556 AL conductor (650 amps). As new loads are added at Stanford Medical Center and Stanford Shopping Center, the Summer 2013 emergency load is expected to exceed the thermal limit of the 556 AL conductor, resulting in a risk of conductor failure and a complete outage to Quarry Substation. Supplemental Information: For an outage of the COP-HO 60kV line, the emergency load on the 556 AL conductor of the PBS-QR 60kV line is expected to exceed the 650 amp thermal limit in Summer 2013. Also, the future 230kV transmission line extension to SLAC will require larger 60kV lines along the same paths described to accommodate larger power flows. Phase 1 will reconductor the Park Boulevard Substation to Encina Avenue portion (10,000 feet) in FY 2012 at an estimated cost of $1,975,000. Phase 2 will reconductor the PBS-QR 60kV line from Encina Avenue to Quarry Substation in FY 2013 (4,000 feet) and the HO-QR 60kV line from the former Alma Substation site to Quarry Substation portion (4,200 feet) in FY 2013 at an estimated cost of $1,750,000. Attachment D- CIP As Amended 163Capital Budget FY 2012 City of Palo Alto RECONDUCTOR 60KV OVERHEAD TRANSMISSION SYSTEM (EL-11015) CONTINUED PRIOR YEARS PY Budget $450,000 PY Actuals as of 12/31/2010 1,473 FUTURE FINANCIAL REQUIREMENTS FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Total Funding Pre-Design Costs Design Costs Construction Costs $1,525,000 $1,750,000 $3,275,000 Other Total Budget Request $1,525,000 $1,750,000 $3,275,000 Revenues: Source of Funds:Electric Fund Attachment D- CIP As Amended City of Palo Alto Capital Budget FY 2012162 EL-11015Reconductor 60kV Overhead Transmission System RECONDUCTOR 60KV OVERHEAD TRANSMISSION SYSTEM (EL-11015) CIP FACTS: • Continuing • Project Status: Pre-Design • Timeline: FY 2011-2014 • Overall Project Completion: 0% • Percent Spent: 0.33% • Managing Department: Utilities • Comprehensive Plan: Policy L-79 • Potential Board/Commission Review: UAC IMPACT ANALYSIS: • Environmental: This project is categorically exempt from CEQA under Section 15302. • Design Elements: This project may be subject to ARB review. • Operating: This project will enhance the reliabil- ity to Quarry Substation and will reduce operating expenses involved in switching and maitaining additional feeders from other stations to provide service in the downtown and Stanford area. Description: This project will reconductor existing 556 AL 60kV transmission lines with 477 ACCR (Aluminum Conductor Composite Reinforced) conductor to prevent overloads in the event of single contingency line outages. The ACCR has an emergency rating of over 1200 amps compared with 650 amps for the existing 556 AL conductor and can be strung on existing poles designed for 556 AL conductor. The projects will be completed in 4 phases as outlined in the supplemental information. Justification: Project Justification: Using Summer 2009 actual loads, an outage of the PB-PBS 60kV line will result in an emergency load of 650 amps on the HO-QR 60kV line. This load is right at the thermal limit of 556 AL conductor (650 amps). As new loads are added at Stanford Medical Center and Stanford Shopping Center, the Summer 2010 emergency load is expected to exceed the thermal limit of the 556 AL conductor, resulting in a risk of conductor failure and a complete outage to Quarry Substation. Supplemental Information: For an outage of the COP-HO 60kV line, the emergency load on the 556 AL conductor of the PBS-QR 60kV line is expected to exceed the 650 amp thermal limit in Summer 2013. For an outage of the COP-AC 60kV line, the emergency load on the 556 AL conductor of the PBS-MB 60kV line is expected to exceed the 650 amp thermal limit in Summer 2015. Phase 1 will reconductor the HO-QR 60kV line from the former Alma Substation site to Quarry Substation (4200 feet) in FY 2011 at an estimated cost of $450,000. Phase 2 will reconductor the PBS-QR 60kV line from Park Boulevard Substation to Churchill Ave. (7000 feet) in FY 2012 at an estimated cost of $700,000. Phase 3 will reconductor the PBS-QR 60kV line from Churchill Ave. to Quarry Substation (7000 feet) in FY 2013 at an estimated cost of $700,000. Phase 4 will reconductor the PBS-MB 60kV line from Park Boulevard Substation to Maybell Substation (6900 feet) in FY 2014 at an estimated cost of $700,000. Attachment D- CIP As Originally Adopted 163Capital Budget FY 2012 City of Palo Alto RECONDUCTOR 60KV OVERHEAD TRANSMISSION SYSTEM (EL-11015) CONTINUED PRIOR YEARS PY Budget $450,000 PY Actuals as of 12/31/2010 1,473 FUTURE FINANCIAL REQUIREMENTS FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Total Funding Pre-Design Costs Design Costs Construction Costs $700,000 $700,000 $700,000 $2,100,000 Other Total Budget Request $700,000 $700,000 $700,000 $2,100,000 Revenues: Source of Funds:Electric Fund Attachment D- CIP As Originally Adopted City of Palo Alto (ID # 2421) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/6/2012 February 06, 2012 Page 1 of 5 (ID # 2421) Summary Title: Utilities Organizational Assessment Contract Title: Approval of an agreement for Professional Services with SAIC Energy, Environment & Infrastructure, LLC in the amount of Two Hundred and Twenty Five Thousand dollars ($225,000) for an Organizational Assessment of the Palo Alto Utilities Department From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the City Council authorize the City Manager to execute a contract for professional services with SAIC Energy, Environment & Infrastructure, LLC in the amount of Two-Hundred and Twenty Five Thousand dollars ($225,000) to complete an organizational assessment of the Utilities Department. Executive Summary The City Council as part of the FY12 budget discussion asked the City Manager to move forward with a plan to retain a firm with expertise in conducting organizational assessments of municipal utility operations. The City issued a formal Request for Proposals (RFP) for this work in the fall of 2011. Seven firms responded to the RFP. After review of the written RFP responses and personal interviews with the finalist firms, SAIC was selected to do the work. Two SAIC innovations they proposed included: 1. A Cultural Assessment Tool. SAIC plans to quantify and measure the existing CPAU culture to determine how the culture is supporting or hindering organizational performance and achievement of strategic initiatives. This work will be essential to developing a practical plan leading to potential attainable improvements in CPAU operations. 2. A Workload Forecasting Tool. SAIC has also developed a forecasting tool to provide a quantitative assessment of staffing requirements. The tool looks at both capital and operating budget-based projects and estimates the labor hours required by task, subtask, project and function. Each project and function is assigned a priority based on a multi-objective function that considers safety, reliability, customer service, regulatory compliance and cost minimization as objectives. The tool then provides a quantitative assessment of the workload and resources to help managers align the work with February 06, 2012 Page 2 of 5 (ID # 2421) available resources. Background and Discussion Solicitation and Evaluation Process Development of the Request for Proposals (RFP) began in the summer 2011. As part of this process the decision was made that the evaluation criteria weighted value would be 90% qualitative and 10% cost. The Request for Proposals (RFP) for these services was issued September 16, 2011. As part of the outreach, sixteen perspective proposers were sent a copy of the RFP. Additionally, the RFP was posted on the City Web Site. Furthermore, a Pre-Proposal Solicitation Conference was held October 5, 2011 to explain the RFP and answer questions submitted by potential proposers regarding the RFP. On November 7, 2011 the RFP closed. Seven proposers responded. These firms were: First Quartile, Moss Adams LLP, PA Consulting Group LLC, SAIC, Nexant, Matrix and Capgemini Consulting. The range of proposal prices submitted was between: $95,000-$516,120. The evaluation committee was comprised of members from the City Manager’s Office, Planning and Community Environment, Utilities and ASD. After reviewing the seven proposals the committee decided to invite four proposers for interviews: First Quartile, Moss Adams LLP, PA Consulting Group LLC, SAIC. After completion of the interviews the evaluation committee unanimously decided to recommend to the City Manager that SAIC be awarded a contract to perform the work. The last major external organizational assessment of the City of Palo Alto Utilities Department (CPAU) was done in November of 1996. This assessment was done by a firm called TB&J which has since been purchased by a larger firm in the same line of work. The City has also completed such studies in the past including an organizational review of paramedic billings and collections and a separate report was done evaluating all city operations. Both of these reports were done in 1994. Since that time, there have been many changes to CPAU’s operations and services to the community. For example, one significant change has been the emergence of sustainability measures due to the passage of AB32 and SB375 in California. CPAU is the largest City department. It operates five enterprise funds in which rates and charges support the services provided as well as the infrastructure maintained and operated by CPAU. In each budget cycle CPAU presents information on suggested rates and charges, recommended capital improvement plans, and operational data. An independent and comprehensive review of CPAU will be conducted, including administration, customer support services, resource management, engineering, and operations. The report will analyze and review how the department is organized, and how the department is performing in terms of providing highly efficient and effective utility services to the community. The purpose for undertaking an organizational assessment is twofold. The first is to review the services CPAU provides to determine optimal staffing levels. The second is to evaluate the current and potential future trends in the utilities industry (electric, gas, water, wastewater collection, fiber), to ensure that CPAU is appropriately positioned to meet those challenges. For example, is CPAU positioned correctly to be appropriately innovative and February 06, 2012 Page 3 of 5 (ID # 2421) effectively and efficiently use state-of-the art technology applications to serve its customers? Should CPAU take full advantage of emerging and new technologies on the horizon and at what cost? What level of leadership should CPAU take as compared to its peers in the area of environmental sustainability and green technologies, and at what cost? The organizational assessment will review current CPAU services and determine how to best deliver required services to customers in the most fiscally responsible way. How it relates to strategic plan The CPAU 2011 strategic plan approved by the City Council will be one of several source documents that will be used by SAIC to perform the CPAU organizational analysis work. Driving the recent completion by CPAU of a new strategic plan was the need for an update since the last plan was completed in 2005. Deliverables A report listing current CPAU services, organizational structure, and services desired by the community Recommendations on the optimal utilities services provision model Report outlining external regulatory and business environment Report outlining future trends and technologies expected to influence the provision of utilities services in the next 5-10 years Assessment of skills required to meet current and future utilities business needs Recommendations on the organizational changes desired to optimally meet the needs of the current and future utility business and the customer service environment Report outlining the current cost of service delivery by function or service Benchmark results comparing CPAU to organizations providing similar services Report providing a comparison of customer satisfaction for CPAU versus similar organizations Recommendations for the adequacy of current staffing and the use of internal versus external service delivery mechanisms Report listing alternative service delivery mechanisms, services that should be discontinued, and services that should be added Recommendations on the optimal service delivery mechanism for the delivery of each service identified The final report will include recommendations on the: 1) set of services that are valued by the community; 2) key features of the external environment that will the influence organizational structure and the delivery of services; 3) appropriate staffing and use of external resources and services; 4) the best way to provide each service; 5) organizational changes needed to support the provision of the recommended services; and 6) a plan to implement the organizational changes over the next three years. The final report will include: An executive summary of key findings February 06, 2012 Page 4 of 5 (ID # 2421) A comprehensive analysis of CPAU’s current effectiveness and efficiency in the delivery of services Recommendations on areas where efficiency and effectiveness can be improved. The report will also identify recommendations in order of priority and consider: Alternative staffing strategies Alternative or modified service delivery methods including, the costs and benefits of privatization options and alternatives Alternative organizational structures and functional relationships within the department, and possible changes to this structure and with third party organizations; and Alternative or modified work methods and protocols Recommendations on changes to the organizational structure to enhance the cost effectiveness and quality of service delivery in the future will analyze: Steps needed to implement the organizational structure Options for phasing in the recommendation Costs for implementation Staffing and additional resources required to implement the changes Changes required in existing policy Impacts to existing employees The recommendations including recommended actions will be ranked by priority, include a resource plan needed to execute (e.g., staff, budget, outside resources), identified success criteria, a workplan and schedule, issues identification and policy implications. Once completed, the report will be presented to the City Manager, the UAC and the City Council for review and action. Based on City Council policy direction, staff will implement the plan recommendations. Timeline and Resource Impacts It is anticipated this work will take approximately four to five months to complete following contract award. Thus, we are anticipating the report will be available in May/June of this year. The Utilities Department (UTL) had budgeted $100,000 in their FY12 budget previously approved by the City Council. The project cost is $225,000. The UTL’s Department will augment the original $100,000 with another $50,000 in current savings in their budget and request the remaining balance of $75,000 in the FY12 Mid-Year budget adjustment. Attachments: Attachment A: Introduction to SAIC, the Project Consultant (PDF) Attachment B: Palo Alto City Council Slides January 2012 (PDF) February 06, 2012 Page 5 of 5 (ID # 2421) Prepared By: Rob Braulik, Director of Office of Management and Budget Department Head: Lalo Perez, Director City Manager Approval: ____________________________________ James Keene, City Manager 120118 dm 6051671 1 CITY OF PALO ALTO CONTRACT NO. C141152 AGREEMENT BETWEEN THE CITY OF PALO AND SAIC ENERGY, ENVIRONMENT AND INFRASTRUCTURE, LLC FOR PROFESSIONAL SERVICES This Agreement is entered into on this 23rd day of January, 2012, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SAIC ENERGY, ENVIRONMENT & INFRASTRUCUTRE, LLC (SAIC), located at 1000 Broadway, Oakland, CA 94607 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to conduct an organizational assessment of the City’s Utilities Department (“Project”) and desires to engage a consultant to perform this assessment 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, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in 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. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion of the services in accordance with the Schedule of Performance attached as Exhibit “B” 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 120118 dm 6051671 2 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”, including both payment for professional services and reimbursable expenses, shall not exceed Two Hundred and Five Thousand Eight Hundred and Eighty-Eight Dollars ($205,888). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed Nineteen Thousand One Hundred and Twelve Dollars ($19,112). The applicable rates and schedule of payment are set out in Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. 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 in 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 Exhibit “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 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. 120118 dm 6051671 3 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 shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSULTANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. 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 the CITY’s stated construction budget, CONSULTANT shall make recommendations to the 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 the 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. 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. 120118 dm 6051671 4 SECTION 12. SUBCONTRACTING. 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. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Thomas Jensen as the Project Lead to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director 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. The City’s project manager is Rob Braulik, City Managers Office, Telephone:650-329-2512. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. The 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, provided, however, that CONSULTANT shall retain ownership of its intellectual property including the procedures, processes, internal resources, tools and other means used by CONSULTANT to prepare the work product. 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, except the intellectual property, described above, which CONSULTANT used to prepare the work products, in favor of the CITY. Neither CONSULTANT nor its contractors, if 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 with three (3) business days notice, 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) years after the expiration or earlier termination of this Agreement. 120118 dm 6051671 5 SECTION 16. INDEMNITY. 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 attorneys 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 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 by blanket endorsement 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 by blanket endorsement under such policies as required above. 18.3. A Memorandum of Insurance (MOI) evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The MOI will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage. If the insurance is canceled or materially reduced in coverage or limits by the insurer, the CONSULTANT shall provide the Purchasing Manager seventy-five (75) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the 120118 dm 6051671 6 insurance without providing prior notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that the current MOI evidencing the insurance are provided to CITY’s Purchasing Manager 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. 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. 120118 dm 6051671 7 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: Attention of the project director at the address of CONSULTANT recited above 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. 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 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. 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. 120118 dm 6051671 8 SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the City’s Environmentally Preferred Purchasing policies which are available at the 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 the 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: • 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 the 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. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the 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 Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION. 24.1. 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 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. 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. 25.3. 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 of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 120118 dm 6051671 9 25.4. 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. 25.5. 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. 25.6. 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. 25.7. 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. 25.8 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. 25.9 All unchecked boxes do not apply to this agreement. 25.10 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. // // // // // 120118 dm 6051671 EXHIBIT “A” SCOPE OF SERVICES Project Title: Palo Alto Utilities Department Organizational Assessment Description of Project: An independent and comprehensive review of the CPAU will be conducted, including administration, customer support services, resource management, engineering, and operations. The report will analyze and review how the department is organized, and how the department is performing in terms of providing highly efficient and effective utility services to the community. The purpose for undertaking an organizational assessment is twofold. The first is to review the services CPAU provides to determine optimal staffing levels. The second is to evaluate the current trends and challenges in the utilities industry (electric, gas, water, wastewater collection, fiber), and in the future to ensure that the CPAU is appropriately positioned to meet those challenges. For example, is CPAU positioned correctly to be appropriately innovative and effectively and efficiently use state-of-the art technology applications to serve its customers? Should CPAU take full advantage of emerging and new technologies on the horizon and at what cost? What level of leadership should CPAU take as compared to its peers in the area of environmental sustainability and green technologies, and at what cost? The organizational assessment will review current CPAU services, and determine how to best deliver required services to customers in the most fiscally responsible way. Some key questions the assessment will answer include the following: • What are the services the CPAU currently provides to the community? • What are the current CPAU efficiencies and inefficiencies? • Are the services currently delivered valued by customers? • What services do customers want that are not currently being offered? • What functions does the CPAU provide that, in other cities, are funded by the General Fund? • What services are provided to the utility from the City’s General Fund? • Is current staffing optimal to support current services? If additional services were desired what additional resources would be needed to deliver them? • How do the services delivered by the CPAU and staffing levels in place to deliver the services, compare to other organizations of similar size providing similar services? Staff expects that industry accepted benchmarks would be provided to quantify the response to this question. • Which services should be provided internally versus externally? For example, are there services the Northern California Power Agency (NCPA) could provide that would save the City money? What services provided to CPAU by the General Fund should be provided internally versus externally? • Are there opportunities to hire external expertise (e.g., construction, engineering, maintenance) that could save money? There should be a discussion on the advantages and disadvantages of various alternative service delivery methods and costs. 120118 dm 6051671 Project Organization and Startup: Immediately upon receiving authorization to proceed, CONSULTANT will meet with City management and the Project team to kick off the CPAU Organizational Assessment. CONSULTANT will facilitate this one to two-day meeting and prepare a working record of matters discussed and decisions made by the group. The City and CONSULTANT teams will establish all critical components to a successful engagement during the kick off meetings. These components include: • Any revisions to the project scope presented in CONSULTANT’s proposal document. • An appropriate “screening” process to prioritize scope and issues described in sufficient detail to allow CPAU project management to direct CONSULTANT’s efforts at the most critical subjects or topics. Although CONSULTANT’s assessment will be fully objective, some further definition of the areas for investigation will be necessary to insure the most cost effective application of CONSULTANT’s assessment. • Final fee estimate. • Roles and responsibilities, and communication and reporting protocols. • Time commitments and other resource requirements from City staff. • Discussion and understanding of CONSULTANT’s initial Request for Information. CONSULTANT’s request, provided prior to the kick-off meetings, will specify particular types of information and documents that are relevant to the goals of the initiative and the specific requirements of the work plan. Scheduled dates for on-site visits and personnel interviews, status meetings (or conference calls) with CPAU and City staff, delivery of interim memoranda of findings, draft Final Report, Final Report, and presentations. Deliverables: Written record of kick-off meeting discussions and decisions on project components, and revisions to CONSULTANT’s proposed work plan as necessary. 120118 dm 6051671 Task 1A: Assess community needs, current organizational structure, and evaluate service delivery. The purpose of the current situation analysis is to review current CPAU services and determine how to best deliver required services to customers in the most cost-effective way. The CONSULTANT team will develop a more in-depth understanding of CPAU’s current services, the utility’s approach to organizational design, and what services are valued and expected by customers. CPAU has recently completed a strategic plan and associated business plans. The CONSULTANT team will pay particular attention to the details of these plans to determine the appropriateness of the organization’s structure to support the defined strategic initiatives and the delivery of current and potential new services. CONSULTANT’S analysis will identify current services provided by CPAU to customers and the community and how these are structurally organized. It is our understanding the CPAU delivers electric, natural gas, water and wastewater, and fiber optic services to a community with a population of approximately 65,408. Our assessment will also extend to include support services provided by CPAU such as engineering design, resource planning and procurement, construction and contract management, system maintenance and operations, customer support and billing, energy and water efficiency services, and services provided to CPAU by the General Fund. Our assessment will rely on information provided by CPAU and we will also conduct interviews with key CPAU management and staff personnel, as identified in Step 1. The organizational assessment will focus on how CPAU is structurally organized and performing to provide the previously mentioned services and will examine the pertinent interfaces within the utilities department to effectively deliver these services to customers. The review will include the assessment of: • Engineering • Operations • Customer Support Services • Resource Management • Utilities Administration CONSULTANT will also assess customer satisfaction with the current services CPAU provides and whether there is a desire and a need for additional services. CONSULTANT will rely on customer satisfaction surveys and any additional information CPAU will provide. Consultant will: • Identify CPAU services and how those services are organized. • Identify all services provided to CPAU by the General Fund. • Identify utilities services the community needs and values (e.g. reliable and safe delivery of water, gas, electricity, and wastewater collection services, assistance for efficient use of resources, fiber to the home). 120118 dm 6051671 • Evaluate CPAU organizational structure, functional responsibilities, and alignment for delivering efficient and effective utility services. • Determine the best way to deliver CPAU services and how the organization might change to provide those services. • Evaluate services to the CPAU by the General Fund, including an evaluation of alternatives with costs and benefits identified. Deliverables: • Report listing current CPAU services, organizational structure, and services desired by the community. • Assessment of whether CPAU current service delivery approaches support its strategic and business plan. • Draft recommendations on the optimal utilities services provision. Task 1B: Assess the external environment in which the CPAU operates, and evaluate work accomplished to date to respond to future trends in service delivery. Whereas Task 1A focused on CPAU’s current relationship with its customers, the objective of Task 1B is to understand the business and political environment in which CPAU currently operates and identify future demands that will impact this environment, including regulatory requirements, new programs, technologies, and services evolving in the utility industry. The result of this task is an evaluation of CPAU’s capability to excel given anticipated future demands on the utilities department. CONSULTANT will rely on the industry knowledge and expertise of its project team to identify current regulatory requirements that may impact CPAU. Additional research will also be conducted to create a complete and detailed list that compiles the regulatory requirements identified and describes the potential impact to CPAU. CONSULTANT’s team also includes professionals very knowledgeable and up-to-date on the latest trends, technologies, programs and services developing in the utility industry. CONSULTANT will bring this expertise to CPAU’s project to identify and evaluate future trends, and assess what value CPAU may gain from early response to these trends such as adoption of emerging technologies or programs. To guide this task, CONSULTANT will develop an assessment protocol that will list the specific research questions we will address and the metrics we will use. We will identify the information sources that these questions and specific metrics will be applied to. CONSULTANT’s review will heavily rely on the evaluation of any material and information provided by CPAU regarding regulatory requirements and future trends. 120118 dm 6051671 Additionally, an evaluation of CPAU’s culture will be conducted to understand the values and behaviors that exist within CPAU. Understanding the organization’s culture is critical in developing recommendations that will lead to attainable improvements. CONSULTANT suggests the application of Cultural Transformation Tools® (CTT), trademarked by Barrett Values Center, to conduct such a cultural assessment. This assessment tool will measure how open and flexible CPAU’s culture is to organizational change. Consultant will: • Assess the current regulatory environment. Evaluate the adequacy of the CPAU to fulfill and meet these requirements. Provide a list of current regulatory requirements, with current and recommended staffing levels. • Identify the trends that are developing in the utility industry, and the skills needed to support these trends. Determine how the organization needs to change to support future trends in utilities services and future service delivery requirements. • Evaluate programs, technologies, and services that are expected to be part of future utility services. Provide a matrix on future programs, technologies, and services including an estimate of when these services might be implemented. • Evaluate the adequacy of the current organization to support these future services. Identify deficiencies and make recommendations on organizational changes required to meet future needs. • Evaluate the flexibility of the CPAU culture to change, and make recommendations on change management strategies to implement organizational changes. • Assess what skills will be required to meet indentified future needs. Compare the skills required with current Staff credentials. Make recommendations on rectifying deficiencies through the use of internal and external resources. For internal resources, assess the competitiveness of City compensation to attract qualified personnel. Deliverables: • Prepare a report t comparing the current and future regulatory and potential impact to the CPAU organization . • Prepare a reportt outlining future trends and technologies expected to influence the provision of utilities services in the next 5-10 years. • Provide a matrix assessment of skills required to meet current and future utilities business needs. • Draft recommendations on the organizational changes desired to optimally meet the needs of the current and future utility business and the customer service environment. Task 1C: Determine the cost to deliver services provided by the CPAU, and compare CPAU’s cost to deliver services to other similar agencies. The CONSULTANT team will determine and evaluate the cost for CPAU to deliver current services, including operating and capital improvement expense. A comparative benchmarking 120118 dm 6051671 assessment will be conducted with similar utility organizations. CONSULTANT will confer with CPAU to define the criteria for selecting other utilities. Criteria may include: • Number of retail customers • Customer mix (by utility type) • Total sales volume • Geographic location • Services provided Following establishment of criteria, CONSULTANT will produce a list with a maximum of 10 similar utility organizations to benchmark. Additionally, service delivery costs will be compared against industry best practices, when readily available. Publicly available sources of information may include industry associations such as the American Public Power Association, American Water Works Association, and publications such as the Platts UDI Directory of Electric Power Producers and Distributors. Cost parameters, staff numbers and capabilities, compensation levels, organizational structures, and customer satisfaction indices from other similar utility organizations will be compared to those at CPAU. CONSULTANT will establish a list of corporate and tactical performance measures for this benchmarking effort. Corporate measures will evaluate the status and well-being of CPAU: • Financial and operating ratios • Customer service measures • Reserved funds and fund transfers • Tactical measures will evaluate the performance of the utility organization: • Capital, operation and maintenance cost levels and structure • Retail pricing levels and practices • System reliability and efficiency • Customer service and satisfaction The list of measures will be finalized after (1) consulting with Management and the Project Management team (2) assessing CPAU’s strategic plan and associated business initiatives, and (3) reviewing the availability of target data and practice descriptions. Written descriptions will be produced for each measurement parameter and the list of measures will be provided to Management and the Project Management Team for review. CONSULTANT anticipates that the data that will be used to conduct this benchmarking assessment will be obtained from CONSULTANT’s database, industry information that is readily available, and documentation provided by CPAU. This Task will result in the evaluation of the efficiency of CPAU’s service delivery when compared to costs and associated service delivery practices found at other similar utilities. Consultant will: • Analyze the cost of delivery for each service currently provided, including operating and capital improvement costs. • Benchmark, and analyze results, on the cost of providing services to other similar agencies (and, if available, industry standards). 120118 dm 6051671 • Evaluate the efficiency of the CPAU service delivery, and compare the efficiency of the service delivery to other agencies. • Determine staffing levels and compensation levels, and compare the levels to similar organizations delivering similar services. • Compare customer satisfaction survey results to other similar agencies. • Provide recommendations on the adequacy of current staffing levels. • Provide recommendations on the use of internal versus external service delivery. Deliverables: • Prepare a report outlining the current cost of service delivery by function or service. • Benchmark results comparing CPAU to organizations providing similar services regarding service delivery costs, organizational structures to support the delivery of such services, staffing levels and capabilities, customer satisifaction indices • Draft recommendations for the adequacy of current staffing and the use of internal versus external service delivery mechanisms. Task 1D: Identify and evaluate alternative service delivery methods. The CONSULTANT team will explore potential alternative service delivery methods. This will include services recommended to be added, discontinued, modified or performed by third parties. CONSULTANT’s recommendations will include cost impact to CPAU. Using the findings of the organizational assessment and the comparative analysis conducted in previous steps and the Consultant doing the following: • Identifing and analyzing alternative ways to deliver utilities services, and identifying services that should be discontinued. services not currently provided, and potential alternatives for the provision of those services.and • Determining the cost for each alternative service delivery method, and provide a list of the pros and cons of the current method and each alternative delivery method identified and. • Making recommendations on the best way to provide each service identified, including an analysis of potential privatization/outsourcing options. The CONSULTANT team will work closely with management and the project team to agree on candidate areas for alternative service delivery methodology. This discussion will result in identification of a list of services to be added, discontinued and/or modified. The CONSULTANT team will evaluate CPAU’s adequacy and ability to effectively and efficiently provide these alternative service delivery methods. The current structure, staffing and staff skill sets will be evaluated as to capability to support alternative service delivery methods. The CONSULTANT team will determine estimated cost increases or cost savings for each recommended alternative. Leveraging findings from previous steps the CONSULTANT team will conduct additional primary and secondary research to estimate the costs associated with implementing recommendations for alternative service delivery methods and mechanisms. 120118 dm 6051671 The CONSULTANT will also evaluate the Pros and Cons for Each Alternative Service Delivery Method based on earlier work done. The CONSULTANT team will aggregate potential benefits, challenges, risks and issues that may arise as a result of implementing any of the recommendations for alternative service delivery. This will require a meeting between the CONSULTANT team and management and the project team to facilitate a thorough dialogue around the impacts of each proposed recommended change in service delivery. Once the pros and cons are fully understood and agreed upon by both parties, a final set of potential alternative service delivery methods will be produced succinctly presenting the advantages and disadvantages for each alternative service delivery method. A summary report that includes findings outlined in memoranda submitted in Tasks 3A and 3B along with a high-level qualitative and quantitative evaluation of the advantages and disadvantages for each alternative service delivery method. Deliverables: • A report listing potential alternative service delivery mechanisms and service devlivery methods covering services that could be be discontinued, modified or performed by outside agencies.. Report would also includeoptimal service delivery mechanism for the delivery of each service identified. • A report outlining the cost impact of each alternative service delivery method. • A summary report that includes findings outlined in memoranda submitted in earlier tasks along with qualitative and quantitative evaluation of the advantages and disadvantages for each alternative service delivery method. Task 1E: Organizational Options and Staffing Levels The CONSULTANT team will draw on findings from all previous steps of the work plan to describe alternative organizational options for CPAU. Included will be alternative staffing levels and staffing mix. We will also describe alternative ways for CPAU to receive services currently provided from the General Fund. All changes presented will be focused on reducing costs, improving service delivery effectiveness and/or improving customer satisfaction. CONSULTANT will also provide an Implementation Plan addressing all of CONSULTANT’s recommended actions. The Implementation Plan will show prioritization and timeline for recommendations, costs to implement, any identified staffing changes, and any needed policy or procedural changes. At completion of this step CONSULTANT will deliver a Draft Final Report for City’s review. In this task, the CONSULTANT team will use the list of potential alternative service delivery methods developed in previous steps. Findings from all previous work plan steps will guide the CONSULTANT team in arriving at the final recommendations. During this final selection of alternatives, the CONSULTANT team will meet with management and the project team to explain the logic behind the team’s selections. Included will be staffing levels and skill sets for each recommended structure. If the CONSULTANT team can clearly demonstrate a service can be more cost effectively delivered by a third party, a recommendation will be made to that effect. All changes presented will be focused on reducing costs, improving service delivery effectiveness and/or improving customer satisfaction. 120118 dm 6051671 Alternatives to Services Provided from the General Fund. This component of the task examines those services provided to CPAU that are funded by the City’s General Fund. The CONSULTANT team will determine the services in question and how these services impact CPAU’s from an operational and financial basis. CONSULTANT will then review and analyze alternatives. These alternatives could include different methods as to how the services can be funded, such as funded from utility revenues. Other alternatives could be to discontinue the service, or more cost-effectively obtain the same service from a third party. Implementation Plan, CONSULTANT will develop an Implementation Plan addressing all of CONSULTANT’s recommended actions regarding alternative service delivery methods and CPAU’s organizational structure. The Implementation Plan will show prioritization and timeline for recommendations, costs to implement, staffing changes, potential roles and responsibilities and identification of needed policy or procedural changes. Considerable dialogue with management and the project team will be necessary to formulate the Implementation Plan. The activities of the Implementation plan must be carefully integrated and coordinated all other CPAU initiatives planned or underway, and CONSULTANT will coordinate with management and the project team. Deliverables: • Draft Final Report, including the following recommendations: 1) set of services that are valued by the community; 2) key features of the external environment that will influence organizational structure and the delivery of services; 3) appropriate staffing and use of external resources and services; 4) the best way to provide each service; 5) organizational changes needed to support the provision of the recommended services; and 6) a plan to implement the organizational changes over the next three years. Project Deliverables and Final Project Report A. The Final Report will include: • An executive summary of key findings; • A comprehensive analysis of the CPAU’s current effectiveness and efficiency in the delivery of services • Recommendations on areas where efficiency and effectiveness can be improved. The report should identify recommendations in order of priority and should consider: • Alternative staffing strategies; • Alternative or modified service delivery methods including, the costs and benefits of privatization options and alternatives; • Alternative organizational structure and functional relationships within the department, and possible changes to this structure and with third party organizations; and • Alternative or modified work methods and protocols. • Recommendations on changes to the organizational structure to enhance the cost effectiveness and quality of service delivery in the future. Recommendation should analyze: 120118 dm 6051671 • Steps needed to implement the organizational structure; • Options for phasing in the recommendation; • Costs for implementation; • Staffing and additional resources required to implement the changes; • Changes required in existing policy; • Impacts to existing employees. B. Execution of plan and strategy. The plan will consider and address anticipated policy issues, challenges, and phasing recommendations. C. Provide a comprehensive set of recommendations for recommended actions ranked by priority, resource plan needed to execute (e.g., staff, budget, outside resources), success criteria, workplan and schedule, and issues and policy implications. D. Presentation of the Final Report and findings to the City Manager, Utilities Advisory Commission, and the City Council. Meetings that are incorporated into the project budget in include: 2 City Council meetings, 1 Finance Committee meeting, 1 Utilities Advisory Committee meeting and 1 meeting with the City Manager. 120118 dm 6051671 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within dates 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. • Due Date for Task 1A Deliverables: Completed by April 2. • Due Date for Task 1B Deliverables: Completed by May 2. • Date for Task 1C Deliverables: Completed by May 2. • Date for Task 1D Deliverables: Completed by May 28. • Date for Task 1E Deliverables: Completed by May 28. 16 120118 dm 6051671 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the hourly rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit “A” (“Services”) and reimbursable expenses shall not exceed $205,888. CONSULTANT agrees to complete all Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $225,000. 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. 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. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500 shall be approved in advance by the CITY’s project manager. 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 expenses, for such services based on the rates set forth in Exhibit C-1. 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. 120118 dm 6051671 EXHIBIT C-1 HOURLY RATE SCHEDULE Scope Labor Categories Est. Hours Hourly Rate Extended Rate Step 1 - Project Organization and Startup Sr. Consultant 1 16 $290.00 $4,640.00 Sr. Consultant 2 16 $285.00 $4,560.00 Sr. Consultant 3 16 $205.00 $3,280.00 Sr. Consultant 4 16 $170.00 $2,720.00 Travel and Living Expenses $5,060.00 Not to Exceed, Step 1 $20,260.00 Step 2 - Current Situation Analysis Sr. Consultant 1 8 $290.00 $2,320.00 Sr. Consultant 2 16 $285.00 $4,560.00 Sr. Consultant 3 16 $205.00 $3,280.00 Sr. Consultant 4 16 $170.00 $2,720.00 Sr. Consultant 5 4 $208.00 $832.00 Sr. Consultant 6 4 $250.00 $1,000.00 Sr. Consultant 7 4 $250.00 $1,000.00 Consultant 0 $0.00 Task 2A - Community Needs, Current Organizational Structure, and Service Delivery (CPAU RFP Task 1A) Consultant 0 $0.00 Travel and Living Expenses $1,500.00 Subtotal, Task 2A $17,212.00 Sr. Consultant 1 8 $290.00 $2,320.00 Sr. Consultant 2 24 $285.00 $6,840.00 Sr. Consultant 3 16 $205.00 $3,280.00 Sr. Consultant 4 8 $170.00 $1,360.00 Sr. Consultant 5 8 $208.00 $1,664.00 Sr. Consultant 6 8 $250.00 $2,000.00 Sr. Consultant 7 8 $250.00 $2,000.00 Consultant 1 4 $170.00 $680.00 Task 2B - External Environment and Future Trends (CPAU RFP Task 1B) Consultant 2 8 $141.00 $1,128.00 Travel and Living Expenses $4,180.00 Subtotal, Task 2B $25,452.00 Sr. Consultant 1 0 $290.00 $0.00 Sr. Consultant 2 8 $285.00 $2,280.00 Sr. Consultant 3 16 $205.00 $3,280.00 Sr. Consultant 4 8 $170.00 $1,360.00 Sr. Consultant 5 8 $208.00 $1,664.00 Sr. Consultant 6 8 $250.00 $2,000.00 Sr. Consultant 7 8 $250.00 $2,000.00 Consultant 1 32 $170.00 $5,440.00 Task 2C - Cost to Deliver Services and Cost Comparisons (CPAU RFP Task 1C) Consultant 2 0 $141.00 $0.00 Travel and Living Expenses $500.00 Subtotal, Task 2C $18,524.00 Not to Exceed, Tasks 2A–2C $61,188.00 120118 dm 6051671 Scope Labor Categories Est. Hours Hourly Rate Extended Rate Step 3 - Alternative Service Delivery Methods Sr. Consultant 1 4 $290.00 $1,160.00 Sr. Consultant 2 16 $285.00 $4,560.00 Sr. Consultant 3 8 $205.00 $1,640.00 Sr. Consultant 4 16 $170.00 $2,720.00 Sr. Consultant 5 8 $208.00 $1,664.00 Sr. Consultant 6 8 $250.00 $2,000.00 Sr. Consultant 7 8 $250.00 $2,000.00 Consultant 1 0 $170.00 $0.00 Task 3A - Identification of Alternative Service Delivery Methods (CPAU RFP Task 1D) Consultant 2 8 $141.00 $1,128.00 Travel and Living Expenses $2,970.00 Subtotal, Task 3A $19,842.00 Sr. Consultant 1 0 $290.00 $0.00 Sr. Consultant 2 4 $285.00 $1,140.00 Sr. Consultant 3 4 $205.00 $820.00 Sr. Consultant 4 8 $170.00 $1,360.00 Sr. Consultant 5 4 $208.00 $832.00 Sr. Consultant 6 4 $250.00 $1,000.00 Sr. Consultant 7 4 $250.00 $1,000.00 Consultant 1 28 $170.00 $4,760.00 Task 3B - Cost Impact for Alternative Service Delivery Methods (CPAU RFP Task 1D, cont.) Consultant 2 0 $141.00 $0.00 Travel and Living Expenses $1,500.00 Subtotal, Task 3B $12,412.00 Task 3C - Pros and Cons for Each Alternative Service Delivery Method (CPAU RFP Task 1D, cont.) Sr. Consultant 1 0 $290.00 $0.00 Sr. Consultant 2 16 $285.00 $4,560.00 Sr. Consultant 3 8 $205.00 $1,640.00 Sr. Consultant 4 8 $170.00 $1,360.00 Sr. Consultant 5 4 $208.00 $832.00 Sr. Consultant 6 4 $250.00 $1,000.00 Sr. Consultant 7 4 $250.00 $1,000.00 Consultant 1 0 $170.00 $0.00 Consultant 2 8 $141.00 $1,128.00 Travel and Living Expenses $500.00 Subtotal, Task 3C $12,020.00 Not to Exceed, Tasks 3A–3C $44,274.00 Step 4 - Organizational Options Sr. Consultant 1 4 $290.00 $1,160.00 Sr. Consultant 2 8 $285.00 $2,280.00 Sr. Consultant 3 8 $205.00 $1,640.00 Sr. Consultant 4 8 $170.00 $1,360.00 Sr. Consultant 5 4 $208.00 $832.00 Sr. Consultant 6 4 $250.00 $1,000.00 Sr. Consultant 7 4 $250.00 $1,000.00 Consultant 1 0 $170.00 $0.00 Task 4A - Organizational Options and Staffing Levels (CPAU RFP Task 1E) Consultant 2 0 $141.00 $0.00 Travel and Living Expenses $500.00 Subtotal, Task 4A $9,772.00 Task 4B - Alternatives to Services Sr. Consultant 1 4 $290.00 $1,160.00 120118 dm 6051671 Scope Labor Categories Est. Hours Hourly Rate Extended Rate Sr. Consultant 2 4 $285.00 $1,140.00 Sr. Consultant 3 4 $205.00 $820.00 Sr. Consultant 4 0 $170.00 $0.00 Sr. Consultant 5 0 $208.00 $0.00 Sr. Consultant 6 0 $250.00 $0.00 Sr. Consultant 7 0 $250.00 $0.00 Consultant 1 4 $170.00 $680.00 Provided from the General Fund (CPAU RFP Task 1E, cont.) Consultant 2 0 $141.00 $0.00 Travel and Living Expenses $500.00 Subtotal, Task 4B $4,300.00 Sr. Consultant 1 4 $290.00 $1,160.00 Sr. Consultant 2 4 $285.00 $1,140.00 Sr. Consultant 3 4 $205.00 $820.00 Sr. Consultant 4 0 $170.00 $0.00 Sr. Consultant 5 0 $208.00 $0.00 Sr. Consultant 6 0 $250.00 $0.00 Sr. Consultant 7 0 $250.00 $0.00 Consultant 1 4 $170.00 $680.00 Task 4C - Implementation Plan (CPAU RFP Task 1E, cont.) Consultant 2 0 $141.00 $0.00 Travel and Living Expenses $1,500.00 Subtotal, Task 4C $5,300.00 Sr. Consultant 1 8 $290.00 $2,320.00 Sr. Consultant 2 24 $285.00 $6,840.00 Sr. Consultant 3 20 $205.00 $4,100.00 Sr. Consultant 4 24 $170.00 $4,080.00 Sr. Consultant 5 8 $208.00 $1,664.00 Sr. Consultant 6 8 $250.00 $2,000.00 Sr. Consultant 7 8 $250.00 $2,000.00 Consultant 1 20 $170.00 $3,400.00 Task 4D - Draft and Final Reports (CPAU RFP Task 1E, cont.) Consultant 2 12 $141.00 $1,692.00 Travel and Living Expenses $0.00 Subtotal, Task 4D $28,096.00 Not to Exceed, Tasks 4A–4D $47,468.00 Presentations Sr. Consultant 1 16 $290.00 $4,640.00 Sr. Consultant 2 24 $285.00 $6,840.00 Sr. Consultant 3 20 $205.00 $4,100.00 Consultant 2 8 $141.00 $1,128.00 Travel and Living Expenses $4,180.00 Subtotal, Presentations $20,888.00 TOTAL NOT TO EXCEED, ALL TASKS AND PRESENTATIONS $194,078.00 Optional Tasks: Scope Labor Categories Est. Hours Hourly Rate Extended Rate Sr. Consultant 4 16 $170.00 $2,720.00 Optional Task 1 - Customer Surveys and Focus Group Meetings Consultant 1 36 $170.00 $6,120.00 Travel and Living Expenses $2,970.00 Not to exceed, Optional Task 1 $11,810.00 120118 dm 6051671 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: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT 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 BY BLANKET ENDORSEMENT: 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 PROVISION FOR A WRITTEN SEVENTY-FIVE DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY BLANKET ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT MEMORANDA OF INSURANCE EVIDENCING REQUIRED COVERAGE. III. 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. 120118 dm 6051671 B. CROSS LIABILITY 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 SEVENTY-FIVE (75) 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. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 NATIONAL SECURITY • ENERGY & ENVIRONMENT • HEALTH • CYBERSECURITY © SAIC. All rights reserved. Utilities Department Organizational Assessment City of Palo Alto City Council Presentation January 2012 Agenda SAIC Project Team Similar Engagements Innovative Assessment Tools Project Timeline Conclusion & Questions SAIC.com © SAIC. All rights reserved. Who Is SAIC? 3 •Science Applications International Corporation (SAIC), is a FORTUNE 500® company with approximately 41,000 employees located in 450 offices worldwide, generating $11.1 billion revenue in FY 2011. •The 2009 acquisition of R. W. Beck by SAIC created a firm with an unparalleled pool of talent and resources to deliver complete integrated solutions to utilities. •Organized within SAIC’s Energy Environment & Infrastructure division, these consulting resources have more than 25 years of experience in conducting organizational assessments for various electric, water, wastewater, and natural gas utilities throughout the country. •SAIC’s local presence includes offices in Oakland, Sacramento, and San Diego. Our proposed project manager, Tom Jensen, lives and works in Oakland, while our External Environment Task Leader, Steve Rupp, is in Sacramento. In addition to our proposed project team, we have hundreds of professionals who work day-to- day with utilities. SAIC.com © SAIC. All rights reserved. Introduction to Project Team 4 Similar Engagements SAIC Project Team Similar Engagements Innovative Assessment Tools Project Timeline Conclusion & Questions SAIC.com © SAIC. All rights reserved. Brownsville Public Utilities Board Management & Organizational Assessment •Brownsville Public Utilities (BPUB) is a municipally owned water, wastewater & electric utility in Brownsville, TX governed by a Board of Directors with approximately 50,000 customers. •Purpose: Conduct objective assessment of the organizational structure, strategic & business planning, financial management, operations & maintenance, & overall effectiveness of the utilities. •Highlights: •Using Integrated Systems Approach the assessment resulted in over 100 recommendations related to: •Governance •Planning •Organizational structure & staffing •Financial services & rate design •Water & wastewater services •Electric services •Corporate support services 6 SAIC.com © SAIC. All rights reserved. BPUB Primary Issues & Recommendations Four Primary Issues (PI) & Recommendations (R) were given top priority in the final report •PI 1: Policies for the Board of Directors are not Established & Understood •R: Board policy statements should be developed •PI 2: BPUB does not exhibit a “Planning Culture” •R: Update Strategic Plan •R: Review items that only exceed budget, once approved by Board •R: Involve all employees in planning process •PI 3: An alternate organizational structure is needed •R: Implement proposed organizational structure to more effectively & efficiently manage core functions •PI 4: Water & wastewater utility staffing challenges may create safety issues •R: Assign additional staff to treatment plants •R: Hire/cross-train electrician to serve water & wastewater facilities •R: Hire additional licensed professional engineer to assist in project design & construction. 7 SAIC.com © SAIC. All rights reserved. Lafayette Utilities Systems Organizational Assessment •Lafayette Utilities System (LUS) is a municipally owned utility that provides water, wastewater, electric & fiber services to approximately 60,000 customers in Lafayette, LA. •SAIC has conducted various organizational assessments for LUS over the last 15 years. Examples include assessment for the Civil Engineering & the Power Production Division •Purpose: Conduct objective assessment of the organizational structure, planning culture, operations & maintenance, & overall effectiveness of the divisions. •Assessment resulted in recommendations related to: •Planning •Organizational structure & staffing •Processes 8 SAIC.com © SAIC. All rights reserved. LUS Civil Engineering Division Org Assessment Issues & Recommendations Issues (I) & Recommendations (R) found in LUS report Section 1 •I: Strategic vision & priorities should be established •R: Facilitate a strategic planning process •I: Organizational structure does not support core functions •R: Reorganize division to focus on core areas •I: Insufficient & inadequate planning tools create inefficiencies •R: Implement planning processes & tools 9 SAIC.com © SAIC. All rights reserved. LUS Power Plant Division Org Assessment Issues & Recommendations Issues (I) & Recommendations (R) found in LUS report Section 2 •I: The span of control of Superintendent is very broad •R: Reduce span of control by creating supervisory level •I: Power Plant division is not adequately staffed •R: Pay scales need to be reviewed to attract & maintain qualified personnel •I: Increased costs due to outsourcing & skilled craft augmentation contracts •R: Aggressive efforts to staff vacant positions & reduce dependency on external contractors 10 SAIC.com © SAIC. All rights reserved. Pasadena Water and Power Electric Master Plan & Staffing Analysis •Pasadena Water and Power (PWP) is municipal utility serving 55,000 electric and 33,000 water customers in Pasadena, CA. •Purpose: Conduct objective assessment of the current electrical system, including an organization and staffing analysis, to develop a comprehensive plan for the future. •Highlights: •SAIC developed a Master Plan for PWP which included organization and staffing recommendations. •SAIC developed a Workload Forecasting Tool which was provided to PWP to aid in personnel resources management. 11 SAIC.com © SAIC. All rights reserved. Fortis Turks & Caicos Islands (formerly PPC) Organizational Assessment •Fortis Turks & Caicos Islands (Fortis TCI), formerly PPC, is an investor-owned electric utility located in Providenciales, Turks & Caicos Islands with approximately 10,000 customers. •Purpose: Conduct objective assessment of the utility to determine how to improve organizational effectiveness & efficiency. •Highlights: •Using Integrated Systems Approach the assessment resulted in recommendations related to: •Strategic planning •Cultural challenges •Organizational structure & staffing •Leadership development & succession planning 12 Innovative Assessment Tools SAIC Project Team Similar Engagements Innovative Assessment Tools - A “Systems” Approach - Cultural Transformation -Workload Forecasting Project Timeline Conclusion & Questions SAIC.com © SAIC. All rights reserved. An Approach that Looks at Organizations as “A System.” Greater value to the Utility in using a holistic view. 1414 Strategic Plan Organizational Structure & Processes Personnel Skills & Capabilities Cost Requirements & Structure Cultural Flexibility Optimize Service Delivery SAIC.com © SAIC. All rights reserved. Cultural Transformation Tool (CTT) •Understanding an organization’s current culture, and the values that drive that culture, is critical in developing plans and initiatives that will lead to attainable improvements. •The tool SAIC uses to conduct a cultural assessment is a powerful instrument that describes corporate cultures by identifying the core values that exist within each functional area of the organization. It provides a framework for understanding how the individuals, teams and organizations develop and grow and provides insight into how to align an organization’s culture. •The CTT assessment tools are based on the Seven Levels of Consciousness model. 15 SAIC.com © SAIC. All rights reserved. Seven Levels of Organizational Consciousness Positive Focus /Excessive Focus SERVICE MAKING A DIFFERENCE INTERNAL COHESION TRANSFORMATION SELF-ESTEEM RELATIONSHIP SURVIVAL SERVICE TO HUMANITY Long-term perspective. Future generations. Ethics.. DEVELOPMENT OF CORPORATE COMMUNITYPositive spirit. Creativity. Honesty. Shared vision and values. CONTINUOUS RENEWAL Innovation. Personal Growth. Teamwork.Organizational growth through employee participation. BEING THE BEST. BEST PRACTICEProductivity, efficiency, quality, systems and processes. Bureaucracy. Complacency. RELATIONSHIPS THAT SUPPORT CORPORATE NEEDSOpen communication. Customer satisfaction. Respect. Manipulation. Blame. PURSUIT OF PROFIT & SHAREHOLDER VALUEFinancial stability. Employee health and safety. Exploitation. Over-control. Level 7 Level 6 Level 3 Level 2 Level 1 Level 5 Level 4 COLLABORATION WITH CUSTOMERS & THE LOCAL COMMUNITYStrategic alliances. Employee fulfillment. Environmental awareness. 16 SAIC.com © SAIC. All rights reserved. PPC: Group (80) Level 7 Level 6 Level 5 Level 4 Level 3 Level 2 Level 1 Personal Values Current Culture Values Desired Culture Values IRS (P)= 6-4-0 | IRS (L)= 0-0-0 IROS (P)= 0-1-7-2 | IROS (L)= 0-0-0-0 IROS (P)= 2-5-6-0 | IROS (L)= 0-0-0-0 Matches PV - CC 1CC - DC 6PV - DC 5 Health Index (PL) PV: 10-0CC: 10-0DC: 13-0 1. accountability 40 4(R) 2. honesty 38 5(I) 3. commitment 27 5(I) 4. caring 23 2(R) 5. continuous learning 23 4(I) 6. ambition 21 3(I) 7. performance 21 3(I) 8. positive attitude 21 5(I) 9. respect 21 2(R) 10. reliability 20 3(R) Black Underline = PV & CC Orange = CC & DC P = Positive L = Potentially Limiting I = Individual O = Organizational Orange = PV, CC & DC Blue = PV & DC (white circle) R = Relationship S = Societal 1. community involvement 35 6(S) 2. customer satisfaction 34 2(O) 3. cost management 29 3(O) 4. safety 26 1(O) 5. continuous improvement 24 4(O) 6. accountability 18 4(R) 7. being the best 18 3(O) 8. leadership development 18 6(O) 9. long-term perspective 18 7(O) 10. making a difference 18 6(S) 1. accountability 43 4(R) 2. teamwork 36 4(R) 3. customer satisfaction 31 2(O) 4. continuous improvement 23 4(O) 5. leadership development 23 6(O) 6. open communication 22 2(R) 7. cost management 21 3(O) 8. coaching/ mentoring 20 6(R) 9. reliability 19 3(R) 10. being the best 16 3(O) 11. commitment 16 5(I) 12. continuous learning 16 4(O) 13. positive attitude 16 5(I) Values Plot Copyright 2011 Barrett Values Centre February 2011 SAIC.com © SAIC. All rights reserved. Current Strengths Key Issues Moving Forward Personal Values: •Take ownership of actions & demonstrating dedication •Building relationships based on authenticity •An upbeat & determined approach to expanding knowledge & skills to be effective •Top Value: Accountability Current Culture: •Participating in the community & having positive impact •Attention to the bottom line & creating secure work environment where employees take ownership of their actions •Being leaders in the industry •Top Value: Community Involvement •Entropy is slightly elevated at 13% •No potentially limiting values; however some issues beneath the surface may be cause for frustration: •Employees feel stifled by rigid systems/processes & lack of communication •May be working against each other at times due to lack of empowerment & uncertainty about the future •No values at Level 5: Internal Cohesion: May be a gap, covered or new area for development Personal Values to Desired Culture: •Reliability, commitment, continuous learning, positive attitude •Suggests employees desire greater sense of satisfaction & connection with their workplace Current to Desired Culture: •Accountability, customer satisfaction, continuous improvement, leadership development, cost management, being the best •Suggest employees have confidence in the direction of PPC •Values concentrated in Level 4 – Transformation – suggest desire for more energy directed to employee participation & development Desired Culture: •New values indicate that employees want to strengthen the way they work together: •Opportunities to work together & learn from each other •Take ownership of their actions •Establish high standards & principles Cultural Assessment Summary – An Example 18 SAIC.com © SAIC. All rights reserved. Cultural Assessment Recommendations – from recently completed project •Develop internal communication plan to share results of assessment. •Define the key processes & systems to focus on in the next year. Develop specific actions and programs that will foster changes. •Examine new values desired to determine meaning & associated behaviors. •Discuss how the Utility can continue to live the values carried from Current to Desired Culture. •Consider the Values Jump and determine significance. •Determine & define what values the Utility wants to espouse. 19 SAIC.com © SAIC. All rights reserved. Workload Forecasting Tool An Excel© spreadsheet based tool developed by SAIC that: •Provides a quantitative assessment of workload and staffing requirements •Allows management to understand the work that needs to get done and resources required to perform that work in the required timeframe •Allows quantification of resource needs to help solve hiring and outsourcing decisions •Includes templates for estimating resource needs for operating, maintenance and capital projects 20 SAIC.com © SAIC. All rights reserved. Workload Forecasting Tool, cont. •SAIC will evaluate CPAU’s existing staffing levels for field construction work, project management and engineering work to determine how time is allocated between administrative, O&M, customer projects and capital improvement projects. 21 Allocation Hours/Year Ta s k O w n e r Task Name Ti m e A l l o c a t e d Ho u r s P e r Y e a r MG T & A d m i n Op e r a t i o n s / Ma i n t e n a n c e Cu s t o m e r P r o j e c t s CI P MG T & A d m i n O& M Cu s t o m e r C a p i t a l Pr o j e c t s Ca p i t a l R e p l a c e m e n t & I m p r o v e m e n t s Chen “As Built” drawing revisions & updating 10 hrs/wk 500 30% 40% 30% 0 150 200 150 Chen Drawing for new project of underground utility district 10 hrs/wk 500 50% 50% 0 0 0 500 Chen Another work assigned 5 hr/wk 250 20% 40% 40% 0 50 100 100 Moeis Material specifications 3 hrs/day 666 100% 0 666 0 0 Moeis Material inventory 1 hr/day 222 50% 50% 0 222 0 0 Moeis Underground utility districts 2 hrs/day 444 100% 0 0 0 444 SAIC.com © SAIC. All rights reserved. Workload Forecasting Tool, cont. •SAIC will assist CPAU in prioritization of proposed projects to determine schedules and associated FTE requirements 22 SAIC.com © SAIC. All rights reserved. Workload Forecasting Tool, cont. •SAIC will assist CPAU in evaluating the hours currently spent to support each function compared to the hours required to meet budget projections and the impact of levelizing, expanding and/or outsourcing resources. 23 Project Timeline SAIC Project Team Similar Engagements Innovative Assessment Tools Project Timeline Conclusion & Questions SAIC.com © SAIC. All rights reserved. Project Timeline 25 Conclusion & Questions SAIC Project Team Similar Engagements Innovative Assessment Tools Project Timeline Conclusion & Questions SAIC.com © SAIC. All rights reserved. 2727 Why Select SAIC? Utility Experts Innovative Approach to Organizational Assessments Experience with Multi- Service Utilities Local Presence & Knowledge To Optimize Service Delivery at the City of Palo Alto Questions City of Palo Alto (ID # 2396) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/6/2012 February 06, 2012 Page 1 of 4 (ID # 2396) Summary Title: Mitchell Park Library/CC Custom Casework Title: Award of Contract with Ross McDonald Company, Inc., in the Amount of $648,412 for Custom Casework for the Mitchell Park Library and Community Center (CIP PE-09006) From:City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1.Approve and authorize the City Manager or designee to execute the attached contract (Attachment A) with Ross McDonald Company, Inc., in the amount of $648,412 for custom casework for the Mitchell Park Library & Community Center Project (PE-09006 and LB-11000). 2.Authorize the City Manager or designee to negotiate and execute one or more change orders to the contract with Ross McDonald Company, Inc., for related, additional but unforeseen work which may develop during the project, the total value of which shall not exceed $65,000. Discussion The work to be performed under the contract is for custom casework (built-in furnishings such as reception and express checkout counters) that will be part of the Mitchell Park Library and Community Center (MPLCC) project.The contract includes the fabrication and installation of 372 pieces of 50 different bid items consisting of a variety of sizes, colors, and materials. Custom casework includes all of the furniture-like items that are built into the facility to meet specific design needs and library uses. Many items are public service counters or parts of library shelving which must be secured to the structure for seismic stability. Other items are tables that need to be bolted to the floor to maintain operational clearances and are in sizes that are not feasible for standard furniture. Three deductive bid alternates were listed on the bid form. Each of the deductive bid alternates would have allowed the City the option of choosing less expensive materials if the cost greatly exceeded the engineers estimate. The low bid of $648,412 is two percent below February 06, 2012 Page 2 of 4 (ID # 2396) the engineer's estimate of $662,000, therefore none of the deductive bid alternates is recommended. The engineer’s estimate is higher than the original estimate amount of $602,000 which was a rough estimate done in 2008 for the bond election and was based on conceptual plans that had very little casework detail (see Resource Impact). The current engineer’s estimate was based on current design that had been reviewed by various boards and commissions as well as by the Library Foundation. Bid Name IFB Number 144111 Mitchell Park Library and Community Center Casework Proposed Length of Project 165 calendar days Number of Bids Mailed to Contractors 6 Number of Bids Mailed to Builder’s Exchanges 0 Total Days to Respond to Bid 28 Pre-Bid Meeting?No Number of Company Attendees at Pre-Bid Meeting Not applicable Number of Bids Received:3 Bid Price Range From a low of $648,412 to a high of $814,236 *Bid summary provided in Attachment B. Staff has reviewed all bids submitted and recommends that the bid of $648,412 submitted by Ross McDonald Company, Inc., be accepted and that Ross McDonald Company, Inc., be declared the lowest responsible bidder. Staff confirmed with the Contractor's State License Board that the contractor has an active license on file. Resource Impact Funding for this work is available in Capital Improvement Program Projects PE-09006 Mitchell Park Library and Community Center. The cost of casework was included in the Measure N bond estimate prepared in 2008. The casework contract fits into the overall (bondable) Measure N package as follows: Mitchell Park Library/CC Budgeted- 2008 Awarded, including Contingency Future Bondable Contracts (MPLCC only) Available Budget Reserves Construction: Flintco $32,400,000 $29,238,000 $3,162,000 Art $326,000 $270,000 $56,000 February 06, 2012 Page 3 of 4 (ID # 2396) Hazmat $100,000 $25,000 $75,000 Signage (bondable only) $275,000 $488,312 ($213,312) Technology: Automated Material Handling $850,000 $475,000 $375,000 Book Security System $150,000 $150,000 $0 Casework $602,000 $713,412 ($111,412) Design: Group 4 $4,350,000 $5,067,915 ($717,915) Construction Management Inspection Turner $2,510,000 $3,213,318 ($703,318) Other Costs: Permits, Fees, printing, offsite utilities, moving $460,000 $498,063 $76,045 ($114,108) Subtotals:$42,023,000 $39,989,020 $226,045 $1,807,935 Inflation & Future Contract Contingency $7,977,000 $0 $0 $7,977,000 TOTALS:$50,000,000 $39,989,020 $226,045 $9,784,935 Policy Implications Approval of this contract is consistent with Council’s previous direction on the library projects and will further the projects identified in Measure N. The cost of casework was included in the Measure N bond estimate and does not represent a change in City policy. Timeline The MPLCC is currently under construction and is expected to be opened to the public in the fall of 2012. Casework will be installed at various times during the construction. Environmental Review On July 21, 2008, the Council confirmed the Director of Planning and Community Environment’s approvals of a Mitigated Negative Declaration for the MPLCC and a 2007 Addendum to the 2002 final Environmental Impact Report for the Main Library. February 06, 2012 Page 4 of 4 (ID # 2396) Attachments: ·A -C12144111_Ross McDonald_CustCaseWork_Updated 01252012 (DOC) ·B -MP case work bids (XLS) Prepared By:Karen Bengard, Senior Engineer Department Head:J. Michael Sartor, Director City Manager Approval: ____________________________________ James Keene, City Manager Rev. January 3, 2012 CONSTRUCTION CONTRACT Contract No.C12144111 City of Palo Alto and Ross McDonald Company, Inc. PROJECT MITCHELL PARK LIBRARY & COMMUNITY CENTER CUSTOM CASE WORK Rev. January 3, 2012 IFB Construction Contract i CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1.INCORPORATION OF RECITALS AND DEFINITIONS ....................................1 1.1 Recitals ................................................................................................................................1 1.2 Definitions ...........................................................................................................................1 SECTION 2.THE PROJECT ...................................................................................................1 SECTION 3.THE CONTRACT DOCUMENTS........................................................................1 LIST OF DOCUMENTS.....................................................................................................................1 3.2 ORDER OF PRECEDENCE................................................................................2 SECTION 4.THE WORK.........................................................................................................2 SECTION 5.PROJECT TEAM ................................................................................................2 SECTION 6.TIME OF COMPLETION.....................................................................................3 6.1 Time Is of Essence..............................................................................................................3 6.2 Commencement of Work ...................................................................................................3 6.3 Contract Time......................................................................................................................3 6.4 Liquidated Damages...........................................................................................................3 6.4.1 Entitlement ...................................................................................................................3 6.4.2 Daily Amount................................................................................................................3 6.4.3 Exclusive Remedy........................................................................................................3 6.4.4 Other Remedies...........................................................................................................3 6.5 Adjustments to Contract Time ..........................................................................................3 SECTION 7.COMPENSATION TO CONTRACTOR ..............................................................3 7.1 Contract Sum ......................................................................................................................1 7.2 Full Compensation .............................................................................................................1 7.3 Compensation for Extra or Deleted Work ........................................................................1 7.3.1 Self Performed Work ...................................................................................................1 7.3.2 Subcontractors .............................................................................................................1 Rev. January 3, 2012 IFB Construction Contract ii SECTION 8.STANDARD OF CARE .......................................................................................1 SECTION 9.INDEMNIFICATION ............................................................................................5 9.1 Hold Harmless.....................................................................................................................5 9.2 Survival................................................................................................................................5 SECTION 10 NONDISCRIMINATION.......................................................................................5 SECTION 11.INSURANCE AND BONDS.................................................................................5 SECTION 12.PROHIBITION AGAINST TRANSFERS.............................................................5 SECTION 13.NOTICES.............................................................................................................6 13.1 Method of Notice.................................................................................................................6 13.2 Notice Recipients................................................................................................................6 13.3 Change of Address .............................................................................................................7 14.1 Resolution of Contract Disputes.......................................................................................7 14.2 Resolution of Other Disputes ............................................................................................7 14.2.1 Non-Contract Disputes.................................................................................................7 14.2.2 Litigation, City Election .................................................................................................7 14.3 Submission of Contract Dispute.......................................................................................8 14.3.1 By Contractor ...............................................................................................................8 14.3.2 By City ..........................................................................................................................8 14.4 Contract Dispute Resolution Process ..............................................................................8 14.4.1 Direct Negotiations.......................................................................................................8 14.4.2 Deferral of Contract Disputes.......................................................................................9 14.4.3 Mediation......................................................................................................................9 14.4.4 Binding Arbitration ........................................................................................................9 14.5 Non-Waiver........................................................................................................................10 SECTION 15.DEFAULT..........................................................................................................11 15.1 Notice of Default ...............................................................................................................11 15.2 Opportunity to Cure Default ............................................................................................11 SECTION 16.CITY'S RIGHTS AND REMEDIES....................................................................11 16.1 Remedies Upon Default ...................................................................................................11 16.1.1 Delete Certain Services..............................................................................................11 16.1.2 Perform and Withhold ................................................................................................11 Rev. January 3, 2012 IFB Construction Contract iii 16.1.3 Suspend The Construction Contract..........................................................................11 16.1.4 Terminate the Construction Contract for Default .......................................................11 16.1.5 Invoke the Performance Bond....................................................................................11 16.1.6 Additional Provisions ..................................................................................................12 16.2 Delays by Sureties ............................................................................................................12 16.3 Damages to City................................................................................................................12 16.3.1 For Contractor's Default.............................................................................................12 16.3.2 Compensation for Losses ..........................................................................................12 16.5 Suspension by City for Convenience .............................................................................12 16.6 Termination Without Cause.............................................................................................13 16.6.1 Compensation............................................................................................................13 16.6.2 Subcontractors ...........................................................................................................13 16.7 Contractor’s Duties Upon Termination...........................................................................13 SECTION 17.CONTRACTOR'S RIGHTS AND REMEDIES ..................................................14 17.1 Contractor’s Remedies.....................................................................................................14 17.1.1 For Work Stoppage....................................................................................................14 17.1.2.For City's Non-Payment .............................................................................................14 17.2 Damages to Contractor ....................................................................................................14 SECTION 18.ACCOUNTING RECORDS ...............................................................................14 18.1 Financial Management and City Access.........................................................................14 18.2 Compliance with City Requests ......................................................................................14 SECTION 19.INDEPENDENT PARTIES ................................................................................14 SECTION 20.NUISANCE........................................................................................................15 SECTION 21.PERMITS AND LICENSES...............................................................................15 SECTION 22.WAIVER ............................................................................................................15 SECTION 23 GOVERNING LAW ...........................................................................................15 SECTION 24 COMPLETE AGREEMENT ..............................................................................15 SECTION 25 SURVIVAL OF CONTRACT .............................................................................15 SECTION 26 PREVAILING WAGES ......................................................................................15 Rev. January 3, 2012 IFB Construction Contract iv SECTION 27 NON APPROPRIATION....................................................................................16 SECTION 28 GOVERNMENTAL POWERS...........................................................................16 SECTION 29 ATTORNEY FEES ............................................................................................16 SECTION 30 SEVERABILITY ................................................................................................16 1 Rev. January 3, 2012 IFB Construction Contract CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on January 30, 2012 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and ROSS MCDONALD COMPANY, INC.("Contractor"), is made with reference to the following: R E C I T A L S: A.City is a municipal corporation dulyorganized and validlyexisting 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 314333. 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 November 04, 2011, City issued an Invitation for Bids (IFB) to contractors for the Mitchell Park Library & Community Center Custom Case Work (“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 Bid 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 construction of the MITCHELL PARK LIBRARY & COMMUNITY CENTER CUSTOM CASE WORK ("Project"). 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 Change Orders 3)Contract 4)Project Plans and Drawings Rev. January3, 2012 IFB Construction Contract 2 5)Technical Specifications 6)Special Provisions 7) Notice Inviting Bids 8) Instructions to Bidders 9) General Conditions 10)Bidding Addenda 11)Invitation for Bids 12)Contractor's Bid/Non-Collusion Affidavit 13) Reports listed in the Bidding Documents 14) Public Works Department’s Standard Drawings and Specifications dated 2007 and updated from time to time 15)Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards dated 2005 and updated from time to time 16)City of Palo Alto Traffic Control Requirements 17)City of Palo Alto Truck Route Map and Regulations 18)Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 19)Performance and Payment Bonds 20)Insurance Forms 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. SECTION 4 THE WORK. The Work includes all labor, materials, equipment, services, permits, fees, licenses and taxes, and all other things necessary for Contractor to perform its obligations and complete the Project, including, without limitation, any Changes approved by City, in accordance with the Contract Documents and all Applicable Code Requirements. SECTION 5 PROJECT TEAM. 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 Project 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. Rev. January3, 2012 IFB Construction Contract 3 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 Hundered Eighty calendar days (180)after the commencement date specified in City’s Notice to Proceed. 6.4 Liquidated Damages. 6.4.1 Entitlement. City and Contractor acknowledge and agree that if Contractor fails to fully and satisfactorily complete the Work within the Contract Time, City will suffer, as a result of Contractor’s failure, substantial damages which are both extremely difficult and impracticable to ascertain. Such damages may include, but are not limited to: (i)Loss of public confidence in City and its contractors and consultants. (ii)Loss of public use of public facilities. (iii)Extended disruption to public. 6.4.2 Daily Amount. City and Contractor have reasonably endeavored, but failed, to ascertain the actual damage that City will incur if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time. Therefore, the parties agree that in addition to all other damages to which City may be entitled other than delay damages, in the event Contractor shall fail to achieve Substantial Completion of the entire Work within the Contract Time, Contractor shall pay City as liquidated damages the amount of $500 per day for each Day occurring after the expiration of the Contract Time until Contractor achieves Substantial Completion of the entire Work. The liquidated damages amount 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. 6.4.3 Exclusive Remedy. City and Contractor acknowledge and agree that this liquidated damages provision shall be City’s only remedy for delay damages caused by Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.4.4 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 agreed to by Change Order executed by City and Contractor in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. 1 Rev. January 3, 2012 IFB Construction Contract 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of Six Hundred Forty-Eight Thousand Four Hundred Twelve Dollars ($648,412.00). [This amount includes the Base Bid and Add 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. The Contract Sum may only be adjusted for Change Orders issued, executed and satisfactorily performed in accordance with the requirements of the Contract Documents. 7.3 Compensation for Extra or Deleted Work. The Contract Sum shall be adjusted (either by addition or credit) for Changes in the Work involving Extra Work or Deleted Work based on one or more of the following methods to be selected by City: 1.Unit prices stated in the Contract Documents or agreed upon byCityand Contractor, which unit prices shall be deemed to include Contractor Markup and Subcontractor/Sub-subcontractor Markups permitted by this Section. 2.A lump sum agreed upon by City and Contractor, based on the estimated Allowable Costs and Contractor Markup and Subcontractor Markup computed in accordance with this Section. 3.Contractor’s Allowable Costs, plus Contractor Markup and Subcontractor Markups applicable to such Extra Work computed in accordance with this Section. Contractor Markup and Subcontractor/Sub-subcontractor Markups set forth herein are the full amount of compensation to be added for Extra Work or to be subtracted for Deleted Work that is attributable to overhead (direct and indirect) and profit of Contractor and of its Subcontractors and Sub-subcontractors, of every Tier. When using this payment methodology, Contractor Markup and Subcontractor/Sub-subcontractor Markups, which shall not be compounded, shall be computed as follows: 7.3.1 Markup Self-Performed Work. 10% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by Contractor with its own forces. 7.3.2 Markup for Work Performed by Subcontractors. 15% of the Allowable Costs for that portion of the Extra Work or Deleted Work to be performed by a first Tier Subcontractor. SECTION 8 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. Rev. January3, 2012 IFB Construction Contract 5 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 collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and all Losses arising directly or indirectly from, or in any manner relating to any of, the following: (i)Performance or nonperformance of the Work by Contractor or its Subcontractors or Sub-subcontractors, of any tier; (ii)Performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of any of the obligations under the Contract Documents; (iii)The construction activities of Contractor or its Subcontractors or Sub-subcontractors, of any tier, either on the Site or on other properties; (iv)The payment or nonpayment by Contractor to any of its employees, Subcontractors or Sub-subcontractors of any tier, for Work performed on or off the Site for the Project; and (v)Any personal injury, property damage or economic loss to third persons associated with the performance or nonperformance by Contractor or its Subcontractors or Sub- subcontractors of any tier, of the Work. However, nothing herein shall obligate Contractor to indemnify any Indemnitee for Losses resulting from the sole or active negligence or willful misconduct of the Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. 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. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NONDISCRIMINATION. 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. On or before the Execution Date, Contractor shall provide City with evidence that it has obtained insurance and Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Failure to do so shall be deemed a material breach of this Construction Contract. SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Construction Contract based 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. The sale, assignment, transfer or other disposition of anyof 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 Rev. January3, 2012 IFB Construction Contract 6 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 (iv)On the date it is accepted or rejected if sent by certified mail. 13.2 Notice Recipients. All notices, demands or requests (including, without limitation, 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: Debra Jacobs Or 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 delivered personally or sent by certified mail. Rev. January3, 2012 IFB Construction Contract 7 All notices, demands, requests or approvals from City to Contractor shall be addressed to: Ross Mcdonald Company, Inc. 1154 Stealth Street Livermore, Ca 94551 Attn: Robert Schmidt 13.3 Change of Address. In the event of any change of address, the moving party shall notify the other party 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 DISPUTE RESOLUTION. 14.1 Resolution of Contract Disputes. Contract Disputes shall be resolved by the parties in accordance with the provisions of this Section 14, in lieu of any and all rights under the law that either party have its rights adjudged by a trial court or jury. All Contract Disputes shall be subject to the Contract Dispute Resolution Process set forth in this Section 14, which shall be the exclusive recourse of Contractor and City for such Contract Disputes. 14.2 Resolution of Other Disputes. 14.2.1 Non-Contract Disputes. Contract Disputes shall not include any of the following: (i)Penalties or forfeitures prescribed by statute or regulation imposed by a governmental agency; (ii)Third party tort claims for personal injury, property damage or death relating to any Work performed by Contractor or its Subcontractors or Sub- subcontractors of any tier; (iii)False claims liability under California Government Code Section 12650, et. seq.; (iv)Defects in the Work first discovered by City after Final Payment by City to Contractor; (v)Stop notices; or (vi)The right of City to specific performance or injunctive relief to compel performance of any provision of the Contract Documents. 14.2.2 Litigation, City Election. Matters that do not constitute Contract Disputes shall be resolved by way of an action filed in the Superior Court of the State of California, County of Santa Clara, and shall not be subject to the Contract Dispute Resolution Process. However, the City reserves the right, in its sole and absolute discretion, to treat such disputes as Contract Disputes. Upon written notice by City of its election as provided in the preceding sentence, such dispute shall be submitted bythe parties and finally decided pursuant to the Contract Dispute Resolution Process in the manner as required for Contract Disputes, including, without limitation, City’s right under Paragraph 14.4.2 to defer resolution and final determination until after Final Completion of the Work. Rev. January3, 2012 IFB Construction Contract 8 14.3 Submission of Contract Dispute. 14.3.1 By Contractor. Contractors may commence the Contract Dispute Resolution Process upon City's written response denying all or part of a Claim pursuant to Paragraph 4.2.9 or 4.2.10 of the General Conditions. Contractor shall submit a written Statement of Contract Dispute (as set forth below) to City within seven (7) Days after City rejects all or a portion of Contractor's Claim. Failure by Contractor to submit its Statement of Contract Dispute in a timelymanner shall result in City’s decision by City on the Claim becoming final and binding. Contractor’s Statement of Contract Dispute shall be signed under penalty of perjury and shall state with specificity the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the asserted effect on the Contract Sum and the Contract Time. The Statement of Contract Dispute shall include adequate supporting data to substantiate the disputed Claim. Adequate supporting data for a Contract Dispute relating to an adjustment of the Contract Time shall include both of the following: (i)All of the scheduling data required to be submitted by Contractor under the Contract Documents to obtain extensions of time and adjustments to the Contract Time and (ii)A detailed, event-by-event description of the impact of each event on completion of Work.Adequate data to support a Statement of Contract Dispute involving an adjustment of the Contract Sum must include both of the following: (a)A detailed cost breakdown and (b)Supporting cost data in such form and including such information and other supporting data as required under the Contract Documents for submission of Change Order Requests and Claims. 14.3.2 By City. City's right to commence the Contract Dispute Resolution Process shall arise at any time following City's actual discovery of the circumstances giving rise to the Contract Dispute. City asserts Contract Disputes in response to a Contract Dispute asserted by Contractor. A Statement of Contract Dispute submitted by City shall state the events or circumstances giving rise to the Contract Dispute, the dates of their occurrence and the damages or other relief claimed by City as a result of such events. 14.4 Contract Dispute Resolution Process. The parties shall utilize each of the following steps in the Contract Dispute Resolution Process in the sequence they appear below. Each party shall participate fully and in good faith in each step in the Contract Dispute Resolution Process, and good faith effort shall be a condition precedent to the right of each party to proceed to the next step in the process. 14.4.1 Direct Negotiations. Designated representatives of City and Contractor shall meet as soon as possible (but not later than ten (10) Days after receipt of the Statement of Contract Dispute) in a good faith effort to negotiate a resolution to the Contract Dispute. Each party shall be represented in such negotiations by an authorized representative with full knowledge of the details of the Claims or defenses being asserted by such party in the negotiations, and with full authority to resolve such Contract Dispute then and there, subject only to City’s obligation to obtain administrative and/or City Council approval of any agreed settlement or resolution. If the Contract Dispute involves the assertion of a right or claim by a Subcontractor or Sub-subcontractor, of any tier, against Contractor that is in turn being asserted by Contractor against City (“Pass- Through Claim”), then the Subcontractor or Sub-Subcontractor shall also have a Rev. January3, 2012 IFB Construction Contract 9 representative attend the negotiations, with the same authority and knowledge as described above. Upon completion of the meeting, if the Contract Dispute is not resolved, the parties may either continue the negotiations or any party may declare negotiations ended. All discussions that occur during such negotiations and all documents prepared solely for the purpose of such negotiations shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.2 Deferral of Contract Disputes. Following the completion of the negotiations required by Paragraph 14.4.1, all unresolved Contract Disputes shall be deferred pending Final Completion of the Project, subject to City’s right, in its sole and absolute discretion, to require that the Contract Dispute Resolution Process proceed prior to Final Completion. All Contract Disputes that have been deferred until Final Completion shall be consolidated within a reasonable time after Final Completion and thereafter pursued to resolution pursuant to this Contract Dispute Resolution Process. The parties can continue informal negotiations of Contract Disputes; provided, however, that such informal negotiations shall not be alter the provisions of the Agreement deferring final determination and resolution of unresolved Contract Disputes until after Final Completion. 14.4.3 Mediation. If the Contract Dispute remains unresolved after negotiations pursuant to Paragraph 14.4.1, the parties shall submit the Contract Dispute to non-binding mediation before a mutually acceptable third party mediator. .1 Qualifications of Mediator.The parties shall endeavor to select a mediator who is a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in mediating public works construction disputes. In addition, the mediator shall have at least twenty (20) hours of formal training in mediation skills. .2 Submission to Mediation and Selection of Mediator.The party initiating mediation of a Contract Dispute shall provide written notice to the other party of its decision to mediate. In the event the parties are unable to agree upon a mediator within fifteen (15) Days after the receipt of such written notice, then the parties shall submit the matter to the American Arbitration Association (AAA) at its San Francisco Regional Office for selection of a mediator in accordance with the AAA Construction Industry Mediation Rules. .3 Mediation Process.The location of the mediation shall be at the offices of City. The costs of mediation shall be shared equally by both parties. The mediator shall provide an independent assessment on the merits of the Contract Dispute and recommendations for resolution. All discussions that occur during the mediation and all documents prepared solely for the purpose of the mediation shall be confidential and privileged pursuant to California Evidence Code Sections 1119 and 1152. 14.4.4 Binding Arbitration. If the Contract Dispute is not resolved by mediation, then any party may submit the Contract Dispute for final and binding arbitration pursuant to the provisions of California Public Contract Code Sections 10240, et seq. The award of the arbitrator therein shall be final and may be entered as a judgment by any court of competent jurisdiction. Such arbitration shall be conducted in accordance with the following: .1 Arbitration Initiation.The arbitration shall be initiated by filing a complaint in arbitration in accordance with the regulations promulgated pursuant to California Public Contract Code Section 10240.5. Rev. January3, 2012 IFB Construction Contract 10 .2 Qualifications of the Arbitrator.The arbitrator shall be approved by all parties.The arbitrator shall be a retired judge or an attorney with at least five (5) years of experience in public works construction contract law and in arbitrating public works construction disputes. In addition, the arbitrator shall have at least twenty (20) hours of formal training in arbitration skills. In the event the parties cannot agree upon an arbitrator, the provisions of California Public Contract Code Section 10240.3 shall be followed in selecting an arbitrator possessing the qualifications required herein. .3 Hearing Days and Location.Arbitration hearings shall be held at the offices of City and shall, except for good cause shown to and determined by the arbitrator, be conducted on consecutive business days, without interruption or continuance. .4 Hearing Delays.Arbitration hearings shall not be delayed except upon good cause shown. .5 Recording Hearings.All hearings to receive evidence shall be recorded by a certified stenographic reporter, with the costs thereof borne equally by City and Contractor and allocated by the arbitrator in the final award. .6 Limitation of Depositions.The parties may conduct discovery in accordance with the provisions of section 10240.11 of the Public Contract Code; provided, however, that depositions shall be limited to both of the following: (i)Ten (10) percipient witnesses for each party and 5 expert witnesses per party. Upon a showing of good cause, the arbitrator may increase the number of permitted depositions. An individual who is both percipient and expert shall, for purposes of applying the foregoing numerical limitation only, be deemed an expert.Expert reports shall be exchanged prior to receipt of evidence, in accordance with the direction of the arbitrator, and expert reports (including initial and rebuttal reports) not so submitted shall not be admissible as evidence. .7 Authority of the Arbitrator.The arbitrator shall have the authority to hear dispositive motions and issue interim orders and interim or executory awards. .8 Waiver of Jury Trial.Contractor and Cityeach voluntarily waives its right to a jury trial with respect to any Contract Dispute that is subject to binding arbitration in accordance with the provisions of this Paragraph 14.4.4. Contractor shall include this provision in its contracts with its Subcontractors who provide any portion of the Work. 14.5 Non-Waiver. Participation in the Contract Dispute Resolution Process shall not waive, release or compromise any defense of City, including, without limitation, any defense based on the assertion that the rights or Claims of Contractor that are the basis of a Contract Dispute were previously waived by Contractor due to Contractor’s failure to comply with the Contract Documents, including, without limitation, Contractor’s failure to comply with any time periods for providing notice of requests for adjustments of the Contract Sum or Contract Time or for submission of Claims or supporting documentation of Claims. Rev. January3, 2012 IFB Construction Contract 11 SECTION 15 DEFAULT. 15.1 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. 15.2 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 Citymay 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. SECTION 16 CITY'S RIGHTS AND REMEDIES. 16.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 15, then City may pursue any remedies available under law or equity, including, without limitation, the following: 16.1.1 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. 16.1.2 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 Cityfrom future payments to Contractor, reserving to itself all rights to Losses related thereto. 16.1.3 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. 16.1.4 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 bySection 15. 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. 16.1.5 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. Rev. January3, 2012 IFB Construction Contract 12 16.1.6 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 Cityprovided by law or equity or by the Contract Documents upon such termination; and Citymay proceed against Contractor to recover all liquidated damages and Losses suffered by City. 16.2 Delays by Sureties. Without limiting to any of City’s other rights or remedies, City has the right to suspend the performance of the Work by Contractor’s sureties in the event of any of the following: (i)The sureties’ failure to begin Work within a reasonable time in such manner as to insure full compliance with the Construction Contract within the Contract Time; (ii)The sureties’ abandonment of the Work; (iii)If at any time City is of the opinion the sureties’ Work is unnecessarily or unreasonably delaying the Work; (iv)The sureties’ violation of any terms of the Construction Contract; (v)The sureties’ failure to perform according to the Contract Documents; or (vi)The sureties’ failure to follow City’s instructions for completion of the Work within the Contract Time. 16.3 Damages to City. 16.3.1 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. 16.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to withhold monies otherwise payable to Contractor until Final Completion of the Project. If City incurs Losses due to Contractor’s default, then the amount of Losses shall be deducted from the amounts withheld. Should the amount withheld exceed the amount deducted, the balance will be paid to Contractor or its designee upon Final Completion of the Project. If the Losses incurred by City exceed the amount withheld, Contractor shall be liable to City for the difference and shall promptly remit same to City. 16.4 Suspension by City 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. Rev. January3, 2012 IFB Construction Contract 13 16.5 Termination Without Cause. City may,at its sole discretion and without cause, terminate this Construction Contract in part or in whole by giving thirty (30) Days written notice to Contractor. The compensation allowed under this Paragraph 16.5 shall be the Contractor’s sole and exclusive compensation for such termination and Contractor waives anyclaim 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. 16.5.1 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 16.5, Cityshall 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 and Sub-subcontractors for: (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. 16.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience byContractor 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. 16.6 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 copyof the subcontract, purchase order or contract and anywritten 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)Promptlyassign 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. Rev. January3, 2012 IFB Construction Contract 14 SECTION 17 CONTRACTOR'S RIGHTS AND REMEDIES. 17.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 17.1.1 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 emergencymaking 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. 17.1.2 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 mayterminate the Construction Contract (30) days following a second notice to City of Contractor’s intention to terminate the Construction Contract. 17.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 16.5.1 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 18 ACCOUNTING RECORDS. 18.1 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. 18.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 18 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 18.1 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 19 INDEPENDENT PARTIES. Each party is acting in its independent capacity and not as agents, employees, partners, or joint venturers 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. Rev. January3, 2012 IFB Construction Contract 15 SECTION 20 NUISANCE. 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 21 PERMITS AND LICENSES. 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 22 WAIVER. A waiver by either party of anybreach 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. SECTION 23 GOVERNING LAW. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California. SECTION 24 COMPLETE AGREEMENT. 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 25 SURVIVAL OF CONTRACT. 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 26 PREVAILING WAGES. This Project is not subject to prevailing wages. The Contractor is not required to pay prevailing wages in the performance and implementation of the Project, because the City, pursuant to its authority as a chartered city, has adopted Resolution No. 5981 exempting the City from prevailing wages. The City invokes the exemption from the state prevailing wage requirement for this Project and declares that the Project is funded one hundred percent (100%) by the City of Palo Alto. Or The 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 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.Copies of these rates maybe obtained at cost at the Purchasing 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 Sections 1775, 1776, Rev. January3, 2012IFB Construction Contract 16 1777.5, 1810, and 1813 of the Labor Code. SECTION 27 NON APPROPRIATION. 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 28 AUTHORITY. 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 29 ATTORNEY FEES. Each Party shall bear its own costs, including attorney’s fees through the completion of mediation. If the claim or dispute is not resolved through mediation and in any dispute described in Paragraph 14.2, the prevailing party in any action brought to enforce the provision of this Agreement may recover its reasonable costs and attorney’s fees expended in connection with that action. 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 attorney’s’ fees paid to third parties. SECTION 30 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. IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. 1 Rev. January 3, 2012 IFB Construction Contract CITY OF PALO ALTO ____________________________ Purchasing Manager City Manager APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney APPROVED: ___________________________ Public Works Director CONTRACTOR ROSS MCDONALD COMPANY, INC. By:___________________________ Name:_________________________ Title:________________________ Attachment B BID SUMMARY IFB #144111 Mitchell Park Library & Community Center Custom Case Work Engineer's Estimate $662,000 % above/below Bidder Base Bid Deduct Alt 1 Deduct Alt 2 Deduct Alt 3 Bid Amount Eng. Est. Not awarded Not awarded Not awarded Ross McDonald Company $648,412 $2,834 $36,317 $5,764 $648,412 2% below Dependable Furniture Manufacturing $667,430 $13,625 $11,232 $4,375 $667,430 1% above SBD Commercial Interiors $814,236 $11,990 $21,165 $2,300 $814,236 23% above Base Bid (53 items) Deduct Alternate #1 (Bookshelves end panel material) Deduct Alternate #2 (Bookshelves material) Deduct Alternate #3 (Express checkout material) S:PWD/Eng/KB Projects/CIPs/Libraries & Comm Cntr/Mitchell Park Specific/Contract others/FFE/Custom casework/MP case work bids City of Palo Alto (ID # 2398) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/6/2012 February 06, 2012 Page 1 of 5 (ID # 2398) Summary Title: Approval of a Lease Agreement for Cafe Title: Approval of Lease Agreement Between the City of Palo Alto and Ada’s Cafe’, Inc. for a Portion of the new Mitchell Park Library and Community Center, 3700 Middlefield Road for a Five Year Term with One Five Year Option to Extend From:City Manager Lead Department: City Manager Recommendation Staff recommends that City Council approve and authorize the City Manager or designee to execute the attached five year Lease Agreement (Attachment B), with one five year renewal period, between the City of Palo Alto and Ada’s Café for the café space at the new Mitchell Park Library and Community Center. Background Currently under construction, the Mitchell Park Library and Community Center was designed to include a 533 square foot café space. It has been the intent of the City to seek an outside operator for the café. In June, 2011, the City issued an Request for Proposal (RFP) to lease the 533 square foot café portion to a qualified operator. The City received 3 proposals, and went through a selection process. Unfortunately, near the end of the process, it was determined that there was a technical error in the RFP which necessitated that it be cancelled and re-issued. Given the disparity between the proposals, staff took the opportunity to approach the Council on September 12, 2011 for direction regarding vision for the Café operator and the concepts for the evaluation criteria that Staff should use in determining the café vendor finalist. Staff was given direction regarding the evaluation criteria and was encouraged to meet with the Mitchell Park Stakeholders Committee to help staff put the Council’s vision into the RFP document. The minutes from 9/12/11 are attached (Attachment C) Staff drafted a new RFP using criteria incorporating Council direction and attended the Mitchell Park Stakeholders Committee meeting on October 4, 2011. The minutes from the Stakeholders Committee are attached (Attachment D) After incorporating additional thoughts from the Stakeholders Committee, staff released a new February 06, 2012 Page 2 of 5 (ID # 2398) RFP for the Café on November 2, 2011. After careful staff review and a selection panel evaluation, Ada’s Café was unanimously selected as the finalist. The attached Lease Agreement was negotiated and Staff recommends that the Council approve it. Discussion Summary of RFP Process At the September 12, 2011 Council meeting, staff was directed to include the following considerations in the re-issuance of the RFP for the Café at Mitchell Park Library and Community Center: In reissuing the RFP, Staff will consider multiple factors in its selection of a tenant/ operator for the Mitchell Park Café: 1) Financial feasibility 2) Social services programs 3) Sustainability efforts in produce and food purchasing 4) That the RFP is to include that the proponent will indicate how they would be compatible with and fulfill the programming of the project to include the park, community center, and library. Further, staff was encouraged to discuss the execution of these factors through the Mitchell Park Stakeholders Committee. On October 4, 2011, Staff met with the Stakeholder’s Committee with a draft of the RFP and evaluation criteria and was given further input (Attachment D). Input was incorporated, and staff created the following criteria for selection, which was also included in the formal RFP released on November 2, 2011 [Total=100 points]: 1.The extent to which the proposal provides a financially sustainable business model [25 points] 2.The extent to which the proposal provides a social service public benefit to Library, Community Center and Park users and/or other community sectors (i.e. employment/ job training opportunities for youth and teens, disabled people, the underemployed, etc) [20 points] 3.The extent to which the proposal meets City sustainability goals by locally sourcing food products, separating waste, using sustainable materials, etc. [20 points] 4.Creativity and variety of menu, including healthy menu options and competitive pricing [15 points] 5.Completeness of customer service/ satisfaction plan to meet or exceed City standards, including the proposer’s references regarding operating a café and/or similar food and beverage service with a proven track record of high customer satisfaction [10points] February 06, 2012 Page 3 of 5 (ID # 2398) 6.The degree to which the proposed atmosphere/operation integrates with and reflects the Library/ Community Center purpose. [10 points] The intent of the RFP is to lease approximately 533 square feet of the Mitchell Park Library and Community Center which has been planned as a café space. As part of the design and build-out, plumbing and other fixtures are part of the City’s overall costs. However, a significant portion of improvements are to be borne by the café tenant/ operator. The minimum bid for the monthly rental was $650, with a security deposit of $5000. The rent was a minimum bid item. Other cities have rented similar café facilities and they were leased at $1.00 per square foot per month. Rent is to start on the 1st month of retail operation that the Mitchell Park Library and Community Center is to open, scheduled for fall of 2012. The intent of the City is to work together with the café operator to ensure that the café opens concurrently. 4 proposals were received. 1) Ada’s Café, 2) Coupa Café, 3) KJ’s Café, and 4) Sanghee Lee. The proposals were reviewed by an evaluation committee comprised of representatives from Community Services Department, Library Services Department, Public Works Department and the City Manager’s Office. After 25 years of experience in catering, event planning and fundraising, Ada’s Café was created by Kathleen Foley-Hughes in 2008 as a 501(c)3 corporation. They strive to manage their company, and the new opportunity at the Mitchell Park Café through the “Three C’s”: Commercial Success, Community Values, and Compassionate Employment. Ada’s concept is to operate a successful café by cooking and selling quality food and snacks while providing jobs and job training for disabled workers and those who assist the disabled in its business. Their unique concept of matching compassionate employees with disabled workers while focusing on quality food and customer service has garnered them significant support in the community, and even a notice by the White House Office of Public Engagement. Through their proposal it was very clear to City Staff that Ada’s Café is making a significant investment in time, talent, and funds to make the café a commercial, environmental, and social services success. The concept includes a separate arrangement for shared use of the catering kitchen at Mitchell Park at early hours and subject to agreement by City uses. They have bid $650/ month for the café space, and $250/ month for the shared use of the catering kitchen. They have also agreed to provide a security deposit of $5000, as well as pledging up to $150,000 to pay their share of the improvements proposed as part of their design/ build out of the café space, including adding equipment, machines, display cases, design features, etc. Ada’s anticipates being open to the public an average of 82 hours a week, opening most days at 7am, and staying open until 11pm on Fridays and Saturdays, although the schedule may be adjusted due to demand. They intend to work closely through regular meetings with Community Service and Library Staff to ensure that the café offers programs, menu items, and activities that relate to or enhance the Library and Community Services programming. Also, February 06, 2012 Page 4 of 5 (ID # 2398) they will work together with staff to ensure a clean, safe, and welcoming environment, especially for youth and teens. The selection panel, using the criteria developed through Council direction, selected Ada’s Café as the overall winner in each category. The panel is impressed by Ada’s concept of a balance between a viable non-profit business model and clear public benefit, which will please the general public. Their commitment to sustainable practices in waste disposal and food sourcing is also an important factor for staff, as is their willingness to work with City Staff to ensure that they are creatively enhancing the other uses at the Center, and providing a welcoming place for all people, especially youth and teens. Their adherence to city requirements, attractiveness of their menu options and pricing, as well as their significant related experience and realistic pro forma also contributed to the high rank. Lease Agreement The attached Lease Agreement (Attachment B) provides for Ada’s Café to operate its café service for the general public in the 533 square-foot portion of the Mitchell Park Library and Community Center. Attachment B includes a summary of the terms of the attached Lease. Its terms are consistent with the requirements of the RFP with the exception of three changes requested by the proposer: 1) the addition of the option to extend the initial five-year term for an additional term of five years; 2) use of the Catering Kitchen from 4:00 a.m. to 8:00 a.m.; and 3) use of six hundred (600) square feet of outdoor space adjacent to the Premises for food and beverage service and customer dining. Staff supports these modifications, including the use of the exterior six hundred (600) square footage, which provides Ada’s a larger seating area. The specifics of the seating and development plan for the café are subject to the City’s approval. Timeline Work is expected to begin immediately in coordination between City staff and Ada’s Café design staff. The shared intention for the City and Ada’s is that the café opens simultaneously with the opening of the Mitchell Park Library and Community Center, in the Fall of 2012. Resource Impact The lease requires Ada’s Café to maintain and operate the property at no cost to the City. In addition, Ada’s Café will be responsible for constructing the bulk of the tenant improvements and providing furniture that will be compatible with the new Center. The income from this agreement is expected to produce $10,800 for the City per year. Policy Implications The proposed lease is consistent with Policy and Procedures 1-11, Leased Use of City Land/ Facilities. Environmental Review Environmental review was previously conducted in connection with the Mitchell Park Library and Community Center project. February 06, 2012 Page 5 of 5 (ID # 2398) Attachments: ·Attachment A: Summary of Lease (PDF) ·Attachment B: Lease Agreement (PDF) ·Attachment C: Minutes of 9-12-11 Council Meeting (PDF) ·Attachment D: Stakeholders Special Meeting Minutes 10-4-11 (DOC) Prepared By:Thomas Fehrenbach, Econ Dev Mgr Department Head:James Keene, City Manager City Manager Approval: ____________________________________ James Keene, City Manager SUMMARY OF LEASE between the City of Palo Alto and Ada's Cafe for the cafe located at the Mitchell Park Library and Community Center located at 3800 Middlefield Road, Palo Alto LESSOR: City of Palo Alto LESSEE: Ada's Cafe PREMISES: 533 square feet of space within the Mitchell Park Library and Community Center located at 3800 Middlefield Road, Palo Alto PURPOSE: The purpose of the Lease is to allow Lessee to conduct a food and beverage service in order to provide for the needs of the public using the Mitchell Park Library and Community Center. TERM: The term of the Lease is five years with an option to renew for an additional five years upon mutual agreement of City and Lessee. Lease may be terminated by either party with 120 days written notice. USES: REQUIRED USES: Lessee shall provide a food and beverage service subject to the Operational Requirements outlined in Lease. A. OPTIONAL USES: Subject to the approval ofthe City Manager or designee, Lessee may use Premises for additional services which are ancillary to and compatible with required uses. B. PROHIBITED: Any use not authorized by the Lease. RENT: Monthly rent for the Cafe rental is $650 per month commencing the 1 st month of retail operations upon the opening of the cafe. Rent to be adjusted annually based on the increases in the Consumer Price Index. In addition, Ada's Cafe will pay $250.00 per month for the use of the Catering Kitchen. The combined monthly rent shall be for a total of $950.00 per month. SECURITY DEPOSIT: A $5,000 security deposit is required. MAINTENANCE OBLIGATIONS OF LESSEE: Lessee to maintain Premises including plumbing and electrical systems, all interior painting, and maintenance of doors and locks, carpeting and floor coverings and replacement of broken windows. MAINTENANCE OBLIGATIONS OF CITY: City to maintain common areas serving the Premises and main support systems not exclusively serving the Premises, including roof repair, electrical system repair, exterior painting and structural repairs UTILITIES: City to provide gas, water, wastewater, and electric utility and refuse services. Lessee to be responsible for ensuring that all refuse, compost, garbage, recycling and any other refuse pickup and disposal is placed regularly within the designated trash and recycling area. ASSIGNMENT/SUBLETTING: Assigument or encumbrance ofthe Lease is subject to approval by the City. TAXES, ASSESSMENTS, INSURANCE: Lessee to be responsible for all taxes and assessments for the property and shall maintain insurance meeting the City's standard requirements for insurance protection. LEASE PROVISIONS LEASE AGREEMENT BETWEEN CITY OF PALO ALTO AND Ada's Cafe TABLE OF CONTENTS 1. PREMISES ........................................................................................................................ 2 2. TERM ................................................................................................................................. 2 3. RENT ................................................................................................................................. 2 4. SECURITY DEPOSIT ........................................................................................ : ............ 3 5. USE OF PROPERTY ....................................................................................................... 4 6. HAZARDOUS MATERIALS .......................................................................................... 6 7. UTILITIES AND OPERATING EXPENSES ................................................................ 8 8. TAXES ............................................................................................................................... 9 9. MAINTENANCE ............................................................................................................ 10 10. ALTERATIONS BY LESSEE ....................................................................................... 11 11. INTENTIONALLY OMITTED .................................................................................... 11 12. HOLD HARMLESSIINDEMNIFICATION ....................................... ; ........................ 12 13. DAMAGE, DESTRUCTION AND TERMINATION ................................................. 12 14. SIGNS ............................................................................................................................... 14 15. ASSIGNMENT AND SUBLETTING .......................................................... 14 16. DEFAULTS; REMEDIES .............................................................................................. 14 17. INTEREST ON PAST-DUE OBLIGATIONS ............................................................. 16 18. HOLDING OVER ........................................................................................................... 16 19. CITY'S ACCESS ................................................... ; ........................................................ 16 20. INSURANCE ................................................................................................................... 17 21. INTENTIONALLY OMITTED .................................................................................... 18 22. EMINENT DOMAIN ..................................................................................................... 18 23. POST-ACQUISITION TENANCy ............................................................................... 19 24. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY ............... 19 25. NON-DISCRIMINATION ............................................................................................. 19 26. INDEPENDENT CONTRACTOR ................................................................................ 1 9 27. CONFLICT OF INTEREST .......................................................................................... 20 28. MEMORANDUM OF LEASE ...................................................................................... 20 29. ESTOPPEL CERTIFICATE ......................................................................................... 20 30. LIENS .............................................................................................................................. 20 31. V ACATING ..................................................................................................................... 20 32. ABANDONMENT .......................................................................................................... 20 33. NOTICES ........................................................................................................................ 21 34. TIME ................................................................................................................................ 21 35. AMENDMENTS ............................................................................................................. 21 36. SIGNING AUTHORITy ...................................................................... : ......................... 21 37. CAPTIONS ...................................................................................................................... 22 38. SURRENDER OF LEASE NOT MERGER ................................................................ 22 39. INTEGRATED DOCUMENT ....................................................................................... 22 40. W AIVER .......................................................................................................................... 22 41. INTERPRETATIONS .................................................................................................... 22 42. SEVERABILITY CLAUSE ........................................................................................... 22 43. GOVERNING LAW ....................................................................................................... 23 44. VENUE .............................................................................................................................. 23 45. COMPLIANCE WITH LAWS ...................................................................................... 23 46. BROKERS ....................................................................................................................... 23 47. LIMITATION OF LEASEHOLD ................................................................................. 23 48. TERMINATION OF PRIOR AGREEMENTS ........................................................... 23 49. ATTACHMENTS TO LEASE ...................................................................................... 23 EXHIBITS A DESCRIPTION OF SUBJECT PROPERTy .................................................................. 26 B INVENTORY OF FIXTURES ........................................................................................... 27 ii C STANDARD INSURANCE REQUIREMENTS .............................................................. 28 D OPERATIONAL REOUIREMENTS ............................................................................... 31 iii LEASE AGREEMENT BETWEEN CITY OF PALO ALTO AND Ada's Cafe This lease agreement (herein "Lease") is made and entered into this __ dayof ,2012, by and between the City of Palo Alto, a California chartered municipal corporation (herein "City") and Ada's Cafe, a California non-profit corporation (herein "Lessee"). City and Lessee may be referred to individually as a "Party" or collectively as the "Parties" or the "Parties to this Lease." The City Manager serves as Contract Administrator for this Lease on behalf of the City Council. RECITALS A. These recitals are a substantive portion of this Lease. B. City and Lessee desire to lease the Premises to provide for the operation and maintenance of a cafe serving primarily the public and customers using the Mitchell Park Library and Community Center (the Center) and surrounding Park area. The Mitchell Park Community Center will be home to the City of Palo Alto Teen Center. The Cafe is expected to provide a welcoming and supportive environment for the teen community particularly during non-school hours. C. Customer service is very important to the City of Palo Alto. The City of Palo Alto expects a customer service philosophy and specific strategies for achieving results for high level of customer satisfaction in areas such as friendliness of staff, prompt service and a welcoming atmosphere at the Cafe. D. The Community Center and Library is intended to be an accessible, welcoming, multi- purpose gathering space for Palo Alto's diverse community. It is expected that the Lessee shall go beyond providing minimum food and beverage service, but shall also provide the public some form of social benefit. E. Environmental Sustainability is an important value to the City of Palo Alto. It is expected that the Lessee will operate the cafe in complete accordance with established City environmental policies, practices, directives, and initiatives (currently in effect, or as may be adopted in the future). Now, therefore, in consideration of these recitals and the following covenants, terms, and conditions, Lessee and City mutually agree as follows: 1 Rev. Jan. 29, 2012 LEASE PROVISIONS I. PREMISES. City hereby leases to Lessee, certain real property located in the City of Palo Alto, County of Santa Clara, State of California, commonly known as the Palo Alto Mitchell Park Library and Community Center Cafe (herein the "Property") and more particularly described in Exhibit A attached hereto and incorporated herein by reference. The Property consists of approximately five hundred and thirty- three (533) square feet of the Palo Alto Mitchell Park Library and Community Center facility except for the Inventory of Fixtures set forth in Exhibit B attached hereto and incorporated herein by reference. Unless specifically provided, Lessee accepts the Property "as-is" on the date of execution of this Lease. 2. TERM. 2.1 Original Term. The initial term ofthis Lease shall be for Five (5) years, commencing on 30 days from the City's completion of Premises or approval of Lessee to begin improvements for the Premises, whichever comes first ("Delivery Date"). Delivery Date is the date the term commences. If City Mitchell Park project prevents access to the Premises, the Delivery Date shall be delayed until access to the Premises is provided. Lessee shall, at the expiration of the term of this lease, or upon its earlier termination, surrender the Property in as good condition as it is on the Delivery Date. The Parties expect reasonable wear and tear. 2.2 Renewal Term. This Lease may be renewed by mutual agreement for an additional Five (5) years. 2.3 Termination. City or Lessee may terminate this Lease upon one-hundred twenty (120) days written notice. If City terminates the lease without cause, the City will reimburse the Lessee for the unamortized cost of any capital build-out investment incurred by Lessee, but in no event not to exceed $150,000.00. 3. RENT. 3.1 Monthly Rent. The Monthly Rent to be paid by Lessee shall be in the amount of six hundred fifty dollars ($650.00) per month without deduction or offset. Rent shall be payable on the first day of each and every month commencing on the first (1 st) dilY of retail operations, at a place (or places) as may be designated in writing from time to time by City. For the purposes of this provision, the first month of retail operations means the first day that Lessee begins providing service to the public. It is contemplated the retail opening will take place concurrently with the public opening of the Center. 3.2 Annual Increase. During the Term of this Lease, including the Option Period if the option is exercised, the Base Rent shall be increased effective on each anniversary of the 2 Rev. Jan. 29, 2012 Delivery Date. The sum shall be adjusted annually resulting in a compound rate of increase. Lease payments are to be adjusted based on the State of California Department ofIndustrial Relations, Division of Labor Statistics and Research's Consumer Price Index, All Urban Consumers, All Items, San Francisco-Oakland-San Jose, California. ("CPI Index") The CPI Index for the quarter ending just prior to this lease date is established as the base index . . Percentage and adjustments to the original lease payments shall be as indicated by percentage changes in said index. 3.3 Late Charge. Lessee acknowledges late payment of rent will cause City to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impracticable to fix. Such costs include, without limitation, processing, accounting and late charges that may be imposed on City. Therefore, if City does not receive any installment of rent due from Lessee within ten (10) days after the date such rent is due, Lessee shall pay to City an additional suIn of ten percent (10%) of the overdue rent as a late charge. The parties agree this late charge represents a fair and reasonable estimate of the costs City will incur by reason oflate payment by Lessee. Acceptance of any late charge shall not constitute a waiver of Lessee's default with respect to the overdue amount, nor prevent City from exercising any of the other rights and remedies available to City, including termination of this lease. 3.4 Rent Payment Procedures. As described in Section 3.1, Lessee's obligation to pay rent shall commence I on the first (I st) day of retail operations. Ifthe term commences or terminates on a date other than the first of any month, monthly rent for the first and last month of this Lease shall be prorated based on a 30-day month. Rent payments, including any additional facility use fees, shall be delivered to City's Revenue Collections Division, 250 Hamilton Avenue, PO Box 10250, Palo Alto, CA 94303. The designated place of payment may be changed at any time by City upon ten (10) days' written notice to Lessee. Lessee specifically agrees that acceptance of any late or incorrect rentals submitted by Lessee shall not constitute an acquiescence or waiver by City and shall not prevent City from enforcing Section 3.3 (Late Charge) or any other remedy provided in this Lease. Acceptance of rent shall not constitute approval of any unauthorized sublease or use, nor constitute a waiver of any non-monetary breach. Payments shall be effective upon receipt. City may apply any payment received from Lessee at any time against any obligation due and owing by Lessee under this Lease, regardless of any statement appearing on or referred to in any remittance from Lessee or any prior application of such payments. 3.5 Partial Payment. The receipt by City ofa partial payment of any amount due to City endorsed as payment in full will be deemed to be a partial payment only. City may accept and deposit said check without prejudice to its right to recover the balance. Any endorsements or statements on the check or any letter accompanying the check shall not be deemed an accord andlor satisfaction. Lessee's obligation (without prior notice or demands) to pay rent and all other amounts due hereunder shall be absolute and unconditional, and not subject to any abatement, set off, defense, recoupment or reduction. 4. SECURITY DEPOSIT 3 Rev. Jan. 29, 2012 4.1 Security Deposit. Upon execution of this Lease, Lessee shall deliver to City an amount of five thousand dollars ($5,000.00) as a security deposit. City may use these funds as ar~ reasonably necessary to remedy any Lessee default(s) in the payment of rent, to repair damages caused by Lessee, or expenses incurred to clean the Property upon termination of tenancy. If any portion of the security deposit is used towards rent or damages at City's sole discretion, Lessee agrees to reinstate the total security deposit upon receipt often (10) days written notice. 4.2 Return of Security Deposit. The balance of security deposit, if any, shall be mailed to Lessee's last known address within thirty (30) days of surrender of Property. 5. USE OF PROPERTY 5.1 Required Uses. Throughout the term ofthis Lease, Lessee shall provide the following uses, services and activities ("Required Uses"): Lessee is hereby authorized to and shall conduct in the Premises a food and beverage service, in order to provide for the needs ofthe public and those persons utilizing the Mitchell Park Library and Community Center and surrounding park users subject to the Operational Requirements outlined in Exhibit D which is attached and incorporated into this Lease and which may be modified from time to time by City. 5.2 Optional Uses. Subject to the prior written approval of the City Manager or designee, which approval shall be within the sole discretion of the City Manager or designee, Lessee may also use the Premises to provide additional services and uses which are ancillary to and compatible with the required services and uses set forth above. Examples of such ancillary services and uses may include, but are not limited to, the following: A. Vending machines, including games and convenience items. Lessee may, at its cost, place an identification sign on or beneath the existing community center sign on the building itself and may place advertisements in newspapers, magazines or on radio. If, in the opinion of the City Manager, based upon his or her sole discretion, the number of non-Center users is adversely affecting access to the facilities and services by the public, Lessee agrees that upon 30 days' written notice from the City Manager, advertising shall cease or be modified to eliminate such adverse effect. The signs shall be approved by Lessee in accordance with this Lease and applicable City of Palo Alto processes including the Architectural Review Board and Site and Design review prior to installation Signage design should conform with Architectural Review Board -adopted design guidelines specific to the Mitchell Park Community Center and Library. 5.3 Prohibited Uses. Lessee shall not use Premises for any purpose not expressly permitted hereunder. Lessee shall not create, cause, maintain or permit any nuisance or waste in, on, or about the Premises, or permit or allow the Premises to be used for any unlawful or inunoral 4 Rev. Jan. 29, 2012 purpose. Lessee shall not do or permit to be done anything in any manner which unreasonably disturbs the users of the City Property or the occupants of neighboring property. Specifically, and without limiting the above, Lessee agrees not to cause any unreasonable odor, noise, vibration, power emission, or other item to emanate from the Premises or to interfere with Center programs, classes, rentals and activities .. No materials or articles of any nature shall be stored outsi.de upon any portion of the Premises without approval by the City Manager or designee. Lessee will not use Property in a manner that increases the risk of fire, cost of fire insurance or improvements thereon. No unreasonable sign or placard shall be painted, inscribed or placed in or on said Property; and no tree or shrub thereon shall be destroyed orremoved or other waste committed of said Property. No bicycles, motorcycles, automobiles or other mechanical means of transportation) shall be placed or stored anywhere on the Property except for the parking lot. No repair, overhaul or modification of any motor vehicle shall take place on the Property or the street in front of said Property. Lessee, at hislher expense, shall keep the Property in as good condition as it was at the beginning ofthe terms hereof, except damage occasioned by ordinary wear and tear, and except damage to the roof, sidewalks and underground plumbing, which is not the fault of Lessee. 5.4 Condition. Use of Premises. City makes no warranty or representation of any kind concerning the condition of the Premises, or the fitness of the Premises for the use intended by Lessee, and hereby disclaims any personal knowledge with respect thereto, it being expressly understood by the parties that Lessee has personally inspected the Premises, knows its condition, finds itfit for Lessee's intended use, aCGepts it as is, and has ascertained that it can be used exclusively for the limited purposes specified in Section 5.1 or (ii) notifies the City of any design or construction deficiencies that make the Premises unsuitable to be used for the limited purposes and works with the City to resolve such deficiencies. If such deficiencies cannot be amicably resolved, the Lessee shall have the right to reject the space and cancel this Lease. Such notification of deficiencies shall be provided to City with ten (10) days of Delivery Date and such cancellation shall be delivered to City with sixty (60 days'of Delivery Date. Further, in the build out of the Premises and prior to Lessee's occupancy, the City shall reasonably consult with the Lessee concerning interior finishes for the Premises, including flooring, counters, shelving and other fixtures. 5.5 Operating Requirements Lessee shall continuously use the Premises and at approved and scheduled times the Additional Spaces described in Attachment D for the uses specified in this Lease during all usual business hours and on all such days as comparable businesses in the area or as are customary for the Required Uses and in accordance with the additional requirements/guidelines outlined in Attachment D. Minimum hours for food service are 10 a.m. to 5 p.m. Lessee shall use only such space within the Premises for non-sales or service uses as is reasonably required for Lessee's required or approved uses of the Premises. Lessee shall at all times maintain a written schedule setting forth the operating hours and 5 Rev. Jan. 29, 2012 operating procedures for each required and permitted use provided on or from the Premises. A schedule of prices charged for all goods and/or services related to the required and permitted uses of this Lease shall also be maintained and individual merchandise must be clearly priced. Lessee agrees that when alternate forms of packaging are available, only items packaged in the manner most compatible with the goals of reducing litter and preserving the environment shall be sold. Upon written request, Lessee shall furnish the City Manager a copy of the schedules and procedures. Should the City Manager decide that any part of these schedules or procedures is not justified with regard to fairly satisfYing the needs of the public, Lessee, upon written notice from the City Manager, shall modifY these schedules or procedures to the satisfaction of the City Manager. Prior to issuing such a notice, the City Manager shall personally review and confer with Lessee or its representative. Primary consideration shall be given to the public's benefit in implementing this Section. All prices charged for goods and/or services supplied to the public on or from the Premises shall be fair and reasonable, based upon the following considerations: A. The degree of public service involved in the sale of the goods and/or services; B. The market prices charged by other competing and/or comparable businesses; and C. The reasonableness of the profit margin as related industry-wide. Lessee's failure to comply with the provisions of this Section shall constitute a material breach of this Lease. Lessee agrees that it will operate and manage the services and facilities offered in a competent and efficient· manner at least comparable to other well-managed operations of a similar type. Lessee shall at all times retain active, qualified, competent, and experienced personnel to supervise Lessee's operation and to represent and act for Lessee. Lessee shall require its attendants and employees to be properly dressed, clean, courteous, efficient, and neat in appearance at all times. Lessee shall not allow any person(s) in or about the Premises who shall use offensive language and/or act in a boisterous or otherwise improper manner. Lessee shall maintain a close check over attendants and employees to insure the maintenance of a high standard of service to the public. 6. HAZARDOUS MATERIALS. 6.4 Hazardous Materials Defined. The term Hazardous Material(s) shall mean any toxic or hazardous substance, material or waste or any pollutant or contaminant, or infectious or 6 Rev. Jan. 29, 2012 radioactive material, including but not limited to, those substances, materials, or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of hazardous substances, hazardous waste, hazardous chemical substance or mixture, imminently hazardous chemical substance or mixture," "toxic substances," hazardous air pollutant, toxic pollutant or solid waste in the (a) CERCLA or Superfund as amended by SARA,42 U.S.C. Sec. 9601 et seq., (b) RCRA, 42 U.S.C. Sec. 6901 et seq., (c) CWA., 33 U.S.C. Sec. 1251 et seq., (d) CAA, 42 U.S.C. 78401 et seq., (e) TSCA, 15 U.S.C. Sec. 2601 et seq., (f) The Refuse Act of 1899, 33 U.S.C. Sec. 407, (g) OSHA, 29 U.S.C. 651 et seq. (h) Hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801 et seq., (i) USDOT Table (40 CFRPart 302 and amendments) or the EPA Table (40 CFR Part 302 and amendments), G) California Superfund, Cal. Health & Safety Code Sec. 25300 et seq., (k) Cal. Hazardous Waste Control Act, Cal. Health & Safety Code Section 25100 et seq., (I) Porter-Cologne Act, Cal. Water Code Sec. 13000 et seq., (m) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety Code Sec. 25220 et seq., (n) Proposition 65, Cal. Health and Safety Code Sec. 25249.5 et seq., (0) Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety Code Sec. 25280 et seq., (P) California Hazardous Substance Act, Cal. Health & Safety Code Sec. 28740 et seq., (q) Air Resources Law, Cal. Health & Safety Code Sec. 39000 et seq., (1') Hazardous Materials Release Response Plans and Inventory, Cal. Health & Safety CodeSecs. 25500-25541, (s) TCPA, Cal. Health and Safety Code Secs. 25208 et seq., and (t) regulations promUlgated pursuant to said laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules. Hazardous Materials shall also mean any and all other substances, materials, and wastes which are, or in the future become, regulated under applicable local, state or federal law for the protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including without limitation: (i) trichloroethylene, tetracholoethylene, perchloroethylene and other chlorinated solvents; (ii) any petroleum products or fractions thereof; (iii) asbestos, (iv) polychlorinated biphenyls; (v) flammable explosives; (vi) urea formaldehyde; and, (vii) radioactive materials and waste. 6.2. Compliance with Laws. Lessee shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept or used in or about the Premises or Project by Lessee, its agents, employees, contractors or invitees. 6.3 Termination of Lease. City shall have the right to terminate the Lease in City's sole and absolute discretion in the event that: (i) any anticipated use of the Premises by Lessee involves the generation or storage, use, treatment, disposal, or release of Hazardous Material in a manner or for a purpose prohibited or regulated by any governmental agency, authority, or Hazardous Materials Laws; (ii) Lessee has been required by any lender or governmental authority to take remedial action in connection with Hazardous Material contaminating the Premises, if the contamination resulted from Lessee's action or use of the Premises; or (iii) Lessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal, 01' storage of a Hazardous Material on the 7 Rev. Jan. 29, 2012 Premises. 6.4 Assignment and Subletting. It shall not be unreasonable for City to withhold its consent to an assignment or subletting to such proposed assignee or sub lessee if: (i) any anticipated use of the Premises by any proposed assignee or sub lessee involves the generation or storage, use, treatment, disposal, or release of Hazardous Material in a manner or for any purpose; (ii) the proposed assignee or sub lessee has been required by any prior landlord, lender, or governmental authority to take remedial action in connection with Hazardous Material contaminating a property, ifthe contamination resulted from such partyOs action or use of the property in question; or, (iii) the proposed assignee or sub lessee is subject to an enforcement order issued by any governmental authority in connection with the release, use, disposal or storage of a Hazardous Material. 6.5 Hazardous Materials Indemnity. Lessee shall indemnify, defend (by counsel reasonably acceptable to City), protect, and hold Landlord harmless from and against any and all claims, liabilities, penalties, forfeitures, losses, and/or expenses, including without limitation, diminution in value ofthe Premises, damages for the loss or restriction on use of the rentable or usable space or of any amenity of the Premises, damages arising from any adverse impact or marketing of the Premises and sums paid in settlement of claims, response costs, cleanup costs, site assessment costs, attorneys' fees, consultant and expert fees, judgments, administrative rulings or orders, fines, costs of death of or injury to any person, or damage to any property whatsoever (including, without limitation, groundwater, sewer systems, and atmosphere), arising from, caused,or resulting, during the Lease Term, in whole or in part, directly or indirectly, by the presence or discharge in, on, under, or about the Premises by Lessee, Lessee's agents, employees, licensees, or invitees or at Lessee's direction, of Hazardous Material, or by Lessee's failure, to comply with any Hazardous Materials Law, whether knowingly or by strict liability. For purposes of the indemnity provided herein, any acts or omissions of Lessee or its employees, agents, customers, sub lessees, assignees, contractors, or subcontractors of Lessee (whether or not they are negligent, intentional, willful or unlawful) shall be strictly attributable to Lessee. Lessee's indemnification obligations shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary Hazardous Materials management plan, investigation, repairs, cleanup or detoxification or decontamination of the Premises, and the presence and implementation of any closure, remedial action or other required plans, and shall survive the expiration of or early termination ofthe Lease Term. 6.6 City's Right to Perform Tests. At any time prior to the expiration of the Lease Term, City shall have the right to enter upon the Premises in order to conduct tests of water and soil. 7. UtILITIES AND OPERATING EXPENSES. Lessee shall be responsible for ensuring that all refuse, compost, garbage, recycling and any other refuse pickup and disposal is placed regularly within the designated trash and 8 Rev. Jan. 29, 2012 recycling area. Should Lessee generate more refuse, garbage or recycling that requires additional service; Lessee shall be solely responsible for the cost of that additional service. City shall pay for and provide gas, water, wastewater, and electric utility and refuse services. Should Lessee, and or City, determine that a security alarm system, or any additional security monitoring service, is necessary for the security of the Cafe area, Lessee shall bear the cost of having such an alarm installed and maintained at its sole cost and expense. Lessee will be solely responsible for payment of any false alarm fees resulting from the negligent use or disarming of the security alarm system. 8. TAXES 8.1 Real Property Taxes Defined. The term "real property taxes" as used herein shall mean all taxes, assessments, levies and other charges, general and special, foreseen and unforeseen, now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed against or with respect to: (i) value, occupancy, use or possession of the Premises and/or the Improvements; (ii) any improvements, fixtures, equipment and other real or personal property of Lessee that are an integral part of the Premises; or, (iii) use of the Premises, Improvements public utilities or energy within the Premises. The term "real property taxes" shall also mean all charges, levies Or fees imposed by reason of environmental regulation or other governmental control of the premises and/or the Improvements, new or altered excise, transaction, sales, privilege, assessment, or other taxes or charges now or hereafter imposed upon City as a result of this Lease, and all costs and fees (including attorneys' fees) incurred by City in contesting any real property taxes and in negotiating with public authorities as to any real property taxes affecting the Premises. If any real property taxes are based upon property or rents unrelated to the Premises and/or the Improvements, then only that part of such tax that is fairly allocable to the Premises and/or the Improvements, as determined by City, on the basis of the assessor's worksheets or other available information, shall be included within the meaning ofthe term "real property taxes." 8.2 Payment of Real Property Taxes. Lessee shall pay Lessee's share of all real property taxes (as defined in Section 8.1 above) which become due and payable to City on or before the later of ten (10) days prior to the delinquency thereof or three (3) days after the date on which Lessee receives a copy of the tax bill and notice of City's determination hereunder. Lessee's liability to pay real property taxes shall be prorated on the basis of a three hundred sixty-five (365) day year to account for any fraction or portion of a tax year included in the Lease term at the commencement or expiration of the Lease. 8.3 Revenue and Taxation Code. Lessee specifically acknowledges it is familiar with section 107.6 of the California Revenue and Taxation Code. Lessee realizes that a possessory interest subject to property taxes may be created, agrees to pay any such tax, and hereby waives any rights Lessee may have under said California Revenue and Taxation Code section 107.6. 9 Rev. Jan. 29, 2012 8.4 Personal Property Taxes. Lessee shall pay before delinquent, or if requested by City, reimburse City for, any and all taxes, fees, and assessments associated with the Property, the personal property contained in the premises and other taxes, fees, and assessments regarding any activities which take place at the Property. Lessee recognizes and understands in accepting this Lease that its interest therein may be subject to a possible possessory interest tax that City or County may impose on such interest and that such tax payment shall not reduce any rent due City hereunder and any such tax shall be the liability of and be paid by Lessee. 9. MAINTENANCE. City and Lessee Responsibilities. Lessee at Lessee's expense, shall perform all maintenance and repairs of the Premises, including plumbing and electrical systems, all interior painting, and maintenance of doors and locks, carpeting and floor coverings and replacement of broken windows with City approval on job specifications, if such breakage is caused from within the demised Premises. Lessee is responsible to keep and maintain in good working condition all items owned and furnished by the Lessee and those provided by the City as listed in Exhibit B (Inventory of Cafe Equipment). Lessee shall keep the Premises and all improvements thereto in good working order, repair, and condition, and shall keep the Premises in a safe, clean, attractive, wholesome, and sanitary condition to the complete satisfaction of City, and in compliance with all applicable laws, throughout the term of this Lease. In addition, Lessee shall maintain, at Lessee's expense, all equipment, furnishings and trade fixtures upon the Premises required for the maintenance and operation of a first- . class business of the type to be conducted pursuant to this Lease. Equipment to be maintained per manufacturer's guidelines. Lessee is also responsible for lamp and ballast replacement, exhaust hood fire suppression system maintenance and inspections, exhaust hood filter/duct cleaning, and grease trap cleaning. City will maintain all lock hardware. Lessee hereby agrees to specifically comply with City'S Sewer Use Ordinance Chapter 16.09 with special attention to the maintenance ofthe grease control device as required under Palo Alto Municipal Code Section 16.09.075 Food Service Establishments. Should City be required to maintain, repair or replace the grease control devise including exhaust hood filters and ducts due to non compliance by Lessee, all costs associated with the maintenance, repair or replacement shall be at the sole cost and expense of Lessee. City shall be responsible for the maintenance and repair of all Center structural elements located on or within the Premises and main support systems not exclusively serving the Premises, including roof repair, plmnbing infrastructure, electrical system repair, exterior painting and structural repairs. City shall maintain the HV AC units and boiler serving the Premises and replacement of broken windows if such breakage is caused from outside of the Premises. 9.2 Waiver of Civil Code. Lessee expressly waives the benefit of any statute now or hereinafter in effect, including the provisions of sections 1941 and 1942 of the Civil Code of California, which would otherwise afford Lessee the right to make repairs at City'S expense 10 Rev. Jan. 29, 2012 or to terminate this Lease because of City's failure to keep Premises in good order, condition and repair. Lessee further agrees that if and when any repairs, alterations, additions or betterments shall be made by Lessee as required by this paragraph, Lessee shall promptly pay for all labor done or materials furnished and shall keep the Premises free and clear of any lien or encumbrance of any kind whatsoever. If Lessee fails to make any repairs or perform any maintenance work for which Lessee is responsible within a reasonable time (as determined by the City Manager in the City Manager's sole discretion) after demand by the City, City shall have the right, but not the obligation, to make the repairs at Lessee's expense; within ten (10) days of receipt of a bill, Lessee shall reimburse City for the cost of such repairs, including a fifteen percent (15%) administrative overhead fee. The making of such repairs or performance of maintenance by City shall in no event be construed as a waiver of the duty of Lessee to make repairs or perform maintenance as provided in this Section. 9.3 Maintenance of Common Areas. City shall maintain or cause to be maintained, including repair and replacement as necessary, the following common areas serving the Premises and other premises: public restrooms, exterior walkways, exterior window washing two (2) times per year, parking lot and landscaping. 10. ALTERATIONS BY LESSEE 10.1 Lessee shall not make any additional alterations or improvements, beyond those described below in 10.2, to the Premises without obtaining the prior written consent of the City Manager. . Lessee may, at any time and at its sole expense, install and place business fixtures and equipment within the Premises, provided such fixtures and installation have been reviewed and approved by the City Manager. 10.2 Lessee Improvements, including plumbing and electrical. The Lessee is responsible for all Lessee improvements associated with design and installation of display cases. Vendor shall use the overall library and community center design as a "guideline" in designing display cases to insure the design is complimentary to the surrounding design elements already in place. The vendor shall employ a professional designer. All designs and specifications are subject to City or other appropriate governmental approval, such as the Santa Clara County Health Department. The City is responsible for ptoviding the minimum plumbing and electrical requirements shown on Exhibit B. Vendor will provide any plumbing and electrical modifications that are required over and above those already provided by the City. The vendor shall employ a professional designer. All designs and specifications are subject to City or other appropriate governmental approval, especially those necessary to meet Santa Clara County Health Department regulations. As discussed in Sections 5.2 and Section 14, any facility signage shall be designed and displayed in accordance with site and design conditions and with the Architectural Review Board adopted sign design guidelines. 11. INTENTIONALLY OMITTED ---------- 11 Rev. Jan. 29, 2012 12. HOLD HARMLESSIINDEMNIFICATION. 12.1 Indemnification. To the extent permitted by law, Lessee agrees to protect, defend, hold hannless and indemnifY City, its City Council, commissions, officers, agents, volunteers, and employees fi'om and against any claim, injnry, liability, loss, cost, and/or expense or damage, however same may be caused, including all costs and reasonable attorney's fees in providing , a defense to any claim arising there from for which City shall become legally liable arising from Lessee's negligent, reckless, or wrongful acts, errors, or omissions with respect to or in any way connected with this Lease. Lessee shall give City immediate notice of any claim or liability hereby indemnified against. This indemnity shall be in addition to the Hazardous Materials indenmity contained in this Lease and shall survive shall survive the expiration of or early termination ofthe Lease Term. 12.2 Waiver of Claims. Lessee waives any claims against City for injury to Lessee's business or any loss of income there from, for damage to Lessee's property, or for injnry or death of any person in or about the Premises or the City Property, from any cause whatsoever, except to the extent caused by City'S active negligence or willful misconduct. 13. DAMAGE, DESTRUCTION AND TERMINATION 13.1 Nontermination and Nonabatement. Except as provided herein, no destruction or damage to the Premises by fire, windstorm or other casualty, whether insured or uninsured, shall entitle Lessee to terminate this Lease. City and Lessee waive the provisions of any statutes which relate to termination of a lease when leased property is destroyed and agree that such event shall be governed by the terms of this Lease. 13.2 Force Majeure. Prevention, delay or stoppage due to strikes, lockouts, labor disputes, Acts of God, inability to obtain labor, inability to obtain materials or reasonable substitutes, governmental restrictions, governmental regulation, governmental controls, judicial orders, .enemyor hostile governmental actions, civil commotion, fire or other casualty, and other causes beyond the reasonable control of Lessee (financial inability excepted), shall excuse the performance by Lessee for a period equal to the prevention, delay, or stoppage, except the obligations imposed with regard to rent to be paid by Lessee pursuant to this Lease. In the event any work performed by Lessee or Lessee's contractors results in a strike, lockout, andlor labor dispute, the strike, lockout, andlor labor dispute shall not excuse the performance by Lessee ofthe provisions of this Lease. 13.3 Restoration of Premises by City . 13.3.1 Destruction Due to Risk Covered by Insurance. If, during the term, the Premises or the building in which the Premises are located are totally or partially destroyed from a risk covered by the insurance described in Section 20 (Insurance), OR ANY INSURANCE, INCLUDING SELF INSURANCE, MAINTAINED BY THE CITY" rendering the Premises or the building in 12 Rev. Jan. 29, 2012 which the Premises are located totally or partially inaccessible or unusable, City shall restore the Premises or the building in which the Premises are located to substantially the same condition as it was in immediately before destruction. Such destruction shall not terminate this Lease. If the laws existing at that time do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party. If, during the term of this Lease, the loss to the Premises or the building in which the Premises are located exceeds the proceeds from the insurance described in Section 20 (Insurance) OR ANY INSURANCE, INCLUDING SELF INSURANCE MAINTAINED BY THE CITY" City can elect to terminate this Lease by giving notice to Lessee within thirty (30) days after determining the cost of restoration will exceed the insurance proceeds. In the case of destruction to the Premises only, if City elects to terminate this Lease, Lessee, within thirty (30) days after receiving City's notice to terminate, can elect to pay to City, at the time Lessee notifies City of its election, the difference between the amount of insurance proceeds and the cost of restoration, in which case City shall restore the Premises. City shall give Lessee satisfactory evidence that all sums contributed by Tenant as provided in the paragraph have been expended by City in paying the cost of restoration. If City elects to terminate this Lease and Lessee does not elect to contribute toward the cost of restoration as provided in this section, this Lease shall terminate. 13.3.2 Destruction Due to Risk Not Covered by Insurance. If, DUE TO AN EVENT NOT COVERED BY INSURANCE DESCRIBED BY SECTION 20 OR OTHERWISE MAINTAINED BY THE CITY, the cost of restoration exceeds ten percent (10%) of the then replacement value of the Premises totally or partially destroyed, City can elect to terminate this Lease by giving notice to City within sixty (60) days after determining the restoration cost and replacement value. In the case of destruction to the Premises only, ifCity elects to terminate this Lease, Lessee, within thirty (30) days after receiving City's notice to terminate, can. elect to pay to City at the time Lessee notifies City of its election, the difference between ten percent (10%) of the then replacement value of the Premises and the actual cost of restoration, in which case City shall restore the Premises. City shall give Lessee satisfactory evidence that all sums contributed by Tenant as provided in the paragraph have been expended by City in paying the cost of restoration. If City elects to terminate this Lease and Lessee cannot or does not elect to 13 Rev. Jan. 29, 2012 14. SIGNS. contribute toward the cost of restoration as provided in this section, this Lease shall terminate 13.3.3 Extent of City's Obligation to Restore. If City is required or elects to restore the Premises. as provided in this section, City shall not be required to restore alterations made by Lessee, Lessee's improvements, Lessee's trade fixtures, and Lessee's personal property, such excluded items being the sole responsibility of Lessee to restore. Lessee shall not place, construct, maintain, or allow any signs upon the Premises or on the adjacent sidewalk or courtyard without prior written consent of City. 15. ASSIGNMENT AND SUBLETTING. 15.1 City's Consent Required. Lessee shall not assign this lease, nor any interest therein, and shall not sublet or encumber the Property or any part thereof, nor any right or privilege appurtenant thereto, nor allow or permit any other person(s) to occupy or use the Property, or any portion thereof, without the prior written consent of City. Such consent shall not be unreasonably withheld or delayed. This Lease shall be binding upon any permitted assignee or successor of Lessee. Consent by City to one assignment, subletting, occupation or use by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another person. No assignment, subletting, or encumbrance by Lessee shall release it from or in any way alter any of Lessee's obligations under this Lease. Lessee may have the Property delivered to a subsidiary company of Lessee, but such arrangement shall in no way alter Lessee's responsibilities hereunder with respect to the Property. Any assignment, subletting, encumbrances, occupation, or use contrary to the provisions of this Lease shall be void and shall constitute breach of this Lease. City may assign any of its rights hereunder without notice to Lessee. 15.2 No Release of Lessee. No subletting or assignment as approved by City shall release Lessee of Lessee's obligation or alter the primary liability of Lessee to pay the rent and to perform all other obligations by Lessee hereunder. The acceptance of rent by City from any other person shall not be deemed to be a waiver by City of any provision hereof. In the event of default by any assignee of Lessee or any successor of Lessee in the performance of any of the terms hereof, City may proceed directly against Lessee without the necessity of exhausting remedies against said assignee. 16. DEFAULTS; REMEDIES. 16.1 Defaults. The occurrence of anyone or more of the following events shall constitute a material default, or breach of this Lease, by Lessee: 14 Rev. Jan. 29, 2012 16.1.1 Abandonment of the Premises by Lessee as defined by California Civil Code section 1951.3; 16.1.2 Failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as provided in this Lease, where such failure shall continue for a period of three (3) business days after written notice thereof from City to Lessee. In the event City serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes, such Notice to Pay Rent or Quit shall also constitute the notice required by this subparagraph; 16.1.3 Failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease in any material respect where such failure shall continue for a period of thirty (30) days after written notice thereoffrom City to Lessee; provided, however, that if the nature of Lessee's default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion; 16.1.4 Making by Lessee of any general arrangement or assignment for the benefit of creditors; Lessee's becoming a "debtor" as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days); the appointment of a bankruptcy trustee or receiver to take possession of all or substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in this Lease where possession is not restored to Lessee within thirty (30) days; or the attachment, execution or other judicial seizure of all or substantially all of Lessee's assets located at or on the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within thirty (30) days. 16.2 Remedies. In the event of any material default or breach by Lessee, City may at any time thereafter, following any notice required by statute, and without limiting City in the exercise of any right or remedy which City may have by reason of such default or breach: 16.2.1 Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession of the Premises and Improvements to City. In such event, City shall be entitled to recover from Lessee all damages incurred by City by reason of Lessee's default including but not limited to: the cost of recovering possession of the Premises and Improvements; expenses of reletting, including necessary renovation and alteration of the Premises and Improvements; reasonable attorneys' fees; the worth at the time of the award of the unpaid rent that had been earned at the time of termination of this Lease and the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably 15 Rev. Jan. 29,2012 avoided. 16.2.2 Maintain Lessee's right to possession, in which case this Lease shall continue in effect whether or not Lessee shall have abandoned the Premises. In such event, City shall be entitled to enforce all of City's rights and remedies under this Lease, including the right to recover rent and other payments as they become due hereunder. 16.2.3 Pursue any other remedy now or hereafter available to City under the laws or judicial decisions of the State of California. City shall have all remedies provided by law and equity. 16.3 No Relief from Forfeiture After Default. Lessee waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure sections 1174 and 1179, and any other present or future law, in the event Lessee is evicted or City otherwise lawfully takes possession of the Premises by reason of any default or breach of this Lease by Lessee. 16.4 Disposition of Abandoned Personal Property. If the Lessee fails to remove any personal property belonging to Lessee from the Premises after forty-five (45) days of the expiration or termination of this Lease, such property shall at the option of City be deemed to have been transferred to City. City shall have the right to remove and to dispose of such property without liability to Lessee or to any person claiming under Lessee, and the City shall have no need to account for such property. 17. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly provided herein, any amount due City when not paid when due shall bear interest at the lesser of ten percent (10%) per year or the maximum rate then allowable by law from the date due. 18. HOLDING OVER. If Lessee remains in possession of the Premises or any part thereof after the expiration of the term or option term hereof, such occupancy shall be a holdover tenancy from month to month with all the obligations of this Lease applicable to Lessee. Nothing contained in this Lease shall give to Lessee the right to occupy the Property after the expiration of the term, or upon an earlier termination for breach. 19. CITY'S ACCESS. 19.1 Access for Inspection. City and City's agents shall, have the right to enter the Premises at reasonable times, upon not less than twenty-four (24) hours prior notice to Lessee, for the purpose of inspecting same, showing same to prospective purchasers, lenders or lessees, and making such alterations, repairs, improvements, or additions to the Premises as City may 16 Rev. Jan. 29, 2012 deem necessary. However, City and City's agents shall have the right to enter the Premises at any time for emergency situations that may involve property damage such as flooding. City may at any time place on or about the Premises any ordinary OF or SaieD signs and City may at any time during the last one hundred twenty (120) days of the term hereof place on or about the Premises any ordinary DFor LeaseD signs, all without rebate of rent or liability to Lessee. 19.2 Security Measures. City shall have the right to require a reasonable security system, device, operation, or plan be installed and implemented to protect the Premises or the Improvements. Should City, in its sole discretion, require Lessee to install such a security system, Lessee agrees to bear the sole cost and expense of any security system, device, operation or plan and the installation and implementation thereof. Lessee shall obtain City's prior approval before installing, implementing or changing any City approved security system, device, operation or plan. 19.3 New Locks. Lessee may install new locks on all exterior doors. Lessee shall advise City of such action and shall provide City with keys to said locks. Lessee shall also deliver to City the old locks with keys. Upon termination, Lessee shall leave new locks that shall become the property of City. Lessee may not install their own locks. City will maintain all lock hardware and rekey locks as required. City may charge for excess key request. 20. INSURANCE. Lessee's responsibility for the Premises begins immediately upon Delivery Date and Lessee, at its sole cost and expense, and at no cost to City, shall purchase and maintain in full force and effect from that date forward and during the entire term of this Lease, insurance coverage in amounts and in a form acceptable to City as set forth in Exhibit C attached hereto and incorporated herein by reference. Said policies shall be maintained with respect to Lessee's employees, if any, and all vehicles operated on the Premises. The policies shall include the required endorsements, certificates of insurance and coverage verifications as described in Exhibit C. Lessee also agrees to secure renter's liability insurance. . . Lessee shall deposit with the City Manager, on 01' before the Delivery Date, certificates of insurance necessary to satisfy City that the insurance provisions of this Lease have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with City during the entire term of this Lease. Should Lessee not provide evidence of such required coverage at least three (3) days prior to the expiration of any existing insurance coverage, City may purchase such insurance, on behalf of and at the expense of Lessee to provide six months of coverage. City shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the City's Risk Manager (or comparable official), the insurance provisions in this Lease do not provide adequate protection for City and for members of the public using the Premises, the City Manager may require Lessee to obtain insurance sufficient in coverage, form, and amount to provide adequate protection as determined by the Risk Manager. City's 17 Rev. Jan. 29, 2012 requirements shall be reasonable and shall be designed to assure protection from and against the kind and extent of risk that exists at the time a change in insurance is required. The City Manager shall notifY Lessee in writing of changes in the insurance requirements. If Lessee does not deposit copies of acceptable insurance policies with City incorporating such changes within sixty (60) days of receipt of such notice, or in the event Lessee fails to maintain in effect any required insurance coverage, Lessee shall be in default under this lease without further notice to Lessee. Such failure shall constitute a material breach and shall be grounds for immediate termination of this Lease at the option of City. The procuring of such required policy or policies of insurance shall not be construed to limit Lessee's liability hereunder nor to fulfill the indemnification provision and requirements of this Lease. Notwithstanding the policy or policies of insurance, Lessee shall be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this Lease or with use or occupancy of the Premises. 21. INTENTIONALLY OMITTED. 22. EMINENT DOMAIN. 22.1 If all or any part of the Premises (or the building in which the Premises are located) is condemned by a public entity in the lawful exercise of its power of eminent domain, this Lease shall cease as to the part condemned. The date of such termination shall be the effective date of possession of the whole or part of the Premises by the condemning public entity. 22.2 If only a part is condemned and the condemnation of that part does not substantially impair the capacity of the remainder to be used for the purposes required by this Lease, Lessee shall continue to be bound by the terms, covenants, and conditions of this Lease. However, the then monthly rent shall be reduced in proportion to the diminution in value of the Premises. I{the condemnation of a part of the Premises substantially impairs the capacity of the remainder to be used for the purposes required by this Lease, Lessee may: A. Terminate this Lease and thereby be absolved of obligations under this Lease which have not accrued as ofthe date of possession by the condemning public entity; or B. Continue to occupy the remaining Premises and thereby continue to be bound by the terms, covenants and conditions of this Lease. If Lessee elects to continue in possession of the remainder of the Premises, the monthly rent shall be reduced in proportion to the diminution in value of the Premises. C. Lessee shall provide City with written notice advising City of Lessee's choice < within thirty (30) days of possession of the part condemned by the condemning 18 Rev. Jan. 29, 2012 public entity. 22.3 City shall be entitled to and shall receive all compensation related to the condemnation, except that Lessee shall be entitled to: (a) that portion of the compensation which represents the value for the remainder of the Lease term of any Lessee-constructed improvements taken by the condemning public entity, which amount shall not exceed the actual cost of such improvements reduced in proportion to the relationship ofthe remaining Lease term to the original Lease term, using a straight line approach; and (b) any amount specifically . 'designated as a moving allowance or as compensation for Lessee's personal property. Lessee shall have no claim against Landlord for the value of any unexpired term of this Lease. 23. POST-ACOUISITION TENANCY. Lessee hereby acknowledges that Lessee was not an occupant of the Premises at the time the Premises were acquired by City. Lessee further understands and agrees that as a post-acquisition Lessee, Lessee is not eligible and furthermore waives all claims for relocation assistance and benefits under federal, state or local law. 24. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY. No official or employee of City shall be personally liable for any default or liability under this agreement. 25. NON-DISCRIMINATION 25.1 Non-discrimination in Lease Activities. Lessee agrees that in the performance ofthis Lease and in connection with all of the activities Lessee conducts on the Premises, it shall not discriminate against any employee or 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. Lessee acknowledges that is familiar with the provisions set forth in Section 2.30.510 of the Palo Alto Municipal Code relating to nondiscrimination in employment and Section 9.73 of the Palo Alto Municipal Code relating to City policy against arbitrary discrimination. 25.2 Human Rights Policy. In connection with all activities that are conducted upon the Premises, Lessee agrees to accept and enforce the statements of policy set forth in Section 9.73.010 which provides: "It is the policy of the City of Palo Alto to affirm, support and protect the human rights of every person within its jurisdiction. These rights include, but are not limited to, equal economic, political, and educational opportunity; equal accommodations in all business establishments in the city; and equal service and protection by all public agencies of the city." 26. INDEPENDENT CONTRACTOR. It is agreed that Lessee shall act and be an independent contractor and not an agent nor employee of City. 19 Rev. Jan. 29. 2012 27. CONFLICT OF INTEREST. Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this agreement. Lessee warrants and covenants that no official or employee of City nor any business entity in which any official or employee of City is interested: (l) has been employed or retained to solicit or aid in the procuring of this agreement; or (2) will be employed in the perfonnance of this agreement without the divulgence of such fact to City. In the event that City detennines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of City, Lessee upon request of City shall immediately tenninate such employment. Violation of this provision constitutes a serious breach of this Lease and City may tenninate this Lease as a result of such violation. 28. MEMORANDUM OF LEASE. Following execution of this Lease, either party, at its sole expense, shall be entitled to record a Memorandum of Lease in the official records of Santa Clara County. Upon tennination or expiration of this Lease, Lessee shall execute and record a quitclaim deed as to its leasehold interest. 29. ESTOPPEL CERTIFICATE. Lessee shall, from time to time, upon at least thirty (30) days prior written notice from City, execute, acknowledge and deliver to City a statement in writing: (i) certifYing this Lease is unmodified and in full force and effect, or, if modified, stating the nature ofthe modification and certifYing that the Lease, as modified, is in full force and effect, and the date to which the rental and other charges, if any, have been paid; and, (ii) acknowledging that there are not to Lessee's knowledge, any defaults, or stating if any defaults are claimed, any statement may be relied upon by any prospective purchaser or encumbrancer of the City Property. 30. LIENS. Lessee agrees at its sole cost and expense to keep the Property free and clear of any and all claims, levies, liens, encumbrances or attachments. 31. VACATING. Upon termination of the tenancy, Lessee shall completely vacate the Property, including the removal of any and all of its property. Before departure, Lessee shall return keys and personal property listed on the inventory to City in good, clean and sanitary condition, reasonable wear and tear excepted. Lessee shall allow City to inspect the Property to verifY the condition of the Property and its contents. 32. ABANDONMENT. 20 Rev. Jan. 29, 2012 Lessee.s absence from the Property for ten (10) consecutive days, withoutpriornotice, during which time rent or other charges are delinquent, shall be deemed abandonment of the Property. Such abandonment will be deemed cause for immediate termination without notice. City shall thereupon be authorized to enter and take possession and to remove and dispose of the property of Lessee or its guests without any liability whatsoever to City. 33. NOTICES. All notices to the Parties shall, unless otherwise requested in writing, be sent to City addressed as follows: City of Palo Alto Attention: Real Property Manager 250 Hamilton Avenue Palo Alto, CA 94301 Donna.Hartman@CityofPaloAlto.org And to Lessee addressed as follows: Name: Ada's Cafe 839 Northampton Drive Palo Alto, CA 94303 Phone: 650-269-5505 Email: adascafe@att.net Cell phone: 650-269-5505 Notices may be served upon Lessee in person or by certified mail whether or not said notice or mailing is accepted by Lessee. If notice is sent via facsimile, a signed, hard copy of the material shall also be mailed. The workday the facsimile was sent shall control the date notice was deemed given if there is a facsimile machine generated document on the date of transmission. A facsimile transmitted after 1 :00 p.m. on a Friday shall be deemed to have been transmitted on the following Monday. These addresses shall be used for service of process. 34. TIME. Time shall be ofthe essence in this Lease.' 35. AMENDMENTS. It is mutually agreed that no oral Leases have been entered into and that no alteration or variation of the terms of this Lease shall be valid unless made in writing and signed by the Parties to this Lease. 36. SIGNING AUTHORITY. 21 Rev. Jan, 29,2012 If this Lease is not signed by all Lessees named herein, the person actually signing warrants that he/she has the authority to sign for the others. 37. CAPTIONS. The captions of the various sections, paragraphs and subparagraphs of this Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation. 38. SURRENDER OF LEASE NOT MERGER. The voluntary or other surrender of this lease by Lessee, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of City, terminate all or any existing subleases or sub tenancies, or may, at the option of City, operate as an assignment of any and all such subleases or sub tenancies. 39. INTEGRATED DOCUMENT. This Lease, including any exhibits attached hereto, embodies the entire agreement between City and Lessee. No other understanding, agreements, conversations or otherwise, with any officer, agent or employee of City prior to execution of this Lease shall affect or modifY any of the terms or obligations contained in any documents comprising this Lease. Any such verbal agreement shall be considered as unofficial information and in no way binding upon City. All agreements with City are subject to approval of the City Council before City shall be bound thereby. 40. WAIVER. Wa.iver by City of one or more conditions of performance or any breach of a condition under this Lease shall not be construed as a waiver of any other condition of performance or subsequent breaches. The subsequent acceptance by a Party of the performance of any obligation or duty by another Party shall not be deemed to be a waiver of any term or condition of this Lease. The exercise of any remedy, right, option or privilege hereunder by City shall not preclude City from exercising the same or any and all other remedies, rights, options and privileges hereunder and City's failure to exercise any remedy, right, option or privilege at law or equity, or otherwise which City may have, shall not be construed as a waiver. 41. INTERPRETATIONS. In construing or interpreting this Lease, the word "or" shall not be construed as exclusive and the word "including" shall not be limiting. The Parties agree that this Lease shall be fairly interpreted in accordance with its terms without any strict construction in favor of or against any other Party. 42. SEVERABILITY CLAUSE. 22 Rev. Jan. 29, 2012 If any provision of this Lease is held to be illegal, invalid or unenforceable in full or in part, for any reason, then such provision shall be modified to the minimum extent necessary to make the provision legal, valid and enforceable, and the other provisions of this Lease shall not be affected thereby. 43. GOVERNING LAW. This Lease shall be governed and construed in accordance with the statutes and laws of the State of California. 44. VENUE. In the event that suit shall be brought by any Party to this Lease, the Parties agree that venue shall be exclusively vested in the state courts of the County of Santa Clara. 45. COMPLIANCE WITH LAWS. The Parties hereto shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments in the performance oftheir rights, duties and obligations under this Lease. Lessee hereby agrees to specifically comply with maintenance of the grease control devise as required under Palo Alto Municipal Code Section 16.09.075 Food Service Establishments. 46. BROKERS. Each party represents that is has not had dealings with any real estate broker, finder, or other person, with respect to this lease in any manner. Each Party shall hold harmless the other party from all damages resulting from any claims that may be asserted against the other party by any broker, finder, or other person with whom the Indemnifying Party has or purportedly has dealt. 47. LIMITATION OF LEASEHOLD This Lease and the rights and privileges granted Lessee in and to the Premises are subject to all covenants, conditions, restrictions, and physical encumbrances, governing the Center. Nothing contained in this Lease or in any document related hereto shall be construed to imply the conveyance to Lessee of rights in the Premises which exceed those owned by City. 48. TERMINATION OF PRIOR AGREEMENTS This Lease supersedes any and all prior leases entered into by City for use of the Premises. All such prior leases or agreements are null and void. 49. ATTACHMENTS TO LEASE. The following exhibits are attached to and made a part ofthis Agreement: 23 Rev. Jan. 29,2012 "A" -Description of Subject Property "B" -Inventory of Fixtures "c" -Standard Insurance Requirements "D" -Operational Requirements 24 Rev. Jan. 29, 2012 LEASE AGREEMENT BY AND BETWEEN CITY OF PALO ALTO, CALIFORNIA AND Ada's Cafe EXHIBITC STANDARD INSURANCE REOUIREMENTS Insurance Requirements for Lessee: Lessee shall purchase and maintain the insurance policies set forth below on all of its operations under this Lease at its sole cost and expense. Such policies shall be maintained for the full term of this Lease and the related warranty period (if applicable). For purposes of the insurance policies required under this Lease, the term "City" shall include the duly elected or appointed council members, commissioners, officers, agents, employees and volunteers of the City of Palo Alto, California, individually or collectively. Coverages (RL 28.lA) S Minimum Scope ofInsurance Coverage shall be at least as broad as: 1) . Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001). 2) Insurance Services Office form number CA 0001 (Ed. 1187) covering Automobile Liability, code 1 (any auto). 3) Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance (for lessees with employees). 4) Property insurance against all risks of loss to any Lessee improvements or betterments The policy or policies of insurance maintained by Lessee shall provide the following limits and coverages: POLICY (1) Commercial General Liability (2) Automobile Liability Lease Agreement/Ada's MINIMUM LIMITS OF LIABILITY $1,000,000 per each occurrence for bodily injury, personal irtiury and property damage $ 1,000,000 Combined Single Limit Exhibit C Page 28 Including Owned, Hired and Non-Owned Automobiles Statutory (3) Workers' Compensation Employers Liability $1,000,000 per accident for bodily injury or disease (4) Lessee's Property Insurance Lessee shall procure and maintain property insurance coverage for: (a) all office furniture, trade fixture, office equipment, merchandise, and all other items of Lessee's property in, on, at, or about the premises and the building, include property installed by, for, or at the expense of Lessee; (b) all other improvements, betterments, alterations, and additions to the premises. Lessee's property insurance must fulfill the following requirements: (a) it must be written on the broadest available "all risk" policy form or an equivalent form acceptable City of Palo Alto, including earthquake and sprinkler leakage. (RL 28.2) (b) for no less than ninety percent (90%) of the full replacement cost (new without deduction for depreciation) of the covered items and property; and (c) the amounts of coverage must meet any coinsurance requirements ofthe policy or policies. Deductibles and Self-Insured Retentions Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of the City either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment oflosses and related investigations, claim administration and defense expenses. . Insurance shall be in full force and effect commencing on the first day ofthe term of this Lease. Each insurance policy required by this Lease sh\lll: 1. Be endorsed to state that coverage shall not be suspended, voided, canceled by either patty, reduced in coverage or in limits except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City. 2. . Include a waiver of all rights of subrogation against the City and the members of the City Council and elective or appointive officers or employees, and each party.shall Lease Agreement/Ada's Exhibit c Page 29 indemnifY the other against any loss or expense including reasonable attorney fees, resulting from the failure to obtain such waiver. 3. Name the City of Palo Alto as a loss payee on the property policy. 4. Provide that the City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the Lessee; products and completed operations of the Lessee; premises owned, occupied or used by the Lessee; or automobiles owned, leased, hired or borrowed by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, officials, employees, agents or volunteers. 5. Provide that for any claims related to this Lease, the Lessee's insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Lessee's insurance and shall not contribute with it. 6. Provide that any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees, agents or volunteers. 7. Provide that Lessee's insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 8. Lessee agrees to promptly pay to City as Additional Rent, upon demand, the amount of any increase in the rate of insurance on the Premises or on any other part of Building that results by reason of Lessee's act(s) or Lessee's permitting certain activities to take place. Acceptabilitv of Insurers All insurance policies shall be issued by California-admitted carriers having current A.M. Best's ratings of no lower than A-:VII. Lease Agreement/Ada's Exhibit C Page 30 LEASE AGREEMENT BY AND BETWEEN CITY OF PALO ALTO, CALIFORNIA AND Ada's Cafe EXHIBITD OPERATIONAL REOUIREMENTS 1. Catering Kitchen: Lessee shall enterinto agreement with City's Manager, Mitchell Park Community Center, or designee for use of the Catering Kitchen. Terms of the agreement shall provide Lessee with use ofthe kitchen from 4:00 a.m. to 8 a.m. and non-exclusive access to and/or use ofthe kitchen during the remainder of the day, as approved and scheduled by the Mitchell Park Community Center Manager or designee. The City shall attempt to allow Lessee exclusive use of the Catering Kitchen from 4:00 a.m. to 8:00 a.m., but, from time to time, there may be uses that will require shared use of the kitchen during limited times. The parties will jointly develop guidelines to address such shared use. Lessee shall pay $250 per month for use of the kitchen during this designated period. Additional use outside of the designated use period of 4:00 a.m. and 8:00 a.m. shall be billed according to the non-profit hourly room rate adopted in the Palo Alto Municipal Fee Schedule. Lessee will maintain and clean the kitchen after each use and leave it ready for use by other authorized users. 2. Patio Space: Lessee shall obtain approval from City to use six hundred (600) square feet of outdoor space adjacent to the Premises for food and beverage service and customer dining. Such use shall not interfere with any access to the Center and any outdoor furniture will be consistent with the City's plarmed finishes. Lessee intends to place up to 6 tables with 24 chairs as well as heaters, sun shade umbrellas and similar customer service equipment in the patio area and to store such equipment outdoors in accordance with City approval. The City shall develop guidelines for the use of such outdoor space and Lessee's approval to use such space shall be subject to such guidelines. 3. Prior to the retail opening, the City shall develop operational guidelines for the catering kitchen, patio space and cafe. These guidelines, which may be modified by City from time, to time, shall become part of the Lease and Lessee shall abide to them. Before finalizing the guidelines, the City shall meet and confer with Lessee. Lease Agreement/Ada's Exhibit D Page 31 09/12/2011 108-474 Special Meeting September 12, 2011 STUDY SESSIONS .................................................................................477 1. Potential Topics for Discussion during the City Council Study Session with Assembly Member Rich Gordon. ...............................................477 2. Parking Strategies for Downtown and California Avenue Business Districts.......................................................................................477 SPECIAL ORDERS OF THE DAY................................................................478 3. Proclamation Recognizing September as Library Card Sign-Up Month 2011...........................................................................................478 4. Selection of Candidates to be Interviewed for the Planning and Transportation Commission for One Term Ending on July 31, 2015. .....478 5. Selection of Candidates to be Interviewed for the Architectural Review Board for Two Terms Ending on September 30, 2014.........................478 6. Inn Vision –Opportunity Center Community Presentation....................478 CITY MANAGER COMMENTS....................................................................480 ORAL COMMUNICATIONS.......................................................................480 CONSENT CALENDAR.............................................................................482 7. Recommendation from Finance Committee to Preliminarily Approve Fiscal Year 2011 Re-appropriation Requests to be Carried Forward into Fiscal Year 2012. ..........................................................................482 8. Approval of Amendment No. 1 in the Amount of $28,013 to Contract No. C11138402 with TMAD, Taylor & Gaines for a Total Contract Amount of $159,600 for Adding Design of Two Permanent Load Banks 9/12/2011 108-475 to the Power Monitoring and Standby Generator Replacement Project at the Water Quality Control Plant – Capital Improvement Program Project WQ-80021.........................................................................482 9. Approval of Response to Santa Clara County Grand Jury Report “Can You Hear Me Now? Emergency Dispatch in Santa Clara County”. .........482 10. Approval of Response to Santa Clara County Grand Jury Report on “Fighting Fire or Fighting Change? Rethinking Fire Department Response Protocol and Consolidation Opportunities”. .........................482 11. Approval of Response to the 2010-2011 Santa Clara County Civil Grand Jury Report “Rehiring of Pensioners: Bad Policy, Good Business or Both?”.....................................................................................482 12. Approval of a Contract with Riezebos Holzbaur Group (RHDG) in the Amount of $93,350 for Graphic Design, Printing and Photography for the Quarterly Production of the Enjoy! Catalog Classes and Activities Guide..........................................................................................482 13. Resolution 9199 entitled “Resolution of the Council of the City of Palo Alto Waiving the Community Services Department’s Recreation Municipal Fees for Nickelodeon's 8th Annual Worldwide "Day of Play" on September 24, 2011.”...............................................................482 14. Approval of Professional Services Agreement with Geodesy in the amount of $164,720 for Development Support of New Computer Applications Linked to the Geographic Information System (GIS).........483 AGENDA CHANGES, ADDITIONS, AND DELETIONS.....................................483 14a. (Former Item No. 11) Approval of Response to the 2010-2011 Santa Clara County Civil Grand Jury Report “Rehiring of Pensioners: Bad Policy, Good Business or Both?”......................................................483 14b. (Former Item No. 17) Recommendation for Vision on Cafe Operations at the New Mitchell Park Library & Community Center Cafe.................485 15. Council Direction in Response to Sustainable Communities Strategy (SB375) Alternative Scenarios and Update of Regional Housing Needs Assessment (RHNA) Process...........................................................495 ACTION ITEMS......................................................................................496 16. Approval of Increase in Construction Contingency from 10 percent to 25 percent on Contract C11136473 with Flintco Pacific Construction, 9/12/2011 108-476 Inc. for Construction of the Mitchell Park Library and Community Center, PE-09006; and Approval of Two Contract Amendments for Additional Construction Management and Design Services: Amendment No. Three with Turner Construction, Inc., to Add $205,287 for a Total Amount Not to Exceed $3,783,745 and Amendment No. Five with Group 4 Architecture, Inc. To Add $220,670 for a Total Amount Not to Exceed $7,902,421. ......................................................................496 17. Recommendation for Vision on Cafe Operations at the New Mitchell Park Library & Community Center Cafe............................................514 COUNCIL MEMBER QUESTIONS, COMMENTS, AND ANNOUNCEMENTS ..........514 ADJOURNMENT: The meeting was adjourned at 1:10 A.M. .........................514 9/12/2011 108-477 The City Council of the City of Palo Alto met on this date in the Council Conference Room at 6:03 P.M. Present: Burt, Espinosa, Holman, Klein, Price, Scharff, Schmid arrived @ 6:05 P.M., Shepherd, Yeh Absent: STUDY SESSIONS 1. Potential Topics for Discussion during the City Council Study Session with Assembly Member Rich Gordon. The City Council participated in a study session with Assembly Member Rich Gordon. Assembly Member Gordon discussed the challenges of passing collaborative legislation in the California State Assembly, the impact of the current economic situation on the state, early response strategies for local issues, incentives for regional coordination, public pension and health care benefit reform, the status of the blended approach for high speed rail, and the state budget process. Mayor Espinosa read a statement expressing the City’s gratitude to Assembly Member Gordon and his Staff for their assistance with public power issues, renewable portfolio standards, and high-speed rail. 2. Parking Strategies for Downtown and California Avenue Business Districts. The City Council participated in a study session to provide input regarding parking management strategies for implementation in and around the downtown area. Strategies around the California Avenue business district were also discussed but Staff was still pursuing outreach with the California Avenue district. Information regarding active projects was presented including new permit management software and introduced new strategies such as tier-pricing strategies for permit holders such as monthly permit options, roof-level parking pricing and fleet vehicle parking. New pilot projects such as gate control facilities at garages were also discussed to help the City track garage use and disseminate parking space availability information through future parking guidance system signage. Lastly, alternatives to help manage neighborhood intrusion around the downtown were also discussed including the use of residential permit parking. The City Council provided positive input regarding permit strategies and technology enhancements for Staff to further investigate. Consensus around the development of a new Working Group to track progress in strategies 9/12/2011 108-478 implemented around downtown and to further refine a potential policy for residential permit parking was provided. SPECIAL ORDERS OF THE DAY 3. Proclamation Recognizing September as Library Card Sign-Up Month 2011. Council Member Schmid read the Proclamation into the record. Library Director, Monique le Conge, thanked Council for recognizing National Library Card Sign-up Month. She stated that each Council Member would receive either a renewed library card or a thank you note for being a current library cardholder. She expressed hope that recognition of Library Card Sign- Up Month would draw attention to the Downtown Library’s new promotional efforts and motivate members of the public and Staff to sign-up for a library card. 4. Selection of Candidates to be Interviewed for the Planning and Transportation Commission for One Term Ending on July 31, 2015. MOTION: Council Member Klein moved, seconded by Council Member Shepherd to interview all candidates for one Planning and Transportation Commission term ending on July 31, 2015. MOTION PASSED: 9-0 5. Selection of Candidates to be Interviewed for the Architectural Review Board for Two Terms Ending on September 30, 2014. MOTION: Vice Mayor Yeh moved, seconded by Council Member Schmid to interview all candidates for the Architectural Review Board for the two terms ending on September 30, 2014. MOTION PASSED: 9-0 6. Inn Vision –Opportunity Center Community Presentation. Philip Dah, Director of Peninsula Programs, stated that the Community Center was hosting several community events in celebration of its fifth anniversary. He explained that the Opportunity Center was currently coordinating a beautification project, which would take place in November to coincide with Homeless Awareness Month. He stated that the current Property Manager would be leaving the Opportunity Center in October, and 9/12/2011 108-479 that the owners of the building were currently searching for a replacement. The new Property Manager would likely be in place by late October, but Inn Vision would remain the Opportunity Center’s service provider. Many Palo Alto residents had visited the Opportunity Center over the previous several months, seeking emergency housing and utilities assistance. The Opportunity Center had spent approximately $6,000 in assistance over the previous three months to low-income Palo Alto residents in danger of losing their homes or having their utilities cut off. The Opportunity Center had successfully collaborated with the Stanford Disability Law Clinic to provide social security application services for many Palo Alto residents who would otherwise have been unable to navigate the cumbersome process. He commented that during the previous quarter the Opportunity Center had successfully helped nine individuals to secure social security benefits, three of whom were then able to obtain permanent housing. Twenty-one children were in residence at the Opportunity Center. Opportunity Center staff had spent approximately $8,000 on the children’s summer camp, field trips to San Francisco Museums, a trip to the Monterey Bay Aquarium, and numerous other field trips. He noted that the Opportunity Center had received unprecedented support from the City, and that they were very happy with the status of their partnership with the City’s Social Services Department. He invited Council to attend the Center’s November beautification project BBQ. Mayor Espinosa asked Mr. Dah to give a brief explanation of the services available at the Opportunity Center, including the number of recipients. Mr. Dah explained that the Opportunity Center was a unique program, which served as a one-stop service center. The Opportunity Center offered a clinic, social service counseling, a clothing closet, and a permanent housing facility. The original intention was to create a facility that could provide low-income or mentally ill residents all of the necessary services under one roof. He stated that the Center currently housed 135 residents. All of the children in residence attended school within the Palo Alto School District, and were transported by bus to school every day. Outside contractors provided those services which the Center was unable to provide in-house. Mayor Espinosa stated that he had been asked by members of the public whether there was a need for a second Opportunity Center in Palo Alto. He asked Mr. Dah whether the current Center was filled to capacity and whether there was a waiting list for those families seeking assistance. Mr. Dah replied that there was a waiting list of approximately 200 people. Over the last five years, the Opportunity Center had experienced very few vacancies. He stated that another Opportunity Center would be very nice for 9/12/2011 108-480 the low-income community in Palo Alto. The majority of the current residents were long-term Palo Alto residents who had lost their jobs and did not have the income to rent a $1,200 per month apartment. Subsidized housing served as a stepping-stone for most of the families to rejoin the workforce and transition into more affordable housing. He explained that the core service offered by the Opportunity Center was their drop-in service, which provided the homeless community a place to access resources that would help them to better themselves. Vice Mayor Yeh asked Mr. Dah what type of opportunities there were for the community to get involved or to volunteer at the Opportunity Center. Mr. Dah stated that getting involved with the Opportunity Center did not require performing physical work. Members of the community could stop by the Opportunity Center to spend time with the residents or to play board games with them. Many of the residents lacked a sense of belonging, and opportunities to engage with the outside community would be therapeutic. There were also volunteer and donation opportunities at the Food Closet on Hamilton Avenue and various community churches which provided daily meals. Mayor Espinosa thanked Mr. Dah for his work with the community and for the Opportunity Center’s partnership with the City. CITY MANAGER COMMENTS City Manager, James Keene reported on: 1) reminder regarding three separate City sponsored events in downtown Palo Alto on Saturday, September 17, 2011 to celebrate bicycling. He stated that the Gran Fondo bicycle race would begin at 8:00 a.m. downtown and would include a 65, 80, or 90-mile ride, and that the Eschelon would begin directly after the Gran Fondo and was open to families and children. 2) The City was co-sponsoring a living in vehicles community forum at 7 p.m. on September 15, 2011 at the University Church on Stanford Avenue, along with the College Terrace neighborhood and the Community Outreach Team. He stated that the group would follow up to develop solutions to present to the Policy and Services Committee in late October or early November, and then to the full Council. He stated that the Cubberly Community Center had not been designated as a camping site for vehicle camping. 3) A significant and historic live oak tree at 816 Cowper Street had been scheduled for removal due to extensive trunk and root decay. ORAL COMMUNICATIONS 9/12/2011 108-481 Brett Barley extended an invitation on behalf of the Silicon Valley Leadership Group to attend the 7th Annual Applied Materials Silicon Valley Turkey Trot. Over the last six years, the race had raised over $1.5 million dollars on behalf of the Second Harvest Food Bank, the Housing Trust, and the Children’s Health Initiative. He stated that the event was expected to attract over 17,000 participants, and that the Silicon Leadership Group hoped to raise $500,000 for charity at the event. Michelle Lindeman spoke on behalf of Brocade. She stated that Brocade would be hosting the 4th Annual Mayors Cup Challenge at the Applied Materials Silicon Valley Turkey Trot, and invited Council to participate in the event. Michelle Berg spoke on behalf of the Second Harvest Food Bank, and urged Council and community members to participate in the Applied Materials Silicon Valley Turkey Trot. One in every ten San Mateo and Santa Clara County residents received at least some food from the Second Harvest Food Bank. She stated that the peninsula was one of the most affluent areas in the world, and the fact that nearly 250,000 people from the peninsula relied on the Second Harvest Food Bank was unacceptable. She urged Council to participate in the event. Ian Irwin stated that he resided at 800 Cowper Street. He explained that there were two heritage oaks in the area, both of which were 200 to 300 years old. He stated that one of the oaks was located on his property. The tree in question was not located on his property, but was very important to the community. The neighborhood had adapted to the oak’s presence, and would appreciate further investigation. He explained that members of the neighborhood had come to address the Council regarding the issue, but had left due to the late hour. He warned against the creation of a city with no canopy and no heritage trees. Chloe Blanchard introduced herself as a student at Henry M. Gunn High School, and spoke on behalf of National Disaster Preparedness Day. She explained that National Disaster Preparedness Day was a youth-based non- profit organization created and maintained by local youths in Palo Alto to bring awareness and education on the topic of disaster preparedness. The organization’s next event would be held on Friday, September 16, 2011 from 4:00-6:00 p.m. at Henry M. Gunn High School, which she encouraged Council to attend. Shani Kleinhaus introduced herself as a member of the Santa Clara Audubon Society and a resident of Palo Alto. She stated that she had reviewed the Energy/Compost Feasibility Study Commissioned by Council, and asked 9/12/2011 108-482 Council to instruct Staff to remove Alternative 1A from the Study. The technology needed to implement Alternative 1A did not exist anywhere in the world. She had spoken with experts around the world, and all agreed that the solution did not make sense. CONSENT CALENDAR MOTION: Council Member Schmid moved, seconded by Council Member Holman to pull Agenda Item No. 11, to become Agenda Item No. 14a. MOTION: Council Member Klein moved, seconded by Vice Mayor Yeh to approve Agenda Item Nos. 7-10, and 12-14. 7. Recommendation from Finance Committee to Preliminarily Approve Fiscal Year 2011 Re-appropriation Requests to be Carried Forward into Fiscal Year 2012. 8. Approval of Amendment No. 1 in the Amount of $28,013 to Contract No. C11138402 with TMAD, Taylor & Gaines for a Total Contract Amount of $159,600 for Adding Design of Two Permanent Load Banks to the Power Monitoring and Standby Generator Replacement Project at the Water Quality Control Plant – Capital Improvement Program Project WQ-80021. 9. Approval of Response to Santa Clara County Grand Jury Report “Can You Hear Me Now? Emergency Dispatch in Santa Clara County”. 10. Approval of Response to Santa Clara County Grand Jury Report on “Fighting Fire or Fighting Change? Rethinking Fire Department Response Protocol and Consolidation Opportunities”. 11. Approval of Response to the 2010-2011 Santa Clara County Civil Grand Jury Report “Rehiring of Pensioners: Bad Policy, Good Business or Both?”. 12. Approval of a Contract with Riezebos Holzbaur Group (RHDG) in the Amount of $93,350 for Graphic Design, Printing and Photography for the Quarterly Production of the Enjoy! Catalog Classes and Activities Guide. 13. Resolution 9199 entitled “Resolution of the Council of the City of Palo Alto Waiving the Community Services Department’s Recreation Municipal Fees for Nickelodeon's 8th Annual Worldwide "Day of Play" on September 24, 2011.” 9/12/2011 108-483 14. Approval of Professional Services Agreement with Geodesy in the amount of $164,720 for Development Support of New Computer Applications Linked to the Geographic Information System (GIS). MOTION PASSED for Agenda Item Nos. 7-10, and 12-14: 9-0 AGENDA CHANGES, ADDITIONS, AND DELETIONS 14a. (Former Item No. 11) Approval of Response to the 2010-2011 Santa Clara County Civil Grand Jury Report “Rehiring of Pensioners: Bad Policy, Good Business or Both?” Council Member Schmid stated that Table 1 of the Grand Jury Report showed that Palo Alto utilized retired personnel at a much higher rate than other Santa Clara County communities. The City Manager’s Report explained the phenomena as a unique event and as a rapid and unprecedented “brain drain,” whereby unusually high numbers of City employees had retired within a short period. He noted that four years prior, the then City Manager had given a presentation regarding the need for the City to prepare for the impending baby boomer retirement surge. Given the statistics, the City must not have prepared for that situation as well as other Santa Clara County cities. He asked what could be done to better prepare for that situation in the future. City Manager, James Keene, replied that Staff might need some time to return with a more detailed response to that question. The presentation that Council Member Schmid had referred to was prior to 2008, and while Staff had anticipated future organizational demographics, they had not anticipated the subsequent economic crisis or the necessary actions taken in response to that crisis. He added that the economic situation had accelerated the departures of some of the City employees. Acting Human Resources Director, Sandra Blanch, stated that when the City adjusted its CalPERS retirement benefit formula to 2.7 percent at 55, they experienced an increase in retirements. She explained that the City also experienced a high volume of retirements in response to the implementation of retirement contribution increases for SEIU membership and management, and recent medical contribution increases. She explained that many of the other agencies included in the Grand Jury report had not implemented such benefit changes. 9/12/2011 108-484 Council Member Schmid asked whether Staff considered the unusually high number of retirements, and temporary re-hiring of retirees, as a unique one- time phenomenon. Mr. Keene replied that Staff needed to review overall employee demographics with regards to retirement. If the City were to implement further benefit concessions in response to another recessionary environment, the result could be another spike in retirements. He stated that the re-hiring of pensioners was not Staff’s preferred practice. Ms. Blanch stated that 45 recruitments were currently in progress. She indicated that Staff had already reduced the percentage of employed pensioners reported in the Grand Jury Report to 4 percent, and that the number was expected to steadily decrease. Council Member Holman stated that she would like to see the Item returned to Council because Attachment A: City of Palo Alto’s Response to The 2010- 2011 Santa Clara County Civil Grand Jury Report - “Rehiring of Pensioners: Bad Policy, Good Business or Both?” did not adequately explain the Cities responses to the Grand Jury findings. The City’s responses to the other two Grand Jury Reports on the Agenda were much more descriptive. She stated that she did not want the response to be sent in the current form. MOTION: Council Member Holman moved, seconded by Council Member Scharff to direct Staff to rewrite the response to include comments from Council Members to meet the response deadline to the Grand Jury of September 19, 2011 Council Member Scharff stated that he agreed with Council Member Holman, and that he would like to see the response rewritten and the information from the Staff Report incorporated into the document. Mr. Keene suggested that Staff revise the response according to Council’s comments and send it out directly, in order to meet the September 19th submission deadline. Mayor Espinosa requested that Staff email the final version of the document to Council for review prior to submission. Mr. Keene stated that Staff would revise the document and email the final version to Council, with a deadline for Council comments. Council Member Holman stated that she would like to see the Council’s comments incorporated into the final version. 9/12/2011 108-485 Mayor Espinosa agreed. MOTION PASSED: 9-0 MOTION: Council Member Klein moved, seconded by Council Member Shepherd to move Agenda Item No. 17 forward to become Agenda Item No. 14b. 14b. (Former Item No. 17) Recommendation for Vision on Cafe Operations at the New Mitchell Park Library & Community Center Cafe. Manager of Economic Development, Thomas Fehrenbach, stated that he had been involved in leading the Request for Proposals (RFP) process for the selection of a candidate to operate the Mitchell Park Library & Community Center Café. He explained that the original RFP was cancelled so that clarifying revisions could be made to the document. Staff had more time than was initially expected, and had decided to seek a policy recommendation from Council regarding the selection of a candidate to operate the Mitchell Park Library & Community Center Café. He asked Council to provide direction regarding whether Staff should use the lease opportunity to optimize traditional business considerations or to pursue social objectives, such as employment development for traditionally underemployed populations. Council input could be incorporated into the evaluation criteria for the new RFP, and Staff would also consult with the Library and Community Center stakeholders prior to finalization. City Attorney, Molly Stump, stated that Staff sought broad direction as to the programmatic elements for the space. The reissuance of the RFP provided an opportunity for Council to determine whether they would like Staff to pursue a traditional business approach or whether they would like Staff to address particular social objectives. Mr. Keene stated that when Staff had rejected the initial RFP, they spoke directly with the respondents. Staff informed the respondents that a new RFP would be released, and that their information would be kept confidential. He explained that he had not been comfortable making this policy determination without Council input. Staff initially felt that the project required a quick release of the RFP and completion of the review process, which was the reason that the Item did not originally receive Council input. Staff had been informed that the key to these types of operations was to coordinate a simultaneous opening between the building and the café. Staff now felt that the City could release a new RFP, receive input from Council, engage the stakeholders, and still be ready to open the café when the Library & Community Center opened to the public. 9/12/2011 108-486 Hank Barren spoke in support of the Ada’s Café application to operate at the Mitchell Park Library & Community Center. He expressed dissatisfaction with the City’s management of the first RFP process. He stated that Council had been presented a false choice between a traditional business model and emphasis on community service, as Ada’s Café provided an opportunity for both. Rudy Batties spoke in support of Ada’s Café and agreed that Council had been provided a false choice. He stated that traditional businesses and those that provide a community benefit were not separate entities. Christy Wolf introduced herself as a Palo Alto resident and the owner of a Palo Alto small business. She spoke in support of Ada’s Café. She stated that she had known Kathleen Foley-Hughes, author of the proposal for Ada’s Café, for many years, and that she had personally witnessed Mrs. Foley- Hughes dedication to the community. She emphasized that Mrs. Hughes had a proven history of creating excellent food in an established kitchen, while overseeing a staff of disabled students with compassion, care and direction. Mrs. Foley-Hughes could run a business and serve the community at the same time. Janet Fox stated that she had taught Special Education for 30 years in Palo Alto, and that she had worked with Mrs. Foley-Hughes in the Gunn High School Café for the previous six years. As a native of Palo Alto, she felt that the Library and Community Center project would benefit from the participation of those members of the community who were not typically considered. In her experience, when disabled students were given an opportunity, they rose to the challenge. She stated that under the direction of Mrs. Foley-Hughes, and with the assistance of other built-in support mechanisms, the disabled students at Ada’s Café would run a traditional business. Kathleen Foley-Hughes stated that she had submitted her proposal to be a vendor for the New Mitchell Park Library and Community Center Café in June 2011. She stated that she had been a resident of Palo Alto for 18 years, and had raised her four children there. She explained that she had a son with developmental disabilities, and was excited at the prospect of becoming a vendor at the Mitchell Park Café. She remarked that she could offer not only a strong business model, but a strong social service component as well. Ada’s Café would provide delicious food that would appeal to all demographics and would provide teens and disabled members of the community an opportunity to gain job experience. 9/12/2011 108-487 Kirsten Moss stated that she had served as the Dean of Admissions for Harvard Business School, and most recently the Director of Admissions at Stanford Business School. She praised Mrs. Foley-Hughes food, and stated that she could undoubtedly run a successful business. Every person that walked into Mrs. Foley-Hughes Café would feel welcomed and respected, and her Café would help create the kind of Community Center that Palo Alto needed. Dominic Pefillo introduced himself as a job coach at Gunn High School, and stated that he had worked with Mrs. Foley-Hughes and her son for several years. The Hughes family defined what Palo Alto was about; they were involved in the community and supportive of their fellow community members. He praised Mrs. Foley-Hughes food and stated that Ada’s Café offered the added benefit of serving an undervalued population. He stated that he only knew of two other businesses in the community that hired disabled teens. Mego Tracy introduced herself as a 25-year Palo Alto resident, and explained that she had known Mrs. Foley-Hughes for 18 years. She stated that Mrs. Foley-Hughes kitchen offered visitors a feeling of safety, productivity and of being involved, and emphasized that her spirit and personality represented what Mitchell Park was all about. Shelly Pederson introduced herself and her son. She stated that Mrs. Foley- Hughes’ philosophy was based on the principle of compassionate employment. She explained that her son was very efficient and worked well, but that as a disabled teen, he had a very difficult time obtaining employment. Mrs. Foley-Hughes had offered him employment and valued his contribution. Stephanie Batties introduced herself as the designer of Ada’s Café. She explained that the café’s design would create a warm and inviting atmosphere, but would also place a strong emphasis on sustainability and energy efficiency. The design materials were chosen for their environmentally friendly attributes. She stated that she lived within walking distance of Mitchell Park, and that she would welcome the Café into her community. Mrs. Foley-Hughes wonderful food, paired with her mission of employing and training developmentally disabled youth, was the perfect fit for Mitchell Park. Tony Hughes read a statement from Brynhild Dumas, Executive Director of the French-American Chamber of Commerce of San Francisco, in support of Mrs. Foley-Hughes. He introduced himself as a resident of Palo Alto, Managing Director at Barclays Capital, father of four, husband of Mrs. Foley- 9/12/2011 108-488 Hughes, and Secretary of Ada’s Café. Ada’s Café was a traditional business with a community service mission, built on commercial success, community involvement, and compassionate employment. He stated that as a first time entrant, Ada’s Café had received the people’s choice award and tied for first in the judge’s choice category at the Palo Alto Chili Cook-off. Bob Moss stated that the Library Advisory Commission had not had the opportunity to discuss the topic in any detail. He stated that since Staff was revising the RFP, it was appropriate that the Library Advisory Commission have a chance to make recommendations on the nature of the RFP and the services to be provided. He cautioned Council against supporting a particular candidate before the completion of the RFP process. Jane Harris introduced herself as a resident of Palo Alto and the mother to two teenage sons. She stated that Council did not have to decide between a traditional business and a business that offered a community benefit, and explained that she did not have a clear understanding of what defined a traditional business. If Council’s intent was to determine the parameters of the RFP, it would be helpful to offer the public a definition of the term “traditional.” She commented that Ada’s Café would offer a community benefit, and would be a great addition to the community. Henry Hughes introduced himself as the son of Mrs. Foley-Hughes, and expressed his support for her. Alex Hawthorne stated that he had often enjoyed Mrs. Foley-Hughes cooking and that if he had to select one person to open a café it would be Mrs. Foley- Hughes. Bertil Chappuls introduced himself as a Director at McKenzie & Company Management Consultants and a resident of Palo Alto for the previous 20 years. He had served as an advisor during the development of the Ada’s Café business plan. The Ada’s Café business plan was a first class plan, which should be judged on its merits. Ada’s Café offered a compelling and innovative product, which combined an important social cause, a comprehensive operating plan, and sound financials. He stated that although the cafe would be a profit making entity, it was designed as a non-profit establishment in which all profits were recycled back into the chosen cause. Council Member Klein asked for clarification regarding Staff’s recommendation and objective with regards to the Item. City Manager, James Keene, replied that Staff sought Council input regarding the criteria that would be considered in the new RFP, and 9/12/2011 108-489 emphasized that Council had not been asked to make any determinations regarding applicants. He stated that the language in the Staff Report was purposefully vague to allow Council to offer broad policy direction. He reviewed the criteria from the original proposal, and inquired as to whether potential community benefit should be added to the list of criteria as the new RFP was developed. Council Member Klein stated that the list of criteria from the first RFP looked to be a standard list for those types of projects. Mr. Keene stated that it was, and that the use of boilerplate criteria was one of the deficiencies of the first RFP. Council Member Klein asked whether Council was also expected to provide a determination regarding how much weight should be given to the potential new criteria. Mr. Keene stated that it would be helpful to have a general sense for how the Council viewed the “community benefit” criteria, but that he did not need a specific determination regarding how to weight it against other criteria. Staff’s goal was to receive general direction regarding how many objectives Council would like to see pursued during the RFP process. Council Member Klein stated that each criterion had been assigned a percentage which reflected how heavily that criteria would be weighted, and stated that Staff would likely need direction regarding how the Council wished to weigh “community benefit.” Council Member Scharff asked whether it was true that Staff had received two good proposals from the first RFP. Mr. Keene replied that Staff had received more than two proposals. Council Member Scharff emphasized that Staff had received two very solid proposals, and inquired as to why Staff hadn’t made recommendations based on the proposals received. He asked why Staff had decided to release a new RFP. City Attorney, Molly Stump, stated that there were some technical issues with the way that the RFP had been issued. She stated that the City’s RFPs allowed Staff the ability to cancel the process at any time. She explained that it had been important to cancel the RFP to ensure a clean and fair process. 9/12/2011 108-490 Council Member Scharff asked whether there was time to reissue the RFP and still coordinate the opening of the café with the opening of the Community Center. Mr. Keene stated that there was enough time, and that the Item would be returned to Council. Council Member Scharff asked whether the Item would be returned to Council for a final determination, or whether the decision would be left to Staff. Mr. Keene stated that Staff would review the proposals and would make a recommendation to Council, but that Council would make the final determination. Council Member Scharff stated that if Council were going to serve as the deciding authority, than it was not as important for Council to provide specific direction regarding the weight of the criteria. Ms. Stump stated that typically the criteria were determined by Staff, with direction from Council. She explained that after Council had provided direction, the criteria would not come back to Council, but would be included in the new RFP. The RFP would include language describing the selection process, which typically included a panel to review and score each proposal. The panel would offer a recommendation to Council based on the top ranked proposal. Council Member Scharff asked whether Council was bound to accept the top ranked proposal as determined by Staff, or whether they had the ability to award the contract to a different applicant if they so desired. Ms. Stump replied that it depended on the RFP language, but that in her experience the RFP process did not typically work that way. Council Member Scharff inquired as to what action could be taken to ensure that social responsibility was included in the list of criteria, and that Council was granted ultimate authority over final approval of the winning proposal. Ms. Stump stated that once the RFP was re-issued everyone would have a new opportunity to apply. She emphasized that Council had been asked to provide their input regarding the priority of specific RFP criteria, and that there could be no discussion of applicants at the present time. 9/12/2011 108-491 Mr. Keene preferred that Council provide qualitative rather than quantitative feedback as to whether social service should be included as part of the RFP criteria. He stated that Staff had an established framework for how to weight the other criteria, but that there was no previous tradition of including a social benefit factor. He remarked that he had been uncomfortable establishing the framework for the new potential criteria without discussion with Council. MOTION: Council Member Scharff moved, seconded by Council Member Klein to include in the Request for Proposal (RFP) moderate social responsibilities and to direct Staff to return to Council with their recommendation after the new RFP process has been completed. Council Member Scharff stated that his Motion accomplished Staff’s objective, allowed for an open and fair process, and conveyed that moderate social responsibility was something that the Council would look upon favorably. Council Member Klein stated that he assumed that Council Member Scharff’s Motion was intended to direct Staff to include social responsibility on the list of RFP criteria and to place moderate emphasis on its importance. Council Member Scharff replied in the affirmative. Council Member Klein expressed skepticism regarding the idea of giving only qualitative direction to Staff. He stated that by not establishing a specific number for the ranking of the new criterion, Council could risk a future disagreement with Staff over the applicant’s scores recommendation for final approval of the bid. Mr. Keene stated that Council was free to provide quantitative input, and that his recommendation that Council do otherwise was an attempt to avoid a complex and prolonged debate on the topic. Council Member Klein stated that Staff would assign a number to the criteria at some point. Mr. Keene stated that Staff would assign numbers to all of the criteria. Council Member Klein stated that social responsibility should be a factor in the final decision, and that he was excited to add the criterion to the consideration process. 9/12/2011 108-492 Council Member Shepherd asked whether Council would be determining what type of programs were offered at the Mitchell Park Community Center or whether a previous Council had already done that. She stated that she would like to have a better understanding of the City’s objectives with regards to the project. Community Services Division Manager, Rob De Geus, stated that he did not believe that Council had weighed in on what type of programs would be offered at the Community Center, but that Staff would like to see a diversity of programs for all ages. The Center included a teen center that could house after-school programs, a main hall for aerobics classes and weekend weddings, and an art room for children of all ages. Council Member Shepherd asked whether the City planned to rent the café at a flat rate or whether the City would receive a percentage of profits. Mr. Fehrenbach replied that the RFP was designed as a lease agreement, and did not include a profit sharing model. Council Member Shepherd stated that she would like to add multiple bottom line factors to the RFP criteria, such as financial feasibility, social service programs, and sustainability efforts with regards to produce and food purchasing. She stated that she did not like the usage of the term moderate in the original Motion. Council Member Scharff asked whether the RFP already included some of the criteria proposed by Council Member Shepherd. Mr. Keene stated that some of the original RFP criteria might be changed. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace moderate social responsibilities with: In reissuing the RFP, Staff will consider multiple factors: financial feasibility, social services programs, and sustainability efforts in produce and food purchasing. Council Member Shepherd stated that efforts were always being made to expand the market system, and that Council was faced with a great opportunity to expand the bottom-line to include other factors. She had considered recommending a criteria to determine whether the applicants were local, but had not wanted the RFP to become too restrictive. She explained that the Motion would allow for a greater variety of applications and for a greater emphasis on social change. The Motion would also encourage the entrepreneurial spirit by attempting to promote social change through profitability. 9/12/2011 108-493 Council Member Schmid stated that the café would serve as the central attraction of the Mitchell Park development, and would be the center of all social interaction. He emphasized that the RFP should capture the importance of the café as a community focal point. He observed that the café reflected a different market than a standard commercial enterprise, as it would mainly attract people from the library and community center. The café should offer a warm, friendly environment, a proven record of success in the community, and a variety of healthy food options. Council Member Burt stated that the discussion belonged within the broader conversation of how various City programs related to Council priorities. He explained that the Policy and Services Committee (P&S) reviewed Council priorities and had directed Staff to assess City programs from a multi- dimensional viewpoint. The Café presented an opportunity to address Council priorities regarding youth well-being and environmental sustainability, both from the point from the point of view of the employees and the patrons. Council Member Holman asked whether the Item would be reviewed by the Parks and Recreation Commission (PARC). Mr. Keene stated that the Item would be reviewed by a cross-section stakeholders group to include representatives from the PARC and the various library groups. Council Member Holman stated that the RFP should include information regarding the programs offered at the Park, the Library, and the Community Center. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER that the RFP is to include that the proponent will indicate how they would be compatible with and fulfill the programming of the project to include the park, community center, and library. Mr. Keene asked whether Staff could amend the proposed language for insertion into the RFP, and assured Council that Staff would not alter the intent of the language. Council Member Holman replied yes. She agreed with some of the public speakers that Council had been presented with a false choice, and stated that she was happy to have the opportunity to add additional criteria to address Council priorities. 9/12/2011 108-494 AMENDMENT: Council Member Price moved, seconded by Council Member XXXX that the RFP include criteria that addresses Council Priorities such as Youth Well Being, and Environmental Sustainability, and that significant consideration be given to but not limited to training and job opportunities for developmentally challenged youth and adults. AMENDMENT FAILED DUE TO THE LACK OF A SECOND Council Member Price stated that she had experience with one of the applicants from the cancelled RFP during her time as a Palo Alto Unified School Board Trustee, and that the applicant provided a tremendous service to the School District and to the community. Vice Mayor Yeh expressed support for the Motion and agreed with Council Member Burt that the project should be closely tied to Council priorities. Mayor Espinosa stated that he would support the Motion, but that he had concerns regarding the fact that project objectives were being determined in the middle of the RFP process. He agreed with the addition of the criteria, but disagreed with the sequence in which Staff had approached the RFP. The City should have identified the new criteria as important independent of the current RFP process. He expressed concern over how the City would handle competing social objectives in the future, and explained that social benefit and environmental sustainability were broad policy issues that should not be developed around one RFP process. Council Member Shepherd asked whether Staff had to reissue the RFP or whether they could accept one of the previous applicants after receiving input from Council. Mr. Keene replied that the RFPs had already been rejected, and added that there were additional criterion to be considered in the new RFP, other than those which had been included in the Motion. Council Member Shepherd thanked the Hughes family for attending the meeting. She explained that although Council would not be making the decision regarding the RFP, she hoped that the City could match the community interest with Council priorities in a broader conversation regarding the Mitchell Park Community Center. Council Member Price asked whether Council’s actions were defensible. Ms. Stump stated that when the City issued a solicitation, they set the rules and parameters for the process. All were welcome to participate and 9/12/2011 108-495 guaranteed fair treatment, and the City was bound to follow the process described in the solicitation. She explained that adjustments could not be made in the middle of the process, and that even had the RFP not been cancelled for other reasons, the City would be unable to add new criteria after issuance. MOTION PASSED: 9-0 Mr. Keene suggested that Council consider Item Number 15 at a special meeting on September 26, 2011. City Clerk, Donna Grider stated that one Council Member had a potential conflict and that one Council Member had confirmed that they would not be available on that date. Council Member Burt asked whether the Item could be considered at the meeting on September 19, 2011. Director of Planning & Community Environment, Curtis Williams stated that one of the items on the agenda for September 19, 2011 was somewhat complex and could take some time to review. Council Member Burt stated that he did not see a problem in adding an item to the September 19, 2011 Agenda. Ms. Grider stated that the item relating to medical marijuana dispensaries was also scheduled for the September 19, 2011 Agenda. Council Member Holman suggested that Council postpone consideration of Item Number 15, and asked Mayor Espinosa and Vice-Mayor Yeh to ensure that the Item was heard at a reasonable hour on a future agenda. MOTION: Council Member Klein moved, seconded by Council Member Holman to continue Agenda Item No. 15 to September 19, 2011. 15. Council Direction in Response to Sustainable Communities Strategy (SB375) Alternative Scenarios and Update of Regional Housing Needs Assessment (RHNA) Process. Council Member Klein agreed with Council Member Holman that Item Number 15 was an important item and that it was too late in the evening to consider a complex item that would require lengthy discussion. It would be better to postpone the Item to a meeting at which it could receive the deliberation it deserved. 9/12/2011 108-496 MOTION PASSED: 9-0 Council Member Scharff left the meeting at 11:30 P.M. ACTION ITEMS 16. Approval of Increase in Construction Contingency from 10 percent to 25 percent on Contract C11136473 with Flintco Pacific Construction, Inc. for Construction of the Mitchell Park Library and Community Center, PE-09006; and Approval of Two Contract Amendments for Additional Construction Management and Design Services: Amendment No. Three with Turner Construction, Inc., to Add $205,287 for a Total Amount Not to Exceed $3,783,745 and Amendment No. Five with Group 4 Architecture, Inc. To Add $220,670 for a Total Amount Not to Exceed $7,902,421. Interim Public Works Director, Mike Sartor stated that Staff recommended an increase to the construction contingency for the Mitchell Park Library and Community Center Project up to 25 percent, as well as a 5 percent increase for additional services to the Contract with Group 4 Architecture, Inc., and an increase of 7.5 percent for additional services to the contract with Turner Construction, Inc. If the recommended increases were approved, the Mitchell Park Library and Community Center Project would still be below the engineer’s estimate and original bond amount. He reviewed the projected project cost and a history of the project change orders. One of the unforeseen site conditions, which had necessitated a change order, was the discovery of a PG&E main gas transmission line running next to the site. The transmission line was the same line that had been to blame for the San Bruno explosion, and its proximity to the site had necessitated additional precautions. He stated that the recommended increases would allow Staff to keep the project moving ahead on-schedule and to avoid future claims. He maintained that the Library and Community Center Project was scheduled to open as planned in the fall of 2012. Council Member Burt asked whether Staff had been aware of the PG&E main gas transmission line prior to the San Bruno explosion. Mr. Sartor stated that Staff had been aware of the existence of a gas line, but had not known of the importance of the line. Council Member Burt stated that he would like Staff to prepare a report to Council detailing how much was known about the existence of PG&E gas lines within the City. The report should also include any changes that had 9/12/2011 108-497 been made, or needed to be made in the future, to the City’s practices or policies in response to the information provided. He asked Mr. Sartor to explain his comment that the City needed the increase to the construction contingency to avoid future claims. Mr. Sartor stated that if the City did not keep up with the change orders and delayed settlement, the contractor could experience productivity losses. If this were to occur, the contractor could file a claim against the City at the end of the project, which would cause additional expenses for the City. Council Member Burt observed that the executive summary portion of the City Manager’s Report referred to underground utility conflicts (which he assumed referred to PG&E gas transmission line), the complexity of the Library project, and the LEED certification. He asked whether these were new factors. Mr. Sartor stated that those factors were not new. He explained that the City had received a very low bid in an extremely tight construction climate. That climate created a situation in which Turner Construction, Inc., as well as many of the other contractors that the City had worked with over the last several years, worked hard to identify potential project changes. John DeRuiter, Vice President of Turner Construction, Inc., stated that it was not uncommon on a lump sum public bid project to encounter those issues on a fairly regular basis. The contractors do what they can to put together the best bid that they can for the project, but generally when the bid is low they look for opportunities to make up that ground. Often times the situation becomes adversarial, and the contractor will look for every opportunity to request a change order. He stated that generally a construction contingency would be utilized in order to offset some of the issues that arose during construction. Some of the contractor’s claims were legitimate, and so necessitated a change order, but some fell into a grey area. Those requests which fell into the grey area often required that both parties reach some type of settlement. He agreed with Mr. Sartor that it was best for the City to handle these claims as they came up, rather than wait until the end of the project. It could be very costly to wait to handle change order requests until the end of the project, and the City would have more leverage as the project progressed. Council Member Burt offered his interpretation of the issue, stating that the City had been pleased to receive an aggressive bid for the project, the legitimacy of which was perhaps now in question. Some of the change orders seemed to be legitimate, although there were also some which Staff questioned the legitimacy of. Approval of the Item would allow Staff 9/12/2011 108-498 additional discretion to settle the change order requests without delaying the project. He stated that the change orders should not be so large on that type of fixed bid project, and expressed concern regarding the City’s relationship with the contractor. City Attorney, Molly Stump stated that the City Attorney’s Office was actively working with Public Works Staff and Turner Construction, Inc. to address those issues, but emphasized the need to move forward with the project. Council Member Schmid asked whether the project had already been granted a 25 percent construction contingency. Mr. Sartor stated that it had not. The original construction contract was awarded to Flintco Pacific Construction, Inc. in the amount of $26 million, and included a 10 percent construction contingency. Council Member Schmid stated that the projected total cost listed in the PowerPoint presentation was $41.6 million, and observed that Council’s approval of the contingency increase did not appear to affect that projection. Mr. Sartor stated that the number listed included not only the construction contract, but also the design contract, the construction management contract, and other miscellaneous ancillary contracts. Council Member Schmid asked whether there had been a net decline in the cost of the project or whether Staff would be asking for additional increases in the future. Mr. Sartor replied that Staff did not expect any future increase requests. Council Member Schmid responded to Mr. Sartor’s comment that the Library and Community Center Project was scheduled to open as planned in the fall of 2012, stating that he thought that the opening had originally been scheduled for the summer of 2012. Mr. Sartor stated that fall had always been the target completion date. Council Member Schmid asked whether the project could realistically be completed by the fall of 2012. Mr. Sartor replied that it could. 9/12/2011 108-499 Council Member Schmid asked whether the Citizens Oversight Committee for Expenditures of Library Bond Funds and the Library Bond Stakeholders Committee had reviewed the proposed increases. Mr. Sartor replied that Staff had met with both groups. Council Member Schmid asked how the groups had responded to Staff’s proposed increases. Mr. Sartor explained that Staff had communicated to both groups that they would work closely with Turner Construction, Inc. and the City Attorney’s Office in handling potential changes to the project. He stated that Staff had been working with the City Attorney’s Office for the past several months. There was a great deal riding on the success of the Mitchell Park Library and Community Center Project, especially in light of future potential bond measures. He stated that the recommendation was in alignment with Staff’s goal of completing the project on budget and on schedule, in anticipation of a successful opening next fall. Council Member Price acknowledged that change orders were common, but expressed concern that the change orders to-date for the completion of plans and specifications represented 29 percent of the project cost. She asked when Staff had determined that the plans and specifications were inadequate. Mr. Sartor agreed with Council Member Price that there had been a significant number of change orders. He stated that Staff first encountered an issue with the contractor in spring 2011, related to the submission of steel detailing purchasing paperwork. Staff was working with the City Attorney to determine whether there was any basis for an errors and omissions claim to the designer. They had contacted officials at both the City of Walnut Creek and the City of San Jose, for whom Group 4 Architecture, Inc. had completed similar projects, and neither had reported any problems with their plans and specifications. He noted that the situation with the contractor was a major ongoing concern. Council Member Price was pleased to see Staff’s reference to the American Institute of Architects contingency formulas, which were now regarded as somewhat low. She asked whether the current project indicated a need for higher contingencies across the board, and whether, as a matter of standard practice, Staff planned to include a 20 percent to 25 percent contingency for future projects. 9/12/2011 108-500 Mr. Sartor stated that the situation was unique to the current construction climate. The bids for the project had been more than 25 percent below each of the two engineering estimates received by the City. Given the economic climate, he recommended a 15 percent to 20 percent contingency for upcoming projects such as the Main Library project. He explained that he had recommended a 20 percent contingency for the Art Center project. It was a rather unique project, which included a major renovation to an existing facility. Mr. Keene asked whether, given the current environment, Staff could complete a more detailed assessment of the bid at the beginning of the project, which would factor escalating contingencies into the bid price. Mr. Sartor stated that Staff had pre-qualified all of the bidders, and that Flintco Pacific Construction, Inc. had passed the pre-qualification screening based on their past experience and claim history. Council Member Shepherd stated that she had been a construction accountant for 25 years, and had never seen a 25 percent construction contingency. She expressed deep concern, and indicated that she was not likely to support the Staff recommended action. She inquired as to the difference between a lump sum public bid project and a regular private contract. Mr. DeRuiter replied that the city did not have the same decision making flexibility that a private owner would have. Council Member Shepherd acknowledged that the contractor’s steel sub- contractor had fallen through, but asked why the City should accept a change order to keep the project moving on schedule, rather than placing the burden on the contractor to resolve the situation. Mr. DeRuiter replied that the change order was not specifically related to the steel sub-contractor. Council Member Shepherd stated that the issue with the steel sub-contractor appeared to be a part of the change order, and that she would like to understand the reasoning behind $3.6 million in additional contingencies. Mr. DeRuiter stated that there were significant legitimate changes that had occurred throughout the course of the project, such as changes to the exterior skin of the building. Council Member Shepherd asked whether the City had initiated the change order to the exterior skin. 9/12/2011 108-501 Mr. DeRuiter responded that Staff had not, and that information not available to the contractor at the time of bid had necessitated the change order. Council Member Shepherd inquired as to the nature of the difficulties with the steel sub-contractor. Mr. Sartor responded that there had been two issues with the steel sub- contractor: 1) the same steel sub-contractor was listed on the first three lowest bids that the City received. This sub-contractor went out of business shortly before the project began. 2) Due to the fact that steel was needed to begin the job and was a critical part of the project, there was a potential for a three-month delay in starting the project after the loss of the sub- contractor. He agreed that it was not the City’s responsibility to resolve the situation, but explained that Staff had decided to adjust the steel design to recover some of the lost time. The original steel detailing that was included in the plans and specifications was not adequate. If Staff had completed the plans prior to releasing the RFP, or had recognized the inadequacy, the bids would have been higher. Council Member Shepherd inquired as to the amount of the change order for that item. Mr. Sartor replied that the change order had been approximately $200,000. Council Member Shepherd asked how much the changes to the exterior skin would cost. Mr. Sartor replied that it had been included in the $200,000 change order for the steel redesign. Council Member Shepherd asked how the lump sum public bid process differed from the private bid process. Mr. DeRuiter explained that the private sector bid process was not subject to public scrutiny, and so allowed for much more flexibility to negotiate settlements with contractors when something went wrong. In the private sector, the lump sum bid process could be avoided altogether by selecting a contractor and negotiating a deal with them. Council Member Shepherd commented that she had a great deal of experience working with investor pools with very strict budgets. She explained that the presentation of such large change orders to an investor 9/12/2011 108-502 pool would jeopardize the chances of those investors re-investing in the future. A 25 percent contingency allowed for a great deal of freedom, with little oversight. She asked whether the Leadership in Energy and Environmental Design (LEED) work was part of the original bid process. Mr. Sartor stated that LEED gold standards were part of the design and bid package. Council Member Shepherd asked whether Staff expected any change orders related to the LEED work. Mr. Sartor stated that Turner Construction, Inc. had informed him that to meet LEED gold standards would require the installation of a very complex energy efficient heating ventilation system, which could necessitate additional change order requests. Council Member Shepherd asked whether the ventilation systems were included in the original design that the contractor bid on. Mr. Sartor stated that the element had been included in the plans from the beginning. Council Member Shepherd summarized that if the contractor had missed something in the original bid, it was cheaper to approve a change order immediately than to risk legal action later. Mr. Sartor stated that was correct. Council Member Klein asked how much of the requested $3.65 million had already been committed. Mr. Sartor replied that none of the funds had been committed. Staff anticipated the $3.65 million to be the maximum amount needed, but only approximately five to six percent had been spent on contingencies to date. Council Member Klein inquired as to how many change order claims had been requested by the contractor to date. Greg Smith, Turner Construction Manager, stated that they had resolved claims and negotiated settlements for disputed items in the amount of approximately $1.25 million to date. Although change orders had not been executed, negotiated settlements were pending on another $500,000. The sum of all change orders submitted by the contractor to Turner Construction, Inc. was over $4 million. 9/12/2011 108-503 Council Member Klein stated that the total contingency would be a little over $6 million. Mr. Sartor confirmed that if the $4 million in change orders were 100 percent valid, then Council Member Klein’s statement would be correct. He stated that Staff anticipated an 18 to 23 percent contingency by the end of the project. Mr. Smith clarified that of the $4 million in requested change orders, $1.25 million had been settled. Staff was about to settle another $500,000. Council Member Klein asked whether Staff had received any assurance that they would not receive further change orders requests on the project. Mr. Sartor stated that there had been no assurances but, that after meeting with both Turner Construction, Inc. and Group 4 Architecture, Inc., they felt confident that they could complete the project with the 25 percent contingency. Council Member Klein stated that Staff seemed to have a very serious claim against Group 4 Architecture, Inc. Mr. Sartor agreed, and indicated that Staff was working with the City Attorney’s office to resolve the issue. Council Member Klein asked, given the current situation, why the City would increase the contingency for a Group 4 Architecture, Inc. project. Mr. Sartor stated that Staff had recommended an increase to the additional services contract with Group 4 Architecture, Inc. in order to allow for the increased manpower necessary to keep the project moving forward on schedule. Council Member Klein inquired as to how Group 4 Architecture, Inc. had responded to the concept that they were responsible for some of the additional costs. Mr. Sartor responded that after Staff had communicated their concerns to Group 4 Architecture, Inc., they had added additional personnel and had begun to work more closely with Staff. Council Member Klein asked whether Group 4 Architecture, Inc. had acknowledged that they had made a mistake. 9/12/2011 108-504 Mr. Sartor replied that Group 4 Architecture, Inc. had accepted the fact that the plans had problems, but emphasized that it had not yet been determined whether those problems constituted a valid errors and omissions claim. Council Member Klein asked whether Group 4 Architecture, Inc. had been notified that the City might pursue claims against them. Mr. Sartor stated that in the previous Additional Services Authorization, Staff had put Group 4 Architecture, Inc. on notice that the City was investigating the issue. Council Member Klein remarked that the Staff Report was somewhat misleading. The Report emphasized that the project was still within the $41 million total projected cost, despite the fact that $41 million was not the projected cost discussed prior to the issues that emerged with the contractor in spring 2011. Mr. Sartor stated that for the previous several months, the projected total cost listed in the Staff Report had been $41 million. Council Member Klein stated that at some point, the projected cost had been lower. Mr. Sartor replied that the original Engineer’s estimate had been close to $41 million. Council Member Klein maintained that there must have been a lower projected cost at the time that the City entered into the 10 percent construction contingency contract with Flintco Pacific Construction, Inc. Mr. Sartor indicated that was correct. Council Member Klein asked Staff whether there had been an increase of approximately $3.5 million to the projected project cost since that time. Mr. Sartor stated that there had been. Council Member Klein explained that he had hoped that the City would spend between $36 million and $37 million on the project, rather than the current projected cost of $41 million. 9/12/2011 108-505 Mr. Sartor replied that the total projected Engineer’s estimate, which included design, construction management, and other contracts, was always approximately $41 million. Council Member Klein commented that the City was not doing as well as they would like on the project. Mr. Sartor agreed. Council Member Klein expressed concern over the situation with Group 4 Architecture, Inc., and emphasized that Staff and Council needed to be more candid regarding the realities of the project’s increased costs. Council Member Holman observed that a decision had not yet been made as to whether the project would achieve gold or platinum LEED standards. She stated that such a determination should have been made in the original design process. Mr. Sartor explained that the project would be scored by a commissioning agent for both design and operational functionality of the building after the completion of the project in order to determine its status. Group 4 Architecture, Inc. had advised Staff that the building would easily meet gold standards, and that there was a good chance that it could achieve platinum. He emphasized that Staff was doing all that they could to increase the project’s likelihood of achieving platinum status, which could include some change order requests. Council Member Holman stated that there were operational and maintenance costs associated with upgrading the building to platinum status, and asked whether those expenses were being considered. Mr. Sartor agreed and stated that both the facilities and operations Staff were involved in the decision making process. Council Member Holman asked whether it was true that Staff would like to achieve platinum status, but had not yet completed the decision making process. Mr. Sartor stated that the basic electrical and mechanical design of the building would not change, regardless of the designation. Council Member Holman was glad to hear that the City Attorney had been working with the Public Works Department. She suggested that Staff 9/12/2011 108-506 investigate whether the City’s construction project contracts could be tighter. Ms. Stump stated that the City Attorney’s Office was always reviewing contract language for language improvements. She agreed with representatives from Turner Construction, Inc. that the situation was likely a result of the bidding climate, rather than a reflection of the City’s contracts. Vice Mayor Yeh asked whether there were alternative contracts that could be used, which would include risk for the contractor and incorporate job performance. If the City did not create disincentives for change orders, then it was, in effect, incentivizing them. Ms. Stump stated that the contract used for this project was the traditional contracting process used in Palo Alto. She stated that other agencies had used contracting models such as design build and construction manager at risk. There were many ways of organizing relationships, and the Council might like to investigate the subject further at some point in the future. Vice Mayor Yeh noted that with regards to the exterior cladding of the building, the contract mentioned use of a proprietary system instead of conventional framing. He expressed concern that the use of a proprietary system would lock the City into a cycle of ongoing maintenance with the same contractors because they would be the only ones who understood the system. Mr. Sartor replied that exterior cladding was not a high maintenance activity. Mr. Smith explained that the Architect had originally conceived of a high performance exterior wall framing system, which had a higher insulating value. The specialty insulation was only produced by one company, which was not appropriate for the public bid process. For this reason, the project was bid with conventional framing. Staff had later opted to buy the specialty system, and had completed a $100,000 change order for the item. The higher insulating value would help to decrease electrical costs and increase the building’s energy performance, which would contribute to the building’s LEED points. He agreed with Mr. Sartor that there would be no ongoing maintenance costs. Council Member Price left the meeting at 12:22 A.M. Vice Mayor Yeh stated that it was helpful to understand the dollar amount attributed to each sub-section of the project. Any claim not initiated by the City should be accompanied by shared risk between the contractor and the 9/12/2011 108-507 City. If the City did not initiate the claim, then the City should not be exposed to future claims regarding the issue. He asked whether the contract was structured in such a way as to prohibit shared risk. Mr. DeRuiter explained that the lump sum bid process was, by nature, a process in which the contractor limited their bid to only those items included in the bid package. The public sector bidding process provided much less flexibility than the private sector, where a contractor would be able to propose amendments to the original design. He stated that the construction manager at risk bidding process was much different, and allowed for the prequalification of both sub-contractors and the general contractor. Council Member Burt asked how a contractor could be exempt from liability when the plans and specifications had not described the item in question. Mr. DeRuiter stated that the contractor would only bid on what was included in the bid documents. Council Member Burt inquired as to how the contractor was able to bid the cost of steel for the project, if the spacing and length of the steel had not been included in the bid documents. He further inquired as to why the City was liable for a change order, when the contractor had provided the bid despite the fact that the necessary information was not provided in the bid documents. Mr. DeRuiter stated that the contractor assumed that all required information had been detailed in the bid documents, and submitted a bid based on that assumption. Council Member Burt asked how it was possible for the contractor to make an assumption regarding an item for which no information had been provided. Mr. Smith stated that the information regarding the steel frame of the building had been complete. The additional steel needed to support the stone cladding and large window openings had not been included in the bid documents. The steel needed was not shown on the plans or structural drawings, and the contractor had not had any information with which to bid the additional steel required according to the design. He stated that some additional steel pieces had been included in the drawings, but that their presence had not been accompanied by any measurements or explanation. Council Member Burt asked for confirmation that the project had been designed to meet LEED gold standards. 9/12/2011 108-508 Mr. Sartor answered that it had. Council Member Burt stated that the City would need to decide whether, for a reasonable expense, the project should be upgraded to platinum standards. He commented that the decision should be made by Council, and that he was not comfortable with the decision being made at the Staff level. Mr. Sartor stated that Staff did not intend to change the design of the project to upgrade the building from gold to platinum status. He explained that a project could sometimes reach the next status level based on the commissioning and building operation. If there were any issues that necessitated a change in design, Staff would seek direction from Council. Council Member Burt noted that change orders could potentially be required to move the building from gold to platinum status. Mr. Sartor stated that Staff had not intended to convey that. Council Member Burt observed that the executive summary section of the City Manager’s Report stated that moving up to the platinum status would increase the complexity of the project. Mr. Sartor replied that Staff had not been clear, and that they had intended to convey that even at LEED gold status, the Mitchell Park Library and Community Center was a very complex building. Council Member Burt asked whether a completion schedule had been included in the bid. Mr. Sartor responded that the contract included May 2012 as the completion date. The contract also incorporated liquidated damages. Council Member Burt acknowledged that the loss of the steel sub-contractor was a major setback for the project, but inquired as to why the City was paying for the overtime needed to allow the new steel sub-contractor to get up to speed on the project. He asked why the contractor did not suffer financial ramifications from his failure to meet the agreed upon schedule. Mr. Smith stated that conditions were such that it was not likely that the project would be completed by May 2012. He explained that the contractor was not responsible for the majority of the delays. 9/12/2011 108-509 Council Member Burt asked whether the overtime costs needed for the new steel sub-contractor’s to keep the project on schedule was included in the requested change orders. Mr. Smith stated that there were, and explained that the overtime costs for the steel shop to deliver the steel on time was approximately $40,000. Council Member Burt remarked that he was not certain that the City should be responsible for that expense. Whether it was the City’s liability or disputed liability with the contractor, Council needed to discuss the costs associated with keeping the project on schedule. Mr. Sartor stated that in order to keep the project moving on schedule, Staff would require a contingency authority of up to 25 percent. Council Member Burt observed that a portion of the costs that comprised the requested 25 percent contingency, were a direct consequence of Staff’s effort to keep the project on schedule. Ideally, the project would be on schedule and within budget, but Council needed to determine how much it was now worth to keep the project on schedule. He inquired as to how much money the City could save by allowing the project to be delayed. Mr. DeRuiter stated that project delays would increase the contractor’s costs in areas such as personnel. If the contractor was not responsible for the delay, then the City would be responsible for the additional costs. Council Member Burt commented that Staff’s priorities were not clear. He explained that he would like to understand the motivation behind the requested contingency. It was not clear whether the motivation behind the Staff recommendation was a willingness to pay extra to stay on schedule or a desire to avoid potential penalties for delay. Mr. DeRuiter stated that the schedule had been revised to accommodate the dynamics of the project. Council Member Burt asked whether it cost the City more to stay on schedule with the project than to allow for delays and risk additional contractor costs. Mr. DeRuiter replied that the contractor would experience increased costs, and that it was still unclear what percentage of those additional costs would be the City’s responsibility. 9/12/2011 108-510 Council Member Burt stated that it appeared that Staff’s desire to complete the project was not the primary motivation behind the Staff recommendation. He asked whether the Staff recommendation was motivated by the desire to avoid financial risk. Mr. DeRuiter stated that both were motivating factors behind the proposal of the Item. Council Member Burt stated that Council needed to have a discussion, separate from the conversation regarding potential liabilities, regarding how much it was worth to the City to complete the project on time. He explained that the first was a policy decision which should be made by Council, while the second was a project management decision that should be made by Staff. Mr. Sartor stated that there would be a cost even if Council decided to accept an extended project schedule. The contractor would experience increased equipment and personnel costs, which had been determined to be approximately $100,000 per month. Mr. Smith explained that the City would receive a claim from the contractor for each day that he was on site past May 29, 2012. Those claims would total approximately $100,000 per month. The project manager’s were working hard to ensure that the contractor had everything that he needed to finish the project, which often included more Staff time to assist in details and more time with the Architect to complete any unfinished design details. The City would also pay the premium for selected over-time in those situations in which there would be a significant benefit in the critical path schedule. Those efforts would be less costly than the $100,000 per month in claims which would be submitted by the contractor if the project were to be delayed. Council Member Klein stated that, as he had understood it, if the project was not completed by May 29, 2011, the City could file a claim against the contractor for failure to complete on time. Mr. Smith replied that the liability would depend on who was responsible for the delay. If the contractor were responsible for the delay, then he would have to pay the City $2,500 per day in liquidated damages. If the City were responsible for the delay, then the City would be liable for the contractor’s overhead costs for the duration of the delay. Council Member Klein asked whether the contractor would have a good claim against the City if the project were not completed by May 29, 2011. 9/12/2011 108-511 Mr. Smith stated that the contractor had a stronger claim than the City did. MOTION: Council Member Klein moved, seconded by Council Member Burt to approve the following Staff recommendations: 1) The existing contingency for construction of the Mitchell Park Library and Community Center PE-09006) (“MPLCC”) is 10 percent of the construction contract of $24,365,000, or $2,436,500. Staff recommends the construction contingency for contract C11136473 with Flintco Pacific, Inc., be increased by $3,654,750 an additional 15 percent of the Contract amount. The revised total contingency authorization for this contract would be $6,091,250 for a total contract contingency of 25 percent, 2) Approve and Authorize the City Manager to execute Amendment No. Three (Attachment B) to contract C10131631 with Turner Construction, Inc., to add $205,297 for additional construction management services for a total contract amount of $3,783,745. This increase represents a 7.5 percent increase in the Additional Services budget, 3) Approve and Authorize the City Manager to execute Amendment No. Five (Attachment C) to contract C09130744 with Group 4 Architecture, Inc., to add $220,670 for additional design services for a total contract amount of $7,902,421. This increase represents a 5 percent increase in the Additional Services budget, 4) Staff is to provide monthly reports to Council on Change Orders and their resolution, 5) Council approval is required on any individual Change Order that exceeds City Manager authority of $85,000, 6) City Attorney to supply monthly reports regarding potential claims against Group 4 either in a confidential report or during a Closed Session. 7) Staff is to return to Council for approval of any additional expenditures to achieve LEED Platinum. Council Member Klein stated that he was not happy with the status of the project. Staff should have initiated a more candid debate about the issues sooner. He acknowledged that construction debates were commonplace, but 9/12/2011 108-512 that he was not sure that the City was being sufficiently aggressive. Council had no choice but to accept the recommended action, but emphasized that there would need to be greater oversight moving forward. Council Member Burt agreed with Council Member Klein. Council Member Holman clarified that the Motion would adopt Staff recommendations, but would also include four additions. One of the additions was to require Council approval for any change order in excess of $85,000, and the second was to direct the City Attorney to provide monthly reports to Council. She asked whether the Monthly reports should be agendized for each meeting, for the duration of the project, in order to allow Council to take action as needed. Mr. Keene stated that were the Motion to pass, any change order above $85,000 would necessarily return to Council as an action item. All other change orders could be included in a monthly summary to Council. Council Member Holman stated that she could foresee the need for Council action on items other than expenditures exceeding $85,000. Ms. Stump explained that one standard agendized item would not be sufficient for noticing purposes, and that each item would need to be specifically identified on the agenda in order for the Council to take action. Council Member Holman replied that it was important to have an item on the agenda as a placeholder, in order to ensure that Council stayed involved in the project. She was not comfortable with the monthly report returning as an informational item. Council Member Klein stated that, per the Motion, Staff would automatically present any change order above $85,000 for Council approval. Council Member Shepherd expressed concern regarding the requested 25 percent contingency, and stated that she would like to see the contingency increase incrementally. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to change the contingency percentage to 20 percent. Council Member Shepherd remarked that the Staff report had not been particularly clear regarding the future of the project, and that she agreed with the need for increased communication between Staff and Council 9/12/2011 108-513 moving forward. She hoped that large change orders would not be separated into a multitude of smaller change orders in order to avoid Council’s approval threshold. Ms. Stump asked whether the monthly project reports should be scheduled as closed session items or handled as confidential reports. Council Member Klein replied that the City Attorney should have discretion to determine which method was most appropriate. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to have Staff provide a report to Council from both library oversight committees on their evaluation of the effectiveness of the oversight process. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to change recommendation Number 6 to include any potential claims rather than just Group 4 claims. Council Member Klein stated that although he accepted the Incorporation, the change order would resolve all of the claims against the City. He stated that he was not aware of any currents claims, other than those that the City had filed against Group 4 Architecture, Inc. Mr. Smith explained that a change order was written once a month, which resolved anywhere from 10 to 20 changes. None of those monthly change orders had been for less than $85,000, even though the individual changes were all less than that amount. Review of every change order in excess of $85,000 would amount to review of every change order written for the project. He inquired as to whether that was Council’s intent. Council Member Klein replied that it was. Mr. Keene stated that he had interpreted the Motion to mean any individual change order of more than $85,000. Council Member Burt stated that Council wanted the opportunity to review individual change orders in excess of $85,000, not aggregate change orders. Council Member Klein agreed. Mr. Sartor clarified that Staff was not to consolidate changes into one change order, but to leave each change order separate. Those changes over $85,000 would be presented to Council for review. 9/12/2011 108-514 Council member Burt stated that was correct. Mr. Keene added that separate from the presentation of change orders above $85,000, Staff would also present a monthly report with a summary of all change orders for the month. MOTION AS AMENDED PASSED: 7-0 Price, Scharff absent 17. Recommendation for Vision on Cafe Operations at the New Mitchell Park Library & Community Center Cafe. COUNCIL MEMBER QUESTIONS, COMMENTS, AND ANNOUNCEMENTS Council Member Shepherd asked Staff to provide information to the public regarding the City’s involvement in the future of the Varsity Theater. City Manager, James Keene stated that the future of the Varsity Theater was dependent upon future viable prospects for the owners of the building. Mayor Espinosa stated that he believed that Council Member Shepherd had requested that Staff more effectively communicate those issues to the public. Mr. Keene asked whether Council would like Staff to put something together for the public. Council Member Shepherd stated that there were those in the community who were very excited about the use of Varsity Theater, but that she did not see the project moving forward without the prospect of an appealing financial scenario for the landowner. She asked that Staff work to better inform the activists and the community regarding the current status and future prospects for the Varsity Theater. Mr. Keene stated that Staff would work to spread the word regarding a realistic vision for the future of the Varsity Theater. Council Member Holman discussed the poor clarity of some of the charts included in the agenda packet. Mr. Keene stated that he would be at the ICMA annual meeting the following Monday and would be unable to attend that day’s Council meeting. ADJOURNMENT: The meeting was adjourned at 1:10 A.M. 9/12/2011 108-515 ATTEST: APPROVED: City Clerk Mayor NOTE: Sense minutes (synopsis) are prepared in accordance with Palo Alto Municipal Code Sections 2.04.180(a) and (b). The City Council and Standing Committee meeting tapes are made solely for the purpose of facilitating the preparation of the minutes of the meetings. City Council and Standing Committee meeting tapes are recycled 90 days from the date of the meeting. The tapes are available for members of the public to listen to during regular office hours. Library Bond Stakeholders Committee Special Meeting Minutes -October 4,2011 Attendees: Sunny Dykwel, Adam Howard, RuthAnn Garcia, Rob De Geus, Monique leConge, Susie Thom, Greg Betts, Jim Schmidt, Elise DeMarzo, Cornelia van Aken, Tom Fehrenbach, Jim Keene Council Direction regarding RFP Tom reported that in reissuing the RFP, staff must consider multiple factors: 1.Financial feasibility 2.Social services programs 3.Sustainability efforts in produce and food purchasing 4.That the RFP is to include that the proponent will indicate how they would be compatible with and fulfill the programming of the project to include the park, community center, and library. Tom also advised the Committee that this is a confidential process and that members should not discuss any of this information with prospective bidders. It was noted that because the Stakeholders group has no decision-making authority, the following comments are only for the purpose of providing input. Draft Evaluation Criteria Discussion ·Regular meetings should be held with the selected vendor. ·Operating hours are currently set for Monday-Saturday 10-5. This may not meet the needs of either the Library or Community Center since both do business outside the proposed hours. ·The RFP should place emphasis on the importance of supporting youth well-being. Input regarding the draft MPLCC Café Proposal Evaluation Matrix ·The group discussed the 6 proposed criteria and made suggestions for changes in language. Tom will take them into account when revising the document. ·The following 6 criteria should be rated separately: 1.financial sustainability 2.social service benefit to the community 3.compatibility with Library/Community Center purpose 4.sustainability goals 5.customer service standards 6.menu Attachment D ·The group felt that the points system should be reallocated to elevate the importance of the menu and sustainability elements, resulting as follows: 1.financial sustainability –25 2.social service benefit to the community –15 3.compatibility with Library/Community Center purpose –10 4.sustainability goals –20 5.customer service standards –15 6.menu -15 Lease terms discussion The proposed lease term of 1 year with 2 2-year renewal options will likely not appeal to many vendors. The group believes that a 3 year lease with 1 2-year option to renew may be more attractive. Next steps The RFP will go out October 18 and close at the end of November, with a goal of going to City Council on December 5, 2011. NEXT STAKEHOLDERS MEETING: October 13, 2011 City of Palo Alto (ID # 2444) City Council Staff Report Report Type: Consent Calendar Meeting Date: 1/30/2012 January 30, 2012 Page 1 of 2 (ID # 2444) Summary Title: MOU with weCARE Alliance Title: WeCARE (Community Alliance to Reduce Euthanasia) Memorandum of Understanding From:City Manager Lead Department: Police Recommendation Staff recommends that Council approve the Memorandum of Understanding (MOU) with the WeCARE Coalition relating to the establishment of a cooperative working alliance between the founding agencies. Executive Summary <<Enter Executive Summary here>> Background In 2009, the WeCARE Coalition was formed. The Coalition is comprised of the following “founding” agencies: Palo Alto Animal Services, San Jose Animal Care and Services, Silicon Valley Animal Control Authority, Town Cats Rescue, Humane Society of Silicon Valley and the County of Santa Clara Animal Care and Control. The purpose of establishing this cooperative working alliance is to end the euthanasia of healthy and treatable dogs and cats in Santa Clara County by 2016. Discussion The WeCARE Coalition is preparing to apply for a “Lifesaving Award Grant” through Maddie’s Fund. Maddie’s Fund, located in Alameda, California has established these grants to recognize communities that are leading the way to saving lives. The Coalition is applying for one million dollars that will be shared between the founding agencies. Coalitions of animal groups operating in any county with a human population of 200,000 or greater are eligible to apply for a Maddie’s Fund Lifesaving Award Grant. Coalitions must have achieved and sustained an adoption guarantee for healthy shelter dogs and cats for at least two years and demonstrate the ability to maintain that status in the future. Coalition members agree to publicly report their individual and January 30, 2012 Page 2 of 2 (ID # 2444) community-wide annual statistics. Each participating group, regardless of its operational model or approach, is eligible to receive a portion of the Maddie’s Fund Lifesaving Award Grant. Following the requirements as set forth by Maddie’s Fund, the Coalition has met and developed standardized terminology and evaluation criteria and each agency has committed to collecting and publicizing relevant statistics. The six founding agencies have been collecting statistics using consistent classifications, discussing grant opportunities and working together to end euthanasia of healthy and treatable dogs and cats. The next step for the Coalition is to implement the MOU in order to apply for the Lifesaving Award Grant. Timeline, Resource Impact, Policy Implications, Environmental Review (If Applicable) Palo Alto Animal Services will not realize revenue from Maddie’s Lifesaving Award Grant if this MOU is not signed. Attachments: ·mouwecarefinal (DOC) Prepared By:Sandra Stadler, Superintendent Department Head:Dennis Burns, Police Chief City Manager Approval: ____________________________________ James Keene, City Manager Memorandum of Understanding By and Between weCARE Alliance Members Page 1 MEMORANDUM OF UNDERSTANDING BY AND BETWEEN weCARE ALLIANCE MEMBERS This Memorandum of Understanding is entered into by and between Palo Alto Animal Services, San Jose Animal Care and Services, Silicon Valley Animal Control Authority, Town Cats Rescue, Humane Society Silicon Valley and the County of Santa Clara Animal Care and Control (subject to approval by the County of Santa Clara Board of Supervisors) for the purpose of establishing a cooperative working alliance between these organizations. These six groups shall be known as “founding agencies” of the weCARE Alliance. This alliance may include other qualified animal welfare groups (“participants”) that can support and help accomplish the goals outlined in this agreement. Joint Goal: To respect and support each Alliance member’s individual and differing roles and responsibilities and to work cooperatively and productively to end the euthanasia of healthy and treatable dogs and cats in Santa Clara County, California. Definition of Success: Success will have been achieved when each healthy and/or treatable cat and dog entering any facility operated by an Alliance member, or any recognized rescue partner within the county, can be placed in a responsible and appropriate home and no dogs or cats are euthanized because of a lack of space or the passage of time. The parties are committed to the achievement of success no later than December 31, 2016. Statement of Respective Roles: The founding agencies and other participants will work collaboratively in a mutually supportive relationship that publically recognizes the contributions of each Alliance member. All parties to this Memorandum of Understanding acknowledge that they have wholly different but mutually supportive roles with respect to the management of companion animal issues in the County and the care and placement of stray and owner-surrendered cats and dogs in the County. They are committed through this relationship to help the community to understand the difference between the role of a public animal control agency and that of other humane organizations, and to at all times treat each other’s role in a respectful and supportive manner. Memorandum of Understanding By and Between weCARE Alliance Members Page 2 I. Agency Roles: A. Palo Alto Animal Services is the government agency responsible for: i. Addressing public safety issues with respect to animals in the cities of Palo Alto, Mountain View, Los Altos and Los Altos Hills including the impoundment of strays in their community. ii. Investigating and resolving animal abuse and neglect matters. iii. Acting as a receiving point for stray and owner- surrendered dogs, cats and other companion animals. iv. Adopting out animals after their legal holding period or, if necessary, performing euthanasia for those animals where adoption or rescue is not available. v. Providing low-cost spay and neuter services for their community. B. San Jose Animal Care and Services is the government agency responsible for: i. Addressing public safety issues with respect to animals in the cities of San Jose, Saratoga, Cupertino, Milpitas and Los Gatos including the impoundment of strays in their community. ii. Investigating and resolving animal abuse and neglect matters. iii. Acting as a receiving point for stray and owner- surrendered dogs, cats and other companion animals. iv. Adopting out animals after their legal holding period or, if necessary, performing euthanasia for those animals where adoption or rescue is not available. v. Funding low-cost spay/neuter services for the public. C. Silicon Valley Animal Control Authority is the government agency responsible for: i. Addressing public safety issues with respect to animals in the cities of Santa Clara, Campbell and Monte Sereno including the impoundment of strays in their community. ii. Investigating and resolving animal abuse and neglect matters. iii. Acting as a receiving point for stray and owner- surrendered dogs, cats and other companion animals iv. Adopting out animals after their legal holding period or, if necessary, performing euthanasia for those animals where adoption or rescue is not available. Memorandum of Understanding By and Between weCARE Alliance Members Page 3 v. Providing low-cost Spay and Neuter opportunities for their community. D. The County of Santa Clara Animal Care and Control is the government agency responsible for the following functions within the unincorporated areas of the County of Santa Clara: i. Addressing public safety issues with respect to including the impoundment of strays in their community. ii. Investigating and resolving animal abuse and neglect matters. iii. Acting as a receiving point for stray and owner- surrendered dogs, cats and other companion animals. iv. Adopting out animals after their legal holding period or, if necessary, performing euthanasia for those animals where adoption or rescue is not available. v. Providing funding for the County’s Low-Cost Spay/Neuter Program at a level approved by the Board of Supervisors. E. Town Cats is a private, 501(c)(3) organization that accepts responsibility for: i. Acting as a cat adoption partner in Santa Clara County. ii. Accepting transfer of cats for adoption from any partnering shelter in need of assistance as long as space and resources allow. iii. Providing public education about the pet overpopulation problem and providing the public with the tools to become part of the solution to assist homeless and community feral cats though trap, neuter and return programs. iv. Accepting owner-surrendered cats. F. Humane Society Silicon Valley is a private, 501(c)(3) organization that accepts responsibility for: i. Acting as a cat and dog adoption partner in Santa Clara County. ii. Accepting transfer of cats and dogs for adoption from any partnering shelter in need of assistance as long as space and resources allow. iii. Providing public education about the pet overpopulation problem and providing the public with the tools to become part of the solution to assist homeless and community feral cats though trap, neuter and return programs. iv. Coordinating countywide programs to enhance the human- animal bond and prevent the surrender of companion animals. Memorandum of Understanding By and Between weCARE Alliance Members Page 4 v. Leading collaborative efforts on increasing adoptions and the opportunities for low cost spay/neuter programs while continuing to support the existing County of Santa Clara Low-Cost Spay/Neuter Program. vi. Acting as a receiving point for stray and owner- surrendered dogs, cats and other companion animals from the City of Sunnyvale. vii. Accepting owner-surrendered animals. II. Alliance Undertakings: A. Humane Society Silicon Valley (HSSV) and Town Cats (TC) will accept from Palo Alto Animal Services, Silicon Valley Animal Control Authority, San Jose Animal Care and Services and the County of Santa Clara Animal Care and Control, healthy and treatable dogs and cats that are legally available for adoption while space and resources allow. HSSV and TC will adopt out these animals to responsible and appropriate homes/placements or may transfer some animals to other adoption partners. B. Each founding agency will participate in at least four (4) joint marketing events each calendar year promoting adoption and plan to transfer “at risk” groups of animals based on time of year and current shelter population needs. C. The specific details of how the Alliance will operate on a day-to- day basis and how animals will be identified for selection and transfer to HSSV or TC will be set forth in an Operating Agreement to be established by the mutual agreement of the founding agencies following the adoption of this Memorandum of Understanding. The Operating Agreement will be subject to annual review, modification and acceptance by the founding agencies. III. Inclusion of Other Animal Welfare Organizations as Adoption Partners: The founding agencies recognize that success is more likely to be achieved with the participation and cooperation of other organizations, such as rescue partners. The founding agencies will welcome and encourage such participation in this alliance and will encourage rescue adoptions at each of their facilities. All current and future parties to this Alliance will meet specific qualifications and accept specific and quantifiable obligations. Each Alliance member will cooperate in good faith with respect to the public release of statistics and information about the Alliance and the number of lives saved. All public statements made by them will acknowledge that improvement in those numbers is a mutual Memorandum of Understanding By and Between weCARE Alliance Members Page 5 success owing to the commitment and participation of all Alliance members. IV. Financial Matters: Nothing in this Memorandum of Understanding shall commit any party to any financial obligations to any other party of this alliance or vice versa. The Alliance is to be collaboratively developed so that it is cost-effective in its approach and that any costs incurred are first mutually agreed upon and then divided fairly among Alliance members. V. Termination: Each founding agency may withdraw from this Memorandum of Understanding without cause by giving thirty (30) days written notice to each of the other founding agency. Each founding agency’s participation and financial contributions under this Memorandum of Understanding are contingent upon the appropriation of sufficient funding by that founding agency for the services covered by this Memorandum of Understanding. If the funding for any founding agency for the services covered by this Memorandum of Understanding is reduced or eliminated, that founding agency has the option to either terminate its involvement in this Memorandum of Understanding with no liability occurring to that Founding Member and thereby terminate all of its rights and obligations under this Memorandum of Understanding, or to offer an amendment to this Memorandum of Understanding indicating the reduced amount of participation or funding. Any amendment of this Memorandum of Understanding shall only be binding if approved by [all][a majority] of the other founding agencies. VI. Non-Discrimination: Each founding agency and participant shall comply with all applicable Federal, State, and local laws and regulations including the County of Santa Clara’s policies concerning nondiscrimination and equal opportunity in contracting. Such laws include but are not limited to the following: Title VII of the Civil Rights Act of 1964 as amended; Americans with Disabilities Act of 1990; The Rehabilitation Act of 1973 (Sections 503 and 504); California Fair Employment and Housing Act (Government Code sections 12900 et seq.); and California Labor Code sections 1101 and 1102. Each founding agency and participant shall not discriminate against any subcontractor, employee, or applicant for employment because of age, race, color, national orgin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status in the recruitment, selection for training including apprenticeship, hiring, employment, utilization, promotion, layoff, rates of pay or other forms of compensation. Nor Memorandum of Understanding By and Between weCARE Alliance Members Page 6 shall any founding agency or participant discriminate in provision of services provided under this contract because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status. VII. Notices: Any notices required to be given to any founding agency pursuant to this Memorandum of Understanding shall be in writing and sent by pre-paid first class mail to the address specified below or to nay other address, fax number or email address that such founding agency shall otherwise specify in writing to all other founding agencies. VIII. Governing Law, Venue: This Memorandum of Understanding has been executed and delivered in, and shall be construed and enforced in accordance with, the laws of the State of California. Proper venue for legal action regarding this Memorandum of Understanding shall be in the County of Santa Clara. IX. Transition Matters: All founding agencies will continue to accept animals directly from their contracted cities/county. Puppies and kittens under 2 pounds or 8 weeks of age may be accepted into any founding agency (except for the County of Santa Clara Animal Care & Control due to limited space) regardless of the location found. The appropriate founding agency will be notified through a found report and the admitting agency will provide appropriate care for that animal. Transition plans will be developed between the founding agencies for all animals transferred between founding agencies. The transition plan will provide for efficiency and effectiveness for all agencies and minimize any adverse impact for either organization or the animals involved. _________________________ Date_______________ San Jose Animal Care and Services _________________________ Date_______________ Palo Alto Animal Services _________________________ Date_______________ Humane Society Silicon Valley Memorandum of Understanding By and Between weCARE Alliance Members Page 7 _________________________ Date_______________ County of Santa Clara Animal Care & Control _________________________ Date_______________ Silicon Valley Animal Control Authority _________________________ Date_______________ Town Cats Santa Clara County, ("County") By: Name: Sylvia Gallegos Title: Deputy County Executive Date: APPROVED AS TO FORM AND LEGALITY Santa Clara County, (“County”) By: Name: Mark Bernal Title: Deputy County Counsel Date: City of Palo Alto (ID # 2370) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/6/2012 February 06, 2012 Page 1 of 3 (ID # 2370) Summary Title: Approve Air Emissions Consultant Contract Title: Approval of a Contract with Golder Associates, Inc in the Amount of $227,136 to Assist with New Sewage Sludge Incinerator Air Regulations at the Regional Water Quality Control Plant From:City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute the attached contract (Attachment A) with Golder Associates Inc. (Golder) in the amount of $227,136 for assistance with air emissions permitting and compliance at the Regional Water Quality Control Plant. This amount includes $208,636 for basic services and $18,500 for additional services for a total contract of $227,136. Background On March 21, 2011, the United States Environmental Protection Agency (EPA) finalized new regulations for sewage sludge incinerators (Staff Report #1625 dated May 16, 2011 and Staff Report #1297 dated February 14, 2011). The new EPA rule requires a formal incinerator training program, expanded emissions testing, an extensive permit application, a new Title V Permit, additional recordkeeping, and minor equipment modifications, details can be found in the Request for Proposals (RFP) (Attachment B). The continued, compliant operation of the incinerator must be maintained as the Regional Water Quality Control Plant continues to explore alternatives to incineration as part of the ongoing Long Range Facilities Planning process. Discussion The RFP for the project was sent to four prospective air emissions consulting firms and posted on the City’s web site on August 23, 2011. A single firm, Golder, submitted a proposal. An evaluation committee consisting of representatives from the Environmental Services Division of Public Works reviewed the proposal. On October 24, 2011, the committee interviewed Golder and determined the firm had sufficient experience to ensure the City complies with the new EPA regulations; below are some of the key items included in the scope of work: ·an extensive Title V Bay Area Air Quality Management District permit application February 06, 2012 Page 2 of 3 (ID # 2370) ·increase in monitoring and reporting for stack emissions, ash handling, scrubber water pH, and general monitoring of the multiple hearth incinerators, ·develop standard operating procedures for the incinerator, ·provide a certified trainer for the incinerator operator training requirements, ·create an operator training procedure guide, ·assist with complying with Oxides of Nitrogen limit, ·and provide technical assistance with reviewing emissions data and greenhouse gas reporting requirements. In addition to the firm’s regular staff, they have teamed with an incineration specialist with specific expertise in multiple hearth incineration. The committee is satisfied that Golder can assist the City with the new air emissions requirements. Timeline The consultant will ensure that the Regional Water Quality Control Plant is in compliance with EPA’s Regulations by the final compliance date of March 21, 2016. The Plant is already in compliance with many aspects of the newly promulgated Regulations and expects to be in compliance with them well before the March 21, 2016 compliance date. Where compliance can be obtained sooner (e.g., operator training), early adoption will be pursued. In other areas (e.g., Title V application) a longer timeframe of four years will be required. Resource Impact Funds are available in Wastewater Treatment Fund Capital Improvement Program Project WQ-80021. The Plant has been anticipating new sewage sludge incinerator regulations for many years, however the specific $227,136 in compliance costs were not anticipated; WQ-80021 has sufficient funding and scope to cover the unanticipated costs. This contract covers the full costs for compliance; minor compliance costs will be covered by the Wasteater Treatment Fund operating budget. Environmental Review The recommended action is exempt from review under the California Environmental Quality Act pursuant to CEQA Guidelines Section 15301 (b), which exempts repair and maintenance of an existing use including operation of publicly-owned sewerage services, structures, facilities, mechanical equipment, or topographical features. Attachments: ·A: Contract S12142714 (PDF) Prepared By:Karin North, Manager, Environmental Control Programs February 06, 2012 Page 3 of 3 (ID # 2370) Department Head:J. Michael Sartor, Director City Manager Approval: ____________________________________ James Keene, City Manager CITY OF PALO ALTO CONTRACT NO. S12142714 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND GOLDER ASSOCIATES FOR PROFESSIONAL SERVICES . This Agreement is entered into on this _ day of , ("Agreement") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and GOLDER ASSOCIATES INC, located at 425 Lakeside Drive, Sunnyvale, CA 94085 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to comply with new incinerator regulations ("Project") and desires to engage a consultant to ensure compliance with the new incinerator regulatins 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, contained in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in 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. o Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.) Services will be authorized by the City, as needed, with a Task Order assigned and approved by the City's Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-I. 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 forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and the City may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. Professional Services Rev. June 2, 2010 SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through completion ofthe services on March 26,2016, in accordance with the. Schedule of Performance attached as Exhibit "B" 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", including both payment for professional services and reimbursable expenses, shall not exceed two hundred eight thousand six hundred thirty-six dollars ($208,636.00). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not two hundred twenty-seven thousand one hundred thirty six dollars ($227,136.00). The applicable rates and schedule of payment are set out in Exhibit "C-l", entitled "HOURLY RATE SCHEDULE," which is attached to and made a part of this Agreement. 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 in 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 Exhibit "C-l "). 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 receipt. SECTION 6. OUALIFICATIONS/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. Professional Services Rev. June 2, 2010 2 \\Cc-terTa\shared\ASD\PURCffiSOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714_ Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc 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 itselfinformed 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 shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSUL TANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination ofthe Agreement. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design ofa 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 the CITY's stated construction budget, CONSULTANT shall make recommendations to the 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 the 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 CONSUL TANT's obligations hereunder without the prior written consent ofthe city manager. 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. 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: Chavond-Barry Engineering Corporation CONSULTANT shall be responsible for directing the work of any subconsultants and for any Professional Services Rev. June 2, 2010 3 \\Cc-terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW • JOHN M\Contracts\S 12142714_ Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc 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 Rich Merrill as the project director to have supervisory responsibility for the performance, progress, and execution of the Services and Jason Nettleton as the project manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director 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. The City's project manager is Jamie Allen, Public Works Department, Environmental Services Division, 2501 Embarcadero Way, Palo Alto, CA 94303, Telephone:650-329-2243. The project manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSIllP 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 ofthe 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 any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. City acknowledges that its use of the work product is limited to the purposes contemplated by the scope of work and that the CONSULTANT makes no representation ofthe suitability of the work product for use.in or application to circumstances not contemplated by the scope ofwork. 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) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. O[Option A applies to the following design professionals pursnant 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 4 Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICITA TIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indenmified 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 attorneys fees, experts fees, court costs and disbursements ("Claims") that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the 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 qualilY as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnilY, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indenmified 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 attorneys 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 indenmify an Indenmified Party from Claims arising from the 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 indenmification. 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 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 ofthis 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. Professional Services Rev. June 2, 2010 5 \\Cc-terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW -JO:H:N" M\Contracts\S 12142714_ Golder Assoc_RWQCP Air Erniss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution ofthis Agreement. The certificates will be subjectto the approval of CITY's rusk Manager and will contain an endorsement stating that the insurance is primary coverage to the extent any covered losses are caused CONSULTANT's negligence and will not be canceled by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation, CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY's Purchasing Manager 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 ofthis 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 writtert notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereofto 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, CONSULT ANT 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 ofhislher discretion. The following Sections will survive any expiration or termination ofthis 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. Professional Services Rev. June 2,2010 6 \\Cc·terra\shared\ASD\PURCH\SOLICITATIONS\CURRENT BlNER-CM FOLDERS\PW -JOHN M\Contracts\S 12142714_ Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc , , , . 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: Attention of the project director at the address of CONSULTANT recited above 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, fmancial or otherwise, which would conflict in any manner or degree with the performance ofthe Services. 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 fmancial interest under this Agreement is an officer or employee of CITY ; this provision will be interpreted in accordance with the applicable provisions ofthe Palo Alto Municipal Code and the Govermnent Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as thatterm is defined by the Regulations ofthe 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 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. 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 REOUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the 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 the City's Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, 7 Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICIT ATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN" M\Contracts\S 12142714_ Golder Assoc_RWQCP AirEmiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc recycling or composting waste. In particular, Consultant shall comply with the following zero waste requirements: • 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 of30% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the City's Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy ofthis policy is on file at the Purchasing Office. • Reusable/returnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verifY that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. 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 Ca) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or Cb) 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 25. MISCELLANEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws of the State of California. 25.2. 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. 25.3. 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 of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. 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. 25.5. The covenants, terms, conditions and provisions ofthis Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the 8 Professional Services Rev. June 2, 20ID \\Cc--terra\shared\ASD\PURCH\SOLlCITA TIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714_ Golder Assoc_RWQCP Air Emiss Consult\S12142714:....Golder Assoc_RWQCP Air Emissions Consultant.doc parties. 25.6. 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 ofthis Agreement and any amendments thereto will remain in full force and effect. 25.7. 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. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal information as defmed in California Civil Code section l798.81.5(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. /I II II II /I /I II II /I /I /I 9 Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICITA TIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S 12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - Task 1-Regulatory Review EXIllBIT "A" SCOPE OF SERVICES The compliance schedule for the Subpart MMMM includes uncertainty due to unknowns in the BAAQMD rulemaking process, EPA approval process, and ongoing legal challenges. To ensure that all deadlines are met while avoiding unnecessary expense of premature compliance activities, the rule development process and legal actions must be monitored. Golder will track the progress of the BAAQMD rule development by monitoring public announcements regarding the prospective rule. Golder will also contact the BAAQMD staff member assigned to the rule development to make sure we are aware of relevant developments. The deadline for the submittal ofa compliance plan is March 21, 2012 so the format and terms of the BAAQMD implementation of Subpart MMMM should be known by the end of the first quarter of2012. At that time, the compliance schedule will be reevaluated. The EPA has issued regulations under Section 129 of the Clean Air Act that affect a wide variety of sources in addition of sewage sludge incinerators. Golderwill review the processes and equipment at the WWTP to determine if any other current or proposed Section 129 rules apply to the facility. Compliance demonstrations or additional compliance work associated with other rules is not covered in this scope of work. Task 2: Title V Permit Application The Title V permit is intended to be a comprehensive document that lists subject equipment and associated air emissions, applicable federal and local air quality regulations, compliance provisions, insignificant emissions activities, and alternative operating scenarios. The Title V permit application process includes a comprehensive evaluation ofthe facility's emission sources, a review of applicable regulations, a review of existing operating permits, an evaluation of existing emissions monitoring equipment, and an evaluation of the compliance status of the facility. The timing of the submittal of the Title V application is dependent upon the regulatory actions described in the previous subsection. Golder will coordinate with the R WQCP staff and the BAAQMD permit engineer to ensure that the application is prepared and submitted within the required regulatory time frame. Golder will prepare the Title V application during 2014 to meet a deadline in 2015. Prior to beginning work on the Title V application, Golder will visit the facility to discuss the requirements of the Title V program with compliance personnel followed by a tour of the operation to review the current air compliance operation. After the facility visit, Golder will request relevant compliance records, current permits, and other relevant information. Golder will advise the R WQCP staff if any previously unpermitted equipment would be subject to authority to construct (ATe) application requirements. The cost to prepare additional permit applications will be negotiated with the RWQCP staff should an ATC be necessary. The scope of work associated with permitting previously unpermitted equipment is difficult to estimate without 11 Professional Services Rev. June 2, 2010 \\Cc;..terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S 12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - understanding of the number of affected sources. This task does not include the cost of ATC preparation. Golder will prepare a draft Title V permit application according to BAAQMD guidelines for approval of the RWQCP staff. Upon receipt of comments, Golder will prepare a final application for submittal to the BAAQMD. Any BAAQMD permit fees are not included in the cost estimate for this proposal. After submittal ofthe Title V application, Golder will respond to requests from the BAAQMD permit engineer as required. Upon request, the BAAQMD will provide an informal draft operating permit to the applicant prior to the official public notice period. Golder will request a copy of the draft application, review the document, and present any concerns to R WQCP staff. Golder will discuss any areas of concern with the BAAQMD permit engineer followed by submittal of concerns in writing. Golder's approach in negotiating with the BAAQMD involves educating the permit engineer on the concerns of the facility, providing justification for any requested changes, and providing alternative permit language that satisfies BAAQMD and facility requirements. Task 3: Operating Limits, Monitoring Plans, Reporting, and Recordkeeping The new MACT regulation and the resulting Title V permit program applicability will impose additional monitoring and reporting requirements on the operation ofthe incinerators. Golder will review and evaluate current compliance records to determine what enhancements to the compliance program will be required. Golder will work with the R WQCP and the BAAQMD during the Title V permitting process to attempt to minimize the additional burden of compliance with the new requirements. Task 3.1: Ash Handling Monitoring Plan Golder will review ash handling procedures and current records to determine what additional monitoring and recordkeeping may be necessary. Golder will discuss the results of this review with R WQCP staff and make recommendations for revised procedures. Based on input from R WQCP staff and monitoring plans for other facilities, Golder will prepare an ash monitoring plan that meets the requirements of the Rule. Task 3.2: Bypass Stack Monitoring Golder and CBE are familiar with existing state (Massachusetts and New Jersey) bypass stack monitoring requirements and can provide guidance for proposed approaches for compliance with the CAA Section 129 rules. Golder recommends early influence on the USEPA interpretation of this provision in the CAA Section 129 rule, to ensure a cost effective approach to compliance. Golder and CBE will propose an approach, based on state experience, and draft a letter to USEP A Region IX requesting approval of the approach. Task 3.3: New Instruments Golder understands that additional instrumentation will be required to monitor the incinerator operation and will procure additional instrumentation as specified in the RFP. Golder will identify appropriate instruments and vendors, obtain cost estimates, discuss the merits ofthe proposed instruments, and procure the mutually agreed upon instruments on behalf of the City. The additional instruments task includes a continuous pH monitor for the scrubber water, a portable NOx analyzer, and a FLUKE 744 Documenting Process Calibrator. Golder will also 2 Professional Services Rev. June 2, 2010 \\Cc-terra\Shared\ASD\PURCH\SOLICITA TIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - supply a portable NOx analyzer for use during the combustion evaluation described in Section 4.6. This proposal includes an estimate of$20,000 for the purchase of the desired instrumentation. If the cost of the agreed upon instruments exceeds this amount, the City may select less expensive instrument, adjust the project budget, or pursue purchase an alternative procurement approach. Task 3.4: Operating Limits Title V permits include compliance provisions to ensure that emission limits are not exceeded. These compliance provisions often extend to operating parameter limits or approved ranges that must be both maintained and monitored on either a continuous or at least a routine basis. In the absence of specific guidance in the application, the BAAQMD may impose operating parameter limits that are not acceptable to the RWQCP. Golder proposes to review existing process data, information collected during the NOx monitoring task, and source test data to evaluate operating parameter ranges that will ensure compliance with the Rule. Golder will incorporate these proposed operating ranges into the Title V application so that the resulting permit includes requirements that are reasonable and achievable on an ongoing basis. Task 3.5: Monitoring Plans Ongoing compliance with the operating limits will require maintenance and calibration of monitoring equipment. Golder will prepare a plan that lists the monitoring equipment and the associated calibration requirements for each monitor. The plan will include monitor specifications and a quick reference form that summarizes the requirements. Golder will prepare forms that can be used for on-site calibration for equipment to be calibrated by RWQCP personnel. Task 3.6: Recordkeeping Generating and maintain complete records of compliance activities is a key challenge for ongoing compliance. Golder will review current incinerator operating records for key parameters and discuss the current procedures with R WQCP personnel. Golder will provide recommendations and formats for ongoing records that will ensure compliance with the Title V permit. Task 3.7: Deviation Report The BAAQMD utilizes Reportable Compliance Activity (RCA) Forms for initial notification of deviations from permit conditions. These forms are to be completed and submitted by facsimile to the BAAQMD immediately upon the occurrence of a deviation. The Title V permit requires submittal of 10-day and 30-day reports for any deviation. For incidents that require little investigation, combined 10/30 day reports are accepted by the BAAQMD as long as the combined report is submitted within 10 days ofthe incident. . Golder will prepare a template for 10-day and 30-day deviation reports. However, the templates cannot include language for all possible contingencies. Task 3.8: Standard Operating Procedures Golder will create a semi-annual report template that describes the requirements of the Title V permit and includes recordkeeping forms for all required data elements. These forms are 3 Professional Services Rev. June 2, 2010 \\Cv-terra\Shared\ASD\PURCH\SOLICITATlONS\CURRENT BUYER~CM FOLDERS\PW -JOHN M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - populated throughout the reporting period and compiled in the semi-annual report at the end of the period. The information in these reports is used to complete the annual compliance certification. Golder will prepare templates for the semi -annual reports, compliance certification, and other recordkeeping forms along with instructions for maintaining the required documentation. These instructions and related compliance documents will be compiled in the standard operating procedure (SOP). Task 3.9: Air Compliance One Page Summary Golder will prepare a summary of requirements to include with the SOP document. This summary will include a listing of requirements and compliance schedules with reference to the relevant sections ofthe SOP. Task 4: Scope of Work for Qualified Trainer for Incinerator Operator Training Requirements Golder will provide a training that meets the CAA Section 129 Regulations. The training course will include the following: o Environmental Concerns (including emissions) o Combustion Principles (including combustion products) o Incinerator Operations (specific to type) including start up, shutdown, and sludge feeding o Combustion Controls and Monitoring o Operation, Inspection, and Maintenance of Air Pollution Control Equipment and Factors Affecting Performance o Bottom Ash Characteristics and Handling o Malfunction Prevention o Federal, State, Local Regulations (including OSHA standards) o Pollution Prevention • Annual refresher course o Update of regulations o Incinerator procedures, including start up, shutdown, sludge feeding, and ash handling o Inspection and maintenance o Malfunction prevention o Discussion of operating problems encountered by attendees The training will be conducted on-site for operators, maintenance personnel, and supervisors. Key elements of training will focus on the procedures and operating parameters that minimize NOx formation and ensure compliance with NOx and other emission limits. The NOx minimization procedures included in the training program will be developed during the NOx assistance task (Task 6). Training will take place over the course of 5 business days at the R WQCP. Two separate sessions for operators will be conducted to accommodate multiple shifts. One additional training 4 Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICIT A TIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - session will be conducted for supervisory personnel and a second additional session will be held for maintenance personnel. The training will be tailored to the specific conditions ofthe incinerators at the R WQCP but will also include general information required by the rule such as basic combustion theory, heat transfer, and mass transfer discussions. The training will include a discussion of regulatory requirements including recordkeeping and the operating parameters necessary to ensure compliance with emission limits. Operating considerations such as ash handling and feed parameters will be included. Task 5: Develop an Operator Training Procedure Guide Golder will collaborate with RWQCP personnel (engineers and operators), review existing operating and maintenance (O&M) manuals, review current RWQCP operating procedures, consult with CBE, review the CAA Section 129 regulatory requirements, and coordinate with BAAQMD in order to develop facility specific procedures for operator training. The facility specific procedures to be prepared will include the following: • Summary of 40CFR 60 Subpart LLLL or MMMM (as applicable) • Procedures for receiving, handling, and feeding sewage sludge • Incinerator start up, shutdown, and malfunction preventive and corrective procedures • Procedures for maintaining proper combustion air supply levels • Procedures for operating the incinerator and associated air pollution control systems in accordance with the law • Monitoring procedures for demonstrating continuous compliance with operating limits • Reporting and recordkeeping procedures • Ash handling procedures • List of any substances burned during the performance test (in addition to sewage sludge) • List of all General Operators (have reviewed the Operator Training Procedures within the last 12 months) and are familiar with the operation ofthe unit Golder anticipates spending two days in on-site meetings with engineers and operators in order to accomplish this task. Palo Alto will supply copies of all O&M manuals related to the operation of the incinerators and their air pollution controls. Task 6: Assistance with Oxides of Nitrogen A NOx evaluation will be performed to determine the optimal operating parameters for the minimization of NO x emissions. The evaluation of NO x emissions will require the presence of an incinerator combustion expert on site with the ability to monitor outlet NOx concentrations in real time as he makes adjustments to the operating parameters of the units. Lou Barry from CBE will serve as the combustion expert for this project. CBE will supply a portable NOx analyzer for use during this evaluation. The evaluation will be conducted over a period of up to two consecutive weeks during which an extensive evaluation of the parameters affecting NOx formation in the incinerators will be conducted. Following the evaluation, CBE will summarize the results of the evaluation including operating parameter ranges for NOx minimization and a determination if the NOx limits in the Rule are achievable without additional control equipment of modification of the process. 5 Professional Services Rev. June 2, 20ID \\Cc-terra\shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\SI2142714 Golder Assoc _ RWQCP Air Emiss Consult\S12142714 _Golder Assoc _ RWQCP Air Emissions Consultant,doc - lithe NOx emission rates are not achievable through process optimization, CBE will summarize potential NOx reduction strategies. CBE has found that flue gas recirculation has been a cost effective approach to NOx reduction for other multiple hearth incinerators and will evaluate if that approach would be appropriate for the RWQCP. During the permitting process should the offset threshold be exceeded, the BAAQMD may require information on NOx offsets. Generally, NOx offsets are only required for increases in NOx emissions. Golder anticipates that the NOx evaluation will limit NOx emissions and not trigger additional offset requirements. IfNOx offsets are required, Golder will research the current cost of offsets and provide recommendations to the RWQCP for purchasing offsets. Task 7: Estimate the initial cost of the incinerator building in current dollars. The RFP indicates an interest in demonstrating that the existing incinerator will not be modified to greater than fifty percent of the initial cost of the incinerator in current dollars. Golder assumes that the purpose of such an evaluation is to prevent the incineration facilities from being considered reconstructed and subject to new incinerator rules under the CAA Section 129 regulations. Multiple hearth incinerators have largely been replaced by fluidized bed incinerators and are not commonly built. Current costs of a unit comparable similar to the incinerators at the RWQCP may not be readily accessible. However, an incinerator vendor should be able to provide a reasonable budgetary quote for the construction of a comparable system. Golder will contact an established vendor to request a quotation for the cost of building a new incinerator comparable to those in use at the RWQCP. Task 8: Develop Control Plan The goal of this project as shown in the proposed project schedule is to ensure that the incinerators are in compliance with the applicable new air regulations according to the time frame specified in the MACT. If these efforts are not successful and the provisions of the Rule cannot be met according to the specified dates, Golder will prepare a compliance schedule for submittal to the BAAQMD. The submittal will include a description of the equipment, efforts to achieve compliance, and reasons why compliance carmot be achieved as specified in the Rule. The submittal would also include a conceptual plan and proposed schedule to achieve compliance. Golder has not included a budget for this item with the expectation that the compliance schedule can be met. Task 9: Technical Review of Existing Source Testing Annual source testing is a key aspect of the BAAQMD compliance program. These tests typically must measure all compliance parameters including criteria air pollutant emissions and hazardous air pollutant emissions. All process inputs and variables are monitored and recorded during the test. Golder will review the most recent source test report and compare the test methods, results, and monitored parameters to the requirements of the new Rule. Golder will list new requirements for source testing, list changes to emission limits, and provide recommendations for revising the source test protocol. Golder can also identiJY a qualified source testing contractor if requested. This task does not include the costs associated with preparing a source test protocol, preparing an RFP, evaluating proposals, or overseeing or conducting the source testing. 6 Professional Services Rev. June 2, 2010 \\Cc~terra\Shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYERMCM FOLDERS\PW -JOHN M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - Task 10: Technical Assistance for Greenhouse Gas Reporting The California Air Resources Board (CARB) Mandatory Greenhouse Gas Reporting Program requires the reporting of process input to allow for the calculation of GHG emissions. The program is conceptually simple -the amount of fuel input to a combustion device is directly related to the GHG emissions. However, the CARB program is designed to be part of an emissions trading program and as such has stringent quality control requirements. Meeting these requirements can be both costly and time consuming. Golder proposes to review the GHG reporting protocol as it relates to sewage sludge incinerators and advise the RWQCP on the data reporting requirements of the program. Golder will review the available data and provide recommendations for completing the GHG report. Golder will also assist with the completion ofthe online GHG report. Third party verification must be performed by an accredited verifier hired by the City. Golder will identify companies that are qualified to conduct the verification. Golder will also respond to questions raised during the verification process. The City will hire the Greenhouse Gas verifier. Additional Services Innovative NOx Control Technology If additional NOx control is found to be required, CBE can recommend innovative, cost effective NOx control technology. CBE has successfully implemented Flue Gas Recirculation (FGR) retrofits on several multiple hearth incinerators. After conducting the combustion evaluation in Task 6, CBE will be able to determine if a FGR system would be necessary or appropriate for this application. 7 Professional Services Rev. June 2, 2010 \\Cc-terra\share;d\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - EXIDBIT "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 ofthe Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones 1. EPA Regulatory Compliance 8 Completion No. of Days/Weeks FromNTP March 21, 2016 Professional Services Rev. June 2, 2010 \\Cc-terra\shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714 -Golder Assoc_RWQCP Air Emiss Consult\SI2142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - EXIllBIT "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 hourly rate schedule attached as exhibit C-I up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit "A" ("Basic Services"). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $18,500. 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. 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, does not exceed $208,636 and the total compensation for Additional Services does not exceed $18,500. BUDGET SCHEDULE Task 1 (Regulatory review) Task 2 (Title V Permit Application) Task 3 (Operating Limits, Monitoring Plans, Reporting and Recordkeeping) Task 4 (Incinerator Operator Training) TaskS (Develop Operator Training Procedure Guide) Task 6 (Assistance with Oxides of Nitrogen) Task 7 (Estimate Incinerator Cost) Task 8 14 NOT TO EXCEED AMOUNT $9,054 $24,650 $73,312 $34,240 $13,235 $36,106 $8,222 $0 (as needed) Professional Services Rev. June 2, 2010 \\CCo-terra\shared\ASD\PURCffiSOLICIT ATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714_ Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder AssocY.WQCP Air Emissions Consultant.doc (Develop Control Plan) Task 9 $5,329 (Technical Review of Existing Source Testing) Task 10 $5,522 (Technical Assistance for OHO Reporting) Sub-total Basic Services $208,636 Reimbursable Expenses $0 Total Basic Services and Reimbursable expenses $208,636 Additional Services (Not to Exceed) $18,500 Maximum Total Compensation $227,136 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 Exhibit C-1. 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: 1. NOx control feasibility analysis is required per Task 6. 2. A control plan is required per Task 8 15 Professional Services Rev. June 2, 2010 \\Cc-terra\Shared\ASD\PURCH\SOLICITATION::;\CURRENT BUYER-eM FOLDERS\PW -JOHN :M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - EXHIBIT "C-l" HOURLY RATE SCHEDULE Invoices from Golder Associates Inc. include all labor charges, other direct costs, and costs associated with in-house services. Charges include only those services directly attributable to the execution of the work. Time spent when traveling in the interest of work will be charged in accordance with the hourly rates. An additional 50% will be added to the applicable labor rate for expert testimony, including time spent in depositions and the preparation and presentations of testimony. Labor charges are based upon standard hourly billing rates for each category of staff. The billing rates include costs for salary, payroll taxes, insurance associated with employment, benefits (including holiday, sick leave, and vacation), administrative overheads, and profit. Rates by labor category are as follows: Personnel Personnel Category Hourly Rate Level (U.S. $) LAI Admin Support $67 LA2 Staff Admin Support $73 LA3 Senior Admin Support $77 LTi Technician $73 LT2 Staff Technician $83 LT3 Senior Technician $93 LDi Draftsperson $73 LD2 Staff Draftsperson $83 LD3 Senior Draftsperson $93 LVI Engineer/Scientist $93 LV2 Staff Engineer/Scientist $103 LV3 Project Engineer/Scientist Senior $125 LV4 Project Engineer/Scientist $145 LV5 Senior Engineer/Scientist $170 LV6 Senior Consultant $195 LV7 PracticelProgram Leader $227 Other direct costs, including materials, travel, subsistence, and subcontractor costs, will be invoiced at cost plus a minimum general and administrative fee of 15%. Office Service Fee: Project non-labor office costs including telephone, fax transmissions, personal computers, and in-house photocopying will be billed at 6% of the total labor fees (this does not include large-volume copying by an external printing facility). This Office Service Fee does not include CAD computers, color photocopies, or drawing reproduction. These services will be billed at the following rates: SERVICE RATE GIS/CAD Computers $20/hour Color Photocopies $0.20/col'L Plotter CD & E sizes) $5 per sf' 1. In·house plots (color on paper), $lIsf(B&W on paper) Rates for laboratory services and use of equipment owned by Golder Associates Inc. will be provided upon request. Professional Services Rev June 2, 2010 )8 \\Cc-terra\shared\ASD\PURCH\SOLICITATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S 12142714_ Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc EXHIBIT "D" INSURANCE REQUIREMENTS CONTRACTORS TO TIlE CITY OF PALO ALTO (CITY), AT TIlEIR SOLE EXPENSE, SHALL FOR THE TERM OF TIlE CONTRACT OBTAlN AND MAINTAlN INSURANCE IN TIlE AMOUNTS FOR TIlE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITHAMBEST'SKEYBATINGOFA-:VII,ORIDGHER,LICENSEDORAUTIIORIZEDTOTRANSACTINSURANCEBUSINESSIN THE STATE OF CALIFORNIA, A WARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REOUIREMENTS AS SPECIFIED, BELOW: MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT YES YES YES YES YES YES EACH AGGREGATE OCCURRENCE WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 $1,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAO FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 $1,000,000 LIABILITY COMBINED. BODILY INJURY $1,000,000 $1,000,000 -EACH PERSON $1,000,000 $1,000,000 -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000 BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAlN AND MAINTAlN, IN FULL FORCE AND EFFECT THROUGHOUT TIlE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH TIlE 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 PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CEIANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL. n. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE. TIl. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDmONAL 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 with respect to claims arising out of the CONSULTANT negligence AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THB BENEFIT OF THE 19 Professional Services Rev June 2, 2010 \\Cc-terra\Shared\ASD\PURCH\SOLICIT A TIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S 12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - ADDITIONAL INSUREDS. B. CROSS UABILITY THE NAMING OF MORE TIIAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR TIlAT REASON ALONE, EXTINGUISH ANY RIGmS 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 THANTHENON·PAYMENT OF PREMIUM, THE ISSUING COMPANY 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 ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 20 Professional Services Rev June 2, 2010 \\Cc-terra\shared\ASD\PURCffiSOLlCITATIONS\CURRENT BUYER-eM FOLDERS\PW -JOHN M\Contracts\S12142714 Golder Assoc_RWQCP Air Emiss Consult\S12142714_Golder Assoc_RWQCP Air Emissions Consultant.doc - City of Palo Alto (ID # 2462) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/6/2012 February 06, 2012 Page 1 of 3 (ID # 2462) Summary Title: Contract for Group Life Insurance with LINA Title: Approval of a Contract with Life Insurance Company of North America for Underwriting of the City's Group Life, Accidental Death and Dismemberment (AD&D), and Long Term Disability Insurance (LTD) Plans for Up to Three Years for a Total Amount Not to Exceed $597,156 Per Year From:City Manager Lead Department: Human Resources RECOMMENDATION Staff recommends that Council: Approve and authorize the City Manager or his designee to execute the attached contract with Life Insurance Company of North America (LINA) in the amount up to $597,156 per year to provide group life, accidental death and dismemberment (AD&D), and long-term disability (LTD) insurance benefits. Authorize the City Manager or his designee to exercise the option to renew the contract for the second and third years provided LINA is responsive to the City’s needs and the quality of its work is acceptable during the term of the contract. If the City exercises the option to renew the contract, the annual not to exceed amount of contract would remain the same at $597,156 per year. BACKGROUND The work to be performed under this contract is for underwriting the City’s group life, AD&D, and LTD benefits. Existing agreements with City employee bargaining units provide for maintaining these standard benefit policies offered by most employers. While the City pays for basic Life insurance coverage for its employees which is one time their annual salary, employees can choose to purchase additional a supplemental plan. For LTD, employees contribute to participate in the LTD plan. February 06, 2012 Page 2 of 3 (ID # 2462) The last Request for Proposal (RFP) for underwriting the Life, AD&D, and LTD insurance policies was conducted in 2009. That process resulted in two proposals received from The Standard Insurance Company for $719,833 annually and the proposal received from LINA was for $597,156in annual cost. Staff selected LINA due to cost savings. 2011 Selection Process A Request For Proposals (RFP) was conducted with the assistance of the City’s benefits broker to obtain a group life, AD&D, and LTD policies at a reduced rate if possible. City staff was aware that the increased number of long term disability claims experience and life insurance claims due to employee deaths during the last three years could impact this goal. Proposals were sent to five insurance companies. Four proposals were received from The Standard Insurance Company, UNUM, The Hartford Insurance Company, and LINA. The Standard Insurance Company only provided a quote for Life and ADD and declined to present a quote for LTD insurance because they could not provide competitive rates. UNUM did not provide competitive rates and overall did not provide provisions to match the City’s current insurance policies or administrative costs. The Hartford provided rates that overall were only slightly lower than those proposed by LINA, by $3,500. LINA submitted a proposal with a guaranteed rate through 2014. DISCUSSION Human Resources staff reviewed the proposals with the assistance of the City’s benefits broker. Staff carefully reviewed each firm’s qualifications relative to the following criteria: ·Plan administration ·Cost ·Claims paying administration ·Knowledge of and experience working with public agencies and the Public Employees’ Retirement System ·Customer service capabilities ·Workers’ compensation interface February 06, 2012 Page 3 of 3 (ID # 2462) ·Statistical reports LINA was selected because of its proven ability to provide claims administration services with no increase in cost and a 3 year rate guarantee. RESOURCE IMPACT The rates for group life, AD&D, and LTD insurance policies are based on the number of City employees, and on the current salary of employees, will total $597,156.00 annually. The per employee rate formula will remain the same if the City opts to extend the contract for the second and/or third year. With a three year rate guarantee, the annual premium would not increase in years two (2) and three (3). Funds for group life, AD&D, and LTD insurance are already included in the 2012 Adopted Budget in the General Benefits Internal Service Fund. POLICY IMPLICATIONS This request supports the Finance Committee’s recommendation for staff to bring alternatives forward on how to slow the increasing cost of employee benefits and lessen the impact on other City priorities. ENVIRONMENTAL REVIEW This is not a project requiring review under the California Environmental Quality Act. Attachments: ·Life Insurance of America Agreement (PDF) ·Attachment to the Agreement (PDF) Prepared By:Sandra Blanch, Interim Director, Human Resources Department Department Head:Sandra Blanch, Interim Director, Human Resources Department City Manager Approval: ____________________________________ James Keene, City Manager ) .•. ' .• ' ~ CITY OF PALO ALTO CONTRACT NO. C12144417 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND LIFE INS{JRANCE COMPAI'iY OF NORTH AMERICA, A WHOLLY OWNED SUBSIDIARY OF THE CIGNA CORPORATION FOR PROFESSIONAL SERVICES UNDERWRITE GROUP LIFE, ACCIDENTAL DEATH & DISMEMBERMENT (AD&D), and LONG TERM DISABILITY INSURANCE (LTD). This Agreement is entered into on this I st day of January, 2012, ("Agreement") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and LIFE INSURANCE COMPANY OF NORTII AMERICA, A WHOLLY OWNED SUBSIDIARY OF THE CIGNA CORPORATION, located at 1601 Chestnut Street, Philadelphia, PA 19192 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to provide for its employees GROUP LIFE, ACCIDENTAL DEATH & DISMEMBERMENT (AD&D), and LONG TERM DISABILITY INSURANCE (LTD) ("Project") and desires to engage a consultant to underwrite these insurance benefits ("Services"). B. CONSULTANT has represente<l that it has the necessary professional expertise, qualifications, and capability, and all required licenses andlor 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", Scope of Service, "Exhibit A-I", Life Insurance Policy, "Exhibit A-2", Supplemental Life Insurance Policy, "Exhibit A-3", Long Term Disability Insurance Policy attached to and made II part of this Agreement. NOW, TIIEREFORE, in consideration ofthe recitals, covenants, tem1S, and conditions, this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES, CONSULTANT shall perform the Services described in Exhibit "An in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfuction of CITY, Professional Services Rev June 2, 2010 SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through December 30, 2014 unless terminated earlier pursuant to Section 19 of this Agreement. The CITY retains option to renew for up to two additional one year periods. 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 ifthe extension is required due to the fault ofCOKSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed Five Hundred and Ninety Seven Thousand One Hundred and Fifty Six Dollars ($597,156.00), for year one, Five Hundred and Ninety Seven Thousand One Hundred and Fifty Six Dollars ($597,156.00) for year two, and Five Hundred and Ninety Seven Thousand One Hundred and Fifty Six Dollars ($597,156.00) for year three. The compensation for all three years shall not exceed One Million Seven Hundred Ninety One Thousand Four Hundred and Sixty Eight Dollars ($1,791,468.00). The applicable rates and schedule of payment are set out in Exhibit "C", entitled "COMPENSA'I10N," which is attached to and made a part of this Agreement. In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed Fifty Nine Thousand Seven Hundred Fifteen Thousand Dollars and 60 Cents ($59,715.60) for year one, Fifty Nine Thousand Seven Hundred Fifteen Thousand Dollars and 60 Cents ($59,715.60) for yeartwo, Fifty Nine Thousand Seven Hundred Fifteen Thousand Dollars and 60 Cents ($59,715.60) for year three. The compensation for all three years of additional services shall not exceed One Hundred Seventy Nine Thousand One Hundred Forty Six Dollars and Eighty Cents ($179,146.80). 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 in Exhibit "A.I, A·2, A-3", SECTION 5. INVOICES. The CITY shall, on a monthly basis, determine the amount of insurance premiums and fees, based on current payroll and coverage amounts, and shall report its calculation to CONSULTANT using billing tools provided by CONSULTANT. Premiums and fees are due at the end of each month during which insurance coverage and services are provided and shall be paid no later than 31 days from such date 2 Professional Services Rev. June 2, 2010 S:IASDIPURCH\SOLlClTAT10NSICURRENT BUYER·eM FOLDERSIOTI!ERS .ADRlANIRFPsI144417 Sign.: HR\CI2144417 Clgna: Group Life Et AI: FTNAL.doc SECTION 6. OUALIFICATIONS/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 perm itted, 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 shall correct, at no cost to CITY, any and all errors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSUL TANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction of the Project. This obligation shall survive termination of the Agreement. SECTION 9. COST ESTIMATES. NOT APPLICABLE SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in perfonning 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 the CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSUL TANTshali not assign or transfer any interest in this Agreement nor the performance of any of CONSUL TANT's obligations hereunder without the prior written consent of the city manager. 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. CONSUL TANTshali not subcontract any portion ofthe work to be performed underthis Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for any 2 Professiona! Services Rev. June 2, 20\0 S;\ASO\PlJRCH\SOUClTATIONS\CURRENT BUYER-eM FOLDERS\OTHERS -ADRTAN\RFPs\I44417 Signa; HR\C12144417 Cign21, Group Lite Et AI; FINAL doc l j compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions ofa subconsultant CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSUL TANTwili assign Jennifer Redding, as the Account Manager, One Front Street, Suite 700, San Francisco, CA 94111, Tel: (415) 364- 2552, Email: Jennifer.Redding(aJcigna.com to have supervisory responsibility for the performance, progress, and execution of the Services and Brad Stuckey as the project Account Service Representative, 1455 Valley center Parkway, Bethlehem, PA 18017, Tel: (800) 557-7975 Ext. 7067, Email: Bradley.Stnkey;a;cigna.com to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitnte project director and the assignment of any key new or replacement personnel will be subjectto the prior written approval of the CITY's project manager. CONSULTANT, atCITY'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. The City'S project manager is Sandra Blanch, Human Resources Department, Division, 250 Hamilton Ave, Palo Alto, CA 94303, Telephone: (650) 329-2294, Email: Sandra.Blanch@CitvofPaioAito.org . The project manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The 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. CONSULT ANT 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 oflhe CITY. Neither CONSULTANT nor its contractors, ifany, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CO::-lSUL TANT makes no representation of the suitability ofthe 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 tor three (3) years thereafter, CONSULTA~T's records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 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 4 Professional Services Rev"Iune2,2010 S:IASDiPURCHlSOLICITATIONSICURRENT BL'VER-CM FOLDERSIOTHERS· ADRIAN\RFP,1144417 Signa: HRiCI2144411 Cigna: Group Life Et AI; FTh~AL,doc l I (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 attorneys 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 Agreemcnt, regardless ofwhethcr 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 ofthe provisions of any ordinance 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 ofthis 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 aftcr filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification, CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY's Purchasing Manager during the entire term of th is 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 5 ProfesslOnal Services, Rev. June 2, 2010 S iASD\PURCHISOLICITATIONSICURRENT BUYER-CM POLDERSIOTHERS· ADRIANIRFP,II444!7 Signa, HRIC12144417 Cigna; Group Life Et AJ; FINALdQe 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 ofthe Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereofto CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19 .2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereofto 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. Gpon such suspension or termination by CITY, CONSGLTANTwill be paid for th,e Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (Le., 10 days after giving notice) of suspension or termination; provided, howeyer, if this Agreement is suspended or terminated on accountof a default by CONSULTANT, CITY will be obligated to compensate CONS UL T ANT only for that portion of CONS ULTANT' s services which arc 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 C1TY will operate as a waiver on the part of CITY of any of its rights under this Agreement. 6 Professional SCiVices Rev June 2. 2010 S:IASD\PURCIW,OLlCITA T[ONSICI;RRENT BUYER-CM FOLDERS\OTHERS -ADRIANIRFP,\144417 Signa. HR\C12144411 Cign.; Group Life EtA!; FfNAl.doe 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 COI\:SULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. COl'l<'LICT 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 ofthe Services. 21.2. COI\:SULT ANT further covenants that, in the performance ofthis 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 ofthe State of California . 21.3. If the Project Manager determines that CONSULTANT is a "Consultant" as thatterm 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 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. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requ,irementsand 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 REOUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the 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 the City's Zero Waste Program. Zero 7 PrOfessIonal Services Rey,June2,201O S:"ASD\Pl.JRCH>SOLICIT ATIONS\CURRENT BUYER-CM FOLDERS\OTHERS ~ ADRIAN\RFPs\144417 Signa ~ HR\C12144417 Cigna; Group Life Et AI; FINAI~.doc f ! I I 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 foHowing zero waste requirements: • All printed material s 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 of30% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of30% or greater post-consumer material and printed with vegetable based inks. • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the 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 Office. • Reusableireturnable pallets shall be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. 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 eventthat 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 ofa conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 25. MISCELLA;\lEOUS PROVISIONS. 25.1. This Agreement will be governed by the laws ofthe State of California. 25.2. 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. 25.3. 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 of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. 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 . . 25.5. The covenants, terms, conditions and provisions ofthis Agreement will apply 8 Professional Services Rev. June 2, 201 0 S,\ASDIPURCH\SOllCrrATIOKs\CURRENT BUYER-CM FOLDERSIOTHERS· ADRIAN\RFP,11444J7 Signa; HRICI2I44411 Cigna; Group Li fe Et AI; FINAL,doc to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 25.6. 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 ofthis Agreement and any amendments thereto will remain in fu 11 foree and effect. 25.7. 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 he a part oflhi, Agreement. 25.8 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 learn ing that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Persona! Information for direct marketing purposes without City's express written consent. II II II /I /I II II /I II II /I 9 ProfessiOl1nl Services Rev, June 2, 2010 S:I.ASD\PURCH\$OLIC1TATIONS\CURRENT aCYERwCM FOLDERS\01HERS p ADR!AN\RFPs\;t.4417 Signa, HR\C!2144417 Cig!'la; Group Lire Et Al; FI~AL.doe 25.9 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. 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 LIFE INSURAc"lCE COMPANY OF NORTHAMERICA,A WHOLLY OWNED SUBSIDIARY 01<" THE CIGNA CORPORATION City Manager APPROVED AS TO FOR.:'v[: Senior Ass!. City Attorney Director of Administrative Services EXHIBIT "A-I": EXHIBIT "A-2": EXmBIT "A-3": EXHIBIT "B": EXHIBIT "e': EXHIBIT "0": EXHIBIT "E": SCOPE OF WORK BASIC & VOLUNTARY LIFE INSlJRANCE POLICY [NO. FLX 962659] BASIC AND VOLUNTARY AD & D LIFE INSURANCE POLICY [NO. OK 964302] LONG TEIU,J DISABILITY INSURANCE POLICY [NO.LK 961943] SCHEDULE OF PERFORMANCE COMPENSATION IST 10 Professional Services Rev. June 2, 2(HO S,IASDlPURCH'SOLICITATlONSlCURRENT BUYER·CM FOLDERS\OTHERS· ADRIA'~RFPs\144417 Signa; HRICI21444! 7 Cigna; Group Life Et AI; FINAL,doc Exhibits to Agreement EXHIBIT “A” Scope of Services EXHIBIT “A-1” Life Insurance Policy EXHIBIT “A-2” Long-Term Disability Insurance Policy EXHIBIT “A-3” Accidental Death and Dismemberment Policy EXHIBIT “B” Schedule of Performance EXHIBIT “C” Compensation EXHIBIT “D” Insurance Requirement EXHIBIT “E” Cigna Contact List j j EXHIBIT "A" SCOPE OF SERVICES CONSULTANT shall provide for the employees ofthe CITY: BASIC AND VOLUNTARY LIFE INSURANCE, BASIC AND VOUJNTARY ACCIDENTAL DEATH & DISMEMBERMENT (AD&D), AND LONG TERM DISABILITY INSURANCE (LTD) PLANS. CONSULTANT shall administer the above named insurance benefits in accordance with the Policies provided in this Agreement and attached as Exhibits "A-J ", "A-2" and "A-3". Professional Servic:;s Rev June 2, 2010 S:IASDIPURCHISOLlClTA TIONS\CURRENT BUYER.(;M FOLDERSIOTIlERS • ADRIA NIRFP,I 144417 Signa: HRIC 12144417 CIgn" Group Life Et AI; FINALdQC 1 j LIFE INSURANCE COMPANY OF NORTI! AMERICA 1601 CHES1NUT STREET GROUP POLICY PHILADELPHIA, PA 19192-2235 (800) 732-1603 TDD (800) 552-5744 A STOCK INSURANCE COMPANY POLICYHOLDER: SUBSCRIBER: POLICY NUMBER: POLICY EFFECTIVE DATE: POLICY ANNIVERSARY DATE: TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY City of Palo Alto FLX-962659 January 1,2009 January I This Policy describes the tenns and conditions of coverage. It is issued in Delaware and shall be governed by its laws. The Policy goes into effect on the Policy Effective Date, 12:01 a.m. at the Policyholder's address. In return for the required premium, the Insurance Company and the Policyholder have agreed to all the terms oflhis Policy. Deborah Young, Corporate Secretary Karen S. Rohan, President TL-004100 T ABLE OF emlTENTS SCHEDULE OF BENEFITS ........................................................................................................................ 1 SCHEDULE OF BENEFITS FOR CLASS I ............................................................................................... 2 SCHEDULE OF BENEFITS FOR CLASS 2 ............................................................................................... 5 SCHEDULE OF BENEFITS FOR CLASS 3 ............................................................................................... 2 ELIGIBILITY FOR INSURANCE .............................................................................................................. 2 I ENROLLING FOR INSURANCE ............................................................................................................... 2 EFFECTIVE DATE OF INSURANCE ........................................................................................................ 2 TERMINATION OF INSURANCE ............................................................................................................. 3 , CONTINUATION OF INSURANCE .......................................................................................................... 3 LIFE INSURANCE BENEFITS ................................................................................................................... 6 LIFE INSURANCE EXCLUSIONS ............................................................................................................ 8 CLAIM PROVISIONS ................................................................................................................................. 8 ADMINISTRATIVE PROVISIONS .......................................................................................................... 10 SCHEDULE OF RATES ............................................................................................................................ 12 GENERAL PROVISIONS ......................................................................................................................... 13 DEFINlTlOJ\S ............................................................................................................................................ 14 SCHEDULE OF BENEFITS Premium Due Date: The last day of each month Classes of Eligible Employees On the pages following the definition of eligible employees there is a Schedu Ie of Benefits for each Class of Eligible Employees listed below. For an explanation of these benefits, please see the Description of Benefits provision. If an Employee is eligible under one Class of Eligible Employees and later becomes eligible under a different Class of Eligible Employees, changes in his or her insurance due to the class change will be effective on the first of the month following the change in class. Class 1 Class 2 Class 3 All active Full-time Employees ofthe Employer, regularly working a minimum of20 hours per week excluding Employees who are classified as Management. All active Full-time Employees of the Employer, regularly working a minimum of20 hours per week who are classified as Management. All active employees as defined under the prior carrier policy number 643835 and on file with the lnsmance Company. (Closed Class) 1 j i SCHEDULE OF BENEFITS FOR CLASS I Eligibility Waiting Period The Eligibility Waiting Period is the period of time the Employee must be in Active Service to be eligible for coverage, It will be extended by the number of days the Employee is not in Active Service. For Employees hired on or before the Policy Effective Date: For Employees hired after the Policy EfIective Date: Employee Benefits Basic Benefit Guaranteed Issue Amount: Maximum Benefit: Voluntary Benefit Guaranteed Issue Amount: Maximum Benefit: Age Based Reductions Continuation Options For Layoff Maximum Benefit Period: For Leave of Absence Maximum Benefit Period: For Family Medical Leave Maximum Benetit Period: No Waiting Period, No Waiting Period, LIFE INSURANCE BENEFITS I times Annual Compensation rounded to the next higher $1,000, if not already a multiple thereof, the lesser of 1 times Annual Compensation or $325,000 the lesser of I times Annual Compensation or $325,000 I times Annual Compensation rounded to the next higher $1,000, ifnot already a multiple thereof. the lesser of I times Annual Compensation or $325,000 the lesser of 1 times Annual Compensation or $325,000 Life Insurance Benefit for an Employee age 70 and over will reduce to: 65% ofthe Life Insurance Benefit at age 70 50% of the Life Insurance Benefit at age 75 Coverage continues through the end of the month in which the layoff begins Coverage continues through the end of the month in which the leave of absence begins 12 weeks For Disability for Employees over Age 60 Maximum Benefit Period: J 2 months Applicable Coverages: Life Insurance Benefits for the Employee Extended Death Benefit with Waiver of Premium Extended Death Benefit Applicable Coverages Life Insurance Benefits for the Employee 2 j Waiver of Premium Waiver Waiting Period Maximum Benefit Period Applieable Coverages Portability Options For Employees Terminal Illness Benefit Automatic Increase Feature 9 months from the date the Employee's Active Serviee ends To Age 65 Life Insurance BeneHts for the Employee See the Former Employee sections in this Schedule of Benefits for the amounts ofinsurance an Insured is eligible to continue under this option. 75% of Life Insurance BeneHts in force on the date the Insured is determined by the Insurance Company to be Terminally Ill, subject to a Maximum Benefit of$5oo,000, Ifan Employee's Voluntary Life Insurance BeneHt is based on Annual Compensation, it will automatically increase. The amount of the increase may be up to 25% of the Employee's previous salary but not more than $25,000. rt will automatically increase, subject to the conditions below, Conditions for Automatic Increase: I, the Employ~'I' provides the Insurance Company with the required notice of an increase in Annual Compensation; and 2. the Employee is in Active Service on the effective date of the increase. If an Employee is not in Active Service on that date, his or her benefit will not increase until he or she returns to Active Service, The Employee may stop the Automatic Increase Feature at any time, If an Employee stops the feature, it may not be restarted at a later date, 11..-004731;-1 Re-solicitation Period During a Re-solicitation Period, an Employee currently insured under the Voluntary Life Insurance portion of this Policy may increase his or her Voluntary Life Insurance Benefits, and an Employee who is eligible for the Voluntary Life Insurance portion of this Policy but who has not previously enrolled may become insured under the Policy, by satisl)dng the Insurability Requirement. An Employee's insurance will be effective on the date the Insurance Company agrees in writing to insure the Employee, An Employee may reduce Insurance Benefits at any time, A request for a Benefit reduction received during a Re-solicitation Period will become effective on the Policy Anniversary following the Re- solicitation Period, Any other Benefit reduction will be elfeclive on the date the Insurance Company receives the completed change form. 3 Former Employee Benefits Amount of insuf'dI1ce Maximum Benefit Period Terminallllness Benefit An amount elected subject to the Maximum Benefit amount for Life Insurance Benefits allowable to an Employee, less any amount of conversion insurance issued under the Conversion Privilege for Life Insurance. Any amount elected in excess of the Life Insurance Benefits in effect on the date he or she no longer qualifies as an Employee will be effective On the date the Insurance Company agrees in writing to insure him or her. The Maximum Benefit for Basic Life Insurance Benefits is $50,000. To Age 70 75% of Life Insurance Benefits in force on the date the Insured is determined by the Insurance Company to be Terminally III, subject to a Maximum Benefit of $500,000. 4 SCHEDULE OF BENEFITS FOR CLASS 2 Eligibility Waiting Period The Eligibility Waiting Period is the period of time the Employee must be in Active Service to be eligible for coverage. 11 will be extended by the number of days the Employee is not in Active Service. For Employees hired on or before the Policy Effective Date: For Employees hired after the Policy Effective Date: Employee Benefits Basic Benefit Guaranteed Issue Amount: Maximum Benefit: Voluntary Benefit Guaranteed Issue Amount: Maximum Benefit: Age Based Reductions Continuation Options For Layoff Maximum Benefit Period: For Leave of Absence Maximum Benefit Period: For Family Medical Leave Maximum Benefit Period: No Waiting Period. No Waiting Period. LIFE INSlJRANCE BENEFITS I times Annual Compensation rounded to the next higher $1,000, if not already a mUltiple thereof. the lesser of I times Annual Compensation or $325,000 the lesser of I times Annual Compensation or $325,000 I or 2 times Annual Compensation rounded to the next higher $1,000, if not already a multiple thereof. the lesser of2 times Annual Compensation or $325,000 the lesser of I times Annual Compensation or $325,000 Life Insurance Benefit for an Employee age 70 and over will reduce to: 65% ofthe Life Insurance Benefit at age 70 50% of the Life Insurance Benefit at age 75 Coverage continues through the end of the month in which the layoff begins Coverage continues through the end of the month in which the leave of absence begins 12 weeks For Disability for Employees over Age 60 Maximum Benefit Period: 12 months Applicable Coverages: Life Insurance Benefits for the Employee Extended Death Benefit with Waiver of Premium Extended Death Benefit Applicable Coverages Life Insurance Benefits for the Employee 5 j I i Waiver of Premium Waiver Waiting Period Maximum Benefit Period Applicable Coverages Portability Options F or Employees Terminal Illness Benefit Automatic Increase Feature 9 months from the date the Employee's Active Service ends To Age 65 Life Insurance Benefits for the Employee See the Former Employee sections in this Schedule of Benefits for the amounts of insurance an Insured is eligible to continue under this option. 75% of Life Insurance Benefits in force on the date the Insured is determined by the Insurance Company to be Terminally 111, subject to a Maximum Bene!it of $500,000. Ifan Employee's Voluntary Life Insurance Benefit is based on Annual Compensation, it will automatically increase. The amount of the increase may be upto 25% of the Employee's previous salary but not more than $25,000. It will automatically increase, subject to the conditions below. Conditions for Automatic Increase: I. the Employer provides the Insurance Company with the required notice of an increase in Annual Compensation; and 2. the Employee is in Active Service on the effective date of the increase. If an Employee is not in Active Service on that date, his or her benefit will not increase until he or she returns to Active Service. The Employee may stop the Automatic Increase Feature at any time. Ifan Employee stops the feature, it may not be restarted at a later date. TtrC047J6-J Re-solicitation Period During a Re-solicitation Period, an Employee currently insured under the Voluntary Life Insurance portion ofrhis Policy may increase his or her Voluntary Life Insurance Benefits, and an Employee who is eligible for the Voluntary Life Insurance portion ofrhis Policy but who has not previously enrolled may become insured under the Policy, by satistying the Insurability Requirement. An Employee's insurance will be effective on the date the Insurance Company agrees in writing to insure the Employee. An Employee may reduce Insurance Benefits at any time. A request for a Benefit reduction received during a Re-solicitation Period will become effective on the Policy Anniversary following the Re- solicitation Period. Any other Benefit reduction will be effective on the date the Insurance Company receives the completed change form. 6 Former Employee Benefits Amount of Insurance Maximum Benefit Period Terminal Illness Benefit An amount elected subject to the Maximum Benefit amount for Life Insurance Benefits allowable to an Employee, less any amount of conversion insurance issued under the Conversion Privilege for Life Insurance. Any amount elected in excess of the Life Insurance Benefits in effect on the date he or she no longer qualifies as an Employee will be effective on the date the Insurance Company agrees in writing to insure him or her. The Maximum Benefit for Basic Life Insuranee Benefits is $50,000. To Age 70 75% of Life Insurance Benefits in force on the date the Insured is determined by the Insurance Company to be Terminally Ill, subject to a Maximum Benefit ofS500,000. SCHEDULE OF BENEFITS FOR CLASS 3 Eligibility Waiting Period The Eligibility Waiting Period is the period of time the Employee mllst be in Active Service to be eligible for coverage. It will be extended by the number of days the Employee is not in Active Service. For Employees hired on or before the Policy Effective Date: For Employees hired after the Policy Effective Date: Employee Benefits Basic Benefit Guaranteed Issue Amount: Maximum Benefit: Voluntary Benefit Guaranteed Issue Amount: Maximum Benefit: Age Based Reductions Continuation Options For Layoff Maximum Benefit Period: For Leave of Absence Maximum Benefit Period: For Family Medical Leave Maximum Benefit Period: No Waiting Period. No Waiting Period. LIFE INSURANCE BENEFITS I times Annual Compensation rounded to the next higher $1,000, if not already a multiple thereof. the lesser of 1 times Annual Compensation or $325,000 the lesser of I times Annual Compensation or $325,000 1 or 2 times Annual Compensation rounded to the next higher $1,000, ifnot already a multiple thereof. the greater of a) or b) below: a) the lesser of2 times Annual Compensation or $325,000, or b) an amount equal to the Life Insurance Benefit in effect on the termination date of the Prior Plan the lesser of 1 times Annual Compensation or $325,000 Life Insurance Benefit for an Employee age 70 and over will reduce to: 65% of the Life Insurance Benefit at age 70 50% of the Life Insurance Benefit at age 75 Coverage c{)minues through the end of the month in which the layoffbegins Coverage continues through the end of the month in which the leave of absence begins 12 weeks For Disability for Employees over Age 60 Maximum Benefit Period: 12 months Applic~ble Coverages: Lile Insurance Benefits for the Employee 2 1 Extended Death Benefit with Waiver of Premium Extended Death Benefit Applicable Coverages Waiver of Premium Waiver Waiting Period Maximum Benefit Period Applicable Coverages Portability Options For Employees Terminal Illness Benefit Automatic Increase Feature Life Insurance Benefits for the Employee 9 months from the date the Employee's Active Service ends To Age 65 Life Insurance Benefits for the Employee See the Former Employee sections in this Schedule of Benefits for the amounts of insurance an Insured is eligible to continue under this option. 75% of Life Insurance Benefits in force on the date the Insured is determined by the Insurance Company to be Terminally Ill, subject to a Maximum Benefit of $500,000. If an Employee's Voluntary Life Insurance Benefit is based on Annual Compensation, it will automatically increase. The amount of the increase may be up to 25% of the Employee's previous salary but not more than $25,000. It will automatically increase, subject to the conditions below. Conditions for Automatic Increase: I. the Employer provides the Insurance Company with the required notice of an increase in Annual Compensation; and 2. the Employee is in Active Service on the effective date ofthe increase. If an Employee is not in Active Service on that date, his or her benefit will nor increase until he or she returns to Active Service. The Employee may stop the Automatic Increase Feature at any time. If an Employee stops the feature, it may not be restarted at a later date. 11..·0047J6.1 Re-solicitation Period During a Re-solicitation Period, an Employee currently insured under the Voluntary Life Insurance portion of this Policy may increase his or her Voluntary Life Insurance Benefits, and an Employee who is eligible for the Voluntary Life Insurance portIon ofthis Policy but who has not previously enrolled may become insured under the Policy, by satisfYing the Insurability Requirement. An Employee's insurance will be effective on the date the Insurance Company agrees in writing to insure the Employee. An Employee may reduce Insurance Benefits at any time. A request for a Benefit reduction received during a Re-solicitation Period will become effective on the Policy Anniversary following the Re- solicitation Period. Any other Benefit reduction will be effective on the date the Insurance Company receives the completed change form. 3 Former Employee Benefits Amount ofInsurance j Maximum Benefit Period Terminal Illness Benefit l'L"()::l4114 An amount elected subject to Ihe Maximum Benefit amount for Life Insurance Benefits allowable to an Employee, less any amount of conversion insurance issued under the Conversion Privilege for Life Insurance. Any amounl elected in excess of the Life Insurance Benefits in effect on the date he or she no longer qualifies as an,Employee will be effecti ve on the date the Insurance Company agrees in writing to insure him or her. The Maximum Benefit for Basic Life Insurance Benefits is $50,000. To Age 70 75% of Life Insurance Benefits in force on the date the Insured is determined by the Insurance Company to be Tenninally III, subject to a Maximum Benefit 01'$500,000. I ELIGIBILITY FOR INSURANCE Classes of Eligible Persons A person may be insured only once under the Basic Ufe portion of the Policy even though he or she may be eligible under more than one class, A person may also be insured only once under the Voluntary Life portion of the Policy as an Employee, even though he or she may be eligible under more than one class, Employee An Employee in one of the Classes of Eligible Employees shown in the Schedule of Benefits is eligible to be insured on the Policy Etfective Date or the day after he or she completes the applicable Eligibility Waiting Period, iflater, If a person has previously converted his or her insurance under the Policy; he or she will not become eligible until the converted policy is surrendered, This does not apply to any amount of insurance that was previously converted under the Policy due to a reduction in the Employee's Ufe Insurance Benefits based on age or a change in class unless those conditions no longer affect the amount of coverage available to the Employee, Except as noted in the Reinstatement Provision, if an Employee terminates coverage and later wishes to reapply, or if a former Employee is rehired, a new Eligibility Waiting Period must be satisfied, An Employee is not required to satisty a new Eligibility Waiting Period if insurance ends because he or she is no longer in a Class of Eligible Employees, but continues to be employed by the Employer, and within one year becomes a member of an eligible class, rt-0047JD ENROLLING FOR INSURANCE Initial Open Enrollment During the Initial Open Enrollment Period, an Employee who was insured, or who was eligible to be insured, under the Prior Plan may become insured under the Voluntary Life Insurance Plan provided by this Policy for a Benefit of one times Annual Compensation up to this Policy's Guaranteed Issue Amount, as shown in the Schedule of Benefits, without satistying any Insurability Requirement. Any Employee who is not actively at work, due to Injury or Sickness, on the date his or her coverage would otherwise become effective under this Policy, may not become insured under this Policy until he or she returns to Active Service, An Employee may become insured for an amount in excess of the Guaranteed Issue Amount only if he or she satisfies the Insurability Requirement, Any excess amount will be effective on the date the Insurance Company agrees in writing to insure the Employee, EFFECTIVE DATE OF INSURA"CE An Employee will be insured for an amount not to exceed the Guaranteed Issue Amount on the date he or she becomes eligible, if the Employee is not required to contribute to the cost Gfthis insurance, An Employee who is required to contribute to the cost Oflhis insurance may elect insurance for himself or herself only by authorizing payroll deduction in a form approved by the Employer and the Insurance Company, The effective date of this insurance depends on the date and amount of insurance elected, If an individual elects coverage within 3 I days after becoming eligible to enroll, or for any increases, the Guaranteed Issue Amount will be effective on the latest afthe following dates: L The Policy Effective Date, 2, The date payroll deduction is authorized for this insurance, 3, The date the Employer or Insurance Company receives the completed enrollment form, 2 A I 1 Ifan enrollment form for Employee coverage is received more than 31 days after becoming eligible to elect coverage, this insurance will be effective on the date the Insurance Company agrees in writing to insure that eligible person. The Insurance Company will require the eligible Employee to satisfy the Insurability Requirement before it agrees to insure him or her. If an eligible Employee is not in Active Service on the date insurance would otherwise be effective, it will be effective on the date he or she returns to Active Service. Takeover Provision Special Terms Applicable to Previously Insured Employees Not in Active Service Employees not in Active Service on the Policy Effective Date are not covered under the Policy. However, the Insurance Company agrees to provide a death benefit equal to the lesser of: I. the amount due under this Policy (withont regard to the Active Service provision), or 2. the amount that would have been due under lhe Prior Plan had it remained in force. The benefit amount will be reduced by any amount paid by the Prior Plan, or that would have been paid had this Policy not been issued and had timely filing of the claim been made under the Prior Plan. These special terms will end on the earliest ofthe following dates: I. the date the Employee meets the Active Service requirements; 2. the date insurance terminates for one of the reasons stated in the Termination ofinsurance provision; 3. 12 months after the Policy Effective Date; or 4. the last day the Employee would have been covered under the Prior Plan if that plan was still in force. TERMINATION OF INSURANCE An Insured's coverage will end on the earliest ofthe following dates: I. the date the Employee is eligible for coverage under a plan intended to replace this coverage; 2. the date the Policy is terminated by the Insurance Company; 3. the date the Insured is nO longer in an eligible class; 4. the date coinciding with the end of the last period for which premiums are paid; 5. the date an Employee is no longer in Active Service; and 6. for an Employee, the date the Employer cancels participation under the Policy. 11"::104714 CONTINUATION OF INSURANCE If an Employee is no longer in Active Service, he or she may be eligible to continue insurance. The following provisions explain the continuation options available under the Policy. Please see the Schedule of Benefits to determine the applicability of these benefits on a class level. Continuation for Layoff, Temporary Leave of Absence or Family Medical Leave If an Employee's Active Service ends due to a layoff, Employer approved unpaid leave of absence, or family medical leave of absence, insurance will continue for up to the Maximum Benefit Period shown in the Schedule of Benefits, if the required premium is paid. 3 Continuation for Disability for Employees over Age 60 If an Employee becomes Disabled and is age 60 or over, the Life Insurance Benefits shown in the Schedule of Benefits will be continued, provided premiums are paid, until the earlier of the following dates: I. 2. 3. 4. The date the Employee is no longer Disabled. The date following the Maximum Benefit Period shown in the Schedule of Benefits. The date coinciding with the end of the last period for which premiums are paid. The date the Policy is terminated by the Insurance Company. Amount of Insurance I f an Employee dies while he or she is Disabled and coverage is continued under this provision, the Insurance Company will pay a Death Benefit equal to the amount in effect on the date the Employee became Disabled. However, the Life Insurance Benefit will be subject to the provisions of the Policy that reduce the coverage amount because of age, retirement, payment of an Accelerated Benefit or a change in class. Automatic increases in Life Insurance Benefits will end while coverage is continued under this provision. The Insurance Company will pay benefits only if due proof of the Employee's continuous Disability is received within one year of the date of the loss. "Disability"I"Disabled" means because of Injury or Sickness the Employee is unable to perform all the material duties of his or her Regular Occupation; or is receiving disability benefits under the Employer's plan. "Regular Occupation" means the occupation the Employee routinely performs at the time the Disability begins. The Insurance Company will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. Extended Death Benefit with Waiver of Premium Extended Death Benejlt If an Employee becomes Disabled and is less than age 60, the Life Insurance Benefits shown in the Schedule of Bene/its will be extended without premium payment until the earlier of the following dates: I. The date the Employee is no longer Disabled. 2. The date the Employee fails to qualitY for Waiver of Premium or fails to provide proof of Disability as indicated under Waiver of Premium. Amount of Insurance If an Employee dies while he or she is Disabled and coverage is extended under this provision, the Insurance Company will pay a Death Benefit equal to the amount in effect on the date the Employee became Disabled. However, the Life Insurance Benefit will be subject to the provisions of the Policy that reduce the coverage amount because of age, retirement, payment of an Accelerated Benefit or a change in class. Automatic increases in Life Insurance Benefits will end while premiums are waived. The Insurance Company will pay benefits only if due proof of the Employee's continuous Disability is received within one year of the date of the loss. "Disabilily"I"Disabled" means because ofinjury or Sickness the Employee is unable to perform all the material duties of his or her Regular Occupation; or is receiving disability benefits under the Employer's plan. "Regular Occupation" means the occupation the Employee routinely performs at the time the Disability begins. The Insurance Company will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. 4 Waiver of Premium If the Employee submits satisfactory proof that he or she has been continuously Disabled for the Waiver Waiting Period shown in the Schedule of Benefits, coverage will be extended up (0 the Maximum Benefit Period shown in the Schedule of Benefits, Such proof must be submitted to the Insurance Company no later than 3 months after the date the Waiver Waiting Period ends, Premiums will be waived from the date the Insurance Company agrees in writing to waive premiums for that Employee, After premiums have been waived for 12 months, they will be waived for future periods of 12 months, if the Employee remains Disabled and submits satisfactory proofthat Disabi Iity continues, Satisfactory proof must be submitted to the Insurance Company 3 months before the end of the 12-month period, Amount o/Insurance Ifan Employee dies while he or she is Disabled and coverage is continued under this provision, the Insurance Company will pay a Death Benefit equal to the amount in effect on the date the Employee became Disabled, However, the Life Insurance Benefit will be subject to the provisions of the Policy that reduce the coverage amount because of age, retirement, payment of an Accelerated Benefit or a change in class, A utomatic increases in Life Insurance Benefits will end while premiums are waived, The Insurance Company will pay benefits only if due proof ofllle Employee's continuous Disability is received within one year of the date of the loss, Termination a/Waiver Insurance will end for any Employee whose premiums are waived on the earliest of the following dates, 1. The date he or she is no longer Disabled, 2, The date he or she refuses to submit to any physical examination required by the Insurance Company, 3, The last day oflhe 12-month period of Disability during which he or she fails to submit satisfactory proof of continued Disability, 4, The date follOWing the end of the Maximum Benefit Period shown in the Schedule of Bene fils, "Disability"f'Disabled" means because ofinjury or Sickness an Employee is unable to perform all the material duties of any occupation which he or she may reusonably become qualified based on education, training or experience. TIrC0914S Pormbility Options For Employees Ifan Employee's coverage under the Policy ends prior to age 70, for any of the following reasons: a, termination of employment; or b, termination of membership in an eligible class under the Policy; Life Insurance Benefits may be continued up to the Maximum Benefit shown in the Schedule ofBenefit~ for this option, The Employee must apply to the Insurance Company and pay the required premium. The application must be submitted: a, within 31 days of the Employee's termination of employment or membership in an eligible class under the Policy; or b, during the time that the Employee has to exercise the Conversion Privilege, Coverage under this option may not be elected at a later date, 5 When applying for this option, the Employee must name a beneficiary. Any beneficiary named previously under the Policy is no longer in effect. Ifthere is no named or surviving beneficiary, Death Benefits will be paid to the first surviving class ofthe fol1o,";,ing living relatives: a. spouse; b. child or children; c. mother or father; d. brothers or sisters; or e, the executors or administrators of the Insured's estate. When coverage is continued under this option, the Employee becomes a Former Employee. Coverage will end on the earliest of the following dates. a. The date the Insurance Company cancels coverage for all Fonner Employees, b, The end of the period for which premiums are paid. c, The date an Insured reaches age 70. d. The date the Maximum Benefit Period shown in the Schedule of Benefits for this option ends. TL·004716 at 1J\oditl"d by TI.-OO933C DESCRIPTION OF BENEFITS The following provisions explain the benefits available under the Policy, Please see the Schedule of Benefits for the applicability ofthes. benefits on a class level. LIFE INSURANCE BENEFITS Death Benefit If an Insured dies, the Insurance Company will pay the Life Insurance Benefit in foree for that Insured on the dale of his or her death. TL-0047l0 Accelerated Benefits Any benefits payable under this Accelerated Benefits provision will reduce the Death Benefit payable for Life Insurance. Any automatic increases in Life Insurance Benefits will end when benefits are payable under this provision. Terminal Illness Benefit The Insurance Company will pay a Terminal Illness Benefit to an Insured who has been determined by the Insurance Company to be Terminally Ill. The Terminal Illness Benefit is payable only once in an Insured's lifetime. Determination a/Terminal Illness For the purpose of determining the existence of a TerminallHness, the Insurance Company will require the Insured submit the following proof. J. A written diagnosis and prognosis by two Physicians licensed to practice in the United States. 2. Supportive evidence satisfactory to the Insurance Company, including but not limited to radiological, histological or laboratory reports documenting the Term inal Illness. The Insurance Company may require, at its expense, an examination of the Insured and a review of the documented evidence by a Physician of its choice. "Terminal Illness" means a person has a prognosis of 12 months or less to live, as diagnosed by a Physician. Tl...o04148 6 j j Conversion Privilege for Life Insurance Each Insured may convert all or any portion of his or her Life Insurance that would end under the Policy due to: I. tennination of employment; 2, 3. termination of membership in an eligible class under the Policy; termination ofthe Policy, The Insured may apply for any type of life insurance the Insurance Company offers to persons of the same age in the amount applied for, except the Insured may nOt: I. choose term insurance; 2, apply for an amount of insurance greater than the coverage amount terminating under the Policy (also, the conversion policy will not provide acddent, disability or other benefits); or 3, apply for more than $10,000 of insurance if the Policy is terminated or amended to terminate the insurance for any ciass oflnsureds, or the Employer cancels participation under the Policy. Conversion in these cases is only permitted if the Insured has been covered by the Policy or, any group life insurance policy issued to the Employer which the Policy replaced, for at least 3 years, If the Insured becomes eligible for coverage under any group life policy within 31 days oftennination of coverage under this Policy, the Insured may not convert an amount of insurance greater than the amount of coverage terminating under the Policy less the amount for which he or she may be covered under the other policy. To apply for conversion insurance, the Insured must, within 31 days after coverage under the Policy ends: I, submit an application to the Insurance Company; and 2. pay the required premium. Evidence of insurability is not required, Premium for the conversion insurance will be based on the age and class of risk ofthe Insured and the type and amount of coverage issued. If the Insured has assigned ownership of his group coverage, the owner/assignee must apply for the individual policy. Conversion insurance will become effective on the 31 st day after the date coverage under the Policy ends provided the application is received by the Insurance Company and the required premium has been paid, If the Insured dies during the 3 I-day conversion period, the Life Insurance benefits will be paid under the Policy regardless of whether he or she applied for conversion insurance. If a conversion policy is issued, it will be in exchange for any further benefits for that type and amount of insurance from this Policy. Extension o/Conversion Period If an Insured is eligible for conversion insurance and is not notified of this right at least 15 days prior to the end of the 3 I-day conversion period, the conversion period will be extended, The Insured will have 15 days from the date notice is given to apply for conversion insurance, In no event will the conversion period be extended beyond 90 days. Notice, for the purpose of this section, means written notice presented to the Insured by the Employer or mailed to the Insured's las! known address as reported by the Employer. If the Insured dies during the extended conversion period, but more than 31 days after his or her coverage under the Policy terminates, Life Insurance benefits: 1. will not be paid under the Policy; and 2, will be payable under the conversion insurance; provided: a, the Insured's application for conversion insurance has been received by the Insurance Company; and b. the required premium has been paid, Prior Conversion Limitation Ifan Insured is covered under a life insurance conversion policy previously issued by the Insurance Company, he or she will not be eligible for this Conversion Privilege unless the prior coverage has ended, TIr0091~O 7 I LIFE INSURANCE EXCLUSIONS If an Insured commits suicide, while sane or insane, within 2 years from the date his or her insurance under the Policy becomes effective, Voluntary Life Insurance Benefits will be limited to a refund of the premiums paid on the Insured's behalf. The suicide exclusion applies from the effective date of any additional benefits or increases in Life Insurance Benefits. Except for any amount of benefits in excess of the Prior Plan'S benefits, this exclusion will not apply to any person covered under the Prior Plan for more than two years. If a person was not insured for two years under the Prior Plan, credit will be given for the time he or she was insured. 11.·004752 CLAIM PROVlSIONS Notice of Claim Written notice, or notice by any other electronic/telephonic means authorized by the Insurance Company, must be given to the Insurance Company within 31 days after a covered loss occurs or begins or as soon as reasonably possible. rfwritten notice, or notice by any other electronic/telephonic means authorized by the Insurance Company, is not given in that time. the claim will not be invalidated or reduced ifit is shown that notice was given as soon as was reasonably possible. Notice can be given at our home office in Philadelphia, Pennsylvania or to our ageht. Notice should include the Employer's Name, the Policy Number and the claimant's name and address. Written notice or any other electronic/telephonic me",ns authorized by the Insurance Company of a diagnosis of a Terminallllness on which claim is based must be given to us within 60 days after the diagnosis. [fnotice is not given in that time, the claim will not be invalidated or reduced if it is shown that written notice or any other electronic/telephonic means authorized by the Insurance Company was given as soon as reasonably possible. Claim Forms When the Insurance Company receives notice of claim, the Insurance Company will send claim forms for filing proof ofloss. If claim forms are not sent within 15 days after notice is received by the Insurance Company, the proof requirements will be met by submitting, within the time required under the "Proof of Loss" section, written proof, or proof by any other electronic/telephonic means authorized by the [nsuranee Company, of the nature and extent of the loss. Claimant Cooperation Provision Failure of a claimant to cooperate with the Insurance Company in the administration of the claim may resu It in termination of the claim. Such cooperation includes, but is not limited to, providing any . information or documents needed to determine whether benefits are payable or the actual benefit amount due. Insurance Data The Employer is required to cooperate with the Insurance Company in fhe review of claims and applications for coverage. Any information the Insurance Company provides in these areas is confidential and may not be used or released by the Employer ifnot pennitted by applicable privacy laws. 8 Proof of Loss Written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance Company, must be given to the Insurance Company within 90 days after the date of the loss for which a claim is made. If written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance Company, is not given in that 90 day period, the claim will not be invalidated nor reduced if it is shown that it was given as soon as was reasonably possible. In any case, written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance Company, must be given not more than one year after that 90 day period. If written proof ofloss, or proofhy any other electronic/telephonic means authorized by the Insurance Company, is provided outside of these time limits, the claim will be denied. These time limits will not apply while the person making the claim lacks legal capacity. Written proof, or any other electronic/telephonic means authorized by the Insurance Company, ofloss for Accelerated Benefits must be furnished 90 days after the date of diagnosis. This proof must describe the occurrence, character and diagnosis for which claim is made. In case of claim for any other loss, proof must be furnished within 90 days after the date of such loss. lfit is not reasonably possible to submit proof ofloss within these time periods, the Insurance Company will not deny or reduce any c!aim ifproofis furnished as soon as reasonably possible. Proof must, in any case, be furnished not more than a year later, except for lack of legal capacity. Time of Payment Benefits due under the Policy for a loss, other than a loss for which the Policy provides installment payments, will be paid immediately upon receipt of due written proof of such loss. Subject to the receipt of satisfactory written proof ofloss, all accrued benefits for loss for which the Policy provides installments will be paid monthly; any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof, unless otherwise stated in the Description of Benefits. To Whom Payable Death Benefits will be paid to the Insured's named beneficiary, if any, on file at the time of payment. If there is no named beneficiary or surviving beneficiary, Death Benefits will be paid to the first surviving class of the following living relatives: spouse; child or children; mother or father; brothers or sisters; or to the executors or administrators of the Insured's estate. The Insurance Company may reduce the amount payable by any indebtedness due. All benefits payable under the Accelerated Benefits section are payable to the Insured, ifiiving. If the Insured dies prior to the payment of an eligible claim for an Accelerated Benefit, benefits will be paid in accordance with the provisions applicable to the payment of Life Insurance proceeds, unless the Insured has directed uS otherwise in writing. However, any payment made by us prior to notice of the Insured's death shall discharge us of any benefit that was paid. All other benefits, unless otherwise stated in the Policy, will be payable to the Insured or the certificate owner if other than the Insured. Any other accrued benefits which are unpaid at the Insured's death may, at the Insurance Company's option, be paid either to the Insured's beneficiary or to the executor or administrator of the Insured's estate. If the Insurance Company pays benefits to the executor or administmtor of the Insured's estate or to a person who is incapable of giving a valid release, the Insurance Company may pay up to $1,000 to a relative by blood or marriage whom it believes is equiIabIy entitled. This good fuith payment satisfies the Insurance Company's legal duty to the extent of that payment. 9 1 I I Change of Beneficiary The Insured may change the beneficiary at any time by giving written notice to the Employer or the Insurance Company. The beneficiary's consent is not required for this or any other change which the Insured may make unless the designation of beneficiary is irrevocable. No change in beneficiary will take effect until the form is received by the Employer or the Insurance Company. When this form is received, it will take effect as of the date of the fonn. Ifthe Insured dies before the fonn is received, the Insurance Company will not be liable for any payment that was made before receipt of the form. Physical Examination and Autopsy The Insurance Company, at its expense, will have the right to examine any person for whom a claim is pending as often as it may reasonably require. The Insurance Company may, at its expense, require an autopsy unless prohibited by law. Legal Actions No action at law or in equity may be brought to recover benefits under the Policy less than 60 days after written proof ofloss, or proof by any other electronic/telephonic means authorized by the Insurance Company, has been furnished as required by the Policy. No such action shall be brought more than 3 years after the time satisfactory proof of loss is required to be furnished. Time Limitations If any time limit stated in the Policy for giving notice of claim or proof of loss, or for bringing any action at law or in equity, is less than that permitted by the law of the state in which the Employee lives when the Policy is issued, then the time limit provided in the Policy is extended to agree with the minimum permitted by the law of that state. PhysicianlPaticnt Relations hip The Insured will have the right to choose any Physician who is practicing legally. The Insurance Company will in no way disturb the Physician/patient relationship. 1L-004724 ADMINISTRATIVE PROVISIONS Premiums The premiums for this Policy will be based on the rates currently in force, the plan and the amount of insurance in effect. If the Insured's coverage amount is reduced due to acceleration of his or her Death Benefit, his or her premium will be based on the amount of coverage he or she has in force on the day before the reduction took place. If the Insured's coverage amount is reduced due to his or her attained age, premium will be based on the amount of coverage in force on the day after the reduction took place. Changes in Premium Rates The premium rates may be changed by the Insurance Company from time to time with at least 31 days advance written notice. No change in rates will be made until 48 months after the Policy Effective Date. An increase in rates will not be made more often than once in a 12 month period. However, the Insurance Company reserves the right to change the rates even during a period for which the rate is guaranteed if any of the following events take place. I. The terms of the Policy change. 2. A division, subsidiary, affiliated company or eligible class is added or deleted from the Policy. 3. There is a change in the factors bearing on the risk assumed. 4. Any federal or state law or regulation is amended to the extent it affects the Insurance Company's benefit obligation. 10 5. The Insurence Company determines that the Employer has failed to promptly furnish any necessary information requested by the Insurance Company, or has failed to perfonTI any other obligations in relation to the Policy. If an increase or decrease in rates takes placc on a date that is not a Prcmium Due Date, a pro rata adjustment will apply from the date ofthe change to the next Premium Due Date. Reporting Requirements The Employer must, upon request, give the Insurance Company any information required to determine who is insured, the amount of insurance in force and any other information needed to administer the plan of insurance. Payment of Premium The first premium is due on the Policy Effective Date. After that, premiums will bc due monthly unless the Employer and the Insurance Company agree on some other mcthod of premium payment. If any premium is not paid when due, the plan will be canceled as of the Premium Due Date, except as provided in the Policy Grace Period section. Notice of Cancellation The Employer or the Insurance Company may cancel the Policy as of any Premium Due Date by giving 31 days advance wtitten notice. If a premium is not paid when due, the Policy will automatically be canceled as of the Premium Due Date, except as provided in the Policy Grace Period section. Policy Grace Period A Policy Grace Period of 60 days will be granted for the payment of the required premiums under this Policy. This Policy wiII be in force during the Policy Grace Period. The Employer is liable to the Insurance Company for any unpaid premium for the time this Policy was in force. Grace Period for the Insured If the required premium is not paid on the Premium Due Date, there is a 60 day grace period after each premium due date after the first. If the required premium is not paid during the grace period, insurance will end on the last day for which premium was paid. If benefits are paid during the Grace Period for the Insured, the Insurance Company will deduct any overdue premium from the proceeds payable under the Policy. Reinstatement of Insurance Coverage may be reinstated without satisfYing the Insurability Requirement, ifan Employee's insurance ends because he or she is on an unpaid leave of absence and he or she applies for Reinstatement within 31 days of his return to Active Service. After an Insured's coverage has ceased, it may be reinstated at any date prior to five years after the date of termination jfthe following conditions are met: I. The Policy is still in force. 2. The Insured is eligible under the Policy. 3. A written request for reinstatement and a new enrollment form are sent to the Insurance Company. 4. The required premium is paid. 5. The Insurability Requirement, if any, is satisfied. 11 1 } SCHEDULE OF RATES The following monthly rales apply 10 all Classes of Eligible Persons unless otherwise indicated. FOR EMPLOYEE BENEFITS Basic Life Insurance Voluntary Life Insurance FOH FORMER EMPLOYEE BE:-IEFlTS $.13 Per $1,000 $.24 Per $1,000 Monthly Rates are based on units of $1,000. Under Age 20 $.153 Age 45 -49 Age 20 -24 $.144 Age 50 -54 Age 25 -29 $.153 Age 55 -59 Age 30 -34 $.177 Age 60 -64 Age 35 -39 $.19 Age 65 -69 Age 40 -44 $.243 $.384 $.726 $1.347 $2.461 $4.065 A change in rates due to a change in the Former Employee's age will become effective on the Policy Anniversary Date coinciding with or following the Former Employee's birthday. 12 GENERAL PROVISIONS Entire Contract The entire contract will be made up of the Policy, the application of the Employer, a copy of which is attached to the Policy, and the applications, if any, of the Insureds. Incontestability All statements made by the Employer or by an Insured are representations not warranties. No statement will be used to deny or reduce benefits or as a defense to a claim, unless a copy of the instrument containing the statement has been furnished to the claimant. In the event of death or legal incapacity, the beneficiary or representative must receive the copy. After two years from an Insured's effective date of insurance, or from the effeciive date of any added or increased benefits, no such statement will cause insurance to be contested except for fraud or eligibility for coverage. Misstatement of Age If an Insured's age has been misstated, the Insurance Company will adjust all benefits to the amounts that would have been purchased for the correct age. Policy Changes No change in the Policy will be valid until approved by an executive officer of the Insurance Company. This approval must be endorsed on, or attached to, the Policy. No agent may change the Policy or waive any of its provisions. Workers' Compensation Insurance The Policy is not in lieu of and does not affect any requirements for insurance under any Workers' Compensation Insurance Law. Certificates A certificate of insurance will be delivered to the Employer for delivery to Insureds. Each certificate will list the benefits, conditions and limits of the Policy. It will state to whom benefits will be paid. Assignment of Benefits The Insurance Company will not be affected by the assignment of an Insured's certificate until the original assignment or a certified copy of the assignment is filed with the lnsurance Company. The Insurance Company will not be responsible for the validity or sufficiency of an assignment. An assignment of benefits will operate so long as the assignment remains in force provided insurance under the Policy is in effect. This insurance may not be levied on, attached, garnisheed, or otherwise taken for a person's debts. This prohibition does not apply where contrary to law. Clerical Error A person's insurance will not be affected by error or delay in keeping records of insurance under the Policy. If such an error is found, the premium will be adjusted fairly. Ageney The Employer and Plan Administrator are agents of the Employee for transactions relating to insurance under the Policy. The Insurance Company is not liable for any of their acts or omissions. TL-004i26 13 DEFL~ITIONS Please note, certain words used in this document have specific meanings. These tenns will be capitalized throughout this document. The definition of any word, if not defined in the text where it is used, may be found either in this Definitions section or in the Schedule of Bene fits. Accident An Accident is a sudden, unforeseeable external event that causes bodily Injury to an Insured while coverage is in force under the Policy. Active Service An Employee will be considered in Active Service with the Employer on a day which is one of the Employer's scheduled work days if either of the following conditions are met. I. He or she is actively at work, This means the Employee is perfonning his or her regular occupation for the Employer on a Full-time basis, either at one of the Employer's usual places of business or at some location to which the Employers business requires the EmplOyee to travel. 2, The day is a scheduled holiday, vacation day or period of Employer approved paid leave of absence, other than disability or sick leave after 7 days. An Employee is considered in Active Service on a day which is not one of the Employer's scheduled work days only if he or she was in Active Service on the preceding scheduled work day. Annual Compensation An Employee's annual wage or salary as reported by the Employer for work performed for the Employer as of the date the covered loss occurs. It includes earnings received as commissions, but not bonuses, overtime payor other extra compensation. Commissions will be averaged for the 12 months just prior to the date the covered loss occurs, or the months employed, jf less than 12 months. Employee For eligibility purposes, an Employee is an employee ofthe Employer in one oflhe "Classes of Eligible Employees." Otherwise, Employee means an employee of the Employer who is insured under the Policy. Employer The Employer who has subscribed to the Policyholder and for the benefit of whose Employees this policy has been issued. The Employer, named as the Subscriber on the front of this Policy, includes any affiliates or subsidiaries covered under the Policy. The Employer is acting as an agent of the Insured for transactions relating to this insurance. The actions of the Employer shall not be considered the actions of the Insurance Company. Full-time Full-time means the number of hours set by the Employer as a regular work day for Employees in the Employee's eligibility class. Initial Open Enrollment Period The period in the calendar year when an eligible Employee who was hired on or before the Policy Effective Date may enroll for the first time for Insurance Benefits under this Policy. This period must be agreed upon by the Employer and the Insurance Company, Refer to Initial Open Enrollment under the Enrolling for Insurance section of the Policy, Injury Any accidental loss or bodily hann which results direetly and independently of all other causes from an Accident. 14 Insurability Requirement An eligible person will satis/)' the Insurability Requirement for an amount of coverage on the day the Insurance Company agrees in writing to accept him or her as insured for that amount. To determine a person's acceptability for coverage, the Insurance Company will require evidence of good health and may require it be provided at the Employee's expense. Insurance Company The Insurance Company underwriting the Policy is named on the Policy cover page. Insured A person who is eligible for insurance under the Policy, for whom insurance is elected, the required premium is paid and coverage is in force under the Policy. Physician Physician means a licensed doctor practicing within the scope of his or her license and rendering care and treatment to an Insured that is appropriate for the condition and locality. The term does not include an Employee, an Employee's spouse, the immediate family (including parents, children, siblings or spouses of any of the foregoing, whether the relationship derives from blood or marriage), of an Employee or spouse, or a person living in an Employee's household. Prior Plan The Prior Plan refers to the plan of insurance providing similar benefits sponsored by the Employer in effect directly prior to the Policy Effective Date. Sickness Any physical or mental illness. Tlr004708 15 IMPORTANT CHANGES FOR STATE REQUIREMENTS If an Employee resides in one of the following states, the provisions ofthe certificate are modified for residents of the following stlltes. The modifications listed apply only to residents of that state. California Residents: Conversion Privilege for Life Insurance Insured Employees and Insured Spouses may convert to an individual policy of life insurance for an amount not greater than the Conversion Amount shown below when the Policy ends, without regard to any requirement that the person be insured under the policy for a specified period oftime, if all of the following apply. a. The Insured became Totally Disabled while covered for the Life Benefit of the Policy. Totally Disabled means the person is unable to perform all the material duties of any occupation for which he or she may reasonably be qualified based on training, education and experience, b. The Insured remained Totally Disabled until the Policy ended while covered for the Life Benefit of this Policy. c. The Policy does not provide a Waiver of Premium, Extended Death Benefit Provision or monthly payments to Totally' Disabled Insureds for the Life Benefit. d. The person meets all other conditions for converting the insurance. Conversion Amount -Insured's life insurance amount under the Policy on the date the Policy ends minus the amount for which the Insured is insured under a group policy that provides life coverage to employees of the Insured Employee's Employer covered under this Policy. The dollar limit that applies to the amount for conversion at Policy termination does not apply. The requirement that the Insured be covered under the Policy for the stated number ofye.rs in order to convert life insurance does not apply. Missouri residents: Regardless of any language to the contrary in the Policy, suicide is no defense to payment of life insurance benefits. However, if an Insured commits suicide within 2 years from the date their insurance under the Policy becomes effective, and the Insurance Company can show that the Insured intended suicide at the time they applied for the insurance, life insurance benefits will be limited to a refund of premium paid on the Insured's behalf. North Dakota residents: The Suicide exclusion, if any, is limited to one year from the effective date of insurance. The suicide exclusion with respect to any increase in death benefits which results from an application of the insured subsequent to the eflective date, if any, is limited to one year from the eflective date of the increase. 16 -~ LIFE INSURANCE COMPANY OF NORTH AMERICA PIDLADELPHIA, PA 19192-2235 We, City of Palo Alto, whose main office address is Palo A Ito, CA, hereby approve and accept the terms of Group Policy Number FLX-962659 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA 10 the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY. This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA. City of Palo Alto Signature and Title: ________________ Date: _________ _ (This Copy Is To Be Returned To Life Insurance Company of North America) LIFE INSURANCE COMPANY OF NORTH AMERICA PHILADELPHIA, PA 19192-2235 We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the terms of Group Policy Number FLX-962659 issued by the LIFE INSURANCE COMPANY OF NORTII AMERICA to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRA TIO~ INDUSTRY. This form is to be signed in duplicate. Ooe part is to be retained by City of Palo Alto; the other part is to be returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA. City of Palo Alto Signature and Title: _____ ~. (This Copy Is To Be Retained By City of Palo Alto) LIFE INSURANCE COMPANY OF NORTH AMERICA 1601 CHESTNUT STREET GROUP POLICY PHILADELPHIA, PA 19192-2235 (800) 732-1603 TDD (800) 552-5744 A STOCK INSURANCE COMPANY POLICYHOLDER: SUBSCRIBER: POLICY NUMBER: POLICY EFFECTIVE DATE: POLICY ANNIVERSARY DATE: TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY City of Palo Alto LK-961943 January 1, 2009 January 1 This Policy describes the terms and conditions of coverage. It is issued in Delaware and shall be governed by its laws. The Policy goes into effect on the Policy Effective Date, 12:01 a.m. at the Policyholder's address. In return for the required premium, the Insurance Company and the Policyholder have agreed to all the terms of this Policy. Deborah Young, Corporate Secretary Karen S. Rohan, President TL-004700 OIOv-2 TABLE OF CONTENTS SCHEDULE OF BENEFITS ........................................................................................................................ I SCHEDULE OF BENEFITS FOR CLASS I ............................................................................................... 2 SCHEDULE OF BENEFITS FOR CLASS 2 ............................................................................................... 5 SCHEDULE OF BENEFITS FOR CLASS 3 .................................................................. " ........................... 8 ELIGIBILITY FOR INSURANCE .......................................................................................... : ................. 11 EFFECTIVE DATE OF INSURANCE ...................................................................................................... 11 TERMINATION OF INSURANCE ........................................................................................................... 11 CONTINUATION OF INSURt>,NCE ........................................................................................................ 12 DESCRIPTION OF BENEFITS ................................................................................................................. 13 EXCLUSiONS ............................................................................................................................................ 18 CLAIM PROVISIONS ............................................................................................................................... 18 ADMINISTRATIVE PROVISIONS .......................................................................................................... 20 GENERAL PROVISIONS ......................................................................................................................... 21 DEFINITIONS ............................................................................................................................................ 22 DOMESTIC PARTNER RIDER ................................................................................................................ 25 1 1 I , SCHEDULE OF BENEFITS Premium Due Date: The last day of each month Classes of Eligible Employees On the pages following the definition of eligible employees there is a Schedule of Benefits for each Class of Eligible Employees listed below. For an explanation of these benefits, please see the Description of Benefits provision. If an Employee is eligible under one Class of Eligible Employees and later becomes eligible under a different Class of Eligible Employees, changes in his or her insurance due to the class change will be effective on the first of the month following the change in class. Class 1 Class 2 Class 3 All active, Full-time Service Employees International Union Employees/Members of the Employer regularly working a minimum 0[20 hours per week. All active, Full-time Employees of the Employer regularly working a minimum of 20 hours per week who are classified as Management, Confidential and Council Officer. AU active, Full-time Employees oflhe Employer as defined under the prior carrier policy, number 643835, and on file with the Insurance Company, regularly working a minimum of20 hours per week. (Closed Class) I SCHEDULE OF BENEFITS FOR CLASS I Eligibility Waiting Period For Employees hired on or before the Policy Effective Date: No Waiting Period No Waiting Period For Employees hired after the Policy Effective Date: Dellnition of DisabilitylDisabled The Employee is considered Disabled if, solely because of Injury or Sickness, he or she is: I. unable to perform the material duties of his or her Regular Occupation; and 2. unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular Occupation. After Disability Benefits have been payable for 24 months, the Employee is considered Disabled if, solely due to Injury or Sickness, he or she is: I. unable to perform the material duties of any occupation for which he or she is, or may reasonably become, qualified based on education, training or experience; and 2. unable to earn 60% or more of his or her Indexed Earnings. The Insurance Company will require proof of earnings and continued Disabil ity. Definition of Covered Earnings Covered Earnings means an Employee's wage Or salary as reported by 1he Employer for work performed for the Employer as in effect just prior to 1ho date Disability begins. It includes earnings received from commissions but not bonuses, overtime pay and other extra compensation. Covered Earnings are determined initially on the date an Employee applies for coverage. A change in the amount of Covered Earnings is effective on the date of1he change, if the Employer gives us written notice oflhe change and the required premium is paid. Commissions will be averaged for the 12 months just prior to the date Disability begins, or the months employed, if less 1han 12 months. Any increase in an Employee's Covered Earnings will not be effective during a period of continuous Disability. Elimination Period Gross Disability Benellt Option I Option 2 Maximum Disability Benetlt Option 1 Option 2 Minimum Disability Benellt Disability Benelll Calculation 60 days The lesser of 66,67% of an Employee's monthly Covered Earnings rounded to the nearest dollar or the Maximum Disability Benefit. The lesser of 60% of an Employee's monthly Covered Earnings rounded to the nearest dollar orthe :Maximum Disability Benefit. $4,000 per month $1,800 per month $100 per month The Disability Benefit payable to the Employee is figured using the Gross Disability Benefit, Other Income Benefits and the Return to Work Incentive. Monthly Benefits are based on a 30-day month. The Disability Benefit will be prorated if payable for any period less than a month. During any month the Employee has no Disability Earnings, the monthly benefit payable is the Gross Disability Benefit less Other Income Benefits. During any month the Employee has Disability Earnings, benefits are detennined under the Return to Work Incentive. Benefits will not be less than the minimum benefit shown in the Schedule of Benefits except as provided under the section Minimum Benefit. 2 "Other Income Benefits" means any benefits listed in the Other Income Benefits provision that an Employee receives on his or her own behalf or for dependents, or which the Employee's dependents receive because of the Employee's entitlement to Other Income Benefits. Return to Work Incentive During any month the Employee has Disability Earnings, his or her benefits will be calculated as follows. The Employee's monthly benefit payable will be calculated as follows during the first 24 months disability benefits are payable and the Employee has Disability Earnings: I. Add the Employee's Gross Disability Benefit and Disability Earnings. 2. Compare the Sum from I. to the Employee's Indexed Earnings. 3. lfthe sum from 1. exceeds 100% of the Employee's Indexed Earnings, then subtract the Indexed Earnings from the sum in I. 4. The Employee's Gross Disability Benefit will be reduced by the difference from 3., as well as by Other Income Benefits. 5. If the sum from I. does not exceed 100% of the Employee's Indexed Earnings, the Employee's Gross Disability Benefit will be reduced by Other Income Benefits. After disability benefits are payable for 24 months, the monthly benefit payable is the Gross Disability Benefit reduced by Other Income Benefits and 50% of Disability Earnings. No Disability Benefits will be paid, and insurance will end if the Insurance Company determines the Employee is able to work under a modified work arrangement and he or she refuses to do so without Good Cause. Additional Benefits Survivor Benefit Benefit Waiting Period: Amount of Benefit: Maximum Benefit Period Maximum Benefit Period After 3 Monthly Benefits are payable. 100% of the sum of the last full Disability Benefit plus the amount of any Disability Earnings by which the benefit had been reduced for that month. A single lump sum payment equal to 3 monthly Survivor Benefits. The later of the Employee's SSNRA' or the Maximum Benefit Period listed below. Age When Disability Begins Age 62 or under Age 63 Age 64 Age 65 Age 66 Age 67 Age 68 Age 69 or older Maximum Benefil Period The Employee's 65th birthday or the date the 42nd Monthly Benefit is payable, if later. The date the 36th Monthly Benefit is payable. The date the 30th Monthly Benefit is payable. The date the 24th Monthly Benefit is payable. The date the 21st Monthly Benefit is payable. The date the 18th Monthly Benefit is payable. The date the 15th Monthly Benefit is payable. The date the 12th Monthly Benefit is payable. 'SSNRA means the Social Security Normal Retirement Age in effect under the Social Security Act on the Policy Effective Date. 3 Initial Premium Rates -Option 1 $1.23 per$100 of Covered Payroll Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the determination is made, However, an Employee's Covered Payroll will not include any part of his or her monthly Covered Earnings which exceed $6,000, Initial Premium Rates -Option 2 $,575 per $100 of Covered Payroll Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the determination is made, However. an Employee's Covered Payroll will not include any part of his or her monthly Covered Earnings which exceed $3,000, 11AI04774 4 SCHEDULE OF BENEFITS FOR CLASS 2 Eligibility Waiting Period For Employees hired on or before the Policy Effective Date: No Waiting Period For Employees hired after the Policy Effective Date: No Waiting Period Definition of DisabilityfDisabled The Employee is c-onsidered Disabled if, solely because oflnjury or Sickness, he or she is: 1. unable to perform the material duties of his or her Regular Occupation; and 2. unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular Occupation. After Disability Benefits have been payable for 24 months, the Employee is considered Disabled if, solely due to Injury or Sickness, he or she is: 1. unable to perform the material duties of any occupation for which he or she is, or may reasonably become, qualified based on education, training or experience; and 2. unable to earn 60% or more of his or her Indexed Earnings. The Insurance Company will require proof of earnings and continued Disability. Definition of Covered Earnings Covered Earnings means an Employee's wage or salary as reported by the Employer for work performed for the Employer as in effect just prior to the date Disability begins. It includes earnings received from c-ommissions but not bonuses, overti me pay and other extra compensation. Covered Earnings are determined initially on the date an Employee applies for coverage. A change in the amount of Covered Earnings is effective on the date of the change, if the Employer gives us written notice of the change and the required premium is paid. Commissions will be averaged for the 12 months just prior to the date Disability begins, or the months employed, ifless than 12 months, Any increase in an Employee's Covered Earnings will not be effective during a period of continuous Disability . Elimination Period Gross Disability Benefit Maximum Disability Benefit Minimum Disability Benefit Disability Benefit Calculation 60 days The lesser of 66.67% of an Employee's monthly Covered Earnings rounded to the nearest dollar or the Maximum Disability Benefit. $10,000 per month $100 per month The Disability Benefit payable to the Employee is figured using the Gross Disability Benefit, Other Income Benefits and the Return to Work Incentive. Monthly Benefits are based on a 3D-day month, The Disability Benefit will be prorated ifpayable for any period less than a month. During any month the Employee has no Disability Earnings, the monthly benefit payable is the Gross Disability Benefit less Other Income Benefits. During any month the Employee has Disability Earnings, benefits are determined under the Return to Work Incentive. Benefits will not be less than the minimum benefit shown in the Schedule of Benefits except as provided under the section Minimum Benefit. 5 "Other Income Benefits" means any benefits listed in the Other Income Benefits provision that an Employee receives on his or her own behalf or for dependents, or which the Employee's dependents receive because of the Employee's entitlement to Other Income Benefits. Return to Work incentive During any month the Employee has Disability Earnings, his or her benefits will be calculated as follows. The Employee's monthly benefit payable wlll be calculated as follows during the first 24 months disability benefits are payable and the Employee has Disability Earnings: I. Add the Employee's Gross Disability Benefit and Disability Earnings. 2. Compare the sum from 1. to the Employee's Indexed Earnings. 3. If the sum from I. exceeds 100% of the Employee's Indexed Earnings, Ulen subtract the Indexed Earnings from the sum in I. 4. The Employee's Gross Disability Benefit will be reduced by the difference from 3., as well as by Other Income Benefits. 5. If the Sum from I. does not exceed 100% of the Employee's Indexed Earnings, the Employee's Gross Disability Benefit will be reduced by Other Income Benefits. After disability benefits are payable for 24 months, the monthly benefit payable is the Gross Disability Benefit reduced by Other Income Benefits and 50% ofDisabllity Earnings. No Disability Benefits will be paid, and insurance will end if the Insurance Company deternlines the Employee is able to work under a modified work arrangement and he or she refuses to do so without Good Cause. Additional Benefits Survivor Benefit Benefit Waiting Period: Amount of Benefit: Maximum Benefit Period Maximum Benefit Period After 3 Monthly Benetits are payable. 100% of the sum of the last full Disability Benetit plus the amount ohny Disability Earnings by which the benefit had been reduced for that month. A single lump sum payment equal to 3 monthly Survivor Benefits. The later of the Employee's SSNRA' or the Maximum Benetlt Period listed below. Age When Disability Begins Age 62 or under Age 63 Age 64 Age 65 Age 66 Age 67 Age 68 Age 69 or older Maximum Benefit Period The Employee's 65th birthday or the date the 421.1d Monthly Benefit is payable, iflater. The date the 36th Monthly Benefit is payable. The date the 30th Monthly Benefit is payable. The date the 24th Monthly Benefit is payable. The date the 21 st Monthly Bt'1lefit is payable. The date the 18th Monthly Benefit is payable. The date the 15th Monthly Benefit is payable. The date the 12th Monthly Benefit is payable. 'SS:>iRA means the Social Security Normal Retirement Age in effect under the Social Security Act on the Policy Effective Date. 6 Initial Premium Rates $.62 per $ lOO of Covered Payroll Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered Earnings which exceed $15,000. 1 SCHEDULE OF BENEFITS FOR CLASS 3 Eligibility Waiting Period For Employees hired on or before the Policy Effective Date: No Waiting Period For Employees hired after the Policy Effective Date: No Waiting Period Definition of DisabilitylDisabled The Employee is considered Disabled if, solely because ofinjury or Sickness, he or she is: L unable to perform the material duties of his or her Regular Occupation; and 2, unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular Occupation, After Disability Benefits have been payable for 24 months, the Employee is considered Disabled if; sOlely due to Injury or Sickness, he or she is: I, unable to perform the material duties of any occupation for which he or she is, Or may reasonably become, qualified based on education, training or experience; and 2, unable to earn 60% or more of his or her Indexed Earnings, The Insurance Company will require proof of earnings and continued Disability, Definition of Covered Earnings Covered Earnings means an Employee's wage or salary as reported by the Employer for work performed for the Employer as in effect jus! prior to the date Disability begins, It includes earnings received from commissions but not bonuses, overtime pay and other extra compensation. Covered Earnings are determined initially on the date an Employee applies for coverage, A change in the amount of Covered Earnings is effective on the date of the change, if the Employer gives us written notice of the change and the required premium is paid, Commissions will be averaged for the 12 months just prior to the date Disability begins, or the months employed, ifless than 12 months, Any increase in an Employee's Covered Earnings will not be effective during a period of continuous Disability, Elimination Period Gross Disability Benefit Maximum Disability Benefit Minimum Disability Benefit Disability Benefit Calculation 60 days The lesser of 66.67% of an Employee's monthly Covered Earnings rounded to the nearest dollar or the Maximum Disability Benefit $10,000 per month $100 per month The Disability Benefit payable to the Employee is figured using the Gross Disability Benefit, Other Income Benefits and the Return to Work lncentive, Monthly Beneftts are based on a 3D-day month. The Disability Benefit will be prorated if payable for any period less than a month, During any month the Employee has no Disability Earnings, the monthly benefit payable is the Gross Disability Benefit less Other Income Beneftts, During any month the Employee has Disability Earnings, benefits are determined under the Return to Work Incentive, Benefits will not be less than the minimum benefit shown in the Schedule of Benefits except as provided under the section Minimum Benefit 8 ·'Other Income Benefits" means any benefits listed in the Other Income Benefits provision that an Employee receives on his or her own behalf or for dependents, or which the Employee's dependents receive because of the Employee's entitlement to Other Income Benefits. Return to Work Incentive During any month the Employee has Disability Earnings, his or her benefits will be calculated as follows. The Employee's monthly benefit payable will be calculated as follows during the first 24 months disability benefns are payable and the Employee has Disability Earnings; 1. Add the Employee's Gross Disability Beneflt and Disability Earnings. 2. Compare the sum from 1. to the Employee's Indexed Earnings. 3. Jfthe sum from 1. exceeds 100% of the Employee's Indexed Earnings, then subtract the Indexed Earnings from the sum in I. 4. The Employee's Gross Disability Beneflt will be reduced by the difference from 3., as well as by Other Income Beneflts. 5. If the sum from I. does not exceed 100% of the Employee's Indexed Earnings, the Employee's Gross Disability Benefit will be reduced by Other Income Beneflts. After disability benefits are payable for 24 months, the monthly bencflt payable is the Gross Disability Benefit reduced by Other Income Benefits and 50% of Disability Earnings. No Disability Beneflts will be paid, and insurance will end if the Insurance Company determines the Employee is able to work under a modified work arrangement and he or she refuses to do so without Good Cause. Additional Benefits Survivor Benefit Beneflt Waiting Period: Amount ofBeneflt: Maximum Benefit Period Maximum Benefit Period After 3 Monthly Benefits are payable. 100% of the sum of the last full Disability Benefit plus the amount of any Disability Earnings by which the beneflt had been reduced for that month, A single lump sum payment equal to 3 monthly Survivor Benefits. The later of the Employee's SSl'\RA· or the \1aximum Benetit Period listed below. Age When Disability Begins Age 62 or under Age 63 Age 64 Age 65 Age 66 Age 67 Age 68 Age 69 or older Maximum Beneflt Period The Employee's 65th birthday or the date the 42nd Mqnthly Beneflt is payable, if later. The date the 36th Monthly Beneflt is payable. The date the 30th Monthly Beneflt is payable. The date the 24 th Monthly Beneflt is payable. The date the 2 [st Monthly Benefit is payable. The date the 18th \1onthly Benefit is payable. The date the 15th Monthly Benefit is payable. The date the 12th Monthly Benefit is payable, 'SSNRA means the Social Security Normal Retirement Age in effect under the Social Security Act on the Policy Effective Date. 9 Initial Premium Rates $.62 per $100 of Covered Payroll Covered Payroll for an Employee will mean his or her Covered Earnings for the insurance month prior to the date the determination is made. However, an Employee's Covered Payroll will not include any part of his or her monthly Covered Earnings which exceed $15,000. 11.-004774 10 J ELIGIBILITY FOR INSURANCE An Employee in one orthe Classes of Eligible Employees shown in the Schedule of Benefits is eligible to be insured on the Policy Effective Date, or the day after he or she completes the Eligibility Waiting Period, iflater. The Eligibility Waiting Period is the period of time the Employee must be in Active Service to be eligible for coverage. It will be extended by the number of days the Employee is not in Active Service. Except as noted in the Reinstatement Provision, if an Employee terminates coverage and later wishes to reapply, or if a former Employee is rehired, a new Eligibility Waiting Period must be satisfied. An Employee is not required to satisfY a new Eligibility Waiting Period if insurance ends because he or she is no longer in a Class of Eligible Employees, but continues to be employed and within one year becomes a member of an eligible class. TL.004i!O EFFECTIVE DATE OF INSURANCE An Employee will be insured on the date he or she becomes eligible, if the Employee is not required to contribute to the cost of this insurance. An Employee who is required to contribute to the cost of this insurance may elect to be insured only by authorizing payroll deduction in a form approved by the Employer and the Insurance Company. The effective date of this insurance depends on the date coverage is elected. Insurance for an Employee who applies for insurance within 31 days after he or she becomes eligible is effective on the latest of the following dates. I. The Policy Effective Date. 2. The date payroll deduction is authorized. 3. The date the Insurance Company receives the Employee's completed enrollment form. If an Employee's enrollment form is received more than 31 days after he or she is eligible for this insurance, the Insurability Requirement must be satisfied before this insurance is effective. If approved, this insurance is effective on the date the Insurance Company agrees in writing to insure the Employee. If an Employee is not in Active Service on the date insurance would otherwise be effective, it will be effective on the date he or she returns to any occupation for the Employer on a Full-time basis. TIA0471l TERMINATION OF INSURANCE An Employee's coverage will end on the earliest of the following dates: I. the date the Employee is eligible for coverage under a plan intended to replace this coverage; 2. the date the Policy is terminated; 3. the date the Employee is no longer in an eligible class; 4. the day after the end of the period for which premiums are paid; 5. the date the Employee is no longer in Active Service; 6. the date benefits end for failure to comply with the terms and conditions ofthe Policy. Disability Benefits wilJ be payable to an Employee who is entitled to recel ve Disability Benefits when the Policy terminates, ifhe or she remains disabled and meets the requirements of the Policy. Any period of Disability, regardless of cause, that begins when the Employee is eligible under another group disability coverage provided by any employer, will not be covered. . 11 j 1 i CONTINUATION OF INSURANCE This Continuation oflnsurance provision modifies the Termination oflnsurancc provision In allow insurance to continue under certain circumstances if the Insured Employee is no longer in Active Service. Insurance that is continued under this provision is subject to all other terms ofthe Termination of Insurance provisions. . Disability Insurance continues if an Employee's Active Service ends due to a Disability for which benefits under the Policy arc or may become payable. Premiums for the Employee will be waived while Disability Benefits are payable. If the Employee does not return to Active Service, this insurance ends when the Disability ends or when benefits are no longer payable, whichever occurs first. Ifan Employee's Active Service ends due to personal or family medical leave approved timely by the Employer, insurance will continue for an Employee for up to 12 weeks, if the required premium is paid when due. If an Employee's Active Service ends due In any other leave of absence approved in writing by the Employer prior to the date the Employee eeases work insurance will continue for an Employee until the end of the month in which the leave begins if the required premium is paid. An approved leave of absence does not include termination of employment. If an Employee's Active Service ends due to a layoff, insurance will continue for an Employee until the end of the month in which the leave begins if the required premium is paid. If an Employee's Active Service ends due to any other excused short tenn absence from work that is . reported to the Employer timely in accordance with the Employer's reporting requirements for such short term absence, insurance for an Employee will continue until the earlier of: a. the date the Employee's employment relationship with the Employer terminates; b. the date prom iums arc not paid when due; c. the end of the 30 day period that begins with the first day of such e~cused absence; d. the end of the period for which such ShOl1 term absence is excused by the Employer. Notwithstanding any other provision of this policy, ifan Employee's Active Service ends due to termination of employment, or any other termination of the employment relationship, insurance will terminate and Continuation of Insurance under this provision will not apply. Ifan Employee's insurance is continued pursuant to this Continuation oflnsurance provision, and he or she becomes Disabled during such period of continuation, Disability Benefits will not begin until the later ofthe date the Elimination Period is satisfied or the date he or she is scheduled to return to Active Service. Tt-Ot)17!6 TAKEOVER PROVISION This provision applies only to Employees eligible under this Policy who were covered for long term disability coverage on the day prior to the effective date of this Policy under the Prior Plan provided by the Policyholder or by an entity that has been acquired by the Policyholder. A. This section A applies to Employees who are not in Active Service on the day prior to the effective date of this Policy due to a reason for which the Prior Plan and this Policy both provide for continuation of insurance. If required premium is paid when due, the Insurance Company will insure an Employee to which this section applies against a disability that occurs after the effective date of this Policy for the affected employee group. This coverage will be provided until the earlier ofthe date: (a) the employee returns to Active Service, (b) continuation of insurance under the Prior Plan would end but for termination of that plan; or (c) the date continuation of insurance under this Policy would end if computed ITom the first day the employee was not in Active Service. The Policy will provide this coverage as follows: 12 1. If benefits for a disability are covered under the Prior Plan, no benefits are payable under this Plan. 2. If the disability is not a covered disability under the Prior Plan solely because the plan terminated, benefits payable under this Policy for that disability will be the lesser of: Ca) the disability benefits that would have been payable under the Prior Plan; and Cb) those provided by this Policy. Credit will be given for partial completion under the Prior Plan of Elimination Periods and partial satisfaction of pre-existing condition limitations. B. The Elimination Period under this Policy will be waived for a Disability which begins while the Employee is insured under this Policy if all of the following conditions are met: I. The Disability results from the same or related causes as a Disability for which monthly benefits were payable under the Prior Plan; 2. Benefits are not payable for the Disability under the Prior Plan solely because it is not in effect; 3. An Elimination Period would not apply to the Disability if the Prior Plan had not ended; 4. The Disability begins within 6 months of the Employee's return to Active Service and the Employee's insurance under this Policy is continuous from this Policy's Effective Date. C. Except for any amount of benefit in excess ofa Prior Plan's benefits, the Pre-existing Condition Limitation will not apply to an Employee covered under a Prior Plan who satisfied the pre-existing condition limitation, ifany, under that plan. Ifan Employee, covered under a Prior Plan, did not fully satisfy the pre-existing condition limitation of that plan, credit will be given for any time that was satisfied under the Prior Plan's pre-existing condition limitation. Benefits will be determined based on the lesser of: (1) the amount of the gross disability benefit under the Prior Plan and any applicable maximums; and (2) those provided by this Policy. If benefits are payable under the Prior Plan for the Disability, no benefits are payable under this Policy. 1L-005108 DESCRIPTION OF BENEFITS The following provisions explain the benefits available under the Policy. Please see the Schedule of Benefits for the applicability of these benefits to each class ofInsureds. Disability Benefits The Insurance Company will pay Disability Benefits ifan Employee becomes Disabled while covered under this Policy. The Employee must satisfy the Elimination Period, be under the Appropriate Care of a Physician, and meet all the other terms and conditions of the Policy. He or she must provide the Insurance Company, at his or her own expense, satisfactory proof of Disability before benefits will be paid. The Disability Benefit is shown in the Schedule of Benefits. The Insurance Company will require continued proof of the Employee's Disability for benefits to continue, Elimination Period The Elimination Period is the period of time an Employee must be continuously Disabled before Disability Benefits are payable. The Elimination Period is shown in the Schedule of Benefits. A period of Disability is not continuous if separate periods of Disabil ity result from unrelated causes. Disability Benefit Calculation The Disability Benefit Calculation is shown in the Schedule of Benefits. Monthly Disability Benefits are based on a 30 day period. They will be prorated if payable for any period less than a month. Ifan 13 j Employee is working while Disabled, the Disability Benefit Calculation will be the Return to Work Incentive. Return to Work Incentive The Return to Work Incentive is shown in the Schedule or Benefits. An Employee may work jor wage or profit while Disabled. In any month in which the Employee works and a Disability Benefit is payable, the Return to Work Incentive applies. The Insurance Company will, from time to time, review the Employee's status and will require satisfactory proof of earnings and continued Disability. Minimum Benefit The Insurance Company will pay the Minimum Benefit shown in the Schedule of Benefits despite any reductions made for Other Income Benefits. The Minimum Benefit will not apply if benefits are being withheld to recover an overpayment of benefits. Other Income Benefits An Employee for whom Disability Benefits are payable under this Poli(;y may be eligible for benefits from Other Income Benefits. If so, the Insurance Company may reduce the Disability Benefits by the amount of such Other Income Benefits. Other Income Benefits include: I. any amounts received (or assumed to be received*) by the Employee or his or her dependents under: the Canada and Quebec Pension Plans; the Railroad Retirement Act; any local, state, provincial or federal government disability or relirement plan or law payable for Injury or Sickness provided as a result of employment with the Employer; any sick leave or salary continuation plan of the Employer; any work loss provision in mandatory "No-Fault" auto insuranee. 2. any Social Security disability or retirement benefits the Employee or any third party receives (or is assumed to receive') on his or her own behalf or for his or her dependents; or which his or her dependents receive (or are assumed to receive") because of his or her entitlement to such benefits. 3. any Retirement Plan benefits funded by the Employer. "Retirement Plan" means any defined benefit or defined contribution plan sponsored or funded by the Employer. It does not include an individual deferred compensation agreement; a profit sharing or any other retirement or savings plan maintained in addition to a defined benefit or other detined contribution pension plan, or any employee savings plan including a thrift, stock option or stock bonus plan, individual retirement account or 401(k) plan. 4. any proceeds payable under any franchise or group insurance or similar plan. If other insurance applies to the same claim for Disability, and contains the same or similar provision for reduction because of other insurance, the Insurance Company will pay for its pro rata share of the total claim. "Pro rata share" means the proportion of the total benefit that the amount payable under one policy, without other insurance, bears to the total benefits under all such policies. 5. any amounts received (or assumed to be received') by the Employee or his or her dependents under any workers' compensation, occupational disease, unemployment compensation law or similar stale or federal law payable for Injury or Sickness arising out of work with the Employer, including all permanent and temporary disability benefits. This includes any damages, compromises or settlement paid in place of such benetits, whether or not liability is admitted. 6. any amounts paid because of loss of earnings or earning capacity through settlement, judgment, arbitration or otherwise, where a third party may be liable, regardless of whether liability is determined. Dependents include any person who receives (or is assumed to receive') benefits under any applicable law beeause of an Employee's entitlement to benefits. 14 I I J ! j l 'See the Assumed Receipt of Benefits provision. Increases in Other Income Benefits Any increase in Olher Income Benefits during a period of Disability due to a cost of living adjustment will not be considered in calculating the Employee's Disability Benefits after the first reduction is made for any Other Income Benefits. This section does not apply to any cost of living adjustment for Disability Earnings. Lump Sum Payments Other Income Benefits or earnings paid in a lump sum will be prorated over the period for which the sum is given. Ifno time is staled, the lump sum will be prorated over five years. Ifno specific allocation of a lump sum payment is made, then the total payment will be an Other Income Benefit. Assumed Receipt of Benefits The Insurance Company will assume the Employee (and his or her dependents, if applicable) are receiving benefits for which they arc eligible from Other Income Benefits. The Insurance Company will reduce the Employee's Disability Benefits by the amount from Other Income Benefits it estimates are payable to the Employee and his or her dependents. The Insurance Company will waive Assumed Receipt of Benefits, except for Disability Earnings for work the Employee performs while Disability Benefits are payable, if the Employee; I. provides satisfactory proof of application for Other Income Benefits; 2. signs a Reimbursement Agreement; 3. provides satisfactory proofthst all appeals for Other Income Benefits have been made unless the Insurance Company determines that further appeals are not likely to succeed; and 4. submits satisfactory proof that Other Income Benefits were denied. The Insurance Company wil! not assume receipt of any pension or retirement benefits that are actuariaIIy reduced according to applicable law, until the Employee actually receives them. Social Security Assistance . The Insurance Company may help the Employee in applying for Social Security Disability Inoome (SSDI) Benefits, and may require the Employee to file an appeal if it believes a reversal of a prior decision is possible. The lnsurance Company will reduce Disability Benefits by the amount it estimates the Employee will receive, if the Employee refuses to cooperate with or participate in the Social Security Assistance Program. Recovery of Overpayment The Insurance Company has tbe right to recover any benefits it has overpaid. The Insurance Company may use any or all of the following to recover an overpayment: 1. request a lump sum payment ofthe overpaid amount; 2. reduce any amounts payable under this Policy; and/or 3. take any appropriate collection activity available to it. The Minimum Benefit amount will not apply when Disability Benefits are reduced in order to recover any overpayment. Ifan overpayment is due when the Employee dies, any benefits payable under the Policy will be reduced to recover the overpayment. 15 Successive Periods of Disability A separate period of Disability will be considered continuous: 1. if it results from the same or related causes as a prior Disability for which benefits were payable; and 2. if, after receiving Disability Benefits, the Employee returns to work in his or her Regular Occupation for less than 6 consecutive months; and 3. if the Employee earru; less than the percentage ofIndexed Earnings that would still quality him or her to meet the definition of Dis abilityl Disabled during at least one month. Any later period ofDisabHity, regardless of cause, that begins when the Employee is eligible tor coverage under another group disabiHty plan provided by any employer will not be considered a continuous period of Disability. For any separate period of disability which is not considered continuous, the Employee must satisfy a new Elimination Period. LIMITATIONS Limited Benefit PeriodS for Mental or Nervous Disorders The Insurance Company will pay Disability Benefits on a limited basis during an Employee's lifetime for a Disability caused by, or contributed to by, anyone or more of the following conditions. Once 24 monthly Disability Benefits have been paid, no further benefits will be payable for any of the following conditions, 1) Anxiety disorders 2) Delusional (paranoid) disorders 3) Depressive disorders 4) Eating disorders 5) Mental illness 6) Somatoform disorders (psychosomatic illness) Jf, before reaching his or her lifetime maximum benefit, an Employee is confmed in a hospital for more than 14 consecutive days, that period of confinement will not count against his or her lifetime limit. The confinement must be for the Appropriate Care of any of the conditions listed above. Limited Benefit Periods for Alcoholism and Drug Addiction or Abuse The Insurance Company will pay Disability Benefits on a limited basis during an Employee's lifetime for a Disability caused by, or contributed to by, anyone or more of the following conditions. Once 24 monthly Disability Benefits have been paid, no further benefits will be payable for any oflhe following conditions. 1) Alcoholism 2) Drug addiction or abuse If, before reaching his or her lifetime maximum benefit, an Employee is confined in a hospital for more than 14 consecutive days, that period of confinement will not count against his or her lifetime limit. The confinement must be for the Appropriate Care of any of the conditions listed above. Pre-Existing Condition Limitation The Insurance Company will not pay benefits for any period of Disability caused or contributed to by, or resulting from, a Pre-existing Condition. A "Pre-existing Condition" means any Injury or Sickness for which the Employee incurred expenses, received medical treatment, care or services including diagnostic measures, took prescribed drugs or medicines, or for which a reasonable person would have consulted a Physician within 3 months before his or her most recent effective date of iru;urance. The Pre-existing Condition Limitation will apply to any added benefits or increases in benefits. This limitation will not apply to a period of Disability \hat begins after an Employee is covered for at least 12 months after his or her most recent effective date of insurance, or the effective date of any added or increased benefits. 'fL.OO75003Xl 16 ADDITIONAL BENEFITS Rehabilitation During a Period of Disability If the Insurance Company determines that a Disabled Employee is a suitable candidate for rehabilitation, the Insurance Company may require the Employee to participate in a Rehabilitation Plan and assessment at our expense. The Insurance Company has the sole discretion to approve the Employee's participation in a Rehabilitation Plan and to approve a program as a Rehabilitation Plan. The Insurance Company will work with the Employee, the Employer and the Employee's Physician and others, as appropriate, to perfonn the assessment, develop a Rehabilitation Plan, and discuss retum to work opportunities. The Rehabilitation Plan may, at the Insurance Company's discretion, allow for payment ofthe Employee's medical expense, education expense, moving expense, accommodation expense or family care expense while he or she participates in the program. Ifan Employee fails to fully cooperate in all required phases of the Rehabilitation Plan and assessment without Good Cause, no Disability Benefits will be paid, and insurance wiIJ end. n-C01$CLOO Survivor Benefit The Insurance Company will pay a Survivor Benefit if an Employee dies while Monthly Benefits are payable. The Employee must have been continuously Disabled for the Survivor Benefit Waiting Period before the first benefit is payable. These benefits will be payable for the Maximum Benefit Period for Survivor Benefits. Benefits will be paid to the Employee's Spouse. If there is no Spouse, benefits will be paid in equal shares to the Employee's surviving Children. If there are no Spouse and no Children, benefits will be paid to the Employee's estate. "Spouse" means an Employee's la",ful spouse. "Children" means an Employee's unmarried children under age 21 who arc chiefly dependent upon the Employee for support and maintenance. The term includes a stepchild living with the Employee at the time of his or her death. TL-V05107 TERMINATION 01<' DISABILITY BENEFITS Benefits will end on the earliest of the following dates: 1. the date the Employee earns from any occupation, more than the percentage of Indexed Earnings set forth in the definition of Disability applicable to him or her at that time; 2. the date the Insurance Company detennines he or she is not Disabled; 3. the end of the Maximum Benefit Period; 4. the date the Employee dies; 5. the date the Employee refuses, without Good Cause, to fully cooperate in all required phases of the Rehabilitation Plan and assessment; 6. the date the Employee is nO longer receiving Appropriate Care; 7. the date the Employee fails to cooperate with the Insurance Company in the administration of the claim. Such cooperation includes, but is not limited to, providing any information or documents needed to determine whether benefits are payable or the actual banefit amount due. Benefits may be resumed if the Employee begins to cooperate fuJly in the Rehabilitation Plan within 30 days of the date benefits terminated. 17 EXCLUSIONS The Insurance Company will not pay any Disability Benefits for a Disability that results, directly or indirectly, from: I. suicide, attempted suicide, or self-inflicted injury while sane or insane. 2, war or any act of war, whether or not declared, 3. active participation in a riot. 4, commission of a felony. 5. the revocation, restriction or non-renewal of an Employee's license, permit or certification necessary to perform the duties of his or her occupation unless due solely to Injury or Sickness otherwise covered by the Policy. In addition, the Insurance Company will not pay Disability Benefits for any period of Disability during which the Employee is incarcerated in a penal or corrections institution. CLAIM PROVISIONS Notice of Claim Written notice, or notice by any other electronic/telephonic means authorized by the Insurance Company, must be given to the Insurance Company within 31 days after a covered loss occurs or begins or as soon as reasonably possible. lfwritten notice, or notice by any other electronicltelephonic means authorized by the Insurance Company, is not given in that time, the claim will not be invalidated or reduced if it is shown that notice was given as soon as was reasonably possible. Notice can be given at our home office in Philadelphia, Pennsylvania or to our agent. Notice should include the Employer's Name, the Policy Number and the claimant's name and address. Claim Forms When the Insurance Company receives notice of claim, the Insurance Company will send claim forms for filing proof of loss. If claim forms are not sent within 15 days atter notice is received by the Insurance Company, the proofrequirements will be met by submitting, within the time required under the "Proof of Loss" section, written proof, or proof by any other electronic/telephonic means authorized by the Insurance Company, of the nature and extent of the loss. Claimant Cooperation Provision Failure of a claimant to cooperate with the Insurance Company in the administration of the claim may result in termination of the claim. Such cooperation includes, but is not limited to, providing any information or documents needed to determine whether benefits are payable or the actual benefit amount due. Insurance Data The Employer is required to cooperate with the Insurance Company in the review of claims and applications for coverage. Any information the Insurance Company provides in these areas is confidential and may not be used or released by the Employer ifnot permitted by applicable privacy laws. IS I Proof of Loss Written proof ofloss, or proof by any other electronic/telephonic means authorized by the Insurance Company, must be given to the Insurance Company within 90 days after the date of the loss for which a claim is made, !fwritten proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance Company, is not given in that 90 day period, the claim will not be invalidated nor reduced if it is shown that it was given as soon as was reasonably possible, In any case, written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance Company, must be given not more than one year after that 90 day period, If written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance Company, is provided outside of these time limits, the claim will be denied, These time limits will not apply while the person making the claim lacks legal capacity, Written proof, or proof by any other electronic/telephonic means authorized by the Insurance Company, that the loss continues must be furnished to the Insurance Company at intervals required by us, Within 30 days ofa request, written proof of continued Disability and Appropriate Care by a Physician must be given to the Insurance Company, Time of Payment Disability Benefits will be paid at regular intervals of not less frequently than once a month, Any balance, unpaid at the end of any period for which the Insurance Company is liable, will be paid at that time, To Whom Payable Disability Benefits will be paid to the Employee, Ifany person to whom benefits are payable is a minor or, in the opinion of the Insurance Company, is not able to give a valid receip~ such payment will be made to his or her legal guardian, However, if no request for payment has been made by the legal guardian, the Insurance Company may, at its option, make payment to the person or institution appearing to have assumed custody and support. If an Employee dies while any Disability Benefits remain unpaid, the Insurance Company may, at its option, make direct payment to any of the following living relatives of the Employee: spouse, mother, father. children, brothers or sisters; or to the executors or administrators of the Employee's estate, The Insurance Company may reduce the amount payable by any indebtedness due, Payment in the manner described above will release the Insurance Company from allliabiJity for any payment made, Physical Examination and Autopsy The Insurance Company. at its expense, will have the right to examine any person for whom a claim is pending as often as it may reasonably require, The Insurance Company may, at its expense, require an autopsy unless prohibited by law, Legal Actions No action at law or in equity may be brought to recover benefits under the Policy less than 60 days after written proof of loss, or proof by any other electronic/telephonic means authorized by the Insurance Company, has bcen furnished as required by the Policy. No such action shall be brought more than 3 years after the time satisfactory proof of loss is required to be furnished, Time Limitations lfuny time limit stated in the Policy for giving notice of claim or proof ofloss, or for bringing any action at law or in equity, is less than that permitted by the law of the state in which the Employee lives when the Policy is issued, then the time limit provided in the Policy is extended to agree with the minimum permitted by the law of that state, PhysieianlPatient Relationship The Insured will have the right to choose any Physician who is practicing legally, The Insurance Company will in no way disturb the Physician/patient relationship, TI.-004124 19 I I ADMINISTRATIVE PROVISIONS Premiums The premiums for this Policy will be based on the rates currently in force, the plan and the amount of insurance in effect. Changes in Premium Rates The premium rates may be changed by the Insurance Company from time to time with at least 31 days advance written notice. No change in rates will be made until 36 months after the Policy Effective Date. An increase in rates will not be made more often than once in a 12 month period. However, the Insurance Company reserves the right to change the rates even during a period for which the rate is guaranteed if any of the following events take place. I. The terms of the Policy change. 2. A division, subsidiary. affiliated company or elig"ible class is added or deleted from the Policy. 3. There is a change in the factors bearing on the risk assumed. . 4. Any federal or state law or regulation is amended to the extent it affects the Insurance Company's benefit obligation. 5. The Insurance Company determines that the Employer has failed to promptly furnish any necessary information requested by the Insurance Company, or has failed to perform any other obligations in relation to the Policy. If an increase or decrease in rates takes place on a date that is not a Premium Due Date, a pro rata adjustment will apply from the date ofthe change to the next Premium Due Date. Reporting Requirements The Employer must, upon request, give the Insurance Company any information required to determine who is insured, the amount of insurance in force and any other information needed to administer the plan of insurance. Payment of Premiunl The first premium is due on the Policy Effective Date. After that, premiums will be due monthly unless the Employer and the Insurance Company agree on some other method of premium payment. If any premium is not paid when due, the plan will be canceled as of the Premium Due Date, except as provided in the Policy Grace Period section. Notice of CanwUation The Employer or the Insurance Company may cancel the Policy as of any Premium Due Date by giving 31 days advance written notice. If a premium is not paid when due, the Policy will automatically be canceled as of the Premium Due Date, except as provided in the Policy Grace Period section, Policy Grace Period A Policy Grace Period of60 days will be granted for the payment of the required premiums under this Policy. This Policy will be in force during the Policy Grace Period. The Employer is liable to the Insurance Company for any unpaid premium for the time this Policy was in force. Grace Period for the Insured [fthe required premium is not paid on the Premium Due Date, there is a 60 day grace period after each premium due date after the first. If the required premium is not paid during the grace period, insurance will end on the last day for which premium was paid. 20 Reinstatement of Insurance An Employee's insurance may be reinstated if it ends because the Employee is on an unpaid leave of absence, An Employee's insurance may be reinstated only if reinstatement occurs within 12 weeks from the date insurance ends due to an Employer approved unpaid leave of absence or must be returning from military service pursuant to the Uniformed Services Employment and Reemployment Rights Act of J 994 (lJSERRA). For insurance to be reinstated the following conditions must be met. I. An Employee must be in a Class of Eligible Employees. 2. The required premium must be paid. 3. A written request for reinstatement must be received by the Insurance Company within 31 days from the date an Employee returns to Active Service. Reinstated insurance will be effective on the date the Employee returns to Active Service. If an Employee did not fully satisfy the Eligibility Waiting Period or the Pre-Existing Condition Limitation (if any) before insurance ended due to an unpaid leave of absence, credit will be given for any rime that was satisfied. GENERAL PROVISIONS Entire Contract The entire contract will be made up of the Policy> the application ofthe Employer, a copy of which is attached to the Policy, and the applications, if any, of the Insureds. Incontestability All statements made by the Employer or by an Insured are representations not warranties. No statement will be used to deny or reduce benefits or as a defense to a claim, unless a copy of the instrument containing the statement has been furnished to the claimant. In the event of death or legal incapacity, the beneficiary or representative must receive the copy. After two years tram an Insured>s effective date of insurance, or from the effective date of any added or increased benefits, no such statement will cause insurance to be contested except for fraud or eligibility for coverage. Misstatement of Age Ifan Insured's age has boon misstated, the Insurance Company will adjust all benefits to the amounts that would have been purchased for the correct age. Policy Changes No change in the Policy will be valid until approved by an executive officer ofthe Insurance Company. This approval must be endorsed on, or attached to, the Policy. No agent may change the Policy or waive any of its provisions. Workers' Compensation Insurance The Policy is not in Jieu of and does not affect any requirements for insurance under any Workers> Compensation Insurance Law. Certificates A certificate of insurance will be delivered to the Employer for delivery to Insureds. Each certificate will list the benefits, c<lnditions and limits of the Policy, It will state to whom benefits will be paid. 21 Assignment of Benefits The Insurance Company will not be affected by the assignment of an Insured's certificate until the original assignment or a certified copy of the assignment is filed with the Insurance Company. The Insurance Company will not be responsible for the validity or sufficiency of an assignment. An assignment of benefits will operate so long as the assignment remains in force provided insurance under the Policy is in effect. This insurance may not be levied on, attached, garnisheed, or otherwise taken for a person's debts. This prohibition does not apply where contrary to law. Clerical Error A person's insurance will not be affected by error or delay in keeping records of insurance under the Policy. lfsuch an error is found, the premium will be adjusted fairly. Agency The Employer and Plan Administrator are agents of the Employee for transactions relating to insurance under the Policy. The Insurance Company is not liable for any of their acts or omissions. Certain Internal Revenue Code (IRC) & Internal Revenue Service (IRS) Functions The Insurer may agree with the Subscriber to perform certain functions required by the Internal Revenue Code and IRS regulations. Such functions may include the preparation and filing of wage and tax statements (Form W·2) for disability benefit payments made under this Policy. In consideration of the payment of premiums by the Subscriber, the Insurer waives the right to transfer liability with respect to the employer taxes impnsed on the Insurer by IRS Regulation 32, I (e)(I) for monthly Disability payments made under this Policy, Employee money may not be used to fund the Premium for the services and payments of this section. TL"()092}O,OO DEFINITIONS Please note, certain words used in this document have specific meanings, These terms will be capitalized throughout this document, The definition of any word, if not defined in the text where it is used, may be found either in this Definitions section or in the Schedule of Benefits. Active Service An Employee is in Active Service on a day which is one of the Employer's scheduled work days if either of the follOWing conditions are met. 1. The Employee is performing his or her regular occupation for the Employer on a full-time basis. He Or she must be working at one of the Employer's usual places of business or at some location to which the employer's business requires an Employee to travel. 2. The day is a scheduled holiday or vacation day and the Employee was performing his or her regular occupation on the preceding scheduled work day. An Employee is in Active Service on a day which is not one of the Employer's scheduled work days only ifhe or she was in Active Service on the preceding scheduled work day, Appropriate Care Appropriate Care means the determination of an accurate and medically supponed diagnosis of the Employee's Disability by a Physician, or a plan established by a Physician of ongoing medical treatment and care of the Disability that conforms to generally accepted medical standards, including frequency of treatment and care. ' 22 Consumer Price Index (CPI-W) The Consumer Price Index for Urban Wage Earners and Clerical Workers published by the U.S. Department of Labor. If the index is discontinued or changed, another nationally published index that is comparable to the CPl· W will be used. Disability Earnings Any wage or salary for any work performed for any employer during the Employee's Disability, including commissions, bonus, overtime payor other extra compensation. Employee For eligibility purposes, an Employee is an employee of the Employer in one of the "Classes of Eligible Employees." Otherwise, Employee means an employee of the Employer who is insured under the Policy. Employer The Employer who has subscribed to the Policyholder and for the benefit of whose Employees this policy has been issued. The Employer, named as the Subscriber on the front of this Policy, includes any affiliates or subsidiaries covered under the Policy. The Employer is acting as an agent ofthe Insured for transactions relating to this insurance. The actions of the Employer shall not be considered the actions of the Insurance Company. Full-time Full-time means the number of hours set by the Employer as a regular work day for Employces in the Employee's eligibility class. Good Cause A medical reason preventing participation in the Rehabilitation Plan. Satisfactory proof of Good Cause must be provided to the Insurance Company. Indexed Earnings For the first 12 months Monthly Benefits are payable, Indexed Earnings will be equal to Covered Earnings. After 12 Monthly Benefits are payable, Indexed Earnings will be an Employee's Covered Earnings plus an increase applied on each anniversary of the date Monthly Benefits became payable. The amount of each increase will be the lesser of: 1. 10% of the Employee'S Indexed Earnings during the preceding year of Disability; or 2. the rate of increase in the Consumer Price Index (CPI-W) during the preceding calendar year. Injury Any accidental loss or bodily harm which results directly and independently of all other causes from an Accident. Insurability Requirement An eligible person will satisfY the Insurability Requirement for an amount of coverage on the day the Insurance Company agrees in writing to accept him or her as insured for that amount. To determine a person's acceptability for coverage, the Insurance Company will require evidence of good health and may require it be provided at the Employee's expense. Insurance Company The Insurance Company underwriting the Policy is named on the Policy cover page. Insured A person who is eligible for insurance under the Policy, for whom insurance is elected, the required premium is paid and coverage is in force under the Policy. 23 Physician Physician means a licensed doctor practicing within the scope of his or her license and rendering care and treatment to an Insured that is appropriate for the condition and locality. The tenn does not include an Employee, an Employee's spouse, the immediate family (including parents, children, siblings or spouses of any of the foregoing, whether the relationship derives from blood or marriage), of an Employee or spouse, or a person living in an Employee's household. Prior Plan The Prior Plan refers to the plan of insurance providing similar benefits sponsored by the Employer in effect directly prior to the Policy Effective Date. A Prior Plan will include the plan of a company in effect on the day prior to that company's addition to this Policy after the Policy Effective Date. Regular Occupation The occupation the Employee routinely performs at the time the Disability begins. In evaluating the Disability, the Insurance Company will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. It is not work tasks that are performed for a specific employer or at a specific location. Rehabilitation Plan A written plan designed to enable the Employee to return to work. The Rehabilitation Plan will consist of one or more of the following phases: I. rehabilitation, under which the Insurance Company may provide, arrange or authorize educational, vocational or physical rehabilitation or other appropriate services; 2. work, which may include modified work and work on a part-lime basis. Sickness Any physical or mental illness. 24 Life Insurance Company of North America a stock insurance company Rider to Group Policy No. LK-961943 Effective Date of Rider: January 1,2009 Eligible Classes to which this Rider applies: All Classes MODIFICATION OF GROUP DISABILITY POLICY TO ADD DOMESTIC PARTNER AS AN ELIGIBLE SURVIVOR UNDER THE SURVIVOR BENEFIT The Survivor Benefit are modified in the Policy as follows: r. All references to the term "Spou.,e" are replaced by "Spouse or Domestic Partner" except for the following references: a. The first reference to "Spouse" in the benefit text is changed to "Spouse, or Domestic Partner if there is no Spouse," b. The text pertaining to the definition of "Spouse" remains unchanged. 2. The following definition of Domestic Partner is added. "Domestic Partner" means a person who is registered as the Employee's domestic partner with the California Secretary of State. Except for the above, this Rider does not change the Group Policy to which it is attached. Life Insurance Company of North America By: Karen S. Rohan, President TL-007152-1.05 25 IMPORTAl'iT CHAl'iGES FOR STATE REQUlREMEl'iTS Ifan Employee resides in one of the following states, the provisions of the certificate are modified for residents of the following states. The modifications listed apply only to residents ofthat state. Louisiana residents: The percentage ofindexcd Earnings, if any, that qualifies an insured to meet the definition of DisabilitylDisabled may not be less than 80%. Minnesota residents: The Pre-existing Condition Limitation, ifany, may not be longer than 24 months from the insured's most recent effective date of insumnce. Texas residents: Any provision offsetting or otherwise reducing any benefit by an amount payable under.n individual or franchise policy will not apply. 26 LIFE INSURANCE COMPANY OF i'iORTH AMERICA PHILADELPHIA, PA 19192-2235 We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the tenus of Group Policy Number LK-96 1943 issued by tbe LIFE INSURANCE COMPANY OF NORTH AMERICA to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY. This form is to be signed in duplicate. One part is to be retained by City afPalo Alto; the other part is to be returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA. City of Palo Alto Signature and Title: ____ _ _ ____ Dale: (This Copy Is To Be Returned To Life Insurance Company of North America) LIFE INSURANCE COMPAi'iY OF NORTH AMERICA PHILADELPHIA, FA 19192-2235 We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the tenns of Group Policy Number LK-961943 issued by the LIFE INSURANCE COMPANY OF NORTI1 AMERICA to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION DlDUSTRY. This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA, City of Palo Alto Signature and Title: _~. __ Date: (This Copy Is To Be Retained By City of Palo Alto) Life Insurance Company of North America 1601 Chestnut Street, Philadelphia, Pennsylvania 19192-2235 A Stock Insurance Company GROUP ACCIDENT POLICY POLICYHOLDER: POLICY NUMBER: POLICY EFFECTIVE DATE: POLICY ANNIVERSARY DATE: STATE OF ISSUE: Trustee of the Group Insurance Trust for Employers in the Public Administration Industry OK 964302 January I, 2009 January I Delaware This Policy describes the terms and conditions of insurance. This Policy goes into effect subject to its applicable terms and conditions at 12:01 AM on the Policy Effective Date shown above at the Policyholder's address. The laws of the State of Issue shown above govern this Policy, We and the Policyholder agree to all ofthe terms of this Policy. THIS IS A GROUP ACCIDENT ONLY INSURANCE POLICY. IT DOES NOT PAY BENEFITS FOR LOSS CAUSED BY SICKNESS. THIS IS A LIMITED POLICY. PLEASE READ IT CAREFULLY, Deborah Young, Corporate Secretary Karen S. Rohan, President Countersigned,_---cc-c.-----=_-o-=--=-______ _ Where Required By Law OA-OO-lOOO.OO TABLE OF CONTENTS SECTION PAGE NUMBER SCHEDULE OF AFFlLlA TES SCHEDULE OF BE?'>1EFITS 2 GENERAL DEFI?'>1ITIONS 15 ELlGlBILITY AND EFFECTIVE DA TEl PROVISIONS 18 CO~IMON EXCLUSIONS 19 I CONVERSION PRIVILEGE CLAIM PROVISIONS ADMINISTRATIVE PROVISIONS 20 22 24 I GENERAL PROVISIONS 25 ACClDENTAL DEATH AND DISMEMBERMENT COVERAGE 27 EXPOSURE AND DISAPPEARANCE COVERAGE 28 CHILD CARE CENTER BENEFIT 28 COMMO?'>1 CARRIER BENEFIT 29 FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT 29 SEA TBEL T AND AIRBAG BENEFIT 30 SPECIAL EDUCATIO?'>1 BENEFIT 30 SPOUSE RETRAINING BENEFIT 32 OA-00-1000,00 SCHEDULE OF AFFILIATES The following affiliates are covered under this Policy on the effective dates listed below. AFFILIATE NAME LOCATION EFFECTIVE DATE None GA-OO-1000.OO j i 1 SCHEDULE OF BENEFITS This Policy is intended to be read in Its entirety. In order /0 understand all the conditions, exclusions and limitations applicable to ils benejlts, please read all the pOIi<:y provisions carefully. The Schedule of Benejlts provides. brief outline ofthe coverage and benefits provided by this Policy. Please read the Description of Coverages and Beneflls Section for full details. Subscriber: City of Palo Alto Effective Date of Subscriber Participation: January 1,2009 Covered aasses: Class J Class 2 Class 3 All active, full-time Employees ofthe Employer, regularly working a minimum of 20 hours per week excluding Employees who are classified as Management. All active, full-time Employees of the Employer, regularly working a minimum of 20 hours per week who are classified as Management. All active, Full-time Employees of the Employer as defined under the prior carrier policy number 643835. and on file with the Insurance Company. and who are regularly working a minimum of 20 hours per week. (Closed Class) 2 I ! SCHEDULE OF BENEFITS FOR CLASS 1 This Schedule of Benefits shows ma,lmums, benelll periods and any limitaUons applicable to benefits provided in this Policy for each Covered Person onless otherwise indicatcd. Principal Som, whcn referred to In tbis Schedule, means the Employee's Principal Sum in effect on Ihe date of Ihe Covered Accident causing the Covered Injury or Covered Loss unless otherwise speeified. Eligibility Walling Period The Eligibility Waiting Period is the period oftime the Employee must be in a Covered Class to be eligible for coverage. For Employees hired on 01' before the Policy Effective Date: No Waiting Period For Employees hired after the Policy Effective Date; No Waiting Period Time Period for Loss: Any Covered Loss must occur within: 365 days of the Covered Accident Maximum Age for Insurance: None BASIC ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS Employee Principal Sum: 1 times Annual Compensation rouinded to the next higher $1,000 if not already a multiple thereof, subject to a maximum of $325,000, Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of Annual Compensalion take effe"'!, subject to any Active Service requirement, on the first day of the month following the change in Annual Compensation, SCHEDULE OF COVERED LOSS~;S Covered Loss Loss of Life Loss of Two or More Hands or Fcct Loss of Sight of Both Eyes Loss of One Hand or One Foot and Sight in One Eye Loss of Speech and Hearing (in both ears) Quadriplegia Paraplegia Hemiplegia Uniplegia Coma Monthly Benefit Number of Monthly Benefits Lump Sum Benefit When Payable Loss of One Hand or Foot Loss of Sight in One Eye Loss of Speech Loss of Hearing (in both ears) Loss of all Four Fingers of the Same Hand Loss of Thumb and Index Finger ofthe Same Hand Loss of all the Toe; of the Same Foot 3 Benent 100% oftlle Principal Sum 100% of the Principal Sum 100% ofthe Principal Sum 100% of the Principal Sum 100% oftlle Principal Sum 100% oHhe Principal Sum 75% oftlle Principal Sum 50% of the Principal Sum 25% ofthe Principal Sum 1% oflhe Principal Sum 11 100% crthe Principal Sum Beginning of the 12'" month 50% of the Principal Sum 50% of the Principal Sum 50% of the Principal Sum 50% oHhe Principal Sum 25% of the Principal Sum 25% ofthe Principal Sum 25% ofthe Principal Sum Age ReductioDS A Covered Person's Principal Sum will be reduced to the percentage oIhis Principal Sum in eft""t on the date preceding the first reduction, as shown below. Age 70 but less than 75 75 and over Percentage of Benefit Amount 65% 50% AIlDITIONAL ACCIIlENTAL DEATH ANIl DISMEMBER'VIENT COVERAGES Acddental Death and Dismemberment benefits al'e provided under the following coverages. Any benefits payable under them are as shown in the Schedule o/Covered Losses and are not paid in addition to any other Accidental Death and Dismemberment benefits, EXPOSURE ANIl DISAPPEARANCE COVERAGE ADDITIONAL ACCIIlENT BENEFITS Principal Sum multiplied by the percentage applicable to the Covered Loss, as shown in the Schedule a/Covered Losses. Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidenlal Death and Dismemberment benefits payable. CHILD CARE CENTER BENEFIT Benefit Amount Maximum Benefit Period COMMON CARRIER BENEFIT $5,000 the earlier of 4 years or until the child turns 13 for each surviving Dependent Child 100% multiplied by the percentage ofthe Principal Sum applicable to the Covered Loss, as shown in the Schedule 0/ Covered Losses, subject to a maximum oU200,OOO FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT Accidental Death and Dismemberment Benefit Hospital Stay Benefit Maximum Benefit Period SEATBELT ANIl AIRBAG BENEFIT Scatbelt Benefit Airbag Benefit Default Benefit SPECIAL EIlUCATION BENEFIT Surviving Dependent Child Benefit Maximum Number of Annual Payments For Each Surviving Dependent ChHd Default Benefit SPOUSE RETRAINING BENEFIT Benefit 50% multiplied by the percentage ofthe Principal Sum applicable to the Covered Loss, as shown in the Schedule 0/ Covered Losses, subject to a maximum of$25,OOO $100 per day 365 days per Hospital Stay per Covered Accident $10,000 $5,000 $1,000 $5,000 4 $1,000 $5,000 4 I VOLtiNTARY ACCIDENTAL DEATH A"iD DISMEMBER1\1ENT BENEFITS Employee Principal Sum: Voluntary Benefits match the Voluntary Life Benefits under policy number FLX 962659, Only Employees covered for the Voluntary Life can elect Voluntary AD&D, Changes in the Covered Person IS amount of insurance resulting from a change in the Employee's amount of Annual Compensation take effect, subject to any Active Service reguirement, on the first day of the month following the change in Annual Compensation, SCHEDULE OF COVERED LOSSES Covered Loss Loss of Life Loss of Two or More Hands or Feet Loss of Sight of Both Eyes Loss of One Hand or One Foot and Sight in One Eye Loss of Speech and Hearing (in both ears) Quadriplegia Paraplegia Hemiplegia Uniplegia Coma Monthly Benefit Number of Monthly Benefits Lump Sum Benefit When Payable Loss of One Hand or Foot Loss of Sight in One Eye Loss of Speeeh Loss of Ilea ring (in both ears) Loss of all Four Fingers of the Same Hand Loss of Thumb and Index Finger ofthe Same Hand Loss of all the Toes ofthe Same Foot Age Reduction, Benefit 100% oftne Principal Sum 100% of the Principal Sum 100% ofthe Principal Sum 100% of the Principal Sum 100% of the Principal Sum 100% of the Principal Sum 75% ofthe Principal Sum 50% ofthe Principal Sum 25% of the Principal Sum 1% of the Principal Sum 11 100% oflhe Principal Som Beginning of the 12'" month 50% of the Principal Sum 50% of the Principal Sum 50% of the Principal Sum 50% of the Principal Sum 25% of the Principal Sum 25% of the Principal Sum 25% of the Principal Sum A Covered Person's Prineipal Sum will be reduced to the pereentage of his Principal Sum in effect on the date preceding the first reduetion, as shown below, Age 70 but less than 75 75 and over Percenlage ofBeneftl Amounl 65% 50% ADDITIONAL ACCIDE"iTAL DEATH A"iD DISMEMBERMENT COVERAGES Accidental Death and Dismemberment benefits are provided under the following coverages, Any benefIts payahle under them are as shown in the Schedule of Covered Losses and are nol paid in addition to any other Accidental Death and Dismemberment benefits, EXPOSURE A"iD DISAPPEARANCE COVERAGE Principal Sum multipliad by the pereentage applieable to the Covered Loss, as shown in the Schedule of Covered Losses. 5 1 1 ADDITIONAL ACCIDENT BENEFITS Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental Death and Dismemberment benefits payable, CHILD CARE CEl\'TER BENEFIT Benefit Amount Maximum Benefit Period COMMON CARRIER BENEFIT $5,000 the earlier of 4 years or unlil the child turns 13 for each surviving Dependent Child 100% multiplied by the percentage ofthe Principal Sum applicable to the Covered Loss, as shown in the Schedule 0/ COI'ered Losses, subject to a maximum of$200,000 FELONIOUS ASSACLT AND VIOLENT CRIME BENEFIT Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum Hospital Stay Benefit :vIaximum Benefit Period SEATBELT ANDAIRBAG BENEnT Seatbelt Benefit Airbag Benefit Default Benefit SPECIAL EDUCATION BENEFIT Surviving Dependent Child Benefit Maximum Number of Annual Payments For Each Surviving Dependent Child Default Benefit SPOUSE RETRAINING BENEFIT Benef!t INITIAL PREMIUM RATES Premium Rate: Mode o[Premium Payment: Contributions: Premium Due Dates: applicable (0 the Covered Loss, as shown in the Sehedule 0/ Covered Losses, subject to a maximum of $25,000 $100 per day 365 days per Hospital Stay per Covered Accident $10,000 $5,000 $1,000 $5,000 4 $1,000 $5,000 Basic Insurance Employee Rate: $0,02 per $1 ,000 Voluntary )nsuranee Employee Rate: $0,02 per $1,000 :vIonthly The cost ofthe coverage is paid by the Subscriber and the Employee The Policy Effective Date and the f,rst day of each succeeding modal period Premium rates are subject to change in accordance with the Changes in Premium Rates section contained in the Administrative Provisions section of this Policy. GA-OO-J100,OO 6 SCHEDULE OF BENEFITS FOR CLASS 2 This Schedule of Benefits shows maximums, benefit periods and any limitations applicable to benefits provided in tbis Policy for each Covered Person unless otherwise indicated. Principal Sum~ when referred to in this Schedlile~ means tbe Employee's Principal Sum in effect on the date of Ihe Covered Accident causing tbe Covered Injury or Covered Loss unless otherwise specified. Eligibility Waiting Period The Eligibility Waiting Period is the period oHime the Employee must be in a Covered Class to be eligible for coverage, For Employees hired on or before the Policy Effective Date: No Waiting Period For Employees hired after the Policy Effective Date: No Waiting Period Time Period for Loss: Any Covered Loss must occur within: 365 days of the Covered Accident Maximum Age for Insurance: None BASIC ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS Employee Principal Sum: 1 times Annual Compensalion rouinded to the next higher Sl ,000 if not already a multiple thereof, subject to a maximum of $325,000, Changes in the Covered Person!s amount of insurance resulting from a change in the Employee's amount of Annual Compensation take effect, subject to any Active Service requirement, on the flfst day of the month following the change in Annual Compensation. SCHEDULE OF COVERED LOSSES Covered Loss Loss of Life Loss of Two or More Hands or Feet Loss of Sight of Both Eyes Loss of One Hand or One Foot and Sight in One Eye Loss of Speech and Hearing (in both ears) Quadriplegia Paraplegia Hemiplegia Uniplegia Coma Monthly Hcnefit Number of Monthly Benefits Lump Sum Benefit When Payabie Loss of One Hand or Foot Loss of Sight in One Eye Loss of Speech Loss of Hearing (in both ears) Loss of all Four Fingers of the Same Hand Loss of Thumb and Index Pinger of the Same Hand Loss of all the Toes of the Same fool 7 Benefit 100% of the Principal Sum I DO% oflh. Principal Sum I OD% of the Principal Sum I OD% of the Principal Sum 100% ufthe Principal Sum 100% afthe Principal Sum 75% ofth. Principal Sum 50% ofth. Principal Sum 25% of the Principal Sum 1 % ofthe Principal Sum 11 100% ofth. Principal Sum Beginning ofthe 12'" month 50% of the Principal Sum 50% of the Principal Sum 50% ofthc Principel Sum 50% oflhe Principal Sum 25% of the Principal Sum 25% of the Principal Sum 25% oflhe Principal Sum 1 1 i I I Age Reductions A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date preceding the first reduction, lIS shown below. Age 70 but Jess than 75 75 and over Pereentage of Benefit Amount 65% 50% ADDITIONAL ACCIDENTAL DEATH AND DISMEMBElli'\1ENT COYERAGES Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under them are as shown in the Schedule afCovered Losses and are not paid in addition 10 any other Accidental Death and Dismemberment benefits, EXPOSURE AND DISAPPEARANCE COVERAGE ADDITIONAL ACCIDENT BENEFITS Principal Sum multiplied by the percentage applicable to the Covered Loss, as shown in the Schedule of Covered Losses. Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental Death and Dismemberment benefits payable. CHILD CARE CENTER BENEFIT Benefit Amount Maximum Benefit Period COMMON CARRIER BENEFIT $5,000 the earlier of 4 years or until the child turns 13 for e""h surviving Dependent Child 100% multiplied by the percentage of the Principal Sum applicable to the Covered Loss, as shown in the Schedule of Covered Losses, subject to a maximum of $200,000 FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT Accidental Death and Dismemberment Benefit Hospital Stay Benefit Maximum Benefit Period SEATBELT AND AIRBAG BENEFIT Seatbelt Benefit A irbag Benefit Default Benefit SPECIAL EDUCATION BENEFIT Surviving Dependent Child Benefit Maximum Number of Annual Payments For Each Surviving Dependent Child Default Benefit SPOUSE RETRAINING BENEFIT Benefit 50% multiplied by the percentage of the Principal Sum applicable to the Covered Loss, as shown in the Schedule of Covered Losses. subject to a maximum of$25,000 $100 per day 365 days per Hospital Stay per Covered Accident $10,000 $5,000 $1,000 $5,000 4 SI,OOO $5,000 8 j 1 VOLUNTARY ACCIDENTAL DEATII AND DIS:\1E:\1BERMEi\T BENEFITS Employee Principal Sum: Voluntary Benefits match the Voluntary Life Benefits under policy number FLX 962659, Only Employees covered for the Voluntary Life can elect Voluntary AD&D, Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of Annual Compensation take effect, subject to any Active Service requirement, on the first day oflhe month following the change in Annual Compensation, SCHEDULE OF COVERED LOSSES Covered Loss Loss of Life Loss of Two or More Hands or Feet Loss of Sight of Both Eyes Loss of One Hand or One Foot and Sight in One Eye Loss of Speech and Hearing (in both ears) Quadriplegia Paraplegia Hemiplegia Uniplegia Coma Monthly Benefit Number of Monthly Benefits Lump Sum Benefit When Payable Loss of One Hand or Foot Loss of Sight in One Eye Loss of Speech Loss of Hearing (in both ears) Loss of all Four Fingers of the Same Hand Loss of Thumb and Index Finger ofthe Same Hand Loss of all the Toes of the Same Foot Age Reductions Benefit 100% of the Principal Sum 100% of the Principal Sum 100% of the Principal Sum 100% of the Principal Sum 100% of the Principal Sum 100% oftbo Principal Sum ;5% of the Principal Sum 50% of the Principal Sum 25% of the Principal Sum 1% of the Principal Sum 1 I 100% ofthe Principal Sum Beginning ofthe 12" month 50% of the Principal Sum 50% of the Principal Sum 50% of the Principal Sum 50% oftbe Principal Sum 25% Dfthe Principal Sum 25% ofthe Principal Sum 25% ofthe Principal Sum A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date preceding the first reduction, as shown below. Age 70 but less than 75 75 and oyer Percentage of Benefit Amount 65%'} 50% ADDITIONAL ACCIDENTAL DEATH AND mS:\1EMBERMENT COVERAGES Accidental Death and Dismemberment benefits are provided under the following coverages, Any benefits payable under them are as shown in the Schedule qfCovered Losses and are not paid in addition to noy other Accidental Death and Dismemberment benefits, EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the Covered Loss, as shown in the Schedule qfCovered Losses, 9 I I ADDITIONAL ACCIDENT BENEFITS Any benefits payable under these Additional Accident Ben~fits shown below are paid in addition to any other Aecidental Death and Dismemberment benefits payable. CHILD CARE CENTER BENEFIT Benefit Amount Maximum Benefit Period COMMON CARRIER BE?I[EFIT $5,000 Ihe earlier of 4 years or until the child turns 13 for each surviving Dependent Child 100% multipl led by the percentage of the Principal Sum applicable to the Covered Loss, as shown in the Schedule of Covered LOlises, subject to. maximum ofS200,OOO FELONIOUS ASSAULT A?I[D VIOLE?I[T CRIME BENEFIT Accidental Death and Dismemberment Benefit 50% multiplied by the pere<:ntage ofthe Principal Sum Hospital Stay Benefit Maximum Benefit Period SEA TBELT A?I[D AIRBAG BENEFIT Scatbelt Benefit Airbag Benefit Default Benefit SPECIAL EDUCATION BENEFIT Surviving Dependent Child Benefit Maximum Number of Annual Payments For Each Surviving Dependent Child Default Benefit SPOUSE RETRAINI?I[G BE?I[EFIT Benefit INITIAL PREMIUM RATES Premium Rate: Mode of Premium rayment: Contributions: Premium Due Dates: applicable to the Covered Loss, as shown in the Schedule of Covered Losses, su~iect to a maximum of $25,000 SIOO per day 365 days per Hospital Stay per Covered Accident SIO,OOO $5,000 SI,OOO $5,000 4 $1,000 $5,000 Basic Insurance Employee Rate: $0.02 per $1 ,000 Voluntary Insurance Employee Rate: $0.02 per $1 ,000 Monthly The cost ofthe coverage is paid by thc Subscriber and the Employee The Policy Effective Date and the first day of each succeeding modal . period Premium rates are subject to change in accordance with the Changes in Premium Rates seetion contained in the Administrative Provisions section ofthis Poliey, GA-00-I100.OO 10 • } I SCHEDULE OF BENEFITS FOR CLASS J This Schedule of Benefits shows ma.imums, benefit periods and any limitations applicabie to benefits provided in this Policy for each Covered Person unless otherwise indicated. Principal Sum, when referred to in this Schedule, means the Employee's Principal Sum in effect on the date of the Covered Accident causing the Covered Injury or Covered Loss unless otherwise specified. Eligibility Waiting Period The Eligibility Waiting Period is the period of lime the Employee must be in a Covered Class to be eligible for coverage, For Employees hired on or before the Policy Effective Date: No Waiting Period For Employees hired after the Policy Effeetiv. Date: No Waiting Period Time Period for Loss: Any Covered Loss must occur within: 365 days of the Covered Accident Maximum Age for Insurance: None BASIC ACCIDENTAL DEATH AND DISMEMBERMENT B~;NEFITS Employee Principal Sum: I times Annual Compensation rouinded to the next higher $1,000 if not already a multiple thereof, subject to a maximum of $325,000, Changes in the Covered Person!s amount of insurance resulting from a change in the Employeels amount of Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month following the changc in Annual Compensation, SCHEDULE OF COVERED LOSSES Covered Loss Loss of Life Loss of Two or More Hands or Feet Loss of Sight of Both Eyes Loss of One Hand or One Foot and Sight in One Eye Loss of Speech and Hearing (in both ears) Quadriplegia Paraplegia Hemiplegia Uniplegia Coma Monthly Benefit Number of Monthly Benefits Lump Sum Benefit When Payable Loss of One Hand or Foot Loss of Sight in One Eye Loss of Speech Loss of Hearing (in both ears) Loss of all Four Fingers of the Same Hand Loss of Thumb and Index Finger ofthe Same Hand Loss of all the Toes of the Same Foot 11 Benefit 100% ofthc Principal Sum 100% of the Principal Sum 100% of the Principal Sum 100% of the Principal Sum 100% of the Principal Sum 100% of the Principal Sum 75% ofthe Principal Sum 50% ofthe Principal Sum 25% of the Principal Sum 1 % of the Principal Sum 11 100% of the Principal Sum Beginning of the 12'" month 50% of the Principal Sum 50% of the Principal Sum 50% of the Principal Sum 50% of the Principal Sum 25% of thc Principal Sum 25% of the Principal Sum 25% of the Principal Sum Age Reductions A Covered Person's Principal Sum will be reduced to the percentage of his Principal Sum in effect on the date preceding the first reduction, as shown below. Age 70 but less than 75 75 and over Percenlage of Benelit Amount 65% 50% ADDITIONAL ACCIDENTAL DEATH AND DISMEMB.:R'I1ENT COVERAGES Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under them are as shown in the Schedule of Covered Losses and are not paid in addition to any other Accidental Death and Dismemberment benefits. EXPOSURE A."\D DISAPPEARANCE COVERAGE; ADDITIONAL ACCIDENT BENEFITS Principal Sum multiplied by the percentage applicable to the Covered Loss, as shown in the Schedule of Covered Losses. Any benefits payable under these Additional Accident Benefits shown below are paid in addition to any other Accidental Death and Dismemberment benefits payable. CHILD CARE CENTER BE:NEFIT Benefit Amount Maximum Benefit Period COMMON CARRIER BENEFIT $5,000 the earlier of 4 years or until the child turns 13 for each surviving Dependent Child 100% multiplied by the percentage of the Principal Sum applicable to the Covered Loss, as shown in the Schedule of Covered I,osses, subject to a maximum 0[$200,000 FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT Accidental Death and Dismemberment Benefit 50% multiplied by the percentage of the Principal Sum Hospital Stay Benefit Maximum Benefit Period SEA TBEI:r A."\D AIRBAG BENEFIT Seatbelt Benefit Airbag Benetit Default Benefit SPECIAL EDUCATION BENEFIT Surviving Dependent Child Benefit Maximum Number of Annual Payments For Each Surviving Dependent Child Default Benefit SPOIlSE RETRAINING BENE~'[T Benefit applicable to the Covered Loss, as shown in the Schedule of Covered Losses, subject to a maximum of $25,000 $100 per day 365 days per Hospital Stay per Covered Accident $10,000 $5,000 $1,000 $5,000 4 $1,000 S5,000 12 VOLUNTARY ACCIDENTAL DEATH AND DISMEMBERMENT BENEFITS Employee Principal Sum; Voluntary Benefits match the Voluntary Life Benefits under policy number FLX 962659, Only Employees covered for the Voluntary Life can elect Voluntary AD&D, Changes in the Covered Person's amount of insurance resulting from a change in the Employee's amount of Annual Compensation take effect, subject to any Active Service requirement, on the first day of the month following the change in Annual Compensation. SCHEDULE OF COVERED LOSSES Covered Loss Loss of Life Loss of Two or More Hands or Feet Loss of Sight of Both Eyes Loss of One Hand or One Foot and Sight in One Eye Loss of Speech and Hearing (in both ears) Quadriplegia Paraplegia Hemiplegia Uniplegia Coma Monthly Benefit Number of Monthly Benefits Lump Sum Benefit When Payable Loss of One Hand or Foot Loss of Sight in One Eye Loss of Speech Loss of Hearing (in both ears) Loss of all Four Fingers of the Same Hand Loss of Thumb and Index Finger ofthe Same Hand Loss of all the Toes of the Same Foot Age Reduetions Benefit 100% of the Principal Sum 100% of the Principal Sum 100% of the Prineipal Sum 100% of the Prineipal Sum 100% of the Principal Sum 100% of the Prineipal Sum 75% of the Principal Sum 50% of the Principal Sum 25% ofthe Principal Sum 1 % of the Prineipal Sum 11 100% ofthe Principal Sum Beginning of the 12'h month 50% of the Prineipal Sum 50% of the Prineipal Sum 50% of the Principal Sum 50% of the Principal Sum 25% of the Prineipal Sum 25% of the Principal Sum 25% ofthe Principal Sum A Covered Person's Principal Sum will be redueed to the percentage of his Principal Sum in effect on the date preceding the first reduction, as shown below. Age 70 but less than 75 75 and over Percentage of Benefit Amount 65% 50% ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under them are as shown in the Schedule a/Covered Losses and are not paid in addition to any other Accidental Death and Dismemberment benefits, EXPOSURE AND DISAPPEARANCE COVERAGE Principal Sum multiplied by the percentage applicable to the Covered Loss, as shown in the Schedule a/Covered Losses. 13 I ADDITIONAL ACCIDENT BENEFITS Any benetits payable under these Addilional Accident Benefits shown below are paid in addition to any other Accidental Death and Dismemberment benefits payable. CHILD CARE CENTER BENEFIT. Benefit Amount Maximum Benefit Period COM~1ON CARRIER BENEFIT $5,000 the earlier of 4 years or until the child turns 13 for each surviving Dependent Child 100% multiplied by the percentage of the Principal Sum applicable to the Covered Loss, as shown in the Schedule of Covered Losses, subject to a maximum of'$200,000 FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT Accidental Death and Dismemberment Benefit Hospital Stay Benefit Maximum Benefit Period SEATBELT AND AIRBAG BENEFIT Scatbel! Benefit Airbag Benefit Default Benefit SPECIAL EDUCATION BENEFIT Surviving Dependent Child Benefit Maximum Number of Annual Payments For Each Surviving Dependent Child Default Benefit SPOl:SE RETRAINING BENEFIT Benefit INITIAL PREMIUM RATES Premium Rate: Mode of Premium Payment: Contributions: Premium Due Dates: 50% multiplied by the percentage of the Principal Sum applicable to the Covered Loss, as shown in the Schedule of Covered Losses, subject to a maximum of $25,000 S100 per day 365 days per Hospital Stay per 'Covered Aceident $10,000 $5,000 SI,OOO $5,000 4 $1,000 $5,000 Basic Insurance Employee Rate: $0,02 per S I ,000 Yoluntarv Insurance Employee Rate: $0.02 per $1,000 Monthly The cost ofthe eoverage is paid by the Subseriber and the Employee The Policy Effective Date and the first day of each succeeding modal period . Premium rates are subject to change in accordance with the Changes in Premium Rates section contained in the Adminislrative Provisions section of this Policy, GA·OO·] 100.00 14 GENERAL DEFINITIONS Please note that certain words used in this Policy have specific meanings. The words defined below and capitalized within the text ofthis Policy have Ihe meanings set forth below. Acti\'c Service Age Aircraft AnnuaJ Compensation Covered Accident Covered Injury Covered Loss Covered Person Employee Employer He, His, Him An Employee will be considered in Active Service with his employer on any day that is either of the following: I. one of the Employer's scheduled work days on which Ihe Employee is perfonning his regular duties on a full-time basis, either at one oflhe Employer1s usual places of business or at some other location to which the Employer's business requires the Employee to travel; 2. a scheduled holiday, vacation day or period of Employer-approved paid leave ofabsence, other than sick leave, only ifth. Employee was in Active Service on the preceding scheduled workday. A Covered Person's Age, for purposes of initial premium calculations, is his Age attained on the date coverage becomes effective for him under this Policy, Thereafter, it is his Age attained on his last birthday, A vehicle which: 1. has a valid certificate of airworthiness; and 2, is being flown by a pilot with a valid license to operate the Aircraft, An Employee's annual earnings for normal work established by the Subscriber for his job classification, including commissions averaged over 12 months, excluding bonuses or overtime. A sudden, unforeseeable, external event that results, directly and independenlly of all other causes, in a Covered Injury or Covered Loss and meets .11 of the following conditions: 1, occurs while the Covered Person is insured under this Policy~ 2. is not contributed to by djsease~ Sickness, mental or bodily infirmity; 3. is not otherwise excluded under the terms ofthis Policy. Any bodily harm that results directly and independently of all other causes from a Covered Accident. A loss that is all of the following: I. the result, directly and independently of all other causes, of a Covered Accident; 2. one of the Covered Losses specified in the Schedule a/Covered Losses; 3. suffered by the Covered Person within the applicable time period specified in the Schedule 0/ Benefits. An eligible person, as defined in the Schedule a/Benefits, for whom an enrollment form has been accepted by Us and required premium has been paid when due and for whom coverage under this Policy remains in force. For eligibility purposes, an Employee of the Employer who is in one ofthe Covered Classes. The Subscriber and any affiliates, subsidiaries or divisions shown in the Schedule o/Coveted Affiliates and which are covered under this Policy on the date of issue or subsequently agreed to by Us, Refers to any individual, male or female. 15 Hospital Inpatient Nurse Outpatient Prior Plan Pbysician Sickness Subscriber Terrorist Act An institution that meets all of the following: 1, it is licensed as a Hospital pursuant to appl1cable Jaw; 2, it is primarily and eontinuously engaged in providing medieal eare and treatment to siek and injured persons; 3. it is managed under the supervision of a staff of medical doctors; 4. it provides 24-hour nursing serviees by or under the supervision of a graduate registered nurse (R,N,); 5. it has medieal, diagnostic and treatment faeilities, with major surgical facilities on its premises, or available on a prearranged basis; 6. it charges for its services, The term Hospital does not include a clinie, meility, or unit ofa Hospital for: 1, rehabilitation, eonvalescent. custodial, educational or nursing care; 2, the aged, drug addicts or alcoholics; 3, a Veteran's Administration Hospital or Federal Government Hospit.1 unless the Covered Person ineurs an expense, A Covered Person who is eonfined for at least one full day's Hospit.l room and board, The requirement that a person be charged for room and board does not apply to eonfinement in a Veteran's Administration Hospital or Federal Government Hospital and in such case, the term 'Inpatient' shall mean a Covered Person who is required to be confined for a period of at le.st a full day as determined by the Hospital. A Iieensed graduate Registered Nurse (R,N,), a licensed practical Nurse (L.PN,) or a licensed voeational Nurse (L.V,N,) and who is not: I, employed or retained by the Subscriber; 2. living in the Covered Person's household; or 3, a parent, sibling, spouse or child ofthe Covered Person, A Covered Person who receives treatment, services and supplies while not an lnpatient in a Hospital. The plan of insuranee providing similar benefits, sponsored by the Employer in effect immediately prior to this Polley's Effective Date, A licensed health care provider practicing within the seope of his license and rendering care and treatment to • Covered Person that is appropriate for the condition and locality and who is not: I, employed or retained by the Subscriber; 2, living in the Covered Person's household; 3, a parent, sibling, spouse or child of the Covered Person, A physical or mental illness, Any participating organization that subscribes to the trust to which this Policy is issued, Any hostile or violent act carried out by a group of persons having political or military goals but not operating on behalf of a foreign state and whose purpose is to compel an act or omission by any other person or governmental entity, 16 ! Totally Disabled or Total Disability We, Us,Our GA-OO-1200.00 Totally Disable<! or Total Disability means either: 1. inability of the Covered Person who is currently employed to do any Iype of work for which he is or may become qualified by reason of education, training or experience; or 2. inability of the Covered Person who is not currently employed to perform all of the activities of daily living including eating) transferring, dressing. toiieting) bathing. and continence) without human supervision or assistance, Life Insurance Company of North America. 17 ELIGmILITY AND EFFECTIVE DATE PROVISIONS Subscriber Effective Dale Accident Insurance Benefits become effective for each Subscriber in consideration of the Subscriber's application, Subscription Agreement and payment of the initial premium when due. Insurance coverage for the Subscriber becomes effective on the Effective Date of Subscriber Participation, Eligibility An Employee becomes eligible for insurance under this Policy on the date he meets all of the requirements of one ofthe Covered Classes and completes any Eligibility Waiting Period, as shown in the Schedule of Benefits, Effective Dale for Individuals Basic Accidental Death and Dismemberment Benefits Insuranee becomes effective for an eligible Employee, subject to the Deferred Effeclive Dale provision below, on the latest ofthe following dates: L the effective date of Ibis Policy; 2, the date the Employee becomes eligible, Voluntary Accidental Death and Dismemberment Benefits Insurance becomes effective fur an eligible Employee who applies and agrees to make required contributions within 31 days of eligibility, and subject to the Deferred Effective Dale proviSion below, on the latest of the following dates: I, the effective date of this Policy; 2, the date the Employee becomes eligible; 3, the date We receive the Employee's completed enrollment form and the required first premium, during his lifetime. DEFERRED EFFECTIVE DATE Active Service The effective date of insurance will be deferred for any Employee who is not in Active Service on the date eoverage would otherwise become effective, Coverage will become effective on the later ofthe date he returns to Active Service and the date coverage would otherwise have become effective, ' Effective Dale of Changes Any increase or decrease in the amounl of insurance for the Covered Person resulting from: I, a change in benefits provided by this Policy; or 2, a change in the Employee's Covered Class will take effect on the date of such change, Increases will take effect subject (0 any Active Service requirement, TERMINATION OF INSURANCE The insurance on a Covered Person will end on the earliest date below: 1. the date this Policy or insurance for a Covered Class is terminated; 2, the next premium due date after the date the Covered Person is no longer in a Covered Class or satisfies eligibility requirements under this Policy; 3, the last day ofthe last period for which premium is paid; 4, the next premium due date after the Covered Person attains the maximum Age for insurance under this Policy, Termination will not affect a claim for a Covered Loss or Covered Injury that is the result, directly and independently of all other causes, of a Covered Accident that OccurS while coverage was in effect. Continuation for Layoff, Leave of Absence or Family Medical Leave Insurance for an Employee may be continued until the earliest ofthe following dates if: (a) an Employee is on a temporary layoff, an Employer-approved leave of absence or an Employer-approved family medical leave; and (b) required premium contributions are paid when due, I, for a layoff: coverage continues through the end of the month in which the layoff begins; 2, for an Employer-approved leave of absence: coverage continues through the end of the month in which the leave begins; 3, for an Employer-approved family medical leave: 12 weeks in a consecutive 12-month period, GA-OO-130Q,QO 18 I I COMMON EXCLUSIONS In addition to any benefit.specifie exclusions, benefits will not be paid for any Covered Injury or Covered Loss which, direetly or indirectly, in whole or in part, is caused by or results from any of the following unless coverage is specifically provided for by name in the Description of Benefits Section: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. intentionally self·inflicted injury, suicide Or any attempt thereat while sane or insane; commission or attempt to commit a felony Or an assau1t~ commission of or active participation in a riot, insurrection or Terrorist Act; bungee Jumping; parachuting; sl,.diving; parasailing; hang·gliding; declared or undeclared war or act of war; flight in, boarding or alighting from an Aircraft or any craft designed to fly above the Earth's surfacc: a. except as a passenger on a regularly scheduled commercial airline; b. being flown by the Covered Person or in which the Covered Person is a member of the erew; e. being used for: i. crop dusting, spraying or seeding, giving and reeeiving flying instruction, fire fighting, sky writing, sky diving or hang·gliding, pipeline Or power line inspection, aerial photography or exploration, racing, endurance tests, stunt or acrobatic flying; or ii. any operation that requires a special permit from the FAA, even if it is granted (this does not apply if the permit is required only because oflhe territory flown over or landed on); d. designed for tljght above Or beyond the earth's atmosphere; e. an ultra·light or glider; f. being used for the purpose of parachuting Or skydiving; g. being used by any military authority, except an Aircraft used by the Air Mobility Command or its foreign equivalent; Sickness, disease, bodily or mental infirmity, bacterial or viral infection or medical or surgical treatment thereof, except for any bacterial infection resulting from an accidental external cut or wound or accidental ingestion of eontaminated food; travel in any Aircraft owned, leased or controlled by the Subscriber, Or any of its subsidiaries or affiliates. An Aircraft will be deemed to be "controlled" by the Subscriber if the Aircraft may be used as the Subscriber wishes for more than 10 straight days, or more than 15 days in any year: a Covered Accident that occurs while engaged in the activities of active duty serviee in the military, navy or air force of any country or international organization. Covered Accidents that occur While engaged in Reserve or National Guard training are not excluded until training extends beyond 31 days; operating any type of vehicle while under the influence of alcohol or any drug, narcotic or other intoxicant including any prescribed drug for which the Covered Person has been provided a written warning against operating a vehicle while taking it. Under the influence of alcohol, for purposes of this exclusion, means Intoxicated, as defined by the law of the state in which the Covered Accident occurred; voluntary Ingestion of any narcotic, drug, poison, gas or fumes, unless prescribed or taken under the direction ofa Physician and taken io accordance with the prescribed dosage; in addition, benefits will not be paid for services or treatment rendered by a Physician, Nurse or any other person who is: a. employed or retained by the Subscriber; b. providing homeopathic, aroma~therapeutic or herbal therapeutic services; e. living in the Covered Person's household; d. a parent, sibling, spouse or child of the Covered Person. GA·OO·1403.00 [9 CONVERSION PRIVILEGE 1, If the Covered Person's insurance or any portion of it ends for any of the following reasons: a. employment or membership ends; b. eligibility ends (except for age for the Employee); 'the Covered Person may have Us issue converted accident insurance on an individual policy or an individual certificate under a designated group policy, The Covered Person may apply for an amount of coverage that is: a. in $1,000 increments; b. not less than $25,000, regardless ofthe amount ofinsurance under the group policy; and c. not more than the amount of insurance he had under the group policy, except as provided above, up to a maximum amount of $250,000, The Covered Person must be under age 70 to get a converted policy. If the Covered Person's insurance or any portion of it ends for non-payment of premium, he may not convert, If the Covered Person's insurance ends for a reason described in 2. below, conversion is subject to that section. The converted policy or certificate will e<>ver accidental death and dismemberment. The policy or certificate will not contain disability or other additional benefits. The Covered Person need not show Us that he is insurable, If the Covered Person has converted his group coverage and later becomes insured under the same group plan as before, he may not convert a second time unless he provides, at his own expense, proof of insurability or proof the prior converted policy is no longer in force, The Covered Person must apply for the individual policy within 3 I days after his coverage under this Group Policy ends and pay the required premium, based on Our table of rates for such policies, his Age and class of risk. Ifthe Covered Person has assigned ownership of his group covemge, the owner/assignee must apply for the individual policy. If the Covered Person suffers a Covered Loss or dies during this 31.day period as the result of an accident that would have been covered under this Group Policy, We will pay as a claim under this Group Policy the amount of insurance that the Covered Person was entitled to convert, [t does not matter whether the Covered Person applied for the individual policy or certificate, If such policy or certificate is issued, it will be in exchange for any other benefits under this Group Policy, The individual policy or certificate will take etfect on the day following the date coverage under the Group Policy ended; or, if later, the date application is made, Exclusions The converted policy may exclude the hazards or conditions that apply to the Covcred Person's group coveragc at the time it ends. We will reduce payment under the converted policy by the amount of any benefits paid under the group policy ifboth cover the swne loss, 2, If the Covered Person"s insurance ends because this Group Policy is terminated or is amended to terminate insurance for the Covered Person's class, and he has been covered under this Group Policy or, any group accident insurance issued to the Employer which the Group Policy replaced, for at least five years, the Covered Person may have Us issue an individual policy or certificate of accident insurance subject to the same terms, conditions and limitations listed above, However, the amount he may apply for will be limited to the lesser ofthe following: a, coverage under this Group Polley less any amount of group accident insurance for which he is eligible on the date this Group Policy is terminated or for which he became eligible within 31 days of such termination, or b, $10,000, 20 Extension of Conversion Period If the Covered Person is eligible to convert and is not notified of this right at least 15 days prior to the end of the 31 day conversion period, the conversion period will be extended. The Covered Person will have 15 days from the date notice is given to apply for a eonverted policy or certificate. In no event will the eonversion period be extended beyond 90 days. Notice, for the purpose of this section, means written notice presented to the Covered Person by the Subseriber or mailed to the Covered Person's last known address as reported by the Subscriber. If the Covered Person sustains a Covered Loss or dies during the extended conversion period, but more than 31 days after his coverage under the Group Policy terminates, benefits will not be paid under the Group Policy. If the Covered Person's application for a converted policy or certificate is received by Us and the required premium is paid, benefits may be payable I under the converted policy or certificate. GA·01·1505.00 21 I CLAIM PROVISIONS Notice of Claim Written or authorized electronic/telephonic notice of claim must be given to Us within 31 days after a Covered Loss occurs or begins Of as soon as reasonably possible, If written or authorized electronic/telephonic notice is not given in that time, the claim will not be invalidated or reduced if it is shown that written or authorized electronic/telephonic notice was given as soon as was reasonably possible, Notice can be given to Us at Our Home Office in Philadelphia, Pennsylvania, such othcr place as We may designate for the purpose, or to Our authorized agenl Notice should include the Subscriber's name and policy number and the Covered Person's name, address, policy and certificate number. Claim Forms We will send claim forms for filing proof of loss when We receive notice ofa claim, If such forms are not sent within 15 days after We receive notice, the proof requirements will be met by submitting, within the time fixed in this Policy for filing proof of loss, written or authorized electronic proof of the nature and extent of the loss for which the claim is madc, Claimant Cooperation Provision FaIlure of a claimant to cooperate with L's in the administration of the claim may result in tennination oftne claim. Such cooperation includes, but is not limited to, providing any information or documents needed to determine whether benefits are payable or the actual benefit amount due, , Proof of Loss Written or authorized electronic proof of loss satisfactory \0 Us must be given to Us at Our office, within 90 days of the loss for which claim is made, If(a) benefits are payablc as periodic payments and (b) each payment is contingent upon continuing loss, then proof of loss must be submitted within 90 days after the termination of each period for which We are liable, If written or authorized electronic notice Is not glvcn within that time, no claim will be invalidated or reduced if It Is shown that such notice was given as soon as reasonably possible. In any case, written or authorized electronic proof must be given not more than one year aftcr the time It is otherwise required, except if proof Is not given soJely due to the lack of Icgal capacity, Time of Payment of Claims We will pay benefits due under this Policy for any loss other than a loss for which this Policy provides any periodic payment immediately upon receipt of due written or authorized electronic proof of such loss, Subject to due written or authorized electronic proof of loss, all accrued benefits for loss for which this Policy provides periodic paymcnt will be paid monthly unlcss otherwise specified in the benefits descriptions and any balance remaining unpaid at the termination of liability will be paid immediately upon receipt of proof satisfactory to Us, Payment of Claims All benefits will be paid in United States currency, Benefits for loss of life will be payable in accordance with the Beneficiary provision and these Claim Provisions, All other proceeds payable under this Policy, unless otherwise stated, will be payable to the covered Employee or to his estate, If We are to pay benefits to the estate or to a person who is incapable of giving a valid release, We may pay S I ,000 to a relative by blood or marriage whom We believe is equitably entitled, Any payment made by Us in good faith pursuant to this provision will fully discharge Us to the extent of such payment and release Us from all liability, Payment of Claims to Foreign Employ.es The Subscriber may, in a fiduciary capacity, receive and hold any benefits payable to covered Employees whose place of employment is other than the United States of America, We will not be responsible for the application or disposition by the Subscriber of any such benefits paid, Our payments to the Subscriber will constitute a full discharge of Our liability for those payments under this Polley, Physical Ex.mination and Autopsy We, at Our own expense, have the right and opportunity to examine the Covered Person when and as often as We may reasonably require while a claim is pending and to make an autopsy in case of death where it is not forbidden by law, 22 Legal Actions No action at law or in equity may be brought to recover under this Policy less than 60 days amr written or authorized electronic proof of loss has been furnished as required by this Policy. No such action will be brought more than three years after the time such written proof of loss must be furnished. Beneficiary The beneficiary is the pcrson or persons the Employee names or changes on a form executed by him and satisfactory to lis. This form may be in writing or by any electronic means agreed upon between Us and the Subscriber. Consent ofthe beneficiary is not required to affect any changes, unless the beneficiary has been designated as an irrevocable beneficiary. or to make any assignment of rights or benefits permitted by this Policy. A benefieiary designation or change will become effective on the date the Employee exeeutes it. However, We will not be liable for any aetion taken or payment made before We record notiee of the change at our Home Office, Ifmore than one person is named as beneficiary, the interests of each will be equal unless the Employee has specified otherwise. The share of any beneficiary who does not survive the Covered Person will pass equally to any surviving beneficiaries unless otherwise specified, If there is no named beneficiary or surviving beneficiary, or ifthe Employee dies while benefits are payable to him, We may make direct payment to the first surviving class ofthe following classes of persons: L spouse~ 2. child or children; 3, mother or father; 4. sisters Of brothers; 5. estate oflhe Covered Person, Recovery of Overpayment If benefits are overpaid, We have the right to recover the amollnt overpaid by either ofthe following methods. 1. A request for lump sum payment of the overpaid amount. 2. A reduetion of any amounts payable under this Policy. Ifthere is an overpayment due when the Covered Person dies, We may reeover the overpayment from the Covered Person's estate. 01\-00-1600.00 23 ADMINISTRATIVE PROVISIONS Premiums All premium rates are expressed in, and all premiums are payable in, United States eurreney. The premiums for this Policy will be based on the rates set forth in the Schedule of Benefits, the plan and amounts of insurance in effect. If a Covered Person's insuranee amounts are reduced due to age, premium will be based on the amounts of insurance in force on the day after the reduetion took place. Changes ill Premium Rates We may change the premium rates from time to time with at least 31 days advance written notice to the Subscriber. No change in rates will be made until 48 months after the Policy Effective Date. An increase in rates will not be made more often than once in a 12-month period. However, We reserve the right to change rates at any time if any of the following events take place: 1. the terms of this Policy change; 2. the terms of the Subscriber's participation change; 3, a division, subsidiary, affiliated company or eligible class is added or deleted from this Policy; 4. there is a change in the factors bearing on the risk assumed; 5. any federal or state law or regulation is amended to the extent it affects OUf benefit obligation. Payment of Premium The first premium is due on the Subscriber's effective date of participation under this Policy. Thereafter, premiums are due on the Premium Due Dates agreed upon between Us and the Subscriber. If any premium is not paid when due, the Subscriber's participation under this Policy will be terminated as of the Premium Due Date on which premium was not paid. Grace Period A Grace Period of 60 days will be granted to each Subscriber for payment of required premiums under this Policy. A Subscriber's participation under this Policy will remain in effect during the Grace Period. The Subscriber is liable to Us for any unpaid premium for the time its participation under this Policy was in force. A Grace Period of 60 days will be granted for payment of required premiums under this Policy. A Covered Person's insurance under this Policy will remain in force during the Grace Period. We will reduce any benefits payable for any claims incurred during the grace period by the amount of premium due. Ifno such claims are incurred and premium is not paid during the grace period, insurance will end on the last day of the period for which premiums were paid. GA·OO·1701.00 24 GENERAL PROVISIONS Entire Contract; Changes This Policy, including the endorsements, amendments and any attached papers constitutes the entire contract of insurance. No change in this Policy will be valid until approved by one of Our executive officers and endorsed on or attached to this Policy. No agent has authority to change this Policy or to waive any of its provisions. Subscriber Participation Under This Policy An organization may elect to participate under this Policy by submitting a signed Subscriber participation agreement to the Policyholder. No participation by an organization is in effect until approved by Us. Misstatement of Fact If the Covered Person has misstated any fact, all amounts payable under this Policy will be such as the premium paid would have purchased had such fact been correctly stated. Certificates Where required by law, We will provide a certificate ofinsurance for delivery to the Covered Person. Each certificate will list the benefits, conditions and limits of this Policy. It will state to whom benefits will be paid. 30 Day Right To Examine Certificate If a Covered Person does not like the Certificate for any reason, it may be returned to Us within 30 days after receipt. We will return any premium that has been paid and the Certificate will be void as if it had never been issued. Multiple Certificates The Covered Person may have in force only one certificate at a time under this Policy. If at any time the Covered Person has been issued more than one certificate, then only the largest shall be in effect. We will refund premiums paid for the others for any period of time that more than one certificate was issued. Assignment We will be bound by an assignment of a Covered Person's insurance under this Policy only when the original assignment or a certified copy ofthe assignment, signed by the Covered Person and any irrevocable beneficiary, is filed with Us. The assignee may exercise all rights and receive all benefits assigned only while the assignment remains in effect and insurance under this Policy and the Covered Person's' certificate remains in force. Incontestability 1. Of This Policy or Participation Under This Policy All statements made by the Subscriber to obtain this Policy or to participate under this Policy are considered representations and not warranties. No statement will be used to deny or reduce benefits or be used as a defense to a claim, or to deny the validity of this Policy or of participation under this Policy unless a copy of the instrument containing the statement is, or has been, furnished to the Subseriber. After two years from the Policy Effective Date, no such statement will cause this Policy to be contested except for fraud. 2. Of A Covered Person's Insurance All statements made by a Covered Person are considered representations and not warranties. No statement will be used to deny or reduce benefits or be used as a defense to a claim, unless a copy of the instrument containing the statement is, or has been, furnished to the claimant. After two years from the Covered Person's effective date of insurance, or from the effective date of increased benefits, no such statement will cause insuranee or the increased benefits to be contested except for fraud or lack of eligibility for insurance. In the event of death or incapacity, the beneficiary or representative shall be given a copy. 25 Policy Termination We may terminate coverage on or after the first anniversary of the policy effective date. The Subscriber may terminate coverage on any premium due date. Written or authorized electronic notice must be given at least 31 days prtor to such premium due date, Tennination will not affect a claim for a Covered Loss that is the result, directly and independently of all other causes, of a Covered Accident that oceurs while coverage was in effee(, Reinstatement This Policy may be reinstated if it lapsed for nonpayment of premium, Requirements for reinstatement are written application of the Subscriber satisfactory 10 Us and payment of all overdue premiums, Any premium accepted in connection with a reinstatement will be applied to a period for which premium was not previously paid, Clerical Error A Covered Person's insurance will not be affected by error or delay in keeping records of insurance under this Policy, If such error or delay is found, We will adjusttbe premium fairly, Conformity with Statutes Any provisions in contlict with the requirements ofany state or federal law that apply to this Policy are automatically changed to satisfY the minimum requirements of such laws, Policy Ch. nges We may agree with the Subscriber to modifY a plan of benefits without the Covered Person's consent. Workers' Compensation Insurance This Policy is not in place of and does not affect any requirements for coverage under any Workers' Compensation law, ExaminAtion of the Policy This Group Policy will be available for inspection at the Subscriber's office during regular business hours, Examination of Records We will be pennitted to examine all of the Subscriber's records relating to this Group Policy, Examination may occur at any reasonable time while the Group Policy is in foree; or it may occur: I, at any time for two years after the expiration of this Group Policy; or, if later, 2, upon the final adjustment and settlement of all Group Policy elaims, The Subscriber is acting as an agent of the Covered Person for transactions relating to this insurancc, The actions of the Subscriber will not be considered OUf actions. GA-OO-1800,OO 26 DESCRIPTION OF COVERAGES AND BENEFITS This Description 0/ Coverages and Benefits Section deserihes tbe Accident Coverages and Benelils provided to You. Benefit amounts, benefit periods and any applicable aggregate and benefit maximums .re shown in Ibe Schedule 0/ Benefits. Certain words capitalized in Ihe lext ofthes. descriptions have special meanings witbin this Certilicate and are defined in the General Definitions section. Please read these and the Comtn(Jn Exclusions sections in order to understand an of the terms, conditions and limitations applicable to these coverages and benefits. ACCIDENTAL DEATH AND DISME"'IBERMENT BENEFITS Covered Loss We will pay the benefit for anyone ofth. Covered Losses listed in the Schedule 0/ Benejlls, ifthe Covered Person suffers a Covered Loss resuiting directly and independently of all other cauSes from a Covered Accident within the applicable time period specified in the Schedule of Benefits. Definitions If the Covered Person sustains more than one Covered Loss as a result oftbe same Covered Accident, benefits will be paid for the Covered Loss for which the largest available benefit is payable. If the loss results in death, benefits will only be paid under the Loss of Life benefit provision. Any Loss of Life benefit will be reduced by any paid or payable Accidental Dismemberment benefit. However, if such Accidental Dismemberment benefit equals or exceeds the Loss of Life benefit, no additional benefit will be paid. Loss of a Hand or Foot means complete Severance through Or above the wrh.1 or ankle joint. Los. of Sight means the total, permanent ioss of all vision in one eye which is irrecoverable by natural, surgical or artificial means. Loss of Speech means total and permanent loss of audible communication which is irrecoverable by natural, surgical or artificial means. Loss ofH.aring means total and permanent los. of ability to hear any sound in both ears which is irrecoverable by natural. surgical or artificial means. Loss of a Thumb and Index Finger of the Same H.nd or Four Fingers of the Same Hand means complete Severance through or above the metacarpophalangeal joints ofth. same hand (the joints between the lingers and the hand), I,oss of Toes means complete Severance through the metatars.lphalangeal joint. Paralysis or Paralyzed means tOlallo .. of use of a limb. A Physician must determine the loss of use to be complete and irreversible. Quadriplegia means total Paralysis of both upper and both lower limbs. Hemiplegia means total Paralysis of the upper and lower limbs on one side of the body. Paraplegia means total Paralysis of both lower limbs or both upper limbs. Uniplegla means total Paralysis of one upper or one lower limb. Coma means a profound state ofunconsciousne .. which resulted directly and independently from all other causes from a Covered Accident, and from which the Covered Person is not likely to be aroused through powerful stimulation. This condition must be diagnosed and treated regularly by a Physician. Coma does not mean any state of unconsciousness intentionally induced during the course of treatment of a Covered Injury unless the state of unconsciousness results from the administration of anesthesia in prcp.ration for surgical treatment of that Covered Accident. Severance means the complete and permanent separation and dismemberment of the part from the body. Exclusions The exclusions that apply to this benefit are in the Common F.xclusions section, GA·QO·2100.00 27 1 j ADDITIONAL ACCIDENTAL DEATH AND DISMEMBERMENT COVERAGES Accidental Death and Dismemberment benefits are provided under the following coverages. Any benefits payable under them are shown in the Schedule of Covered Losses and will not be paid in addition to any other Accidental Death and Dismemberment benefits payable. EXPOSURE AND DISAPPEARANCE COVER<l.GE Benefits for Accidental Death and Dismemberment, as shown in the Schedule of Covered Losses. will be payable if a Covered Person suffers a Covered Loss which results directly and independently ofal! other causes from unavoidable exposure to the elements following a Covered Accident. Ifth. Covered Person disappears and is not found within one year from the date of the wrecking, sinking or disappearance of the conveyance in which the Covered Person was riding In the course ofa trip which would otherwise be covered under this Policy, it will be presumed that the Covered Person's death resulted directly and independently of all other causes from a Covered Accident Exclusions The exclusions that apply to this coverage are in the Common Exclusions Section. GA-OO-2202.00 ADDITIONAL ACCIDENT BENEFITS Accidental Death and Dismemberment benefits are provided under the following Additional Benefits. Any benefits payable under them will be paid in addition to any other Accidental Death and Dismemberment benefit payable. CHILD CARE CENU;R BENEFIT We will pay benefits shown in the Schedule of Benefits for the care of each surviving Dependent Child in a Child Care Center if death ofthe covered Employee results directly and independently of all other Causes from a Covered Accident and all of the following conditions are met: I. coverage for his Dependent Children was in force on the date ofthe Covered Accident causing his death; and 2. one or more surviving Dependent Children is under Age 13 and: a. was enrolled in a Child Care Center on the date ofthe Covered Accident; or b. enrolls in a Child Care Center within 90 days from the date ofth. Covered Accident. This benefit will be payable to the Surviving Spouse if the Spouse has custody ofthe child. If the Surviving Spouse docs not have custody of the child, benefits will be paid to the child's legally appointed guardian. Payments will be made at the end of each 12 month period that begins after the date of the covered Employee's death. A claim must be submitted to Us at the end of each 12 month period. A 12 month period begins: 1. when the Dependent Child enters a Child Care Center for the first time, within the period specified in (2b) above, after the covered Employee's death; or 2. on the first ofthe month following the covered Employee's death, if the Dependent Child was enrolled in a Child Care Center before the covered Employee's death. Each succeeding 12 month period begins on the day immediately following the last day of the preceding period. Pro rata payments will be made for periods of enrollment in u Child Care Center ofless than 12 months. Definitions For purposes of this benefit: Cbild Care Center is a facility which: 1. is licensed and run according to laws and regulations applicable to child care facilities; and 2. provides care and supervision for children in a group setting on a regular, daily basis. A Child Care Center does not include any of the following: 1. a Hospital; 2. the child's home; 3. care provided during normal school hours while a child is attending grades one through twelve. Exclusions The exclusions that apply to this benefit are in the Common Exclusions SeCTion. GA-OO-2222.DO 28 COMMON CARRIER BENEFIT We will pay the benefit shown in the Schedule of Benefits ifthe Covered Person suffers a Covered Loss that results directly and independently of all other causes from a Covered Accident that occurs while riding as a fare-paying passenger in, or being struck by, a Common Carrier. Riding includes getting into and out ofthe Common Carrier. Definition For purposes of this benefit: Common Carrier means: 1. a public conveyance, including Aircraft, licensed for hire to carry fare-paying passengers; or 2. a transport Aircraft operated by the Air Mobility Command ofthe United States of America or a similar air transport service of another country. Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section. OA-00-2225.00 FELONIOUS ASSAULT AND VIOLENT CRIME BENEFIT We will pay the amount shown in the Schedule of Benefits, subject to the following conditions and exclusions, when the Covered Employee suffers a Covered Loss resulting directly and independently of all other causes from a Covered Accident that occurs during a violent crime or felonious assault as described below. A police report detailing the felonious assault or violent crime must be provided before any benefits will be paid. The Covered Accident must occur while the Covered Person is on the business or premises of the Employer. To qualify for benefit payment, the Covered Accident must occur during any of the following: I. actual or attempted robbery or holdup; 2. actual or attempted kidnapping; 3. any other type of intentional assault that is a crime classified as a felony by the governing statute or common law in the state where the felony occurred. We will pay a Hospital Stay Benefit, subject to the following conditions and exclusions, when the Covered Person suffers a Covcred Loss resulting directly and independently of all other causes from a Covered Accident that oceurs during a violent crime or felonious assault if all of the following conditions are met: 1. the Covered Person is covered for Hospital Stay benefits under this Policy; 2. the Hospital Stay begins within 30 days ofthe violent crimelfelonious assault; 3. the Hospital Stay is at the direction and under the care of a Physician; 4. the Covered Person provides proof satisfactory to Us that his Hospital Stay was necessitated to treat Covered Injuries sustained in a Covered Aecident caused solely by a violent crime or felonious assault; 5. the Hospital Stay begins while the Covered Person's insurance" is in effect. The benefit will be paid for each day ofa continuous Hospital Stay. Definitions For purposes of this benefit: Family Member means the Covered Person's parent, step-parent, Spouse or former Spouse, son, daughter, brother, sister, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother- in-law, sister-in-law, aunt, unele, cousins, grandparent, grandchild and stepchild. Fellow Employee means a person employed by the same Employer as the Covered Person or by an Employer that is an affiliated or subsidiary corporation. It shall also include any person who was so employed, but whose employment was terminated not more than 45 days prior to the date on which the defined violent crime/felonious assault was committed. Member of the Same Household means a person who maintains residence at the same address as the Covered Person. 29 Exclusions GA·OO·2234,QO Benefits will not be paid for treatment of any Covered Injury sustained or Covered Loss incurred during any: 1. violent crime or felonious assault committed by the Covered Person; or 2. felonious assault or violent crime committcd upon the Covered Person by a Fellow Employee, Family Member, or Member of the Same Household, Other exclusions that apply to this benefit are in the Common Exclusions Section, SEATBELT AND AIRBAG BENEFIT We will pay the benefit shown in the Schedule of Benefits, subject to the conditions and exclusions described below, when the Covered Person dies directly and independently of all other causes from a Covered Accident while wearing a seathelt and operating or riding as a passenger in an Automobile, An additional benefit is provided if the Covered Person was also positioned in a seat protected by a propcrly·functioning and properly deployed Supplemental Restraint System (Airbag), Verification of proper use of the soatbelt at the time of the Covered Accident and that the Supplemental Restraint System properly inflated upon impact must be a part of an official policc report of the Covered Aceident or be certified, in writing, by the investigating officer(s} and submitted with the ('..overed Person's claim to Us. If such certification or police report is not available or it is unclear whether the Covered Person was wearing a seatbelr or positioned in a seat protected by a properly functioning and properly deployed Supplemental Restraint System, We will pay a defuuit benefit shown in the Schedule of Bene fils to the Covered Person's beneficiary, In the case of a child, soatbelt means a child restraint, as required by state law and approved by the National Highway Traffic Safety Administration, properly secured and being used as recommended by its manufacturer for childrcn of like Age and weight at the time oflhe Covered Accident. Definitions For purposes ofthi. henefit: Supplemental Restraint System means an airbag that inflates upon impact for added protection to the head and chest areas, AutomobUe means a self~propelled, private passenger motor vehicle with four or more wheels which is a type both designed and required to be licensed for use on the highway of any state or country, AutomobiJe includes, but is not limited to, a sedan, station wagon, sport utility vehicle, or a motor vehicle of the pickup, van, camper, or motor·home type, Automobile does not include a mobile home or any motor vehicle whieh is used in maSS or public transit, Exclusinns The .xclusions that apply to this benefit are in the Common Exclusions Section, GA·QQ·2251.00 SPECIAL EDUCATION BENEFIT We will pay the benefit, up to the Maximum Benefit shown in the Schedule of Benefits, for each qualifjling Dependent Child. The Covered Person's death must result, directly and independently of all other causes from a Covered Accident for which an Accidental Death Benefit is payable under this Policy, This benetit is subject to the conditions and exclusions described below. A qualifjling Dependent Child must: 1. enroll as a full-time student at an accredited school of higher learning before reaching the limiting Age for dependent eligibility stated in this Policy; 2, continue his education as a full·time student; and 3, incur expenses for tuitionj fees., books, room and boardt transportation and any 'other costs payable direetly to, or approved arid certified by, such school. A qualifjling surviving Spouse must: I, enroll in any accredited school for the purpose of retraining or refreshing skills needed for employment within one year ofthc dale of the covered Employee's Covered Accident; 2, remain enrolled in such accredited school; and 3, incur expenses payable directly to, or approved by, such school. 30 Payments will be made to each qualil)dng Dependent Child or to the child's legal guardian, if the ehild is a minor at the end of each year for the number of years shown in the Schedule of Benefits. We must receive proof satisfactory to Us of the Dependent Child's enrollment and attendance within 31 days of the end of each year. The first year for which a Speeial Education Benefit is payable will begin on the first of the month following the date the covered Employee died, if the surviving Dependent Child was enrolled on that date in an accredited school of highcr learning beyond the 12th grade; otherwise on the date he enrolls in such school. Each succeeding year for which benefits are payable will begin on the date following the end of the preceding year. If no Dependent Child qualifies for Special Education Benefits within 365 days ofthe covered Employee's death, We will pay the default benefit shown in the Schedule olBenefits to the covered Employee'S beneficiary. Payments will be made to the surviving Spouse at the end of each year for the number of years shown in the Schedule of Benejlts We must receive proof satisfactory to Us ofthe Spouse's enrollment and attendance within 31 days ofthe end of each year. The lirst year for which a Speeial Edueation Benefit is payable will begin on the date the surviving Spouse enrolls in an accredited school for the first time following the date the Employee died. Each succeeding year lor which benefits are payable will begin on the date following the end of the preceding year. If a surviving Spouse does not quaHJY for Special Education Benefits within 365 days ofthe eovered Employee's death, We will pay the delault bcnefit shown in the Schedule of Bene filS to the covered Employ.e's beneficiary. Definitions ExclUSIons For the purposes of this benefit: Dependent Chlld(ren) An Employee's unmarried child who meets the following requirements; l. A child from live birth to 19 years old; 2. A child who is 19 or more years old but less than 25 years old, enrolled in a school as a full-time student and primarily supported by the Employee; 3. A child who is 19 or more years old, primarily supported by the Employee and incapable of self, sustaining employment by reason of mental or physical handicap. Proof of the child's e<>ndition and dependence must be submitted to Us within 31 days after the date the child eoasos to qualiJY as a Dependent Child for the reasons listed above. During the next two years, We may, from time to time. require proof of the continuation of such condition and dependence. After that, We may require proof no more than onee a year, A child, for purposes of this provision, includes an Employee's: I, natural child; 2. adopted child, beginning with any waiting period pending finalization ofthe child's adoption; 3. stepchild who resides with the Employee; 4. child for whom the Employee is legal guardian, as long as the child resides with the Employee and depends on the Employee for financial support. Financial support means that the Employee is eligible to claim the dependent for purposes of Federal and State income tax returns. Spouse the Employee's lawful spouse under age 70. The exclusions that apply to this benefit are in the Common Exclusions Section. 31 SPOUSE RETRAINING BENEFIT We will pay expenses incurred, as described below, up to the Maximum Benefit shown in the Schedule oj Benefils, to enable the covered Employee's Spouse to oblllin occupational or educational training needed for employment ifthe covered Employee dies directly and independently of all other causes from a Covered Accident. This benefit is subject to the conditions and exclusions described below. This benefit will be payable if the covered Employee dies within one year ofa Covered Accident and is survived by his Spouse who: 1. enrolls, within three years after the covered Employee's death in any accredited school for the purpose of retraining or refreshing skills needed for employment; and 2. incurs expenses payable directly to, or approved and eertified by, such school. If there is no surviving Spouse at the time of the covered Employee's Covered Accidental Death, the Default Benefit shown in the Schedule ofBen~flls will be paid to the covered Employee's beneficiary. Definitions For the purposes of this benefit: Spouse will include the Employee's lawful spouse under age 70. Exclusions The exclusions that apply to this benefit are in the Common Exclusions Section. GA-OO-2254a,OO 32 I ~ j I :j LIFE INSURANCE COMPANY OF NORTH AMERICA Pblladelphia, PA 19192-2235 We, City of Palo Alto, whose main office address is Palo Alto, CA, hereby approve and accept the tenus of Group Policy Number OK 964302 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA to the TRUSTEE OF THE GROUP INSURANCE TRtiST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY. This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be returned to the LIFE INSURANCE COMPANY OF NORTH AMERICA. Signature and City of Palo Alto .... __________ ......... ______ Date: _________ _ (This Copy Is To Be Returned To Life Insurance Company of North America) LIFE INSURANCE COMPANY OF NORTH AMERICA Philadelphia, PA 19192-2235 We, City of Palo Alto, whose main offiee address is Palo Alto, CA, hereby approve and accept the terms of Group Policy Number OK 964302 issued by the LIFE INSURANCE COMPANY OF NORTH AMERICA to the TRUSTEE OF THE GROUP INSURANCE TRUST FOR EMPLOYERS IN THE PUBLIC ADMINISTRATION INDUSTRY. This form is to be signed in duplicate. One part is to be retained by City of Palo Alto; the other part is to be returned to the LIfE INSURANCE COMPANY OF NORTH AMERICA. City of Palo Alto Signature and ,uo.~ ___ ........ ____________ Date: (This Copy Is To Be Retained By City of Palo Alto) 1 , t J I EXHIBIT "B" CONSULTANT shall provide the insurance benefits described in Exhibit A. Claims shall be processed in a timely manner to the reasonable satisfaction of the CITY. Professional Services RevJune2,2010 S IASD\PURCH',SOLlCITATIONS\CURRENT BUYER·eM FOLDERSIOTHERS· ADRI"N\RFP,\144417 Signa, HR\C12144417 EXHIBITS B-D,doc I EXHIBIT "C" COMPENSATION The CITY agrees to compensate the CO>';SCL T ANT for professional services performed in accordance with the terms and conditions ofthis Agreement, to the reasonable satisfaction of the CITY, according to the schedule offees included below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit "A" ("Services") and reimbursable expenses shall not exceed $597,160.00 for year one, $597,160.00 for year two and $597,160.00 for year three. Total COMPENSATION for the three year Contract shall not exceed $1,791,480.00. In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed Fifty Nine Thousand Seven Hundred Fifteen Thousand Dollars and 60 Cents ($59,715.60) for year one, Fifty Nine Thousand Seven Hundred Fifteen Thousand Dollars and 60 Cents ($59,715.60) for year two, Fifty Nine Thousand Seven Hundred Fifteen Thousand Dollars and 60 Cents ($59,715.60) for year three. The compensation for all three years of additional shall not exceed One Hundred Seventy >.;ine Thousand One Hundred Forty Six Dollars and Eighty Cents ($179,146.80). Additional Services, if any, shall be authorized in accordance with and subject to the provisions ofExhibit "e". CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization ofcny. 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 in Exhibit "A-I, A- 2, A-3". ProfessIQnal Services Rev June 2, 2010 S,IASDIPURCH\SOLICITATlONSICURRENT BUYER·CM FOLDER"'.DTHERS· ADRIANIRFP,1144417 Signa: HRIC12144417 EXHIBITS B~D,doc 1 i 1 COMPENSATION BREAKDOWN FOR EACH YEAR City of Palo Alto EE: 925 Effective 11112012 Broker: LJW Quote CIGNA Long Term Disability Cost Volume 2.091.967 Class 1 Rate 1.230 Annual Premium 308,772.00 Long Term Disability Cost Volume 283.971 Class 2 Rate 0.5750 Annual Premium 19,596.00 Long Term Disability Cost Volume 1,663,275 Class 3 Rate 0.6200 Annual Premium 123,744.00 Basic Life Cost Volum. 80,580,000 Rate 013 Annual Premium 125,700.00 Basic AD&D Volume 80,580,000 Rate 0.02 Annual Premium 19,344.00 Total Annual Premium (Year One) 597,156.00 3 year rate Guarantee 3 year rate Guarantee 3 year rate Guarantee Professional Services Rev lune 2, 2010 SIASDIPURCH\SOUCIT ATIONSI{''URRENT BUYER·eM FOLDERSIOTllERS • ;\DRIANlRFPsI144417 Signa. HRIC12144417 EXHIBITS B·D.d", I EXHIBIT I'D" INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TE~\1 OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THECOVLRAGE SPECIFIED BELOW, AFFORDED BY CO~IPA1\lES WITH AM BEST'S KEY RATING OF A-:VII, OR IDGHER, LICENSED OR AUTHORIZED TO TRANSACT INS1-'RA:-<CE BUSINESS IN THE STATE OF CALIFORNIA, AWARD IS (:ONTlNGENTON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS AS SPECIFIED BELOW" MINIMUM LIMITS REQUIRED TYPE OF COVERAGE REQIJIREMEN'f EACH YES YES YES YES YES YES OCCURRENCE AGGREGATE WORKER'S COMPENSATIOK STATL'TORY EMPLOYER'S LIABILITY • STATL'TORY BODILY INJURY SI,OOO,DOo $1,0)0,000 GENERAL LIABILITY, fNCLUDING PERSONAL INJURY, BROAD FOR.'" PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET COOlTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 .$1,000,000 LIABILITY COMBINED" BODILY INJURY $;,000,000 $I,COO,OOO -EACH PERSON $1,000,000 SI,CO{l,OOO -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON,OW;<ED PROPERTY DAMAGE $1,000,000 SI,OOO,OOO BODILY INJURY AND PROPERTY 81,000,000 $;,OOO,OOC DAMAGE. COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL $1000000 THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTIV\CTOR, AT ITS SOLE COST AND EXPEOlSE, SHALL OBTAI, A;lD MAINTAIN, I, FULL PORCE AND EFFECT THROIJGHOcT eHE ENTIRE TERM OF AOlY RESULTANT AGREEME/,'T,11lE Il'SURANCE COVERAGE HEREIN DESCRIBED, INSt-1UNG OlOTONL YCONTRACTORAOlD res SCBCONSULTA!>lTS, IF ANY, BUT ALSO, WITH eHE E.XCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LlABILlTY AND PROFESSIOOlAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES, 1. INSURANCE COVERAGE MUST INCLUDE: A, A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATIOOl; AND B, A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY" C, DEDUCTIBLE AMOL'OlTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL IL com ACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE" !II, ENDORSEMENT PROVISIOOlS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDrIlONAL INSUREDS" A, PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRlMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING '111m ANY OTHER INSURA NCE CARRlED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS, B, CROSS LIABILITY Proiess:onal SerYlces RevJune2.2(l~O S"\ASD\PlJRCH\SOLlCITA T10NS\CURRENT BUYER-eM FOLDERS\OTHERS -ADRIA1\\RFP,\144< 17 S'gna : HR\CI Z: 44417 EXHiBITS B-D.dov , THE NAMING OF MORE THAN ONE PERSON, FIR~. OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHE~ BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHA LL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY, C. NOTICE OF CANCELLATION L IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON·PA YMENT OF PRE'I4lUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRlTTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION, 2, IF THE POLICY IS CANCELED BEFORE ITS EXPIRA nON DATE FOR THE NON-FA Y~ENT OF PREMICM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION, NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTR4TION CITY OF PALO ALTO P,O, BOX 10250 PALO ALTO,eA 94303 Professional Services Rev June 2, 20 I 0 S:\ASDIPURCH\SOLlClTATIONSiCURRENT BUYER-eM FOLDERB\OTHERS -ADRl!\N\RFPs\I444I 7 Signa; HR\C12144417 EXHIBITS B,D,doc EXHIBIT "E" SIGNA CONTACT LIST CIGNA Group Insurance Contact st w How to File a Llfe/AD&D or Disability Claim www.cigna.com 1-800-3G-CIGNA (1-800-36-2462) Hours: lam to 7pm CST (Monday -Friday) .. The CIGNAssurance® Program for beneficiaries PO Box 570 Rockland, MA 02370-0570 U.S. 1-800-570-3778 www.clgna.com Hours: Cam to 8pm EST (Monday -Friday) .. Healthy Rewards® CIGNA.comlrewards Password: savings 1-800-258-3312 Hours: online access available 24 hours • Will Preparation Program www.CIGNAWilICenter.com " Ufe Insurance Medical Underwriting CIGNA Group Insurance PO Box 20310 Lehigh Valley, PA 18003-9924 Phone 1-800-732-1603 NOIl(s.· 8am -6pm Eastern (Monday -Fri[jay) Email applicationsto:BethlehemMail@cigna.com Fax applications to: 1-800-440-0856 . " Life Insurance Conversion & Portability Info NEBCO PO Box 152501 Irving, TX 75015-2501 Phone: 1-800-423-1282 .. Secure Travel Assistance Services (AD&D only) U.S.: 1-888-226-4567 Outside U.S.: 202-331-7635 Hours, 24 hours II Life AssistancelEAP www.cicnatJehavioral.comicgi 1-600-538-3543 Hours: 24 hoors "c I (~ry/\" 3nd the "T me of Ufe" !ego rim tDqb!8r;:;d ::;c:rv;~,,'C :1]Yt',:·; 'Ji C:c,~~!\ ;~i!:.':il)Ci! :al to, (;(';P"Y, 'c":" :lrj~~::se(5 io; ~<,;\: 0\' ;; ,;;, ,,', C(]rpO!'(1tiOll ar;d its c;ut'!';l(~inl'::);~ f:':!'od,I\;t:. 'i,~,j S()(v':.'e~; i'i (. nrC·li"i"i ,ij <;'1"1 ')rY"'l'il'i" f' J~"""'I'~I ,.,' -,"" ,,"1 '\" ( ir",,'~r CJrpQ! mion ::>llCf) '·i)b~,·d,dr;"'1: i'l{:!l :OF. t, .i,~ :)"'l:i':l~ '(;f) :::(:;;"P(,:,: I~; i\':,,',;;~ A :':~f';;i; ~;!',:-:!'~"):'r:;;~;i~'~' ',I';~' i~';;~\~~~! 1(.', .~Cl, lp"J;1,. t1f ~-JRW Y(Hk. City of Palo Alto (ID # 2361) City Council Staff Report Report Type: Action ItemsMeeting Date: 2/6/2012 February 06, 2012 Page 1 of 8 (ID # 2361) Summary Title: Energy/Compost Facility Recommendations Title: Approval of Amendment No.1 to Contract C11136602 with Alternative Resources, Inc. in the Amount of $29,700 for a Total Not to Exceed Amount of $227,758 for Assistance in Developing a Process and Timeline for Energy/Compost Facility Consideration; Approval of Contract C12143502 with Golder Associates, Inc. in the Amount of $193,713 for a Total Not to Exceed Amount of $213,113 for Final Landfill Cap Design and Landfill Capping-Related Services (CIP RF-11001); and Temporary Suspension of Landfill Capping and Compost Termination to Allow for the Establishment of a Process and Timeline for Consideration of an Energy/Compost Facility 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 Amendment No. 1 to Contract No. C11136602 (Attachment A) with Alternative Resources Inc., (ARI) in the amount of $29,700 for assisting the City in generating a process and timeline for considering an Energy/Compost Facility on the 10-acre site made available by Measure E, for a total contract amount of $227,458; 2.Approve and authorize the City Manager or his designee to execute the attached contract (Attachment B) with Golder Associates, Inc. (Golder) in the amount of $193,713 for the final landfill cap design and $19,400 for additional services for a total contract amount of $213,113; 3.Direct staff to continue dialogue with regulatory agencies to obtain approval for a postponement of final capping of the landfill for one construction season (from 2012 to 2013) so that Council can retain all options while the process and timeline for considering an Energy/Compost Facility is developed; 4.Direct staff to continue operating the City’s existing aerobic windrow composting operation on the landfill instead of closing the composting facility and diverting yard trimmings to the Sunnyvale SMaRT® Station while the process and timeline for considering an Energy/Compost Facility is developed; and February 06, 2012 Page 2 of 8 (ID # 2361) 5.Direct staff to return to Council in approximately three months to present the process and timeline for considering an Energy/Compost Facility and to obtain further Council direction on the landfill closure and existing composting operation. Executive Summary This staff report contains recommendations pertaining to the City’s consideration of a potential Compost/Energy Facility, final capping and closure of the Palo Alto landfill, and short-term continued operation of the City’s composting operation at the landfill. Final capping and closure of the landfill, as well as closure of the composting operation, were scheduled to occur in calendar year 2012. The passage of Measure E in November 2011, which undedicated from parkland a 10- acre parcel of the landfill scheduled for closure, allows the City to carefully consider an Energy/Compost Facility on the 10-acre parcel or some portion thereof. Staff’s recommendations are intended to preserve the City’s options and to avoid unnecessary expenditures while a process and timeline for considering an Energy/Compost Facility are developed. Staff recommends that 1)a contract amendment with Alternative Resources, Inc. (ARI) be approved to assist in development of the plan and timeline for considering an Energy/Compost Facility; 2)capping and final closure of the landfill be delayed for one construction season; 3)a contract with Golder Associates (Golder) be approved to complete certain closure-related tasks immediately and to allow closure to proceed in calendar year 2012 if necessary; and 4)the existing composting operation be continued in the short term at its current location. Staff intends to return to Council in approximately three months to present the process and timeline developed with the assistance of ARI and to obtain further Council direction on the landfill and closure and existing composting operation. Background ARI Contract Amendment No. 1 On April 5, 2010, Council directed staff to initiate a feasibility study for an Energy/Compost Facility in Palo Alto. Council approved a contract with ARI to conduct the study (CMR:333:10) on August 2, 2010. In September 2011, a Final Feasibility Report was presented to Council. The Feasibility Report recommended that if the site at Byxbee Park becomes available through the passage of Measure E, the City should take further actions to consider anaerobic digestion and other technologies for managing the City’s food scraps, yard trimmings, and biosolids at the site. In November 2011, Palo Alto voters passed Measure E, which removes a 10-acre parcel of land adjacent to the wastewater treatment plant from dedication as parkland for the limited use as an Energy/Compost Facility. Approximately 8 of this 10 acre parcel is located on the Palo Alto landfill. A contract amendment with ARI is being proposed to February 06, 2012 Page 3 of 8 (ID # 2361) assist the City with developing a plan and timeline for consideration of an Energy/Compost Facility on the 10-acre parcel or a portion thereof. . Landfill Closure and Golder Associates Inc. Contract The Palo Alto Landfill is comprised of 126-acres and is divided into four Phases –I, IIA, IIB, and IIC. Phase I known as Byxbee Park was capped and opened to park users in 1991. Phase IIA was capped in 1992 and Phase IIB was capped in 2000. In the summer of 2011, all of Phase IIA and a large portion of Phase IIB were opened to park users after the environmental control systems were buried and additional clean soil was brought in to bring the phases to final design grades. In November of 2011, an additional 7 acres of Phase IIB was opened to park users. Approximately 2 acres of Phase IIB is being used to stockpile a vegetative soil mixture. The remaining portion of Phase IIB is expected to be open to the public in 2012. Phase IIC is the final phase of the landfill to be closed. It is 51 acres in size and includes the open windrow aerobic composting operation, Palo Alto Recycling Center (set to close February 1, 2012), former equipment maintenance facility, and the landfill office, scale, and tollbooth. The last remaining section of Phase IIC accepting refuse reached capacity in July 2011 and the landfill has officially stopped accepting any more refuse. The landfill has continued to accept yard trimmings from the contract hauler (residential curbside collection), City crews, and City tree trimming contractors so compost could be made and added to soil to produce a vegetative soil layer. The landfill also started accepting clean soil to bring settled areas of Phase IIC up to the final design grades and as an additive for the vegetative soil layer. The vegetative soil layer will be used during capping and is being stockpiled on a small portion of Phase IIB and on Phase IIC. Capping of Phase IIC was originally scheduled to begin during the 2012 construction season. Once capped, all areas of Phase IIB and IIC can be opened to park users with the exception of the 10-acre parcel described in Measure E. . Before Phase IIC can be capped and opened to the public, final construction plans and specifications must be prepared by an engineering firm specializing in landfill closures. The engineering firm, Golder, was selected to prepare the final construction documents as well as other closure activities for Phase IIC. This professional services contract C12143502 is included as Attachment B. Composting Operation The City operates an open windrow aerobic composting facility at the landfill (on top of Phase IIC). The composting facility receives yard trimmings from the City’s solid waste hauler, from City crews generating yard trimmings, and from City tree trimming contractors. Public self-haul yard trimmings have not been accepted since the landfill stopped accepting refuse in July 2011. Seven to ten trucks deliver approximately 70 tons of compostable material five days per week. The yard trimmings are ground and February 06, 2012 Page 4 of 8 (ID # 2361) placed into windrows, watered and turned so that aerobic digestion can be accomplished. After approximately six weeks the compost is finished and the material is screened. The screened finished compost is then mixed with clean soil and stockpiled for use as the vegetative soil layer that will be used to cover the Phase IIC cap. The composting operation had been scheduled to end in early 2012 once enough finished compost had been generated for the vegetative layer. Discussion ARI Contract Amendment No. 1 Staff recommends that a contract amendment with ARI be approved to allow ARI to assist the City in developing a process and timeline following the passage of Measure E which removes from dedication as parkland a 10-acre parcel of land located in Byxbee Park for the exclusive purpose of building a processing facility for the City’s organic wastes: food scraps, yard trimmings, and biosolids. The initial ARI contract funding of $197,758 was used to complete the Energy/Compost Feasibility Study. The next step in considering an Energy/Compost Facility is to develop a detailed plan and timeline for evaluating the technologies, environmental impacts, funding mechanisms and technology providers associated with the potential project. The process and timeline will then serve as a roadmap throughout the evaluation process. This ARI contract amendment in the amount of $29,700 will enable ARI to assist the City in preparing the plan and timeline. This contract amendment also provides funding for the consultant to answer some remaining questions and concerns about the Feasibility Study. The funds budgeted for this purpose in the initial contract were used earlier in the process to answer concerns and make revisions precipitated by the extraordinary amount of public comment received. If all of the contract amendment money is not needed, it will not be spent. It is anticipated that development of the process and timeline will take approximately three months. Staff intends to return to Council at that time to review the plan and timeline and to obtain further Council direction before beginning implementation of the plan. Landfill Closure and Golder Associates Inc. Contract The remaining uncapped 51 acres of the landfill had been scheduled to be graded and capped during the 2012 construction season, which extends through the Fall of 2012. In accordance with the Measure E amendments to the Comprehensive Plan and Baylands Master Plan, staff is recommending that Council direct staff to contact regulatory agencies to apply for the postponement of the capping for one construction season. A postponement for one construction season allows time for staff to develop and begin implementing the process and timeline for considering an Energy/Compost Facility. Installing the cap while still considering options for an Energy/Compost Facility would substantially increase the future cost to build the Facility. Refuse excavated from the 10-acre site to create a usable pad for the Facility would need to be relocated to the remaining 41 acres of Phase IIC of the landfill or exported to an off-site landfill. Relocation of refuse to the remainder of Phase IIC would require that those areas be regraded and have a new cap installed, in addition to changes to the leachate and February 06, 2012 Page 5 of 8 (ID # 2361) landfill gas collection systems. Exporting the excavated refuse to another landfill would involve significant transportation and tip fee costs. Staff is developing cost estimates for several different potential Energy/Compost Facility pad sizes and configurations. Preliminary estimates indicate that the increased cost to build an Energy/Compost Facility after the landfill had already been capped could be several million dollars. Postponement of the landfill closure can be allowed if all three of the oversight agencies with jurisdiction over the landfill closure approve the City’s request. These three agencies are the California Regional Water Quality Control Board (RWQCB), the California Department of Resources Recycling and Recovery (CalRecycle), and the County of Santa Clara, Department of Environmental Health (Local Enforcement Agency or “LEA”). Preliminary conversations between City staff and the agencies indicate that postponement could be acceptable. The State Lands Commission may also need to be consulted. In the event the RWQCB, CalRecycle or the LEA does not approve postponing the closure of the landfill, a professional services contract would be needed immediately to provide final construction plans and specifications for the landfill closure. Certain tasks in such a contract can be performed now, regardless of when capping occurs. The scope of the Golder contract includes investigating and characterizing the extent and quality of the low-permeability soil in the 0.1 acre former landfill gas-to-energy (Cogeneration) Facility, located on the North-Western corner of the landfill. The Cogeneration Facility closed in 2004 and has been used to store equipment, an oil lube shed, and has acted as a maintenance bay to service landfill heavy equipment. The Golder contract scope also includes, assisting the City by answering technical questions and/or design conflicts, performing a CEQA analysis of the closure construction impacts, performing facility closure sampling and analytical testing of soils at the Cogeneration and Recycling Center, providing construction quality assurance (CQA) oversight, and preparing a CQA Summary Report. If closure of the landfill is postponed, staff will only proceed with those portions of the scope of work that need to take place in the same manner regardless of whether a Compost/Energy Facility is built, while delaying the scope of work components for which funds would not be needed if a Facility is built. A summary of the consultant solicitation process is provided below. Summary of Solicitation Process Description Number Proposed Length of Project:70 weeks Number of Proposals Mailed:6 Total Days to Respond to Proposal:37 Number of Proposals Received:3 February 06, 2012 Page 6 of 8 (ID # 2361) Company Name Location (City, State) 1. SCS Engineers Pleasanton, CA 2. Golder Associates, Inc.Roseville, CA 3. EBA Santa Rosa, CA Range of Proposal Amounts Submitted $329,760 to $421,725 The Request for Proposals (RFP) was sent to six engineering firms and was obtained by others after being published on the City web site. The response period was 37 days. Proposals were received from three firms. The proposal amount ranged from a high of $421,725 to a low of $329,760. The firms not proposing indicated that they did not think they could be competitive, were too busy, and the work did not fit into their schedule. The RFP process allows the City to negotiate the price of the work upon selection of the successful firm.An evaluation committee consisting of Public Works Department Engineering Services and Environmental Services staff reviewed the proposals. The committee carefully reviewed each firm's qualifications and submittal in response to the criteria identified in the RFP. The criteria used to evaluate the proposing firms included: quality and completeness of proposal; quality, performance, and effectiveness of the solutions; proposer's experience; cost; proposer's financial stability; proposer's ability to perform the work within the time specified; proposer's prior record of performance with the City; and proposer's compliance with applicable laws and regulations. Golder was selected because of its understanding of the needed design services, the inclusion of Hargreaves Associates as a subconsultant, its experience in dealing with regulatory agencies, and past professional experience of the key team members. Following the consultantant selection process and the passage of Measure E, the scope of work of the contract was reduced. Therefore the final Contract amount is lower than the amounts in any of the proposals. Composting Operations Prior to the passage of Measure E, staff had planned to begin sending curbside collected yard trimmings, as well as yard trimmings generated by City crews and contractors, to the Sunnyvale SMaRT® Station in early 2012. This transfer was scheduled to occur once the City’s existing composting operation had generated a sufficient volume of finished compost to complete the stockpile of vegetative soil needed for closure of the landfill. Yard trimmings delivered to the SMaRT® Station are trucked to the Z-Best facility in Gilroy for aerobic windrow composting, the same composting method used at the City’s composting operation. If the City is granted permission from the regulatory agencies to postpone the closure of the landfill then the City has the option of continuing the composting operation at the landfill instead of sending the yard trimmings to the SMaRT® Station. Staff has had several outreach meetings to discuss these options with stakeholders. Measure E proponents are in favor of retaining the City’s composting operation while the potential Energy/Compost Facility is considered, while Measure E opponents want the composting operation to end as originally scheduled. February 06, 2012 Page 7 of 8 (ID # 2361) Staff has completed estimates of the short-term costs for continuing the City’s composting operation at its current location and for sending the City’s yard trimmings to the SMaRT Station®.The estimates are provided in Attachment C.Staff’s estimates conclude that the costs for both options in the short term are about $45,000 per month.It is important to note that the City’s composting operation cost estimate only includes the out-of-pocket costs for the City to continue composting over the next several months without considering land rent or vehicle replacement contributions.This cost estimate also does not include one-time large equipment repair costs and overhauls that may or may not be needed in the short term.Conversely, the cost estimate for delivering yard trimmings to the SMaRT Station assumes that the cost per ton of yard trimmings paid by the City for materials delivered to the SMaRT Station during FY 2011 will remain unchanged.However, the contract with the operator of the SMaRT Station includes provisions that could result in a significantly reduced cost per ton for yard trimmings if additional diversion from refuse is achieved. Improvements to the quality of the “fines” generated through the sorting process are needed in order to meet market specifications for composting, and thus additional diversion from the landfill. Potential solutions for improvements are being investigated, but there is no scheduled date for implementing a solution. Given the relatively nominal price differential in the two options, Staff recommends that the City’s existing composting operation be continued at its current location while the process and timeline for considering a Compost/Energy Facility is developed over the next several months. Staff intends to return to Council in approximately three months to present the process and timeline, and to obtain further Council direction on the composting operation. Staff will also return to Council before incurring any significant expenses from the composting operation in the event of equipment failures or other factors, or if changes occur at the SMaRT® Station that significantly reduce the cost of sending the City’s yard trimmings there. Resource Impact ARI Contract Amendment No. 1 The $29,700 for this amendment is available from existing funds in the FY 2012 Wastewater Treatment Fund operating budget. The original $197,758 came from three sources: Wastewater Treatment Fund, the Electric Fund Calaveras Reserve, and the Refuse Fund. The Wastewater Treatment Fund is being used for this amendment because the recent questions and concerns have focused on the relationship between the potential Energy/Compost Facility and the Wastewater Treatment Plant. Landfill Closure and Golder Associates Inc. Contract Funds for this project/contract are available in the FY 2011-2012 Refuse Fund Capital Improvement Program project (RF-11001 Palo Alto Landfill Phase IIC Closure). Policy Implications February 06, 2012 Page 8 of 8 (ID # 2361) Recommendations of this staff report are consistent with existing City policies including the Baylands Master Plan and Comprehensive Plan as amended by Measure E on November 8, 2011. Environmental Review An Environmental Impact Report (EIR) was prepared in connection with the 1978 Baylands Master Plan. The Golder professional services contract implements the final portion of the landfill closure and will cover any additional environmental assessment required for full landfill closure. Any variations to the approved closure plan will be subject to an additional environmental assessment under the California Environmental Quality Act (CEQA). Likewise any construction of a new Energy/Compost Facility will be subject to additional environmental review. Attachments: ·A -ARI Contract C11136602 Amendment No. 1 (PDF) ·B -Golder Associates Inc. Contract C12143502 (PDF) ·C -Composting Cost Analysis (PDF) ·D -Public Letters to Council (PDF) Prepared By:Charles Muir, Department Head:J. Michael Sartor, Director City Manager Approval: ____________________________________ James Keene, City Manager AMENDMENT NO.1 TO CONTRACT NO.C11136602 BETWEEN THE CITY OF PALO ALTO AND ALTERNATIVE RESOURCES, INC. This Amendment No.1 to contract No. Cl1136602 ("Contract") is entered into , 2011, by and between the CITY OF PALO ALTO, a charter city and a municipal corporation of the State of California ("CITY"), and Al ternati ve Resources, Inc., a corporation in the State of Massachusetts, located at 1732 Main Street, Concord, Massachusetts, 01742-3837 ("CONTRACTOR"). R E CIT A L S: WHEREAS, the Contract was entered into between the parties for the provision of preparation of a Feasibility Study for a Dry Anaerobic Digestion Facility; and WHEREAS, the parties wish to amend the Contract; NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 4 of the Contract is hereby amended to read as follows: "Section 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit "A", including both payment for professional services and reimbursable expenses, shall not exceed two hundred twenty-seven thousand four hundred fifty-eight dollars ($227,458)." SECTION 2. The following exhibit to the Contract is hereby amended to read as set forth in the attachment to this Amendment, which is incorporated in full by this reference: a. Exhibit "A" entitled "Scope of Services". b. Exhibit "B" entitled "Schedule of Performance". c. Exhibit "C" entitles "Compensation". SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. II II II Amendment 1 to Cll136602 1 111215smOl0 ,CITY OF PALO ALTO CONTRACT NO.: C11136602 EXHIBIT "A" SCOPE OF SERVICES GENERAL DESCRIPTION OF WORK The project is to prepare a Feasibility Study for a Dry Anaerobic Energy/Compost Facility in the City of Palo alto, California. The facility would recover energy from methane derived from dry anaerobic digestion of food scraps, yard trimmings, and, possibly wastewater biosolids. The chief residual from the processes would be compost. The Feasibility Study would include an economic, greenhouse gas, and environmental impact analysis. An Initial Study (CEQA Checklist) pursuant to the California Environmental Quality Act will also be prepared. (Further California Environmental Quality Act work may be performed through a Contract Amendment.) Several suboptions will be studied. The costs, impacts, and benefits will be compared to a "no action" alternative and to the alternative of a similar processing facility located outside of Palo Alto, but within 20 miles. The location of the Palo Alto facility would be immediately southeast of the Palo Alto Regional Water Quality Control Plant on an 8-9 acre site. BACKGROUND The City of Palo Alto currently handles organic residuals in the following ways: 1. Yard trimmings are composted at the Palo Alto landfill site in uncovered windrows; 2. Residential food scraps are disposed of with the garbage and landfilled in South San Jose; 3. Commercial food scraps are increasingly being source separated and composted near Gilroy, CA, with the remainder being landfilled in South San Jose; and 4. Wastewater Biosolids are dewatered and incinerated at the Regional Water Quality Control Plant in Palo Alto. The 8-9 acre site described above is currently on dedicated Parkland. The site would have to be undedicated by a vote of the residents before an Energy/Compost Facility could be constructed. A number of other approvals and permits would also be needed. However, this Scope of Services does not include working on these approval processes. The City already operates its own gas and electric utilities, which are potential users of gas or energy generated by an anaerobic digestion facility. The electric enterprise fund has been directed to procure 33% of its electric supply from renewable sources by 2015. The gas enterprise fund Amendment 1 to C11136602 3 111215 sm 010 CITY OF PALO ALTO CONTRACT NO.: Cll136602 is investigating opportunities to supply some load using biogas. The City also fuels a portion of its vehicle fleet with compressed natural gas, which is another potential use for biogas generated by the facility. PROJECT APPROACH The Consultant will evaluate and compare three basic alternatives: Alternative 1: A new dry anaerobic digestion facility adjacent to the Palo Alto Wastewater Treatment Plant. Alternative 2: A similar Regional Facility adjacent to the San Jose Wastewater Treatment Plant Alternative 3: The current facilities and plans which Palo Alto has arranged for its organics residuals following closure of the Palo Alto Landfill. The City will provide much of the d~ta for the analysis of Alternatives 2 and 3. The majority of the Consultants work will be on Alternative1. There are two sites involved in Alternative 1, the 8-9 acre Landfill site just Southeast of the Wastewater Treatment Plant, and the Wastewater Treatment Plant itself. Therefore, there will be subalternatives to Alternative 1 as follows: SUb-options to Alternative1: 1a) A new dry anaerobic digestion for yard, food and biosolids on the landfill site (biosolids in separate cells). lb.) Dry anaerobic digestion for yard, food and wet anaerobic digestion for biosolids on the landfill site. 1c.) Dry anaerobic digestion for yard and food on the landfill site and wet anaerobic digestion for biosolids on the Wastewater Plant site. 1d.) Dry anaerobic digestion for yard and food waste and no methane production from the biosoids. The analysis of all four sub-options of Alternative 1 will assume that a common methane energy recovery facility will be located on the Landfill site. The analysis of all main options and sub- options will include: 1. A financial analysis; 2. A life-cycle analysis of greenhouse gas emissions; and Amendment 1 to Cl1136602 4 111215 sm 010 CITY OF PALO ALTO CONTRACT NO.: C11136602 3. An analysis of environmental and other impacts. The analysis of the wastewater anaerobic digestion process in Alternative 2 and Alternative 3 will be performed through a separate, parallel study: The Wastewater Long Range Planning process. The firm selected for that study will provide the evaluation of wet anaerobic digestion to the Consultant. Following submittal of Preliminary Analysis (Task 4), City will consider whether other alternatives should be considered as well. For example, it may become apparent that an alternative of a somewhat larger or smaller site would better accommodate a cost effective option, and be within the intent of the Council April 5, 2010 Directive to staff. CONSULTANT SERVICES TASK 1: Development of Detailed Workplan The Consultant will develop a draft detailed Workplan and attend a kickcoff meeting in Palo Alto with City representatives. The draft Workplan will be available for review prior to the meeting. Other goals of the kick-off meeting will be to review the draft Workplan and schedule, to establish the City's goals, objectives and expectations for the Feasibility Study and Environmental Impact Initial Study, and to estab'lish lines of communication. TASK 2: Community Scoping for Feasibility Study and for Environmental Review The Consultant will attend a community meeting arranged by the City to solicit input on the Feasibility Study and Environment Impact Initial Study. In addition to gathering information from the public on the Feasibility Study, a primary purpose of the community scoping meeting will be to identify key community concerns regarding the project's potential environmental effects. The CEQA environmental review process will be described, as necessary, and the opportunities for the public to participate in the environmental review process will be identified. Following the meeting, City comments will be incorporated into and a final Workplan will be issued. TASK 3: Preparation of Draft Preliminary Financial and Greenhouse Gas Analysis The Consultant will develop a financial model to evaluate each of the four (4) sUb-options of Alternative 1. Using budgetary cost estimates supplemented with additional information such as estimated financing costs, the Consultant will calculate annual costs per ton and the total present value cost over the life cycle for each sub-option. The economic model will be constructed to enable the analysis of alternative project Amendment 1 to C11136602 5 111215 sm 010 CITY OF PALO ALTO CONTRACT NO.: Cll136602 development scenarios (for example, private ownership and operation compared to publically-financed design/build/operate implementation), as well as the impact of potential grant and funding sources. In addition, the economic model will provide for consideration of the potential cost-savings associated with the prevailing tax exempt market should the City own the energy/compost facility. The preliminary financial model will be submitted to the City for review. Key environmental parameters will be considered in preparing the draft preliminary evaluation. The key environmental parameters will be identified through consultation with the City, through the community scoping meeting input, and based on the professional experience of the project team. The key environmental parameters will be presented in a data management system format. The greenhouse gas (GHG) analysis will discuss the current state of the science .(e.g., Intergovernmental Panel on Cli~ate Change's [IPCC] Fourth Assessment Report) along with applicable regulatory framework and relevant guidance (e.g., Assembly Bill [AB] 32, recently adopted CEQA Guideline amendments and Bay Area Air Quality Management District's [BAAQMD] Air quality Guidance and GHG Thresholds of Significance). Specifically, as required by Senate Bill 97, the CEQA Guidelines were revised on December 30, 2009, to address GHG emissions under CEQA; this analysis will comply with these newly adopted guidelines along with those adopted by BAAQMD on June 2, 2010. The following analysis will be conducted for all alternatives and SUb-options. For project-generated construction-related emissions, the Urban Emissions Model (URBEMIS) will be used to estimate increases in GHGs (e.g., heavy-duty construction equipment exhaust). This modeling will be based on BAAQMD-recommended input parameters, project-specific construction data (e.g., size of disturbed ground area, construction phasing schedule), and URBEMIS default settings. URBEMIS, the BAAQMD GHG Model (BGM) , and methods from the California air Resources Board (ARB) will be used to estimate direct project-generated operational-related emissions of GHGs for mobile, stationary, and area source types (e.g., vehicle trips associated with facility employees and material collection and delivery). This modeling will be based on BAAQMD-recommended input parameters, project-specific operational data (e.g., type and size of the proposed facility, operational schedule), default settings, and project specific traffic data (e.g., overall trip generation and vehicle miles traveled [VMT]). Other applicable quantification methods, emissions factors, and assumptions protocols from, but not limited to, the Western Climate Amendment 1 to Cl1136602 6 111215 sm 010 CITY OF PALO ALTO CONTRACT NO.: Cll136602 Initiative, IPCC, California Climate Action Registry's General Reporting Protocol, and ARB will be used to estimate long-term operational-related indirect source emissions. These types of facilities are not a covered sector under ARB regulation for the mandatory_reporting of GHG emissions; however, aspects of the digester offset quantification protocol may apply. Additionally, though mandatory reporting would not be required or utilization of the digester offset protocol, quantification methods selected for this project will rely on ARB requirements and default emission factors, where applicable to this exact facility type, as stated in the regulation for usability in the future and substantiation of approach for legal defensibility. This analysis will also address the GHG emissions (e.g., lifecycle) from the alternate fates (e.g., composting, land filling, and incinerating) of the wastes by virtue of the collection of these wastes for use with regards to the proposed project. Increases in GHGs wil~ be compared to applicable thresholds and mitigation measures prepared as needed that clearly identify timing, responsibility, and performance standards. A two-tiered approach will be used to assess the project's potential generation of GHGs and its incremental contribution to the cumulative effect resulting from emission of the GHGs as follows: (1) the potential for project-generated GHG emissions to have a significant impact on the environment and (2) the potential for the project to conflict with applicable plans, policies, or regulations adopted for the purpose of reducing GHG emissions. The amount of GHGs determined in this analysis (and associated impacts) will be presented in a data management system. TASK 4: Preparation of Final Preliminary Financial and Greenhouse Gas Analysis Based on the City's comments from review of the preliminary financial and greenhouse analysis, a final preliminary analysis will be submitted to the City. This will include a working model in Excel format that will allow the City to test a change in clearly identified variables to assess the impact on life-cycle cost and greenhouse gas emissions. TASK 5: Preparation of Draft Feasibility Study and California Environmental Quality Act Checklist The Consultant will assist the City in presenting the preliminary financial analysis to the Community and City Council. In consultation with the City, comments and suggestions received from these presentations will be incorporated into a draft feasibility report which will be prepared to succinctly compile the results of the work performed. The report will include an Amendment 1 to Cll136602 7 111215 sm 010 CITY OF PALO ALTO CONTRACT NO.: Cll136602 overview, introduction, waste analysis, conversion technology facility description, and economic analysis. The introduction will include a description of the project planning and history, system elements, and participants. The waste analysis section of the report will include an overview of the existing solid waste management system in the City as well as summarizing available information on waste generation, composition of yard trimmings, food scraps, and biosolids, and waste flow control provisions. Site regulatory. and permitting considerations will be included with descriptions of the technologies responding to the request- for-information described in Task 8. The economic analysis section of the report will include a discussion of scope and methods, capital and operation and maintenance costs estimates (including staffing estimates), financing considerations, and life-cycle cost analysis with sensitivities. Following presentation of the Preliminary Analysis to the community and the City Council, the Consultant will prepare a Draft CEQA Initial Study (CEQA Checklist). The Consultant will coordinate with City of Palo Alto staff and the project team members to identify the elements to be included in the Initial Study project description. The project description will focus on the changes anticipated with implementation of the Feasibility Study. Depending upon the alternative approach selected by the City, the key considerations will likely include the odor and traffic generating potential of the proposed Dry Anaerobic Energy/Compost Facility and its compatibility with Byxbee Park users, biological resources, and the nearby municipal airport. The Environmental Checklist Form will be completed with explanations for each response for the proposed project. The level of analysis and degree of impact will vary depending on the environmental impacts anticipated from the proposed project. An administrative draft Initial Study will be prepared for review by City staff and the project team members. The Initial Study will be revised based on the comments received on the administrative draft documents. The completed document will be presented to the City for public distribution. TASK 6: Preparation of Final Feasibility Study, California Environmental Quality Act Checklist, and Workplan for Completion of California Environmental Quality Act Analysis. The Consultant will assist the City in presenting the draft Feasibility Study to the Community and to City Council. Comments and suggestions received from these presentations will be incorporated, in consultation with the City, into a final Feasibility Study. Feedback gathered during the City Council meeting will be used to finalize the Initial Study including any information presented regarding potential environmental effects Amendment 1 to C11136602 8 111215smOl0 CITY OF PALO ALTO CONTRACT NO.: Cll136602 or suggested mitigation strategies. The administrative draft Initial Study will be revised based on the comments received during the City Council meeting. The completed document will be submitted to the City. TASK 7: Preparation of Workplan for Complete California Environmental Quality Act Analysis. Following completion of the Initial Study, the Consultant. will confer with the City and the project team regarding the appropriate level of CEQA review for the Feasibility Study (i.e., Program EIR, Project-level EIR, or Focused EIR). Based on the direction provided by the City, the Consultant will prepare a work plan for the preparation of the environmental review document identified by the City as being appropriate for the Feasibility Plan. TASK 8: Analysis of Energy Generation from Methane. Four (4) SUb-options for Alternative 1 will be evaluated for anew dry anaerobic facility at the landfill site. These options are in the following matrix: Anaerobic Sub-Digestion Yard Food option System Trimmings Scraps Biosolids Dry X X X 1 a) (separate cell) Wet --- - - - Dry X X - - lb) Wet --- -X Dry X X -- --- -X lc) (wastewater Wet treatment plant site) X X - - ld) Dry ----- - Wet The Consultant will prepare a request-for-information (RFI) document for selected technology companies, requesting cost and performance data for each of the sub-options identified above. The Consultant understands that cost and performance data for the wet anaerobic digestion or biosolids will be provided by another Amendment 1 to C11136602 9 111215smOl0 CITY OF PALO ALTO CONTRACT NO.: Cll136602 firm selected by the City for the facility planning process associated with the wastewater treatment facility (i.e., the Long Range ~acilities Plan) . The RFI will include an introduction, discussion of general conditions, schedule, submission of information requirements, and qualification information. The RFI approach will enable the Consultant to solicit project-specific information and will en,able the responding companies to incorporate thei,r current thinking regarding both technology and business postures in their responses. The Consultant's database will also be used to compare the cost and. performance data received from the technology companies through the RFI process for reasonableness. Adjustments will be made to cost and performance data input to the economic model, as deemed necessary. Based on the response to the RFI and the Consultant's experience and judgment, the quantity of biogas generated in each of the four (<j,) sUb-options will be estimated. The. quantity of landfill gas available from the Palo Alto landfill will be considered in a separate sensitivity analysis and a recommendation made as to whether landfill gas should be incorporated into the sUb-options. The methane-rich gas produced from the dry anaerobic digestion proces's can be used in a variety of electrical generation equipment including: internal combustion en,gines, gas turbines, gas turbines in a combined cycle configuration, or fuel cells. The methane-rich gas can also be upgraded for production of compressed natural gas or pipeline quality natural gas. A common methane energy recovery system will be adopted by the Consultant for the analysis of the four (4) sUb-options. This selection will be made based on the Consultant's experience and the responses to the RFI received from technology companies. The Consultant will also investigate grant and funding opportunities that could result in either a lower overall amount of borrowing or a lower cost of capital. These include, among others, Clean Renewable Energy Bonds (CREBS), Qualified Energy Conservation Bonds (QECBs), Tax Credit Bonds, United States Department of Energy (USDOE) grants, and loan guarantees. Additional funding opportunities may be available through various State-administered programs. In addition, the Consultant will analyze the advantages and disadvantages of public and private models for project delivery, considering ownership, risk sharing for performance and cost, financing options and opportunities for grants and low interest loans available on a State and Federal basis for different methods of project delivery; These methods include both public and private models; design-build (DB), design-build-operate (DBO) Amendment 1 to Cll136602 10 111215smOlO CITY OF PALO ALTO CONTRACT NO.: Cll136602 and design-build-own-operate-transfer (DBOOT). A preliminary site engineering analysis will be conducted for the landfill site including consideration of access, space requirements, rough grading requirements, foundation considerations, and interconnection of utilities. The City will provide the Consultant with a quantity estimate of cubic yards of in-place refuse that will need to be relocated from the site. The City wil'l also provide the Consultant copies of previous geotechnical investigations performed on and adjacent to the landfill site. A conceptual site layout drawing will be prepared indicating the arrangement and location of the facility on the site. The drawing will be compatible with the City's GIS system. If facility information is available in sufficient detail to depict plan and side views, additional drawings will be prepared depicting a three dimensional view of the facility. TASK 9: Proj eC.t Management The Consultant will meet with the City monthly to review progress and establish priorities for work to be conducted the following month. It is anticipated that these meetings will be conducted both in person, as needed, and by teleconference. TASK 10: Additional Services Ascent Environmental-GHG Model: Additional runs of the GHG model to accommodate: transport and processing of yard trimmings at the Z-Best compost facility in Gilroy instead of the AD facility in San Jose; eliminating biosolids from consideration thereby anaerobically digesting food scraps and yard trimmings only; and additional model adjustments and runs to account for changes in the assumptions for wet anaerobic digestion of biosolids, production of pipeline quality gas and site preparation. Attendance at an additional meeting with City Council, not anticipated in the original scope. Alternative Resources Inc.-Additional runs of the Economic Model to address: eliminating biosolids from consideration thereby anaerobically digesting food scraps and yard trimmings only; increasing future costs for continued incineration of bisosolids; applying a contingency for export options for Alternatives 2 and 3; and to include up to two other sensitivity analyses as may result from public review and comment on the draft economic analyses. TASK 11: RESPOND TO PUBLIC QUESTIONS ON FINAL FEASIBILITY REPORT. In Task 11, the Consultant will respond to public questions regarding the Final Feasibility Report (dated 9/20/11) and in doing Amendment 1 to C11136602 11 111215 sm 010 CITY OF PALO ALTO CONTRACT NO.: C11136602 so provide one set of revisions to the Final Feasibility Report and June 2011 Power Point Presentation to City Council. TASK 12: ASSIST CITY IN DETERMINING AN ACTION PLAN FOLLOWING THE PASSAGE OF MEASURE E. In Task 12, the Consultant shall, assist the City in determining an action plan for the 10 acre site undedicated by the passage of Measure E during the November 2011 elections. Work shall include: Participating in a meeting with City staff to review the recommendations and approach for next steps made in the Final Feasibility Report, to discuss how these recommendations are impacted by passage of Measure E, to identify other City actions (such as landfill closure and the development of the Long Range Facilities Plan for biosolids management for the RWQCP) which will impact or be impacted by next steps regarding the Energy/Compost Facility or export options, and to discuss ,an integrated approach for an action plan; Conducting a half day "workshop" with appropriate City officials and staff to review an approach for soliciting firm technical and cost proposals for an Energy/Compo~t Facility and for export options, such approa'ch to consider City preferences for technology, site development, type of materials to be processed, energy generation/use, facility ownership, financing, project delivery method/risk allocation, scope of services, performance, environmental mitigation, and business terms; In conjunction with City staff, developing a draft action plan, identifying an approach, next steps and schedule; Participating in a public meeting with City staff and interested public groups to discuss the draft action plan, and responding to comments from these parties, prepare a final draft action plan for presentation to City Council; and Assisting City staff to prepare a final action plan based on direction from City Council. Amendment 1 to C11136602 12 111215 sm 010 CITY OF PALO ALTO CONTRACT NO.: Cll136602 EXHIBIT "C" (Page 1 of 2) 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 paid to the CONSULTANT on a Not To Exceed basis for responding to public questions/inquiries on final feasibility study including updating PowerPoint Presentation to Council Task 12A and assisting City in determining an action plan for an AD facility following the passage of Measure E Tasks 12Bl-5. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit "AU including the reimbursable expenses shall not exceed $27,000. CONSULTANT agrees to complete all Tasks, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $29,700 or ten percent (10%) of the total contract amount. 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. Amendment 1 to Cll136602 111215 sm 010 14 CITY OF PALO ALTO CONTRACT NO.: Cll136602 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 the tasks, including reimbursable expenses and add alternates, does not exceed $27,000 and the total compensation for Additional Services does not exceed $29,700. Amendment 1 to C11136602 111215 sm 010 15 CITY OF PALO ALTO CONTRACT NO. C12143502 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND GOLDER ASSOCIATES, INC. FOR PROFESSIONAL SERVICES This Agreement is entered into on this _ day ofJanuary, 2012, ("Agreement") by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("CITY"), and GOLDER ASSOCIATES, INC, a U.S. corporation in the State of Georgia with offices located, located at 1000 Enterprise Way, Suite 190, Roseville, CA 95678 ("CONSULTANT"). RECITALS The following recitals are a substantive pOilion of this Agreement. A. CITY intends to install a closure cap upon Phase IIC of the Palo Alto Landfill ("Project") and desires to engage a consultant to provide services for design, California Environmental Qnality Act (CEQA) compliance, permitting, and Construction Quality Assurance (CQA) in connection with the Project ("Services"). B. CONSULTANT has represented that it has the necessary professional expeltise, qualifications, and capability, and all required licenses andlor certifications to provide the Services. C. CITY in reliance on these representations desires to eng~ge CONSULTANT to provide the Services as more fully described in Exhibit "A", attached to and made a part ofthis Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, contained in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described in 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. SECTION 2. TERM. The term of this Agreement shall be fi'om the date of its full execution through completion of the services in accordance with the Schedule of Performance attached as Exhibit "B" unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is ofthe essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term ofthis Agreement and in accordance with the schedule set forth in Exhibit "BOO, attached to and made a pall 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. Professional Services Rev. June 2, 2010 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", including both payment for professional services and reimbursable expenses, shall not exceed one hundred ninety-three thousand seven hundred thiJteen dollars ($193,713). In the event Additional Services are authorized, the total compensation for services and reimbursable expenses shall not exceed two hundred thhteen thousand one hundred thirteen dollars ($213,113). The applicable rates and schedule of payment are set out in Exhibit "C", entitled "COMPENSATION," which is attached to and made a part of this . Agreement. 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 in 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 Exhibit "C"). 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 receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be perfOlmed 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 itselfinformed 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 ofthe 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 perfonnance of the Services. 2 C12143502_ GOLDER * PROF SERVICES Contract * 12.08.12.doc Professional Services Rev, Jtme 2, 2010 SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall COI1"ect, at no cost to CITY, any and all enors, omissions, or ambiguities in the work product submitted to CITY, provided CITY gives notice to CONSULTANT. If CONSUL TANT has prepared plans and specifications or other design documents to construct the Project, CONSULTANT shall be obligated to correct any and all errors, omissions or ambiguities discovered prior to and during the course of construction ofthe Project. This obligation shall survive termination of the Agreement. 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. Ifthe total estimated construction cost at any submittal exceeds ten percent (10%) of the CITY's stated construction budget, CONSULTANT shall make recommendations to the 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 the CITY. SECTION 11. ASSIGNMENT. The pmties agree that the expeltise 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 CONSUL TANT's obligations hereunder without the prior written consent ofthe city manager. 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. Notwithstanding Section I I above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: 1. Hargreaves Associates 2. TRA Environmental Sciences, Inc. 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 subconsnItants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANTwiIlassignRandall Wall as the project director to have supervisory responsibility for the performance, progress, and execution of the Services and Ken Haskell as the project manager to represent CONSULTANT during the day-to- day work on the Project. If circumstances cause the substitution of the project director, project manager, or any other key persollllel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement persormel will be subject to the prior written approval of the CITY's project manager. CONSULTANT, at CITY's request, shall promptly 3 C12143502_GOLDER ~ PROF SERVICES Contract -12.08.12.doc Professional Services Rev. June 2, 2010 remove personnel who CITY finds do not perfonn 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. The City's project manager is Ron Arp, Public Works Department, Environmental Services Division, P.O. Box 10250 Palo Alto, CA 94303, Telephone: 650-496-5930. The project manager will be CONSULTANT's point of contact with respect to performance, progress and execution of the Services. The 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. CONSUL TANTagrees 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 ofthe CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CITY acknowledges that its use of the work product is limited to the purposes contemplated by the scope of work and that the CONSULTANT makes no representation ofthe suitability ofthe 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 tln'ee (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) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnity, defend and hold harmless CITY, its Council members, officers, employees and agents (each an "Indemnified Party") fi'om 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 attorneys fees, experts fees, court costs and disbursements ("Claims") that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct ofthe CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in patt by an Indemnified Patty. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnity an Indemnified Patty fi'om Claims arising fi'om the 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. 4 C12143502~GOLDER-PROF SERVICES Contract -12.0S.12.doc Professional Services Rev. June 2, 2010 SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision ofthis Agreement, or ofthe provisions of any ordinance or law, wiII 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, shaIl obtain and maintain, in fuIl 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. AIl insurance coverage required hereunder shaIl 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 shaIl 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 wiII contain an endorsement stating that the insurance is primary coverage, to the extent any covered losses are caused by CONSULTANT's negligence and will not be canceled by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation, CONSULTANT shaIl be responsible for ensuring that current celiificates evidencing the insurance are provided to CITY's Purchasing Manager during the entire term ofthis Agreement. 18.4. The procuring of such required policy or policies of insurance wiII 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 tenninated 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 wiII immediately discontinue its performance of the Services. 19 .2. CONSULTANT may terminate this Agreement or suspend its perfOlmance 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. 5 C12143502_GOLDER -PROF SERVICES Contract -12.08.12.doc Professional Services Rev. June 2, 2010 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, ifany, 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, CONSUL TANTwill be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (Le., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or tenninated on account ofa 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 detelmination may be made by the City Manager acting in the reasonable exercise ofhislher 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 and the Project Manager To CONSULTANT: Attention ofthe project director at the address of CONSULTANT recited above 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 01' otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2 . CONSULTANT fiuther 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. Ifthe Project Manager determines that CONSULTANT is a "Consultant" as that tel'ln is defined by the Regulations of the Fair Political Practices COllllnission, CONSULTANT 6 C12143502_GOLDER-PROF SERVICES Contract-12.08.12,doc Professional Services Rev, June 2, 2010 shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Refornl Act. SECTION 22. NONDISCRIMINATION. As set forth iu 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 because ofthe race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, 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 penal,ties for violation thereof, and agrees to meet all requirements of Section ' 2.3 0.51 0 pertaining to nondiscrimination in employment. SECTION23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REOUIREMENTS. CONSULTANT shall comply with the City's Environmentally Preferred Purchasing policies which are available at the 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 the 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: • 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, shaH be double-sided and printed on a mininlUm oDO% or greater post-consumer content paper, unless otherwise approved by the City's Project Manager. Any submitted materials printed by a professional printing company shall be a minimum oDO% or greater post-consumer material and printed with vegetable based inks, • Goods purchased by Consultant on behalf of the City shall be purchased in accordance with the 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 Office. • Reusable/returnable pallets shaH be taken back by the Consultant, at no additional cost to the City, for reuse or recycling. Consultant shall provide documentation ii'om the facility accepting the pallets to verifY that paHets are not being disposed. SECTION 24. NON-APPROPRIATION 24.1. This Agreement is subject to the fiscal provisions ofthe Chmiel' ofthe City of Palo Alto aIld 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 pOliion of the fiscal year and funds for this Agreement are no longer available. This section shaH take precedence in the event of a conflict with any other covenant, term, condition, or provision ofthis Agreement. SECTION 25. MISCELLANEOUS PROVISIONS. 7 C12143502~GOLDER ~ PROF SERVICES COl1tract~ 12.08.12.doc Professional Services Rev. June 2, 2010 25.1. This Agreement will be governed by the laws of the State of California. 25.2. 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 Califomia in the County of Santa Clara, State of Califomia. 25.3. 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 of legal services provided by attorneys employed by it as well as any attorneys' fees paid to third parties. 25.4. 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 patties. 25.5. The covenants, telms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants ofthe parties. 25.6. 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 theryto will remain in full force and effect. 25.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, fi'om 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 palt of this Agreement. 25.8 If, pursuant to this contract with CONSULTANT, City shares with CONSULTANT personal infOlmation 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 plllposes without City's express written consent. 1/ II 1/ 25.9 All unchecked boxes do not apply to this agreement. 25.1 0 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf oftheir respective legal entities. 8 C12143502_GOLDER-PROF SERVICES Contract-12.08.l2.doc Professional Services Rev. June 2, 2010 IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date fITst above written. CITY OF PALO ALTO GOLDER ASSOCIATES, INC. City Manager BY:6~ APPROVED AS TO FORM: Name: ){,(l1tte"A r: A.SlteJ/ Title: Dbnqa/,&ee -/1y~-j Senior Ass!. City Attorney Attachments: EXHIBIT "A": EXHIBIT "B": EXHIBIT "C": EXIDBIT "C-I": EXIDBIT "D": SCOPE OF WORK SCHEDULE OF PERFORMANCE COMPENSATION SCHEDULE OF RATES INSURANCE REQUIREMENTS 9 C12143502_GOLDER-PROF SERVICES COlltract-12.0S,]2,doc Professiona1 Services Rev. June 2,2010 BACKGROUND EXHIBIT "A" SCOPE OF SERVICES The Palo Alto Landfill (P ALF) is an unlined, Class III municipal solid waste landfill. The landfill is approximately 126 acres, of which approximately 76 acres have been filled to grade and closed in accordance with the relevant closure regulations. Closure activities to date occUlTed in three construction phases (Phases I, IIA, and IIB) between 1991 and 2000. Closure construction for the remaining approximately 50 acres (phase IIC) is scheduled for 2012. After closure, the landfill is being developed as a public park, which is referred to as Byxbee Park. The initial phase of Byxbee Park, encompassing the 29-acre Phase I closure area, was completed in 1991. The Phase lIA and IIB portions of the park were opened to public access in 2011. The City has been accepting clean fill soil and stockpiling these soils for use in the final closure covel'. These soils are being stockpiled on a portion of Phase lIC and along the western pOltion of Phase lIB. The City anticipates that all soil required for closure will be imported by the stmi of closure construction. The scope of work for this Phase lIC closure project involves the preparation of construction plans and specifications for the closure cap, geotechnical and enviromnental investigation ofthe former cogeneration facility area (Coge,n Area), environmental review in conformance with the California Enviromnental Quality Act (CEQA), construction and bid support, and construction quality assurance (CQA) monitoring. Golder Associates, Inc. previously prepared the recent ' Facility Closure and Post-closure Monitoring Plan (FCPMP) that addressed the design and construction ofthe closure cover and improvements to the landfill gas (LFG) and leachate controls. The LFG and leachate control improvements have since been completed as a sepm'ate project in 2011. WORK PLAN SUMMARY The major components of the project include: • Preparation of the final construction plans and specifications for Phase lIC closure will include updating the existing site topography and final grades for closure, updating the plans to show the location ofthe soil stockpile locations, revising the Phase lICIIIB closure tie-in to reflect the cUlTent Phase IIB grades that are several feet higher than when the FCPMP was prepared in 2008, and updating the plans to reflect the LFG and leachate system improvements that have already been completed. • The site air compressor is currently located in the Cogen Area, which is sUlTounded by screening berms. The City believes that a low-permeability soil cover was constructed underneath the Cogen Area based on construction plans that were prepared at the time of construction. The intent was to construct the cogeneration facility on a closed portion of the landfill. However, the City does not have any documentation for the low- penneability soil layer construction, and the regulatory agencies likely have not reviewed 10 C12143502_GOLDER ~ PROF SERVICES Contract-12.0S.12.doc Professional Services Rev. June 2, 2010 nor provided approval ofthis small closure area. A pOltion of this project involves investigating and characterizing the extent and quality of the low-pelmeability soil to see ifit can be ceJtified as closed in compliance with applicable regulations and the FCPMP. • Support will be provided during bidding and construction to address bidder and contractor's technical questions and/or design conflicts that may arise during construction. • The consultant will provide construction quality assurance oversight and prepare a CQA RepOlt to gain regulatory approval of the Phase IICc!osure. The Golder Project Team will apply its extensive site knowledge to cost-effectively prepare the Phase lIC Closme Design and Documentation. TASK DETAILS TASK 1-COGEN AREA CAP CERTIFICATION Task I consists ofthe investigation ofthe existing final cover under the Cogen Area, and assuming favorable cap conditions are confirmed, preparing a letter celtifYing that the existing cap complies with applicable requirements of Title 27 of the California Code of Regulations. The focus ofthis task will be to identifY the thickness and extent ofthe various soil types, and to assess the permeability ofthe low-permeability soil cover. Specifically, certification requires confirmation of the following: • The existence of a minimum 2-foot thick foundation layer • The foundation layer is compacted to a minimum relative compaction of 90 percent • The existence of a minimum I-foot thick low-permeability soil layer with a permeability less than or equal to 1 x10-6 centimeters per second (om/s) • The low-permeability layer is compacted to a minimum relative compaction of 90 percent We propose excavating a series of6 to 8 test pits to define the lateral extent and thickness of the various soil types. The City will provide a backhoe and operator for the test pits. Based on the size of the Cogen Area, we anticipate that the volumes ofthe foundation layer and the low-permeability soil layer are each less than 1,000 cubic yards (cy). In accordance with the CQA plan prepared by Golder for Phase lIC and testing frequencies typicallY accepted by Cal Recycle and the R WQCB, we propose to obtain samples using Shelby tubes and drive samples in accordance with American Society for Testing and Materials Test Method D2937 (ASTM D2937) and to perform the following tests: • Up to four samples of the foundation layer tomeasme in-situ density per ASTM D2937 and moisture (minimum frequency of I test per 250 cy) • One Modified Proctor test each per ASTM DI557 for the foundation layer and low- 11 C12143502_GOLDER-PROF SERVICES Contract-12.0S.12.doc Professional Services Rev. June 2, 2010 '"':: permeability soil layer • Up to four samples of the low-permeability soil layer to measure in-situ density per ASTM D2937 and moisture (minimum frequency of 1 test per 250 cy) • One sample of the low-permeability soil layer to measure permeability per ASTM D5084 • Up to four samples of the low-permeability soil layer to measure Atterberg Limits per ASTM D4318 and grain-size distribution per ASTM D422 Although Atterberg Limits and grain-size distribution tests are typically performed at a fi'equency of 1 test per 1,500 cy for the low-permeability soil layer, we propose four samples to demonstrate consistency of material properties and to assist with cOlTelation of the soil permeability to the in-situ material properties. Before proceeding with the field investigation and testing, we will submit the proposed sampling and testing plan to the R WQCB for review and approval. Following completion ofthe field investigation and testing, Golder will provide a draft certification letter electronically (PDF format) for the City's review. Following receipt of any City comments, Golder will finalize the certification letter. The final celtification letter will be submitted to the RWQCB. For cost estimating purposes, we have assumed the RWQCB will approved the field investigation and testing program, described above, and that the final cover in the Cogen Area will be detelTllined to be consistent with Title 27 requirements. TASK 2 -PREPARE FINAL CLOSURE PLANS AND SPECIFICATIONS Golder will update the final closure plans, specifications, CQA Plan, bid schedule, and engineer's cost estimate under Task 2. The latest version of the FCPMP shows a geomembrane cover as an engineered alternative design to the prescriptive final cover, but includes language to allow the use of the prescriptive cover in the event an economical source of suitable low- permeability soil is identified for the Phase lIC closure. Golder will revisit this aspect of the design with the City to determine the best approach for the final cover. Assuming that a geomembrane final cover is the preferred approach, we will contact geomembrane manufacturers to determine the approximate lead time for geomembrane manufacture and delivery. We will also outline the advantages and disadvantages of the City pre-ordering the geomembrane and providing the geomembrane to the closure contractor. If it is determined that pre-ordering the geomembrane is the best approach to meeting the time schedule presented in the RFP, Golder will prepare separate geomembrane material specifications and provide the City the estimated quantity of geomembrane required for closure. For cost estimating purposes, we have assumed that the City will not pre-order the geomembrane. As requested in the RFP, we will prepare a remote monitoring plan for the LFG and leachate wells. The remote monitoring plan will include: • Site plan(s) showing the installation of the required power wiring and signal cables from Professional Services Rev. JtUle 2, 2010 12 C12143502_GOLDER * PROF SERVICES Contract * 12.0S.12.doc each monitoring location to the Cogen Area • A conceptnal design of the required remote monitoring instrumentation and central SCADA processor hardware and software for the City-requested monitoring parameters and locations • Preliminary budgetmy cost estimates for implementing and operating the complete remote monitoring system as presented in the City-approved conceptnal design The following elements are assumed to be included in the remote monitoring plan: • Methane concentration and pressure (vacuum) for LFG wells • Water level and pump discharge flow metering for leachate wells • Integration of LFG flow, system vacuum, and blower speed data from the LFG flare station (expected to be rebid in spring 2012) At a minimum, the site electrical and communication network plan will be included as an add- alternate bid item for the closure construction. For the final closure plans, the drawings prepared as part of the FCPMP will be updated to address the following: • Updated topography (using the latest site topographic map) • Show the location ofthe City's stockpiled soils • Cover system tie-in at the Phase IICIIIB boundary. The Phase IIC grades are now several feet higher than the Phase lID low-permeability soil layer. We propose to show a minimum horizontal overlap between the Phase IIC geomembrane and Phase lID low- permeability soil liner, but not requiring the geomembrane to directly contact the low- permeability soil, which would otherwise require expensive soil excavation. • Include rip-rap erosion control where stonnwater is concentrated on the south side of the landfill • Incorporation of the existing Cogen Area Cap as appropriate per the results of Task 1 • Show the updated leachate and landfill gas control system that are currently in place • Show the general arrangement with remote monitoring stations, wiring requirements, communications network diagram, and one-line power diagram The technical specifications and CQA Plan will be updated to address the following: • Updated specifications to address stormwater and erosion controls • Revisit the maximum particle size and screening requirements for the foundation layer and vegetative soil cover. Soil that the City has imported contains rocks and other debris that could damage the geomembrane, and therefore it is expected to require some level of screening. Soil screening adds cost to the project and the requirements need to be carefully considered. • Construction sequencing including specifYing limits for the time and number of leachate and landfill gas wells that can be temporarily taken out of service to facilitate construction of the cover. • Performance specification for selected remote monitoring system 13 C12143502_GOLDER-PROF SERVICES Contract-12.08.12.doc Professional Services Rev. Jlll1e 2, 2010 • Update the CQA Plan to reflect our proposed CQA approach discussed in Task 6. As part of this task, Golder will also complete the following: • Prepare a written scope of work for the contractor that describes the work necessary for the construction project • Update bid quantities and prepare a detailed bid schedule • Prepare an updated engineer's cost estimate Golder will provide a draft copy each of the deliverable work products electronically (PDF format) for the City's review. Following receipt of any City comments, Golder wiII finalize the various deliverables and issue one hard copy and one electronic copy. The deliverables for this task consist of the following: • Construction plans (34"x22") • Remote Monitoring Plan • Technical Specifications • CQAPlan • Contractor Scope of Work • Bid Schedule and Quantities • Engineer's Cost Estimate TASK 3 -FACILITY CLOSURE SAMPLING AND ANALYSES Task 3 consists of verifYing whether a hazardous-materials release has occurred at the Recycling Center or the Cogen Area, and if so, determining the nature and extent of the release so that appropriate corrective action can be taken by the City before the site is capped. Golder performed a Phase IlPhase II enviromnental site assessment at the Cogen Area in late 2002 and submitted the report in 2003. We concluded that less than 20 square feet of shallow soils were impacted by petroleum hydrocarbons and metals. In 2009, Golder performed an enviromnental assessment at the Recycling Center for soil impacts that may have resulted from temporary storage of recycled hazardous and universal wastes. We concluded that impacts were limited to petroleum hydrocarbons in two small areas where used motor oil had been stored. Based on Golder's knowledge of site conditions at the Recycl ing Center and Cogen Area, we believe that a limited assessment of the nature and extent of soil impacts is appropriate to confiml conditions and develop cost-efficient corrective action. After reviewing available documents, Golder will prepare a sampling and analysis plan for each facility, seek City approval, implement the plan, and prepare cleanup recommendations that are appropriate for the protection of human health and the environment. The recommendations may vary from no action to removal of contaminated soils. Appropriate cleanup goals wiII be based on regulatory criteria such as Enviromncntal Screening Levels (ESLs) established by the San Francisco RWQCB or Regional Screening Levels (RSLs) established by the US Environmental Protection Agency. After corrective actions are complete, Golder will prepare a summary repOlt suitable for submittal to regulatory agencies to support the implemented corrective action. 14 C12143502~GOLDER-PROF SERVICES Contract-12.0S.12.doc Professional Services Rev. June 2, 2010 TASK 4 -ENVIRONMENTAL REVIEW During this task, TRA Environmental Services (TRA) will prepare an Initial Study (IS) Checklist according to Appendix G of the State CEQA Guidelines (Title 14, Section 15000 et seq of the California Code of Regulations) to assess the potential environmental effects of constructing the closure cap. The IS will follow the format specified in the CEQA Guidelines, which includes a detailed project description with suppOlting maps, photos, and figures, a description ofthe envirorunental setting ofthe proposed site, complete responses to each Initial Study Checklist question with a clear statement as to the level of impact (less than significant or significant) and, where necessary, measures to mitigate potentially significant effects. Construction of the closure cap involves the spreading and compacting ofsoi!, geomembrane, and vegetative soil over the surface of the landfill. The ISIMND will reference appropriate infOlmation fi'om the FCPMP, Bay lands Master Plan, and Byxbee Park Master Plan. The closure of Phase lIC of the landfiIl is guided by a number of permit and regulatory documents, as well as the Baylands Master Plan and Byxbee Park Master Plan. The landfill is the focus of a host of complex land use issues, which will be thoroughly described in the ISIMND. The closure of Phase HC of the landfill and its conversion to non-irrigated pastoral park is consistent with existing land use plans for the area. The anticipated impacts of these proposed activities are related to aesthetics, temporary air quality/greenhouse gas emissions during construction, and water quality impacts. These impacts are considered minor and can be mitigated to a less-than-significant level, therefore the anticipated level of CEQA documentation would be a Mitigated Negative Declaration (MND). TRA will conduct a kick-off meeting with City staff and conduct a site visit to evaluate the on- site conditions and take representative site photos to develop a detailed project description. Any remaining questions wiII be posed through a data request to the City. Once all the questions are answered, a complete project description will be prepared then reviewed for technical accuracy with the City. TRA wiII then proceed with responding to the Checklist questions. Once completed, the entire document wiII be submitted to the City for administrative review. Any comments or edits will be incorporated into a public review ISIMND and then circulated to the public for 30 days. As a cost saving measure, we assume that TRA wiII provide the City with an electronic version of the administrative draft and public review version of the IS/MND and that the City will make any paper copies of the public review version of the document. It is TRA's understanding that the traffic associated with the closure construction wiII not exceed the traffic levels currently allowed under the existing solid waste facility permit, which is 475 trips per day. If, at a later date, a traffic study does become necessary, TRA wiII contract with Hexagon Transportation Consultants (San Jose) to prepare a traffic repOlt. Mitigation Monitoring and RepOlting Plan After closure of the public review period for the CEQA document, TRA wiII provide the City with an electronic version of the Mitigation Monitoring and Reporting Plan (MMRP). CEQA Notices and Public Noticing C12143502_GOLDER-PROF SERVICES Contract-12.0S.12.doc 15 Professional Services Rev. J1U1e 2, 2010 TRA will prepare a Notice of Completion and Notice of Determination and provide the City with an electronic version of each notice. TRA assumes that the City will conduct the legal noticing required under CEQA and mail the required number of documents to the State Clearinghouse. Meetings and Hearings For cost estimating purposes, we have assumed attendance by the TRA Project Manager and Senior Analyst at one meeting with City staff (2 hours), one Planning and Transportation Commission meeting (4 hours for each staff person) and one City Council meeting (4 hours for each staff person). We can attend additional meetings at the request of the City on a time and materials basis. TASK 5 -CONSTRUCTION AND BID SUPPORT Golder will provide construction and bid support as follows: • Attend one Pre-Bid Meeting. Our design Engineer-of-Record and CQA Engineer-of- Record will attend this meeting. Golder will record the meeting minutes and transmit the minutes to the City for review. • Attend one Pre-Construction Meeting. Our CQA Engineer-of-Record will attend this meeting and record the meeting minutes. The minutes will be transmitted to the City for review. • Attend weekly Construction Meetings. Our CQA Engineer-of-Record will attend up to 12 weekly construction meetings. For each meeting, we will record the meeting minutes, which will be transmitted to the City for review. • Provide responses to technical Requests for Information (RFI's) and contractor submittals. Based on our experience with similar projects, we have budgeted 40 hours of staff time to review contractor submittals and address technical issues in RFI' s submitted by the contractor. TASK 6 -CONSTRUCTION QUALITY ASSURANCE Task 6 consists of providing CQA oversight and preparation ofa CQA Report at the completion of the Phase HC closure construction. We have outlined our general approach and specific task elements below. General Approach For past closure projects, the City has had the construction contractors hire a firm to complete the construction quality assurance testing and then the City compiled the testing and observation data and prepared a CQA Report. The City's past approach to CQA follows what Golder refers to as the "Federal Approach," in which most of the field and laboratory testing and observations are completed by the contractor's subcontracted testing firm. The CQA Engineer-of-Record's role is then to provide oversight to check that the tests are being completed correctly, including completing side-by-side test comparisons, verifying the minimum testing frequencies are being met, and the observation and documentation requirements ofthe CQA Plan are being fulfilled. 16 C12143502_GOLDER· PROF SERVICES Contract-12.0S.12.doc Professional Services Rev. June 2, 2010 In contrast, "Owner Retained QC/QA Approach" differs in that the majority ofthe field and laboratory CQA testing is completed by a firm retained by the owner. This approach is more commonly used for landfills that are constructed or closed in California. This approach puts more distance and independence between the firm performing the field and laboratory testing and the contractor. Golder has extensive experience in providing CQA services under both approaches. In fact, this past summer, Golder provided CQA services for closures at the Pacheco Pass Landfill (Gilroy) and Pescadero Landfill (San Mateo County) using the Owner Retained QC/QA Approach. We were also the CQA Engineer-of-Record using the Federal Approach for a closure located on U.S. Forest Service lands in Tuolumne County, California. We also provided CQA field testing and observation service to a general contractor for a project that involved capping waste materials with a geomembrane cover on a Superfund site near Redding, California. The advantage of the "Federal Approach" is that it can be cost-effective and provides fewer potential conflicts between the firm providing the CQA testing and the contractor. The disadvantage is that the contractors solicit bids for CQA testing firms and typically select one on the basis of cost and not qualifications. Therefore, the CQA testing film sometimes has marginal qualifications to perform the work. For these cases, the CQA Engineer-of-Record often needs to increase on-site oversight, which can offset any cost savings provided by having the contractor retain the CQA testing firm. For this project, Golder proposes using a "modified Federal Approach" in which the contractor retains a CQA testing firm to perform the routine soils testing and observation. There are numerous local firms that are qualified to do this work. Golder will then provide testing and observation services for specialized items, such as the geomembrane cover. As part ofthe CQA Plan, Golder will include minimum experience requirements for the CQA testing finn and clearly define the roles ofthe CQA Engineer and CQA testing firm. We believe this will approach provide the City with the optimum balance between cost effectiveness and quality. CQA Oversight Golder proposes to implement the above "Federal Approach" for the routine earthworks QAlQC inspection and testing to ensure that the City gets the most cost-effective QAlQC services. Golder wiII provide field QAlQC inspection and testing for the geomembrane and geocomposite, which involves a specialty inspection service that is provided by only a limited number of companies in the Bay Area. All QAlQC inspection and testing wiII be completed under the oversight by Golder's CQA Engineer-of-Record to confirm that inspection and testing protocols are being properly implemented including verification of test methods and test frequencies. Golder anticipates that the closure construction will take approxinmtely 12 to 16 weeks to complete. We anticipate that Golder's active involvement, using the QAlQC approach described above, wiII be 12 weeks. We anticipate that the geomembrane and geocomposite will take approximately 6 weeks to complete assuming the geosynthetics installer works 6 days per week. Golder's CQA Engineer-of-Record wiII coordinate with the contractor's QAlQC testing firm and Golder's field technician to ensure that the following data is recorded: 17 C12143502_GOLDER-PROF SERVICES Contract-12.08.12.doc Professional Services Rev, June 2, 2010 • A daily field report describing the work completed and any construction conflicts or non- compliance issues and their status and/or resolution • Weather conditions including impacts to construction progress (i.e. high winds dming geomembrane deployment or precipitation) • Document that the contractor's construction methods comply with the plans and specifications including construction sequencing for the landfill gas and leachate controls • Document that the materials used comply with the plans and specifications • The location and results of all field and laboratOlY testing • Representative construction photographs At the completion of the construction project, Golder will prepare a CQA Celiification RepOli that summarizes the following: • Summarize the work performed by the prime contractor and its subcontractors, including the dates that various components of the closure was completed • Summarize the roles of the contractor's firm and Golder's CQA team in providing overall QNQC services. • Docnment design changes or clarifications • Document the location and results of all field and laboratory testing • Document the construction methods and materials used by the Contractor • Provide representative construction photographs • Provide a certification statement that closure construction was completed in accordance with the plans, specifications, CQA Plan and applicable requirements of Title 27 of the California Code of Regulations. Golder will provide a draft CQA Report electronically (PDF format) for the City's review. Following receipt of any City connnents, Golder will finalize the report and issue four hard copies and one electronic copy. PROPOSED INNOVATIONS For this project, Golder offers the City a number of innovations and unique knowledge that we believe will result in cost savings. Specific innovations include: • Our CQA approach provides the best combination of using a "Federal Approach" and "Owner Retained Approach" to ensure the City gets the best combination of value and quality of construction • Om involvement in the sampling and testing for the closure of the Recycling Center area and Cogen Area ensures that we can complete this work cost effectively and provide the City with substantial cost savings. We anticipate that this work can be completed significantly less than $20,000 budget specified in the RFP. 18 C12143502_ GOLDER-PROF SERVICES Contract -12.08.12.doc Professional Services Rev. JWle2, 2010 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 ofthe Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt ofthe notice to proceed. Milestones 1. TASK 1 -Cogen Area Cap Certification 2. TASK 2 -Prepare Final Closure Plan & Specifications 3. TASK 3 -Facility Closure Sampling & Analysis 4. TASK 4 -Environmental Review 5. TASK 5 -Construction & Bid Support 6. TASK 6 -Construction Quality Assurance 19 C12143502_GOLDER-PROF SERVICES Contract-12.08.12.doc Completion No. of Days FromNTP 90 75 90 160 220 400 Professional Services Rev. June 2, 2010 EXHIBIT "C" COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the telms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-l up to the not to exceed budget amount for each task set forth below. The compensation to be paid to CONSULTANT under this Agreement for all services described in Exhibit "A" ("Basic Services") and reimbursable expenses shall not exceed $371,289. CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event CITY authorizes any Additional Services, the maximum compensation shall not exceed $408,389. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set f0l1h herein shall be at no cost to the CITY. 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, does not exceed $371,289 and the total compensation for Additional Services does not exceed $37,100. BUDGET SCHEDULE Task 1 (Cogen Area Cap Certification) Task 2 (prepare Final Closure Plans & Specifications) Task 3 (Facility Closure Sampling & Analysis) Task 4 (Environmental Review) Task 5 (Construction & Bid Supp0l1) Task 6 (Construction Quality Assurance) Sub-total Basic Services: Reimbursable Expenses: NOT TO EXCEED AMOUNT $7,253 $40,312 $20,000 $2,111 $21,745 $63,833 $155,254 Total Basic Services and Reimbursable expenses: $193,713 $19,400 Additional Services (Not to Exceed): Maximum Total Compensation: $213,113 21 C12143502_GOLDER-PROF SERVICES Contract-J2.0S.12.rloc REIMBURSABLES $2,619 $400 $0 $20,950 $200 $14,290 $38,459 Professional Services Rev. June 2, 2010 REUWBURSABLEEXPENSES The administrative, overhead, secretarial time 01' secretarial oveltime, word processing, photocopying, in-house printing, insurance and other ordinaIY business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost plus 10% and as budgeted in the table above: A. Subconsultant fees. B. LaboratOlY testing Expenses for which CONSULTANT shall be reimbursed at cost are: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto's policy for reimbursement oftravel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup infOimation. Any expense anticipated to be more than budgeted shall be approved in advance by the CITY's project manager. 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 reimbnrsable expense, for such services based on the rates set forth in Exhibit C-l. 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 subjectto 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: • Additional testing requirements for the existing clay cap material under the Cogen Area. e Design and phasing for a cap beneath the Cogen Area if the existing clay material beneath it cannot be certified as described under Task I. • Assistance with a separate procurement for geomebrane material if necessmy due to manufacturer's availability. • A traffic study for CEQA Environmental Review. 21 C12143502_GOLDER* PROF SERVICES Contract * 12.08.12.doc Professional Services Rev. June 2, 2010 EXHIBIT "C-I" HOURLY RATE SCHEDULE Labor Category Sr. Executive 2011 Fee Schedule Golder Associates Inc. Sr. Practice/Program Leader Practice/Program Leader Senior Consultant Senior Engineer/Scientist Sr. Project Engineer/Scientist Project Engineer/Scientist Staff Engineer/Scientist Engineer/Scientist Senior Technician Staff Technician Technician Senior Drafter/CADD Technician Staff Drafter/CADD Technician Drafter/CADD Technician Senior Admin Support Staff Admin Support Admin Support Notes: Level 9 8 7 6 5 4 3 2 1 LT3 LT2 LT1 LD3 LD2 LS1 LA3 LA2 LA1 1 _ Standard rates are increased by 1.5 times for legal services and by 2.0 times for depositions, testimony, and court time. Expenses Category Subconsultants Other Indirect Costs C12143502_ GOLDER -PROF SERVICES Contract H 12.08.12.doc 24 Rate $275 $240 $230 $200 $182 $149 $125 $98 $89 $104 $98 $69 $95 $83 $72 $95 $78 $69 Fee Cost + 10% Cost + 10% Professional Services Rev June 2, 2010 EXHIBIT "D" INSURANCE REQIDREMENTS 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 WITHAM BEST'S KEY UATING OF A-: VII, OUlIlGHER, LICENSED OUAUTHOruzEDTO TnANSACTINSUUANCE BUSINESS IN TIlE STATE OF CALIFORNIA. A WARD IS CONTINGENT ON COMPLIANCE WITH CITY'S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW, MINIMUr-t LIMITS REQUIRED TYPE OF COVERAGE REQUIREMENT YES YES YES YEO YES YES EACH AGGREGATE OCCURRENCE WORKER'S COMPENSATION STATUTORY EMPLOYER'S LIABILITY STATUTORY BODILY INJURY $1,000,000 11,000,000 GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE $1,000,000 $1,000,000 PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL BODILY INJURY & PROPERTY DAMAGE $1,000,000 11,000,000 LIABILITY COMBINED, BODILY INJURY $1,000,000 $1,000,000 -EACH PERSON $1,000,000 11,000,000 -EACH OCCURRENCE $1,000,000 $1,000,000 AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, lllRED, NON-OWNED PROPERTY DAMAGE $1,000,000 $1,000,000 BODILY INJURY AND PROPERTY $1,000,000 $1,000,000 DAMAGE, COMBINED PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WIlEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 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 THROUGEOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURlNGNOT ONLY CONTRACTORAND ITS SUB CONSULT ANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS' COMPENSATION, EMPLOYER'S LIABILITY AND PROFESSIONAL INSUUANCE, NAMING AS ADDITIONAL INSUREDS CITY, rrs COUNCIL ME~mEUS, OFFICEUS, AGENTS, AND EMPLOYEES, l. INSURANCE COVERAGE MUST INCLUDE: A, A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT ON THE COMMERCIAL GENERAL LIABILITY POLICY PROVIDING INSURANCE COVERAGE FOR CONTRACTOR'S AGREEMENT TO INDEMNIFY CITY, C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY'S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIPICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE, m. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSU!<ANCE AFFORDED TO "ADDITIONAl. INSUREDSH A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY WITH RESPECT TO CLAIMS ARISING OUT OF THE CONSULTANT'S NEGLIGENCE AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS, 25 C12143502_ GOLDER -PROF SERVICES Contract· 12.0S.12.doc Professional Services Rev June 2, 2010 B. CROSS LIABILITY (APPLIES TO COMMERICAL GENERAL LIABILITY POLICY ONLY) 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 COMFANYUNDER THIS POLICY. C. NOTICE OF CANCELLATION I. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FORANYREASON OTHER THAN THE NON·PAYMENT OF PREMIUM, THEISSUINGCOMFANY 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·PA YMENT OF PREMIUM, THE ISSUING COMFANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTNE DATE OF CANCELLATION. NOTICES SHALL BE MAILED TO: PURCHASING AND CONTRACT ADMINISTRATION CITY OF PALO ALTO P.O. BOX 10250 PALO ALTO, CA 94303 26 C12143502_GOLDER ~ PROF SERVICES Contract~ 12.0S.12.doc Professional Services Rev June2, 2010 City of Palo Alto Composting Facility Short Term Estimated Cost For Managing Palo Alto Yard Trimmings During 2012 Equipment Costs Equipment ID Model Year Description Meter (11 months) Meter Annualized Meter Units Parts and Labor 11 months Parts and Labor Annualized Sublet 11 months Sublet Annualized Fuel 11 months Fuel Annualized Combined Annualized Total 1.09 1.09 1.09 1.09 4218 2000 Freightliner FL80 Fuel Truck 392 428 miles $6,165.56 $6,726.07 $448.42 $489.19 $775.15 $845.62 $8,060.87 4225 2005 Peterbilt 365 Water Truck 2841 3,099 miles $8,256.87 $9,007.49 $2,482.42 $2,708.09 $4,960.35 $5,411.29 $17,126.88 4229 1992 Ford LNT-8000 Water Truck 208 227 miles $2,383.88 $2,600.60 $155.55 $169.69 $120.01 $130.92 $2,901.21 4304 2001 Morbark 5600 Wood Grinder *386 545 hours $79,796.27 $79,796.27 $6,124.89 $8,646.90 $26,586.14 $37,533.37 $125,976.55 4305 2007 Phoenix Powerscreen 732 799 hours $11,346.15 $12,377.62 $1,356.05 $1,479.33 $12,109.54 $13,210.41 $27,067.35 4324 2006 Caterpillar 966G Loader 1030 1,124 hours $25,469.31 $27,784.70 $7,388.29 $8,059.95 $18,694.84 $20,394.37 $56,239.03 4326 2008 Caterpillar 950H Loader 732 799 hours $11,346.15 $12,377.62 $1,356.15 $1,479.44 $12,109.54 $13,210.41 $27,067.46 $150,670.36 $23,032.59 $90,736.39 $264,439.34 Notes Sublet costs are commercial charges. These costs include commercial tire service, machine shop work, hydraulic cylinder rebuilding, fire suppression system service, etc *Grinder Operated 8.5 months. All annualized grinder costs except Parts and Labor are based on 12/8.5. Conducted major repair on bell housing in early 2011. Grinder Rental Costs Rental Grinder Number of events Mobilization Costs per event Annual Total Mobilization Number of Days Onsite Hours Per Day Rental Cost per hour Annual Operating Costs Fuel Costs per Hour Annual Fuel Costs Total Annual Costs Contract #S11137500 4 800.00$ 3,200.00$ 16 8 300.00$ 38,400.00$ $68.88 $8,816.13 50,416.13$ Labor Costs Class. Number Number of Staff Description Hourly Wage Annual Salary Benefits @ 60.03% Combined Salary and Benefits Overtime Total Annual Salary & OT Total Staff 0.603 390 2 Heavy Equipment Operator 33.05$ 68,744.00$ 41,452.63$ 110,196.63$ 9,915.00$ 120,111.63$ 240,223.26$ Hourly 1 Maintenance Assistant 18.72$ 7,787.52$ 4,695.87$ 12,483.39$ N/A N/A 12,483.39$ Notes 252,706.66$ Assume 8 hours per week picking litter Lab Tests 7 per year 200.00$ 1,400.00$ Annual Cost Reclaimed Water 1,000.00$ Annual Cost Trash Bin 2 cy bin serviced weekly 4,132.00$ Annual Cost Solid Waste Facility Permit 13,722.00$ Annual Cost 20,254.00$ Compost Sales Assume Broker 50,000.00$ Annual Revenue Total Cost Per Month $48,984.68 Revenue Per Month (4,166.67)$ Net Cost Per Month $44,818.01 Sunnyvale SMaRT Station Short Term Estimated Cost for Managing Palo Alto Yard Trimmings During 2012 FY 2011 SMaRT Station Tip Fee per ton:$30.23 Tons Yard Trimmings FY 2011 FY 2010 GreenWaste Yard Trimmings to PA Landfill 12,800 12,185 GreenWaste Yard Trimmings to SMaRT Station 1,105 391 City Crews Yard Trimmings to PA Landfill 2,461 2,700 City Contractors Yard Trimmings to PA Landfill 1,394 1,450 Total Tons Yard Trimmings:17,760 16,726 Total Tip Fee Costs Per Month at FY 2011 Tip Fee:$44,740 $42,136 ClIY OF PALO ALTt),CA CITY CLERK'S @FftGE Mayor Yeh and Members of the Oty Council: February 1, 2012 12 fEB -I AM 8: 3 ~ I have not yet seen the staff report for the Measure E follow-up item on your agenda Monday. I understand, however, that Staff is recommending continuing the windrow composting for some indefinite period. It is unlawful to continue this non-park use. Windrow Composting is not a permitted park use and was only ancillary to the landfilling that was justified as II shaping the park". There is no justification for continuing the windrow composting operation on Byxbee Park. The windrow compost operation is not shaping the park and ample compost has been stockpiled for the vegetative cover. Windrow compost:i.1:Jg may not continue on the 10 acre site by the very terms of thg Initiative. Measure E did not in any way speak to windrow composting, but rather only facilities that would convert organics to compost AND green energy and specifically Dry Anaerobic Digestion. Windrow composting does not create any green energy. Nor is windrow composting "fully enclosed" as proponents assured voters. Measure E proponents repeatedly assured the voting public that the 10-acre site was "exclusively" for a facility to convert organics to green energy. (?ee attachment A) Continuing the windrow composting is costly. Staff has ignored capital costs and rent in their most recent cost calculations. They "say" that if any machinery breaks down, they will return to Council for spending guidance. That's a false assurance, since most of the equipment repairs have been done within the City Manager's authorization. Sooner or later, the cost will be borne by the ratepayers. None of the 51 remaining unopened acres of Byxbee Park have been capped, so continuing the windrow composting will interfere with the serious matter of final closure of the landfill and necessitate expensive migration of the windrows from one area to another in order to complete the capping. Continuing windrow composting has no justification, is illegal and costly. Sincerely, 6/;;/·~ Emily M. Renzel, Coordinator Baylands Conservation Committee 1056 Forest Avenue Palo Alto, CA 94301