Agenda packet — Cotati City Council, October 22, 2024 (part 6 of 6)

An expense of €42 million was recognized in 2023, and €38 million in 2022 in respect of these defined contribution plans.

18.1.3 Other pension plans
Most other Group companies also grant their employees retirement benefits. In terms of financing, pension plans within the Group are almost equally split between defined benefit and defined contribution plans. 876 of 1021

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The Group’s main pension plans outside France and Belgium concern:
• the United Kingdom: the large majority of defined benefit pension plans are now closed to new entrants and future benefits no longer vest under these plans. All entities run a defined contribution scheme. The pension obligations of International Power’s subsidiaries in the United Kingdom are covered by the special Electricity Supply Pension Scheme (ESPS). The assets of this defined benefit scheme are invested in separate funds. Since June 1, 2008, the scheme has been closed and a defined contribution plan has been set up for new entrants; • Germany: the Group’s German subsidiaries have closed their defined benefit plans to new entrants and now offer defined contribution plans;
• Brazil: ENGIE Brasil Energia operates its own pension scheme. This scheme has been split into two parts, one for the (closed) defined benefit plan, and the other for the defined contribution plan that has been available to new entrants since the beginning of 2005.

18.2 Description of other post-employment benefit obligations and other long-term benefits

18.2.1 Other benefits granted to current and former EGI sector employees Other benefits granted to EGI sector employees are:
• Post-employment benefits:
− reduced energy prices;
− end-of-career indemnities;
− bonus leave;
− death capital benefits.
• Long-term benefits:
− allowances for occupational accidents and illnesses;
− temporary and permanent disability allowances;
− length-of-service awards.

The Group’s main obligations are described below.

18.2.1.1 Reduced energy prices
Under Article 28 of the national statute for electricity and gas industry personnel, all employees (current and former employees, provided they meet certain length-of-service conditions) are entitled to benefits in kind, which take the form of reduced energy prices known as “employee rates”.

This benefit entitles employees to electricity and gas supplies at a reduced price. For retired employees, this provision represents a post-employment defined benefit. Retired employees are only entitled to the reduced rate if they have completed at least 15 years’ service within EGI sector companies.

In accordance with the agreements signed with EDF in 1951, ENGIE provides gas to all current and former employees of ENGIE and EDF, while EDF supplies electricity to these same beneficiaries. ENGIE pays (or benefits from) the balancing contribution payable in respect of its employees as a result of energy exchanges between the two utilities.

The obligation to provide energy at a reduced price to current and former employees during their retirement is measured as the difference between the energy sale price and the preferential rate granted to employees.

The provision set aside in respect of reduced energy prices stood at €2.97 billion at December 31, 2023. The duration of the obligation is 19 years.
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18.2.1.2 End-of-career indemnities
Retiring employees (or their dependents in the event of death during active service) are entitled to end-of-career indemnities, which increase in line with the length of service within the EGI sector.

18.2.1.3 Compensation for occupational accidents and illnesses EGI sector employees are entitled to compensation for accidents at work and occupational illnesses. These benefits cover all employees or the dependents of employees who die as a result of occupational accidents or illnesses, or injuries undergone on the way to work.

The amount of the obligation corresponds to the likely present value of the benefits to be paid to current beneficiaries, taking into account any reversionary annuities.

18.2.2 Other benefits granted to employees of the gas and electricity sector in Belgium Electricity and gas sector companies also grant other post-employee benefits such as the reimbursement of medical expenses, electricity and gas price reductions, as well as length-of-service awards and early retirement schemes. These benefits are not prefunded, with the exception of the special “allocation transitoire” termination indemnity, considered as an end-of-career indemnity.

18.2.3 Other collective agreements
Most other Group companies also grant their staff post-employment benefits (early retirement plans, medical coverage, benefits in kind, etc.) and other long-term benefits such as jubilee and length-of-service awards.

18.3 Defined benefit plans

18.3.1 Amounts presented in the statement of financial position and statement of comprehensive income
In accordance with IAS 19, the information presented in the statement of financial position relating to post-employment benefit obligations and other long-term benefits results from the difference between the gross projected benefit obligation and the fair value of plan assets. A provision is recognized if this difference is positive (net obligation), while a prepaid benefit cost is recorded in the statement of financial position when the difference is negative, provided that the conditions for recognizing the prepaid benefit cost are met.
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Changes in provisions for pension plans, post-employment benefits and other long-term benefits, plan assets and reimbursement rights recognized in the statement of financial position are as follows:

In millions of euros Provisions Plan assets Reimbursement rights AT DECEMBER 31, 2022 (4,471) 316 208
Exchange rate differences 6 1 ‐
Changes in scope of consolidation and other (3) 3 25
Actuarial gains and losses (645) 44 ‐
Periodic pension cost (403) (89) 9
Contributions/benefits paid 308 14 1
AT DECEMBER 31, 2023 (5,208) 289 244
Plan assets and reimbursement rights are presented in the statement of financial position under “Other non-current assets” or “Other current assets”.

The cost recognized for the period amounted to €492 million in 2023 (€354 million in 2022). The components of this defined benefit cost in the period are set out in Note 18.3.3 “Components of the net periodic pension cost”.

The Eurozone represented 97% of the Group’s net obligation at December 31, 2023, (98% at December 31, 2022).

Cumulative actuarial gains and losses recognized in equity amounted to €1 979 million at December 31, 2023, compared to €1,400 million at December 31, 2022.

Net actuarial differences arising in the period and presented on a separate line in the statement of comprehensive income represented a net actuarial loss of €601 million in 2023 and a gain of €2,774 million in 2022. 879 of 1021

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18.3.2 Change in benefit obligations and plan assets
The table below shows the amount of the Group’s projected benefit obligations and plan assets, changes in these items during the periods presented, and their reconciliation with the amounts reported in the statement of financial position:

Dec. 31, 2023 Dec. 31, 2022
In millions of euros
Pension
benefit
obligations
(1)
Other postemployment
benefit
obligations
(2)
Long-term
benefit
obligations
(3) Total
Pension
benefit
obligations
(1)
Other postemployment
benefit
obligations
(2)
Long-term
benefit
obligations
(3) Total

A - CHANGE IN PROJECTED BENEFIT OBLIGATION
Projected benefit
obligation at January 1 (5,565) (3,308) (395) (9,268) (7,566) (4,649) (499) (12,715) Service cost (168) (48) (33) (248) (229) (97) (45) (372) Interest expense (245) (123) (16) (384) (124) (60) (6) (190) Contributions paid (9) ‐ ‐ (9) (8) ‐ ‐ (8)
Amendments (82) 27 (1) (56) ‐ ‐ ‐ ‐
Changes in scope of
consolidation ‐ ‐ ‐ ‐ 10 2 ‐ 12
Curtailments/settlements 8 5 1 14 (87) ‐ ‐ (87)
Financial actuarial gains
and losses (163) (233) (33) (430) 2,118 1,390 81 3,590
Demographic actuarial
gains and losses (110) 25 ‐ (85) 8 (4) 34 39
Benefits paid 378 127 43 549 346 110 39 495
Other (of which
translation adjustments) (11) ‐ (1) (11) (33) ‐ (1) (34) Projected benefit
obligation at December
31 A (5,966) (3,529) (433) (9,928) (5,565) (3,308) (395) (9,268)

B - CHANGE IN FAIR VALUE OF PLAN ASSETS
Fair value of plan
assets at January 1 5,181 ‐ - 5,181 5,843 ‐ ‐ 5,843
Interest income on plan
assets 214 ‐ ‐ 214 97 ‐ ‐ 97
Financial actuarial gains
and losses (119) ‐ ‐ (119) (739) ‐ ‐ (739)
Contributions received 91 ‐ ‐ 91 133 ‐ ‐ 133
Changes in scope of
consolidation ‐ ‐ ‐ ‐ 3 ‐ ‐ 3
Settlements ‐ ‐ ‐ ‐ 81 ‐ ‐ 81
Benefits paid (308) ‐ ‐ (308) (260) ‐ ‐ (260)
Other (of which
translation adjustments) 9 ‐ ‐ 9 22 ‐ ‐ 22
Fair value of plan
assets at December 31 B 5,067 ‐ - 5,067 5,181 ‐ - 5,181 C - FUNDED STATUS A+B (899) (3,529) (433) (4,861) (384) (3,308) (395) (4,087) Asset ceiling (58) ‐ ‐ (58) (68) ‐ ‐ (68)
NET BENEFIT OBLIGATION (957) (3,529) (433) (4,919) (452) (3,308) (395) (4,155)

ACCRUED BENEFIT
LIABILITY (1,246) (3,529) (433) (5,208) (768) (3,308) (395) (4,471)

PREPAID BENEFIT
COST
289 ‐ ‐ 289 316 ‐ ‐ 316
(1) Pensions and retirement bonuses.
(2) Reduced energy prices, healthcare, gratuities and other post-employment benefits. (3) Length-of-service awards and other long-term benefits. 880 of 1021

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18.3.3 Components of the net periodic pension cost
The net periodic cost recognized in respect of defined benefit obligations for the years ended December 31, 2023 and 2022 breaks down as follows:

In millions of euros Dec. 31, 2023 Dec. 31, 2022
Current service cost 248 372
Actuarial gains and losses (1) 32 (116)
Gains or losses on pension plan curtailments, terminations and settlements (2) 42 6 Total accounted for under current operating income including operating MtM and share in net income of equity method entities 322 261
Net interest expense 170 93
Total accounted for under net financial income/(loss) 170 93 TOTAL 492 354
(1) On the long-term benefit obligation.
(2) Including the €56 million impact of the pension reform in 2023 on the IEG plan.

18.3.4 Funding policy and strategy
When defined benefit plans are funded, the related plan assets are invested in pension funds and/or with insurance companies, depending on the investment practices specific to the country concerned. The investment strategies underlying these defined benefit plans are aimed at striking the right balance between return on investment and acceptable levels of risk.

The objectives of these strategies can be summarized as follows: to maintain sufficient liquidity to cover pension and other benefit payments; and as part of risk management, to achieve a long-term rate of return higher than the discount rate or, where appropriate, at least equal to future required returns.

When plan assets are invested in pension funds, investment decisions are the responsibility of the fund management concerned. For French companies, where plan assets are invested with an insurance company, the latter manages the investment portfolio for unit-linked policies or euro-denominated policies, in a manner adapted to the risk and long-term profile of the liabilities.

The funding of these obligations for each of the periods presented can be analyzed as follows:

In millions of euros
Projected
benefit
obligation
Fair value of
plan assets Asset ceiling
Total net
obligation
Underfunded plans (4,063) 3,382 (56) (737)
Overfunded plans (1,365) 1,686 (2) 319
Unfunded plans (4,501) ‐ ‐ (4,501)
AT DECEMBER 31, 2023 (9,929) 5,068 (58) (4,919)
Underfunded plans (3,886) 3,391 (63) (558)
Overfunded plans (1,360) 1,788 (4) 424
Unfunded plans (4,021) ‐ ‐ (4,021)
AT DECEMBER 31, 2022 (9,267) 5,180 (68) (4,156)
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The allocation of plan assets by principal asset category can be analyzed as follows:

In % Dec. 31, 2023 Dec. 31, 2022
Equity investments 26 27
Sovereign bond investments 26 25
Corporate bond investments 33 35
Money market securities 4 4
Real estate 3 2
Other assets 8 8
TOTAL 100 100
All plan assets were quoted on an active market at December 31, 2023.

The actual return on assets of EGI sector companies stood at a positive 7.7% in 2023.

In 2023, the actual return on plan assets of Belgian entities amounted to approximately a positive 6.9% in Group insurance and a positive 9.3% in pension funds.

The allocation of plan asset categories by geographic area of investment can be analyzed as follows:

In % Europe North America Latin America Asia - Oceania Rest of the World Total Equity investments 45 34 7 12 2 100
Sovereign bond investments 74 3 19 1 3 100
Corporate bond investments 64 27 1 5 4 100
Money market securities 29 ‐ 3 ‐ 68 100
Real estate 68 3 5 ‐ 24 100
Other assets 10 ‐ ‐ ‐ 89 100

18.3.5 Actuarial assumptions
Actuarial assumptions are determined individually by country and company in conjunction with independent actuaries.

Weighted discount rates for the main actuarial assumptions are presented below:

Pension benefit
obligations
Other post-employment
benefit obligations
Long-term benefit
obligations Total benefit obligations
2023 2022 2023 2022 2023 2022 2023 2022
Discount rate Eurozone 3.5% 3.8% 3.5% 3.8% 3.5% 3.8% 3.5% 3.8% UK Zone 5.2% 4.1% - - - - - -
Inflation rate Eurozone 2.0% 2.1% 2.0% 2.1% 2.0% 2.1% 2.0% 2.1% UK Zone 3.5% 3.9% - - - - - -

18.3.5.1 Discount and inflation rates
The discount rate applied is determined based on the yield, at the date of the calculation, of investment grade corporate bonds with maturities mirroring the term of the plan.

The rates were determined for each monetary area based on data for AA corporate bond yields. For the Eurozone, data (from Bloomberg) are extrapolated on the basis of government bond yields for long maturities.

According to the Group’s estimates, a 100-basis-point increase (decrease) in the discount rate would result in a decrease (increase) of approximately 13% in the projected benefit obligation.

The inflation rates were determined for each monetary area. A 100-basis-point increase (decrease) in the inflation rate (with an unchanged discount rate) would result in an increase (decrease) of approximately 13% in the projected benefit obligation.
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18.3.6 Estimated employer contributions payable in 2024 under defined benefit plans The Group expects to pay around €207 million in contributions into its defined benefit plans in 2024, including €103 million for EGI sector companies. Annual contributions in respect of EGI sector companies will be made by reference to rights vested during the year, taking into account the funding level for each entity in order to even out contributions over the medium term.

18.4 Defined contribution plans
In 2023, the Group recorded a €92 million expense in respect of amounts paid into Group defined contribution plans of which €8 million concerning multi-employer plans in Netherlands (compared with €91 million in 2022, of which €9 million concerned multi-employer plans in the Netherlands). These contributions are recorded under “Personnel costs” in the consolidated income statement.
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NOTE 19 SHARE-BASED PAYMENTS
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NOTE 19 SHARE-BASED PAYMENTS
Accounting standards
Under IFRS 2, share-based payments made in consideration for services provided are recognized as personnel costs.

These services are measured at the fair value of the instruments awarded.

The fair value of bonus share plans is estimated by reference to the share price at the grant date, taking into account the fact that no dividend is payable over the vesting period, and based on the estimated turnover rate for the employees concerned and the probability that the Group will meet its performance targets. The fair value measurement also takes into account the non-transferability period associated with these instruments. The cost of shares granted to employees is expensed over the vesting period of the rights and offset against equity.

A Monte Carlo pricing model is used for performance shares granted on a discretionary basis and subject to external performance criteria.

Expenses recognized in respect of share-based payments break down as follows:

Expense for the year
In millions of euros Dec. 31, 2023 Dec. 31, 2022
Employee share issues (1) 1 (49)
Bonus/performance share plans (2) (3) (46) (40)
Other Group companies' plans ‐ (3)
TOTAL (45) (92)
(1) Including Share Appreciation Rights set up within the scope of employee share issues in certain countries. (2) Following the review of performance conditions, the expense has not been adjusted in 2023 (an additional expense of €4.2 million was recognized in 2022).
(3) Following the review of continuing employment, the expense was not adjusted in 2023 (a reversal of €9,8 million was recognized in 2022).

19.1 Performance shares

19.1.1 New awards in 2023
No award of performance shares to members of the Group’s executive or senior management has been made in 2023.

19.1.2 Review of internal performance conditions applicable to the plans In addition to the condition of continuing employment within the Group, eligibility for certain bonus share and performance share plans is subject to an internal performance condition. When this condition is not fully met, the number of bonus shares granted to employees is reduced in accordance with the plans’ regulations, leading to a decrease in the total expense recognized in relation to the plans in accordance with IFRS 2. Performance conditions are reviewed at each reporting date.
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NOTE 20 RELATED PARTY TRANSACTIONS
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NOTE 20 RELATED PARTY TRANSACTIONS
This note describes material transactions between the Group and its related parties.

Compensation payable to key management personnel is disclosed in Note 21 “Executive compensation”.

Transactions with joint ventures and associates are described in Note 3 “Investments in equity method entities”.

Only material transactions are described below.

20.1 Relations with the French State and with entities owned or partly owned by the French State

20.1.1 Relations with the French State
The French State’s interest in the Group at December 31, 2023 remained unchanged at 23.64% compared with the previous year. This entitles it to three of the fourteen seats on the Board of Directors (one director representing the State appointed by decree, and two directors appointed by the Shareholders’ Meeting at the proposal of the State).

The French State holds 33.80% of the theoretical voting rights (33.95% of exercisable voting rights) compared with 33.56% at end-2022.

On May 22, 2019, the PACTE Law (“Action plan for business growth and transformation”) was enacted, enabling the French State to dispose of its ENGIE shares without restriction.

In addition, the French State holds a golden share aimed at protecting France’s critical interests and ensuring the continuity and safeguarding of supplies in the energy sector. The golden share is granted to the French State indefinitely and entitles it to veto decisions taken by ENGIE if it considers they could harm France’s interests.

Public service engagements in the energy sector are defined by the law of January 3, 2003.

Transmission rates on the GRTgaz transportation network and the gas distribution network in France, as well as rates for accessing the French LNG terminals and revenues from storage capacities, are all regulated.

The Law on Energy and Climate enacted on November 8, 2019 provided for the phase out of regulated gas tariffs and the restriction of regulated electricity tariffs to residential consumers and small businesses. Regulated gas tariffs were phased out on July 1, 2023.

20.1.2 Relations with EDF
Following the creation on July 1, 2004 of the French gas and electricity distribution network operator (EDF Gaz de France Distribution), Gaz de France SA and EDF entered into an agreement on April 18, 2005 setting out their relationship as regards the distribution business. The December 7, 2006 law on the energy sector reorganized the natural gas and electricity distribution networks. Enedis SA, a subsidiary of EDF SA, and GRDF SA, a subsidiary of ENGIE SA, were created on January 1, 2007 and December 31, 2007, respectively, and act in accordance with the agreement previously signed by the two incumbent operators. With the deployment of smart meters for both electricity and gas, the "common" activities operated by the two distributors evolved significantly. The remaining mixed activities are mainly in the areas of inventory management, human resources, the medical field, local IT and accountancy. 885 of 1021

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NOTE 20 RELATED PARTY TRANSACTIONS
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20.2 Relations with the CNIEG (Caisse Nationale des Industries Électriques et Gazières)
The Group’s relations with the CNIEG, which manages all old-age, death and disability benefits for active and retired employees of the Group who belong to the special EGI pension plan, employees of EDF and Non-Nationalized Companies (Entreprises Non Nationalisées – ENN), are described in Note 18 “Post-employment benefits and other long-term benefits”. 886 of 1021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21 EXECUTIVE COMPENSATION
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NOTE 21 EXECUTIVE COMPENSATION
The executive compensation presented below includes the compensation of the members of the Group's Executive Committee and Board of Directors.

The Executive Committee had 10 members at December 31, 2023 and at December 31, 2022.

Their compensation breaks down as follows:

In millions of euros Dec. 31, 2023 Dec. 31, 2022
Short-term benefits 23 34
Post-employment benefits ‐ ‐
Share-based payments 4 4
Termination benefits ‐ ‐
TOTAL 27 37
887 of 1021

OTHER ASSETS AND OTHER LIABILITIES
Accounting standards
In accordance with IAS 1, the Group’s current and non-current assets and liabilities are shown separately in the consolidated statement of financial position. For most of the Group’s activities, the breakdown into current and non current items is based on when assets are expected to be realized, or liabilities extinguished. Assets expected to be realized or liabilities extinguished within 12 months of the reporting date are classified as current, while all other items are classified as non-current.

Inventories
Inventories are measured at the lower of cost and net realizable value. Net realizable value corresponds to the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

The cost of inventories is determined based on the first-in, first-out method or the weighted average cost formula.

Nuclear fuel purchased is consumed in the process of producing electricity over a number of years. The consumption of this nuclear fuel inventory is recorded based on estimates of the quantity of electricity produced per unit of fuel.

Gas inventories
Gas injected into underground storage facilities includes working gas, which can be extracted without adversely affecting the subsequent operation of the reservoirs, and cushion gas, which is inseparable from the reservoirs and essential for their operation (see Note 13.3 “Property, plant and equipment”).

Working gas is classified in inventories and measured at weighted average purchase cost upon entering the transportation network regardless of its source, including any regasification costs.

Group inventory outflows are valued using the weighted average unit cost method.

Certain inventories are used for trading purposes and are recognized at fair value less selling costs, in accordance with IAS 2. Any changes in said fair value are recognized in the consolidated income statement for the year in which they occur.

Greenhouse gas emission rights, energy saving certificates and green certificates In the absence of specific IFRS standards or IFRIC interpretations on accounting for greenhouse gas emission allowances, energy saving certificates and green certificates, the Group has decided to recognize certificates in inventories at their acquisition or production cost. At the reporting date, a liability is recognized if the certificates held by the Group are insufficient to meet the obligation to return certificates to the French government. When not covered by the certificates held in inventories, the liability is measured at the market value or based on the price of any future contracts that have been entered into, when applicable.

Tax equity
The ENGIE Group finances its renewables projects in the United States through tax equity structures, in which part of the necessary funds is provided by a tax partner. The tax partner obtains, up to a pre-determined level, a preferential right essentially to the project’s tax credits, which it can deduct from its own tax base. 888 of 1021

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NOTE 22 WORKING CAPITAL REQUIREMENTS, INVENTORIES, OTHER ASSETS AND OTHER LIABILITIES ENGIE - 2023CONSOLIDATED FINANCIAL STATEMENTS
157
The tax partner’s investments meet the definition of a liability under IFRS. Since the tax equity liability corresponding to these tax benefits does not give rise to any cash outflow for the project entity, it does not represent a financial debt and is accounted for in “Other liabilities”.

Besides the unwinding effect, the liability changes mainly in line with the tax credits allocated to the tax partner and recognized in profit or loss.

22.1 Composition of change in working capital requirements In millions of euros
Change in working
capital
requirements at
Dec. 31, 2023
Change in working
capital
requirements at
Dec. 31, 2022
Inventories 3,003 (2,115)
Trade and other receivables, net 12,507 (11,614)
Trade and other payables, net (13,554) 8,521
Tax and employee-related receivables/payables (325) 1,545 Margin calls and derivative instruments hedging commodities relating to trading activities (1,113) 199 Other (120) 1,040
TOTAL 397 (2,424)

22.2 Inventories
In millions of euros Dec. 31, 2023 Dec. 31, 2022
Inventories of natural gas, net 2,218 4,628
Inventories of uranium (1) 307 308
CO2 emissions allowances, green certificates and energy saving certificates, net 1,535 1,788 Inventories of commodities other than gas and other inventories, net 1,283 1,420 TOTAL 5,343 8,145
(1) Financial hedging instruments are backed by these uranium inventories and represented a negative amount of €1 million at December 31, 2023.

22.3 Other assets and other liabilities
Dec. 31, 2023 Dec. 31, 2022
Assets Liabilities Assets Liabilities
In millions of euros
Noncurrent CurrentNoncurrent CurrentNoncurrent CurrentNoncurrent Current Other assets and liabilities 990 13,424 (3,614) (18,118) 766 18,294 (3,646) (23,583) Tax receivables/payables ‐ 9,420 ‐ (10,415) ‐ 14,647 ‐ (16,863) Employee receivables/payables 531 16 (2) (2,503) 523 22 (2) (2,479) Dividend receivables/payables ‐ 127 ‐ (20) ‐ 12 ‐ (23)
Other 459 3,845 (3,613) (5,178) 243 3,614 (3,644) (4,218) At December 31, 2023, other non-current assets included a receivable towards EDF in respect of nuclear provisions amounting to €654 million (€162 million at December 31, 2022).

Other liabilities include €2,140 million in investments made by tax partners as part of the financing of renewable projects in the United States by tax equity (€1,981 million at December 31, 2022). 889 of 1021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23 LEGAL AND ANTI-TRUST PROCEEDINGS
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NOTE 23 LEGAL AND ANTI-TRUST PROCEEDINGS
The Group is party to a number of legal and anti-trust proceedings with third parties or with legal and/or administrative authorities (including tax authorities) in the normal course of its business.

The main disputes and investigations presented hereafter are recognized as liabilities or give rise to contingent assets or liabilities.

In the ordinary course of its business, the Group is involved in a number of disputes and investigations before state courts, arbitral tribunals or regulatory authorities. The disputes and investigations that could have a material impact on the Group are presented below.

23.1 Renewables

23.1.1 Mexico – Renewable energy
In 2021, the Mexican government and public authorities took positions and legislative and regulatory measures that directly affect private players in the energy sector (in particular renewable energy producers) and go against the letter and spirit of the latest energy sector reforms introduced in 2013 and 2014. The constitutionality and legality of some of these measures have been contested in legal proceedings launched by non-government bodies and private investors, in particular by ENGIE subsidiaries that develop or implement renewable energy projects in the country. These proceedings are currently ongoing. The Mexican President has also submitted a draft revision of the Constitution that would substantially change the regulatory framework applicable to the electricity sector. However, Congress rejected the constitutional amendments proposed by the government, so the current law remains in force.

23.2 Energy Solutions

23.2.1 Spain – Púnica
In the Púnica case (procedure concerning the awarding of contracts), 15 Cofely España employees, as well as the company itself, were placed under investigation by the examining judge in charge of the case. The criminal investigation was closed on July 19, 2021 with the referral of Cofely España and eight (former) employees before the criminal court.

Cofely España lodged an appeal against this decision on September 30, 2021. On March 9, 2022, the appeal was dismissed and the referral decision upheld. The hearings are expected to begin in 2024.

23.2.2 Italy – Competition procedure
On May 9, 2019, a fine of €38 million was jointly and severally imposed on ENGIE Servizi SpA and ENGIE Energy Services International S.A. ("ENGIE ESI") by the Italian Competition Authority (the "Authority") for certain alleged anti-competitive practices relating to the award of the Consip FM4 2014 contract. An appeal was lodged with the Lazio Regional Administrative Court (Lazio RAC). On July 18, 2019, the Lazio RAC suspended the payment of the fine, and on July 27, 2020, it overturned the Authority’s decision as regards both ENGIE Servizi SpA and ENGIE ESI. On November 17, 2020, the Authority appealed the Lazio RAC’s decision before Italy's highest administrative court. On May 9, 2022, the Italian administrative court rejected the Authority’s appeal and upheld the Lazio RAC’s reversal of the Authority’s decision. Two companies (including Consorzio Innova whose appeals concern ENGIE Servizi SpA and ENGIE ESI) filed a special appeal against the administrative court’s decision before the administrative court itself on June 13, 2022. This appeal does not have suspensive effect. Another appeal challenging the administrative court’s rejection was also filed by the same companies before the Supreme Court on July 11, 2022. Following Consorzio Innova’s withdrawal of its appeal to the Supreme Court, it closed the proceedings on April 4, 2023. On July 21, 2023, the Italian administrative court rejected Consorzio Innova’s appeal. The Italian administrative court thereby confirmed its previous decision and upheld the Lazio RAC’s reversal of the Authority’s decision concerning ENGIE Servizi SpA and ENGIE ESI. 890 of 1021

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23.2.3 Italy – Manitalidea
In 2012, ENGIE Servizi formed a temporary association (“associazione temporanea di imprese” or “ATI”) with Manitalidea with the aim of submitting a bid for a public contract launched by CONSIP. ENGIE Servizi had an 85% stake in the ATI, with Manitalidea holding the remaining 15%. The purpose of the contract was to provide energy and maintenance services to hospitals.

In September 2012, three lots of the contract were awarded to the ATI.

On March 11, 2022, Manitalidea filed for damages against ENGIE Servizi in the Rome Civil Court, claiming that (i) ENGIE Servizi had not complied with the provisions of the temporary association agreement relating to the distribution of contracts between the partners, and (ii) as a result, Manitalidea had missed an opportunity to increase its revenue. After Manitalidea filed for bankruptcy, the claim was extended to include the alleged responsibility of ENGIE Servizi for Manitalidea’s financial difficulties and bankruptcy.

The proceedings are still ongoing.

23.3 Retail

23.3.1 Peru – Antamina
In 2012, following a tender for the annual purchase of 170 MW until 2032, ENGIE Energía Perú S.A. entered into a longterm gas purchase agreement with the Peruvian mining company Antamina (the “Agreement”).

In 2021, however, Antamina launched another tender for the same annual volume and entered into three purchase agreements with three new suppliers for a six-month period renewable twice. This called into question the exclusivity and “take or pay” clause that ENGIE Energía Perú S.A. believed it had been granted until 2032 under the Agreement. Following the signing of these new agreements, Antamina refused, as of January 2022, to accept delivery of the agreed upon quantity of gas under the Agreement and, consequently, to pay the corresponding penalty.

On April 26, 2022, ENGIE Energía Perú S.A. filed an arbitration procedure against Antamina, seeking recognition of the exclusive nature of the Agreement and Antamina’s obligation to only procure gas supplies from ENGIE. The suit also seeks the payment of invoices that have been outstanding since January 2022. The arbitration procedure is governed by the rules of the Arbitration Center of the Lima Chamber of Commerce. On January 4, 2023, ENGIE Energía Perú S.A. filed its statement of claim. The procedure is underway, and the verdict is expected in early 2024.

23.3.2 GEMS
At the beginning of the fourth quarter of 2022, ENGIE initiated an arbitration procedure against Gazprom Export LLC seeking, in particular to obtain (i) recognition of Gazprom Export LLC’s non-performance of its gas delivery obligations towards ENGIE under long-term gas delivery agreements and (ii) payment of contractual penalties as well as compensation for damage resulting from this non-performance from Gazprom Export LLC.

This arbitration procedure is due to the significant delivery shortages by Gazprom Export LLC to ENGIE as of mid-June 2022, followed by Gazprom Export LLC’s unilateral decision at the end of summer 2022 to reduce its deliveries to ENGIE due to a disagreement between the parties on the application of the agreements.

23.3.3 Chile – TotalEnergies
On January 3, 2023, ENGIE Energía Chile S.A. initiated international arbitration proceedings against TotalEnergies Gas & Power Limited for breaching its contractual obligations under an LNG supply contract entered into in August 2011. The proceedings are currently ongoing.
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23.4 FlexGen

23.4.1 Italy – Vado Ligure
On March 11, 2014, the Court of Savona seized and closed down the VL3 and VL4 coal-fired production units at the Vado Ligure thermal power plant belonging to Tirreno Power S.p.A. (TP), a company which is 50%-owned by the ENGIE Group.

This decision was taken as part of a criminal investigation against the present and former executive managers of TP into environmental infringements and public health risks. The investigation was closed on July 20, 2016. The case was referred to the Court of Savona to be tried on the merits. The proceedings before the Court of First Instance began on December 11, 2018 and carried on into 2023, seeking the liability of the former members of the Board of Directors and management. Third parties, including the Italian Ministry of the Environment and Ministry of Health, joined the proceedings to claim damages. On October 3, 2023, the Court of Savona acquitted all 26 directors and managers of all charges. The subsidiary Tirreno Power SpA, in which ENGIE has a 50% stake, was also acquitted. The decision was notified in January 2024. The public prosecutor has decided to appeal the decision in February 2024.

23.4.2 Brazil – Claim against sales tax adjustments
ENGIE Brasil Energia S.A. was subject to a tax reassessment covering fiscal years 2014, 2015, 2016 and 2018 in respect of federal value-added taxes (PIS and COFINS) for refunds relating to fuels used in the production of energy by thermopower plants. The total amount at stake is 693.6 million Brazilian real, including a principal amount of 258.9 million.

The company is contesting these reassessments and has lodged administrative appeals. The administrative appeals for fiscal years 2014, 2015 and 2016 were rejected and the company initiated the discussion at the judicial court. The administrative appeal for 2018 is being examined. If this administrative appeal is unsuccessful, the case could also be brought before the ordinary courts and tribunals.

In 2023, Diamante Geraçao de Energia (controlled by ENGIE Brasil Energia SA at the time and owner of the thermopower plants) was also subject to reassessments for the tax treatment of comparable fuel reimbursements. The reassessments concerned both PIS and COFINS taxes (fiscal years 2019 and 2020) and corporate income tax (fiscal year 2018). The total amount at stake is 542 million Brazilian real, including a principal amount of 260.5 million. Although ENGIE Brasil Energia SA sold this company in 2021, it remains financially responsible under the vendor's warranty regarding the years prior to the sale. The company is challenging these reassessments and has lodged an administrative appeal, which is currently under review, with the potential for escalation to ordinary courts and tribunals.

23.4.3 Italy – exceptional tax on the energy sector
In December 2022, ENGIE filed an action against the tax authorities to obtain the reimbursement of the tax it had paid in July and November 2022 for a total amount of more than €308 million, pursuant to two legislative decrees (no. 21 and no. 50/2022) that introduced an exceptional solidarity contribution to be paid by operators in the energy sector. ENGIE contests the validity of the basis of the tax in relation to the decree’s objective, its compatibility with the Italian Constitution as well as its compatibility with Italy’s European commitments (EU law). In December 2023, the Milan Court of First Instance asked the Italian Constitutional Court to rule on the constitutionality of the tax as part of the proceedings launched by ENGIE.

23.4.4 Flémalle – EPC
In November 2021, Electrabel SA entered into an EPC (Engineering, Procurement, Construction) agreement with SEPCO III for the construction of a gas-fired power plant in Flémalle (Belgium), in the context of the CRM (Capacity Remuneration Mechanism).

In August 2022, Electrabel SA terminated the EPC agreement with SEPCO III for non-performance of its contractual obligations and initiated arbitration proceedings in November 2022, to obtain compensation for the damage sustained. 892 of 1021

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SEPCO III filed a counterclaim against Electrabel seeking damages to cover the alleged loss it had sustained due to the termination of the contract.

23.5 Nuclear

23.5.1 Extension of operations at the nuclear power plants 2015-2025 Various associations have brought actions before the Constitutional Court, the Conseil d’État and the ordinary courts against the laws and administrative decisions authorizing the extension of operations at the Doel 1 and Doel 2 plants. On June 22, 2017 the Constitutional Court referred the case to the Court of Justice of the European Union (CJEU) for a preliminary ruling. In its judgment of July 29, 2019, the CJEU ruled that the Belgian law extending the operating lives of the Doel 1 and Doel 2 reactors (law extending Doel 1 and Doel 2) was adopted without the required environmental assessments being carried out first, but that the effects of the law on extension could provisionally be maintained where there was a genuine and serious threat of an interruption to the electricity supply, and then only for the length of time strictly necessary to eliminate this threat. In its decision of March 5, 2020, the Constitutional Court overturned the law extending Doel 1 and Doel 2, while maintaining its effects until the legislator adopts a new law after having carried out the required environmental assessment, including a cross-border public consultation process, by December 31, 2022 at the latest.

The environmental assessment and the cross-border public consultation were carried out by the Belgian State in 2021.

The draft law incorporating the conclusion of the assessment and the consultation was passed by the Belgian Federal Parliament on October 11, 2022 and published on November 3, 2022.

The appeal before the Conseil d’État against the administrative decisions that allowed the extension of operations at the Doel 1 and Doel 2 plants is still pending.

23.5.2 Shutdown of the Doel 3 and Tihange 2 power plants Various associations have lodged appeals before the Brussels Court of First Instance against Electrabel, the Belgian State, the Nuclear Safety Authority and/or the Elia electricity transmission network to contest the decisions and actions to shut down the Doel 3 (on September 23, 2022) and/or Tihange 2 (on January 31, 2023) power plants. In a first judgment dated November 16, 2022, the Brussels Court of First Instance, ruling in summary proceedings in one of the cases, confirmed the decisions and actions taken in relation to the shutdown. The applicants in this case withdrew their action on the merits.

In the second case on the merits, a judgment was handed down on June 30, 2023, rejecting the interim measures requested, including the request to prohibit Electrabel from taking any irreversible action in connection with the shutdown of Doel 3 and Tihange 2. The case is continuing on the merits, with no precise timetable at this stage.

23.5.3 Appeal against the Belgian energy regulator’s decision implementing the law of December 16, 2022 introducing a cap on electricity producers’ market revenues Electrabel lodged an appeal with the Belgian Market Court (Cour des Marchés) on March 29, 2023 against the decision of the Belgian energy regulator (CREG) to implement the December 16, 2022 law introducing a cap on electricity producers’ market revenues for 2022. Electrabel lodged a second action for annulment with the same court against the same regulator’s decision for 2023 revenues.

Electrabel contests the validity of this revenue cap, arguing that it is contrary to the European Regulation that introduced it, notably because it falsely determines market revenues using presumptions and not on the basis of revenues actually received, as provided for by the Regulation, and because it is implemented retroactively from August 1, 2022, outside the period covered by the Regulation. The Market Court handed down its ruling in the first case on October 18, 2023, finding that the action was admissible and prima facie founded, and referred three questions to the Court of Justice of the European Union for a preliminary ruling. The second case was heard on January 10, 2024, and the ruling handed down on January 31 suspends delivery until the Court of Justice of the European Union has ruled on the first case.

An appeal was also lodged with the Constitutional Court in June 2023. 893 of 1021

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In addition to the above-mentioned appeals, a claim for restitution of the 2022 tax has been lodged, as well as an appeal to the Court of First Instance for the annulment of the tax.

23.5.4 Arbitration procedure in application of the Tihange 1 and Doel 1 and 2 agreements following the adoption of the law of December 16, 2022 introducing a cap on electricity producers' market revenues
On October 17, 2023, Electrabel gave notice of the launch of arbitration proceedings before an arbitral tribunal for the breach of the agreements signed for the extension of Tihange 1 on March 12, 2014 and the extension of Doel 1 and Doel 2 on November 30, 2015. These agreements excluded, by virtue of the royalties paid in particular, any other charges in favor of the State (with the exception of general application taxes) linked to the ownership or operation of Tihange 1 or Doel 1 and Doel 2, the revenues, production or production capacity of these plants, or their use of nuclear fuel. Under the terms of the agreements, Electrabel is claiming the reimbursement of the tax paid for 2022 and the levy for 2023 on these plants.

23.6 Other

23.6.1 Withholding tax
In their tax deficiency notice dated December 22, 2008, the French tax authorities questioned the tax treatment of the nonrecourse Dailly sale by SUEZ (now ENGIE) of a disputed withholding tax (précompte) receivable in 2005 for an amount of €995 million (receivable relating to the précompte paid in respect of the 1999-2003 fiscal years). The Montreuil Administrative Court handed down a judgment in ENGIE’s favor in 2019, which led the French tax authorities to appeal the decision before the Versailles Court of Appeal, which overturned the prior Court’s decision in 2021. On April 14, 2023, the Conseil d’État overturned the Court’s ruling on the grounds that the assigned claim should be classified as an advance repayment of non-deductible tax, irrespective of the fact that the State had not authorized its repayment by the bank assigning the claim, and that the repayment was only partial. The Conseil d’État referred the case back to the Versailles Administrative Court of Appeal to decide on the basis of a procedure that made the tax treatment of the disputed assignment of receivables in 2005 dependent on the outcome of the précompte litigation itself. The Court of Appeal's decision is expected in 2024.

Regarding the dispute over the précompte itself, on February 1, 2016, the Conseil d’État dismissed the appeal before the Court of Cassation seeking the repayment of the précompte in respect of the 1999, 2000 and 2001 fiscal years. On June 23, 2020, the Versailles Administrative Court of Appeal found in favor of ENGIE as regards the cases seeking repayment of the précompte in respect of the 2002 and 2003 fiscal years but rejected the case in respect of the 2004 fiscal year. As the précompte receivables for 2002/2003 have been assigned, the relevant amounts have been repaid to the assignee banks. The case has been referred to the Conseil d'État by the two parties. On March 27, 2023, the Conseil d’État dismissed ENGIE’s appeal in light of the Conseil Constitutionnel’s decision of October 2022. On June 30, 2023, the Conseil d’État upheld the Court’s ruling and dismissed the Minister’s appeal in respect of the 2002 claim. It accordingly referred the matter back to the Versailles Administrative Court of Appeal, which was tasked with quantifying the amount of the 2003 précompte claim to be refunded in the light of the rules it had laid down, taking into account the prior decisions of the Court of Justice of the European Union and the Conseil constitutionnel. On January 9, 2024, the Court validated the calculation of the refundable précompte proposed by the tax authorities, without responding to ENGIE’s arguments. The latter intends to appeal the decision before the Conseil d’État.

Furthermore, after ENGIE and several French groups lodged a complaint, on April 28, 2016, the European Commission issued a reasoned opinion to the French State as part of infringement proceedings, setting out its view that the Conseil d’État did not comply with European Union law when handing down decisions in disputes regarding the précompte, such as those involving ENGIE. On July 10, 2017, the European Commission referred the matter to the Court of Justice of the European Union on the grounds of France’s failure to comply. On October 4, 2018, the Court of Justice of the European Union ruled partially in favor of the European Commission. Following this decision, France must revisit its methodology in order to determine the précompte repayment amounts in closed and pending court cases. No action has been initiated to date due to parallel litigation proceedings on the basis of Directive 90/435/EC. 894 of 1021

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23.6.2 Luxembourg – State aid investigation
On September 19, 2016, the European Commission announced its decision to open an investigation into whether or not two private rulings granted by the Luxembourg State in 2008 and 2010 covering two similar transactions between several of the Group’s Luxembourg subsidiaries constituted State aid. On June 20, 2018, the European Commission adopted a final, unfavorable decision deeming that Luxembourg had provided ENGIE with State aid. On September 4, 2018, ENGIE requested the annulment of the decision before the European Courts, thereby challenging the existence of a selective advantage. As these proceedings did not have a suspensive effect, ENGIE paid a sum of €123 million into an escrow account on October 22, 2018 in respect of one of the two transactions in question, since no aid was actually received for the other. Following the proceedings before the European Courts, this sum will be returned to ENGIE or paid to the Luxembourg State depending on whether or not the Commission’s decision is annulled. On May 12, 2021, the Court rejected the appeals of the Luxembourg State and of ENGIE, thereby confirming the European Commission’s position on the existence of State aid granted to the Group’s Luxembourg subsidiaries. On July 22, 2021, ENGIE referred the matter to the Court of Justice of the European Union seeking the annulment of the Court’s decision. On December 5, 2023, the Court ruled in favor of the Luxembourg State and ENGIE, annulling both the judgment of the Court of First Instance and the Commission’s decision on the grounds of errors in the reference framework. ENGIE recovered the 123 million in escrow in January 2024, thus concluding the dispute.

23.6.3 Poland – Competition procedure
On November 7, 2019, a fine of 172 million Polish zloty (€40 million) was imposed on ENGIE Energy Management Holding Switzerland AG (EEMHS) for failing to respond to a request for disclosure of documents from the Polish Competition Authority (UOKiK) in proceedings initiated by the UOKiK which suspected a potential failure to notify by EEMHS and other financial investors involved in the financing of the Nord Stream 2 pipeline (main proceeding). EEMHS filed an appeal with the Competition Protection Court. On November 7, 2023, the Court reduced the penalty to around €100,000. The UOKiK has appealed this decision to the Warsaw Court of Appeal (2 nd degree). The proceedings are pending.

In the context of the main proceedings, on October 6, 2020, the UOKiK ordered EEMHS to pay a fine of 55.5 million Polish zlotys (approximately €12.3 million). The UOKiK also ordered the termination of the financing agreements for the Nord Stream 2 project. On November 5, 2020, EEMHS appealed this decision with the Competition Protection Court (the “Court”). The appeal automatically suspends the execution of all of the penalties ordered by the UOKiK. On November 21, 2022, the Court overturned the UOKiK’s decision in its entirety. The UOKiK has appealed this decision. On October 16, 2023, the Warsaw Court of Appeal (2
nd degree) upheld the lower court’s decisions, which overturned the UOKIK’s decision in its entirety. The UOKiK may file an appeal in cassation.

23.6.4 Claim by the Dutch tax authorities related to interest deductibility Based on a disputable interpretation of a statutory modification that came into force in 2007, the Dutch tax authorities refused the deductibility of a portion (€1.1 billion) of the interest paid on financing contracted for the acquisition of investments made in the Netherlands since 2000. Following the Dutch tax authorities’ rejection of the administrative claim against the 2007 tax assessment, action was brought before the Arnhem Court of First Instance in June 2016. On October 4, 2018, the court ruled in favor of the tax authorities. On October 26, 2020, the ruling was confirmed by the Arnhem Court of Appeal. ENGIE Energie Nederland Holding BV considers that the Court committed errors in law and that its decision was not well-founded, under either Dutch or European law. It has therefore appealed the decision before the Court of Cassation. In July 2022, the Court of Cassation decided to refer questions on the compatibility of the Dutch legislation on interest with three of the European fundamental freedoms to the Court of Justice of the European Union for a preliminary ruling. The hearing was held before the Court of Justice of the European Union in November 2023. Its decision is expected in the first half of 2024.

23.6.5 Transfer price of gas
The Belgian tax authorities’ Special Tax Inspectorate has issued two tax deficiency notices in respect of taxable income for fiscal years 2012 and 2013 for an aggregate amount of €706 million, considering that the price applied for the supply 895 of 1021

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of gas by ENGIE (then GDF SUEZ) to Electrabel S.A. was excessive. ENGIE and Electrabel S.A. are challenging this adjustment and have submitted a request for conciliation proceedings, which was accepted by France and Belgium in May 2018. The proceedings are ongoing between the two States, who put forward their respective positions late 2022/early 2023, although the issue was still not resolved by the end of December 2023. 896 of 1021

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NOTE 24 SUBSEQUENT EVENTS
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NOTE 24 SUBSEQUENT EVENTS
No significant subsequent events have occurred since the closing of the accounts at December 31, 2023. 897 of 1021

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NOTE 25 FEES PAID TO THE STATUTORY AUDITORS AND TO MEMBERS OF THEIR NETWORKS ENGIE - 2023CONSOLIDATED FINANCIAL STATEMENTS
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NOTE 25 FEES PAID TO THE STATUTORY AUDITORS AND TO

MEMBERS OF THEIR NETWORKS
Pursuant to Article 222-8 of the General Regulations of the French Financial Markets Authority (AMF), the following table presents information on the fees paid by ENGIE SA, its fully consolidated subsidiaries and joint operations to each of the auditors in charge of auditing the annual and consolidated financial statements of the ENGIE Group.

The Shareholders’ Meeting of ENGIE SA of May 14, 2020 decided to renew the terms of office of Deloitte and EY as Statutory Auditors for a six-year period from 2020 to 2025.

Deloitte EY
In millions of euros
Deloitte &
Associés Network Total EY & others Network Total Total
Statutory audit and review of
consolidated and parent company
financial statements 5.0 6.8 11.8 5.7 9.5 15.1 26.9
ENGIE SA 2.5 - 2.5 2.9 - 2.9 5.4
Controlled entities 2.5 6.8 9.3 2.8 9.5 12.2 21.5
Non-audit services 0.7 0.7 1.4 1.5 2.2 3.7 5.1
ENGIE SA 0.6 ‐ 0.6 1.0 ‐ 1.1 1.6
Of which services related to legal and
regulatory requirements 0.4 - 0.4 0.6 - 0.6 0.9
Of which other audit services 0.1 - 0.1 0.5 ‐ 0.5 0.6
Of which reviews of internal control - - - - - - -
Of which due diligence services - - - - - - -
Of which tax services 0.1 - 0.1 - ‐ ‐ 0.1
Controlled entities 0.1 0.7 0.8 0.5 2.2 2.6 3.4
Of which services related to legal and
regulatory requirements ‐ 0.4 0.4 0.4 0.5 0.9 1.3
Of which other audit services 0.1 0.1 0.2 ‐ 0.2 0.2 0.4 Of which reviews of internal control - - - - - - -
Of which due diligence services - - - - 1.1 1.1 1.1
Of which tax services - 0.1 0.1 - 0.4 0.4 0.5
Total 5.6 7.5 13.1 7.1 11.7 18.8 31.9
898 of 1021

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NOTE 26 INFORMATION REGARDING LUXEMBOURG AND DUTCH COMPANIES EXEMPTED FROM THE REQUIREMENTS TO PUBLISH ANNUAL FINANCIAL

STATEMENTS
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NOTE 26 INFORMATION REGARDING LUXEMBOURG AND

DUTCH COMPANIES EXEMPTED FROM THE

REQUIREMENTS TO PUBLISH ANNUAL FINANCIAL

STATEMENTS
Some companies do not publish annual financial statements pursuant to domestic provisions under Luxembourg law (Article 70 of the Law of December 19, 2002) and Dutch law (Article 403 of the Civil Code) relating to the exemption from the requirement to publish audited annual financial statements.

The companies exempted are notably: ENGIE Energie Nederland NV, ENGIE Energie Nederland Holding BV, ENGIE Nederland Retail BV, ENGIE United Consumers Energie BV, Electrabel Invest Luxembourg, ENGIE Treasury Management SARL and ENGIE Invest International SA.
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900 of 1021
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A public limited company with a share capital of €2,435,285,011 Corporate headquarters: 1 place Samuel de Champlain
92400 Courbevoie – France
Tel.: +33 (0)1 44 22 00 00
Register of commerce: 542 107 651 RCS NANTERRE
VAT FR 13 542 107 651
engie.com
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Appendix B – M&V Report
903 of 1021
Steve Schulte, CMVP, CEM
Report Team Manager
ENGIE Services U.S. Inc.
12980 Foster Street, Suite 400
Overland Park, KS 66213
[email protected]
T. 913.225.7134
F. 913.653.0013
March 26, 2024
Mr. James Hamilton
Management Assistant
North Georgia Mountains Authority
199 South Erwin Street
Cartersville, GA 30120
Re: Final Energy Savings Reports – Year 7
Dear Mr. Hamilton:

The final energy savings reports for January 2023 thru December 2023 of Year 7 are ready to be viewed on our reporting website at www.utilityvision.com.

In Year 7, electric and propane savings of $336,955 were achieved at the Option C sites. These savings were realized because of the reduction in electric consumption by 35.0% and propane consumption by

21.9%. When you include the Option A measured lighting and water savings of $26,818, utility meter consolidation and wholesale propane purchasing of $51,316, as well as the stipulated savings from electric, gas, water & sewer of $68,612, life cycle cost avoidance of $9,580 and O&M savings of $40,532, the savings total $533,813. This exceeds the Year 7 guarantee of $508,479 by $25,334.

YEAR 7
Dollar
Savings
Electric
%
(kWh)
Svgs
Propane
%
(Therms)
Svgs
Lighting
& Water
Utility Meter
Consolidation
& Wholesale
Propane
Purchasing
Electric,
Gas,
Water &
Sewer
Life Cycle
Cost
Avoidance
Savings
Operations
& Maint.

Savings
Jan-23 $29,216 33.6% 16.9% $2,235 $4,276 $5,718 $798 $3,378 $45,621 $42,373 $3,248 Feb-23 $45,324 47.3% 41.1% $2,235 $4,276 $5,718 $798 $3,378 $107,350 $84,747 $22,603 Mar-23 $29,004 36.4% 23.3% $2,235 $4,276 $5,718 $798 $3,378 $152,759 $127,120 $25,639 Apr-23 $28,910 40.7% 18.5% $2,235 $4,276 $5,718 $798 $3,378 $198,074 $169,493 $28,581 May-23 $21,948 31.8% 22.2% $2,235 $4,276 $5,718 $798 $3,378 $236,427 $211,866 $24,560 Jun-23 $23,277 34.3% -2.0% $2,235 $4,276 $5,718 $798 $3,378 $276,109 $254,240 $21,870 Jul-23 $21,537 26.1% 19.7% $2,235 $4,276 $5,718 $798 $3,378 $314,051 $296,613 $17,438 Aug-23 $23,312 27.5% 25.5% $2,235 $4,276 $5,718 $798 $3,378 $353,768 $338,986 $14,782 Sep-23 $25,853 33.8% 22.3% $2,235 $4,276 $5,718 $798 $3,378 $396,026 $381,359 $14,667 Oct-23 $34,785 43.1% 26.5% $2,235 $4,276 $5,718 $798 $3,378 $447,216 $423,733 $23,483 Nov-23 $29,121 35.3% 22.7% $2,235 $4,276 $5,718 $798 $3,378 $492,742 $466,106 $26,636 Dec-23 $24,667 29.4% 13.6% $2,235 $4,276 $5,718 $798 $3,378 $533,813 $508,479 $25,334 Totals $336,955 35.0% 21.9% $26,818 $51,316 $68,612 $9,580 $40,532 *Some totals may be off slightly due to rounding.

Page 2 ends

The items included in this package are similar to last year’s from Utilityvision®. In order of inclusion:

1.) Cover Letter

2.) Sign-off sheet for acceptance

3.) Savings Summary: Monthly Dollar Savings vs. Guarantee – Year 7

4.) Cost Analysis: Energy Savings Project Performance Graph & Table – Year 7

5.) Energy Analysis – Graph & Table for Amicalola Falls Monthly kWh Savings

6.) Energy Analysis – Graph & Table for Brasstown Monthly kWh Savings

7.) Energy Analysis – Graph & Table for Brasstown Monthly Therm Savings

8.) Energy Analysis – Graph & Table for Unicoi Monthly kWh Savings

9.) Baseline Summary Sheet (for Option C Meters)
Here is a historical summary of the program to-date:

Some totals may be off slightly due to rounding.

Please sign the sign-off sheet and send back to ENGIE Services U.S. Inc. showing your acceptance of the Year 7 reports within 30 days in the envelope provided. After reviewing the reports, if you have any questions, please call me at (816) 679-3389 or contact me by e-mail at [email protected].

Sincerely,
ENGIE Services U.S. Inc.

Steve Schulte, CMVP, CEM
Report Team Manager
cc: Bill Donohue – NGMA – Buford, GA
Craig Campbell – ENGIE Services U.S. Inc. – Georgia
Option A Stipulated Total Guaranteed Total
Year $ Savings % kWh
Svgs
% Therm
Svgs
$ Savings $ Savings $ Savings $ Savings Excess
Savings
Year 0 (9m) $154,617 23.8% 24.9% $23,757 $15,053 $193,428 $0 $193,428 Year 1 (12m) $300,961 34.3% 30.6% $68,570 $161,064 $530,595 $503,111 $27,484 Year 2 (12m) $282,585 31.3% 28.9% $70,079 $154,400 $507,064 $503,972 $3,091 Year 3 (12m) $299,468 34.1% 21.6% $71,620 $147,584 $518,672 $504,847 $13,825 Year 4 (12m) $305,526 36.6% 27.4% $73,196 $140,613 $519,335 $505,735 $13,600 Year 5 (12m) $334,632 36.6% 21.9% $74,806 $133,481 $542,919 $506,637 $36,282 Year 6 (12m) $312,789 33.0% 21.6% $76,452 $126,186 $515,427 $507,551 $7,876 Year 7 (12m) $336,955 35.0% 21.9% $78,134 $118,724 $533,813 $508,479 $25,334 $2,327,534 34.4% 24.8% $536,614 $997,105 $3,861,253 $3,540,332 $320,921 Option C
Averages Yr1 - Yr 7
905 of 1021
I have looked at and accept the reports and
calculations included with the letter copied here.

Date:

Mr. James Hamilton, Management Assistant
North Georgia Mountains Authority

Please return this signed page to:

ENGIE Services U.S. Inc.

Energy Management Group – Vicki Santoro
12980 Foster Street, Suite 400
Overland Park, KS 66213-2601
[email protected]
906 of 1021
YEAR 7
Dollar
Savings
Electric
% (kWh)
Svgs
Propane
%
(Therms)
Svgs
Lighting &
Water
Utility Meter
Consolidation &
Wholesale
Propane
Purchasing
Electric,
Gas,
Water &
Sewer
Life Cycle
Cost
Avoidance
Savings
Operations
& Maint.

Measured Option C - Sites Measured Option A Stipulated
Savings
to-date
Pro-rated
Guarantee
to-date
Excess
Savings
to-date
North Georgia Mountains Authority - Savings Summary
907 of 1021
Cost Analysis : Energy Savings Project Performance - Year 7 From: Sunday, January 1, 2023 To: Sunday, December 31, 2023 Interval 1 Month Wednesday, January 3, 2024 1 / 1
908 of 1021
Cost Analysis : Energy Savings Project Performance - Year 7 From: Sunday, January 1, 2023 To: Sunday, December 31, 2023 From Timestamp All Sites.Life
Cycle Cost
Avoidance
Savings ($)
All
Sites.Operati
on and
Maintenance
Savings ($)
All
Sites.Option
A Lighting
Savings ($)
All
Sites.Option
A Utility
Meter
Consolidatio
n Savings ($)
All
Sites.Option
A Water
Savings ($)
All
Sites.Option
A Wholesale
Propane
Savings ($)
All
Sites.Stipulat
ed Electric
Savings ($)
All
Sites.Stipulat
ed Propane
Savings ($)
All
Sites.Stipulat
ed Water and
Sewer
Savings ($)
Amicalola
Falls State
Park and
Lodge.Electri
city Savings
($)
1/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 11,283.97 2/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 9,745.78 3/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 6,265.23 4/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 6,605.18 5/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 3,809.14 6/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 2,842.06 7/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 1,388.65 8/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 2,229.84 9/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 3,414.68 10/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 6,129.88 11/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 7,013.48 12/1/2023 12:00:00 AM 798.33 3,377.67 1,699.06 815.30 535.74 3,461.07 3,112.26 2,589.29 16.11 8,504.57 9,579.96 40,532.04 20,388.72 9,783.60 6,428.88 41,532.84 37,347.12 31,071.48 193.32 69,232.46 Wednesday, January 3, 2024 1 / 2
909 of 1021
Brasstown
Valley
Resort.Electr
icity Savings
($)
Brasstown
Valley
Resort.Propa
ne Savings
($)
Unicoi State
Park and
Lodge.Electri
city Savings
($)
7,729.82 3,652.50 6,550.14
16,629.56 7,458.04 11,490.46
7,943.75 3,746.86 11,048.46
10,949.70 2,292.96 9,062.50
8,895.30 2,731.31 6,511.92
11,850.79 -158.52 8,743.12
12,220.96 1,813.73 6,113.73
13,645.03 2,633.26 4,804.32
16,914.33 2,353.71 3,170.52
14,560.92 3,632.93 10,460.91
10,797.79 3,716.54 7,593.45
6,827.27 2,129.53 7,205.42
138,965.22 36,002.85 92,754.95
Wednesday, January 3, 2024 2 / 2
910 of 1021
1 Month (Month and Year) : 1/1/2023 12:00 AM - 12/31/2023 11:59 PM [ Change Interval ] Chart Data Estimated Reads Notes Investigate
Energy Analysis 
Month and Year
kWh
Amicalola Falls State Park and Lodge.Actual Electricity (kWh) Amicalola Falls State Park and Lodge.Baseline Electricity (kWh) Amicalola Falls State Park and Lodge.Electricity Savings (kWh) Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 0 25k
50k
75k
100k
125k
150k
175k
200k
225k
From Timestamp Amicalola Falls State Park and Lodge.Actual Electricity (kWh) Amicalola Falls State Park and Lodge.Baseline Electricity (kWh) Amicalola Falls State Park and Lodge.Electricity Savings (kWh) January 2023 93,101.0 193,394 100,293.0
February 2023 76,909.5 163,531 86,621.5
March 2023 78,393.0 134,079 55,686.0
April 2023 68,347.5 127,055 58,707.5
May 2023 76,820.0 110,676 33,856.0
June 2023 82,769.5 108,030 25,260.5
July 2023 104,106.5 116,449 12,342.5
August 2023 96,378.0 116,197 19,819.0
September 2023 80,168.0 110,518 30,350.0
October 2023 72,996.0 127,479 54,483.0
November 2023 92,997.5 155,334 62,336.5
December 2023 108,322.5 183,912 75,589.5
1,031,309.0 1,646,654 615,345.0

911 of 1021
1 Month (Month and Year) : 1/1/2023 12:00 AM - 12/31/2023 11:59 PM [ Change Interval ] Chart Data Estimated Reads Notes Investigate
Energy Analysis 
Month and Year
kWh
Brasstown Valley Resort.Actual Electricity (kWh) Brasstown Valley Resort.Baseline Electricity (kWh) Brasstown Valley Resort.Electricity Savings (kWh) Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 0 50k
100k
150k
200k
250k
300k
From Timestamp Brasstown Valley Resort.Actual Electricity (kWh) Brasstown Valley Resort.Baseline Electricity (kWh) Brasstown Valley Resort.Electricity Savings (kWh) January 2023 169,844.7 227,920 58,075.3
February 2023 134,819.6 259,760 124,940.4
March 2023 148,877.4 208,560 59,682.6
April 2023 131,733.3 214,000 82,266.7
May 2023 142,048.3 208,880 66,831.7
June 2023 155,683.3 244,720 89,036.7
July 2023 182,742.1 274,560 91,817.9
August 2023 180,522.9 283,040 102,517.1
September 2023 151,080.1 278,160 127,079.9
October 2023 142,601.7 252,000 109,398.3
November 2023 148,474.6 229,600 81,125.4
December 2023 166,305.7 217,600 51,294.3
1,854,733.7 2,898,800 1,044,066.3

912 of 1021
1 Month (Month and Year) : 1/1/2023 12:00 AM - 12/31/2023 11:59 PM [ Change Interval ] Chart Data Estimated Reads Notes Investigate
Energy Analysis 
Month and Year
Therm
Brasstown Valley Resort.Actual Propane (Therm) Brasstown Valley Resort.Baseline Propane (Therm) Brasstown Valley Resort.Propane Savings (Therm) Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 -2k
0 2k
4k
6k
8k
10k
12k
From Timestamp Brasstown Valley Resort.Actual Propane (Therm) Brasstown Valley Resort.Baseline Propane (Therm) Brasstown Valley Resort.Propane Savings (Therm) January 2023 9,229.2 11,109 1,879.8
February 2023 5,511.6 9,350 3,838.4
March 2023 6,343.6 8,272 1,928.4
April 2023 5,184.9 6,365 1,180.1
May 2023 4,919.3 6,325 1,405.7
June 2023 4,202.6 4,121 -81.6
July 2023 3,793.5 4,727 933.5
August 2023 3,960.7 5,316 1,355.3
September 2023 4,229.6 5,441 1,211.4
October 2023 5,189.2 7,059 1,869.8
November 2023 6,515.2 8,428 1,912.8
December 2023 6,959.0 8,055 1,096.0
66,038.4 84,568 18,529.6

913 of 1021
1 Month (Month and Year) : 1/1/2023 12:00 AM - 12/31/2023 11:59 PM [ Change Interval ] Chart Data Estimated Reads Notes Investigate
Energy Analysis 
Month and Year
kWh
Unicoi State Park and Lodge.Actual Electricity (kWh) Unicoi State Park and Lodge.Baseline Electricity (kWh) Unicoi State Park and Lodge.Electricity Savings (kWh) Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 0 25k
50k
75k
100k
125k
150k
175k
200k
225k
250k
From Timestamp Unicoi State Park and Lodge.Actual Electricity (kWh) Unicoi State Park and Lodge.Baseline Electricity (kWh) Unicoi State Park and Lodge.Electricity Savings (kWh) January 2023 152,254.7 204,240 51,985.3
February 2023 125,645.9 216,840 91,194.1
March 2023 127,833.8 215,520 87,686.2
April 2023 109,635.4 181,560 71,924.6
May 2023 108,278.1 159,960 51,681.9
June 2023 114,018.1 183,408 69,389.9
July 2023 145,034.4 193,556 48,521.6
August 2023 147,160.5 185,290 38,129.5
September 2023 126,277.1 151,440 25,162.9
October 2023 110,656.9 193,680 83,023.1
November 2023 131,494.5 191,760 60,265.5
December 2023 167,814.1 225,000 57,185.9
1,566,103.5 2,302,254 736,150.5

914 of 1021
North Georgia Mountains Authority Year 7 1/3/2024
Baseline Summary Sheet Page 1 of 1
Amicalola Falls
Electric Usage (kWh)
Previous
Baseline
Adjusted
Baseline
January 193,394 193,394.0
February 163,531 163,531.0
March 134,079 134,079.0
April 127,055 127,055.0
May 110,676 110,676.0
June 108,030 108,030.0
July 116,449 116,449.0
August 116,197 116,197.0
September 110,518 110,518.0
October 127,479 127,479.0
November 155,334 155,334.0
December 183,912 183,912.0
Totals 1,646,654 - 1,646,654.0
Brasstown Valley
Electric Usage (kWh) Propane Usage (therms)
Previous
Baseline
Adjusted
Baseline
Previous
Baseline
Adjusted
Baseline
January 227,920 227,920.0 11,109 11,109.0
February 259,760 259,760.0 9,350 9,350.0
March 208,560 208,560.0 8,272 8,272.0
April 214,000 214,000.0 6,365 6,365.0
May 208,880 208,880.0 6,325 6,325.0
June 244,720 244,720.0 4,121 4,121.0
July 274,560 274,560.0 4,727 4,727.0
August 283,040 283,040.0 5,316 5,316.0
September 278,160 278,160.0 5,441 5,441.0
October 252,000 252,000.0 7,059 7,059.0
November 229,600 229,600.0 8,428 8,428.0
December 217,600 217,600.0 8,055 8,055.0
Totals 2,898,800 - 2,898,800.0 84,568 - 84,568.0
Unicoi State Park and Lodge
Electric Usage (kWh)
Previous
Baseline
Adjusted
Baseline
January 204,240 204,240.0
February 216,840 216,840.0
March 215,520 215,520.0
April 181,560 181,560.0
May 159,960 159,960.0
June 183,408 183,408.0
July 193,556 193,556.0
August 185,290 185,290.0
September 151,440 151,440.0
October 193,680 193,680.0
November 191,760 191,760.0
December 225,000 225,000.0
Totals 2,302,254 - 2,302,254.0
There may be changes at the facilities that will affect the energy use. In order to accurately calculate the savings that have been achieved from the implementation of energy conservation measures, it is important to account for changes in use or equipment to the facility. The tables below summarize these adjustments in terms of the change in the amount of energy used at each facility, and a detailed adjustment will be included for each change to the baseline. The Adjusted Monitoring Baselines will be used in the reports to calculate energy savings. 915 of 1021
Appendix C – Sample Performance
Energy Contract
916 of 1021
Energy Services Contract
[Customer] and ENGIE Services U.S.

Rev. Date: _______ Page 1 of 28 ESC – CA Public
V 06/14/2022
DIR Project Registration # _ _ _ _ _ _
ENGIE Services Project #: _ _ _ _ _
ENGIE Services Contract # R _ _ _ _

ENERGY SERVICES CONTRACT
DRAFT DATED [●]
This ENERGY SERVICES CONTRACT (this “Contract”) is made and entered into as of [●] (the “Contract Effective Date”) by and between ENGIE Services U.S. Inc., a Delaware corporation, with California State Contractor’s License Number 995037 (“ENGIE Services U.S.”), and [Customer] (“[Customer]” and together with ENGIE Services U.S. the “Parties” and each of [Customer] and ENGIE Services U.S. a “Party”).

CONTRACT RECITALS
WHEREAS, [Customer] owns and/or operates certain public facilities specifically described in Attachment A (the “Facilities”) and [Customer] wishes to reduce the Facilities’ energy consumption and costs and improve the Facilities’ energy quality and reliability; and
WHEREAS, ENGIE Services U.S. is a full-service energy services company with the technical capabilities to provide services to [Customer] including identifying supply-side and/or demand-side energy conservation measures (“ECMs”), engineering, procurement, construction management, installation, construction and training; and WHEREAS, ENGIE Services U.S. has identified potential energy and operational savings opportunities at [Customer]’s Facilities and estimated program costs to implement the ECMs and presented an overall potential energy cost and consumption savings for implementing the ECMs; and WHEREAS, pursuant to California Government Code §4217.12, [Customer] held a regularly scheduled public hearing on [●], of which two weeks advance public notice was given regarding this Contract and its subject matter, and WHEREAS, [Customer] has determined that the anticipated cost to [Customer] to implement the ECMs will be less than the anticipated cost to [Customer] for thermal, electrical, and other energy, together with anticipated operational, maintenance and other costs, that would have been consumed by [Customer] in the absence of the ECMs [for 4217 projects: in compliance with California Government Code §§4217.10 through 4217.18; and WHEREAS, [Customer] has determined that entering into this energy services contract to implement the ECMs is in the best interests of [Customer] and that California Government Code §4217.10 et seq. allows [Customer] to enter into this Contract; and
WHEREAS, by adoption of Resolution No. [●] at the above-referenced meeting, [Customer] approved this Contract and authorized its execution.

NOW, THEREFORE, [Customer] and ENGIE Services U.S. hereby agree as follows:

ARTICLE 1. DEFINITIONS
For purposes of this Contract and its Attachments, defined terms will have the following meanings:
“Abnormally Severe Weather Conditions” means typhoons, hurricanes, tornadoes, lightning storms and other climatic and weather conditions that are abnormally severe for the period of time when, and the area where, such storms or conditions occur, in each case occurring at a property, the access roads to a property, or any other location where Work or Professional Services are then being performed. The term “Abnormally Severe Weather Conditions” specifically includes rain, snow or sleet in excess of one hundred fifty percent (150%) of the median level over the preceding ten (10) year period for the local geographic area and time of year in which such rain, snow or sleet accumulates.
“Act” is defined in ARTICLE 14.
“Affiliate” means any Person that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise; ownership of fifty percent (50%) or more of the voting securities of another Person creates a rebuttable presumption that such Person controls such other Person. “Applicable Law” means any statute, law, treaty, building code, rule, regulation, ordinance, code, enactment, injunction, writ, order, decision, authorization, judgment, decree, protocol, procedure or other legal or regulatory 917 of 1021
Energy Services Contract
[Customer] and ENGIE Services U.S.

Rev. Date: _______ Page 2 of 28 ESC – CA Public
V 06/14/2022
determination or restriction by a court or Governmental Authority of competent jurisdiction, as may be in effect at the time the Work or Professional Services are undertaken.
“Applicable Permits” means all permits, approvals, inspections and certifications required to be issued by any Governmental Authority in connection with the Professional Services or the building, installation and start-up of the Work as of the Contract Effective Date.
“Application for Payment” means a monthly progress payment as described in Section 8.01 or an invoice for materials stored off-site as described in Section 8.02. “Arbitral Panel” is defined in Section 19.04(ii).
“Arbitration Rules” is defined in Section 19.04(ii).
“Attachment” means the following attachments to this Contract, each of which is an “Attachment:” Attachment A [Customer]’s Facilities and Existing Equipment Attachment B Standards of Occupancy and Control
Attachment C Scope of Work
Attachment D Scope of Monitoring Installation
Attachment E M&V Services
Attachment F Maintenance Services
Attachment G Education Services
“Beneficial Use” means when major new equipment and systems included in the Scope of Work are properly installed, inspected, operational, and are capable of being used for their intended purpose. Criteria for Beneficial Use of equipment / systems will be established as defined in Attachment C. “Business Day” means any calendar day other than a Saturday, a Sunday or a calendar day on which banking institutions in San Francisco, California, are authorized or obligated by law or executive order to be closed. “CEQA” means the California Environmental Quality Act, codified at California Public Resource Code § 21000 et seq., and the applicable state and local guidelines promulgated thereunder. “Certificate of Beneficial Use” means the certificate, issued by ENGIE Services U.S. to [Customer] and subcontractor(s), which identifies when [Customer] took Beneficial Use of the Work or any portion thereof. A Certificate of Beneficial Use may be executed for an individual subcontract, a specific building, a portion of the Work, or the entire Work.
“Certificate of Final Completion” means the certificate issued by ENGIE Services U.S. to [Customer], in accordance with Section 6.03. A Certificate of Final Completion may be executed for an individual subcontract, a specific building, a portion of the Work, or the entire Work. “Certificate of Substantial Completion” means the certificate issued by ENGIE Services U.S. to [Customer], in accordance with Section 6.02. A Certificate of Substantial Completion may be executed for an individual subcontract, a specific building, a portion of the Work, or the entire Work. “Change” means any addition to, deletion from, suspension of, or other modification to the quality, function, or intent of the Work or Professional Services.
“Change in Law” means any of the following events or circumstances occurring after the Contract Effective Date:
(i) an amendment, modification, interpretation, construction, enforcement standard, supplement or other change in or repeal of an existing Applicable Law; or (ii) an enactment or making of a new Applicable Law (excluding a change in any income or franchise tax law, worker’s compensation, payroll or withholding tax law, but including any change in law imposing new or additional tariffs or import duties). “Change Order” means a written document, signed by both ENGIE Services U.S. and [Customer], authorizing ENGIE Services U.S. to perform a Change. The Change Order modifies the Scope of Work and should identify: (i) the applicable Change; (ii) any additional compensation to be paid to ENGIE Services U.S. to perform such Change; and (iii) any extension of time to complete the Project. “Construction” means any and all Work to be performed that involves construction, alteration, repair, installation or removal of equipment, addition to, subtraction from, improving, moving, wrecking or demolishing any building, parking facility, excavation, or other structure or improvement, or any part thereof. 918 of 1021
Energy Services Contract
[Customer] and ENGIE Services U.S.

Rev. Date: _______ Page 3 of 28 ESC – CA Public
V 06/14/2022
“Construction Documents” means the final designs, drawings, specifications and submittals that are used for Construction, and any Change Orders affecting those documents, that describe the technical requirements for the installation of all the materials and equipment pursuant to this Contract. “Construction Period” means the period beginning with the first day of the month in which material or equipment is first installed at the Facilities and continuing until the [M&V Commencement Date][date of Final Completion]. “Contract” is defined in the Preamble, and includes all Attachments hereto (all of which are incorporated herein by this reference), as well as all Change Orders, amendments, restatements, supplements and other modifications hereto.
“Contract Amount” means [●] ($[●]), which is inclusive of the mobilization payment, as set forth in Section 8.01, but exclusive of any fees for Professional Services.
“Contract Bonds” is defined in Section 12.02.
“Contract Effective Date” is defined in the Preamble.
“[Customer]” is defined in the Preamble.
“[Customer] Persons” means [Customer], its agents, employees, subcontractors, architects, general contractors, lease/leaseback contractors or other Persons acting on behalf of [Customer] or for whom [Customer] is responsible. “Delay” means any circumstances involving delay, disruption, hindrance or interference affecting the time of performance of the Work or the Professional Services.
“Dispute” is defined in Section 19.02.
“DOE Guidelines” is defined in Section 13.01.
“ECM” is defined in the Recitals.
“Education Services” (if any) are defined in Attachment G. “EMS” means an energy management system.
“Energy Delivery Point” means, for each Generating Facility, the point at which Utility meter energy is being delivered, as designated in the Interconnection Agreement. “Energy Usage Data” is defined in Section 2.05.
“ENGIE Services U.S.” is defined in the Preamble.
“ENGIE Services U.S. Warranty” is defined in Section 9.01. “Event of Default” is defined in ARTICLE 16.
“Excusable Event” means an act, event, occurrence, condition or cause beyond the control of ENGIE Services U.S., including, but not limited to, the following: (i) any act or failure to act of, or other Delay caused by any [Customer] Person; (ii) the failure to obtain, or delay in obtaining, any Interconnection Agreement, Applicable Permit, or approval of a Governmental Authority (including due to failure to make timely inspection), or Delays caused by Changes and/or modifications to the Scope of Work required by a Governmental Authority, other than a failure caused by the action or inaction of ENGIE Services U.S.; (iii) changes in the design, scope or schedule of the Work required by any Governmental Authority or [Customer] Person; (iv) undisclosed or unforeseen conditions encountered at the Project Location, including discovery or existence of Hazardous Substances; (v) the failure to obtain, or delay in obtaining, approval of any Governmental Authority for design and installation of any portion of the Work, including any further or subsequent approval required with respect to any Change, other than a failure caused by the action or inaction of ENGIE Services U.S.; (vi) information provided to ENGIE Services U.S. by any [Customer] Person or Utility is later found to be inaccurate or incomplete; (vii) any Change in Law; (viii) Delay caused by pending arbitration; (ix) acts of God; (x) acts of the public enemy or terrorist acts; (xi) relocation or construction of transmission facilities or the shutdown of such facilities for the purpose of necessary repairs; (xii) work by Utility; (xiii) flood, earthquake, tornado, storm, fire, explosions, lightning, landslide or similar cataclysmic occurrence; (xiv) sabotage, vandalism, riots or civil disobedience; (xv) labor disputes or strikes; (xvi) labor or material shortages; delay in manufacturing and deliveries of equipment; supply chain disruptions; material price increases that equal or exceed fifteen percent (15%) in a six (6) month period; (xvii) Abnormally Severe Weather Conditions; (xviii) an annual level of direct beam solar resource availability that is less than or equal to 90% of historical averages as measured by long-term weather data (minimum 5 years) collected at the applicable Facility and/or other reliable calibrated and appropriate weather station representative of such Facility; (xix) requirement by Utility that any Generating Facility discontinue operation; (xx) any action by a Governmental Authority that prevents or inhibits the Parties from carrying out their respective obligations under this Contract (including an unstayed order of a court 919 of 1021
Energy Services Contract
[Customer] and ENGIE Services U.S.

Rev. Date: _______ Page 4 of 28 ESC – CA Public
V 06/14/2022
or administrative agency having the effect of subjecting the sales of energy output to federal or state regulation of prices and/or services); (xxi) any Utility power outage at a Facility; or (xxii) regional epidemic or global pandemic. “Facilities” is defined in the Recitals.
“Final Completion” means the stage in the progress of the Work at which the Construction Work as identified in the Scope of Work, or a designated portion thereof, has been completed and commissioned, including completion of all Punch List items, completion of all required training, and delivery to [Customer] of the final documentation (as-built drawings, operation and maintenance manuals, warranty documentation and final submittals). “Generating Facility” means each of the photovoltaic, solar powered generating facilities located at the sites listed in Attachment E, and includes all associated photovoltaic panels, mounting assemblies, inverters, converters, metering, lighting fixtures, transformers, ballasts, disconnects, combiners, switches, wires and other equipment that may be necessary to connect the Generating Facility to the applicable Energy Delivery Point. “Governmental Authority” means any federal, state, regional, town, county, city, municipal or local government agency, department or regulatory body having jurisdiction under Applicable Law over the matter in question. “Greenhouse Gas” is defined in Section 13.01.
“Hazardous Substances” means (i) any hazardous, toxic, or dangerous wastes, substances, chemicals, constituents, contaminants, pollutants, and materials and any other carcinogenic, liquids, corrosive, ignitable, radioactive, reactive, toxic, or otherwise hazardous substances or mixtures (whether solids, liquids, gases) now or at any time subject to regulation, control, remediation, or otherwise addressed under Applicable Laws; (ii) any “hazardous substance” as defined by the Resource, Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et seq.), as amended, and regulations promulgated thereunder; (iii) any “hazardous, toxic or dangerous waste, substance or material” specifically defined as such in 42 U.S.C. §9601 et seq.), as amended and regulations promulgated thereunder; and (iv) any hazardous, toxic or dangerous waste, substance, or material as defined in any so-called “superfund” or “superlien” law.
“Incentive Funds” is defined in Section 8.06.
“Installation” means the setting up, construction, and placement of any equipment or materials in the manner it will be operated, in accordance with the Scope of Work and in accordance with all Applicable Laws. “Instruments of Service” is defined in Section 10.01(c). “Interconnection Agreement” means the Interconnection Agreement to be entered into between [Customer] and the Utility with respect to the Generating Facilities.
“Interconnection Facilities” is defined in Section 18.02. “Interest” means interest calculated at the lesser of (i) the prime rate plus two percent (2%) or (ii) the maximum rate permitted by Applicable Law. The “prime rate” will be the “Prime Rate” of interest per annum for domestic banks as published in The Wall Street Journal in the “Money Rates” section. “Losses” is defined in Section 11.01.
“M&V Commencement Date” means the first day of the month immediately following the later of (i) ENGIE Services U.S.’s receipt of the fully signed Certificate of Final Completion, and (ii) ENGIE Services U.S.’s receipt of the full Contract Amount.
“M&V Services” (if any) are defined in Attachment E.
“Maintenance Services” (if any) are defined in Attachment F. “Measurement Period” means each one-year period following the M&V Commencement Date. “NEC” means the National Electric Code.
“Notice to Proceed” is defined in Section 2.04.
“Party” and “Parties” are defined in the Preamble.
“Person” means any natural person, corporation, general partnership, limited partnership, limited liability company, proprietorship, other business organization, trust, union, association or Governmental Authority. “Professional Services” means professional services (such as Education Services, Maintenance Services and M&V Services, if any) provided by ENGIE Services U.S. to [Customer] under this Contract. “Project” means the entirety of Work to be performed by ENGIE Services U.S. pursuant to the Scope of Work, and any Change Orders.
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“Project Location” means the area or areas where the Project materials and equipment and any other energy related equipment, as described in the Scope of Work, are installed, and the general area where the Work is performed.
“Punch List” means, with respect to any portion of the Work, a list of minor corrective items which need to be completed or corrected in order to complete such portion of the Work, but do not impair [Customer]’s ability to beneficially operate and utilize such portion of the Work. “Retained Items” is defined in Section 10.02.
“Retention” is defined in Section 8.03.
“Schedule of Values” is defined in Section 8.01.
“Scope of Work” means the Work set forth in Attachments C and D, as modified by any Change Order. “Substantial Completion” means the stage in the progress of the Work at which the Work, or a designated portion thereof, is sufficiently complete, in conformance with the Scope of Work, the Construction Documents and any Change Orders, so that [Customer] can take Beneficial Use thereof. “Surety” means the surety supplying the Contract Bonds, which must be an “admitted surety insurer,” as defined by California Code of Civil Procedure §995.120, authorized to do business in the State of California, and reasonably satisfactory to [Customer].
“Utility” is defined in Section 18.02.
“Work” means the Work to be done by ENGIE Services U.S. pursuant to the Scope of Work, subject to any Change Orders.

ARTICLE 2. TERM; PERFORMANCE OF THE WORK
Section 2.01 Contract Term. The term of this Contract commences on the Contract Effective Date and ends on the [last day of the Energy Savings Term][last day on which Professional Services are provided], unless terminated earlier as provided in this Contract.

Section 2.02 Performance of Work. The Work and Professional Services to be performed hereunder will be provided in accordance with the terms of this Contract and the applicable standard of care. ENGIE Services U.S. will perform its obligations under this Contract (i) using the degree of skill and care that is required by current, good and sound professional procedures and practices, and (ii) in conformance with (x) generally accepted professional standards prevailing at the time the Work is performed, (y) the covenants, terms and conditions of this Contract, and (z) applicable laws, codes, rules and regulations, including, without limitation, the applicable provisions of the California Building Code.

ENGIE Services U.S. represents and warrants that it is fully experienced in projects of the nature and scope of the Work and Professional Services, and that it is properly qualified, licensed and equipped to supply and perform the Work and Professional Services. The Work completed herein will be subject to [Customer]’s general right of inspection and supervision to secure the satisfactory completion thereof in accordance with this Contract.

Section 2.03 Scope of Work.
(a) The Scope of Work may not exceed that set forth in Attachments C and D, except pursuant to a Change Order. (b) The Professional Services may not exceed those set forth in Attachments E, F and G, except pursuant to a Change Order.

Section 2.04 Notice to Proceed. Within ten (10) days after [Customer] has closed the financing referenced in Section 2.07, [Customer] will issue to ENGIE Services U.S. a written Notice to Proceed (“Notice to Proceed”). ENGIE Services U.S. will begin Work within thirty (30) calendar days after ENGIE Services U.S.’s receipt of the Notice to Proceed. If [Customer] fails to issue the Notice to Proceed within twenty (20) calendar days after the financing has closed, ENGIE Services U.S. will be entitled to an equitable extension of time and/or an equitable adjustment in the Contract Amount as a result of such delay.

Section 2.05 Project Schedule. After receipt of the Notice to Proceed, ENGIE Services U.S. will develop, with input from [Customer], a master project schedule using Microsoft Project®. ENGIE Services U.S. will establish a weekly construction meeting at which time the Work of the previous week will be reviewed and a two-week look ahead will be coordinated. The project schedule will be updated monthly.

Section 2.06 [Customer]’s Energy and Operational Records and Data. If ENGIE Services U.S. requests, [Customer] will provide to ENGIE Services U.S., within thirty (30) calendar days after such request, [Customer]’s Energy Usage Data for the twelve (12) months preceding the Contract Effective Date, and will make commercially reasonable efforts to provide the Energy Usage Data for the thirty-six (36) months preceding the Contract Effective Date. “Energy Usage Data” means all of [Customer]’s records and complete data concerning energy usage, energy-related 921 of 1021
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maintenance, and other related costs for the Facilities, and including, without limitation, utility records; occupancy information; descriptions of any past, present or anticipated changes in a building’s structure or its heating, cooling, lighting or other systems or energy requirements; descriptions of all energy consuming or saving equipment used in the Facilities; applicable building drawings, specifications, existing AutoCAD files, operation and maintenance manuals, and as-builts; bills and records relating to operation and maintenance of systems and equipment within the Facilities, and a description of operation and management procedures currently utilized. [Customer] agrees that ENGIE Services U.S. may rely on the foregoing data as being accurate in all respects. If ENGIE Services U.S. requests, [Customer] will also provide to ENGIE Services U.S., within thirty (30) calendar days after such request, any prior energy audits of the Facilities, and copies of [Customer]’s financial statements and records related to energy usage and operational costs for said time period at the Facilities, and will authorize its agents and employees to provide and freely discuss such records and to make themselves available for consultations and discussions with authorized representatives, employees, subcontractors, and agents of ENGIE Services U.S.

Section 2.07 Finance Contingency. It is acknowledged and agreed by the Parties that the continued existence of this Contract is expressly contingent upon [Customer] closing financing that will allow it to make the payments to ENGIE Services U.S. required by this Contract. [Customer] will have thirty (30) calendar days after the Contract Effective Date to close such financing. If the financing is not closed within this time, for any reason, either Party may by written notice to the other Party declare this Contract to be null and void; and the Contract will be null and void as of the other Party’s receipt of this notice; provided that [Customer] may not declare this Contract to be null and void after it has issued the Notice to Proceed. It is acknowledged and agreed that ENGIE Services U.S. will have no obligation to commence performance of the Work unless and until the financing has been closed.

Section 2.08 Proof of Financial Arrangements. Prior to the commencement of the Work, [Customer] will provide ENGIE Services U.S. proof that financial arrangements have been made to fulfill [Customer]’s obligations under this Contract. [Customer]’s requirement to furnish such proof to ENGIE Services U.S. is a condition precedent to commencement of the Work. After commencement of the Work, ENGIE Services U.S. may request such proof if (i) [Customer] fails to make payments to ENGIE Services U.S. as this Contract requires; (ii) a Change in the Work materially changes the Contract Amount; or (iii) ENGIE Services U.S. has other reasonable concerns regarding [Customer]’s ability to fulfill its payment obligations under this Contract when due. [Customer] will furnish such proof as a condition precedent to commencement or continuation of the Work or the portion of the Work affected by a material change. After [Customer] furnishes any such proof, [Customer] will not materially vary such financial arrangements without prior consent of ENGIE Services U.S. If [Customer] fails to provide ENGIE Services U.S. with such proof within ten (10) calendar days of receiving a demand from ENGIE Services U.S., ENGIE Services U.S. will be entitled to suspend its performance under this Contract until such proof is received.

ARTICLE 3. PROJECT IMPLEMENTATION - GENERAL
Section 3.01 Registrations, Permits and Approvals.
(a) Prior to issuing the Notice to Proceed, [Customer] must register the Project with the California Department of Industrial Relations, using Form PWC-100.
(b) ENGIE Services U.S. is responsible for obtaining (but not paying for) all Applicable Permits required under this Contract. [Customer] will cooperate fully with and assist ENGIE Services U.S. in obtaining Applicable Permits. (c) [Customer] is responsible for paying for all permit fees (including expedited plan check fees), inspections, and certifications costs, including any additional work that may be required by the Authority(ies) Having Jurisdiction as part of the permitting process.
(d) [Customer] is responsible for hiring and paying for all inspectors, site testing (including geotechnical observations) and laboratory testing.
(e) [Customer] is responsible for paying for all utility interconnection(s) costs, including any additional work that may be required by the Utility(ies) as part of the Interconnection Agreement(s). (f) [Customer] is responsible for obtaining and paying for any annual operating permits and approvals or exemptions required by CEQA, as applicable.

Section 3.02 Coordination. [Customer] will be responsible for coordinating the activities of ENGIE Services U.S. and ENGIE Services U.S.’s subcontractors and suppliers with those of [Customer] Persons.

Section 3.03 Project Meetings/Status Updates. During the course of the Work, ENGIE Services U.S. will periodically meet with [Customer] to report on the general status and progress of the Work. ENGIE Services U.S. may (but is not required to) make food and beverage items of nominal value available to [Customer] and [Customer]’s employees and agents at such meetings, which if offered will be deemed part of the Scope of Work and included in the Contract Amount.
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Section 3.04 Project Location Access. [Customer] hereby grants to ENGIE Services U.S., without cost to ENGIE Services U.S., all rights of ingress and egress at the Project Location, necessary for ENGIE Services U.S. to perform the Work and provide all services contemplated by this Contract. ENGIE Services U.S. will provide twenty-fourhour advance notice to [Customer] for access to any [Customer] Facilities. All persons entering the Project Location, including [Customer] and its employees and agents, must follow ENGIE Services U.S.’s safety procedures. ENGIE Services U.S. may (but is not required to) make transportation available to [Customer] and [Customer]’s employees and agents between and within Project Locations, which if offered will be deemed part of the Scope of Work and included in the Contract Amount.

Section 3.05 Consents; Cooperation. Whenever a Party’s consent, approval, satisfaction, or determination will be required or permitted under this Contract, and this Contract does not expressly state that the Party may act in its sole discretion, such consent, approval, satisfaction, or determination will not be unreasonably withheld, qualified, conditioned, or delayed, whether or not such a “reasonableness” standard is expressly stated in this Contract. Whenever a Party’s cooperation is required for the other Party to carry out its obligations hereunder, each Party agrees that it will act in good faith and reasonably in so cooperating with the other Party or its designated representatives or assignees or subcontractors. Each Party will furnish decisions, information, and approvals required by this Contract in a timely manner so as not to delay the other Party’s performance under this Contract.

Section 3.06 Independent Contractor. The Parties hereto agree that ENGIE Services U.S., and any agents and employees of ENGIE Services U.S., its subcontractors and/or consultants, is acting in an independent capacity in the performance of this Contract, and not as a public official, officer, employee, consultant, or agent of [Customer] for purposes of conflict of interest laws or any other Applicable Law.

ARTICLE 4. FINAL DESIGN PHASE – CONSTRUCTION DOCUMENTS / EQUIPMENT PROCUREMENT Section 4.01 General Provisions.
(a) After receipt of the Notice to Proceed, ENGIE Services U.S. will proceed with the preparation of any necessary designs, drawings, and specifications related to the Scope of Work. (b) After completion of the design phase and approval of the final plans and specifications by [Customer], ENGIE Services U.S. will order the equipment identified in the Scope of Work, and any other necessary materials and supplies in order to meet the project schedule.
(c) [Customer] will designate a single-point representative with whom ENGIE Services U.S. may consult on a reasonable, regular basis and who is authorized to act on [Customer]’s behalf with respect to the Project design. [Customer]’s representative will render decisions in a timely manner with regard to any documents submitted by ENGIE Services U.S. and to other requests made by ENGIE Services U.S. in order to avoid delay in the orderly and sequential progress of ENGIE Services U.S.’s design services. (d) Within ten (10) Business Days after ENGIE Services U.S.’s request, [Customer] will:
(i) furnish all surveys or other information in [Customer]’s possession that describe the physical characteristics, legal limitations, and utility locations in and around the Project Location; (ii) disclose any prior environmental review documentation and all information in its possession concerning subsurface conditions, including without limitation the existence of any known Hazardous Substances, in or around the general area of the Project Location; (iii) supply ENGIE Services U.S. with all relevant information in [Customer]’s possession, including any as-built drawings and photographs, of prior construction undertaken at the Project Location; (iv) obtain any and all easements, zoning variances, planning approvals, including any resolution of any environmental impact issues, and any other legal authorization regarding utilization of the Project Location for the execution of the Work; and
(v) obtain any and all title reports for those Project Locations reasonably requested by ENGIE Services U.S.
(e) All information furnished pursuant to this Section 4.01 will be supplied at [Customer]’s expense, and ENGIE Services U.S. will be entitled to rely upon the accuracy and completeness of all information provided. If ENGIE Services U.S. is adversely affected by any failure to provide, or delay in providing, the information specified in Section 4.01(d), ENGIE Services U.S. will be entitled to an equitable extension of time and/or an equitable adjustment in the Contract Amount.
(f) If any information disclosed under this Section 4.01 gives rise to a Change to the Work or an Excusable Event, ENGIE Services U.S. will notify [Customer]. The Parties will meet and confer with respect to those Changes, and ENGIE Services U.S. will be entitled to an equitable extension of time and/or an equitable adjustment in the Contract Amount. If the Parties, however, are unable to agree on whether [Customer]’s disclosed information 923 of 1021
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gives rise to a Change to the Work or an Excusable Event, those disputes are to be resolved in accordance with ARTICLE 19.
(g) ENGIE Services U.S. contemplates that it will not encounter any Hazardous Substances at the Project Location, except as has been disclosed as a pre-existing condition by [Customer] prior to the Contract Effective Date.

However, any disclosure of Hazardous Substances that will affect the performance of the Work after the Contract Effective Date will constitute a valid basis for a Change Order.

Section 4.02 Review of Construction Documents. ENGIE Services U.S. will prepare and submit all drawings and specifications to [Customer] for review. [Customer] will review the documents and provide any comments in writing to ENGIE Services U.S. within ten (10) Business Days after receipt of the documents. ENGIE Services U.S. will incorporate appropriate [Customer] comments into the applicable drawings and specifications. ENGIE Services U.S. reserves the right to issue the drawings and specifications in phases to allow Construction to be performed in phases. If [Customer] fails to provide written comments within the ten (10) Business Day period, [Customer] will be deemed to have no comments regarding the documents.

Section 4.03 Permits. The respective obligations of the Parties in obtaining inspections and permits are as specified in Section 3.01. [Customer] will agree to any nonmaterial changes to the designs, drawings, and specifications required by any Governmental Authority. The Contract Amount must be increased by any additional cost incurred by ENGIE Services U.S. due to a Change required by a Governmental Authority and the time required to complete the Work must be increased by the number of additional days required to complete the Work because of a Change imposed by a Governmental Authority.

Section 4.04 Changes During Final Design Phase. If during the design phase any [Customer] Person requests Changes and/or modifications to the Work and/or an Excusable Event occurs, ENGIE Services U.S. will be entitled to an equitable extension of time and/or an equitable adjustment in the Contract Amount. Valid bases for additional compensation and/or time extension include, but are not limited to: (i) any [Customer] Person requests changes and/or modifications to the Project Scope of Work during the Project design phase; (ii) any [Customer] Person causes delays during ENGIE Services U.S.’s design work; (iii) the discovery of subsurface or other site conditions that were not reasonably anticipated or disclosed as of the Contract Effective Date; (iv) the discovery of Hazardous Substances at or impacting the Project Location; (v) changes to the Scope of Work required to obtain Applicable Permits; (vi) damage to any equipment or other Work installed by ENGIE Services U.S. caused by the act or omission of any [Customer] Person; (vii) changes and/or modifications to Scope of Work ordered by any Governmental Authority; and (viii) any other condition that would not reasonably have been anticipated by ENGIE Services U.S., that modifies and/or changes the Scope of Work, that increases the agreed-upon Contract Amount or increases the time needed to complete the Work.

ARTICLE 5. CONSTRUCTION PHASE
Section 5.01 General Provisions. Upon securing the requisite Applicable Permits pursuant to Section 3.01, and completion of Construction Documents, ENGIE Services U.S. will commence the construction of the Project in accordance with the Construction Documents. The construction will be performed in accordance with all Applicable Laws and Applicable Permits, by ENGIE Services U.S. and/or one or more licensed subcontractors qualified to perform the Work.

Section 5.02 ENGIE Services U.S.’s Responsibilities during Construction Phase. (a) As an independent contractor to [Customer], ENGIE Services U.S. will provide, or cause to be provided by its subcontractor(s), all labor, materials, equipment, tools, transportation, and other facilities and services necessary for the proper execution, construction, and completion of the Work. ENGIE Services U.S. will purchase in advance all necessary materials and supplies for the construction of the Project in order to assure the prompt and timely delivery of the completed Work pursuant to the project schedule. ENGIE Services U.S. will also be responsible for all means, methods, techniques, sequences, and procedures required by the Construction Documents.
(b) ENGIE Services U.S. will make commercially reasonable efforts to coordinate construction activities and perform the Work to minimize disruption to [Customer]’s operations at the Project Location. ENGIE Services U.S. will provide at least fifteen (15) calendar days’ written notice to [Customer] of any planned power outages that will be necessary for the construction. ENGIE Services U.S. will cooperate with [Customer] in scheduling such outages, and [Customer] agrees to provide its reasonable approval of any scheduled outage. (c) ENGIE Services U.S. will initiate and maintain a safety program in connection with its Construction of the Project. ENGIE Services U.S. will take reasonable precautions for the safety of, and will provide reasonable protection to prevent damage, injury, or loss to: (i) employees of ENGIE Services U.S. and subcontractors performing Work under this Contract; (ii) ENGIE Services U.S.’s property and other materials to be incorporated into the Project, under the care, custody, and control of ENGIE Services U.S. or its subcontractors; and (iii) other property at or adjacent to the Project Location not designated for removal, relocation, or replacement 924 of 1021
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during the course of construction. ENGIE Services U.S. will not be responsible for [Customer]’s employees’ safety unless ENGIE Services U.S.’s negligence in the performance of its Work is the proximate cause of the employee’s injury.
(d) ENGIE Services U.S. will provide notice to [Customer] of scheduled test(s) of installed equipment, if any, and [Customer] and/or its designees will have the right to be present at any or all such tests conducted by ENGIE Services U.S., any subcontractor, and/or manufacturers of the equipment. (e) Pursuant to California Labor Code §6705, if the Work is a public work involving an estimated expenditure in excess of $25,000 and includes the excavation of any trench or trenches five (5) feet or more in depth, ENGIE Services U.S. will, in advance of excavation, submit to [Customer] and/or a registered civil or structural engineer, employed by [Customer], to whom authority to accept has been delegated, a detailed plan showing the design of shoring, bracing, sloping, or other provisions to be made for worker protection from the hazard of caving ground during the excavation of such trench or trenches, which provisions will be no less effective than the current and applicable CAL-OSHA Construction Safety Orders. No excavation of such trench or trenches may be commenced until this detailed plan has been accepted by [Customer] or by the person to whom authority to accept has been delegated by [Customer]. Pursuant to California Labor Code §6705, nothing in this Section 5.02(e) imposes tort liability on [Customer] or any of its employees. (f) Pursuant to California Public Contract Code §7104, if the Work is a public work involving digging trenches or other excavations that extend deeper than four (4) feet below the surface of the ground:
(i) ENGIE Services U.S. will promptly, and before the following conditions are disturbed, notify [Customer], in writing, of any:
1) Material that ENGIE Services U.S. believes may be material that is hazardous waste, as defined in California Health and Safety Code §25117, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with provisions of existing law; 2) Subsurface or latent physical conditions at the site differing from those indicated by information about the site made available to ENGIE Services U.S. before the Contract Effective Date;
3) Unknown physical conditions at the site of any unusual nature, different materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Contract.
(ii) [Customer] will promptly investigate the conditions and, if it finds that the conditions do materially so differ or do involve hazardous waste, and cause a decrease or increase in ENGIE Services U.S.’s cost of, or the time required for, performance of any part of the Work will issue a Change Order under the procedures described in this Contract.
(iii) If a dispute arises between [Customer] and ENGIE Services U.S., whether the conditions materially differ, or involve hazardous waste, or cause a decrease or increase in ENGIE Services U.S.’s cost of, or time required for, performance of any part of the Work, ENGIE Services U.S. will not be excused from any scheduled completion date provided for by this Contract but will proceed with all Work to be performed under this Contract. ENGIE Services U.S. will retain any and all rights provided either by contract or by law which pertain to the resolution of disputes and protests between the Parties.
(g) [Remove if not a school:] Pursuant to California Education Code §32244, no lead-based paint, lead plumbing and solders, or other potential sources of lead contamination will be utilized on this Project. [Customer] acknowledges and agrees that actions to abate existing risk factors for lead are expressly excluded from the Scope of Work and the Professional Services, and ENGIE Services U.S. will have no obligation to take any such abatement action.

Section 5.03 [Customer]’s Responsibilities during Construction Phase. (a) [Customer] will designate a single-point representative authorized to act on [Customer]’s behalf with respect to Project construction and/or equipment installation. [Customer] may from time to time change the designated representative and will provide written notice to ENGIE Services U.S. of such change. Any independent review of the construction will be undertaken at [Customer]’s sole expense, and will be performed in a timely manner so as to not unreasonably delay the orderly progress of ENGIE Services U.S.’s Work. (b) [Customer] will provide a temporary staging area for ENGIE Services U.S., or its subcontractors, to use during the construction phase to store and assemble equipment for completion of the Work, if needed. [Customer] will provide sufficient space at the Facilities for the performance of the Work and the storage, installation, and operation of any equipment and materials and will take reasonable steps to protect any such equipment and materials from harm, theft and misuse. [Customer] will provide access to the Facilities, including parking permits and identification tags, for ENGIE Services U.S. and subcontractors to perform the Work during regular 925 of 1021
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business hours, or such other reasonable hours as may be requested by ENGIE Services U.S. and acceptable to [Customer]. [Customer] will also either provide a set or sets of keys to ENGIE Services U.S. and its subcontractors (signed out per [Customer] policy) or provide a readily available security escort to unlock and lock doors. [Customer] will not unreasonably restrict ENGIE Services U.S.’s access to Facilities to make emergency repairs or corrections as ENGIE Services U.S. may determine are needed. (c) [Customer] will maintain the portion of the Project Location that is not directly affected by ENGIE Services U.S.’s Work. [Customer] will keep the designated Project Location and staging area for the Project free of obstructions, waste, and materials within the control of [Customer].
(d) [Customer] will obtain any required environmental clearance from, and any inspections, including special inspections, or permits required by, any federal, state, and local jurisdictions, including but not limited to any clearances required under CEQA, prior to scheduled construction start date. (e) [Customer] will prepare the Project Location for construction, including, but not limited to, clearance of all above and below ground obstructions, such as vegetation, buildings, appurtenances, and utilities. Subsurface conditions and obstacles (buried pipe, utilities, etc.) that are not otherwise previously and accurately documented by [Customer] and such documentation made available to ENGIE Services U.S. are the responsibility of [Customer]. If ENGIE Services U.S. encounters such unforeseen conditions in the performance of the Work, ENGIE Services U.S. will be entitled to an equitable extension of time and/or an equitable adjustment in the Contract Amount.
(f) [Customer] will remove any Hazardous Substances either known to [Customer] prior to the commencement of the Work or encountered by ENGIE Services U.S. during the construction of the Project, if necessary in order for the Work to progress safely, that were not knowingly released or brought to the site by ENGIE Services U.S.

ENGIE Services U.S. will respond to the discovery of Hazardous Substances at or around the Project Location during the course of ENGIE Services U.S.’s construction in accordance with Section 5.06. (g) [Customer] will coordinate the Work to be performed by ENGIE Services U.S. with its own operations and with any other construction project that is ongoing at or around the Project Location, with the exception that ENGIE Services U.S. will coordinate the Interconnection Facilities work, if any, which will be performed by the local utility.
(h) [Customer] will, and will cause [Customer] Persons to, allow ENGIE Services U.S. and its subcontractors access to and reasonable use of necessary quantities of [Customer]’s water and other utilities, including electrical power, as needed for the construction of the Work, at no cost to ENGIE Services U.S. (i) [Customer] will, and will cause [Customer] Persons to, provide ENGIE Services U.S. and/or its subcontractors with reasonable access to the Project Location to perform the Work, including without limitation and at no extra cost to ENGIE Services U.S., access to perform Work on Saturdays, Sundays, legal holidays, and non-regular working hours.
(j) [Customer] will also do the following:
(i) Attend the regularly scheduled progress meetings. Participate as needed regarding scheduling of the Work.
(ii) When requested by ENGIE Services U.S., participate in the job inspection walk-through with ENGIE Services U.S. to determine Substantial Completion or Beneficial Use of major equipment, and will sign the Certificate(s) of Substantial Completion. (iii) Perform a final walk-through of the Project and, upon receipt of the operation and maintenance manuals and as-built drawings, sign the Certificate of Final Completion for the related Work. (iv) Upon the completion of the entire Scope of Work listed in Attachment C, including training, if any, and submission of close-out documents, sign a Certificate of Final Completion for the entire Project.

Section 5.04 Changes.
(a) Change Orders Generally. Changes and/or modifications to the Scope of Work will be authorized by a written Change Order. The Change Order should state the change and/or modification to the Scope of Work, any additional compensation to be paid, and any applicable extension of time. ENGIE Services U.S. may, at its election, suspend performance of that portion of the Work affected by any proposed Change until a written Change Order with respect to the Changed or modified Work has been signed by both [Customer] and ENGIE Services U.S. ENGIE Services U.S. will use its reasonable efforts to continue other portions of the Work not affected or impacted by such proposed Change until such time as the applicable Change Order is resolved. In addition, if any [Customer] Person requests a proposal from ENGIE Services U.S. for a Change and [Customer] subsequently elects to not proceed with such Change, [Customer] agrees that a Change Order will be issued to 926 of 1021
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reimburse ENGIE Services U.S. for any costs reasonably incurred for estimating services, design services, and/or preparation of the proposal requested by such [Customer] Person. (b) Change Orders Requiring Additional Compensation. If during construction any [Customer] Person requests changes and/or modifications to the Work, and/or there are Excusable Events, [Customer] will pay the extra costs caused by such modifications and/or changes and/or Excusable Event and ENGIE Services U.S. will be entitled to additional compensation for the following reasons, that include, but are not limited to: (i) any [Customer] Person requests changes and/or modifications to the Scope of Work during the construction phase of the Project; (ii) any [Customer] Person causes delays during ENGIE Services U.S.’s construction work; (iii) discovery of subsurface or other site conditions that were not reasonably anticipated or disclosed prior to the commencement of the Work; (iv) discovery of Hazardous Substances at or impacting the Project Location; (v) changes and/or modifications to the Scope of Work required to obtain required permits and approvals as required by any Governmental Authority; (vi) damage to any equipment or other Work installed by ENGIE Services U.S. caused by the act or omission of any [Customer] Person; (vii) changes and/or modifications to Scope of Work ordered by any Governmental Authority; and (viii) any other condition that would not reasonably have been anticipated by ENGIE Services U.S., that modifies and/or changes the Scope of Work or the Contract Amount.
(c) Change Orders Requiring Additional Time. If during construction any [Customer] Person requests changes and/or modifications to the Scope of Work and/or an Excusable Event occurs, the Parties agree that an equitable extension of time to complete the Work may be necessary. Prior to any extension of time, ENGIE Services U.S. will use commercially reasonable efforts to make up such delays, including authorizing overtime payments; provided that [Customer] has issued a Change Order authorizing any such overtime payment and has specifically agreed to pay all costs, including administrative charges and expenses, associated therewith. (d) Method for Adjustment. An increase or decrease in the Contract Amount and/or time resulting from a Change in the Work and/or Excusable Event must be determined by one or more of the following methods:
(i) unit prices set forth in this Contract or as subsequently agreed; (ii) a mutually accepted, itemized lump sum; or
(iii) costs calculated on a basis agreed upon by [Customer] and ENGIE Services U.S. plus a fee (either a lump sum or a fee based on a percentage of cost) to which the Parties agree. (e) Disagreements. If there is a disagreement between [Customer] and ENGIE Services U.S. as to whether ENGIE Services U.S. is entitled to an equitable extension of time and/or an equitable adjustment in the Contract Amount, those disputes are to be resolved in accordance with the provisions of ARTICLE 19. Pending the resolution of any such dispute, ENGIE Services U.S. may suspend Work.

Section 5.05 Minor Changes to Scope of Work. ENGIE Services U.S. has the authority to make minor changes that do not change the total Contract Amount and are consistent with the intent of the Construction Documents, without prior notice to [Customer]. ENGIE Services U.S. will either promptly inform [Customer], in writing, of any minor changes made during the implementation of the Project, or make available to [Customer] at the site a set of as-built drawings that will be kept current to show those minor changes.

Section 5.06 Hazardous Substances.
(a) ENGIE Services U.S. will promptly provide written notice to [Customer] if ENGIE Services U.S. observes any Hazardous Substance, as defined herein, at or around the Facilities during the course of construction or installation of any equipment which have not been addressed as part of the Scope of Work. ENGIE Services U.S. will have no obligation to investigate the Facilities for the presence of Hazardous Substances prior to commencement of the Work unless otherwise specified in the Scope of Work. [Customer] will be solely responsible for investigating Hazardous Substances and determining the appropriate removal and remediation measures with respect to the Hazardous Substances. [Customer] will comply with all Applicable Laws with respect to the identification, removal and proper disposal of any Hazardous Substances known or discovered at or around the Facilities, and in such connection will execute all generator manifests with respect thereto. ENGIE Services U.S. will comply with all Applicable Laws in connection with the use, handling, and disposal of any Hazardous Substances in the performance of its Work. In connection with the foregoing, [Customer] will provide ENGIE Services U.S., within ten (10) Business Days after the Contract Effective Date, a written statement that represents and warrants (i) whether or not, to its knowledge, there are Hazardous Substances either on or within the walls, ceiling or other structural components, or otherwise located in the Project Location, including, but not limited to, asbestos-containing materials; (ii) whether or not, to its knowledge, conditions or situations exist at the Facilities which are subject to special precautions or equipment required by federal, state, or local health or safety regulations; and (iii) whether or not, to its knowledge, there are unsafe working conditions at the Facilities.
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(b) [Customer] will indemnify, defend, and hold ENGIE Services U.S. harmless from and against any and all Losses that in any way result from, or arise under, such [Customer] owned or generated Hazardous Substances, except for liabilities to the extent due to the negligence or willful misconduct of ENGIE Services U.S., or its subcontractors, agents or representatives, in the handling, disturbance or release of Hazardous Substances.

This indemnification will survive any termination of this Contract.

Section 5.07 Pre-Existing Conditions. Certain pre-existing conditions may be present within the Facilities that (i) are non-compliant with applicable codes, (ii) may become non-compliant with applicable codes upon completion of ENGIE Services U.S.’s Work, (iii) may cause ENGIE Services U.S.’s completed Work to be non-compliant with applicable codes, (iv) may prevent [Customer] from realizing the full benefits of ENGIE Services U.S.’s Work, (v) may present a safety or equipment hazard, or (vi) are otherwise outside the scope of ENGIE Services U.S.’s Work.

Regardless of whether or not such conditions may have been readily identifiable prior to the commencement of Work, ENGIE Services U.S. will not be responsible for repairing such pre-existing conditions unless such responsibility is expressly provided for in the Scope of Work or an approved Change Order. ENGIE Services U.S., in its sole discretion, may determine whether it will bring said pre-existing conditions into compliance by agreeing to execute a Change Order with [Customer] for additional compensation and, if appropriate, an extension of time.

ARTICLE 6. PROJECT COMPLETION
Section 6.01 Occupancy or Use of Work. [Customer] may take occupancy or use of any completed or partially completed portion of the Work at any stage, whether or not such portion is Substantially Complete, provided that such occupancy or use is authorized by Governmental Authority and, provided further, that [Customer] assumes responsibility for the security of, insurance coverage for, maintenance, utilities for, and damage to or destruction of such portion of the Work. If Substantial Completion of a portion of the Construction Work is not yet achieved, occupancy or use of such portion of the Work will not commence until [Customer]’s insurance company has consented to such occupancy or use. When occupancy or use of a portion of the Work occurs before Substantial Completion of such portion, [Customer] and ENGIE Services U.S. will accept in writing the responsibilities assigned to each of them for title to materials and equipment, payments and Retention with respect to such portion.

Section 6.02 Substantial Completion. When ENGIE Services U.S. considers the Work, or any portion thereof, to be Substantially Complete, ENGIE Services U.S. will supply to [Customer] a written Certificate of Substantial Completion with respect to such portion of the Work, including a Punch List of items and the time for their completion or correction. [Customer] will within ten (10) Business Days of receipt of the Certificate of Substantial Completion, review such portion of the Work for the sole purpose of determining that it is Substantially Complete, and sign and return the Certificate of Substantial Completion to ENGIE Services U.S. acknowledging and agreeing: (i) that such portion of the Work is Substantially Complete; (ii) the date of such Substantial Completion; (iii) that from the date of Substantial Completion [Customer] will assume responsibility for the security of, insurance coverage for, maintenance, utilities for, and damage to or destruction of such portion of the Work. [Customer] agrees that approval of a Certificate of Substantial Completion will not be unreasonably withheld, delayed or conditioned.

Section 6.03 Final Completion. When ENGIE Services U.S. considers the entirety of the Work to be Finally Complete, ENGIE Services U.S. will notify [Customer] that the Work is fully complete and ready for final inspection. [Customer] will inspect the Work to verify the status of Final Completion within ten (10) Business Days after its receipt of ENGIE Services U.S.’s certification that the Work is complete. If [Customer] does not verify the Final Completion of the Work within this period, the Work will be deemed fully completed. When [Customer] agrees that the Work is fully completed, ENGIE Services U.S. will issue a Certificate of Final Completion, which [Customer] must sign. [Customer] agrees that its signing of the Certificate of Final Completion will not be unreasonably withheld, delayed or conditioned. At that time, [Customer] will pay ENGIE Services U.S. any remaining Contract Amount due and any outstanding Retention being withheld by [Customer], in accordance with Section 8.03. [Customer] may give ENGIE Services U.S. written notice of acceptance of the Work and will promptly record a notice of completion or notice of acceptance in the office of the county recorder in accordance with California Civil Code §9204.

Section 6.04 Transfer of Title; Risk of Loss. Title to all or a portion of the Project equipment, supplies and other components of the Construction Work will pass to [Customer] upon the earlier of (i) the date payment for such Project equipment, supplies or components is made by [Customer] or (ii) the date any such items are incorporated into the Project Location. ENGIE Services U.S. will retain care, custody and control and risk of loss of such Project equipment, supplies and components until the earlier of Beneficial Use or Substantial Completion. Transfer of title to [Customer] will in no way affect [Customer]’s and ENGIE Services U.S.’s rights and obligations as set forth in other provisions of this Contract. Except as provided in this Section 6.04, after the date of Substantial Completion, ENGIE Services U.S. will have no further obligations or liabilities to [Customer] arising out of or relating to this Contract, except for the obligation to complete any Punch List items, the obligation to perform any warranty service under Section 9.01, and obligations which, pursuant to their terms, survive the termination of this Contract. 928 of 1021
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ARTICLE 7. SUBCONTRACTORS
Section 7.01 Authority to Subcontract. ENGIE Services U.S. may delegate its duties and performance under this Contract, and has the right to enter into agreements with any subcontractors and other service or material providers as ENGIE Services U.S. may select in its discretion to perform the Work. ENGIE Services U.S. will not be required to enter into any subcontracts with parties whom ENGIE Services U.S. has not selected or subcontractors whom ENGIE Services U.S. has objection to using.

Section 7.02 Prompt Payment of Subcontractors. ENGIE Services U.S. will promptly pay, when due, all amounts payable for labor and materials furnished in the performance of this Contract and will endeavor to prevent any lien or other claim under any provision of Applicable Law from arising against any [Customer] property, against ENGIE Services U.S.’s rights to payments hereunder, or against [Customer].

Section 7.03 Relationship. Nothing in this Contract constitutes or will be deemed to constitute a contractual relationship between any of ENGIE Services U.S.’s subcontractors and [Customer], or any obligation on the part of [Customer] to pay any sums to any of ENGIE Services U.S.’s subcontractors.

Section 7.04 Prevailing Wages. To the extent required by California Labor Code §1771 or other Applicable Law, all employees of ENGIE Services U.S. and ENGIE Services U.S.’s subcontractors performing Work at the Project Location will be paid the per diem prevailing wages for the employee’s job classification in the locality in which the Work is performed. In accordance with California Labor Code §§1773 and 1773.2, [Customer] will obtain from the Director of Industrial Relations the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work, in the locality in which the Work is to be performed, for each craft, classification or type of worker needed to execute the Work at the Project Location, and will cause copies of such determinations to be kept on file at its principal office and posted at each Project Location. [Customer] will promptly notify ENGIE Services U.S. of any changes to any such prevailing wage determination. [If CREBs, QZABs, QSCBs, QECBs, or other tax credit bonds are being used:

If a portion of the Work is subject to the federal Davis-Bacon Act and/or related acts because it is being paid for with CREBs, QZABs or other tax credit bonds, ENGIE Services U.S. will ensure that its subcontracts for such portion of the Work require the use of the labor classifications identified in the applicable federal wage determination for certified payroll records, and that all employees of ENGIE Services U.S. and ENGIE Services U.S.’s subcontractors performing such portion of the Work be paid the higher of the California or federal prevailing wage rates with respect to such portion of the Work.]
ARTICLE 8. PAYMENTS
Section 8.01 Monthly Progress Payments. Promptly after the Contract Effective Date, ENGIE Services U.S. will invoice [Customer] for a mobilization payment in the amount of [●]. These amounts must be paid to ENGIE Services U.S. within thirty (30) calendar days after [Customer]’s receipt of an invoice for those amounts. In addition, as the Work progresses, ENGIE Services U.S. will submit to [Customer] its applications for monthly payments based on the progress made on the Project through the date on which ENGIE Services U.S. submits such Application for Payment. Within twenty-one (21) calendar days from the Contract Effective Date, ENGIE Services U.S. will prepare and submit to [Customer] a schedule of values apportioned to the various divisions or phases of the Work (“Schedule of Values”). Each line item contained in the Schedule of Values will be assigned a value such that the total of all items equals the Contract Amount. All Applications for Payment will be in accordance with the Schedule of Values.

Section 8.02 Materials Stored Off-Site. In addition to the monthly progress payments specified in Section

8.01, ENGIE Services U.S. may invoice [Customer] for materials purchased in advance and not stored at the Project Location. Each such Application for Payment will be accompanied by proof of off-site material purchases, evidence that the materials have been delivered to a warehouse reasonably acceptable to [Customer] and evidence of appropriate insurance coverage. ENGIE Services U.S. will furnish to [Customer] written consent from the Surety approving the advance payment for materials stored off site. [Customer] will pre-pay one hundred percent (100%) of ENGIE Services U.S.’s Application for Payment for the materials delivered, less Retention as indicated in Section 8.03. ENGIE Services U.S. will protect stored materials from damage. Damaged materials, even though paid for, will not be incorporated into the Work.

Section 8.03 Retention. [Customer], or its designee, must approve and pay each Application for Payment, less a retention amount (“Retention”) of five percent (5%) in accordance with California Public Contract Code §7201, within thirty (30) calendar days after its receipt of the Application for Payment; provided, however, that there is to be no Retention with respect to the mobilization payment. A failure to approve and pay an Application for Payment in a timely manner is a material default by [Customer] under this Contract. [Customer] may make progress payments in full without Retention at any time after fifty percent (50%) of the Work has been completed, as permitted pursuant to California Public Contract Code §9203. Upon Substantial Completion, the Retention must be reduced to two percent (2%) of the Contract Amount, and ENGIE Services U.S. may invoice and [Customer] will pay this amount. [Customer] will pay ENGIE Services U.S. the remaining two percent (2%) Retention amount upon achieving Final Completion. In lieu of Retention being held by [Customer], ENGIE Services U.S. may request that securities be substituted or Retention be held in an escrow account pursuant to California Public Contract Code §22300. 929 of 1021
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Section 8.04 Final Payment. The final Application for Payment may be submitted after Final Completion.

The final payment amount must also include payment to ENGIE Services U.S. for any remaining Retention withheld by [Customer].

Section 8.05 Disputed Invoices/Late Payments. [Customer] may in good faith dispute any Application for Payment, or part thereof, within fifteen (15) calendar days after the date the Application for Payment was received by [Customer]. If [Customer] disputes all or a portion of any Application for Payment, [Customer] will pay the undisputed portion when due and provide ENGIE Services U.S. a written notice and explanation of the basis for the dispute and the amount of the Application for Payment being withheld related to the dispute. [Customer] will be deemed to have waived and released any dispute known to it with respect to an Application for Payment if such notice and written explanation is not provided within fifteen (15) calendar days after the date the Application for Payment was received by [Customer]. If any amount disputed by [Customer] is finally determined to be due to ENGIE Services U.S., either by agreement between the Parties or as a result of dispute resolution pursuant to ARTICLE 19 below, it will be paid to ENGIE Services U.S. within ten (10) Business Days after such final determination, plus Interest from the date billed or claimed until such amount is paid.

Section 8.06 Rebate Programs. ENGIE Services U.S. will assist [Customer] in the preparation and submission to the applicable agencies of applications and documentation necessary for the following energy efficiency rebate, incentive, and/or loan program(s) ________________. ENGIE Services U.S. makes no guarantee that [Customer] will receive funding from any energy efficiency rebate, incentive, and/or loan program(s), including those listed above (collectively, “Incentive Funds), or any portion thereof; ENGIE Services U.S. expressly disclaims any liability for [Customer]’s failure to receive any portion of the Incentive Funds, and [Customer] acknowledges and agrees that ENGIE Services U.S. will have no liability for any failure to receive all or any portion of the Incentive Funds. Procurement, or lack thereof, of the Incentive Funds will not alter the Contract Amount of this Contract or the payment timeline associated with payment of the Contract Amount.

ARTICLE 9. WARRANTY / LIMITATION OF LIABILITY
EXCEPT FOR THE WARRANTIES PROVIDED IN THIS ARTICLE 9, ENGIE SERVICES U.S. MAKES NO WARRANTIES

IN CONNECTION WITH THE WORK PROVIDED UNDER THIS CONTRACT, WHETHER EXPRESS OR IMPLIED IN

LAW, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES AGAINST INTELLECTUAL PROPERTY INFRINGEMENT. [Customer] WILL HAVE NO REMEDIES AGAINST EITHER ENGIE SERVICES U.S. OR ANY ENGIE SERVICES U.S.

SUBCONTRACTOR OR VENDOR FOR ANY DEFECTIVE MATERIALS OR EQUIPMENT INSTALLED, EXCEPT FOR

THE REPAIR OR REPLACEMENT OF SUCH MATERIALS OR EQUIPMENT IN ACCORDANCE WITH THE WARRANTIES INDICATED BELOW. SPECIFICALLY, NEITHER ENGIE SERVICES U.S., NOR ENGIE SERVICES U.S.’s SUBCONTRACTORS OR VENDORS, WILL BE LIABLE TO [Customer] FOR LOSS OF PROFITS OR FOR ANY

SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY.

Section 9.01 ENGIE Services U.S. warrants to [Customer] that material and equipment furnished under this Contract will be of good quality and new, unless otherwise specifically required or permitted by this Contract. ENGIE Services U.S. further warrants that its workmanship provided hereunder, including its subcontractors’ workmanship, will be free of material defects for a period of one (1) year from the date of Substantial Completion as indicated on the executed Certificate of Substantial Completion, or the date of Beneficial Use as indicated on the executed Certificate of Beneficial Use (“ENGIE Services U.S. Warranty”). Notwithstanding the preceding sentence, the date the ENGIE Services U.S. Warranty commences with respect to a specific piece or pieces of equipment may be further defined in Attachment C.

Section 9.02 Equipment and material warranties that exceed the ENGIE Services U.S. Warranty period will be provided directly by the equipment and/or material manufacturers and such warranties will be assigned directly to [Customer], after the one (1) year period. During the ENGIE Services U.S. Warranty period, ENGIE Services U.S. will be [Customer]’s agent in working with the equipment and material manufacturers in resolving any equipment or material warranty issues. If any material defects are discovered within the ENGIE Services U.S. Warranty period, ENGIE Services U.S., or ENGIE Services U.S.’s subcontractors, will correct its defects, and/or ENGIE Services U.S. will work with the equipment or material manufacturer as [Customer]’s agent to facilitate the manufacturer’s correction of the equipment or material defect. Such warranty services will be performed in a timely manner and at the reasonable convenience of [Customer]. If a warranty issue arises on any equipment or material installed after the ENGIE Services U.S. Warranty period, and the equipment or material has a warranty period that exceeds one (1) year, [Customer] will contact the manufacturer directly to resolve such warranty issues and [Customer] acknowledges that the manufacturer will have sole responsibility for such issues.

Section 9.03 The warranties in this ARTICLE 9 expressly exclude any remedy for damage or defect caused by improper or inadequate maintenance of the installed equipment by service providers other than ENGIE Services U.S. or its subcontractors, corrosion, erosion, deterioration, abuse, modifications or repairs not performed by an authorized ENGIE Services U.S. subcontractor, improper use or operation, or normal wear and tear under normal usage. ENGIE 930 of 1021
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Services U.S. shall not be responsible for the cost of correcting a breach of warranty or defect to the extent that the manufacturer of the equipment that is the subject of a warranty hereunder does not honor its equipment warranty as a result of its termination of operations, insolvency, liquidation, bankruptcy or similar occurrence. Unless otherwise specified, all warranties hereunder, including without limitation those for defects, whether latent or patent, in design, engineering, or construction, will terminate one (1) year from the date of Substantial Completion or Beneficial Use; and thereafter, ENGIE Services U.S. will have no liability for breach of any warranty or for any latent or patent defect of any kind pursuant to California Code of Civil Procedure §§337.1 and 337.15.

Section 9.04 [Customer] and ENGIE Services U.S. have discussed the risks and rewards associated with this Project, as well as the Contract Amount to be paid to ENGIE Services U.S. for performance of the Work. [Customer] and ENGIE Services U.S. agree to allocate certain of the risks so that, to the fullest extent permitted by Applicable Law, ENGIE Services U.S.’s total aggregate liability to [Customer] and all third parties is limited to the Contract Amount for any and all injuries, damages, claims, losses, expenses, or claim expenses (including attorney’s fees) arising out of this Contract from any cause or causes. Such causes include, but are not limited to, negligence, errors, omissions, strict liability, breach of contract, or breach of warranty.

Section 9.05 [Remove if M&V Services are included: This Contract does not contain an energy savings guarantee or solar PV system performance guarantee and [Customer] hereby waives any such guarantee to the fullest extent permitted by Applicable Law.]
ARTICLE 10. OWNERSHIP OF CERTAIN PROPERTY AND EXISTING EQUIPMENT Section 10.01 Ownership of Certain Proprietary Property Rights. (a) Ownership: Except as expressly provided in this Contract, [Customer] will not acquire, by virtue of this Contract, any rights or interest in any formulas, patterns, devices, software, inventions or processes, copyrights, patents, trade secrets, other intellectual property rights, or similar items of property which are or may be used in connection with the Work. ENGIE Services U.S. will own all inventions, improvements, technical data, models, processes, methods, and information and all other work products developed or used in connection with the Work, including all intellectual property rights therein. (b) License: Solely in connection with the Facilities, ENGIE Services U.S. grants to [Customer] a limited, perpetual, royalty-free, non-transferrable license for any ENGIE Services U.S. intellectual property rights necessary for [Customer] to operate, maintain, and repair any modifications or additions to Facilities, or equipment delivered, as a part of the Work.
(c) Ownership and Use of Instruments of Service. All data, reports, proposals, plans, specifications, flow sheets, drawings, and other products of the Work (the “Instruments of Service”) furnished directly or indirectly, in writing or otherwise, to [Customer] by ENGIE Services U.S. under this Contract will remain ENGIE Services U.S.’s property and may be used by [Customer] only for the Work. ENGIE Services U.S. will be deemed the author and owner of such Instruments of Service and will retain all common law, statutory and other reserved rights, including copyrights. The Instruments of Service may not be used by [Customer] or any [Customer] Person for future additions or alterations to the Project or for other projects, without the prior written agreement of ENGIE Services U.S. Any unauthorized use of the Instruments of Service will be at [Customer]’s sole risk and without liability to ENGIE Services U.S. If [Customer] uses the Instruments of Service for implementation purposes, including additions to or completion of the Project, without the written permission of ENGIE Services U.S., [Customer] agrees to waive and release, and indemnify and hold harmless, ENGIE Services U.S., its subcontractors, and their directors, employees, subcontractors, and agents from any and all Losses associated with or resulting from such use.

Section 10.02 Ownership of any Existing Equipment. Ownership of any equipment and materials presently existing at the Facilities on the Contract Effective Date will remain the property of [Customer] even if such equipment or materials are replaced or their operation made unnecessary by work performed by ENGIE Services U.S. If applicable, ENGIE Services U.S. will advise [Customer] in writing of all equipment and materials that will be replaced at the Facilities and [Customer] will, within five (5) Business Days of ENGIE Services U.S.’s notice, designate in writing to ENGIE Services U.S. which replaced equipment and materials should not be disposed of off-site by ENGIE Services U.S. (the “Retained Items”). [Customer] will be responsible for and designate the location and storage for the Retained Items.

ENGIE Services U.S. will be responsible for the disposal of replaced equipment and materials, except for the Retained Items. ENGIE Services U.S. will use commercially reasonable efforts to remove the Retained Items in such a manner as to avoid damage thereto, or if it is unreasonable to avoid damage altogether, to minimize the damage done. ENGIE Services U.S. will not be responsible for the removal and/or disposal of any Hazardous Substances except as required by the Scope of Work.

ARTICLE 11. INDEMNIFICATION / LIMITATION ON LIABILITY
Section 11.01 Indemnification. To the fullest extent permitted by Applicable Laws, each Party will indemnify, hold harmless, release and defend the other Party, its officers, employees, and agents from and against any and all 931 of 1021 Energy Services Contract
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actions, claims, demands, damages, disabilities, fines, penalties, losses, costs, expenses (including consultants’ and attorneys’ fees and other defense expenses) and liabilities of any nature (“Losses”) that may be asserted by any person or entity, to the extent arising out of that Party’s performance or activities hereunder, including the performance or activities of other persons employed or utilized by that Party in the performance of this Contract, excepting liabilities to the extent due to the negligence or willful misconduct of the indemnified party. This indemnification obligation will continue to bind the Parties after the termination of this Contract.

Section 11.02 Waiver of Consequential Damages and Limitation of Liability. The liability of a defaulting Party will be limited to direct, actual damages. Neither Party shall be liable to the other Party for any special, indirect, incidental or consequential damages whatsoever, whether in contract, tort (including negligence) or strict liability, including, but not limited to, operational losses in the performance of business such as lost profits or revenues or any increase in operating expense. Additionally, each Party waives any claims for negligence against the other Party to the fullest extent permitted by Applicable Law.

ARTICLE 12. INSURANCE / BONDS
Section 12.01 ENGIE Services U.S. Insurance. ENGIE Services U.S. will maintain, or cause to be maintained, for the duration of this Contract, the insurance coverage outlined in (a) through (f) below, and all such other insurance as required by Applicable Law. Evidence of coverage will be provided to [Customer] via an insurance certificate.
(a) Workers’ Compensation/Employers Liability for states in which ENGIE Services U.S. is not a qualified selfinsured. Limits as follows:
* Workers’ Compensation: Statutory
* Employers Liability: Bodily Injury by accident $1,000,000 each accident Bodily Injury by disease $1,000,000 each employee
Bodily Injury by disease $1,000,000 policy limit
(b) Commercial General Liability insurance with limits of:
* $2,000,000 each occurrence for Bodily Injury and Property Damage * $4,000,000 General Aggregate - other than Products/Completed Operations * $2,000,000 Products/Completed Operations Aggregate
* $2,000,000 Personal and Advertising Injury
* $ 100,000 Damage to premises rented to ENGIE Services U.S.

Coverage to be written on an occurrence form. Coverage to be at least as broad as ISO form CG 0001 (04/13) or its equivalent forms, without endorsements that limit the policy terms with respect to:
(1) provisions for severability of interest or (2) explosion, collapse, underground hazard. (c) Auto Liability insurance for owned, hired and non-owned vehicles with limits of $1,000,000 per accident.

Coverage to be written on an occurrence form.
(d) Professional Liability insurance with limits of:
* $1,000,000 per occurrence
* $1,000,000 aggregate
Coverage to be written on a claims-made form.
(e) Umbrella/Excess Liability Insurance. Limits as follows:
* $1,000,000 each occurrence
* $1,000,000 aggregate
Coverage terms and limits to apply excess of the per occurrence and/or aggregate limits provided for Commercial General Liability and Professional Liability written on a claims made form. Coverage terms and limits also to apply in excess of those required for Employers Liability and Auto Liability written on an occurrence form.
(f) Policy Endorsements.
* The insurance provided for Workers’ Compensation and Employers’ Liability above will contain waivers of subrogation rights against [Customer], but only to the extent of the indemnity obligations contained in this Contract.
* The insurance provided for Commercial General Liability and Auto Liability above will:
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(i) include [Customer] as an additional insured with respect to Work performed under this Contract, but only to the extent of the indemnity obligations contained in this Contract, and
(ii) provide that the insurance is primary coverage with respect to all insureds, but only to the extent of the indemnity obligations contained in this Contract.

Section 12.02 [Customer]’s Insurance. [Customer] will maintain, or cause to be maintained, for the duration of this Contract, the insurance coverage outlined below, and all such other insurance as required by Applicable Law.

Evidence of coverage will be provided to ENGIE Services U.S. via an insurance certificate. (a) Commercial General Liability insurance, written on an occurrence form, with limits of:
* $2,000,000 each occurrence for Bodily Injury and Property Damage; and * $4,000,000 General Aggregate
(b) The insurance provided for above will contain waivers of subrogation rights against ENGIE Services U.S., will include ENGIE Services U.S. as an additional insured, and will provide that the insurance is primary coverage with respect to all insureds.

Section 12.03 Waivers of Subrogation. The Parties waive all rights against each other and any of their subcontractors, sub-subcontractors, agents and employees, each of the other, for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this ARTICLE 12 or other property insurance applicable to the Work, except such rights as they have to proceeds of such insurance. The Parties and their respective property damage insurers also waive all rights of subrogation against the other Party, its directors, officers, agents and employees. A waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged.

Section 12.04 Performance and Payment Bonds. Prior to commencing Work under this Contract, ENGIE Services U.S. will furnish a performance bond, in an amount equal to one hundred percent (100%) of the Contract Amount, and a payment bond to guarantee payment of all claims for labor and materials furnished, in an amount equal to one hundred percent (100%) of the Contract Amount (collectively, the “Contract Bonds”). The Contract Bonds shall be maintained in full force and effect until Final Completion; provided that upon the achievement of Substantial Completion, the value of the Contract Bonds shall be reduced to the value of the Retainage being withheld by [Customer]. The Contract Bonds are not being furnished to cover the performance of any Professional Services, including any energy guaranty or guaranteed savings under this Contract, nor to cover any equipment and/or material manufacturer’s warranty or other third-party warranty being assigned to [Customer]. [Customer] agrees that upon Final Completion and expiration of the ENGIE Services U.S. Warranty period set forth in Article 9 herein, the Contract Bonds shall be returned to ENGIE Services U.S., and all obligations arising thereunder are terminated and the surety company that issued the bond is forever discharged from any and all liabilities of whatever nature arising in connection with the Contract Bonds.

ARTICLE 13. DOE GUIDELINES; ENERGY POLICY ACT
Section 13.01 As authorized by §1605(b) of the Energy Policy Act of 1992 (Pub. L. No. 102-486) the U.S.

Department of Energy has issued, and may issue in the future, guidelines for the voluntary reporting of Greenhouse Gas emissions (“DOE Guidelines”). “Greenhouse Gases” means those gases and other particles as defined in the DOE Guidelines. [Customer] hereby assigns and transfers to ENGIE Services U.S., and its Affiliates and assigns, any Greenhouse Gas emission reduction credits that result from the Work.

ARTICLE 14. MUNICIPAL ADVISOR
Section 14.01 THE PARTIES ACKNOWLEDGE AND AGREE THAT ENGIE SERVICES U.S. IS NOT A MUNICIPAL ADVISOR AND CANNOT GIVE ADVICE TO [Customer] WITH RESPECT TO MUNICIPAL SECURITIES OR MUNICIPAL FINANCIAL PRODUCTS ABSENT [Customer] BEING REPRESENTED BY, AND RELYING UPON THE ADVICE OF, AN INDEPENDENT REGISTERED MUNICIPAL ADVISOR. ENGIE SERVICES U.S. IS NOT SUBJECT TO A FIDUCIARY DUTY WITH REGARD TO [Customer] OR THE PROVISION OF INFORMATION TO [Customer]. [Customer] WILL CONSULT WITH AN INDEPENDENT REGISTERED MUNICIPAL ADVISOR ABOUT THE FINANCING OPTION APPROPRIATE FOR [Customer]’S SITUATION.

ARTICLE 15. TRADE SECRETS
If any materials or information provided by ENGIE Services U.S. to [Customer] under this Contract are designated by ENGIE Services U.S. as a “trade secret” or otherwise exempt from disclosure under the Public Records Act (California Government Code §6250 et seq., the “Act”) and if a third party makes a request for disclosure of the materials under the Act, as soon as practical (but not later than five (5) calendar days) after receipt of such request, [Customer] will notify ENGIE Services U.S. of such request and advise ENGIE Services U.S. whether [Customer] believes that there is a reasonable possibility that the materials may not be exempt from disclosure. Within ten (10) calendar days after a third party’s request for 933 of 1021
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disclosure of materials under the Act, ENGIE Services U.S. will (i) authorize [Customer] to release the documents or information sought; or (ii) if ENGIE Services U.S. reasonably believes that the information is exempt from disclosure, advise [Customer] not to release the materials.

ARTICLE 16. EVENTS OF DEFAULT
Section 16.01 Events of Default by ENGIE Services U.S. Each of the following events or conditions will constitute an “Event of Default” by ENGIE Services U.S.:
(i) any substantial failure by ENGIE Services U.S. to perform or comply with this Contract, including a material breach of any covenant contained herein, and such failure continues for thirty (30) calendar days after notice to ENGIE Services U.S. demanding that such failure to perform be cured; provided that (y) such failure to perform will not be deemed a default hereunder if it is excused by a provision of this Contract, and (z) if such cure cannot be effected in thirty (30) calendar days, ENGIE Services U.S. will be deemed to have cured the default upon the commencement of a cure within thirty (30) calendar days and diligent subsequent completion thereof; or
(ii) any representation or warranty furnished by ENGIE Services U.S. in this Contract which was false or misleading in any material respect when made.

Section 16.02 Events of Default by [Customer]. Each of the following events or conditions will constitute an “Event of Default” by [Customer]:
(i) any substantial failure by [Customer] to perform or comply with this Contract, including a material breach of any covenant contained herein, and such failure continues for thirty (30) calendar days after notice to [Customer] demanding that such failure to perform be cured; provided that (y) such failure to perform will not be deemed a default hereunder if it is excused by a provision of this Contract; and (z) if such cure cannot be effected in thirty (30) calendar days, [Customer] will be deemed to have cured the default upon the commencement of a cure within thirty (30) calendar days and diligent subsequent completion thereof; or
(ii) any representation or warranty furnished by [Customer] in this Contract which was false or misleading in any material respect when made; or
(iii) any failure by [Customer] to pay any amount to ENGIE Services U.S. which is not paid within ten (10) calendar days after written notice from ENGIE Services U.S. that the amount is past due.

ARTICLE 17. REMEDIES UPON DEFAULT
Section 17.01 Termination for Cause. If there is an Event of Default by either Party under this Contract, unless such Event of Default has been cured within the applicable time periods for a cure set forth in ARTICLE 16, the non-defaulting Party may terminate this Contract by providing three (3) Business Days’ written notice to the defaulting Party in the case of a monetary default and ten (10) Business Days’ written notice to the defaulting Party in the case of a non-monetary default. Upon termination of this Contract, each Party will promptly return to the other all papers, materials, and property of the other held by such Party in connection with this Contract. Each Party will also assist the other in the orderly termination of this Contract and the transfer of all aspects hereof, tangible and intangible, as may be necessary for the orderly, non-disrupted business continuation of each Party. If this Contract is so terminated, ENGIE Services U.S. will be entitled to payment for Work satisfactorily performed, earned profit and overhead, and costs incurred in accordance with this Contract up to the date of termination.

Section 17.02 Remedies Upon Default by ENGIE Services U.S. If an Event of Default by ENGIE Services U.S. occurs, [Customer] will be entitled to obtain any available legal or equitable remedies through arbitration proceedings instituted pursuant to ARTICLE 19, including, without limitation, terminating this Contract, or recovering amounts due and unpaid by ENGIE Services U.S. and/or damages, which will include [Customer]’s reasonable, actual, direct out-of-pocket losses incurred by reason of such Event of Default and any cost of funding; loss of anticipated payment obligations; and any payment or delivery required to have been made on or before the date of the Event of Default and not made, including interest on any sums due, and losses and costs incurred as a result of terminating this Contract and all costs and expenses reasonably incurred in exercising the foregoing remedies.

Section 17.03 Remedies upon Default by [Customer]. If an Event of Default by [Customer] occurs, ENGIE Services U.S. will be entitled to obtain any available legal or equitable remedies through arbitration proceedings instituted pursuant to ARTICLE 19 including, without limitation, terminating this Contract or recovering amounts due and unpaid by [Customer], and/or damages which will include ENGIE Services U.S.’s reasonable, actual, direct out-of-pocket losses incurred by reason of such Event of Default and any cost of funding; loss of anticipated payment obligations; and any payment or delivery required to have been made on or before the date of the Event of Default and not made, including 934 of 1021
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Interest on any sums due, and losses and costs incurred as a result of terminating this Contract and all costs and expenses reasonably incurred in exercising the foregoing remedies.

ARTICLE 18. CONDITIONS BEYOND CONTROL OF THE PARTIES
Section 18.01 Excusable Events. If any Party is delayed in, or prevented from, performing or carrying out its obligations under this Contract by reason of any Excusable Event, such circumstance will not constitute an Event of Default, and such Party will be excused from performance hereunder and will not be liable to the other Party for or on account of any loss, damage, injury or expense resulting from, or arising out of, such delay or prevention.

Notwithstanding the foregoing, no Party will be excused from any payment obligations under this Contract as a result of an Excusable Event.

Section 18.02 Utility Work. [Customer] expressly understands and agrees that Excusable Events may occur due to Interconnection Facilities work that may need to be performed by the local electric utility (“Utility”) in order for ENGIE Services U.S. to fully implement the Project. “Interconnection Facilities” means any distribution or transmission lines and other facilities that may be required to connect equipment supplied under this Contract to an electrical distribution/transmission system owned and maintained by the Utility. Any Interconnection Facilities work that may be required will be performed by the Utility under the Interconnection Agreement.

ARTICLE 19. GOVERNING LAW AND RESOLUTION OF DISPUTES
Section 19.01 Governing Law. This Contract is governed by and must be interpreted under the laws of the State where the Work is performed, without regard to the jurisdiction’s choice of law rules.

Section 19.02 Initial Dispute Resolution. If a dispute arises out of or relates to this Contract, the transaction contemplated by this Contract, or the breach of this Contract (a “Dispute”), either Party may initiate the dispute resolution process set forth in this ARTICLE 19 by giving notice to the other Party. The Parties will endeavor to settle the Dispute as follows:
(i) Field Representatives’ Meeting: Within fifteen (15) Business Days after notice of the Dispute, ENGIE Services U.S.’s senior project management personnel will meet with [Customer]’s project representative in a good faith attempt to resolve the Dispute. (ii) Management Representatives’ Meeting: If ENGIE Services U.S.’s and [Customer]’s project representatives fail to meet, or if they are unable to resolve the Dispute, senior executives for ENGIE Services U.S. and for [Customer], neither of whom have had day-to-day management responsibilities for the Project, will meet, within thirty (30) calendar days after notice of the Dispute, in an attempt to resolve the Dispute and any other identified disputes or any unresolved issues that may lead to a dispute. If the senior executives of ENGIE Services U.S. and [Customer] are unable to resolve a Dispute or if a senior management conference is not held within the time provided herein, either Party may submit the Dispute to mediation in accordance with Section

19.03. Section 19.03 Mediation. If the Dispute is not settled pursuant to Section 19.02, the Parties will endeavor to settle the Dispute by mediation under the Commercial Mediation Procedures of the American Arbitration Association.

Mediation is a condition precedent to arbitration or the institution of legal or equitable proceedings by either Party. Once one Party files a request for mediation with the other Party and with the American Arbitration Association, the Parties agree to conclude the mediation within sixty (60) calendar days after filing the request. Either Party may terminate the mediation at any time after the first session, but the decision to terminate must be delivered in person by the Party’s representative to the other Party’s representative and the mediator. If the Dispute is not resolved by mediation within sixty (60) calendar days after the date of filing of the request for mediation, then the exclusive means to resolve the Dispute is final and binding arbitration, as described in Section 19.04. Either Party may initiate arbitration proceedings by notice to the other Party and the American Arbitration Association.

Section 19.04 Arbitration Proceedings. The following provisions apply to all arbitration proceedings pursuant to this ARTICLE 19:
(i) The place of arbitration will be the American Arbitration Association office closest to where the Work was performed.
(ii) One arbitrator (or three arbitrators if the monetary value of the Dispute is more than $2,000,000) (the “Arbitral Panel”) will conduct the arbitral proceedings in accordance with the Commercial Arbitration Rules and Mediation Procedures (Excluding the Procedures for Large, Complex Commercial Disputes) of the American Arbitration Association currently in effect (“Arbitration Rules”). To the extent of any conflicts between the Arbitration Rules and the provisions of this Contract, the provisions of this Contract prevail.
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(iii) The Parties will submit true copies of all documents considered relevant with their respective statement of claim or defense, and any counterclaim or reply. In the discretion of the Arbitral Panel, the production of additional documents that are relevant and material to the determination of the Dispute may be required.
(iv) The Arbitral Panel does not have the power to award, and may not award, any punitive, indirect or consequential damages (however denominated). All arbitration fees and costs are to be shared equally by the parties, regardless of which Party prevails. Each Party will pay its own costs of legal representation and witness expenses.
(v) The award must be in the form of a reasoned award.
(vi) The Dispute will be resolved as quickly as possible. The Arbitral Panel will endeavor to issue the arbitration award within six (6) months after the date on which the arbitration proceedings were commenced.
(vii) The award will be final and binding and subject to confirmation and enforcement proceedings in any court of competent jurisdiction.

Section 19.05 Multiparty Proceeding. Either Party may join third parties whose joinder would facilitate complete resolution of the Dispute and matters arising from the resolution of the Dispute.

Section 19.06 Lien Rights. Nothing in this ARTICLE 19 limits any rights or remedies not expressly waived by ENGIE Services U.S. that ENGIE Services U.S. may have under any lien laws or stop notice laws.

ARTICLE 20. REPRESENTATIONS AND WARRANTIES
Section 20.01 Each Party warrants and represents to the other that:
(i) it has all requisite power and authority to enter into this Contract, to perform its obligations hereunder and to consummate the transactions contemplated hereby; (ii) the execution, delivery, and performance of this Contract have been duly authorized by its governing body, or are in accordance with its organizational documents, and this Contract has been duly executed and delivered for it by the signatories so authorized, and constitutes its legal, valid, and binding obligation;
(iii) the execution, delivery, and performance of this Contract will not breach or violate, or constitute a default under, its organizational documents or any contract, lease or instrument to which it is a party or by which it or its properties may be bound or affected; and (iv) it has not received any notice, nor to the best of its knowledge is there pending or threatened any notice, of any violation of any Applicable Laws, awards or permits which would materially and adversely affect its ability to perform hereunder.

ARTICLE 21. NOTICE
Any notice required or permitted hereunder will be deemed sufficient if given in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or delivered to a nationally recognized express mail service, charges prepaid, receipt obtained, to the address shown below or to such other persons or addresses as are specified by similar notice.

TO ENGIE SERVICES U.S.: ENGIE Services U.S. Inc.
[Local Address]
Tel:

Attention: ______________, Project Manager
With a COPY TO: Legal Department
ENGIE Services U.S. Inc.
150 East Colorado Boulevard, Suite 360
Pasadena, CA 91105-3711
Tel: 626-377-4948
Attention: Contract Administrator
TO [Customer]: [Customer]
Street Address
City, State, Zip
Tel:
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Attention:

With a COPY TO: Office of _____________
_____________________
Street Address
City, State, Zip
Tel:

Attention:

ARTICLE 22. CONSTRUCTION OF CONTRACT
This Contract is the result of arms-length negotiations between two sophisticated parties and ambiguities or uncertainties in it will not be construed for or against either Party, but will be construed in a manner that most accurately reflects the intent of the Parties as of the Contract Effective Date. Each of the Parties acknowledges and agrees that neither Party has provided the other with any legal, accounting, regulatory, financial, or tax advice with respect to any of the transactions contemplated hereby, and each Party has consulted its own legal, accounting, regulatory, financial and tax advisors to the extent it has deemed appropriate.

ARTICLE 23. CHOICE OF LAW

THE INTERPRETATION, VALIDITY AND ENFORCEMENT OF THIS CONTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

ARTICLE 24. BINDING EFFECT
Except as otherwise provided herein, the terms and provisions of this Contract will apply to, be binding upon, and inure to the benefit of the Parties hereto and their respective heirs, legal representatives, successors, and permitted assigns.

ARTICLE 25. NO WAIVER
The failure of ENGIE Services U.S. or [Customer] to insist upon the strict performance of this Contract will not constitute or be construed as a waiver or relinquishment of either Party’s right to thereafter enforce the same in accordance with this Contract in the event of a continuing or subsequent default on the part of ENGIE Services U.S. or [Customer].

ARTICLE 26. SEVERABILITY
If any clause or provision of this Contract or any part thereof becomes or is declared by a court of competent jurisdiction invalid, illegal, void, or unenforceable, this Contract will continue in full force and effect without said provisions; provided that no such severability will be effective if it materially changes the benefits or obligations of either Party hereunder.

ARTICLE 27. HEADINGS
Headings and subtitles used throughout this Contract are for the purpose of convenience only, and no heading or subtitle will modify or be used to interpret the text of any section.

ARTICLE 28. COUNTERPARTS; INTEGRATION
This Contract may be executed in counterparts (and by different Parties hereto in different counterparts), each of which will constitute an original, but all of which when taken together will constitute a single contract. This Contract constitutes the entire contract among the Parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Contract cannot be amended, modified, or terminated except by a written instrument, executed by both Parties hereto. Delivery of an executed counterpart of a signature page of this Contract by email will be effective as delivery of a manually executed counterpart of this Contract. [the Parties’ signatures appear on the following page]
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IN WITNESS WHEREOF, and intending to be legally bound, the Parties hereto subscribe their names to this Contract by their duly authorized officers as of the Contract Effective Date.

ENGIE SERVICES U.S.: [Customer]:

ENGIE Services U.S. Inc. [type [Customer] name here)
By: _________________________________ By: __________________________________ Name: Name:

Title: Title:
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ATTACHMENT A

FACILITIES
(a) The following [Customer] Facilities are included under the Scope of Work as listed below:

Facility Address Square Feet
(insert rows as needed)
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ATTACHMENT B
STANDARDS OF OCCUPANCY and CONTROL
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ATTACHMENT C

SCOPE OF WORK
California State Contractor’s License Number 995037
California Public Works Contractor Registration Number 1000001498 Energy Conservation Measures to Be Implemented
ECM
# Description
(add lines when necessary)
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ATTACHMENT D

MONITORING INSTALLATION SCOPE OF WORK
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ATTACHMENT E

M&V SERVICES
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ATTACHMENT F

MAINTENANCE SERVICES
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500 12th Street, Suite 300
Oakland, CA 94607
engie-na.com
©2024 ENGIE North America
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A Submittal for the RFP for an Energy/Water Resources Audit and Implementation of Energy and Water Resources Efficiency Improvement Projects City of Cotati
Attn: City Manager’s Office
201 W. Sierra Avenue
Cotati, CA 94931

Prepared by
EcoGreen Solutions Inc.
27671 La Paz Rd., Laguna Niguel, CA 92677
(949) 364-6800
Anthony Mitchell
[email protected]
August 2
nd, 2024
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 2 of 37 Table of Contents
List of Tables ............................................................................................................................... 3 A. Executive Summary............................................................................................................. 4 B. Project Approach and Objectives ....................................................................................... 4 C. Overview of Approach to Energy Savings Performance Contracting (ESPC)...................... 5 D. Project History .................................................................................................................... 6 I. Fifteen Energy Savings Performance Contracts.............................................................. 6 II. Detailed Information on Performance Contract Projects............................................... 9 E. Qualifications.................................................................................................................... 13 I. Relevant Licenses, Certifications and Accreditations related to performance of Energy Savings Projects .................................................................................................................... 13 F. Financial Soundness and Stability..................................................................................... 14 I. Financial Statements..................................................................................................... 14 a. Balance Sheets.............................................................................................................. 14 b. Income Statement ........................................................................................................ 23 i. Please contact financial department at EcoGreen Solutions Inc.................................. 23 c. Statement of Cash Flow................................................................................................ 23 d. Statement of Financial Condition ................................................................................. 23 G. Technical Approach........................................................................................................... 23 H. Management Approach for this Project........................................................................... 23 I. Conclusion......................................................................................................................... 24 Attachment A – City of Cotati Standard Professional Services Agreement ............................. 25 Attachment B – Sample Audit................................................................................................... 26 Attachment C – OPV, M&V, and O&M Sample Plan................................................................. 27 Attachment D – EcoGreen Solutions Inc. Certification for the U.S. Department of Energy’s (DOE) Qualified List of Energy Service Companies................................................................... 28 Attachment E – EcoGreen Solutions Inc. Electrical Contractor State License (C-10) ............... 30 Attachment F – Sample Performance Energy Contract “OBF Agreement”.............................. 31 Attachment G – Sample Performance Energy Contract “OBF Agreement” ............................. 32 Attachment H – Response to Request for Proposal Question ................................................. 37 947 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 3 of 37 List of Tables
Table 1. Table of Fifteen (15) Energy Savings Performance Contracts that were projects developed and implemented by EcoGreen Solutions Inc................................................ 6 Table 2. Detailed Information on Rocket Farms, a 1,467,752 SF Agriculture site with total energy savings of 1,758,814 kWh and $78,657. ..................................................... 9 Table 3. Detailed Information on Gonzales Unified School District, a 139,202 SF multiple School site with total energy savings of 239,889 kWh and $50,311. ............... 10 Table 4. Detailed Information on Robinson Rancheria Resort and Casino, a 105,488 SF Agriculture site with total yearly energy savings of 306,438 kWh and $53,634. ............ 11 Table 5. Detailed Information on NCIS, a 50,957 SF International School with Achieved energy savings of 128,280 kWh and $24,331. .............................................................. 12 948 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 4 of 37 A. Executive Summary
Thank you for the opportunity to submit a proposal for the City of Cotati's energy performance contract and water infrastructure improvements. We understand the City's goals to expand electric vehicle (EV) charging infrastructure, enhance facility resilience, and lower operational costs while maintaining a focus on energy efficiency and sustainability. Our team is committed to delivering a comprehensive solution that meets these objectives within the constraints of no capital outlay and no increase in net annual operational costs.

EcoGreen Solutions Inc. boasts a robust history of over 1,000 and counting successful project completions in energy services retrofits and upgrades since 2007. Our team of auditors, surveyors, process, installation, engineering, and management bring a wealth of expertise, comprising professionals with diverse qualifications and a shared dedication to delivering high-quality outcomes. Our experience aligns seamlessly with the requirements of the project outlined in the RFP.

EcoGreen Solutions is uniquely equipped to meet the requirements of the RFP. Our expertise lies in comprehensive energy conservation measures, and we have a proven track record in analyzing, developing, and executing projects like those specified for the city facilities. Our team's proficiency in implementing environmentally friendly solutions aligns seamlessly with the proposed initiatives, including lighting upgrades, HVAC equipment enhancements, roofing assembly, solar power generation, micro-grid emergency power solutions, EV charging infrastructure planning, and renewable energy system program planning and design.

B. Project Approach and Objectives
Our proposed approach is designed to address each of the City’s specific goals while ensuring financial feasibility and maximizing long-term benefits. Below is an outline of our plan, tailored to meet the requirements and goals outlined in the RFP:

1. Expand Electric Vehicle Charging Infrastructure
o City Hall Complex: Install additional EV chargers, including both Level 2 and fast chargers, to support staff and public needs. Evaluate existing electrical capacity and propose necessary upgrades to accommodate new chargers.
o Police Building: Enhance charging infrastructure with dedicated EV stations, ensuring they meet the operational needs of the Police Department’s electric fleet.
o Public Works Corporation Yard: Assess and install EV chargers to support future fleet expansion.

2. Evaluate Time of Use Electric Rates
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 5 of 37 o Conduct an analysis of time-of-use (TOU) rates to optimize charging schedules for cost savings. Evaluate energy use patterns and propose strategies to leverage lower rates during off-peak hours.

3. Develop Microgrid and Backup Systems
o City Hall Complex and Police Building: Design and implement a microgrid capable of sustaining critical loads for up to 2 days using a combination of battery storage and solar PV systems. Evaluate integration with the existing diesel generator for extended outages. o Public Works Corporation Yard: Develop a photovoltaic and battery backup system to provide critical loads for up to 2 days. Include a local interconnect for extended outage scenarios.

4. Load-Shaving and Virtual Power Plant
o Implement load-shaving strategies to reduce peak demand charges.

Explore opportunities for virtual power plant participation to contribute excess power to the grid and generate additional revenue.

5. Vehicle-to-Grid Capabilities
o Assess the potential for existing and future EVs to provide vehicle-to-grid (V2G) or vehicle-to-load (V2L) capabilities. Develop a plan to integrate these capabilities to support emergency backup power, load shaving, and virtual power plant functions.

6. Virtual Net Metering
o Evaluate the feasibility of virtual net metering across City electrical accounts to optimize energy usage and cost savings.

7. Water System Monitoring and Optimization
o Integrate water production and consumption monitoring into the SCADA system for enhanced efficiency. Evaluate distribution system zone monitoring to identify and address water loss. Analyze the costeffectiveness of TOU municipal well pumping.

8. Additional Energy Improvements
o Identify and propose additional energy improvements aligned with the City’s Climate and Sustainability goals, including potential upgrades to HVAC systems, building envelope enhancements, and further energyefficient technologies.

C. Overview of Approach to Energy Savings Performance
Contracting (ESPC)
Expertise in Energy Management:

EcoGreen Solutions Inc. boasts a team of seasoned professionals with diverse backgrounds in energy management, engineering, and sustainable technology. Our collective expertise enables us to conduct meticulous energy audits, design robust systems, and implement comprehensive solutions tailored to the unique needs of the City of Cotati. Our proven track record in executing similar projects in the area showcases our competence in navigating the intricacies of energy management with precision and efficacy.
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 6 of 37 Comprehensive Solutions:

Our commitment to providing end-to-end energy services sets us apart in a competitive landscape. From initial energy audits to system design, implementation, and ongoing monitoring, EcoGreen Solutions ensures a seamless and holistic approach to energy efficiency. By addressing every facet of a client's energy infrastructure, we guarantee optimal performance, longevity, and adaptability.

Cutting-Edge Technology Integration:

The cornerstone of EcoGreen Solutions' success lies in our dedication to integrating the latest advancements in energy-efficient technologies. By adopting intelligent building systems, IoT-enabled devices, and a suite of innovative technologies, such as evaporator blower motor retrofits with Variable Frequency Drives (VFD) and Switch Reluctance motors, LED lighting, VFD installations on pool pumps and irrigation pumps, Electronically Commutated Motor (ECM) replacements on refrigeration units, boiler economizers, heat pump retrofits, Electric Vehicle (EV) stations, as well as solar rooftop and carports, we present a futuristic and sustainable approach to energy optimization. This dedication positions the City of Cotati at the forefront of pioneering technological innovation in the energy sector.

Financial Viability and ROI Analysis:

EcoGreen Solutions understands that sustainability should not come at the cost of financial viability. Our team conducts thorough cost-benefit analyses, ensuring that every investment yields a positive return. By aligning economic and environmental goals, we empower our clients in the City of Cotati to make informed decisions that not only benefit their bottom line but also contribute to a sustainable future.

Sustainability as a Guiding Principle:

EcoGreen Solutions Inc. operates on the belief that true progress must be sustainable.

Our commitment to environmental stewardship is embedded in every project we undertake. By emphasizing the reduction of carbon footprints and promoting renewable energy sources, we go beyond compliance, actively contributing to a greener planet.

D. Project History
I. Fifteen Energy Savings Performance Contracts
Table 1. Table of Fifteen (15) Energy Savings Performance Contracts that were projects developed and implemented by EcoGreen Solutions Inc.
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 7 of 37 Project Name Market
Sector
City &
State
Project
Size (USD)
Project
Size
(ft2)
Year
Completed
Rocket Farms Commercial
- Agriculture
Half Moon
Bay, CA $5,308,544 1,467,752 FEB 2021
CADEDD
9 State
Buildings in
PG&E
Territory
San
Francisco,
Ca
$678,645
(for all
sites)
266,490 2019-2020
Kern City
Fairgrounds*
Fairgrounds Bakersfield,
CA $903,197 75,000 OCT 2023
College of the
Redwoods*
University Eureka, CA $713,299 249,691 OCT 2023
Gilroy USD Multiple
Schools Gilroy, CA $77,789 1,880,248 MAY 2019
Glenn City
Office of
Education
City
Orland, Ca
& Willows,
Ca
$352,867 50,650 2018
Greenwood
Ford Commercial Hollister, Ca $141,011 29,662 2014
Parks and REC
CADPR State All Sites in PG&E 2019
Parks and REC
CADPR –
Hearts Castle
State San
Simeon 154,237.27 170,860 2019
State of
California,
Department of
Forestry & Fire
Protection, Ione
Fire Academy
State Ione, CA $393,801 137,399 2020
Atascadero
USD
Atascadero HS
School Atascadero,
Ca 199,679.05 19,647
National Center
for International
Schools (NCIS)
International
School
San
Francisco,
CA
$237,240 50,957 NOV 2021
Robinson
Rancheria
Resort & Casino
Resort Nice, CA $321,143 105,488 AUG 2020
Gonzales
Unified School
District
Multiple
Schools
Gonzales,
CA $201,928 139,202 MAY 2019
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 8 of 37 Project Name Market
Sector
City &
State
Project
Size (USD)
Project
Size
(ft2)
Year
Completed
State of
California,
Department of
Forestry & Fire
Protection
State All Sites in
PG&E 2021
953 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 9 of 37 II. Detailed Information on Performance Contract Projects Table 2. Detailed Information on Rocket Farms, a 1,467,752 SF Agriculture site with total energy savings of 1,758,814 kWh and $78,657.

Data and References Project 1
Project Name Rocket Farms
Facility Type and Use Commercial Agriculture
Project Size:
-Number of Buildings
-Total Square Footage
1,467,752 SF
Types of Measures Horticulture Lights, LED retrofit, VFD Irrigation Pumps
Project Cost: Installed Project Costs $5,308,544
Project Cost: Financed Amount PGE OBFNI Program
Guaranteed Annual Savings ($) $78,657
Project Schedule:
-Construction Start and End Dates
-Guarantee Period Start and End Dates
Describe if project was completed on
schedule or delayed
Yes, the project was completed on schedule.

November 16,2020 to February 16, 2021
Measurement and Verification Methods Utility Bill Analysis Project Personnel:

List all Vendor personnel associated with this
project (limit to
those who may be assigned to a project) and
their roles and
responsibilities (only list those who may be
assigned to a
project).

Surveyors – 2 persons
Sales – 4 persons
Installation Crew –20 persons
Management – 3 persons
Processing – 5 persons
Engineering – 3 persons
Contact Information:

Current phone and email address of owner
representatives you
worked with.

Ruben Nunez – General Manager
(650) 712-4195
[email protected]
Rocket Farms
Commodity Units
Guaranteed
Annual
Savings
Achieved
Savings
Year 1
Achieved
Savings
Year 2
Achieved
Savings
Year 3
Achieved
Savings
Year 4
Achieved
Savings
Year 5
Electricity kWh 5,388,803 1,758,814
Electric Demand kW
N/A
Natural Gas Therms
Fuel Oil Gal
Steam
Water
Other
Material $
Maintenance
Contracts $
TOTAL
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 10 of 37 Table 3. Detailed Information on Gonzales Unified School District, a 139,202 SF multiple School site with total energy savings of 239,889 kWh and $50,311.

Data and References Project 2
Project Name Gonzales Unified School District
Facility Type and Use High School, Middle School, and Elementary School
Project Size:
-Number of Buildings
-Total Square Footage
139,202 SF
7 buildings
Types of Measures LED Lightning
Project Cost: Installed Project Costs $201,928
Project Cost: Financed Amount PGE OBFNI Program
Guaranteed Annual Savings ($) $45,163
Project Schedule:
-Construction Start and End Dates
-Guarantee Period Start and End Dates
Describe if project was completed on schedule
or delayed
Yes, the project was completed on schedule.

May 1, 2019 to May 23, 2019
Measurement and Verification Methods LED Lightning
Project Personnel:

List all Vendor personnel associated with this
project (limit to those who may be assigned to a
project) and their roles and responsibilities (only
list those who may be assigned to a project).

Surveyors – 2 persons
Sales – 4 persons
Installation Crew –20 persons
Management – 3 persons
Processing – 5 persons
Engineering – 3 persons
Contact Information:

Current phone and email address of owner
representatives you worked with.

Trini Zavala – Director
831-675-2568 x8326
[email protected]
Kern City Fairgrounds
Commodity Units
Guaranteed
Annual
Savings
Achieved
Savings
Year 1
Achieved
Savings
Year 2
Achieved
Savings
Year 3
Achieved
Savings
Year 4
Achieved
Savings
Year 5
Electricity kWh 208,403 239,889
Electric Demand kW 90.1 99.2
Natural Gas Therms
Fuel Oil Gal
Steam
Water
Other
Material $
Maintenance
Contracts $
TOTAL
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 11 of 37 Table 4. Detailed Information on Robinson Rancheria Resort and Casino, a 105,488 SF Agriculture site with total yearly energy savings of 306,438 kWh and $53,634.

Data and References Project 3
Project Name Robinson Rancheria Resort and Casino
Facility Type and Use Resort & Casino
Project Size:
-Number of Buildings
-Total Square Footage
105,488 SF
One building four different areas
Types of Measures Lighting & HVAC
Project Cost: Installed Project Costs $321,143
Project Cost: Financed Amount PGE OBFNI Program
Guaranteed Annual Savings ($) $53,634
Project Schedule:
-Construction Start and End Dates
-Guarantee Period Start and End Dates
Describe if project was completed on schedule
or delayed
Lighting Scope Install: 6/17/20 - 7/8/20
HVAC Scope Install: 10/23/19 - 8/10/20
Measurement and Verification Methods Utility Bill Analysis Project Personnel:

List all Vendor personnel associated with this
project (limit to those who may be assigned to a
project) and their roles and responsibilities (only
list those who may be assigned to a project).

Surveyors – 2 persons
Sales – 4 persons
Installation Crew –20 persons
Management – 3 persons
Processing – 5 persons
Engineering – 3 persons
Contact Information:

Current phone and email address of owner
representatives you worked with.

Vince Moran – Maintenance Director
707-245-7634
[email protected]
Robinson Rancheria and Casino
Commodity Units
Guaranteed
Annual
Savings
Achieved
Savings
Year 1
Achieved
Savings
Year 2
Achieved
Savings
Year 3
Achieved
Savings
Year 4
Achieved
Savings
Year 5
Electricity kWh 285,275 306,438
Electric Demand kW 10.4 13.7
Natural Gas Therms
N/A
Fuel Oil Gal
Steam
Water
Other
Material $
Maintenance
Contracts $
TOTAL
956 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 12 of 37 Table 5. Detailed Information on NCIS, a 50,957 SF International School with Achieved energy savings of 128,280 kWh and $24,331.

Data and References Project 4
Project Name National Center for International Schools
(NCIS)
Facility Type and Use International School
Project Size:
-Number of Buildings
-Total Square Footage
One building split into 4 sections
50,957 SF
Types of Measures LED Lightning (Troffer, Linear, Bypass PLL, Flat Panel)
Project Cost: Installed Project Costs $237,240.77
Project Cost: Financed Amount $0 - PG&E OBF Program
Guaranteed Annual Savings ($) $23,772
Project Schedule:
-Construction Start and End Dates
-Guarantee Period Start and End Dates
Describe if project was completed on schedule
or delayed
Yes, project was completed as scheduled
October 21, 2021 – November 9, 2021
Measurement and Verification Methods Utility Bill Analysis Project Personnel:

List all Vendor personnel associated with this
project (limit to those who may be assigned to a
project) and their roles and responsibilities (only
list those who may be assigned to a project).

Surveyors – 2 persons
Sales – 4 persons
Installation Crew –20 persons
Management – 3 persons
Processing – 5 persons
Engineering – 3 persons
Contact Information:

Current phone and email address of owner
representatives you worked with.

Daniel Klingebiel – Executive Director
(415) 865-6040
[email protected]
National Center for International Schools (NCIS)
Commodity Units
Guaranteed
Annual
Savings
Achieved
Savings
Year 1
Achieved
Savings
Year 2
Achieved
Savings
Year 3
Achieved
Savings
Year 4
Achieved
Savings
Year 5
Electricity kWh 125,330 128,280
Electric Demand kW 85.6 88.5
N/A
Natural Gas Therms
N/A
Fuel Oil Gal
Steam
Water
Other
Material $
Maintenance
Contracts $
TOTAL
957 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 13 of 37 E. Qualifications
I. Relevant Licenses, Certifications and Accreditations related to performance of Energy Savings Projects
a. DOE Qualified List of ESCO (see attachment D)
b. California Department of Industrial Relations Listing c. C-10 (see attachment E)
d. ICP certified Developer
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 14 of 37 F. Financial Soundness and Stability
I. Financial Statements
a. Balance Sheets
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 15 of 37 960 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 16 of 37 961 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 17 of 37 962 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 18 of 37 963 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 19 of 37 964 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 20 of 37 965 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 21 of 37 966 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 22 of 37 967 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 23 of 37 b. Income Statement
i. Please contact financial department at EcoGreen Solutions Inc. c. Statement of Cash Flow
Please contact financial department at EcoGreen Solutions Inc. d. Statement of Financial Condition
Please contact financial department at EcoGreen Solutions Inc.

G. Technical Approach
EcoGreen Solutions will send an engineer or an energy auditor to the site to conduct an ASHRAE II Audit. The auditor will go room by room and measure the square footage, open every fixture to examine the bulb type and wattage, examine the existing controls, and gather the run hours of the existing fixtures.

A similar approach will be used on all hydraulic and pump equipment. A throughout report and narrative will then be created with the addition of PI&D diagrams as necessary. This report will be shared with our VFD partners will implement the addition of a VFD to any pumping system where worthwhile and where the addition of a VFD does not adversely affect the existing system’s primary desired output process.

Regarding OPV, M&V, and O&M EcoGreen will verify that all items installed are functioning properly before leaving the site and closing out the project.

H. Management Approach for this Project
The management chart for this is as follows:
• Anthony Mitchel, Managing Director
o Anthony will be EcoGreen’s representative to the city • Corey Brophy, VP Programs
o Corey will handle technical and any utility information • Camron, McCoach, Projects and Logistics Director
o In charge of scheduling the installation team and coordinating with the customer for installation times
• Kelsey Xavier, Supply Chain and Project Coordinator
o Kelsey will ensure that all that EcoGreen and the customer receive the correct product on site
• Cameron Barcelona, Program Manager
o Cameron will provide installation invoices
• Robert Vela, Installation Lead
o Robert is the head of our on site installation crew
Location
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 24 of 37 • EcoGreen is located at 27671 La Paz Rd #100, Laguna Niguel, CA 92677 Services
• EcoGreen has an in-house installation team and an in-house engineering team which handles LED lighting retrofits, EC Motor replacements, and other electrical work on-site
• EcoGreen has subcontractors for solar, EV Chargers, Battery Storage, HVAC, VFD’s, steam insulation, economizers, and steam traps.

Engagement
• After auditing the site EcoGreen will present the project to the customer for permission to install
Servicing
• EcoGreen will provide a statement of work which will explain our warranty and repair process. We will handle all repairs as they come in with the respective manufacturer's we purchase the product from
I. Conclusion
We appreciate the opportunity to partner with City of Cotati for this project. Our team is dedicated to delivering a project that meets the City’s objectives for energy efficiency, resilience, and cost-effectiveness. We are confident that our approach will fulfill the City's goals while providing long-term value and sustainability.

We look forward to the opportunity to discuss our proposal further and collaborate with the City of Cotati on this important initiative.
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 25 of 37 Attachment A – City of Cotati Standard Professional Services Agreement 970 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 26 of 37 Attachment B – Sample Audit
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 27 of 37 Attachment C – OPV, M&V, and O&M Sample Plan
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City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 28 of 37 Attachment D – EcoGreen Solutions Inc. Certification for the U.S. Department of Energy’s (DOE) Qualified List of Energy Service Companies
973 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 29 of 37 974 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 30 of 37 Attachment E – EcoGreen Solutions Inc. Electrical Contractor State License (C-10) 975 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 31 of 37 Attachment F – Sample Performance Energy Contract “OBF Agreement” 976 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 32 of 37 Attachment G – Sample Performance Energy Contract “OBF Agreement” 977 of 1021
City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 33 of 37 978 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 34 of 37 979 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 35 of 37 980 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 36 of 37 981 of 1021 City of Cotati RFP for Water & Energy Services - EcoGreen Solutions Inc. Page 37 of 37 Attachment H – Response to Request for Proposal Question 982 of 1021
RESOLUTION NO. (XX)

OF THE CITY COUNCIL OF THE CITY OF COTATI AWARDING THE

ENERGY/WATER RESOURCE AUDIT AND IMPLEMENTATION OF ENERGY

AND WATER RESOURCES EFFICIENCY IMPROVEMENT PROJECT TO

SCHNEIDER ELECTRIC
WHEREAS, on July 17, 2024, the City posted a request for proposals (RFP) for energy services firms; and
WHEREAS, the announcement for the RFP was distributed to the entire list of Qualified Energy Services Firms published by the Department of Energy, as well as other interested parties, which amounted to about 120 recipients of the announcement; and WHEREAS, proposals were due on August 22, 2024 and the City received a total of 4 proposals from ENGIE, Schneider Electric, Centrica and EcoGreen; and WHEREAS, the proposals were reviewed by a review team consisting of internal and external reviewers; and
WHEREAS, in the City has completed many energy efficiency projects previously, including the LEED certified Police Station, a variety of energy improvements through a Performance Contract, including replacing all customer water meters with remote read meters, converting all city owned high-pressure sodium streetlights to light emitting diode (LED) lights, and retrofitted City building lights with compact fluorescent lights, LED lights, and other lower energy use fixtures, transitioning the vehicle fleet to battery-electric, reconfiguration of Community Development and Engineering offices, which received new insulation and energy efficient fixtures to meet current CalGreen building codes, new double pane windows on the West Sierra Avenue side of City Hall as well as throughout the Community Center, replaced older hot water heaters with heat pump water heaters at the Cotati Room in the City Hall Complex, the Train Depot, and at the Public Works Corporation Yard; and WHEREAS, the City purchases all of it’s electricity from Sonoma Clean Power, a local Community Choice Aggregator, using 100% renewable power (“EverGreen”); and WHEREAS, the intent of the RFP is to work on implementing the next phase of energy efficiency and resiliency work, consistent with the City Council’s strategic planning goals and objectives, including Long-Term Vitality, Climate Change, and Best in Class Services; and WHEREAS, a major focus of the proposed work was energy efficiency upgrades to lower emissions while simultaneously also stabilizing future energy costs; expanding the electric vehicle fleet infrastructure to continue with fleet electrification; and exploring the feasibility of a microgrid to support public safety and other critical emergency operations at the City Hall complex as well as photovoltaic solar (PV) with battery backup to support disaster operations at the Corporation Yard; and
WHEREAS, based on the feedback from the review committee, as well as calls to references, Schneider Electric is the most qualified contractor for the proposed work; and 983 of 1021
WHEREAS, the City is looking for a mix of projects that reduce our operational costs and do not require an initial outlay of capital; and
WHEREAS, if the City declines to move forward on any element of the work, the preliminary evaluation could cost an estimated $8,000.

NOW THEREFORE BE IT RESOLVED, that the City Council hereby authorizes:

1. The award of the Energy/Water Resources Audit and Implementation of Energy and Water Resources Efficiency Improvement Project to Schneider Electric.

2. The City Manager to execute the necessary agreements and take any necessary actions to complete the preliminary assessment work and return to City Council for further direction.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on October 22, 2024, by the following vote, to wit:

Approved:___________________________
Mayor
Attest:____________________________
Kevin Patterson, Deputy City Clerk
Approved as to form:______________________________
City Attorney
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: FISCAL YEAR 2024/25 -FIRST QUARTER FINANCIAL

UPDATE - REPORT FOR SUMMARY OF REVENUE

SOURCES, CASH AND INVESTMENT
Date: October 22, 2024
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council receive the presentation on the un-audited financial position for the City as of the First Quarter Fiscal Year 2024/25.

Background
City staff are committed to continued financial updates to report on receipts of key revenues and the overall City cash position.

Analysis/Discussion
General Fund:

Revenues:

The City of Cotati’s main revenue sources as a percent of total General Fund Sources are Sales Taxes at 26.6%, Voter Approved Local Revenue (Measure S) at 27.75%, Property Taxes at 17% then other Taxes, Charges for Services, Permits and Licenses for a combined 27.1%.

Overall Revenues for the General Fund are $1,089,149 or 4.3% higher than the same period in Fiscal year 2023/24.

Significant changes to the total revenues for the General Fund were:
 Licenses, Permits and Franchise increased by approximately $41K due to timing of receipts for the garbage franchise fees.
 Other Taxes, primarily made up of cannabis business taxes, had increases of approximately

33.6% or $28K over prior year due to additional businesses operations. 985 of 1021
 Other Revenues increased 126.5% or $35K due to the timing of receipts for the SSU Safety Services Contract.
 Investment Earnings increased 44.6% or $23K primarily due to the timing of interest earnings from internal debt service from other funds.
 Property Taxes are received from the County in December and April. The annual budgeted balance is in line with the County’s projections.

Expenditures:

Overall, cumulative General Fund expenditure decreased from the previous year by approximately

18.7% or $569,000. This change was due to the reduction in transfers out required for capital projects due to timing of projects as well as availability of other funding sources including special revenue funds, grant funds, or street bond funds, which are utilized before General Fund.

By department, total dollar increases were noted across all departments, when compared to the same quarter in the previous year. This increase is primarily due to increased insurance, utilities, and IT infrastructure improvements. Comparing the fiscal quarter to budget all departments are mostly aligned with an expectation of 25% with the Recreation Department at 30.5% primarily due to the volume of events and camps during the summer months. The Community Development department was at 28.3% primarily due to a one-time purchase of software to implement online permit processing which is currently in implementation.

Enterprise Funds:

The Water and Wastewater Funds revenues include charges for services, connection fees other revenues, and development fees. Utility accounts are billed monthly. In the prior year, utility accounts were billed bi-monthly and as such within the first quarter of the fiscal year, only one billing cycle has been completed.

Revenues:

The revenues for the Water Funds and Wastewater Funds have increased from the same period last year primarily due to the move to monthly billing as well as increased consumption with drought regulations in place during fiscal year 2023/24.

Expenditures:

For Fiscal Year 2024/25, most expenses are in line with budget at year-end. Wastewater Treatment is the largest expenditure, however it only increased by 6.7% compared to the prior year. Other significant increases are aligned with the General Fund where cost of insurance paid at the start of the year, utilities, and the allocation IT infrastructure improvements increased expenditures the most during this quarter. The wastewater fund also was impacted by an emergency repair totaling an additional $45K in the quarter. The annual budget for expenditures is in line with expectations given the timing of capital projects. Staff will continue to review the expenditures for alignment and adjustment as of Mid-Year.

City-Wide Cash and Investments:

Cash and Investments remain stable at $15.4M, where most of the funds are held in the US Bank Trust $7.8M (53%) and California Asset Management Program (CAMP) $6.5M (43%) due to higher return. The City Operating funds held at Exchange Bank with $620K (4%). The 986 of 1021
remainder of the City’s funds are held in the Sonoma County Investment Pool (SCIP), Local Agency Investment Funds (LAIF), a Restricted Escrow Account, and within a Fiduciary Funds account at US Bank with a combined total of $390K.

Financial Considerations
There is no immediate fiscal impact or budget action necessary. City Staff will continue to report to Council and the community quarterly.

Environmental Issues
The presentation of recurring financial position has been identified to have no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review. This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.
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Page 0 ends

Mid-Year Financial Report
Fiscal Year to Date: July 1, 2024, to September 30, 2024 Administrative Services 10/15/24 Q1 2024/25
9 988 of 1021

Page 1 ends

Introduction
This financial report provides an overview of our where we are within the budget cycle, then a summary of the City’s financial position through the mid-year of Fiscal Year (FY) 2024/25 (July 1, 2024, through September 30, 2024) for (1) Citywide Revenues and Expenses, (2) the General Fund, (3) Enterprise Funds, and (4) Summary of Cash and Investments. Notable cumulative mid-year to midyear and preliminary amended budget to actual comparisons are included in this report.

The following factors should be taken into consideration when analyzing first quarter data:
• Revenues reported herein are calculated based on actual receipts through September 30, 2024.

Some revenues are received later in the year, and as such can appear to be low at mid-year with variances smoothing out over the Fiscal Year.
• Some costs, such as subscription services and other dues, are typically incurred at the beginning of the Fiscal Year, so appear high at mid-year but are on-budget for the fiscal year, with variances smoothing out over the Fiscal Year.
• Construction projects, specifically street improvements, have a different project cycle which is offset from the Fiscal Year. As such, major projects are typically funded across two or more Fiscal Years.

Standard Budget Process Cycle - Where We Are Now & Next Steps:

Tentative Schedule for Financial Reporting & Budget Year 2025/26 and 2026/27 Planning:
• November 12th – Council Acceptance of Audited financial statements for Fiscal Year 2023/24 • December 6th – Measure S Oversight Committee Meeting on annual report for fiscal year 2023/24 • January 21st – Mid-Year Financial Update
• February 18th – Strategic Planning Session
• March 18th – Budget Study #1 - General Fund - Revenues and Expenditures, Special Revenues • April 15th – Budget Study#2 - Enterprise Funds, Capital Projects, Special Revenues • April 22nd – Third Quarter Financial Update for Fiscal Year 2024/25 • June 10th – Council Adoption of Biennial Budget For FY 2025/26 and 2026/27 * January
Mid-Year & Financial
Performance Review
February-March
Internal Budget Review,
Strategic/Long-Term and
Capital Planning
April
Draft Budget
Workshops
May
Budget Adoption
June
Budget Rollout
NOW* July -
December
Financial Evaluations
Budget Adjustments as
Approved by Council
NovemberDecember
City Manager and
Admin. Services Budget
Planning Meetings
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Page 2 ends

Citywide Revenues and Expenses
*Other Special Revenues consists of the following funds: Grants, CDBG Grants, Gas Tax, MTC Streets, RMRA, Traffic Mitigation Fees, Park-In-Lieu, PEG, Public Safety, K-9 Program, Inclusionary Housing, Linkage Affordable Housing, Community Facilities Districts, Measure M Parks, PEG, Bed Tax, and all Local Landscaping and Maintenance Districts.

City-wide Significant Variances
Fund type variances where revenues were less than 20 percent or expenditures are greater than 25 percent of budget as of mid-year were evaluated as follows:
• General Fund Revenues – The difference is primarily due to pending receipts for sales tax, property tax and other taxes. See further discussion on pages 3-4 herein. • Revenues for Special Revenues funds are primarily derived for other special taxes which are reported to the City months after collection, so accrual of revenue lags significantly. • Capital Projects are subject to construction timing of the projects. The City has programed over $12 million in capital projects, utilizing funding from a combination of funding sources including the Streets Improvement Lease Revenue Bond, State and Local Grants, Special Revenue Funds, and General Fund Contributions. Capital Projects timeframes vary due to design and review processes before construction as well as the time to construct. For more information on the City projects they are displayed online both on the City budget at https://city-cotati-ca-budgetbook.cleargov.com/14567 on the City’s transparency portal at www.tinyurl.com/CotatiProjects. • Internal Service revenues indicate as low due to the timing of transferred funds required for the purchase of replacement fleet vehicles. This transfer is expected to be complete by the end of the fiscal year.
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Page 3 ends

General Fund: Operating Revenues
The following table includes cumulative revenue comparisons through the first quarter of the Fiscal Year 2023/24 and a revenue budget to actual comparison for Fiscal Year 2024/25.

General Fund operating revenues through the first quarter are approximately $45,000, or 4.3% above the same period in FY 2023/24. Although revenues are only at 9.9% of the annual budget, this is in line with the previous year’s comparison, which was at 9.1% of the budget through September 30, 2023. The percentage of receipts of revenues is typically less 25% due to the timing associated with receiving some of the larger revenue sources. For instance, sales tax is the largest General Fund revenue source, but the receipts are received two months after the period paid by the consumers. The following is an explanation of other variations in revenues:
- Property Taxes are received in December and April of the Fiscal Year, and as such are not included in this report to date. We have budgeted for over $2 million, in line with the County’s proposed allocation, for Fiscal Year 2024/25.
- Sales Tax revenues are approximately 5.0% or $27,600 greater than last year’s cumulative first quarter ending balance. Adjusting the sales tax on an annualized basis, the revenue compared to budget is in line with budgetary expectations at approximately 27% (consistent with one quarter of the year).
- Other Taxes are primarily made up of Cannabis Business Tax. Last year had a decrease in taxes received which seems to have improved in the current fiscal year. Staff are continuing to monitor this revenue account. Financial reviews of each cannabis business are concluding currently, and all revenue appears properly reported to the City.
- Licenses, Permits and Franchises are subject to timing as most franchise payments are due annually near the end of the fiscal year.

SALES TAX BUDGET

ADJUSTMENT
FY 2024/25
Budget
Actual 1
Months
Receipts
Annualized 3
Months
FY 2024/25
% Variance
Annualized to
Budget
Sales Tax $ 6,027,000 $ 534,892 $ 1,604,676 26.6%
Bradley Burns $ 2,912,000 256,990 770,970 26.5%
Measure S $ 3,115,000 277,902 833,706 26.8%
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Page 4 ends

- Rents are primarily related to revenue from renting out community facilities and park space. This revenue source has continued to improve as more events, post covid, are planned. - Other Agencies increased from the previous year due to the timing of receipts for the State Mandated Cost from the State and the timing of receipts from SSU for the negotiated Dispatching Contract. - Charges for Services have increased over the last year as Community Development, Public Works, and the Public Safety Department are again working on new development projects or engaging in more reimbursable activities.
- Investment Earnings have increased primarily due to active investment management and increased interest rate earnings.
- Other revenues are misc. other receipts received by the City for general purposes. These are made up of one-time unbudgeted receipts.

General Fund: Department Operating Expenditures
The following table includes cumulative first quarter actual expenditure comparisons by department and again by expenditure type for Fiscal Year 2023/24 and Fiscal Year 2024/25 and an expenditure budget to actual comparison for Fiscal Year 2024/25.

Expenditures by Type
Overall, cumulative mid-year General Fund expenditures decreased from the previous year by approximately 18.7% or $569,000. Most of the decrease was due to the timing of transfers out for capital projects. The increase in Contract Services is primarily related to insurance and IT improvements.

Expenditures by Department
General Fund Expenditures by Type FY 2023/24 FY 2024/25 $ Variance % Variance FY 2024/25 Budget % Budget
Salaries & Benefits $ 1,251,821 $ 1,290,208 $ 38,387 3.1% $ 5,937,120 21.7% Contract Services 843,828 964,072 120,244 14.2% 2,586,064 37.3% Materials & Supplies 18,249 18,376 127 0.7% 73,416 25.0% Utilities 66,754 93,046 26,292 39.4% 435,700 21.4%
Repairs & Maintenance 8,908 41,883 32,975 370.2% 206,200 20.3% Other Expenses 76,030 71,878 (4,152) -5.5% 747,646 9.6% Transfers Out 783,292 (75) (783,366) -100.0% 4,101,000 0.0% Total: $ 3,048,882 $ 2,479,389 $ (569,493) -18.7% $ 14,087,146 17.6% Un-Audited Actuals Comparison
(July 1 - Sept 30) Budget to Actual Comparison
General Fund Expenditures by
Department FY 2023/24 FY 2024/25 $ Variance % Variance FY 2024/25 Budget % Budget City Council $ 43,209 $ 50,976 $ 7,767 18.0% $ 183,606 27.8% City Manager 192,404 197,289 4,885 2.5% 935,990 21.1%
Admin Services 115,430 126,035 10,605 9.2% 531,160 23.7% Community Development 221,407 266,194 44,787 20.2% 942,168 28.3% Public Works 276,339 378,519 102,180 37.0% 1,738,486 21.8% Police 1,279,270 1,306,983 27,713 2.2% 5,152,304 25.4%
Recreation 137,532 153,467 15,935 11.6% 502,432 30.5%
Transfers Out 783,292 (75) (783,366) -100.0% 4,101,000 0.0% Total: $ 3,048,882 $ 2,479,389 $ (569,493) -18.7% $ 14,087,146 17.6% Un-Audited Actuals Comparison
(July 1 - Sept 30) Budget to Actual Comparison
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Spending by General Fund Departments are consistent with the prior year. The majority of the increases are related to the proportional share of allocated expenses for insurance and tech and data management. Other increases for the Public Works include current year work on tree removal and park maintenance. The increase in community development is related to the software purchase for online permit submittal and processing as well as their proportional allocation of increased insurance.

The first three months, as compared to budget, General Fund expenditures are mostly tracking as expected with all operating departments (all departments except transfers out) averaging 24.8% of the budget. Overall expenditure is in line with staff expectations.

Enterprise Funds: Operating Revenue
The following table includes cumulative revenue and expenses comparisons through the first quarter of the Fiscal Year 2023/24 and 2024/25 and a revenue budget to actual comparison for Fiscal Year 2024/25 for the Enterprise Operational Funds.

The Water and Wastewater Fund revenues are made up of charges for services, connection fees other revenues, and development fees. The operating revenues for the Water and Wastewater Funds (removing one-time interfund debt service and investment earnings) have increased compared to the prior year primarily due to applied rates. For Fiscal Year 2024/25, most expenses are in line with the budget apart from (1) Contract Services for both funds, (2) Aquaduct Water for the Water fund, and (3) Other Expenses for the Wastewater fund. Discussion on these differences is included within the funds discussion as follows.

Enterprise Funds FY 2023/24 FY 2024/25 $ Variance % Variance FY 2024/25 Budget % Budget
-
Water Operations & Capital
Revenues $ 467,829 $ 730,335 $ 262,506 56.1% $ 2,370,900 30.8% Expenses
Salaries & Benefits 161,934 161,294 (639) -0.4% 724,960 22.2% Contract Services 148,451 169,834 21,383 14.4% 399,427 42.5% Other Expenses 47,040 55,496 8,456 18.0% 375,266 14.8%
Aquaduct Water 93,414 219,336 125,922 134.8% 694,460 31.6% Capital Outlay - - - 100.0% 72,500 0.0%
Interfund Debt 13,915 10,971 (2,944) -21.2% 104,469 10.5% Total Expenses $ 464,752 $ 616,931 $ 152,179 32.7% $ 2,371,082 26.0% Net Income $ 3,077 $ 113,404 $ (182)
Wastewater
Revenues $ 559,114 $ 827,643 $ 268,529 48.0% $ 3,445,300 24.0% Expenses
Salaries & Benefits 161,917 161,885 (33) 0.0% 701,290 23.1% Contract Services 93,429 120,221 26,792 28.7% 225,713 53.3% Other Expenses 18,790 69,364 50,575 269.2% 208,210 33.3% Wastewater Treatment 587,238 626,704 39,467 6.7% 2,506,900 25.0% Capital Outlay - - - 0.0% 118,695 0.0%
Interfund Debt 20,810 16,096 (4,714) -22.7% 67,498 23.8% Total Expenses $ 882,184 $ 994,270 $ 112,086 12.7% $ 3,828,306 26.0% Net Income $ (323,070) $ (166,627) $ (383,006)
Un-Audited Actuals Comparison
(July 1 - Sept 30) Budget to Actual Comparison
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Water Funds – Revenues for the water funds charges for services are tracking at 30.8% of the budget and 56.1% greater than the same period in the last year. This increase is primarily related to the move to monthly billing as well as increased water consumption and rates compared to the prior year.

For this quarter the prior year accounted for one billing cycle covering two months where we have covered three full months. Additionally, with continued warmer weather and less regulation on irrigation, consumption has increased over the prior year when drought restrictions were still in place for nonessential irrigation of ornamental lawns. Expenses as of the first quarter in total are at budget where payments for aqueduct water usage continues to be the main operating expense for the fund at approximately $219,000. We expect the water usage to decline over the next two quarters as weather changes and irrigation along with the practice for outdoor irrigation. Other expenses that are increased compared to budget are contract services which is primarily derived from the water funds proportion of the insurance and IT infrastructure updates. The water main flushing project is expected to run again during the spring of 2024 bringing the capital expenditures in line with expectations. The last major expense for sewer is the Salaries and Benefits. These costs though are both in line with the budget and prior year’s costs. No adjustments were deemed needed at this time.

Sewer Funds – Revenues are currently tracking at 24.0% of the budget and increased 48% from the prior year. Consistent with the water fund, the increase in revenues is due to the change to monthly billing as well as the increased consumption of water after the prior year drought restrictions. The City has processed the annual re-averaging for the wastewater consumption charges and anticipates the consumption to rebound after multiple years of strict water usage during fiscal years 2021/22 and 2022/23. Operating Expenses for the first quarter have increased by approximately $112,000 or 12.7% compared to the prior fiscal year. This is primarily due to the increased cost of Wastewater Treatment, Contract services and Other Expenses. Contract services are increased due to the insurance and IT Services allocation for improvement projects. Other expenses increased due to an emergency repair that was required along old redwood highway totaling approximately $45,000.

These funds will continue to be monitored, and staff will provide the City Council with updated information during development of the FY 2024/25 budget.

Cash and Investments
The tables below show the cash and investments held by the City as of September 30, 2024. The current cash and investment balances are in line with the City adopted investment policy and as budgeted are enough to meet the City’s expenditure requirements for the remainder of the fiscal year. 994 of 1021

Page 7 ends

Cash and Investment Detail by Composition
Conclusion
Except for identified variances, expenditures and revenues are tracking as expected. Staff will continue to monitor these variances and provide updated information to the City Council during budget development for Fiscal Year 2025/26.

Name of Investment Maturity Date Yield
Balance at
09/30/2024
Local Agency Investment Funds - (LAIF)
LAIF - Pooled Investments - Net FMV N/A 4.58% $ 6,288
Sonoma County Inestment Pool - SCIP N/A 1.96% $ 141,845 US Bank Trust
Managed investments in CD's and Treasuries Various 4.12% $ 7,851,417 Accrued Interest $ 27,645
California Asset Management Program (CAMP)
Pooled Investment Funds N/A 5.29% $ 6,470,416
Fiduciary Funds N/A 1.20% $ 163,193
Restricted Escrow Account
Funds held for payment on Park and Ride Project N/A $ 79,668 Exchange Bank Operating & Payroll Accounts N/A N/A $ 620,074 Total Cash and Investments $ 15,360,545
FISCAL YEAR 2024/25
AS OF SEPTEMBER 30, 2024
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Un-Audited
First Quarter
Budget & Actuals Review
First Quarter Fiscal Year 2024/25
Period Ending September 30, 2024
City of Cotati
996 of 1021
Financial Reporting
• Citywide Overview
• General Fund
• Enterprise Funds
• Cash and Investments
Portfolio
997 of 1021
Citywide
998 of 1021
Citywide -
Revenues &
Expenses
Revenues and Expenses On Target
•General Fund – Due to timing of Receipts for
major revenue sources.
•Other Special Revenues – Due to Timing of
Receipts for Revenues.
•Capital Projects – Due to timing of transfer of
funds for schedule of projects.
•Internal Service – Decreased revenue due to
reduced payout transfers of funds required.

Revenues are at 12.5% of Budget (PY 16.8%)
•Wastewater
- Beg. of Fiscal Year Payments for Insurance
and IT System Improvements.
- Emergency Repair to a Sewer Line on Old
Redwood Highway.
•Water
- Beg. of Fiscal Year Payments for Insurance
and IT System Improvements.

Expenses are at 17.3% of Budget (PY 18.4%)
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General
Fund
1000 of 1021
Comparative
Revenues & Expenditures
1001 of 1021
Proportion of
General Fund Revenues
Sales Tax, $534,892
Other Taxes, $109,928
Licenses, Permits & Franchises,
$86,308
Rent, $34,838
Other Agencies, $85,945 Community
Development
Charges, $55,710
Public
Works
Charges,
$18,427
Public Safety
Charges,
$14,261
Other Revenues,
$62,908
Investment Earnings, $76,878
Con
$4,
…
…
Tra
In,
…
…
1002 of 1021
Enterprise Funds

SUMMARY OF WATER AND WASTEWATER FUNDS
1003 of 1021
Enterprise Funds Analysis
•Improved Net Income from PY
Revenues and Expenses On Target
• Increases from prior year due to
increased consumption and
increased rates.

Revenues are at 30% and 24% of Annual
Budget (PY at 20% and 17%)
• Increased Wastewater Treatment
Costs
• Increased Water Usage from the
Aqueduct instead of Local Well
Production
• Increased Contract Services
Expenses Consistent with General
Fund (Insurance/Utilities/IT
Infrastructure Improvements)
• Other Costs increased for one time
repair for Wastewater fund.

Expenses are at 26% and 26% of Annual
Budget (PY at 19% and 21%)
Enterprise Funds FY 2023/24 FY 2024/25 $ Variance % Variance FY 2024/25 Budget % Budget
-
Water Operations & Capital
Revenues $ 467,829 $ 730,335 $ 262,506 56.1% $ 2,370,900 30.8% Expenses
Salaries & Benefits 161,934 161,294 (639) -0.4% 724,960 22.2% Contract Services 148,451 169,834 21,383 14.4% 399,427 42.5% Other Expenses 47,040 55,496 8,456 18.0% 375,266 14.8%
Aquaduct Water 190,977 219,336 28,360 14.8% 694,460 31.6% Capital Outlay - - - 100.0% 72,500 0.0%
Interfund Debt 13,915 10,971 (2,944) -21.2% 104,469 10.5% Total Expenses $ 562,315 $ 616,931 $ 54,616 9.7% $ 2,371,082 26.0% Net Income $ (94,486) $ 113,404 $ (182)
Wastewater
Revenues $ 559,114 $ 827,643 $ 268,529 48.0% $ 3,445,300 24.0% Expenses
Salaries & Benefits 161,917 161,885 (33) 0.0% 701,290 23.1% Contract Services 93,429 120,221 26,792 28.7% 225,713 53.3% Other Expenses 18,790 69,364 50,575 269.2% 208,210 33.3% Wastewater Treatment 587,238 626,704 39,467 6.7% 2,506,900 25.0% Capital Outlay - - - 0.0% 118,695 0.0%
Interfund Debt 20,810 16,096 (4,714) -22.7% 67,498 23.8% Total Expenses $ 882,184 $ 994,270 $ 112,086 12.7% $ 3,828,306 26.0% Net Income $ (323,070) $ (166,627) $ (383,006)
Un-Audited Actuals Comparison
(July 1 - Sept 30) Budget to Actual Comparison
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Cash & Investments Impacts for Q1 FY 2024/25
1005 of 1021
Summary of Cash
and Investments at
September 30, 2024
• Total approximately $15.4M.
• In line with the City updated
adopted investment policy.
• Investments for quarter
earned $186K in returns
• Overall cash is enough to
meet operational needs for
next 6 months in fiscal year
Name of Investment Maturity Date Yield
Balance at
09/30/2024
Local Agency Investment Funds - (LAIF)
LAIF - Pooled Investments - Net FMV N/A 4.58% 6,288 $
Sonoma County Inestment Pool - SCIP N/A 1.96% 141,845 $ US Bank Trust
Managed investments in CD's and Treasuries Various 4.12% 7,851,417 $ Accrued Interest $ 27,645
California Asset Management Program (CAMP)
Pooled Investment Funds N/A 5.29% 6,470,416 $
Fiduciary Funds N/A 1.20% 163,193 $
Restricted Escrow Account
Funds held for payment on Park and Ride Project N/A $ 79,668 Exchange Bank Operating & Payroll Accounts N/A N/A $ 620,074 Total Cash and Investments $ 15,360,545
FISCAL YEAR 2024/25
AS OF SEPTEMBER 30, 2024
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1007 of 1021
Conclusion
Fiscal Year was primarily on
track with increases in both
overall Revenues and
Expenditures compared to
the same Period in Prior Year.

No Additional Budget
Requests for Adjustments.

City staff will continue to
update the Council with
quarterly financial reports as
well as the audited financial
reports for Fiscal Year
2023/24
City staff are committed to
exercising prudence and
integrity in the management
of public funds and provide
transparent accountability
for its use
1008 of 1021
City of Cotati
Summary of Fiscal Resilience Enterprise Fund Factors
As of:

General Fund:

Cash*
Budget Operating
Expenses Cash Coverage Goal
A. Cash Coverage Ratio = $ 4,576,774 $ 9,986,146 45.83% > 25% Cash* Current Liabilities** Quick Ratio Goal
B. Liquidity Ratio = $ 4,576,774 $ 187,310 24.43 > 2.00 Twelve Month
Rolling Revenues To
9/30/2024
Twelve Month
Rolling Budget
Revenues
Revenues to
Budget Goal
C.1 Rolling Twelve Months Revenue to Budget = $ 11,458,756 $ 10,946,693 5% > - 10% Fiscal Year Total
Revenues To
9/30/2024
Prior Fiscal Year
Revenues *
9/30/2023
Revenues to Prior
Year
C.2 Current Fiscal Year Revenue to Prior Fiscal Year = $ 1,034,142 $ 1,044,353 -1% D. Increase in Expenditures
Operating
Expenditures
9/30/2024
Budget Expenditures
(3 Months)
Expenditures to
Budget Goal
Operating Expenditures Compared to Budget $ 2,479,464 $ 2,496,537 -1% < 10% Operating
Expenditures
9/30/2024
Prior Fiscal Year
Expenditures
9/30/2023
Expenditures to
Prior Year
Operating Expenditures Compared to Prior Year $ 2,479,464 $ 2,265,590 9% E. Significant Revenue Sources Changes
Current Fiscal Year
9/30/2024
Prior Fiscal Year
9/30/2023 % Change Goal
Bradley Burns $ 256,990 $ 258,876 -0.7% > - 10%
Measure S $ 277,902 $ 248,135 12.0%
Combined Sales Tax $ 534,892 $ 507,011 5.5%
Property Tax $ - $ - 0.0%
Current Fiscal Year
9/30/2024
Budget
(1 Month) % Change Goal
Bradley Burns* $ 256,990 $ 242,667 5.9% > - 10%
Measure S* $ 277,902 $ 259,583 7.1%
Combined Sales Tax* $ 534,892 $ 502,250 6.5%
Property Tax $ - $ 177,000 -100.0%
Monday, September 30, 2024
* - Sales Tax - 1 of the 12 monthly payments have been received to date as they are received two months after the collection period they represent. ** - Property Tax - Payments are received in December, April and August of each year. As such, no payments have been received for the fiscal year.. 1009 of 1021
City of Cotati
Summary of Fiscal Resilience Enterprise Fund Factors
As of:

General Fund:

Monday, September 30, 2024
F. Community Event Identification:

Fiscal Year Total
Revenues To
9/30/2024
Fiscal Year
Operating
Expenditures
9/30/2024
Current Year
Revenues to
Expenses Goal
G. Current Fiscal Year Revenues to Operating Expenditures $ 1,034,142 $ 2,479,464 42% > 110% Prior Fiscal Year
Revenues
9/30/2023
Prior Fiscal Year
Expenditures
9/30/2023
Prior Year
Revenues to
Expenses
Prior year Revenues to Operating Expenditures $ 1,044,353 $ 2,265,590 46% Ref:
* Cash incudes the pooled cash attributable to the evaluated fund which consists of all liquid available cash and investments held including CD's and Treasury notes. ** Current Liabilities are the total of all liabilities for the evaluated fund, as of the reporting date, that are due and payable within one year.

Due to timing of major revenue sources, mentioned in E above, it is consistent that the coverage for revenues would be lower through this period to date. This will continue to be monitored for risk.
- Informed of a possible closure of a licensed cannabis business within the City by the end of this year. Future estimated revenue losses are approximately $110,000 per year. These losses could be offset by increases in operating revenue for other similar businesses within the City. These business operations will be monitored and reported back at future financial updates. 1010 of 1021
City of Cotati
Summary of Fiscal Resilience Enterprise Fund Factors
As of:

Water Enterprise Fund
Cash*
Budget Operating
Expenses Cash Coverage Goal
A. Cash Coverage Ratio = $ 3,686,940 $ 2,194,113 168.04% > 33% Cash* Current Liabilities** Quick Ratio Goal
B. Liquidity Ratio: = $ 3,686,940 $ 285,775 12.90 > 2.0 Twelve Month
Rolling Revenues To
9/30/2024
Twelve Month
Rolling Budget
Revenues Revenues to Budget Goal
C.1 Rolling Twelve Months Revenue to Budget = $ 2,367,645 $ 2,348,268 1% > - 10% Fiscal Year Total
Revenues To
9/30/2024
Prior Fiscal Year
Revenues
6/30/2023
Revenues to Prior
Year
C.2 Current Fiscal Year Revenue to Prior Fiscal Year = $ 730,335 $ 467,829 56% D. Increase in Expenditures Fiscal Year
Operating
Expenditures
9/30/2024
Budget
Expenditures
(3 Months)
Expenditures to
Budget Goal
Operating Expenditures Compared to Budget $ 605,960 $ 548,528 10% < 10% Fiscal Year
Operating
Expenditures
6/30/2024
Prior Fiscal Year
Expenditures
9/30/2023
Expenditures to
Prior Year
Operating Expenditures Compared to Prior Year $ 605,960 $ 548,400 10% E. Supporting Agency Change In Rates
1-Jul-24 Goal
Budgeted Rate Agency Rate Difference < 2%
Sonoma County Water Agency (65% of supply) 6.00% 9.98% 3.9800% F.

Fiscal Year Total
Revenues To
9/30/2024
Fiscal Year
Operating
Expenditures
9/30/2024
Revenues to
Expenses Goal
Operating Revenues to Operating Expenditures $ 730,335 $ 605,960 121% > 110% Prior Fiscal Year
Revenues
9/30/2023
Prior Fiscal Year
Expenditures
9/30/2023
Prior Year Revenues
to Expenses
Prior Year Revenues to Operating Expenditures $ 467,829 $ 548,400 85% Monday, September 30, 2024
* Cash incudes the pooled cash attributable to the evaluated fund which consists of all liquid available cash and investments held including CD's and Treasury notes. ** Current Liabilities are the total of all liabilities for the evaluated fund, as of the reporting date, that are due and payable within one year. 1011 of 1021 City of Cotati
Summary of Fiscal Resilience General Fund Factors
As of:

Sewer Enterprise Funds
Cash*
Budget Operating
Expenses Cash Coverage Goal
A. Cash Coverage Ratio = $ 2,976,001 $ 3,642,113 81.71% > 33% B. Cash* Current Liabilities** Quick Ratio Goal
Liquidity Ratio: = $ 2,976,001 $ 66,656 44.65 > 2.0
C.1 Twelve Month
Rolling Revenues To
9/30/2024
Twelve Month
Rolling Budget
Revenues Revenues to Budget Goal
Rolling Twelve Months Revenue to Budget = $ 3,666,711 $ 3,614,286 1% > - 10% C.2 Fiscal Year Total
Revenues To
9/30/2024
Prior Fiscal Year
Revenues
9/30/2023
Revenues to Prior
Year
Current Fiscal Year Revenue to Prior Fiscal Year = $ 827,643 $ 559,114 48% D. Increase in Expenditures Fiscal Year
Operating
Expenditures
9/30/2024
Budget
Expenditures
(3 Months)
Expenditures to
Budget Goal
Operating Expenditures Compared to Budget $ 978,174 $ 1,214,038 -19% < 10% Fiscal Year
Operating
Expenditures
9/30/2024
Prior Fiscal Year
Expenditures
9/30/2023
Expenditures to
Prior Year
Operating Expenditures Compared to Prior Year $ 978,174 $ 861,374 14% * E. Supporting Agency Change In Rates
1-Jul-24 Goal
Budgeted Rate Agency Rate Difference < 2%
Santa Rosa Wastewater Treatment 9.00% 6.38% -2.6200%
F.

Total Revenues To
9/30/2024
Operating
Expenditures
9/30/2024
Revenues to
Expenses Goal
Operating Revenues to Operating Expenditures $ 827,643 $ 978,174 85% > 110% Prior Fiscal Year
Revenues
9/30/2023
Prior Fiscal Year
Expenditures
9/30/2023
Prior Year Revenues
to Expenses
Prior Year Revenues to Operating Expenditures $ 559,114 $ 861,374 65% Note:

Monday, September 30, 2024
* Cash incudes the pooled cash attributable to the evaluated fund which consists of all liquid available cash and investments held including CD's and Treasury notes. ** Current Liabilities are the total of all liabilities for the evaluated fund, as of the reporting date, that are due and payable within one year.

This item is improving over prior year and aligned with the utility rate study. Revenues have improved in part due to the move to monthly billing which more closely ties to the cost of services rendered. This will continue to be monitored for increased risk. * Operating Expenditures Compared to Prior Year - The increase compared to prior year are primarily due to an emergency repair to a mainline on old redwood highway for approximately $50,000. Adjusted for this one time expense the comparative expenditures are approximately a 8% increase. This fund will be monitored and reported back on with the next financial update. 1012 of 1021

FINANCE DEPARTMENT
DATE: October 16, 2024
TO: Honorable Mayor and City Council
VIA: Damien O’Bid, City Manager
FROM: Angela Courter, Administrator Services Director
SUBJECT: INVESTMENT REPORT FOR THE QUARTER ENDED
SEPTEMBER 30, 2024
Attached for your information is the quarterly report of investments as of September 30, 2024.

The total cash and investment portfolio book value (cost) held by the City as of September 30, 2024 was $14,975,840 and total cash and investments held by trustees was $384,706.

The cash and investments held by the City include the following components:

Managed Investment Portfolio ($7,879,062), State of CA Local Agency Investment Fund ($6,288), California Asset Management Program (CAMP) Pooled Investment Fund ($6,470,416), Cash/Time Deposits ($592,429), and accrued interest on investments ($27,645). (Earned interest is the interest earned on investments over a specific time period, accrued interest is the interest that an investment has earned, but hasn’t yet been received, and paid interest is the interest that has already been received as payment).

Cash and investments held by the City and the trustees continue to be invested in accordance with the Government Code and the Council Investment Policy as adopted on May 9, 2023.
1013 of 1021
Council Information
FY 2024-25 1st Quarter Investment Report
September 30, 2024

Page 2 of 3 ends

During the quarter, two Federal Agency Bonds matured in the amounts of $750,000 & $800,000. One U.S. Treasury Bill also matured in the amount of $638,000. One U.S. Treasury Bill was purchased in the amount of $811,066.

Two-year Treasuries yielding 4.71% at the beginning of the quarter ended lower at the end of the quarter at 3.66%, which was a decrease of 105 basis points for the quarter.

As of September 30, 2024, the Weighted Yield to Maturity on the Managed Investment Portfolio was 4.45%.

At the end of this quarter, the Weighted Average Maturity of the Managed Investment Portfolio was 1.70 years.

The Federal Open Market Committee (FOMC) meets approximately every six weeks and determines the level of the Federal Funds Rate. At the September 17th meeting, the FOMC voted to lower the target range for the federal funds rate by ½ percentage point to 4¾ to 5 percent.

Summary from the September 17th meeting:
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.

In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by ½ percentage point to 4¾ to 5 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee will continue reducing its holdings of Treasury securities and agency debt and Minutes of the Federal Open Market Committee 13 agency mortgage-backed securities. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.
1014 of 1021
Council Information
FY 2024-25 1st Quarter Investment Report
September 30, 2024

Page 3 of 3 ends

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
Finance staff hired Optimized Investment Partners in May 2023 to help improve the investment returns for the city and to ensure compliance with California Government Code by ensuring safety of principal and sufficient liquidity for operations. Ongoing portfolio management activity will continue to be performed in partnership with Optimized Investment Partners, the City Manager, and the Administrator Services Director.

Considering the projected timing of cash receipts and disbursements and the structure of the Pooled Investment Portfolio, the City will be able to comfortably meet overall cash flow needs over the next six months.

If you have any questions, please feel free to contact me at 707-665-4236. 1015 of 1021
Par Value (1) Market Value (2) Book Value (3)
Cash & Investments Held by District
Investment Portfolio
Managed Investments
U.S. Bank Custodial Cash Account $ 1,513,600 $ 1,513,600 $ 1,513,600 10.13% U.S. Treasury Bill/ Note 1,630,000 1,628,605 1,622,329 10.85% Federal Agency Bond 1,600,000 1,574,552 1,548,133 10.36% Certificate of Deposit 3,195,000 3,245,753 3,195,000 21.37% Managed Investments Subtotal $ 7,938,600 $ 7,962,510 $ 7,879,062 52.71% Pooled Investments
State of CA Local Agency Investment Fund $ 6,288 $ 6,288 $ 6,288 0.04% CAMP 6,470,416 6,470,416 6,470,416 43.29%
Pooled Investments Subtotal $ 6,476,704 $ 6,476,704 $ 6,476,704 43.33% Investment Portfolio Subtotal $ 14,415,304 $ 14,439,214 $ 14,355,766 96.04% Cash/Time Deposits $ 592,429 $ 592,429 $ 592,429 3.96%
Funds Available for Investment $ 15,007,732 $ 15,031,643 $ 14,948,194 100.00% Accrued Interest $ 27,645 $ 27,645 $ 27,645
Total Cash & Investments Held by the City $ 15,035,378 $ 15,059,288 $ 14,975,840 Cash & Investments Held by Trustee
Investment Agreements $ - $ - $ -
Cash with Fiscal Agents 305,038 305,038 305,038
Restricted Cash 79,668 79,668 79,668
U.S. Government
Total Cash & Investments Held by Trustee $ 384,706 $ 384,706 $ 384,706 Total Portfolio 15,420,084 $ 15,443,994 $ 15,360,546 $
Notes:

1. Par value is the principal amount of the investment on maturity.

2. Market values contained herein are received from sources we believe are reliable; however, we do not guarantee their accuracy.

3. Book value is par value of the security plus or minus any premium or discount on the security.

City of Cotati
Summary of Cash and Investments for the Quarter Ended September 30, 2024 Portfolio Assets % of Portfolio
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*Note: Cash/time deposits not included in WYTM
Excludes Pooled Investments and U.S. Bank Custodial Cash Account Under 1 Year
Maturity Sep-24 Jun-24 Change 1 - 2 Years
3-Month 4.73% 5.48% -0.75% 2 - 3 Years
1-Year 3.98% 5.09% -1.11% 3 - 4 Years
2-Year 3.66% 4.71% -1.05% 4 - 5 Years
3-Year 3.58% 4.52% -0.94% Total
5-Year 3.58% 4.33% -0.75%
10-Year 3.81% 4.36% -0.55%
July
Aug
Sep 2024 Sep 2023 Sep 2022 Sep 2021 Sept

3.66% 4.87% 3.51% 0.20% Total for Quarter
Note: Interest Earnings figures do not include capital gains or losses $ 183,679 235,609 $ (51,930) $
$ 69,237 88,109 $ (18,872) $
$ 54,359 68,662 $ (14,303) $
2-Year U.S. Treasury Yield - Historical Data 78,838 $ 60,083 $ (18,755) $ $ 0% -
$ 100% 6,425,000
Interest Earnings FY 23-24 FY 24-25 Change
$ 28% 1,784,000
$ 28% 1,783,000
$ 4% 248,000
U.S. Treasury Yields - Quarterly Comparison $ 41% 2,610,000 Book Value (COST) 14,355,766 $
Market Value 14,439,214 $
Weighted Average Maturity (in years) 1.70
Weighted Yield to Maturity* 4.45%
Portfolio Maturity PAR Maturing % Maturing
City of Cotati
Investment Report for the Quarter Ended September 30, 2024 Investment Portfolio Summary and Key Statistics
Portfolio Key Statistics
PAR Value 14,415,304 $

43.05%

21.59%

10.83%

10.47%

10.07%

3.94% 0.04%
CAMP 43.05%
CERTIFICATE OF DEPOSIT 21.59%
U.S. TREASURY BILL/NOTE 10.83%
FEDERAL AGENCY BOND 10.47%
INVESTMENT CASH ACCOUNT 10.07%
CASH/TIME DEPOSITS 3.94%
LOCAL AGENCY INVESTMENT FUND 0.04%
0%
10%
20%
30%
40%
50%
Under 1
Year
1 - 2 Years 2 - 3 Years 3 - 4 Years 4 - 5 Years
41%
28% 28%
4%
0%
Portfolio Maturity Distribution
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: DISCUSSION ABOUT THE WEEK WITHOUT DRIVING
Date: October 22, 2024
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council discuss the Week Without Driving. No action will be taken.

Background
This year, the annual week without driving ran from September 30-October 6. The Week Without Driving challenge was created so that those who have the option to drive can learn firsthand about the barriers and challenges that nondrivers face.

The Week Without Driving challenge was launched in 2021 by Anna Zivarts at Disability Rights Washington. After two years, this event went national in 2023 as a partnership between America Walks and Disability Rights Washington.

Analysis/Discussion
Attached to this staff report is a summary of Mayor Sparks’ Week Without Driving experience for discussion.

Financial Considerations
None.

Environmental Issues
Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review. 1018 of 1021
This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed discussion is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.
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Day Without Driving
Mayor’s Report
On Tues. 10/1, I participated in a “Day Without Driving” as part of the “Week without Driving” initiative.

I rode Sonoma County Transit’s 44 line to get to work in Petaluma, 6 miles away from my home in Cotati. Here is a summary of the experience:
• The buses were clean and safe, and the ride was pleasant. • The drivers were courteous.
• Payment with the Clipper Card was easy and convenient. • The morning bus to get to work was on time.
• The morning journey took about 50 minutes, including 20 minutes of walking to the bus stop and 30 minutes of riding.
• In comparision, it takes on average 12 minutes for me to drive to work. • I had to delay going home approximately 1 hour later than I usually would because of the limited schedule.
• In the afternoon, the bus was 10 minutes late. This was uncomfortable because there was no shade at the bus stop, and the temperature was over 100 degrees. By the time the bus arrived, I would have already been home if I had used my car. And I was overheated and still had a 50 minute journey ahead of me.
• Overall, the bus was a reasonable option of last resort, but I will not be using the bus in the future regularly because of the large time commitment it requires. As a daily commute, using the bus would cost me over 10 hours per week of time that I do not have.

I am sure that my choice not to use the bus mirrors the choice of many other Sonoma County residents.

I understand that we can only run routes that are justified by ridership, but we need a critical mass in which the system is much more convenient in order to compete with an automobile. For climate reasons, I would actually prefer to ride the bus if it were feasible. The following changes would help:
• Bus runs more frequently so that I could use it without having to alter my schedule dramatically, and so that riding the bus isn’t such a risk – at some times during the day a missed bus means waiting 2 hours for the next ride.
• Bus route is more direct so that the travel time difference between driving and taking the bus is more competitive.
• Shade at every bus stop, and take particular care to ensure that buses run on time on days with excessive heat advisories.
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Cotati City Council
Agenda Staff Report
Item type: INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED To: City Council
Subject: INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED Date: October 22, 2024
Written by: Kevin Patterson, Deputy City Clerk
Recommendation
Information or written comments pertaining to this meeting, and which was received after the agenda was posted, is attached below.

Pursuant to City Council Policy 2023-01: City Council Rules section IV A., written Communications, interested persons or their authorized representative may address the Council by written communication on any matters concerning the City’s business, or any matters over which the Council has control.

1. To be considered for inclusion in the agenda packet, such written communication shall be delivered to the Deputy City Clerk no later than 11:00 a.m. of the Wednesday the week preceding the regular Council meeting for which such written communication is intended.

2. If received after the above date and time, but no later than noon the day before the meeting, written communications received by the Deputy City Clerk shall be posted on the website by the end of that day and notification provided to the electronic Agenda mailing list by the end of the day. All written communications received by the Deputy City Clerk by 5 pm on the City Council meeting day shall be made available to the City Council and public at the City Council meeting.

City Council Policy 2023-01 is available at the online meeting portal at www.cotaticity.org or by request from the Deputy City Clerk at 707-665-3622 or [email protected]. 1021 of 1021

Cotati City CouncilOctober 22, 2024

Cotati City Council
October 22, 2024