Colton City Council
February 3, 2026

5 (vii) the Monthly PPA Payment;
(viii) the “Monthly PPA Invoice Payment Date”, which shall be the last Business Day on which payment on such Monthly PPA Invoice may be made before any incremental interest arises thereon or any default or breach arises under the relevant Purchaser Assigned PPA;
(ix) the “Custodial Agreement Payment Date,” which shall be one Business Day preceding such Monthly PPA Invoice Payment Date; and
(x) the PPA Shortfall Lookback Summary;
provided that Participant shall deliver an updated Monthly Statement in respect of such Monthly PPA Invoice within seven days following agreement by Participant and the applicable PPA Seller to an adjustment to such Monthly PPA Invoice to the extent that such adjustment is agreed upon prior to the date that is 10 days prior to such Monthly PPA Invoice Date; provided furthermore that the Parties acknowledge and agree that any adjustments agreed upon with respect to a Monthly PPA Invoice after the date specified in the foregoing prov ision shall be resolved solely between Participant and the relevant PPA Seller as provided in the Assignment Agreements. (b) Monthly Statement Verification. J. Aron shall notify Participant and the Custodian promptly, but in no event more than three (3) Business Days, following Participant’s delivery of a Monthly Statement if J. Aron believes any information included on such Monthly Statement is incorrect. Following receipt and verification of the information included in any such notice from J. Aron , Participant shall, to the extent appropriate and in consultation with J. Aron , issue a corrected Monthly Statement to all Parties. Each Party hereto acknowledges and agrees that ( i) Participant is calculating th e Monthly Statement s only for convenience of the Parties , (ii ) the purpose of this Agreement is solely to determine amounts to be paid by Participant and J. Aron under separate contracts, and (iii) none of Participant, J. Aron nor any other Party hereto will have any liability whatsoever with respect to any action taken or omitted by it under this Agreement (but without prejudice to an express payment obligation arising under another contract), including as a result of any failure by Participant to timely or properly calculate any amount to be included in a Monthly Statement. Without limiting the foregoing, J. Aron acknowledges that it will have an opportunity to review and comment on each calculation and date included in a Mon thly Statement (and shall be aware if such Monthly Statement has not been timely delivered) , and Participant will not be responsible in any way for any damages, costs, liabilities, loss of use or any other claims related to an insufficient or late payment under a Purchaser Assigned PPA as a result of any deficiencies in any Monthly Statement.
(c) Purchaser Assigned PPAs Exhibit. [Promptly following the execution of the initial Assignment Agreements, ]J. Aron shall deliver Exhibit A to the other Parties hereto, which will set forth certain information regarding the Purchaser Assigned PPA s as of the date hereof , including, for each Purchaser Assigned PPA, the Assignment Period, the Assigned Product Price, the PPA Seller thereunder , the date thereof, and payment i nstructions for payments to the PPA Seller. Exhibit B to this Agreement sets forth the J. Aron Fixed Payment s for the relevant Purchaser Assigned PPAs. J. Aron shall deliver an updated Exhibit A or Exhibit B, as applicable, to each of the other Parties hereto to reflect any changes to the information set forth therein.

6 (d) Remediation of Remarketing Proceeds with Participant’s Purchases of Assigned PAYGO Products. The Parties acknowledge and agree that Participant’s purchase of Assigned PAYGO Products shall be applied to the remediation of remarketing proceeds, if any, under the Master Power Supply Agreement in accordance with the terms thereof, provided that for the avoidance of doubt Assigned PAYGO Products may only be applied to remediate remarketing proceeds that arose either in or prior to the Month in which such Assigned PAYGO Products were purchased.
(e) Payments Following the End of an Assignment Period . Participant agrees that it shall be solely responsible for payment under a Purchaser Assigned PPA for any Assigned Products delivered thereunder following the end of an Assignment Period, including without limitation any Assigned Products that are associated with Assigned E nergy delivered during the relevant Assignment Period, but payable separately from such Assigned Energy and not delivered pursuant to the terms of the Purchaser Assigned PPA until after the end of the Assignment Period.

Additionally, Participant shall be solely responsible for payment for any Assigned Products that are associated with Assigned Energy delivered during the relevant Assignment Period, but payable separately from such Assig ned Energy and not delivered pursuant to the terms of the Purchaser Assigned PPA until after the end of the Assignment Period, and any such amounts will be payable by Participant directly to PPA Seller under any such Purchaser Assigned PPA.

Section 4. Participant Assigned PPA Payments Account.
(a) Payments. With respect to certain payments required to be made by J. Aron and Participant to the PPA Sellers under the Purchaser Assigned PPAs, there is hereby established the custodial account detailed below , bearing the Custodian’s Account No. [____] (the “Participant Assigned PPA Payments Account ”), and all payments and deposits made by J. Aron and Participant hereunder shall be wired to such Participant Assigned PPA Payments Account:
[________]
ABA: [________]
FBO: [________]
Acct: [________]
FFC: [________]
Address: [________]
[________]

(b) J. Aron Payments. J. Aron shall pay the J. Aron Prepay Payment in respect of each Monthly PPA Invoice into the Participant Assigned PPA Payments Account on or before the relevant Custodial Agreement Payment Date set forth in the related Monthly Statement . To the extent that (i) a J. Aron Resettlement Amount is due with respect to a Purchaser Assigned PPA and (ii) J. Aron pays some portion of the J. Aron Prepay Payment for such Purchaser Assigned PPA but less than the total amount of the J. Aron Prepay Payment due, J. Aron’s partial payment shall be applied first to the payment of the Monthly PPA Payment to the relevant PPA Seller. In addition, the Custodian agrees to promptly notify Participant if it does not receive the J. Aron Prepay Payment from J. Aron on or before any Custodial Agreement Payment Date, and in such case Participant may elect in its sole discretion to make the J. Aron Prepay Payment to the Custodian for the purpose of satisfying the Monthly PPA Payment.

7 (c) Participant Deposits. Participant shall deposit the Participant Net Payment in respect of each Monthly PPA Invoice into the Participant Assigned PPA Payments Account on the relevant Custodial Agreement Payment Date set forth in the related Monthly Statement. (d) Application of Payments . The Custodian shall withdraw and apply amounts received under this Section 4 as follows:
(i) any J. Aron Prepay Payment in respect of a Monthly PPA Invoice received from J. Aron (including any payment by Participant on J. Aron’s behalf pursuant to the last sentence of Section 4(b)) and any Participant Net Payment in respect of a Monthly PPA Invoice received from Participant shall be applied first to the payment of the Monthly PPA Payment in respect of such Monthly PPA Invoice to the relevant PPA Seller on the relevant Monthly PPA Invoice Payment Date pursuant to the payment instructions set forth on Exhibit A; provided that if amounts on deposit in the Purchaser Assigned PPA Payment Account are insufficient to pay the entire Monthly PPA Payment in respect of any Monthly PPA Invoice on such date, the Custodian shall (i) withdraw and pay to the relevant PPA Seller the entire remaining balance of the Purchaser Assigned PPA Payment Account (provided that, to the extent that more than one Monthly PPA Invoice is due on such date, the Custodian shall make payment of the available amounts on a pro -rated basis to the payment of the relevant Monthly PPA Invoices on a percentage basis with payment to each relevant PPA Seller of (x) a percentage of the available funds based on (y) the percentage of each relevant Monthly PPA Payment of the aggregate amount of the M onthly PPA Payments due on such date) and (ii) notify such PPA Seller of the amounts received for such Month from each of J. Aron and Participant consistent with such PPA Seller’s contact information provided in Exhibit A ; provided furthermore that, if the J. Aron Prepay Payment in respect of any Monthly PPA Invoice exceeds the Monthly PPA Payment in respect of such Monthly PPA Invoice , then the excess of such J. Aron Prepay Payment over such Monthly PPA Payment shall be remitted to Participant on the relevant Monthly PPA Invoice Payment Date pursuant to Participant’s payment instructions set forth on Exhibit C; and
(ii) following the application of payments pursuant to Section 4(d)(i), any J.

Aron Resettlement Amount in respect of a Monthly PPA Invoice received from J. Aron shall be remitted to Participant on the relevant Monthly PPA Invoice Payment Date pursuant to Participant’s payment instructions set forth on Exhibit C. (e) Amounts Held in Trust . Amounts deposited in the Participant Assigned PPA Payments Account shall be held in trust for the benefit of Participant until applied as set forth in Section 4(d) and Section 12, as applicable, and there is hereby granted to Participant a lien on and security interest in the Participant Assigned PPA Payments Account pending such application.

The Custodian shall not be required to comply with any orders, demands, or other instructions from Participant with respect to the Participant Assigned PPA Payments Account , including, without limitation, items presented for payment, or any order or instruction directing the disposition of funds or other assets held in or credited to the Participant Assigned PPA Payments Account, and Participant agrees that prior to the termination of this Agreement in accordance with the terms hereof, it shall have no right to direct the disposition of funds or other assets held in or credited to the Participant Assigned PPA Payments Account other than by issuing Monthly

8 Statements, or to withdraw or otherwise obtain funds or other assets held in or credited to the Participant Assigned PPA Payments Account, whether by order or instruction to the Custodian or otherwise.
(f) Transfer of Receivables. With respect to each Monthly Statement, to the extent J.

Aron has purchased Receivables (as defined in the Electricity Sale and Service Agreement) for amounts owed by Participant for the Month to which such Monthly Statement relates, J. Aron may, at its option and subject to the terms of the relevant Issuer Assignment Agreement (including the terms thereof that limit the transfer of Receivables by J. Aron to a PPA Seller to the portion of any Receivables that relate to Assigned Pro ducts delivered under the applicable Issuer Assignment Agreement), (i) notify the Custodian that it intends to transfer all or any portion of such Receivables to the applicable PPA Seller, and (ii) reduce the J. Aron Prepay Payment(s) in respect of the Monthly PPA Invoice from such PPA Seller by th e face amount of such Receivables to be transferred. To the extent J. Aron has notified the Custodian of its intent to transfer any such Receivables to a PPA Seller, J. Aron shall cause such Receivables to be transferred to such PPA Seller not later than the relevant Custodial Agreement Payment Date.

Section 5. Custodian; Fees.
(a) Limitation on Liability . The Custodian shall have ( i) no liability under any agreement other than this Agreement and ( ii) no duty to inquire as to the provisions of any agreement other than this Agreement and the Purchaser Assigned PPAs. The Custodian may rely upon and shall not be liable for acting or refraining from acting upon any written notice, document, instruction or request furnished to it hereunder in accordance with the terms hereof and believed by it to be genuine and to have been signed or pre sented by the proper Party or Parties. The Custodian shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document, notice, instruction or request. The Custodian shall have no duty to solicit or compel any payments which may be due to it, or to take any action to compel J. Aron or Participant to make the deposits required under Section 4. The Custodian shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Custodian’s gross negligence or willful misconduct was the primary cause of any loss to any other Party hereto. In connection with the execution of any of its powers or the performance of any of its duties hereunder, the Custodian may consult with counsel, accountants and other skilled persons selected and retained by it. The Custodian shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons, provided the Custodian exercised due care and good faith in the selection of suc h person. Any permissive right or power granted to the Custodian to take actions enumerated under this Agreement shall not be construed as a duty to act. In the event that the Custodian shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any Party hereto which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other Parties hereto or by a final order or judgment of a court of competent jurisdiction. The Custodian may interplead all of the assets held hereunder into a court of competent jurisdiction or may seek a declaratory judgment with respect to certain circumstances, an d thereafter be fully relieved from any and all liability or obligation with respect to such interpleaded assets or any action or non -action based on such declaratory ju dgment. Anything in this Agreement to the

9 contrary notwithstanding, in no event shall the Custodian be liable for special, indirect, incidental or consequential or punitive damages, losses or penalties of any kind whatsoever (including but not limited to lost profits), regardless of the form of action . The Custodian may engage and act through agents and attorneys and shall not be liable for the misconduct or negligence of any such agent or attorney appointed with due care. Nothing herein shall obligate or be construed to obligate the Custodian to advance its own funds, or to expend or risk its own funds. The Custodian shall be responsible only for funds actually received by it for deposit into the Participant Assigned PPA Payments Account, and the Custodian shall not be obliged to advance or risk its own funds to make any payments required hereunder. The Custodian shall have only those duties expressly set forth in this Agreement and no implied duties shall be read into this Agreement against the Custodian.

The Parties hereto acknowledge and agree that the Custodian is not a fiduciary by virtue of accepting and carrying out its obligations under this Agreement and has not accepted any fiduciary duties, responsibilities or liabilities with respect to its services hereunder. The Custodian shall not be responsible for the perfection of any security interest granted hereunder. (b) Custodian Fee. Participant agrees to (i) pay the Custodian reasonable compensation for the services to be rendered hereunder, which compensation shall be $ [_______] for each year that this Agreement is in effect , and (ii) pay or reimburse the Custodian upon request for all expenses, disbursements and advances, including reasonable attorneys ’ fees and expenses, incurred or made by it in connection with the preparation, execution, performance, delivery, modification and termination of this Agreement . The pa rties hereto acknowledge that this provision shall survive the resignation or removal of the Custodian or the termination of this Agreement.

Section 6. Succession. The Custodian may resign and be discharged from its duties or obligations hereunder by giving not less than 45 days’ advance notice in writing of such resignation to the other Parties hereto specifying a date when such resignation shall take effect; and such resignation shall take effect upon the day specified in such notice unless a successor shall not have been appointed by the other Parties hereto on such date, in which event such resignation shall not take effect until a successor is appointed. The other Parties hereto shall use their commercially reasonable efforts to make such appointment in a timely fashion, provided that any custodian appointed in succession to the Custodian shall be a bank or trust company organized under the laws of any state or a national banking association and shall have capital stock, surplus and undivided earnings aggregating at least $50,000,000 and shall be a bank with trust powers or trust company willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Agreement. Any corporation or association into which the Custodian may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all of the Custodian’s corporate trust line of business may be trans ferred, shall be the Custodian under this Agreement without further act. Notwithstanding the foregoing, if no appointment of a successor Custodian shall be made pursuant to the foregoing provisions of this Section 6 within 45 days after the Custodian has given written notice to the other Parties of its resignation as provided in this Section 6, the Custodian shall be entitled to apply to any court of competent jurisdiction to appoint a successor Custodian.

Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Custodian. Any corporation or association into which the Custodian may be merged or converted or with which it may be consolidated, or any corporation or association to which all or

10 substantially all of the Custodian’s corporate trust line of business may be transferred, shall be the Custodian under this Agreement without further act.

Section 7. Reimbursement. J. Aron and Participant agree, jointly and severally (subject to the second proviso of this Section 7), to reimburse the Custodian and its directors, officers, agents and employees for any and all loss, liability or expense (including the fees and expenses of in-house or outside counsel and experts and their staffs and all expense of document location, du plication and shipment) arising out of or in connection with (a) the Custodian’s execution and performance of this Agreement , except to the extent that such loss, liability or expense is finally adjudicated to have been caused primarily by the negligence of the Custodian or such director, officer, agent or employee seeking reimbursement, or (b) its following any instructions or other directions from J. Aron or Participant, except to the extent that its following any such instruction or direction is expressl y forbidden by the terms hereof; provided, however, that any amounts due under this Section 7 (x) shall not duplicate any other amounts due under this Agreement, including without limitation amounts due under Section 13 hereof and (y) as between J. Aron and Participant (but without affecting the joint and several nature of the obligation to the Custodian), shall be paid equally by each of J. Aron and Participant (i.e., 50% by J. Aron and 50% by Participant), subject to the second proviso of this Section 7; provided further, however, that, notwithstanding the joint and several nature of the obligations under this Section 7, any amounts due under clause (b) of this sentence resulting from instructions or directions that are not expressly provided for in this Agreement and are given to the Custodian by only one Party shall be the sole obligation of such Party. The Parties hereto acknowledge that this provision shall survive the resignation or removal of the Custodian or the termination of this Agreement.

Section 8. Taxpayer Identification Numbers; Tax Matters . J. Aron and Participant represent that their correct taxpayer identification numbers assigned by the Internal Revenue Service or any other taxing authority is set forth on the signature page hereof. Any tax returns or reports required to be prepared and filed in connection with the Participant Assigned PPA Payments Account will be prepared and filed by Participant, and the Custodian shall have no responsibility for the preparation and/or filing of any tax return with respect to any income earned on the Participant Assigned PPA Payments Account . In addition, any tax or other payments required to be made pursuant to such tax return or filing shall be paid by Participant. The Custodian shall have no responsibility for making such payment unless directed to do so in writing by the appropriate authorized Party and fully indemnified to the Custodian’s satisfaction.

Section 9. Notices. Any notice, demand, statement or request required or authorized by this Agreement to be given by one Party to an other Party shall be in writing and shall be sent by courier, or personal delivery (including overnight delivery service) to each of the notice recipients and addresses specified in Exhibit C for the receiving Party. Any such notice, demand, or request shall be deemed to be given when actually received if delivered by courier or personal delivery (including overnight delivery service). Each Party shall have the right, upon 10 days’ prior written notice to the other Party, to change its list of notice recipients and addresses in Exhibit C. The Parties may mutually agree in writing at any time to deliver notices, demands or requests through alternate or additional methods, such as electronic mail ; provided furthermore that the Parties acknowledge and agree that Monthly Statements and any communications under this Agreement relating thereto may be delivered via email to the email addresses speci fied for each Party in Exhibit C.

11 Section 10. Miscellaneous.
(a) Amendments. The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by all of the Parties hereto. (b) Assignments. Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by any Party, except as provided in Section 6, without the prior written consent of the other Parties.
(c) Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced, and performed in accordance with the laws of the State of New York , without regard to any conflicts of law principle that would direct the application of the laws another jurisdiction; provided, however, that the authority of Participant to enter into and perform its obligations under this Agreement shall be determined in accordance with the laws of the State of California.
(d) Jurisdiction. Each Party hereto irrevocably waives any objection on the grounds of venue, forum non -conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the exclusive jurisdiction of (A) the courts of the State of New York located in the Borough of Manhattan, or of the United States District Court located in the Borough of Manhattan. The Parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement.
(e) Force Majeure. No Party to this Agreement shall be liable to any other Party hereto for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of, acts of God, fire, war, terrorism, epidemic, pandemic, floods, strikes, electrical outages, equipment or transmission failure, or other causes reasonably beyond its control ; provided that a party affected by any such event shall exercise commercially reasonable efforts to resume performance as quickly as possible.
(f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures of the Parties to this Agreement may be transmitted by facsimile or by digital pdf transmission, and such facsimile or pdf will, for all purposes, be deemed to be the original signature of such Party whose signature it reproduces, and will be binding upon such Party.

The Parties agree that the electronic signature of a Party to this Agreement, including all acknowledgements, authorizations, directions, waivers and consents thereto (or any amendment or supplement thereto) shall be as valid as an original signature of such Party and shall be effective to bind such Party to this Agreement. The Parties agree that any electronically signed document (including this Agreement) shall be deemed (i) to be “written” or “in writing,” (ii) to have been signed, and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. For purposes hereof, “electronic signature” means a manually signed original signature that is then transmitted by electronic means; “transmitted by electronic means” means sent in the form of a facsimile or sent via the Internet as a pdf (portable document format) or other replicating image attached to an e -mail message; and, “electronically signed document” means a document transmitted by electronic means and

12 containing, or to which there is affixed, an electronic signature. Paper copies or “printouts”, if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the Parties to the same extent and u nder the same conditions as other original business records created and maintained in documentary form. Neither Party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. (g) No Obligation to Invest. The Custodian shall not be under any obligation to invest or pay interest on amounts held in the Participant Assigned PPA Payments Account from time to time.
(h) Allocation of Payments . Nothing in this Agreement is intended to create any liabilities between Participant and J. Aron. This Agreement is intended solely to allocate payments that are actually made by J. Aron and Participant in respect of amounts owed for physically settled energy under the Purchaser Assigned PPAs that is redelivered under the Electricity Sale and Service Agreement, the Master Power Supply Agreement and the Clean Energy Purchase Contract.

Section 11. Compliance with Court Orders . In the event that any amount held by the Custodian hereunder shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or enter ed by any court affecting the property deposited under this Agreement , the Custodian is hereby expressly authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing are binding upon it, whether with or without jurisdiction, and in the event that the Custodian obeys or complies with any such writ, order or decree it shall not be liable to any of the Parties hereto or to any other person, firm or corporation, by reason of such compliance notwithstanding that such writ, order or decree may be subsequently reversed, modified, annulled, set aside or vacated.

Section 12. Term; Winding Up . This Agreement will expire concurrently with the receipt of written notice from Participant, with a copy to the other Parties, that the Clean Energy Purchase Contract has te rminated in accordance with its terms. Following the Custodian’s payment of any Monthly PPA Payments due in respect of the final month of commodity deliveries prior to such a termination, a ny remaining balance in the Participant Assigned PPA Payments Account shall be paid to Participant.

Section 13. Indemnification. J. Aron and Participant, jointly and severally, agree to protect, indemnify, defend and hold harmless, the Custodian, and affiliates, and each person who controls the Custodian (and each of their respective directors, officers, agents and employees) from and against all claims, damages, losses, liabilities, actions, suits, costs, judgments and expenses (including, without limitation, court costs and reasonable attorneys’ fees) arising from its acting as Custodian hereunder (including, for the avoidance of doubt, any costs, expenses and reasonable attorneys’ fees incurred in enforcing any payment obligation of an indemnifying Party), except for any claim, damage or loss resulting from the negligence of the Custodian; provided, however, that any amounts due under this Section 13 (x) shall not duplicate any other amounts due under this Agreement, including without limitation amounts due under Section 7 hereof, and (y) as between J. Aron and Participant (but without affecting the joint and several nature of the obligation to the Custodian) shall be paid equally by each of the J. Aron and Participant (i.e., 50% by J. Aron and

13 50% by Participant). The obligations of this Section 13 shall survive any resignation or removal of the Custodian and the termination of this Agreement.

Section 14. Patriot Act . J. Aron and Participant acknowledge that the Custodian is subject to federal laws, including the Customer Identification Program (“CIP”) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which the Custodian must obtain, verify and record information that allows the Custodian to identify J. Aron and Participant.

Accordingly, prior to opening the Participant Assigned PPA Payments Account described in Section 4 of this Agreement, the Custodian will ask J. Aron and Participant to provide certain information including but not limited to name, physical address, tax identification number and other information that will help the Custodian identify and verify J. Aron ’s and Participant’s identities, such as organizational documents, certificate of good standing, license to do business, or other pertinent identifying information. J. Aron and Participant agree that the Custodian cannot open any account hereunder unless and until the Custodian verifies J. Aron’s and Participant’s identities in accordance with its CIP.
[Signature Pages Follow]

Signature Page to Participant PPA Payment Custodial Agreement IN WITNE SS WHEREOF, the Parties hereto have caused this Agreement to be duly executed and delivered by their respective duly authorized officers as of the date first written above.
[PARTICIPANT]

By: ___________________________________
Name: _____________________________
Title: ______________________________
Taxpayer ID Number: _________________

J. ARON & COMPANY LLC

By: ___________________________________
Name: _____________________________
Title: ______________________________
Taxpayer ID Number: _________________

[CUSTODIAN]

By: ___________________________________
Name: _____________________________
Title: ______________________________

Exhibit A

EXHIBIT A

ASSIGNED PPAS
Purchaser Assignment Agreements Issuer Assignment Agreements

1. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:

Assignment Period:

PPA Seller:

PPA Seller Payment Instructions:

1. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]

2. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:

Assignment Period:

PPA Seller:

PPA Seller Payment Instructions:

2. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]

Exhibit B

EXHIBIT B
J. ARON FIXED PAYMENTS
Month J. Aron Fixed Payment for
[PPA 1]
J. Aron Fixed Payment for
[PPA 2]
1/1/2026
2/1/2026
3/1/2026
4/1/2026
5/1/2026
6/1/2026
7/1/2026
8/1/2026
9/1/2026
10/1/2026
11/1/2026
12/1/2026
1/1/2026
2/1/2026
3/1/2026
4/1/2026
5/1/2026
6/1/2026
7/1/2026
8/1/2026
9/1/2026
10/1/2026
11/1/2026
12/1/2026

Exhibit C

EXHIBIT C

NOTICE INFORMATION

J. Aron:

J. Aron & Company LLC
200 West Street
New York, NY 10282
Email: [email protected]

Participant:
[______________]
[______________]
[______________]
Attention: [______________]
Email: [______________]

Custodian:
[______________]
[______________]
[______________]
Attention: [______________]
Email: [______________]

SM Draft 11 December 2025

LETTER AGREEMENT1
[_______], 2026
City of Colton
650 N La Cadena Dr,
Colton, CA 92324

Re: Prepay Limited Assignment Agreements

Ladies and Gentlemen:

This Letter Agreement (this “ Letter Agreement”) confirms our mutual agreement with respect to the matters set forth below and relates to those certain Limited Assignment Agreements listed on Exhibit A under the heading titled “Purchaser Assignment Agreements” (the “Assignment Agreements”, which definition shall include any new Assignment Agreements identified by SCPPA’s delivery of an updated Exhibit A consistent with Section 2), with each of the PPA Sellers identified in Exhibit A (each, individually, a “PPA Seller” and collectively the “PPA Sellers”, and which definitions shall include any new PPA Seller identified by SCPPA’s delivery of an updated Exhibit A consistent with Section 2). Any capitalized term used in this Letter Agreement and not otherwise defined herein shall have the meaning assign ed to such term in the Clean Energy Purchase Contract. In consideration of each Party’s execution of the Assignment Agreements, and the mutual covenants and agreements set forth herein, [Participant] (“Participant”) and Southern California Public Power Authority (“ SCPPA” and together with Participant, collectively the “Parties” and each a “Party”) agree as follows:

1. Assignment Early Termination . Each of the Parties agrees that it shall only exercise its right to deliver a written notice of termination of an Assignment Period under an Assignment Agreement consistent with the following:
(a) Any Party may deliver a notice of termination under an Assignment Agreement in the event (i) of the suspension of performance under or expiration or termination of the relevant PPA by either Participant or the applicable PPA Seller; (ii) of the termination or suspension of deliveries for any reason other than force majeure under (A) the Clean Energy Purchase Contract (the “Clean Energy Purchase Contract”), dated as of [_______], 2026 by and between SCPPA and Participant (including, for the avoidance of doubt, due to a “Remarketing Election” by Participant under the Clean Energy Purchase Contract or the reduction of the aggregate Base Quantity and Assigned Quantity under a Clean Energy Purchase Contract to zero pursuant to the terms thereof), (B) that certain Electricity Purchase, Sale and Service Agreement, dated as of [_______], 2026 by and between J. Aron & Company LLC and Aron Energy Prepay 51 LLC (the “Electricity Sale and Service Agreement”), (C) that certain Master Power Supply Agreement, dated as of [_______], 2026, by and between SCPPA and Aron Energy Prepay 51 LLC or (D) an Issuer Assigned PPA PSA relating to the relevant Assigned PPA; (iii) that the California Renewable Portfolio Standard Portfolio Content Category designation of the renewable energy assigned under the Assignment

1 NTD: To streamline negotiations, we have created a generic form for review and comment by the working group. Once agreed upon, we will replicate this for each Project Participant.

2 Agreements is altered, reclassified, or invalidated as a direct or indirect result of the transaction contemplated by the Assignment Agreements or the Clean Energy Purchase Contract; (iv) that the relevant Assignment Agreement is subject to termination due to the bankruptcy or insolvency of the PPA Seller, however defined therein ; or (v) that the corresponding Issuer Assignment Agreement (as listed in Exibbit A) is terminated;

(b) SCPPA shall deliver a notice of termination contemporaneous with any assignment by SCPPA of its interest in the Clean Energy Purchase Contrac t, provided that Participant in any event shall be entitled to deliver a notice of termination to the extent SCPPA fails to do so in connection with the assignment of SCPPA’s interest under the Clean Energy Purchase Contract; and

(c) Either Party may deliver a notice of termination of an Assignment Agreement to the extent that the Parties have mutually agreed upon an assignment of Replacement Assigned Rights and Obligations (as defined in the Clean Energy Purchase Contract) that will replace the Assigned Rights and Obligations under such Assignment Agreement immediately following the termination thereof; provided that such notice is conditioned on the execution and delivery of such Assignment Agreement.

For the avoidance of doubt, each of the Parties agrees that it shall not terminate an Assignment Agreement pursuant to the at will termination provision thereof except in the circumstances set forth immediately above. The at will termination provision ref erenced in the immediately preceding sentence (x) is set forth in [Section 2(a)(1) ] of the form of Purchaser Assignment Agreement attached to the Clean Energy Purchase Contract and (y) shall refer to any such provision set forth in an Assignment Agreement entered into by the Parties consistent with the terms of the Clean Energy Purchase Contract and the Electricity Sale and Service Agreement.

2. Exhibit A . Promptly following execution of the Assignment Agreements with respect to the Initial Assigned Rights and Obligations, SCPPA shall deliver an Exhibit A that lists such Assignment Agreements . SCPPA shall deliver an updated Exhibit A to this Agreement to reflect any changes to the information set forth therei n in connection with the termination, expiration or replacement of an Assignment Agreement consistent with the terms of the Clean Energy Purchase Contract.

3. Representations, Warranties and Covenants.
(a) Participant agrees that it shall provide a true, complete, and correct copy to SCPPA and SCPPA’s assigns of any PPA to be assigned pursuant to an Assignment Agreement.

(b) Each Party represents to the other:

(i) Status. It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.

(ii) Powers. It has the power to execute, deliver and perform its obligations under this Letter Agreement, the Assignment Agreement s and any other documentation to

3 which it is a party relating to this Letter Agreement and any Assignment Agreement, and it has taken all necessary action to authorize such execution, delivery and performance.

(iii)No Violation or Conflict. Such execution, delivery and performance of this Letter Agreement and the Assignment Agreement s and the consummation of the transactions contemplated hereby and thereby, including the incurrence by such Party of its obligations under this Letter Agreement and the Assignment Agreements, will not result in any violation of or conflict with: (i) any term of any material contract or agreement applicable to it; (ii) any of its charter, bylaws, or other constitutional documents; (iii) any determination or award of any arbitrator applicable to it; or (iv) any license, permit, franchise, judgment, writ, injunction or regulation, decree, order, charter, law, ordinance, rule or regulation of any government agency , applicable to it or any of its assets or properties or to any obligations incurred by it or by which it or any of its assets or properties or obligations are bound or affected, and shall not cause a breach of, or default under, any such term or result in the creation of any lien upon any of its properties or assets.

(iv) Consents. All consents, approvals, orders or authorizations of; registrations, declarations, filings or giving of notice to; obtaining of any licenses or permits from; or taking of any other action with respect to, any Person or Government Agency, that are required to have been obtained or made by such Party with respect to this Letter Agreement and Assignment Agreement s and the transactions contemplated hereby and thereby, including the due authorization of such Party and its governing body and any approval or consent of any security holder of such Party or any holder (or any trustee for any holder) of any indebtedness or other obligation of such Party, have been obtained and are in full force and effect and all conditions of any such consents have been complied with.

(v) Obligations Binding . Its obligations under this Letter Agreement and the Assignment Agreement s constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to en forceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).

(vi) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into this Letter Agreement and the Assignment Agreements and as to whether this Letter Agreement and the Assignment Agreement s are appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other Parties as investment advice or as a recommendation to enter into this Letter Agreement or the Assignment Agreement s, it being understood that information and explanations related to the terms and conditions of

4 this Letter Agreement and the Assignment Agreement s shall not be considered investment advice or a recommendation to enter into this Letter Agreement. It is entering into this Letter Agreement and the Assignment Agreements as a bona-fide, arm’s-length transaction involving the mutual exchange of consideration and, once executed by the applicable parties , considers this Letter Agreement and the Assignment Agreements to be legally enforceable contract s. No communication (written or oral) received from any of the other Parties shall be deemed to be an assurance or guarantee as to the expected results of this Letter Agreement or the Assignment Agreements.

(vii) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Letter Agreement and the Assignment Agreements. It is also capable of assuming, and assumes, the risks of this Letter Agreement and the Assignment Agreements.

(viii) Status of Parties. Neither Party is acting as a fiduciary for or an adviser to the other in respect of this Letter Agreement or the Assignment Agreements.

4. Miscellaneous
(a) Governing Law. This Letter Agreement and the rights and duties of the Parties will be governed by and construed, enforced and performed in a ccordance with the laws of the State of California, without reference to any conflicts of laws provisions that would direct the application of another jurisdiction’s laws.

(b) Jurisdiction. Each Party submits to the exclusive jurisdiction of the courts of the State of California or of the United States of America, in either case located in Los Angeles County, California.

(c) Waiver of Right to Trial by Jury. Each Party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this Letter Agreement.

(d) Third Party Beneficiary. Any Party that takes assignment of SCPPA’s rights pursuant to an Issuer Assignment Agreement (as defined in the Clean Energy Purchase Contract) shall be a third-party beneficiary of this Letter Agreement with right to enforce the terms hereof.

(e) Limited Obligation. Notwithstanding anything to the contrary herein, all obligations of SCPPA under this Letter Agreement, including without limitation all obligations to make payments of any kind whatsoever, are special, limited obligations of SCPPA, payable solely from the Trust Estate (as such term is defined in the Trust Indenture, dated as of [_______], 2026, between SCPPA and [_______], as trustee) as and to the extent provided in such Trust Indenture, including with respect to Operating Expenses (as such term is defined in such Trust Indenture).

SCPPA shall not be required to advance any moneys derived from any source other than the Revenues (as such term is defined in such Trust Indenture) and other assets pledged under such Trust Indenture for any of the purposes in this Letter Agreement. Neither the faith and credit of

5 SCPPA nor the taxing power of the State of California or any political subdivision thereof is pledged to payments pursuant to this Letter Agreement. SCPPA shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reasons of or in connection with this Letter Agreement, except solely to the extent Revenues (as such term is defined in such Trust Indenture) are received for the payment thereof and may be applied therefor pursuant to the terms of such Trust Indenture.

[Signature Pages to Follow]

Signature Page to Letter Agreement
Very truly yours,

SCPPA

SOUTHERN CALIFORNIA PUBLIC POWER

AUTHORITY

By:

Name:

Title:

ACKNOWLEDGED, ACCEPTED AND AGREED TO as of the date first set forth above:

ATTEST CITY OF COLTON

By: By:

Name: Isaac T. Suchil Name: Charles Berry Title: City Clerk Title: Electric Utility Director

APPROVED AS TO FORM:

COLTON CITY ATTORNEY’S OFFICE

By:

Name: Carlos L. Campos
Title: City Attorney

Exhibit A

ASSIGNMENT AGREEMENTS

Purchaser Assignment Agreements Issuer Assignment Agreements

1. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:

Assignment Period:

PPA Seller:

PPA Seller Payment Instructions:

1. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]

2. Limited Assignment Agreement dated
[____], by and among Purchaser, the Issuer
and [PPA Seller]
Assigned PPA: [____]
Assigned Product Price:

Assignment Period:

PPA Seller:

PPA Seller Payment Instructions:

2. Limited Assignment Agreement dated
[____], by and among J. Aron, the Issuer
and [PPA Seller]

Item: 4.

Staff Report

Meeting Date: February 3, 2026
To: City Council
From: Bill Smith, City Manager
Prepared By: Charles Berry, Electric Utility Director
Item Name: Contract Amendment - Montrose Air Quality Services LLC. - Approve Amendment No. 2 to the Professional Services Agreement with Montrose Air Quality Services, LLC for South Coast Air Quality Management District Compliance Emissions Testing.

Recommended Action:

Staff recommend that the City Council take the following action:

Approve Amendment No. 2 to the Professional Services Agreement (PSA) between the City of Colton and Montrose Air Quality Services, LLC to increase compensation by $9,500, for a revised not-to-exceed contract amount of $57,006.

Background:

On September 18, 2024, the City entered into a Professional Services Agreement (PSA) with Montrose Air Quality Services, LLC to provide compliance emissions testing as required by the City’s South Coast Air Quality Management District ("SCAQMD") operating permit.

The agreement allows for amendments pursuant to Section 3.3.1.

Issues/Analysis:

Since execution of the original PSA, additional testing effort and work hours have been identified as necessary to support ongoing compliance requirements associated with the City’s SCAQMD regulatory Air Permit. To address this additional scope, staff proposes Amendment No. 2, which updates the compensation section of the PSA.

Amendment No. 2 increases the agreement compensation by $9,500, which requires City Council approval, to cover additional testing work hours, resulting in a revised not-to-exceed total of $57,006. All other terms and conditions of the Professional Services Agreement remain unchanged and in full force and effect.

Fiscal Impacts:

Approval of Amendment No. 2 increases the PSA amount by $9,500, for a revised not-to-exceed total of $57,006. Sufficient appropriations for the contract amendment are available in the adopted Fiscal Year 2025-26 budget in Electric Utility Fund O&M Contract Account Number 520-8000-8009-2225-0548-000.

Alternatives:

Provide alternative direction to staff.

Attachments:

1. Montrose Air Quality Services Professional Services Agreement

2. Montrose Air Quality Services 2nd Amendment

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-1”

CITY OF COLTON

PROFESSIONAL SERVICES AGREEMENT

1. PARTIES AND DATE.

This Agreement is made and entered into this 18th day of September, 20 24, by and between the City of Colton, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 650 North La Cadena Drive, Colton, California 92324 ("City") and Montrose Ai Quality Services, LLC , with its principal place of business at 1631 East Sainte Andrew Place, Santa Ana, California 92705 ("Consultant"). City and Consultant are sometimes individually referred to herein as "Party" and collectively as "Parties."

2. RECITALS.

2.1 Consultant.

Consultant desires to perform and assume responsibility for the provision of certain professional consulting services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing 4Q24 tri-annual compliance & 2025 annual RATAs and annual compliance testing services to public clients, is licensed in the State of California, and is familiar with the plans of City.

2.2 Project.

City desires to engage Consultant to render such professional Montrose Air Quality Services consulting services for the Agua Mansa Power Plant project ("Project") as set forth in this Agreement.

3. TERMS.

3.1 Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional federal and state regulatory, consulting, and the annual compliance test consulting services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.

3.1.2 Term. The term of this Agreement shall be from September 18th, 2024 to June 30 th, 2025 , unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Services.

3.2 Responsibilities of Consultant.

3.2.1 Independent Contractor; Control and Payment of Subordinates . The Services shall be performed by Consultant or under its supervision. Consultant will determine the

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-2”

means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee.

Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, nor any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.

3.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant's conformance with the Schedule, City shall respond to Consultant's submittals in a timely ma nner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

3.2.3 Conformance to Applicable Requirements . All work prepared by Consultant shall be subject to the approval of City.

3.2.4 Substitution of Key Personnel . Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who f ail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, sha ll be promptly removed from the Project by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows Dave Wonderly.

3.2.5 City's Representative. The City hereby designates Charles J. Berry or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the Scope of Work or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Work or change the Consultant's total compensation subject to the provisions contained in Section 3.3 of this Agreement. Consultant shall not accept di rection or orders from any person other than the City Manager, City's Representative or his/her designee.

3.2.6 Consultant's Representative . Consultant hereby designates Dave Wonderly or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-3”

and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times.

3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represent s and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement.

As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a t hreat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Con sultant and shall not be re -employed to perform any of the Services or to work on the Project.

3.2.9 Period of Performance. Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”).

Consultant shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately agreed upon in writing by the City and Consultant (“Performance Milestones”). Consultant agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Project Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage.

3.2.10 Laws and Regulations ; Employee/Labor Certification . Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If Consultant performs any work knowing it to be contrary to such laws, rules and regulations, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees, agents, and volunteers free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.

3.2.10.1 Employment Eligibility; Consultant . By executing this Agreement, Consultant verifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to,

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-4”

the Immigration Reform and Control Act of 1986, as may be amended from time to time. Such requirements and restrictions include, but are not limited to, examination and retention of documentation confirming the identity and immigration status of each employee of the Consultant.

Consultant also verifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement. Consultant shall avoid any violation of any such law during the term of this Agreement by participating in an electronic verification of work authorization program operated by the United States Department of Homeland Security, by participating in an equivalent federal work authorization program operated by the United States Department of Homeland Security to verify information of newly hired employees, or by some other legally acceptable method. Consultant shall maintain records of each such verification, and shall make them available to the City or its representatives for inspection and copy at any time during normal business hours. The City shall not be responsible for any costs or expenses related to Consultant’s compliance with the requirements provided for in Section 3.2.10 or any of its sub- sections.

3.2.10.2 Employment Eligibility; Subcontractors, Consultants, Sub - subcontractors and Subconsultants . To the same extent and under the same conditions as Consultant, Consultant shall require all of its subcontractors, consultants, sub-subcontractors and subconsultants performing any work relating to the Project or this Agreement to make the same verifications and comply with all requirements and restrictions provided for in Section 3.2.10.1.

3.2.10.3 Employment Eligibility; Failure to Comply . Each person executing this Agreement on behalf of Consultant verifies that they are a duly authorized officer of Consultant, and understands that any of the following shall be grounds for the City to terminate the Agreement for cause: (1) failure of Consultant or its subcontractors, consultants, sub - subcontractors or subconsultants to meet any of the requirements provided for in Sections

3.2.10.1 or 3.2.10.2; (2) any misrepresentation or material omission concerning compliance with such requirements (including in those verifications provided to the Consultant under Section

3.2.10.2); or (3) failure to immediately remove from the Project any person found not to be in compliance with such requirements.

3.2.10.4 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non -discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.2.10.5 Air Quality . To the extent applicable, Consultant must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Although the SCAQMD and CARB limits and requirements are more broad, Consultant shall specifically be aware of their application to "portable eq uipment", which definition is considered by SCAQMD and CARB to include any item of equipment with a fuel - powered engine. Consultant shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-5”

laws, rules and/or regulations by Consultant, its sub-consultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement.

3.2.10.6 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions, where applicable, shall include, but shall not be limited to: (A) adequate life protection and lifesaving equipment and procedures; (B) instructions in accident prevention for all employees and subconsultants, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined spac e procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures.

3.2.11 Insurance.

Time for Compliance . Consultant shall not commence Work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this Section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this Section.

3.2.11.2 Minimum Requirements. Consultant shall, at its expense, procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by the Consultan t, its agents, representatives, employees or subconsultants.

Consultant shall also require all of its subconsultants to procure and maintain the same insurance for the duration of the Agreement. Such insurance shall meet at least the following minimum levels of coverage:
(A) Minimum Scope of Insurance . Coverage shall be at least as broad as the latest version of the following: (1) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (2) Automobile Liability :

Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); and (3) Workers’ Compensation and Employer’s Liability: Workers’ Compensation insurance as required by the State of California and Employer’s Liability Insurance. The policy shall not contain any exclusion contrary to the Agreement, including but not limited to endorsements or provisions limiting coverage for (1) contractual liability (including but not limited to ISO CG 24 26 or 21 29); or (2) cross liability for claims or suits by one insured against another. (B) Minimum Limits of Insurance . Consultant shall maintain limits no less than: (1) General Liability: 1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with general aggregate limit is used including, but not limited to, form CG 2503, either the general aggregate limit shall apply separately to this Agreement/location or the general aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: 100,000 per accident for bodily injury and property damage; and (3) Workers’ Compensation and Employer’s Liabili ty: Workers’ Compensation limits as required by the Labor Code of the State of California. Employer’s Liability

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-6”

limits of 100,000 per accident for bodily injury or disease. Defense costs shall be paid in addition to the limits.
(C) Notices; Cancellation or Reduction of Coverage . At least fifteen (15) days prior to the expiration of any such policy, evidence showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or materially reduced, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, the City has the right but not the duty to obtain the insu rance it deems necessary and any premium paid by the City will be promptly reimbursed by Consultant or the City may withhold amounts sufficient to pay premium from Consultant payments. In the alternative, the City may suspend or terminate this Agreement.

3.2.11.3 Professional Liability . Consultant shall procure and maintain, and require its sub -consultants to procure and maintain, for a period of five (5) years following completion of the Project, errors and omissions liability insurance appropriate to their profession. Such insurance shall be in an amount not less than 100,000 per claim, and shall be endorsed to include contractual liability. Defense costs shall be paid in addition to the limits.

3.2.11.4 Insurance Endorsements . The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by the City to add the following provisions to the insurance policies:
(A) General Liability. The general liability policy shall include or be endorsed (amended) to state that: (1) using ISO CG forms 20 10 and 20 37, or endorsements providing the exact same coverage, the City of Colton, its directors, officials, officers, employees, agents, and volunteers shall be covered as additional insured with respect to the Services or ongoing and completed operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work; and (2) using ISO form 20 01, or endorsements providing the exact same coverage, the insurance coverage shall be primary insurance as respects the City, its directors, officials, officers, employees, agents, and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant’s scheduled underlying coverage. Any excess insurance shall contain a provision that such coverage shall also apply on a primary and noncontributory basis for the benefit of the City, before the City’s own primary insurance or self -insurance shall be called upon to protect it as a named insured. Any insurance or self -insurance maintained by the City, its directors, officials, officers, employees, agents, and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way. Notwithstanding the minimum limits set forth in Section

3.2.11.2(B), any available insurance proceeds in excess of the specified minimum limits of coverage shall be available to the parties required to be named as additional insureds pursuant to this Section 3.2.11.4(A).
(B) Automobile Liability . The automobile liability policy shall include or be endorsed (amended) to state that: (1) the City, its directors, officials, officers, employees, agents, and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible; and (2) the insurance coverage shall be primary insurance as respects the City, its di rectors, officials, officers, employees, agents, and volunteers, or if excess, shall stand in an unbroken chain of coverage

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-7”

excess of the Consultant’s scheduled underlying coverage. Any insurance or self -insurance maintained by the City, its directors, officials, officers, employees, agents, and volunteers shall be excess of the Consultant’s insurance and shall not be called upon to contribute with it in any way.

Notwithstanding the minimum limits set forth in Section 3.2.11.2(B), any available insurance proceeds in excess of the specified minimum limits of coverage shall be available to the parties required to be named as additional insureds pursuant to this Section 3.2.11.4(B). (C) Workers’ Compensation and Employer’s Liability Coverage.

The insurer shall agree to waive all rights of subrogation against the City, its directors, officials, officers, employees, agents, and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Consultant. (D) All Coverages . Each insurance policy required by this Agreement shall be endorsed to state that: (A) coverage shall not be suspended, voided, reduced or canceled except after thirty (30) days (10 days for nonpayment of premium) prior written notice by certified mail, return receipt requested, has been given to the City; and (B) 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 directors, officials, officers, employees, agents, and volunteers.

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 officials, officers, employees, agents and volunteers, or any other additional insureds.

3.2.11.5 Separation of Insureds; No Special Limitations; Waiver of Subrogation. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, its directors, officials, officers, employees, agents, and volunteers.

All policies shall waive any right of subrogation of the insurer against the City, its officials, officers, employees, agents, and volunteers, or any other additional insureds, or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, its officials, office rs, employees, agents, and volunteers, or any other additional insureds, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

3.2.11.6 Deductibles and Self -Insurance Retentions . Any deductibles or self-insured retentions must be declared to and approved by the City. Consultant shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self -insured retentions as respe cts the City, its directors, officials, officers, employees, agents, and volunteers; or (2) the Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims, and ad ministrative and defense expenses.

3.2.11.7 Subconsultant Insurance Requirements. Consultant shall not allow any subconsultants to commence work on any subcontract relating to the work under the Agreement until they have provided evidence satisfactory to the City that they have secured all insurance required under this Section. If r equested by Consultant, the City may approve different scopes or minimum limits of insurance for particular subconsultants. The Consultant and the City shall be named as additional insureds on all subconsultan ts’ policies of Commercial General Liability using ISO form 20 38, or coverage at least as broad.

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-8”

3.2.11.8 Acceptability of Insurers . Insurance is to be placed with insurers with a current A.M. Best’s rating no less than A:VIII, licensed to do business in California, and satisfactory to the City.

3.2.11.9 Verification of Coverage. Consultant shall furnish City with original certificates of insurance and endorsements effecting coverage required by this Agreement on forms satisfactory to the City. The certificates and endorsements for each insurance policy shall be signed by a per son authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested. All certificates and endorsements must be received and approved by the City before work commences. Th e City reserves the right to require complete, certified copies of all required insurance policies, at any time.

3.2.11.10 Reporting of Claims. Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement.

3.2.12 Water Quality Management and Compliance.

3.2.12.1 Storm Water Management. Storm, surface, nuisance, or other waters may be encountered at various times during the Services. Consultant hereby acknowledges that it has investigated the risk arising from such waters, and assumes any and all risks and liabilities arising therefrom.

3.2.12.2 Compliance with Water Quality Laws, Ordinances and Regulations. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, w ithout limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the Californi a Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must additionally comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges.

3.2.12.3 Standard of Care. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the work assigned to them without impacting water quality in violation of the laws, regulations an d policies described in Section 3.2.12.2 of this Agreement. Consultant further warrants that it, its employees and subcontractors have or will receive adequate training, as determined by the City, regarding these requirements as they may relate to the Services.

3.2.12.4 Liability for Non-compliance.
(A) Indemnity: Failure to comply with laws, regulations, a nd ordinances listed in Section 3.2.14.2 of this Agreement is a violation of federal and state law.

Notwithstanding any other indemnity contained in this Agreement, Consultant agrees to indemnify and hold harmless the City, its officials, officers, agents, employees and authorized volunteers from and against any and all claims, demands, losses or liabilities of any kind or nature which the City, its officials, officers, agents, employees and authorized volunteers may sustain or incur for Consultant’s noncompliance with the laws, regulations, and ordinances listed above, arising out

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-9”

of or in connection with the Services, except for liability resulting from the sole established negligence, willful misconduct or active negligence of the City, its officials, officers, agents, employees or authorized volunteers.
(B) Defense: City reserves the right to defend any enforcement action or civil action brought against the City for Consultant’s failure to comply with any applicable water quality law, regulation, or policy. Consultant hereby agrees to be bound by, and to reimburse the City for the costs associated with, any settlement reached between the City and the relevant enforcement entity.
(C) Damages: City may seek damages from Consultant for delay in completing the Services caused by Consultant’s failure to comply with the laws, regulations and policies described in Section 3.2.12.2 of this Agreement, or any other relevant water quality law, regulation, or policy.

3.3 Fees and Payments.

3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed forty-seven thousand five hundred and six dollars and zero cents ($47,506.00) without written approval of the City Council or City Manager as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.3.2 Payment of Compensation . Consultant shall submit to City a monthly invoice which indicates work completed and hours of Services rendered by Consultant. The invoice shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the invoice.

City shall, within 30 days of receiving such invoice, review the invoice and pay all non -disputed and approved charges thereon. If the City disputes any of C onsultant's fees, the City shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein.

3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "C" of this Agreement.

3.3.4 Extra Work . At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement.

Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.3.5 Rate Increases. In the event that this Agreement is renewed pursuant to Section 3.1.2, the rate set forth in Exhibit “C” may be adjusted each year at the time of renewal as set forth in Exhibit “C.”

3.4 Labor Code Requirements.

3.4.1 Prevailing Wages. Consultant is aware of the requirements of California

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-10”

Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execut e the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Con sultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its officials, officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.4.2 Registration/DIR Compliance. If the Services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain regis tration for the duration of the project and require the same of any subconsultants. This project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Consultant’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the Department of Industrial Relations against Consultant or any subconsultant that affect Consultant’s performance of servic es, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the Department of Industrial Relations against Consultant or any subconsultant.

3.4.3 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

3.5 Accounting Records.

3.5.1 Maintenance and Inspection . Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to t he Agreement for a period of three (3) years from the date of final payment under this Agreement.

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-11”

3.6 General Provisions.

3.6.1 Termination of Agreement.

3.6.1.1 Grounds for Termination . City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consult ant may not terminate this Agreement except for cause.

3.6.1.2 Effect of Termination . If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this A greement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request.

3.6.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

3.6.2 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Consultant: Montrose Air Quality Services, LLC
1631 East Saint Andrew Place
Santa Ana, CA 92705
ATTN: John Peterson, District Manager
Montrose Environmental Group, Inc
4 Park Plaza, Suite# 790
Irvine, CA 92614
Attn: Legal Department

City: City of Colton
650 North La Cadena Drive
Colton, CA 92324
ATTN: Charles J. Berry, Electric Utility Director
Such notice shall be deemed made when personally delivered or when mailed, forty -eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.6.3 Ownership of Materials and Confidentiality.

3.6.3.1 Documents & Data; Licensing of Intellectual Property . This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-12”

sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to , physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City, and s hall not be used in whole or in substantial part by Consultant on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant shall retain copies of all Documents & Data on file for a minimum of ten (10) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.

3.6.3.2 Subconsultants. Consultant shall require all subconsultants to agree in writing that City is granted a non -exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or its subconsultants, or those provided to Consultant by the City.

3.6.3.3 Right to Use . City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project, provided that any such use not within the purposes intended by this Agreement or on a project other than this Project without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Consultant’s seal from the Documents & Data and indemni fy and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re-use of the Documents & Data on such other project. Consultant shall be responsible and liable for its Documents & Data, pu rsuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant.

3.6.3.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted.

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-13”

3.6.3.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be di sclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed c onfidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

3.6.3.6 Confidential Information. The City shall refrain from releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information.

Consultant shall have five (5) working days after receipt of the Release Notice to give City written notice of Consultant's objection to the City's release of Proprietary Information. Consultant shall indemnify, defend and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of the Objection Notice unless either: (1) Consultant fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City release such information.

3.6.4 Cooperation; Further Acts . The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

3.6.5 Indemnification.

3.6.5.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Consul tant, its officials, officers, employees, subconsultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses. Co nsultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

3.6.5.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-14”

misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

3.6.6 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties.

3.6.7 Governing Law; Government Code Claim Compliance . This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County.

In addition to any and all contract requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Consultant must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Consulta nt. If no such Government Code claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit against the City.

3.6.8 Time of Essence. Time is of the essence for each and every provision of this Agreement.

3.6.9 City's Right to Employ Other Consultants . City reserves right to employ other consultants in connection with this Project.

3.6.10 Successors and Assigns . This Agreement shall be binding on the successors and assigns of the parties.

3.6.11 Assignment or Transfer . Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

3.6.12 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.6.13 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

3.6.14 Waiver. No waiver of any default shall constitute a waiver of any other

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-15”

default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.6.15 No Third -Party Beneficiaries . There are no intended third-party beneficiaries of any right or obligation assumed by the Parties.

3.6.16 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.6.17 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Consultant further agrees to file, or shall cause its employees or subconsultants to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in th e performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

3.6.18 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.6.19 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

3.7 Subcontracting.

3.7.1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.
[SIGNATURES ON NEXT PAGE]

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-16”

SIGNATURE PAGE TO

PROFESSIONAL SERVICES AGREEMENT BY AND

BETWEEN THE CITY OF COLTON AND MONTROSE AIR

QUALITY SERVICES, LLC

CITY OF COLTON Montrose Air Quality Services, LLC

By: ____________________________ By: _________________________ William R Smith John Peterson
City Manager District Manager

Attest:

____
Stephanie Vargas
Deputy City Clerk

(BB&K 2018)
23152.06000\30453088.2 Exhibit “A-I-17”

EXHIBIT "A"

SCOPE OF SERVICES
City of Colton 4Q2024 tri-annual compliance & 2025 annual RATAs and Annual Compliance Testing
4Q2024- Prepare for and perform RECLAIM and Part 75 RATAs, Tri-Annual Source testing for NOx, CO, Fuel Sulfur, NH3, VOC and particulate compliance test at 100% load after the Turbine change reporting for RATAs and Compliance. In 2025 perform annual NH3 Slip tests, PM/PM10 test, RECLAIM and Parts 75 RATAs reporting for RATAs and compliance and reporting quarterly linearity’s and CGA test.

(BB&K 2018)
23152.06000\30453088.2 Exhibit “B”-1

EXHIBIT "B"

SCHEDULE OF SERVICES
City and consultant shall agree on due dates for specific task under this agreement. All services shall be completed no later than June 30th, 2025

(BB&K 2018)
23152.06000\30453088.2 Exhibit “C”-1

EXHIBIT "C"

Consultant shall bill for services completed in accordance with the rates set forth below, however, the total compensation for the Project shall not exceed forty-seven thousand five hundred six dollars and zero cents ($47,506.00.00) for the period September 18th, 2024 thru June 30th, 2025 without written approval of the City’s City Manager.

Proposed Lump Sum Services for 4Q24 tri-annual testing

Item # Quantity Item Description Unit Price Amount
1 1 Planning 580.00 580.00
2 1 Test Preparation 1,280.00 1,280.00
3 1 Mob/Travel/Set
Up/DeMob
3,371.70 3,371.70
4 1 Part 75 RATA test 4,264.50 4,264.50
5 1 RECLAIM RATA , 4,264.50 4,264.50
6 1 Compliance, Nox,
CO, NH3, PM,
Fuel Sulfur
5,686.00 5,686.00
7 1 Onsite NH3
analysis
900.00 900.00
8 1 Lab Analysis for
Fuel Sulfer, PM
and VOC
5,812.80 5,812.80
9 2 RATA Reporting 550.00 1,100.00
10 1 Compliance
Reporting
700.00 700.00
11 2 Quarterly
Linearity CGA
Reporting
350.00 700.00
-
4Q24, Total 28,659.00

(BB&K 2018)
23152.06000\30453088.2 Exhibit “B”-2

Proposed Lump Sum 2025 Services

Item # Quantity Item Description Unit Price Amount
12 1 Planning 617.00 617.00
13 1 Test Preparation 1,366.00 1,366.00
14 1 Mob/Travel/Set
Up/DeMob
3,539.70 3,539.70
15 1 Test Day, annual
PM/PM10 and Part
75 RATA test
4,687.50 4,687.50
16 1 Test Day-NH3 Slip
annual
compliance and

RECLAIM RATA ,
4,687.50 4,687.50
17 1 Onsite NH3
analysis
900.00 900.00
18 2 RATA Reporting 550.00 1,100.00
19 1 Compliance
Reporting
550.00 550.00
20 4 Quarterly
Linearity CGA
Reporting
350.00 1,400.00
2025, Total: 18,847.00
Total: 47,506.00

Standby Fees:

Hourly 460.00
Daily 3680.00
Postponement/ Cancellation Fee:

Less than two weeks (14 Days) Prior to a scheduled test date: 1,885.00 Less than one week (7 days) prior to a scheduled test date 4,712.00

(BB&K 2018)
23152.06000\30453088.2 Exhibit “B”-3

EXHIBIT “D”

AGREEMENT MODIFICATIONS

Section 3.5.1 is amended to read as follow:

3.5.1 Maintenance and Inspection . Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement and at City’s sole cost and expense. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement and at the City’s Sole cost and expense.

Section 3.6.3.1 is amended to read as follow:

3.6.3.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, whic h are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data").

For purposes of clarity, City acknowledges and agrees that Consultant’s proprietary spreadsheets and data modeling tools (Pre-Existing IP) used to generate City’s reports are proprietary to and a trade secret of Consultant and are not included as Documents and Data. Consultant is and shall remain the executive owner of the Pre -Existing IP and all patient, copyright, trade secret, trademark and other intellectual property rights therein. No license or conveyance of any such rights to the City is granted or implied under this Agreement All Documents & Data shall be and remain the property of City, and shall not be used in whole or in substantial part by Consultant on other projects without the City’s express written permission.

Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish wh ere the reproduction will be accomplished. The reproduction expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Con sultant shall retain copies of all Documents & Data on file for a minimum of ten (10) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs.

Before destroying the Documents & Data following this retention period, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.

(BB&K 2018)
23152.06000\30453088.2 Exhibit “B”-4

Section 3.6.3.4 is amended to read the following:

3.6.3.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted, except to the such actual or alleged improper use of infringement arises from the unauthorized use or modification by City.

Section 3.6.3.5 is amended to read the following:

3.6.3.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry, (c) beco mes available to Consultant on a non -confidential basis, (d) was or is independently developed by or for Consultant without reference to Cit’s Documents & Data or (e) is required to be disclosed by law, provided, however, that prior to making any such lega lly required disclosure, Consultant give City as much prior notice of the requirement for and contents of such disclosure as is permitted by law and is reasonably practicable under the circumstances shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

Section 3.6.5.1 is amended to read the following:

3.6.5.1 To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner to the extent caused by and arising as a result of, pertaining to, and incident to any negligent acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subconsultants or agents in connection with the performance of the Consultant’s Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and reasonable attorney’s fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

(BB&K: 06/2024)
23152.06000\32391457.2
AMENDMENT NO. 2 TO

PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF COLTON
AND

MONTROSE AIR QUALITY SERVICES

1. PARTIES AND DATE.

This Amendment No. 2 to the Professional Services Agreement is made and entered into this 3rd day of December, 2025 by and between the City of Colton, a California municipal corporation (“City”) and Montrose Air Quality Services, LLC (“Consultant”). City and Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.”.

2. RECITALS.

2.1 Consultant. City and Consultant entered into an agreement titled “Professional Services Agreement ,” dated 18th day of September, 2024 (“Agreement”), whereby Consultant agreed to provide compliance emission testing as required by the SCAQMD’s operating permit.

2.2 Amendment Purpose. City and Consultant now desire to amend the Agreement for the purposes of to increase the total compensation by $9,500.00 for the additional testing work hours on the Project’s South Coast Air Quality District regulatory Air Permit.

2.3 Amendment Authority. This Amendment No. 2 is authorized pursuant to Section

3.3.1 of the Agreement.

3. TERMS.

3.1 Amendment. Section 3.3.1 of the Agreement is hereby amended in its entirety to read as follows:

3.1.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed Fifty-seven thousand and six dollars and zero cents ($57,006.00) without written approval of the City Council or City Manager as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 2, all provisions of the Agreement shall remain unchanged and in full force and effect. From and

2 (BB&K: 06/2024)
23152.06000\32391457.2
after the date of this Amendment No. 2, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 2.

3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 2.

3.4 Severability. If any portion of this Amendment No. 2 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.5 Counterparts. This Amendment No. 2 may be executed in duplicate originals, each of which is deemed to be an original , but when taken together shall constitute but one and the same instrument.
[SIGNATURES ON FOLLOWING PAGE]

3 (BB&K: 06/2024)
23152.06000\32391457.2
SIGNATURE PAGE FOR AMENDMENT NO. 2 TO

PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF COLTON

AND MONTROSE AIR QUALITY, LLC
IN WITNESS WHEREOF , the Partie s have entere d into this Amendme nt No. 1 to the Professional Services Agreement as of the day and year first above written.

CITY OF COLTON
By: _________________________
William R Smith
City Manager
Attest: _________________________
Isaac T. Suchil
City Clerk
Montrose Air Quality, LLC
By: _________________________ Date: ________________________ Signature
John Peterson
District Manager
Montrose Air Quality
December 4, 2025

Item: 5.

Staff Report

Meeting Date: February 3, 2026
To: City Council
From: Bill Smith, City Manager
Prepared By: Heidi Strutz, Recreation Manager
Item Name: Contract Amendment - HASA, Inc. - Approve Contract Amendment for HASA, Inc. for Swimming Pool Maintenance at the Gonzales Community Center.

Recommended Action:

Approve a $12,362.39 amendment to the Professional Services Agreement with HASA Inc. for providing swimming pool maintenance services at the Gonzales Community Center, for a total aggregate amount of $59,362.39.

Background:

Qualified pool maintenance services are essential to the safe and compliant operation of a community pool. The Community Services Department contracts with an external company to maintain the City’s only public pool. The vendor ensures proper water chemistry and filtration to protect public health, identifies and addresses safety hazards before incidents occur, and maintains compliance with state and local health regulations to avoid citations or closures. In addition, professional maintenance extends the life of critical equipment and helps control long- term operating costs. Contracting with a qualified pool maintenance company ensures consistent, reliable service and demonstrates a commitment to providing a safe, well-maintained facility for the community.

Issues/Analysis:

The current contract with HASA, Inc. was awarded under the City Manager's authority for a total of $47,000 to provide services for the swimming pool at the Gonzales Community Center. The scope of the project included year-round maintenance and on-call support in facility emergency situations. The contracted pool maintenance services overlaps two fiscal years to prevent any lapse in services over the summer months when the pool is in operation. While the majority of this contract was paid in FY2024-2025, there are four months of the current fiscal year that require a contract amendment, requiring City Council approval. In recent years, the cost for pool maintenance services continues to increase and Staff have been able to secure a reputable vendor

at a lower cost. This amendment will conclude the final contract with HASA, Inc., who has provided pool maintenance services since FY 2016-2017.

Staff is requesting approval of the contract amendment to accommodate the increased cost of services. There is no request for additional appropriations, as the total anticipated contract costs are included in the current fiscal year’s budget.

Fiscal Impacts:

Sufficient appropriations for the contract amendment are available in the FY 2025-2026 adopted budget in General Fund, Community Services, Aquatics, Professional Services Account #100-6200- 6203-2350-0000-000.

Alternatives:

Provide alternative direction to Staff.

Attachments:

1. Staff Report HASA Inc. Contract Amendment

ITEM NO. 12

STAFF REPORT

DATE: FEBRUARY 3, 2026
TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
FROM: BILL SMITH, CITY MANAGER
PREPARED BY: DEB FARRAR, COMMUNITY SERVICES DIRECTOR
SUBJECT: APPROVE AN AMENDMENT TO THE CONTRACT WITH HASA, INC. IN ORDER TO PROVIDE SWIMMING POOL MAINTENANCE
SERVICES AT THE GONZALES COMMUNITY CENTER.

RECOMMENDED ACTION

Staff recommends that the City Council take the following action:

Approve a $11,762.39 amendment to the Professional Services Agreement with HASA Inc. for providing swimming pool maintenance services at the Gonzales Community Center, for a total aggregate amount of $59,362.39 over two fiscal years: FY 2024-2025, FY 2025-2026.

BACKGROUND

Qualified pool maintenance services are essential to the safe and compliant operation of a community pool. The Community Services Department contracts with an external company to maintain the City’s only public pool. The vendor ensures proper water chemistry and filtration to protect public health, identifies and addresses safety hazards before incidents occur, and maintains compliance with state and local health regulations to avoid citations or closures. In addition, professional maintenance extends the life of critical equipment and helps control long- term operating costs. Contracting with qualified pool maintenance company ensures consistent, reliable service and demonstrates a commitment to providing a safe, well-maintained facility for the community.

On October 1, 2024, a contract with HASA, Inc. was awarded to provide services for the swimming pool at the Gonzales Community Center. The scope of the project included year- round maintenance and on-call support in facility emergency situations.

Staff Report to the Mayor and City Council
Contract Amendment – HASA, Inc.

February 3, 2026

ISSUES/ANALYSIS

The contracted pool maintenance services overlaps two fiscal years to prevent any lapse in services over the summer months when the pool is in operation. While the majority of this contract was paid in FY2024-2025, there are four months of the current fiscal year that require an increase in the current purchase order which requires City Council approval. In recent years, the cost for pool maintenance services continues to increase and Staff have been able to secure a reputable vendor at a lower cost. This amendment will conclude the final contract with HASA, Inc. who has provided pool maintenance services since FY 2016-2017.

Staff is requesting approval of the contract amendment to accommodate the cost of services.

There is no request for additional funding. The contract cost are included in the current fiscal year’s budget appropriation.

FISCAL IMPACTS

Sufficient appropriations for the contract amendment are available in the FY 2025-2026 adopted budget in General Fund, Community Services, Aquatics, Professional Services Account #100- 6200-6203-2350-0000-000.

ALTERNATIVES

Provide alternative directions.

Item: 6.

Staff Report

Meeting Date: February 3, 2026
To: City Council
From: Bill Smith, City Manager
Prepared By: Chad Blais, PW & Utility Services Director Item Name: Development Impact Fee (DIF) Report - Fiscal Year 2025 - Approve the Annual Development Impact Fee Report for Fiscal Year Ending June 30, 2025.

Recommended Action:

Staff recommends that the City Council take the following action:

Approve the Annual Development Impact Fee Report for Fiscal Year Ending June 30, 2025.

Background:

In 1987, the California Legislature passed Assembly Bill 1600 (AB 1600), also known as the Mitigation Fee Act (Government Code, Sections 66000 et seq.) that governs the establishment and administration of development impact fees. A development impact fee is a monetary exaction other than a tax or special assessment that is charged by a local agency to new development for the purposes of defraying costs of public facilities needed as a result of impacts created by the new development.

California Government Code, Section 66006 (b) (1) requires a local agency within 180 days after the last day of each fiscal year, to make available to the public the following information for the fiscal year:

1. A brief description of the type of fee in the account or fund

2. The amount of the fee

3. The beginning and ending balance of the account or fund

4. The amount of the fees collected, and interest earned

5. Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the percentage of the cost of the public improvement that was funded with fees.

6. Identification of the approximate date by which the construction of a public improvement

will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement.

7. A description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the improvement on which the transfer or loan will be expended.

8. The amount of any refunds or allocations made pursuant to Section 66001, paragraphs (e) and (f).

Government Code 66001(d) (1) states the following requirements as pertains to Development Impact Fees:

For the fifth fiscal year following the first deposit into the account or fund, and every five years thereafter, the local agency shall make all of the following findings with respect to that portion of the account or fund remaining unexpended, whether committed or uncommitted:

1. Identify the purpose to which the fee is to be put

2. Demonstrate a reasonable relationship between the fee and the purpose for which it is charged

3. Identify all sources and amounts of funding anticipated to complete financing in incomplete improvements

4. Designate the approximate dates on which the funding referred to in subparagraph C is expected to be deposited in the appropriate account or fund

Issues/Analysis:

Government Code Section 66006 requires cities imposing impact fees to undertake an annual accounting of such fees within 180 days of the fiscal year end, and that the accounting be made available for public review. The accounting must provide the beginning and ending balances for the fiscal year, receipts, disbursements, interest earned and any other income that was received.

The report must also include a description of how the fees were expended during the past year. If fees are unexpended, whether committed or uncommitted for a period of five or more years, the report must include a finding regarding the continuing need for the fees. If a continuing need cannot be shown, State law requires that the City refund the unused, uncommitted fees. The City’s report contains no such instances of Development Impact Fees that remain unexpended and uncommitted.
.

The attached Annual AB 1600 Compliance Report is for the fiscal year ended June 30, 2025, and has been prepared in compliance with the California Government Code Section 66006 regarding the annual accounting for impact fees. The accounting was completed and the required information was made available to the public within the required time frame of 180 days subsequent to fiscal year end. The report has been on file in the Public Works office since December 16, 2025 and available for public review which is also in compliance with state law requiring that the report be made available at least 15 days prior to being considered by the City Council.

This report does not include any findings that require the return of unexpended or uncommitted

DIF fees. This report does make a finding for continuing to hold previously collected development impact fees since all funds collected and held by the City as of June 30, 2025, within each of the respective Development Impact Fee funds, have been designated for capital projects.

Government Code Section 66001(d)(1) requires that at least every five years certain findings be made with respect to each impact fee being assessed. The following information is provided to satisfy the four requirements of this code section:

A. Identify the purpose to which the fee is to be put – The purpose of the development impact fee program is to ensure that new development is paying its share of the transportation infrastructure and facility costs associated with the growth resulting from that development. The program includes projects related to Arterial Street Improvements, Traffic Signal Improvements, Fire Facilities, Police Facilities, Park Improvements, Recreation Centers, Libraries, City Hall, Corporate Yard, Water and Wastewater Infrastructure and Impact Fee Administration.

B. Demonstrate a reasonable relationship between the fee and the purpose for which it is charged – The fees are based on the relationship between the needed transportation infrastructure and facility costs associated with the growth resulting from new development.

C. Identify all sources and amounts of funding anticipated for incomplete improvements – Facilities to be funded from development impact fees are also funded by other sources including gas tax, Measure A, General Fund, and grant funding. The specific funding sources utilized for each project depend on funds availability at the time a project is moved forward.

D. Designate the approximate dates on which the funding is expected to be deposited into the appropriate account or fund – The receipt of funding and the construction of improvements is dependent upon when undeveloped land remaining in the City is developed. Facilities constructed utilizing development impact fee funding are constructed when all required funding is available and the City Engineer has determined that it is appropriate for the project to move forward.

Fiscal Impacts:

There is no impact on City resources from this annual report, and this report meets the compliance requirements of the Mitigation Fee Act.

Alternatives:

Provide alternative direction to staff.

Attachments:

1. Colton Annual DIF Report FY 2025

Annual Development Impact Fee Report
Fiscal Year Ended June 30, 2025

December 16, 202 5

Prepared by:

NBS
for the

CITY OF COLTON

City of Colton

City Officials
Frank J. Navarro, Mayor
David J. Toro, Council Member, District 1
Kelly J. Chastain, Council Member, District 2
Dr. Luis S. Gonzalez, Council Member, District 3
John R. Echevarria, Council Member, District 4

Officers
Isaac T. Suchil, City Clerk

Administrative Team
William R. Smith, City Manager
Carlos L. Campos, City Attorney
Stacey Dabbs, Finance Director
Chad Blais, Public Works & Utilities Services Director
Eva Elias, Public Works, Water/Wastewater Admin Manager

TABLE OF CONTENTS

Development Impact Fee Report ........................................................................ ................................................... ........................... 1

1.1 Annual Report Requirements .................... ............................................................. 1

1.2 Five-Year Report .............................. ........................................................................ 2 Current Impact Fees ................................................................................... ................................................... ................................... 4

2.1 Types of Impact Fees and Impact Fee Funds ..... ..................................................... 4 Financial Summary Report.............................................................................. ................................................... ............................... 6 Public Improvements .................................................................................. ................................................... .................................. 7 Interfund Loans ...................................................................................... ................................................... ....................................... 8 Refunds ........................................... ................................................... ................................................... .......................................... 9 ATTACHMENT – CURRENT IMPACT FEE SCHEDULE ................................................................ ................................................... .............. 10

City of Colton 1
Annual Development Impact Fee Report
Prepared by NBS

DEVELOPMENT IMPACT FEE REPORT
The California Mitigation Fee Act (Government Code Sections 66000 et seq.) mandates procedures for administration of impact fee programs, including collection and accounting, reporting, and refunds. Regarding reporting requirements, the Mitigation Fee Act requires annual reporting on each impact fee fund, as well as a separate five-year reporting process. This report meets the requirements described in 1.1 Annual Report, below. A combined Annual and Five-Year Report was completed in 2024 and will next be provided in 2029.

1.1 Annual Report Requirements
Section 66006 (b) (1) requires that once each year, within 180 days of the close of the fiscal year, the local agency must make available to the public the following information for each separate account established to receive impact fee revenues:

1. A brief description of the type of fee in the account or fund; (report section 2)

2. The amount of the fee; (report section 2 and attachment)

3. The beginning and ending balance of the account or fund; (report section 3)

4. The amount of the fees collected, and interest earned; (report section 3)

5. Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the total percentage of the cost of the public improvement that was funded with fees; (report section 4)

6. Identification of the approximate date by which the construction of a public improvement will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement; An identification of each public improvement identified in a previous report and whether construction began on the approximate date noted in the previous report. For a project identified for which construction did not commence by the approximate date provided in the previous report, the reason for the delay and a revised approximate date that the local agency will commence construction. (report section 4)

7. A description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the improvement on which the transfer or loan will be expended; (report section 5)

8. The amount of any refunds or allocations made pursuant to Section 66001, paragraphs (e) and (f). (report section 6) The annual report must be reviewed by the City Coun cil at its next regularly scheduled public meeting, but not less than 15 days after the statements are made public, per Section 66006 (b) (2).

City of Colton 2
Annual Development Impact Fee Report
Prepared by NBS
Section 66013(d) has similar requirements for utility capacity charges in that, within 180 days after the close of each fiscal year, the local agency must make available to the public the following information:

1. A description of the charges deposited in the fund; (report section 2)

2. The beginning and ending balance of the fund and the interest earned from investment of moneys in the fund; (report section 3)

3. The amount of charges collected in that fiscal year; (report section 3)

4. An identification of:
a. Each public improvement on which charges were expended and the amount of expenditure for each improvement, including the percentage of the total cost of the public improvement that was funded with those charges if more than one source of funding was used; (report section 4) b. Each public improvement on which charges were expended that was completed during that fiscal year; (see report section 4) c. Each public improvement that is anticipated to be undertaken in the following fiscal year; (report section 4)

5. A description of each interfund transfer or loan made from the capital facilities fund, including the public improvement on which the transferred or loaned charges are or will be expended and, in the case of an interfund loan, the date on which the loan will be repaid and the rate of interest that the fund will receive on the loan. (see report section 5)

1.2 Five-Year Report
Prior to 1996, The Mitigation Fee Act required that a local agency collecting impact fees was required to expend or commit impact fee revenue within five years or make findings to justify a continued need for the money, otherwise those funds had to be refunded. SB 1693, adopted in 1996 as an amendment to the Mitigation Fee Act, changed that requirement in material ways.

Now, Section 66001 (d) requires that, for the fifth fiscal year following the first deposit of any impact fee revenue into an account or fund as required by Section 66006 (b), and every five years thereafter, the local agency shall make all of the following findings for any fee revenue that remains unexpended, whether committed or uncommitted:

1. Identify the purpose to which the fee will be put;

2. Demonstrate the reasonable relationship between the fee and the purpose for which it is charged;

3. Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements for which impact fees are to be used;

4. Designate the approximate dates on which the funding necessary to complete financing of those improvements will be deposited into the appropriate account or fund.

City of Colton 3
Annual Development Impact Fee Report
Prepared by NBS
Those findings are to be made in conjunction with the annual reports discussed above. If such findings are not made as required by Section 66001, the local agency could be required to refund the moneys in the account or fund, per Section 66001 (d).

Once the agency determines that sufficient funds have been collected to complete financing on incomplete improvements for which impact fee revenue is to be used, it must, within 180 days of that determination, identify an approximate date by which construction of the public improvement will be commenced (Section 66001 (e)). If the agency fails to comply with that requirement, it must refund impact fee revenue in the account according to procedures specified in Section 66001 (d).

City of Colton 4
Annual Development Impact Fee Report
Prepared by NBS

CURRENT IMPACT FEES
Development impact fees (DIFs) in the City of Colton are one-time charges levied on new development in Colton to fund various infrastructure, facilities, vehicles, and equipment. The City’s DIF program was most recently updated by City Council’s ratification of Ordinance O-02-20. The fee amounts included in the Ordinance are substantiated by the Development Impact Fee Justification Study for the City of Colton, Report Date: January 21, 2020 (DIF Study). The Attachment to this report provides a copy of Colton’s current DIF Fee Schedule.

2.1 Types of Impact Fees and Impact Fee Funds
The fees documented in the body of this Annual Development Impact Fee Report (Report) include the following fees listed below. The revenue and expenditures for each fee type are tracked by the City in separate funds.

Table 1. Impact Fees and Impact Fee Funds
Fund No. Fund/Fee Name Purpose and Use of the Fee
248 Park Development Fund
The Park Development Fund tracks revenues and expenditures associated with Park Development (Facilities) Fees and Quimby In-Lieu Fees. Quimby In-Lieu fees are regulated by Government Code Section 66477, not the Mitigation Fee Act. This Annual Report intends to comply specifically with the Mitigation Fee Act’s reporting requirements. Therefore, the description of the purpose and use of fees for this fund is limited to the Park Development (Facilities) Fees. These fees are collected and spent on the construction of new parks, recreational facilities, and trails needed to serve new development. The fees are intended to meet demand for park facilities caused by new development through the year 2035.
249 Traffic Impact Fund
Traffic Facilities Fees are collected and spent on the construction of new roadways, interchanges, intersections, traffic signals, bridge construction and related improvements in the City, as specifically identified in the City’s Needs List. This List is documented within ordinance O-02-20 and the DIF Study, Appendix A, which shows the amount of cost attributable to the impact of new development. The fees are intended to meet the transportation demand for new development through the year 2035. 250 New/Library Facilities
Library Facilities Fees are collected and spent on the expansion and remodeling of existing library facilities, acquisition of books, equipment, and materials for these facilities, specifically identified in the City’s Needs List.

This List is documented within ordinance O-02-20 and the DIF Study, Appendix A, which shows the amount of cost attributable to the impact of new development.

City of Colton 5
Annual Development Impact Fee Report
Prepared by NBS
Fund No. Fund/Fee Name Purpose and Use of the Fee
251 Civic Center
Civic Center Facilities Fees are collected and spent on the acquisition of land, construction of new public buildings, and expansion of existing City facilities to accommodate new development growth. Facilities are identified on the City’s Needs List. This List is documented within ordinance O-02-20 and the DIF Study, Appendix A, which shows the amount of cost attributable to the impact of new development. 252 Fire Department Facilities
Fire Department Facilities Fees are collected and spent on the construction of new Fire Department facilities, a fire training facility, dorm and apparatus bay, a fire training tower and vehicle and equipment acquisition and replacement, specifically identified on the City’s Needs List. This List is documented within ordinance O-20-20 and the DIF Study, Appendix A, which shows the amount of cost attributable to the impact of new development. 253 Police Department
Facilities
Police Department Facilities Fees are collected and spent on the construction, expansion and build-out of Police department facilities as well as vehicle and equipment replacement, specifically identified on the City’s Needs List. This List is documented within ordinance O-02-20 and the DIF Study, Appendix A, which shows the amount of cost attributable to the impact of new development.
521 Water
The City charges a combined Waste/Water Facilities Fee, collected and spent for additional water and wastewater facilities identified as needed to serve new development. Among facilities needed are new wells, treatment plants, booster stations, lift stations, pipes, reservoirs, station rehabs and others. This List is documented within ordinance O-02-20 and the DIF Study, Appendix A, which shows the amount of cost attributable to the impact of new development. Facility needs, costs, and calculated fee amounts for water separate from wastewater are substantiated by the DIF Study, even though the City has adopted a combined Waste/Water Facilities Fee. Revenue is tracked to a specific revenue account within the respective utility funds for Water and Wastewater.
522 Wastewater

City of Colton 6
Annual Development Impact Fee Report
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FINANCIAL SUMMARY REPORT
The following financial summary provides an annual statement of revenue, and changes in fund balance for each impact fee fund, for the Fiscal Year End June 30, 2025. Figures shown in the table below are unaudited as of the date of this report.

Table 2. Financial Summary Fiscal Year 2025

Fund No. 248 249 250 251 252 253 521 522
Description
Park Facilities
Fee Fund
2 Traffic Facilities
Fee Fund
New/
Library
Facilities Fee
Fund
Civic Center
Facilities Fee
Fund
Fire Facilities
Fee Fund
Police
Facilities Fee
Fund
Water
Facilities
Fees 3
Wastewater
Facilities
Fees 3

REVENUES
Fees 224,106 381,581 117,174 7,653 1,395 7 48 86,177 365,964 Interest 232,852 554,254 31,7 92 7,806 18,918 21,907 - - Other Revenue 225,155 75,530 - - - - - - Total Revenues 682,113 1,011,365 148,966 15,459 20,313 22,655 86,177 365,964 Fund Balance, Beginning of the Year
1 4,298,465 10,965,954 541,241 1 50,460 375,485 485,697 45,453,034 36,979,481 Fund Balance, End of the Year 4,980,578 11,122,041 690,207 1 65,920 395,798 367,673 49,534,516 38,961,023 1 Beginning & Ending Fund Balances match unaudited f inancial reports provided by the City's Finance Dep artment at the time of posting. Fund balances are s ubject to change once annual audit is completed. 2 "Other Revenue" for Fund 248 is Quimby Fees; Fund Balance includes both Quimby and DIF sources and us es 3 Beginning & Ending Fund Balance reflects balance o f entire utility fund, not specific to capacity fee revenues and expenses

City of Colton 7
Annual Development Impact Fee Report
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PUBLIC IMPROVEMENTS
This section of the Annual Report identifies each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the percentage of the cost of the public improvement that was funded with fees.

Table 3. Public Improvements Fiscal Year 2025

The projects listed above represent active uses of impact fee funds to complete current capital improvement projects.

Government Code Section 66006 (b)(1)(F)(i) also requires Identification of the approximate date by which the construction of a public improvement will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement.

The City has identified public improvement projects that have sufficient impact fee funds available to complete, including approximate dates (fiscal year) of construction in the City’s 2025/26 Capital Improvement Plan as adopted by City Council. Other than projects shown above or in the CIP, the City has not determined that sufficient funds have been collected to complete financing of any other incomplete public improvements.

Government Section 66013(d) requirements for water and wastewater capacity charges are to identify each public improvement that is anticipated to be undertaken in the following fiscal year. The City has not identified any Water or Wastewater improvements scheduled for capacity fee funding in Fiscal Year 2025/26.

Fund CIP # Fund Name Project Name Project
Start FY
Project
Finish FY
Project
Phase
Total Facility
Cost
Total Impact Fee
Funded Amount
% Impact Fee
Funded
Total Prior Year
Impact Fee
Expenditures
FY 2025 Impact
Fee
Expenditures
Impact Fee
Funding
Remaining
249 1803 Traffic Barton Bridge Replacement Project 2019 2027 Active 611,132 $ 164,064 $ 26.8% 33,465 $ 419 $ 130,179 $ 249 1816 Traffic Agua Mansa Road Widening including Bridge Widening at Rialto Channel 2022 2030 Active 1,379,976 $ 232,530 $ 16.9% 247,579 $ 46,519 $ (61,568) $ 249 2226 Traffic Traffic Signal-Meridian/San Bernardin o/Olive 2022 2026 Active 493,995 $ 400,000 $ 81.0% 68,995 $ 1,414 $ 329,591 $ 249 2238 Traffic Washington St Class II Bicycle Route 2 022 2025 Completed 405,698 $ 182,498 $ 45.0% 20,195 $ 161,348 $ 955 $ 249 2315 Traffic Traffic Signal 7th&Valley 2023 2026 Acti ve 400,000 $ 387,070 $ 96.8% 26,704 $ - $ 360,366 $ 249 2316 Traffic Traffic Signal Upgrade La Cadena/Bord well/Laurel 2023 2026 Active 300,000 $ 287,105 $ 95.7% 27,161 $ - $ 259,944 $ 249 2347 Traffic West Colton Class I Bike Trail Projec t 2019 2027 Active 2,820,000 $ 260,006 $ 9.2% 21,040 $ 187,498 $ 51,468 $ 249 2423 Traffic Traffic Signal Cooley at Old Ranch Rd 2023 2026 Active 400,000 $ 400,000 $ 100.0% 1,914 $ 5,135 $ 392,951 $ 249 2463 Traffic Crosswalk Improvement Project 2024 2026 Active 203,400 $ 20,340 $ 10.0% 2,063 $ 1,402 $ 16,875 $ 249 2465 Traffic Traffic Signal - Valley Bl x La Cadena 2025 2025 Completed 322,080 $ 322,080 $ 100.0% -$ 322,080 $ (0) $ 249 2466 Traffic Bike Lane SO La Cadena Dr 2024 2026 Active 320,000 $ 112,000 $ 35.0% 8,237 $ 15,930 $ 87,833 $ 249 2501 Traffic FY25 Citywide Street Paving Project 2025 2026 Active 2,589,244 $ 75,645 $ 2.9% -$ 4,602 $ 71,043 $ 249 N/A Traffic Non Dept. CIP Transfer to fund 450; Mi sc Expenses 2023 on-going Active n/a 622,006 $ n/a 32,271 $ 13,218 $ 576,517 $ 9,517,747 $ 2,960,766 $ 469,431 $ 276,136 $ 2,215,200 $ DIF Fees
TOTAL

City of Colton 8
Annual Development Impact Fee Report
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INTERFUND LOANS
The Mitigation Fee Act requires a description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the improvement on which the transfer or loan will be expended. The following table provides the status of an existing loan made from impact fee funds in 2013.

Table 4. Interfund Loan Status

Date of Loan Maturity Date Purpose of Loan Original
Advance Lender Borrower Balance Due
06/30/25
Interest
Rate
102,809 $ 248 - Park Development Fee 100,230 $ 2.0% 56,177 $ 249 - Traffic Impact Fee 54,768 $ 2.0% 3,629 $ 250 - New Facilities Fee 3,538 $ 2.0% 1,273 $ 251 - Civic Center Fee 1,241 $ 2.0% 1,767 $ 252 - Fire Facility Fee 1,723 $ 2.0% 2,489 $ 253 - Police Facility Fee 2,427 $ 2.0% 7,900 $ 521 - Water Enterprise 7,702 $ 2.0% Eagle Colton 55, LP /
Colton Housing
Authority Fund 898
Acquisition and
redevelopment of a 120-
unit multifamily affordable
senior citizen rental housng
development
3/1/2013 3/1/2068

City of Colton 9
Annual Development Impact Fee Report
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REFUNDS
The refunding requirements for the Mitigation Fee Act are summarized as follows:

Refunds under the Mitigation Fee Act If the City determines that sufficient funds have been collected to complete financing on incomplete improvements for which impact fee revenue is to be used, it must, within 180 days of that determination, identify an approximate date by which construction of the public improvement will be commenced (Government Code Section 66001 (e)). If the agency fails to comply with that requirement, it must refund impact fee revenue in the account according to procedures specified in Section 66001 (d).

As discussed in Section 4 of this report, determinations regarding sufficient funds collected to complete incomplete improvements are provided by the City’s annual Capital Improvement Plan. The City has not made a determination that sufficient funds have been collected to complete financing of any other incomplete public improvements. No refunds of impact fee monies were made or required.

Disclaimer: In preparing this report and any analys is and findings included herein, NBS has relied on several principal assumptions and considerations re garding financial matters, conditions and events th at occurred or may occur in the future. This informat ion and assumptions, including the City’s budgets, financial reports, capital project data, and other information were provided by sources we believe to be reliable; however, NBS has not independently verifi ed such information and assumptions. While we belie ve NBS’ use of such information and assumptions is reasonable for the purpose of this report, some assumptions will invariably not materialize as stat ed herein and may vary due to unanticipated events and circumstances.

City of Colton 10
Annual Development Impact Fee Report
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ATTACHMENT – CURRENT IMPACT FEE SCHEDULE

City of Colton 11
Annual Development Impact Fee Report
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