Cupertino City Council
December 5, 2023

10. Summary of all loads of Organic Materials that were rejected at the Approved Transfer Facility and Approved Organic Materials Processing Facility, including: the date and time the load was rejected at the Approved Facility; Contractor’s truck number; the reason for rejection; the materials in the load that required the load to be landfilled; Contractor’s Disposal method; and, final destination for the rejected load.

11. Any other information reasonably requested by the City or specified in contamination monitoring provisions of this Agreement.

12. SB 1383-related public education and outreach materials described in this Exhibit D, Section

1.F.1 through 1.F.4 above.

H. C&D Collection. In accordance with Section 4.5 and Exhibit B3, Contractor shall separately document the following information:

1. Tonnage of C&D Collected;

2. Tonnage of C&D delivered to the Designated Disposal Facility; and,

3. Calculation of the Diversion level, including C&D Transported to a City-Approved Facility other than the Designated Disposal Facility (Tons of C&D Recycled, Reused, or salvaged divided by Total Tons of C&D Collected).

Upon City direction, Contractor shall utilize a cloud-based C&D software system to track and report such C&D data. Contractor shall provide each Customer with documentation necessary for the Customer to meet the requirements of the City’s C&D ordinance.

I. Non-Conforming Carts Status. In accordance with Section 5.6, Contractor shall document the status of exchanging Non-Conforming Carts.

2. QUARTERLY REPORT CONTENT
A. Tonnage Allocation. On a quarterly basis, Contractor shall report the Tonnage attributed to the City that was taken to landfills other than the Designated Disposal Facility as Residual from Organic Material screening or Processing at any Contractor facility. The report shall include 278
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EXHIBIT D

REPORTING REQUIREMENTS
December 3, 2020 Page D-6 City of Cupertino/Recology Franchise Exhibit D Contractor’s methodology, including how often it is reviewed and updated, for estimating what percentage of the jurisdictionally commingled non-Compostable Tonnage that was landfilled is attributable to the City and reported to CalRecycle through the Disposal Reporting System (DRS).

B. Claims. On a quarterly basis, Contactor shall submit to City all claims against Contractor specific to the services provided under the Agreement, that have been filed, settled, or that are under review.

3. BIANNUAL REPORT CONTENT
On April 1 and October 1 of each year of this Agreement, and at other times upon City request, Contractor shall provide the City with copies of laboratory results on the quality of the Compost materials produced from the Organic Materials Collected in the City in the prior three months, and on the Organic Materials provided to the City as required in Exhibit B4, Section 5 of this Agreement.

4. ANNUAL REPORT CONTENT
The annual report shall be the final monthly report, including annual totals, summary pages, and a compilation of any materials required by the monthly reports, plus the following additional information.

A. Summary Assessment. Provide a summary assessment of the programs performed under this Agreement from Contractor's perspective relative to the financial and physical status of the program. The physical status assessment shall reflect how well the program is operating in terms of efficiency, economy, and effectiveness in meeting all the goals and objectives of this Agreement, particularly Contractor’s Diversion goals as provided in Section 5.11. Provide recommendations and plans to improve, and highlight significant accomplishments and problems.

B. Collection and Processing Report

1. The total Tonnage amount of Discarded Materials, listed separately by Discarded Material type, removed by Contractor from illegal Disposal sites as part of an abatement activity, listing each Collection event separately by date, location, and Tonnage Collected, pursuant to Section 4.2.B of the Agreement.

2. Number of Containers at each Service Level by Customer Type and program. Summarizing the total gallons of Cart service, cubic yards of Bin service, and pulls and cubic yards or Tons of Drop Box and Compactor service by Customer Type. Report should calculate the average volume of service received per: Single-Family Dwelling Unit (separately identifying Dwelling Units in a duplex, triplex, or fourplex); Multi-Family Dwelling Unit; and, Commercial Customer.

3. A record of all compliance agreements for quarantined Organic Waste that are Disposed of, including the name of Generator, date issued, location of final disposition, and the amount of quarantined Organic Waste that was required to be Disposed at a landfill, pursuant to Section

4.2.C of the Agreement.

4. Written notification as to whether the Approved Organic Materials Processing Facilities have and will continue to have the capabilities to Process and recover Compostable Plastic, in accordance with Section 4.2.C of the Agreement.
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EXHIBIT D

REPORTING REQUIREMENTS
December 3, 2020 Page D-7 City of Cupertino/Recology Franchise Exhibit D

5. Summary report of the “Coats for Kids” program.

C. Education and Outreach Report

1. A summary of the status of the annual education plan of the reporting year, including activities conducted and the quantitative and/or qualitative results of those activities.

2. The annual public education plan required by Exhibit C of the Agreement for the upcoming then-current calendar year. For example, Contractor submittal of a 2021 annual report in February 2022 shall include Contractor submittal of the annual public education plan for calendar year 2022.

D. Commercial Edible Food Generator Report
Commercial Customer list including contact information for each Commercial Customer designated by City as either a Tier One Commercial Edible Food Generator, Tier Two Commercial Edible Food Generator, or non-covered Edible Food Generator.

E. Vehicle Inventory

1. A list of all vehicles used in performing services under this Agreement, including the license plate number, VIN, make, model, model year, purchase date, engine overhaul/rebuild date (if applicable), and mileage at January 31.

2. The results of any Collection vehicle pilot programs conducted by Contractor and approved by the City.

3. Description of the use of electric vehicles in pilot programs as well as in regular collection service by Contractor in other jurisdictions and Contractor’s recommendation on feasibility of use of such technology in Cupertino.

F. Temporary Equipment or Operations Failure: If Contractor is granted a Processing Facility temporary equipment or operational failure waiver, in accordance with Section 4.1 and 4.2 of the Agreement, Contractor shall include the following documents and information:

1. The number of days the Processing Facility temporary equipment waiver or operation failure waiver was in effect;

2. Copies of any notifications sent to the City pursuant to Sections 4.1 and 4.2 of the Agreement, and copies of City notices to Contractor pursuant to Sections 4.1 and 4.2 of the Agreement;

3. Documentation setting forth the date of issuance of the waiver, the timeframe for the waiver; and,

4. A record of the Tons of Recyclable Materials and/or Organic Materials redirected to an alternative facility or Disposed at an Approved Facility or Designated Disposal Facility as a result of the waiver, recorded by Collection vehicle or transfer vehicle number/load, date, and weight.
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EXHIBIT D

REPORTING REQUIREMENTS
December 3, 2020 Page D-8 City of Cupertino/Recology Franchise Exhibit D G. Environmentally-Preferable Purchasing Report. In accordance with Section 5.10, provide the type of Recycled content paper and other items purchased, a summary of any other source reduction strategies implemented during the year, and the quantified results of the source reduction strategy.

5. ADDITIONAL REPORTS
A. Upon Incident Reporting. The City reserves the right to request additional reports or documents in the case of unforeseen events or additional requirements imposed upon the City. Contractor shall provide the requested reports, documents, or information within ten (10) Business Days upon receipt of the request or within a timeframe determined by the City Contract Manager, which shall not to exceed ten (10) days.

B. AB 901 Reporting. At the City’s option, the City may require that Contractor provide the City copies of Contractor’s AB 901 reports on a regular basis (such as monthly, quarterly, or annually) or within ten (10) Business Days of the request.

C. Delinquent Accounts. In accordance with Section 4.9 and at the City’s option, the City may require that Contractor provide a list of Customers that are forty-five (45) or more calendar days past due and include the following information for each delinquent account: name; service address; contact information; number of days the account is delinquent; and method(s) Contractor has used to attempt collection of the bad debt including date of such attempt(s).

D. Reviewed Financials. After the end of each year, Contractor shall submit to the City a copy of its reviewed financial statements for such year as provided in Exhibit E. Contractor shall not be required to submit reviewed financials in Rate Year 2 and Rate Year 3.

E. Customized Reports. The City reserves the right to request Contractor to prepare and provide customized reports from records Contractor is required to maintain; or require a specified format or submission system, such as the use of a web-based software platform.

F. Recyclable Materials and Organic Materials Markets. Contractor shall provide, if and to the extent available from the Approved Recyclable Materials Processing Facility, an assessment describing such facility’s marketing of Recyclable Materials, including: 1) quantities and dates of Recyclable Materials marketed during the prior year; 2) actual prior year and estimated coming year per unit or per Ton market values for each, including adjustments on previously reported market values; and, 3) brokers, markets, and end uses for each.

G. Subcontractor Insurance Certificates. Copies of insurance certificates from Subcontractors, as provided Section 3.3.
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EXHIBIT E:

RATE ADJUSTMENT METHODOLOGY
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EXHIBIT E

RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E-1 City of Cupertino/Recology Franchise Exhibit E

1. GENERAL
The Rates for Rate Period One are as specified in Table 8-2 of Section 8.2 and Exhibit G3 of this Agreement.

Subject to the terms herein, and beginning with Rate Period Four, the City shall adjust all Rates on an annual basis for each Rate Period in accordance with Exhibit E1 or E2, as provided in Article 8 and otherwise in this Agreement.

Contractor shall submit its application for a Rate adjustment to the City Contract Manager on or before August 1 of each Rate Period where Rates shall be adjusted using the index-based methodology described in Exhibit E1. Contractor shall submit its application on or before August 1 for any Rate Period where Rates shall be adjusted using the cost-based methodology described in Exhibit E2. Contractor’s Rate application shall document all calculations and include all supporting schedules, documentation of perTon charges for Approved Facilities, documentation of changes in governmental fees at Approved Facilities (if applicable), and any other documentation or evidence determined by the City Contract Manager to be reasonably necessary to ensure that the calculation of Rate adjustments has been performed in strict conformance to the requirements of this Exhibit E.

The City Council shall make a good faith effort to approve Rates by January 1 of each year, and such Rates shall be effective on each subsequent February 1. If Rates are not effective by February 1 due to a delay caused solely by the City, the City shall allow Contractor to retroactively bill Customers for the amount of the Rate increase for any period of said delay that is solely caused by the City (subject to the City’s approval of how the retroactive adjustment is billed) or the City may compensate Contractor for lost Gross Receipts.

In the case of a delayed Rate adjustment, Contractor may bill the Customer during the next billing cycle to recoup the deferred Rate increase. If Rates are not effective by February 1 as a result of Contractor’s delay in submitting the Rate application in a complete and accurate form, then prior Rates remain in effect until such adjustment is made and Contractor shall not be entitled to a retroactive adjustment for lost Gross Receipts.

2. DEFINITIONS
Certain terms that are specific to this Exhibit (including Exhibits E1 and E2) are defined below:

A. “Annual Percentage Change” means the annual percentage change in any of the indices defined herein calculated as described in the following paragraph.

The Annual Percentage Change for a cost index shall be calculated as: the Average Index Value for the twelve- (12) month period ending in June of the then-current Rate Period, minus the Average Index Value for the corresponding twelve- (12) month period ending in June of the most-recently completed Rate Period, and the result of which shall be divided by the Average Index Value for the same twelve- (12) month period ending in June of the most recently completed Rate Period.

For example, if Contractor is calculating the Total Calculated Costs in July 2024 to be effective for Rate Period Five (February 2025 through January 2026), the Annual Percentage Change for the CPI-U would be calculated as follows:
[ (Average CPI-U for July 2023 through June 2024) minus (Average CPI-U for July 2022 through June 2023) ] divided by (Average CPI-U for July 2022 through June 2023)
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EXHIBIT E

RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E-2 City of Cupertino/Recology Franchise Exhibit E The calculated Annual Percentage Change shall be carried to three places to the right of the decimal and rounded to the nearest thousandths.

B. “Average Index Value” means the sum of the monthly index values during the applicable twelve- (12) month period divided by twelve (12) (in the case of indices published monthly) or the sum of the bi-monthly index values during the applicable twelve- (12) month period divided by six (6) (in the case of indices published bi-monthly).

C. “City Payments” means: 1) those annual amounts, payable by City to Contractor monthly, as are specified in Article 8.2 for Rate Periods One, Two and Three; and 2) for subsequent Rate Periods, such annual amounts payable by City to Contractor monthly as the City agrees to pay during the Rate adjustment process for such Rate Period, to reduce the Rate increase that would otherwise occur in that Rate Period. Such payments shall be effected by netting the monthly amount of the City Payment against the monthly amount of City Fees payable by Contractor to City.

E. “CPI-U” means the Consumer Price Index, All Urban Consumers, all items, not seasonally adjusted San Francisco Bay Area compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.

F. “Disposal Cost” means the cost of Disposing of Solid Waste at the Designated Disposal Facility where the per-Ton tipping fee (cost) is the then-applicable contractual amount as confirmed by the City.

G. “ECI” means the Employment Cost Index, Total Compensation, Private Industry, Service-Providing Industries, seasonally adjusted, compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.

H. “Fuel Index” means the Consumer Price Index, All Urban Consumers, Motor Fuel, San FranciscoOakland-Hayward, not seasonally adjusted, series ID: CUURS49BSETB, compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.

I. “Motor Vehicle Maintenance and Repair Index” or “MVI” means the Consumer Price Index, All Urban Consumers, Motor Vehicle Maintenance and Repair, not seasonally adjusted U.S. city average, compiled and published by the U.S. Department of Labor, Bureau of Labor Statistics.

J. “Total Calculated Costs” means the total amount to be used as a basis for determining the Rate Adjustment Factor. The Total Calculated Costs do not reflect or in any way guarantee the Gross Receipts that are to be generated by Rates or retained by Contractor.

K. “Total Rate Adjustment Factor” means the Total Rate Adjustment Factor as calculated in Section 3 of Exhibit E1 for index-based adjustments, or as calculated in Section 4 of Exhibit E2 for costbased adjustments.

Table 1 below provides additional information about the four (4) indices defined above. 284
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EXHIBIT E

RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E-3 City of Cupertino/Recology Franchise Exhibit E TABLE 1*
CPI-U Fuel Index ECI Motor Vehicle
Maintenance and
Repair
Description Consumer Price
Index - All Urban
Consumers
Consumer Price
Index - All Urban
Consumers
Employment Cost
Index - Total
Compensation for
Private Industry
Workers in ServiceProviding Industries.

Consumer Price
Index – All Urban
Consumers, Motor
Vehicle
Maintenance and
Repair
Series ID CUUSS49BSA0 CUURS49BSETB CIS201S000000000I CUUR0000SETD Adjusted Not seasonally
adjusted
Not seasonally
adjusted
Seasonally adjusted Not seasonally
adjusted
Area San FranciscoOakland-Hayward San FranciscoOakland-Hayward N/A U.S. City average Item All items Motor fuel Total compensation Motor vehicle maintenance and
repair
Base
Period
1982-84=100 1982-84=100 Dec. 2005=100 1982-84=100
Periodicity Bi-monthly Monthly Quarterly Monthly
* All indices published by the U.S. Bureau of Labor Statistics.

3. COST OF RATE ADJUSTMENT PROCESS
The City may incur costs, including consulting and legal fees, when determining adjustments to the Rates in accordance with this Exhibit and may require Contractor to pay for such costs within sixty (60) calendar days of receipt of the City’s invoice for such costs. Contractor may recover such costs through the Rates by treating the costs as an allowable Pass-Through Cost. Notwithstanding the foregoing, Contractor shall only be required to reimburse City’s costs to the extent such costs have been included as allowable PassThrough Costs in the Rate adjustment with respect to which the costs were incurred, and such Rate adjustment has been approved by the City Council. Regardless of Contractor’s payment of costs associated with said review, the City shall retain full and unimpeded discretion in selection of its agents to ensure, at a minimum, that no conflict of interest arises in the review of Contractor’s request. The City retains the right to select its agents on the basis of their qualifications and experience and without regard to cost. 285
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EXHIBIT E1:

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-1 City of Cupertino/Recology Franchise Exhibit E1

1. GENERAL
The purpose of this attachment is to describe and illustrate the method by which the City will calculate the annual adjustment to Rates to reflect changes in various cost indices and changes to Processing and Disposal Costs based on Tonnages of materials Collected and changes in tipping fees. This index-based adjustment process shall be used to determine Rates for Rate Periods Five, Six, Seven, Nine, and Ten (and, if the Term is extended, Twelve, Thirteen, Fourteen, and Fifteen). However, the cost-based methodology described in Exhibit E2 shall be used to set Rates in lieu of the index adjustment to set Rates provided in Exhibit E1, as provided in Sections 3.2, 8.2 and 8.3 of the Agreement, and the third paragraph below.

The index-based adjustment involves application of indices to various costs that comprise the Total Proposed Annual Costs, beginning with Rate Period Four to determine the Total Calculated Costs for the subsequent Rate Period. In addition, Processing and Disposal costs shall be adjusted to reflect actual Tonnage Collected during the most-recently completed Rate Period.

The annual increase in Total Calculated Costs calculated pursuant to this Exhibit E1 may not exceed five percent (5%). In the event that Total Calculated Costs for the coming Rate Period as calculated under this Exhibit E1 exceeds by more than five percent (5%) Total Calculated Costs for the then-current Rate Period, then Contractor may elect to either: i) accept an increase in Contractor Compensation based on an increase in Total Calculated Costs of five percent (5%); or, ii) require that a cost-based Rate adjustment be performed under the procedures described in Exhibit E2.

In the event that the index-based adjustment as calculated by this Exhibit E1 results in a negative Rate Adjustment Factor, the City reserves the right to “roll-under” the Rate reduction, such that there is no Rate adjustment in the Rate Period for which the negative Rate Adjustment Factor was calculated, but the calculated Rate reduction may be deferred to the following Rate Period, as a credit against future Rate increases.

2. ADJUSTMENT OF TOTAL CALCULATED COSTS
The cost categories of the main components of Total Calculated Costs are presented in detail in Exhibit G2. Adjustments to these components to calculate costs for the coming Rate Period shall be calculated as follows:

A. Total Annual Cost of Operations

1. Labor-Related Costs. The Labor-Related Costs component of Total Calculated Costs for the then-current Rate Period is multiplied by one (1) plus the Annual Percentage Change in the ECI.

For example, in Rate Period Five when calculating the Labor-Related Costs for Rate Period Three, the Labor-Related Costs of Rate Period Four shall be multiplied by one (1) plus the Annual Percentage change in the ECI.

2. Vehicle-Related Costs (excluding Fuel). The Vehicle-Related Costs component of Total Calculated Costs for the then-current Rate Period is multiplied by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index. 288
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-2 City of Cupertino/Recology Franchise Exhibit E1

3. Fuel Costs. The Fuel Cost component of Total Calculated Costs for the then-current Rate Period is multiplied by one (1) plus the Annual Percentage Change in the Fuel Index.

4. Other Costs. The Other Costs component of the Total Calculated Costs for the then-current Rate Period is multiplied by one (1) plus the Annual Percentage Change in the CPI-U.

5. Direct Depreciation. Direct Depreciation for Containers and equipment is nine hundred and five thousand, eight hundred and fifty-three dollars ($905,853.00) per year in Rate Periods Two through Ten, and is not annually adjusted. If the Agreement is extended beyond Rate Period Ten, direct depreciation shall be as set forth in Exhibit G2 (Capital Plan), unless Parties mutually agree to a different amount.

6. Allocated Costs (Labor, Vehicle, Fuel, and Other Costs). The Allocated Costs (Labor, Vehicle, Fuel, and Other Costs) component for the then-current Rate Period is multiplied by one (1) plus the Annual Percentage Change in the CPI-U.

7. Allocated Depreciation. The Allocated Depreciation shall be thirty five thousand, three hundred and eleven dollars ($35,311.00) per year in Rate Periods Two through Ten, and is not annually adjusted. These costs shall be zero (0) for all subsequent Rate Periods unless Parties mutually agree to a different amount.

8. Total Annual Cost of Operations. The Total Annual Cost of Operations for the coming Rate Period equals the sum of the costs calculated in this Exhibit E1, Section 2.A.1-7 above.

B. Profit. Profit for the coming Rate Period shall be calculated by dividing the Total Annual Cost of Operations for the coming Rate Period (the value calculated in Section 2.A.8 above) by an operating ratio of seventy-two and one-half percent (72.5%) and subtracting from the result the Total Annual Cost of Operations for the coming year.

Profit =
Total Annual Cost of Operations
___for Coming Rate Period___
Operating Ratio
−
Total Annual Cost of Operations
for Coming Rate Period
C. Pass-Through Costs (Excluded from the Calculation of Profit)

1. Recyclable Materials Processing Costs. The Recyclable Materials Processing Costs shall be calculated as follows:

Recyclable Materials Processing Costs = Per-Ton Recycling Materials Processing fee at the Approved Recyclable Materials Processing Facility for the coming Rate Period x Total Tons of Recyclable Materials Collected for the most-recently completed twelve- (12) month period.

If the City approves a change in the Approved Recyclables Material Processing Facility or the Designated Recyclables Material Processing Facility, the Recyclable Materials Processing Cost shall adjust by the actual change in the costs, as specified in the Recyclable Materials Processing contract.

2. Organic Materials Processing Costs. The Organic Materials Processing Costs shall be calculated as follows:
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-3 City of Cupertino/Recology Franchise Exhibit E1 Residential Organic Materials Processing Costs
Residential Organic Materials Processing Cost = [(Per-Ton Residential Organic Materials Processing Cost for the then-current Rate Period - All regulatory fees identified on Form 7 of Exhibit G2, (Contractor’s Proposal) and included in the then-current per-Ton cost) x (1 + Annual Percentage Change in the CPI-U) + (Then-current per-Ton regulatory fees)] x (Total Tons of Residential Organic Materials Collected for the most-recently completed twelve- (12) month period).

Commercial Organic Materials Processing Costs
Commercial Organic Materials Processing Cost = [(Per-Ton Commercial Organic Materials Processing Cost for the then-current Rate Period - All regulatory fees identified on Form 7 of Exhibit G2, (Contractor’s Proposal) and included in the then-current per-Ton cost) x (1 + Annual Percentage Change in the CPI-U) + (Then-current per-Ton regulatory fees)] x (Total Tons of Commercial Organic Materials Collected for the most-recently completed twelve- (12) month period). Residential Organic Materials Processing Costs and Commercial Organic Materials Processing Costs shall be inclusive of transfer costs.

If the City approves a change in the Approved Organic Materials Processing Facility, the Processing Costs shall adjust to the then-current tip fee at the new Approved Organic Materials Processing Facility.

3. Disposal & C&D Processing Costs. The Disposal Costs and C&D Processing Costs shall be calculated as follows:

Disposal Costs = Per-Ton Disposal fee at the Designated Disposal Facility for the coming Rate Period x Total Tons of Solid Waste Collected for the most-recently completed twelve- (12) month period.

C&D Processing Costs = Per-Ton Processing fee at the Designated C&D Processing Facility for the coming Rate Period x Total Tons of C&D Collected for the most-recently completed twelve- (12) month period.

If the City approves a change in the Designated Disposal Facility or the Approved Disposal Facility, or the Designated C&D Processing Facility or the Approved C&D Processing Facility the Disposal Costs or C&D Processing Costs (as the case may be) shall adjust to the thencurrent tip fee at the new facility.

4. Interest Expense. The Interest Expense amount is three hundred twenty six thousand, six hundred and fifty-five dollars ($326,655) in Rate Periods Two through Ten, is not annually adjusted, and shall be zero (0) in any subsequent Rate Period unless Parties mutually agree to a different amount.

5. Direct Lease Costs. The Direct Lease Costs amount is zero (0) in Rate Periods Two through Ten, is not annually adjusted, and shall be zero in any subsequent Rate Period unless Parties mutually agree to a different amount.
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-4 City of Cupertino/Recology Franchise Exhibit E1

6. Allocated Lease Costs. The Allocated Lease Costs amount is one hundred eighty thousand dollars ($180,000) in Rate Periods Two through Ten (including interest costs for Allocated General and Administrative of $0, Allocated Vehicle Maintenance costs of $0, and Allocated Container Maintenance of $0), is not annually adjusted, and shall remain unadjusted in any subsequent Rate Period unless Parties mutually agree to a different amount.

7. Total Pass-Through Costs. Total Pass-Through Costs for the coming Rate Period are the sum of the amounts in this Exhibit E1, Section 2.C.1-6 above.

D. Total Calculated Costs before City Fees/Reimbursements. The Total Calculated Costs before City Fees/Reimbursements shall be the sum of the Total Annual Cost of Operations, Profit, and Total Pass-Through Costs for the coming Rate Period.

E. City Fees/Reimbursements

1. Franchise Fee. Franchise Fees for the coming Rate Period shall equal twelve percent (12%) of projected Gross Receipts for the coming Rate Period less any other City Fees. While the Franchise Fee is calculated based on Gross Receipts less any other City Fees for the purposes of this formula, it shall be paid out of Contractor’s profit.

2. Solid Waste Fund Operations Fee. The Solid Waste Fund Operations Fee payment for the coming Rate Period shall equal the total Solid Waste Fund Operations Fee paid to the City in the most-recently completed twelve- (12) month period multiplied by one (1) plus the Annual Percentage Change in the CPI-U, or such other amount as is determined by City in accordance with Section 7.2.

3. Other City Fees. The amount for the coming Rate Period of any other fees established by City under Section 7.3.

4. Rate Application Review Costs. The amount that Contractor is required to pay City to reimburse City for City’s costs, including consulting and legal fees, associated with determination of Rates for the coming Rate Period.

5. Total City Fees/Reimbursements. The Total City Fees/Reimbursements for the coming Rate Period shall equal costs calculated in this Exhibit E1, Section 2.E.1-4 above; provided, however, that any adjustment in any such fee, whether pursuant to the relevant index or as the result of the decision of the City, shall be pass-through fees (excluded from the calculation of profit) and reflected in the Total City Fees/Reimbursements.

F. Other Adjustments. From time to time during the Term of the Agreement, it may be necessary to make other adjustments to the compensation calculations, either as mutually agreed or as required under various provisions of this Agreement. For example, if the City elects to roll-under a negative Rate adjustment to a future year, the dollar value of that negative adjustment shall be reflected as an adjustment. In such case, the adjustment would be a reduction to the Total Calculated Costs. Amounts that Contractor is entitled to recover under this Agreement shall be reflected as a positive adjustment that increases Total Calculated Costs. 291
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-5 City of Cupertino/Recology Franchise Exhibit E1 G. Total Calculated Costs. The Total Calculated Costs for the coming Rate Period shall equal the sum of the Total Annual Cost of Operations, Profit, Total Pass-Through Costs, Total City Fees/Reimbursements, and Other Adjustments (if applicable), for the coming Rate Period.

3. TOTAL RATE ADJUSTMENT FACTOR
The Total Rate Adjustment Factor shall equal: (i) the Total Calculated Costs for the coming Rate Period divided by (ii) the amount obtained by subtracting the City Payments for the then-current Rate Period from the Total Calculated Costs for the then-current Rate Period. The Total Rate Adjustment Factor shall be rounded to the nearest thousandth.

4. ADJUSTMENT OF RATES
City may, as part of the Rate adjustment process for the coming Rate Period, do either or both of the following:

A. Agree to make a City Payment in the coming Rate Period, so as to reduce the Rate increase that would otherwise occur in that Rate Period; and/or,
B. Request a change in the relationship of individual Rates in comparison with other Rates, which may include changing the relationship of Rates across sector(s) and/or material stream(s). Section

8.2.D (Rate Structure) shall apply to any change under this subsection 4.B. If City wishes to do this, then City may request the Contractor to resubmit its Rate application by sector(s) and/or material type(s), so as to enable City to address over/under-funding of particular sector(s) and/or material type(s).

If City does either 4.A or 4.B above, then Rates shall be adjusted such that projected Gross Receipts for the coming Rate Period at the adjusted Rates, plus any City Payments that City agrees to make for that coming Rate Period, equal or exceed Total Calculated Costs for the coming Rate Period.

If City does neither 4.A nor 4.B above, then each then-current Rate shall be multiplied by the Total Rate Adjustment Factor, to calculate the effective Rate for the coming Rate Period. The adjustment to each Rate shall be rounded to the nearest cent.

5. EXAMPLES
The following examples illustrates the index-based adjustment method for determining Rates for Rate Period Five. The dollar amounts shown are hypothetical amounts for Total Calculated Costs for Rate Period Four (February 1, 2024 through January 31, 2025) and the adjustment factors are based on assumed changes in the various indices between the Average Index Values for the twelve (12) months ending January 2023 and for the twelve (12) months ending January 2024. Example A depicts a standard index-based adjustment, wherein the calculated Total Calculated Costs increased greater than zero percent (0%) and less than five percent (5%) over the prior Rate Period. Example B depicts an index-based adjustment wherein the calculated Total Calculated Costs resulted in a decrease from the prior Rate Period.

A. Example A

1. Assumptions for Example Adjustment to Contractor’s Compensation:
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-6 City of Cupertino/Recology Franchise Exhibit E1 Most-Recently Completed Rate Period = Rate Period Three (February 1, 2023 through January 31, 2024)
Then-current Rate Period = Rate Period Four (February 1, 2024 through January 31, 2025) Coming Rate Period = Rate Period Five (February 1, 2025 through January 31, 2026) Solid Waste Disposal Cost per Ton for the coming Rate Period = $52.27 per Ton (C&D Processing Cost assumed to be same as Solid Waste Disposal Cost) Recyclable Materials Processing Costs per Ton for the coming Rate Period = $39.78 per Ton Residential Organic Materials Processing Costs per Ton for the then-current Rate Period = $98.65 per Ton
Commercial Organic Materials Processing Costs per Ton for the then-current Rate Period = $134.20 per Ton
Annual Percentage Change in the ECI = 0.018
Annual Percentage Change in the CPI-U = 0.040
Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index = 0.031 Annual Percentage Change in the Fuel Index = 0.075
Solid Waste Fund Operations Fee – Directed by City to increase by CPI-U for Rate Period 5 Last twelve (12) months of Gross Receipts = $18,600,000 Rate Period 4 City Payment = $279,544
Tonnages for the most-recently completed twelve- (12) month period:

Solid Waste – 18,000 Tons
Recyclable Materials – 8,000 Tons
Residential Organic Materials – 9,300 Tons
Commercial Organic Materials – 5,200 Tons
C&D – 2,500 Tons

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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-7 City of Cupertino/Recology Franchise Exhibit E1 Note: All values presented in this table are hypothetical and used for illustrative purposes only.

TABLE 1A
Example A Calculation of Total Calculated Costs for Rate Period Five Rate Period
Four
Adjustment
Index
Adjustment
Factor
Rate Period
Five
Processing Tip Fee Adjustment (per Ton)
Solid Waste Disposal Tip Fee 50.26 $ N.A. N.A. 51.77 $
Recyclables Material Processing Rebate 38.25 $ N.A. N.A. 39.40 $ Residential Organic Materials Processing Tip Fee 98.65 $ CPI-U 1+0.040 102.60 $ Commercial Organic Materials Processing Tip Fee 134.20 $ CPI-U 1+0.040 139.57 $ C&D Processing Tip Fee* 50.26 $ N.A. N.A. 51.77 $
Annual Cost of Operations
Labor-related Costs 4,443,290 $ ECI 1+0.018 4,523,269 $ Vehicle-related Costs (excluding fuel) 643,477 $ MVI 1+0.031 663,425 $ Fuel Costs 383,049 $ Fuel Index 1+0.075 411,778 $
Other Costs 353,725 $ CPI-U 1+0.040 367,874 $
Direct Depreciation 905,853 $ N.A. N.A. 905,853 $
Allocated Costs (Labor, Vehicle, Fuel, and Other Costs) $ CPI-U 1+0.040 3,445,355 3,312,841 $ Allocated Costs (Depreciation and Start-Up) 35,311 $ N.A. N.A. 35,311 $ Total Annual Cost of Operations 10,077,545 $ 10,352,864 $ Profit (assuming operating ratio of .725) 3,822,517 $ 3,926,948 $ Pass Through Costs
Solid Waste Disposal Costs 881,109 $ Tip Fee x Tons 18,000 x $51.77 931,787 $ Recyclable Materials Processing Costs 308,522 $ Tip Fee x Tons 8,000 x $39.40 315,186 $ Residential Organic Materials Processing Costs 913,425 $ Tip Fee x Tons 9,300 x $102.60 954,179 $ Commercial Organic Materials Processing Costs 694,383 $ Tip Fee x Tons 5,200 x $139.57 725,749 $ C&D Processing Costs 127,475 $ Tip Fee x Tons 2,500 x $51.77 129,415 $ Reusable Materials Handling Costs - $ Tip Fee x Tons 0 x $0.00 -$ Interest Expense 326,655 $ N.A. N.A. 326,655 $
Direct Lease Costs - $ N.A. N.A. -$
Allocated Lease Costs $ 180,000 N.A. N.A. $ 180,000
Total Pass-Through Costs $ 3,431,569 $ 3,562,971
Total Calculated Costs before City Reimbursements $ 17,331,632 $ 17,842,783 Cost Reimbursements to City
Solid Waste Fund Operations Fee $ 1,547,912 CPI-U** 1+0.040 1,609,829 $ Total Reimbursements to City $ 1,547,912 $ 1,609,829
Total Calculated Costs $ 18,879,544 $ 19,452,611
Gross Operating Margin $ 3,822,517 $ 3,926,948
Franchise Fee $ 2,284,235 N.A. N.A. 2,313,732 $
Net Profit Margin $ 1,538,282 $ 1,613,217
Other Adjustments (City Payments) $ (279,544) $ (171,514) **The Solid Waste Fund Operations Fee may be increased by the CPI-U or at the City's discretion. *Newby currently charges the same rate for Solid Waste Disposal and C&D Processing. If the City designates a new facility(ies) for disposal and processing, there may be two separate tip fees.
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-8 City of Cupertino/Recology Franchise Exhibit E1

2. Example Calculation of the Rate Adjustment Factor and Adjusted Rate for Rate Period Five Rate Adjustment Factor = $19,452,611/($18,879,544-$279,544) = 1.046 Proposed City Payment as detailed in Exhibit E1 Section 4.A = $171,514 City does not propose resubmission of individual Rates that address over/under-funding of particular sector(s) and/or material type(s) as detailed in Exhibit E1 Section 4.B.

Rate Adjustment Factor considering City Payment = ($19,425,611-$171,514)/($ 18,879,544-$279,544) =

1.037
32-gallon Single-Family Rate for Rate Period Five = $45.41 x 1.037 = $47.07, which shall be effective February 1, 2025.

B. Example B

1. Assumptions for Example Adjustment to Contractor’s Compensation:

Most-Recently Completed Rate Period = Rate Period Three (February 1, 2023 through January 31, 2024)
Then-current Rate Period = Rate Period Four (February 1, 2024 through January 31, 2025) Coming Rate Period = Rate Period Five (February 1, 2025 through January 31, 2026) Solid Waste Disposal Cost per Ton for the coming Rate Period = $52.27 per Ton (C&D Processing Cost assumed to be same as Solid Waste Disposal Cost) Recyclable Materials Processing Costs per Ton for the coming Rate Period = $39.78 per Ton Residential Organic Materials Processing Costs per Ton for the then-current Rate Period = $98.65 per Ton
Commercial Organic Materials Processing Costs per Ton for the then-current Rate Period = $134.20 per Ton
Annual Percentage Change in the ECI = (0.018)
Annual Percentage Change in the CPI-U = (0.040)
Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index = 0.031 Annual Percentage Change in the Fuel Index = (0.075)
Solid Waste Fund Operations Fee – Directed by City to remain flat for Rate Period 5 Last twelve (12) months of Gross Receipts = $18,600,000 Rate Period 4 City Payment = $279,544
Tonnages for the most-recently completed twelve- (12) month period:

Solid Waste – 18,000 Tons
Recyclable Materials – 8,000 Tons
Residential Organic Materials – 9,300 Tons
Commercial Organic Materials – 5,200 Tons
C&D – 2,500 Tons

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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-9 City of Cupertino/Recology Franchise Exhibit E1 Note: All values presented in this table are hypothetical and used for illustrative purposes only.

TABLE 2A
Example B Calculation of Total Calculated Costs for Rate Period Five Rate Period
Four
Adjustment
Index
Adjustment
Factor
Rate Period
Five
Processing Tip Fee Adjustment (per Ton)
Solid Waste Disposal Tip Fee $ N.A. N.A. 50.26 $ 51.77
Recyclables Material Processing Rebate $ N.A. N.A. 38.25 $ 39.40 Residential Organic Materials Processing Tip Fee $ CPI-U 1+ -0.040 98.65 $ 94.71 Commercial Organic Materials Processing Tip Fee 134.20 $ CPI-U 1+ -0.040 128.83 $ C&D Processing Tip Fee* $ N.A. N.A. 50.26 $ 51.77
Annual Cost of Operations
Labor-related Costs $ 4,443,290 ECI 1+ -0.018 4,363,310 $ Vehicle-related Costs (excluding fuel) $ 643,477 MVI 1+0.031 663,425 $ Fuel Costs $ Fuel Index 1+ -0.075 354,321 383,049 $
Other Costs $ 353,725 CPI-U 1+ -0.040 339,576 $
Direct Depreciation $ 905,853 N.A. N.A. $ 905,853
Allocated Costs (Labor, Vehicle, Fuel, and Other Costs) 3,312,84 $ 1 CPI-U 1+ -0.040 3,180,327 $ Allocated Costs (Depreciation and Start-Up) $ 35,311 N.A. N.A. $ 35,311 Total Annual Cost of Operations $ 10,077,545 $ 9,842,123 Profit (assuming operating ratio of .725) $ 3,822,517 $ 3,733,219 Pass Through Costs
Solid Waste Disposal Costs $ Tip Fee x Tons 18,000 x $51.77 931,787 881,109 $ Recyclable Materials Processing Costs $ Tip Fee x Tons 8,000 x $39.40 315,186 308,522 $ Residential Organic Materials Processing Costs $ Tip Fee x Tons 9,300 x $94.71 880,780 913,425 $ Commercial Organic Materials Processing Costs 694,383 $ Tip Fee x Tons 5,200 x $128.83 669,922 $ C&D Processing Costs $ Tip Fee x Tons 2,500 x $51.77 129,415 127,475 $ Reusable Materials Handling Costs $ Tip Fee x Tons 0 x $0.00 - -$ Interest Expense $ 326,655 N.A. N.A. $ 326,655
Direct Lease Costs $ N.A. N.A. - -$
Allocated Lease Costs $ 180,000 N.A. N.A. $ 180,000
Total Pass-Through Costs $ 3,431,569 $ 3,433,746
Total Calculated Costs before City Reimbursements $ 17,331,632 $ 17,009,087 Cost Reimbursements to City
Solid Waste Fund Operations Fee $ 1,547,912 N.A.** $ 1,547,912 Total Reimbursements to City $ 1,547,912 $ 1,547,912
Total Calculated Costs $ 18,879,544 $ 18,556,999
Gross Operating Margin $ 3,822,517 $ 3,733,219
Franchise Fee $ 2,284,235 N.A. N.A. 2,284,235 $
Net Profit Margin $ 1,538,282 $ 1,448,984
Other Adjustments (City Payments) $ (279,544) -$
**The Solid Waste Fund Operations Fee may be increased by the CPI-U or at the City's discretion. *Newby currently charges the same rate for Solid Waste Disposal and C&D Processing. If the City designates a new facility(ies) for disposal and processing, there may be two separate tip fees.
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EXHIBIT E1

MULTI-INDEX RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E1-10 City of Cupertino/Recology Franchise Exhibit E1

2. Example Calculation of the Rate Adjustment Factor and Adjusted Rate for Rate Period Five Total Calculated Costs = $18,556,999 < ($18,879,544-$279,544); Adjusted Total Calculated Costs = $18,600,000 (Total Calculated Costs less City Payments from prior Rate Period) Rate Adjustment Factor = $18,600,000/ $18,600,000= 1.00 No City Payment is proposed as clarified in Exhibit E1 Section 4.A as Total Calculated Costs for the coming Rate Period < Total Calculated Costs less City Payment from the then-current Rate Period.
32-gallon Single-Family Rate for Rate Period Five = $45.41 x 1.00= $45.41, which shall be effective February 1, 2025 (i.e., NO RATE ADJUSTMENT).

NOTE: Except if requested by the City, the rates will not change from prior Rate Period. The City may request Contractor resubmit individual Rates that address over/under-funding of particular sector(s) and/or material type(s), as described in Exhibit E1 Section 4.B, where rates still generating the same total rate revenue.

Subsequent Rate Period Adjustment. $18,600,000 - $18,556,999 = $43,001 cost savings to be applied as an “Other Adjustment” in the subsequent Rate Period adjustment calculations as an offset to Contractor’s Total Calculated Costs.

3. OTHER
If an index described in Exhibit E is discontinued, the successor index with which it is replaced shall be used for subsequent calculations. If no successor index is identified by the Bureau of Labor Statistics, the index which is most comparable shall be used.
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EXHIBIT E2:

COST-BASED RATE ADJUSTMENT METHODOLOGY
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-1 City of Cupertino/Recology Franchise Exhibit E2

1. GENERAL
The Parties shall use the cost-based Rate adjustment method described in this Exhibit to determine Rates for the Rate Periods specified in Section 8.2, or in the event of a change in scope (under the circumstances described in Section 3.5) or Change in Law, or pursuant to Section 3.2 or 8.2 or the third paragraph of Section 1 of Exhibit E1.1
The cost-based adjustment involves review of Contractor’s actual cost of operations and operational statistics (e.g., staffing levels, routes, route hours, Customers and their service levels) to determine the Actual Allowable Total Annual Cost of Operations for the most-recently completed Rate Period, the Forecasted Total Calculated Costs for the coming Rate Period, and the Contractor’s Compensation.

The intent of performing the cost-based adjustment is to examine the actual impact of changes in inflation or deflation, the number of Customers, and the Service Level of Customers.

The Forecasted Total Annual Cost of Operations calculated pursuant to this Exhibit E2 for the coming Rate Period (adjusted per the first paragraph of Section 2 of this Exhibit E2, if applicable) may not exceed by more than five percent (5%) the Total Annual Cost of Operations for the then-current Rate Period.

In the event that the cost-based adjustment calculated in accordance with this Exhibit E2 results in a negative Rate Adjustment Factor, the City reserves the right to “roll-under” the Rate reduction, such that there is no Rate adjustment in the Rate Period for which the negative Rate Adjustment Factor was calculated, but the calculated Rate reduction may be deferred to the following Rate Period, as a credit against future Rate increases.

A. Contractor’s Rate Application. Contractor’s Rate application for any Rate Period where Rates shall be adjusted using the cost-based methodology described in this Exhibit E2 shall include the information described in this Section 1.A. With the exception of the information identified in Section 1.A.1, and 1.A.2 below, all other items listed may be requested by the City Contract Manager at any time during the Term of the Agreement and Contractor shall comply with that request in a timely fashion.

1. Financial Statements. Within one hundred twenty (120) calendar days after the close of the Agreement year, Contractor shall deliver to the City one (1) hard copy of the reviewed consolidated financial statements of Contractor for the preceding Agreement year. Financial statements shall include a supplemental combining schedule showing Contractor’s results of operations, including the specific revenues and expenses in connection with the operations provided for in this Agreement separate from others included in such financial statements.

The financial statements and footnotes shall be prepared in accordance with Generally Accepted Accounting Principles (GAAP) consistently applied and fairly reflecting the results of operation and Contractor’s financial condition. Annual financial statements shall be reviewed, in accordance with Generally Accepted Auditing Standards (GAAS) by a Certified Public Accountant (CPA) licensed (in good standing) to practice public accounting in the State as determined by the State Department of Consumer Affairs Board of Accountancy. 1 Exhibit E2 dates (such as providing for use of 12 months of tonnage ending in October) assume use of the Exhibit E2 for an annual Rate adjustment; dates for use of data should be adjusted as necessary to accommodate any offschedule adjustment. 299
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-2 City of Cupertino/Recology Franchise Exhibit E2

2. Financial Statement Reconciliation. Contractor shall provide a schedule that clearly and accurately ties the amounts shown in Contractor’s Rate application to Contractor’s financial statements. Such schedule shall include any and all allocation factors and methodologies used to report cost and operating information for services provided to the City under this Agreement separately from Contractor obligations related to other public or private entities.

Such statement of reconciliation shall include:
a. General explanation of the various allocation methodologies used for each Rate application line item.
b. Specific examples of each type of allocation used showing how an entry is reported in the general ledger and ties to the Rate application.
c. Statement indicating whether there have been any changes in allocation methods used since the last Rate application. If any allocation methods have changed clearly identify those changes.

3. Operational Information.
a. Routes by Line of Business:
i. Number of routes per day.
ii. Types of vehicles.
iii. Crew size per route.
iv. Number of full time equivalent (FTE) routes.
v. Number of accounts and cubic yards scheduled per route. vi. Total route hours per Line of Business per year.
vii. Average cost per route.
b. Personnel:
i. Organizational chart.
ii. Job classifications and number of employees (e.g., administrative, Customer service representatives, drivers, supervisors, educational staff). iii. Union wages by job classification.
iv. Number of FTE positions for each job classification. v. Number of hours per job classification per year.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-3 City of Cupertino/Recology Franchise Exhibit E2 c. Productivity Statistics:
i. Average Number of accounts per route per day by Line of Business. ii. Average number of setouts per route per day by Line of Business. iii. Average Tons per route per day by vehicle type (i.e., side-loader, front-loader, rolloff). iv. Average cubic yards of Collection scheduled per route. d. Vehicles:
i. List of Collection vehicles including year purchased and mileage. ii. Average age of mobile equipment with oldest and newest. e. Operational Changes:
i. Number of routes.
ii. Staffing.
iii. Supervision.
iv. Collection services.

5. Variance Analysis. Provide the following variance analysis for each Line of Business. For any variances greater than five percent (5%) annually, Contractor shall provide sufficient rationale to support variance:
a. Variance analysis comparing current Rate Period to each of the prior Rate Periods of Agreement.
b. Variance analysis comparing current Rate Period to each of the future projected Rate Periods.

6. Projections. Provide the following projection data:
a. Provide support for the basis for projected Gross Receipts and line item expenses, clearly indicate the supporting calculations and assumptions. b. Provide support for the most recent twelve (12) months of Tonnage data for Rate Period, ending in the May preceding the August 1 Rate application due date. Clearly indicate the supporting calculations and assumptions.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-4 City of Cupertino/Recology Franchise Exhibit E2

2. FORECASTING TOTAL CALCULATED COSTS
The Total Calculated Costs for the coming Rate Period shall be forecasted in the manner described in this Section, assuming no change in operations between the most-recently completed Rate Period and the coming Rate Period. If there is or is reasonably expected to be a change in operations directed by the City or resulting from a Change in Law (e.g., a change in a Designated Facility as described in Section 3.2 that affects Contractor’s labor, vehicle-related and fuel costs, or change in scope as described in Section 3.5), then notwithstanding any other provision, appropriate adjustments shall be made to forecasted cost and revenue line items so that they reflect reasonable good faith estimates of the cost and revenue impacts of the change, and such cost and revenue impacts shall be excluded from Forecasted Total Annual Cost of Operations for the coming Rate Period in determining whether the five percent (5%) cap set forth in Section 1 of this Exhibit E2 has been met.

A. Forecasting Total Annual Cost of Operations

1. Determine Actual Allowable Total Annual Cost of Operations. The City or its designated representative(s) shall review Contractor's financial statements, books, and records to determine Contractor's “Actual Allowable Total Annual Cost of Operations” for the mostrecently completed Rate Period. Such cost shall be Contractor’s costs to perform all the obligations of Contractor under this Agreement (excluding the costs of Disposal and processing fees and of payments to City) in the manner required by this Agreement, and shall be divided into the following cost categories:
a. Actual labor-related costs
b. Actual vehicle-related costs (excluding fuel and depreciation) c. Actual fuel costs
d. Actual other costs (as defined on Form 6E of Exhibit G2) e. Direct Container and equipment depreciation costs (in the amount specified in Exhibit E1)
f. Actual allocated costs (labor, vehicle, general and administrative, and other costs) g. Actual allocated costs (depreciation and start-up) (in the amount stated in Exhibit E1)

2. Non-Allowable Costs. The following list of non-allowable costs shall be deducted from Contractor’s actual costs when determining the Actual Allowable Total Annual Cost of Operations.
a. Labor, equipment, fuel, and start-up costs for personnel, vehicles, and facilities that are not specified in the proposal forms contained in Exhibit G2 and that cannot be demonstrated to have been incurred as part of the performance of services under this Agreement.
b. Payments to directors and/or Owners of Contractor unless the amount paid is 302
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-5 City of Cupertino/Recology Franchise Exhibit E2 reasonable compensation for services actually rendered. Reasonableness shall be determined based on available market pricing for similar services and shall be in the sole discretion of the City.
c. Travel expenses and entertainment (above five thousand dollars ($5,000) annually in total) expenses, unless authorized in advance by the City. d. Payments to repair damage to public or private property for which Contractor is legally liable.
e. Fines or penalties of any nature.
f. Liquidated Damages assessed under this Agreement.
g. Federal or State income taxes.
h. Cash donations or value of in-kind services provided to charitable, political, youth, civic, or other community organizations, unless such donations or in-kind services are expressly provided for under this Agreement, or have been previously approved in writing as an allowable expense by the City Contract Manager. i. Depreciation or interest expense for Collection vehicles, Containers, other equipment, offices and other facilities if such items are leased as specified in Exhibit G2. j. Attorney's fees and other expenses incurred by Contractor in any court proceeding in which the City and Contractor are adverse Parties.
k. Attorney's fees and other expenses incurred by Contractor arising from any act or omission in violation of this Agreement.
l. Attorneys' fees and other expenses incurred by Contractor in any court proceeding in which Contractor's own negligence, violation of law or regulation, or wrong doing are in issue and occasion, in whole or in part, the attorneys' fees and expenses claimed; and attorneys' fees and expenses incurred by Contractor in a court proceeding in which the legal theory or statute providing a basis of liability against Contractor also provides for separate potential liability for the City derived from the action of its citizens or Rate payers (such as in a CERCLA lawsuit) unless Contractor is found not liable in such claims and such claims arise from acts or occurrences within the Term of the Agreement. m. Payments to Related-Party Entities for products or services, in excess of the cost to the Related-Party Entities for those products or services. Approved Facilities that are operated by Related-Party Entities or Affiliates of Contractor and have a stipulated tipping fee in Contractor’s Proposal shall not be subject to this limitation and only the tipping fee and any contemplated adjustments thereto shall be allowable expenses. n. Goodwill.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-6 City of Cupertino/Recology Franchise Exhibit E2 o. Unreasonable profit-sharing distributions.
p. Replacement costs for Containers that need to be replaced because the useful life of such Container was less than the Term.
q. Administrative costs greater than the administrative costs presented in Contractor’s Proposal (i.e., each of the items listed as General & Administrative on Form 6F of Exhibit G2) adjusted annually by one (1) plus the Annual Percentage Change in the CPI-U. r. Bad debt write-offs in excess of two percent (2%) of annual Gross Receipts.

3. Forecast Total Annual Cost of Operations. Forecasted Total Annual Cost of Operations for the coming Rate Period shall be calculated based on Actual Allowed Total Cost of Operations for the most-recently completed Rate Period determined in accordance with Sections 2.A.1 and 2.A.2 above. The forecasts shall be performed in the following manner:
a. Forecasted labor-related costs shall be calculated for the coming Rate Period by (i) multiplying the allowed labor-related costs, both direct and allocated, for the mostrecently completed Rate Period by one (1) plus the Annual Percentage Change in the CPI-U, and (ii) multiplying the result of step one once more by one (1) plus the Annual Percentage Change in the CPI-U.
b. Forecasted vehicle-related costs (excluding fuel and depreciation costs) shall be calculated for the coming Rate Period by (i) multiplying the allowed vehicle-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index, and (ii) multiplying the result of step one once more by one (1) plus the Annual Percentage Change in the Motor Vehicle Maintenance and Repair Index. c. Forecasted fuel costs shall be calculated for the coming Rate Period by (i) multiplying the allowed fuel costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in the Fuel Index, and (ii) multiplying the result of step one once more by one (1) plus the Annual Percentage Change in the Fuel Index.
d. Forecasted other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed other-related costs, both direct and allocated, for the most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one once more by one (1) plus the Annual Percentage Change in the CPI-U.
e. Forecasted direct depreciation expense shall be the amount specified in Exhibit G2 for vehicles, Containers, and facilities. Direct depreciation expense is a fixed cost and is not subject to inflation.
f. Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs shall be calculated for the coming Rate Period by (i) multiplying the allowed 304
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-7 City of Cupertino/Recology Franchise Exhibit E2 other-related costs for most-recently completed Rate Period by one (1) plus the Annual Percentage Change in CPI-U, and (ii) multiplying the result of step one once more by one (1) plus the Annual Percentage Change in CPI-U.
g. Forecasted allocated depreciation and start-up expense shall be the amount specified in Section 2.A.7 of Exhibit E1 for vehicles, Containers, and facilities. h. Forecasted Total Annual Cost of Operations for the coming Rate Period shall equal the sum of the following costs, which shall have been calculated in accordance with the procedures in this Exhibit E2, and shall be subject to the five percent (5%) cap described in Section 1 of this Exhibit E2:
i. Forecasted labor-related costs
ii. Forecasted vehicle-related costs (excluding fuel and depreciation costs) iii. Forecasted fuel costs
iv. Forecasted other costs
v. Forecasted direct depreciation expense
vi. Forecasted allocated labor-related, vehicle-related, general and administrative, and other costs
vii. Forecasted allocated costs for depreciation and start-up B. Forecast Profit. Contractor shall be entitled to Profit on Forecasted Total Annual Cost of Operations. Profit shall be calculated using an operating ratio of seventy-two and one-half percent (72.5%) as proposed by Contractor and described in Exhibit G2. Profit shall be calculated using the following formula:

Profit = (Forecasted Total Annual Cost of Operations / Operating Ratio) – Forecasted Total Annual Cost of Operations
For example:

1. Assuming an operating ratio of 72.5

2. Assuming a Forecasted Total Annual Cost of Operations of $1,000,000

3. Profit = ($1,000,000 / 0.725) – $1,000,000 = $379,310.35 C. Forecast Pass-Through Costs. Pass-Through Costs for the coming Rate Period shall be forecasted in the following manner:

1. Forecasted Recyclable Materials Processing costs shall be calculated in the manner described in Section 2.C.1 of Exhibit E1.
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December 3, 2020 Page E2-8 City of Cupertino/Recology Franchise Exhibit E2

2. Forecasted Residential Organic Materials Processing costs shall be calculated in the manner described in Section 2.C.2 of Exhibit E1.

3. Forecasted Commercial Organic Materials Processing costs shall be calculated in the manner described in Section 2.C.2 of Exhibit E1.

4. Forecasted Disposal costs shall be calculated in the manner described in Section 2.C.3 of Exhibit E1.

5. Forecasted Interest Expense. Interest Expense is three hundred twenty six thousand, six hundred and fifty-five dollars ($326,655) per year and shall not be adjusted over the Term of the Agreement. See Section 2.C.4 of Exhibit E1.

6. Forecasted Direct Lease Costs. Direct Lease Costs are zero dollars ($0) per year and shall not be adjusted over the Term of the Agreement, unless the Parties mutually agree to a different amount for any Rate Period after Rate Period Ten.

7. Forecasted Allocated Lease Costs. Allocated Lease Costs are one hundred eighty thousand dollars ($180,000) per year and shall not be adjusted over the Term of the Agreement.

D. Forecast City Fees/Reimbursements. The City Fees/Reimbursements shall be calculated in the manner described in Section 2.E of Exhibit E1.

E. Other Adjustments. Other Adjustments shall be determined in the manner described in Section

2.F of Exhibit E1.

F. Forecasted Total Calculated Costs for the coming Rate Period shall equal the sum of Forecasted Total Annual Cost of Operations, Forecasted Profit, Forecasted Pass-Through Costs, Forecasted City Fees/Reimbursements, and Other Adjustments (if applicable), each determined as provided above. Such Forecasted Total Calculated Costs shall become the Total Calculated Costs for the coming Rate Period, for purposes of future index-based adjustments under Exhibit E1.

3. PROJECTED GROSS RECEIPTS
Projected Gross Receipts at then-current Rates shall reflect projected annual Gross Receipts from all Customers based on then-current Rates and then-current Customer Service Levels, inclusive of all Rates and special charges authorized under this Agreement. For the purposes of determining Customer Service Levels for on-call services (e.g., drop-box service provided less than weekly, Bin rentals) and special charges (e.g., push charges, lock/unlock charges), the prior twelve (12) months of billing activity (ending in the May preceding the August 1 Rate application due date) for such services and special charges shall be used.

Contractor shall also calculate projected Gross Receipts by sector(s) and/or material stream(s) based on then-current Rates and then-current Customer Service Levels, inclusive of all Rates and special charges authorized under this Agreement.
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EXHIBIT E2

COST-BASED RATE ADJUSTMENT METHODOLOGY
December 3, 2020 Page E2-9 City of Cupertino/Recology Franchise Exhibit E2

4. TOTAL RATE ADJUSTMENT FACTOR
The Total Rate Adjustment Factor shall equal the Forecasted Total Calculated Costs for the coming Rate Period divided by the projected Gross Receipts calculated in accordance with Section 3 of this Exhibit E2.

The Total Rate Adjustment Factor shall be rounded to the nearest thousandth.

5. ADJUSTMENT OF RATES
City may, as part of the Rate adjustment process for the coming Rate Period, do either or both of the following:

A. Agree to make a City Payment in the coming Rate Period, so as to reduce the Rate increase that would otherwise occur in that Rate Period; and/or,
B. Request a change in the relationship of individual Rates in comparison with other Rates, which may include changing the relationship of Rates across sector(s) and/or material stream(s). Section

8.2.D (Rate Structure) shall apply to any change under this subsection 5.B. If City wishes to do this, then City may request the Contractor to resubmit its Rate application by sector(s) and/or material type(s) so as to enable City to address over/under-funding of particular sector(s) and/or material type(s).

If City does either 5.A or 5.B above, then Rates shall be adjusted such that projected Gross Receipts for the coming Rate Period at the adjusted Rates, plus any City Payments that City agrees to make for that coming Rate Period, equal or exceed Forecasted Total Calculated Costs for the coming Rate Period.

If City does neither 5.A nor 5.B above, then each then-current Rate shall be multiplied by the Total Rate Adjustment Factor to calculate the effective Rate for the coming Rate Period. The adjustment to each Rate shall be rounded to the nearest cent.
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EXHIBIT F:

PERFORMANCE STANDARDS AND LIQUIDATED

DAMAGES
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-1 City of Cupertino/Recology Franchise Exhibit F The City wishes to establish standards of performance under the Agreement in each of the “Performance Areas” listed below. The City Contract Manager may monitor Contractor’s performance in each of those areas based on the “Overall Performance Indicator” listed below for each area. In the event that Contractor fails to meet the performance standard established for any “Overall Performance Indicator,” the City Contract Manager may review Contractor’s performance relative to the “Specific Performance Measures” within that performance area. In the event that the City Contract Manager determines that Contractor has failed to meet the performance standard established for any “Specific Performance Measure,” the City may in its sole discretion assess Liquidated Damages pursuant to Section 10.6 of the Agreement. Liquidated Damages, if assessed, shall only be assessed for the number of events, days, or other measure in excess of the acceptable performance level.

1. DEFINED TERMS
Exhibit F relies on the terms “Complaint,” “Service Opportunity,” and “Total Service Opportunities,” as defined in Exhibit A.

2. PERFORMANCE AREA NO. 1: SERVICE QUALITY AND RELIABILITY Overall Performance Indicator: Contractor’s service quality and reliability shall be considered acceptable by the City if the total number of calls and emails (including, without limitation: Complaints, inquiries, billing questions, service requests, and compliments) received by Contractor from Customers served under this Agreement does not exceed one (1) per one thousand (1,000) Total Service Opportunities in any calendar quarter. If the number exceeds this level, the City may in its sole discretion assess Liquidated Damages for the specific performance measures identified in the following table.

Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Missed Collections Each Service Opportunity where Contractor fails to Collect a Container from a Customer
who properly placed said Container for
Collection.

Less than one
(1) per one
thousand
(1,000) Service
Opportunities
$50/Event
Failure to Correct
Missed Collections
Each “Missed Collection” as defined above
that is not Collected pursuant to Section

4.10.3.B.

Less than (1)
per one
hundred (100)
missed
Collections
$50/Event
Failure to Return
Container to
Location of Setout
Failure to properly return empty Carts or Bins
to the Collection location, or to place Carts
upright.

Less than (1)
per one
thousand
(1,000) Service
Opportunities
$50/Event
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-2 City of Cupertino/Recology Franchise Exhibit F Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Failure to Clean-Up
Spillage
Pursuant to Section 5.3.C, each failure by
Contractor to clean up: (1) any items or
materials spilled during the Collection of a
Container; (2) any fluids spilled or leaked
from a Container or Collection vehicle prior
to leaving the Collection location; or, failure
by Contractor to notify the City within two
(2) hours of an observed spill.

Less than one
(1) per one
thousand
(1,000) Service
Opportunities
$100/Event
Damage to Property Each event of damage to either public or private property as a result of Collection
activity, including without limitation Curbs,
sidewalks, landscapes, Container enclosures
and gates, signs, light fixtures, and overhead
wires and cables.

Less than one
(1) per one
thousand
(1,000) Service
Opportunities
$250/Event
Excessive Noise Each Complaint received that is related to noise during Collection activity.

Less than one
(1) per one
thousand
(1,000) Service
Opportunities
$250/Event
Discourteous
Behavior
Each Complaint received that is related to
the discourteous behavior of Contractor’s
employees.

Less than one
(1) per one
thousand
(1,000) Service
Opportunities
$250/Event
Inaccurate Billing Each Complaint received where Contractor billed a Customer in error. Inaccurate billing
may include, but is not limited to: (i) either
over- or under-charging of the Customer
relative to the approved maximum Rates for
services; (ii) charging the Customer a Rate
that is not the same as other Customers with
the same Service Level; (iii) charging a
Customer for an increased Service Level prior
to providing the service; and, (iv) not
charging a Customer for reduced Service
Level within seven (7) days of the date
Customer requested the change, regardless
of whether or not Contractor delivers the
appropriate Containers or modifies the
Service Level within that timeframe.

Less than one
(1) per one
thousand
(1,000) bills
issued
$100/Event
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-3 City of Cupertino/Recology Franchise Exhibit F

3. PERFORMANCE AREA NO. 2: CUSTOMER SERVICE
Overall Performance Indicator: The level of Customer service provided by Contractor shall be considered acceptable if the total number of Complaints received by the City regarding Contractor does not exceed one (1) per one thousand (1,000) Total Service Opportunities in any calendar quarter. If the number exceeds this level, the City may in its sole discretion assess Liquidated Damages for the specific performance measures identified in the following table.

Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Failure to
Commence Service
Any failure by Contractor to deliver a
Container and begin providing Collection to a
Customer, at the Service Level requested by
said Customer, within seven (7) calendar days
of receiving such request. This may include a
new Customer receiving new service or an
existing Customer requesting a change in or
addition to existing Service Levels. This may
also include delivering Used Oil Recovery Kits
to Customers upon request.

Less than one
(1) per one
hundred (100)
service
requests
$50/Event
Failure to Replace
Container or
Remove Graffiti
Any failure by Contractor to replace or repair
a damaged Container within seven (7)
calendar days of receiving such a request
from a Customer, or any failure by Contractor
to remove graffiti from Containers within two
(2) Working Days following identification by
Contractor or notice by the City or Customer
if such graffiti includes any written or pictorial
obscenities, and otherwise within five (5)
Business Days.

No acceptable
failure level
$100/Event
Failure to Resolve
Complaint
Any failure by Contractor to resolve or
remedy a Complaint within seven (7)
calendar days of receiving such Complaint.

Less than one
(1) per one
hundred (100)
Complaints
$250/Event
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-4 City of Cupertino/Recology Franchise Exhibit F Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Failure to Answer
Phones; Respond to
Emails
Any failure by Contractor during normal
business hours to answer a Customer
telephone call within four rings, or to respond
to a Customer email. A call is not considered
to be answered if the Customer does not
speak with a live operator. A call is
considered to be answered if the Customer
hangs-up or abandons the call following a
hold time of less than three (3) minutes.

Less than one
(1) per one
thousand
(1,000) calls
received under
this Agreement
Less than one
(1) per one
thousand
(1,000) emails
received under
this Agreement
$50/Event
Excessive Call
Center Hold Time
Each occurrence of a call being placed “on
hold” for more than two (2) minutes.

Less than one
(1) per one
thousand
(1,000) calls
received under
this Agreement
$50/Event
Unauthorized Hours
of Operation
Each occurrence of Contractor Collecting
from Customers during unauthorized hours.

Less than one
(1) per one
thousand
(1,000) Service
Opportunities
$250/Event

4. PERFORMANCE AREA NO. 3: OUTREACH
Overall Performance Indicator: Contractor’s performance shall be considered acceptable if service meets the requirements of Section 4.7, Exhibit C, and the following table.

Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Failure to Perform
Public Outreach
Activities
Each failure by Contractor to develop,
produce, and distribute a public outreach
document or perform a community
outreach activity in the form and manner
required under Exhibit C to this
Agreement.

No acceptable
failure level
$500/Document
or Activity
Failure to Provide
Targeted Technical
Assistance
Each individual failure to provide targeted
technical assistance to a Commercial or
Multi-Family Customer, or to a City facility
in the manner required under Exhibit C to
this Agreement.

No acceptable
failure level
$50/Customer
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-5 City of Cupertino/Recology Franchise Exhibit F Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Delay in Annual
Outreach Plan
Failure to submit the initial annual
outreach plan by the Commencement Date
or November 1, or to submit a revised plan
within 15 Business Days after receiving the
City Contract Manager’s comments, as
required by Exhibit C, Section 1.A.

No acceptable
failure level
$250/Day

5. PERFORMANCE AREA NO. 4: DIVERSION
Overall Performance Indicator: Contractor’s Diversion performance, as provided in Section 5.11, shall be considered acceptable if (based on twelve (12) months of Collected Tonnage report data for any calendar year after 2021) the Diversion percentage is less than the Tonnage Baseline Diversion Percentage. The City may assess Liquidated Damages for the specific performance measures identified in the following table.

Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Failure to Maintain
Contractor’s
Minimum Required
Diversion Level by
Weight
Failure to meet Tonnage Baseline Diversion
Percentage specified in Section 5.11.B in
any calendar year after 2021.

No acceptable
failure level
$100/Ton of
material that
would have
needed to be
Diverted instead
of landfilled to
meet the
requirement for
the given
calendar year

6. PERFORMANCE AREA NO. 5: FACILITIES
Overall Performance Indicator: Contractor’s performance relative to facilities shall be considered acceptable when one hundred percent (100%) of all material types Collected by Contractor shall be Delivered to the appropriate Approved Facility (including Designated Facility(ies)) as required under Sections 4.1, 4.2 and 4.3 of this Agreement. If Contractor fails to meet this level of performance, the City may assess Liquidated Damages for the specific performance measures identified in the following table. 314
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-6 City of Cupertino/Recology Franchise Exhibit F Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Delivery to NonApproved Facility Each individual occurrence of delivering materials to a facility other than the
Approved Facility designated for each
material type under Sections 4.1, 4.2, and 4.3
of this Agreement.

No
acceptable
failure level
$100/Ton
Disposal of Material
Targeted for
Diversion
Each individual occurrence of Disposal rather
than Processing of Recyclable Materials,
Organic Materials, or C&D set out for
Collection by the Customer, unless the
contamination level in the Container exceeds
the acceptable contamination level specified
in this Agreement.

No
acceptable
failure level
$500/Ton
Mixing Material
Types During
Collection
Each individual Container that is Collected by
Contractor in a vehicle intended or
designated for the purpose of Collecting a
different material type (e.g., Recyclable
Materials Collected in Solid Waste vehicle,
Solid Waste Collected in Organic Materials
vehicle, etc.). This item does not apply to
collection in a Solid Waste vehicle of
Containers with a contamination level that
exceeds the acceptable contamination level
specified in this Agreement.

No
acceptable
failure level
$100/Container

7. PERFORMANCE AREA NO. 6: REPORTING
Overall Performance Indicator: Contractor’s reporting shall be considered acceptable if Reports required under Exhibit D and record requests allowed under Article 6 to this Agreement are received, complete, and accurate within seven (7) calendar days after the date due or date requested. If Contractor fails to meet this level of performance, the City may in its sole discretion assess Liquidated Damages for the specific performance measures identified in the following table.

Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Late Report Each occurrence of a report, as required
under Exhibit D to this Agreement, being
submitted after the due date. Reports shall
be considered late until they are submitted
in a complete and accurate format.

Less than
seven (7)
calendar days
after report
due date
$250/Day
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-7 City of Cupertino/Recology Franchise Exhibit F Specific
Performance
Measure Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Failure to Maintain
or Provide Access
to Records
Each occurrence of the City Contract
Manager requesting information required
to be maintained by Contractor where
Contractor fails to provide such
information.

Less than
seven (7)
calendar days
after due date
$500/Event
Misleading/
Inaccurate
Reporting
Each occurrence of Contractor providing
materially or intentionally misleading or
inaccurate information or reporting to the
City under or in regard to this Agreement.

Typographical, cell reference,
mathematical, and/or logic errors shall not
be considered legitimate excuses from this
requirement, nor shall ignorance.

No acceptable
failure level
$500/Event

8. PERFORMANCE AREA NO. 7: SB 1383
Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount

1. Failure to Provide
Recyclable Material
and Organic Material
Collection Services to
every Customer
Exceptions noted
below table
For each occurrence of
failing to provide Customers
with the three- Container
system, including Recyclable
Material and Organic
Materials. This item shall not
apply to missed pickups,
which is covered under
Performance Area No. 1.

No acceptable
failure level
$500/Customer

2. Failure to Conduct
Route reviews and
contamination
monitoring
Failure to conduct Route
reviews as required by
Section 4.13.1 of this
Agreement.

No acceptable
failure level
$150/Route review

3. Failure to Issue
contamination notices,
if permitted by City
Failure to issue
contamination notices as
required by Section 4.13.1 of
this Agreement.

No acceptable
failure level
$500/Route/Day
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-8 City of Cupertino/Recology Franchise Exhibit F Item
Specific Performance
Measure Definition
Acceptable
Performance
Level
Liquidated Damage
Amount

4. Commingling with NonCity Materials Commingling of materials Collected inside and outside
the City during Collection,
except as provided in Section

5.3.F and except for service
to the Creston Drive area
until the area is fully
annexed.

No acceptable
failure level
$1,000/Event

5. Failure to Comply with
Container Labeling and
Colors
For each occurrence of
Contractor’s failure to
comply with Container
labeling and color
requirements pursuant to
Section 5.6 of this
Agreement, and not
corrected within two (2)
Business Days of notice by
City.

No acceptable
failure level
$50 / Container /
occurrence

6. Failure to Conduct
Compliance Tasks
For each failure to conduct
any compliance review, or
cooperate in conducting
waste evaluations pursuant
to Sections 4.13 and 4.14,
and/or failure to conduct any
other SB 1383-related
inspection required by this
Agreement.

No acceptable
failure level
$250 / occurrence.

7. Failure to Conduct
Follow-Up Inspections
For each failure to conduct
an SB 1383 noncompliance
complaint investigation as
required by Section 4.14.C of
this Agreement.

No acceptable
failure level
$250 / occurrence.

The City shall not assess Liquidated Damages for Exhibit F.8, item 1, above, under the following circumstances:

A. City has granted the Customer a waiver pursuant to Section 4.12.2 of this Agreement; B. Contractor documents that Customer is compliant with the Cupertino Municipal Code and 14 CCR, Division 7, Chapter 12, Article 7;
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EXHIBIT F

PERFORMANCE STANDARDS & LIQUIDATED DAMAGES
December 3, 2020 Page F-9 City of Cupertino/Recology Franchise Exhibit F C. Contractor documents to the City that the Customer is being provided Recyclable Material and/or Organic Material Collection services from a City-permitted, or non-exclusively franchised, recycler or discarded materials service provider;
D. Contractor documents that Customer is sharing Recyclable Materials and/or Organic Materials Collection services with another Customer in a manner approved by the City; E. The City has failed to adopt a mandatory Recyclable Materials and Organic Materials ordinance; F. The Customer does not subscribe for service; or,
G. The Customer refuses to accept the service or the required Containers.

9. PERFORMANCE AREA NO. 8: COMPLIANT CONTAINERS
Overall Performance Indicator: Contractor’s Container replacement services shall be considered acceptable by the City if Contractor replaces Containers in accordance with Section 5.6. If Contractor fails to meet this level of performance, the City may in its sole discretion assess Liquidated Damages for the specific performance measures identified in the following table.

Specific
Performance
Measure
Definition
Acceptable
Performance
Level
Liquidated
Damage
Amount
Failure to Correct
Non-Conforming
Carts
Each occurrence after December 31, 2021
in which a Non-Conforming Cart (as defined
in Exhibit A and Section 5.6) is still in
service.

No acceptable
performance
level
$250/NonConforming
Cart not
exchanged
within two (2)
Business Days
after notice by
City for the first
fifty (50) NonConforming
Carts identified
by City;
thereafter,
$250/NonConforming
Cart.

By placing designee’s initials at the places provided, each Party specifically confirms the accuracy of the statements made above and the fact that each Party has had ample opportunity to consult with legal counsel and obtain an explanation of Liquidated Damage provisions at the time that the Agreement was made.

Contractor City
Initial Here:_________ Initial Here: _________
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EXHIBIT G:

EXCERPTS OF CONTRACTOR’S PROPOSAL
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EXHIBIT G1:
(;&(53762)TECHNICAL PROPOSAL
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EXHIBIT G2:

COST BASIS FOR PROPOSAL
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Recology Information Form 1 City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

A. Primary Contact Information

1. Name John Zirelli

2. Title General Manager

3. Phone (408)368Ͳ1776

4. Fax

5. EͲmail [email protected]
B. Support Facilities

1. Address of collection vehicle parking, maintenance,
washing, and route staff parking facility(ies)
1675 Rogers Ave, San Jose, CA

2. Address of administrative office
1675 Rogers Ave, San Jose, CA

3. Address of billing office
1675 Rogers Ave, San Jose, CA

4. Address of customer service office
1675 Rogers Ave, San Jose, CA
C. Vehicle Manufacturer and Specifications (Body Capacity, GVWR, Load Capacity)

1. Residential Collection Vehicles
Autocar, 28yd Heil

2. Commercial Collection Vehicles
Autocar, 40yd Heil

3. Drop Box Vehicles
Autocar, NorCal Hoist
D. Container Manufacturer, Sizes Offered, and Specifications

1. Carts Toter (24, 32, 64, 96)

2. Bins Consolidated Fabricators (1, 1.5, 2, 3, 4, 6, 8)

3. Drop Boxes Consolidated Fabricators (8, 16, 20, 26, 30, 40 ) E. Recyclable Materials Processing and Handling

1. Name of processing site
Greenwaste RecoveryͲCharles Street

2. Owner's name
Greenwaste Recovery, Inc.

3. Operator's name
Greenwaste Recovery, Inc.

4. Address of processing site
625 Charles St, San Jose, CA

5. Hauling method (e.g. direct haul, transfer haul, Pod haul) Direct Haul

6. Name and address of transfer location (if applicable) F.Reusable Materials Handling

1. Name of processing site
Hope Services

2. Owner's name
Hope Services

3. Operator's name
Hope Services

4. Address of processing site
460 E. Middlefield Road, Mountain View, CA

5. Hauling method (e.g. direct haul, transfer haul, Pod haul) Transfer

6. Name and address of transfer location (if applicable) 1675 Rogers Ave, San Jose, CA
G.Organics Processing and Handling Facility #1

1. Name of processing site
Recology South Valley Organics

2. Owner's name
Recology, Inc.

3. Operator's name
Recology South Valley Organics

4. Address of processing site
3675 Pacheco Pass Hwy, Gilroy, CA

5. Hauling method (e.g. direct haul, transfer haul, Pod haul) Transfer

6. Name and address of transfer location (if applicable) 1675 Rogers Ave, San Jose, CA
H.Organics Processing and Handling Facility #2

1. Name of processing site Recology Blossom Valley OrganicsͲNorth

2. Owner's name Recology, Inc.

3. Operator's name Recology Blossom Valley OrganicsͲNorth

4. Address of processing site 3909 Gaffery Rd, Vernalis, CA

5. Hauling method (e.g. direct haul, transfer haul, Pod haul) Transfer

6. Name and address of transfer location (if applicable) 1675 Rogers Ave, San Jose, CA I.Other Processing and Handling (Optional)*

1. Name of processing site

2. Owner's name

3. Operator's name

4. Address of processing site

5. Hauling method (e.g. direct haul, transfer haul, Pod haul)

6. Name and address of transfer location (if applicable) * Insert Rows as Needed to Reflect Additional Facility and/or Subcontractor Information.

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Form 2
Operating Statistics City of Cupertino Future Services
Proposer Name: Recology
Note to Recology: Input data in yellow shaded areas only.

RollͲOff
(Form 6D)
Solid Waste
Recyclable
Materials
Organic
Materials Solid Waste
Recyclable
Materials
Organic
Materials Solid Waste
Recyclable
Materials
Organic
Materials
All Material
Types
Bulky Items/
Reusable
Materials
Other
(Specify) TOTAL
1 Account Information
# of weekly accounts (customers) 13,972 13,972 13,972 453 998 371 542 422 120 Labor Information
2 # of regular route personnel 3.8 3.9 3.0 0.2 0.8 0.043 2.3 1.7 0.9 2.1 1.0 19.63 Labor hours/day/person 8.0 8.4 8.1 8.0 8.4 8.1 9.1 8.6 8.0 8.0 8.04 Total labor hours/year 7,925 8,474 6,255 333 1,660 91 5,347 3,779 1,895 4,451 2,080 0 42,289 Route Information
# of routes per
5 Weekday 3.81 3.88 2.97 0.16 0.76 0.043 2.26 1.69 0.91 2.14 1.00 19.6 6 Saturday 1.4 0.3 0.3 0.71 2.77 Sunday 0.0
# of persons per route per
8 Weekday 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
9 Saturday 1.0 1.0 1.0 1.0
10 Sunday
# of route hours/day/route per
11 Weekday 8.0 8.4 8.1 8.0 8.4 8.1 9.1 8.6 8.0 8.0 8.0
12 Saturday 8.0 8.0 8.0 8.013 Sunday
# of route hours per year per:
14 Weekday 7,925 8,474 6,255 333 1,660 91 5,347 3,779 1,895 4,451 2,080 42,289 15 Saturday 582 125 125 295 1,12716 Sunday 017 Total Route Hours per Year (all routes) 7,925 8,474 6,255 333 1,660 91 5,930 3,904 2,020 4,747 2,080 0 43,41618 # of FTE routes 3.81 4.07 3.01 0.16 0.80 0.04 2.85 1.88 0.97 2.28 1.00 0.00 20.8719 Total # of cart setouts per day for all routes 2,431 2,347 2,06820 # of cart setouts/day/FTE route 638 576 68821 # of cart setouts per week for all routes 12,156 11,736 10,33922 # of household driveͲbys per wk for all routes 13,972 13,972 13,97223 Set out rate (%) 87% 84% 74%24 # of lifts or pulls per week for all routes 471 1,554 375 915 922 225 58 9525 # of lifts or pulls per year for all routes 24,492 80,808 19,500 47,580 47,944 11,700 3,002 4,940 026 # of lifts or pulls per route hour 73.6 48.68 215.33 8.02 12.28 5.79 0.63 2.38 0.00 Vehicle Information
27 # of regular collection vehicles (from Form 4) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.029 # of spare collection vehicles (from Form 4) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.030 Total # of collection vehicles 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Tonnage Information (annual)
31 Solid Waste Collected 7,520 360 6,150 3,250 17,280.032 Recyclable Materials Collected 4,890 380 2,200 480 7,950.033 Organic Materials Collected Facillity #1 8,010 116 1,000 9,126.034 Organic Materials Collected Facillity #2 0 2,600 2,500 5,100.035 C&D 2,500 2,500.036 HHW 0.037 Bulky Items/Reusable Materials Collected 0.038 Other Materials Collected (Specify) 0.039 Total Collected 7,520 4,890 8,010 360 380 116 6,150 2,200 2,600 9,730 0 0 41,95640 Processing residue disposed 0.041 Net Diverted (Line 32 + 33 + 34 + 35 + 36 + 37 + 38Ͳ40) 0 4,890 8,010 0 380 116 0 2,200 2,600 6,480 0 0 24,676

58.8%
Residential Cart Service (Form 6A) REPORT FOR 12ͲMONTH PERIOD From February 1, 2021 to January 31, 2022
Commercial Cart Service (Form 6B) Commercial Bin Service (Form 6C) Other (Form 6E)

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Form 2
Operating Statistics City of Cupertino Future Services
Proposer Name: Recology
Notes for Form 2:

Pulls = pull and return etc.Full Time Equivalent (FTE) = 40 hours per week, 2,080 hours per year Line 27 ͲNo input needed by Recology, data linked to Form 4ͲCapital. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6AͲ6E.

Line 28 ͲNo input needed by Recology, data linked to Form 4ͲCapital. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6AͲ6E.

Line 29 ͲNo input needed by Recology, data linked to Form 4ͲCapital. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6AͲ6E.

Line 41ͲShould equal Line 32 + Line 33 + Line 34 + Line 35 + Line 36 + Line 37 + Line 38ͲLine 40 Line 30ͲShould equal Line 27 + Line 28 + Line 29
Lines 31 Ͳ38ͲData to be input by Recology. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6AͲ6E.

Line 39ͲShould equal the sum of Line 31 + Line 32 + Line 33 + Line 34 + Line35 + Line 36 + Line 37 + Line 38 Line 40Ͳ Data to be input by Recology. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6AͲ6E.

Line 23ͲShould equal Line 21 / Line 22
Line 24ͲData to be input by Recology. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6BͲ6E.

Line 25ͲData to be input by Recology and should equal Line 24 * 52 weeks. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6BͲ6E.

Line 26ͲShould equal Line 25/ Line 17
Line 19 ͲData to be input by Recology. Data should reflect the assumptions used for the basis of the costs proposed in Form 6A Line 20ͲShould equal Line 19 / Line 18Line 21ͲShould equal Line 19 * 5 daysLine 22ͲData to be input by Recology. Data should reflect the assumptions used for the basis of the costs proposed in Form 6A.

Line 15ͲShould equal Line 6 * Line 12 * 52 weeks
Line 16ͲShould equal Line 7 * Line 13 * 52 weeks
Line 17ͲShould equal Line 14 + Line 15 + Line 16
Line 18ͲShould equal Line 17 / 2,080 hours
Line 14ͲShould equal Line 5 * Line 11* 260 days
Line 2ͲData to be input by Recology. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6AͲ6E.

Line 3ͲIdentify number of hours per day each regular route employee will work each day (including breaks, preͲand postͲroute checks, etc., excludes casual/pool personnel).

Line 4ͲShould equal Line 2 * Line 3 * 260 days. Total should tie to total payroll hours.

Lines 11, 12, and 13ͲIdentify number of hours per day each route will take to complete (including collection time and hauling time to transfer station, landfill, or processing site).

Line 1 ͲShould equal the number of customer serviced on a weekly basisLines 5, 6, and 7ͲInformation is to be reported for collection routes only and does not include any support (e.g., container delivery routes, cleanup routes, missed pickup routes etc.) Line 8, 9, and 10 ͲData to be input by Recology. Data should reflect the assumptions used for the basis of the costs proposed in Forms 6AͲ6E.

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Form 3
Proposed Labor Requirements City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

Route Personnel Headcount (include fraction of employee) Residential Cart Solid Waste (6A) 3.8 1.0 4.8
Residential Cart Recyclable Materials (6A) 3.9 1.0 4.9
Residential Cart Organic Matrials (6A) 3.0 0.7 3.7
Commercial Cart Solid Waste (6B) 0.2 0.0 0.2
Commercial Cart Recyclable Materials (6B) 0.8 0.2 1.0
Commercial Cart Organic Materials (6B) 0.0 0.0 0.1
Commercial Bin Solid Waste (6C) 2.3 0.6 2.8
Commercial Bin Recyclable Materials (6C) 1.7 0.4 2.1
Commercial Bin Organic Materials (6C) 0.9 0.2 1.1
RollͲOff (6D) 2.1 0.5 2.7
HHW (6E) 0.0 0.0 0.0
Bulky (6E) 1.0 0.3 1.3
Stinger 0.0
Subtotal Route Personnel 19.6 4.9 24.5
Other Personnel Headcount (include fraction of employee) # of Employees Hourly Rate Executive Management (CEO, CFO, COO, etc.)
General Manager 0.6
Operations Manager 0.6
Municipal Relations Manager
Route Supervisor 1.1
Dispatcher 0.6
Container Distribution 0.6
Container Maintenance/Welder 1.1
Maintenance Supervisor 0.6
Maintenance Personnel 2.8
Controller
Safety Specialist
Staff Accountant
Office Manager 0.6
Human Resources
Accounting Clerk 0.6
Billings Clerk
Accounts Receivable Clerk
Collection Clerk
Financial & Reporting Analyst 0.75
Benefits Coordinator
Customer Service Supervisor
Customer Service Representatives 1.1
Sales Coordinator
Recycling Manager
Waste Zero Specialist 2.0
Contract Manager
Other (specify): __________________
Other (specify): __________________
Subtotal Other Personnel 12.8

37.3 # of Regular Personnel # of Casual/Pool Total Hourly Rate Benefits Cost/Hour Notes Benefits Cost/Hour
Total All Personnel

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Form 4
Capital Requirements City of Cupertino Future Services
Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

Actual Spare Total Actual Spare Total Actual Spare Total Vehicles
Collection Vehicles
Residential Cart Solid Waste 0 0 0 0 0 N/A
Residential Cart Recyclable Materials 0 0 0 0 0 N/A
Residential Cart Organic Materials 0 0 0 0 0 N/A
Commercial Cart Solid Waste 0 0 0 0 0 N/A
Commercial Cart Recyclable Materials 0 0 0 0 0 N/A
Commercial Cart Organic Materials 0 0 0 0 0 N/A
Commercial Bin Solid Waste 0 0 0 0 0 N/A
Commercial Bin Recyclable Materials 0 0 0 0 0 N/A
Commercial Bin Organic Materials 0 0 0 0 0 N/A
RollͲOff 0 0 0 0 0 N/A
HHW 0 0 0 0 0 N/A
Bulky Items/Reusable Materials 0 0 0 0 0 N/A
Subtotal 000000000 $0
Other Vehicles
Pickup Trucks 0 0 0 0 0 N/A
Container Distribution 0 0 0 0 0 N/A
Mobile Service Truck 0 0000 N/A
Stinger 0 0000 N/A
Other (specify): __________________ 0 0 0 0 0 N/A
Other (specify): __________________ 0 0 0 0 0 N/A
Subtotal 000000000 $0
Total Vehicle Cost $0
Containers
Carts
Solid Waste 35Ͳgallon 0 0 0 0 0 N/A
Solid Waste 64Ͳgallon 0 0 0 0 0 N/A
Solid Waste 96Ͳgallon 0 0 0 0 0 N/A
Recyclable Material 32Ͳgallon 0 0 0 0 0 N/A
Recyclable Material 64Ͳgallon 0 0000 N/A
Recyclable Material 96Ͳgallon 0 0 0 0 0 N/A
Organic Materials 32Ͳgallon 0 0 0 0 0 N/A
Organic Materials 64Ͳgallon 0 0 0 0 0 N/A
Organic Materials 96Ͳgallon 0 0000 N/A
Subtotal 000000000 $0
Bins
1 cubic yard 0 0 0 0 0 N/A

1.5 cubic yards 0 0000 N/A
2 cubic yards 0 0000 N/A
3 cubic yards 0 0000 N/A
4 cubic yards 0 0000 N/A
5 cubic yards 0 0000 N/A
6 cubic yards 00 0 0 0 N/A
Subtotal 000000000 $0
Drop Boxes
7 cubic yards 0 0 0 0 0 N/A
20 cubic yards 0 0000 N/A
30 cubic yards 0 0000 N/A
40 cubic yards 0 0000 N/A
Subtotal 000000000 $0
Foodwaste Pails 0 0 0 0 0 N/A
Other (specify): __________________ 0 0 0 0 0 N/A
Other (specify): __________________ 0 0 0 0 0 N/A
Subtotal 000000000 $0
Total Container Cost $0
Other Description
Offices
Processing Site(s)
Transfer Station
Corporation Yard/Maintenance
Container Storage Yard
Shop Equipment
Fueling Equipment
Computer and Office Equipment
Other (specify): __________________
Other (specify): __________________
Total Other Cost $0
Total Capital Cost $0
Average Price
Quantity
Total Capital Cost
Over Contract Term
(in 2022 dollars)
New Used Total

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Form 5
Summary of Proposed Costs City of Cupertino Future Services Proposer Name: Recology
Note to Recology: No data input required on this Form 5; costs are pulled automatically from Forms 6A through 6D.

RATE PERIOD 1
RollͲOff
(Form 6D)
From February 1, 2021 to January 31, 2022 Solid Waste
Recyclable
Materials
Organic
Materials Solid Waste
Recyclable
Materials
Organic
Materials Solid Waste
Recyclable
Materials
Organic
Materials
All Material
Types
Bulky Items/
Reusable
Materials
Other
(Specify) TOTAL
Cost of Operations
LaborͲRelated Costs $742,162 $784,524 $584,033 $31,167 $153,670 $8,456 $527,709 $356,854 $186,341 $437,884 $194,793 $0 $4,007,593 VehicleͲRelated Costs $110,795 $112,831 $86,368 $4,653 $22,101 $10,962 $65,721 $49,145 $26,492 $62,231 $29,080 $0 $580,379 Fuel Costs $64,228 $69,433 $50,838 $2,697 $13,600 $736 $44,546 $31,119 $15,357 $36,076 $16,858 $0 $345,489 Other Costs $61,820 $62,956 $48,190 $2,596 $12,332 $1,323 $36,670 $27,421 $14,782 $34,723 $16,226 $0 $319,039 Direct Depreciation $192,461 $177,682 $136,009 $7,327 $34,804 $1,969 $103,495 $77,392 $41,719 $98,000 $34,994 $0 $905,853 Total Allocated CostsͲLabor, Vehicle, Fuel & Other $418,319 $418,319 $418,319 $31,673 $149,698 $173,304 $433,558 $323,301 $173,304 $358,559 $89,640 $0 $2,987,993Total Allocated CostsͲDepreciation & StartͲUp $4,944 $4,944 $4,944 $374 $1,769 $2,048 $5,124 $3,821 $2,048 $4,237 $1,059 $0 $35,311 Total Cost of Operations $1,594,729 $1,630,689 $1,328,701 $80,487 $387,974 $198,798 $1,216,823 $869,054 $460,042 $1,031,711 $382,650 $0 $9,181,656Profit (Includes Franchise Fees) $604,897 $618,537 $503,990 $30,530 $147,162 $75,406 $461,553 $329,641 $174,499 $391,338 $145,143 $0 $3,482,697PassͲThrough Costs Disposal Costs $340,882 $0 $0 $16,319 $0 $0 $278,780 $0 $0 $147,323 $0 $0 $783,302 Recyclable Processing Costs $0 $168,705 $0 $0 $13,110 $0 $0 $75,900 $0 $16,560 $0 $0 $274,275Organics Processing CostsͲFacility #1 $0 $0 $712,730 $0 $0 $10,322 $0 $0 $0 $88,980 $0 $0 $812,031 Organics Processing CostsͲFacility #2 $0 $0 $0 $0 $0 $0 $0 $0 $314,704 $302,600 $0 $0 $617,304 C&D Processing Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $113,325 $0 $0 $113,325 Reusable Materials Processing Costs $0 $0 $0 $0 $0 $0$0$0$0$0$0$0 $0 Other Processing Costs $0 $0 $0 $0 $0 $0$0$0$0$0$0$0 $0 Interest Expense $64,054 $65,231 $49,932 $2,690 $12,777 $723 $37,995 $28,412 $15,316 $35,978 $13,547 $0 $326,655Direct Lease Costs $0 $0 $0 $0 $0 $0$0$0$0$0$0$0 $0 Total Allocated CostsͲLease $25,200 $25,200 $25,200 $1,908 $9,018 $10,440 $26,118 $19,476 $10,440 $21,600 $5,400 $0 $180,000 Total PassͲThrough Costs $430,136 $259,136 $787,862 $20,917 $34,905 $21,485 $342,893 $123,788 $340,460 $726,365 $18,947 $0 $3,106,893 $2,629,762 $2,508,361 $2,620,552 $131,934 $570,041 $295,689 $2,021,269 $1,322,483 $975,001 $2,149,414 $546,740 $0 $15,771,247 Cost Reimbursements
Solid Waste Operations Fund Fee (net of disposal) ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ $1,394,128  ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ $0 Total Cost Reimbursements ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ $1,394,128Total Proposed Costs ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ $17,165,375Profit (Includes Franchise Fees) ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ $3,482,697 Less: Franchise Fee ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ $1,740,683 Net Profit Margin ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ ͲͲͲ $1,742,014*Amounts to tie to Forms 6A through 6E.

Residential Cart Service (Form 6A) Commercial Cart Service (Form 6B) Total Costs before Cost Reimbursements*
Commercial Bin Service (Form 6C) Other (Form 6E)

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Form 6
Collection Cost Proposal City of Cupertino Future Services Proposer Name: Recology
Note to Recology:No data input required on Form 6; costs are pulled from Forms 6AͲ6E.

Rate Period One
SUMMARY (Total Costs from Forms 6A through 6E) From February 1, 2021 to January 31, 2022
LaborͲRelated Costs (include regular & pool personnel)
Regular Wages $1,641,333
Overtime Wages $436,351
Holiday Wages $169,366
Vacation Wages $214,267
Sick Leave Wages $87,809
Workers Compensation Insurance Premiums $216,294
Workers Compensation Claims $0
Health & Welfare $804,688
Pension/ Retirement Benefits $240,121
Payroll Taxes $197,363
Other (Please List) $0
Total Labor RelatedͲCosts $4,007,593
VehicleͲRelated Costs (do not include depreciation)
Tires & Tubes $72,824
Parts & Supplies (fluid, oil, etc,) $240,229
Outside Repairs $145,749
Taxes & Licenses $78,203
OnͲBoard Computer Operational Costs $43,374
Other (Please List) $0
Total VehicleͲRelated Costs $580,379
Fuel Costs $345,489
Other Costs
Liability & Property Damage Insurance $245,418
Equipment Insurance $0
Training & Safety Programs $22,236
Uniforms $19,040
Towing $32,346
Total Other Costs $319,039
Direct Depreciation
Container Depreciation $163,863
Route Vehicle Depreciation $724,005
Other Depreciation $17,985
Total Direct Depreciation $905,853
Allocated CostsͲLabor, Vehicle, Fuel & Other Costs
From General and Administrative (6F) $2,008,046
From Vehicle Maintenance (6F) $973,379
From Container Maintenance (6F) $6,569
Total Allocated CostsͲLabor, Vehicle, Fuel & Other Costs $2,987,993 Allocated CostsͲDepreciation and StartͲUp Costs
From General and Administrative (6F) $35,311
From Vehicle Maintenance (6F) $0
From Container Maintenance (6F) $0
Total Allocated CostsͲDepreciation and StartͲUp Costs $35,311 Total Cost of Operations $9,181,656
Gross Operating Ratio (% Operating Ratio; i.e. 90%): 72.5 % $3,482,697

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Form 6
Collection Cost Proposal City of Cupertino Future Services Proposer Name: Recology
Note to Recology:No data input required on Form 6; costs are pulled from Forms 6AͲ6E.

Rate Period One
SUMMARY (Total Costs from Forms 6A through 6E) From February 1, 2021 to January 31, 2022
PassͲThrough Costs
Disposal Cost 45.33$ /ton $783,302
Recyclables Processing Costs 34.50$ /ton $274,275
Organics Processing CostsͲFacility #1 88.98$ /ton $812,031 Organics Processing CostsͲFacility #2 $121.04 /ton $617,304 C&D Processing Costs $45.33 /ton $113,325
Reusable Materials Handling Costs $Ͳ /ton $0
Other Processing Costs: __________ (specify) $Ͳ $0 Interest Expense $326,655
Direct Lease Costs
Route Vehicles $0
Other (Please List) $0
Total Direct Lease Costs $0
Allocated Lease Costs
From General and Administrative (6F) $180,000
From Vehicle Maintenance (6F) $0
From Container Maintenance (6F) $0
Total Allocated Lease Costs $180,000
Total PassͲThrough Costs $3,106,893
Total Cost Before Cost Reimbursements $15,771,247
Cost Reimbursements to City
Solid Waste Operations Fee $1,394,128.00 $Ͳ
Total Reimbursements to City $1,394,128.00 Total Proposed Cost $17,165,375
Gross Operating Margin $3,482,697
Less: Franchise Fee $1,740,683
Net Profit Margin $1,742,014

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Form 6A Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

RESIDENTIAL CART COSTS Solid Waste
Recyclable
Materials Organic Materials Subtotal
LaborͲRelated Costs (include regular & pool personnel)
Regular Wages $318,665 $324,520 $248,408 $891,592
Overtime Wages $51,386 $78,993 $45,159 $175,538
Holiday Wages $32,882 $33,487 $25,633 $92,002
Vacation Wages $41,600 $42,364 $32,428 $116,392
Sick Leave Wages $17,048 $17,361 $13,290 $47,699
Workers Compensation Insurance Premiums $41,993 $42,765 $32,735 $117,494 Workers Compensation Claims $0
Health & Welfare $156,230 $159,101 $121,786 $437,117
Pension/ Retirement Benefits $46,619 $47,476 $36,341 $130,437 Payroll Taxes $35,737 $38,458 $28,253 $102,449
Other (Please List) $0
Total Labor RelatedͲCosts $742,162 $784,524 $584,033 $2,110,719 VehicleͲRelated Costs (do not include depreciation)
Tires & Tubes $13,865 $14,120 $10,808 $38,794
Parts & Supplies (fluid, oil, etc,) $45,739 $46,579 $35,654 $127,972 Outside Repairs $27,750 $28,260 $21,632 $77,641
Taxes & Licenses $15,183 $15,462 $11,836 $42,481
OnͲBoard Computer Operational Costs $8,258 $8,410 $6,438 $23,106 Other (Please List) $0
Total VehicleͲRelated Costs $110,795 $112,831 $86,368 $309,994 Fuel Costs $64,228 $69,433 $50,838 $184,499
Other Costs
Liability & Property Damage Insurance $47,648 $48,523 $37,143 $133,314 Equipment Insurance $0
Training & Safety Programs $4,317 $4,396 $3,365 $12,079 Uniforms $3,697 $3,765 $2,882 $10,343
Towing $6,158 $6,272 $4,801 $17,231
Total Other Costs $61,820 $62,956 $48,190 $172,966
Direct Depreciation
Container Depreciation $31,814 $32,398 $24,800 $89,012
Route Vehicle Depreciation $142,662 $145,284 $111,209 $399,155 Other DepreciationͲ24 Gallon Solid Waste Carts $17,985 $17,985 Total Direct Depreciation $192,461 $177,682 $136,009 $506,152 Allocated CostsͲLabor, Vehicle, Fuel & Other Costs
From General and Administrative (6F) $281,126 $281,126 $281,126 $843,379 From Vehicle Maintenance (6F) $136,273 $136,273 $136,273 $408,819 From Container Maintenance (6F) $920 $920 $920 $2,759
Total Allocated CostsͲLabor, Vehicle, Fuel & Other Costs $418,319 $418,319 $418,319 $1,254,957 Allocated CostsͲDepreciation and StartͲUp Costs
From General and Administrative (6F) $4,944 $4,944 $4,944 $14,831 From Vehicle Maintenance (6F) $0 $0 $0 $0
From Container Maintenance (6F) $0 $0 $0 $0
Total Allocated CostsͲDepreciation and StartͲUp Costs $4,944 $4,944 $4,944 $14,831 Total Cost of Operations $1,594,729 $1,630,689 $1,328,701 $4,554,118 Profit (Enter % Operating Ratio; i.e. 95%): 72.5 % $604,897 $618,537 $503,990 $1,727,424 Rate Period One
From February 1, 2021 to January 31, 2022

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Form 6A Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

RESIDENTIAL CART COSTS Solid Waste
Recyclable
Materials Organic Materials Subtotal
Rate Period One
From February 1, 2021 to January 31, 2022
PassͲThrough Costs per ton
Disposal Cost $45.33 $340,882 $0 $0 $340,882
Recyclables Processing Costs $34.50 $0 $168,705 $0 $168,705 Bulky Items/Reusable Materials Handling Costs $Ͳ $0 $0 $0 $0 Other Processing Costs: __________ (specify) $Ͳ $0 $0 $0 $0 Organics Processing CostsͲFacility #1 $88.98 $0 $0 $712,730 $712,730 Organics Processing CostsͲFacility #2 $121.04 $0 $0 $0 $0 C&D Processing Costs $45.33 $0 $0 $0 $0
Interest Expense $64,054 $65,231 $49,932 $179,217
Direct Lease Costs
Route Vehicles $0
Other (Please List) $0
Total Direct Lease Costs $0 $0 $0 $0
Allocated Lease Costs
From General and Administrative (6E) $25,200 $25,200 $25,200 $75,600 From Vehicle Maintenance (6E) $0 $0 $0 $0
From Container Maintenance (6E) $0 $0 $0 $0
Total Allocated Lease Costs $25,200 $25,200 $25,200 $75,600 Total PassͲThrough Costs $430,136 $259,136 $787,862 $1,477,133 Total Cost $2,629,762 $2,508,361 $2,620,552 $7,758,675

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Form 6B Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

COMMERCIAL CART COSTS Solid Waste
Recyclable
Materials
Organic
Materials Subtotal
LaborͲRelated Costs (include regular & pool personnel)
Regular Wages $13,382 $63,566 $3,596 $80,544
Overtime Wages $2,158 $15,473 $654 $18,285
Holiday Wages $1,381 $6,559 $371 $8,311
Vacation Wages $1,747 $8,298 $470 $10,515
Sick Leave Wages $716 $3,401 $192 $4,309
Workers Compensation Insurance Premiums $1,764 $8,377 $474 $10,614 Workers Compensation Claims $0
Health & Welfare $6,561 $31,164 $1,763 $39,488
Pension/ Retirement Benefits $1,958 $9,299 $526 $11,783 Payroll Taxes $1,501 $7,533 $409 $9,443
Other (Please List) $0
Total Labor RelatedͲCosts $31,167 $153,670 $8,456 $193,292 VehicleͲRelated Costs (do not include depreciation)
Tires & Tubes $582 $2,766 $1,565 $4,913
Parts & Supplies (fluid, oil, etc,) $1,921 $9,124 $5,162 $16,207 Outside Repairs $1,165 $5,535 $3,132 $9,833
Taxes & Licenses $638 $3,029 $171 $3,838
OnͲBoard Computer Operational Costs $347 $1,647 $932 $2,926 Other (Please List) $0
Total VehicleͲRelated Costs $4,653 $22,101 $10,962 $37,716 Fuel Costs $2,697 $13,600 $736 $17,034
Other Costs
Liability & Property Damage Insurance $2,001 $9,505 $538 $12,043 Equipment Insurance $0
Training & Safety Programs $181 $861 $49 $1,091
Uniforms $155 $737 $42 $934
Towing $259 $1,228 $695 $2,182
Total Other Costs $2,596 $12,332 $1,323 $16,251
Direct Depreciation
Container Depreciation $1,336 $6,346 $359 $8,041
Route Vehicle Depreciation $5,991 $28,458 $1,610 $36,059 Other Depreciation $0
Total Direct Depreciation $7,327 $34,804 $1,969 $44,100 Allocated CostsͲLabor, Vehicle, Fuel & Other Costs
From General and Administrative (6F) $21,285 $100,603 $116,467 $238,355 From Vehicle Maintenance (6F) $10,318 $48,766 $56,456 $115,540 From Container Maintenance (6F) $70 $329 $381 $780
Total Allocated CostsͲLabor, Vehicle, Fuel & Other Costs $31,673 $149,698 $173,304 $354,675 Allocated CostsͲDepreciation and StartͲUp Costs
From General and Administrative (6F) $374 $1,769 $2,048 $4,191 From Vehicle Maintenance (6F) $0 $0 $0 $0
From Container Maintenance (6F) $0 $0 $0 $0
Total Allocated CostsͲDepreciation and StartͲUp Costs $374 $1,769 $2,048 $4,191 Total Cost of Operations $80,487 $387,974 $198,798 $667,259 Profit (Enter % Operating Ratio; i.e. 95%): 72.5 % $30,530 $147,162 $75,406 $253,098 Rate Period One
From February 1, 2021 to January 31, 2022

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Form 6B Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

COMMERCIAL CART COSTS Solid Waste
Recyclable
Materials
Organic
Materials Subtotal
Rate Period One
From February 1, 2021 to January 31, 2022
PassͲThrough Costs per ton
Disposal Cost $45.33 $16,319 $0 $0 $16,319
Recyclables Processing Costs $34.50 $0 $13,110 $0 $13,110 Bulky Items/Reusable Materials Handling Costs $Ͳ $0 $0 $0 $0 Other Processing Costs: __________ (specify) $Ͳ $0 $0 $0 $0 Organics Processing CostsͲFacility #1 $88.98 $0 $0 $10,322 $10,322 Organics Processing CostsͲFacility #2 $121.04 $0 $0 $0 $0 C&D Processing Costs 45.33$ $0 $0 $0 $0
Interest Expense $2,690 $12,777 $723 $16,190
Direct Lease Costs
Route Vehicles $0
Other (Please List) $0
Total Direct Lease Costs $0 $0 $0 $0
Allocated Lease Costs
From General and Administrative (6F) $1,908 $9,018 $10,440 $21,366 From Vehicle Maintenance (6F) $0 $0 $0 $0
From Container Maintenance (6F) $0 $0 $0 $0
Total Allocated Lease Costs $1,908 $9,018 $10,440 $21,366 Total PassͲThrough Costs $20,917 $34,905 $21,485 $77,307 Total Cost $131,934 $570,041 $295,689 $997,663

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Form 6C Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

COMMERCIAL BIN COSTS Solid Waste
Recyclable
Materials
Organic
Materials Subtotal
LaborͲRelated Costs (include regular & pool personnel)
Regular Wages $189,024 $141,350 $76,195 $406,569
Overtime Wages $111,671 $48,459 $20,533 $180,664
Holiday Wages $19,505 $14,586 $7,862 $41,953
Vacation Wages $24,676 $18,452 $9,947 $53,075
Sick Leave Wages $10,113 $7,562 $4,076 $21,751
Workers Compensation Insurance Premiums $24,910 $18,627 $10,041 $53,578 Workers Compensation Claims $0
Health & Welfare $92,672 $69,299 $37,356 $199,327
Pension/ Retirement Benefits $27,654 $20,679 $11,147 $59,480 Payroll Taxes $27,485 $17,839 $9,184 $54,507
Other (Please List) $0
Total Labor RelatedͲCosts $527,709 $356,854 $186,341 $1,070,904 VehicleͲRelated Costs (do not include depreciation)
Tires & Tubes $8,225 $6,150 $3,315 $17,690
Parts & Supplies (fluid, oil, etc,) $27,131 $20,288 $10,936 $58,356 Outside Repairs $16,461 $12,309 $6,635 $35,405
Taxes & Licenses $9,006 $6,735 $3,630 $19,371
OnͲBoard Computer Operational Costs $4,899 $3,663 $1,975 $10,536 Other (Please List) $0
Total VehicleͲRelated Costs $65,721 $49,145 $26,492 $141,358 Fuel Costs $44,546 $31,119 $15,357 $91,023
Other Costs
Liability & Property Damage Insurance $28,264 $21,135 $11,393 $60,792 Equipment Insurance $0
Training & Safety Programs $2,561 $1,915 $1,032 $5,508
Uniforms $2,193 $1,640 $884 $4,716
Towing $3,653 $2,732 $1,473 $7,857
Total Other Costs $36,670 $27,421 $14,782 $78,873
Direct Depreciation
Container Depreciation $18,871 $14,112 $7,607 $40,590
Route Vehicle Depreciation $84,624 $63,281 $34,112 $182,016 Other Depreciation $0
Total Direct Depreciation $103,495 $77,392 $41,719 $222,606 Allocated CostsͲLabor, Vehicle, Fuel & Other Costs
From General and Administrative (6F) $291,367 $217,271 $116,467 $625,105 From Vehicle Maintenance (6F) $141,237 $105,320 $56,456 $303,013 From Container Maintenance (6F) $953 $711 $381 $2,045
Total Allocated CostsͲLabor, Vehicle, Fuel & Other Costs $433,558 $323,301 $173,304 $930,162 Allocated CostsͲDepreciation and StartͲUp Costs
From General and Administrative (6F) $5,124 $3,821 $2,048 $10,992 From Vehicle Maintenance (6F) $0 $0 $0 $0
From Container Maintenance (6F) $0 $0 $0 $0
Total Allocated CostsͲDepreciation and StartͲUp Costs $5,124 $3,821 $2,048 $10,992 Total Cost of Operations $1,216,823 $869,054 $460,042 $2,545,919 Profit (Enter % Operating Ratio; i.e. 95%): 72.5 % $461,553 $329,641 $174,499 $965,693 Rate Period One
From February 1, 2021 to January 31, 2022

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Form 6C Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

COMMERCIAL BIN COSTS Solid Waste
Recyclable
Materials
Organic
Materials Subtotal
Rate Period One
From February 1, 2021 to January 31, 2022
PassͲThrough Costs per ton
Disposal Cost 45.33$ $278,780 $0 $0 $278,780
Recyclables Processing Costs $34.50 $0 $75,900 $0 $75,900 Bulky Items/Reusable Materials Handling Costs $Ͳ $0 $0 $0 $0 Other Processing Costs: __________ (specify) $Ͳ $0 $0 $0 $0 Organics Processing CostsͲFacility #1 $88.98 $0 $0 $0 $0 Organics Processing CostsͲFacility #2 $121.04 $0 $0 $314,704 $314,704 C&D Processing Costs 45.33$ $0 $0 $0 $0
Interest Expense $37,995 $28,412 $15,316 $81,723
Direct Lease Costs
Route Vehicles $0
Other (Please List) $0
Total Direct Lease Costs $0$0$0$0
Allocated Lease Costs
From General and Administrative (6F) $26,118 $19,476 $10,440 $56,034 From Vehicle Maintenance (6F) $0 $0 $0 $0
From Container Maintenance (6F) $0 $0 $0 $0
Total Allocated Lease Costs $26,118 $19,476 $10,440 $56,034 Total PassͲThrough Costs $342,893 $123,788 $25,756 $492,437 Total Cost $2,021,269 $1,322,483 $660,297 $4,004,049

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Form 6D Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
ROLLͲOFF COSTS All Material Types Subtotal
LaborͲRelated Costs (include regular & pool personnel)
Regular Wages $178,988 $178,988
Overtime Wages $48,378 $48,378
Holiday Wages $18,469 $18,469
Vacation Wages $23,366 $23,366
Sick Leave Wages $9,576 $9,576
Workers Compensation Insurance Premiums $23,587 $23,587 Workers Compensation Claims $0
Health & Welfare $87,751 $87,751
Pension/ Retirement Benefits $26,185 $26,185
Payroll Taxes $21,584 $21,584
Other (Please List) $0
Total Labor RelatedͲCosts $437,884 $437,884
VehicleͲRelated Costs (do not include depreciation)
Tires & Tubes $7,788 $7,788
Parts & Supplies (fluid, oil, etc,) $25,690 $25,690
Outside Repairs $15,587 $15,587
Taxes & Licenses $8,528 $8,528
OnͲBoard Computer Operational Costs $4,639 $4,639
Other (Please List) $0
Total VehicleͲRelated Costs $62,231 $62,231
Fuel Costs $36,076 $36,076
Other Costs
Liability & Property Damage Insurance $26,763 $26,763
Equipment Insurance $0
Training & Safety Programs $2,425 $2,425
Uniforms $2,076 $2,076
Towing $3,459 $3,459
Total Other Costs $34,723 $34,723
Direct Depreciation
Container Depreciation $17,869 $17,869
Route Vehicle Depreciation $80,131 $80,131
Other Depreciation $0
Total Direct Depreciation $98,000 $98,000
Allocated CostsͲLabor, Vehicle, Fuel & Other Costs
From General and Administrative (6F) $240,965 $240,965
From Vehicle Maintenance (6F) $116,805 $116,805
From Container Maintenance (6F) $788 $788
Total Allocated CostsͲLabor, Vehicle, Fuel & Other Costs $358,559 $358,559 Allocated CostsͲDepreciation and StartͲUp Costs
From General and Administrative (6F) $4,237 $4,237
From Vehicle Maintenance (6F) $0 $0
From Container Maintenance (6F) $0 $0
Total Allocated CostsͲDepreciation and StartͲUp Costs $4,237 $4,237 Total Cost of Operations $1,031,711 $1,031,711
Profit (Enter % Operating Ratio; i.e. 95%): 72.5 % $391,338 $391,338 Rate Period One
From February 1, 2021 to January 31,
2022
Note to Recology:Input data in
yellow shaded areas only.

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Form 6D Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
ROLLͲOFF COSTS All Material Types Subtotal
Rate Period One
From February 1, 2021 to January 31,
2022
Note to Recology:Input data in
yellow shaded areas only.

PassͲThrough Costs per ton
Disposal Cost 45.33$ $147,323 $147,323
Recyclables Processing Costs $34.50 $16,560 $16,560 Bulky Items/Reusable Materials Handling Costs $Ͳ $0 $0 Other Processing Costs: __________ (specify) $Ͳ $0 $0 Organics Processing CostsͲFacility #1 $88.98 $88,980 $88,980 Organics Processing CostsͲFacility #2 $121.04 $302,600 $302,600 C&D Processing Costs 45.33$ $113,325 $113,325
Interest Expense $35,978 $35,978
Direct Lease Costs
Route Vehicles $0
Other (Please List) $0
Total Direct Lease Costs $0 $0
Allocated Lease Costs
From General and Administrative (6F) $21,600 $21,600
From Vehicle Maintenance (6F) $0 $0
From Container Maintenance (6F) $0 $0
Total Allocated Lease Costs $21,600 $21,600
Total PassͲThrough Costs $423,765 $423,765
Total Cost $1,846,814 $1,846,814

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Form 6E
Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

OTHER COSTS
Bulky Items/
Reusable
Materials
Other
(Specify) Subtotal
LaborͲRelated Costs (include regular & pool personnel)
Regular Wages $83,639 $83,639
Overtime Wages $13,487 $13,487
Holiday Wages $8,631 $8,631
Vacation Wages $10,919 $10,919
Sick Leave Wages $4,475 $4,475
Workers Compensation Insurance Premiums $11,022 $11,022 Workers Compensation Claims $0
Health & Welfare $41,005 $41,005
Pension/ Retirement Benefits $12,236 $12,236
Payroll Taxes $9,380 $9,380
Other (Please List) $0
Total Labor RelatedͲCosts $194,793 $0 $194,793
VehicleͲRelated Costs (do not include depreciation)
Tires & Tubes $3,639 $3,639
Parts & Supplies (fluid, oil, etc,) $12,005 $12,005
Outside Repairs $7,283 $7,283
Taxes & Licenses $3,985 $3,985
OnͲBoard Computer Operational Costs $2,168 $2,168
Other (Please List) $0
Total VehicleͲRelated Costs $29,080 $0 $29,080
Fuel Costs $16,858 $16,858
Other Costs
Liability & Property Damage Insurance $12,506 $12,506
Equipment Insurance $0
Training & Safety Programs $1,133 $1,133
Uniforms $970 $970
Towing $1,616 $1,616
Total Other Costs $16,226 $0 $16,226
Direct Depreciation
Container Depreciation $8,350 $8,350
Route Vehicle Depreciation $26,644 $26,644
Other Depreciation $0
Total Direct Depreciation $34,994 $0 $34,994
Rate Period One
From February 1, 2021 to January 31, 2022

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Form 6E
Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

OTHER COSTS
Bulky Items/
Reusable
Materials
Other
(Specify) Subtotal
Rate Period One
From February 1, 2021 to January 31, 2022
Allocated CostsͲLabor, Vehicle, Fuel & Other Costs
From General and Administrative (6F) $60,241 $0 $60,241 From Vehicle Maintenance (6F) $29,201 $0 $29,201
From Container Maintenance (6F) $197 $0 $197
Total Allocated CostsͲLabor, Vehicle, Fuel & Other Costs $89,640 $0 $89,640 Allocated CostsͲDepreciation and StartͲUp Costs
From General and Administrative (6F) $1,059 $0 $1,059
From Vehicle Maintenance (6F) $0 $0 $0
From Container Maintenance (6F) $0 $0 $0
Total Allocated CostsͲDepreciation and StartͲUp Costs $1,059 $0 $1,059 Total Cost of Operations $382,650 $0 $382,650
Profit (Enter % Operating Ratio; i.e. 95%): 72.5 % $145,143 $0 $145,143 PassͲThrough Costs per ton
Disposal Cost 45.33$ $0 $0 $0
Recyclables Processing Costs 34.50$ $0 $0 $0
Bulky Items/Reusable Materials Handling Costs $Ͳ $0 $0 $0 Other Processing Costs: __________ (specify) $Ͳ $0 $0 $0 Organics Processing CostsͲFacility #1 $88.98 $0 $0 $0 Organics Processing CostsͲFacility #2 $121.04 $0 $0 $0 C&D Processing Costs 45.33$ $0 $0 $0
Interest Expense $13,547 $13,547
Direct Lease Costs
Route Vehicles $0
Other (Please List) $0
Total Direct Lease Costs $0 $0 $0
Allocated Lease Costs
From General and Administrative (6F) $5,400 $0 $5,400
From Vehicle Maintenance (6F) $0 $0 $0
From Container Maintenance (6F) $0 $0 $0
Total Allocated Lease Costs $5,400 $0 $5,400
Total PassͲThrough Costs $18,947 $0 $18,947
Total Cost $546,740 $0 $546,740

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Form 6F
Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

PROPOSED ALLOCATED COST
General and
Administrative
Vehicle
Maintenance
Container
Maintenance Subtotal
LaborͲRelated Costs (include nonͲroute personnel only)
Regular Wages $569,984 $378,845 $948,829
Overtime Wages $7,056 $107,714 $114,770
Holiday Wages $16,131 $30,990 $47,121
Vacation Wages $54,287 $39,933 $94,220
Sick Leave Wages $16,003 $16,003
Workers Compensation Insurance Premiums $10,052 $42,427 $52,479 Workers Compensation Claims $0
Health & Welfare $137,192 $162,936 $300,128
Pension/ Retirement Benefits $48,367 $46,575 $94,942
Payroll Taxes $43,120 $43,922 $87,042
Other (Please List) $0
Total Labor RelatedͲCosts $886,189 $869,343 $0 $1,755,533 VehicleͲRelated Costs
Tires & Tubes $0
Parts & Supplies (fluid, oil, etc,) $94,035 $6,569 $100,604 Taxes & Licenses
Other (Please List) $0
Total VehicleͲRelated Costs $0 $94,035 $6,569 $100,604
Fuel Costs $0
Other Costs
Liability & Property Damage Insurance $0
Equipment Insurance $0
RentͲTruck & Container Yard $51,039 $51,039
Utilities $20,295 $20,295
Building Maintenance, Janitorial, Security $37,304
Telephone $82,036 $82,036
Postage $5,392
Bank Fees $25,855
Billing Services $26,848
NonͲvehicle Related Supplies $13,978 $13,978
NonͲvehicle Related Taxes & Licenses $31,500 $31,500
Training & Safety Programs $2,354 $2,354
Ongoing, Annual Public Education & Outreach Efforts $52,738 $52,738 Uniforms $0
Professional ServicesͲAccounting, Legal, Engineering $35,000 $10,000 Bad Debt $65,784 $65,784
Performance Bond $15,200 $15,200
Regional Accounting (GL Accounting, AR, Accounting Mgr, Controller) $77,087 Regional Management (HR, Safety, Enviornmental, Group Mgr) $96,612 Corporate Finance $58,289
C2C $118,827
Corporate Information Technology $153,225
Corporate Environmental Compliance $13,105
Corporate Human Resources $52,783
Corporate Legal $25,160
Corporate Admininstration $48,376 $48,376
Travel & Meals (Most is travel for mileage reimbursements) $13,070 Other (Please List) $0
Total Other Costs $1,121,857 $10,000 $0 $383,300
Total Labor, Vehicle, Fuel, and Other Costs $2,008,046 $973,379 $6,569 $2,239,436 Depreciation (nonͲroute specific) and StartͲUp Costs
Vehicle Depreciation (nonͲroute vehicles) $0
Other Depreciation $0
Initial Public Education & Outreach Efforts $18,911 $18,911 Procurement Cost Reimbursement $0
StartͲup CostsͲ1383 Container Labeling (Year 4 to 10 recovery) $16,400 $16,400 Total Depreciation and StartͲUp Costs $35,311 $0 $0 $35,311 Lease Costs
Facility Costs: 30% of 1675 Rogers Ave Building and Property $180,000 $180,000 Other Lease Costs: _________________________(describe) $0 Total Lease Costs $180,000 $0 $0 $180,000
Rate Period One
From February 1, 2021 to January 31, 2022

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Form 6F
Detailed Collection Cost Proposal Information City of Cupertino Future Services Proposer Name: Recology
Note to Recology:Input data in yellow shaded areas only.

PROPOSED ALLOCATED COST
General and
Administrative
Vehicle
Maintenance
Container
Maintenance Subtotal
Rate Period One
From February 1, 2021 to January 31, 2022
Total Costs to be Allocated $2,223,357 $973,379 $6,569 $2,454,747 Labor, Vehicle, Fuel, & Other Costs Allocated Out Percentage To Residential Cart Solid Waste (6A) 14.00% $281,126 $136,273 $920 $418,319 To Residential Cart Recyclable Materials (6A) 14.00% $281,126 $136,273 $920 $418,319 To Residential Cart Organic Materials (6A) 14.00% $281,126 $136,273 $920 $418,319 To Commercial Cart Solid Waste (6B) 1.06% $21,285 $10,318 $70 $31,673 To Commercial Cart Recyclable Materials (6B) 5.01% $100,603 $48,766 $329 $149,698 To Commercial Cart Organic Materials (6B) 5.80% $116,467 $56,456 $381 $173,304 To Commercial Bin Solid Waste (6C) 14.51% $291,367 $141,237 $953 $433,558 To Commercial Bin Recyclable Materials (6C) 10.82% $217,271 $105,320 $711 $323,301 To Commercial Bin Organic Materials (6C) 5.80% $116,467 $56,456 $381 $173,304 To RollͲOff (6D) 12.00% $240,965 $116,805 $788 $358,559 To HHW (6E) 0.00% $0 $0 $0 $0
To Bulky Item Service (6E) 3.00% $60,241 $29,201 $197 $89,640 Total Labor, Vehicle, Fuel & Other Costs Allocated Out 100.00% $2,008,046 $973,379 $6,569 $2,987,993 Depreciation and StartͲUp Costs Allocated Out
To Residential Cart Solid Waste (6A) 14.00% $4,944 $0 $0 $4,944 To Residential Cart Recyclable Materials (6A) 14.00% $4,944 $0 $0 $4,944 To Residential Cart Organic Materials (6A) 14.00% $4,944 $0 $0 $4,944 To Commercial Cart Solid Waste (6B) 1.06% $374 $0 $0 $374 To Commercial Cart Recyclable Materials (6B) 5.01% $1,769 $0 $0 $1,769 To Commercial Cart Organic Materials (6B) 5.80% $2,048 $0 $0 $2,048 To Commercial Bin Solid Waste (6C) 14.51% $5,124 $0 $0 $5,124 To Commercial Bin Recyclable Materials (6C) 10.82% $3,821 $0 $0 $3,821 To Commercial Bin Organic Materials (6C) 5.80% $2,048 $0 $0 $2,048 To RollͲOff (6D) 12.00% $4,237 $0 $0 $4,237
To HHW (6E) 0.00% $0 $0 $0 $0
To Bulky Item Service (6E) 3.00% $1,059 $0 $0 $1,059
Total Depreciation and StartͲUp Costs Allocated Out 100.00% $35,311 $0 $0 $35,311 Lease Costs Allocated Out
To Residential Cart Solid Waste (6A) 14.00% $25,200 $0 $0 $25,200 To Residential Cart Recyclable Materials (6A) 14.00% $25,200 $0 $0 $25,200 To Residential Cart Organic Materials (6A) 14.00% $25,200 $0 $0 $25,200 To Commercial Cart Solid Waste (6B) 1.06% $1,908 $0 $0 $1,908 To Commercial Cart Recyclable Materials (6B) 5.01% $9,018 $0 $0 $9,018 To Commercial Cart Organic Materials (6B) 5.80% $10,440 $0 $0 $10,440 To Commercial Bin Solid Waste (6C) 14.51% $26,118 $0 $0 $26,118 To Commercial Bin Recyclable Materials (6C) 10.82% $19,476 $0 $0 $19,476 To Commercial Bin Organic Materials (6C) 5.80% $10,440 $0 $0 $10,440 To RollͲOff (6D) 12.00% $21,600 $0 $0 $21,600
To HHW (6E) 0.00% $0 $0 $0 $0
To Bulky Item Service (6E) 3.00% $5,400 $0 $0 $5,400
Total Lease Costs Allocated Out 100.00% $180,000 $0 $0 $180,000 Total Allocated Out $2,223,357 $973,379 $6,569 $3,203,304

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Form 7
Disposal/Processing Cost Proposal City of Cupertino Future Services Proposer Name: Recology
Please provide all costs as $/Ton effective for Rate Period One (February 1, 2021 through January 31, 2022).Include processing residue disposal costs in "Disposal/Processing Cost" Note to Recology: Input data in yellow shaded areas only.Disposal/Processing Costs Solid WasteͲNewby Island
Recyclable MaterialsͲ
Greenwaste Recovery
Organic Materials
(Facility 1)Ͳ
South Valley Organics
Organic Materials
(Facility 2)Ͳ
Blossom Valley Organics
North C&DͲNewby Island
Bulky Items/
Reusable Materials
Handling
Other
(Specify)
Disposal/Processing Cost ($/ton) $45.33 $34.50 $71.50 $90.00 $45.33 $0.00 Disposal/Processing Facility Regulatory Fees & Taxes (list separately) ________________________________________________________________________________________________________________________________________________ Total Regulatory Fees ($/ton) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Disposal/Processing Cost ($/ton) $45.33 $34.50 $71.50 $90.00 $45.33 $0.00 $0.00Processor Fee and Curbside Supplemental Revenues from CRV ($/ton) (show as a negative value)
Revenues from the Sale of Materials ($/ton)
(show as a negative value)
Net Disposal/Processing Cost ($/Ton)* $45.33 $34.50 $71.50 $90.00 $45.33 $0.00 $0.00 * If the net is a revenue, net processing cost/ton is to show as a negative amount.Transfer Costs (if applicable) Solid WasteͲNewby Island
Recyclable MaterialsͲ
Greenwaste Recovery
Organic Materials
(Facility 1)Ͳ
South Valley Organics
Organic Materials
(Facility 2)Ͳ
Blossom Valley Organics
North C&DͲNewby Island
Bulky Items/
Reusable Materials
Handling
Other
(Specify)
Transfer Station Cost ($/Ton)** $16.96 $30.52Transfer Station Regulatory Fees & Taxes (list separately) City of San Jose LEA Fee $0.52 $0.52
________________________________________________
________________________________________________________________________ Total Regulatory Fees ($/ton) $0.00 $0.00 $0.52 $0.52 $0.00 $0.00 $0.00 Total Transfer Cost ($/ton) $0.00 $0.00 $17.48 $31.04 $0.00 $0.00 $0.00 ** Transfer station fee to include all transfer facilityͲrelated costs and the longͲhaul transportation costs from thetransfer station to the processing facility.Total Disposal/Processing Costs Solid WasteͲNewby Island
Recyclable MaterialsͲ
Greenwaste Recovery
Organic Materials
(Facility 1)Ͳ
South Valley Organics
Organic Materials
(Facility 2)Ͳ
Blossom Valley Organics
North C&DͲNewby Island
Bulky Items/
Reusable Materials
Handling
Other
(Specify)
Total Net Disposal/Processing Costs Including Transfer $45.33 $34.50 $88.98 $121.04 $45.33 $0.00 $0.00 Rate Period One (February 1, 2021 through January 31, 2022) Rate Period One (February 1, 2021 through January 31, 2022) Rate Period One (February 1, 2021 through January 31, 2022)

343
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Collection Vehicle Transport Costs City of Cupertino Base Services Proposer Name: Recology Note to Recology: Input data in yellow shaded areas only.

Solid Waste Recyclables
Organic
Materials Solid Waste Recyclables
Organic
Materials Solid Waste Recyclables
Organic
Materials Solid Waste Recyclables
Organic
Materials As Needed As Needed
TruckType ASL ASL ASL ASL MSL ASL FEL FEL FEL RollͲOff RollͲOff RollͲOff N/A Collection vehicle transport rate ($ per hour)
(Total CostͲForm6/Total HoursͲForm2) $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 $291.70 Average tons per load (tons) 7.4 4.0 7.2 7.4 4.0 7.2 8.2 3.5 8.7 2.7 1.8 5.7 5.7Recology: If using more than one truck type for one or more material types, copy rows 8Ͳ10 and complete Residential Cart Collection MultiͲFamily & Commercial Cart MultiͲFamily & Commercial Bin RollͲOff Other Average
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EXHIBIT G3:

INITIAL RATES FOR COLLECTION SERVICES
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Commercial/Multi Family Recycle Rate Schedule
City of Cupertino
February 1, 2021
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+DXO5DWH       5HF\FOLQJ3URFHVV5DWHSHUWRQ      Note: Source Separated Recycling Loads will
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EXHIBIT G4:

APPROVED SUBCONTRACTORS AND AFFILIATES
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EXHIBIT G4

APPROVED SUBCONTRACTORS AND AFFILIATES
December 3, 2020 Page G4-1 City of Cupertino/Recology Franchise Exhibit G5 In accordance with Section 3.3 of the Agreement, the City has approved the following Subcontractors and Affiliates to manage the specified services and otherwise assist Contractor in the performance of the requirements of this Agreement.

Approved Facility/Subcontractor/Affiliate Services
GreenWaste Recovery Recyclables Processing
Recology Blossom Valley Organics – North Commercial/Multi-Family Organics Processing South Valley Organics Residential (Single-Family) Organics Processing Toter Inc New Cart rollout
Keith Day Trucking Transfer of Organics from Rogers Ave. to Processing facilities; hauling of compost and
mulch for City
Clean Earth E-Waste and U-Waste Recycling
Viking Shred Document shredding for Environmental Days
Simms Metal White goods/metal Recycling
Safety Klean Used Motor Oil and Filters Recycling
Sequential Recycling Used cooking oil Recycling
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EXHIBIT H:

MINIMUM ANTICIPATED POSITIONS
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EXHIBIT H

MINIMUM ANTICIPATED POSITIONS
December 3, 2020 Page H-1 City of Cupertino/Recology Franchise Exhibit H Positions detailed in this Exhibit H are the minimum anticipated positions needed for the provision of Recyclable Materials, Organic Materials, and Solid Waste Collection services and other related services in the City.

Table 1 represents management positions classified as salary, exempt.

Table 2 represents non-management positions classified as hourly, non-exempt.

Table 1: Management Positions
Position Classification FTE
General Manager Management, Exempt 0.6
Operations Manager Management, Exempt 0.6
Route Supervisor Management, Exempt 1.1
Dispatcher Management, Exempt 0.6
Container Distribution Management, Exempt 0.6
Container Maintenance / Welder Management, Exempt 1.1
Maintenance Supervisor Management, Exempt 0.6
Maintenance Personnel Management, Exempt 2.8
Office Manager Management, Exempt 0.6
Accounting Clerk Management, Exempt 0.6
Financial & Reporting Analyst Management, Exempt 0.75
Customer Service Representatives Management, Exempt 1.1 Waste Zero Specialists Management, Exempt 2.0
Total Management Positions 12.8
Table 2: Non-Management Positions
Position Classification FTE
Route Personnel – Cart Solid Waste Non-Management, Non-Exempt 4.8 Route Personnel – Cart Recyclables Non-Management, Non-Exempt 4.9 Route Personnel – Cart Organics Non-Management, Non-Exempt 3.7 Route Personnel – COM Cart Solid Waste Non-Management, Non-Exempt 0.2 Route Personnel – COM Cart Recyclables Non-Management, Non-Exempt 1.0 Route Personnel – COM Cart Organics Non-Management, Non-Exempt 0.1 Route Personnel – COM Bin Solid Waste Non-Management, Non-Exempt 2.8 Route Personnel – COM Bin Recyclables Non-Management, Non-Exempt 2.1 Route Personnel – COM Bin Organic Materials Non-Management, Non-Exempt 1.1 Route Personnel – Roll-Off Non-Management, Non-Exempt 2.7 Route Personnel – Bulky Non-Management, Non-Exempt 1.3
Non-Management, Non-Exempt
Non-Management, Non-Exempt

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EXHIBIT I:

FORM OF PERFORMANCE BOND
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EXHIBIT I

FORM OF PERFORMANCE BOND
December 3, 2020 Page I-1 City of Cupertino/Recology Franchise Exhibit I 359
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EXHIBIT J:

SB 1383 RESPONSIBILITIES
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EXHIBIT J
SB 1383 RESPONSIBILITIES
December 3, 2020 Page J-1 City of Cupertino/Recology Franchise Exhibit J The following table provides guidance regarding the allocation of broad responsibility between the Contractor and the City with regard to SB 1383 compliance. The table is based on the draft regulations issued for formal review by CalRecycle on April 20, 2020, and assumes use of the standard approach to compliance. The table is not intended to be inclusive of detailed requirements for compliance addressed in the body of the Agreement and does not relieve Contractor of or expand those specific obligations. The below table may contain terms that are specific to SB 1383 or may have capitalized terms with different meanings than this Agreement. In the event of any conflict between this exhibit on the one hand, and the body of the Agreement, any other exhibit, or SB 1383 on the other hand, the latter shall govern.

Topic/
Ref. # SB 1383 Requirement City Responsibility Contractor Responsibility Collection

1. Commencing January 1, 2022, provide
Collection Containers to Generators that comply with color requirements when replacing Containers or by January 1, 2036, whichever comes first (§18984.7).

The City is to review, comment on, and approve Container colors.

Contractor to provide Containers to the City and its Customers that comply with SB 1383 requirements. Container colors shall be as such: green for Organic Materials; blue for Recyclable Containers; gray for Solid Waste Containers.

2. Commencing January 1, 2022, clearly
label or imprint all new Containers or lids to include language or graphic materials indicating primary materials that are accepted and rejected in each Container (§18984.8).

The City is to review, comment on, and approve Container labels.

In accordance with Section 5.6, Contractor to place Cityapproved labels on all new or refurbished Containers; labels should include text and/or graphic images that indicate primary materials that are accepted and primary materials that are not accepted for each Container type. Labels shall be placed on new Containers before or at time of initial Container delivery to Customer or to the City. By the end of Agreement Term, every Customer Container shall have SB 1383-compliant labels.

Contamination Monitoring

3. Commencing April 1, 2022, conduct
Route reviews such that all Hauler Routes are inspected annually. During each Route review, inspect randomly selected Containers for contaminants and determine Organic Waste Generator compliance (Organic Waste Generators must subscribe to collection service or self-haul Organic Materials; commercial Organic Waste Generators are also required to provide color-compliant Containers to their Customers).

The City is to review, comment on, and approve Route review plan and methodology provided by Contractor. The City is to review, comment on, and approve content and design of notices to be distributed by Contractor to noncompliant Generators.

Contractor shall develop a plan and methodology, to be approved by the City, for conducting annual Route reviews such that an adequate number of Containers are inspected on all Routes annually. The number of Containers that must be inspected per Route shall be based on guidelines provided below, as referenced in Section 18984.5. The draft regulations do not specify what an "adequate" number of Containers per Route review entails; however, Section 18984.5 determines adequacy for a different type of contamination study based on Route populations. As such, these guidelines will be utilized for Route reviews. 362
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EXHIBIT J
SB 1383 RESPONSIBILITIES
December 3, 2020 Page J-2 City of Cupertino/Recology Franchise Exhibit J Topic/
Ref. # SB 1383 Requirement City Responsibility Contractor Responsibility If contamination is found during Route reviews or if inspected Generators are out of compliance, notify such Generators of recycling requirements (§18984.5.b; 18995.1; 18984.9). “Route review(s)” means a visual inspection of Containers along a Hauler Route for the purpose of determining contamination, and may include mechanical methods such as the use cameras (§18982). “Hauler Route” means the designated itinerary or sequence of stops for each segment of the jurisdictions collection services.

1. For Routes with less than 1,500 Generators the study shall include a minimum of 25 samples;2. For Routes with 1,500-4,000 Generators the study shall include a minimum of 30 samples;3. For Routes with 4,001-7,000 Generators the study shall include a minimum of 35 samples;4. For Routes with more than 7,000 Generators the study shall include a minimum of 40 samples.In the event that Contractor identifies contamination, Contractor shall be responsible for affixing a Cityapproved notice on to Customer's Containers, documenting the location or account where contamination was present. Contractor shall provide monthly reports to the City summarizing the results of each Route review and recording, at a minimum, each contamination location, corresponding photographic evidence, and date of Customer contamination identified. 363
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EXHIBIT J
SB 1383 RESPONSIBILITIES
December 3, 2020 Page J-3 City of Cupertino/Recology Franchise Exhibit J Topic/
Ref. # SB 1383 Requirement City Responsibility Contractor Responsibility Enforcement & Penalties

4. Commencing January 1, 2022, conduct
annual compliance reviews of commercial Solid Waste accounts that produce over two (2) cubic yards of Solid Waste per week, including organics waste (§18995.1.a).

The City shall, if applicable, provide Contractor with a list of commercial accounts that have received Cityapproved organics collection waivers. The City shall approve format and content of all compliance reports provided by Contractor. The City shall receive Contractor's report, review and clarify as needed, and report to the State. The City shall follow-up with Contractorindicated commercial accounts that may Back-Haul Organic Materials.

Annually, Contractor shall review all Commercial garbage accounts that produce over two (2) cubic yards of Solid Waste per week and that produce organics waste to ensure compliance with organics Generator requirements described in Section 18984.9.a (subscription to organics recycling service). Following each compliance review, Contractor shall provide the City with a report of results, including addresses, and service level information in a format accepted and approved by the City. Additionally, Contractor shall provide to the City, in quarterly reports, a list of Commercial Customers that may be Back-Hauling Organic Materials. The list shall include account information including addresses and service levels.

5. From January 1, 2022 through December
31, 2023, provide educational materials to regulated entities not in compliance with SB 1383, as determined by compliance review of Commercial accounts (§18995.1.a).

The City is to develop content and design of compliance notices for Customers.

Contractor shall produce and distribute City-developed compliance notices to all noncompliant Customers of Contractor annually.

6. Commencing January 1, 2022, conduct
inspections of Tier One Commercial Edible Food Generators for compliance with Section 18991.3. Beginning January 1, 2024, conduct inspections of Tier Two Commercial Edible Food Generators for compliance with Sections 18991.3 (§18995.1.a.2). See Item 16 for outreach requirements related to Edible Food.

The City and Contractor will meet and confer annually to determine how to share this inspection requirement.

The City and Contractor will meet and confer annually to determine how to share this inspection requirement.

7. Commencing January 1, 2022, conduct
inspections of Edible Food recovery
The City is to conduct inspections of Food Recovery Services and organizations.

None.
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EXHIBIT J
SB 1383 RESPONSIBILITIES
December 3, 2020 Page J-4 City of Cupertino/Recology Franchise Exhibit J Topic/
Ref. # SB 1383 Requirement City Responsibility Contractor Responsibility organizations and services for compliance with Sections 18991.5. See Item 16 for outreach requirements related to Edible Food.

8. Commencing January 1, 2022, investigate
written Complaints received within ninety (90) days of receiving Complaint; provide method for Customer who made Complaint to determine results of Complaint; maintain records of all Complaints and responses; take enforcement action if it is determined that a violation has occurred (§18995.3).

The City is to investigate and maintain records of all SB 1383-related Complaints received by Contactor that have not been resolved within thirty (30) days of receiving Customer Complaint. Upon resolving the Complaint, Contractor shall notify the Customer who made the Complaint. From January 1, 2022 to December 31, 2023, if, upon investigation, the City discovers a violation has occurred, the City shall provide educational materials to noncompliant Customers. Commencing January 1, 2024, if, upon investigation, the City discovers a violation has occurred, the City shall take enforcement action against noncompliant Customers.

Contractor to investigate and resolve written Complaints made by Customers alleging SB 1383 violations within thirty (30) days of receiving Customer Complaint. Upon resolving the Complaint, Contractor shall notify the Customer who made the Complaint. From January 1, 2022 to December 31, 2023, if, upon investigation, Contractor discovers a violation has occurred, Contractor shall provide City-approved educational materials to noncompliant Customers. Commencing January 1, 2024, if, upon investigation, Contractor discovers a violation has occurred, Contractor shall provide the City, in monthly reports, with a list of such noncompliant Customers. Contractor shall maintain all compliant records, including documentation of resolution. Contractor to provide the City, in monthly reports, a list of Customer Complaints that have not been resolved within thirty (30) days. The Complaints list shall include Customer account information including the nature of the Complaint. Such Complaints shall be discussed during the monthly Franchise Roundtable Meeting.

9. Commencing January 1, 2024, take
enforcement actions, including issuing notices of violations within sixty (60) days of determining a violation has occurred, following up at least every ninety (90) days to issue further notices if compliance is not achieved, grant The City is to issue penalties to noncompliant Generators based on Contractor-led inspections and monthly reports submitted by Contractor that identify noncompliant Generators.

Contractor to maintain records of noncompliant Generators and report via monthly reports to the City on issuance of noncompliant notices (e.g., contamination tags issued, Route review results, commercial account review). 365
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EXHIBIT J
SB 1383 RESPONSIBILITIES
December 3, 2020 Page J-5 City of Cupertino/Recology Franchise Exhibit J Topic/
Ref. # SB 1383 Requirement City Responsibility Contractor Responsibility compliance deadline extensions if applicable, and impose penalties equivalent to or greater than those outlined in Articles 14 and 16 of SB 1383 (§18995.4). Impose penalties on non-compliant entities (§18997.2).

Education & Outreach

10. By February 1, 2022, and annually
thereafter, provide Generators with information on properly separating materials, Organic Waste prevention, onsite recycling, Community Composting, methane reduction benefits, how to Recycle Organic Waste, a list of approved haulers, and information related to food recovery (§18985.1.a).

The City is to develop content and design of outreach materials and distribute outreach materials to all Customers annually. The City is to provide outreach materials to Contractor for website posting.

Contractor to post City-developed educational material on its website annually or as requested by the City. Contractor shall post material on its website within one week of the City’s initial request and review and make updates/changes to website on a monthly basis to ensure accuracy of information. Contractor to disseminate City-approved educational materials as requested by the City.

11. Translate educational materials required
into any non-English language spoken by a substantial number of the public provided Organic Waste collection services by the jurisdiction (§18985.1.e).

The City is to translate City-developed outreach materials and translate such materials as needed. The City is to provide translated outreach materials to Contractor for website posting.

Contractor to post City-developed educational material that has been translated by the City on its website annually or as requested by the City. Contractor shall post material on its website within one week of the City’s initial request. 366
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EXHIBIT J
SB 1383 RESPONSIBILITIES
December 3, 2020 Page J-6 City of Cupertino/Recology Franchise Exhibit J Topic/
Ref. # SB 1383 Requirement City Responsibility Contractor Responsibility Record Keeping & Reporting

12. By April 1, 2022, file an initial compliance
report that includes copies of adopted ordinances, items required for the annual report under Section 18994.2.b, and contact information for the responsible Party for compliance-related issues (§18994.1). Commencing August 1, 2022, submit an annual report relative to compliance with SB 1383; the first report is due October 1, 2022 for the period of January 1, 2022 to June 30, 2022 (§18994.2).

The City is to compile and submit relevant documentation for the initial compliance report and the annual report. The City shall compile documentation that details the City's: hauler oversight; CALGreen building standard utilization; edible food recovery program; Organic Waste recycling and edible food recovery capacity planning; and, Organic Waste product procurements.

No later than February 1, 2022, and within two weeks of the City request, Contractor shall supply the City with reports documenting Organic Waste collection services; contamination monitoring; education and outreach efforts; and, the monitoring and enforcement program.

13. Maintain all implementation records in a
central location (physical or electronic) that can be made available to or accessed by CalRecycle within ten Business Days (§18981.1, 18984.4.a, 18984.6, 18984.14, 18985.3, 18988.4, 18991.2, 18993.2, 18995.2).

The City is to maintain all implementation records including: ordinances, enforceable mechanisms, contracts, or agreements; waiver and exemption records; hauler program records; edible food recovery program records; and organic waste procurement records.

Contractor shall enter required data including documentation of organic waste collection services; contamination monitoring; education and outreach efforts; and, monitoring and enforcement into a Citydesignated reporting platform (e.g., Recyclist, Microsoft Excel, a database) within five (5) Business Days of any change affecting data within any required reporting category and within one (1) Business Days of notification from CalRecycle request to review implementation record. In the event such information is not entered into a shared electronic platform, Contractor shall convey data to the City within the required period.

Organic Materials Procurement

14. Procure a quantity of recovered organic
waste that meets or exceeds the organic waste product procurement target as determined by the CalRecycle (CalRecycle will confirm and provide notice of annual procurement requirements to jurisdictions every five years) (§18993.1).

The City is to procure a quantity of Compost and Mulch from Contractor annually. The exact quantity for procurement shall be determined by the Parties.

Contractor to Transport Organic Materials collected from Customers to the Approved Facility. Contractor shall, at the City’s option, procure fuels derived from organics disposal (biofuels) to power collection vehicles. 367
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EXHIBIT J
SB 1383 RESPONSIBILITIES
December 3, 2020 Page J-7 City of Cupertino/Recology Franchise Exhibit J Topic/
Ref. # SB 1383 Requirement City Responsibility Contractor Responsibility

15. Procure Paper Products, and printing and
writing paper consistent with the requirements of Section 22150-22154 of the Public Contracts Code. These Paper Products shall be Recyclable (as defined in 16 C.F.R. 260.12). Jurisdiction shall require all businesses that it purchases Paper Products and printing/writing paper from to certify minimum percentage of postconsumer material in the Paper Products (§18993.3).

The City is to update Environmentally Preferable Purchasing Policy with requirements set forth in SB 1383.

Contractor to develop or update existing Purchasing Policy to meet minimum SB 1383 paper procurement requirements.

Edible Food Recovery

16. Commencing January 1, 2022, annually
provide Tier One and Tier Two Edible Food Generators with information about the food recovery program, Generator requirements, Food Recovery Organizations and services, and edible food source-reduction information (§18985.2).

The City is to develop and distribute annual outreach materials for Commercial Edible Food Generators businesses.

Contractor to post City-developed educational material on its website annually or as requested by the City. Contractor shall post material on its website within one week of the City’s initial request and review and make updates/changes to website on a monthly basis to ensure accuracy of information. 368
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EXHIBIT K:

GUARANTY AGREEMENT
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EXHIBIT K

GUARANTY AGREEMENT
December 3, 2020 Page K-1 City of Cupertino/Recology Franchise Exhibit K THIS GUARANTY (the "Guaranty") is given as of the [___] day of [________], 2020, by Recology Inc., ("Guarantor"), to the CITY OF CUPERTINO ("CITY").

THIS GUARANTY is made with reference to the following facts and circumstances:

A. Recology South Bay (d/b/a Recology Cupertino) (“Contractor”) is a corporation organized under the laws of the State of California, all of the issued and outstanding stock of which is owned by Guarantor.

B. Guarantor is a corporation organized under the laws of the State of California.

C. Contractor and City have negotiated a Franchise Agreement for Recyclable Materials, Organic Materials, and Solid Waste Collection, Recyclable Materials and Organic Materials Processing Services, and Transport For Disposal (such agreement, as it may be amended, modified or waived from time to time, the “Agreement”), under which Contractor is to provide specified services to City. A copy of this Agreement is attached hereto and incorporated herein by this reference.

D. It is a requirement of the Agreement, and a condition to City's entering into the Agreement, that Guarantor guaranty Contractor's performance of the Agreement.

E. Guarantor is providing this Guaranty to induce City to enter into the Agreement.

NOW, THEREFORE, in consideration of the foregoing, Guarantor agrees as follows:

1. Guaranty of the Agreement. Guarantor hereby irrevocably and unconditionally guarantees to City the complete and timely performance, satisfaction and observation by Contractor of each and every term and condition of the Agreement which Contractor is required to perform, satisfy or observe. In the event that Contractor fails to perform, satisfy or observe any of the terms or conditions of the Agreement, Guarantor will promptly and fully perform, satisfy or observe them in the place of the Contractor. Guarantor hereby guarantees prompt payment to City of each and every sum due from Contractor to City under the Agreement, as and when due from time to time, and the prompt performance of every other task and duty required to be performed by the Contractor under the Agreement.

2. Guarantor’s Obligations Are Absolute. The obligations of the Guarantor hereunder are direct, immediate, absolute, continuing, unconditional and unlimited and, with respect to any payment obligation of Contractor under the Agreement, shall constitute a guarantee of payment and not of collection, and are not conditioned upon the genuineness, validity, regularity or enforceability of the Agreement.

3. Waivers and Subordination. The Guarantor shall have no right to terminate this Guaranty or to be released, relieved, exonerated or discharged from its obligations under Section 1 hereof for any reason whatsoever, including, without limitation: (1) the insolvency, bankruptcy, reorganization or cessation of existence of the Contractor; (2) any amendment, modification or waiver of any provision of the Agreement or the extension of its Term; (3) the actual or purported rejection of the Agreement by a trustee in bankruptcy, or any limitation on any claim in bankruptcy resulting from the actual or purported termination of the Agreement; (4) any waiver, extension, release or modification with respect to any of the obligations of the 371
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EXHIBIT K

GUARANTY AGREEMENT
December 3, 2020 Page K-2 City of Cupertino/Recology Franchise Exhibit K Agreement guaranteed hereunder or the impairment or suspension of any of City's rights or remedies against Contractor; or (5) any merger or consolidation of the Contractor with any other organization, or any sale, lease or transfer of any or all the assets of the Contractor.

The Guarantor hereby waives any and all rights, benefits and defenses under California Civil Code Sections 2809, 2815, 2819, 2845, 2849 and 2850, and all other rights permitted to be waived by Section 2856(a) including, without limitation, the right to require City to (a) proceed against Contractor, (b) proceed against or exhaust any security or collateral City may hold now or hereafter hold, or (c) pursue any other right or remedy for Guarantor’s benefit, and agree that City may proceed against Guarantor for the obligations guaranteed herein without taking any action against Contractor or any other guarantor or pledgor and without proceeding against or exhausting any security or collateral City may hold now or hereafter hold. City may unqualifiedly exercise in its sole discretion any or all rights and remedies available to it against Contractor or any other guarantor or pledgor without impairing City’s rights and remedies in enforcing this Guarantee.

The Guarantor hereby waives and agrees to waive at any future time at the request of City, to the extent now or then permitted by applicable law, any and all rights which the Guarantor may have or which at any time hereafter may be conferred upon it, by statute, regulation or otherwise, to avoid any of its obligations under, or to terminate, cancel, quit or surrender this Guaranty. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not affect the liability of the Guarantor hereunder:
(a) at any time or from time to time, without notice to the Guarantor, the time for Contractor's performance of or compliance with any of its obligations under the Agreement is extended, or such performance or compliance is waived; (b) the Agreement is modified or amended in any respect; (c) any other indemnification with respect to Contractor's obligations under the Agreement or any security therefore is released or exchanged in whole or in part or otherwise dealt with; (d) any assignment of the Agreement is effected which does not require City's approval; or (e) any termination or suspension of the Agreement arising by reason of a default by Contractor.

The Guarantor hereby expressly waives diligence, presentment, demand for payment or performance, protest and all notices whatsoever, including, but not limited to, notices of nonpayment or non-performance, notices of protest, notices of any breach or default, and notices of acceptance of this Guaranty. If all or any portion of the obligations guaranteed hereunder are paid or performed, Guarantor’s obligations hereunder shall continue and remain in full force and effect in the event that all or any part of such payment or performance is avoided or recovered directly or indirectly from City as a preference, fraudulent transfer or otherwise, irrespective of (a) any notice of revocation given by Guarantor or Contractor prior to such avoidance or recovery, or (b) payment in full of any obligations then outstanding.

The Guarantor expressly subordinates and waives its rights to subrogation, reimbursement, contribution or indemnity with respect to performance by Guarantor of the obligations of Contractor guaranteed hereby, until such time as City receives payment or performance in full of all such obligations.
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EXHIBIT K

GUARANTY AGREEMENT
December 3, 2020 Page K-3 City of Cupertino/Recology Franchise Exhibit K

4. Term. This Guaranty is not limited to any period of time, but shall continue in full force and effect until all of the terms and conditions of the Agreement have been fully performed by Contractor, and Guarantor shall remain fully responsible under this Guaranty without regard to the acceptance by City of any performance bond or other collateral to assure the performance of Contractor's obligations under the Agreement. Guarantor shall not be released of its obligations hereunder so long as there is any claim by City against Contractor arising out of the Agreement based on Contractor's failure to perform which has not been settled or discharged.

5. No Waivers by City. No delay on the part of City in exercising any rights under this Guaranty or failure to exercise such rights shall operate as a waiver of such rights. No notice to or demand on Guarantor shall be a waiver of any obligation of Guarantor or right of City to take other or further action without notice or demand. No modification or waiver by City of any of the provisions of this Guaranty shall be effective unless it is in writing and signed by City and by Guarantor, nor shall any waiver by City be effective except in the specific instance or matter for which it is given.

6. Attorney's Fees. In addition to the amounts guaranteed under this Guaranty, Guarantor agrees to pay actual attorney's fees and all other costs and expenses incurred by City in enforcing this Guaranty, or in any action or proceeding arising out of or relating to this Guaranty, including any action instituted to determine the respective rights and obligations of the parties hereunder.

7. Governing Law; Jurisdiction. This Guaranty is and shall be deemed to be a contract entered into in and pursuant to the laws of the State of California and shall be governed and construed in accordance with the laws of California without regard to its conflicts of laws rules for all purposes, including, but not limited to, matters of construction, validity and performance.

Guarantor agrees that any action brought by City to enforce this Guaranty may be brought in any court of the State of California and Guarantor consents to personal jurisdiction over it by such courts. Guarantor appoints the following person as its agent for service of process in California:

Roxanne L. Frye
Recology Inc.
50 California Street, 24th Floor
San Francisco, CA 94111

8. Severability. If any portion of this Guaranty is held to be invalid or unenforceable, such invalidity shall have no effect upon the remaining portions of this Guaranty, which shall be severable and continue in full force and effect.

9. Binding on Successors. This Guaranty shall inure to the benefit of City and its successors and shall be binding upon Guarantor and its successors, including a successor entity formed by a merger or consolidation, a transferee of substantially all of its assets, and its shareholders in the event of its dissolution or insolvency.
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EXHIBIT K

GUARANTY AGREEMENT
December 3, 2020 Page K-4 City of Cupertino/Recology Franchise Exhibit K

10. Authority. Guarantor represents and warrants that it has the corporate power to give this guaranty, that its execution of this Guaranty has been authorized by all necessary action under its Articles of Incorporation and by-laws, and that the person signing this Guaranty on its behalf has authority to do so.

11. Notices. Notice shall be given in writing, deposited in the U.S. mail, registered or certified, first class postage prepaid, addressed as follows:

To City: City of Cupertino
Attention: City Manager
10300 Torre Avenue
Cupertino, California, 95014,
To Guarantor: Recology Inc.

Attn: Legal Department
50 California Street, 24th Floor
San Francisco, CA 94111
The parties may change the address to which notice is to be sent by giving the other party notice of the change as provided in this Section.

IN WITNESS WHEREOF, Guarantor has executed this Guaranty on the day and year first above written.

By:

Michael J. Sangiacomo
Chief Executive Officer
By:

Cary Chen
Corporate Secretary
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EXHIBIT L:

DIVERSION DATA
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Managing Tomorrow’ s Resources Today
590 Ygnacio Valley Road, Suite 105 John W. Farnkopf, PE Walnut Creek, California 94596 Laith B. Ezzet, CMC
Telephone: 925/ 977-6950 Richard J. Simonson
www.hfh-consultants. com Marva M. Sheehan, CPA
Robert C. Hilton
November 27, 2023
Ursula Syrova
Environmental Programs Manager
Public Works
10300 Torre Avenue
Cupertino, CA 95014
Subject: Review of Recology South Bay Rate Period Four Contractor’ s Compensation Application Reference Number: S7018
Dear Ursula Syrova:

HF& H Consultants, LLC’ s (HF& H) is pleased to present our findings and recommendations to the City of Cupertino ( City) from our review of Recology South Bay’s (Recology) Rate Period Four (RP 4) Contractor’ s Compensation Application (Application), which was submitted on August 1, 2023. This report presents our findings and recommendations and is organized into the following three sections:

I. Summary and Recommendations
II. Background
III. HF& H Analysis
It should be noted that this report is based solely on our review of Recology’ s Application prepared in accordance with the methodology prescribed in its franchise agreement ( Agreement) with the City.

I. SUMMARY AND RECOMMENDATIONS
A. Review of Recology’s RP 4 Rate Application (for rates effective 2/ 1/ 24) Recology’ s Application calculated a revenue requirement of $20,505,312 to provide current franchised services for RP 4 (see Table 1).

Attachment C
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November 27, 2023

Table 1: Recology’ s RP 4 Rate Application
Note: Numbers may not sum exactly due to rounding.

Based on our recommended adjustments to the Application, we have determined that a total revenue requirement of $19,475,934 is appropriate and consistent with the rate setting methodology described in the Agreement. These adjustments result in a 5.02% overall rate increase to provide the services currently 378
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required in the Agreement. The City may apply a different rate increase by sector or use City funds in order to generate the overall 5.02% rate increase. HF& H’s adjustments to Recology’ s Application are described in more detail in Section III.C below. We have reviewed our findings with Recology, and Recology agrees with the proposed rate adjustment unless otherwise noted in this letter report.

II. BACKGROUND
A. General
The Agreement with Recology for recyclable materials, organic materials, and solid waste collection, recyclable materials and organic materials processing services, and transport for disposal commenced in February 2021. In accordance with Article 8.2.B of the Agreement, Recology’ s maximum rates for RP 1-3 were determined at the start of the Agreement. In accordance with Article 8.2.C of the Agreement, Recology’ s compensation shall be adjusted annually in subsequent rate periods, beginning with RP 4 through the remaining term of the Agreement, including any extension periods. The adjustments to Recology’ s compensation shall be determined using one of two methodologies: ( i) an index-based adjustment or (ii) a cost-based adjustment ( detailed rate review).

In RP 4, rates shall be adjusted using the cost-based methodology as described in Exhibit E2 of the Agreement. The cost-based methodology involves review of Recology’ s actual cost of operations and operational statistics ( staffing levels, routes, route hours, customers, and their service levels, etc.) to determine the actual allowable total annual cost of operations for the most-recently completed rate period to forecast Recology’ s allowable costs for RP 4.

The intent of performing the cost-based adjustment is to examine the actual costs to serve the City’ s ratepayers, instead of relying on Recology’ s proposed costs from the proposal process. This methodology takes into consideration the impacts of changes in inflation, deflation, number of customers, and the service levels of each customer to determine Recology’ s allowable compensation.

Additionally, because the rates for RP 1-3 were set at the start of the Agreement, the City wishes to use this rate adjustment process to reconcile any significant cost areas that Recology was compensated for, but did not incur, or that the City incorporated into the projected Solid Waste Fund Operations Fee that the City did not yet incur costs for, and integrate the impact in this year’ s rate adjustment.

III. HF&H ANALYSIS
A. Scope of Work
Our approach to this engagement was to work objectively to follow the compensation adjustment terms of the Agreement between Recology and the City. When performing the procedures described in the Agreement for the cost-based adjustment, we relied on Recology’ s audited financial statements, current year-to-date financial results of operations data, copies of transactions, reports of operations, and other information provided by Recology, Recology’ s proposal to the City, and industry standards. 379
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The results of our review and our findings were documented by the HF& H staff that performed the engagement and were consequently objectively reviewed by our Engagement Manager. This documentation and subsequent HF& H adjustments were made available to Recology and the City for review. While taking direction from the City, we worked cooperatively with Recology in an open and transparent manner to ensure that Recology understood our procedures and preliminary findings. In this capacity, the City and Recology had the opportunity to correct any misunderstandings and understand the reasons for any adjustments to the Application that we recommended.

HF& H staff performed this review based upon procedures agreed upon by the City and HF& H, as documented in our proposal, and the agreement between the City and Recology. These procedures included the following activities:

We reviewed the Application to ensure its completeness and compliance with the methodology described in the Agreement.

We reviewed the Application for mathematical accuracy and internal consistency. We also checked that the summary schedules agreed to the supporting schedules and worksheets.

We verified Recology correctly calculated their RP 4 compensation using the allowable expenses and the correct percentage changes in CPI in accordance with the Agreement.

We reviewed the Application by performing: a review of revenue; a verification of solid waste tonnage and disposal expenses; a review of organic material tonnage and processing expenses; and a review of recyclable commodity revenue and processing costs.

We compared actual RP 2 costs to projections and inquired about any significant unexplainable variances.

We verified that the estimated RP 3 gross receipts were correctly calculated according to the methodology per the Agreement.

We reviewed the costs to process multi-family and commercial solid waste, which did not occur during RP 1-3, and discussed with the City options to integrate these funds in the rate adjustment process.

We reviewed the updated Solid Waste Fund Operations Fee with the City to integrate into the rate application.

We met with the City and Recology to review the recommended adjustments to the Application described herein.

We prepared a written draft and final report to document our findings and recommendations to share at the Council meeting.

B. Limitations
Our review was substantially different in scope than an examination in accordance with Generally Accepted Auditing Standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Such a review was conducted, and an opinion expressed by Recology’ s independent accountants BFBA, LLP. 380
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Our conclusions are based on the review of Recology’ s projections of its financial results of operations.

Actual results of operations will usually differ from projections because events and circumstances frequently do not occur as expected, and the difference may be significant.

C. Review of RP 4 Application (February 1, 2024 – January 31, 2025) The City engaged HF& H to perform a review of Recology’ s Application submitted in accordance with Section 8.2.C of the Agreement. Recology submitted the Application on August 1, 2023. HF& H’s procedures included the following steps:

Step 1: Verification of the Mathematical Accuracy
HF& H reviewed Recology’ s Application to determine completeness, mathematical accuracy, reasonableness, and logical consistency of the assumptions supporting the projected revenues and expenses. This included:

Verification that all cost indices used to project expenses conformed to Exhibit E2 of the Agreement; Verification of the mathematical accuracy of Recology’ s compensation adjustment calculations; and, Verification of the consistency and integrity of the spreadsheets housing calculations.

HF& H found that Recology’ s application was mathematically correct and used the correct indices. No adjustments required.

Step 2: Determine Current Cost Components
As required by Exhibit E2.2.A.1 of the Agreement, we found that Recology did correctly use the actual expenses incurred for RP 2 ( Labor-related, Vehicle-related costs, fuel, etc.) as the starting point for calculating their RP 4 allowable compensation. However, Recology did not exclude all non-allowable costs as detailed in Exhibit E2.2.A.2. HF& H adjusted allocated costs to remove non-allowable costs related to legal services, citations, and tax penalties. The dollar effect of this adjustment is included with Step 3 F below.

Step 3: Adjust Specific Cost Component
A. Labor-Related Costs
Section 2.A.3.a of Exhibit E2 states that the projected labor-related costs for the coming rate period shall be calculated by (i) multiplying the allowed labor-related cost, both direct and allocated, for the most recently completed Rate Period by one plus the Annual Percentage Change in the CPI-U, and ( ii) multiplying the result of step one once more by one plus the Annual Percentage Change in the CPI-U. We reviewed and verified the reasonableness of Recology’ s actual RP 2 labor-related expenses and inquired about any large variances from projected RP 2 costs, noting no unexplainable variances. Adjustments were made pursuant to the 5% cap on total annual operating costs as further described in Step 3 H below. 381
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B. Vehicle-Related Costs (excluding fuel and depreciation costs) Section 2.A.3.b. of Exhibit E2 states that projected vehicle-related costs for the coming rate year shall equal the allowable vehicle-related costs (i) multiplied by one plus the percentage change in the Moter Vehicle Index and (ii) multiplying the result of step one by the same percentage change used in step one.

Adjustments were made pursuant to the 5% cap on total annual operating costs as further described in Step 3 H below.

C. Fuel Costs
Section 2.A.3.c of Exhibit E2 states that projected fuel costs for the coming rate year shall equal the allowable fuel costs (i) multiplied by one plus the percentage change in the Fuel Index and (ii) multiplying the result of step one by the same percentage change used in step one. We reviewed and verified the reasonableness of Recology’ s actual RP 2 fuel expenses and inquired about any large variances from projected RP 2 costs, noting no unexplainable variances. Adjustments were made pursuant to the 5% cap on total annual operating costs as further described in Step 3 H below.

D. Other Costs
Section 2.A.3.d of Exhibit E2 states that projected other costs for the coming rate year shall equal the allowable other costs (i) multiplied by one plus the percentage change in the CPI-U and (ii) multiplying the result of step one by the same percentage change used in step one. Adjustments were made pursuant to the 5% cap on total annual operating costs as further described in Step 3 H below.

E. Depreciation
Section 2.A.3.e of Exhibit E2 states that direct depreciation shall be fixed at $905,853 per year for vehicles, containers, and facilities. Recology’ s application correctly included depreciation at $ 905,853. No adjustment recommended.

F. Allocated Costs – Labor, Vehicle, Fuel, and Other Costs Section 2.A.3.f of Exhibit E2 states that allocated costs for labor, vehicle, fuel, other, and depreciation shall equal the allowable allocated costs (i) multiplied by one plus the percentage change in the CPI-U and (ii) multiplying the result of step one by the same percentage change used in step one. However, Section

2.A.1.a through f of Exhibit E2 indicates the various indices applied by expense category apply to both direct and allocated expenses. In other words, instead of applying the CPI-U to the total allocated costs, allocated labor costs will be increased by the ECI, allocated vehicle costs will be increased by the Motor Vehicle Index, allocated fuel costs will be increased by the Fuel Index, allocated depreciation will be held flat, and other costs will be increased by the CPI-U. As such, HF& H recalculated the allocated costs for RP 4 by applying the individual labor, fuel, vehicle, and other indices to the allocated cost categories.

Allocated depreciation was held flat, the Fuel Index was less than the CPI-U, and non-allowable costs were removed from allocated costs. As such, HF& H recommends a decrease of $44,126 to reflect the net impact of non-allowable costs from Step 2 and the multiple indices on allocated costs. 382
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G. Allocated Costs – Depreciation and Start-Up Costs
Section 2.A.3.g of Exhibit E2 states that Allocated Depreciation and Start-Up Costs shall be $35,311 per year and are not annually adjusted. Recology’ s Application correctly included Allocated Depreciation and Start-Up Costs of $35,311. No adjustment recommended.

H. Total Cost of Operations
Section 2.A.3.h of Exhibit E2 states that the total of Sections A – G above shall be subject to the 5% cap as described in Section 1 of Exhibit E2. For the coming rate period, total forecasted annual cost of operations for RP 4 may not be more than a 5% increase to the total annual cost of operations for the then-current rate period (RP 3). HF& H calculated the 5% cap based on the RP 3 total annual cost of operations, which was calculated per the index methodology in Exhibit E1. HF& H noted that the sum of Sections A – G was above the 5% cap. HF& H adjusted the total forecasted annual cost of operations for RP 4 to meet the 5% cap and recommends a $909,320 decrease in total cost of operations ( exclusive of prior adjustments from Steps 2 and 3).

I. Profit
We found that Recology correctly calculated its allowable profit by applying an 72.5% operating ratio approximately an 27.5% profit) to its allowable operating costs; however, due to the calculated adjustments described above, we recommend a $361,652 decrease to Recology’ s profit.

J. Pass-Through Costs Disposal and Processing Costs – All Material Streams Solid Waste Disposal
Section 2.A.3.C.4 of Exhibit E2 states the projected cost to process solid waste disposal shall be calculated based on the total tons of materials processed during the most recently completed 12-month rate period multiplied by the allowable per-ton disposal fee.

The per-ton disposal fee adjusts every July 1. Because the City’s rate period is from February – January, the disposal fee adjusts in the middle of the rate period. Recology proposed a methodology to account for these timing differences: a weighted average based on the current rate and the most recent rate increase. The per-ton disposal fee is known for February 2024 through June 2024 ($47.59). The July 2024 January 2025 rate is the current per-ton disposal fee increased by July 1, 2023 rate increase ($47.59 x

1.022 = $50.67). The weighted average was calculated as follows: (($47.59 x 5)+($50.67 x 7))/ 12 = $48.22.

HF& H reviewed this calculation for reasonableness and agrees with Recology’ s proposed methodology.

However, Recology’ s proposed RP 4 disposal costs did not take into consideration the first amendment to the disposal agreement. The amendment states the tipping fee for the disposal and/ or recycling of Municipal Solid Waste at Newby Island as of July 1, 2024, shall be the amount adjusted pursuant to Section

5.2 and 5.4 of this Agreement plus an additional $2.00 per-ton to the adjustable portion of the tipping fee.

As a result, HF& H recommends an increase of $2.00 per-ton to July 2024 Newby Island’ s tipping fee, which 383
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modified the weighted average calculation and yielded a per-ton disposal rate of $49.39. HF& H revised the application to use this per-ton rate and noted the net impact of $13,380 in Table 2 below.

Recycling Processing
Section 2.A.3.C.1 of Exhibit E2 states the projected cost to process recyclable materials shall be calculated based on the total tons of materials processed during the most recently completed 12-month rate period multiplied by the allowable per-ton processing fee. The City’ s recycling processor is GreenWaste; however, the processing agreement is between Recology and GreenWaste, not the City and GreenWaste, and therefore the details of the processing agreement are not available for HF& H to review. HF& H received communications from GreenWaste stating the increase for RP 4 to be about $ 1.25 per ton.

Recology’ s calculation of the allowable per-ton processing fee reflected the processing expense incurred during the most recently completed 12-month rate period (RP 2) divided by tons collected in RP 2 ($31.01).

This rate was increased by $1.25 twice to calculate the RP 4 per ton rate of $33.51.

Recology further explained that the processing charge at GreenWaste has four tiers that change throughout the year. The tiers are based on contamination and include seasonal wet material; it is not a set rate throughout the year. Therefore, a full 12 months should be considered for any comparative analysis. Because we are in the middle of RP 3, a full 12 months at the current processing tiers are unavailable and an average of the available months in RP 3 (February 2023 – September 2023) would not capture the full scale of seasonal material. Therefore, Recology provided the RP 2 average rate per ton and increased it by $1.25 twice to capture this seasonality.

HF& H reviewed Recology’ s proposed methodology for RP 4 and deemed it reasonable. The RP 4 rate of

33.51 will be used as in the RP 4 cost-based rate adjustment methodology. Therefore, no adjustment required to the per ton recycling processing rate.

Organic Materials Processing
Section 2.A.3.C.2 through 3 of Exhibit E2 describes the projected cost to process organic materials shall be calculated based on the total tons of materials processed during the most recently completed 12- month rate period (i) multiplied by one plus the percentage change in the CPI-U and (ii) multiplying the result of step one by the same percentage change used in step one. No adjustment required to the perton organic materials rate.

Construction and Demolition Processing
Section 2.A.3.C.4 of Exhibit E2 describes the projected cost to process construction and demolition ( C& D) materials shall be calculated based on the total tons of materials processed during the most recently completed 12-month rate period multiplied by the allowable per-ton processing fee. Because the disposal agreement for solid waste is inclusive of C& D materials, and the first amendment only applies to solid waste, the weighted average per-ton rate for C& D is $48.22. Therefore, no adjustment required to the per-ton C& D rate.
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Tonnage Adjustment
The tonnage information submitted by Recology for RP 4 did not tie to the City’ s monthly reports. HF& H inquired with Recology, who acknowledged the tonnage was submitted in error and that it should align with the City’s monthly reports. HF& H corrected the tonnage in the application to agree with the tonnage as presented in the City’ s monthly reports.

Table 2 below summarizes the tonnage adjustments related to both per-ton calculation corrections and tonnage corrections noted above.

Table 2: HF& H Adjustment to Tons
K. Interest Expense
Section 2.C.5 of Exhibit E2 states interest expense shall be fixed at $326,655 and is not annually adjusted.

Recology’ s Application correctly included an interest expense of $326,655. No adjustment recommended.

L. Direct and Allocated Lease Costs
Section 2.C.6 of Exhibit E2 states Direct Lease Costs shall be fixed at $0, until RP 10, and is not annually adjusted. Section 2.C.7 of Exhibit E2 states Allocated Lease Costs shall be fixed at $180,00 and is not annually adjusted over the term of the Agreement. Recology’ s Application correctly included Direct and Allocated Lease Costs at $180,000. No adjustment recommended.

M. City Fees / Reimbursements
Solid Waste Fund Operations Fee: The Solid Waste Fund Operations Fee ( SWFOFee) payment for the coming Rate Period shall equal the total Solid Waste Fund Operations Fee paid to the City in the mostrecently completed 12-month period multiplied by one plus the Annual Percentage Change in the CPI-U, or such other amount as is determined by the City in accordance with Section 7.2. Recology’ s application included the RP 2 SWFOFee amount. HF& H worked with the City to determine the projected SWFOFee amount required in RP 4 and recommends an increase of $34,360 for a total SWFOFee of $1,635,697.

Rate Application Review Cost: Section 2.E.4 of Exhibit E1 states Recology is required to pay City to reimburse City for City’ s costs, including consulting and legal fees, associated with determination of Rates for the coming Rate Period. Recology did not include the cost of the rate application review in costs reimbursed to the City. HF& H recommends including $ 85,000.

Material Proposed RP4
Tons
HF& H RP4
Tons
Impact on Revenue
Requirement
Solid Waste 16,502 16,382 13,380$
RecyclableMaterials 7,251 8,026 26,021
Organic Residential 7,424 8,362 93,445
Organic Commercial 5,944 6,222 37,726
C& D 2,422 2,334 ( 4,213)
Total 39,542 41,328 166,359$
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Step 4: Other Adjustments
Section 2.F states that from time to time, it may be necessary to make other adjustments to the compensation calculation, either as mutually agreed or as required under various provisions on the Agreement.

The City plans to use reserves or other funding sources to reduce the RP 4 rate impact on customers.

HF& H’s report is reflective of the overall rate increase before the City’ s use of funds.

Step 5: Determine Projected Gross Receipts
Section 3 states that the projected gross receipts at then-current rates shall reflect projected annual gross receipts from all customers. On-call services and special charges shall be based on the prior 12 months of billing activity. Recology based its gross receipts on current subscription and rate revenue for one month in RP 3, multiplied by 12 months to annualize, and added annual debris box and compactors revenue from February 2022 – January 2023 inflated by 5%. HF& H reviewed the reasonableness of Recology’ s method of calculating projected gross receipts and performed our own build-up of rate revenue based on actual RP 2 revenue and the predetermined rate increases in RP 3. HF& H recommends the following adjustment to the projected gross receipts:

Miscellaneous service and recycling revenue were not included in Recology’ s calculation. HF& H recommend a $ 14,862 increase to Recology’ s projected gross receipts to account for miscellaneous revenue attributable to the City.

Step 6: Adjusted Revenue Requirement
The following table summarizes Recology’ s requested revenue requirement of $20,505,312 to provide current franchised services for RP 4 and HF& H’s adjusted Application. Based on our recommended adjustments to the Application described in this report, we have determined that a total revenue requirement of $19,475,934 (a decrease of $1,029,378 from Recology’ s Application) is appropriate and a recommended 5.02% overall rate increase is consistent with the rate-setting methodology described in the Agreement. The City may apply a different rate increase by customer sector or use City funds in order to generate the overall 5.02% rate increase.
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Table 3: HF& H Adjusted Rate Application
Note: Numbers may not sum exactly due to rounding.

Proposed RY4 Adjustments HF&H RP4
Labor- related Costs 5,256,746$ -$ 5,256, 746$
Vehicle- related Costs ( excluding fuel) 794,980 - 794, 980 Fuel Costs 543,089 - 543, 089
Other Costs 482,240 - 482, 240
Direct Depreciation 905,853 - 905, 853
Allocated Costs 3,362,188 ( 44,126) 3,318, 063
Allocated Costs ( Depreciation and Start- Up) 35,311 - 35,311 Total Cost of Operations 11,380,408$ ( 44,126)$ 11,336, 282$ Application of 5% Cap ( 909, 320)$
Total Cost of Operations with Cap 10,426, 962$
Profit ( assuming operating ratio of .725) 4,316,706$ ( 361,652)$ 3,955, 055$ Solid Waste Disposal Costs 795,729$ 13,380$ 809, 109$
Recyclable Materials Processing Costs 242,966 26,021 268, 987 Residential Organic Materials Processing Costs 739,034 93,445 832, 479 Commercial Organic Materials Processing Costs 805,697 37,726 843, 423 C& D Processing Costs 116,781 ( 4,213) 112, 568
Reusable Materials Handling Costs - - -
Interest Expense 326,655 - 326, 655
Direct Lease Costs - - -
Allocated Lease Costs 180,000 - 180, 000
Total Pass Through Costs 3,206,862$ 166,359$ 3,373,221$ Solid Waste Fund Operations Fee 1,601,336$ 34,360$ 1,635, 697$ Rate Application Review Costs - 85,000 85,000
Total Reimbursements to City 1,601,336$ 119,360$ 1,720,697$ Total Calculated Costs 20,505,312$ ( 1,029,378)$ 19,475, 934$ Other Adjustments (City Payments)
Calculated Costs 20,505,312$ ( 120,058)$ 19,475,934$
Revenue 18,530,975$ 14,862$ 18,545, 837$
Surplus / ( Shortfall)( 1,974,338)$ ( 930, 098)$
Required Percentage Increase / Decrease 10.65% 5.02%
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We would like to express our appreciation to Recology’ s management and staff for their assistance. In addition, we express our appreciation to you for your assistance and guidance during the course of the review. Should you have any questions, please contact Dave Hilton directly at ( 925) 977-6964 or [email protected].

Sincerely,

HF& H CONSULTANTS, LLC
Rob C. Hilton Dave Hilton
President Project Manager
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CITY OF CUPERTINO
Agenda Item
23-12784 Agenda Date: 12/5/2023
Agenda #: 7.

Subject: Adopt the OPEB and Pension Trust Investment Policies

1. Adopt Resolution No. 23-132 for the OPEB Trust Investment Policy; and

2. Adopt Resolution No. 23-133 for the Pension Trust Investment Policy CITY OF CUPERTINO Page 1 of 1 Printed on 11/29/2023
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CITY COUNCIL STAFF REPORT
Meeting: December 5, 2023
Subject
Adopt the OPEB and Pension Trust Investment Policies
Recommended Action
 Adopt Resolution No. 23-132 for the OPEB Trust Investment Policy; and  Adopt Resolution No. 23-133 for the Pension Trust Investment Policy Discussion
Background
In Fiscal Year (FY) 2009-10, the City established a Section 115 Trust to help fund its retiree health obligations, also known as other post-employment benefits (OPEB). In FY 2017-18, the City also established a Section 115 Trust to pre-fund its pension obligations and reduce the potential impact of pension cost volatility on the City's operating budget.

OPEB and Pension Trusts
Section 115 Trust Overview
A Section 115 Trust is a tax-exempt investment tool that allows local governments to prefund pension and retiree health costs. The benefits of a Section 115 Trust include the following:
 Local control over assets: The City controls the contributions, withdrawals, investment strategy, and risk level of assets in the Trust.  Potential for higher investment returns than General Fund: Investment requirements that apply to the City's General Fund assets under Government Code 53601 are not applicable to Trust assets.
 Pension rate stabilization: Assets can be transferred to CalPERS at the City's discretion to pay for Normal Cost or Unfunded Accrued Liability (UAL) contributions and can be used to reduce or eliminate large fluctuations in the City's pension costs.
 Diversification: Trust assets will be diversified from CalPERS investments. 390
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2 OPEB Trust Overview
In FY 2009-10, the City established a Section 115 Trust to help fund its retiree health obligations, also known as other post-employment benefits (OPEB). Compared to a payas-you-go plan, the OPEB Trust allows the City to:
 Grow assets to pay future OPEB benefits.
 Earn higher returns than the General Fund.
 Reduce its total cost for providing post-employment benefits.  Reduce its Net OPEB Liability.

In July 2010, the City contributed $7.0 million in initial funding. With additional contributions of $12.3 million, total contributions to date are $19.3 million.

As of June 30, 2023, the City's OPEB Trust had a market value of $31.3 million and had earned an annualized investment return of 6.18% gross of fees since inception.

Time Period Annualized Investment Return
1 Year 11.14%
5 Year 4.66%
Since Inception 6.18%
1-Year investment returns were impacted by financial market volatility due to heightened geopolitical risk, supply chain bottlenecks and persistent inflation, and the Federal Reserve’s pivot to a less accommodative monetary policy.

As of the June 30, 2023 measurement date, using a 6.5% discount rate, the City’s OPEB plan had an accrued liability of $35.3 million and a market value of assets of $34.7 million, resulting in an unfunded accrued liability of $.5 million and a funded ratio of 98.4%.

Compared to June 30, 2022, the unfunded accrued liability continued to increase and the funded ratio decreased, primarily due to changes in actuarial assumptions.

June 30, 2021 June 30, 2022 June 30, 2023*
Accrued Liability 28,626,000 29,871,000 35,290,000
Market Value of Assets 38,025,000 31,340,000 34,708,000 Unfunded Accrued Liability (9,399,000) (1,469,000) 582,000 Funded Ratio 132.8% 104.9% 98.4%
*Amounts provided from Actuarial Report, as opposed to PARS provided.

Pension Trust Overview
Since pension obligations are one of the City's largest financial obligations, the City has taken proactive steps to reduce the impacts of pension cost volatility. In March 2018, the City provided options to Council for addressing rising pension costs. In April 2018, the City presented a long-term pension funding strategy to the Fiscal Strategic Plan Committee. In May 2018, the City adopted a Section 115 Trust, also known as a Pension 391
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3 Rate Stabilization Program (PRSP), to reduce pension rate volatility on the City's budget.

The Pension Trust helps the City to:
 Grow assets for future pension contributions.
 Invest assets over appropriate time horizons.
 Earn higher investment returns than the General Fund.  Reduce pension contribution volatility.
 Diversify funds from CalPERS investments.

As a fiscal sustainability measure, the City funds the Pension Trust using a more conservative discount rate of 6.25%. The City's pension funding goal is to accumulate sufficient funds in the Pension Trust to fund the difference between a 6.25% and a 7% discount rate and achieve a funded status of 80% by FY 2036-37, 20 years from the adoption of the Pension Trust. The City's projections indicated that it would need to accumulate over $42 million in the Pension Trust within 20 years to achieve its pension funding goal.

As a result, the funding strategy proposed $8.0 million in initial funding, along with additional funding of $10.0 million over the first five years. To date, the City has contributed $16.0 million, including:
 $8.0 million in FY 2018-19
 $4.0 million in FY 2019-20
 $2.0 million in FY 2020-21
 $2.0 million in FY 2021-22
As of June 30, 2023, the City's Pension Trust had a market value of $19.1 million and had earned an annualized investment return of 5.62% gross of fees since inception.

Time Period Annualized Investment Return
1 Year 11.12%
Since Inception 5.62%
1-Year investment returns were impacted by financial market volatility due to heightened geopolitical risk, supply chain bottlenecks and persistent inflation, and the Federal Reserve’s pivot to a less accommodative monetary policy.

OPEB and Pension Trust Investment Policies
The California Government Code requires a statement of investment policy to be reviewed and adopted by the City Council on at least an annual basis. This statement is intended to provide guidelines for the prudent investment of the City’s OPEB and Pension Trust’s idle cash. The OPEB Investment Policy was adopted as part of the greater City Investment Policy in June 2010 and subsequently adopted as a standalone policy. The 392
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4 Pension Investment Policy was first approved by the Audit Committee in December 2018 and adopted in February 2019, following the Pension Trust establishment.

The Audit Committee is responsible for reviewing the OPEB and Pension Trust investment policies annually and monitoring investment performance, as stated in Cupertino Municipal Code Chapter 2.88.100 (E). The City Council is responsible for annually adopting the OPEB and Pension Trust investment policies.

As with any other investment policies, the OPEB and Pension Trust investment policies are not expected to be materially updated or updated frequently. Short-term changes in the financial markets typically would not warrant any immediate revisions to the existing policies.

On October 23, 2023, the Audit Committee reviewed both proposed policies and discussed the policies with no proposed changes. The Audit Committee unanimously voted to accept the policies and forward to City Council for adoption.

Public Agency Retirement Services (PARS) is the City’s Trust Administrator and US Bank is the City’s Investment Manager for the Pension and OPEB Trusts. The Investment Manager manages the investments per the investment policies. Within the constraints imposed by these policies, Investment Managers are expected to comply with all applicable fiduciary and due diligence requirements under the “prudent investor” rules.

OPEB and Pension Trust Investment Objectives
The OPEB Trust has a “Balanced” investment objective with a target rate of return of

6.50%, and the Pension Trust has a “Balanced” investment objective with a target rate of return of 6.25%. The “Balanced” investment objective is designed to provide a moderate amount of current income with moderate growth of capital. Investors should have sufficient tolerance for price and return volatility and substantial periodic declines in investment value. This objective is recommended for investors with a long-term time horizon. The strategic asset allocation ranges and tactical targets for this objective are listed below:

Asset Class Range Target
Fixed Income 20-40% 29%
Equities 50-70% 63%
Real Estate 0-15% 5%
Commodities 0-10% 2%
Cash 0-10% 1%
The target rates of return are based on the long-term expected rate of return for assets in the trusts and the City's time horizon for the investments. 393
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5 With strong reserves and a fully funded OPEB plan, the City can maintain a long-term investment horizon with a “balanced” investment objective. There may be periods of substantial decline in investment value, and the portfolio should expect periodic volatility. However, a 6.56% return on investment is expected over the long-term, based on the current investment objective. More conservative investment objectives such as “moderate” and “moderate-conservative” would expect less volatility and declines in investment value; however, over the long term, they would also expect lower returns.

Many agencies anticipate needing to access the funds in their respective trusts sooner and invest with more emphasis on preserving capital in the near term.

The OPEB Trust has a higher discount rate than the Pension Trust because OPEB investments are expected to have a longer time horizon. OPEB obligations are generally longer in duration, and the City expects to withdraw Pension Trust funds earlier to fund CalPERS contributions. Given that changes to the CalPERS discount rate have larger effects on the City's operating budget and are farther out of the City's control, it is important that the City be able to use the Trust to pay CalPERS contributions as needed.

Sustainability Impact
There is no sustainability impact.

Fiscal Impact
There is no direct fiscal impact at this time.

California Environmental Quality Act
Not applicable.
_____________________________________
Prepared by: Jonathan Orozco, Finance Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services Approved for Submission by: Matt Morley, Assistant City Manager Attachments:

A – OPEB Trust Investment Policy Clean
B – OPEB Trust Investment Policy Redline
C – OPEB Investment Policy Draft Resolution
D – Pension Trust Investment Policy Clean
E – Pension Trust Investment Policy Redline
F – Pension Investment Policy Draft Resolution
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Other PostEmployment Benefits
(OPEB) Investment
Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:

December 5, 2023
Responsible Department:

Administrative Services
Related Policies & Notes:

City Investment Policy, Pension Investment Policy
Overview
In response to the Government Accounting Standards Board (GASB) Statement No. 45, replaced by GASB Statement No. 74 and GASB Statement No. 75, new disclosure requirements for Other Post-employment Benefit (OPEB) Plans, the City of Cupertino has adopted a Section 115 Trust and Plan that seeks to satisfy these liabilities for certain eligible employees
Executive Summary
Account Name: City of Cupertino OPEB Trust
Account Number: 6746035000
Investment Authority: Full Investment Authority
Current Assets: $33.6 million (September 2023)
Time Horizon: Long-Term
Target Rate of Return: 6.5%
Communication Schedule: Meetings will be conducted at least quarterly U.S. Bank Portfolio Manager: Rick Rosenthal
[email protected]
213-359-7954
U.S. Bank Relationship Manager: Ryan Maxey
[email protected]
503-464-3789
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Investment Objective: ‘Balanced’
This investment objective is designed to provide a moderate amount of current income with moderate growth of capital. Investors should have sufficient tolerance for price and return volatility and substantial periodic declines in investment value. This objective is recommended for investors with a long-term time horizon.

The strategic asset allocation ranges and tactical targets for this objective are listed below:

Investment Guidelines
Overview
This document defines the investment policy, guidelines and performance objectives applicable to the assets of The City of Cupertino’s OPEB Trust. The goal of this Policy is to create an investment framework within which the assets can be actively yet prudently managed.

The purpose of this document is threefold.
 First, it will set forth an investment structure for managing the Portfolio assets. This structure is expected to produce an appropriate level of overall diversification and total investment return over the investment time horizon.  Second, it will serve as to encourage effective communications between the organization and parties involved with investment management decisions.  Third, these guidelines will provide a framework to measure ongoing investment performance.

Within the constraints imposed by these policies, Investment Managers are expected to comply with all applicable fiduciary and due diligence requirements under the “prudent investor” rules, which state: “Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.” All applicable laws, rules and regulations from various local, state, federal and international political entities that may impact the Portfolio are to be adhered to.

Asset Class Range
Benchmark
Target
Fixed Income 20-40% 29%
Equities 50-70% 63%
Real Estate 0-15% 5%
Commodities 0-10% 2%
Cash 0-10% 1%
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Diversification
Your Portfolio Manager is responsible for maintaining the balance between the various asset classes based on the investment objective’s strategic asset allocation. As a general policy, the Investment Manager will maintain reasonable diversification at all times by asset class, credit quality, issuer, sector, industry, and country.

The following parameters shall be adhered to in managing the portfolio:

Fixed Income Assets
 The fixed income investments are to maintain intermediate-term average weighted duration, between three-seven years.
 At the time of purchase, no single fixed income issuer shall exceed 2% of the total market value of the Portfolio, with the exception of U.S. Treasury or Agency obligations.  The direct high-yield portion shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged fixed income positions shall constitute no more than 10% of the total market value of the Portfolio.

Equity & Growth Assets
 The domestic equity investments are expected to be diversified at all times by size, industry, sector, and style (Large Cap, Mid Cap, and Small Cap).  At the time of purchase, no individual equity security shall exceed 2% of the total market value of the Portfolio.
 The international equity investments (including emerging markets) shall constitute no more than 20% of the total market value of the Portfolio  The real estate investments shall be captured through the use of diversified mutual funds or ETFs investing in REITs; and shall constitute no more than 15% of the total market value of the Portfolio.
 The commodities investments shall be captured through the use of diversified mutual funds or ETFs; and shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged equity positions shall constitute no more than 10% of the total market value of the Portfolio
Permitted Asset Classes and Security Types
Fixed Income & Cash Equivalent Investments:
 Domestic Certificates of Deposit (rated A-1/P-1 or better)  Domestic Commercial Paper (rated A-1/P-1 or better)
 Floating Rate Notes
 Money Market Mutual Funds
 U.S. Treasury Bonds, Bills and Notes
 U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds  Treasury Inflation-Protected Securities (TIPS)
 Municipal Bonds and Notes
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 Corporate Bonds
 Mortgage-Backed Bonds (MBS)
 Asset-Backed Bonds (ABS)
 High-Yield Bonds (rated B-/B3 or better)
 Dollar denominated Foreign Bonds and Notes
 Bond Mutual Funds
Equity Investments:
 Common & Preferred Stocks
 American Depository Receipts (ADRs)
 Domestic and International Equity Mutual Funds (Open and Closed)  Emerging Market Equity Funds or Exchange Traded Funds (ETFs) Alternative Investments:
 Commodities Mutual Funds or Exchange Traded Notes (ETNs)  REIT Investment or Pooled Strategy or Fund of REITs
 Registered Hedge Funds or Hedge Fund of Funds
Prohibited Asset Classes and Transactions
The Investment Manager is prohibited from purchasing or holding any of the following types of investments:
 Partnerships unless investing in Master Limited Partnerships invested in a mutual fund and limited in scope and allocation of Portfolio based on asset class limitations of table above
 Letter stock and other unregistered securities; physical commodities or other commodity contracts; and short sales or margin transactions
 Investments in the equity securities of any company with a record of less than three years continuous operation, including the operation of any predecessor  Investments for the purpose of exercising control of management  Direct or indirect exposure to cryptocurrencies
 Leveraged securities, other than registered Hedged Equity and Hedged Fixed Income positions
Duties and Responsibilities
1) CITY OF CUPERTINO AUDIT COMMITTEE
a) Establish, approve, and maintain investment objectives, guidelines, and policies (including this Policy).
b) Appoint Investment Managers who can be reasonably expected to adhere to the investment guidelines and meet the investment objectives as established. c) Monitor the investment performance of the Portfolio and compare actual investment performance relative to an appropriate benchmark index given the stated investment guidelines and objectives set forth in this Policy.
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d) Conduct a formal review of the Portfolio’s asset allocation, investment structure and performance annually or more frequently as the need arises. e) Periodically review the Portfolio performance against objectives. 2) CITY OF CUPERTINO CITY COUNCIL
a) Adopt the Policy by resolution of the City Council on an annual basis. 3) PORTFOLIO MANAGER
The Portfolio Manager will be responsible for carrying out the activities related to the Portfolio in accordance with the Policy including:
a) Manage the day-to-day investment of Portfolio assets in accordance with the Policy guidelines and objectives included herein.
b) Exercise full investment discretion and prudence in the selection and diversification of investments.
c) Promptly bring to the attention of the City Treasurer or designee any investment that is subsequently downgraded and fails to meet the quality guidelines, along with a recommendation of retention or disposal.
d) Provide on a quarterly basis the following investment reporting:
(i) Year-to-date rate of return
(ii) Annualized one, three, five, etc. rates of return
e) Provide annually to the City’s Audit Committee a commentary and analysis of investment performance to include an evaluation of the current and future investment environment and potential impact of the investment environment on achievement of investment objectives.

Investment Policy Statement Review
The City’s Audit Committee will review and the Cupertino City Council will adopt this Investment Policy Statement at least annually to determine whether stated investment objectives are still relevant and the continued feasibility of achieving the same. It is not expected that the Policy will change frequently. In particular, short-term changes in the financial markets should not require adjustments to the Policy.

If at any time the Portfolio Manager finds the above guidelines too restrictive or possibly injurious to investment returns, they should communicate that information immediately to the City’s Audit Committee.

City Manager’s signature: _______________________________ Date: _______________________________
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Revisions: 6.5.2018, 11.19.2019, 11.17.2020, 12.7.2021, 12.06.2022, 12.05.2023 Director of Administrative Services’ signature: _______________________________ Date: _______________________________
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1 | Page
Other PostEmployment Benefits
(OPEB) Investment
Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:

December 6, 2022 December 5, 2023
Responsible Department:

Administrative Services
Related Policies & Notes:

City Investment Policy, Pension Investment Policy
Overview
In response to the Government Accounting Standards Board (GASB) Statement No. 45, replaced by GASB Statement No. 74 and GASB Statement No. 75, new disclosure requirements for Other Post‐employment Benefit (OPEB) Plans, the City of Cupertino has adopted a Section 115 Trust and Plan that seeks to satisfy these liabilities for certain eligible employees
Executive Summary
Account Name:       City of Cupertino OPEB Trust
Account Number:     6746035000
Investment Authority:     Full Investment Authority
Current Assets:     $29.8 33.6 million (September 20222023) Time Horizon:      Long‐Term
Target Rate of Return:     6.5%
Communication Schedule: Meetings will be conducted at least quarterly U.S. Bank Portfolio Manager:   Rick Rosenthal
[email protected]
213‐443‐1848 213‐359‐7954
U.S. Bank Relationship Manager: Ryan Maxey
[email protected]
503‐464‐3789
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Investment Objective: ‘Balanced’
This investment objective is designed to provide a moderate amount of current income with moderate growth of capital.Investors should have sufficient tolerance for price and return volatility and substantial periodic declines in investment value. This objective is recommended forinvestors with a long‐term time horizon.

The strategic asset allocation ranges and tactical targets for this objective are listed below:

Investment Guidelines
Overview
This document defines the investment policy, guidelines and performance objectives applicable to the assets of The City of Cupertino’s OPEB Trust. The goal of this Policy is to create an investment framework within which the assets can be actively yet prudently managed.

The purpose of this document is threefold.
 First, it will set forth an investment structure for managing the Portfolio assets. This structure is expected to produce an appropriate level of overall diversification and total investment return over the investment time horizon.  Second, it will serve as to encourage effective communications between the organization and parties involved with investment management decisions.  Third, these guidelines will provide a framework to measure ongoing investment performance.

Within the constraints imposed by these policies, Investment Managers are expected to comply with all applicable fiduciary and due diligence requirements under the “prudent investor” rules, which state:   “Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”  All applicable laws, rules and regulations from various local, state, federal and international political entities that may impact the Portfolio are to be adhered to.

Asset Class Range
Benchmark
Target
Fixed Income 20‐40% 29%
Equities 50‐70% 63%
Real Estate 0‐15% 5%
Commodities 0‐10% 2%
Cash 0‐10% 1%
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Diversification
Your Portfolio Manager is responsible for maintaining the balance between the various asset classes based on the investment objective’s strategic asset allocation. As a general policy, the Investment Manager will maintain reasonable diversification at all times by asset class, credit quality, issuer, sector, industry, and country.

The following parameters shall be adhered to in managing the portfolio:

Fixed Income Assets
 The fixed income investments are to maintain intermediate‐term average weighted duration, between three‐seven years.
 At the time of purchase, no single fixed income issuer shall exceed 2% of the total market value of the Portfolio, with the exception of U.S. Treasury or Agency obligations.  The direct high‐yield portion shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged fixed income positions shall constitute no more than 10% of the total market value of the Portfolio.

Equity & Growth Assets
 The domestic equity investments are expected to be diversified at all times by size, industry, sector, and style (Large Cap, Mid Cap, and Small Cap).  At the time of purchase, no individual equity security shall exceed 2% of the total market value of the Portfolio.
 The international equity investments (including emerging markets) shall constitute no more than 20% of the total market value of the Portfolio  The real estate investments shall be captured through the use of diversified mutual funds or ETFs investing in REITs; and shall constitute no more than 15% of the total market value of the Portfolio.
 The commodities investments shall be captured through the use of diversified mutual funds or ETFs; and shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged equity positions shall constitute no more than 10% of the total market value of the Portfolio
Permitted Asset Classes and Security Types
Fixed Income & Cash Equivalent Investments:
 Domestic Certificates of Deposit (rated A‐1/P‐1 or better)  Domestic Commercial Paper (rated A‐1/P‐1 or better)
 Floating Rate Notes
 Money Market Mutual Funds
 U.S. Treasury Bonds, Bills and Notes
 U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds  Treasury Inflation‐Protected Securities (TIPS)
 Municipal Bonds and Notes
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 Corporate Bonds
 Mortgage‐Backed Bonds (MBS)
 Asset‐Backed Bonds (ABS)
 High‐Yield Bonds (rated B‐/B3 or better)
 Dollar denominated Foreign Bonds and Notes
 Bond Mutual Funds
Equity Investments:
 Common & Preferred Stocks
 American Depository Receipts (ADRs)
 Domestic and International Equity Mutual Funds (Open and Closed)  Emerging Market Equity Funds or Exchange Traded Funds (ETFs) Alternative Investments:
 Commodities Mutual Funds or Exchange Traded Notes (ETNs)  REIT Investment or Pooled Strategy or Fund of REITs
 Registered Hedge Funds or Hedge Fund of Funds
Prohibited Asset Classes and Transactions
The Investment Manager is prohibited from purchasing or holding any of the following types of investments:
 Partnerships unless investing in Master Limited Partnerships invested in a mutual fund and limited in scope and allocation of Portfolio based on asset class limitations of table above
 Letter stock and other unregistered securities; physical commodities or other commodity contracts; and short sales or margin transactions
 Investments in the equity securities of any company with a record of less than three years continuous operation, including the operation of any predecessor  Investments for the purpose of exercising control of management  Direct or indirect exposure to cryptocurrencies
 Leveraged securities, other than registered Hedged Equity and Hedged Fixed Income positions
Duties and Responsibilities
1) CITY OF CUPERTINO AUDIT COMMITTEE
a) Establish, approve, and maintain investment objectives, guidelines, and policies (including this Policy).
b) Appoint Investment Managers who can be reasonably expected to adhere to the investment guidelines and meet the investment objectives as established. c) Monitor the investment performance of the Portfolio and compare actual investment performance relative to an appropriate benchmark index given the stated investment guidelines and objectives set forth in this Policy.
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d) Conduct a formal review of the Portfolio’s asset allocation, investment structure and performance annually or more frequently as the need arises. e) Periodically review the Portfolio performance against objectives. 2) CITY OF CUPERTINO CITY COUNCIL
a) Adopt the Policy by resolution of the City Council on an annual basis. 3) PORTFOLIO MANAGER
The Portfolio Manager will be responsible for carrying out the activities related to the Portfolio in accordance with the Policy including:
a) Manage the day‐to‐day investment of Portfolio assets in accordance with the Policy guidelines and objectives included herein.
b) Exercise full investment discretion and prudence in the selection and diversification of investments.
c) Promptly bring to the attention of the City Treasurer or designee any investment that is subsequently downgraded and fails to meet the quality guidelines, along with a recommendation of retention or disposal.
d) Provide on a quarterly basis the following investment reporting:
(i) Year‐to‐date rate of return
(ii) Annualized one, three, five, etc. rates of return
e) Provide annually to the City’s Audit Committee a commentary and analysis of investment performance to include an evaluation of the current and future investment environment and potential impact of the investment environment on achievement of investment objectives.

Investment Policy Statement Review
The City’s Audit Committee will review and the Cupertino City Council will adopt this Investment Policy Statement at least annually to determine whether stated investment objectives are still relevant and the continued feasibility of achieving the same.  It is not expected that the Policy will change frequently.  In particular, short‐term changes in the financial markets should not require adjustments to the Policy.

If at any time the Portfolio Managerfinds the above guidelines too restrictive or possibly injurious to investmentreturns, they should communicate that information immediately to the City’s Audit Committee.

City Manager’s signature: _______________________________ Date: _______________________________
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Revisions: 6.5.2018, 11.19.2019, 11.17.2020, 12.7.2021, 12.06.2022, 12.05.2023 Director of Administrative Services’ signature: _______________________________ Date: _______________________________
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RESOLUTION NO. 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO ACCEPTING THE CITY INVESTMENT POLICY FOR THE OTHER POSTEMPLOYMENT BENEFITS TRUST WHEREAS, the City’s Other Post-Employment Benefit Trust, established for sole purpose to benefit the general public, has available funds to invest in accordance with principles of sound treasury management; and
WHEREAS, the City invests funds in accordance with provisions of California Government Code Section 53600; and
WHEREAS, the City’s Audit Committee reviewed and accepted the attached City Investment Policy for the Other Post-Employment Benefits Trust on October 23, 2023.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cupertino accepts the attached City Investment Policy for the Other Post-Employment Benefits Trust dated December 5, 2023.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 5
th day of December 2023, by the following vote:

Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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Pension Trust
Investment Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:

December 5, 2023
Responsible Department:

Administrative Services
Related Policies & Notes:

N/A
Investment Policy Statement
Overview
The City has established a Section 115 Trust with PARS to assist in stabilizing the potential impact of pension cost volatility on the City’s operating budget. The City intends to use the Section 115 Trust to pre-fund pension costs and proactively address the unfunded liability. The City’s goal is to have sufficient assets in the trust to increase the funded status to over 80% within 20 years, as well as fund the difference between a 7.0% and 6.25% discount rate.

Executive Summary
Account Name: City of Cupertino Pension Trust
Account Number: 6746050100
Investment Authority: Full Investment Authority
Current Assets: $18.5 Million (September 2023)
Time Horizon: Long-Term
Target Rate of Return: 6.25%
Communication Schedule: Meetings will be conducted at least quarterly U.S. Bank Portfolio Manager: Rick Rosenthal
[email protected]
213-359-7954
U.S. Bank Relationship Manager: Ryan Maxey
[email protected]
503-464-3789
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Investment Objective: ‘Balanced’
This investment objective is designed to provide a moderate amount of current income with moderate growth of capital. Investors should have sufficient tolerance for price and return volatility and substantial periodic declines in investment value. This objective is recommended for investors with a long-term time horizon.

The strategic asset allocation ranges and tactical targets for this objective are listed below:

Investment Guidelines
Overview
This document defines the investment policy, guidelines and performance objectives applicable to the assets of The City of Cupertino’s Pension Trust. The goal of this Policy is to create an investment framework within which the assets can be actively yet prudently managed.

The purpose of this document is threefold.
 First, it will set forth an investment structure for managing the Portfolio assets. This structure is expected to produce an appropriate level of overall diversification and total investment return over the investment time horizon.  Second, it will serve as to encourage effective communications between the organization and parties involved with investment management decisions.  Third, these guidelines will provide a framework to measure ongoing investment performance.

Within the constraints imposed by these policies, Investment Managers are expected to comply with all applicable fiduciary and due diligence requirements under the “prudent investor” rules, which state: “Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.” All applicable laws, rules and regulations from various local, state, federal and international political entities that may impact the Portfolio are to be adhered to.

Asset Class Range
Benchmark
Target
Fixed Income 20-40% 29%
Equities 50-70% 63%
Real Estate 0-15% 5%
Commodities 0-10% 2%
Cash 0-10% 1%
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Diversification
Your Portfolio Manager is responsible for maintaining the balance between the various asset classes based on the investment objective’s strategic asset allocation. As a general policy, the Investment Manager will maintain reasonable diversification at all times by asset class, credit quality, issuer, sector, industry, and country.

The following parameters shall be adhered to in managing the portfolio:

Fixed Income Assets
 The fixed income investments are to maintain intermediate-term average weighted duration, between three-seven years.
 At the time of purchase, no single fixed income issuer shall exceed 2% of the total market value of the Portfolio, with the exception of U.S. Treasury or Agency obligations.  The direct high-yield portion shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged fixed income positions shall constitute no more than 10% of the total market value of the Portfolio
Equity & Growth Assets
 The domestic equity investments are expected to be diversified at all times by size, industry, sector, and style (Large Cap, Mid Cap, and Small Cap).  At the time of purchase, no individual equity security shall exceed 2% of the total market value of the Portfolio.
 The international equity investments (including emerging markets) shall constitute no more than 20% of the total market value of the Portfolio  The real estate investments shall be captured through the use of diversified mutual funds or ETFs investing in REITs; and shall constitute no more than 15% of the total market value of the Portfolio.
 The commodities investments shall be captured through the use of diversified mutual funds or ETFs; and shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged equity positions shall constitute no more than 10% of the total market value of the Portfolio
Permitted Asset Classes and Security Types
Fixed Income & Cash Equivalent Investments:
 Domestic Certificates of Deposit (rated A-1/P-1 or better)  Domestic Commercial Paper (rated A-1/P-1 or better)
 Floating Rate Notes
 Money Market Mutual Funds
 U.S. Treasury Bonds, Bills and Notes
 U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds  Treasury Inflation-Protected Securities (TIPS)
 Municipal Bonds and Notes
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 Corporate Bonds
 Mortgage-Backed Bonds (MBS)
 Asset-Backed Bonds (ABS)
 High-Yield Bonds (rated B-/B3 or better)
 Dollar denominated Foreign Bonds and Notes
 Bond Mutual Funds
Equity Investments:
 Common & Preferred Stocks
 American Depository Receipts (ADRs)
 Domestic and International Equity Mutual Funds (Open and Closed)  Emerging Market Equity Funds or Exchange Traded Funds (ETFs) Alternative Investments:
 Commodities Mutual Funds or Exchange Traded Notes (ETNs)  REIT Investment or Pooled Strategy or Fund of REITs
 Registered Hedge Funds or Hedge Fund of Funds
Prohibited Asset Classes and Transactions
The Investment Manager is prohibited from purchasing or holding any of the following types of investments:
 Partnerships unless investing in Master Limited Partnerships invested in a mutual fund and limited in scope and allocation of Portfolio based on asset class limitations of table above
 Letter stock and other unregistered securities; physical commodities or other commodity contracts; and short sales or margin transactions
 Investments in the equity securities of any company with a record of less than three years continuous operation, including the operation of any predecessor  Investments for the purpose of exercising control of management  Direct or indirect exposure to cryptocurrencies
 Leveraged securities, other than registered Hedged Equity and Hedged Fixed Income positions
Duties and Responsibilities
1) CITY OF CUPERTINO AUDIT COMMITTEE
a) Establish, approve, and maintain investment objectives, guidelines, and policies (including this Policy).
b) Appoint Investment Managers who can be reasonably expected to adhere to the investment guidelines and meet the investment objectives as established. c) Monitor the investment performance of the Portfolio and compare actual investment performance relative to an appropriate benchmark index given the stated investment guidelines and objectives set forth in this Policy.
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d) Conduct a formal review of the Portfolio’s asset allocation, investment structure and performance annually or more frequently as the need arises. e) Periodically review the Portfolio performance against objectives. 2) CITY OF CUPERTINO CITY COUNCIL
a) Adopt the Policy by resolution of the City Council on an annual basis. 3) PORTFOLIO MANAGER
The Portfolio Manager will be responsible for carrying out the activities related to the Portfolio in accordance with the Policy including:
a) Manage the day-to-day investment of Portfolio assets in accordance with the Policy guidelines and objectives included herein.
b) Exercise full investment discretion and prudence in the selection and diversification of investments.
c) Promptly bring to the attention of the City Treasurer or designee any investment that is subsequently downgraded and fails to meet the quality guidelines, along with a recommendation of retention or disposal.
d) Provide on a quarterly basis the following investment reporting:
(i) Year-to-date rate of return
(ii) Annualized one, three, five, etc. rates of return
e) Provide annually to the City’s Audit Committee a commentary and analysis of investment performance to include an evaluation of the current and future investment environment and potential impact of the investment environment on achievement of investment objectives.

Investment Policy Statement Review
The City’s Audit Committee will review and the Cupertino City Council will adopt this Investment Policy Statement at least annually to determine whether stated investment objectives are still relevant and the continued feasibility of achieving the same. It is not expected that the Policy will change frequently. In particular, short-term changes in the financial markets should not require adjustments to the Policy.

If at any time the Portfolio Manager finds the above guidelines too restrictive or possibly injurious to investment returns, they should communicate that information immediately to the City’s Audit Committee.

City Manager’s signature: _______________________________ Date: _______________________________
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Revisions: 11.19.2019, 11.17.2020, 12.7.2021, 12.06.2022, 12.05.2023 Director of Administrative Services’ signature: _______________________________ Date: _______________________________
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Pension Trust
Investment Policy
Citywide Policy Manual
Attachments: N/A
Effective Date:

December 6, 2022 December 5, 2023
Responsible Department:

Administrative Services
Related Policies & Notes:

N/A
Investment Policy Statement
Overview
The City has established a Section 115 Trust with PARS to assist in stabilizing the potential impact of pension cost volatility on the City’s operating budget.  The City intends to use the Section 115 Trust to pre‐fund pension costs and proactively address the unfunded liability.  The City’s goal is to have sufficient assets in the trust to increase the funded status to over 80% within 20 years, as well as fund the difference between a 7.0% and 6.25% discount rate.

Executive Summary
Account Name:       City of Cupertino Pension Trust
Account Number:     6746050100
Investment Authority:     Full Investment Authority
Current Assets:     $16.4 18.5 Million (September 20222023) Time Horizon:      Long‐Term
Target Rate of Return:     6.25%
Communication Schedule: Meetings will be conducted at least quarterly U.S. Bank Portfolio Manager:   Rick Rosenthal
[email protected]
213‐443‐1848 213‐359‐7954
U.S. Bank Relationship Manager: Ryan Maxey
[email protected]
503‐464‐3789
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Investment Objective: ‘Balanced’
This investment objective is designed to provide a moderate amount of current income with moderate growth of capital.Investors should have sufficient tolerance for price and return volatility and substantial periodic declines in investment value. This objective is recommended forinvestors with a long‐term time horizon.

The strategic asset allocation ranges and tactical targets for this objective are listed below:

Investment Guidelines
Overview
This document defines the investment policy, guidelines and performance objectives applicable to the assets of The City of Cupertino’s Pension Trust. The goal of this Policy is to create an investment framework within which the assets can be actively yet prudently managed.

The purpose of this document is threefold.
 First, it will set forth an investment structure for managing the Portfolio assets. This structure is expected to produce an appropriate level of overall diversification and total investment return over the investment time horizon.  Second, it will serve as to encourage effective communications between the organization and parties involved with investment management decisions.  Third, these guidelines will provide a framework to measure ongoing investment performance.

Within the constraints imposed by these policies, Investment Managers are expected to comply with all applicable fiduciary and due diligence requirements under the “prudent investor” rules, which state:   “Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”  All applicable laws, rules and regulations from various local, state, federal and international political entities that may impact the Portfolio are to be adhered to.

Asset Class Range
Benchmark
Target
Fixed Income 20‐40% 29%
Equities 50‐70% 63%
Real Estate 0‐15% 5%
Commodities 0‐10% 2%
Cash 0‐10% 1%
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Diversification
Your Portfolio Manager is responsible for maintaining the balance between the various asset classes based on the investment objective’s strategic asset allocation. As a general policy, the Investment Manager will maintain reasonable diversification at all times by asset class, credit quality, issuer, sector, industry, and country.

The following parameters shall be adhered to in managing the portfolio:

Fixed Income Assets
 The fixed income investments are to maintain intermediate‐term average weighted duration, between three‐seven years.
 At the time of purchase, no single fixed income issuer shall exceed 2% of the total market value of the Portfolio, with the exception of U.S. Treasury or Agency obligations.  The direct high‐yield portion shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged fixed income positions shall constitute no more than 10% of the total market value of the Portfolio
Equity & Growth Assets
 The domestic equity investments are expected to be diversified at all times by size, industry, sector, and style (Large Cap, Mid Cap, and Small Cap).  At the time of purchase, no individual equity security shall exceed 2% of the total market value of the Portfolio.
 The international equity investments (including emerging markets) shall constitute no more than 20% of the total market value of the Portfolio  The real estate investments shall be captured through the use of diversified mutual funds or ETFs investing in REITs; and shall constitute no more than 15% of the total market value of the Portfolio.
 The commodities investments shall be captured through the use of diversified mutual funds or ETFs; and shall constitute no more than 10% of the total market value of the Portfolio.
 Hedged equity positions shall constitute no more than 10% of the total market value of the Portfolio
Permitted Asset Classes and Security Types
Fixed Income & Cash Equivalent Investments:
 Domestic Certificates of Deposit (rated A‐1/P‐1 or better)  Domestic Commercial Paper (rated A‐1/P‐1 or better)
 Floating Rate Notes
 Money Market Mutual Funds
 U.S. Treasury Bonds, Bills and Notes
 U.S. Agency (and Instrumentality) Discount Notes, Notes, and Bonds  Treasury Inflation‐Protected Securities (TIPS)
 Municipal Bonds and Notes
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 Corporate Bonds
 Mortgage‐Backed Bonds (MBS)
 Asset‐Backed Bonds (ABS)
 High‐Yield Bonds (rated B‐/B3 or better)
 Dollar denominated Foreign Bonds and Notes
 Bond Mutual Funds
Equity Investments:
 Common & Preferred Stocks
 American Depository Receipts (ADRs)
 Domestic and International Equity Mutual Funds (Open and Closed)  Emerging Market Equity Funds or Exchange Traded Funds (ETFs) Alternative Investments:
 Commodities Mutual Funds or Exchange Traded Notes (ETNs)  REIT Investment or Pooled Strategy or Fund of REITs
 Registered Hedge Funds or Hedge Fund of Funds
Prohibited Asset Classes and Transactions
The Investment Manager is prohibited from purchasing or holding any of the following types of investments:
 Partnerships unless investing in Master Limited Partnerships invested in a mutual fund and limited in scope and allocation of Portfolio based on asset class limitations of table above
 Letter stock and other unregistered securities; physical commodities or other commodity contracts; and short sales or margin transactions
 Investments in the equity securities of any company with a record of less than three years continuous operation, including the operation of any predecessor  Investments for the purpose of exercising control of management  Direct or indirect exposure to cryptocurrencies
 Leveraged securities, other than registered Hedged Equity and Hedged Fixed Income positions
Duties and Responsibilities
1) CITY OF CUPERTINO AUDIT COMMITTEE
a) Establish, approve, and maintain investment objectives, guidelines, and policies (including this Policy).
b) Appoint Investment Managers who can be reasonably expected to adhere to the investment guidelines and meet the investment objectives as established. c) Monitor the investment performance of the Portfolio and compare actual investment performance relative to an appropriate benchmark index given the stated investment guidelines and objectives set forth in this Policy.
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d) Conduct a formal review of the Portfolio’s asset allocation, investment structure and performance annually or more frequently as the need arises. e) Periodically review the Portfolio performance against objectives. 2) CITY OF CUPERTINO CITY COUNCIL
a) Adopt the Policy by resolution of the City Council on an annual basis. 3) PORTFOLIO MANAGER
The Portfolio Manager will be responsible for carrying out the activities related to the Portfolio in accordance with the Policy including:
a) Manage the day‐to‐day investment of Portfolio assets in accordance with the Policy guidelines and objectives included herein.
b) Exercise full investment discretion and prudence in the selection and diversification of investments.
c) Promptly bring to the attention of the City Treasurer or designee any investment that is subsequently downgraded and fails to meet the quality guidelines, along with a recommendation of retention or disposal.
d) Provide on a quarterly basis the following investment reporting:
(i) Year‐to‐date rate of return
(ii) Annualized one, three, five, etc. rates of return
e) Provide annually to the City’s Audit Committee a commentary and analysis of investment performance to include an evaluation of the current and future investment environment and potential impact of the investment environment on achievement of investment objectives.

Investment Policy Statement Review
The City’s Audit Committee will review and the Cupertino City Council will adopt this Investment Policy Statement at least annually to determine whether stated investment objectives are still relevant and the continued feasibility of achieving the same.  It is not expected that the Policy will change frequently.  In particular, short‐term changes in the financial markets should not require adjustments to the Policy.

If at any time the Portfolio Managerfinds the above guidelines too restrictive or possibly injurious to investmentreturns, they should communicate that information immediately to the City’s Audit Committee.

City Manager’s signature: _______________________________ Date: _______________________________
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Revisions: 11.19.2019, 11.17.2020, 12.7.2021, 12.06.2022, 12.05.2023 Director of Administrative Services’ signature: _______________________________ Date: _______________________________
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RESOLUTION NO. 23-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

ACCEPTING THE CITY INVESTMENT POLICY FOR THE PENSION TRUST WHEREAS, the City’s Pension Trust, established for sole purpose to benefit the general public, has available funds to invest in accordance with principles of sound treasury management; and
WHEREAS, the City invests funds in accordance with provisions of California Government Code Section 53600; and
WHEREAS, the City’s Audit Committee reviewed and accepted the attached City Investment Policy for the Pension Trust on October 23, 2023.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Cupertino accepts the attached City Investment Policy for the Pension Trust dated December 5, 2023.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 5
th day of December 2023, by the following vote:

Vote Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
________________________
Kirsten Squarcia, City Clerk
________________________
Date
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CITY OF CUPERTINO
Agenda Item
23-12810 Agenda Date: 12/5/2023
Agenda #: 8.

Subject: Accept Silicon Valley Clean Energy Community Resilience Grant in the amount of up to $233,963 to purchase two (2) Electric Vehicle Autonomous Renewable Charger (EV ARC) portable solar-powered charging systems

1. Adopt Resolution No. 23-134 accepting up to $233,963 in Community Resilience Grant funding from Silicon Valley Clean Energy and approving budget modification #2324-316 increasing appropriation and estimated revenues by $233,963 in 100-87-829 900-990 for procurement of Electric Vehicle Autonomous Renewable Charger units;

2. Authorize the City Manager to execute all documentation necessary to accept the grant funding; and

3. Authorize the purchase the two (2) Electric Vehicle Autonomous Renewable Charger units, trailer and additional support and maintenance for a total cost of $233,963 from Beam Global CITY OF CUPERTINO Page 1 of 1 Printed on 11/29/2023
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CITY COUNCIL STAFF REPORT
Meeting: December 5, 2023
Subject
Accept Silicon Valley Clean Energy Community Resilience Grant in the amount of up to $233,963 to purchase two (2) Electric Vehicle Autonomous Renewable Charger (EV ARC) portable solar-powered charging systems.

Recommended Action

1. Adopt Resolution No. 23-XXX accepting up to $233,963 in Community Resilience Grant funding from Silicon Valley Clean Energy and approving budget modification #2324-316 increasing appropriation and estimated revenues by $233,963 in 100-87-829 900-990 for procurement of Electric Vehicle Autonomous Renewable Charger units;

2. Authorize the City Manager to execute all documentation necessary to accept the grant fundings; and

3. Authorize the purchase of two (2) Electric Vehicle Autonomous Renewable Charger units, trailer and additional support and maintenance for a total cost of $233,963 from Beam Global.

Reasons for Recommendation
Silicon Valley Clean Energy Community Resilience Grant Silicon Valley Clean Energy (SVCE), a community choice energy agency, was formed as a Joint Powers Authority in 2016, and now serves approximately 270,000 residential and commercial electricity customers across a service area comprised of the following thirteen communities:

Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale, and Unincorporated portions of Santa Clara County.

The SVCE launched a community resilience program that provides $5 million in grants to member jurisdictions to aid in planning and implementing resiliency projects (energy resilience is defined as the ability to mitigate, withstand, or recover quickly from unanticipated energy disruptions to ensure energy availability and reliability.) The grant maximum for each jurisdiction is based on the proportion of load as determined by SVCE.
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To be eligible for these funds, projects must:

1. Support a critical facility and/or provide community services during a power outage;

2. Enable self-sufficient access to power during an outage, or decrease the risk of power outages; and

3. Be a zero-carbon project.

The City submitted a grant application to SVCE for the purchase of two EV ARC units, including a trailer and additional support and maintenance. The procurement of the EV ARC units will greatly benefit the City of Cupertino by providing reliable power sources during a disaster or power outage.

Electric Vehicle Autonomous Renewable Charger units (EV ARC units) Each EV ARC unit is mounted with a solar array and equipped with battery storage, EV chargers, and an emergency power panel. The unit generates clean energy to power EV chargers or equipment. During a power outage, drivers can still charge their vehicles and first responders can power their equipment using the emergency electrical panel.

When power is not needed, energy collected from the solar array is stored in the onboard battery.

The EV ARC units the City is proposing for purchase come with 43 kilowatt per hour (kWh) battery storage which will store approximately 120 e-miles of range each. The total miles of range the units can provide increases to approximately 190 e-miles if vehicles are charged during daytime hours with solar exposure.

City staff anticipates locating the EV ARC units at City Hall and Quinlan Community Center but will rotate the units to other City facilities (Senior Center, Wilson Park, Creekside Park, etc.) approximately every two months for public use. The portable unit will be placed within existing standard parking stalls. Placement of these units requires no construction or infrastructure installation. During an emergency, such as an extended PG&E Public Safety Power Shutoff (PSPS) or power outage, the City can relocate both units to the most appropriate location to serve the residents and allow for charging of personal electronic devices.

In addition to the purchase of these units, the remaining grant funding will be used to extend services such as Enterprise Cloud Plan which provides access to charging session data, usage controls, data management, and reporting; an annual plan for a Remote Monitoring and Management System (RMMS) which provides access to view data and status of the EV ARC system, battery status, energy output and energy use session data; and an Operation & Maintenance (O&M) plan. The extension of these services will allow the City to evaluate them for efficacy and will provide a longer maintenance coverage period.
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Formal Competitive Bidding Exemption
Purchase of Beam Global units is available through the State of California Contract DGS #1-22-61-16 which expires on June 23, 2025. Staff recommends the use of the State’s contract as the City leverages economy of scale cost benefits and reduces administrative time.

Cupertino Municipal Code Chapter 3.22 provides for exemptions to the bidding process requirements of that chapter when these purchases occur from any other public agency created under the laws of the State of California or the United States Government. The State of California contract is available to any public entity in the State of California.

Next Steps
Upon City Council acceptance of the grant funds, the City will execute the grant agreement, initiate procurement of the units, and apply for reimbursement from SVCE.

Projects must be completed no later than December 31, 2024, and all requests for reimbursement must be submitted within 60 days of project completion. The units are expected to be manufactured and delivered 90 days from issuance of the purchase order.

Sustainability Impact
Procurement of the EV ARC units support Cupertino’s Climate Action Plan 2.0 which focuses on carbon-free electricity and reduction of greenhouse gas emissions.

Fiscal Impact
There is no net fiscal impact associated with the procurement of the EV ARC units. The City will purchase the EV ARC units and request full reimbursement of the grant funds from Silicon Valley Clean Energy. Staff is requesting increased appropriations in 100-87- 829 900-990 to fund the purchase of the units and is also increasing estimated revenues in 100-87-829 440-428 for estimated grant fund to be received.

California Environmental Quality Act (CEQA)
The project is exempt from CEQA under CEQA Guideline Section 15311 which exempts the construction or placement of minor structures accessory to (appurtenant to) existing commercial, industrial, or institutional facilities including small parking lots. _____________________________________
Prepared by: Jimmy Tan, Assistant Director of Public Works Reviewed by: Chad Mosley, Director of Public Works
Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:

A – Draft Resolution
B – Grant Agreement
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C – Beam EV ARC Price Quote
D – BEAM EV ARC Product Information
E – State of California Agreement
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Attachment A
RESOLUTION NO. ________

A RESOLUTION OF THE CUPERTINO CITY COUNCIL ACCEPTING UP TO $233,963 IN COMMUNITY RESILIENCE GRANT FUNDING FROM
SILICON VALLEY CLEAN ENERGY; AUTHORIZING THE CITY

MANAGER TO EXECUTE CONTRACTS TO ACCEPT THE GRANT

FUNDING AND PURCHASE OF ELECTRIC VEHICLE AUTONOMOUS
RENEWABLE CHARGE UNITS WITH TRAILER FROM BEAM GLOBAL;

AND APPROPRIATING MONIES FOR THE PROCUREMENT
WHEREAS, Silicon Valley Clean Energy (SVCE) launched a community resilience program that provides $5 million in grants to member jurisdictions to plan and develop resiliency projects.; and
WHEREAS, the eligibility of projects must support a critical facility and/or provide community services during a power outage; enable self-sufficient access to power during an outage, or decrease the risk of power outages; and be zero carbon; and
WHEREAS, the City will use the grant funds from SVCE to purchase two Electric Vehicle Autonomous Renewable Charger (EV ARC) units and trailer that will provide the community with reliable power source during a disaster or power outage; and
WHEREAS, approving budget modification #2324-316 increasing the estimated revenue in 100-87-829 440-428 and appropriating $233,963 from the General Fund 100-87-829 900-990 for procurement EV ARC units and trailer is necessary prior to reimbursement of the approved grant funds; and WHEREAS, the City Council does hereby authorize the City Manager to execute any and all documentation necessary to accept the grant funding.

WHEREAS, the City Manager has determined that the balances from the funds specified in this resolution are adequate to cover the proposed amended appropriations, and therefore recommends the fund reallocations described herein.

NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby approve the recommended fund allocations and ratifies the attached amended appropriations as set forth in Exhibit A.
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Resolution No. __________________
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 5
th day of December 2023, by the following vote:

Members of the City Council
AYES:

NOES:

ABSENT:

ABSTAIN:

SIGNED:
________
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
________
Kirsten Squarcia, City Clerk
________________________
Date
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Resolution No. __________________
Exhibit A
Fund Revenue Expenditure (Use of) Fund
Balance
General Fund
100-87-829
$233,963.00 $233,963.00 $0
TOTAL $233,963.00 $233,963.00 $0
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SILICON VALLEY CLEAN ENERGY
COMMUNITY RESILIENCE PROGRAM – CAPITAL PROJECTS

GRANT AGREEMENT
THIS AGREEMENT is made and effective as of December 5, 2023 (“Effective Date”), by and between the SILICON VALLEY CLEAN ENERGY AUTHORITY ("SVCE"), an independent public agency, and The City of Cupertino, a municipal corporation (“Recipient”). In consideration of the covenants, conditions and undertakings set forth herein, the parties agree as follows:

1. RECITALS. This Agreement is made with respect to the following facts and purposes which each of the parties acknowledge and agree are true and correct:

A. SVCE’s community resilience program (“Program”) will provide $5M in grants to member jurisdictions to plan and develop resilience projects. The grant maximum for each jurisdiction is based on proportion of load as determined by SVCE.

B. As a condition of eligibility to receive funding under the Program, projects must: (1) support a critical facility and/or provide community services during a power outage; (2) enable self-sufficient access to power during an outage, or decrease the risk of power outages; and (3) be zero carbon.

C. Recipient submitted an application for Program funding, attached hereto and incorporated herein as Exhibit A, for installation of energy resilience infrastructure (“Project”). The scope and estimated budget for the Project are attached hereto and incorporated herein as Exhibit B.

D. SVCE finds that the use of Grant Funds described herein furthers a public purpose and meets the goals and objectives established for the Program, and desires to award Recipient a one-time grant pursuant to the terms of this Agreement.

2. GRANT. SVCE hereby agrees to provide funding to Recipient in an amount not to exceed $223,665, subject to the provisions of this Agreement (“Grant Funds”). Such Grant Funds shall be disbursed to Recipient on a reimbursement basis. It is agreed and understood that the Grant Amount is a ceiling and that SVCE will only reimburse the allowable cost of services actually rendered as authorized by SVCE at or below the Grant Amount established herein.

3. REIMBURSEMENT OF GRANT FUNDS. Grant Funds shall be reimbursed pursuant to the following process:

A. SVCE shall reimburse Recipient for its actual and reasonable costs of constructing the Project up to the agreed upon Grant Funds.

B. Requests for payment submitted to SVCE shall include: 1) an itemized list of all expenditures; 2) supporting documentation that clearly identifies the expenditure(s) in relation to the scope of the Project set Attachment B
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forth in Exhibit B of this Agreement; and 3) the Job Impacts Data Collection Worksheet, attached hereto as Exhibit C. Payment requests should be aggregated and submitted no more often than once per month.

C. SVCE shall process requests for payment and remit payment within 30 days.

D. If, in SVCE’s sole discretion, the request for payment is incomplete, inadequate, or inaccurate, SVCE may dispute the invoice for reasonable cause and hold all or a portion of the payment request until all required information is received or corrected. Any penalties imposed on the Recipient by a contractor, or other consequence, because of delays in payment or other breach of the agreement between the Recipient and the contractor are the responsibility of the Recipient and are not reimbursable under this Agreement.

E. Unless otherwise authorized by SVCE in writing, Recipient shall submit all documentation of Project completion, including a final request for payment, within sixty (60) days of Project completion.

F. Final payment of remaining Grant Funds, including any amounts withheld from previous payments, shall be paid up to the total amount of the actual Project cost, not to exceed the Grant Funds amount set forth in this Agreement, upon completion of the Project, receipt of the final report and final request for payment from the Recipient in a form and content satisfactory to SVCE.

4. USE OF GRANT FUNDS. Recipient shall use the Grant Funds to support the Program as set forth in Exhibits A and B. Any use(s) of Grant Funds not contemplated in this Agreement must be approved in writing by SVCE. This Agreement was awarded to Recipient based on the application submitted by Recipient with the intention that the awarded funds would be used to implement the Project as described in Exhibit A and Exhibit B. Any substantive deviation during Project implementation may require reevaluation or result in loss of funding. In no event shall Recipient’s Grant Funds or scope of work be increased. If Recipient knows or should have known that substantive changes to the Project will occur or have occurred, Recipient will immediately notify SVCE in writing. SVCE will then determine whether the Project is still consistent with the overall objectives of the Program and whether the changes would have negatively affected the Project ranking during the Grant evaluation process. SVCE reserves the right to have Grant Funds withheld from Recipient, or refunded to SVCE, due to Recipient’s failure to satisfactorily complete the Project or due to substantive changes to the Project.

5. TERM. This Agreement shall commence on the Effective Date, and shall remain and continue in effect until the final Grant Funds are paid to Recipient, unless sooner terminated pursuant to the provisions of this Agreement. Projects must be complete no later than December 31, 2024.

6. REPORTING AND RECORDS. Recipient agrees to cooperate with SVCE and provide requested information, if any, related to the use of Grant Funds and the Project, including for the purposes of SVCE’s evaluation, measurement, and verification activities for the Program. Recipient will cooperate in good faith with SVCE or its authorized representative in performing evaluation, measurement and verification (EM&V) of the Program. Information accessed for EM&V may include, but is not limited to, onsite verification of Project operation, Program compliance, and Project records, analysis of facility billing metered data, analysis of data collected from facility-owned submetering, and collection of supplementary metered data on-site. All information collected will be held confidentially and will be used by SVCE or its authorized representative for Program analysis purposes only. Recipient is responsible for ensuring, through a separate agreement between 430
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Recipient and property owner, that property owner shall cooperate with SVCE to provide any documentation and assist in analysis and provide access to the Project site at reasonable times, during the construction of the Project and for a period of up to two (2) years from the completion of the Project. During the course of the Project and for three (3) years thereafter from the receipt of the final Grant Funds, the Recipient agrees to maintain, intact and readily accessible, all communications, data, documents, reports, records, contracts, and supporting materials relating to the Project, as SVCE may require. The Recipient agrees to have financial and compliance audits performed as SVCE may require.

7. LEGAL RESPONSIBILITIES. Recipient shall keep itself informed of all local, State and Federal ordinances, laws and regulations which in any manner affect those employed by it or in any way affect the performance under this Agreement. Recipient shall at all times observe and comply with all such ordinances, laws and regulations. SVCE, and its officers and employees, shall not be liable at law or in equity occasioned by failure of Recipient to comply with this Section.

8. PREVAILING WAGES. By accepting the Grant Funds, Recipient as a material term of this Agreement shall be fully responsible for complying with all California public works requirements including but not limited to payment of prevailing wage. Therefore, as a material term of this Agreement, to the extent required by California law, Recipient shall ensure that prevailing wages are paid, that the project budget for labor reflects these prevailing wage requirements, and that the project complies with all other requirements of prevailing wage law, including that Recipient’s subcontractors also comply with all applicable public works/prevailing wage requirements.

9. PROCUREMENT. At minimum, Recipient shall solicit at least three bids and select the lowest bidder when procuring goods or services, where the costs are eligible for reimbursement under this Agreement. In the event the Recipient is required by statute or policy to solicit additional bids or follow a more stringent solicitation process, Recipient shall follow such process. Recipient may also procure goods and services through California Government Code section 4217.10.

10. CALIFORNIA PUBLIC RECORDS ACT. Recipient acknowledges that SVCE is subject to the California Public Records Act (Gov. Code § 6250 et seq.). SVCE acknowledges that Recipient may submit information to SVCE that Recipient considers to be confidential, proprietary, or trade secret information. Only such information clearly designated in writing as “confidential” shall be deemed “Confidential Information.” Upon request or demand of any third person or entity (“Requestor”) for the production, inspection, and/or copying of Confidential Information, SVCE shall notify Recipient that such request has been made. Recipient shall be solely responsible for taking whatever legal steps are necessary to protect Confidential Information and to prevent its release to the Requestor. Without limiting SVCE’s right to disclose Confidential Information as may be required by law, if Recipient takes no such action after receiving the foregoing notice from SVCE, SVCE shall be permitted to release information it deems subject to disclosure.

11. NOTICES. Any notices provided under this Agreement must be in writing and may be given either by mail or e-mail to the following addresses:
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SVCE: Silicon Valley Clean Energy Authority
333 W. El Camino Real #330
Sunnyvale, CA 94087
Attention: [email protected]
RECIPIENT:

12. INDEPENDENT CONTRACTOR.

A. Recipient shall at all times remain as to the SVCE a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Recipient shall at all times be under Recipient's exclusive direction and control. Neither SVCE nor any of its officers, employees, agents, or volunteers shall have control over the conduct of Recipient or any of Recipient's officers, employees, or agents except as set forth in this Agreement. Recipient shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the SVCE. Recipient shall not incur or have the power to incur any debt, obligation or liability whatever against SVCE, or bind SVCE in any manner.

B. No employee benefits shall be available to Recipient in connection with the performance of this Agreement. Except for the fees paid to Recipient as provided in the Agreement, SVCE shall not pay salaries, wages, or other compensation to Recipient for performing services hereunder for SVCE. SVCE shall not be liable for compensation or indemnification to Recipient for injury or sickness arising out of performing services hereunder.

13. INDEMNIFICATION. Recipient shall indemnify, protect, defend and hold harmless SVCE, its elected officials, officers, employees, volunteers, and representatives from any and all suits, claims, demands, losses, defense costs or expenses, actions, liability or damages of whatsoever kind and nature which SVCE, its officers, agents and employees may sustain or incur or which may be imposed upon them for injury to or death of persons, or damage to property arising out of Recipient’s acts or omissions arising out of or in any way related to the performance or non-performance of this Agreement.

14. INSURANCE.

A. On or before the commencement of the term of this Agreement, Recipient shall furnish SVCE with certificates showing the type, amount, class of operations covered, effective dates, and dates of expiration of insurance coverage in compliance with the requirements in this Section. Recipient shall maintain such coverage in full force at all times for the duration of this Agreement, at its sole cost and expense. Nothing herein shall be construed as a limitation on Recipient indemnification obligations under this Agreement.

B. Recipient shall maintain the following minimum insurance coverages:

City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
Attention: City Manager
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1) Workers’ compensation, as required by the State of California; 2) Commercial general liability coverage with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate for bodily injury and property damage. ISO occurrence Form CG 0001 or equivalent is required;
3) Comprehensive automotive liability coverage with minimum limits of $1,000,000 per accident for bodily injury and property damage. ISO Form CA 0001 or equivalent is required.

C. Such coverages shall be issued by an insurer(s) licensed to conduct business in the State of California, with a minimum A.M. Best’s Insurance Rating of A:VII unless otherwise approved in writing as satisfactory to SVCE.

D. The insurance limits required by SVCE are not represented as being sufficient to protect Consultant. Recipient is advised to confer with its insurance broker to determine adequate coverage for Recipient.

15. DEFAULT AND TERMINATION. Should an Event of Default occur, SVCE shall provide a notice of default to Recipient and shall give Recipient at least fifteen (15) calendar days from the date the notice is sent to cure the Event of Default. If Recipient fails to cure the Event of Default within the time prescribed, SVCE may, at SVCE’s sole discretion, withhold Grant Funds not yet disbursed hereunder, require the return or repayment of Grant Funds already disbursed, and/or terminate this Agreement by written notice which shall be effective upon receipt by Recipient. “Event of Default” shall mean the occurrence of any one or more of the following events by Recipient: (a) any false statement, representation, or warranty contained in this Agreement, the Application, or any other document submitted to SVCE; (b) failure to comply with applicable laws; (c) a failure to maintain in effect any policy of insurance required under this Agreement; or (d) a material breach of this Agreement.

16. NON-APPROPRIATION. Recipient acknowledges that SVCE is a public agency. In the event that sufficient funds for the performance of this Agreement are not appropriated by the SVCE Board of Directors in any fiscal year covered by this Agreement, this Agreement may be terminated by SVCE, without penalty, by giving notice to Recipient of such facts and of SVCE’s intention to terminate.

17. NON-WAIVER. Failure to exercise any right the SVCE may have or be entitled to, in the event of default hereunder, shall not constitute a waiver of such right or any other right in the event of a subsequent default.

18. AMENDMENT OF AGREEMENT. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by the Recipient and the SVCE.

19. ASSIGNMENT PROHIBITED. In no event shall the Recipient assign or transfer any portion of this Agreement.
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20. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Santa Clara, State of California.

21. NO THIRD-PARTY BENEFIT. The provisions of this Agreement are for the sole benefit of the parties hereto and confer no rights, benefits, or claims upon any person or entity not a party hereto.

22. SEVERABILITY. If any provision of this Agreement is held to be invalid or unenforceable for any reason, the remaining provisions will continue in full force without being impaired or invalidated in any way.

The parties agree to replace any invalid provision with a valid provision that most closely approximates the intent and economic effect of the invalid provision.

23. RECIPIENT'S AUTHORITY. Recipient represents and warrants that (a) it has the power and authority to enter into this Agreement and to perform its obligations hereunder; (b) the person who executes this Agreement on its behalf has the necessary authority to bind Recipient; and (c) neither the execution and delivery of this Agreement nor the performance of its obligations hereunder will constitute a violation of, a default under, or conflict with any term of any governance documents or other agreements to which it is bound.

24. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall be taken together and deemed to be one instrument. Faxed and PDF counterpart signatures are sufficient to make this Agreement effective.

25. ENTIRE AGREEMENT. This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material.

SIGNATURES CONTINUE ON THE FOLLOWING PAGE
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written.

SILICON VALLEY CLEAN ENERGY AUTHORITY
_____________________________________
Girish Balachandran, Chief Executive Officer
APPROVED AS TO FORM:
________________________________
Trisha Ortiz, General Counsel

CITY OF CUPERTINO
By: _________________________________
Pamela Wu, City Manager
APPROVED AS TO FORM:
_____________________________________
Christopher Jensen, City Attorney
[*Note: Signatures of two corporate officers are required for corporations – First signature must be one of the following: 1) the chairman of the board; 2) the president; or 3) any vice president. The second corporate signature must be one of the following: 1) the secretary; 2) any assistant secretary; 3) the chief financial officer; or 4) any assistant treasurer. Signature of City Manager is required for cities.] 435
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26. Community Resilience Program – Capital Projects Grant Application – Phase 1 About Silicon Valley Clean Energy
Silicon Valley Clean Energy (SVCE), a community choice energy agency, is redefining the local electricity market and providing our residents and businesses with new clean energy choices—renewable and carbon–free electricity at competitive rates. SVCE was formed as a Joint Powers Authority in 2016, and now serves approximately 270,000 residential and commercial electricity customers across a service area comprised of the following thirteen communities: Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Milpitas, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale and Unincorporated Santa Clara County. 97% of electricity customers in SVCE’s service area receive their electricity from SVCE. For more information on SVCE, please visit: https://www.svcleanenergy.org/.

27. Community Resilience Program Overview
Funding Levels and Deadlines
SVCE’s community resilience program will provide $5M in grants to member jurisdictions to plan and develop resilience projects. The grant maximum for each jurisdiction is based on proportion of load as determined by SVCE. See chart below for the each jurisdiction’s grant maximum. Applications will be accepted and reviewed on a rolling basis. Projects must be complete by December 31, 2024.

Allocated Budget by Jurisdiction
Jurisdiction % of Total Load (2019) Planning Allocation Capex Support Allocation Total Allocation
SUNNYVALE 28.25% $ 221,280 $ 1,106,400 $ 1,327,680
MILPITAS 14.91% $ 116,784 $ 583,918 $ 700,702
MOUNTAIN VIEW 13.54% $ 106,061 $ 530,304 $ 636,365
UNINCORPORATE 8.78% $ 68,792 $ 343,959 $ 412,751
GILROY 6.68% $ 52,339 $ 261,693 $ 314,031
CUPERTINO 5.44% $ 42,633 $ 213,165 $ 255,798
MORGAN HILL 5.18% $ 40,540 $ 202,701 $ 243,241
CAMPBELL 5.05% $ 39,594 $ 197,972 $ 237,566
LOS GATOS 4.55% $ 35,640 $ 178,202 $ 213,842
LOS ALTOS 3.18% $ 24,920 $ 124,601 $ 149,521
SARATOGA 2.97% $ 23,241 $ 116,204 $ 139,444
LOS ALTOS HILLS 1.08% $ 8,430 $ 42,152 $ 50,582
MONTE SERENO 0.39% $ 3,079 $ 15,396 $ 18,475
Grand Total 100.00% $ 783,333 $ 3,916,667 $ 4,700,000
Attachment A
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Capital Project Requirements – Phase 1
To be eligible for these funds, projects must:

1. Support a critical facility and/or provide community services during a power outage

2. Enable self-sufficient access to power during an outage, or decrease the risk of power outages

3. Be zero carbon
In addition, for this phase, SVCE has identified two project types that are eligible by default:
1) islandable solar + storage systems designed to increase energy resilience and 2) portable battery systems use to support critical services or support vulnerable communities (such as medically fragile customers) during a power outage. Note that eligibility of a project does not guarantee funding.

Energy resilience is defined as the ability to mitigate, withstand or recover quickly from disruptions in the availability of energy via centralized energy infrastructure.

SVCE reserves the right to consider factors other than those specified above and to request additional information as a part of the selection process. 437
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Application Questions:

Date of Application: November 8, 2023 Name of Organization: City of Cupertino Contact Person/Title: Jimmy Tan, Assistant
Director of Public Works
Address: 10300 Torre Avenue, Cupertino, CA
95014
Email: [email protected] Project Name: Installation of EV ARC Units Is this project an islandable solar plus storage installation? Yes No
Is this project a portable battery project?
Yes No
Is this project zero-carbon?
Yes No
Project Site: (please describe why this site was chosen and what benefits it provides the community)
Project Description: (please provide a brief description of the project and the technologies used) This project will purchase and install two EV ARC (Sustainable EV Charging) units. The City is applying for grant funding to increase the availability of EV charging stations for the public and increase City’s energy resiliency. The units will be rotated throughout different City facilities and parks.

The EV charging units are powered by built in solar panels and are self-sufficient. The unit also fits in a standard parking space without reducing available parking while being ADA compliant. The units can also be transported to other City facilities using the trailer.

The EV Arc units are equipped with 4.3KW solar array and 22kWh expandable storage. The unit stores its own electricity in a lithium-ion battery. Two EV charging ports are included with each unit. The units will provide the public with accessible chargers and allow city fleet vehicles to charge without incurring electricity cost. 438
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Decarbonization Benefits: (please describe how this project supports SVCE’s decarbonization mission)
Resilience Benefits: (please describe the resilience benefits of this project) How would this project make a good case study for other jurisdictions? What do you expect to learn from this project?
Grant Amount Requested: (Please specify the total amount you are requesting and a breakdown of the project budget. Indicate any co-funding that is contributing to the project budget, such as in-kind resources or additional grant funding) Beginning and Ending Dates of the Project:

This project is in line with SVCE Decarbonization Strategy, to accelerate the electrification and transformation of mobility in our community to reduce emissions. Within this strategy, SVCE calls to implement a strategy and plan for community-wide buildout of EV charging infrastructure. The project will expand the EV charging infrastructure in the City.

Each unit will be net zero energy on an annual basis through the on-site generation of clean electricity via the solar array.

It will also reduce the load of the surrounding EV chargers connected to the grid. Reducing grid load supports grid stability and reduces the need to operate additional power plans which can emit more greenhouse gases.

Each unit has a solar array that generates clean energy and stores it in a battery. This system provides a reliable solution for energy resilience for a facility that supports the community. During power outage or emergency disaster, the public can still charge their electric vehicles. The public and first responders can also utilize the unit electrical panel which contain various outlets to power cell phones or equipment. By having another power source, the first responders can continue to provide assistance to the community. These units are also portable and can be relocated to provide electricity at various sites that lost or do not have access to the power grid. The project will include a trailer to allow city staff to relocate the units.

This project sets an example of a charging infrastructure that strictly relies on solar array and battery storage system and it’s not dependent on grid energy thus reducing the demand on the grid to ensure long-term resilience.

The unit are easily transportable and are made ADA-compliant where public can easily access it. The unit can also provide backup power during emergencies to serve the community.

Anticipate learning the use patterns including peak and off peak demands of the units at various City locations: Quinlan Community Center, Senior Center, City Hall, Wilson Park, Creekside Park, Jollyman Park, Memorial Park, Blackberry Farm Golf Course, McClellan Ranch, and Sports Center.

Grant amount requested:

Beam Solar Unit: $204,260
Sales Tax: $19,405
Total: $223,665
12/1/2023 to 12/31/2024
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28. Application Terms and Conditions
All parties acknowledge that SVCE is a public agency subject to the requirements of the California Public Records Act, Cal. Gov. Code section 6250 et seq. Applications submitted are public records subject to public review.

The submission of an application shall be deemed a representation and certification by the applicant that it:
• Has read, understands and agrees to the information and requirements set forth in this application.
• Has the capability to complete the responsibilities and obligations of the application being submitted.
• Represents that all information contained in the application is true and correct. • Did not, in any way, collude, conspire to agree, directly or indirectly, with any person, firm, or corporation in regard to the amount, terms or conditions of this application.
• Acknowledges that SVCE has the right to make any inquiry it deems appropriate to substantiate or supplement information supplied by applicant, and applicant hereby grants SVCE permission to make these inquiries.
• Will provide any and all documentation related to the application in a timely manner. • Has disclosed any conflicts of interest.

This application does not commit SVCE to enter into a contract or disburse any grant funds, nor does it obligate SVCE to pay for any costs incurred in the preparation and submission of applications or in anticipation of a contract. SVCE reserves the right to:
• Make the selection based on its sole discretion.
• Reject any and all applications in its sole discretion. • Issue subsequent applications.
• Postpone opening for its own convenience.
• Remedy technical errors in the process.
• Negotiate with any, all or none of the applicants.
• Waive informalities and irregularities in the applications.

The person signing below hereby represents and warrants that s/he is signing with full and complete authority to bind the party on whose behalf of whom s/he is signing. 440
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Solar-Powered Transportable Electric Vehicle Charging System Scope of Work Statement
Project Summary
The City of Cupertino will be procuring two solar-powered transportable electric vehicle charging systems to provide alternative charging solutions to the community that reduce emissions. Each of the unit will be net zero energy since it is capable of on-site generation of clean electricity using the solar array thus providing carbon free solution that eliminates the dependency on fossil fuels.

During power outage or emergency disaster, the public can still charge their electric vehicles. The public and first responders can also utilize the unit electrical panel which contain various outlets to power cell phones or equipment. By having another power source, the first responders can continue to provide assistance to the community. These units are also portable and can be relocated to provide electricity at various sites that lost or do not have access to the power grid.

The procurement will also include a trailer to allow city staff to relocate the units.

Deliverables

1. The City will place the units at various City parks and facilities to allow the public to use the units to charge their electric vehicles. The units will be rotated every two months to determine which sites have the most use.

2. Cupertino staff will provide a brief presentation to Silicon Valley Clean Energy’s Member Agency Working Group (MAWG) upon completion of the project.

Estimated Costs:

Silicon Valley Clean Energy Funding: Cost ($)
Two mobile solar charging station with
trailer for transportation
$204,260
Sales Tax: $19,405
Project Total: $223,665
Project Schedule:
• Procurement and delivery of two transportable electric vehicle charging systems. – Delivery by 1/31/2024
• Place units at various City parks and facilities and rotate every two months – 1/31/2024 to 10/31/2024
• Collect and analyze charging session data – 1/31/2024 to 10/31/2024 • Provide brief presentation to Silicon Valley Clean Energy by 12/31/2024.

Attachment B
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Beam EV ARC™ Proposal via CA DGS Contract #1-22-61-16
Quote Number
Created Date
Customer Name
00000904
10/27/2023
City of Cupertino
Contact Name
Title
Email
Phone
Jimmy Tan
Assistant Public Works Director
[email protected]
(408) 777-3248
Bill To Name
Bill To
City of Cupertino
10300 Torre Ave.

Cupertino, CA 95014
Ship To Name
Ship To
City of Cupertino
10300 Torre Ave.

Cupertino, CA 95014
Prepared By
Email
Andy Ike
[email protected]
Phone (858) 790-8140
EV ARC™ 2020 Product Description
The patented EV ARC™ 2020 is the world’s first and only fully autonomous, transportable, solar-powered electric vehicle charging system.

Designed, engineered and manufactured in the U.S., the EV ARC™ 2020 measures 7.5' X 18' at the base and fits inside a standard parking space without reducing available parking while being ADA compliant.

EV ARC™ 2020 systems are capable of generating and storing enough clean, solar electricity to charge up to 265 e miles in a single day. Thanks to its battery storage, it can charge electric vehicles day or night, or even during periods of cloudiness, and is also an excellent source of emergency/alternative power. The electricity produced is clean and renewable, reducing 100% of greenhouse gas emissions from ICE vehicles and electric vehicles powered from the utility grid.

The EV ARC™ 2020 is deployed in minutes and has not required any kind of permitting in the over 100 jurisdictions which are currently benefitting from it. It is deployed without any construction or electrical work and does not require civil or electrical engineering, foundations, trenching, electrical connections or upgrades. It will produce energy reliably and consistently but will not generate a utility bill or fail to operate because of a black out or other utility grid failure. It’s no wonder that Google, the City of New York, the State of California and many others across the U.S. and internationally trust the EV ARC™ product line to charge their electric vehicles. Your EV ARC™ 2020 is an American-made product and will be fabricated in our San Diego, California facility.

Customer Details
Billing and Shipping
Your Clean Mobility Expert
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EV ARC™ 2020 Diagram
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EV ARC™ 2020 Pricing
Product Product Code Product Description Quantity List Price Total Price Beam EV
ARC™ with
one (1) Enel
X Way
JuiceBox®
charger
ARC2020-EJ1
EV ARC™ 2020, 4.3kW solar array, 22kWh expandable storage, BeamTrak™, 1 (one) Enel X Way networked JuiceBox® charger, one (1) standard J1772 connector. Includes 12 months of Enel X Way JuiceNet Enterprise Cloud Plan.

CLIN #1102, includes 2% CA DGS Contract discount.

2.00 $63,542.22 $127,084.44
Enel X Way
JuiceNet
Enterprise
Cloud Plan

EJ-CLOUD
The annual Enel X Way JuiceNet Enterprise Cloud Plan provides remote access to charging session data, usage controls, data management and reporting. Annual subscription is available with purchase of EV ARC™ systems with Enel X Way JuiceBox chargers. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system with a JuiceBox charger; Annual renewal thereafter. Annual plan is per plug.

CLIN #1303, includes 2% CA DGS Contract discount.

2.00 $147.00 $0.00
Enel X Way
JuiceNet
Enterprise
Cloud Plan

EJ-CLOUD
The annual Enel X Way JuiceNet Enterprise Cloud Plan provides remote access to charging session data, usage controls, data management and reporting. Annual subscription is available with purchase of EV ARC™ systems with Enel X Way JuiceBox chargers. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system with a JuiceBox charger; Annual renewal thereafter. Annual plan is per plug.

CLIN #1303, includes 2% CA DGS Contract discount.

10.00 $147.00 $1,470.00
Beam Boost
battery
upgrade
BOOST40
Beam Boost upgrade for EV ARC™ 2020 systems increases battery storage to 43 kWh.

CLIN #1201, includes 2% CA DGS Contract discount.

2.00 $9,821.56 $19,643.12
Emergency
Power Panel
EPP
Off-grid, 100% solar-powered Emergency Power Panel for energy resiliency and disaster preparednes. 6kW 120/240V solar generator with 2 x 120V NEMA 5-20 duplex outlets (GFCI protected), 2 x 120V NEMA L5-20 outlets (twist lock, GFCI protected), 1 x 240V NEMA L14-30 outlet (not GFCI protected) , lockable polycarbonate cover plate.

CLIN #1202, includes 2% CA DGS Contract discount.

2.00 $1,925.70 $3,851.40
Safety
Bollards
BOLLARDS Heavy-duty safety bollards mounted on the EV ARC™ base pad.

CLIN #1205, includes 2% CA DGS Contract discount. 2.00 $357.70 $715.40 Beam ARC™
Mobility trailer
AMT
The Beam ARC Mobility™ trailer, designed to relocate off-grid EV ARC™ 2020 sustainable EV charging systems. Remote controlled hydraulics enable one person to stow, transport, place and unstow EV ARC™ products. Gooseneck or pintle hitch options available.

CLIN #1203, includes 2% CA DGS Contract discount.

1.00 $42,238.00 $42,238.00
Remote
Monitoring
and
Management
System
(RMMS)
RMMS-1
Annual plan for Remote Monitoring and Management System (RMMS) provides login access to view data and status of the EV ARC system. 4G LTE and WiFi connections enable remote monitoring of solar energy production, battery status, energy output, energy use session data.

Remote performance assessment and troubleshooting can prevent service calls. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system; Annual renewal thereafter.

CLIN #1300, includes 2% CA DGS Contract discount.

2.00 $388.08 $0.00
Remote
Monitoring
Five-year (5 year) prepaid plan for the Remote Monitoring and Management System (RMMS) provides login access to view data and status of the EV ARC system. 4G LTE and WiFi connections enable 444
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and
Management
System
(RMMS)
5-Year
Extension
RMMS-5
remote monitoring of solar energy production, battery status, energy output, energy use session data. Remote performance assessment and troubleshooting can prevent service calls. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system; 5-year prepaid plan discounts the annual cost.

CLIN #1301, includes 2% CA DGS Contract discount.

2.00 $1,715.00 $3,430.00
Beam Annual
Operation &
Maintenance
Plan

O&M-PLAN
Operation & Maintenance: Includes PV panel cleaning, grease slew drives, check calibration of BeamTrak™, check battery charging systems, settings, performance of inverter, overall condition of structure, and inspect and confirm operation of EV charger. Service is included for the 1st twelve months.

CLIN #1402, includes 10% CA DGS Contract discount.

2.00 $582.75 $0.00
Beam Annual
Operation &
Maintenance
Plan

O&M-PLAN
Operation & Maintenance: Includes PV panel cleaning, grease slew drives, check calibration of BeamTrak™, check battery charging systems, settings, performance of inverter, overall condition of structure, and inspect and confirm operation of EV charger. Service is included for the 1st twelve months.

CLIN #1402, includes 10% CA DGS Contract discount.

10.00 $582.75 $5,827.50
Vendor
Catalog Item -
Warranty (1
Year)
Manufacturer Warranty - First 12 months included
Segment ID: A, includes 2% CA DGS Contract discount. Non-core item. 2.00 $0.00 $0.00 Shipping & Handling is FOB Destination and includes Beam Team performing un-load / un-stow of equipment. Customer may need a 12K capacity forklift onsite upon delivery; to be determined when delivery date is scheduled.

Total Price
Shipping and
Handling
Grand Total
Expiration Date
Notes
$204,259.86
$0.00
$204,259.86
12/31/2023
6-Years of RMMS (1st year included)
6-Years of Enel X Way JuiceNet Enterprise
Cloud Plan per charger (1st year included)
6-Years of O&M (1st year included)
Totals
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Applicable sales tax will be billed upon
invoicing Payment Terms:

Net 30 days
https://caleprocure.ca.gov/PSRelay/ZZ_PO.ZZ_CTR_SUP_CMP.GBL?Page=ZZ_CTR_SUP_PG&Action=U&SETID=STATE&C NTRCT_ID=1-22-61-16
California DGS Contract Link
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EXHIBIT C
Job Impacts Data Collection Worksheet
Silicon Valley Clean Energy Community Resilience Program Job Impacts Data Collection
Worksheet
Instructions: The form should be completed and submitted with each invoice. Each contractor and subcontractor should complete a separate form. The information will be used by SVCE to better understand the economic impacts of program investments and will have no impact on payment or performance evaluation of the grantee or contractors. Please be as accurate and complete as possible.

Position Title [Type of
Worker]
Total
Employees
in Position*
Average
Hourly
Wage
Total
Hours
Worked**
EmployerSponsored
Health
Benefits?
Y/N

[Type 1]
[Type 2]
[Add Additional Rows as
Needed]
*Sum of all individual employees with at least (1) labor hour during the invoice period
**Sum of all the hours of all employees at this title/wage for the invoice period
***Add rows as need for additional employees
Note: If this reporting system does not align with the funding source of your project, please contact SVCE to discuss possible reporting alternatives. 447
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BeamForAll.com
[email protected]
+1 858-799-4583
Beam Global
5660 Eastgate Drive
San Diego, CA 92121
Your EV ARC™ 2020 is an American-made product and will be fabricated in our San Diego, California facility.

EV ARC™ 2020 systems are capable of generating and storing enough clean, solar electricity to charge up to 265 e miles in a single day. Thanks to its battery storage, it can charge electric vehicles day or night, or even during periods of cloudiness, and is also an excellent source of emergency/alternative power. The electricity produced is clean and renewable, reducing 100% of greenhouse gas emissions from ICE vehicles and electric vehicles powered from the utility grid.

The EV ARC™ 2020 is deployed in minutes and has not required any kind of permitting in the over 100 jurisdictions which are currently benefitting from it. It is deployed without any construction or electrical work and does not require civil or electrical engineering, foundations, trenching, electrical connections or upgrades. It will produce energy reliably and consistently but will not generate a utility bill or fail to operate because of a black out or other utility grid failure. It’s no wonder that Google, the City of New York, the State of California and many others across the U.S. and internationally trust the EV ARC™ product line to charge their electric vehicles.

The patented EV ARC™ 2020 is the world’s first and only fully autonomous, transportable, solar-powered electric vehicle charging system.

Designed, engineered and manufactured in the U.S., the EV ARC™ 2020 measures 7.5' X 18' at the base and fits inside a standard parking space without reducing available parking while being ADA compliant.

EV ARC 2020 Product Description ™
Phone (858) 790-8140
Email [email protected]
Prepared By Andy Ike
10300 Torre Ave.

Cupertino, CA 95014
Ship To
Ship To Name City of Cupertino
10300 Torre Ave.

Cupertino, CA 95014
Bill To
Bill To Name City of Cupertino
Phone (408) 777-3248
Email [email protected]
Title Assistant Public Works Director
Contact Name Jimmy Tan
Customer Name City of Cupertino
Created Date 10/27/2023
Quote Number 00000904
Beam EV ARC Proposal via CA DGS Contract #1-22-61-16 ™
Customer Details
Billing and Shipping
Your Clean Mobility Expert
Attachment C
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BeamForAll.com
[email protected]
+1 858-799-4583
Beam Global
5660 Eastgate Drive
San Diego, CA 92121
EV ARC 2020 Diagram ™
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BeamForAll.com
[email protected]
+1 858-799-4583
Beam Global
5660 Eastgate Drive
San Diego, CA 92121
EV ARC 2020 Pricing ™
Product Product Code Product Description Quantity List Price Total Price Beam EV
ARC™ with
one (1) Enel
X Way
JuiceBox®
charger
ARC2020-EJ1
EV ARC™ 2020, 4.3kW solar array, 22kWh expandable storage, BeamTrak™, 1 (one) Enel X Way networked JuiceBox® charger, one (1) standard J1772 connector. Includes 12 months of Enel X Way JuiceNet Enterprise Cloud Plan.

CLIN #1102, includes 2% CA DGS Contract discount.

2.00 $63,542.22 $127,084.44
Enel X Way
JuiceNet
Enterprise
Cloud Plan

EJ-CLOUD
The annual Enel X Way JuiceNet Enterprise Cloud Plan provides remote access to charging session data, usage controls, data management and reporting. Annual subscription is available with purchase of EV ARC™ systems with Enel X Way JuiceBox chargers. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system with a JuiceBox charger; Annual renewal thereafter. Annual plan is per plug.

CLIN #1303, includes 2% CA DGS Contract discount.

2.00 $147.00 $0.00
Enel X Way
JuiceNet
Enterprise
Cloud Plan

EJ-CLOUD
The annual Enel X Way JuiceNet Enterprise Cloud Plan provides remote access to charging session data, usage controls, data management and reporting. Annual subscription is available with purchase of EV ARC™ systems with Enel X Way JuiceBox chargers. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system with a JuiceBox charger; Annual renewal thereafter. Annual plan is per plug.

CLIN #1303, includes 2% CA DGS Contract discount.

10.00 $147.00 $1,470.00
Beam Boost
battery
upgrade
BOOST40
Beam Boost upgrade for EV ARC™ 2020 systems increases battery storage to 43 kWh.

CLIN #1201, includes 2% CA DGS Contract discount.

2.00 $9,821.56 $19,643.12
Emergency
Power Panel EPP
Off-grid, 100% solar-powered Emergency Power Panel for energy resiliency and disaster preparednes. 6kW 120/240V solar generator with 2 x 120V NEMA 5-20 duplex outlets (GFCI protected), 2 x 120V NEMA L5-20 outlets (twist lock, GFCI protected), 1 x 240V NEMA L14-30 outlet (not GFCI protected) , lockable polycarbonate cover plate.

CLIN #1202, includes 2% CA DGS Contract discount.

2.00 $1,925.70 $3,851.40
Safety
Bollards BOLLARDS Heavy-duty safety bollards mounted on the EV ARC™ base pad. CLIN #1205, includes 2% CA DGS Contract discount. 2.00 $357.70 $715.40 Beam ARC™
Mobility trailer AMT
The Beam ARC Mobility™ trailer, designed to relocate off-grid EV ARC™ 2020 sustainable EV charging systems. Remote controlled hydraulics enable one person to stow, transport, place and unstow EV ARC™ products. Gooseneck or pintle hitch options available.

CLIN #1203, includes 2% CA DGS Contract discount.

1.00 $42,238.00 $42,238.00
Remote
Monitoring
and
Management
System
(RMMS)
RMMS-1
Annual plan for Remote Monitoring and Management System (RMMS) provides login access to view data and status of the EV ARC system. 4G LTE and WiFi connections enable remote monitoring of solar energy production, battery status, energy output, energy use session data.

Remote performance assessment and troubleshooting can prevent service calls. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system; Annual renewal thereafter.

CLIN #1300, includes 2% CA DGS Contract discount.

2.00 $388.08 $0.00
Remote
Monitoring
Five-year (5 year) prepaid plan for the Remote Monitoring and Management System (RMMS) provides login access to view data and status of the EV ARC system. 4G LTE and WiFi connections enable 450
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BeamForAll.com
[email protected]
+1 858-799-4583
Beam Global
5660 Eastgate Drive
San Diego, CA 92121
https://caleprocure.ca.gov/PSRelay/ZZ_PO.ZZ_CTR_SUP_CMP.GBL?Page=ZZ_CTR_SUP_PG&Action=U&SETID=STATE&CNTRCT_ID=1-22-61-16 Applicable sales tax will be billed upon invoicing
Payment Terms: Net 30 days
6-Years of RMMS (1st year included)
6-Years of Enel X Way JuiceNet Enterprise
Cloud Plan per charger (1st year included)
6-Years of O&M (1st year included)
Notes
Expiration Date 12/31/2023
Grand Total $204,259.86
Shipping and $0.00
Handling
Shipping & Handling is FOB Destination and includes Beam Team Total Price $204,259.86 performing un-load / un-stow of equipment. Customer may need a 12K capacity forklift onsite upon delivery; to be determined when delivery date is scheduled.
and
Management
System
(RMMS)
5-Year
Extension
RMMS-5
remote monitoring of solar energy production, battery status, energy output, energy use session data. Remote performance assessment and troubleshooting can prevent service calls. Service is included for the 1st twelve (12) months with purchase of an EV ARC™ system; 5-year prepaid plan discounts the annual cost.

CLIN #1301, includes 2% CA DGS Contract discount.

2.00 $1,715.00 $3,430.00
Beam Annual
Operation &
Maintenance
Plan

O&M-PLAN
Operation & Maintenance: Includes PV panel cleaning, grease slew drives, check calibration of BeamTrak™, check battery charging systems, settings, performance of inverter, overall condition of structure, and inspect and confirm operation of EV charger. Service is included for the 1st twelve months.

CLIN #1402, includes 10% CA DGS Contract discount.

2.00 $582.75 $0.00
Beam Annual
Operation &
Maintenance
Plan

O&M-PLAN
Operation & Maintenance: Includes PV panel cleaning, grease slew drives, check calibration of BeamTrak™, check battery charging systems, settings, performance of inverter, overall condition of structure, and inspect and confirm operation of EV charger. Service is included for the 1st twelve months.

CLIN #1402, includes 10% CA DGS Contract discount.

10.00 $582.75 $5,827.50
Vendor
Catalog Item -
Warranty (1
Year)
Manufacturer Warranty - First 12 months included
Segment ID: A, includes 2% CA DGS Contract discount. Non-core item. 2.00 $0.00 $0.00 Totals
California DGS Contract Link
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Rapidly Scalable No Construction,
No Electrical Work
Charge 24/7: Night,
Rain, Grid Failures
Any Brand Charger,
Pre-Mounted
EV ARC™ 2020
The EV ARC™ 2020 from Beam Global is the only rapidly deployed, 100% renewable, transportable but permanent EV charging solution. Grid independent, it deploys in minutes with no permitting, no construction, no electrical work and no utility bill. It will charge electric vehicles with the EV charger brand of your choice, even during grid outages.

Sustainable EV Charging
Each EV ARC™ system generates and stores its
own electricity and tracks the sun to generate up
to 25% more energy. Battery storage allows you to
charge during the night, inclement weather and
power outages. It fits inside a standard parking
space and because vehicles easily park on the
base pad you won’t lose a single spot. Reaching
as many as 12 vehicles, you can charge up to six
EVs at the same time.

Join organizations like Google, New York City and
Caltrans who are Driving on Sunshine.

EV Charging Deployed in Minutes Not Months
BeamForAll.com [email protected]
Attachment D
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Mechanical
Array Dimensions 20.7 L x 10.7 W ft
Max Height 15.3 ft
Min Clearance 9 ft
Base-Pad Footprint 18 L x 7.5 W ft
Weight 5 <12,500 lbs
Surface Loading 6 8.14 psi
Standard Shipping Methods ARC Mobility™ Trailer/ Truck
& Trailer / Shipping Container
EV ARC™ Stowed Ship Size 7 18 L x 7.5 W x 7.6 H ft
Performance
Solar Array 4.4 kW
Range 1 Up to 265 e-miles in a single day
Battery Storage Options 20, 30, 40 kWh
Total EV Charger Power 2 Up to 5.76 kW
EV Charger Type 3, 4 Any brand; 1-6 plugs;
type J1772
Certified Wind Load 160 mph
Major Component Ratings
EVSE: UL 2231, UL 2594
Solar Panels: UL 1703
Battery: Cells UL 1642 UL/ULC 2580, PCC Thermal
Management Encapsulant UL 94 V0
Inverter: UL 1741-2010/2018, IEEE1547a-2003/2014, FCC 15 class B, UL 1741SA, CA Rule 21, HECO Rule 14H
The EV ARC™ 2020 is off-grid so generates no utility bill and can charge EVs during power outages.

It provides emergency power for first responders, is wind-rated to 160 mph, flood-proof to 9.5’ and ADA compliant. Units are deployed in minutes by a Beam Deployment Expert and require zero contact.

1. Range will vary based on local conditions

2. Actual total output power depends on EV model and charger model

3. Supports a variety of quality EV chargers that come pre-mounted.

4. Power may be reduced based on number of circuits, EV model and charger model.

5. Exact weight varies based on EV ARC™ model and options

6. Pressure calculated by weight distributed over 8in x 24in anti-skid pads

7. Enables domestic and international shipping on a standard flatbed trailer or shipping container
Vital Energy When and Where You Need It
EV ARC™ 2020 Specifications
Drive on Sunshine™
Fastest Deployed Most Scalable Lowest TCO
Get the Charger Brand You Want
BeamForAll.com [email protected]
v1.82
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[email protected] | 5660 Eastgate Drive,San Diego,CA 92121 EV Charging | Emergency Preparedness | Energy Resiliency EV ARC™ 2020
The EV ARC™ 2020 is a 100% off-grid solar-powered electric vehicle (EV) charging system that doubles as a mobile emergency preparedness and energy resiliency asset. During grid failure it continues to produce, store and deliver energy. The Transformer ARC™ design folds into a low-profile structure for ease of transport, providing vital energy where and when needed. • Mobile Energy
• Off Grid
• Rapid Deployment
• Emergency Power
• Easily Moved
• 100% Renewable
EV ARC™ 2020
“Transforms” into a low
profile for transport
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ENVISIONSOLAR.COM | GOSOL AR@ENVISIONSOL AR.COM | 5660 EASTGATE DRIVE,SAN DIEGO,CA 92121 Provide vital electricity during emergencies, disasters, power outages or in locations without a utility grid connection. Deliver total continuous power of 25A at 240V max. Emergency Power Panel is securely located on the upper enclosure and is accessible via a ladder.

Breakers
• 1 x 30A main 240V breaker
• 2 x 20A push to reset 120V breakers
• 1 x 240V NEMA L14 30 outlet (not GFCI protected)
• 2 x 120V NEMA 5-20 duplex (GFCI protected)
• 2 x 120V NEMA L5-20 outlet (twist lock, GFCI protected) Protection
• Lockable polycarbonate cover plate
• Cover plate serves as weather protection
• Padlock latch is universally compatible with standard locking mechanisms

EMERGENCY POWER PANEL SPECIFICATIONS
The EV ARC™ 2020 is a versatile energy infrastructure
product and is the only 100% renewable, movable, grid
independent EV charging option that fits in a standard parking space. It is uniquely suited to serve emergency preparedness needs of local, state, federal and military agencies. • Self contained EV/NEV charging station
• 4.3kW solar array with lithium ion battery storage
• Wind-rated up to 120 mph
• Flood-proof up to 9.5’
• BeamTrak™ sun tracking creates up to 25% more power
• Transportable for power where and when required
• Included in FEMA’s Authorized Equipment List (AEL)*
Clean, Quiet, Safe Power
No fueling. No emissions. No noise. No on-site liquid fuel storage or handling.
v1.5
EV Charging | Emergency Preparedness | Energy Resiliency EV ARC™ 2020
* EV ARC™ solar powered charging stations are included in the FEMA Authorized Equipment List, under designation 10BC 00 SOLR Chargers.

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[email protected] | 5660 Eastgate Drive,San Diego,CA 92121 California Emergency Medical Services Authority (CAL EMSA) Runs Emergency Equipment Day and Night for 3-Day Training Operation Communications Hub
• ViaSat Satellite for Internet
• Monitoring camera
• Router, radio repeater
• Laptops, cell phones
Mobile Workstation
• 2 CB Radios
• Portable radio charger
• Lights
• ACU-M interoperability gateway
• Laptops, cell phones
Medical Tent and Ops Tent
• Medical tent with medical
equipment, air conditioning, lights
• Operations tent with communications hub, air conditioning, lighting EV ARC™ Solar Microgrid Powers 3-Day
Anti-Terrorist Field Training Exercise

CASE STUDY
Held on Alameda Island in California, CAL EMSA,
local police and urban search and rescue squads
held a three day training for first responders
focused on anti-terrorist readiness. Two EV ARC™
units were deployed to power field operations and
a field hospital. Each EV ARC™ had an Emergency
Power Panel (included in FEMA’s Authorized
Equipment List). Exercises included mock civilian
rescues and medical triage in various situations.

The two EV ARC™ units were combined to create
a 208V, three-phase, 12 kW microgrid for clean
quiet energy day and night. Replacing diesel
generators typically used eliminated the need to
store, transport and handle fuel, and eliminated
the noise, noxious fumes and fuel management.

Because EV ARC™ systems are portable and 100%
off grid, cities can build EV charging infrastructure,
energy resiliency and emergency preparedness
with EV ARC™ systems.

MISSION CRITICAL STATIONS POWERED:

ENVISIONSOLAR.COM | GOSOL AR@ENVISIONSOL AR.COM | 5660 EASTGATE DRIVE,SAN DIEGO,CA 92121 Day Job: Faithful solar-powered electric vehicle
charging system. 100% off-grid.

Weekend Warrior: Mission-critical hero providing
electricity in emergencies, disasters, grid outages.

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Single
Person Use
Easy
Stow/Unstow
Remote
Control Use
Rapid
Relocation
ARC Mobility™ Trailer
The Beam ARC Mobility™ trailer is specialized hydraulic transport equipment designed to rapidly relocate off-grid EV ARC™ 2020 sustainable EV charging systems. Remote controlled hydraulics enable one person to stow, transport, place and unstow EV ARC™ products. EV charging infrastructure has never been more scalable, flexible and resilient.

ARC Mobility™ Trailer for EV ARC™
Owners of Beam EV ARC™ sustainable off-grid EV
charging systems can relocate systems for events,
a move from leased properties, emergencies, a
change in EV driver patterns or simply because
they want them in a more optimal location. The
frame is powder-coated for long-lasting durability
and rust prevention with slip-resistant, grit-surface
decking for safety and ease of movement. The
ARC Mobility™ transport system is the fastest and
easiest way to relocate and redeploy off-grid solarpowered EV ARC™ systems.

Rapidly Relocate and Redeploy EV ARC™ Systems
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Tools and Hardware
Full set of EV ARC™ deployment tools and hardware
for EV ARC™ stow and unstow
LED lighting package
7-Way RV blade electrical connector
2-5/16” ball adjustable pipe coupler (Gooseneck) or
height-adjustable 3” lunette ring (Pintle)
12V DC onboard hydraulic power unit and battery
Specs
Axles Tandem Dexter Torflex 10k Axles (20k total)
Wheels 17.5X6.75 Wheel .19 Inset Steel. 6,005lb capacity Tires Taskmaster Provider HD ST215 /75 R17.5 135N
Hydraulic Power Unit 12VDC 1.3GPM HPU with 5 gallon tank Hydraulic Fluid AW-32 Hydraulic Oil
Overall Length 26ft 8in
Overall Width 9ft 6in
Loaded Height 10ft 3in
Unloaded Height 7ft 3in (Gooseneck) 6ft 10in (Pintle)
Unloaded Weight 6,000lbs
Loaded Weight 16,000lbs
The fully integrated hydraulic system and ruggedized remote control make it easy for one operator to stow, transport and unstow EV ARC™ systems. Heavy duty suspension, self-adjusting electric brakes and tandem 10,000 lb axles provide smooth stable transport. The trailer includes a spare wheel and mount, and comes in gooseneck or pintle hitch configurations for powerful towing options.

A commercial driver’s license (CDL) is
required to tow an ARC Mobility™ trailer
that is loaded with an EV ARC™ system.

Durable, Industrial-Grade Transport System
ARC Mobility™ Trailer Specifications
Flexible Scalable Resilient
EV ARC™ Systems When and Where You Need Them
BeamForAll.com [email protected]
v1.1
™
Drive on Sunshine™
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11/8/23, 9:59 AM
https://caleprocure.ca.gov/pages/LPASearch/lpa-details-print.html 1/2 LPA Contract Details
Contract ID 1-22-61-16
UNSPSC UNSPSC Description
25175002 Vehicle vibration dampeners & isolators - Electric vehicle charging station Contract Type
Statewide Contract
Acquisition Type
NON-IT Goods
Status
Active
Description
Mobile Solar Panel Electric Vehicle Charger System
Supplier Name

BEAM GLOBAL
Supplier ID
0000040423
Begin Date
06/24/2022
Expire Date
06/23/2025
Contract Administrator
Buyer
Melissa Cisneros
Department
DGS - Statewide Procurement
Email
[email protected]
Phone
(279) 799-4293
Categories 1 of 1
Attachments 1-3 of 3
Attachment E
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11/8/23, 9:59 AM
https://caleprocure.ca.gov/pages/LPASearch/lpa-details-print.html 2/2 Attachment File
Attach._B_-_EVCharger_Specification.pdf
Attach._A_-_Contract_Pricing.xlsx
UI_1-22-61-16_Supp_5.docx
https://caleprocure.ca.gov/PSRelay/ZZ_PO.ZZ_CTR_SUP_CMP.GBL? Page=ZZ_CTR_SUP_PG&Action=U&SETID=STATE&CNTRCT_ID=1-22-61-16 460
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Department of General Services
Procurement Division
707 Third Street, 2nd Floor
West Sacramento, CA 95605-2811
State of California

STATEWIDE CONTRACT
USER INSTRUCTIONS All changes to most recent Supplem ent are in bold red italic. Additi ons ar e enclosed in asterisks, *, and deleti ons are enclosed in br ackets, [].

MANDATORY
*Supplement 5*
*Incorporates Supplements 1 – 5*
ISSUE AND EFFECTIVE DATE: *7/12/2023*
CONTRACT NUMBER: 1-22-61-16
DESCRIPTION: Mobile Solar Electric Vehicle Supply
Equipment (EVSE)
CONTRACTOR: Beam Global
CONTRACT TERM: 6/24/2022 through 6/23/2025
STATE CONTRACT ADMINISTRATOR: Melissa Cisneros
(279) 799-4293
[email protected]
The contract user instructions, products, and pricing are included herein. All purchase documents issued under this contract incorporate the contract terms and applicable California General Provisions:

Non-IT General Provisions (rev 11/19/2021) (https://www.dgs.ca.gov/- /media/199A6A32E4DE4BECAFF4EFA7194350CD.ashx)
Cal eProcure link: www.caleprocure.ca.gov

ORDER PLACEMENT INFORMATION
Mailing Address:

Beam Global
5660 Eastgate Drive
San Diego, CA 92121
Fax/Email:
*[email protected]*
Contact Information:

Beam Global
*Ryan Ogan*
Phone: *925-383-0869*
Email:
*[email protected]*
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All changes to most recent Supplement are in bold red italic. Additions are enclosed in asterisks; deletions are enclosed in brackets.

SUMMARY OF CHANGES
Supplement
Number Description/Articles Supplement
Date
*5*
*Subject contract for Mobile Solar EVSE is
hereby modified to reflect the following
changes:
 Front Page, Article 14, and Article 25:

Update contact information for Order
Placement and Beam Global Contract
Administrator.*
*7/12/2023*
4 Subject contract for Mobile Solar EVSE is hereby
modified to reflect the following changes:
 Front Page and Article 25: Update State
Contract Administrator information.
4/12/2023
3 Subject contract for Mobile Solar EVSE is hereby
modified to reflect the following changes:
 Table of Contents and User Instructions:

Added Section 32 “Bidder
Declaration/Commercially Useful Function
(CUF)/Certifications”.
3/02/2023
2 Subject contract for Mobile Solar EVSE is hereby
modified to reflect the following changes:
 Front Page and Article 25: Update State
Contract Administrator information.
11/16/2022
1 Subject contract for Mobile Solar EVSE is hereby
modified to reflect the following changes:
 Article 10: Added language to allow contractor
to provide offer in a format acceptable to the
requesting agency.
7/28/2022
N/A Original Contract Posted 6/24/2022
All other terms and conditions remain the same.
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SCOPE
The State’s contract with Beam Global (Beam) provides Mobile Solar Panel (MSP) Electric Vehicle Autonomous Renewal Charger (EV ARC) at contracted pricing to the State of California and local governmental agencies in accordance with the requirements of Contract # 1-22-61-16. The Contractor shall supply the entire portfolio of products as identified in the contract and will be the primary point of contact for data collection, reporting, and distribution of EV ARC to the State.

The contract term is for three (3) years with an option to extend the contract for two (2) additional one (1) year periods or portion thereof. The terms, conditions, and prices for the contract extension option shall be by mutual agreement between the Contractor and the State. If a mutual agreement cannot be met the contract will expire at the end of the current contract term.

CONTRACT USAGE/RULES
A. State Departments
• The use of this contract is mandatory for all State of California departments. • State departments must adhere to all applicable State laws, regulations, policies, best practices, and purchasing authority requirements, e.g. California Codes, Code of Regulations, State Administrative Manual, Management Memos, and State Contracting Manual Volume 2, as applicable.
• Prior to placing orders against this contract, State departments must have been granted non-IT purchasing authority by the Department of General Services, Procurement Division (DGS-PD) for the use of this statewide contract. State departments that have not been granted purchasing authority by DGS-PD for the use of the State’s statewide contracts may contact DGS-PD’s Purchasing Authority Management Section by e-mail at [email protected].
• State departments must have a Department of General Services (DGS) agency billing code prior to placing orders against this contract. Ordering departments may contact their Purchasing Authority contact or their department’s fiscal office to obtain this information.

B. Local Governmental Agencies
• Local governmental agency use of this contract is optional. • Local government agencies are defined in Public Contract Code Chapter 2, Section 10298 (a) (b) and 10299 (b); this includes the California State Universities (CSU) and University of California (UC) systems, K-12 schools and community colleges empowered to expend public funds for the acquisition of products. Local governmental agencies also include government entities from other states within the United States. Local governmental agencies shall have the same rights and privileges as the State under the terms of this contract. While the State makes this contract available to local governmental agencies, each local governmental agency 465
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should determine whether this contract is consistent with its procurement policies and regulations.
• Local governmental agencies shall have the same rights and privileges as State departments under the terms of this contract. Any local governmental agencies desiring to participate shall be required to adhere to the same responsibilities as do State departments and have no authority to amend, modify or change any condition of the contract.
• A DGS issued billing code is not required for local governmental agencies to place orders against this contract.

C. Unless otherwise specified within this document, the term “ordering agencies” will refer to all State departments and/or local governmental agencies eligible to utilize this contract. Ordering and/or usage instructions exclusive to State departments or local governmental agencies shall be identified within each article.

DGS ADMINISTRATIVE FEES
A. State Departments
The DGS will bill each State department an administrative fee for use of this statewide contract. The administrative fee should NOT be included in the order total, nor remitted before an invoice is received from DGS.

Current fees are available online in the Price Book & Directory of Services (https://www.dgs.ca.gov/OFS/Price-Book) (go to Price Book Download and click on Purchasing under Procurement Division).

B. Local Governmental Agencies
For all local government agency transactions issued against the contract, the Contractor is required to remit the DGS-PD an Incentive Fee of an amount equal to

1.25 percent of the total purchase order amount excluding taxes and freight. This Incentive Fee shall not be included in the local governmental agency’s purchase price, nor invoiced or charged to the local governmental agency. All prices quoted to local governmental agencies shall reflect State contract pricing, including any and all applicable discounts, and shall include no other add-on fees.

SB/DVBE OFF-RAMP PROVISION
There is no SB/DVBE off ramp associated with this contract.

EXEMPT PURCHASES
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PROBLEM RESOLUTION/SUPPLIER PERFORMANCE
Ordering agencies and/or Contractor shall inform the State Contract Administrator of any technical or contractual difficulties encountered during contract performance in a timely manner. This includes and is not limited to informal disputes, supplier performance, outstanding deliveries, etc. The ordering agency should include all relevant information and/or documentation (e.g., purchase documents).

CONTRACT ITEMS
Electric Vehicle Autonomous Renewal Charger
(EV ARC)
Contract Discount
Core Items – EV ARC with Smart Chargers 2%
Accessories 2%
Network Services 2%
Operations & Maintenance, Repair Services,
Relocation
10%
Non-Core Catalog 2%
Core Items:

Hardware
Contractor shall provide an EV ARC System, per EV Charger Specification 6150-5950 Attachment B. This includes delivery, setup, and all installation hardware. EV ARC shall come with a one (1) year manufacturer’s warranty on all system components after installation/upgrade, commencing on the date of acceptance.

Accessories
Additional items are available at the quoted discount to upgrade the EV ARC for deployment.

Network Services
Remote Monitoring and Management System (RMMS) is included at no additional cost for twelve (12) months from date of delivery. The Contractor-supplied smart chargers meet the following requirements:
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• Track solar energy production, battery charge/status, energy output, use session data, software/firmware upgrade, etc.
• Charger specific network operating systems (charging session data, usage controls, set pricing, collect fees, reservations, data management, reporting, etc.) • Utilizes open-source protocol communications (such as Open Charge Point Protocol (OCPP)) and/or provide open connectors to OCPP or similar After the initial twelve (12) month period, ordering agencies may purchase additional subscription services at the price quoted on Attachment A – Contract Pricing.

Operations & Maintenance, Repair Services, Relocation
Includes photovoltaic (PV) panel cleaning, grease slew drives, check calibration of BeamTrak, check battery charging systems, check settings and performance of inverter.

Check overall condition of structure and confirm operations of EV charger. This service is included for the first twelve (12) months after acceptance of unit.

Repair Services are included under warranty for the first twelve (12) months and shall commence on the system delivery and acceptance date. After warranty, repair services and field technicians are available at the discounted hourly rate on Attachment A – Contract Pricing. Replacements for damaged or broken items are available through the Non-Core Catalog, at the published discount rate.

Relocation services are available to move deployed units from one location to another, using a Beam deployment expert, at the discounted hourly rate on Attachment A – Contract Pricing.

Non-Core Catalog Items:

Non-core catalog items are all options available in the Contractor’s commercially available catalog, including Integration Services. Non-core catalog items are limited to items within the scope of the EV ARC and are not included as part of the core line items identified in Attachment A – Contract Pricing.
• Integration
The following Integration Services are provided as part of the Non-Core Catalog:
o EVSE Integration
EVSE integration is installation of a customer identified and provided charger that is not available under this contract. The charger will be evaluated to confirm compatibility with the EV ARC system and will be fully integrated into the EV ARC and delivered to customer.
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o EVSP Integration
Electric Vehicle Service Provider (EVSP) integration includes setup of dashboard and monitoring systems for chargers installed under EVSE Integration.

Non-core catalog items are available for purchase by ordering agencies at a single discount off catalog list price. The Contractor’s discount off list price (offered on Attachment 1 – Pricing Workbook, Non-Core Catalog) is applicable to all non-core catalog items purchased.

Non-core items may be offered at a greater discount than the contract discount off list.

SPECIFICATIONS
All products listed on Attachment A, Contract Pricing, conform to Attachment B, State of California EV ARC Specification Number 6150-5950 dated 2/1/2022.

CUSTOMER SERVICE AND TECHNICAL SUPPORT
The Contractor will have a customer service unit that is dedicated to this contract. The customer service unit provides office and personnel resources for responding to inquiries, including telephone and email coverage weekdays during the hours of 8:00 a.m. - 5:00 p.m., PT.

The customer service unit shall be staffed with individuals that:
• Are trained in the requirements of this contract
• Have the authority to take administrative action to correct problems that may occur The Contractor’s customer service unit shall respond to all customer inquiries within eight (8) working hours after initial contact. The contact may be a documented phone call. When requested, on-site technical support shall be provided within three (3) business days.

Contact Phone Email
Customer Service Unit:

Davis Nacamu (858) 201-5477 [email protected]

OFFER FORMAT
If requested, the Contractor shall provide an offer to ordering agencies in MS Excel spreadsheet format. Otherwise, Contractor can provide an offer using a format acceptable to the requesting agency. The quote must include the following data elements:
• Contractor letterhead
• Offer/Quote “prepared by” name and contact information • Offer/Quote number
• Date of Offer/Quote
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• Date of the OEM’s publicly available price index (MSRP/MSIP) • Ordering agency name
• Ordering agency contact person
• Contract number
• Contract expiration date
o Table consisting of:
o Contract Line Item Number
o Quantity
o Core/Non-Core (Y/N)
o Description of Item
o Manufacturer’s Part Number/SKU
o MSRP/Index Price
o Contract Discount
o Contract Unit Price
o Extended Price (Quantity x Contract Price)
o Subtotals of taxable and non-taxable items
o Rate and calculated tax
o Applicable fees
o Grand total

PRODUCT SUBSTITUTIONS
The Contractor will maintain the contract discount as bid throughout the original term of the contract and any extensions, including upon approved substitution. If specified contract line items are no longer available, Contractor may propose substitute product that meets or exceeds the minimum requirements as identified on the State of California EV ARC Bid Specification Number 6150-5950 dated 2/1/2022.

Product substitution shall be in accordance with the General Provisions (rev 06/08/10), Article 16 entitled “Substitutions”.

PURCHASE EXECUTION
A. State Departments
1) Std. 65 Purchase Documents
State departments not transacting in FI$CAL must use the Purchasing Authority Purchase Order (Std. 65) for purchase execution. An electronic version of the Std. 65 is available at the Office of State Publishing web site (https://www.dgsapps.dgs.ca.gov/osp/StatewideFormsWeb/Forms.aspx) (select STD Forms).

All Purchasing Authority Purchase Orders (Std. 65) must contain the following:
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• Agency Order Number (Purchase Order Number)
• Ordering Agency Name
• Agency Billing Code
• Purchasing Authority Number
• Leveraged Procurement Number (Contract Number)
• Supplier Information (Contact Name, Address, Phone Number, Fax Number, E-mail)
• Line Item number
• Quantity
• Unit of Measure
• Commodity Code Number
• Product Description
• Unit Price
• Extension Price
2) FI$CAL Purchase Documents
State departments transacting in FI$CAL will follow the FI$CAL procurement and contracting procedures.
3) Blanket Orders
The use of blanket purchase orders against this statewide contract is not allowed.

B. Local Governmental Agencies
Local governmental agencies may use their own purchase document for purchase execution. The purchase documents must include the same data elements as listed above (Exception: Purchasing Authority Number and Billing Code which are used by State departments only).

MINIMUM ORDER
There is no minimum order for this contract.

ORDERING PROCEDURE
Ordering agencies are to submit appropriate purchase documents directly to the Contractor via one of the following ordering methods:
• U.S. Mail
• Facsimile
• Email
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The Contractor’s Order Placement Information is as follows:

ORDER PLACEMENT INFORMATION
Beam Global
5660 Eastgate Drive
San Diego, CA 92121
Phone:
*(925) 383-0869*
Email:
*[email protected]*
When using any of the ordering methods specified above, all State departments must conform to proper State procedures.

ORDER ACCEPTANCE
The Contractor shall accept orders from any authorized ordering agency. The Contractor shall not accept purchase documents for this contract that:
• Are incomplete
• Contain non-contract items
• Contain non-contract terms and conditions
The Contractor must not refuse to accept orders from any ordering agency for any other reason without written authorization from the State Contract Administrator.

ORDER RECEIPT CONFIRMATION
The Contractor will provide ordering agencies with an order receipt acknowledgement within two (2) working days of receipt. The order receipt confirmation shall include the following information:
• Contractor’s order number
• Ordering agency name
• Agency order number (purchase order number)
• Description of goods
• Purchase order total cost
• Anticipated delivery date
• Identification of any out of stock/discontinued items

OUT OF STOCK REMEDY
Upon receipt of an order acknowledgment identifying out of stock items, the ordering agencies shall have the following options:
• Request a back order
• Cancel the item from the order with no penalty
The Contractor will provide notification to the ordering agencies regarding out-of-stock items which have been back ordered.
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Under no circumstance is the Contractor permitted to make substitutions with non-contract items or unauthorized products.

DISCONTINUED ITEM REMEDY
Upon receipt of an order acknowledgment identifying discontinued items, the ordering agencies shall have the following options:
• Amend purchase document to reflect State-approved substitute item (per Article 11, Product Substitutions)
• Cancel the item from the order
Under no circumstance is the Contractor permitted to make substitutions with non-contract items or unauthorized products without approval from the State Contract Administrator.

DELIVERY SCHEDULES
Delivery for orders placed against this contract shall be in accordance with the following:

A. Locations
Deliveries are to be made within the State of California to the location specified on the individual purchase order, which may include, but not limited to parking structures, roofless parking garages, parking lots and rural or commercial locations.

B. Schedule
Delivery of ordered product shall be completed in full within ninety (90) days after receipt of an order (ARO), unless otherwise agreed to by the ordering agency. Since receiving hours for each ordering agency will vary by facility, it will be the Contractor’s responsibility to check with each ordering agency for their specific delivery hours before delivery occurs. The Contractor must notify the ordering agency within twentyfour (24) hours of scheduled delivery time, if delivery cannot be made within the time frame specified on the Order Receipt Confirmation.

The Contractor is requested to make deliveries in Los Angeles County, Orange County, San Bernardino Metropolitan Area, and San Diego Metropolitan Area during off-peak hours. Off-peak hours are Monday through Friday, 10:00 AM to 4:00 PM PT.

C. Security Requirements
Deliveries may be made to locations inside secure grounds that require prior clearances or special entry procedures for delivery drivers.

Security procedures may vary from facility to facility. The Contractor will be responsible for contacting the secure location for security procedures, hours of operation for deliveries and service, dress code, and other rules of delivery. 473
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Deliveries that are delayed due to drivers not being cleared to enter secure grounds may be cause for contract default.

FREE ON BOARD (F.O.B.) DESTINATION
All prices are F.O.B. destination; freight prepaid by the Contractor, to the ordering agency’s receiving point. Responsibility and liability for loss or damage for all orders will remain with the Contractor until final inspection and acceptance, when all responsibility will pass to the ordering agency, except the responsibility for latent defects, fraud, and the warranty obligations.

Delivery for out of state orders will be negotiated with that ordering agency.

SHIPPED ORDERS
All shipments shall be in accordance with the General Provisions, Article 12 entitled “Packing and Shipment”.

PACKING SLIP
Packing slip requirements shall be in accordance with the General Provisions, Article 12 entitled “Packing and Shipment”.

INSTALLATION
Units will be delivered using either Beam Global company trucks and drivers, or by a third party delivery company, to the location identified by the purchasing agency. Once on site, a Beam technician will install the unit at the appropriate location as determined by the agency and technician. Unit will be installed and tested to ensure it is operating properly.

For California State owned buildings only, a permit must be submitted by the ordering agency for each EV ARC purchased.

Submit the permit application to the Office of the State Fire Marshall, under “Other” at:
https://calfire.govmotus.org/
The following documents must be uploaded as part of the application:

1. BEAM EV ARC 2020 information document, including battery technology type and battery capacities.

2. DGS EV ARC 2020 Program Guide.

3. A site plan showing the required clearances in 2019 CFC Section 1206 will be provided. The site plan does not require a design professional stamp/signature; the permit is for equipment placement, not construction.
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Once documentation has been uploaded to Govmotus, the project can contact the local DSFM for that facility or the area Supervisor for an over-the-counter/field review and permitting; contact information is available on the OSFM website. Once the equipment has been delivered and placed on site, contact the local DSFM or area Supervisor to request a final inspection.

INSPECTION AND ACCEPTANCE
In accordance with the General Provisions, unless otherwise noted in the ordering agency’s SOW, rejection of deliverables must be processed within thirty (30) days of delivery or it shall be deemed as accepted by the State.

CONTRACT ADMINISTRATION
Both the State and the Contractor have assigned contract administrators as the single points of contact for problem resolution and related contract issues.

Administrator
Information DGS-PD Beam Global
Contact
Name:

Melissa Cisneros *Ryan Ogan*
Telephone: (279) 799-4293 *925-383-0869*
Facsimile: N/A N/A
Email: [email protected] *[email protected]* Address: DGS/Procurement Division
Attn: Melissa Cisneros
707 Third Street, 2nd Floor, MS 201
West Sacramento, CA 95605
Beam Global
Attn: *Ryan Ogan*
5660 Eastgate Drive
San Diego, CA 92121

INVOICING
Ordering agencies may require separate invoicing, as specified by each ordering agency.

Invoices will contain the following information:
• Contractor’s name, address and telephone number
• Leveraged Procurement Agreement Number (Contract Number) • Agency order number (purchase order number)
• Item and commodity code number
• Quantity purchased
• Contract price and extension
• State sales and/or use tax
• Prompt payment discounts/cash discounts, if applicable • Totals for each order
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PAYMENT
A. Terms
Payment terms for this contract are net forty-five (45) days. Payment will be made in accordance with the provisions of the California Prompt Payment Act, Government Code Section 927, et seq. Unless expressly exempted by statute, the Act requires State departments to pay properly submitted, undisputed invoices not more than fortyfive (45) days after the date of acceptance of goods, performance of services, or receipt of an undisputed invoice, whichever is later.

B. CAL-Card Use
Use of the CAL-Card for payment of invoices is not allowed under this statewide contract.

C. State Financial Marketplace
State departments reserve the right to select the form of payment for all procurements, be it either an outright purchase with payment rendered directly by the State, or a financing/lease-purchase or operating lease via the State Financial Marketplace (GS $Mart and/or Lease $Mart). If payment is via the financial marketplace, the Contractor will invoice the State department and the State department will approve the invoice and the selected Lender/Lessor for all product listed on the State's procurement document will pay the Contractor on behalf of the State.

D. Payee Data Record
Each State department’s accounting office must have a copy of the Contractor’s Payee Data Record (Std. 204) in order to process payments. State departments should forward a copy of the Std. 204 to their accounting offices. Without the Std. 204, payment may be unnecessarily delayed. State departments should contact the Contractor for copies of the Payee Data Record.

CALIFORNIA SELLER’S PERMIT
The California seller permit number for the Contractor is listed below. Ordering Agencies can verify that permits are currently valid at the following website: www.cdtfa.ca.gov.

State departments must adhere to the file documentation identified in the State Contracting Manual Volume 2.

Contractor Name Seller Permit #
Beam Global 102-144216
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WARRANTY
Hardware is covered under a one (1) year manufacturer’s warranty for all system components, commencing on the date of acceptance, and in accordance with General Provisions, Article 19 entitled “Warranty”.

RECYCLED CONTENT
There is no recycled content associated with this contract.

SB/DVBE PARTICIPATION
There is no Small Business (SB) or Disabled Veteran Business Enterprise (DVBE) participation for this contract.

BIDDER DECLARATION/COMMERCIALLY USEFUL FUNCTION (CUF)/

CERTIFICATIONS
The DGS-PD, as the awarding department, has assessed the Contractor certifications, (i.e. Darfur, Russian Sanctions, SB/DVBE, etc.), Bidder Declaration, and CUF during the solicitation evaluation process. Consequently, when executing purchase documents pursuant to this contract, it is not necessary for State departments operating under statewide contract purchasing authority to request the completion of State required certifications, a Bidder Declaration document, or perform additional CUF analysis. The State department should make a notation of this within their procurement file.

ATTACHMENTS
Attachment A – Contract Pricing
Attachment B – State of California Specification EV ARC, Specification Number 6150-5950 dated 2/1/2022
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CITY OF CUPERTINO
Agenda Item
23-12827 Agenda Date: 12/5/2023
Agenda #: 9.

Subject: Cancellation of the December 19, 2023 City Council meeting Cancel the December 19, 2023 City Council meeting
CITY OF CUPERTINO Page 1 of 1 Printed on 11/29/2023
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CITY COUNCIL STAFF REPORT
Meeting: December 5, 2023
Subject
Cancellation of the December 19, 2023 City Council meeting.

Recommended Action
Cancel the December 19, 2023 City Council meeting.

Discussion
The next City Council meeting is scheduled for December 19, 2023. There are currently no urgent items of business to be transacted or discussed which would require this meeting to be held.

Council has previously cancelled the second meeting in December due to its proximity to the holiday closure of City Hall between Christmas Eve and New Year’s Day.

Staff recommends that the City Council cancel the December 19, 2023 City Council Meeting. If Council wishes to authorize the cancellation, staff will provide a meeting notification to the public in advance. Any pending agenda items will be presented for Council consideration and approval at the next regular meeting in January.

Sustainability Impact
No sustainability impact.

Fiscal Impact
No fiscal impact.

California Environmental Quality Act
Not applicable.
_____________________________________
Prepared by: Kirsten Squarcia, City Clerk
Approved for Submission by: Pamela Wu, City Manager
Attachments: None
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CITY OF CUPERTINO
Agenda Item
23-12530 Agenda Date: 12/5/2023
Agenda #: 10.

Subject: Municipal Code Amendment to Chapter 19.76 and a Conditional Use Permit and Parking Exception for the use of a former public school site by a pre-kindergarten through 9th grade private educational facility and associated Categorical Exemption under CEQA. (Application No.: MCA2023-003; U-2023-002; EXC-2023-009 Applicant: City of Cupertino; Grace Stanat on behalf of Tessellations; Location: BA-zoned (Public Building) properties in Cupertino; 1170 Yorkshire Drive; APN# 362-08-001)
That the City Council:

1. Find the proposed actions exempt from the California Environmental Quality Act (CEQA) and CEQA Guidelines;

2. Conduct the first reading of Ordinance No. 23-2253: "An Ordinance of the City Council of the City of Cupertino amending Cupertino Municipal Code Chapter 19.76 (Table 19.76.030) to allow privately operated educational uses and privately operated public serving uses in the BA zoning district ";

3. Adopt Resolution No. 23-135 approving the Conditional Use Permit (U-2023-002); and

4. Adopt Resolution No. 23-136 approving the Parking Exception (EXC-2023-009) Presenter: Emi Sugiyama, Associate Planner
CITY OF CUPERTINO Page 1 of 1 Printed on 11/29/2023
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CITY COUNCIL STAFF REPORT
Meeting: December 5, 2023
Subject
Consider a Municipal Code Amendment to Chapter 19.76 and a Conditional Use Permit and Parking Exception for the use of a former public school site by a pre-kindergarten through 9th grade private educational facility and associated Categorical Exemption under CEQA. (Application No.: MCA-2023-003; U-2023-002; EXC-2023-009 Applicant:

City of Cupertino; Grace Stanat on behalf of Tessellations; Location: BA-zoned (Public Building) properties in Cupertino; 1170 Yorkshire Drive; APN# 362-08-001) Recommended Action
That the City Council:

1. Find the proposed actions exempt from the California Environmental Quality Act (CEQA) and CEQA Guidelines;

2. Conduct the first reading of Ordinance No. XX-XXX: "An Ordinance of the City Council of the City of Cupertino amending Cupertino Municipal Code Chapter

19.76 (Table 19.76.030) to allow privately operated educational uses and privately operated public serving uses in the BA zoning district ";

3. Approve the Conditional Use Permit (U-2023-002); and

4. Approve the Parking Exception (EXC-2023-009)
Discussion
Background
Permit Requirements
The applicant, Tessellations, requests a Conditional Use Permit (“CUP”) to operate a private education facility at a former public school site (the former Regnart Elementary School) in the Public Building, or BA, zoning district. Per Cupertino Municipal Code (“Municipal Code”) Section 19.76.030(1), allowed uses in the BA zoning district consist of “[b]uildings and other uses on land owned or utilized by a federal, State, county, or city government or authority, or by a special district created for public purposes under the laws of the State of California”
As such, the language in Municipal Code Section 19.76.030(1) pertains specifically to public uses operated by public entities and does not explicitly allow a private entity (e.g., a private school) performing a similar use on BA zoned properties. However, such uses 481
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have historically been allowed with a CUP (discussed below). Since the practice of conditionally permitting private operators in a district intended for public uses is not explicitly stated in the current Municipal Code, a Municipal Code Amendment is proposed to clarify the process by which private school uses may operate on a BA zoned site.

Due to the size (i.e., greater than 10,000 square feet) of the former public school facility, approval of a Major CUP application, which must be reviewed by the Planning Commission, is required. However, since the proposed Municipal Code Amendment requires review by both the Planning Commission and approval by the City Council (Municipal Code Section 19.12.030), per Municipal Code Section 19.04.090, the reviewing body having final approval over a combined application shall be the highest body in the City. Therefore, the City Council will be the final decision-making body for both the BA district’s Municipal Code amendment and the CUP. For the CUP to be approved, the Code amendment must first be adopted. Since Code amendments are not effective until 30 days after a second reading of the ordinance, the effective date of the CUP is conditioned to coincide with the date the Code amendment goes into effect.

Context of Municipal Code Amendment
Chapter 19.76 of the Municipal Code governs Public Buildings (BA), Quasi Public Building (BQ), and Transportation (T) Zones. The chapter notes that the BA, BQ, and T zoning districts are designed to accommodate governmental, public utility, educational, religious, community service, transportation, or recreational facilities in the city.

There are currently 23 sites zoned BA in the City, 14 of which are owned and operated by Cupertino Union School District (“CUSD”) and Fremont Union High School District (“FUHSD”). Over the last decade or more CUSD and FUHSD have experienced a steady and significant decline in student enrollment. This decline is projected to continue for the foreseeable future. Based on projections from the two school districts’ 2022 enrollment numbers, CUSD expects to see an approximate 23% decline in transitional kindergarten to eighth grade students by 20271 and FUHSD expects to see an approximately 21% decline in ninth to twelfth grade students by 2027 2.

On October 14, 2021, in response to this downward trend in enrollment and its budgetary impacts, the CUSD Board voted to close Regnart and Meyerholz (located in San Jose) 1 See Analysis of Enrollment Projections – Fall 2023 Cupertino Union School District, Page 10 “Figure 11:

Moderate 5 Year District-Wide Projection by Grade Level” 2 See https://resources.finalsite.net/images/v1674170884/fuhsdorg/bnyvzlpu4kovphpdxm6z/2022- 23FUHSDForecastUpdateReportFINAL.pdf “October Enrollments, 2016 to 2027” 482
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Elementary Schools, effective in the 2022-2023 school year. 3 CUSD, however, retained
ownership of both the Regnart and Meyerholz school properties with the intent to lease the property to generate revenue.

Conditional Use Permit Site Description
The former Regnart
Elementary School site is
located at 1170 Yorkshire
Drive, north of Rainbow
Drive and west of South
Stelling Road, within the
South Monta Vista
neighborhood. Land uses
surrounding the project
consist exclusively of singlefamily detached residential uses (see Figure 1) originally
developed in the 1960s,
around the time Regnart
Elementary was built.

Project Data
General Plan Designation Public Facilities
Zoning Designation BA (Public Buildings)
Lot Area 9.41 acres
Building Area 50,650 square feet
Project Consistency with:

General Plan: Yes
Zoning: Yes
Environmental Review: Categorically Exempt per Section 15301, Class 1 (Existing Facilities), California Environmental Quality Act (CEQA) Municipal Code Amendment Analysis
Per Municipal Code Section 19.152.010 “[t]his title may be amended … by changing the regulations applicable within one or more districts, … whenever the public interest or general welfare so require.” Public school sites are considered a municipal, or local, resource and the school districts that own the properties directly serve the community in 3 See Cupertino Union School District Resolution No. 21-22-07, “http://go.boarddocs.com/ca/cusdk8/Board.nsf/goto?open&id=C6TLJF5695DF” Figure 1. Existing Land Uses
Belknap Drive
Rainbow Road
Bubb Road
Yorkshire
Drive
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which they are located; therefore, the maintenance and retention of public school sites as educational facilities is considered as being in the public interest.

The existing regulations in Chapter 19.76 of the Municipal Code pertaining to the use of BA zoned sites have remained unchanged from the approval of City Council Ordinance 220(1)4in 1970, which was later codified via City Council Ordinance 1601 in 1992 and do not explicitly allow private uses on public properties.

However, CUSD has previously leased their properties, either in part or in whole, to private schools, specialized schools, day care facilities, and tutoring operations, and in these instances, as previously mentioned, the City has required CUPs. In 1985, the Planning Commission approved Resolution No. 26165that outlined recommended guidelines for new uses on public school sites. In general, the resolution recommended that the operations of the new private uses should reflect that of the public school use.

While never formally approved by the City Council, the guidelines were used by the Planning Commission to aid in the review of permits for the use of public school sites.

Table 1: Use Permits for Private Uses on Public School Sites School Address Use Permit Approved Use
Sedgwick
Elementary 19200 Phil Lane U-1983-40 Private education (600 students) Eaton
Elementary
20220 Suisun
Drive U-1984-15 Private preschool, elementary school, and daycare (210 students) Eaton
Elementary
20220 Suisun
Drive U-1984-20 Specialized school (ballet classes, one classroom) Collins
Elementary
10300 N Blaney
Avenue U-1985-18 Preschool and daycare facility (84 students) Collins
Elementary
10300 N Blaney
Avenue
U-1985-18
(Mod)
Two private education institutions in
six classrooms
Eaton
Elementary
20220 Suisun
Drive U-1986-01
Master Use Permit for Public, QuasiPublic, Private Education, Day Care, Exercise Classes, and Counseling
Services
The proposed Municipal Code Amendment would:
 Expand the allowed, or conditionally allowed, uses on BA zoned properties to include a wider range of educational and public service uses. 4 See Ordinance 220 (1) at “https://laserficherioapp.cupertino.org/WebLink/DocView.aspx?id=24869&dbid=0&repo=CityofCupertino” 5 See Resolution No. 2616 at
“https://records.cupertino.org/WebLink/DocView.aspx?id=696268&dbid=0&repo=CityofCupertino” 484
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 Explicitly require a CUP, to be reviewed and approved by the Planning Commission, for privately operated educational and privately operated public serving uses, including, but not limited to day care facilities and private educational facilities.
 Maintain consistency with the intent of the BA district, as the amendment would continue to require that such uses are conducted on property owned by a federal, State, county, or city government or authority, a special district created for public purposes under the laws of the State of California, or any other governmental agency, and leased for said uses.

The amendment would establish a clear process by which private uses that perform functions similar to public agencies, such as schools, can do so on a site that remains owned by the public entity, subject to appropriate conditions that safeguard the surrounding neighborhood. This Code amendment does not modify the uses, conditional or otherwise, for any zoning district other than the BA district and is therefore expected to have no environmental impacts. The potential for operational impacts to the immediate neighborhood are also considered minimal because the added conditional uses are both similar in nature to the public uses that typically operate on the BA-zoned sites and they are subject to the approval of a CUP, unlike public agencies uses which are permitted by right, without conditions affecting their operations.

While the General Plan does not provide specific recommendations for the use of publicly owned and operated land, it does include several policies that support the retention of property, especially school sites, for public use.
 Strategy RPC-2.1.2: Public Use of School Sites. Zone all public school sites for public use to allow for the public to use [the] sites, when not in use by schools, through shared arrangements.
 Policy RPC-8.1.2: School Expansion. Encourage schools to meet their expansion needs without reducing the size of their sports fields.  Goal RPC-8: Cooperate with school districts to share facilities and meet community needs.
 Policy LU-6.4: Public Access. Coordinate with property owners of public and quasi-public sites to allow public access of Historic and Commemorative Sites to foster public awareness and education. Private property owners will be highly encouraged, but not required, to provide public access to Historic and Commemorative Sites
Since the proposed Municipal Code Amendment would allow for a limited expansion of the uses allowed in the BA zoning district, the public agencies with current ownership would, presumably, have additional options for revenue generation should the current primary use of the sites be altered or removed. This is particularly true of the local school 485
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districts given the continuing trend in decreasing enrollment. As such, the proposed Code amendment supports the extension of the use of those sites in the service of the general public, consistent with the General Plan policies and goals outlined above.

Conditional Use Permit Analysis
If amended, Municipal Code Chapter 19.76 would require a Conditional Use Permit for the operation of a private school on a BA zoned property. As such, Tessellations, the applicant and operator of the private school on the former Regnart school site, is requesting approval of a Conditional Use Permit concurrently with the proposal to amend Code Chapter 19.76 to conditionally allow private uses on publicly owned land through the approval of a CUP.

In February of this year, Tessellations signed a 10-year lease agreement with the CUSD for the use of the former Regnart Elementary School campus (“the site”). In August of 2023, Tessellations began its private educational operation at the site and the City was shortly thereafter made aware of its use of the site. Tessellations then submitted a CUP application in late-August requesting the City’s consideration for the use of the site as a private Preschool through 9th grade operation.

The complete scope of Tessellations’ operation includes the following:
 Pre-K through 9th grade for up to 300 students and 85 staff operating from August to June of each academic year, Monday through Friday, 6:30 a.m. to 4:00 p.m.  An afterschool program hosting up to 125 of the students enrolled in the Pre-K through 9th grade operation, occurring Monday through Friday from 4 p.m. to 6:30 p.m.
 Up to seven special events annually for up to 500 people, occurring on weekends and weekdays and ending by 9:00 p.m. with special parking arrangements, as proposed
 Small, school-related events for up to 60 people, occurring on weekends and weekdays and ending by 9:00 p.m.
 Summer school operations for up to 300 students and 60 staff, operating from June to August of each year, Monday through Friday from 7:00 a.m. to 4:00 p.m.

Only minor alterations to the campus, including general upkeep, are proposed at this time. No additional development or facility expansion is proposed. Moreover, since the site remains owned by the CUSD, a public agency, Tessellations is required to obtain approval for architectural alterations and site improvements from the Division of the State Architect (“DSA”). A condition has been added to this permit requiring that the City be notified of any approved permits processed through the DSA. 486
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Tessellations proposed scope of work is generally consistent with the operation of a public school. The following paragraphs analyze the general factors for consideration of a private school operation.

Number of Students and Staff
At its peak enrollment in 2008, Regnart Elementary School had 652 students and approximately 41 full-time staff. In its final year, prior to its closing, Regnart had 309 students and approximately 31 full-time staff. As noted above, Tessellations proposes a maximum of 300 students and 85 staff, including part-time staff and seasonal vendors.

While there are a higher number of staff expected to be on site on a regular basis, due to Tessellations lower teacher to student ratio (1:5), the total number of persons on site is not expected to exceed what was typically seen at the public school campus during its years of operation. With the parking and travel requirements outlined below, and conditioned as part of this permit, the number of students and staff present on site is expected to result in a use that is consistent with that of a typical public school.

Hours of Operation
Tessellations’ proposed hours of operations are Monday through Friday from 6:30 a.m. to 9:00 p.m., with typical school operations, including the afterschool program, occurring between 7:30 a.m. and 6:30 p.m. Classes begin at 8:15 a.m. and end at 3:15 p.m. and staff is expected to arrive between 7:00 a.m. and 7:30 a.m.

Tessellations staff has confirmed that the school’s start and end times have been reviewed and approved by CUSD to avoid conflict, to the extent possible, with other schools in the area. Table 2 below indicates the start and end times of the nearby public schools that were taken into consideration in CUSD’s review, as reported by Tessellations.

Table 2: School start and end times
Distance Start Time End Time
Tessellations n/a 8:15 a.m. 3:15 p.m.

Kennedy Middle School 0.7 miles 8:00 a.m. 3:05 p.m.

Lincoln Elementary School 1.2 miles 8:10 a.m. 2:45 p.m.

Monta Vista High School 1.4 miles 8:30 a.m. 3:50 p.m.

Drop Off and Pick Up
The proposed student drop-off times are between 8:00 a.m. and 8:15 a.m. and student pick-up is proposed between 3:15 p.m. and 3:30 p.m. Pick-up for the after-school program is proposed to occur through to 6:00 p.m.

Student drop-off and pick-up is proposed to occur entirely on the school site, with no drop-off or pick-up occurring on the street. Five staff will supervise the drop-off to assist 487
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children exiting vehicles and to address traffic flow issues. Additionally, a crossing guard is stationed at Yorkshire and Folkstone Drives to ensure the safety of pedestrians and bicyclists and to facilitate traffic management.

For student pick-up, Tessellations requires the use of an App for parents and guardians called DashPass. Per their submission material, “each car has a placard showing the children that are to be picked up. DashPass notifies the school when a parent or guardian car enters a specific geo-fence location. At this point, the teacher is notified to release the student[s] and they proceed to the pick-up area.” The pick-up process has seven staff assigned to monitor traffic and ensure safety.

Parking and Traffic
Municipal Code Section 19.124.040 requires schools and school offices in the BA zoning district to provide parking at a
rate of one space per employee,
plus one space per 56 square feet
of multi-purpose room, plus eight
visitor spaces, plus one space for
every three students at senior
high school or college level. Since
Tessellations proposes a
maximum of 85 employees, has
3,072 square feet of multi-purpose
space, but no driving-age high
school or college students, it
would be expected to provide 148
parking spaces on site, based on
the relevant parking Code
requirements.

The site currently has 47 parking spaces, four of which are ADA designated spaces. In addition to the existing parking, Tessellations has proposed a new parking area located in the northern portion of the campus on an existing blacktop area, shown in yellow in Figure 2, below. This area could accommodate up to 20 additional spaces, providing an on-site total of 67 spaces. Nine of the spaces will be utilized by the school’s vans, leaving 58 spaces to accommodate staff parking.

Table 3: Parking Required and Provided by location
Location of Parking Total parking
Figure 2: Location of proposed surface parking
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Required Parking per Municipal Code (one space per employee, plus one space per 56 square feet of multi-purpose room, plus eight visitor spaces plus 1 space for every 3 senior high school students) 148
Existing on site (including 4 ADA spaces) 47
Blacktop parking 20
Total provided 67
Van parking (9)
Total available for general parking 58
Deficit per Municipal Code (81)
Shared/Alternate Parking Proposed - New Life Church on
McClellan Rd – available for 2 years under existing lease 82 Excess – meets Municipal Code requirements +1
To address this discrepancy between Code-required parking amounts and the on-site parking capacity, Tessellations has proposed the use of a satellite parking lot in the event this is necessary to augment their on-site parking. If a need were indicated, or it becomes apparent that staff parking is not accommodable on the school site as reduced through carpooling, biking, and walking, staff would then park at the satellite parking lot and be shuttled in groups to the Tessellations campus, thereby reducing the number of vehicles parked at the campus. Tessellations is currently proposing to have this satellite parking lot located at 20900 McClellan Road, which is currently occupied by New Life Church.

The church parking lot currently has approximately 132 parking spaces. Based on the Municipal Code requirements for parking for churches, 50 spaces must remain available for church-related operations. This leaves 82 remaining spaces on the site which would adequately address Tessellations’ 81 space deficit. Additionally, since the church’s peak use occurs on weekends, Tessellations’ potential use of the parking area on weekdays would not result in any parking deficiencies when the church is in full use.

For special events, Tessellations has proposed the use of the entire on-site blacktop area, typically used for outdoor recreation by students, for temporary overflow parking (see red highlight in Figure 2). This temporary parking lot, when in use, would be operated by a private company, hired by Tessellations to manage and direct parking. Figure 3 below shows an example of the proposed temporary parking layout. 489
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As these two parking arrangements – satellite parking lots and temporary parking lots – are not a specified alternative to parking standards in the Municipal Code, a Parking Exception is required. Municipal Code Chapter 19.124 allows the City to consider parking exceptions when the proposed project can demonstrate sufficient parking through an alternative means. The findings for approving a parking exception are listed below:

1. The literal enforcement of this chapter will result in restrictions inconsistent with the spirit and intent of this chapter.

2. The granting of the exception will not be injurious to property or improvements in the area nor be detrimental to the public safety, health, and welfare.

3. The exception to be granted is one that will require the least modification and the minimum variance to accomplish the purpose.

4. The proposed exception will not result in significant impacts to neighboring properties.

The proposed Parking Exception considers the alternative parking arrangement of an offsite parking lot for use by the school as well as a temporary parking lot on an existing blacktop area. This total does not account for the staff that may walk, bike, or carpool to work, which would reduce the total number of spaces needed on a regular basis. Through the use of the satellite parking lot, Tessellations would have access to a total of 149 spaces, a surplus of one space over the required parking ratio. Additionally, Tessellations has provided an alternative option for their special events which would accommodate up to approximately 120 additional spaces on site through temporary parking area.

This additional parking is expected to adequately address the potential for spillover into the adjacent areas and does not result in a reduction in the overall number of parking Figure 3: Proposed Event Parking Layout
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spaces required through Municipal Code Section 19.124.040. Therefore, staff recommends approval of the Parking Exception.

Review by Other Departments and Agencies
The project application was reviewed by the City’s Building Division, Public Works Department, Environmental Services Division, and the County Fire Department.

Comments from each of these departments and agencies have been incorporated into the conditions of approval for this project.

Planning Commission Summary
On November 14, 2023, the Planning Commission conducted a public hearing for their recommendation to the Council regarding the proposals. By a 5-0 vote, the Commission adopted Resolution No. 2023-14 (Attachment 6) recommending that the City Council find all actions exempt from CEQA and adopt the proposed Municipal Code Amendment to the standards of the BA zoning district. Separately, by a 4-1 vote (No: Scharf), the Commission adopted Resolution No.s 2023-15 and 2023-16 (Attachments 7 and 8) recommending that the Council approve the Conditional Use Permit and Parking Exception as proposed by Tessellations.

The Commission received comments from the public regarding use of public street parking by school staff and visitors, public access to the school property, potential for increased traffic, concerns of an increase in crime, traffic during large events, the use of the shuttle service, and limited on-site parking.

Municipal Code Amendment Discussion
Discussion related to the Municipal Code Amendment was limited and revolved around an understanding of how the text amendment was exempt from CEQA. Staff clarified that the Municipal Code Amendment would not permit without future review and approval of a CUP, any operations on other BA zoned sites.

Conditional Use Permit Discussion
With regards to the Use Permit, Commissioners noted that there was support for maintaining a school use at the site and that the proposed use was compatible based on its size. The Commission had general comments in the following areas:
 If the barriers to allow for a private school use on school district owned property became too high, it may not be feasible for CUSD to retain ownership of the sites as occurred in the 1980s when school sites were closed.
 One commissioner voiced concerns about impacts to neighborhood traffic and the operation of the school prior to receiving permits while three others noted that some traffic issues were inherent with any school operation. 491
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 One Commissioner was concerned about the use of the blacktop for special events and afterschool program use would limit the public’s access to the site. However, the applicant clarified that the school had approval via email from CUSD for use of the black top exclusively until 6 p.m. even though this was not reflected in their lease. It was further clarified that access to the fields would remain open to the public after 4 p.m., unless permitted by the City for use exclusively by Tessellations6.

Parking Exception Discussion
Discussion around the Parking Exception included comments and clarifications in the following areas:
 Parking requirements and calculation
 Permit parking
 Whether the school intended to expand beyond the proposed 300 students and 85 staff.
 Use of New Life Church as a satellite lot, clarification on existing uses at the Church and the potential for another site to be a satellite lot. Staff clarified that the resolution for EXC-2023-009 contains a condition of approval which requires notification of and approval by the City if the satellite parking lot is proposed at a new location.  Need for parking and traffic studies. Staff clarified that these studies were not required since the project is exempt from CEQA. It was also clarified that the 148 space requirement indicates a maximum parking requirement, which is well in excess of what would typically be utilized on a day to day basis.  One Commissioner noted their support of the school using the parking in the right of way closest to the school along Yorkshire Drive for school parking in the future.

Modifications to Conditions of Approval
Staff has provided two new conditions of approval to address topics discussed by the Planning Commission but not incorporated as a part of their final action, and other minor clarifications, as part of the updated draft resolution for the Council’s consideration:

Permit Parking: Following Tessellations’ opening at the 1170 Yorkshire Drive location, the neighboring property owners concurrently submitted a petition for permit parking to the City. The Planning Commission discussed the neighborhood’s request for permit parking and contemplated the addition of a condition to require that Tessellations cover the costs associated with the permit parking. The Commission did not include this condition in 6 Tessellations is currently permitting the field Tuesdays and Thursdays from 4 p.m. to 6 p.m., in accordance with the City’s Field Use Policy, available online at https://www.cupertino.org/ourcity/departments/parks-recreation/reservations-permits/sports-fields-courts 492
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their final motion. Following the Planning Commission meeting, the request for permit parking was withdrawn by residents of the neighborhood.

Staff recommends adding a condition of approval to address the potential for future requests for permit parking in response to the operation of a private school, which requires that the operator defray the cost of City permit fees associated with the initiation and maintenance of permit parking for up to 75 residences in the surrounding area. This condition would only be if, in the opinion of the Public Works Director (or his/her designee), the permit parking request came as a direct result of significant parking impacts from the private school use.

Shuttle Service: The Commission considered whether to include a condition to regulate and mandate the use of the shuttle service. Two Commissioners noted that with implementation of permit parking (which had been applied for at that time), shuttle service would likely not be needed. Three Commissioners also noted that if the school were allowed credit for the on-street parking spaces abutting the school on the east side of Yorkshire Drive, it would be possible that the shuttle service would not be needed.

Eventually, this condition was not incorporated into the Planning Commission’s action.

Staff recommends adding a condition of approval requiring the use of the shuttle service if it is determined by the Director of Community Development, in consultation with the City’s Public Works Director (or his/her designee), that the parking associated with the private school operation is creating a public nuisance in the surrounding neighborhood.

Sustainability Impact
Modifications to BA zoned properties and the site at 1170 Yorkshire Drive will be subject to Title 24 and other applicable state laws governing green building standards.

Fiscal Impact
No fiscal impact.

Environmental Assessment
The project, as proposed, is categorically exempt from the California Environmental Quality Act (CEQA) per section 15301 (Existing Facilities) of the CEQA Guidelines. The key consideration in making this determination is whether the project involves negligible or no expansion of use (CCR Title 14 § 15301). In this instance, the project is the operation of a private educational facility on a former public school site that involves only minor physical changes to the site.

Prepared by: Emi Sugiyama, Associate Planner
Reviewed by: Benjamin Fu, Director of Community Development Approved for Submission by: Pamela Wu, City Manager
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ATTACHMENTS

1. Draft Ordinance for MCA-2023-003

2. Draft Resolution for U-2023-002

3. Draft Resolution for EXC-2023-009

4. Plan Set (abridged due to limitations of state law pursuant to SB1214)

5. Applicant’s Project Description

6. Planning Commission Resolution 2023-14

7. Planning Commission Resolution 2023-15

8. Planning Commission Resolution 2023-16
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DRAFT ORDINANCE

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

CUPERTINO AMENDING CUPERTINO MUNICIPAL CODE CHAPTER

19.76 (TABLE 19.76.030) TO ALLOW PRIVATELY OPERATED

EDUCATIONAL USES AND PRIVATELY OPERATED PUBLIC

SERVING USES IN THE BA ZONING DISTRICT
SECTION I: PROJECT DESCRIPTION
Application No.: MCA-2023-003
Applicant: City of Cupertino
Location: Public Building (BA) Zoned Properties
SECTION II: RECITALS
WHEREAS, Cupertino Municipal Code Chapter 19.76 outlines the requirements for uses proposed in the City’s Public Building (BA) zoning district; and WHEREAS, the maintenance and retention of public school sites as educational facilities is considered as being in the public interest; and
WHEREAS, the City has certain General Plan Goals, Policies and Strategies that support the retention of publicly owned property, it does not have regulations that specifically address the private use of these properties, and that the amendments to Chapter 19.76 will provide a standard to review private operations on publicly owned property; WHEREAS, the Ordinance amends the City's Municipal Code as set forth in Exhibit A to clarify the development standards to be applied to private uses on publicly owned land within BA Zones; and
WHEREAS, the Ordinance is consistent with the City's General Plan and the public health, safety, convenience, and general welfare; and
WHEREAS, adoption of the Ordinance is exempt from CEQA under Guidelines section 15301 because it can be seen that the regulations for use of existing public facilities for private operations, requiring a discretionary use permit, will result in negligible or no expansion of use and it can be seen with certainty that these regulations related to private uses on publicly owned property will have no possibility of a significant effect on the environment; and
WHEREAS, following necessary public notices given as required by the procedural ordinances of the City of Cupertino and the Government Code, the Planning Commission held a public hearing on November 14, 2023 to consider the Ordinance; and WHEREAS, on November 14, 2023, by Resolution 2023-14, the Planning Commission 495
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recommended on a unanimous vote that the City Council adopt the proposed Municipal Code Amendment to clarify development standards in the Public Building (BA) Zones; and
WHEREAS, on December 5, 2023, upon due notice, the City Council has held at least one public hearing to consider the Municipal Code Amendment; and WHEREAS, the City Council of the City of Cupertino is the decision-making body for this Ordinance.

SECTION III
NOW, THEREFORE, BE IT ORDAINED:

That after careful consideration of facts, exhibits, testimony and other evidence submitted in this matter the City Council hereby adopts the Ordinance based on the findings described below, the public hearing, and the record, as follows:

Section 1. The recitals set forth above are true and correct and are hereby incorporated herein by this reference as if fully set forth in their entirety.

Section 2. The City Council finds the following as set forth by Municipal Code Sections 19.152.020C and 19.152.030D:

1. That the proposed zoning is in accord with Title 19 of the Municipal Code and the City's Comprehensive General Plan (Community Vision 2040) and the proposed amendments are internally consistent with Title 19 of the Municipal Code.

The proposed amendments have been adopted in accord with the requirements of Title 19, and the proposed amendments to Section 19.76.030 are proposed to achieve internal consistency. The amendments are consistent with the Recreation, Parks, and Community Servies Element of the General Plan, which in Strategy RPC-2.1.2 states that the City will Zone all public school sites for public use to allow for the public to use [the] sites, when not in use by schools, through shared arrangements. The proposed Ordinance is intended to update the City's conditionally allowed uses in the BA Zone, in accordance with historical practices, as described in the staff report presented to the Planning Commission and City Council.

2. The proposed zoning is in compliance with the provisions of the California Environmental Quality Act (CEQA).

The proposed amendment is categorically exempt from the CEQA pursuant to section 15301 (Existing Facilities) of the CEQA Guidelines because it can be seen that the regulations for use of existing public facilities for private operations, requiring a discretionary use permit, will result in negligible or no expansion of use and it can be 496
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seen with certainty that these regulations related to private uses on publicly owned property will have no possibility of a significant effect on the environment and none of the exceptions in CEQA Guidelines section 15300.2 apply.

3. The site is physically suitable (including, but not limited to, access, provision of utilities, compatibility with adjoining land uses, and absence of physical constraints) for the requested zoning designation(s) and anticipated land use development(s).

The proposed ordinance amendment is not being applied to any specific site. The modifications would be applied to sites in the BA Zone which are currently maintained as publicly operated public serving uses. The expansion of allowed uses to privately operated public serving uses is not expected to result in a substantial change in operations and therefore, the sites in the BA zone are considered to be physically suitable for the anticipated uses.

4. The proposed zoning will promote orderly development of the City.

The proposed amendment is intended to promote the continued use of BA zoned properties for public serving uses with flexibility in operator. The amendment is not expected to result in significant modifications or physical changes to these sites which are currently used for public serving uses.

5. That the proposed zoning is not detrimental to the health, safety, peace, morals and general welfare of persons residing or working in the neighborhood of subject parcels.

The proposed ordinance amendment is not being applied to any specific site. The modifications would be applied to sites in the BA Zone which are currently maintained as publicly operated public serving uses. The expansion of allowed uses to privately operated public serving uses is not expected to result in a substantial change in operations. The effect of the private operation on the health, safety, peace, moral and general welfare of persons residing or working in the neighborhood of a site will be reviewed when an application is made for a specific site.

Section 3. The City Council hereby approves the following amendments to the Cupertino Municipal Code:

1. Table 19.76.030 in Section 19.76.030 of the Cupertino Municipal Code is hereby amended to read as follows:

Table 19.76.030 - Permitted, Conditional, and Excluded Uses in BA, BQ and T Zones
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Uses Zoning Districts

BA BQ T

1. Buildings and other uses on land owned or utilized by a federal, State, county, or city government or authority, or by a special district created for public purposes under the laws of the State of California are permitted in a BA zone.

P - -

2. Privately operated educational uses and privately
operated public serving uses, including, but not limited to, day care and private educational facilities, which, in the opinion of the Director of Community Development,
are similar to the permitted uses in the BA zoning district, and which do not create significant adverse impacts to the surrounding area.(1)
CUP -
PC

3. Rotating homeless shelter provided that the following conditions are met:
a. Shelter is located within an existing church structure; b. The number of occupants does not exceed twenty-five; c. The hours of operation do not exceed six p.m. to seven a.m.;
d. Adequate supervision is provided;
e. Fire safety regulations are met; and
f. Operation period does not exceed two months in any
twelve-month period at any single location.
- P -

4. Permanent emergency shelter provided the following
conditions are met:
a. Section 19.76.030(2)(b), (d), (e);
b. A management plan is provided which includes a
detailed operation plan.
c. Shelter is available to any individual or household
regardless of their ability to pay; and
d. Occupancy is limited to six months or less.
- P -

5. Public utility companies regulated by the Public Utility Commission for uses restricted to administrative and office buildings, communication equipment buildings, including parking, landscaping and maintenance within an enclosed area or storage yard;
- CUP
- PC -

6. Religious, civic, and comparable organizations, for uses restricted to church buildings, community halls, - CUP - PC - 498
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Uses Zoning Districts
administrative buildings, schoolrooms, recreational
facilities, and athletic fields, convents, seminaries, and similar uses customarily associated with churches,
including parking and landscaping areas;

7. Childcare facility, residential care facilities, congregate residence, hospitals, vocational and specialized schools; - CUP - PC -

8. Lodges, clubs, country clubs, including accessory uses such as swimming pools, picnic areas, golf courses, driving tees or ranges, miniature golf courses (all uses to be restricted to members of the above organizations and their guests);
- CUP
- PC -

9. Large-family daycare home; - CUP
- PC -

10. Airports, airfields and helicopter terminals, including administration and service buildings, maintenance and
storage yards;
- - CUP
- PC

11. Railroads, including terminals and stations, freight yards, marshaling yards, storage yards, administrative and service buildings;
- - CUP
- PC

12. Bus terminals and stations, including administration and service buildings, maintenance and storage yards; - - CUP - PC

13. Freeways, expressways, and other roads with limited or controlled access, including administrative buildings and maintenance yards.
- - CUP
- PC
Key:

P – Permitted Use
- – Not Allowed
CUP - Admin. – Conditional Use Permit issued by the Director of Community Development
CUP - PC – Conditional Use Permit issued by the Planning Commission CUP - CC – Conditional Use Permit issued by the City Council Ex – Excluded Uses
(1) Provided such use is conducted on property owned by a federal, State, county, or city government or authority, a special district created for public purposes under the laws of the State of California, or any other governmental agency, and leased for said uses. 499
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Section 4. If any portion of this Ordinance or its application is for any reason held to be invalid, unenforceable or unconstitutional, by a court of competent jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability or unconstitutionality shall not affect the validity or enforceability of the remaining portions of the Ordinance, or its application to any other person or circumstance. The City Council hereby declares that it would have adopted each section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more other sections, sentences, clauses or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional.

Section 5. This Ordinance shall take effect and be in force thirty (30) days from and after adoption as provided by Government Code Section 36937.

Section 6. The City Clerk shall certify to the passage and adoption of this Ordinance and shall give notice of its adoption as required by law. Pursuant to Government Code Section 36933, a summary of this Ordinance may be published and posted in lieu of publication and posting of the entire text.

Section 7. The City Council hereby finds that the proposed Ordinance amendments are exempt from environmental review pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines because it can be seen that the regulations for use of existing public facilities for private operations, requiring a discretionary use permit, will result in negligible or no expansion of use and it can be seen with certainty that these regulations related to private uses on publicly owned property will have no possibility of a significant effect on the environment and none of the exceptions in CEQA Guidelines section 15300.2 apply. Therefore, the proposed action is not subject to further review under CEQA. The City Council further directs the Director of Community Development to file a Notice of Exemption with the Santa Clara County Recorder in accordance with CEQA and the CEQA guidelines.

Section 8. To the extent the provisions of this Ordinance are substantially the same as previous provisions of the Cupertino Municipal Code, these provisions shall be construed as continuations of those provisions and not as amendments of the earlier provisions.
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INTRODUCED this ____ day of ______, 2023, at a Regular Meeting of the City Council of the City of Cupertino and ENACTED on the ____ day of _____, 2023, at a Regular Meeting of the City Council of the City of Cupertino by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

SIGNED:
_
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
___
Kirsten Squarcia, City Clerk

________________________
Date
APPROVED AS TO FORM:
____
Christopher Jensen, City Attorney
________________________
Date

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CITY OF CUPERTINO
10300 Torre Avenue
Cupertino, California 95014
RESOLUTION NO. 2023-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO APPROVING A CONDITIONAL USE PERMIT (U-2023-002) TO ALLOW FOR

THE USE OF A FORMER PUBLIC SCHOOL SITE FOR A PRIVATE
EDUCATIONAL FACILITY LOCATED AT 1170 YORKSHIRE DRIVE
SECTION I: PROJECT DESCRIPTION
Application No.: U-2023-002
Applicant: Grace Stanat on behalf of Tessellations
Location: 1170 Yorkshire Drive, APN: 362 08 001
SECTION II: FINDINGS FOR A USE PERMIT:

WHEREAS, the City Council of the City of Cupertino received an application for a Conditional Use Permit (U-2023-002) to consider the use of a former public school site for a private educational facility;
WHEREAS, the necessary public notices have been given as required by the Procedural Ordinance of the City of Cupertino, and the City Council has held at least one public hearing in regard to the application; and
WHEREAS, pursuant to the provisions of the California Environmental Quality Act of 1970 (Public Resources Code section 21000 et seq.) (“CEQA”), together with the State CEQA Guidelines (California Code of Regulations, Title 14, Section 15000 et seq.) (hereinafter, "CEQA Guidelines"), the City staff has independently studied the proposed Project and has determined that the Project is exempt from environmental review pursuant to the categorical exemption in CEQA Guidelines section 15301 for the reasons set forth in the staff report dated December 5, 2023 and incorporated herein; and WHEREAS, the applicant has met the burden of proof required to support said application; and
WHEREAS, the City Council finds that:

1. The proposed development and/or use, at the proposed location, will not be detrimental or injurious to property or improvements in the vicinity, and will not be detrimental to the public health, safety, general welfare, or convenience; 502
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The school is an existing facility and only minor improvements are proposed as part of this application to allow for operation as a private school site. Further, the operation of the private school is seen as substantially similar to the previous operation as a public school and is therefore will not be detrimental or injurious to property or improvements in the vicinity and will not be detrimental to the public health, safety, general welfare, or convenience.

2. The proposed development and/or use will be located and conducted in a manner in accord with the Cupertino Comprehensive General Plan, underlying zoning regulations, and the purpose of this title and complies with the California Environmental Quality Act (CEQA).

The Project, as proposed, will be located on an existing school site and will operate in a manner that is substantially similar to previous uses at the site. The operation of a private educational facility at this property is in accord with the General Plan and the underlying zoning regulations. The Project is categorically exempt from the California Environmental Quality Act (“CEQA”) per section 15301 (Existing Facilities) of the CEQA Guidelines, which applies to existing facilities that involve negligible or no expansion of existing or former use.

WHEREAS, the City Council is the approval authority for this project and is granted the authority by the Municipal Code to exercise its independent judgment, based on the record before it, for purposes of the California Environmental Quality Act; and NOW, THEREFORE, BE IT RESOLVED that the City Council takes the following actions:

1. Exercises its independent judgment and determines that the Project is exempt from CEQA pursuant to CEQA Guidelines section 15301. The Class 1 exemption applies to existing facilities that involve negligible or no expansion of existing or former use. The proposed project includes only minor alterations to the existing school facility. Therefore, the proposed project would not involve the expansion of the former use (Section 15301, Class 1), will not significantly expand the use beyond the current use that already exists or previously existed, and will not have a significant effect on the environment.

2. Approves the application for a Conditional Use Permit, Application no. U-2023- 002 subject to conditions which are enumerated in this Resolution beginning on PAGE 4 thereof. The conclusions and sub conclusions upon which the findings and conditions specified in this resolution are based, including those contained in the Public Hearing record concerning Application no. U-2023-002 as set forth in 503
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the Minutes of City Council Meeting of December 5, 2023, are hereby incorporated by reference as though fully set forth herein.

SECTION III: CONDITIONS ADMINISTERED BY THE COMMUNITY

DEVELOPMENT DEPARTMENT

1. APPROVED EXHIBITS
Approval is based on the plan set entitled and documentation entitled “Regnart Elementary School Fabric Shade Structure” prepared by i Parch Architect, consisting of 8 sheets showing the existing site plan, and “Tessellations Project Description for Cupertino Planning Division” and “Applicant Response # 1 (October 9, 2023)” prepared by Tessellations School staff, consisting of 34 sheets, except as may be amended by conditions in this resolution.

2. ACCURACY OF PROJECT PLANS
The applicant/property owner is responsible to verify all pertinent property data including but not limited to property boundary locations, building setbacks, property size, building square footage, any relevant easements and/or construction records.

Any misrepresentation of any property data may invalidate this approval and may require additional review.

3. CONCURRENT APPROVAL CONDITIONS
The conditions of approval contained in file no. EXC-2023-009 shall be applicable to this approval.

3. EFFECTIVE APPROVAL DATE
This permit shall not be considered valid until the time Ordinance 2023-XX takes effect, modifying the conditionally allowed uses in the BA zoning district.

4. USE APPROVAL
Approval is hereby granted to allow the operation of a private school with the following functions:
• Pre-K through 9th grade for up to 300 students and 85 staff operating from August to June of each academic year, Monday through Friday, 6:30 a.m. to 4:00 p.m., with all staff parking provided on-site
• An afterschool program hosting up to 125 of the students enrolled in the Pre-K through 9th grade operation, occurring Monday through Friday from 4 p.m. to 6:30 p.m.
• Up to seven special events annually for up to 500 people, occurring on weekends and weekdays and ending by 9:00 p.m., making use of blacktop parking, as proposed
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• Small, school-related events for up to 60 people, occurring on weekends and weekdays and ending by 9:00 p.m., making use of blacktop parking, as proposed • Summer school operations for up to 200 students and 60 staff, operating from June to August of each year, Monday through Friday from 7:00 a.m. to 4:00 p.m., with all staff parking on-site.

The actual capacity of children at the facility maybe further restricted based on Fire Department, Building Department, CA Department of Social Services, CA Department of Education or other relevant agencies’ requirements. Appropriate licensing/registration from the Community Care Licensing Department and/or other relevant County/State agencies shall be obtained prior to commencement of the operation.

The applicant shall comply with the applicable requirements of the Municipal Code.

The Planning Commission shall review amendments to the project, including modifications to the number of students, number of staff, hours of operation, etc. considered major by the Director of Community Development.

5. USE PERMIT REVIEW/ADDITIONAL RESTRICTIONS
If complaints have been received related to the tenant(s) under this use permit, and the complaints were not addressed immediately by the property owner, then the Planning Commission shall conduct a public hearing on the use permit at which time, the approval for private school operations may be modified or revoked.

6. TITLE 17 COMPLIANCE
Project operation and construction activities shall conform to the applicable requirements of City Code Chapter 17.04.

7. DARK SKY COMPLIANCE AND/OR BIRD SAFE COMPLIANCE
The applicant/property owner shall comply with the development standards of Cupertino Municipal Code Section 19.102.030 (Bird-Safe Development Requirements) and Section 19.102.040 (Outdoor Lighting Requirements). Upon request, the applicant shall provide all documentation required to determine compliance with the Municipal Code.

8. NOTIFICATION OF PERMITS FROM DIVISION OF STATE ARCHITECT The applicant shall provide notification of and documentation showing that alterations have been permitted by Division of the State Architect prior to the commencement of construction activities.

9. SPECIAL EVENT REQUIREMENTS
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Special events hosted by the applicant shall be subject to the requirements for special events as outlined in the “Outdoor Sales and Promotional Events Policy” adopted by the City Council on April 21, 1975. The applicant shall apply for and obtain a Special Events Permit for each of the seven special events proposed as part of this permit.

Special Event Permits shall not be required for small, school related events, as described in Condition 5.

Notice of the event shall be made available online at least seven calendar days in advance of the event to inform neighboring property owners of the date, time, size, and activities to be undertaken at the event.

10. PAYMENT OF OUTSTANDING FEES
The applicant shall make payment of any outstanding fees associated with this permit prior to the commencement of permitted activities.

11. REIMBURSEMENT OF ENFORCEMENT COSTS
The property owner shall pay for any additional Sheriff or Code enforcement time resulting from documented incidents related to the private school operation at the City’s contracted hourly rate with the Sheriff Department or the Code Enforcement Actual Cost fee, as defined in the City’s general fee schedule, at the time of the incident.

12. DROP-OFF AND PICK-UP MANAGEMENT
In order to ensure the safety of children and vehicle movements during the pick-up and drop-off periods, the applicant shall comply with the submitted children pick-up and drop-off plan. In the event that the pick-up and drop-off schedule changes, the applicant must submit a revised plan to the City for review and approval. Such plan shall delineate the system used for pick-up and drop-off operations, general pedestrian/vehicular safety guidelines for parents, appropriate directional signs/parking lot striping (as needed) and parking lot safety measures to include a traffic safety conductor be present in the parking lot to monitor and direct all vehicular activities during pick-up and drop-off times.

13. PERMIT PARKING FEES
Should a future request for permit parking be submitted in response to the operation of a private school, the operator shall defray the cost of City permit fees associated with the initiation and maintenance of permit parking for up to 75 residences in the surrounding area. This condition shall only be applied if it is determined by the Public Works Director (or his/her designee) that the permit parking request is a result of demonstrated negative parking impacts from the private school use. 506
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14. SHUTTLE SERVICE
The proposed shuttle service shall be implemented by the operator upon written notification from the Director of Community Development when it is determined by the Director of Community Development, in consultation with the City’s Public Works Director (or his/her designee), that the parking associated with the private school operation is creating a public nuisance in the surrounding neighborhood.

15. ENVIRONMENTAL PROGRAMS CONDITIONS
Prior to commencement of permitted activities, the applicant shall coordinate with the Environmental Programs Division for additional requirements related to stormwater pollutant management and solid waste diversion and management.

16. NOISE CONTROL
Base equipment stations are subject the Community Noise Control Ordinance, Chapter 10.48. Noise levels shall not exceed those as listed in the Community Nosie Control Ordinance, Cupertino Municipal Code Chapter 10.48. If there are documented violations of the Community Noise Control Ordinance, the Director of Community Development has the discretion to require noise attenuation measures to comply with the ordinance.

17. CONSULTATION WITH OTHER DEPARTMENTS
The applicant is responsible to consult with other departments and/or agencies with regard to the proposed project for additional conditions and requirements. Any misrepresentation of any submitted data may invalidate an approval by the Community Development Department.

18. INDEMNIFICATION AND LIMITATION OF LIABILITY
As part of the application, to the fullest extent permitted by law, the applicant shall agree to indemnify, defend with the attorneys of the City’s choice, and hold harmless the City, its City Council, and its officers, employees, and agents (collectively, the “indemnified parties”) from and against any liability, claim, action, cause of action, suit, damages, judgment, lien, levy, or proceeding (collectively referred to as “proceeding”) brought by a third party against one or more of the indemnified parties or one or more of the indemnified parties and the applicant related to any Ordinance, Resolution, or action approving the project, the related entitlements, environmental review documents, finding or determinations, or any other permit or approval authorized for the project. The indemnification shall include but not be limited to damages, fees, and costs awarded against the City, if any, and cost of suit, attorneys’ fees, and other costs, liabilities, and expenses incurred in connection with such 507
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proceeding whether incurred by the Applicant, the City, or the parties initiating or bringing such proceeding.

The applicant shall agree to (without limitation) reimburse the City its actual attorneys’ fees and costs incurred in defense of the litigation. Such attorneys’ fees and costs shall include amounts paid to the City’s outside counsel and shall include City Attorney time and overhead costs and other City staff overhead costs and any costs directly related to the litigation reasonably incurred by City. The applicant shall likewise agree to indemnify, defend, and hold harmless the indemnified parties from and against any damages, attorneys’ fees, or costs awards, including attorneys’ fees awarded under Code of Civil Procedure section 1021.5, assessed or awarded against the indemnified parties. The Applicant shall cooperate with the City to enter a Reimbursement Agreement to govern any such reimbursement.

The Applicant shall agree to (without limitation) reimburse the City for all costs incurred in additional investigation or study of, or for supplementing, redrafting, revising, or amending, any document (such as an Environmental Impact Report, negative declaration, specific plan, or general plan amendment) if made necessary by proceedings challenging the project approvals and related environmental review, if the applicant desires to continue to pursue the project.

The Applicant shall agree that the City shall have no liability to the Applicant for business interruption, punitive, speculative, or consequential damages.

19. NOTICE OF FEES, DEDICATIONS, RESERVATIONS OR OTHER EXACTIONS The Conditions of Project Approval set forth herein may include certain fees, dedication requirements, reservation requirements, and other exactions. Pursuant to Government Code Section 66020(d) (1), these Conditions constitute written notice of a statement of the amount of such fees, and a description of the dedications, reservations, and other exactions. You are hereby further notified that the 90-day approval period in which you may protest these fees, dedications, reservations, and other exactions, pursuant to Government Code Section 66020(a), has begun. If you fail to file a protest within this 90-day period complying with all of the requirements of Section 66020, you will be legally barred from later challenging such exactions.

SECTION IV: CONDITIONS ADMINISTERED BY THE PUBLIC WORKS

DEPARTMENT

20. STREET IMPROVEMENTS & DEDICATION
Street dedication and improvements along the project frontage may be required to the satisfaction of the Director of Public Works. Street improvements may include, but not be limited to, remove and repair sidewalk, driveways, curb and gutter, and 508
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street tree installations. All improvements must be completed and accepted by the City prior to Building Final Occupancy or Street Improvement Encroachment Permit acceptance whichever comes first.

21. ACCEPTANCE OF PROPERTY RIGHTS
The Public Works Director, or his/her designee, shall have the authority to accept all offers of dedications, easements, quitclaims and other property rights and interests on behalf of the City.

22. PEDESTRIAN AND BICYCLE IMPROVEMENTS
Developer shall provide pedestrian and bicycle related improvements (e.g. walkway and bicycle racks, etc.) consistent with the Cupertino Bicycle Transportation Plan and the Pedestrian Transportation Plan, and as approved by the Director of Public Works. All improvements must be completed and accepted by the City prior to Building Final Occupancy or Street Improvement Encroachment Permit acceptance whichever comes first.

23. DRAINAGE
Drainage shall be provided to the satisfaction of the Director of Public Works. Any storm water overflows or surface sheeting should be directed away from neighboring private properties and to the public right of way as much as reasonably possible.

All storm drain inlets shall be clearly marked with the words “No Dumping – Flows to Creek” using permanently affixed metal medallions or equivalent, as approved by the Environmental Programs Division.

24. C.3 REQUIREMENTS (if required)
C.3 regulated improvements are required for all projects creating and/or replacing 5,000 S.F. or more of impervious surface, collectively over the entire project site. The developer shall reserve a minimum of 4% of developable surface area for the placement of low impact development measures, for storm water treatment, unless an alternative storm water treatment plan, that satisfies C.3 requirements, is approved by the Director of Public Works.

The developer must include the use and maintenance of site design, source control and storm water treatment Best Management Practices (BMPs), which must be designed per approved numeric sizing criteria. A Storm Water Management Plan and a Storm Water Facilities Operation, Maintenance and Easement Agreement, and certification of ongoing operation and maintenance of treatment BMPs are each required.
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All storm water management plans are required to obtain certification from a City approved third party reviewer.

25. DEVELOPMENT FEES & BOND
The project developer shall provide for payment of fees, including but not limited to checking and inspection fees, storm drain fees, transportation impact fees, park dedication fees and fees for under grounding of utilities. Said fees and bond shall be paid prior to issuance of any City of Cupertino permits.

Fees:
a. Checking & Inspection Fees: Per current fee schedule ($1,218) b. Storm Drainage Fee: Per current fee schedule ($4,671 per AC) c. Transportation Impact Fee: Per current fee schedule: ($6,862 per new PM trips generated)
d. Encroachment Permit Fee: Per current fee schedule ($647) e. Storm Management Plan Fee Per current fee schedule ($1,789) (if required)
f. Street Tree Fee: By Developer or Per current fee schedule:
$515 per tree
Bonds:
a. Encroachment Bond: 100% of Off-site Improvements
The fees described above are imposed based upon the current fee schedule adopted by the City Council. However, the fees imposed herein may be modified at the time of recordation of a final map or issuance of a building permit in the event of said change or changes, the fees changed at that time will reflect the then current fee schedule.

26. TRASH, RECYCLING AND COMPOST ENCLOSURES
Trash enclosure plans must be designed in accordance with the City’s “Public Works Guidelines posted at www.cupertino.org/nowaste, and to the satisfaction of the Environmental Programs Manager. Clearance by the Public Works Department is required prior to issuance of any City of Cupertino permits. (CMC 9.18.210 H & K)

27. UNDERGROUND UTILITIES
Developer shall comply with the requirements of the Underground Utilities Ordinance No. 331 and other related Ordinances and regulations of the City of Cupertino, and shall coordinate with affected utility providers for installation of underground utility devices. Developer shall submit detailed plans showing utility 510
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underground provisions. Said plans shall be subject to prior approval of the affected Utility provider and the Director of Public Works.

28. TRANSFORMERS & CABINETS
Electrical transformers, telephone cabinets and similar equipment shall be placed in underground vaults. The developer must receive written approval from both the Public Works Department and the Community Development Department prior to installation of any above ground equipment. Should above ground equipment be permitted by the City, equipment and enclosures shall be screened with fencing and landscaping such that said equipment is not visible from public street areas, as determined by the Community Development Department. Transformers shall not be located in the front or side building setback area.

29. WATER BACKFLOW PREVENTERS
Domestic and Fire Water Backflow preventers and similar above ground equipment shall be placed away from the public right of way and site driveways to a location approved by the Cupertino Planning Department, Santa Clara County Fire Department and the water company.

30. BEST MANAGEMENT PRACTICES
Utilize Best Management Practices (BMPs), as required by the State Water Resources Control Board, for construction activity, which disturbs soil. BMP plans shall be included in grading and street improvement plans.

31. EROSION CONTROL PLAN
Developer must provide an approved erosion control plan by a Registered Civil Engineer. This plan should include all erosion control measures used to retain materials on site. Erosion control notes shall be stated on the plans.

32. WORK SCHEDULE
Every 6 months, the developer shall submit a work schedule to the City to show the timetable for all grading/erosion control work in conjunction with this project.

33. TRAFFIC CONTROL PLAN
The developer must submit a traffic control plan by a Registered Traffic Engineer to be approved by the City. The plan shall include a temporary traffic control plan for work in the right of way as well as a routing plan for all vehicles used during construction. All traffic control signs must be reviewed and approved by the City prior to commencement of work. The City has adopted Manual on Uniform Traffic Control Devices (MUTCD) standards for all signage and striping work throughout the City.
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34. STREET TREES
Street trees shall be planted within the Public Right of Way to the satisfaction of the Director of Public Works and shall be of a type approved by the City in accordance with Ordinance No. 125.

35. FIRE PROTECTION
Fire sprinklers shall be installed in any new construction to the approval of the City.

36. SANTA CLARA COUNTY FIRE DEPARTMENT
A letter of clearance for the project shall be obtained from the Santa Clara County Fire Department prior to issuance of any City of Cupertino permits. Clearance should include written approval of the location of any proposed Fire Backflow Preventers, Fire Department Connections and Fire Hydrants (typically Backflow Preventers should be located on private property adjacent to the public right of way, and fire department connections must be located within 100’ of a Fire Hydrant).

37. FIRE HYDRANT
Fire hydrants shall be located as required by the City and Santa Clara County Fire Department as needed.

38. SAN JOSE WATER SERVICE COMPANY CLEARANCE
Provide San Jose Water Service Company approval for water connection, service capability and location and layout of water lines and backflow preventers before issuance of any City of Cupertino permits.

39. DEDICATION OF UNDERGROUND WATER RIGHTS
Developer shall “quit claim” to the City all rights to pump, take or otherwise extract water from the underground basin or any underground strata in the Santa Clara Valley.

40. SANITARY DISTRICT
A letter of clearance for the project shall be obtained from the Cupertino Sanitary District prior to issuance of any City of Cupertino permits.

INTRODUCED this ____ day of ______, 2023, at a Regular Meeting of the City Council of the City of Cupertino and ENACTED on the ____ day of _____, 2023, at a Regular Meeting of the City Council of the City of Cupertino by the following roll call vote:

AYES:

NOES:

ABSTAIN:
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ABSENT:

SIGNED:
_
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
___
Kirsten Squarcia, City Clerk
________________________
Date
APPROVED AS TO FORM:
____
Christopher Jensen, City Attorney
________________________
Date
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CITY OF CUPERTINO
10300 Torre Avenue
Cupertino, California 95014
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO

APPROVING A PARKING EXCEPTION TO ALLOW OFF-SITE PARKING AND A NON-CONFORMING ON-SITE PARKING LOT DESIGN, LOCATED AT 1170

YORKSHIRE DRIVE
SECTION I: PROJECT DESCRIPTION
Application No.: EXC-2023-009
Applicant: Grace Stanat on behalf of Tessellations
Location: 1170 Yorkshire Drive, APN: 362 08 001
SECTION II: FINDINGS FOR A PARKING EXCEPTION:

WHEREAS, the City Council of the City of Cupertino received an application for a Parking Exception as described in Section I. of this Resolution; and WHEREAS, pursuant to the provisions of the California Environmental Quality Act of 1970 (Public Resources Code section 21000 et seq.) (“CEQA”), together with the State CEQA Guidelines (California Code of Regulations, Title 14, Section 15000 et seq.) (hereinafter, "CEQA Guidelines"), the City staff has independently studied the proposed Project and has determined that the Project is exempt from environmental review pursuant to the categorical exemption in CEQA Guidelines section 15301 for the reasons set forth in the staff report dated December 5, 2023 and incorporated herein; and WHEREAS, the necessary public notices have been given as required by the Procedural Ordinance of the City of Cupertino, and the City Council has held at least one public hearing in regard to the application; and
WHEREAS, the applicant has met the burden of proof required to support said application; and
WHEREAS, the City Council finds as follows with regard to this application:
a) The literal enforcement of this chapter will result in restrictions inconsistent with the spirit and intent of this chapter;
Table 19.124.040 (A) of the City’s Parking Ordinance requires the project to provide a total of 148 parking spaces on site, the existing public school site has a total of 47 parking spaces 514
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available, resulting in a deficit of 101 stalls in the proposed parking supply. However, Municipal Code Chapter 19.124 provides for alternative parking considerations through the exception process. The applicant has proposed the use of an off-site parking lot for staff parking and shuttling of staff from the off-site parking lot to the site. This off-site location would accommodate an additional 81 parking spaces. Additionally, the applicant has proposed 20 alternative parking spaces on-site which would accommodate the total required number of parking spaces. Applying the standard requirements for on-site parking and conforming parking stall and aisle sizes on this property would result in a site that is significantly developed with parking and would remove valuable open space. The development would be detrimental to the peace and enjoyment of neighboring property owners or residents and would therefore be inconsistent with the stated intent of Chapter

19.124.
b) The granting of the exception will not be injurious to property or improvements in the area nor be detrimental to the public safety, health and welfare; Given that the project is consistent with the General Plan and Zoning Ordinances and has been designed to be compatible with and respectful of adjoining land uses, the project will not be detrimental or injurious to property or improvements in the vicinity, and will not be detrimental to the public health, safety, general welfare, or convenience. c) The exception to be granted is one that will require the least modification and the minimum variance to accomplish the purpose;
See Section A above.
d) The proposed exception will not result in significant impacts to neighboring properties;
Given that the project proposes the minimum supply required by the Municipal Code and there are traffic management measures proposed by the applicant and included in the conditions of approval, the proposed exception is not anticipated to result in significant parking impacts to neighboring properties.

WHEREAS, the City Council is the approval authority for this project and is granted the authority by the Municipal Code to exercise its independent judgment, based on the record before it, for purposes of the California Environmental Quality Act; and NOW, THEREFORE, BE IT RESOLVED that the City Council takes the following actions:

1. Exercises its independent judgment and determines that the Project is exempt from CEQA pursuant to CEQA Guidelines section 15301. The Class 1 exemption applies to existing facilities that involve negligible or no expansion of existing or former use. The proposed project includes only minor alterations to the existing school facility. Therefore, the proposed project would not involve the expansion 515
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of the former use (Section 15301, Class 1), will not significantly expand the use beyond the current use that already exists or previously existed, and will not have a significant effect on the environment.

2. Approves the application for a Parking Exception, Application no. EXC-2023-009 subject to conditions which are enumerated in this Resolution beginning on PAGE 3 thereof. The conclusions and sub-conclusions upon which the findings and conditions specified in this resolution are based, including those contained in the Public Hearing record concerning Application No. EXC-2023-009 as set forth in the Minutes of City Council Meeting of December 5, 2023, are hereby incorporated by reference as though fully set forth herein.

SECTION III: CONDITIONS ADMINISTERED BY THE COMMUNITY
DEVELOPMENT DEPT.

1. APPROVED EXHIBITS
Approval is based on the plan set entitled and documentation entitled “Regnart Elementary School Fabric Shade Structure” prepared by i Parch Architect, consisting of 8 sheets showing the existing site plan, and “Tessellations Project Description for Cupertino Planning Division” and “Applicant Response # 1 (October 9, 2023)” prepared by Tessellations School staff, consisting of 34 sheets, except as may be amended by conditions in this resolution.

2. ACCURACY OF PROJECT PLANS
The applicant/property owner is responsible to verify all pertinent property data including but not limited to property boundary locations, building setbacks, property size, building square footage, any relevant easements and/or construction records.

Any misrepresentation of any property data may invalidate this approval and may require additional review.

3. CONCURRENT APPROVAL CONDITIONS
The conditions of approval contained in file no. U-2023-002 shall be applicable to this approval.

4. PARKING EXCEPTION APPROVAL AND PROJECT AMENDMENTS
Parking Exception approval is granted to allow for the use of an off-site parking lot and shuttle system and an alternative on-site parking lot design to accommodate 20 parking spaces. The Director of Community Development may approve minor modifications to the locations of the tandem and regular stalls, and the quantity of regular stalls, provided it does not reduce stalls below the approved parking ratio. 516
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The Planning Commission shall review modifications considered major by the Director of Community Development.

5. AUTO PARKING RATIO
The project auto parking supply shall be provided at the rate outlined by the Municipal Code.

6. TOTAL AVAILABLE PARKING
A reduction in the total number of required parking spaces is not approved with this project. The applicant shall provide adequate off-site parking at the location specified at 20900 McClellan Road. In the event, operations at 20900 McClellan Road cease or relocate and the applicant would like to accommodate parking elsewhere, the applicant has the following options with the approval of a Director's Minor Modification:
a) Modify the business plan to reduce required parking to allow the cars to be parked on site, to be approved by the Director of Community Development; or b) Modify the location of the offsite parking lot, to be approved by the Director of Community Development; or
c) Demonstrate to the City that the parking of cars on site does not affect the parking requirements for the operations via a parking study by an independent traffic/parking consultant, the be reviewed and approved by the Director of Community Development.

7. COORDINATION WITH DEPARTMENTS FOR PARKING IMPROVEMENTS Any expansion of parking on site shall require review and approval by the property owner, Division of the State Architect Department of Community Development, the Public Works Department, and the Santa Clara County Fire Department. Plans shall be submitted prior to commencement of approved use.

8. TANDEM PARKING STALL MANAGEMENT
Tandem parking stalls shall be reserved for employee use only. Employee vehicles shall be moved when necessary in order to allow employees to leave when their shift is over. The plan shall take into account the start and end times of employees’ shifts in order to minimize the amount of vehicle re-parking that needs to occur.

9. TRANSPORTATION DEMAND MEASURES (TDM)
The Director of Community Development has the ability to require additional transportation demand measures (TDM) to address any future parking concerns.

Examples of TDM may include, but are not limited to:
a. Valet service
b. Off-site parking
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c. Carpool or vanpool services
d. Additional onsite parking
e. Transit improvements
f. Non-motorized improvements
g. Shift peak-shared parking
h. Guaranteed ride home
i. Taxi service
j. Pricing
k. Increased shuttle service

10. BICYCLE PARKING
The applicant shall provide bicycle parking and bike racks for the proposed project in accordance with the City’s Parking Regulations under Chapter 19.124 of the Cupertino Municipal Code.

11. PAYMENT OF OUTSTANDING FEES
The applicant shall make payment of any outstanding fees associated with this permit prior to the commencement of permitted activities.

12. CONSULTATION WITH OTHER DEPARTMENTS
The applicant is responsible to consult with other departments and/or agencies with regard to the proposed project for additional conditions and requirements. Any misrepresentation of any submitted data may invalidate an approval by the Community Development Department.

13. INDEMNIFICATION AND LIMITATION OF LIABILITY
As part of the application, to the fullest extent permitted by law, the applicant shall agree to indemnify, defend with the attorneys of the City’s choice, and hold harmless the City, its City Council, and its officers, employees, and agents (collectively, the “indemnified parties”) from and against any liability, claim, action, cause of action, suit, damages, judgment, lien, levy, or proceeding (collectively referred to as “proceeding”) brought by a third party against one or more of the indemnified parties or one or more of the indemnified parties and the applicant related to any Ordinance, Resolution, or action approving the project, the related entitlements, environmental review documents, finding or determinations, or any other permit or approval authorized for the project. The indemnification shall include but not be limited to damages, fees, and costs awarded against the City, if any, and cost of suit, attorneys’ fees, and other costs, liabilities, and expenses incurred in connection with such proceeding whether incurred by the Applicant, the City, or the parties initiating or bringing such proceeding.
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The applicant shall agree to (without limitation) reimburse the City its actual attorneys’ fees and costs incurred in defense of the litigation. Such attorneys’ fees and costs shall include amounts paid to the City’s outside counsel and shall include City Attorney time and overhead costs and other City staff overhead costs and any costs directly related to the litigation reasonably incurred by City. The applicant shall likewise agree to indemnify, defend, and hold harmless the indemnified parties from and against any damages, attorneys’ fees, or costs awards, including attorneys’ fees awarded under Code of Civil Procedure section 1021.5, assessed or awarded against the indemnified parties. The Applicant shall cooperate with the City to enter a Reimbursement Agreement to govern any such reimbursement.

The Applicant shall agree to (without limitation) reimburse the City for all costs incurred in additional investigation or study of, or for supplementing, redrafting, revising, or amending, any document (such as an Environmental Impact Report, negative declaration, specific plan, or general plan amendment) if made necessary by proceedings challenging the project approvals and related environmental review, if the applicant desires to continue to pursue the project.

The Applicant shall agree that the City shall have no liability to the Applicant for business interruption, punitive, speculative, or consequential damages.

14. NOTICE OF FEES, DEDICATIONS, RESERVATIONS OR OTHER EXACTIONS The Conditions of Project Approval set forth herein may include certain fees, dedication requirements, reservation requirements, and other exactions. Pursuant to Government Code Section 66020(d) (1), these Conditions constitute written notice of a statement of the amount of such fees, and a description of the dedications, reservations, and other exactions. You are hereby further notified that the 90-day approval period in which you may protest these fees, dedications, reservations, and other exactions, pursuant to Government Code Section 66020(a), has begun. If you fail to file a protest within this 90-day period complying with all of the requirements of Section 66020, you will be legally barred from later challenging such exactions.

INTRODUCED this ____ day of ______, 2023, at a Regular Meeting of the City Council of the City of Cupertino and ENACTED on the ____ day of _____, 2023, at a Regular Meeting of the City Council of the City of Cupertino by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
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SIGNED:
_
Hung Wei, Mayor
City of Cupertino
________________________
Date
ATTEST:
___
Kirsten Squarcia, City Clerk
________________________
Date
APPROVED AS TO FORM:
____
Christopher Jensen, City Attorney
________________________
Date
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YORKSHIRE DRIVE YORKSHIRE DRIVE

FOLKESTONE DRIVE
(E) LOADING ZONE (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #49606 (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #49606 (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #66937 (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #69066 (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #69066 (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #64503 (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #59252 (E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #49606(E) RELOCATABLE CLASSROOM TYPE V - N HR 960 S.F. DSA #49606 (E) RELOCATABLE STUDENT VILLAGE TYPE V - N HR 2,400 S.F. DSA #51755 (E) BUILDING "C" CLASSROOMS TYPE V - N 3,930 S.F. DSA #19480 (E) BUILDING "E" CLASSROOMS TYPE V - N 3,930 S.F. DSA #19480 (E) BUILDING "D" CLASSROOMS TYPE V - N 3,930 S.F. DSA #19480 (E) BUILDING "F" CLASSROOMS TYPE V - N 3,930 S.F. DSA #19480 (E) BUILDING "B" CLASSROOMS TYPE V - N 3,930 S.F. DSA #51783 (E) BUILDING "H" ADMIN. TYPE V - N 2,405 S.F. DSA #19480 DSA #55794 (E) BUILDING "G" CLASSROOMS TYPE V - N 3,930 S.F. DSA #19480 (E) BUILDING "A" GUIDED LEARNING CENTER TYPE V - 1 HR 13,625 S.F. DSA #51783 MULTI-USE DSA #31225 23 TYP. 27 26302928 2021 22 23 11 TYP. 86 7 15 15 3 8 66 17 17 15 1 58 DSA #51783 DSA #51783 REGNART ELEMENTARY SCHOOL - SITE PLAN SCALE: 1"=30'-0" PLAN NORTH (E) PLAY FIELD 19 20 19 20 19 19 19 19 TYP. 12 14 9 9 9 9 9 10 9 10 (E) LAWN 19 14 14 16 16 16 14 (E) TURF (E) LAWN 14 16 12 14 14 14 (E) TURF 19 TYP. 3 4 21 TYP. (E) LAWN (E) LAWN EDGE OF (E) A.C. PAVING 18 33 16 (E) TREE TO REMAIN (E) IRRIGATION EQUIP. (E) CONC. PLANTERS TO REMAIN 19 12'-0" DSA #55794- SIM. TO DET 8/A1.2 29 15 PARKING RATIO: TOTAL PARKING SPACE: 53 TOTAL DA SPACE: 4 (REQ'D 3) DSA #51783 DSA #51783 DSA #51783 DSA #51783 2 2 2 DSA #55794 DSA #55794 DSA #55794 DSA #51755- SIM.TO 7/A1.2 TYP. 3 (E) SHADE STRUCTURES TYPE V - N 1,600 S.F. DSA #112993 22 1 A1.2 ACCESSIBLE PATH OF TRAVEL: A BARRIER FREE ACCESS WITHOUT ANY ABRUPT VERTICAL CHANGES EXCEEDING 1/2" AT 1:2 MAXIMUM SLOPE, EXCEPT THAT LEVEL CHANGES DO NOT EXCEED 1/4" VERTICAL. MAXIMUM CROSS SLOPE OF 2 % . ARCHITECT AND CONTRACTOR TO VERIFY THAT ALL BARRIERS IN THE PATH OF TRAVEL HAVE BEEN REMOVED PER SECTION 1133B.7 LEGEND: EXISTING BUILDINGS TO REMAIN ( NO WORK TO BE DONE) SITE PLAN NOTES: SCOPE OF WORK (E) VAN ACCESSIBLE PARKING SIGN. (E) D.A. TOWAWAY SIGN. (E) D.A. PARKING SPACE. GENERAL SHEET NOTES: (E) PATH OF TRAVEL IS FLAT, APPROX. 0.5-1% WITHOUT ANY CROSS SLOPE EXCEEDING 2%, OR ABRUPT CHANGES IN LEVEL; MIN. 8'-0" CLEARANCE; (E) NON-SKID LIGHT BROOM FINISH CONC.; WITHOUT ANY STEPS, RAMPS OR STAIRS. A. (E) FIRE HYDRANT. (E) D.A. DRINKING FOUNTAIN. (E) TREE WELL / PLANTER. (E) VAN ACCESSIBLE PARKING SPACE. (E) ACCESSIBLE RESTROOMS PROPERTY LINE (N) A.C. PAVING CONTRACTOR TO PROVIDE TEMPORARY CONSTRUCTION FENCE PER DETAIL 10/A1.2, REVIEW LOCATION WITH THE DISTRICT. D. (E) D.A. PARKING SIGN. (E) STUDENT TOILETS- SEE FLOOR PLANS (E) STAFF TOILETS- SEE FLOOR PLANS (E) CHAIN LINK FENCE. (E) COVERED WALKWAY. (E) A.C. PAVING TO REMAIN. (E) CONCRETE PAVING TO REMAIN. (E) DSA APPROVED CONCRETE CURB CUT. (E) PLAY AREA. CONTRACTOR TO MAINTAIN THE PATH OF TRAVEL WITHOUT CREATING ANY OBSTRUCTION DURING CONSTRUCTION PHASE. B. SEE STRUCTURAL, ELECTRICAL, MECHANICAL, AND PLUMBING FOR MORE INFORMATION. C. (E) AC PAVING. (E) AC TOPSEAL OVER (E) AC PAVING. (E) GAME LINES. (N) CONC. PAVING (N) TURF AT PLAY FIELDS. ASSUMED PROPERTY LINE (E) 3' x 3' D.A. PAVEMENT SYMBOL PER CBC.SEC.1129B.5. (E) COVERED FABRIC SHADE LUNCH AREA. (E) LANDSCAPED AREA. (E) PLAY EQUIPMENT, FURNISHED & INSTALLED BY SCHOOL DISTRICT. NOT USED. NOT USED. NOT USED. REMOVE D.A. PARKING SIGN AND PAINT OVER D.A. PARKING SYMBOL. RELOCATED VAN ACCESSIBLE PARKING SIGN. (E) STRIPING @ D.A. PARKING. (E) CONCRETE PAVING. (E) EQUIP. CONC. PAD W/ EQUIP. FENCE. (E) CONTAINER TO BE MOVED BEFORE (N) A.C. PAVING WORK IS DONE, RELOCATE PER SCHOOL DISTRICT. (E) PARKING SPACE, STRIPING AS SHOWN. 1 HR RATED WALL 2 HR AREA SEPARATION WALL E. PROVIDE SIGN ON OR ADJACENT TO GATES WITHIN PATH OF TRAVEL STATING THAT "THIS GATE IS TO REMAIN LOCKED IN OPEN POSITION DURING SCHOOL/BUSINESS HOURS OR DURING A PUBLIC FUNCTION" 32333130292827262524232220191821141716151011121367984532134 (E) SIGN STATING " ACCESSIBLE LOADING ZONE". EXTERIOR PAINTING : PAINT ALL PERMANENT BUILDINGS, RELOCATABLES, COVERED WALKWAYS AND CANOPIES, SEE SPECIFICATIONS. F. Cupertino, Ca 95014 FABRIC SHADE 1170 Yorkshire 10582 STERLING BLVD. S A N JOSE , C A 9 5 0 1 4 T 4 0 8 . 4 1 0 . 3 4 4 1 [email protected] i PARCH ARCHITECT A1.1 [email protected] REGNART SCHOOL (408) 891-8702 43-13 01-xxxxxx IDENTIFICATION STAMP DSA FILE NUMBER DATE______________________ DIV. OF THE STATE ARCHITECT APPL.# AC _____ FLS _____ SS_____ TESSELLATIONS SCHOOL Cupertino School District caroline.gupta@ tessellations.school STRUCTURE

SITE PLAN
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Tessellations Project Description for Cupertino Planning Division Location: 1170 Yorkshire Drive
Detailed description of operations
Tessellations is a K-8 independent, progressive school tailored for gifted students. It was created in 2020 by a group of like-minded parents and educators dedicated to serving the needs of the whole child. Tessellations provides challenging experiential education that recognizes and nurtures the individual strengths of gifted learners, empowering them to confidently express who they are and pursue a meaningful life. We are a community of imaginative, empathetic, productive, and passionate lifelong learners who advance an equitable and sustainable world.

In the 2023-2024 academic year, Tessellations expects to have approximately 200 students ages 5-13 (grades K-8). It is expected to have 64 full-time staff and 6 part-time staff for the 2023-2024 academic year. Classes offered include homeroom classes for grades K-8, mathematics, literacy, humanities, science, art, theater, music, physical education/movement, and electives.

Tessellations is considering opening or subleasing (with CUSD’s permission) a Preschool, Transitional Kindergarten, or Day Care on the site. We understand that would require a different license, and we are looking into it presently.

Tessellations is also considering subleasing (with CUSD’s permission) space to various afterschool vendors or service providers. These would all be in keeping with our mission of serving the student population and would likely be relatively short-term as we grow to utilize the entire campus.

Student enrollment for academic year 2023-2024 is expected to be:

Age Expected Number
5 (kindergarten) 28
6 (1st grade) 18
7 (2nd grade) 22
8 (3rd grade) 23
9 (4th grade) 20
10 (5th grade) 25
11 (6th grade) 31
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2 12 (7th grade) 14
13 (8th grade) 20
Hours of Operations
From August through June, hours of operation are:

Day of Week Student Drop Off School in
Session
Student Pick Up Aftercare
Monday -
Thursday
8:00-8:15am 8:00am-3:30pm 3:15-3:30pm 3:30-6:00pm
Friday 8:00-8:15am 8:00am-12:30pm 12:15-12:30pm 12:30-6:00pm Future activities
In June-July 2024, Tessellations will offer several weeks of summer camp for grades K-8, details yet to be determined.

In August 2024, Tessellations will add a 9th grade, with the intention to add an additional year of high school each year for the following three years. The high school will be moved to another site after the first year.
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3 Site plan and maps
Aerial view of property (Google Maps)
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4 Site Map provided by Cupertino Unified School District showing existing buildings. 525
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5 Building Description of Usage
Building A Auditorium, library, art classroom, maker space classroom, music classroom, and staff lounge
Building Group B Classrooms, teaching spaces
Building Group C Classrooms, teaching spaces
Building Group D Classrooms, teaching spaces
Building Group E Classrooms, teaching spaces
Building Group F Classrooms, teaching spaces
Building Group G Two kindergarten classrooms and a room currently labeled “Speech” that we will use as a meeting space
Building H Main office with receptionist desk, meeting room, and infirmary Buildings C20-C29 Meeting spaces for staff and adults
Buildings C30-C31 Previously leased to Far East, an after-school Chinese program. This is labeled on CUSD’s map as “Daycare” but is not a daycare program.

Presently the space is used as storage, but may be assigned a different use in the future.

Parking, Drop-off, and Pick-up
Parking spaces are indicated on the map.

During student drop-off and pick-up times, kindergarten families will park in the parking spaces and walk their students to the classroom. Other families will form a car line to drop off students at the front of the school on Yorkshire Drive in the yellow zone designated on the map. 526
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RE: Application Incomplete Letter
1170 Yorkshire Drive
Conditional Use Permit, File # U-2023-002
Applicant Response # 1 (October 9, 2023)
The purpose of this document is to respond to the City of Cupertino’s Application Incomplete Letter for Conditional use Permit, File # U-2023-002. . All of the points of the letter are copied below, with responses following each point.

Additionally, we also wanted to take this opportunity to provide a more comprehensive overview of our school operations for the benefit of City staff. 527
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Tessellations Overview
Our Population: We serve asynchronous learners, meaning children that are more advanced in one area than another. E.g., they may be several years ahead in mathematics, but at grade level when it comes to literacy, or vice versa. Or they may be exceptionally advanced in terms of conceptual thinking, but struggle with a social-emotional issue (perfectionism, risk-taking, etc.). Most of the children that attend our school do so because their families have decided that they benefit significantly from a different type of education, crafted especially for this type of learner. Thus, we are quite different from yet another achievement-oriented high-pressure Bay Area private school. In many ways, we are the opposite of those schools.

Most importantly, we are serving a segment of the population that is “left behind” both by the public schools, as well as the traditional private school network. This is not a criticism of either of those categories of institutions; unfortunately, however, neither is set up to adequately serve the needs of our population. This was the impetus for forming Tessellations in the first place.

Non-Profit: We are a not-for-profit corporation. Our goal is purely to serve our students; we are not financially driven.

Our Mission: Tessellations provides challenging experiential education that recognizes and nurtures the individual strengths of gifted learners, empowering them to confidently express who they are and pursue a meaningful life.

Scope of Use: We are applying as a PreK-9th school, including an after-school program and a summer camp program. For further details, see Item 6 below.

Grade Bands: Tessellations uses a grade band system for homerooms. Kindergarten is it’s own grade band, as is 1st grade. 2nd and 3rd grades are together, as are 4th/5th and 6th/7th. 8th is by itself. This method is considered best practice for asynchronous learners due to the possibility of grouping kids together that may have a wide array of abilities.

Project-Based Learning: At Tessellations, each grade band will cover one or more Journeys every year. “Journeys” are what we call our Project-Based Learning curriculum, and they are a project-based, integrated approach to instruction in multiple subjects. English Language Arts, Social Studies, Science, History, and Art are woven into a meaningful and relevant storyline, instead of treating the subjects as discrete classes. Journeys are designed to strengthen conceptual understanding through critical examination, deep reflection, and meaningful connection to the real world in a collaborative learning experience. All Journeys include SEL (Social Emotional Learning) and DEIB (Diversity Equity Inclusion Belonging) components.

Social Emotional Learning: Social and Emotional Learning (SEL) is incorporated into school experiences in the form of daily opening and closing circles, dedicated SEL classes, and curriculum connections to every single Journey. The SEL curriculum supports student’s development of a deep sense of self, interpersonal relationships, community connections, as well as their personal agency, their potential to impact on the world around them, and the