Agenda packet — Cypress City Council, April 28, 2026 (part 2 of 2)

2/23/2026
Work Order Signature Document

3.00 Detailed Scope of Work
To: Nate Piorek From: Raymond Velasco
ABM Electrical & Lighting Solutions Inc.
14201 Franklin Avenue
Tustin, CA 92780
(949) 330-3049
City of Cypress
5275 Orange Avenue Cypress,
CA 90630
(714)229-6746
Work Order Number:

Date Printed: February 23, 2026
150887.00
Work Order Title: Cypress LED Lighting Upgrades
Brief Scope: Community center lighting upgrade
Preliminary Revised X Final
The following items detail the scope of work as discussed at the site. All requirements necessary to accomplish the items set forth below shall be considered part of this scope of work.

January 18, 2026
Cypress Community Center Lighting Upgrades
Scope of Work
· Replace (96) existing 3 lamp fluorescent troffers with Sylvania LED troffer door kit RDORKIT7A/S045UNVD8SC8/24/BLE, see attached specifications to Include wireless control node. · Replace(16) existing 3 lamp fluorescent troffers with emergency backups , install Sylvania LED troffer door kit and new LED driver emergency backup RDORKIT7A/S045UNVD8SC8/24/BLEE. see attached specifications to Include wireless control node.
· Replace (175) recessed compact fluorescent fixtures throughout the center with new Sylvania LED recessed fixtures RT65AS2000UNVD9SC8WHTAA, see attached specifications · Replace (75) Emergency battery back up units in the recessed ceiling fixtures throughout the center. See attached specifications
· Replace (5) incandescent 4” recessed fixtures in the high ceiling with Sylvania LED recessed gimble fixtures 62393 LEDRT4G650SC3, see attached specifications
· Retrofit (10) 2’ fluorescent lamps in the restroom soffits with Sylvania Type B LED lamps LED8T8L24FG841BFG2
· Retrofit (6) 3’ fluorescent lamps in the restroom soffits with Sylvania Type B LED lamps LED11T8L36FG841BFG2
· (90) 4’ fluorescent lamps in the storage and utility closets with Sylvania Type B LED lamps LED14T5HEL48FGDIM841BFG2
· Retrofit (22) 4 lamp compact fluorescent hanging pendant fixtures throughout the facility with Sylvania Type B LED lamps LED15PBGX24DO8SC8BF
· Remove and replace (30) tall parking lot pole fixtures located on the front and rear parking areas with Sylvania AREAFLD6AS150UNHDSC2ADJBZ. Fixtures to include dimming sensors per Title24 · Remove and replace (15) bollards with Sylvania Bollards spec LED bollards. · Remove and replace (32) 12x12 sq recessed canopy fixtures with ALEO LCP-20/55UX/CT surface mount LED canopy fixtures.
· Remove and replace (3) wallpacks at rear canopy area with Sylvania WALPAKN8A/S080UNHD8SC2/BZ/P · Intercept electrical in canopy fixtures and install (1) Sylvania flagpole LED flood on roof line to illuminate the flags. Spec FLOODLT2AS060UNHD8SC2BZP

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2/23/2026
Scope of Work
Detailed Scope of Work Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
· Intercept electrical in canopy and install (2) wallpacks on the facia of the building to light courtyard entrance.

Spec Sylvania WALPAKN6AS080UNVD8SC2T4BZP
· Install (197) wireless power packs at interior recessed cans to provide wireless controls. · Add (50) new LV dimmer/switch wall controls.

Dispose of and hall off all debris
Dispose of Hazardous materials per EPA guidelines
Provide all required high-reach equipment
Material Lead time 6-8 weeks
Estimated project duration 4 weeks
Cypress Sr. Center Exterior Lighting
· Scope of Work
· Replace (20) existing HID bollard lights with Sylvania LED bollard, install new anchors in existing concrete footing to mount new fixtures as needed. See attached specifications. · Replace (16) HID tall parking lot pole fixtures with new Sylvania LED area fixtures AREAFLD6AS150UNHDSC2ADJBZ , Sylvania parking lot LED fixtures to feature dimming occupancy sensors for Title 24 operation. See attached specifications.
· Replace (16) compact fluorescent recessed fixtures with Sylvania LED recessed 62808 RT65AS2000UNVD9SC8WHTAA. See attached specifications.
· Replace (3) HID Wall Lights with Sylvania medium size LED wall fixture WALPAKN6AS040UNVD8SC2T4BZP See attached specifications.
· Replace (3) HID Wall Lights with Sylvania slim LED wall fixture SLMWPKC3A/S030UNHD8SC2/BZP See attached specifications.
· Replace (3) HID Wall Lights with Sylvania large wall fixture WALPAKN8A/S080UNHD8SC2/BZ/P See attached specifications.
· Replace (3) HID Wall Lights with Sylvania medium forward throw LED wall fixture WALPAKN8AMEDWGAL See attached specifications.
· Replace (3) fluorescent ground flood fixtures with Sylvania LED ground flood fixture BULLTFL2A/S030UNHD8SC2/BZ See attached specifications.
· Relamp (3) Incandescent wall sconce fixtures with Sylvania LED A19 lamps LED6A19F8SC310YVRP4 See attached specifications.

Work to be completed other than normal working hours shift prevailing wage county of Orange Cypress Veterans Park
Scope of Work
· Remove and replace (7) parking lot light poles and fixtures with Sylvania AREAFLD6AS080UNHDSC2ADJBZ and LSI Duragrip 20’ x 4” square poles
· Remove and replace (3) tot lot light poles and fixtures with Sylvania AREAFLD6AS080UNHDSC2ADJBZ and LSI Duragrip 20’ x 4” square poles
· Remove and replace (3) walkway light poles and fixtures with Sylvania AREAFLD6AS080UNHDSC2ADJBZ and LSI Duragrip 15’ x 4” round poles
· Cap and raise (13) existing concrete footings 8-10” above grade · Drill and epoxy new anchors in (13) existing footings · Provide engineered drawings for concrete footing modifications, to be approved by plan check · Pull new wire between (13) pole locations to extend wire length for raised footings · Sylvania fixtures to include programmable sensor per Title 24 Material Lead Time 6-8 weeks
Project Scheduling 2 weeks
Project Duration 3 weeks

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2/23/2026
Scope of Work
Detailed Scope of Work Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
Oaknoll Park
· Scope of Work
· Remove and replace (7) walkway light poles and fixtures with Sylvania AREAFLD6AS080UNHDSC2ADJBZ and LSI Duragrip 15’ x 4” round poles
· Replace anchors to match new pole BCD
· Sylvania fixtures to include programmable sensor per Title 24 Pricing does not include permitting, plan set, engineered drawing or Title 24 Certification Material Lead Time 6-8 weeks
Project Scheduling 2 weeks
Project Duration 1 weeks
Cypress Tennis Court LED Lighting
Scope of work
· Remove and dispose of (24) existing HID tennis court lighting fixtures · Prep existing poles for new fixture mounts
· Install (24)Sylvania Hi Power LED Lighting fixtures FLOODLTPS470UNHD8SC2ADJBZP. · Provide all high reach equipment and misc. hardware for fixture installation · Test all fixtures for proper operation
· Work to be perform 1st Shift prevailing wage, Orange County · Pricing does not include permitting, plan set, engineered drawings or Title 24 Certification.

Material Lead time 3-4 weeks
Project Scheduling 2 weeks
Project duration 1-2 weeks
Notes:

Repairs to existing electrical infrastructure not included Permitting, permitting fees, plans and engineering not included Paint or drywall repairs excluded
Title 24 compliance documentation excluded. Alterations to achieve Title 24 compliance may result in additional cost.

Tariff Note:

In the event of a Change in Law that materially affects ABM’s performance of its obligations under this Agreement , increases the cost of performance, or affects the timing or feasibility of an obligation under this Agreement , ABM shall be entitled to an equitable adjustment of the contract price, schedule, or other relevant terms. For the purposes of this Agreement, a “Change in Law” shall mean (i) the enactment, adoption, promulgation, modification, or repeal of any applicable law, regulation, rule, ordinance, code, or standard by any governmental authority after the Effective Date; or (ii) any change in the interpretation or application of any applicable law by any governmental authority after the Effective Date.

Subject to the terms and conditions of EZIQC Contract CA-R8-E-101723-AEL.

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2/23/2026
Scope of Work
Detailed Scope of Work Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
ABM Electrical & Lighting Solutions Inc. Date
City of Cypress Date

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2/23/2026
Scope of Work

4.00 Contractor's Price Proposal - Summary
Owner PO #:

Cypress LED Lighting Upgrades
150887.00
IQC Master Contract #: CA-R8-E-101723-AEL
Work Order #:

Title:

Re:

Date: February 23, 2026
Proposal Value:

Contractor: ABM Electrical & Lighting Solutions Inc.
$617,300.49
Bonding $13,288.26
Cypress Community Center $328,833.53
Cypress Sr. Center $77,669.23
Cypress Tennis Court $57,966.71
Oaknoll Park $26,376.27
Veterans Park $113,166.49
Proposal Total
Thisl total represents the correct total for the proposal. Any discrepancy between line totals, sub-totals and the proposal total is due to rounding.
$617,300.49
The Percentage of NPP on this Proposal: %

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2/23/2026
Contractor's Price Proposal - Summary

5.00 Contractor's Price Proposal - Detail
Cypress LED Lighting Upgrades
150887.00
IQC Master Contract #: CA-R8-E-101723-AEL
Work Order #:

Owner PO #:

Title:

Re:

Date: February 23, 2026
Proposal Value:

Contractor: ABM Electrical & Lighting Solutions Inc.
$617,300.49
Labor Equip. Material (Excludes)
Sect. Item Mod. UOM Description Line Total
Bonding
01 22 16 00 0002 Reimbursable FeesReimbursable Fees will be paid to the contractor for eligible costs as directed by Owner. Insert the appropriate quantity to adjust the base cost to the actual Reimbursable Fee. If there are multiple Reimbursable Fees, list each one separately and add a comment in the "note" block to identify the Reimbursable Fee (e.g. sidewalk closure, road cut, various permits, extended warranty, expedited shipping costs, etc.). A copy of each receipt, invoice, or proof of payment shall be submitted with the Price Proposal. 1 EA $13,288.26
Installation x x = 13,288.26
Quantity Unit Price Factor Total
12,080.24 1.00 1.1000
Bonding: 604,012.23 x 2% = 12080.24
Subtotal for Bonding $13,288.26
Cypress Community Center
2 01 22 23 00 0065 WK 33' Electric, Scissor Platform Lift $1,363.82 Installation x x = 1,363.82
Quantity Unit Price Factor Total

2.00 695.90 0.9799
High Reach Equipment
01 71 13 00 0004 First 25 Miles, Equipment Delivery, Pickup, Mobilization And Demobilization Using A Tractor Trailer With Up To 53' BedIncludes loading, tie-down of equipment, delivery of equipment, off loading on site, rigging, dismantling, loading for return and transporting away. For equipment such as bulldozers, motor scrapers, hydraulic excavators, gradalls, road graders, loader-backhoes, heavy-duty construction loaders, tractors, pavers, rollers, bridge finishers, straight mast construction forklifts, telescoping boom rough terrain construction forklifts, telescoping and articulating boom man lifts with >40' boom lengths, etc.
3 EA $1,499.22
Installation x x = 1,499.22
Quantity Unit Price Factor Total

1.00 1,529.97 0.9799
Logistics
26 01 50 51 0170 13 Watt, 4000K CCT, PL EDGE BYPass Series (Green Creative 6PLH/840/BYP/E26)
4 EA $2,234.25
Installation x x = 2,234.25
Quantity Unit Price Factor Total

88.00 25.91 0.9799
Hanging Pendants, Specified as Sylvania LED15PBGX24DO8SC8BF 26 01 50 51 0344 2', 1,100 Lumens, LED Tube (T8 Fluorescent Lamp Replacement) (Sylvania LED9T8/L24/FG/835/BF)
5 EA $307.30
Installation x x = 307.30
Quantity Unit Price Factor Total

10.00 31.36 0.9799
Restroom soffits LED Lamps
26 01 50 51 0346 4', 1,700 Lumens, LED Tube (T8 Fluorescent Lamp Replacement) (Sylvania LED14T8/L48/FG/835/BF)
6 EA $2,815.94
Installation x x = 2,815.94
Quantity Unit Price Factor Total

90.00 31.93 0.9799
Closet and Utility room lamps LED lamps

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2/23/2026
Contractor's Price Proposal - Detail
Contractor's Price Proposal - Detail Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
Cypress Community Center
7 26 01 50 51 0382 EA Recycle 4' Length Linear Fluorescent Lamps $1,161.92 Installation x x = 1,161.92
Quantity Unit Price Factor Total
425.00 2.79 0.9799
Disposal
8 26 01 50 51 0385 EA Recycle Compact Fluorescent Lamps $826.64 Installation x x = 826.64
Quantity Unit Price Factor Total
185.00 4.56 0.9799
Disposal
26 01 50 52 0313 Up To 780 Lumens, Ninety Minute Illumination, 120-277 Volt, 6 Watt Output, Emergency LED Driver (Bodine BSL6LST)
9 EA $21,725.85
Installation x x = 19,796.67
Quantity Unit Price Factor Total

75.00 269.37 0.9799
Demolition 75.00 x 26.25 x 0.9799 = 1,929.18
Specified as Sylvania Proprietary Emergency Backup Driver 26 01 50 52 0317 Up To 2,600 Lumens, Ninety Minute Illumination, 120-277 Volt, 20 Watt Output, Emergency LED Driver (Bodine BSL20LV)
10 EA $8,094.91
Installation x x = 7,683.36
Quantity Unit Price Factor Total

16.00 490.06 0.9799
Demolition 16.00 x 26.25 x 0.9799 = 411.56
Specified as Sylvania Proprietary Emergency Backup Driver 11 26 01 50 52 0317 0294 MOD For Factory Installation In New Fixtures, Deduct -$823.12 Installation x x = -823.12
Quantity Unit Price Factor Total

16.00 -52.50 0.9799
12 26 09 23 00 0881 EA 2-pole dimming nLight Air wireless switch (Acuity rPODBA 2P DX WH G2) $5,563.87 Installation x x = 5,563.87
Quantity Unit Price Factor Total

50.00 113.56 0.9799
Wireless Wall Controls adders for Sylvania recessed , Pendants and troffers 13 26 09 23 00 0884 EA nLight Air dimming powerpack (Acuity rPP20 DS) $40,056.35 Installation x x = 40,056.35
Quantity Unit Price Factor Total
300.00 136.26 0.9799
Wireless Controls power pack adders for Sylvania recessed , Pendants and troffers 14 26 09 23 00 0887 EA Wireless battery powered nLight Air ceiling sensor (Acuity rCMSB 7 G2) $3,331.07 Installation x x = 3,331.07
Quantity Unit Price Factor Total

20.00 169.97 0.9799
Wireless Controls sensor adders for Sylvania troffers
15 26 51 19 00 0144 EA 2' x 4', 4,000 Lumens, Volumetric, Lay-In/Troffer LED Fixture (Lithonia 2RTL4) $82,701.21 Installation x x = 76,592.59
Quantity Unit Price Factor Total
112.00 697.89 0.9799
Demolition 112.00 x 55.66 x 0.9799 = 6,108.62
Specified as Sylvania RDORKIT6A/S044UNHD8SC7/24U/WH
16 26 51 19 00 0144 0659 MOD For >100 To 250, Deduct -$4,059.61 Installation x x = -4,059.61
Quantity Unit Price Factor Total
112.00 -36.99 0.9799
26 51 19 00 0321 4" Diameter, 1,300 Lumens, Recessed LED Downlight With Open Trim (Portfolio® LD413)
17 EA $1,501.40
Installation x x = 1,219.53
Quantity Unit Price Factor Total

5.00 248.91 0.9799
Demolition 5.00 x 57.53 x 0.9799 = 281.87
Specified as Sylvania LEDRT4G650SC3

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2/23/2026
Contractor's Price Proposal - Detail
Contractor's Price Proposal - Detail Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
Cypress Community Center
26 51 19 00 0323 6" Diameter, 1,800 Lumens, Recessed LED Downlight With Open Trim (Gotham® EVO® ALED)
18 EA $64,331.66
Installation x x = 54,466.27
Quantity Unit Price Factor Total
175.00 317.62 0.9799
Demolition 175.00 x 57.53 x 0.9799 = 9,865.39
Specified as Sylvania RT65AS2000UNVD9SC8WHTAA
19 26 51 19 00 0323 0659 MOD For >100 To 250, Deduct -$3,093.54 Installation x x = -3,093.54
Quantity Unit Price Factor Total
175.00 -18.04 0.9799
20 26 55 13 00 0104 EA 24" Overall Height, 7" Diameter, 12 LEDs, Aluminum Architectural Bollard $29,474.90 Installation x x = 27,841.46
Quantity Unit Price Factor Total

15.00 1,894.17 0.9799
Demolition 15.00 x 111.13 x 0.9799 = 1,633.44
Proposed Spec: RAB B17 LED , Selectable power /color
26 56 19 00 0015 25 System Watts, Wall Mount, Full Cutoff, LED Wall Pack (CREE® BetaLED® XSPW™ XSPW-A-O-X-X-G-U)
21 EA $3,601.77
Installation x x = 2,999.28
Quantity Unit Price Factor Total

5.00 612.16 0.9799
Demolition 5.00 x 122.97 x 0.9799 = 602.49
Community Center wall packs Spec: Sylvania
26 56 19 00 0225 21,000 Lumens, 210 Watt, Arm Mount, Rectangular, LED Area Fixture (Everlast EL-LED-VS)
22 EA $37,510.57
Installation x x = 33,257.41
Quantity Unit Price Factor Total

30.00 1,131.32 0.9799
Demolition 30.00 x 144.68 x 0.9799 = 4,253.16
Specified as Sylvania AREAFLD6AS200UNHDSC2ADJBZ
26 56 19 00 0247 3,600 Lumens, 36 Watt, Surface Mount, Round, LED Parking Structure Fixture (Everlast EL-LED-SS)
23 EA $28,707.15
Installation x x = 24,624.18
Quantity Unit Price Factor Total

32.00 785.29 0.9799
Demolition 32.00 x 130.21 x 0.9799 = 4,082.97
canopy Fixture Sec: ALEO
Subtotal for Cypress Community Center $328,833.53
Cypress Sr. Center
24 01 22 23 00 0059 WK 25' Electric, Scissor Platform Lift $503.32 Installation x x = 503.32
Quantity Unit Price Factor Total

1.00 513.64 0.9799
High Reach Equipment
26 01 50 51 0349 7.5 Watt, 2700K CCT, Clear A19 Filament LED Lamp (Green Creative

7.5FA19DIM/827 )
25 EA $63.94
Installation x x = 63.94
Quantity Unit Price Factor Total

3.00 20.25 1.0525
LED A19 Relamp Sconce Fixtures
26 51 19 00 0336 6" Diameter, IC Rated, Surface Mount LED Downlight Fixture Housing, White (Cree® SC6-277V)
26 EA $4,039.24
Installation x x = 3,070.44
Quantity Unit Price Factor Total

16.00 182.33 1.0525
Demolition 16.00 x 57.53 x 1.0525 = 968.81
Specified as Sylvania RT65AS2000UNVD9SC8WHTAA

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2/23/2026
Contractor's Price Proposal - Detail
Contractor's Price Proposal - Detail Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
Cypress Sr. Center
27 26 55 13 00 0104 EA 24" Overall Height, 7" Diameter, 12 LEDs, Aluminum Architectural Bollard $42,211.57 Installation x x = 39,872.28
Quantity Unit Price Factor Total

20.00 1,894.17 1.0525
Demolition 20.00 x 111.13 x 1.0525 = 2,339.29
Specified as RAB LED B17
26 56 19 00 0015 25 System Watts, Wall Mount, Full Cutoff, LED Wall Pack (CREE® BetaLED® XSPW™ XSPW-A-O-X-X-G-U)
28 EA $6,963.52
Installation x x = 5,798.69
Quantity Unit Price Factor Total

9.00 612.16 1.0525
Demolition 9.00 x 122.97 x 1.0525 = 1,164.83
Walpack's Specified as Sylvania (3) WALPAKN8AMEDWGAL, (3) WALPAKN6AS040UNVD8SC2T4BZP, (3) SLMWPKC3A/S030UNHD8SC2/BZP
26 56 19 00 0016 42 System Watts, Wall Mount, Full Cutoff, LED Wall Pack (CREE® BetaLED® XSPW™ XSPW-A-O-X-X-C-U)
29 EA $2,659.50
Installation x x = 2,248.36
Quantity Unit Price Factor Total

3.00 712.07 1.0525
Demolition 3.00 x 130.21 x 1.0525 = 411.14
Walpack's Specified as Sylvania WALPAKN8A/S080UNHD8SC2/BZ/P 26 56 19 00 0224 14,000 Lumens, 140 Watt, Arm Mount, Rectangular, LED Area Fixture (Everlast EL-LED-VS)
30 EA $20,382.97
Installation x x = 17,946.56
Quantity Unit Price Factor Total

16.00 1,065.71 1.0525
Demolition 16.00 x 144.68 x 1.0525 = 2,436.41
Specified as Sylvania AREAFLD6AS150UNHDSC2ADJBZ
26 56 19 00 0277 13 Watt, Surface Mount, LED Multi-Purpose Area Fixture (Lumark Crosstour® XTOR1A)
31 EA $845.17
Installation x x = 696.54
Quantity Unit Price Factor Total

3.00 220.60 1.0525
Demolition 3.00 x 47.07 x 1.0525 = 148.62
Ground Flood Fixtures
Subtotal for Cypress Sr. Center $77,669.23
Cypress Tennis Court
32 01 22 23 00 0062 WK 30' Electric, Scissor Platform Lift $641.33 Installation x x = 641.32
Quantity Unit Price Factor Total

1.00 654.48 0.9799
High Reach Equipment
01 71 13 00 0002 First 25 Miles, Equipment Delivery, Pickup, Mobilization And Demobilization Using A Rollback Flatbed TruckIncludes loading, tie-down of equipment, delivery of equipment, off loading on site, rigging, dismantling, loading for return and transporting away. For equipment such as trenchers, skid-steer loaders (bobcats), industrial warehouse forklifts, sweepers, scissor platform lifts, telescoping and articulating boom man lifts with up to 40' boom lengths, etc.
33 EA $482.64
Installation x x = 482.64
Quantity Unit Price Factor Total

1.00 492.54 0.9799
Equipment Logistics
26 56 19 00 0210 15,400 Lumens, 144 Watt, Arm Mount, Rectangular, LED Area Fixture (General Electric EASC 0 F4 F 5 40 A A DKBZ)
34 EA $56,842.74
Installation x x = 53,100.15
Quantity Unit Price Factor Total

24.00 2,257.89 0.9799
Demolition 24.00 x 159.14 x 0.9799 = 3,742.59
Sylvania Hi Power LED Fixtures
Subtotal for Cypress Tennis Court $57,966.71

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2/23/2026
Contractor's Price Proposal - Detail
Contractor's Price Proposal - Detail Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
Oaknoll Park
01 22 23 00 1600 3 Ton Capacity, 12' To 16' Bed, 4 x 2 Flat Bed Truck With Full-Time Truck Driver
35 DAY $2,419.75
Installation x x = 2,419.75
Quantity Unit Price Factor Total

2.00 1,234.69 0.9799
Disposal and pole logistics
26 56 13 00 0190 16' High, 4" OD, 11 Gauge, Round Straight, Steel Area Light Pole, Anchor Base
36 EA $15,654.09
Installation x x = 13,185.22
Quantity Unit Price Factor Total

7.00 1,922.24 0.9799
Demolition 7.00 x 359.93 x 0.9799 = 2,468.87
Spec: Duragrip LSI
26 56 19 00 0224 14,000 Lumens, 140 Watt, Arm Mount, Rectangular, LED Area Fixture (Everlast EL-LED-VS)
37 EA $8,302.43
Installation x x = 7,310.02
Quantity Unit Price Factor Total

7.00 1,065.71 0.9799
Demolition 7.00 x 144.68 x 0.9799 = 992.40
Specified as Sylvania AREAFLD6AS80UNHDSC2ADJBZ
Subtotal for Oaknoll Park $26,376.27
Veterans Park
01 22 20 00 0086 Senior EngineerFor tasks not included in the Construction Task Catalog® and as directed by owner only.
38 HR $14,499.38
Installation x x = 14,499.38
Quantity Unit Price Factor Total

85.00 174.08 0.9799
Shop drawings, site visits and structural calculations for concrete footings, Includes existing footing evaluation and existing conditions evaluation.
39 01 22 23 00 0006 WK 40' Engine Powered, Telescoping Boom Man Lift With Platform $3,620.12 Installation x x = 3,620.12
Quantity Unit Price Factor Total

3.00 1,231.46 0.9799
Equipment to take down and erect 20' poles on new footings 01 22 23 00 1601 3 Ton Capacity, 12' To 16' Bed, 4 x 2 Flat Bed Truck With Full-Time Truck Driver
40 WK $15,087.45
Installation x x = 15,087.45
Quantity Unit Price Factor Total

3.00 5,132.31 0.9799
Disposal and pole logistics
41 01 22 23 00 1601 0042 MOD For Equipment Without Operator, Deduct -$3,920.57 Installation x x = -3,920.57
Quantity Unit Price Factor Total

1.00 -4,000.99 0.9799
42 03 11 13 00 0076 LF 24" Diameter Round Fiber Tube Formwork $3,253.46 Installation x x = 3,253.46
Quantity Unit Price Factor Total

65.00 51.08 0.9799
Concrete Sonotube Forms
43 03 11 13 00 0076 0018 MOD For Columns >12' In Length, Add $65.09 Installation x x = 65.09
Quantity Unit Price Factor Total

13.00 5.11 0.9799
03 30 53 00 0009 Hand Mix And Place 3,000 PSI ConcreteFor use where conventional equipment access is limited or when directed by the owner.

Includes local aggregate, sand, bagged cement (Type I) and water. 44 CF $1,624.18
Installation x x = 1,624.18
Quantity Unit Price Factor Total

78.00 21.25 0.9799
Concrete

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2/23/2026
Contractor's Price Proposal - Detail
Contractor's Price Proposal - Detail Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
Veterans Park
45 03 30 53 00 0009 0033 MOD For 5,000 PSI Concrete, Add $68.02 Installation x x = 68.02
Quantity Unit Price Factor Total

78.00 0.89 0.9799
46 05 05 19 00 0177 EA 3/4" x 9-1/2" Long Chemically Adhered Anchor Rod $4,748.99 Installation x x = 4,748.99
Quantity Unit Price Factor Total
104.00 46.60 0.9799
Epoxy for Anchors
47 05 05 19 00 0177 0222 MOD For >50 To 100, Deduct -$339.36 Installation x x = -339.36
Quantity Unit Price Factor Total
104.00 -3.33 0.9799
48 05 05 23 00 1229 LF 3/4" Diameter, Hot Dipped Galvanized Steel, Low Carbon Threaded Rod $3,476.69 Installation x x = 3,312.06
Quantity Unit Price Factor Total
200.00 16.90 0.9799
Demolition 200.00 x 0.84 x 0.9799 = 164.62
Anchors
49 05 05 23 00 1343 EA 5/8" Diameter, Hot Dipped Galvanized Steel, Low Carbon/Grade 2 Hex Nut $177.32 Installation x x = 147.77
Quantity Unit Price Factor Total
104.00 1.45 0.9799
Demolition 104.00 x 0.29 x 0.9799 = 29.55
Nuts
50 05 05 23 00 1426 EA 3/4" Inside Diameter, Hot Dipped Galvanized Steel Flat Washer $122.29 Installation x x = 122.29
Quantity Unit Price Factor Total
104.00 1.20 0.9799
Washers
26 05 19 16 0015 #12 AWG, Type THHN-THWN, 600 Volt, Copper, Single Solid Cable, Installed In Conduit
51 MLF $1,240.22
Installation x x = 906.04
Quantity Unit Price Factor Total

1.00 924.62 0.9799
Demolition 1.00 x 341.04 x 0.9799 = 334.19
Interior Pole Wire
26 05 19 16 0298 #8 AWG, Type THHN-THWN, 600 Volt, Copper, Single Stranded Cable, Installed In Conduit
52 MLF $20,208.28
Installation x x = 16,497.79
Quantity Unit Price Factor Total

10.00 1,683.62 0.9799
Demolition 10.00 x 378.66 x 0.9799 = 3,710.49
Underground Wiring
26 56 13 00 0190 16' High, 4" OD, 11 Gauge, Round Straight, Steel Area Light Pole, Anchor Base
53 EA $6,708.90
Installation x x = 5,650.81
Quantity Unit Price Factor Total

3.00 1,922.24 0.9799
Demolition 3.00 x 359.93 x 0.9799 = 1,058.09
Spec: Duragrip LSI
26 56 13 00 0236 20' High, 4" OD, 11 Gauge, Square Straight, Steel Area Light Pole, Anchor Base
54 EA $22,375.33
Installation x x = 18,142.95
Quantity Unit Price Factor Total

10.00 1,851.51 0.9799
Demolition 10.00 x 431.92 x 0.9799 = 4,232.38
Spec: Duragrip LSI

Page 6 of 7 ends

2/23/2026
Contractor's Price Proposal - Detail
Contractor's Price Proposal - Detail Continues..

Work Order Title:

Work Order Number: 150887.00
Cypress LED Lighting Upgrades
Veterans Park
26 56 19 00 0224 14,000 Lumens, 140 Watt, Arm Mount, Rectangular, LED Area Fixture (Everlast EL-LED-VS)
55 EA $15,418.80
Installation x x = 13,575.76
Quantity Unit Price Factor Total

13.00 1,065.71 0.9799
Demolition 13.00 x 144.68 x 0.9799 = 1,843.04
Specified as Sylvania AREAFLD6AS80UNHDSC2ADJBZ
31 23 16 13 0008 Excavation For Trenching By Hand In Loose Rock Or Compacted AggregateIncludes stockpiling excess materials and trimming sides and bottom of trench.
56 CY $3,429.00
Installation x x = 3,429.00
Quantity Unit Price Factor Total

13.00 269.18 0.9799
Earthwork Footings
57 31 23 16 13 0016 CY Compaction of Fill or Subbase for Trenches by Hand $626.36 Installation x x = 626.36
Quantity Unit Price Factor Total

13.00 49.17 0.9799
Earthwork Footings
58 31 23 16 13 0019 CY Load Excess Material by Hand for Removal from Excavation for Trenching $676.54 Installation x x = 676.54
Quantity Unit Price Factor Total

6.00 115.07 0.9799
Earthwork Footings
Subtotal for Veterans Park $113,166.49
Proposal Total
This total represents the correct total for the proposal. Any discrepancy between line totals, sub-totals and the proposal total is due to rounding.
$617,300.49
The Percentage of NPP on this Proposal: %

Page 7 of 7 ends

2/23/2026
Contractor's Price Proposal - Detail
01405.0006/857127.1 B-1

EXHIBIT B

SPECIAL REQUIREMENTS
(Superseding Agreement Template)

EXHIBIT C

FAITHFUL PERFORMANCE BOND

SEE ATTACHED
Bond No. __________________

EXHIBIT D

LABOR AND MATERIALS PAYMENT BOND

SEE ATTACHED
Bond No. _________________
__________________

EXHIBIT E

INVOICE FORM

SEE ATTACHED
No. 1
PO No. Date
No.
1 2
3 4
TOTAL INVOICE AMOUNT APPROVED FOR PAYMENT =
Fund Account Amount Program
#DIV/0!
Purchase Order Data
Account No(s): Percent Complete
less Current Invoice Due
Requested by (signature and title) - Contractor Checked by Public Works Inspector Project Manager Public Works Inspector
Recommended by Project Manager Approved by City Engineer Payment Information
Remaining Contract Balance = $ -
$ -
Invoice No. Period Start Period End Date
Less 5% Retainage =
Sub-Total =
$ - $ - $ -
$ - $ -
Contract Completion Data Contract Cost Data
$ -
Net Earning =
Contractor
Plus 65% of Invoice Amount for Materials Delivered - $ - $ - $ Less Adjustment for Previous Materials Invoices $ - $ - $ - $ -
$ -
$ -
Net Payment (this estimate) =
Previous
Amounts
Original Contract Amount
Contract Completion Date
Less Previous Payments =
$ - - $
Approved Time Extensions
Original Contract Duration
Notice to Proceed Date
City of Cypress, Public Works Department

MONTHLY PAYMENT ESTIMATE SUMMARY FORM
City of Cypress City of Cypress
CIP No.

To Date
Project Title
Address
Total Earning for Work and Materials Installed $ - $ - $ - This Estimate
less Previous Payments/Billed $ -
Description
$ -
$ -
$ -
Total Contract Amount =
Approved Change Orders
Progress Payment
Final Payment
Period End
No. 1
Quant. Unit Unit Price Item Total Quant. Earnings Quant. Earnings Quant. Earnings 1 $ - - - $ - - $ - - $ 2 $ - - - $ - - $ - - $ 3 $ - - - $ - - $ - - $ 4 $ - - - $ - - $ - - $ 5 $ - - - $ - - $ - - $ 6 $ - - - $ - - $ - - $ 7 $ - - - $ - - $ - - $ 8 $ - - - $ - - $ - - $ 9 $ - - - $ - - $ - - $ 10 $ - - - $ - - $ - - $
11 $ - - - $ - - $ - - $
12 $ - - - $ - - $ - - $ 13 $ - - - $ - - $ - - $ 14 $ - - - $ - - $ - - $ 15 $ - - - $ - - $ - - $ 16 $ - - - $ - - $ - - $ 17 $ - - - $ - - $ - - $ $ -
CO 1 $ - - $ - $
CO 2CO 3
$ -$ -
TOTAL =
Requested by (signature and title) - Contractor Checked by Public Works InspectorProject Manager Public Works Inspector Invoice No. Period Start Date
Original Contract =
$ - $ -
Total Contract Amount =
Approved CO Total =
Contractor
Item
No
Contract Previous Estimate This Estimate Pay Item
MONTHLY PAYMENT ESTIMATE FORMCity of Cypress, Public Works Department Payment Information
To Date
Project Title CIP No.

Progress PaymentFinal Payment
Period End
No. 1
Quant. Unit Unit Price Material Total Quant. Earnings Quant. Earnings Quant. Earnings 123456789
1011121314151617181920
TOTAL =
Requested by (signature and title) - Contractor Checked by Public Works Inspector Project Manager Public Works Inspector
MATERIALS ESTIMATE FORMCity of Cypress, Public Works Department Invoice No. Period Start Payment Information Date
To Date
Contractor Project Title CIP No.

Item This Estimate
No Pay Item / Storage Location Material Value Previous Estimate Progress PaymentFinal Payment

AGREEMENT TO

MODIFY AND EXTEND
SOURCEWELL CONTRACT #CA-R8-E-101723-AEL
THIS AGREEMENT TO MODIFY AND EXTEND, Sourcewell Contract #CA-R8-E-101723-AEL is effective upon the date of the last signature below.

Sourcewell and ABM Electrical and Lighting Solutions (“Contractor”) have entered into an Indefinite Quantity Construction Contract, Contract Number CA-R8-E-101723-AEL with an initial term ending December 5, 2024, and five bilateral options to extend for an additional one-year term (“Contract”). This contract has previously been extended by the parties for the term ending December 5, 2025. The parties agree to modify and extend the Contract as stated below.

CONTRACT MODIFICATION
The updated CTC will appear in the eGordian software upon receipt of the executed extension document.

Pursuant to the Contract, Contractor’s Adjustment Factors remain fixed for the duration of the contract term and are unaffected by this modification.

EXERCISE OF OPTION: EXTENSION
Contractor and Sourcewell hereby desire and agree to extend the Contract, with the above modification, for the period of December 6, 2025 through December 5, 2026.

Sourcewell ABM Electrical and Lighting Solutions
By: __________________________ By: __________________________ Jeremy Schwartz Chan Onechanh
Title: Chief Procurement Officer Title: Sr. General Manager Date: Date:

Docusign Envelope ID: A29FBB35-8EFC-4B88-A037-16EBC63FEE5E 10/29/2025 | 12:13 PM CDT 10/29/2025 | 3:06 PM CDT

AGREEMENT TO

MODIFY AND EXTEND
SOURCEWELL CONTRACT #CA-R8-E-101723-AEL
THIS AGREEMENT TO MODIFY AND EXTEND, Sourcewell Contract #CA-R8-E-101723-AEL, is effective upon the date of the last signature below.

Sourcewell and ABM Electrical and Lighting Solutions (“Contractor”) have entered into an Indefinite Delivery-Indefinite Quantity Construction Contract, Contract Number CA-R8-E-101723-AEL, with an initial term ending December 5, 2024, and five bilateral options to extend for an additional one-year term (“Contract”). The parties agree to modify and extend the Contract as stated below.

CONTRACT MODIFICATION
The following is adopted as the new CTC for the Contract effective December 6, 2024:

Sourcewell California - Region 8
Pursuant to the Contract, Contractor’s Adjustment Factors remain fixed for the duration of the contract term and are unaffected by this modification.

EXERCISE OF OPTION: EXTENSION
Contractor and Sourcewell hereby desire and agree to extend the Contract, with the above modification, for the period of December 6, 2024 through December 5, 2025.

Docusign Envelope ID: 63C5B10C-6C06-49F9-8ACA-FC9087C9EC8B 11/13/2024 | 5:52 PM CST 11/12/2024 | 5:27 PM CST
Rev. 4/2021 Sourcewell IFB #CA-101723
Indefinite Delivery-Indefinite Quantity Construction Contracts in the State of California

Page 1 ends

Indefinite Delivery-Indefinite Quantity Construction Contract Contract Number: CA-R8-E-101723-AEL
Service Type: Electrical
This Indefinite Delivery-Indefinite Quantity Construction Contract (Contract) is between Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 and ABM Electrical and Lighting Solutions, 14201 Franklin Ave, Tustin, CA 92780 (Contractor).

Sourcewell is a State of Minnesota local government agency and service cooperative created under the laws of the State of Minnesota (Minnesota Statutes Section 123A.21) that offers cooperative procurement solutions to government entities. Participation is open to federal, state and municipal governmental entities, K-12 and higher education entities, nonprofit entities, tribal governments, and other public entities located within the United States.

The Contractor desires to contract with Sourcewell to provide construction services to entities that access Sourcewell’s indefinite delivery-indefinite quantity (IDIQ) construction contracts within the Service Region.

I. TERM OF CONTRACT
A. EFFECTIVE DATE. This Contract, including the General Terms and Conditions incorporated by reference, is effective upon the later of December 6, 2023 or the date of the final signature below.

B. EXPIRATION DATE AND EXTENSION. This Contract expires December 5, 2024, unless it is terminated sooner pursuant to Article XX of the General Terms and Conditions, which are incorporated into this Contract by reference. This Contract allows up to five additional one-year extensions upon the request of Sourcewell and written agreement with Contractor. Sourcewell retains the right to consider additional extensions beyond six years as required under exceptional circumstances.

II. REGION AND SERVICES
The Contractor’s Region is: Region 8. The Contractor’s IDIQ construction service type is: Electrical. The Contractor has agreed to perform work outside the Region.

III. ADJUSTMENT FACTORS
The Contractor will perform any or all Tasks in the Construction Task Catalog for the Unit Price appearing therein multiplied by the following Adjustment Factors. See the General Terms and Conditions for additional information.

A. Normal Working Hours – Prevailing Wage Rate Projects: Work performed from 7:00 a.m. until 4:00 p.m. Monday to Friday, except Holidays. The Contractor will perform Tasks during Normal Working Hours for the Unit Price set forth in the CTC multiplied by the Adjustment Factor of: 0.9799.

Rev. 4/2021 Sourcewell IFB #CA-101723
Indefinite Delivery-Indefinite Quantity Construction Contracts in the State of California

Page 2 ends

B. Other Than Normal Working Hours – Prevailing Wage Rate Projects: Work performed from 4:00 p.m. to 7:00 a.m. Monday to Friday, and any time Saturday, Sunday and Holidays. The Contractor will perform Tasks during Other Than Normal Working Hours for the Unit Price set forth in the CTC multiplied by the Adjustment Factor of: 1.0525.

C. Secured Facilities/OSHPD Prevailing - Wage Rate Projects: Work performed from 7:00 a.m. until 4:00 p.m. Monday to Friday, except Holidays. The Contractor will perform Tasks during Normal Working Hours for the Unit Price set forth in the CTC multiplied by the Adjustment Factor of: 1.0616.

D. All Union Wage Projects: Work performed from 7:00 a.m. until 4:00 p.m. Monday to Friday, except Holidays. The Contractor will perform Tasks during Normal Working Hours for the Unit Price set forth in the CTC multiplied by the Adjustment Factor of: 0.9799.

E. Non pre-priced Adjustment Factor: To be applied to Work determined not to be included in the CTC but within the general scope of the work: 1.1251.

VI. AUTHORIZED REPRESENTATIVE
A. Sourcewell's Authorized Representative is its Chief Procurement Officer.

B. The Contractor’s Authorized Representative is Chan Onechanh. If the Contractor’s Authorized Representative changes at any time during this Contract, Contractor must promptly notify Sourcewell in writing.

March 24, 2026
Daniel Co, P.E,
Assistant City Engineer
City of Cypress
Public Works Engineering
SUBJECT: PROPOSAL TO PROVIDE MATERIAL TESTING AND INSPECTION SERVICES FOR LED LIGHTING UPGRADES PROJECT 434
Dear Mr. Co,
FCG is pleased to present our proposal to the City of Cypress to provide material testing and inspection services for the LED Lighting Upgrades Project 434 in the amount of $34,885.40. All work will be completed pursuant to the City of Cypress On-Call Construction Management and Inspection Services Contract dated July 1, 2024.

We look forward to partnering with the City on this project. If there are any questions regarding this proposal, please contact me at (714) 312-0317 or [email protected] with any questions you may have.

Sincerely,
Maha Fakhouri
President / CEO
Material Testing and Inspection Services for LED Lighting Upgrades Project 434 City of Cypress March 24, 2026

Page 2 of 3 ends

ATTACHMENT “A”

SCOPE OF SERVICES
The scope of services includes part-time inspection services and project controls to assist our inspector in the field.

Below is a list of services included in this proposal:
• Represent the City’s interests with the overall construction inspection of this project. • Monitor the contractor's compliance with the project contract, specifications, and National Pollutant Discharge Elimination System (NPDES). • Assist City staff with public relations and responding to inquiries of residents and the general public.
• Attend the preconstruction meeting and subsequent weekly field meetings, as needed.
• Assist the City’s construction manager in monitoring and documenting the contractor’s adherence to the approved construction schedule. • Be present on the job site when construction is in progress and when inspection is required. Part-time inspection work is proposed as requested by the City. will not be responsible for observing construction activities that are implemented when its inspector is not scheduled/present on site.
• Measure and verify the project pay item quantities in place. All pay item quantities must be confirmed with the contractor prior to submission of the invoice for payment.
• Review the contractor's invoices.
• Prepare daily inspection reports (Daily Activity Report, Weekly Statement of Working Days, etc.) as required for this project.
• Review traffic control and coordinate adjustments as needed. • Identify items requiring corrective action by either the contractor or the City.

Monitor and document timely corrective actions implemented by the contractor. • Develop punch list items and monitor corrections made.

Material Testing and Inspection Services for LED Lighting Upgrades Project 434 City of Cypress March 24, 2026

Page 3 of 3 ends

ATTACHMENT “B”

SCHEDULE OF COMPENSATION
City of Cypress Material Testing and Inspection Services for LED Lighting Upgrades Project 434
50 Working Days Construction Duration
Role / Name Total
Hours
Hourly
Rate
Extended
Fee
Construction Inspector 200 $152.28 $30,456.00
Materials Testing $4,429.40
Total Estimated Fee $34,885.40
Exclusions to Scope and Fee: The following items are specifically excluded:

1. Night-time/weekend inspection and weekday hours in excess of a regular 8-hour shift that would be subject to overtime pay, unless so authorized in writing by the City

2. Special inspections
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 10.

FROM: Nick Mangkalakiri, Director of Public Works
DATE: 04/28/2026
SUBJECT: Approve Change Order for Purchase and Upfitting of Seven Replacement Police Vehicles

RECOMMENDATION

1. Approve Change Order No. 1 for the purchase and upfitting of seven replacement police vehicles, in the amount of $11,858, and authorize the City Manager to execute the change order;

2. Authorize the City Manager to negotiate and execute any change orders up to 5% of the total original amount ($648,847); and

2. Authorize an appropriation increase in the amount of $32,500 in the City's Capital Replacement Fund for Change Order No. 1 and future contingency.

DISCUSSION
Last September, the City Council approved the purchase and upfitting of seven replacement police vehicles from National Auto Fleet Group. The approved scope of work included the procurement of the vehicles and associated upfitting costs, including installation of various equipment.

During implementation, it was determined that the original scope did not account for the labor and materials required to remove existing radio, camera, and mobile data computer systems from the outgoing vehicles prior to installation in the new vehicles. This issue did not arise during the City’s previous vehicle replacement cycle, as these systems were new installations at that time and did not require removal and reinstallation.

The additional work is necessary to properly transfer the existing systems and ensure full operational readiness of the replacement vehicles. The cost for this additional work is $1,694 per vehicle, for a total of $11,858.

A contingency was not included as part of the original vehicle purchase approved last September. Therefore, City Council approval is required for this change order.

September. Therefore, City Council approval is required for this change order.

BUDGET IMPACT
There are sufficient funds available in the unassigned fund balance in the City's capital replacement fund for this work.

Fund 721 - City Capital Replacement Fund
Current
Amended
Budget
Proposed
Amendment
Proposed
Amended Budget
Beginning Fund
Balance 19,142,857 19,142,857
Revenue 2,295,693 0 2,295,693
Expenditures 2,153,711 32,500 2,186,211
Revenue Less
Expenditures 141,982 -32,500 109,482
Ending Fund
Balance $19,284,839 $19,252,339
LEGAL REVIEW
The City Attorney reviewed this staff report.

APPROVED BY: Shannon DeLong, City
Manager
Attachments
Change Order for PD Vehicles

CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 11.

FROM: Nick Mangkalakiri, Director of Public Works
DATE: 04/28/2026
SUBJECT: Accept the HVAC and Roof Replacement for the City-Owned Building at 10161 Moody Street (Cedar Glen Park), Project 378

RECOMMENDATION

1. Accept the HVAC and Roof Replacement for the City-Owned Building at 10161 Moody Street (Cedar Glen Park), Project 378, in the amount of $650,354.85 and approve the final payment of $32,517.74 to MDJ Management, LLC.; and

2. Authorize the City Clerk to file a Notice of Completion with the County Recorder.

DISCUSSION
In July 2024, the City Council awarded a construction contract to MDJ Management, LLC. for the HVAC and Roof Replacement for the City-owned building at 10161 Moody Street (Cedar Glen Park). The project included removal and replacement of the heating, ventilation, and air conditioning (HVAC) units, approximately 8,600 square feet of roofing, and equipment screens. In July 2025, the City Council approved Amendment No. 1 to install structural reinforcements to support the new HVAC units. Work began in September 2025 and was completed in February 2026.

Public Works will release the Labor and Materials Bond and the Faithful Performance Bond upon expiration of the required lien period.

BUDGET IMPACT
The amended estimated cost of construction and inspection was $744,229.37, and final project costs total $697,605.16, as summarized in the attached table. Sufficient amounts are budgeted in the City’s Capital Project Fund to pay for the project.

LEGAL REVIEW
The City Attorney has reviewed this staff report.

APPROVED BY: Shannon DeLong, City
Manager
Attachments
Project Cost Table

PROJECT COST TABLE
Item Description
Original
Amount
Actual
Expenditures Difference
Construction
Construction 611,563.67$ 611,563.67$ -$
Construction Contingency 76,000.00 38,791.18* 37,208.82 Sub-total Construction 687,563.67$ 650,354.85$ 37,208.82$ Construction Management & Inspection
Inspection 49,265.70$ $ 47,250.31 2,015.39$
Inspection Contingency 7,400.00 - 7,400.00
Sub-total Construction Inspection 56,665.70$ 47,250.31$ 9,415.39$ Total Project 744,229.37$ 697,605.16$ 46,624.21$
HVAC and Roof Replacement for City-Owned Building at 10161 Moody Street Project 378
* Includes change orders for unforeseen site conditions and additional work.

CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 12.

FROM: Nick Mangkalakiri, Director of Public Works
DATE: 04/28/2026
SUBJECT: Approve Plans and Specifications and Award Contract for City Hall Executive Boardroom Improvements, Project 392

RECOMMENDATION

1. Approve Plans and Specifications for Executive Boardroom Improvements, Project 392;

2. Award a contract to Ankor Associates Inc. for $338,700, authorize a contingency of $85,000, and authorize the City Manager to execute the contract agreement; and

3. Award a contract for Construction Inspection Services to FCG Consultants, Inc., for $70,966.40, and authorize a contingency of $11,000.

DISCUSSION
The FY 2025–26 Capital Improvement Program includes the modernization of the Executive Boardroom at City Hall. The existing space is outdated, with a dark, inefficient layout that no longer meets operational needs, and underutilized features such as cabinetry and a kitchenette. The project will create a more functional and welcoming space for public engagement, workshops, and staff use. Improvements include a new exterior window, dedicated public access door, separate employee access door, upgraded lighting and finishes, a reconfigured kitchenette, new flooring and paint, and relocation of mechanical and electrical systems. A new secondary entrance/exit will enhance security and circulation by providing a clear public entry point, eliminating the need for visitors to pass through secured employee areas.

Two workshops were held last year to review design options, and feedback from the City Council and the public was incorporated into the final design. Notices for bids were issued on March 19, 2026, and on April 9, the City received eight bids for the project, with Ankor Associates, Inc. identified as the lowest responsive and responsible bidder. FCG Consultants, Inc., the City’s on-call construction manager, will provide inspection services.

A summary of the project award is attached. Construction is expected to begin in late July and be completed by October, with some work occurring outside of business hours and potential temporary staff relocation to minimize impacts.

BUDGET IMPACT
Estimated project costs, including labor and inspection, will not exceed $531,666.40. The Executive Boardroom Improvements project is included in the City’s Capital Improvement Program and funded by the Capital Projects Fund.

Construction Estimate (includes contingency) $423,700.00 Construction Inspection Estimate (includes contingency) $81,966.40 Design $51,000.00
Labor $26,000.00
Total Project Estimate $582,666.40
Total Project Budget $600,000.00
(Over)/Under Budget $17,333.60
LEGAL REVIEW
The City Attorney has reviewed this staff report.

APPROVED BY: Shannon DeLong, City
Manager
Attachments
Project Award Information
Proposed Boardroom Rendering
FCG Task Order
Project Award Information Checklist
Description of Project:

City Hall Executive Boardroom Improvements
Contract Working Days: 40 working days
Notice Inviting Bids Sent to: PlanetBids, City Hall Bulletin Board, Community Center Bulletin Board, Police Department Bulletin Board,
McGraw-Hill Construction, Dodge Construction
Network, AGC Plan Room, Construct Connect
Bid Opening Date: April 9, 2026
No. of Bid Packets Downloaded: 50
Bidders Base Bid Base Bid + Alt A

1. Ankor Associates Inc., Los Angeles, CA $318,700 $338,700

2. Genesis Builders, Inc., Fullerton, CA $377,557 $536,557

3. Global Builders Inc., Laguna Hills, CA $379,364 $396,424

4. Triangle DeCon Services Inc., Mission Viejo, CA $399,000 $414,000

5. YMC, Irvine, CA $416,300 $416,300

6. Elegant Construction Inc., Irvine, CA $421,680 $423,680

7. Gulati Construction Company, Inc., La Palma, CA $443,330 $485,830

8. De La Secura, Inc., Orange, CA $485,058 $489,558
Apparent Low Bidder: Ankor Associates Inc., Los Angeles, CA – $318,700 Qualified to Perform Work: Yes. Staff confirmed bid was responsive.

Contractor’s License: Registration with DIR:

Valid at Time of Award: Yes Contractor: Yes
Valid at Time of Bid: Yes Sub-Contractor: Yes
Experience:

The apparent low bidder has performed this type of work for multiple government agencies in Southern California.

Construction
Management/Inspection Firm:

FCG Consultants, Inc.

On-Call Contract Date: July 1, 2024
Amount of Task Order: $ 70,966.40

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Government Services City of Cypress Executive Boardroom SEE PAGE 3 FOR ACTUAL FURNITURE

AND FINISH SELECTIONS
Architecture
Government Services City of Cypress Executive Boardroom SEE PAGE 3 FOR ACTUAL FURNITURE

AND FINISH SELECTIONS
Architecture
Government Services City of Cypress Executive Boardroom CEILING/WALL SLATS Armstrong - Golden Maple

CONFERENCE CHAIR
Promessa - Atlantic

CONFERENCE TABLE AND CABINETRY
Formica - Aged Ash

ACCENT CHAIR
Wellington - Luggage

KITCHENETTE COUNTER TOP
Wilsonart - Nevis Ridge

CONFERENCE ROOM CARPET
Milliken - Major Frequency One - Static

CONFERENCE TABLE
Matte Black Metal Accents

SIDE CHAIR
(fabric selection not shown)

CONFERENCE CHAIR
(fabric selection not shown) STOREFRONT SYSTEM
Black Metal Mullions and Stainless Steel Handle
March 20, 2026
Daniel Co, P.E,
Assistant City Engineer
City of Cypress
Public Works Engineering
SUBJECT: PROPOSAL TO PROVIDE CONSTRUCTION MANAGEMENT,

INSPECTION SERVICES, AND ASBESTOS ABATEMENT

MONITORING AND REPORTING FOR CITY HALL EXECUTIVE
BOARDROOM IMPROVEMENTS PROJECT 392
Dear Mr. Co,
FCG is pleased to present our proposal to the City of Cypress to provide construction management, inspection services, and asbestos abatement monitoring and reporting for the City Hall Executive Boardroom Improvements Project 392 in the amount of $70,966.40. All work will be completed pursuant to the City of Cypress On-Call Construction Management and Inspection Services Contract dated July 1, 2024.

Sincerely,
Maha Fakhouri
President / CEO
Construction Management, Inspection Services and Asbestos Abatement Monitoring and Reporting for City Hall Executive Boardroom Improvements Proj 392 City of Cypress March 20, 2026

Page 2 of 3 ends

ATTACHMENT “A”

SCOPE OF SERVICES
The scope of services includes part-time inspection services and project controls to assist our inspector in the field.

Monitor and document timely corrective actions implemented by the contractor. • Develop punch list items and monitor corrections made.

Construction Management, Inspection Services and Asbestos Abatement Monitoring and Reporting for City Hall Executive Boardroom Improvements Proj 392 City of Cypress March 20, 2026

Page 3 of 3 ends

ATTACHMENT “B”

SCHEDULE OF COMPENSATION
City of Cypress Construction Management, Inspection Services, and Asbestos Abatement Monitoring and Reporting for the City Hall Executive Boardroom Improvements Project 392
40 Working Days Construction Duration
Role / Name Total
Hours
Hourly
Rate
Extended
Fee
Construction Manager 120 $234.27 $28,112.4
Facilities Inspector 250 $152.28 $38,070.00
Asbestos Abatement Monitoring and Reporting $4,784.00
Total Estimated Fee $70,966.40
Exclusions to Scope and Fee: The following items are specifically excluded:

1. Night-time/weekend inspection and weekday hours in excess of a regular 8-hour shift that would be subject to overtime pay, unless so authorized in writing by the City

2. Special inspections
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 13.

FROM: Jeff Draper, Director of Recreation and Community Services DATE: 04/28/2026
SUBJECT: Approve an Agreement for Senior Transportation Programs

RECOMMENDATION
Approve a three-year agreement, with the option for two one-year extensions, with OCY Management, LLC for Senior Transportation Services in an amount not to exceed $500,000.

DISCUSSION
The Recreation and Park District offers two transportation programs for residents age 60 and older.

The Nutrition Taxi and Taxi Voucher programs are summarized below:

Program Description Cost
Nutrition
Taxi
Daily transport to and from the
Senior Center for the Nutrition
Program.

Average of five passengers per
day.

Eligible senior residents can
receive transportation at no cost.

City currently pays $15.00 per
passenger trip.

The Senior Mobility Program
(SMP) under the Orange County
Transportation Authority pays up to
80% of the costs and the City pays
20% of the costs.

Taxi
Vouchers
Curb-to-curb service taxi service
for nutrition, medical, personal
care, shopping, social/recreation
visits to the Cypress Senior
Center.

Approximately 100 residents
participate in the program.

Eligible senior residents can
receive up to eight vouchers per
month at no cost.

Participants pay difference for
fare if needed.

City currently pays $15.00 per
voucher.

The Senior Mobility Program
(SMP) under the Orange County
Transportation Authority pays up to
80% of the costs and the City pays
20% of the costs.

The current agreement with the OCY Management, LLC is set to expire on June 30, 2026. A Request for Proposal (RFP) was issued in January and two proposals were received. After reviewing the proposals for completeness, service areas, price, past experience with the City, references, and the company’s reputation with other municipalities, OCY Management, LLC was identified as the most qualified vendor. Additionally, historically, 86% to 93% of all rides only utilize one to two vouchers, making the proposal from OCY Management, LLC the most cost-effective.

OCY Management, LLC is the current vendor for the Nutrition Taxi and Taxi Voucher programs and has provided excellent service to the City of Cypress and its senior clients. A summary of the proposed services and costs are below:

Program Proposal
Nutrition Taxi $20.00 per passenger, per trip
Taxi Voucher 0 – 4 Miles = $20.00 (One Voucher)

4.1 – 8 Miles = $32.00 (Two Vouchers)

8.1 – 12 Miles = $47.00 (Three Vouchers)

12.1 – 16 Miles = $62.00 (Four Vouchers)

16.1 to 20 Miles = $77.00 (Five Vouchers)

20.1 to 24 Miles = $92.00 (Six Vouchers)

24.1 to 28 Miles = $ 107.00 (Seven Vouchers)

28.1 to 32 Miles = $122.00 (Eight Vouchers)

32.1+ Miles = $3.85 per mile paid by passenger
BUDGET IMPACT
Based on expected ridership, the annual contract amount is projected to be $100,000 annually with a maximum contract amount of $500,000 over five years. Eighty percent of the costs will be reimbursed through the Senior Mobility Program (SMP) as provided by Measure M2, Orange County’s half-cent sales tax for transportation improvements approved in 2006 for a 30-year period.

Sufficient appropriations are proposed as part of the District’s FY 2026-27 General Fund budget for the Senior Transportation Program.

LEGAL REVIEW
The City Attorney has reviewed and approved the contract to form.

APPROVED BY: Shannon DeLong, City Manager
Attachments
Agreement for Senior Transportation Services
OCY Management, LLC Proposal
Top Notch Medical Transportation, LLC Proposal
101004.0009/301437.1

AGREEMENT FOR CONTRACT SERVICES
By and Between

CITY OF CYPRESS
and

OCY MANAGEMENT, LLC
201004.0009/301437.1

AGREEMENT FOR CONTRACT SERVICES

BY AND BETWEEN THE CITY OF CYPRESS AND

OCY MANAGEMENT, LLC
THIS AGREEMENT FOR CONTRACT SERVICES (herein “Agreement”) is made and entered into this ____ day of ________, 2026 by and between the City of Cypress, a California municipal corporation (“City”) and OCY Management, LLC, a __________ corporation (“Contractor”). City and Contractor are sometimes hereinafter individually referred to as “Party” and hereinafter collectively referred to as the “Parties.”

RECITALS
A. City has sought, by issuance of a Request for Proposals or Invitation for Bids, the performance of the services defined and described particularly in Article 1 of this Agreement.

B. Contractor, following submission of a proposal or bid for the performance of the services defined and described particularly in Article 1 of this Agreement, was selected by the City to perform those services.

C. Pursuant to the City of Cypress’s Charter and Municipal Code, City has authority to enter into and execute this Agreement.

D. The Parties desire to formalize the selection of Contractor for performance of those services defined and described particularly in Article 1 of this Agreement and desire that the terms of that performance be as particularly defined and described herein.

OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises and covenants made by the Parties and contained herein and other consideration, the value and adequacy of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1. SERVICES OF CONSULTANT

1.1Scope of Services.

In compliance with all terms and conditions of this Agreement, the Contractor shall provide those services specified in the “Scope of Services” attached hereto as Exhibit “A” and incorporated herein by this reference, which may be referred to herein as the “services” or “work” hereunder. As a material inducement to the City entering into this Agreement, Contractor represents and warrants that it has the qualifications, experience, and facilities necessary to properly perform the services required under this Agreement in a thorough, competent, and professional manner, and is experienced in performing the work and services contemplated herein. Contractor shall at all times faithfully, competently and to the best of its ability, experience and talent, perform all services described herein. Contractor covenants that it shall follow the highest professional standards in performing the work and services required hereunder and that all materials will be both of good quality as well as fit for the purpose intended. For purposes of this Agreement, the phrase “highest professional standards” shall 301004.0009/301437.1
mean those standards of practice recognized by one or more first-class firms performing similar work under similar circumstances.

1.2Contractor’s Proposal.

The Scope of Service shall include the Contractor’s scope of work or bid which shall be incorporated herein by this reference as though fully set forth herein. In the event of any inconsistency between the terms of such proposal and this Agreement, the terms of this Agreement shall govern.

1.3Compliance with Law.

Contractor shall keep itself informed concerning, and shall render all services hereunder in accordance with, all ordinances, resolutions, statutes, rules, and regulations of the City and any Federal, State or local governmental entity having jurisdiction in effect at the time service is rendered.

1.4Licenses, Permits, Fees and Assessments.

Contractor shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement.

Contractor shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the Contractor’s performance of the services required by this Agreement, and shall indemnify, defend and hold harmless City, its officers, employees or agents of City, against any such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City hereunder.

1.5Familiarity with Work.

By executing this Agreement, Contractor warrants that Contractor (i) has thoroughly investigated and considered the scope of services to be performed, (ii) has carefully considered how the services should be performed, and (iii) fully understands the facilities, difficulties and restrictions attending performance of the services under this Agreement. If the services involve work upon any site, Contractor warrants that Contractor has or will investigate the site and is or will be fully acquainted with the conditions there existing, prior to commencement of services hereunder. Should the Contractor discover any latent or unknown conditions, which will materially affect the performance of the services hereunder, Contractor shall immediately inform the City of such fact and shall not proceed except at Contractor’s risk until written instructions are received from the Contract Officer.

1.6Care of Work.

The Contractor shall adopt reasonable methods during the life of the Agreement to furnish continuous protection to the work, and the equipment, materials, papers, documents, plans, studies and/or other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the work by City, except such losses or damages as may be caused by City’s own negligence. 401004.0009/301437.1

1.7Further Responsibilities of Parties.

Both parties agree to use reasonable care and diligence to perform their respective obligations under this Agreement. Both parties agree to act in good faith to execute all instruments, prepare all documents and take all actions as may be reasonably necessary to carry out the purposes of this Agreement. Unless hereafter specified, neither party shall be responsible for the service of the other.

1.8Additional Services.

City shall have the right at any time during the performance of the services, without invalidating this Agreement, to order extra work beyond that specified in the Scope of Services or make changes by altering, adding to or deducting from said work. No such extra work may be undertaken unless a written order is first given by the Contract Officer to the Contractor, incorporating therein any adjustment in (i) the Contract Sum for the actual costs of the extra work, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the written approval of the Contractor. Any increase in compensation of up to ten percent (10%) of the Contract Sum or $25,000, whichever is less; or, in the time to perform of up to one hundred eighty (180) days, may be approved by the Contract Officer. Any greater increases, taken either separately or cumulatively, must be approved by the City Council. It is expressly understood by Contractor that the provisions of this Section shall not apply to services specifically set forth in the Scope of Services. Contractor hereby acknowledges that it accepts the risk that the services to be provided pursuant to the Scope of Services may be more costly or time consuming than Contractor anticipates and that Contractor shall not be entitled to additional compensation therefor. City may in its sole and absolute discretion have similar work done by other contractors. No claims for an increase in the Contract Sum or time for performance shall be valid unless the procedures established in this Section are followed.

1.9Special Requirements.

Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in the “Special Requirements” attached hereto as Exhibit “B” and incorporated herein by this reference. In the event of a conflict between the provisions of Exhibit “B” and any other provisions of this Agreement, the provisions of Exhibit “B” shall govern.

ARTICLE 2. COMPENSATION AND METHOD OF PAYMENT.

2.1Contract Sum.

Subject to any limitations set forth in this Agreement, City agrees to pay Contractor the amounts specified in the “Schedule of Compensation” attached hereto as Exhibit “C” and incorporated herein by this reference. The total compensation, including reimbursement for actual expenses, shall not exceed $100,000 per fiscal year and a total contract amount of Five Hundred Thousand Dollars ($500,000.00) ("Contract Sum"), unless additional compensation is approved pursuant to Section 1.8.
501004.0009/301437.1

2.2Method of Compensation.

The method of compensation may include: (i) a lump sum payment upon completion; (ii) payment in accordance with specified tasks or the percentage of completion of the services, less contract retention; (iii) payment for time and materials based upon the Contractor’s rates as specified in the Schedule of Compensation, provided that (a) time estimates are provided for the performance of sub tasks, (b) contract retention is maintained, and (c) the Contract Sum is not exceeded; or (iv) such other methods as may be specified in the Schedule of Compensation.

2.3Reimbursable Expenses.

Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, telephone expenses, and travel expenses approved by the Contract Officer in advance, or actual subcontractor expenses of an approved subcontractor pursuant to Section 4.5, and only if specified in the Schedule of Compensation. The Contract Sum shall include the attendance of Contractor at all project meetings reasonably deemed necessary by the City.

Coordination of the performance of the work with City is a critical component of the services. If Contractor is required to attend additional meetings to facilitate such coordination, Contractor shall not be entitled to any additional compensation for attending said meetings.

2.4Invoices.

Each month Contractor shall furnish to City an original invoice for all work performed and expenses incurred during the preceding month in a form approved by City’s Director of Finance. By submitting an invoice for payment under this Agreement, Contractor is certifying compliance with all provisions of the Agreement. The invoice shall detail charges for all necessary and actual expenses by the following categories: labor (by sub-category), travel, materials, equipment, supplies, and sub-contractor contracts. Sub-contractor charges shall also be detailed by such categories. Contractor shall not invoice City for any duplicate services performed by more than one person.

City shall independently review each invoice submitted by the Contractor to determine whether the work performed and expenses incurred are in compliance with the provisions of this Agreement. Except as to any charges for work performed or expenses incurred by Contractor which are disputed by City, or as provided in Section 7.3, City will use its best efforts to cause Contractor to be paid within forty-five (45) days of receipt of Contractor’s correct and undisputed invoice; however, Contractor acknowledges and agrees that due to City warrant run procedures, the City cannot guarantee that payment will occur within this time period. In the event any charges or expenses are disputed by City, the original invoice shall be returned by City to Contractor for correction and resubmission. Review and payment by City for any invoice provided by the Contractor shall not constitute a waiver of any rights or remedies provided herein or any applicable law.

2.5Waiver.

Payment to Contractor for work performed pursuant to this Agreement shall not be deemed to waive any defects in work performed by Contractor. 601004.0009/301437.1
ARTICLE 3. PERFORMANCE SCHEDULE

3.1Time of Essence.

Time is of the essence in the performance of this Agreement.

3.2Schedule of Performance.

Contractor shall commence the services pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all services within the time period(s) established in the “Schedule of Performance” attached hereto as Exhibit “D” and incorporated herein by this reference. When requested by the Contractor, extensions to the time period(s) specified in the Schedule of Performance may be approved in writing by the Contract Officer but not exceeding one hundred eighty (180) days cumulatively.

3.3Force Majeure.

The time period(s) specified in the Schedule of Performance for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the Contractor, including, but not restricted to, acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts of any governmental agency, including the City, if the Contractor shall within ten (10) days of the commencement of such delay notify the Contract Officer in writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend the time for performing the services for the period of the enforced delay when and if in the judgment of the Contract Officer such delay is justified. The Contract Officer’s determination shall be final and conclusive upon the parties to this Agreement. In no event shall Contractor be entitled to recover damages against the City for any delay in the performance of this Agreement, however caused, Contractor’s sole remedy being extension of the Agreement pursuant to this Section.

3.4Term.

Unless earlier terminated in accordance with Article 7 of this Agreement, this Agreement shall continue in full force and effect until completion of the services but not exceeding three (3) years from the date hereof, except as otherwise provided in the Schedule of Performance (Exhibit “D”).

ARTICLE 4. COORDINATION OF WORK

4.1Representatives and Personnel of Contractor.

The following principals of Contractor (“Principals”) are hereby designated as being the principals and representatives of Contractor authorized to act in its behalf with respect to the work specified herein and make all decisions in connection therewith:

Akbar Majid, President/General Manager
520 W. Dyer Road
Santa Ana, CA 92707
701004.0009/301437.1
(714) 427-2555 Ext. 112
It is expressly understood that the experience, knowledge, capability and reputation of the foregoing principals were a substantial inducement for City to enter into this Agreement.

Therefore, the foregoing principals shall be responsible during the term of this Agreement for directing all activities of Contractor and devoting sufficient time to personally supervise the services hereunder. All personnel of Contractor, and any authorized agents, shall at all times be under the exclusive direction and control of the Principals. For purposes of this Agreement, the foregoing Principals may not be replaced nor may their responsibilities be substantially reduced by Contractor without the express written approval of City. Additionally, Contractor shall utilize only competent personnel to perform services pursuant to this Agreement. Contractor shall make every reasonable effort to maintain the stability and continuity of Contractor’s staff and subcontractors, if any, assigned to perform the services required under this Agreement.

Contractor shall notify City of any changes in Contractor’s staff and subcontractors, if any, assigned to perform the services required under this Agreement, prior to and during any such performance.

4.2Status of Contractor.

Contractor shall have no authority to bind City in any manner, or to incur any obligation, debt or liability of any kind on behalf of or against City, whether by contract or otherwise, unless such authority is expressly conferred under this Agreement or is otherwise expressly conferred in writing by City. Contractor shall not at any time or in any manner represent that Contractor or any of Contractor’s officers, employees, or agents are in any manner officials, officers, employees or agents of City. Neither Contractor, nor any of Contractor’s officers, employees or agents, shall obtain any rights to retirement, health care or any other benefits which may otherwise accrue to City’s employees. Contractor expressly waives any claim Contractor may have to any such rights.

4.3Contract Officer.

The Contract Officer shall be the Director of Recreation and Community Services or such person as may be designated by the City Manager. It shall be the Contractor’s responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services and the Contractor shall refer any decisions which must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer. The Contract Officer shall have authority, if specified in writing by the City Manager, to sign all documents on behalf of the City required hereunder to carry out the terms of this Agreement.

4.4Independent Contractor.

Neither the City nor any of its employees shall have any control over the manner, mode or means by which Contractor, its agents or employees, perform the services required herein, except as otherwise set forth herein. City shall have no voice in the selection, discharge, supervision or control of Contractor’s employees, servants, representatives or agents, or in fixing their number, compensation or hours of service. Contractor shall perform all services required herein as an independent contractor of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role. Contractor shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. City shall not in any way or for any purpose become or be deemed 801004.0009/301437.1
to be a partner of Contractor in its business or otherwise or a joint venturer or a member of any joint enterprise with Contractor.

4.5Prohibition Against Subcontracting or Assignment.

The experience, knowledge, capability and reputation of Contractor, its principals and employees were a substantial inducement for the City to enter into this Agreement. Therefore, Contractor shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of the City. In addition, neither this Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated or encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise, without the prior written approval of City. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty five percent (25%) of the present ownership and/or control of Contractor, taking all transfers into account on a cumulative basis. In the event of any such unapproved transfer, including any bankruptcy proceeding, this Agreement shall be void. No approved transfer shall release the Contractor or any surety of Contractor of any liability hereunder without the express consent of City.

ARTICLE 5. INSURANCE AND INDEMNIFICATION

5.1Insurance Coverages.

The Contractor shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to City, during the entire term of this Agreement including any extension thereof, the following policies of insurance which shall cover all elected and appointed officers, employees and agents of City:
(a)General Liability Insurance (Occurrence Form CG0001 or equivalent). A policy of comprehensive general liability insurance written on a per occurrence basis for bodily injury, personal injury and property damage.  The policy of insurance shall be in an amount not less than $1,000,000.00 per occurrence or if a general aggregate limit is used,  then the general aggregate limit shall be twice the occurrence limit.
(b)Worker’s Compensation Insurance. A policy of worker’s compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for the Contractor against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Contractor in the course of carrying out the work or services contemplated in this Agreement.
(c)Automotive Insurance (Form CA 0001 (Ed 1/87) including “any auto” and endorsement CA 0025 or equivalent).  A policy of comprehensive automobile liability insurance written on a per occurrence for bodily injury and property damage in an amount not less than $1,000,000.   Said policy shall include coverage for owned, non-owned, leased, hired cars and any automobile.
(d)Professional Liability. Professional liability insurance appropriate to the Contractor’s profession. This coverage may be written on a “claims made” basis, and must include coverage for contractual liability.  The professional liability insurance required by this Agreement must be endorsed to be applicable to claims based upon, arising out of or related to services performed under this Agreement. The insurance must be maintained for at least 5 901004.0009/301437.1
consecutive years following the completion of Contractor’s services or the termination of this Agreement.  During this additional 5-year period, Contractor shall annually and upon request of the City submit written evidence of this continuous coverage. (e)Subcontractors.  Contractor shall include all subcontractors as insureds under its policies or shall furnish separate certificates and certified endorsements for each subcontractor. All coverages for subcontractors shall include all of the requirements stated herein.
(f)Additional Insurance.  Policies of such other insurance, as may be required in the Special Requirements in Exhibit “B”.

5.2General Insurance Requirements.

All of the above policies of insurance shall be primary insurance and shall name the City, its elected and appointed officers, employees and agents as additional insureds and any insurance maintained by City or its officers, employees or agents may apply in excess of, and not contribute with Contractor’s insurance. The insurer is deemed hereof to waive all rights of subrogation and contribution it may have against the City, its officers, employees and agents and their respective insurers. Moreover, the insurance policy must specify that where the primary insured does not satisfy the self-insured retention, any additional insured may satisfy the selfinsured retention.

All of said policies of insurance shall provide that said insurance may not be amended or cancelled by the insurer or any party hereto without providing thirty (30) days prior written notice by certified mail return receipt requested to the City. In the event any of said policies of insurance are cancelled, the Contractor shall, prior to the cancellation date, submit new evidence of insurance in conformance with Section 5.1 to the Contract Officer.

No work or services under this Agreement shall commence until the Contractor has provided the City with Certificates of Insurance, additional insured endorsement forms or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders are approved by the City. City reserves the right to inspect complete, certified copies of and endorsements to all required insurance policies at any time. Any failure to comply with the reporting or other provisions of the policies including breaches or warranties shall not affect coverage provided to City.

All certificates shall name the City as additional insured (providing the appropriate endorsement) and shall conform to the following “cancellation” notice:

CANCELLATION:

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE
CANCELLED BEFORE THE EXPIRATION DATED
THEREOF, THE ISSUING COMPANY SHALL MAIL THIRTY
(30)-DAY ADVANCE WRITTEN NOTICE TO CERTIFICATE
HOLDER NAMED HEREIN.
[to be initialed] ______________
Contractor Initials
1001004.0009/301437.1
City, its respective elected and appointed officers, directors, officials, employees, agents and volunteers are to be covered as additional insureds as respects: liability arising out of activities Contractor performs; products and completed operations of Contractor; premises owned, occupied or used by Contractor; or any automobiles owned, leased, hired or borrowed by Contractor. The coverage shall contain no special limitations on the scope of protection afforded to City, and their respective elected and appointed officers, officials, employees or volunteers.

Contractor’s insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City or its respective elected or appointed officers, officials, employees and volunteers or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration, defense expenses and claims. The Contractor agrees that the requirement to provide insurance shall not be construed as limiting in any way the extent to which the Contractor may be held responsible for the payment of damages to any persons or property resulting from the Contractor’s activities or the activities of any person or persons for which the Contractor is otherwise responsible nor shall it limit the Contractor’s indemnification liabilities as provided in Section 5.3.

In the event the Contractor subcontracts any portion of the work in compliance with Section 4.5 of this Agreement, the contract between the Contractor and such subcontractor shall require the subcontractor to maintain the same policies of insurance that the Contractor is required to maintain pursuant to Section 5.1, and such certificates and endorsements shall be provided to City.

5.3Indemnification.

To the full extent permitted by law, Contractor agrees to indemnify, defend and hold harmless the City, its officers, employees and agents (“Indemnified Parties”) against, and will hold and save them and each of them harmless from, any and all actions, either judicial, administrative, arbitration or regulatory claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities whether actual or threatened (herein “claims or liabilities”) that may be asserted or claimed by any person, firm or entity arising out of or in connection with the negligent performance of the work, operations or activities provided herein of Contractor, its officers, employees, agents, subcontractors, or invitees, or any individual or entity for which Contractor is legally liable (“indemnitors”), or arising from Contractor’s or indemnitors’ reckless or willful misconduct, or arising from Contractor’s or indemnitors’ negligent performance of or failure to perform any term, provision, covenant or condition of this Agreement, and in connection therewith:
(a)Contractor will defend any action or actions filed in connection with any of said claims or liabilities and will pay all costs and expenses, including legal costs and attorney’s fees incurred in connection therewith;
(b)Contractor will promptly pay any judgment rendered against the City, its officers, agents or employees for any such claims or liabilities arising out of or in connection with the negligent performance of or failure to perform such work, operations or activities of Contractor hereunder; and Contractor agrees to save and hold the City, its officers, agents, and employees harmless therefrom;
1101004.0009/301437.1
(c)In the event the City, its officers, agents or employees is made a party to any action or proceeding filed or prosecuted against Contractor for such damages or other claims arising out of or in connection with the negligent performance of or failure to perform the work, operation or activities of Contractor hereunder, Contractor agrees to pay to the City, its officers, agents or employees, any and all costs and expenses incurred by the City, its officers, agents or employees in such action or proceeding, including but not limited to, legal costs and attorney’s fees.

Contractor shall incorporate similar indemnity agreements with its subcontractors and if it fails to do so Contractor shall be fully responsible to indemnify City hereunder therefore, and failure of City to monitor compliance with these provisions shall not be a waiver hereof. This indemnification includes claims or liabilities arising from any negligent or wrongful act, error or omission, or reckless or willful misconduct of Contractor in the performance of professional services hereunder. The provisions of this Section do not apply to claims or liabilities occurring as a result of City’s sole negligence or willful acts or omissions, but, to the fullest extent permitted by law, shall apply to claims and liabilities resulting in part from City’s negligence, except that design professionals’ indemnity hereunder shall be limited to claims and liabilities arising out of the negligence, recklessness or willful misconduct of the design professional. The indemnity obligation shall be binding on successors and assigns of Contractor and shall survive termination of this Agreement.

5.4Sufficiency of Insurer.

Insurance required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated “A” or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the Risk Manager of the City (“Risk Manager”) due to unique circumstances. If this Agreement continues for more than 3 years duration, or in the event the risk manager determines that the work or services to be performed under this Agreement creates an increased or decreased risk of loss to the City, the Contractor agrees that the minimum limits of the insurance policies may be changed accordingly upon receipt of written notice from the Risk Manager.

ARTICLE 6. RECORDS, REPORTS, AND RELEASE OF INFORMATION

6.1Records.

Contractor shall keep, and require subcontractors to keep, such ledgers, books of accounts, invoices, vouchers, canceled checks, reports, studies or other documents relating to the disbursements charged to City and services performed hereunder (the “books and records”), as shall be necessary to perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. Any and all such documents shall be maintained in accordance with generally accepted accounting principles and shall be complete and detailed. The Contract Officer shall have full and free access to such books and records at all times during normal business hours of City, including the right to inspect, copy, audit and make records and transcripts from such records. Such records shall be maintained for a period of three (3) years following completion of the services hereunder, and the City shall have access to such records in the event any audit is required. In the event of dissolution of Contractor’s business, custody of the books and records may be given to City, and access shall be provided by Contractor’s successor in interest. Notwithstanding the above, the Contractor shall fully 1201004.0009/301437.1
cooperate with the City in providing access to the books and records if a public records request is made and disclosure is required by law including but not limited to the California Public Records Act.

6.2Reports.

Contractor shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the services required by this Agreement as the Contract Officer shall require. Contractor hereby acknowledges that the City is greatly concerned about the cost of work and services to be performed pursuant to this Agreement. For this reason, Contractor agrees that if Contractor becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the work or services contemplated herein or, if Contractor is providing design services, the cost of the project being designed, Contractor shall promptly notify the Contract Officer of said fact, circumstance, technique or event and the estimated increased or decreased cost related thereto and, if Contractor is providing design services, the estimated increased or decreased cost estimate for the project being designed.

6.3Ownership of Documents.

All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes, computer files, reports, records, documents and other materials (the “documents and materials”), including any electronic documents and materials, prepared by Contractor, its employees, subcontractors and agents in the performance of this Agreement shall be the property of City and shall be delivered to City in a format of the City’s choice upon request of the Contract Officer or upon the termination of this Agreement, and Contractor shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership use, reuse, or assignment of the documents and materials hereunder. Any use, reuse or assignment of such completed documents for other projects and/or use of uncompleted documents without specific written authorization by the Contractor will be at the City’s sole risk and without liability to Contractor, and Contractor’s guarantee and warranties shall not extend to such use, reuse or assignment. Contractor may retain copies of such documents for its own use.

Contractor shall have the right to use the concepts embodied therein. All subcontractors shall provide for assignment to City of any documents or materials prepared by them, and in the event Contractor fails to secure such assignment, Contractor shall indemnify City for all damages resulting therefrom. Moreover, Contractor with respect to any documents and materials that may qualify as “works made for hire” as defined in 17 U.S.C. § 101, such documents and materials are hereby deemed “works made for hire” for the City.

6.4Confidentiality and Release of Information.
(a)All information gained or work product produced by Contractor in performance of this Agreement shall be considered confidential, unless such information is in the public domain or already known to Contractor. Contractor shall not release or disclose any such information or work product to persons or entities other than City without prior written authorization from the Contract Officer.
(b)Contractor, its officers, employees, agents or subcontractors, shall not, without prior written authorization from the Contract Officer or unless requested by the City Attorney, voluntarily provide documents, declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this 1301004.0009/301437.1
Agreement. Response to a subpoena or court order shall not be considered “voluntary” provided Contractor gives City notice of such court order or subpoena. (c)If Contractor, or any officer, employee, agent or subcontractor of Contractor, provides any information or work product in violation of this Agreement, then City shall have the right to reimbursement and indemnity from Contractor for any damages, costs and fees, including attorney’s fees, caused by or incurred as a result of Contractor’s conduct. (d)Contractor shall promptly notify City should Contractor, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed there under. City retains the right, but has no obligation, to represent Contractor or be present at any deposition, hearing or similar proceeding. Contractor agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Contractor. However, this right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response.

ARTICLE 7. ENFORCEMENT OF AGREEMENT AND TERMINATION

7.1California Law.

This Agreement shall be interpreted, construed and governed both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Orange, State of California, or any other appropriate court in such county, and Contractor covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Central District of California, in the County of Orange, State of California.

7.2Disputes; Default.

In the event that Contractor is in default under the terms of this Agreement, the City shall not have any obligation or duty to continue compensating Contractor for any work performed after the date of default. Instead, the City may give notice to Contractor of the default and the reasons for the default. The notice shall include the timeframe in which Contractor may cure the default. This timeframe is presumptively thirty (30) days, but may be extended, though not reduced, if circumstances warrant. During the period of time that Contractor is in default, the City shall hold all invoices and shall, when the default is cured, proceed with payment on the invoices. In the alternative, the City may, in its sole discretion, elect to pay some or all of the outstanding invoices during the period of default. If Contractor does not cure the default, the City may take necessary steps to terminate this Agreement under this Article. Any failure on the part of the City to give notice of the Contractor’s default shall not be deemed to result in a waiver of the City’s legal rights or any rights arising out of any provision of this Agreement.

7.3Retention of Funds.

Contractor hereby authorizes City to deduct from any amount payable to Contractor (whether or not arising out of this Agreement) (i) any amounts the payment of which may be in dispute hereunder or which are necessary to compensate City for any losses, costs, liabilities, or 1401004.0009/301437.1
damages suffered by City, and (ii) all amounts for which City may be liable to third parties, by reason of Contractor’s acts or omissions in performing or failing to perform Contractor’s obligation under this Agreement. In the event that any claim is made by a third party, the amount or validity of which is disputed by Contractor, or any indebtedness shall exist which shall appear to be the basis for a claim of lien, City may withhold from any payment due, without liability for interest because of such withholding, an amount sufficient to cover such claim. The failure of City to exercise such right to deduct or to withhold shall not, however, affect the obligations of the Contractor to insure, indemnify, and protect City as elsewhere provided herein.

7.4Waiver.

Waiver by any party to this Agreement of any term, condition, or covenant of this Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by any party of any breach of the provisions of this Agreement shall not constitute a waiver of any other provision or a waiver of any subsequent breach or violation of any provision of this Agreement. Acceptance by City of any work or services by Contractor shall not constitute a waiver of any of the provisions of this Agreement. No delay or omission in the exercise of any right or remedy by a non-defaulting party on any default shall impair such right or remedy or be construed as a waiver. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement.

7.5Rights and Remedies are Cumulative.

Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

7.6Legal Action.

In addition to any other rights or remedies, either party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. Notwithstanding any contrary provision herein, Contractor shall file a statutory claim pursuant to Government Code Sections 905 et. seq. and 910 et. seq., in order to pursue a legal action under this Agreement.

7.7Termination Prior to Expiration of Term.

This Section shall govern any termination of this Contract except as specifically provided in the following Section for termination for cause. The City reserves the right to terminate this Contract at any time, with or without cause, upon written notice to Contractor. In addition, the Contractor may terminate this Contract for cause, upon sixty (60) days’ advance written notice to City. Upon receipt of any notice of termination, Contractor shall immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Except where the Contractor has initiated termination, the Contractor shall be entitled to compensation for all services rendered prior to the effective date of the notice of termination and for any services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation or such as may be approved by the Contract Officer, except as provided in Section 7.3. In the event the Contractor has initiated termination, the Contractor shall be entitled to compensation 1501004.0009/301437.1
only for the reasonable value of the work product actually produced hereunder. In the event of termination without cause pursuant to this Section, the terminating party need not provide the non-terminating party with the opportunity to cure pursuant to Section 7.2.

7.8Termination for Default of Contractor.

If termination is due to the failure of the Contractor to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 7.2, take over the work and prosecute the same to completion by contract or otherwise, and the Contractor shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that the City shall use reasonable efforts to mitigate such damages), and City may withhold any payments to the Contractor for the purpose of set-off or partial payment of the amounts owed the City as previously stated.

7.9Attorney’s Fees.

If either party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney’s fees. Attorney’s fees shall include attorney’s fees on any appeal, and in addition a party entitled to attorney’s fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment.

ARTICLE 8. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION

8.1Non-liability of City Officers and Employees.

No officer or employee of the City shall be personally liable to the Contractor, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Contractor or to its successor, or for breach of any obligation of the terms of this Agreement.

8.2Conflict of Interest.

Contractor covenants that neither it, nor any officer or principal of its firm, has or shall acquire any interest, directly or indirectly, which would conflict in any manner with the interests of City or which would in any way hinder Contractor’s performance of services under this Agreement. Contractor further covenants that in the performance of this Agreement, no person having any such interest shall be employed by it as an officer, employee, agent or subcontractor without the express written consent of the Contract Officer. Contractor agrees to at all times avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City in the performance of this Agreement.

8.3Covenant Against Discrimination.

Contractor covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, sexual 1601004.0009/301437.1
orientation, marital status, national origin, ancestry or other protected class in the performance of this Agreement. Contractor shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other protected class.

8.4Unauthorized Aliens.

Contractor hereby promises and agrees to comply with all of the provisions of the Federal Immigration and Nationality Act, 8 U.S.C.A. §§ 1101, et seq., as amended, and in connection therewith, shall not employ unauthorized aliens as defined therein. Should Contractor so employ such unauthorized aliens for the performance of work and/or services covered by this Agreement, and should any liability or sanctions be imposed against City for such use of unauthorized aliens, Contractor hereby agrees to and shall reimburse City for the cost of all such liabilities or sanctions imposed, together with any and all costs, including attorney’s fees, incurred by City.

ARTICLE 9. MISCELLANEOUS PROVISIONS

9.1Notices.

Any notice, demand, request, document, consent, approval, or communication either party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by prepaid, first-class mail, in the case of the City, to the City Manager and to the attention of the Contract Officer (with her/his name and City title), City of Cypress, 5275 Orange Avenue, Cypress, California 90630 and in the case of the Contractor, to the person(s) at the address designated on the execution page of this Agreement. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated at the time personally delivered or in seventy-two (72) hours from the time of mailing if mailed as provided in this Section.

9.2Interpretation.

The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply.

9.3Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument.

9.4Integration; Amendment.

This Agreement including the attachments hereto is the entire, complete and exclusive expression of the understanding of the parties. It is understood that there are no oral agreements between the parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the parties, and none shall be used to interpret this Agreement. No amendment to or modification of this Agreement shall be valid unless made in writing and approved by the 1701004.0009/301437.1
Contractor and by the City Council. The parties agree that this requirement for written modifications cannot be waived and that any attempted waiver shall be void.

9.5Severability.

In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder unless the invalid provision is so material that its invalidity deprives either party of the basic benefit of their bargain or renders this Agreement meaningless.

9.6Warranty & Representation of Non-Collusion.

No official, officer, or employee of City has any financial interest, direct or indirect, in this Agreement, nor shall any official, officer, or employee of City participate in any decision relating to this Agreement which may affect his/her financial interest or the financial interest of any corporation, partnership, or association in which (s)he is directly or indirectly interested, or in violation of any corporation, partnership, or association in which (s)he is directly or indirectly interested, or in violation of any State or municipal statute or regulation. The determination of “financial interest” shall be consistent with State law and shall not include interests found to be “remote” or “noninterests” pursuant to Government Code Sections 1091 or 1091.5.

Nor shall any such officer or employee participate in any decision relating to the Agreement which affects her/his financial interest or the financial interest of any corporation, partnership or association in which (s)he is, directly or indirectly, interested, in violation of any State statute or regulation, including but not limited to the Political Reform Act (Government Code Sections 81000, et seq.)
Contractor warrants and represents that it has not paid or given, and will not pay or give, to any third party including, but not limited to, any City official, officer, or employee, any money, consideration, or other thing of value as a result or consequence of obtaining or being awarded any agreement. Contractor further warrants and represents that (s)he/it has not engaged in any act(s), omission(s), or other conduct or collusion that would result in the payment of any money, consideration, or other thing of value to any third party including, but not limited to, any City official, officer, or employee, as a result of consequence of obtaining or being awarded any agreement. Contractor is aware of and understands that any such act(s), omission(s) or other conduct resulting in such payment of money, consideration, or other thing of value will render this Agreement void and of no force or effect.

Contractor’s Authorized Initials _______

9.7Corporate Authority.

The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which said party is bound. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the parties. 1801004.0009/301437.1
[SIGNATURES ON FOLLOWING PAGE]
1901004.0009/301437.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first-above written.

CITY:

City of Cypress, a municipal corporation
______________________________________
Leo Medrano, Mayor
ATTEST:
______________________________________
Lisa Bergland, City Clerk
APPROVED AS TO FORM:

ALESHIRE & WYNDER, LLP
______________________________________
William Wynder, City Attorney
CONSULTANT:

OCY MANAGEMENT, LLC
By:
___________________________________
Name:

Title:

By:
___________________________________
Name:

Title:

Address: ______________________________
______________________________
______________________________
Two corporate officer signatures required when Contractor is a corporation, with one signature required from each of the following groups: 1) Chairman of the Board, President or any Vice President; and 2) Secretary, any Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. CONSULTANT’S

SIGNATURES SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE

INCLUDED AS MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR REGULATIONS APPLICABLE TO CONSULTANT’S BUSINESS ENTITY. 2001004.0009/301437.1

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF ORANGE
On __________, 2026 before me, ________________, personally appeared ________________, proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: _____________________________________

OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.

CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT

INDIVIDUAL
CORPORATE OFFICER
_______________________________

TITLE(S)

PARTNER(S)

ATTORNEY-IN-FACT

TRUSTEE(S)

GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
_____________________________________________
_____________________________________________
___________________________________
TITLE OR TYPE OF DOCUMENT
___________________________________
NUMBER OF PAGES
___________________________________
DATE OF DOCUMENT
___________________________________
SIGNER(S) OTHER THAN NAMED ABOVE

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
EXHIBIT "A"
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document. 2101004.0009/301437.1
SCOPE OF SERVICES
SCOPE OF SERVICES
The Contractor shall be responsible for all operations and maintenance of all participating vehicles at its sole cost and expense, including insurance, fuel, taxes, fringe benefits, licensing, dispatching, radio equipment, training, supervision, management, service monitoring, and vehicular accident reporting. All such liability shall be the sole responsibility of the Contractor.

Vehicles shall have a mileage fee meter with a current approval and inspection by the Department of Weights and Measures. The Contractor shall ensure that participating vehicles meet all applicable codes, laws, and regulations.

Taxi Voucher Program
The Contractor will provide curb-to-curb taxi service to qualifying participants.

1.The City issues a maximum number of Taxi Vouchers each month to eligible Cypress resident seniors, 60 years and older, through the Cypress Senior Center.

Each voucher covers a distance of 4 miles. Riders can use up to eight vouchers per trip.

These vouchers are then given to the taxi driver for full or partial payment of their ride.

No change is given to the rider. Participants are responsible for all trip costs exceeding the amount printed on the voucher or the maximum allowed per trip.

The City does not guarantee a minimum level of ridership or the issuance of vouchers through this program.

For Taxi Voucher services, all trip pricing will be charged as follows:
0 to 4 Miles = $20.00 (one voucher)

4.1 to 8 Miles = $32.00 (two vouchers)

8.1 to 12 Miles = $47.00 (three vouchers)

12.1 to 16 Miles = $62.00 (four vouchers)

16.1 to 20 Miles = $77.00 (five vouchers)

20.1 to 24 Miles = $92.00 (six vouchers)

24.1 to 28 Miles = $ 107.00 (seven vouchers)

28.1 to 32 Miles = $122.00 (eight vouchers)

32.1+ Miles = $3.85 per mile

2.Participants may use vouchers for the following transportation seeking purposes in Orange County: nutrition, medical, personal care, shopping, social/recreation, and visits to the Cypress Senior Center. Trips outside of Orange County must be medical trips within 10 miles of the Orange County border.
2201004.0009/301437.1

3.Contractor shall provide trips outside of Orange County for medical trips only, and within 10 miles of the Orange County border.

4. The Contractor shall provide a toll-free telephone number for use by Taxi Voucher participants. The Contractor shall dispatch a vehicle to the requested pick-up location within the program limits. Reservations shall allow for one-way or round-trip transportation services within program limits. Taxi services are available between 7:00 a.m. and 7:00 p.m., seven days a week (including holidays).

5.Contractor will provide transportation upon request to registered disabled seniors. The vehicle shall have wheelchair accessibility if requested by the rider or City staff.

6.Contractor will service and dispatch a vehicle to the pickup location. The vehicle shall arrive at the pickup location within a 15-minute window of the designated pickup time.

Telephone requests must be made at least 24 hours in advance and up to one week in advance if the rider so chooses.

7.It is the Contractor’s responsibility to maintain and operate all owned vehicles at its sole cost and expense. In addition, Contractor will, at its sole cost and expense, provide a messaging system for communicating with drivers. Taxis must have a taximeter with current approval and inspection by the Department of Weights and Measures.

8.All “in-city” taxi vehicles will be uniform in appearance. Taxi vehicles must be cleaned daily before each service day and shall remain clean throughout the day.

9.Contractor must obtain and keep current a permit from the ORANGE COUNTY TAXI ADMINISTRATION PROGRAM (OCTAP).

Nutrition Taxi Program
The Contractor will provide transportation for resident seniors aged 60 and older to participate in the Congregate Lunch Program (Nutrition Program) at the Senior Center.

1.Each week, City staff will provide Contractor with a list of Cypress residents, 60 years and older, to be transported Monday – Thursday to the Cypress Senior Center, 9031 Grindlay Street. Contractors will also accept telephone requests from City staff up to and including the day of transportation services.

2.Contractor will pick up and transport the registered seniors Monday through Thursday (excluding holidays) beginning at 9:00 a.m. and provide a return trip for the same patron(s) starting at 1:00 p.m. The allowable charge is $20 per one-way passenger trip provided to an eligible Cypress resident to and from the Senior Center’s Nutrition Program.

3.The average number of riders per day using the Nutrition Taxi service is between four to six. Therefore, a van or small bus may best serve this program. Not every patron requires a pick-up and a return trip from the Senior Center, as schedules may vary due to activity participation. The City does not guarantee a minimum level of ridership through this program.
2301004.0009/301437.1

4.Contractor will provide transportation upon request to registered disabled seniors. The vehicle shall have wheelchair accessibility if requested by City staff.

5.It is the Contractor’s responsibility to maintain and operate all owned vehicles at its sole cost and expense. In addition, Contractor will, at its sole cost and expense, provide a messaging system for communicating with drivers. Taxis must have a taximeter with current approval and inspection by the Department of Weights and Measures.

6.All “in-city” taxi vehicles will be uniform in appearance. Taxi vehicles must be cleaned daily before each service day and shall remain clean throughout the day.

7.Contractor must obtain and keep current a permit from the ORANGE COUNTY TAXI ADMINISTRATION PROGRAM (OCTAP).

Program Requirements
Reporting

1.The contractor shall gather ridership data for both the Nutrition Transportation and Taxi Voucher Program in accordance with the requirements of the Orange County Transportation Authority and submit reports monthly. More frequent reports are also acceptable.

2.Upon request, the Contractor must submit any required reporting documents at the frequency set by the City. These may include, but are not limited to, monthly statistical reports with monthly invoices, driver’s logs, and office logs for dates requested to document on-time performance standards.

3.Contractor will provide a monthly summary attached to its billing invoice for each program that includes the following data: passenger’s first and last name; vehicle number; trip date; scheduled pick up time; pick up address; pick up city; pick up time; pick up odometer; drop off address; drop off city; drop off time; drop off odometer; number of passengers; vehicle space type; trip category; trip duration; call number; passenger ID number; trip cost; total vehicle miles and revenue miles; total vehicle hours and revenue hours; passengers per hour; no shows and cancellations; response to passenger complaints; accidents or incident investigation findings.

4.Drivers will be required to complete an “incident report” and “vehicle accident report” after any out-of-ordinary occurrence during service. The Contractor is required to inform the City within 24 hours of any report received or filed.

5.Contractor and City will investigate and document all complaints or citizen concerns as a part of program administration.

6.Taxi Voucher Program specific requirements:
a.Contractor may accept taxi voucher tickets only if authorized to do so in writing by the City.
2401004.0009/301437.1
b.Contractor will provide a “trip ticket” for each order that includes the caller’s name, telephone number, pick-up and drop-off addresses, time the call was received, and time the call was dispatched.
c.Contractor will provide one copy of each “taxi voucher” with all Taxi Voucher monthly invoices.

Qualifications for Drivers
All drivers must have a satisfactory Department of Motor Vehicles (DMV) record. Drivers must receive sensitivity and safety training. Drivers shall assist any passenger having difficulty in boarding. Drivers shall assist passengers in wheelchairs with boarding and tie downs. Drivers are to be alert, clean, careful, courteous, and competent in their driver skills. Drivers shall conform to the Contractor’s dress code. City also reserves the right to request driver records and DMV pull notices.

Additional Responsibilities - Contractor must:

1. Perform daily pre-operation inspections that meet or exceed the guidelines provided by OCTA’s SMP Funding Guidelines.

2. Schedule preventative maintenance that meets or exceeds the guidelines provided by OCTA’s SMP Funding Guidelines.

3. Maintain all maintenance records for each vehicle for five (5) years and shall cooperate fully in annual motor coach carrier terminal inspections conducted by the California Highway Patrol.

4. All vehicles shall be cleaned daily before each vehicle service day and shall be kept clean throughout the day. Vehicle exteriors shall be washed not less than once per week, and after any rain or other circumstances that compromise the vehicles’ clean appearance.

Floors shall be free of stains, paper or other debris, gum or other sticky substances.

Windows shall be free of dirt, dust, smudges, hands or fingerprints, exterior or interior.

Dashboards, wheel wells, rails, and ledges shall be kept clean, dirt and grease-free.

Seating areas shall be kept clean and in good repair, with attention paid to cleaning upholsteries on a regular basis. Wheelchair lifts must be kept clean and in good working order.
2501004.0009/301437.1
EXHIBIT “B”

SPECIAL REQUIREMENTS
(Superseding Contract Boilerplate)
[This page is intentionally left blank]
2601004.0009/301437.1
EXHIBIT “C”

SCHEDULE OF COMPENSATION
A. Provided that Contractor is not in default under the terms of this Agreement, and provided further that payment shall not exceed the Contract Sum set forth at Section 2 of the Agreement, Contractor shall be paid for the services described in Exhibit “A” within thirty (30) days after any invoice to City submitted in a form approved by the City’s Finance Director.

B. The contractor shall accept the compensation, as herein indicated, as full payment for the service specified herein. No adjustments in payment to the contractor resulting in an increased cost above the bid price quoted herein will be accepted.

C. Contractor will provide a monthly summary attached to its billing invoice for each program that includes the following data: passenger’s first and last name; vehicle number; trip date; scheduled pick up time; pick up address; pick up city; pick up time; pick up odometer; drop off address; drop off city; drop off time; drop off odometer; number of passengers; vehicle space type; trip category; trip duration; call number; passenger ID number; trip cost; total vehicle miles and revenue miles; total vehicle hours and revenue hours; passengers per hour; no shows and cancellations; response to passenger complaints; accidents or incident investigation findings.

D. All invoices to be submitted within 30 days of the completed month to the Cypress Senior Center, 9031 Grindlay Street, Cypress, CA 90630-0609. Invoices shall contain the Purchase Order Number, description of service(s), quantities, unit price(s), extended total and invoice terms.
2701004.0009/301437.1
EXHIBIT “D”

SCHEDULE OF PERFORMANCE
A. Term: The period of this Agreement covers July 01, 2026 through June 30, 2029. The term of this Agreement may also be extended for two (2) additional one (1) year periods upon mutual written approval between the Contract Officer and Contractor. 1 OCY Management, LLC
Formally known as:

Cabco Yellow Inc.

DBA California Yellow Cab
City of Cypress
Senior Transportation Services
February 13, 2026
2 Table of Contents
Cover Letter 3
Company Summary 4
Qualifications of Personnel 6
Organizational Chart 13
References 16
Overview and Approach 18
Cost Proposal 27
3 OCY Management, LLC
February 13,
Shayna Gutierrez
Recreation Supervisor
9031 Grindlay St
Cypress, CA 90630
Hello Ms. Gutierrez,
OCY Management, LLC (OCY), formerly known as Cabco Yellow Inc., respectfully submits its interest in providing transportation services to the City of Cypress. This proposal shall remain valid for a minimum of 180 days from the date of submission.

OCY has a long-standing history of delivering transportation services that extend well beyond traditional taxicab operations. Early in our development, we recognized underserved populations within Orange County and designed flexible, on-demand transportation solutions to address the limitations of public transit. Today, OCY operates the largest and most adaptable taxicab fleet in the county, offering seniors and paratransit passengers reliable transportation without the constraints of fixed bus schedules.

We are confident in our ability to successfully support this program through our experienced drivers and dedicated staff. Our drivers are professional, patient, and safety-focused, consistently treating senior passengers with the respect and care they deserve.

OCY currently serves as a transportation contractor for more than fifteen senior transportation programs throughout Orange County, including the Cities of Cypress, Rancho Santa Margarita, Laguna Woods, Aliso Viejo, Laguna Niguel, Orange, Garden Grove, Seal Beach, and others.

We appreciate the opportunity to submit this proposal and look forward to the possibility of continuing to serve and support the transportation needs of seniors in the City of Cypress.

Sincerely,
Akbar Majid
President
4 Company Summary
Legal Name of Company:

OCY Management, LLC
Formally known as:

Cabco Yellow Inc.

DBA California Yellow Cab
Office Location:
520 W Dyer Road, Santa Ana, CA 92707
Phone: (714) 427-2555
Dispatch Phone Numbers:
(714)444-4444
(949)444-4444
(657)444-4444
(877)951-8294
Name and Title of Person Authorized to Submit Proposal:

Akbar Majid, President
Ph. (714)427-2555 Ext. 112 Email: [email protected] Federal Employer Identification Number:
33-1810345
Statement of Ownership:

OCY Management, LLC is an LLC
Wholly owned by William Rouse
Years in Business:
>1 year as OCY Management
30+ Years as Cabco Yellow Inc., dba California Yellow Cab Failures or Refusals to Complete Any Contracts:

None
Arbitrations, lawsuits, settlements, etc., in the last 5 years 5 There is no pending litigation or arbitration for OCY other than that related to normal operational vehicle accident activity, which has resulted in routine litigation, which is addressed by our company’s insurance carrier. Additionally, there are no other conditions – including those identified above – that Cabco Yellow believes would impede the company’s ability to service the program.

Comparable contracts in the last 5 years
Please refer to Summary of Experiences (page 13)
6 Qualifications of Personnel
Akbar Majid- Mr. Majid serves as General Manager overseeing the daily operations of SDY Management, LLC, and as President of OCY Management, LLC. He is actively involved in all aspects of the organization’s operations and plays a key role in strategic planning and decision-making. Throughout the term of this contract, Mr. Majid will work closely with Melissa Gomez, Project Manager, to ensure full compliance with all requirements. With more than 30 years of experience in the taxicab industry, Mr. Majid has an extensive background providing transportation services to seniors, individuals with disabilities, and the public.

Melissa Gomez- Since January 2017, Ms. Gomez has served as Project Manager, overseeing compliance with program guidelines and ensuring all outcome objectives are met while maintaining the highest standards of service. She manages established client relationships and takes the lead in addressing service issues and resolving complaints related to Orange County programs. With an extensive background in the transportation industry, Ms. Gomez currently manages more than 19 Senior Mobility Programs in Orange County and is dedicated to ensuring seniors receive exceptional service and are transported safely, reliably, and on time.

Jackson Fraser- As Director of Operations at OCY Management LLC, Mr. Fraser oversees all aspects of day-to-day service delivery for our fleet. His responsibilities include driver oversight, regulatory and contract compliance, customer service quality, and operational strategy to ensure reliable, timely transportation across Orange County. Mr. Fraser has led initiatives to streamline dispatching, improve ADA accessibility, and maintain fleet standards in accordance with county, city, and private contracts. He collaborates closely with both municipal partners and private stakeholders to ensure OCY Management’s services meet evolving community needs.
7 Akbar Majid
[email protected]
619-398-2333
Work Experience
2019-present
Vice President and General Manager
SDY Management, LLC
Yellow Cab of San Diego
• Oversee daily operations of the largest taxicab company in San Diego County
• Responsible and directly involved in all aspects of business and decision makings
• Represent the company with all applicable regulatory agencies, including Metropolitan Transit Systems, San Diego County Sheriff and San Diego County Regional Airport Authority
• Oversee Transdev/ MTS Access contract
• Working closely with legal counsel in drafting agreements, litigation, depositions and other legal matters
Vice President of Operations
2004-2019 Administrative Services SD, LLC
Yellow Cab of San Diego
• Responsible for forming the largest taxicab Cooperative in San Diego County
• Overseeing the agreements, accounting and all other business matters related to over 1000 independent contractors, taxicab drivers and permit holders
• Overseeing all marketing, sales and public relations related to the business • Oversaw customer complaints and related resolutions
• Responsible and directly involved in union negotiations and administration of the union contract related to all union employees
• Negotiations, review and purchase of all commercial insurance policies such as commercial auto, D&O, EPLI
• Participation in various government meetings, such San Diego International Airport Board of Directors, the Metropolitan Transit Systems Board of Directors, and MTS Taxicab Advisory Committee
Operations Manager
2001-2004 Transit Capital Corporation
Yellow Cab of San Diego
• Responsible for hiring, discipline, promotion and termination of employees within the operations department
8 • Operated and was responsible for all aspects of Direct Access Route Transportation contract with the Metropolitan Transit Systems • Oversaw all employees, scheduling and contract compliance related to the Direct Access Route
• Oversaw the operations of the mechanical repair shop and its employees • Oversaw the mechanical parts shop and its employees
• Oversaw the operations of the limousine and sedan fleet • Responsible for all aspects of the operations department President and General Manager
1993-2004 San Diego Cab and San Diego Dispatch
• Established the company
• Organized independent taxi permit holders and fleets under one organized management team
• Directly responsible for all aspects of the business and decision-making • Established the dispatch service for the company
• Developed company policies and procedures
• Hired employees and entered into agreements with vendors • Developed customer service and driver orientation programs Affiliations
Metropolitan Transit System Taxicab Advisory Committee
Member of The Transportation Alliance
Member of the Taxicab and Paratransit Association of California Member of San Diego County Lodging Association
9 MELISSA GOMEZ
Riverside, CA  714-559-8300 [email protected]

EDUCATION
California Baptist University, 2016 (Master’s in Communication) California State University San Bernardino, 2014 (BA in Communications/Spanish) Riverside City College, 2009 (AA in Humanities, Philosophy, and Arts) PROFESSIONAL OCY Management, LLC/California Yellow Cab
January 2017 to Present
▪ Maintain files to meet contractual compliance
▪ Increased overall operational efficiency through the
implementation of innovative scheduling
▪ Coordinate with our Fleet Department to ensure minimal service disruptions and vehicle downtime
▪ Conduct annual safety orientations
▪ Develop effective risk management strategies to decrease safety-related incidents
▪ Develop and implement sales and marketing plans to
achieve company objectives
▪ Create awareness of the company’s services and monitor progress
▪ Ensure high levels of customer service are emphasized ▪ Oversee the planning and execution of logistics and
operations for day-to-day services
Happy Taxi February 2012- January 2017
▪ Answered routine employee and recruitment-related
questions, such as appropriate documentation submission and application status
▪ Assisted in scheduling interviews and training times/dates for candidates
▪ Provided training and orientation for new staff
▪ Provided quotes and answered questions regarding orders, billing, or transportation needs
▪ Dispatched and routed customer orders promptly
▪ Generated invoices and processed payments via fax,
telephone, e-mail, and in person
▪ Responded to and assisted customers with inquiries and/or complaints in an efficient manner
▪ Provided strong skills in analysis and complex problemsolving ▪ Maintained equipment and technology up to date
▪ Implemented innovative marketing efforts to increase
business
▪ Exercise good judgment and make sound decisions in
emergencies under pressure
10 Mission Inn Foundation, August 2016- December 2016
▪ Oversaw the planning and execution of logistics and
operations for events through private meetings and
conferences
▪ Worked with event sponsors and vendors on all aspects of planning events
▪ Assisted in achieving business objectives
▪ Multitasked with demanding timeframes
▪ Negotiated and managed contracts with vendors and
service providers
▪ Maintained strong verbal communication skills for dealing effectively with all types of personalities
▪ Used high-level discretion and maintained a high level of confidentiality
11 Jackson Fraser
[email protected]
(949) 564-2996
Relevant Work Experience
2024 – Present Director of Operations OCY Management, LLC /California Yellow Cab
• Manage day-to-day operations for a fleet of 250+ vehicles, including sedans, minivans, and wheelchair-accessible vehicles, ensuring compliance with local, state, Federal and industry regulations. • Oversee adherence to contracts, including Same-Taxi and OC Access, ensuring full compliance and maintaining strong relationships with key stakeholders.
• Spearhead efforts to identify and secure new business opportunities, contributing to the company’s growth in a competitive market. • Supervise the permitting and drug testing process for all drivers, ensuring adherence to regulatory requirements and maintaining the highest standards of safety and reliability.
• Streamline operational procedures to enhance efficiency, reduce costs, and improve service delivery.
• Overhaul driver orientation and recruitment processes, resulting in improved driver satisfaction, retention, and performance. • Supervise accounting functions, ensuring accuracy and accountability. 2020 – 2024
Development Manager The Jackal Group
• Managed large-scale logistics for television and film productions, coordinating complex schedules, union compliance, and
regulatory adherence across multiple states and international locations.
• Collaborated with legal teams, unions, and regulatory bodies to ensure smooth operations and compliance with industry standards. • Pitched and developed new television and film projects, successfully securing greenlights for multiple productions and building relationships with networks and studios.
• Directed creative and production teams, fostering collaboration and ensuring alignment with project goals and timelines. • Worked closely with production finance teams to manage budgets, control costs, and maximize resource allocation for high-quality outputs.
2015 – 2020
Executive Assistant (2017-2020)
Mosaic Media Group
• Provided comprehensive administrative support to senior talent 12 and literary managers, ensuring seamless day-to-day operations in a fast-paced entertainment environment.
• Managed complex calendars, coordinated meetings with
high-profile clients and executives, and organized travel arrangements across multiple time zones.
• Served as a key point of contact between clients, studios, networks, and other industry stakeholders, fostering strong professional relationships.
• Assisted in the development and execution of client strategies, tracking deadlines and deliverables for ongoing projects in film, television, and publishing.
• Coordinated talent logistics for press tours, premieres, and industry events, ensuring all arrangements were meticulously handled. • Drafted correspondence, deal memos, and pitch materials for client submissions, highlighting professionalism and attention to detail.
• Maintained confidential client files and tracked project statuses, ensuring accuracy and accessibility for managers.

Facilities Coordinator (2015-2017)
• Oversaw day-to-day office functions, ensuring smooth workflow and efficient operations.
• Recruited, trained, and managed a team of 20+ interns per year, creating schedules, delegating tasks, and providing mentorship to foster professional development.
• Supervised receptionist and AV room staff, ensuring professional frontof-office operations and seamless support for client presentations and meetings.
• Coordinated with vendors and managed office supply inventory while adhering to budgetary constraints.
• Provided direct support to executives and staff, maintaining office calendars, arranging meetings, and organizing company events. • Streamlined administrative procedures and implemented new organizational systems to increase efficiency and reduce downtime.

Education:

Bachelor of Science – Communications (2014) The University of Texas at Austin 13 Organizational Chart
OCY Management, LLC Key Personnel
William Rouse
CEO
Akbar Majid
President
Jackson Fraser Director of Operations
Reyna Chavez
Accounting
Clerk
Melissa Gomez Project
Manager/ Director of
Marketing
Bobbing Nguyen Office
Manager
Matthew Rouse
Fleet Manager Jonatan Martin Driver Manager

Key Personnel Statement: President Akbar Majid, Director of Operations Jackson Fraser, and Project Manager Melissa Gomez will be available to the extent proposed for the duration of the project and acknowledge that no person designated as “key” to the project shall be removed or replaced without the prior written concurrence of the City.
14 Summary of Experiences
OCY has numerous contracts with public and private organizations throughout Orange County, including the OC Health Care Agency, OCTA-Same-Day Taxi, OCTA-Access, and Children’s Hospital of Orange County. However, OCY is the primary provider to 19 City Senior Mobility Programs in Orange County. 2004 – Present
City of Laguna Woods- Senior Mobility Program
Transportation for Laguna Woods residents 60 years of age and older. Trips must begin or end in Laguna Woods, but can travel within OC and Long Beach VA.

Participants must provide the taxicab drivers with a co-pay (if applicable) and may use the services for non-emergency medical appointments, social, personal care, and other recreational purposes.
2012 – Present
City of Mission Viejo- Senior Mobility Program
Transportation for Mission Viejo residents 60 years of age and older. Services are limited to the City of Mission Viejo, surrounding cities, and selected satellite destinations. Participants must provide the taxicab driver with a co-pay (if applicable) and may use the services for non-emergency medical appointments, grocery store, church, visit family and friends, the senior center, and more.
2012 – Present
City of Orange- Senior Mobility Program
Transportation for Orange residents 60 years of age and older. Trips must begin and end in Orange. Services must be to/from the seniors’ resident and the senior center, grocery store, and/or a medical facility.
15 2017 – Present
City of Lake Forest- Senior Mobility Program
Transportation for Lake Forest residents 60 years of age and older. Services are limited to the City of Lake Forest, surrounding cities, and selected satellite destinations. Participants must provide the taxicab driver with a co-pay (if applicable) and may use the services for non-emergency medical appointments, grocery store, church, visit family and friends, the senior center, and more.
2012 – Present
City of Mission Viejo- Senior Mobility Program
Transportation for Mission Viejo residents 60 years of age and older. Trips must begin and end in Mission Viejo, but can go to surrounding cities and selected satellite destinations. Participants must provide the taxicab driver with a co-pay (if applicable) and may use the services for non-emergency medical appointments, grocery store, church, visit family and friends, the senior center, and more.
2012 – Present
City of Laguna Hills- Senior Mobility Program
Transportation for Laguna Hills residents 60 years of age and older. Trips must begin and end in Laguna Hills. Riders can travel within Laguna Hills and surrounding cities as well as satellite destinations.
16 References
2004 – Present
City of Laguna Woods- Senior Mobility Program
Yolie Trippy, Deputy City Clerk
24264 El Toro Road, Laguna Woods, CA 98263
T: 949-639-0561
E-mail: [email protected]
2012 – Present
City of Orange- Senior Mobility Program
Katherine Connaghan, Executive Director
170 S Olive St, Orange, CA 92866
T: 714-538-9633
E-mail: [email protected]
2017 – Present
City of Lake Forest- Senior Mobility Program
Victoria “Vicky” Blethen, Recreational Manager
100 Civic Center Dr, Lake Forest, CA 92630
T: 949-461-3453
E-mail: [email protected]
2012 – Present
City of Laguna Hills- Senior Mobility Program
Jessica Cardenas, Administrative Assistant
24035 EL Toro Road, Laguna Hills, CA 92653
T: 949-707-2681
E-mail: [email protected]
17 2012 – Present
City of Mission Viejo- Senior Mobility Program
Melanie McGrane, Recreation & Community Services
24932 Veterans Way, Mission Viejo, CA 92692
T: 949-470-8441
E-mail: [email protected]
18 Overview & Approach
City of Cypress
OCY proposes establishing a dedicated toll-free telephone number for Senior Mobility Program (SMP) participants in the City of Cypress. Through this number, program patrons may request on-demand transportation during program service hours, with the expectation that a vehicle will arrive at the designated pick-up location within sixty (60) minutes.

The toll-free line will automatically recognize callers as program participants, requiring them only to provide basic trip details and their SMP identification number, also known as a Passenger ID number. As the City of Cypress’s current transportation provider, OCY can either continue using the existing toll-free number or establish a new one, based on the City’s preference.

In addition to standard on-demand service, participants may use the same tollfree number and identification process to schedule trips up to two weeks in advance. This advanced scheduling allows OCY dispatchers and routing staff to plan and assign trips to designated drivers ahead of time, ensuring efficient and reliable service.

Reporting and Billing
All OCY documentation and reporting are managed through our proprietary digital dispatch system. In addition to providing monthly trip data and invoicing, the system maintains highly detailed electronic records that are securely archived and can be accessed and compiled into customized reports within as little as twenty-four hours.

The information collected, stored, and readily available for reporting includes essential dispatch details such as passenger names, pick-up locations, destinations, travel dates and times, passenger identification numbers, and additional contact information. Beyond standard trip data, the system also 19 captures GPS “ping” data from each vehicle, providing accurate records of routes taken, vehicle speeds, and performance metrics. Comprehensive records of customer interactions are maintained as well, including audio recordings of all inbound and outbound calls, along with detailed trip event logs documenting pick-up and drop-off times.
**Under current SMP reporting requirements, both pick-up and drop-off odometer readings are recorded. OCTA has approved OCY’s method of reporting the pick-up odometer reading as zero (0) and using the drop-off reading to reflect the total mileage for each trip.

Complaints and Incidents
The Project Manager will review all complaints and concerns within twenty-four (24) hours of receipt. A proposed resolution will be identified promptly, and the City will be notified of the issue and its status within forty-eight (48) hours.

Appropriate remedies will be implemented as necessary to prevent similar issues from occurring in any area of operations.

As a service-oriented organization, OCY maintains that any incident is unacceptable. Upon receipt of an incident report, the Project Manager will assume responsibility for gathering all relevant details and conducting appropriate follow-up. A comprehensive written report documenting any accident, injury, or dispute will be prepared and submitted to the City.

In accordance with standard operating procedures, all accidents receive immediate attention from OCY’s accident investigation team. These investigators are responsible for responding promptly when applicable and for completing a formal investigation using established reporting protocols. Each investigation includes interviews with involved parties, on-site measurements, and photographic documentation of the incident and surrounding conditions. 20 Additionally, detailed trip-level data is included with each monthly invoice.

Ridership is itemized on a line-by-line basis to support program auditing, transparency, and effective oversight.

Experience
OCY has provided senior and paratransit transportation services since its founding more than thirty years ago in 1995. Currently, OCY serves as the transportation contractor for senior mobility programs in the Cities of Cypress, La Habra, Fullerton, Laguna Hills, Laguna Woods, Mission Viejo, Orange, Garden Grove, Rancho Santa Margarita, and others. In addition, OCY is the exclusive ground transportation contractor for John Wayne Airport, holds a franchise in the City of Anaheim, and partners with several independent private care organizations—all of which require strict ADA compliance and comprehensive driver Sensitivity Orientation.

OCY also serves as the transportation provider for OCTA’s Same-Day Taxi Program and as a subcontractor under the ACCESS paratransit contract.

Notably, OCY has more than fifteen years of experience serving the approximately 25,000 senior residents of Laguna Woods, maintaining a complaint rate consistently below one percent.

As the exclusive contractor for John Wayne Airport (JWA), OCY continuously adapts and innovates to meet the evolving needs of a diverse traveling public.

Operational best practices developed at JWA—including modern fleet protocols, advanced customer service standards, enhanced situational awareness, and specialized assistance techniques for seniors and culturally diverse populations—are incorporated into OCY’s street-fleet driver orientation programs, ensuring a consistent and high level of service across the entire fleet.

Fleet and Maintenance
21 OCY has a diverse fleet consisting of conventional sedans, 6-passenger minivans, and ADA-compliant wheelchair-access vans.

All taxicabs are subject to a comprehensive maintenance program to ensure safe, reliable transportation for all passengers. Detailed inspection reports and maintenance logs are maintained as permanent records and are available for review by City staff upon request.

Central to OCY’s vehicle maintenance program is the Preventive Safety and Maintenance Inspection (PSMI). This proactive program is designed to identify and address potential mechanical or safety issues before they escalate, ensuring optimal vehicle performance and passenger safety.

Safety Inspections
Every cab in our fleet is inspected by the driver daily prior to conducting any trip.

This helps prevent any vehicle malfunction or unsafe conditions, including, but not limited to:
• Headlights, taillights, brake lights, interior lights, and turn signals • Steering
• Windshield wipers
• Tires
• Oil, transmission fluid, etc.
• Warning lights on display
22 • Body, windshield, or interior damage
• Leakage of any fluids
• Horn
• Mirrors
• Double-check the hood to ensure both latches are fastened securely • Wheelchair Vehicles: handrails, wheelchair tie-downs (manual or power), internal and exterior lighting, operation of ramp/lift, etc.

If any malfunction or damage is observed, the vehicle is not driven.

Interval PMSI Inspections
PMSI inspections are conducted at intervals established per standard manufacturer recommendations for applicable vehicles. The vehicle’s engine oil and filter are changed at each inspection, and the tires, lights, steering, and brakes are inspected and adjusted, if necessary.

Automated Maintenance Tracking System
OCY utilizes an automated driver and vehicle maintenance tracking system that proactively monitors all drivers and vehicles within the fleet, including the weekly recording of vehicle mileage. The system tracks critical driver compliance data, including:
• Driver’s license status and expiration
• Norton Medical certification expiration (drug screening) • Driver permit status
In addition, the system monitors essential vehicle information, including:
• Vehicle registration status and expiration
• Vehicle mileage and required preventive maintenance
The program also maintains a comprehensive history of prior vehicle inspections.

Using this data, the system evaluates the entire fleet and identifies vehicles scheduled for inspection within the upcoming week, as well as the specific inspection required. This information is communicated to the Fleet Manager to 23 ensure vehicles are made available to the Maintenance Department as scheduled.

All OCY vehicles are washed weekly, and drivers are required to always maintain clean and orderly interiors. Any vehicle found to be dirty or emitting unpleasant odors is immediately removed from service and reinspected after corrective action before being returned to operation.

While most OCY taxicabs maintain a uniform and easily recognizable appearance, some vehicles transitioned to a single solid color beginning in 2020.

However, all vehicles retain consistent decal placement to ensure uniform identification across the fleet.

Insurance Requirements
Since our vehicles can hold a maximum of 6 riders, our automobile liability insurance coverage is with a limit of not less than $1,000,000 for each accident.

Business License
AB1069 states “A city or county shall not require a taxicab company or driver to obtain a business license, service permit, car inspection certification, or driver permit, or to comply with any requirement under this section or Section 53075.52, unless the company or driver is substantially located within the jurisdiction of that city or county”. Under AB 1069, regulatory fees will be paid to the jurisdiction where taxicabs are “substantially located,” which is defined as both where the taxicab driver or taxicab business is located and where the taxicab provided the largest number of trips in the year prior.

Orange County Taxi Administration Program (OCTAP)
OCTAP went out of business in 2019. Therefore, drivers are no longer eligible for a Taxi permit through OCTAP. Drivers now obtain a taxi permit through the City of Anaheim.
24 Dress and Appearance Standard
All drivers participating in the program will wear business casual attire.

Operations Base in Santa Ana
Our facility includes approximately 2,600 square feet of office space and over 5,000 square feet dedicated to logistics and vehicle maintenance. The administrative office is staffed by fifteen full-time employees, and we contract with an additional dozen on-site fleet maintenance technicians and specialists.

All routine and most specialized maintenance is performed on-site, except for certain bodywork and machine shop services. Our fully equipped maintenance facility can handle everything from routine oil changes to complete driveline and chassis rebuilds. The shop meets all local zoning requirements and is staffed by highly trained, certified technicians, ensuring vehicles are maintained to the highest standards of safety and reliability.

Driver Orientation Program
All drivers with (OCY) are independent contractors.

All applicants must be able to produce the following:
• An Excellent Driving Record
o Current, valid California Driver’s License
o ZERO serious violations such as reckless driving, or driving while under the influence of drugs or alcohol
• Pass a drug screening initially, and enroll in a random and annual drug and alcohol program
• Live Scan fingerprints
• Successfully pass a background check
• Provide proof of legal residency
• Be placed on the DMV Pull-Notice program
25 Only after successfully producing the above will a prospective driver be considered for a Lease under the OCY livery.

OCY utilizes a comprehensive driver orientation program structured around four modules: Operations, Safety, Service, and Review (OSSR). OSSR places particular emphasis on customer service, fare collection policies, and sensitivity orientation for transporting seniors and individuals with disabilities. The program includes approximately 30 hours of combined classroom and on-the-road orientation, typically delivered over a three- to five-day period.

Orientation is conducted before assigning a vehicle to a driver, on an annual basis, and as needed. Whenever program guidelines are updated, drivers are promptly notified via their tablets, and the revised guidelines are immediately made available.

For all senior programs we serve, drivers are requested to wear a white shirt with dark trousers and dark shoes. Participation is optional; however, drivers who choose to participate are required to comply with the program’s uniform standards.

Drug and Alcohol Policy
OCY provides safe, dependable, and efficient transportation services to our customers. Our safety-sensitive employees’ and affiliates’ use of illegal drugs and misuse of alcohol pose a significant risk to public safety, as well as the employees’ and affiliates’ health and well-being, and can cause loss of efficiency, productivity, or a disruptive work environment. OCY’s drug and alcohol policy is intended to comply with all applicable State and Federal regulations governing workplace anti-drug use and alcohol misuse programs in the transportation industry. They include DOT 49 CFR Part 40 as amended (“Procedures for Transportation Workplace Drug and Alcohol Testing Programs”); FTA 49 CFR Part 655 (“Prevention of Alcohol Misuse and Prohibited Drug Use in Transit Operations”); DOT 49 CFR Part 29 (“Drug-Free Workplace Act of 1988”); 26 and CA Govt. Code Section 8350 et. Seq. (“Drug-Free Workplace Act of 1990”).

The policy incorporates the requirements of the above regulations for safetysensitive employees and others when so noted (this policy is available at any time). Drivers undergo an FTA Drug test initially (pre-employment) and must enroll in a random pool.
*OCY is aware of and understands the scope of work and all the tasks outlined for the City of Cypress.
27 Cost Proposal
Should the City of Cypress and OCY Management, LLC (OCY) agree, OCY will provide services to eligible participants using the rates below:

Taxi Voucher Program
Proposed Cost
• 0 to 4 Miles = $20.00 (one voucher)
• 4.1 to 8 Miles = $32.00 (two vouchers)
• 8.1 to 12 Miles = $47.00 (three vouchers)
• 12.1 to 16 Miles = $62.00 (four vouchers)
• 16.1 to 20 Miles = $77.00 (five vouchers)
• 20.1 to 24 Miles = $92.00 (six vouchers)
• 24.1 to 28 Miles = $ 107.00 (seven vouchers)
• 28.1 to 32 Miles = $122.00 (eight vouchers)
• 32.1+ Miles = $3.85 per mile
Based on the mileage breakdown above, OCY Management, LLC may accept up to eight vouchers per trip.

If a rider does not have sufficient vouchers to cover the total amount, they can pay the difference with cash, debit or credit card.

Nutrition Taxi Program
Proposed Cost
Trips within Cypress - $20.00 one-way

1 4021 Alberta St. Lynwood CA 90262 (562) 545-2939 [email protected] Table of Contents
Proposal Letter ........................................................................................... 2 Company Experience ................................................................................. 4 Key Personnel ............................................................................................ 5 Approach and Service Delivery .................................................................. 6 Understanding of Project Success Factors ................................................ 6 Reference ................................................................................................... 7 Cost-Fee ..................................................................................................... 8 Diagram ...................................................................................................... 9 Detailed Fee Proposal .............................................................................. 10

4 4021 Alberta St. Lynwood CA 90262 (562) 545-2939 [email protected]

COMPANY EXPERIENCE
Top-Notch Medical Transport LLC is a minority-owned Non-Emergency Medical Transportation provider. We specialize in safe, reliable transportation for seniors, disabled individuals, and patients requiring assistance to medical appointments and community programs.

Relevant Experience Includes:
 Transportation for healthcare providers and community organizations  Scheduled and on-demand NEMT services
 Wheelchair and ambulatory transportation
 Coordination with dispatch systems and medical facilities  Compliance with regulatory and safety requirements
Current Clients (Private Sector)
Call the Car - Non-Emergency Medical Transportation
Service Area: Los Angeles & Orange Counties
Scope: Scheduled and on-demand transportation for medical appointments Department of Veterans Affairs - Senior Transportation
Service Area: Los Angeles & Orange Counties
Scope: Transportation to different locations
Downey Community Health Center - Patient Transportation Service Area: Los Angeles & Orange Counties
Scope: Transportation to primary and specialty care appointments Downey Post Acute - Patient Transportation
Service Area: Los Angeles & Orange Counties
Scope: Transportation to primary and specialty care appointments Norwalk Skilled Nursing - Patient Transportation
Service Area: Los Angeles & Orange Counties
Scope: Transportation to primary and specialty care appointments Top-Notch Medical Transport LLC has demonstrated consistent reliability, punctuality, and patient-focused service delivery to many more health care facilities and brokers.

5 4021 Alberta St. Lynwood CA 90262 (562) 545-2939 [email protected]

KEY PERSONNEL
Francisco Flores - Chief Executive Officer
Responsible for overall program oversight, contract compliance, financial management, and client relations.

Francisco Flores - Operations Supervisor
Responsible for daily scheduling, dispatch coordination, driver supervision, and service quality monitoring.

Matilde Lemus – Office Manager
Oversee daily office activities, manage office supplies and inventory, coordinate communication between departments and facilitate meetings, supervise administrative staff and provide training as needed, implement office policies and procedures to improve efficiency, handle budgeting and financial reporting for office expenses.

Jamiles Aldana – Dispatcher and office assistant
Acts as the central communication hub for organization, coordinating the movement of personnel, vehicles or service teams to ensure efficient operations and provides specialized administrative support that bridges the gap between healthcare and providers, insurance brokers and field drivers
Aileen Flores – office assistant
Provides specialized administrative support that bridges the gap between healthcare and providers, insurance brokers and field drivers
Drivers
Specialized professionals responsible for transporting patients primarily the elderly and individuals with disabilities to and from medical appointment, dialysis centers, errands and rehabilitation facilities All drivers meet or exceed requirements, including:
 Valid California driver’s license with clean DMV record  Background screening
 Drug-free workplace compliance
 Sensitivity training for seniors and disabled passengers  Wheelchair securement training
 Customer service training
Driver assistant
Works alongside the driver to provide hands-on care and physical support to patients during transit transporting high-risk patients, such as those on gurney or severe mobility limitations, where one person cannot safely manage both the vehicle and the patient.

6 4021 Alberta St. Lynwood CA 90262 (562) 545-2939 [email protected]

APPROACH & SERVICE DELIVERY
Top-Notch Medical Transport LLC will implement a structured service model designed for reliability, safety, and responsiveness.

Taxi Voucher Program
 Curb-to-curb transportation for eligible seniors
 Reservations accepted 24 hours to one week in advance  Toll-free dispatch number
 Service hours: 7:00 a.m. – 7:00 p.m., seven days per week  Wheelchair-accessible vehicles available upon request  Arrival within the required 15-minute pickup window
 Capability to provide medical trips outside Orange County (within program limits) Nutrition Taxi Program
 Scheduled transportation Monday–Thursday
 Morning pickup for Congregate Lunch Program
 Return trips beginning at 1:00 p.m.
 Vehicle capacity appropriate for 3–12 riders
 Accessible service when requested

UNDERSTANDING OF PROJECT SUCCESS FACTORS
Key objectives for program success include:
 On-time performance
 Clear communication with City staff
 Accurate reporting
 Safety and ADA compliance
 Rider satisfaction
 Operational reliability
Top-Notch Medical Transport LLC is committed to meeting and exceeding these objectives.

7 4021 Alberta St. Lynwood CA 90262 (562) 545-2939 [email protected]

REFERENCES
Call the Car
Manager: Halmilton
Phone: (626) 827-7891
Department of Veterans Affairs
Supervising Rehabilitation Therapist
Rebecca Lee
Phone: (424) 832-8411
Downey Community Health Center
Social Services
Michelle Woodard
Phone: (626) 394-6559
Downey Post Acute
Social Worker
Evelin Hernandez
Phone: (562) 923-9301
Norwalk Skilled Nursing
Social Services
Lorena
Phone: (562) 927-9627
Taxi Voucher Program
Distance Price
0–4 miles $22.00

4.1–8 miles $34.00

8.1–12 miles $46.00

12.1–16 miles $58.00

16.1–20 miles $70.00

20.1–24 miles $82.00

24.1–28 miles $94.00

28.1–32 miles $106.00
Beyond 32 miles: $4.00 per mile
Nutrition Taxi Program Pricing
Cost per one way trip $60

Detailed Fee Proposal
Contract Term: July 1, 2026 – June 30, 2031 (5 Years)
Task-Based Cost Breakdown
Task / Requirement
Staff
Classification
Est. Annual
Hours
Hourly Rate
Annual
Cost
5-Year Cost
Program oversight &
reporting
Program Manager 520 hrs $60 $31,200 $156,000
Contract compliance Program Manager 120 hrs $60 $7,200 $36,000 Scheduling
coordination
Dispatcher 1,560 hrs $32 $49,920 $249,600
Billing & invoicing Admin Specialist 260 hrs $30 $7,800 $39,000 Annual: $96,120
5-Year: $480,600
Task Staff Annual Hours Hourly Rate
Annual
Cost
5-Year Cost
Vehicle operation Drivers 4,500 hrs $28 $126,000 $630,000 Vehicle standby &
staging
Drivers 500 hrs $28 $14,000 $70,000
Dispatch support Dispatcher 520 hrs $32 $16,640 $83,200 Annual: $156,640
5-Year: $783,200
Nutrition Taxi Program - Dedicated Service
Task Staff Annual Hours Hourly Rate
Annual
Cost
5-Year Cost
Dedicated route driving Driver 1,300 hrs $28 $36,400 $182,000 Vehicle prep &
inspections
Driver 260 hrs $28 $7,280 $36,400
Scheduling &
coordination
Dispatcher 156 hrs $32 $4,992 $24,960
Annual: $48,672
5-Year: $243,360
Assumed trips per year: 3,000
Taxi Voucher Program - Service Delivery
Non-Labor Costs-Vehicle & Operating Expenses
Expense Category Annual Cost 5-Year Cost
Fuel $55,000 $275,000
Maintenance & repairs $28,000 $140,000
Commercial insurance $42,000 $210,000
Vehicle depreciation $35,000 $175,000
Licensing & permits $4,500 $22,500
Technology & dispatch
systems
$8,000 $40,000
Annual: $172,500
5-Year: $862,500
Hourly Billing Rates by Classification
Classification Billing Rate
Program Manager $60/hour
Operations Supervisor $48/hour
Dispatcher $32/hour
Administrative
Specialist
$30/hour
Driver (Ambulatory) $26/hour
Driver (WheelchairCapable)
$28/hour
Vehicle Maintenance
Technician
$42/hour
Item Billing Method
After-hours dispatch
Included in hourly
rates
Accessible vehicle
equipment
Included
Wheelchair
securement systems
Included
Safety supplies & PPE Included
Training & certification Included
Support Services & Materials
Subcontractor Costs
No subcontractors are anticipated for this contract. All services will be performed by Top-Notch Medical Transport LLC personnel.

TOTAL PROJECT COST SUMMARY
Category Annual Cost 5-Year Cost
Administration $96,120 $480,600
Voucher Operations $156,640 $783,200
Nutrition Program $48,672 $243,360
Non-Labor Expenses $172,500 $862,500
Grand Total
Annual Estimated Cost: $473,932
Total Contract Cost (5 Years): $2,369,660
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 14.

FROM: Jeff Draper, Director of Recreation and Community Services DATE: 04/28/2026
SUBJECT: Approve an Agreement for Animal Care Services

RECOMMENDATION

1. Approve a five-year Animal Care Services Agreement with the County of Orange for animal control services, animal care shelter services, and field services; and

2. Authorize the City Manager to execute the annual Notice of Intent during the five-year term of the Animal Care Services Agreement.

DISCUSSION
The City Council’s strategic plan calls for Recreation to recommend an agreement to provide animal care services. Pursuant to state law, municipalities in California must provide for various animal care and control services. Since 1961, the City has contracted with the County of Orange to satisfy its legal responsibilities and provide animal care services, including field and shelter services. In May 2016, the City entered into the current agreement for animal care services with the County of Orange for a 10-year term that is set to expire on May 30, 2026.

Cypress is one of 14 cities (Anaheim, Brea, Cypress, Fountain Valley, Fullerton, Huntington Beach, Lake Forest, Orange, Placentia, San Juan Capistrano, Santa Ana, Tustin, Villa Park and Yorba Linda) that contract with Orange County Animal Care (OCAC) for animal care services. In addition to animal care services, in 2016, the cities also approved a separate Participation Agreement which defined the roles and responsibilities between the County and City for the funding and construction of the regional animal shelter in the City of Tustin.

Cypress has contributed approximately $600,000 (principal and interest) towards the construction of the OCAC animal shelter and has two payments of approximately $15,700 remaining until the construction costs are paid off.

On February 24, 2026, the Orange County Board of Supervisors approved the attached Agreement for Provision of OC Animal Care Services between the County of Orange and contracting cities. The Agreement was developed with the input of cities that currently contract with OCAC for animal care services in anticipation of the expiration of the current agreement on May 30, 2026. A committee made up of Orange County city managers negotiated key components of the OCAC services that are now reflected in the new Agreement.

The services provided by the new Agreement are virtually identical to the current menu of services described in the current agreement. Key differences in the new Agreement include:

A clause describing how contracting cities would assume control of the animal shelter property in the event the County of Orange discontinues the use of the facility.

Contracting cities would have the opportunity to continue using the facility via a $1 per year lease, plus all operational costs and the costs of the land lease the facility is party to with the South Orange County Community College District.

A new section describing the financial responsibilities of new cities that may contract with OCAC for animal care services. New cities would be required to pay for any physical expansion of the existing shelter in the event their accommodation required more space. If the shelter would not need to be expanded to accommodate a new city, the new city would be required to pay 5% above their actual costs annually throughout the term of the new Agreement to defray facility maintenance costs.

A new clause that requires OCAC provide at least 12-months notice before any service category is added that may impact costs for contracting cities. Contracting cities would also have the ability to opt-in or opt-out of the new service.

To provide stabilization from quarterly bills that can fluctuate based on actual use, OCAC has added a new clause that states each contract city would be billed in equal quarterly installments based on the Notice of Intent (NOI) provided for that year or based on their actual utilization – whichever is greater.

The term of the new Agreement is five years in total length, rather than the ten-year term length of the current agreement. The term of the Agreement automatically renews each July for twelve (12) months for a period of five (5) years, provided no notice of termination has been given by either party. Twelve months notice is required to terminate the agreement.

Notice of Intent (NOI)
Before each fiscal year, OCAC provides a Notice of Intent (“NOI”) to each contracting city that projects costs for the next fiscal year. Actual costs billed to each city are based on the services provided to that individual city and are proportional to the use each contracting city incurs.

A City's actual costs may vary depending upon the actual services or shelter stays are provided for Cypress; fewer services provided will likely result in lower costs billed. In some instances, contracting cities pay more than their NOI estimate due to spikes in services rendered, such as hoarding cases and other unexpected surges in animal care demand.

The chart below provides a 5-year history of Cypress’ NOI’s and the actual costs of the OCAC service.

Year NOI Actual Cost
FY 2021-2022 $325,362 $259,032
FY 2022-2023 $327,159 $393,761
FY 2023-2024 $483,010 $674,708
FY 2024-2025 $507,914 $389,355
FY 2025-2026 $587,713 $503,959*
* Projected FY 2025-2026 cost
In fiscal years 2022-2023 and 2023-2024, the actual costs exceeded the NOI. In FY 2022-2023, the increase was due to two factors: 1) inflationary impacts on animal feed and shelter supplies and 2) large increases in animal intakes and field services provided directly to Cypress. In FY 2023-2024, the cost increase was largely related to an animal hoarding case that removed 83 cats and 2 dogs from a Cypress residence. This single hoarding case cost over $147,000.

On April 2, 2026, Cypress received the attached NOI for fiscal year 2026-27. The NOI projects an estimated cost of $663,393 for FY 2026-27 and includes Animal Control Services, Animal Care Special Services, Animal Care Shelter Services, and Barking Dog Complaint Services
Approval of the new agreement for OCAC Services ensures continuity of animal care and shelter services consistent with state and federal statutes and Chapter 3 of the Cypress Municipal Code.

BUDGET IMPACT
The NOI estimate for FY 2026-27, $663,393 (a 13% increase), will be included in the proposed General Fund budget for Animal Control. Because actual costs may fluctuate based on service utilization during a given billing period (e.g. a hoarding case), the City is billed either in equal installments based on its Notice of Intent for that year, or based on actual utilization for the period, whichever is greater for the first three quarters of the year with the final, fourth quarter billed on actual utilization for the full year of services.

LEGAL REVIEW
The City Attorney has reviewed and approved the agreement as to form.

APPROVED BY: Shannon DeLong, City
Manager
Attachments
Agreement for Provision of Animal Care Services
FY 2026-2027 Notice of Intent

AGREEMENT FOR PROVISION OF

OC ANIMAL CARE SERVICES

BETWEEN

COUNTY OF ORANGE
AND

CITY OF CYPRESS
MAY 31, 2026 THROUGH MAY 30, 2031
THIS AGREEMENT entered into this 31st day of May, 2026, which date is enumerated for purposes of reference only, is by and between the COUNTY OF ORANGE, a political subdivision of the State of California (“COUNTY”) and the CITY OF CYPRESS (“CITY”). This AGREEMENT shall be administered by County of Orange OC Community Resources (“ADMINISTRATOR”). COUNTY and CITY may be referred to individually as a “PARTY” and collectively as the “PARTIES.” W I T N E S S E T H:

WHEREAS, COUNTY owns, and through OC Animal Care operates, an animal care shelter facility at 1630 Victory Road, Tustin, California (“SHELTER"); and WHEREAS, CITY wishes to contract with COUNTY for the provision of the Animal Care Services described herein; and
WHEREAS, COUNTY is willing and able to provide such services on the terms and conditions hereinafter set forth:

NOW, THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
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CITY OF CYPRESS 2 of 10

CONTENTS

PARAGRAPH PAGE
Title Page.................................................................................................................................. 1 Contents.................................................................................................................................... 2 Referenced Contract Provisions.............................................................................................. 3 I. Alteration of Terms.................................................................................................................. 4 II. Indemnification and Insurance ................................................................................................ 4 III. Notices...................................................................................................................................... 5 IV. Severability............................................................................................................................... 5 V. Status of the Parties.................................................................................................................. 5 VI. Term ......................................................................................................................................... 6 VII. Termination .............................................................................................................................. 6 VIII. Third Party Beneficiary ........................................................................................................... 7 IX. Waiver of Default or Breach.................................................................................................... 7 X.Use of Shelter Upon Discontinuance of Use by County……………………………………. 7 XI.Participation of New Cities…………………………………………………………………. 8 XII.Governing Law and Venue………………………………………………………………….. 8 XIII.Attorney Fees.............................................................................................................................. 8 XIV.Appropriations………………………………………………………………………………… 8
Signature Page.......................................................................................................................... 10

EXHIBIT A
I. Definitions................................................................................................................................ 1 II. Services to be Provided by County ......................................................................................... 1 III. Payments .................................................................................................................................. 4 IV. City Manager’s Association Animal Care Committee ........................................................... 5 V. Laws and Regulations.............................................................................................................. 5 VI. Reports...................................................................................................................................... 6 VII. Records..................................................................................................................................... 6

EXHIBIT B
Animal Care Notice of Intent................................................................................................1 Page //
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REFERENCED CONTRACT PROVISIONS
Term: MAY 31, 2026 through MAY 30, 2031
Notices to COUNTY and CITY:

COUNTY: County of Orange
OC Community Resources
Director’s Office
1770 North Broadway
Santa Ana, CA 92706-2642
and
County of Orange
OC Community Resources
OC Animal Care Director
1630 Victory Rd.

Tustin, CA 92782
CITY: Shannon DeLong
City Manager
City of Cypress
5275 Orange Avenue
Cypress, CA 90630
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CITY OF CYPRESS 4 of 10
I. ALTERATION OF TERMS
This AGREEMENT, together with Exhibit A and B, attached hereto and incorporated herein by reference, fully expresses all understanding of COUNTY and CITY with respect to the subject matter of this AGREEMENT, and shall constitute the total agreement between the PARTIES for these purposes.

No addition to, or alteration of, the terms of this AGREEMENT, whether written or verbal, shall be valid unless made in writing and formally approved and executed by both COUNTY and CITY.

II. INDEMNIFICATION AND INSURANCE
A. CITY agrees to indemnify, defend and hold COUNTY, its elected and appointed officials, officers, employees, agents and those special districts and agencies for which COUNTY’s Board of Supervisors acts as the governing Board (“COUNTY INDEMNITEES”) harmless from any claims, demands, including defense costs, or liability of any kind or nature, including but not limited to personal injury or property damage, arising from or related to the services, products or other performance provided by CITY pursuant to this AGREEMENT. If judgment is entered against CITY and COUNTY by a court of competent jurisdiction because of the concurrent active negligence of COUNTY or COUNTY INDEMNITEES, CITY and COUNTY agree that liability will be apportioned as determined by the court.

Neither PARTY shall request a jury apportionment.

B. COUNTY agrees to indemnify, defend and hold CITY, its elected and appointed officers, employees, agents, directors, members, shareholders and/or affiliates harmless from any claims, demands, including defense costs, or liability of any kind or nature, including but not limited to, personal injury or property damage, arising from or related to the services, products or other performance provided by COUNTY pursuant to this AGREEMENT. If judgment is entered against COUNTY and CITY by a court of competent jurisdiction because of the concurrent active negligence of CITY, COUNTY and CITY agree that liability will be apportioned as determined by the court. Neither PARTY shall request a jury apportionment.

C. Each PARTY agrees to provide the indemnifying PARTY with written notification of any claim related to services provided by either PARTY pursuant to this AGREEMENT within thirty (30) calendar days of notice thereof, and in the event the indemnifying PARTY is subsequently named party to the litigation, each PARTY shall cooperate with the indemnifying PARTY in its defense.

D. Without limiting CITY’s indemnification, CITY warrants that it is self-insured or shall maintain in force at all times during the term of this AGREEMENT, the policy or policies of insurance covering its operations, placed with reputable insurance companies. Upon request by ADMINISTRATOR, CITY shall provide evidence of such insurance.

E. Without limiting COUNTY’s indemnification, COUNTY warrants that it is self-insured or shall maintain in force at all times during the term of this AGREEMENT, the policy or policies of insurance covering its operations, placed with reputable insurance companies. Upon request by CITY, COUNTY shall provide evidence of such insurance.

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III. NOTICES
A. Unless otherwise specified, all notices, claims, correspondence, reports and/or statements authorized or required by this AGREEMENT shall be effective:

1. When written and deposited in the United States mail, first class postage prepaid and addressed as specified on Page 3 of this AGREEMENT or otherwise directed by ADMINISTRATOR or CITY;

2. When FAXed, transmission confirmed;

3. When sent by electronic mail; or

4. When accepted by U.S. Postal Service Express Mail, Federal Express, United Parcel Service, or other expedited delivery service.

B. Termination Notices shall be addressed as specified on Page 3 of this AGREEMENT or as otherwise directed by ADMINISTRATOR or CITY and shall be effective when FAXed, transmission confirmed, or when accepted by U.S. Postal Service Express Mail, Federal Express, United Parcel Service, or other expedited delivery service.

C. Each PARTY shall notify the other PARTY, in writing, within twenty-four (24) hours of becoming aware of any occurrence of a serious nature, which may expose either PARTY to liability. Such occurrences shall include, but not be limited to, accidents, injuries, or acts of negligence, or loss or damage to any COUNTY property in possession of CITY.

D. For purposes of this AGREEMENT, any notice to be provided by COUNTY may be given by ADMINISTRATOR.

IV. SEVERABILITY
If a court of competent jurisdiction declares any provision of this AGREEMENT or application thereof to any person or circumstances to be invalid or if any provision of this AGREEMENT contravenes any federal, state, or county statute, ordinance, or regulation, the remaining provisions of this AGREEMENT or the application thereof shall remain valid, and the remaining provisions of this AGREEMENT shall remain in full force and effect, and to that extent the provisions of this AGREEMENT are severable.

V. STATUS OF THE PARTIES
Each PARTY is, and shall at all times be deemed to be, an independent contractor and shall be wholly responsible for the manner in which it performs the services required of it by the terms of this AGREEMENT. Each PARTY is entirely responsible for compensating staff and consultants employed by that PARTY. This AGREEMENT shall not be construed as creating the relationship of employer and employee, or principal and agent, between COUNTY and CITY or any of either PARTY’s employees, agents, consultants, or subcontractors. Each PARTY assumes exclusively the responsibility for the acts of its employees, agents, consultants, or subcontractors as they relate to the services to be provided during CITY OF CYPRESS 6 of 10
the course and scope of their employment. Each PARTY, its agents, employees, or subcontractors, shall not be entitled to any rights or privileges of the other PARTY’s employees and shall not be considered in any manner to be employees of the other PARTY.

VI. TERM
A. The term of this AGREEMENT shall commence as specified on Page 3 of this AGREEMENT.

B. The term of this AGREEMENT shall be automatically renewed each July for twelve (12) additional months, for a period of five (5) years, provided no notice of termination has been given by either PARTY in accordance with the “TERMINATION” paragraph of this AGREEMENT.

VII. TERMINATION
A. COUNTY may terminate this AGREEMENT, without cause, upon twelve (12) months written notice to CITY or immediately upon default by the CITY of its obligations hereunder.

B Upon termination, both PARTIES shall be obligated to perform such duties as would normally extend beyond this term, including but not limited to, obligations with respect to confidentiality, indemnification, audits, reporting and accounting.

C.. The obligations of COUNTY or CITY under this AGREEMENT are contingent upon the provision of sufficient funding for the services hereunder in the applicable budgets approved by the Board of Supervisors and the CITY’s City Council. In the event such funding is subsequently reduced or not appropriated, either PARTY may terminate this AGREEMENT upon thirty (30) calendar days written notice to the other PARTY. CITY acknowledges that the sharing of costs among the COUNTY and all contracting cities provides cost efficiencies and operational savings to COUNTY and each contracting city, and that COUNTY and each contracting city have entered into their services agreements in reliance on such shared costs and resulting savings. CITY further acknowledges that the withdrawal by CITY from the program would increase the financial burden of services on COUNTY and all remaining contracting cities, and acknowledges and agrees that it is the current intent of CITY to acquire Animal Care Services from the COUNTY pursuant to this AGREEMENT for a term of at least five (5) years, and that other cities acquiring services from the COUNTY are relying on CITY’s stated intention and the sharing of costs with CITY in electing to acquire similar services. CITY acknowledges and agrees that this AGREEMENT is contingent upon other local cities entering into similar agreements with the COUNTY to provide Animal Care Services for a period of five (5) years, and that this AGREEMENT will not be effective until other cities enter into similar agreements with the COUNTY to provide an estimated annual aggregate of at least 75% of the dollar value of Animal Care Services provided to contract cities during the twelve months prior to execution of this AGREEMENT.

CITY OF CYPRESS 7 of 10
VIII. THIRD PARTY BENEFICIARY
Neither PARTY intends this AGREEMENT to create rights hereunder in any third parties including, but not limited to, any subcontractors or any clients provided services hereunder.

IX. WAIVER OF DEFAULT OR BREACH
Waiver of any default shall not be considered a waiver of any subsequent default. Waiver of any breach of any provision of this AGREEMENT shall not be considered a waiver of any subsequent breach.

Waiver of any default or any breach shall not be considered a modification of the terms of this AGREEMENT.

X. USE OF SHELTER UPON DISCONTINUANCE OF USE BY COUNTY
A. The SHELTER, which is owned and operated by COUNTY, shall be used by COUNTY for the provision of services for contracting cities and COUNTY unincorporated areas, as needed, pursuant to the terms of current and future services agreements. In the event COUNTY elects to discontinue usage of the SHELTER for animal sheltering purposes prior to December 31, 2066, COUNTY shall offer to those CITIES then currently contracting with COUNTY, whose AGREEMENTS contain this provision, to receive services pursuant to a services agreement the opportunity to lease the SHELTER strictly for animal sheltering purposes until such date, at a costs of $1.00 per year plus all rental costs, if any, owed to South Orange County Community College District (SOCCCD) pursuant to the Ground Lease entered into between COUNTY and SOCCCD.

B. Each and every CITY exercising this option shall be responsible for all operational costs; utility costs; maintenance, alteration, repair, and improvement costs; and any other costs of sustaining and operating an animal shelter at the site and shall indemnify COUNTY for any costs or liabilities resulting from or relating to the site. Upon exercise of the option, the COUNTY and the optioning CITIES shall use best efforts to negotiate mutually agreeable terms for the resulting lease. If the PARTIES cannot agree to mutually agreeable terms within one hundred and eighty (180) days after the exercise of the option, the option will terminate. The option provided for in this subsection is exclusive to those CITIES described above and may only be exercised collectively by those CITIES that elect to exercise the option or, if only one CITY wishes to do so, by that single electing CITY. The option must be exercised, if at all, within one hundred and eighty (180) days after COUNTY notifies CITIES of its decision to discontinue use of the SHELTER for animal sheltering purposes. The option provided herein shall be contingent upon the ground lease not terminating by its terms prior to COUNTY obtaining fee hold possession of the site.

C. In the event COUNTY does not yet have fee hold possession of the site as of April 29, 2034, the expiration date of the ground lease, COUNTY shall, at least six months prior to that date, consult with those CITIES then contracting with COUNTY for SERVICES regarding proposed methods of accessing continued use of the site.

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XI. PARTICIPATION OF NEW CITIES
A. After full execution of this AGREEMENT, cities not a PARTY to this AGREEMENT (either new cities or cities previously a PARTY to this AGREEMENT whose AGREEMENT has terminated) may be added to the COUNTY’s Animal Care Services program at the discretion of and under terms deemed acceptable by the COUNTY. If such new or returning city requests to participate in the Animal Care Services program, and COUNTY elects to provide Animal Care Services to such city, such city will be required to pay all, or, if such expansion is necessitated by the participation of multiple new and/or returning cities, its pro rata portion, of the costs of any SHELTER expansion attributable to such city’s anticipated use of the SHELTER. If the COUNTY determines, at its sole discretion, that no expansion is required to accommodate a new or returning city, said city or cities shall be required to pay, in addition to actual annual costs, 5% of its Notice of Intent (see Exhibit A, Section II.A) for shelter maintenance and repair which shall be used by COUNTY to defray the cost of capital projects for the current PARTIES to this Agreement whose contracts did not terminate. CITY payment of 5% above annual Notice of Intent shall be limited to the term of this AGREEMENT. For the sake of clarity and avoidance of misunderstanding, new or returning cities will not be offered the option to lease SHELTER facilities pursuant to the “USE OF SHELTER UPON DISCONTINUANCE OF USE BY COUNTY” paragraph of this AGREEMENT.

XII. GOVERNING LAW AND VENUE
This AGREEMENT has been negotiated and executed in the State of California and shall be governed by and construed under the laws of the State of California. In the event of any legal action to enforce or interpret this AGREEMENT, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the PARTIES hereto agree to and hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. Furthermore, the PARTIES specifically agree to waive any and all rights to request that an action be transferred for trial to another county.

XIII. ATTORNEY’S FEES
In any action or proceeding to enforce or interpret any provision of this AGREEMENT, or where any provision hereof is validly asserted as a defense, each PARTY shall bear its own attorney's fees, costs and expenses.

XIV. APPROPRIATIONS
During the term of this AGREEMENT, for each fiscal year, CITY shall make reasonable efforts to adopt all necessary budgets and make all necessary appropriations for all payments due hereunder. To the extent COUNTY has not terminated this AGREEMENT as provided hereunder, the CITY shall continue to make reasonable efforts to make all payments required hereunder.

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[SIGNATURE PAGE FOLLOWS.]
CITY OF CYPRESS 10 of 10
IN WITNESS WHEREOF, the PARTIES have executed this AGREEMENT in the County of Orange, State of California.

CITY OF CYPRESS
BY: DATED:

LEO MEDRANO, MAYOR
ATTEST:

BY: DATED:

LISA BERGLUND, CITY CLERK
APPROVED AS TO FORM:

BY: DATED:

WILLIAM WYNDER, CITY ATTORNEY

COUNTY OF ORANGE
BY: DATED:

TITLE:

APPROVED AS TO FORM:

OFFICE OF THE COUNTY COUNSEL

ORANGE COUNTY, CALIFORNIA
BY: DATED:

DEPUTY
CITY OF CYPRESS 1 of 7 EXHIBIT A

EXHIBIT A

TO AGREEMENT FOR PROVISION OF

OC ANIMAL CARE SERVICES
WITH

CITY OF CYPRESS
MAY 31, 2026 THROUGH MAY 30, 2031
I. DEFINITIONS
A. "Actual Cost" means all COUNTY expenditures, including indirect charges, for providing Animal Care Services to CITY pursuant to this AGREEMENT.

B. "Animal Care Notice of Intent" means the document, signed by authorized representatives of COUNTY and CITY, which specifies all Animal Care Services COUNTY intends to provide to CITY, the estimated cost of the services, and the effective date.

C. "Animal Care Service(s)" means one or more service to be provided by COUNTY to CITY, as specified, by category, in Paragraph II.B. of Exhibit A to this AGREEMENT.

D. "Fee Revenue" means revenue collected by COUNTY for Animal Care Services provided by COUNTY to CITY pursuant to this AGREEMENT.

E. "Fiscal Year" means a twelve (12)-month period from July through June.

F. "Net Cost" means Actual Cost minus Fee Revenue.

G. "Service Details" mean the activities performed by COUNTY within an Animal Care Service category.

II. SERVICES TO BE PROVIDED BY COUNTY
A. ANIMAL CARE NOTICE OF INTENT

1. Annually, by March 1, CITY shall identify which of the Animal Care Services, specified below in subparagraph II.B. of Exhibit A to this AGREEMENT, CITY would like COUNTY to provide during the next Fiscal Year. CITY and COUNTY may agree to individualized levels of Service Details within the Animal Care Services selected. Requests for individualized levels of Service Details will only be considered by COUNTY if the resulting service level will not conflict with state or federal statutes and will not endanger public health.

2. Annually, by April 1, COUNTY shall prepare and send to CITY an Animal Care Notice of Intent which shall include, but not be limited to, a list of Animal Care Services, and individualized Service Details, if any, COUNTY agrees to provide, estimated costs for said services, and the start date for those services. COUNTY shall provide the Animal Care Services specified in the Animal Care Notice of Intent signed by both ADMINISTRATOR or designee, and an authorized representative of CITY.

3. Upon mutual AGREEMENT of CITY and COUNTY, COUNTY may prepare a new or CITY OF CYPRESS 2 of 7 EXHIBIT A
amended Animal Care Notice of Intent at any time, may change due dates specified in subparagraph II.A.1. and II.A.2. of Exhibit A to this AGREEMENT, and may modify the format of the Animal Care Notice of Intent attached to this AGREEMENT as Exhibit B.

B. ANIMAL CARE SERVICES – COUNTY provides the following seven (7) categories of Animal Care Services. COUNTY shall provide to CITY the Animal Care Services specified on the most current, Animal Care Notice of Intent for the Fiscal Year, signed in accordance with subparagraph II.A.2. of this Exhibit A to the AGREEMENT. Each category of service includes Service Details which may be added or changed by ADMINISTRATOR upon six (6) months prior notification to CITY. However, any new Service Level Details not required by law and which were not contemplated or included in the Animal Care Notice of Intent approved by the PARTIES and in place at the time of the proposed change(s) shall require twelve (12) months prior notice to CITY, and CITY may opt in of the New Service Level Details.

1. ANIMAL CONTROL SERVICES – Animal Control Services include, but are not limited to, emergency response service; patrolling; impounding of stray animals and of owner-released animals; animal cruelty investigations; animal bite investigations; citation issuance; field release to owner and impound fee collection for impounded animals; quarantine activities including home checks of animals involved in bites; site inspections required to comply with vicious dog ordinances; emergency transportation of injured, impounded animals to a veterinarian; impounding of deceased animals for disposal; responses to requests for assistance from law enforcement and CITY officials regarding suspected criminal activities or zoning violations related to animals; advice to residents regarding wildlife management or other animal concerns, not to include wildlife eradication or relocation services; injured wildlife pick-up; animal license issuance and renewal, fee collection and payment services; customer support regarding animal licensing; animal license billing; and delinquent animal license follow-up; assistance to residents regarding potentially dangerous and/or vicious animals; impound data entry; and impound animal photography.

2. ANIMAL CARE SPECIAL SERVICES
a. Animal Care Special Services include, but are not limited to animal license issuance and renewal; fee collection and payment services; customer support regarding animal licensing; animal license billing; delinquent animal license follow-up; digital canvassing to locate and license unlicensed animals; inspection of animal-related businesses in CITY jurisdiction in response to complaints and in accordance with COUNTY established inspection schedules; and when applicable, issuance of animal permits for private homes.

3. ANIMAL CARE SHELTER SERVICES
a. Animal Care Shelter Services for animals impounded by OC Animal Care include, but are not limited to, retention of impounded animals at COUNTY’s Animal Care Shelter (Shelter), public display of animals to allow owner identification; contact of owners when animals are wearing identification; sale or release of impounded animals to residents; animal evaluation for adoption; CITY OF CYPRESS 3 of 7 EXHIBIT A
reasonable effort toward animal placement; public education; volunteer services; rescue group coordination; euthanasia and disposal of animals that are neither redeemed nor adopted; veterinary services and spay/neuter surgeries consistent with standards established by the California Veterinary Medical Board; and necropsies on animals that die under suspicious circumstances or at the request of law enforcement.
b. CITY may request additional retention days for healthy, non-aggressive impounded animals. Additional retention days will be offered to CITY upon written approval by COUNTY’s OC Community Resources Director, or designee, on a space available basis only. c. COUNTY agrees to maintain its Shelter in a humane manner, keep said premises in a clean condition at all times, and use humane methods of care. d. No animals may be donated, sold or otherwise released for the purposes of experimentation, research or vivisection.

4. BARKING DOG COMPLAINT SERVICES – Barking Dog Compliant Services include, but are not limited to, receipt of barking dog complaints from residents, customer assistance regarding barking dog complaints, issuance of citations, and administrative hearings in response to complaints received by COUNTY for barking dogs within jurisdiction of CITY.

5. STANDARD LICENSING SERVICES – Standard Licensing Services include, but are not limited to, animal license issuance and renewal, fee collection and payment services; customer support regarding animal licensing; animal license billing; and delinquent animal license follow-up.

6. CITY LICENSE SERVICES
a. City License Services include, but are not limited to, issuance of CITY animal licenses at the time of adoption or redemption by owners. CITY shall provide CITY licensing tags to COUNTY.

COUNTY shall provide quarterly licensing reports to CITY. b. CITY shall make its best effort to provide updated animal licensing information to COUNTY.

7. ANIMAL IMPOUND SERVICES – Animal Impound Services include, but are not limited to, data entry of impound information for each live or deceased animal from CITY, impound animal photography for each live animal, owner notification of impounded animal, and posting of animal photographs on COUNTY website. COUNTY shall receive CITY animals at Shelter at times arranged by COUNTY.

C. COUNTY shall notify CITY of COUNTY’s hours of operation for Animal Care Services.

COUNTY may adjust hours of operation for Animal Care Services upon ninety (90) calendar days prior notification given to CITY.

D. Animals which are being retained for criminal prosecutions, except for violations of animal control regulations and/or ordinances pursuant to this AGREEMENT, are not to be construed as held pursuant to the services provided under this AGREEMENT; housing will be provided at the discretion of COUNTY and at COUNTY’s usual and customary charges for such housing.

CITY OF CYPRESS 4 of 7 EXHIBIT A
E. To facilitate the performance of services, COUNTY shall have full cooperation and assistance from CITY, its officers, agents and employees.

III. PAYMENTS
A. BASIS FOR PAYMENT

1. CITY shall pay COUNTY the Net Cost of providing Animal Care Services specified in Animal Care Notice of Intent for CITY signed in accordance with subparagraph II.A. CITY Net Costs may include services/supplies procured but not yet delivered within the Fiscal Year.

2. The methodology for determining CITY's Actual Cost of Animal Care Services shall be provided to CITY annually in accordance with the Reports paragraph of this AGREEMENT. CITY shall adopt Animal Care Services fees consistent with the most recent animal care services fees approved by the County of Orange Board of Supervisors (the “COUNTY FEES”) which fee amounts will be charged for Animal Care Services within CITY’s jurisdiction and shall be used in determining CITY's Actual Cost of Animal Care Services. If CITY wishes to adopt fees which are different from the COUNTY FEES, CITY shall notify COUNTY of the applicable fee amounts to be charged for Animal Care Services within CITY’s jurisdiction (the “CITY FEES”) and CITY FEES will be charged for Animal Care Services within CITY’s jurisdiction and shall be used in determining CITY's Actual Cost of Animal Care Services.

3. COUNTY shall record and retain all Fee Revenue derived from providing Animal Care Services to CITY. CITY’s Fee Revenue shall be credited to CITY’s Actual Cost of Animal Care Services.

COUNTY shall have all fee collection powers of CITY and shall receive full cooperation from CITY to enable efficient enforcement of fee collection.

B. PAYMENT SCHEDULE

1. Each Fiscal Year, CITY shall pay COUNTY in arrears for the Net Cost of Animal Care Services provided in accordance with the following payment schedule. Billings are due from COUNTY to CITY within thirty (30) calendar days following the three-month Period specified below.

Period Billing Due Payment Due
July 1 through September 30 October 30 November 25
October 1 through December 31 January 30 February 25
January 1 through March 31 April 30 May 25
April 1 through June 30 July 30 August 25

2. Because Actual Costs may fluctuate based on service utilization during a given billing period (e.g. a hoarding case), CITY shall be billed either in equal installments based on its Notice of Intent for that year, or based on actual utilization for the period, whichever is greater for the first three quarters of the year with the final, fourth quarter billed on actual utilization for the full year of services.

CITY OF CYPRESS 5 of 7 EXHIBIT A

3. If payment is not received by COUNTY by the payment due date specified above in subparagraph III.B. of Exhibit A to this AGREEMENT, COUNTY may cease providing any further service under this AGREEMENT and may satisfy the indebtedness in any manner prescribed by law.

4. COUNTY may modify the payment schedule upon six (6) months written notification to CITY.

IV. CITY MANAGERS ASSOCIATION ANIMAL CARE COMMITTEE
A subcommittee of the Orange County City Managers Association representing all cities participating in OCAC services exists to facilitate communication between OCAC and the city managers and staff of participating cities regarding financial and operational matters of OCAC, including, but not limited to: the assessment of cost options for animal care services provided under the Services Agreements; supplemental services or financial requests which result in a change to a participating city’s Actual Cost; consideration of new or adjusted fees; and other Service Details which may arise during the course of the AGREEMENT. COUNTY shall provide regular updates on operations to the City Managers Association Animal Care Committee and to a participating city upon request.

V. LAWS AND REGULATIONS
A. COUNTY shall comply with all applicable governmental laws, regulations, and requirements related to Animal Care Services, as they exist now or may be hereafter amended or changed and shall enforce federal and state statutes deemed applicable to CITY by COUNTY. Animal Care Services provided by COUNTY to CITY may be changed to comply with said laws, regulations, and requirements.

ADMINISTRATOR will make its best efforts to notify CITY of changes that may impact Animal Care Services provided through this AGREEMENT.

B. For each Animal Care Service that COUNTY agrees to provide to CITY in an Animal Care Notice of Intent, CITY shall enact and maintain in full force and effect ordinances identical to COUNTY ordinances which apply to said service, including but not limited to, those related to fees.

ADMINISTRATOR shall notify CITY of the deadline for adopting said ordinances. If COUNTY is unable to enforce an animal care ordinance because of the limitations of a CITY ordinance or failure of CITY to adopt identical ordinances related to an Animal Care Service, COUNTY may suspend provision of one or all Animal Care Services to CITY or may terminate this AGREEMENT. It is the sole responsibility of CITY to immediately notify COUNTY of any discrepancy between relevant ordinances maintained by CITY and those maintained by COUNTY.

D. If CITY wishes to maintain any relevant ordinance that is not consistent, on any point, with COUNTY ordinances, CITY shall immediately notify COUNTY of the discrepant ordinance. At the sole discretion of COUNTY, COUNTY may waive CITY enactment and maintenance of COUNTY animal care ordinances and may agree to enforce, and issue citations for violations pursuant to, the discrepant CITY ordinance. CITY acknowledges that individualized enforcement of unique CITY ordinances may result in increased costs to CITY.

CITY OF CYPRESS 6 of 7 EXHIBIT A
E. CITY shall notify COUNTY of its intent to add, amend, or delete any CITY animal care ordinance at least ninety (90) calendar days in advance of its addition, amendment, or deletion.

F. CITY may request that specific ordinances adopted by CITY not be enforced in CITY by COUNTY. Requests for exclusion must be submitted in writing and received by COUNTY ninety (90) calendar days prior to the requested exclusion. Requests for exclusion will only be considered by COUNTY if they are not in conflict with state statutes and do not endanger public health. COUNTY shall notify CITY, in writing, of COUNTY’s decision regarding the requested exclusion.

G. COUNTY’s OC Community Resources Director, or designee, may provide assistance to CITY in defining the manner in which enforcement of a new or amended animal care ordinance would be provided by COUNTY. Requests for assistance must be made in writing and received by COUNTY ninety (90) calendar days prior to the requested implementation of the service. If the cost of such service can be delineated and accommodated by COUNTY, COUNTY will send an amended Animal Care Notice of Intent to CITY which will include reference to the CITY ordinance.

H. CITY will reimburse COUNTY for ordinance enforcement, as specified in the “PAYMENTS” paragraph of this AGREEMENT.

VI. REPORTS
A. Each Fiscal Year, COUNTY shall provide to CITY written, quarterly reports of Animal Care Services revenue and expenses for each period specified below. Said reports will be due to CITY within thirty (30) calendar days of the month following the reporting period, in accordance with the schedule below:

Period Reports Due
July 1 through September 30 October 30
October 1 through December 31 January 30
January 1 through March 31 April 30
April 1 through June 30 July 30
B. Each Fiscal Year, COUNTY shall provide the following Animal Care Services reports to CITY by July 30:

1. A payment methodology report for Animal Care Services to be provided by COUNTY during the next Fiscal Year and

2. A Fiscal Year intake and outcome report.

C. COUNTY may change the due dates for reports specified in subparagraphs VI.A. and VI.B. above upon six (6) months written notification to CITY.

D. No less than once every three (3) years, COUNTY shall engage an external auditor to review CITY billings.

CITY OF CYPRESS 7 of 7 EXHIBIT A
VII. RECORDS
A. All records created or received by COUNTY in accordance with the performance of COUNTY services pursuant to this AGREEMENT are confidential. COUNTY agrees to keep said records in such form and manner as the Auditor-Controller of COUNTY shall specify. Said records shall be open for examination by CITY at all reasonable times.

B. Once each Fiscal Year, COUNTY shall deliver to CITY only the addresses of each CITY licensed animal upon demand without additional expense or cost to CITY. Any such information requested which is confidential pursuant to the terms of the Public Records Act shall be released to CITY pursuant to government code. Prior to each disclosure, CITY agrees to complete and return to COUNTY a “Confidentiality Agreement” on a form approved or provided by COUNTY. The PARTIES agree and understand that this procedure is required by the Public Records Act and necessitated to permit CITY to obtain the information required for its use, and to allow COUNTY to disclose said information. Upon receipt by COUNTY, the records requested may be released to the extent COUNTY is in possession of such records, and permitted by state law to disclose them voluntarily. //
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CITY OF CYPRESS 1 of 1 EXHIBIT B

EXHIBIT B

TO AGREEMENT FOR PROVISION OF

OC ANIMAL CARE SERVICES
WITH

CITY OF CYPRESS
MAY 31, 2026 THROUGH MAY 30, 2031

ANIMAL CARE NOTICE OF INTENT
This Animal Care Notice of Intent specifies Animal Care Services to be provided to CITY by COUNTY for the Period: «NOI_START» through «NOI_END». COUNTY agrees to provide to the City of «COMPANY2» the following Animal Care Services beginning «NOI_EFFECTIVE»:
«SERVICE1»
«SERVICE2»
«SERVICE3»
«SERVICE4»
«SERVICE5»
The total estimated cost for Animal Care Services specified above is «TOTAL_COST_».

This is a new Animal Care Notice of Intent for the Period indicated above.

This is an Amendment to an existing Animal Care Notice of Intent for the Period indicated above.

Significant Changes Since the Previous Animal Care Notice of Intent:

To the best of my knowledge, this notice specifies the Animal Care Services to be provided by COUNTY.

City of Cypress Representative and Title Date
OC Animal Care Director Date
CITY OF CYPRESS 1 of 1 EXHIBIT B

EXHIBIT B

TO AGREEMENT FOR PROVISION OF

OC ANIMAL CARE SERVICES
WITH

CITY OF CYPRESS
MAY 31, 2026 THROUGH MAY 30, 2031

ANIMAL CARE NOTICE OF INTENT
This Animal Care Notice of Intent specifies Animal Care Services to be provided to CITY by COUNTY for the Period: JULY 1, 2026, through JUNE 30, 2027. COUNTY agrees to provide to the City of CYPRESS the following Animal Care Services beginning JULY 1, 2026:

Animal Control Services
Animal Care Special Services
Animal Care Shelter Services
Barking Dog Complaint Services
The total estimated cost for Animal Care Services specified above is $663,393.

This is a new Animal Care Notice of Intent for the Period indicated above.

This is an Amendment to an existing Animal Care Notice of Intent for the Period indicated above.

Significant Changes Since the Previous Animal Care Notice of Intent:

To the best of my knowledge, this notice specifies the Animal Care Services to be provided by COUNTY.

City of CYPRESS Representative and Title Date
OC Animal Care Director Date
CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 15.

FROM: Stephanie Sikkema, Director of Finance and Administrative Services DATE: 04/28/2026
SUBJECT: Review of Draft Fiscal Policies

RECOMMENDATION
Direction and feedback on the draft fiscal policies is respectfully requested to inform next steps.

SUMMARY
During the March 24, 2026, City Council workshop, the following fiscal policies were discussed and proposed to be developed or updated:

1. Investment Policy

2. Capital Asset Policy

3. Budget Policy

4. Fund Balance

DISCUSSION
Investment Policy
The purpose of the Investment Policy is to establish prudent investment cash management guidelines for the City. The investment goals of the City are safety, liquidity and yield. The City Treasurer and Finance Manager shall be responsible for reviewing and modifying this Statement of Investment Policy annually for City Council approval to ensure its consistency with the overall objectives of safety, preservation of principal, and liquidity, and its relevance to current law and current financial and economic conditions.

Key provisions of the proposed policy include the following:

General clean up to remove redundancies and possible conflicts with the government code.

1. Revised one of the authorized and suitable investment categories to replace the CalTrust-specific reference with a broader allowance for local government investment pools, thereby expanding the City’s investment opportunities.

2. 3. Added county pools as an authorized and suitable investment.

Capital Asset Policy
The purpose of this policy is to establish the City’s capitalization criteria, update capital thresholds for each asset classification, provide estimates for useful lives of assets for depreciation/amortization, and maintain accurate and up-to-date records of capital asset information to prepare the City’s financial statements in accordance with the Generally Accepted Accounting Principles (GAAP) and Government Accounting Standards Board (GASB).

Key provisions of the proposed policy include the following:

Increased the threshold from $1,000 to $5,000 for all assets other than buildings, improvements, and infrastructure. The threshold for buildings, improvements, and infrastructure remains $10,000 in accordance with the City's Charter.

1. Updated the estimated useful life used in deeming deprecation to be consistent with ideal replacement schedules.

2. Budget Policy
This policy establishes a budget process to help decision makers make informed choices about the provision of services and capital assets and to promote stakeholder participation in the process.

Key provisions of the proposed policy include the following:

1. Inclusion of a long-range financial plan.

Depreciation will be used as the basis for budgeting for service charges paid by departments for equipment replacement funds.

2. 3. One-time resources will only be used for one-time purposes.

The budget process will include a review of the City's Strategic Plan, an update of the long-range financial plan, and a budget calendar presented to City Council.

4. 5. Staff will provide monthly and quarterly reporting.

Fund Balance Policy
This policy establishes the procedures for reporting unrestricted fund balance in the City's financial statements. Certain commitments and assignments of fund balance help ensure that there will be adequate financial resources to protect the City against unforeseen circumstances and events, such as revenue shortfalls and unanticipated expenditures.

Key provisions of the proposed policy include the following:

The City shall maintain a Committed Fund Balance of twenty-five percent (25%) of operating expenditures in the General Fund and a Committed Fund Balance of thirty percent (30%) of the total seven-year capital improvement program plus encumbrances in the Infrastructure Reserve Fund. Additionally, at the end of the fiscal year, the excess unassigned fund balance in the City's General Fund will be prioritized and presented for City Council consideration as follows:
25% will stay in the General Fund Balance as unassigned fund balance for unforeseen appropriations that may arise throughout the fiscal year.

1. Up to 25% will be transferred to the Employee Benefits Fund until a fund balance reserve is established and maintained equal to current liabilities.

2. Up to 15% will be transferred to the Self-Insurance Funds: General Liability and Workers Compensation Funds until a fund balance reserve is established to cover the long-term liabilities due within one year (claims payable).

3. The remaining balance will be transferred to Capital Funds: Infrastructure Reserve Fund, Capital Outlay, and Information Technology.

4. For example, the excess fund balance for fiscal year ending June 30, 2025 would be allocated as follows:

General Fund Operating Budget FY2025-26 $41,316,941
25% of Operating Budget $10,329,235 25%
General Fund Balance 6/30/2025 $35,133,312
Nonspendable 80,845
Committed 10,329,235
Preliminary Unassigned Fund Balance $24,723,232
Proposed use of excess unassigned fund balance/transfers:

Unassigned Fund Balance 6,180,808 25%
Transfer to Employee Benefits Fund 6,180,808 25%
Transfer to Self Insurance Funds 0 0%
Transfer to Infrastructure Reserve 8,653,131 35%
Transfer to City Capital Replacement Fund 2,472,323 10% Transfer to Technology Master Plan Fund 1,236,162 5%
Total Use of Unassigned Fund Balance $24,723,232 100%
Adjusted General Fund Balance after transfers:

Nonspendable 80,845
Committed 10,329,235
Unassigned Fund Balance 6,180,808
Total Fund Balance $16,590,888
BUDGET IMPACT
The recommended updates to the City’s financial policies are procedural in nature and do not directly change revenues or expenditures. The revisions clarify existing practices and strengthen financial management standards. Any budget effects would be indirect and occur over time, such as improved investment yields, more consistent reserve funding, or enhanced long-term planning.

LEGAL REVIEW
The City Attorney has reviewed this staff report.

APPROVED BY: Shannon DeLong, City
Manager
Attachments
Draft Investment Policy with changes marked
Draft Capital Asset Policy
Draft Budget Policy
Draft Fund Balance Reserve Policy

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
2 Table of Contents
POLICY ................................................................................................................................................................... 3

1. PURPOSE .................................................................................................................................. 3

2. SCOPE ........................................................................................................................................ 3

3. PRUDENCE ............................................................................................................................... 3

4. OBJECTIVE ................................................................................................................................ 4

5. DELEGATION OF AUTHORITY .......................................................................................... 4

6. ETHICS AND CONFLICTS OF INTEREST ....................................................................... 4

7. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS .................................... 5

8. AUTHORIZED AND SUITABLE INVESTMENTS ........................................................... 5

9. REVIEW OF INVESTMENT PORTFOLIO ......................................................................... 9

10. INVESTMENT POOLS/MUTUAL FUNDS ..................................................................... 10

11. COLLATERALIZATION ........................................................................................................ 10

12. SAFEKEEPING AND CUSTODY ....................................................................................... 10

13. MAXIMUM MATURITIES AND SETTLEMENT PERIODS ........................................ 10

14. INTERNAL CONTROLS ...................................................................................................... 11

15. REPORTING ........................................................................................................................... 11

16. INVESTMENT POLICY ADOPTION ................................................................................ 11

17. INDEMNIFICATION ............................................................................................................ 11 INVESTMENT GUIDELINES AND STRATEGY......................................................................................... 13 I. GUIDELINES ..................................................................................................................................... 13 II. STRATEGY ........................................................................................................................................ 14 III. AUDIT ............................................................................................................................................... 14 INVESTMENT PROCEDURES – INTERNAL CONTROL GUIDELINES ............................................. 15 I. OBJECTIVES OF INTERNAL CONTROL ................................................................................ 15 II. LIMITATIONS OF INTERNAL CONTROL ............................................................................. 15 III. ELEMENTS OF INTERNAL CONTROL ................................................................................... 15 IV. CASH CONTROLS ....................................................................................................................... 16 SEGREGATION OF RESPONSIBILITIES OF THE TREASURY FUNCTIONS ................................... 17 GLOSSARY OF INVESTMENT TERMINOLOGY ..................................................................................... 18

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
3 POLICY

1. PURPOSE
This purpose of this policy is to provideTo establish guidelines for the prudent investment of unexpended funds to maximize security while meeting daily cash flow demands and providing a market rate of return. The investment practices and policies are based on compliance with State law and prudent money management principles.

2. SCOPE
This Statement of Investment Policy (Policy) covers all funds under the City’s control including the Cypress Recreation and Park District collectively referred to herein as the City’s investment portfolio, or portfolio.

This Policy also applies to any bond proceeds. If a bond's trust agreement is more restrictive than this Policy, then the trust agreement supersedes this Policy. The City may delegate its investment responsibility to the fiscal agent to ensure compliance with the bond covenants when managing bond proceeds. Borrowing money solely for the purpose of investing and earning arbitrage is specifically prohibited.

The Public Agencies Post-Employment Benefits Trust (PARS Trust) is managed under separate investment goals, objectives, and management policies, and as such is specifically excluded from this policy. Additional information can be found in the Investment Guidelines Document for the PARS Trust.

3. PRUDENCE
The City strives to maintain the level of investment of all idle funds as near 100% as possible. All temporarily pooled idle cash is invested under the Prudent Investor Standard, as set forth in California Government Code Section 53600.3:.
"…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
4 anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency. Within the limitations of this section and considering individual investments as part of an overall strategy, investments may be acquired as authorized by law.”

4. OBJECTIVE
The primary objectives, in priority order, of the City’s investment activities shall be:
a. Safety - The safety and risk associated with an investment refers to the potential loss of principal, interest or a combination of these amounts.

The City will undertake investments in a manner that seeks to ensure the preservation of capital in the overall portfolio.
b. Liquidity - This refers to the ability to "cash in" at any moment in time with a minimal chance of losing some portion of principal or interest.

The City will maintain sufficient cash and short-term investment instruments which, together with projected revenues, will provide sufficient liquidity to meet all operating requirements as well as unanticipated needs for funds.
c. Return on Investments (Yield) – Yield is the income returned on investments. The Portfolio will be designed with the objective to attain a market rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk constraints and cash flow requirements.

5. DELEGATION OF AUTHORITY
The City Council, pursuant to California Government Code Section 53601, has primary responsibility for the investment of surplus monies. As authorized under Section 53607, the City Council hereby delegates its authority to invest surplus City funds to the City Treasurer and the Finance Manager. This delegation of authority shall be in effect for one fiscal year. The City Council may renew the authority annually and may revoke the authority at any time.

6. ETHICS AND CONFLICTS OF INTEREST
Commented [SS1]: Eliminated the direct quote from the
code to prevent potential contradictions.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
5 Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program or which could impair their ability to make impartial investment decisions. Officials, staff members and investment consultants shall disclose to the City Manager any material financial interests with a financial institution, provider, dealer or broker that conducts business with the City. Officials, staff members and investment consultants will further disclose any personal financial position that could be related to the City’s cash and investment portfolio.

Any firm proposing to provide any type of investment service to the City shall acknowledge their familiarity with and agree to abide by any Federal and State laws or regulations pertaining to contractual conflicts of interest or contributions by such firms, their employees, spouses or agents. Any persons, firms, dealers, brokers and advisors providing investment services or bond issue assistance shall disclose to the City Treasurer and Finance Manager all fee sharing and commission arrangements with other entities or persons prior to the City agreeing to buy an investment or issuing bonds.

7. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The Treasurer will maintain a list of approved financial institutions authorized to provide investment services to the City. The City of Cypress shall transact business only with banks, savings and loans, and "primary" or "regional" registered investment securities broker/dealers with offices located in the State of California. The firms, and individuals covering the agency, should be knowledgeable and experienced in public agency investing and the investment products involved. Any broker/dealer or financial institution wishing to provide services must provide the following to the City Treasurer:
• A completed City of Cypress Broker/Dealer Questionnaire • Audited financial statements
• Proof of Financial Industry Regulatory Authority (FINRA) certification • Trading resolution
• Proof of state registration

8. AUTHORIZED AND SUITABLE INVESTMENTS
The City is authorized by California Government Code Section 53600 et seq. to invest in specific types of securities. This Statement of Investment Policy further limits the authorized investments to the following:

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
6 a) U.S. Treasury Securities
United States Treasury bills, notes, bonds, or certificates of indebtedness, for which the full faith and credit of the United States are pledged for the payment of principal and interest. There is no limit on the percentage of the portfolio that can be invested in this category.
b) U.S. Government Agency Securities
Bonds or obligations issued by federal government agencies or governmentsponsored enterprises. There is no limit on the percentage of the portfolio that can be invested in this category. Examples include:

• Federal Home Loan Mortgage Corporation (FHLMC)
• Federal National Mortgage Association (FNMA)
• Federal Farm Credit Bank (FFCB)
• Federal Home Loan Bank Notes and Bonds (FHLB)
• Federal Agricultural Mortgage Corporation (FAMC)
• Government National Mortgage Association (GNMA)
c) Certificates of Deposit (CD)
A time deposit with a specific maturity evidenced by a Certificate. Purchases of CDs shall not exceed 25% of the portfolio at the time of purchase, nor one year maturity.
d) Bankers’ Acceptances
Also known as bills of exchange or time drafts, Bankers’ Acceptances are drawn on and accepted by a commercial bank. Purchases of bankers’ acceptances shall not exceed 180 days maturity. Issuing banks must be rated by at least two of the Nationally Recognized Statistical Rating Organizations (NRSROs) and have a short-term rating of at least A1/P1 and a long-term rating, if any, of not less than “A”. Bankers’ Acceptances shall not exceed 25% of the portfolio at the time of purchase with each issuer limited to 10%. Commented [SS2]: Added 10% limit to make consistent with Glossary of Terminology and Investment
Strategy

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
7 e) Commercial Paper
Short-term, unsecured promissory notes issued by both financial and nonfinancial corporations. Eligible commercial paper shall be of “prime” quality of the highest ranking or of the highest letter and number rating as provided by an NRSRO, shall not exceed 270 days maturity, and shall not exceed 25% of the portfolio at the time of purchase. Furthermore, the City may invest no more than 10% of its total portfolio in the commercial paper and mediumterm corporate notes of any single issuer at the time of purchase. f) Negotiable Certificates of Deposit
Negotiable Certificates of Deposit issued by a nationally or state-chartered bank, a savings association, or a federal association, a state or federal credit union, or by a federally licensed or state-licensed branch of a foreign bank.

Issuing institutions must be rated by at least two of the NRSROs and have a short-term rating of at least A1/P1 and a long-term rating, if any, of not less than “A”. Negotiable CDs shall not exceed 25% of the portfolio at the time of purchase.
g) Medium-term Corporate Notes
Unsecured promissory notes issued by corporations organized and operating in the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subdivision shall be rated “A” or better by an NRSRO.

Medium-term Corporate Notes shall not exceed 25% of the portfolio at the time of purchase. Furthermore, the City may invest no more than 10% of its total portfolio in the commercial paper and medium-term corporate notes of any single issuer at the time of purchase.
h) State of California Local Agency Investment Fund (LAIF) LAIF is a voluntary investment program administered by the California State Treasurer and overseen by the Local Investment Advisory Board. It allows local agencies to invest in a major portfolio while maintaining highly liquid investments. The City may invest in LAIF up to the maximum permitted by State law.
i) California County Investment Pools

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
8 County investment pools are investment funds managed by California counties in which local agency deposits are commingled with county funds and invested in accordance with Government Code Section 5364. The total investment in all county investment pools shall not exceed $50 million. i) Investment Trust of California (CalTRUST)
j) CalTRUST is a Joint Powers Authority created by local public agencies to deposit funds for investment. CalTRUST is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers.

There is no minimum investment, nor is there a maximum investment imposed by CalTRUST, however, the City has established a maximum of $50 million.Local Government Investment Pools
Shares of beneficial interest issued by a joint powers authority organized pursuant to Government Code Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (r) of Government Code Section 53601, inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. The total investment in all county investment pools shall not exceed $50 million.

To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:

1. The adviser is registered or exempt from registration with the Securities and Exchange Commission.

2. The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (r) Government Code Section 53601, inclusive.

3. The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

1.4.Only pools that seek to maintain a constant net asset value of $1.00 per Share are permitted.
k) Money Market Mutual Funds
Shares of money market mutual funds as described in Government Code Section 53601(l). The total investment in money market mutual funds shall not exceed 20% of the portfolio at the time of purchase. No more than 10% of the portfolio may be invested in any one mutual fund.

Commented [SS3]: Rather than specifically naming
CalTRUST, staff proposes generally allowing Local
Government Investment Pools through a Joint Powers
Authority.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
9 l) Municipal Bonds
Bonds issued by local agencies of the United States, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency or by a department, board, agency, or authority of the local agency rated “A” or better by an NRSRO. No more than 5% of the portfolio may be invested in any one municipal issuer. In addition, the aggregate investment in municipal bonds may not exceed 25% of the portfolio at the time of purchase.

9. REVIEW OF INVESTMENT PORTFOLIO
The securities held by the City must be in compliance with Section 8 – Authorized and Suitable Investments at the time of purchase. Because some securities may not comply with Section 8 subsequent to the date of purchase, the Treasurer shall at least quarterly review the portfolio to identify any securities no longer in compliance. The Treasurer shall report to the City Council any major and critical incidences of noncompliance identified through the portfolio review.

If the credit rating of a security in the portfolio is downgraded, the City Treasurer and Finance Manager will monitor the credit risk and evaluate the need to sell the security prior to maturity. When selling securities prior to maturity, losses are only acceptable if (1) the proposed swap/trade can clearly enhance yield (value) over the life of the new security on a total return basis, or (2) to prevent the further loss of principal. Sufficient written documentation to facilitate the audit of the transaction must be maintained. Under Section 53601.6 of the California Government Code, the City may hold prohibited investments until their maturity to avoid incurring a loss. This allows the City to "grandfather" in securities purchased prior to a downgrade or the effective date of new legislation.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
10 10. INVESTMENT POOLS/MUTUAL FUNDS
The Treasurer shall be required to research all investment pools and mutual funds prior to investing in them, and to stay abreast of any changes while the funds are invested in the pool/fund. The analysis should include an understanding of the pool/fund’s eligible securities, maximum maturities, interest calculation and distribution, size, withdrawal and deposit limits, and expense ratio.

11. COLLATERALIZATION
Surplus funds must be deposited in state or national banks, state or federal savings associations or federal credit unions within the State of California. All demand and time deposits shall be collateralized with securities authorized by California Government Code Section 53651 et seq. The bank or savings and loan must secure public funds deposits with eligible securities having a market value of 110% of the total amount of the deposits or first trust deeds having a value of 150% of the total amount of the deposits. The Treasurer may waive security for that portion of a deposit, which is insured pursuant to Federal law.

The first $250,000 of a deposit is federally insured. Deposits over $250,000 are collateralized as indicated above.

12. SAFEKEEPING AND CUSTODY
All security transactions shall be conducted on a delivery-versus-payment (DVP) method. All securities shall be registered in the name of the City of Cypress and held by a third-party custodian designated by the City Treasurer.

13. MAXIMUM MATURITIES AND SETTLEMENT PERIODS
In accordance with California Government Code, the City will not invest in any security maturing more than 5 years from the settlement date. Investment purchases must settle within 45 days of the commitment to purchase the investment. If the City Treasurer desires to invest in longer-term securities, the Government Code allows such an investment if it is expressly approved by the City Council at least three months prior to the purchase.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
11 14. INTERNAL CONTROLS
A system of internal control shall be established and documented in writing.

The controls shall be designed to prevent losses of public funds arising from irregularities, employee error, misrepresentation of third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the City. Controls deemed most important include:
control of collusion, separation of duties, custodial safekeeping, clear delegation of authority, written confirmation of transactions, minimizing the number of authorized investment officials, documentation of transactions and strategies, and code of ethics standards.

15. REPORTING
Under provisions of Section 53607 of the California Government Code, the City Treasurer shall submit a monthly investment report to the City Council.

This report will list the type of investment, institution, date of maturity, amount of deposit, rate of interest, current market value of securities with maturities in excess of 12 months, source of market valuations, and statement of compliance. A schedule of market values maturing by date and type, and such other data as required by the City Council will also be provided.

16. INVESTMENT POLICY ADOPTION
The City Treasurer and Finance Manager shall be responsible for reviewing and modifying this Statement of Investment Policy annually for City Council approval to ensure its consistency with the overall objectives of safety, preservation of principal, and liquidity, and its relevance to current law and current financial and economic conditions.

17. INDEMNIFICATION
Any authorized investment personnel acting with prudence and in accordance with the City Statement of Investment Policy, will not be held personally liable for any investment losses. Through surety bonds the City is indemnified against any investment personnel acting with malfeasance, misfeasance or nonfeasance.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
12 June 2, 2025
City Treasurer Date

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
13 INVESTMENT GUIDELINES AND STRATEGY
I. GUIDELINES
Guidelines are established to direct and control activities in such a manner that previously established goals are achieved.

1. Investment Transaction: Every investment transaction must be authorized and reviewed by the City Treasurer and Finance Manager.

2. Pooled Cash: Whenever practical, cash is consolidated into one bank account and invested on a pooled concept basis. Interest earnings are allocated quarterly to each fund according to fund actual month-end cash balances.

3. Competitive Bids: Purchases and sales of securities are made on the basis of competitive offers and bids when practical.

4. Cash Forecasting: The cash flow for the City is projected with the receipt of revenues and maturity of investments scheduled so that adequate cash will be available to meet disbursement requirements.

5. Investment Limitations: Security purchases and holdings are maintained within statutory limits imposed by the California Government Code. The City's current limits are listed on the following page.

6. Liquidity: The marketability (salability) of a security is considered at the time of purchase, as the security may have to be sold at a later date to meet unanticipated cash demands.

7. Diversification: The portfolio should consist of various types of securities, issuers, and maturities.

8. Evaluate Certificates of Deposit:
a) Certificates of Deposit shall be evaluated in terms of Federal Deposit Insurance Corporation (FDIC) coverage. The City does not purchase Certificates of Deposit in excess of the FDIC coverage amount. b) Negotiable Certificates of Deposit shall be evaluated in terms of the credit worthiness of the issuer, as these deposits are uninsured and uncollateralized promissory notes.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
14 CITY POLICY GOVERNMENT CODE
Portfolio Maximum Portfolio Maximum
PERMITTED INVESTMENTS Limit Maturity Limit Maturity
U.S. Treasury Securities No limit 5 years No limit 5 years U.S. Agency Securities No limit 5 years No limit 5 years Certificates of Deposit (CD) 25% 1 year No limit 5 years Bankers' Acceptances 1 25% 180 days 40% 180 days
Commercial Paper 2 25% 270 days 25% - 40% 270 days
Negotiable CDs 1 25% 5 years 30% 5 years
Medium-term Corporate Notes 2 25% 5 years 30% 5 years
LAIF No limit 3 n/a No limit 3 n/a
California Investment Pools $50 million n/a No limit n/a Local Government Investment PoolsCalTRUST $50 million n/a No limit n/a Money Market Mutual Funds 20% n/a 20% n/a
Municipal Bonds 4 25% 5 years No limit 5 years
1 Individual issuer limit of 10%
2 Individual issuer limit of 10% for Commercial Paper and Medium-term Corporate Notes combined 3
Limit set by LAIF Governing Board is $75 million per individual account. The City maintains two LAIF accounts (City and the Recreation and Park District). 4 Individual issuer limit of 5%
II. STRATEGY
Strategy refers to the ability to manage financial resources in the most advantageous manner.

1. Economic Forecasts: Economic forecasts are obtained periodically from economists and financial experts to assist with the formulation of an investment strategy for the local agency.

2. Implementing Investment Strategy: Investment transactions are executed which conform with anticipated interest rate trends and the current investment strategy plan.

3. Preserve Portfolio Value: The City generally holds investments until maturity to avoid short-term market fluctuations..

III. AUDIT
Annually, the City's external auditors test the City's portfolio for conformance to this policy in relation to the financial statement audit.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
15 INVESTMENT PROCEDURES – INTERNAL CONTROL GUIDELINES
I. OBJECTIVES OF INTERNAL CONTROL
Internal control is the plan of organization and all the related systems established by management's objective of ensuring, as far as practicable:
• The orderly and efficient conduct of its business, including adherence to management policies.
• The safeguarding of assets.
• The prevention or timely detection of errors and irregularities. • The accuracy and completeness of the accounting records. • The timely preparation of reliable financial information.

II. LIMITATIONS OF INTERNAL CONTROL
No internal control system, however elaborate, can by itself guarantee the achievement of management's objectives. Internal control can provide only reasonable assurance that the objectives are met, because of its inherent limitations, including:
• Management's typical and practical requirement that a control be cost-effective. • The focus of most controls on recurring, rather than unusual, types of transactions. • Human error due to misunderstanding, carelessness, fatigue or distraction of functions.
• The potential for a person responsible for exercising control abusing that responsibility.
• Frequently, a member of management may be in a position to override controls which management has set up.
• Collusion, where two or more employees conspire to circumvent controls.

III. ELEMENTS OF INTERNAL CONTROL
Elements of a system of internal control are the means by which an organization can satisfy the objectives of internal control. These elements are:
• ORGANIZATION: Specific responsibility for the performance of duties should be assigned and lines of authority and reporting clearly identified and understood. • PERSONNEL: Personnel should have capabilities commensurate with their responsibilities. Personnel selection and training policies, together with the quality and quantity of supervision, are essential.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
16 • SEGREGATION OF FUNCTIONS: Segregation of incompatible functions reduces the risk that a person is in a position both to perpetrate and conceal errors or irregularities in the normal course of duty. If different people handle two parts of a transaction, collusion is necessary to conceal errors or irregularities. In particular, the functions that should be considered when evaluating segregation of functions are authorization, execution, recording, custody of assets, and performing reconciliations.
• AUTHORIZATION: An appropriate responsible individual should authorize all transactions. The responsibilities and limits of authorization should be clearly delineated. The authorization for a specific transaction or the granting of authority for transactions should be to a position commensurate with the significance of the transactions. Delegation of authority to authorize transactions should be handled carefully.
• CONTROLS OVER ACCOUNTING SYSTEM: Controls over an accounting system include manual and automated procedures carried out independently to ascertain that transactions are complete, valid, authorized and properly recorded.

IV. CASH CONTROLS

1. Cash control procedures include the following:
a. Receipts are reconciled on a daily basis.
b. Amounts are deposited intact.
c. All bank accounts are duly authorized.
d. Bank reconciliations are prepared and reviewed.
e. The posting of cash receipt entries in books is timely. f. Receipt forms are automated, accounted for, and physically secured. g. Proper approval required for write-off of customer accounts. h. Checks are restrictively endorsed upon receipt.
i. Adequate physical security over cash.
j. Individuals who handle cash do not post account records. k. Adequate supervision of Finance Department operations.

2. Significant revenues are confirmed directly with payer and compared with City books to make sure amounts are recorded properly.

3. Cash balances are substantiated by confirming all account balances. Bank reconciliations are reviewed for propriety and recalculated by the auditor. All significant reconciling items on bank reconciliations are verified as valid reconciling items by proving to subsequent bank statements.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2026-275-26
17 SEGREGATION OF RESPONSIBILITIES OF THE TREASURY FUNCTIONS Function Responsibility

1. Authorization of Investment Transactions
A) Formal Investment Policy
Prepared by: Finance Manager/City Treasurer
Approved by: City Treasurer
Adopted by: City Council
B) Investment transactions approved by: City Treasurer
C) Monthly Investment Report
Prepared by: Accountant/Finance Manager
Reviewed by: Finance Manager/City Treasurer
Approved by: City Treasurer
Submitted to: City Council

2. Execution of investment transactions: Finance Manager/City Treasurer

3. Timely recording of investments in Treasurer’s records: Finance Manager/City Treasurer

4. Recording of investments in the accounting records: Accountant/Finance Manager

5. Accounting records approved by: City Treasurer

6. Verification on investment with broker’s records: Accountant/Finance Manager

7. Safeguarding of Assets and Records
A) Reconciliation of Treasurer's records to accounting
records, bank statements and safekeeping records:

Finance Manager/City Treasurer
B) Approved by: City Treasurer
C) Review of financial institution’s financial condition, safety, liquidity, and yield potential of investments:

Finance Manager with City Treasurer approval

8. Wire Transfer Control Procedures
A) Written amount, account and authorization agreement: Requesting Department B) Dual-approval required for all wire transfers: Finance Manager/City Treasurer

9. Annual review of investment portfolio prepared by Finance Manager/City Treasurer, including investment types,
purchase price, market values, maturity dates, yields, and safekeeping reports:

Independent Auditors for Financial Statements

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2025-266-27
18 GLOSSARY OF INVESTMENT TERMINOLOGY
Bankers' Acceptances: Short-term debt instruments issued by a company and guaranteed by a commercial bank. They are time drafts in which a bank accepts the obligation to pay the principal and interest at maturity even if the issuer does not. Essentially, these are bank obligations collateralized by goods being shipped between an exporter and importer. The date of maturity typically ranges between 30 and 180 days. The City may not invest more than 25% of its surplus money in Bankers' Acceptances with each issuer limited to 10%.

Basis Point: One one-hundredth of one percent, or 0.01%. Basis points are often used to describe changes in yields on bonds and notes.Bid Price: The price at which a buyer offers to buy a security.

Certificates of Deposit (CD): A deposit of funds at a bank for a specified period of time that earns interest at a specified rate. The City does not purchase Certificates of Deposit that are not FDIC insured. The City may invest up to 25% of its surplus money in insured CD's with maturities of one year of less.

Collateral: Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public funds.

Commercial Paper: Short-term unsecured promissory notes issued by a corporation to raise working capital. These negotiable instruments are typically purchased at a discount to par value or at par value with interest bearing. Local agencies are permitted by State law to invest in Commercial Paper of the highest ranking or of the highest letter and numerical rating as provided by a nationally recognized statistical rating organization (NRSRO). Purchases of eligible Commercial Paper may not exceed 270 days maturity, nor exceed 25% of the City's surplus funds.

Furthermore, the City may invest no more than 10% of its total portfolio in the commercial paper and medium-term corporate notes of any single issuer at the time of purchase.

Coupon: The annual rate of interest a bond’s issuer promises to pay the bondholder on the bond’s face value.

Credit Risk: The risk to an investor that an issuer will default in the payment of interest and/or principal on a security.

Commented [SS4]: Removed duplicate policy stances.

Commented [SS5]: Removed immaterial terms.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2025-266-27
19 Delivery Versus Payment (DVP): A procedure for settling investment transactions in which the delivery of the security by the seller and the payment for the security by the buyer happen simultaneously by a third-party safekeeping agent. This practice ensures no funds are at risk in an investment transaction as funds are not released until securities are delivered.

Discount: The difference between the par value of a bond and the cost of the bond, when cost is below par. Some short-term securities, such as Treasury bills and bankers acceptances, are known as discount securities. They sell at a discount from par and return par value to the investor at maturity, without additional interest. Other securities trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.

Duration: A measure of the timing of cash flows, such as the interest payments and the principal repayment, to be received from a given fixed-income security. This calculation is based on three variables: term to maturity, coupon rate, and yield to maturity. The duration of a security is a useful indicator of its price volatility for given changes in interest rates.

Federal Funds Rate: Interest rate charged by banks with excess reserves at a Federal Reserve bank to banks needing overnight loans to meet reserve requirements.

Interest: The amount earned while owning a security, generally calculated as a percentage of the principal amount.

Investment Trust of California (CalTRUST): A Joint Powers Agency Authority created by local public agencies to deposit funds for investment. CalTRUST is authorized as an investment under California Government Code Section 53601(p). While there is no maximum balance imposed by CalTRUST, the City has established a $50 million limit. CalTRUST offers varying degrees of liquidity, with the short-term option providing that deposits can be converted to cash in 24 hours. Interest is distributed to those agencies participating on a per share basis determined by the amounts deposited and the length of time they are deposited. Interest is paid monthly. CalTRUST retains a portion of the earnings for administrative costs, ranging between 12 and 20 basis points.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2025-266-27
20 Local Agency Investment Fund (LAIF): A voluntary investment alternative for local governments and special districts authorized by California Government Code Section 16429.1 et seq. There is no minimum investment period and the minimum transaction is $5,000. Each LAIF account is limited to 15 transactions per month and subject to a maximum balance, currently set by the State Treasurer at $75 million, but subject to change. LAIF offers high liquidity because deposits can be converted to cash in 24 hours with no interest lost. Interest is distributed to those agencies participating on a per share basis determined by the amounts deposited and the length of time they are deposited. Interest is paid quarterly. The State retains a portion for administrative costs, not to exceed five percent of the quarterly earnings.

The pooling of the State's surplus cash with the participant's surplus cash creates a multi-billion dollar money pool and allows diversified investments. In a high interest rate market, the City may do better than LAIF however, in times of low interest rates, LAIF’s yields tend to be higher. The City invests in the Local Agency Investment Fund, whose Investment Policy allows investments in securities not specifically authorized by the City's Investment Policy. However these investments by LAIF are allowable under the California Government Code.

Market Risk: The possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets. Market risk is also known as undiversifiable risk because it affects all asset classes and is unpredictable.

Market Value: The price at which a security is trading and could presumably be purchased or sold.

Maturity: The date upon which the principal or stated value of an investment becomes due and payable.

Medium Term Corporate Notes: Unsecured promissory notes issued by a corporation organized and operating in the United States. These are negotiable instruments traded in the secondary market. Medium Term Corporate Notes can be defined as extended maturity Commercial Paper. Local agencies are restricted by the Government Code to investments in corporations rated in the top three note categories by an NRSRO, five year maximum maturity and may not exceed 30% of surplus funds. The City's restrictions are a maximum term of five years to maturity and total investments in Medium Term Corporate Notes may not exceed 25% of the City's surplus funds. Furthermore, the City may invest no more than 10% of its total portfolio in the commercial paper and medium-term corporate notes of any single issuer at the time of purchase.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2025-266-27
21 Municipal Bonds: Debt securities issued by a state or local government or governmental entity.

Nationally Recognized Statistical Rating Organization (NRSRO): A credit rating organization that provides an assessment of the creditworthiness of a firm or financial instrument(s), and is registered with the Securities and Exchange Commission.

Negotiable Certificates of Deposit: Unsecured obligations of the financial institution, bank or savings and loan, bought at par value with the promise to pay face value plus accrued interest at maturity. They are high-grade negotiable instruments, paying a higher interest rate than regular certificates of deposit. The primary market issuance is in multiples of $1,000,000, the secondary market usually trades in denominations of $500,000, and smaller lots are occasionally available. As a matter of practice, only the ten largest US banks, where there is a secondary market established for continued liquidity, are considered for investment.

Purchases of Negotiable Certificate of Deposit may not exceed 25% of the City's surplus funds and five years to maturity. The City may invest no more than 10% of its total portfolio in the negotiable certificates of deposit of any single issuer.

Offer Price: The price asked by a seller of securities.Par Value: The face value of a bond.

Principal: The face value or par value of an investment.

Safekeeping: Storage and protection of a customer’s financial assets, provided as a service by an institution serving as Agent or Custodian and, where control is delegated by the customer.

Settlement Date: The date on which an investment trade/purchase is finalized, cash/assets are exchanged and all parties take possession of the securities/assets agreed-upon in the terms of the trade/purchase.

U.S. Government Agency Securities: Debt securities issued or guaranteed by U.S. federal government agencies, or bonds issued by government-sponsored enterprises (GSEs). GSEs are corporations created by Congress to foster a public purpose. Bonds issues or guaranteed be federal agencies, such as the Government National Mortgage Association, are backed by the full faith and credit of the U. S. government. Bonds issued by GSEs, such as the Federal Nation Mortgage Association, are not backed by the same guarantee as federal government agencies.

CITY OF CYPRESS

STATEMENT OF INVESTMENT POLICY
FISCAL YEAR 2025-266-27
22 U.S. Treasury Bills: Direct obligations of the United States Government issued weekly with maturity dates up to one year. They are issued and traded on a discount basis with interest calculated on a 360-day basis and actual invested days, and paid at maturity. They are a highly liquid security. An unlimited amount of the City’s portfolio may be invested in US Treasury Bills.

U.S. Treasury Notes: Direct obligations of the United States Government with original maturities of two to ten years. Notes are actively traded in a large secondary market and are very liquid. Interest is paid every six months until maturity. An unlimited amount of funds may be invested in US Treasury Notes with maximum terms of five years. The term may be extended if authorized by the City Council.

Yield: The rate of annual income return on an investment, expressed as a percentage.

CITY OF CYPRESS

CAPITAL ASSET POLICY

PURPOSE
To ensure adequate control and appropriate use of City capital assets.

OVERVIEW
In accordance with the City’s Charter, the capitalization threshold for capital improvements including buildings, improvements, and infrastructure with a probable life in excess of ten years is $10,000. Buildings and improvements and infrastructure meeting the threshold are assigned a tracking number and are capitalized and depreciated the year after it has been placed in service.

Beginning July 1, 2025, the capitalization threshold for all other tangible and intangibles assets is $5,000 and a useful life of more than two years. Assets previously added but not disposed under lower thresholds will remain part of the capital asset portfolio until disposed.

Costs that are included in the capitalized basis are:

1. Original price, less discounts including design and construction necessary to bring the asset to its intended use

2. Freight, or other carriage charges

3. Sales, use and transportation taxes

4. Installation costs

5. Additional costs necessary to get the asset ready for use (i.e., light bars for police vehicles, truck bed/toolbox for a Maintenance truck, fixtures in buildings, etc.)

CATERGORES OF CAPITAL ASSETS
 Land includes all investments in real property, excluding buildings and improvements. Land is recorded at cost and capitalized as an asset, but it is not depreciated due to the inexhaustible nature of this type of asset.  Land Improvements are non-building assets that add value to the land but have limited useful lives. Examples of depreciable land improvements include parking lots, driveways, fences, retaining walls, irrigation systems, recreation areas, athletic fields and courts, and play structures.

City of Cypress Capital Asset Policy
2  Buildings are permanent structures used for operating purposes. If practical highcost components, such as elevators, HVAC systems, and roofs, are recorded separately to simplify future replacement transactions, because their useful lives can differ from those of buildings.
 Building improvements are additions or improvements to buildings that increase value or extend the useful life of a building. Examples include lighting fixtures, roofs, replacing HVAC systems, major energy conservation projects, and upgrading plumbing or electrical systems.
 Machinery and Equipment include moveable personal property such as machines, guns, tools, furniture, office trailers, computers, phone systems, and copy machines.
 Intangible assets are financial assets that lack physical substance, such as easements, rights-of-way, and computer software. Computer software will be subject to the rules of the Governmental Accounting Standard Board (GASB) Statement No. 96.
 Lease assets is a contract that conveys control of the right to use assets (like land, building, or equipment) for a period in an exchange like transaction. Lease assets are subject to the rules of GASB Statement No. 87.
 Vehicles include any licensed or unlicensed motor vehicle. Historical cost includes the purchase price plus registration, taxes, delivery fees, and outfitting costs.  Infrastructure includes bridges, traffic control devices, pavement, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, traffic signals, and sewer lines.
 Inventoried assets relate to equipment that has an original cost of less than $5,000 and has a useful life of greater than one (1) year. These assets may require inventory control due to susceptibility to theft or misplacement.

DEPRECIATION AND USEFULL LIFE
Straight-line method of depreciation. The original cost of the asset is used as the capitalization basis, divided by the estimated useful life of the asset which yields annual depreciation. The City’s policy is to charge the first year of depreciation the year after the asset has been placed in service.

The City will review estimated useful lives periodically to determine if they are still reasonable. Based on this review, the estimated useful life of a particular asset may be revised at the Director of Finance and Administrative Services discretion to better reflect current trends.

City of Cypress Capital Asset Policy
3 Asset Type Estimated
Useful Life
Capitalization
Threshold
Land N/A -
Land Improvements 10-40 $10,000
Buildings 40 $10,000
Building Improvements 10-40 $10,000
Machinery and Equipment
Computer Equipment 3-5 $5,000
Guns 3 $5,000
Large Tools and Furniture 10 $5,000
Office Equipment 5 $5,000
Intangible Assets (Subscriptions Assets) 2-10 $5,000
Lease Asset 2-10 $5,000
Vehicles
Standard Vehicles 5-8 $5,000
Marked Police Vehicles 5 $5,000
Heavy Duty Vehicles 10 $5,000
Infrastructure
Bridges 65 $10,000
Electronic Traffic Control Devices 20 $10,000
Medians 40 $10,000
Pavement, Curbs, Gutters, & Sidewalks 35 $10,000
Sewer 60 $10,000
Storm Drain System 60 $10,000
Streetlights 20 $10,000

ASSET SURPLUS AND DISPOSAL
Normally, assets become surplus when they are no longer in use or become obsolete or worn out.

Surplus assets are physically removed from the department and put into storage at a designated City location. Surplus assets can be transferred to another department to be put back into service, or they can be disposed of later.

City of Cypress Capital Asset Policy
4 All departments are required to prepare a list of all surplus assets on an annual basis as part of the budget process. However, on an individual and as needed basis, a department head may request the surplus/disposal of specific assets.

A Fixed Asset Status Change Form must be completed and approved by the department head whenever changes to an asset’s status are to be made. This form will include the ID # of the asset, type of status change being made (surplus or disposal), and why the change is being made.

The standards set forth below for the surplus/disposing of City assets will not apply to real property (land or buildings and improvements) or unclaimed property held by the Police Department.

DISPOSAL
Once it is determined that a surplus asset will be disposed of, there are several methods by which the city can dispose of these assets. The preferred method used to dispose of surplus assets will be determined by the purchasing officer and will be the method which proves most advantageous to the city in accordance with Section 21A-15 of the municipal code.

LOST OR STOLEN ASSETS
In the case of lost or stolen assets, it is the responsibility of the assigned department to advise the Director of Finance and Administrative Services. The department assigned the lost or stolen asset is required to complete a Fixed Asset Status Change Form, with detailed information on the asset, as well as any details on the loss and/or theft. In addition, departments are responsible for filing a police report for all lost or stolen assets, if applicable.

CITY OF CYPRESS

BUDGET POLICY

Page 1 of 4 ends

PURPOSE
The purpose of this policy is to establish guidelines for the preparation, adoption, and presentation of the City’s annual budget. The budget shall provide a complete financial plan of all City funds and activities for the ensuing fiscal year.

DEFINITIONS
Non-Recurring Expenditures: Comprise special projects such as capital improvements, asset acquisitions, and other costs incurred infrequently by the City.

Non-Recurring Revenue: Revenues that are one-time in nature and cannot be reasonably expected to continue year-to-year.

Recurring Expenditures: In general, recurring expenditures are those that the City expects to fund every year in order to maintain current service levels. Examples include salaries, benefits, rent, utilities, maintenance costs and certain contracted services.

Recurring Revenues: The portion of the City’s revenues that can reasonably be predicted to continue year-to-year, with some degree of predictability.

Structurally Balanced Budget: A budget is structurally balanced if it does not spend more on ongoing services than it receives in ongoing revenues.

DELEGATION OF AUTHORITY
The budget is prepared by the Finance Department with the support of each operating department under the direct supervision of the City Manager. The Finance Department is responsible for coordinating all revenues estimates contained in the budget. Estimates are reached by analyzing historical revenue history, national and local economic trends and indices, and development patterns in the local economy. The Finance Department also coordinates the development of the expenditure budgets with the support of each operating department and the City Manager.

LONG-RANGE FINANCIAL PLAN
The City’s financial situation and projected future status are important factors in the financial and economic decisions the City Council may make. To support the City’s budgetary planning and financial decision-making process, the City needs to analyze its financial situation and the key factors impacting its economic and financial status.

At a minimum, the proposed annual budget should include a three-year General Fund surplus/(shortfall) projection (the fiscal year plus two additional years). Major assumptions should be identified.

City of Cypress Budget
Policy

REVENUES
The City shall design, maintain and administer a revenue system that will assure a reliable, equitable, diversified and sufficient revenue stream to support desired City services.

EXPENDITURES
The City shall identify priority services, establish and define appropriate service levels and administer the expenditure of available resources to assure fiscal stability and the effective and efficient delivery of services.

INTERNAL SERVICES CHARGES
The City will strive to include depreciation of equipment, furnishings and computer software in the service charges paid by departments to the equipment replacement funds. This will permit the accumulation of cash to cost effectively replace these assets and smooth out budgetary impacts. However, these amounts may be budgeted for less than depreciation to maintain a structurally balanced budget.

STRUCTURALLY BALANCED BUDGET
A structurally balanced budget is a necessary component of good financial management and financial discipline and will help sustain the consistent delivery of services to residents.

An unbalanced budget (spending more than is received) undermines the City’s ability to deal with financial problems. It may lead to reduced services in the future and inhibit the City’s ability to take advantage of opportunities that will periodically occur.

The budget for the General Fund will be structurally balanced for the fiscal year. A structurally unbalanced budget will include an explanation and describe the expected approach and time frame for achieving structural balance within the context of official revenue and expenditure projections. It is not a violation of this policy to have a planned use of funds available to fund one-time items, including capital, equipment, land or transitional costs for operations (starting up or termination of a service element). It is also not a violation of this policy to use funds previously set aside to mitigate temporarily higher costs or lower revenues.

In order to achieve a structurally balanced budget, the City should consider the following:
 Nonrecurring revenues and reserves should not be used to fund employee compensation.
 While capital assets are often funded with non-recurring revenues, the City shall be observant of the long-term operating and maintenance costs of such purposes, to prevent the creation of new on-going expenditures that cannot be maintained by recurring revenues.

City of Cypress Budget
Policy
 The City shall prioritize the use of non-recurring revenues to replace current assets that have outlived their useful lives over the purchase of entirely new assets, where the replacement of the expired or obsolete assets is critical to the maintenance of the City’s core programs. A replacement schedule for such assets is a good indicator of when to budget for these items.

ONE-TIME RESOURCES WILL BE USED ONLY FOR ONE-TIME PURPOSES One-time resources are revenues that only occur once, for a very limited time, or are too unpredictable or unstable to fund operations. One-time revenues may include the variable portion of some revenue sources that have highly variable components. One-time revenues are not suited to fund ongoing operations because they are not available in the future or cannot be relied on from year-to-year to pay the ongoing costs of operations.

One-time resources will not be used to fund ongoing operations. They will be used for onetime uses, including capital and other one-time expenditures, transitional funding of operations (for a limited time-period with a planned ending date), increasing reserves, or paying down unfunded liabilities.

BUDGET PROCESS
The City’s fiscal year begins each July 1st and concludes on June 30th. The development of the annual budget is comprised of distinct phases and requires a great deal of effort on the part of the City Council and all members of the City’s management team.

1. The budget process shall start with a review of the City’s Strategic Plan by City Council.

This review establishes the goals and objectives for the upcoming budget cycle.

Following that, the long-range financial plan shall be updated.

2. Budget Calendar is developed and presented to City Council.

3. An internal budget kick-off meeting shall be held to review the technical and procedural aspects of preparing the budget.

4. Departments may then prepare their line-item budgets. Once the initial line-item requests are compiled, Finance staff shall work with the City Manager and departments to review the requests and gain a high-level understanding of the challenges facing the City and specific departments, including gaps between revenues and expenditures.

5. Budget review meetings may be held with each department to discuss the proposed budgets, including increases, reductions, or other significant changes, goals and objectives, and supplemental requests.

6. In accordance with the City’s Charter, the Manager shall submit the proposed budget to City Council by May 31st each year.

City of Cypress Budget
Policy

AMENDMENTS
In accordance with the City’s Charter, the Manager may transfer part or all of any unencumbered appropriation balance among programs within a department, office, or agency and, upon written request by the Manager, the Council may by resolution transfer part or all of any unencumbered appropriation balance from one department, office, or agency to another.

REPORTING
Monthly: A revenue/expenditure report will be produced monthly so that it can be directly compared to the actual results of the fiscal year to date.

Quarterly: Each quarter, staff will produce a “Quarterly Financial Report” comparing current year to past year actual revenue and expenditure and present the data to City Council.

POLICY ADOPTION
The Director of Finance & Administrative Services shall be responsible for reviewing and modifying this Policy annually for City Council consideration to ensure its consistency with the overall objectives and its relevance to current law and current financial and economic conditions.

CITY OF CYPRESS

FUND BALANCE RESERVE POLICY

Page 1 of 3 ends

PURPOSE
The purpose of this policy is to establish the level of unrestricted fund balance that should be maintained in the general fund for GAAP and budgetary purposes and to and articulate a framework and process for how the city will increase or decrease the level of unrestricted fund balance over time.

DEFINITIONS
Non‐spendable Fund Balance: Inherently non-spendable portions of net resources that cannot be spent because of their form or portions of net resources that cannot be spent because they must be maintained intact.

Restricted Fund Balance: Externally enforceable limitations, on the use of funds, that are imposed by creditors, grantors, contributors, or laws and regulations of other governments or limitations imposed by law through constitutional provisions or enabling legislation. Debt Service fund balance will be designated as restricted.

Committed Fund Balance: Self-imposed limitations, on the use of funds, that are set in place prior to the end of a period. Limitations imposed at highest level of local decision making that requires formal action at the same level to remove. Capital Project fund balances typically will consist of funds designated by City Council for future capital improvement projects.

Assigned Fund Balance: Limitations resulting from intended use that are established by the highest level of decision making or intended use established by the City Council for a specific purpose. The resources for these funds may be acquired through the budgeting process or funds that are deposited with the city for specific purposes. Special Revenue fund balances typically consist of funds assigned by other governmental agencies for specific use or by the City Council specific use.

Unassigned Fund Balance: Residual net resources that make up the fund balance in the general fund more than nonspendable, restricted, committed, and assigned fund balance (i.e., surplus) or excess of nonspendable, restricted, and committed fund balance over total fund balance (i.e., deficit). The General operating fund balance typically will consist pf unassigned funds for use by the City Council.

DELEGATION OF AUTHORITY
The Director of Finance and Administrative Services is responsible for monitoring reserve levels and reporting current and projected reserves during each budget development cycle.

City of Cypress Fund Balance Reserve
Policy

GENERAL FUND RESERVES
The City shall maintain a Committed Fund Balance of twenty-five percent (25%) of operating expenditures in the General Fund. This fund balance is intended to provide stability in the event of unexpected changes to revenues or expenses. The Committed Fund Balance shall mean the dollar amount of unencumbered fund balance, excluding any amounts held in reserves or otherwise committed funds. The total operating budget for the most recent fiscal year—excluding capital expenditures and transfers out—shall be used to calculate the percentage of operating expenditures.

At the end of the fiscal year, the excess unassigned fund balance in the City's General Fund will be prioritized and presented for City Council consideration as follows:

1. Twenty-five percent (25%) shall stay in the General Fund Balance as unassigned fund balance for unforeseen appropriations that may arise throughout the fiscal year.

2. Up to twenty-five percent (25%) will be transferred to the Employee Benefits Fund until a fund balance reserve is established and maintained equal to current liabilities.

3. Up to fifteen percent (15%) will be transferred to the Self-Insurance Funds - General Liability and Workers Compensation Funds until a fund balance reserve is established to cover the long-term liabilities due within one year (claims payable).

4. The remaining balance will be transferred to Capital Funds: Infrastructure Reserve Fund, Capital Outlay, and Information Technology Replacement.

Replenishment of General Fund Reserves
If the General Fund balance falls below policy reserves as defined above, the City Manager shall prepare and present to the City Council a recommended plan to replenish the reserves.

The City Council shall review and adopt a replenishment plan within twelve months after the policy reserve levels first fall below the minimum levels. Once adopted, the replenishment plan's progress will be reviewed periodically with the City Council but no less than every calendar year until such time as the reserves are replenished to or above the target levels described above.

Conditions for Using General Fund Reserves
The City shall endeavor to avoid the appropriation of fund balance for recurring operating expenditures. If at any time the utilization of a fund balance to pay for operating expenditures is necessary to maintain the quality or a defined level of services, an explanation of the circumstances for the utilization of fund balance and demonstration of strategy through the long-term financial model on future fund balance targets will be included in the budget transmittal letter prepared by the Mayor in the Proposed Budget and deliberated by the City Council.

Reserves may be used at the discretion of the City Council to:

City of Cypress Fund Balance Reserve
Policy

1. Provide temporary resources in the event of an economic downturn while expenditure reductions are implemented or alternate sources of revenue are determined;

2. Provide resources to meet emergency expenditures in case of flood, fire, earthquake, landslides or other catastrophic failures; or

3. Provide resources for one-time capital outlay expenditures which include capital equipment as part of the capital improvement plan.

INFRASTRUCTURE FUND RESERVE
The City shall maintain a Committed Fund Balance of thirty percent (30%) of the total sevenyear capital improvement program that is funded by the general fund, plus encumbrances in the Infrastructure Reserve Fund.

CITY OF CYPRESS
CITY COUNCIL REPORT
City Council Regular 16.

FROM: Nick Mangkalakiri, Director of Public Works
DATE: 04/28/2026
SUBJECT: Approve Agreement with the County of Orange for Municipal Solid Waste Disposal Services and Receive the Annual Solid Waste Franchise Consumer Price Index Rate Adjustment

RECOMMENDATION

1. Approve the proposed Waste Infrastructure System Enterprise (WISE) Agreement with the County of Orange for municipal solid waste disposal rates and services; and

2. Authorize the City Manager to execute the agreement and make minor modifications, as necessary; and

3. Receive the annual solid waste franchise Consumer Price Index rate adjustment.

SUMMARY
The proposed Waste Infrastructure System Enterprise (WISE) Agreement with the County of Orange establishes a new long-term framework for solid waste disposal, ensuring continued landfill access at negotiated rates that are phased in over the first three years.

Consistent with the City’s franchise agreement, the annual rate adjustment effective July 1, 2026 includes both standard consumer price index (CPI) based increases and the pass-through of higher County disposal fees, resulting in a $5.80 per month increase for residential service (to $31.05) and $23.97 per month for commercial service (to $198.17), with most of the increase driven by County rates. Approval of the agreement maintains favorable pricing compared to non-participating agencies, avoids higher disposal costs, and has no impact on the City’s General Fund.

DISCUSSION
Background
Background
The County of Orange (County), through Orange County Waste and Recycling (OCWR), operates the County-owned landfill system, which consists of three active landfills and approximately 20 inactive sites. Since 1997, Orange County cities have participated in the Waste Disposal Agreement (WDA), which provides guaranteed landfill capacity and disposal rates at least 10 percent below those charged to non-contract customers. The WDA has been amended periodically, most recently through a one-year extension in 2025.

As the WDA nears expiration, OCWR has developed a successor agreement, known as the Waste Infrastructure System Enterprise (WISE) Agreement. The Orange County City Managers Association (OCCMA), representing cities and special districts that utilize the landfill system, initiated negotiations with the County in late 2024. As part of this process, the parties secured a one-year extension of the WDA through June 30, 2026, including a rate adjustment in accordance with the existing agreement, to allow additional time to finalize negotiations on the WISE Agreement.

County Increased Rate and Impact
The current WDA limits annual rate increases to the Consumer Price Index (CPI) and does not fully account for increasing operational, regulatory, and environmental compliance costs. OCWR has indicated that additional capital investment is necessary to fund the closure of the Brea Olinda Landfill and to significantly expand capacity at the landfill in San Juan Capistrano over the proposed 10-year term.

OCWR’s initial WISE proposal included a substantial rate increase, from $43.76 per ton to $82.00 per ton in the first year, with projected increases to nearly $107.00 per ton by 2035.

Through negotiations, OCCMA secured agreement on a phased rate structure for the first three years of the term. Beginning in FY 2029–30, annual rate adjustments will include a CPI-based increase.

Fiscal Year Contract Disposal Rate
Current $43.76/ton
2026–27 $67.00/ton
2027–28 $74.00/ton
2028–29 $81.00/ton

WISE Agreement Components
While disposal rates were the primary focus of negotiations, OCCMA also secured several key provisions in the WISE Agreement, including:

Implementation of an annual “true-up” process beginning in 2030, which may suspend CPI-based rate adjustments based on OCWR’s cost recovery and tonnage revenue.

The provision also allows cities to initiate a meet-and-confer process, with review by an independent consultant.

Enhanced transparency measures, including ongoing review and annual notification requirements to ensure continued OCCMA participation and oversight of OCWR’s financial condition and WISE implementation.

Removal of provisions that would have made cities financially responsible for hauler non-payment.

Elimination of the requirement that all residential organic waste be delivered to OCWR Elimination of the requirement that all residential organic waste be delivered to OCWR facilities; instead, the County will offer optional organic waste processing services.

Cities must approve the WISE Agreement by April 30, 2026, to avoid disposal rates that may be up to 10 percent higher. In addition, jurisdictions representing at least 50 percent of the total waste disposed at County landfills must ratify the agreement to meet the required participation threshold. The proposed term of the agreement is ten years, through June 30, 2036, with one optional ten-year extension.

Annual Solid Waste Franchise Rate Adjustment
The City’s solid waste franchise agreement with Valley Vista Services (VVS) expressly authorizes an annual rate adjustment effective July 1 of each year. This adjustment is calculated based on a weighted average of component indices, including the published Consumer Price Index (CPI), the County landfill disposal rate, and the recycling and transfer facility gate fee for green waste processing.

In addition, the franchise agreement provides that landfill disposal costs charged by OCWR are treated as a direct pass-through expense. The City does not retain or apply any markup to these costs. Accordingly, increases in disposal rates, such as those established under the WISE Agreement, are incorporated into the hauler’s cost structure and reflected in customer service rates, as permitted under the franchise.

Taking into account the authorized annual CPI rate adjustment and the updated County disposal rates under the WISE Agreement, the resulting rate adjustment effective July 1, 2026, is as follows:

Fiscal Year Residential Rate
(monthly)*
$ Increase
per month
Commercial Rate
(monthly)*
$ Increase
per month
2025-26 Current $25.25 - $174.20 -
2026–27 (actual) $31.05 $5.80 $198.17 $23.97
2027–28 (est.) $32.84 $1.79 $207.07 $8.90
2028–29 (est.) $34.61 $1.77 $215.95 $8.88
Note: Rates assume an annual CPI increase of 3% for FY 2027-28 and FY 2028-29. Rates do not include the City services charge of approximately $4.75 (organics fee, city compliance fee, street sweeping).
* Residential rates are based on single family standard set of refuse, recycling, and green waste carts. Commercial rates are based on 3yd bin for trash (1x weekly service).

Beginning in July, residential VVS rates will increase by $5.80 to $31.05 per month, with approximately $5.33 of the increase attributable to the new County rates and the remaining $0.47 reflecting the annual CPI adjustment. Similarly, the average commercial VVS rate for a three-cubic-yard dumpster serviced once per week will increase by $23.97 to $198.17 per month, of which approximately $19.89 is attributable to the new County rates and $4.08 reflects the annual CPI adjustment.

The franchise requires VVS to prepare and distribute a notice to customers within 60 days of the effective date of a rate change.

Alternatives
Do not approve the WISE Agreement. This alternative is not recommended as the City’s landfill access would be charged higher rates than contained in the proposed agreement, translating into even higher rates for residential (up to $36.68/month) and commercial customers (up to $219.18/month).

BUDGET IMPACT
The WISE Agreement has no impact to the City’s General Fund. Per the solid waste franchise, VVS is permitted to recover increased disposal costs through a pass-through mechanism subject to review and approval by the City.

LEGAL REVIEW
The City Attorney has reviewed and approved the agreement as to form.

APPROVED BY: Shannon DeLong, City
Manager
Attachments
Waste Infrastructure System Enterprise Agreement with the County of Orange VVS Annual Rate Adjustment
2025 Trash Rate Survey

WASTE INFRASTRUCTURE SYSTEM ENTERPRISE AGREEMENT
(“WISE AGREEMENT”)
Between

THE COUNTY OF ORANGE, CALIFORNIA
and
the

CITY OF CYPRESS
Dated April 28, 2026
County Authorization Date: City Authorization Date:

April 28, 2026
County Notice Address:

Director
OC Waste & Recycling
601 N. Ross Street 5th Floor
Santa Ana, CA 92701
City Notice Address:

City Manager
City of Cypress
5275 Orange Avenue
Cypress, CA 90630

TABLE OF CONTENTS
Page

ARTICLE I

DEFINITIONS AND INTERPRETATION
Section 1.1 DEFINITIONS ................................................................................................................................. 2 Section 1.2 INTERPRETATION ........................................................................................................................ 7

ARTICLE II

REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY........................................................ 8 Section 2.2 REPRESENTATIONS AND WARRANTIES OF THE COUNTY ................................................ 9

ARTICLE III

DELIVERY AND ACCEPTANCE OF WASTE AND PROVISION OF DISPOSAL SERVICE Section 3.1 DELIVERY OF WASTE ................................................................................................................. 9 Section 3.2 PROVISION OF DISPOSAL SERVICES BY THE COUNTY. ................................................... 11 Section 3.3 COUNTY RIGHT TO REFUSE WASTE...................................................................................... 12 Section 3.4 UNINCORPORATED AREA ACCEPTABLE WASTE............................................................... 13 Section 3.5 MISCELLANEOUS OPERATIONAL MATTERS....................................................................... 14 Section 3.6 OTHER USERS OF THE DISPOSAL SYSTEM. ......................................................................... 14 Section 3.7 COUNTY PROVISION OF WASTE DIVERSION SERVICES. ................................................. 15

ARTICLE IV

CONTRACT RATE
Section 4.1 CHARGING AND SECURING PAYMENT OF CONTRACT RATE......................................... 15 Section 4.2 CONTRACT RATE ....................................................................................................................... 15 Section 4.3 RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE........................................... 21 Section 4.4 BILLING OF THE CONTRACT RATE........................................................................................ 21 Section 4.5 RESTRICTED RESERVES ........................................................................................................... 21 Section 4.6 AUDITED FINANCIAL STATEMENTS ..................................................................................... 22 Section 4.7 ANNUAL UPDATE OF TEN-YEAR FINANCIAL PROJECTION ............................................ 22

ARTICLE V

BREACH, ENFORCEMENT AND TERMINATION
Section 5.1 BREACH........................................................................................................................................ 23 Section 5.2 CITY CONVENIENCE TERMINATION..................................................................................... 23 Section 5.3 TERMINATION. ........................................................................................................................... 23 Section 5.4 NO WAIVERS ............................................................................................................................... 24 Section 5.5 FORUM FOR DISPUTE RESOLUTION...................................................................................... 24

ARTICLE VI
TERM
Section 6.1 EFFECTIVE DATE AND TERM.................................................................................................. 24 Section 6.2 COMMENCEMENT DATE .......................................................................................................... 25

ARTICLE VII

GENERAL PROVISIONS
Section 7.1 OPERATION AND MAINTENANCE OF THE DISPOSAL SYSTEM.......................................26 Section 7.2 UNCONTROLLABLE CIRCUMSTANCES GENERALLY. .......................................................26 Section 7.3 INDEMNIFICATION.....................................................................................................................27 Section 7.4 RELATIONSHIP OF THE PARTIES ............................................................................................27 Section 7.5 LIMITED RECOURSE. .................................................................................................................27 Section 7.6 PRE-EXISTING RIGHTS AND LIABILITIES.............................................................................27 Section 7.7 NO VESTED RIGHTS ...................................................................................................................28 Section 7.8 LIABILITY FOR COLLECTION, TRANSPORTATION AND PROCESSING..........................28 Section 7.9 NO CONSEQUENTIAL OR PUNITIVE DAMAGES ..................................................................28 Section 7.10 AMENDMENTS ............................................................................................................................28 Section 7.11 NOTICE OF LITIGATION ............................................................................................................28 Section 7.12 FURTHER ASSURANCES............................................................................................................28 Section 7.13 ASSIGNMENT OF AGREEMENT ...............................................................................................28 Section 7.14 INTEREST ON OVERDUE OBLIGATIONS ...............................................................................28 Section 7.15 BINDING EFFECT ........................................................................................................................28 Section 7.16 NOTICES........................................................................................................................................28 APPENDIX 1

ESTIMATED ANNUAL TONNAGE
APPENDIX 2

CUMULATIVE TONNAGE
APPENDIX 3

CUMULATIVE CAPITAL COSTS
APPENDIX 4

FRANCHISE HAULER ACKNOWLEDGEMENT
APPENDIX 5

ORGANIC SERVICES AGREEMENT

WASTE INFRASTRUCTURE SYSTEM ENTERPRISE AGREEMENT
THIS WASTE INFRASTRUCTURE SYSTEM ENTERPRISE AGREEMENT (“WISE Agreement” or “Agreement” are used interchangeably) is made and dated as of the date indicated on the cover page hereof between the County of Orange, a political subdivision of the State of California (the “County”), and the city, special district, or sanitary district designated on the cover page of this Agreement (the “City”). County and City may hereinafter be referred to singularly as “Party” or collectively as “Parties.”.

RECITALS
The County owns, manages and operates a Waste Infrastructure System to manage municipal and solid waste generated within the County of Orange or imported from outside the County pursuant to contractual agreements. The Waste Infrastructure System collectively includes active Class III sanitary landfills (“County Landfills”), resource recovery, recycling and organics programs, infrastructure and operations, closed landfills, and regional household hazardous waste collection centers and other waste management related systems as may be deemed necessary by the County.

The County is also responsible for the long-term management of twenty (20) closed landfills as required under Applicable Law.

County Landfills are used for the management of municipal solid waste pursuant to legislation including but not limited to the California Integrated Waste Management Act of 1989 (Division 30 of the California Public Resources Code) (the “Act”) and the Short-lived Climate Pollutants Reduction Act (“SB 1383”). County Landfills are also subject to other State and federal regulations designed to ensure that landfill operations minimize the impacts to public health and safety and the environment.

Pursuant to Resolution, the County established the Waste Management Enterprise Fund pursuant to Government Code §25261 to ensure that all costs associated with the operation and management of the Waste Infrastructure System are financed by charges imposed for services provided by the Department and are not funded by tax revenue or the County General Fund.

The City, in the exercise of its police power, its powers under the Act, and other Applicable Law, has entered into a franchise or other agreement with or issued permits or licenses to one or more private haulers for the collection, recycling, diversion and disposal of municipal solid waste generated within the City.

A significant portion of municipal solid waste generated within the City historically has been and currently is delivered by such hauler or haulers to the County for disposal in the Disposal System.

Since 1997, the City and the County have provided for the management of municipal solid waste through Waste Disposal Agreements (“WDAs”), wherein the County agreed to provide disposal capacity for waste generated in the City, and the City agreed to deliver or cause the delivery of waste generated in the City to the Disposal System, as more specifically set forth in, and subject to the terms and conditions of the WDAs.

Starting in approximately 2014, the Legislature of the State of California passed several pieces of legislation (“Organics Legislation”) that require significant reductions in the disposal of Organic Waste. The purpose of the Organics Legislation is to mandate organics recycling and curtail the impacts of climate change by reducing greenhouse gas emissions such as methane. In this regard, the decomposition of organic material in the State’s landfills was identified as a significant source of methane that could be reduced.

The County has developed an Organics Infrastructure that is comprised of organic processing facilities to receive and process Organic Waste to support the State’s Organic Legislation goals, promote local recycling, assist local jurisdictions in meeting their organic diversion requirements and correspondingly conserve capacity in the Disposal System and is offering interested Cities the option of participating in the County provided Organic Processing Services pursuant to a separate Organic Services Agreement (“OSA”) as provided in Appendix 5.

In their effort to continue the concepts and purposes outlined in the WDAs and respond to Organics Legislation, the City and the County desire to enter into this Waste Infrastructure System Enterprise Agreement (“WISE Agreement” or “Agreement”), on the terms and conditions set forth herein. The County and City acknowledge that the currently operative WDA shall remain in full force and effect until its expiration or the WISE Agreement Commencement Date, whichever comes first.

The City has determined that the execution of this Agreement by the City will serve the public health, safety and welfare of the City by providing disposal rate stability, predictable and reliable long-term disposal service, and the continuation of sound environmental management.

The County has determined that the execution by the County of this Agreement will serve the public health, safety and welfare by providing a stable, predictable and reliable supply of municipal solid waste and the resulting service payment revenue to the Waste Infrastructure System, thereby enabling the County to plan, manage, operate and finance improvements to the Waste Infrastructure System on a prudent and sound long term, businesslike basis consistent with its legal and regulatory obligations to the State and Federal government.

Official action approving this Agreement and determining it to be in the public interest and authorizing its execution and delivery was duly taken by the County on the County authorization date indicated on the cover page hereof.

Official action approving this Agreement and determining it to be in the public interest and authorizing its execution and delivery was duly taken by the City on the City authorization date indicated on the cover page hereof.

It is, therefore, agreed as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth below.
“Acceptable Waste” means all garbage, refuse, rubbish, Organic Waste and other materials and substances discarded or rejected as being spent, useless, worthless or in excess to the owners at the time of such discard or rejection and which are normally disposed of by or collected from residential (single family and multi-family), commercial, industrial, governmental and institutional establishments and which are acceptable at Class III landfills under Applicable Law.
“Act” means AB 939 the California Integrated Waste Management Act of 1989 (Division 30 of the California Public Resources Code), as amended, supplemented, superseded and replaced from time to time. “Agreement” means this Waste Infrastructure System Enterprise Agreement (“WISE Agreement”) between the County and the City as the same may be amended or modified from time to time in accordance herewith. “Appendix” means an appendix to this Agreement, as the same may be amended or modified from time to time in accordance with the terms hereof
“Applicable Law” means the Act, Organics Legislation, the Orange County Code of Ordinances, CERCLA, RCRA, CEQA, any Legal Entitlement and any federal or State rule, regulation, requirement, guideline, permit, action, determination or order of any Governmental Body having jurisdiction, applicable from time to time to the siting, design, permitting, acquisition, construction, equipping, financing, ownership, possession, operation or maintenance of the Waste Infrastructure System, and the transfer, handling, transportation and disposal of Acceptable Waste, Unacceptable Waste, or any other transaction or matter contemplated hereby (including any of the foregoing which concern health, safety, fire, environmental protection, mitigation monitoring plans and building codes). “CalRecycle” means the California Department of Resources Recycling and Recovery, which is a branch of the California Environmental Protection Agency, and any agency, department or other Governmental Body which succeeds to the duties and powers thereof. CalRecycle oversees the State’s waste management and waste reduction programs. CalRecycle was established in 2010 to replace the California Integrated Waste Management Board and is responsible for the enforcement of legislation and regulations and diversion requirements applicable to the Waste Infrastructure System.
“Capital Costs” means all costs of the Waste Infrastructure System that are classified as capital costs for purposes of the budget of the Department in accordance with procedures established by the County of Orange AuditorController in compliance with the California State Controller’s Manual, including but not limited to all of the categories of costs of the Waste Infrastructure System including but not limited to “Buildings and Improvements, and Infrastructure” (Object Code 4200), “Equipment” (Object Code 4000-4040) and “Intangible” (Object Code 4250- 4299) in the County of Orange – Chart of Accounts, or any successor accounting or reporting system utilized by the County.
“CEQA” means the California Environmental Quality Act, codified in California Public Resources. Code Section 21000 et seq. as amended or superseded, and the regulations promulgated thereunder. “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.

Section 9601 et seq., as amended or superseded, and the regulations promulgated thereunder. “Change in Law” means any of the following events or conditions which has a material and adverse effect on the performance by the parties of their respective obligations under this Agreement (except for payment obligations), or on the siting, design, permitting, acquisition, construction, equipping, financing, ownership, possession, operation or maintenance of the Waste Infrastructure System or other matters to which Applicable Law applies:
(1) the enactment, adoption, promulgation, issuance, material modification or written change in administrative or judicial interpretation on or after the Commencement Date of any Applicable Law (other than Applicable Law enacted by the County); or
(2) the order or judgment of any Governmental Body (other than the County), on or after the Commencement Date, to the extent such order or judgment is not the result of willful or negligent action, error or omission or lack of reasonable diligence of the County or of the City, whichever is asserting the occurrence of a Change in Law; provided, however, that the contesting in good faith or the failure in good faith to contest any such order or judgment shall not constitute or be construed as such a willful or negligent action, error or omission or lack of reasonable diligence; or
(3) the denial of an application for, delay in the review, issuance or renewal of, or suspension, termination, interruption, imposition of a new or more stringent condition in connection with the issuance, renewal or failure of issuance or renewal on or after the Commencement Date of any Legal Entitlement to the extent that such denial, delay, suspension, termination, interruption, imposition or failure materially and adversely interferes with the performance of this Agreement, if and to the extent that such denial, delay, suspension, termination, interruption, imposition or failure is not the result of willful or negligent action, error or omission or a lack of reasonable diligence of the County or of the City, whichever is asserting the occurrence of a Change in Law; provided, however that the contesting in good faith or the failure in good faith to contest any such denial, delay, suspension, termination, interruption, imposition or failure shall not be construed as such a willful or negligent action, error or omission or lack of reasonable diligence; or (4) any new or revised requirements or fees relating to the funding or provision of Waste Infrastructure Services, including but not limited to, Integrated Waste Management Act Fees, Host Fees, regulations for disposal operations, organics processing and diversion, recycling initiatives or activities associated with the remediation, closure, funding or monitoring of closed landfills with respect to facilities comprising the Waste Infrastructure System, or facilities which the County previously utilized to provide waste disposal, transfer, recycling, processing or other waste related activities. “City” means, as applicable, the City (general law, charter or other), Special District or Sanitary District designated on the cover page of this Agreement and party to this Agreement. “City Acceptable Waste” means all Acceptable Waste which was originally discarded by the first generator thereof within the geographical limits of the City, and Residue from the foregoing wherever produced, whether within or outside the City (or Tonnage equivalencies of such Residues, as and to the extent provided in subsection 3.1(D) hereof).
“Consumer Price Index” or “CPI” means a blend of the following two indexes based on the following percentage of each: 60% of the CPI shall be comprised of the Consumer Price Index published by the Bureau of Labor Statistics for All Urban Consumers: Water and Sewer and Trash Collection Services in U.S. City Average (CUSR0000EHG); and, 40% of the CPI shall be comprised of the Consumer Price Index for All Urban Consumers, not seasonally adjusted, all items index (CPI-U) – All items in Los Angeles-Long Beach-Anaheim (CUURS49ASA0).

In the event either of the forgoing indexes is no longer published during the term of this Agreement, such other index identified by the Bureau of Labor Statistics as a replacement or otherwise generally accepted as a replacement shall be used for purposes of this Agreement; and, in the absence thereof, the Orange County Board of Supervisors shall select an index that it determines most closely reflects the forgoing and best implements the intent of this Agreement. “Commencement Date” means the date on which the obligations of the parties hereto commence, established as provided in Section 6.2(B) hereof.
“Contract Date” means the first date on which this Agreement has been executed by both parties hereto. “Contract Rate” has the meaning specified in Section 4.2 hereof “Contract Year” means the fiscal year commencing on July 1 in any year and ending on June 30 of the following year.
“Controllable Waste” means all City Acceptable Waste with respect to which the City has the legal or contractual ability to determine the disposal location therefor and which is:
(1) Non-Recycled City Acceptable Waste;
(2) not generated from the operations of the Governmental Bodies which, under Applicable Law, have the independent power to arrange for the disposal of the waste they generate; and
(3) collected and hauled by Franchise Haulers.
“County” means the County of Orange, a political subdivision of the State of California and party to this Agreement.
“County Landfills” means all active Class III sanitary landfills located within the County of Orange and operated by the Department. At the time of execution, County Landfills consist of the Olinda Alpha Landfill located in Brea, California, the Frank R. Bowerman Landfill located in Irvine, California, and the Prima Deshecha Landfill located in San Juan Capistrano, California. (Note: The current estimated closure date for the Olinda Alpha Landfill is 2036 as specified in its Solid Waste Facility Permit. Throughout the term of this Agreement, County reserves the right to reduce, continue, expand, or cease all operation at the Olinda Alpha Landfill at its sole discretion.) “County Plan” means the integrated waste management plan of the County approved by CalRecycle pursuant to the Act as in effect from time to time.
“County Acceptable Waste” means Acceptable Waste generated in the County. “County-wide Recycling Services” has the meaning set forth in subsection 3.7(A) hereof. “Cumulative Tonnage Target” for any given Contract Year means the amount specified in Appendix 2 hereto with respect to such Contract Year.
“Department” means OC Waste & Recycling, and any agency, department or other Governmental Body which succeeds to the duties and powers thereof.
“Designated Facility” means the landfill or other County facility that the Department directs or assigns City Franchise Haulers to deliver City Acceptable Waste.
“Director” means the Director of OC Waste & Recycling.
“Disposal Services” means the solid waste disposal and other services to be provided by the County pursuant to the Service Covenant and as otherwise provided in this Agreement. “Disposal System” means the Waste Infrastructure System which includes solid waste disposal operations at active landfills; Organics Infrastructure; regional Household Hazardous Waste Collection Centers; and other waste management related systems deemed necessary by the County, as well as services, such as post-closure maintenance and other activities, at closed landfills formerly operated by the County, as appropriate under Applicable Law. “Environmental Fund” means the fund or funds held by the County to pay unanticipated costs of environmental mitigation, remediation or liability.
“Franchise Hauler” means any hauler or collector who provides Acceptable Waste collection services within the City pursuant to, or under authority granted by, a permit, contract, franchise or other agreement with the City. The term Franchise Hauler includes the City itself if Acceptable Waste collection and transportation services are provided directly by City operated municipal collection service. “Full Cost Recovery” means all facets of Department costs and responsibilities including, but not limited to; operation, maintenance and management of the Waste Infrastructure System, labor and equipment, capital projects, environmental monitoring and mitigation, site closure, legal and regulatory compliance, long-term post-closure maintenance, remediation costs, planning for contingencies associated with the County’s long-term liability and maintaining adequate financial reserves.
“Governmental Body” means any federal, State, county, city or regional legislative, executive, judicial or other governmental board, agency, authority, commission, administration, court or other body, or any officer thereof acting within the scope of his or her authority.
“Hazardous Material” or “Hazardous Substance” has the meaning given such term in CERCLA, the Carpenter-Presley-Tanner Hazardous Substance Account Act (California Health and Safety Code Section §78000 et seq.), and Titles 26 and 27 of the California Code of Regulations and other regulations promulgated thereunder. “Hazardous Waste” means (a) any waste which by reason of its quality, concentration, composition or physical, chemical or infectious characteristics may do either of the following: cause, or significantly contribute to, an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness, or pose a substantial threat or potential hazard to human health or the environment, or any waste which is defined or regulated as a hazardous waste, toxic substance, hazardous chemical substance or mixture, or asbestos under Applicable Law, as amended from time to time including, but not limited to: (1) the Resource Conservation and Recovery Act and the regulations contained in 40 CFR Parts 260-281; (2) the Toxic Substances Control Act (15 U.S.C. Sections 2601 et seq.) and the regulations contained in 40 CFR Parts 761-766; (3) the California Health and Safety Code, Section 25117 (West 1992 & Supp. 1996); (4) the California Public Resources Code, Section 40141 (West 1996); and (5) future additional or substitute Applicable Law pertaining to the identification, treatment, storage or disposal of toxic substances or hazardous wastes; or (b) radioactive materials which are source, special nuclear or by-product material as defined by the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et seq.) and the regulations contained in 10 CFR Part 40. The terms Hazardous Waste, Hazardous Material or Hazardous Substance shall be used interchangeably in this Agreement when not referring to specific Applicable Law.
“Host Fee” means the amount paid pursuant to Cooperative Agreements, referred to in Section 1.2 (I) of this Agreement, to compensate the cities identified in Section 1.2(I) (“Host Cities”) for costs or impacts incurred by Host Cities which might be associated with County Landfills due to their location within Host City boundaries, and not already substantially avoided or mitigated through the identification and adoption of Project Design Feature and Mitigation Measures.
“Imported Acceptable Waste” means Acceptable Waste that is generated outside of the geographical boundaries of the County and delivered to the Waste Infrastructure System. “Importation Agreement” means an agreement between the County and any public or private entity for the delivery and acceptance of Imported Acceptable Waste pursuant to contract. “Independent Haulers” means those waste collection/hauler companies primarily engaged as a principal business in the collection and transportation of municipal solid waste generated in the County of Orange which are not obligated to deliver County Acceptable Waste to the Waste Infrastructure System pursuant to a franchise, contract, permit or other authorization with a City in the County. “Initial Term” has the meaning specified in Section 6.1(A) hereof. “Legal Entitlement” means all permits, licenses, approvals, authorizations, consents and entitlements of whatever kind and however described which are required under Applicable Law to be obtained or maintained by any person with respect to the Waste Infrastructure System or the performance of any obligation under this Agreement or the matters covered hereby.
“Legal Proceeding” means every action, suit, litigation, arbitration, administrative or regulatory proceeding, and other legal or equitable proceeding having a bearing upon this Agreement. “Loss-and-Expense” means any and all loss, liability, obligation, damage, delay, penalty, judgment, deposit, cost, expense, claim, demand, charge, tax, or expense, including all fees and costs. “MRF Fines” mean undersized or pulverized material consisting of small fractions of waste that are created during the recycling process as Material Recovery Facilities. “Net Import Revenues” has the meaning ascribed thereto in Section 3.6(F). “Non-Recycled City Acceptable Waste” means all City Acceptable Waste other than Recycled City Acceptable Waste.
“OC Waste & Recycling Enterprise Fund” means the waste management enterprise fund established and managed by the County pursuant to Section 25261 of the Government Code separate from its other funds and accounts for receipts and disbursements in connection with the Waste Infrastructure System. “Organics Infrastructure” means organic processing facilities designed to receive and process Organic Waste to support the State’s Organic Legislation goals, promote local recycling, and/or assist local jurisdictions in meeting their organic diversion requirements which are utilized by interested Cities in connection with their participating in County-provided Organic Processing Services pursuant to a separate Organic Services Agreement. “Organics Legislation” means organics recycling legislation including AB 1594, AB 1826, SB 1383 and any future legislation pertaining to the management and diversion of Organic Waste. “Organics Processing Services” means the services provided by County to Cities that choose to enter into the Organic Services Agreement provided in Appendix 5.
“Organics Services Agreement” (“OSA”) means that separate agreement (as provided in Appendix 5) between County and interested Cities, whereby the County agrees to provide Organic Processing Services to interested Cities pursuant to the terms of the OSA.
“Organic Waste” means solid wastes containing material originated from living organisms and their metabolic waste products including, but not limited to, food, green material, landscape and pruning waste, organic textiles and carpets, lumber, wood, paper products, printing and writing paper, manure, biosolids, digestate, and sludges as defined in Title 14 of the California Code of Regulations, Section 18982(a)(46). “Overdue Rate” means the maximum rate of interest permitted by the laws of the State, if applicable, or the prime rate established from time to time by the Bank of America, N.A. or its successors and assigns, plus 2%, whichever is lower.
“Participating City” means any City executing a WISE Agreement in accordance with Section 3.6(A) hereof and meeting all requisite conditions to the Commencement Date thereof. “Participation Threshold” means the point at which the percentage of the County’s Acceptable Waste attributable to Participating Cities which have executed and delivered Agreements shall exceed 50% percent (using the percentage rates attributed to such Participating Cities in Appendix 1). “Posted Disposal Rate” means the per ton tipping fee charged by the County for the disposal of solid waste at the Disposal System by parties which are not entitled to disposal service at the Contract Rate pursuant to this Agreement or other contractual arrangement.
“Prohibited Medical Waste” means any medical or infectious waste prohibited or restricted under Applicable Law from being received by or disposed at the Disposal System. “Qualified Household Hazardous Waste” means waste materials determined by local, State, and federal regulation to be:
(1) Of a nature that they must be listed as hazardous in State statutes and regulations; (2) Toxic/ignitable/corrosive/reactive; and
(3) Carcinogenic/mutagenic/teratogenic;
which are discarded from households as opposed to businesses. Qualified Household Hazardous Waste shall not include Unacceptable Waste.
“Recycled City Acceptable Waste” means any otherwise Controllable Waste which is separated from Acceptable Waste by the generator thereof or by processing and which is “recycled” within the meaning of Section 40180 of the Public Resources Code.
“Renewal Term” has the meaning specified in Subsection 6.1(C) hereof. “Residue” means any material remaining from the processing, by any means and to any extent, of City Acceptable Waste or Recycled City Acceptable Waste; provided, however, that Residue shall not include minimal amounts of material remaining after such processing (which minimal amounts shall in no event exceed 10% of the amount of such City Acceptable Waste or Recycled City Acceptable Waste prior to processing). “Resource Conservation and Recovery Act” or “RCRA” means the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as amended and superseded. “Restricted Reserves” has the meaning specified in Section 4.5. “Sanitary Districts” means the sanitary districts in the County formed pursuant to the Sanitary District Act of 1923, codified in California Health & Safety Code Section 6400 et seq., as amended, supplemented, superseded and replaced from time to time.
“Self-Hauled Waste” means City Acceptable Waste and City Acceptable Organic Waste collected and hauled by Self-Haulers.
“Self-Hauler” means any person not engaged commercially in waste haulage who collects and hauls Acceptable Waste generated from residential or business activities conducted by such person. “Service Coordinator” means the service coordinator for either party designated pursuant to subsection 3.5(C) hereof.
“Service Covenant” means the covenants and agreements of the County set forth in Sections 3.2 and 3.3 hereof. “Special District” means public agencies created by a Governmental Body to provide one or more specific services to a community, such as but not limited to water, sewer, refuse, parks and recreation, fire protection, pest abatement, etc.
“Source-Separated Household Hazardous Waste” means Qualified Household Hazardous Waste which has been segregated from Acceptable Waste originating or generated within the geographical jurisdiction of the City at the source or location of generation.
“Source-Separated Household Hazardous Waste Disposal System” means the collection centers, facilities, contracts and other arrangements owned or administered by the County for the receipt, handling and disposal of Source-Separated Household Hazardous Waste.
“State” means the State of California.
“Term” shall mean the term of this Agreement.
“Ton” means a “short ton” of two thousand (2,000) pounds. “Transfer Station” means any materials recovery facility, composting facility, intermediate processing facility, recycling center, transfer station or other waste handling or management facility to which solid waste collected for the City is delivered for processing before receipt in the Waste Infrastructure System. “Unacceptable Waste” means Hazardous Material; Hazardous Waste; Hazardous Substances; Prohibited Medical Waste; Qualified Household Hazardous Waste separated from Acceptable Waste; explosives, ordnance, highly flammable substances, and noxious materials and lead-acid batteries (except if delivered in minimal quantities); drums and closed containers; liquid waste, oil, human wastes; machinery and equipment from commercial or industrial sources, such as hardened gears, shafts, motor vehicles or major components thereof, agricultural equipment, trailers, marine vessels and steel cable; hot loads; and any waste which the Waste Infrastructure System is prohibited from receiving under Applicable Law.
“Uncontrollable Circumstance” means any act, event or condition affecting the Waste Infrastructure System, the County, the City, or any of their Franchise Haulers, contractors or suppliers to the extent that it materially and adversely affects the ability of either party to perform any obligation under the Agreement (except for payment obligations), if such act, event or condition is beyond the reasonable control of and is not also the result of the willful or negligent act, error or omission or failure to exercise reasonable diligence on the part of the party relying thereon as justification for not performing an obligation or complying with any condition required of such party under the Agreement; provided, however, that the contesting in good faith or the failure in good faith to contest such action or inaction shall not be construed as willful or negligent action or a lack of reasonable diligence of either party. Examples of Uncontrollable Circumstances are:
(1) an act of God, landslide, lightning, earthquake, fire, explosion, flood, sabotage or similar occurrence, acts of a public enemy, extortion, war, blockade or insurrection, riot or civil disturbance, epidemic; and
(2) a Change in Law.
“Unincorporated Area” means those portions of the County which are not contained within the jurisdictional boundaries of incorporated cities.
“Unincorporated Area Acceptable Waste” means Acceptable Waste originating from or generated within the Unincorporated Area.
“Unrestricted Reserves” means cash and other reserves of the Waste Infrastructure System which are not Restricted Reserves.
“Waste Disposal Covenant” means the covenants and agreements of the City set forth in Section 3.1 hereof. “Waste Infrastructure System” or “Disposal System” means County owned or operated waste management related facilities, including active Class III sanitary landfills (“County Landfills”), closed landfills managed by the County, resource recovery operations, Organics Infrastructure, recycling and organics programs, infrastructure and operations, and regional household hazardous waste collection centers and other waste management related systems as may be deemed necessary by the County.
“WISE” means Waste Infrastructure System Enterprise.
“WISE Agreements” means each of the WISE agreements entered into between the County and any City within the County, Special District, Sanitary District, Jurisdiction, or operator of any Franchise Hauler located in the County in accordance with the terms herewith.

SECTION 1.2 INTERPRETATION. In this Agreement, unless the context otherwise requires:
(A) References Hereto. The terms “hereby”, “hereof”, “herein”, “hereunder”, “herewith”, and any similar terms refer to this Agreement, and the term “hereafter” means after, and the term “heretofore” means before, the Contract Date.
(B) Gender and Plurality. Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.
(C) Persons. Words importing persons include firms, companies, associations, general partnerships, limited partnerships, trusts, business trusts, corporations and other legal entities, including public bodies, as well as individuals.
(D) Headings. The table of contents and any headings preceding the text of the Articles, Sections and subsections of this Agreement shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. (E) No Third Party Beneficiaries. Nothing in this Agreement is intended to confer on haulers or any other person other than the parties hereto and their respective permitted successors and assigns hereunder any rights or remedies under or by reason of this Agreement. (F) Counterparts. This Agreement may be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Agreement. (G) Applicable Law and Venue. This Agreement has been negotiated and executed in the State of California and shall be governed by and construed under the laws of the State of California. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. Furthermore, the parties specifically agree to waive any and all rights to request that an action be transferred for adjudication to another county. (H) Severability. If any clause, provision, subsection, Section or Article of this Agreement shall be ruled invalid by any court of jurisdiction, then the parties shall: (1) promptly meet and negotiate a substitute for such clause, provision, subsection, Section or Article which shall, to the greatest extent legally permissible, effect the intent of the parties therein; (2) if necessary or desirable to accomplish item (1) above, apply to the court having declared such invalidity for a judicial construction of the invalidated portion of this Agreement; and (3) negotiate such changes in, substitutions for or additions to the remaining provisions of this Agreement as may be necessary in addition to and in conjunction with items (1) and (2) above to effect the intent of the parties in the invalid provision. The invalidity of such clause, provision, subsection, Section or Article shall not affect any of the remaining provisions hereof, and this Agreement shall be construed and enforced as if such invalid portion did not exist, unless such invalidity frustrates the underlying primary purpose of the Agreement. (I) Integration; Preservation of Certain Agreements. This Agreement contains the entire agreement between the parties with respect to the transactions contemplated hereby. This Agreement shall completely and fully supersede all prior understandings and agreements between the Parties with respect to such transactions; provided; however, that this Agreement shall not supersede the following Cooperative Agreements as they currently exist or as they may be amended in the future:
1) Cooperative Agreement between the City of Brea and the County of Orange regarding the Olinda Alpha Landfill.
2) Cooperative Agreement between the City of Irvine and the County of Orange regarding the Frank R. Bowerman Landfill.
3) Cooperative Agreement between the City of San Juan Capistrano and the County of Orange regarding the Prima Deshecha Landfill.

ARTICLE II

REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY. The City represents and warrants that:
(A) Existence. The City is a general law or charter city or a Special District or Sanitary District validly existing under the Constitution and laws of the State. (B) Due Authorization. The City has duly authorized the execution and delivery of this Agreement, and this Agreement has been duly executed and delivered by the City.

SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE COUNTY. The County represents and warrants that:
(A) Existence. The County is a political subdivision of the State of California validly existing under the Constitution and laws of the State.
(B) Due Authorization. The County has duly authorized the execution and delivery of this Agreement, and this Agreement has been duly executed and delivered by the County.

ARTICLE III

DELIVERY AND ACCEPTANCE OF WASTE

AND PROVISION OF WASTE

MANAGEMENT AND DISPOSAL SERVICE
SECTION 3.1 DELIVERY OF WASTE.
(A) Waste Management and Disposal Covenant. Subject to the occurrence of the Commencement Date and throughout the Term of this Agreement, and subject to available Waste Infrastructure System capacity, the City shall exercise all legal and contractual power and authority which it may possess from time to time to deliver or cause the delivery of all Controllable Waste to the Waste Infrastructure System in accordance herewith. (B) Recycled City Acceptable Waste. The parties hereto acknowledge the responsibility of the City to meet its own recycling and landfill diversion goals contained in the Act and Organics Legislation. Nothing in this Agreement is intended or shall be interpreted to prohibit or impair the ability of the City to meet such responsibilities, or to restrict the right of the residents, businesses or organizations in the City to practice source separation, recycling, composting or other materials recovery activities, or to restrict the right of the City to conduct, sponsor, encourage or require such activities in any form. No reduction in the amount of Controllable Waste generated in the City and delivered to the Waste Infrastructure System by or on behalf of the City which may result from any such source separation or recycling program shall cause the City any liability hereunder (other than potential adjustment to the Contract Rate to the extent provided in Article IV hereof) and shall not constitute a breach of this Agreement.
(C) Waste Delivered to Transfer Station. All Residue from any processing of Controllable Waste by materials recovery, composting, recycling or other means, wherever performed, shall constitute Controllable Waste and be subject to the Waste Disposal Covenant. Where City Acceptable Waste is processed at a facility which concurrently processes other Acceptable Waste in a manner which produces commingled residue which cannot be traced to a geographic source, generic residues from such facility in Tonnage equal to the residues that would have been produced had City Acceptable Waste only been processed at the facility shall constitute Controllable Waste and be subject to the Waste Disposal Covenant. Any City Acceptable Waste or material derived or segregated therefrom which is held in storage and asserted by the possessor thereof to constitute Recycled City Acceptable Waste awaiting sale or distribution to the secondary materials markets shall constitute Controllable Waste if, when and to the extent that the storage or diversion thereof can be reasonably deemed to constitute an evasion of the Waste Disposal Covenant rather than generally recognized, accepted and prevailing practice in the Southern California materials recovery and recycling industry conducted in accordance with Applicable Law. In order for the owner and/or operator of a transfer station to be entitled to deliver Acceptable Waste from a Participating City to the Waste Infrastructure System for the Contract Rate as provided in Article IV, such owner and/or operator must execute a direct agreement with the County, acknowledging and agreeing to comply with the obligation of the Participating City to cause the delivery of all Controllable Waste to the Waste Infrastructure System pursuant to this Agreement. In addition, the County shall be authorized to implement procedures to determine if Acceptable Waste delivered by the owners or operators of Transfer Stations is entitled to utilize the Waste Infrastructure System for the Contract Rate. Such procedures may include requiring Transfer Stations to certify, under penalty of perjury, the source of any such Acceptable Waste. If necessary, the County may require that, in order to qualify for use of the Waste Infrastructure System for the Contract Rate, Transfer Stations must deliver Controllable Waste in loads containing only Controllable Waste, and not commingled with Acceptable Waste from entities which are not Participating Cities or Participating Independent Haulers. (D) Power to Obligate Waste Disposal and Comply with this Agreement. On or before the Commencement Date, (i) any City franchise, contract, lease, or other agreement which is lawfully in effect relating to or affecting Controllable Waste shall provide, or shall have been amended to provide, that the City shall have the right without material restriction on and after the Commencement Date to direct the delivery of all Controllable Waste to the County Waste Infrastructure System (whether or not such Controllable Waste is delivered to a transfer station as an intermediate step prior to landfill disposal) and otherwise to comply with its obligations under this Agreement with respect to Controllable Waste and Franchise Haulers, and (ii) the City shall designate the Waste Infrastructure System as the disposal location pursuant to such franchise, contract, lease or other agreement. On and after the Commencement Date and throughout the Term of this Agreement the City (a) shall not enter into any franchise, contract, lease, agreement or obligation, issue any permit, license or approval, or adopt any ordinance, resolution or law which is materially inconsistent with the requirements of the Waste Disposal Covenant, and (b) shall maintain non-exclusive or exclusive franchises or other contractual arrangements over any City Acceptable Waste which, as of the Contract Date, is subject to non-exclusive or exclusive franchise or other contractual arrangements. The City agrees that the County shall be a third party beneficiary of the obligation of Franchise Haulers to deliver Controllable Waste to the Waste Infrastructure System, and may directly enforce such obligation through any legal means available. The City shall notify in writing each Franchise Hauler of the County’s third party beneficiary rights. (E) Controllable Waste Flow Enforcement.
(1) The City, in cooperation with the Department, shall establish, implement, carry out and enforce a waste flow enforcement program which is sufficient to assure the delivery of all Controllable Waste to the Waste Infrastructure System pursuant to and in accordance with the Waste Disposal Covenant for Controllable Waste disposal at the times and in the manner provided herein. The waste flow enforcement program shall consist of amending City franchises, permits or authorizations with all Franchise Haulers, to the extent required by this Section and to the extent allowed by law, and shall include in addition, to the extent necessary and appropriate in the circumstances to assure compliance with the Waste Disposal Covenant, but shall not be limited to:
(i) licensing or permitting Franchise Haulers, upon the condition of compliance with the Waste Disposal Covenant,
(ii) providing for and taking appropriate enforcement action under any such franchise, license, or permit, such as but not limited to the suspension, revocation and termination of collection rights and privileges, the imposition of fines or collection of damages, and the exercise of injunctive relief against non-complying Franchise Haulers and
(iii) causing any Transfer Station to which Controllable Waste is delivered for processing to deliver certification, under the penalty of perjury, of the amounts of Controllable Waste received and Residue remaining from processing at such Transfer Station.
(2) The City acknowledges and agrees that in the event of a breach of the Waste Disposal Covenant by the City, the City shall pay the County an amount equal to the amount that the City would have been required to pay to the County had the Waste Disposal Covenant not been breached, which shall be calculated by: (1) subtracting the number of tons actually delivered during the month(s) of the breach from the number of tons that were delivered during the same month(s) closest in time when there was no such breach, even if such month(s) closest in time was prior to the Term, and (2) multiplying such amount by the Contract Rate in effect at the time of such breach (or any higher rate with respect to which the County has provided notice pursuant to Section 4.2). In the event that the County terminates the Agreement as a result of such breach, the damages due as a result of such termination shall be equal to the average monthly deliveries by the City for the twelve (12) months prior to the commencement of the breach multiplied by the Contract Rate in effect at the time of such breach (or any higher rate with respect to which the County has provided notice pursuant to Section 4.2), multiplied by the number of months that would have remained in the Term of the Agreement had the termination not occurred. The parties recognize that if the City fails to meet its obligations hereunder, the County will suffer damages and that it is and will be impracticable and extremely difficult to ascertain and determine the exact amount of such damages. Therefore, the parties agree that the damages specified above represent a reasonable estimate of the amount of such damages, considering all of the circumstances existing on the date hereto, including the relationship of the sums to the range of harm to the County that reasonably could be anticipated and anticipation that proof of actual damages would be costly or inconvenient. In signing this Agreement, each party specifically confirms the accuracy of the statements made above and the fact that each party had ample opportunity to consult with legal counsel and obtain an explanation of this liquidated damage provision at the time that this Agreement was made.
(F) Legal Challenges to Franchise System. The City shall use its best efforts to preserve, protect and defend its right to exercise and comply with the Waste Disposal Covenant against any challenge thereto, legal or otherwise (including any lawsuits against the City or the County, whether as plaintiff or defendant), by a Franchise Hauler or any other person, based upon breach of contract, violation of law or any other legal theory. The City shall bear the cost and expense of any such Legal Proceeding or other challenge. In the event any such Legal Proceeding relating to the Waste Disposal Covenant or the City’s exercise thereof establishes in a final determination that such covenant or exercise thereof is void, unlawful or unenforceable, or if any Franchise Hauler fails to deliver Controllable Waste to the Waste Infrastructure System in breach of its franchise with the City on the grounds that a judicial determination made by any court or other Applicable Law has rendered its obligation to deliver Controllable Waste to the Disposal System void, unlawful or unenforceable on any legal grounds, with the result that actual waste deliveries to the Disposal System fall below the Cumulative Tonnage Targets, the County shall be entitled to avail itself of the remedies described in Section 4.2(B) hereof.
(G) Franchise Haulers. The City shall compile and provide the Department with the following information concerning all Franchise Haulers: name, address and phone number; identification number; area of collection and transportation; and franchise and permit terms. (H) Waste Information System. The City shall cooperate with the Department in collecting information and otherwise monitoring Franchise Haulers in order to assure compliance with this Agreement, the Act, Organics Legislation, or other Applicable Law. Such information may include information such as, data pertaining to Controllable Waste collected, transported, stored, processed and disposed of, Recycled City Acceptable Waste collected, transported, stored, processed and marketed or disposed of, Controllable Organic Waste collected, stored, processed and marketed or disposed of, Franchise Haulers’ franchise, permit or license terms, collection areas, transportation routes and compliance with Applicable Law; and all other information which may reasonably be required by the Department in connection with this Agreement. The City agrees to include in any revised franchise, contract, license or permit or other authorization granted to Franchise Haulers an obligation of the Franchise Hauler to provide to the County information relating to the Controllable Waste collected by such Franchise Hauler, including origins from which such Controllable Waste was collected (identifying Controllable Organic Waste, Recycled City Acceptable Waste, or as otherwise may be required under this Agreement or under Applicable Law), tonnage by type of load (residential, commercial, roll-off box), customer service levels, tonnage delivered by transfer station or material recovery facility utilized, and other related information. (I) City Actions Affecting County. The City agrees to carry out and fulfill its responsibilities under this Agreement and Applicable Law so as to permit full and timely compliance by the County with its covenants and agreements with the State. In particular, the City agrees not to conduct, authorize or permit any disposal services for Controllable Waste to be provided in competition with the Disposal Services provided by the County hereunder, and not to take or omit to take any action with respect to Controllable Waste, its collection, transportation, transfer, storage, treatment, processing, or disposal that may materially and adversely affect the County’s ability to achieve such timely compliance. Notwithstanding the foregoing, the City shall not be required to deny any permit or license or refuse to grant any approval while exercising its police powers. (J) No Right of Waste Substitution. Nothing in this Agreement shall authorize or entitle the City to deliver or cause the delivery to the Waste Infrastructure System of Acceptable Waste or Acceptable Organic Waste originating from or generated outside the jurisdiction of the City, nor obligate the County to receive or dispose of any such Acceptable Waste or Acceptable Organic Waste. The City shall not assign in whole or in part its right to deliver or cause to be delivered Controllable Waste or Controllable Organic Waste to the County hereunder, and shall not permit any Acceptable Waste or Acceptable Organic Waste originating from or generated outside the jurisdiction of the City to be substituted for Controllable Waste or Controllable Organic Waste for any purpose hereunder. (K) Annexations and Restructuring. It is the intention of the parties that this Agreement and the obligations and rights of the City hereunder, including particularly the Waste Disposal Covenant and the Contract Rate, shall, to the extent permitted by Applicable Law, extend to any territory annexed by the City (or any territory with respect to which the City assumes solid waste management responsibility from a Sanitary District or other public entity) and shall bind any successor or restructured Governmental Body which shall assume or succeed to the rights of the City under Applicable Law.

SECTION 3.2 PROVISION OF WASTE INFRASTRUCTURE SERVICES BY THE COUNTY. (A) Service Covenant. Commencing on the Commencement Date, and subject to available Waste Infrastructure System capacity, the County shall provide or cause the provision of the service of receiving and disposing of all Controllable Waste at the Waste Infrastructure System, and, in accordance with subsection 3.3(C) hereof, disposing of Unacceptable Waste inadvertently accepted at the Disposal System. The County, to the maximum extent permitted under Applicable Law, shall use its best efforts to increase source reduction, materials recovery, recycling, organic processing or other waste diversion in the region as may be required by law or which result in the long-term preservation of landfill disposal capacity and to keep the Waste Infrastructure System open for the receipt of Acceptable Waste for disposal or transfer of Controllable Waste pursuant to this Agreement. The County shall do and perform all acts and things which may be reasonably necessary or desirable in connection with its covenants in this subsection, including without limitation all planning, development, administration, implementation, construction, operation, maintenance, management, financing and contract work related thereto or undertaken in connection therewith. The County shall exercise all reasonable efforts to minimize the costs incurred in complying with the Service Covenant consistent with its responsibilities hereunder and under this Agreement, Applicable Law and prudent solid waste management practice and environmental considerations. (B) Source-Separated Household Hazardous Waste. The County shall maintain, as part of the Waste Infrastructure System, a Source-Separated Household Hazardous Waste Disposal System for the disposal of Source-Separated Household Hazardous Waste. The disposal service provided by such system shall constitute part of the Disposal Services, and shall be available to Participating Cities as part of the Contract Rate. The County may impose additional fees and charges for new services relating to Source-Separated Household Hazardous Waste or with respect to cities which are not parties to an Agreement. The County may provide for the expansion, contraction or modification of the Source-Separated Household Hazardous Waste Disposal System and its services to the extent necessary to ensure the Waste Infrastructure System’s viability. (C) Designated Facilities. County and City will coordinate in determining the primary landfill used for disposal and processing of Controllable Waste. The Department shall immediately advise the City by telephone of any situation, event or circumstance which results in the partial or complete inability of the County to receive Controllable Waste at any particular landfill within the Waste Infrastructure System, its effect on the County’s ability to perform its obligations hereunder, and the County’s best estimate of the probable duration. The Department shall confirm such advice in writing within twenty four (24) hours of the occurrence of any such inability. The County shall use its best efforts to resume normal operation of the landfill used by the City as soon as possible. In the event a situation, event or circumstance results in the partial or complete inability of the County to receive Controllable Waste at any particular landfill within the Waste Infrastructure System the County shall have the right to redirect Controllable Waste to another landfill within the Waste Infrastructure System for the duration of the situation, event or circumstance; provided, however, that in such circumstances the County shall utilize reasonable efforts to first redirect waste which is not Controllable Waste. In no event shall the County be required to accept Controllable Waste if it does not have sufficient permitted disposal capacity within the Waste Infrastructure System. (D) Compliance with Service Covenant Not Excused for any Reason. Commencing on the Commencement Date, and subject to the terms of this Agreement, the obligations of the County to duly observe and comply with the Service Covenant, in accordance with Applicable Law, shall apply continuously and without interruption for the Term of this Agreement. In the event that any Change in Law, situation, event or other Uncontrollable Circumstance impairs or precludes compliance with the Service Covenant by the means or methods then being employed by the County, the County shall use best efforts to implement alternative or substitute means and methods to enable it to satisfy the terms and conditions of the Service Covenant. In the event that a Change in Law precludes the County from complying with such covenants with the means or methods then being employed and from utilizing any alternate or substitute means or methods of compliance, the County shall continuously use all reasonable efforts to effectuate executive, legislative or judicial change in or relief from the applicability of such law so as to enable the County lawfully to resume compliance with such covenants as soon as possible following the Change in Law.

County failure to duly observe and comply with the Service Covenant due to its efforts to comply with Applicable Law, shall not constitute a breach under this Agreement, and shall excuse County performance to the extent necessary to comply with Applicable Law.

If the alternative or substitute means and methods proposed for the County to observe and comply with the Service Covenant are more costly than the previously used means and methods, County shall be entitled to a corresponding Contract Rate increase to cover any associated additional costs pursuant to the provisions of Section 4.2 of this Agreement.

SECTION 3.3 COUNTY RIGHT TO REFUSE WASTE.
(A) Right of Refusal. Notwithstanding any other provision hereof, the County may refuse delivery of:
(1) Hazardous Waste;
(2) Controllable Waste delivered at hours other than those provided in Section 3.5 hereof; (3) Waste that does not constitute Acceptable Waste;
(4) Acceptable Waste delivered by City but originating from or generated outside the jurisdiction of the City;
(5) Controllable Waste consisting primarily of construction and demolition debris or inert material which may cause a particular facility’s daily tonnage limit to be exceeded; (6) Acceptable Waste in excess of permitted limits; and (7) Acceptable Waste that would result in County violating Applicable Law. (B) Identification of Unacceptable Waste. The Department shall have the right (but not the duty or the obligation) to inspect the vehicles of all Franchise Haulers delivering material to the Waste Infrastructure System, and may require that the Franchise Hauler remove any Unacceptable Waste from such vehicle before it is unloaded. If the Department determines that it is impractical to separate Controllable Waste from Unacceptable Waste in any vehicle, or if the Franchise Hauler delivering such waste is unwilling to make such separation, or if any vehicle is carrying waste which may spill or leak, then the Department may reject the entire vehicle, and the City shall forthwith remove or cause the removal of the entire delivery from the Waste Infrastructure System. The Department may take all reasonable measures to prevent waste from being blown or scattered before and during unloading. The City shall cause the Franchise Haulers to observe and comply with Applicable Law, the operating rules and regulations of the Department, and the provisions of this Agreement prohibiting the delivery of Unacceptable Waste to the Waste Infrastructure System.
(C) Hazardous Waste and Hazardous Substances. The parties acknowledge that the Waste Infrastructure System has not been designed or permitted to accept Hazardous Waste or Hazardous Substances, and is not intended to be used in any manner or to any extent, for the handling, transportation, storage or disposal of Hazardous Waste, Hazardous Material or Hazardous Substances. Neither the County nor the City shall countenance or knowingly permit the delivery of Hazardous Waste or Hazardous Substances to the Waste Infrastructure System.

City shall be responsible for the costs of removal, and any regulatory fines, associated with the knowing delivery of any Hazardous Substances to the Waste Infrastructure System by the City or its Franchise Hauler. (D) Disposal of Unacceptable Waste and Hazardous Waste. If Unacceptable Waste or Hazardous Waste is discovered in a vehicle at any facility within the Waste Infrastructure System, the driver of the vehicle will not be permitted to discharge the load. If a vehicle is observed unloading Unacceptable Waste or Hazardous Waste in the tipping area of a facility within the Waste Infrastructure System Department personnel will use reasonable efforts to assure that such material has been characterized, properly secured and its disposition resolved. The return or reloading onto the delivery vehicle of any Hazardous Waste, Prohibited Medical Waste or other waste requiring handling or transportation shall be conducted in accordance with Applicable Law. Whenever Hazardous Waste is detected at any facility within the Waste Infrastructure System, the Department shall take immediate action in accordance with Applicable Law.

SECTION 3.4 UNINCORPORATED AREA ACCEPTABLE WASTE.

Commencing on the Commencement Date, the County in accordance with Applicable Law shall provide or cause to be provided the service of disposing of non-recycled Acceptable Waste originating or generated within the Unincorporated Area and, with respect to such material, shall comply with the Waste Disposal Covenant as if the County constituted a City subject to the Waste Disposal Covenant hereunder. Rates charged by the County for the disposal of each class of non-recycled Acceptable Waste generated in the Unincorporated Area shall be the same as the Contract Fee charged for the disposal of each class of Controllable Waste. The County shall use its best efforts to preserve, protect and defend its right to exercise and comply with the Waste Disposal Covenant (with respect to non-recycled Acceptable Waste generated in the Unincorporated Area) against any challenge thereto, legal or otherwise, by a Franchise Hauler or any other person, based upon breach of contract, violation of law or any other legal theory. The County shall bear the cost and expense of any such Legal Proceeding or other challenge (with respect to non-recycled Acceptable Waste generated in the Unincorporated Area).

SECTION 3.5 MISCELLANEOUS OPERATIONAL MATTERS.
(A) Operating Hours. The County shall keep the Waste Infrastructure System open for the receiving of Acceptable Waste during such regular operating hours as may be established by the Department in the operating rules and regulations applicable to the Waste Infrastructure System. The County reserves the right to modify the operating days and hours to comply with Applicable law or as otherwise may be deemed necessary by the County. (B) Scales and Weighing. The Department shall operate and maintain permanent scales at the Waste Infrastructure System as required by Applicable Law. The Department shall weigh all vehicles delivering waste by or on behalf of the City (whether or not the County accepts such waste) and prepare a daily weight record with regard to such delivery.
(C) Service Coordinator. The County and the City each shall designate in writing thirty (30) days prior to the expected Commencement Date a person to transmit instructions, receive information and otherwise coordinate service matters arising pursuant to this Agreement (each a “Service Coordinator”). Either Party may designate a successor or substitute Service Coordinator at any time by notice to the other Party. (D) Review of Records. Each Party may review the other Party’s books and records with respect to matters relevant to the performance by either Party under this Agreement or otherwise related to the operation of the Waste Infrastructure System to the extent allowed under the California Public Records Act (interpreted as if the Parties to this Agreement were natural persons for purposes of the Public Records Act).

SECTION 3.6 OTHER USERS OF THE DISPOSAL SYSTEM.
(A) On or Before April 30, 2026, the County shall have the right to enter into WISE Agreements with Orange County entities with respect to Acceptable Waste which was originally discarded by the first generator thereof within the geographical limits of the County, including other cities in the County, Special Districts, Sanitary Districts, Franchise Haulers and Independent Haulers. Agreements entered into during this period shall have terms and provisions substantially identical to the terms and provisions of this Agreement; provided, however, that in no event shall such agreements have terms and provisions more favorable than the terms and provisions of this Agreement (including but not limited to the Contract Rate and availability of disposal capacity). (B) After April 30, 2026, the County shall have the right to enter into WISE Agreements with Orange County entities, including any city, Special Districts, Sanitary Districts, Franchise Haulers and Independent Haulers, or otherwise accept Acceptable Waste from such parties, but only within the limitations contained in this Section. Any such agreement or waste acceptance agreement must provide that the party delivering waste shall pay a Disposal Rate at least 10% higher than the Contract Rate unless the County determines it is in the best interest of the Waste Infrastructure System to establish a Disposal Rate less than 10% higher than the Contract Rate. In no event shall the Disposal Rate be less than the Contract Rate. In addition, the County shall reserve the right in any such agreement to at any time, to the extent permitted by Applicable Law, refuse to receive and dispose of Acceptable Waste from any city, Special District, Sanitary District, Franchise Hauler and Independent Hauler if and to the extent that such receipt and disposal might materially and adversely affect the ability of the County to comply with its obligations to the Participating Cities under the WISE Agreements to which each is a party. (C) Posted Disposal Rate. The Posted Disposal Rate shall at all times be at least 10% higher than the Contract Rate.
(D) Self-Haulers. The City and the County acknowledge that Self-Haulers shall be entitled to deliver Self-Hauled Waste to the Waste Infrastructure System, on a non-contract basis, at the Posted Disposal Rate.

Such Self-Haulers shall not be entitled to dispose of Acceptable Waste for the Contract Rate. (E) Receipt of Imported Acceptable Waste on a Contract Basis. The County shall have the right to enter into Importation Agreement(s) with any public or private entity for the delivery of Imported Acceptable Waste on terms and conditions that the County determines to be necessary to ensure and enhance the viability of the Waste Infrastructure System and to generate Net Import Revenues. In no event shall such Importation Agreements, entered into after the Commencement Date, include a per ton tipping fee or Disposal Rate for Imported Acceptable Waste that is less than the Contract Rate. The County certifies that in its good faith judgment the contract or other agreement for the delivery of such waste will not materially and adversely affect the ability of the County to receive and dispose of Acceptable Waste from the Participating Cities in accordance with the applicable WISE Agreements throughout the Term thereof; and, should the delivery of waste subject to Importation Agreements adversely affect the County’s ability to receive and dispose of Controllable Waste from Participating Cities the County will prioritize receipt and disposal of Controllable Waste delivered pursuant to applicable WISE Agreements. (F) Application and Use of Revenues From Other Users.
(1) County Acceptable Waste: Throughout the Term hereof, all revenues received by the County from the disposal or processing of County Acceptable Waste into the Waste Infrastructure System (including Surcharges, and any and all fine, penalty, liquidated damages or other damages, grants, awards or revenue received by the County in connection with the Waste Infrastructure System), shall be deposited by the County in the County OC Waste & Recycling Enterprise Fund and shall constitute revenues of the Waste Infrastructure System.
(2) Imported Acceptable Waste: Throughout the Term hereof, all revenues received by the County, pursuant to an Importation Agreement, for the disposal or processing of Imported Acceptable Waste into the Waste Infrastructure System (including Surcharges, and any and all fine, penalty, liquidated damages or other damages or revenue received by the County in connection with the Waste Infrastructure System), shall first be applied toward all of the costs attributable to the acceptance and management of such Imported Acceptable Waste into the Waste Infrastructure System. Costs attributable to the disposal of Imported Acceptable Waste include, but are not limited to, deposits to the Environmental Fund, deposits to closure and post-closure reserves, Host Fees (if applicable), incremental operating costs (such as manpower expenditures, equipment, services and supplies expenditures), State surcharges, regulatory fees, charges or penalties, and a pro rata share of capital project costs. Revenue remaining after costs attributable to the disposal and management of Imported Acceptable Waste shall be considered “Net Import Revenues” and shall be calculated and distributed as follows:
(i) Calculation: Net Import Revenues are estimated to be 30% of the revenues received by the County from the disposal of Imported Acceptable Waste (excluding any newly established per-ton fees or increases to existing per-ton fees with respect to Imported Acceptable Waste payable to the State, other regulatory agencies or cities in which facilities in the Waste Infrastructure System are located.) (ii) Distribution: Net Import Revenues shall be distributed as follows; a. 50% of any Net Import Revenues shall be paid to the County General Fund. b. 50% of such Net Import Revenues shall be paid to the Participating Cities (and to the County, with respect to the unincorporated area) listed in Appendix 1 for use for any purpose by the Participating City, including but not limited to State mandated solid waste programs. Payments of such amount to the County General Fund and the Participating Cities shall be made by the County within ninety (90) days after the end of each fiscal year. The portion of Net Import Revenues specified above payable to the Participating Citiesshall be apportioned in the percentages set forth in Appendix 1.
c. The percentages set forth in Appendix 1 with respect to each Participating City shall be annually reviewed and adjusted every five (5) years by the County to reflect the percentage of deliveries of Acceptable Waste from each Participating City averaged over the last five (5) years. The County shall notify Participating Cities of the revised percentages in Appendix 1 within one hundred and twenty (120) days of the end of each fiscal year.

SECTION 3.7 COUNTY PROVISION OF WASTE DIVERSION SERVICES. (A) County-Wide Recycling and Diversion Services. Unless otherwise specifically provided in this Agreement, County is not required to provide for any source reduction, materials recovery, recycling, organic processing or other waste diversion services under this Agreement. However, County may choose to provide CountyWide Recycling Services funded through the County OC Waste & Recycling Enterprise Fund at its sole discretion on the condition that provision of said services shall be funded in a manner that does not impact the Contract Rate without first going through the process outlined in Section 4.2 and expressly agreed to by 50% of Participating Cities. (B) Organic Processing and Diversion Services. The County has developed Organics Infrastructure and programs available to interested Cities intended to assist Cities in meeting their diversion and Organic Legislative Recycled Organic Waste Procurement goals and to promote the processing and diversion of Organic Waste into compost or other material that qualifies as diversion under Applicable Law. Cities interested in receiving County provided Organic Processing Services may enter into the separate Organic Services Agreement (“OSA”) provided in Appendix 5 of this Agreement.
(C) Food Waste Processing and Diversion. County is in the process of evaluating the options and feasibility of development of a Commercial Food Waste Processing Infrastructure. If developed, Cities will be provided an opportunity to participate in this service on terms which shall be separately agreed upon by the Parties. (D) Edible Food Recovery Programs. County is in the process of evaluating the options and feasibility of development of regional County-wide edible food recovery programs to assist Cities in meeting State mandated goals. The intent of Edible Food Recovery to address the food hierarchy and wasted food scale on a regional level through collaboration of all jurisdictions, key local, State and federal stakeholders, the non-profit sector and business sector. City agrees to reasonably cooperate with County efforts and collaborate on data analysis and reporting to provide jurisdictions reports for compliance under SB 1383. If developed, Cities will be provided an opportunity to participate in this service on terms which shall be separately agreed upon by the Parties. (E) Recycling Market Development Zone (“RMDZ”) Program. The RMDZ program, administered by the California Department of Resource Recycling and Recovery (CalRecycle), combines recycling with economic development to support business that use materials from the waste stream to manufacture their products.

The program offers loans, technical assistance and product marketing to eligible businesses located within designates zones. City agrees to reasonably cooperate and collaborate with County in support of the RMDZ program. (F) Separate City-County Diversion Service Agreements. Nothing in this Agreement is intended to limit the right of the County to enter into a separate agreement with the City or any other person to provide source reduction, materials recovery, recycling, composting or other waste diversion services. Any such program conducted by the County, whether in participation with the City, any other of the Participating Cities, other Cities, Special Districts, Sanitary Districts, Franchise Haulers, Independent Haulers, Unincorporated Area or non-County entity, shall be operated, managed and accounted for as a program separate and distinct from the Disposal Services program contemplated by the WISE Agreements and shall not be funded through the general revenues of the Disposal System.

ARTICLE IV

CONTRACT RATE
SECTION 4.1 CHARGING AND SECURING PAYMENT OF CONTRACT RATE. The City acknowledges that the County shall have the right to charge and collect a Contract Rate for the acceptance, disposal, and processing of Controllable Waste delivered to the Waste Infrastructure System by City or its Franchise Hauler. The Contract Rate shall be calculated and established, and may be modified, as provided in Section 4.2 hereof. In addition, the City acknowledges that the County shall have the right to establish as part of the operating rules and regulations reasonable measures to secure the payment of all Contract Rates.

SECTION 4.2 CONTRACT RATE.
(A) Establishment of Contract Rate. The Contract Rate payable by each City or Franchise Hauler shall be a three (3) year progressive Contract Rate of $67/ton (July 1 2026 through June 30, 2027), $74/ton (July 1, 2027 through June 30, 2028), and $81/ton (July 1, 2028 through June 30, 2029) and contingent on the delivery to the Waste Infrastructure System of an amount of City Acceptable Waste at least equal to the Cumulative Tonnage Targets identified in Appendix 2, and subject to adjustment necessary to reflect the circumstances set forth in this Section 4.2 including but not limited to:
(i) increased costs incurred by the County (in excess of available insurance proceeds) due to the occurrence of one or more Uncontrollable Circumstances, other than Changes in Law; (ii) costs incurred by the County (in excess of available insurance proceeds and amounts available in the Environmental Fund for such purposes) remediating environmental conditions at the Disposal System or inactive or closed disposal sites in the County, which, if uncorrected, could give rise to potential claims under CERCLA or related federal or State statutes, including costs incurred providing indemnification to any Participating City pursuant to subsection 7.3;
(iii) tonnage shortfalls to the extent permitted by Sections 4.2(B); (iv) County determination that the Department revenue is insufficient to meet Full Cost Recovery requirements.
(v) increased costs incurred by the County due to the occurrence of one or more Changes in Law;
(vi) Capital Costs in excess of the Capital Costs at any point in time during the term hereof exceeding the Cumulative Capital Costs set forth in Appendix 3; (vii) Provision of new or expanded services, provided on terms as agreed to by the Parties.

Prior to adjusting the Contract Rate as a result of any of the circumstances described in clauses (i), (ii), (iii) (iv) or (vi) above, the County shall utilize the following remedies in the following order of priority:
(1) reduce the costs of operating the Disposal System to the extent practicable; and (2) at the sole discretion of the County, utilize Unrestricted Reserves to pay costs of the Waste Infrastructure System.

The County will not be required to utilize such remedies prior to adjusting the Contract Rate as a result of any of the circumstances described in clauses (v) or (vii) above.

Any adjustments to the Contract Rate permitted by this Section shall be calculated by the County to reflect the actual costs or expenses of addressing the circumstance or circumstances pursuant to which the adjustment is authorized. The County agrees that, where appropriate, it will evaluate the feasibility of long-term financing for significant capital costs. Notwithstanding the forgoing, no adjustment to the Contract Rate shall occur as a result of costs associated with the programs identified in Section 3.7, without first going through the process outlined in Section 4.2 and expressly agreed to by 50% of Participating Cities.
(B) County Acceptable Waste Shortfall. In the event that the actual amount of County Acceptable Waste delivered to the Disposal System at the end of any Contract Year is less than the Cumulative Tonnage Target for such Contract Year for County Acceptable Waste, as specified in Appendix 2, the County shall utilize the following options, in the following order of priority, in order to remedy any adverse effects of such tonnage shortfall:
(i) reduce the costs of operating the Waste Infrastructure System to the extent practicable;
(ii) at the sole discretion of County, utilize Restricted Reserves described in clause (iii) of Section 4.5 to pay costs of the Waste Infrastructure System; (iii) at the sole discretion of County, utilize Unrestricted Reserves to pay costs of the Waste Infrastructure System; and
(iv) adjust the Contract Rate.

In the event that implementation of the steps described above does not result in sufficient revenues to satisfactorily address the shortfall in tonnage, the County shall have the right to terminate the Agreement on one-hundred eighty (180) days written notice to the City. In addition, in the event that Waste Infrastructure expenses are lower than estimated or actual deliveries to the Disposal System exceed the Cumulative Tonnage Target as of the end of any Contract Year, the City acknowledges the County shall have the right to establish reserves intended to reflect the potential for lower than expected annual waste deliveries in subsequent years, and that any such reserves shall constitute “Restricted Reserves”. (C) [RESERVED]
(D) Interim Use of Remedies. In the event that, during any Contract Year, waste deliveries to the Disposal System are 25% or more below delivery projections for such Contract Year with the result that the County determines it is unlikely that the Cumulative Tonnage Target will be achieved as of the end of such Contract Year, the County may utilize the remedies described in Section 4.2(B) prior to the end of such Contract Year; provided, however, that if at the end of such Contract Year, the Cumulative Tonnage Target is actually met, the County shall reimburse any adjustments to the Contract Rate made pursuant to this Section to Participating Cities. Such reimbursement shall occur in a manner as agreed between the parties, and may be given as a credit or adjustment to the Contract Rate for future deliveries, rather than a lump sum payment.
(E) Special Charges. Notwithstanding Section 4.2(A), the County shall have the right to establish special charges for the provision of new or expanded services or the receipt of hard to handle materials, such as bulky materials, construction and demolition debris, tree stumps and sludge. Should the County wish to provide new or expanded services to Cities, it may charge for such services upon agreement of City. Special charges shall be calculated to reflect the reasonable incremental costs to the County of providing the new or expanded services or accepting such hard to handle materials.

Adjustments pursuant to this Section 4.2(E) shall not require compliance with the provisions of Section 4.2(I) (F) Annual CPI Escalation. Subject to the application of the Contract Rate True-up (provided [ ]
below), the Contract Rate shall be adjusted each July 1, beginning 2029, in an amount equal to the percentage change in the CPI (as defined above) as measured from the October twenty one (21) months prior to the rate adjustment to the October immediately preceding the rate adjustment (the “Annual CPI Adjustment”). For example: The July 1, 2029 Annual CPI Adjustment to the Contract Rate shall be based upon the change in CPI from October 2027, to October 2028, referred to as year 1 and year 2 respectively in the following example.

Formula to calculate percentage change in the Contract Rate based on Annual CPI Adjustment :

Step 1:

October Year 2 CPI
- 1 = % increase in Contract Rate
October Year 1 CPI
Step 2: Current Contract Rate x (1+ % increase in Contract Rate) = Contract Rate as of July 1 Year 2 On each April 1, commencing April 1, 2029, the County shall provide the City with notice of the Annual CPI Adjustment to the Contract Rate to be effective the following July 1. Such notice shall contain the calculation of the adjustment set forth above. The County shall calculate the new Contract Rate each year.

In the event that the change in CPI as described above is negative rather than positive, no rate adjustment will be made for that year. No adjustment under this Section 4.2(F) will take place until the October CPI index surpasses the index level as of the October immediately preceding the last annual rate adjustment pursuant to this Section 4.1(F), which will be considered “year 1” in calculating the change in the Contract Rate.

For example, if the change in CPI is measured as follows: October 2027 = 205, October 2028 = 204, October 2029 = 201, October 2030 = 208, then there would be no adjustment in July 2029, or July 2030, and an adjustment equal to the change from 205 to 208 would be implemented on July 1, 2031.

Contract Rate True-up: On an annual basis, no later than each April 30, beginning April 30, 2030, the County shall conduct an annual review of factors pertaining to the most recently completed fiscal year(s) including but not limited to, tonnage received throughout the Waste Infrastructure System, Cumulative Tonnage Targets identified in Appendix 2, revenue received from all sources, Department expenditures, and other factors that make up Department’s total costs.

County shall notify City prior to April 30, 2030 (and every April 30 thereafter) and advise whether the Annual CPI Adjustment to the Contract Rate should be frozen for a period of time (in circumstances where Department revenues exceed Department Full Cost Recovery needs) or to determine whether the Contract Rate should be increased beyond the Annual CPI Adjustment as defined above (in circumstances where Department costs exceed CPI) to ensure that Department revenues meet Full Cost Recovery.

Within thirty (30) days of finalizing each annual review, the County shall transmit its findings and the bases thereof to Participating Cities at the next regularly scheduled OCCMA meeting or other forum mutually agreed to by the County and OCCMA. If requested by the City or OCCMA, the County shall reasonably respond to requests from the City and/or OCCMA for additional information including, but not limited to, requests to meet and discuss reviews, findings, and bases of findings. At the request of 50% of Participating Cities, County agrees to meet and confer in good faith with OCCMA, within sixty (60) days to discussretention of a consultant acceptable to both the County and OCCMA to conduct an independent review of the County’s annual review findings.

Nothing in this section shall be interpreted as limiting the County’s rights under Section 4.2(A). (G) Adjustment Resulting from Increased Fees. In addition to the other adjustments specified herein, the Contract Rate shall be adjusted to reflect the imposition of new fees or increase in existing fees relating to the disposal of Controllable Waste imposed by State, federal or other agencies (e.g., the State’s Integrated Waste Management fee, which is currently $1.40 per ton, but is expected in increase during the term of this Agreement). The adjustment shall be equal to the amount of any new or increased fee, and the adjustment shall take effect so as to coincide with the imposition of the new or increased fee. The County shall provide notice of any increase pursuant to this Section 4.2(G) as soon as practicable after becoming aware of the imposition of any fees described above.

Adjustments pursuant to this Section 4.2(G) shall not require compliance with the provisions of Section 4.2(I). (H) [RESERVED]
(I) Procedure for Rate Adjustments. In the event the County determines that it is entitled to an adjustment of the Contract Rate pursuant to Section 4.2(A) (other than 4.2(A)(iv)) or Section 4.2(B), it shall utilize the procedures described in this Section 4.2(I). The County shall be required to provide the City with at least ninety (90) days prior written notice of the adjustment, which notice shall identify the specific event(s) or circumstances which require the adjustment. The notice shall also specify the earliest date on which the County Board of Supervisors shall consider the proposed adjustment. At least forty five (45) days prior to such meeting of the Board of Supervisors, the County shall provide the City with a report which shall contain the following information: a description of the specific event(s) or circumstances which require the adjustment; a description (including cost estimates) of any activities (which may include, but not be limited to capital improvements to the Waste Infrastructure System) required in order to remedy such event or circumstance; certification by the County that it has implemented the remedies described in Section 4.2(A) or (B) prior to requiring the rate adjustment; and a description of the methodology used by the County to calculate the adjustment to the Contract Rate (hereinafter the “County Report”). In the event the City disputes the adjustment, it shall provide the County with a written description of the reason for the dispute at least ten (10) days prior to the meeting of the Board of Supervisors identified in the initial notice of the County (hereinafter the “City Report”). The City Report shall be provided to the Board of Supervisors for consideration at such meeting in connection with the proposed rate adjustment. At any time from and after the date that the County provides the City with the County Report, upon the request of either party, the City and County shall meet and confer in good faith to resolve any dispute that may arise regarding the proposed adjustment to the Contract Rate. In any such meeting, the County shall be represented by the Director of the Department or his or her designee. In the event the Board of Supervisors approves all or a portion of the proposed rate adjustment, such rate adjustment shall become effective on the date identified in the initial notice sent by the County regardless of whether or not the procedures in Section 4.2(J) are utilized, but subject to potential reimbursement pursuant to clause (11) of Section 4.2(J). (J) Procedure for Expedited Judicial Review of Contested Rate Adjustment. In the event that, within thirty (30) days after the effective date of any Contract Rate adjustment made pursuant to Section 4.2(I), Participating Cities which, in the aggregate, accounted for more than 50% of the County Acceptable Waste delivered to the County System in the twelve (12) months preceding the Contract Rate adjustment, provide notice to the County of their election to utilize the procedures described in this Section 4.2(J), then the provisions of this Section 4.2(J) shall be utilized by such Participating Cities and the County to resolve the dispute over the Contract Rate Adjustment. In the event that Participating Cities which have delivered the amount of waste contemplated in the preceding sentence do not provide notice to the County of such election, the County shall have no obligation to participate in or cooperate in the implementation of the procedures described below in this Section 4.2(J). (1) In order to pursue the expedited judicial determination described in this Section (the “Expedited Rate Determination”), the Participating Cities which have made the election described in the paragraph above (the “Challenging Cities”) must commence a civil action for breach of contract (the “Action”) in the Orange County Superior Court within forty five (45) days of the date on which the Board of Supervisors approves the challenged adjustment to the Contract Rate.
(2) Within two (2) Court days of filing the Action, the Challenging Cities shall personally serve on the County Counsel, with copy provided to the Clerk of the Board both the summons and complaint, and a stipulation and request for the entering of an order incorporating all of the procedural provisions relating to the Expedited Rate Determination as set forth in this Section 4.2(J) (such stipulation and request for order is hereinafter referred to as the “Expedited Rate Determination Stipulation”). The Expedited Rate Determination Stipulation shall be signed by each of the Challenging Cities, or on behalf of them by their legal counsel. (3) Within fifteen (15) days of the date of service upon the County of the summons and complaint, and Expedited Rate Determination Stipulation, County Counsel shall execute the Expedited Rate Determination Stipulation and deliver it as well as the County’s answer to the complaint in the Action, by electronic means, to the Challenging Cities through their counsel of record. The Stipulation shall also include a waiver by each of the parties of their right to a jury trial of the issues raised in the Action. The Parties agree that the duty to execute the Expedited Rate Determination Stipulation and comply with the procedures set forth for Expedited Rate Determination in this Section 4.2(J) shall be, and are hereby deemed to be, ministerial duties which the law specifically enjoins upon each of them, and shall be subject to enforcement by the parties herein pursuant to Code of Civil Procedure Section 1085, et seq., or by means of a complaint for specific performance. (4) Within three (3) days of the date of service by the County upon the Challenging Cities of the fully signed Expedited Rate Determination Stipulation, the County and the Challenging Cities shall jointly make ex parte application to the Orange County Superior Court in the Action for the issuance of an order reflecting the procedural requirements and timelines contained in the Expedited Rate Determination Stipulation, provided however, the timelines may be adjusted by the Court as it deems may be needed for its convenience. As part of such ex parte application, the County and the Challenging Cities shall expressly seek to confirm with the Orange County Superior Court the briefing schedule, and request a hearing date (effectively a trial date) in accordance with the procedures set forth in this Section 4.2(J).
(5) Within ten (10) days of the date of service by the County upon the Challenging Cities of the answer in the Expedited Rate Determination, the Challenging Cities shall file with the Court and electronically serve upon County Counsel the Challenging Cities’ opening brief and the Record in the Expedited Rate Determination. The opening brief shall not exceed 15 pages in length. The Record shall consist of, and be limited to, the record of the proceedings before the Board of Supervisors with respect to the adjustment of the Contract Rate, including but not limited to the County Report and the City Report prepared by each or any of the Challenging Cities pursuant to Section 4.2(I), any materials filed or lodged with the Board of Supervisors and the Orange County Waste Management Commission in connection with its decision, the transcript of the proceedings of the Board of Supervisors meeting(s), and the Orange County Waste Management Commission, the minutes of the Board of Supervisors and the Orange County Waste Management Commission meeting, and the resolution and/or other documentation evidencing the action by the Board of Supervisors and the Orange County Waste Commission to adjust the Contract Rate pursuant to Section 4.2(A) or (B). The record shall also include the most recent reports prepared pursuant to Sections 4.6 and

4.7. The Expedited Rate Determination shall be decided solely on the evidence in the Record, and no extrinsic evidence shall be submitted to or considered by the Court.
(6) Within ten (10) days of service by the Challenging Cities of their opening brief and the Record, the County shall file and electronically serve upon the Challenging Cities’ Counsel the County’s opposition brief. The opposition brief shall not exceed 15 pages in length. (7) Within five (5) days of service by the County upon the Challenging Cities of the opposition brief, the Challenging Cities may file and electronically serve upon County Counsel a reply rebuttal brief, which shall not exceed 10 pages in length.
(8) The trial of the Expedited Rate Determination shall be conducted as a law and motion hearing, similar to a hearing on a writ, which shall be conducted at the date set by the Court in connection with the ex parte application conducted pursuant to Section 4.2(J)(4), or such other date and time ordered by the Court. If the Court requests the parties to prepare supplemental briefs in response to any question or issue raised by the Court, the parties may do so.
(9) The standard of review for the Expedited Rate Determination shall be the preponderance of the evidence based upon the Record. The burden of proof shall be borne by the Challenging Cities, and the burden of proof shall be the same as with respect to a plaintiff in a damages action for breach of contract. Both parties have participated in the drafting of this Agreement. Accordingly, nothing set forth in this Agreement shall be interpreted or construed for or against either of the parties as a consequence of their participation in the drafting of this Agreement.
(10) The Court shall be advised that the Parties request that it issue a written statement of decision and enter judgment within thirty (30) days of the date of the hearing in the Expedited Rate Determination, although the Parties recognize that the Court has discretion to act as it deems appropriate in accord with applicable laws in connection with the timing thereof.
(11) If the Court determines that any portion of the County’s adjusted Contract Rate which is the subject of the Expedited Rate Determination was improperly imposed, the County shall, within thirty (30) days of the date of the statement of decision, reimburse to the City the amount improperly imposed, together with interest calculated at the Overdue Rate. If agreed by the Parties, as an alternative such reimbursement may be made in the form of a reduction in the Contract Rate for a future period (not to exceed twelve (12) months), applied in a manner such that it provides full reimbursement of the amounts described above (including the Overdue Rate, to be applied consistent with provisions of Section 7.14 hereof.)
(12) In the event that the Court does not sign the order contained in the Expedited Rate Determination Stipulation and set the matter for disposition as contemplated herein, the County and the Challenging Cities shall, within twenty (20) days following the issuance of the Court’s order or decision not to do so and thereby honor the parties’ stipulation, make application to the Orange County Superior Court for an expedited hearing or trial date. The Challenging Cities and the County shall be bound by all of the requirements and restrictions set forth in Section 4.2(J) that are not in conflict with this paragraph (12). In this regard, and without limiting the foregoing, the only evidence to be presented at the hearing or trial shall be the Record, no testimony shall be presented at the hearing or trial; and both the County and the Challenging Cities waive all rights to a jury trial, to any reconsideration of the decision of the Court, to a new trial after the Court renders a decision, and to any appeal or review of the decision of the Court.

SECTION 4.3 RESPONSIBILITY FOR PAYMENT OF THE CONTRACT RATE, AND OTHER AMOUNTS DUE.
(A) Payment by City. In the event and to the extent (1) the City uses municipal collection forces directly for the haulage of Controllable Waste to the Waste Infrastructure System or (2) the City uses non-municipal Franchise Haulers for collection but nonetheless elects to pay the Contract Rate and other amounts due from City revenues, the City, as its own Franchise Hauler, shall have direct responsibility for payment of the Contract Rate and other amounts due, and shall take all such budgetary, appropriation and other action as may be necessary to provide for the timely payment of the Contract Rate and other amounts due. Such action may include, depending upon the means authorized by the City to provide for such payment, the levy and collection of general or special taxes, the imposition of benefit assessments, or the collection of user fees, generator charges or other similar impositions for municipal solid waste disposal. The City shall use best efforts in accordance with Applicable Law to levy and impose all such taxes, assessments, fees or charges, and will take all steps, actions and proceedings for the enforcement, collection and payment of all such amounts which shall become delinquent, to the full extent permitted by Applicable Law.
(B) Payment by Franchise Haulers. With respect to Controllable Waste delivered by Franchise Haulers on behalf of City other than City municipal collection forces, the obligation to pay the Contract Rate and other amounts due shall rest with such Franchise Haulers. Franchise Hauler shall pay the Contract Rate or other amounts due or any portion thereof when due. In the event of any such failure by Hauler, the County and the City shall cooperate with each other and use their best efforts to obtain timely payment from Franchise Hauler. Such efforts by the County may include, as appropriate, requiring cash payments for disposal rights from such Franchise Hauler and bringing a legal proceeding for payment and damages. Such efforts by the City may include, as appropriate, legal proceedings to suspend, revoke or terminate the Franchise Hauler’s franchise, permit or license rights. (C) Disputes. If the City or the Franchise Hauler disputes any amount billed by the County in any Billing Statement, the City or the Franchise Hauler shall nonetheless pay the billed amount and shall provide the County with written objection within thirty (30) days of the receipt of such Billing Statement indicating the amount that is being disputed and providing all reasons then known to the City or the Franchise Hauler for any objection to or disagreement with such amount. If the City or the Franchise Hauler and the County are not able to resolve such dispute within thirty (30) days after the City’s or the Franchise Hauler’s objection, either party may pursue appropriate legal remedies.

SECTION 4.4 BILLING OF THE CONTRACT RATE OR OTHER AMOUNTS DUE. The County shall continue to bill Contract Rates and other amounts due after the Commencement Date, in the same manner as it has customarily billed tipping fees. Subject to the other provisions of this Agreement, the County shall have the right to modify or amend such manner of billing on reasonable notice to affected parties.

SECTION 4.5 RESTRICTED RESERVES. For purposes of this Agreement, “Restricted Reserves” means cash and other reserves of the Waste Infrastructure System which are restricted to specific uses or are otherwise being reserved by the County to meet its obligations hereunder throughout the term of the Agreement with respect to the Waste Infrastructure System pursuant to any Applicable Law, contract, adopted budget, budgetary policy of the County with respect to the Waste Infrastructure System, or other arrangement. Such cash and other reserves are not required to be deposited in separate accounts or funds in order to constitute “Restricted Reserves” hereunder, and may be commingled with Unrestricted Reserves or other funds of the County attributable to the Waste Infrastructure System. “Restricted Reserves” shall include, but not be limited to, the following:
(i) reserves for closure of components of the Waste Infrastructure System to the extent required by Applicable Law;
(ii) amounts reserved by the County for funding of post closure maintenance and monitoring with respect to components of the Waste Infrastructure System; (iii) reserves established to protect the Waste Infrastructure System against the adverse financial impact of potential decreases in waste deliveries pursuant to Section 4.2(B); (iv) amounts reserved to pay the costs of capital improvements with respect to the Waste Infrastructure System;
(v) amounts funded from revenues during the early years of the term of the Agreement reserved to enable the County to provide disposal services for the Contract Rate during the later years of the Agreement; (vi) amounts temporarily held by the County prior to payment to the State or other Governmental Bodies pursuant to Applicable Law (including any fees or charges payable to CalRecycle); (vii) reserves required to meet bond covenants pursuant to financing agreements for Waste Infrastructure System assets to the extent such amounts must be legally separate and distinct from other reserves identified in this Section;
(viii) security deposits from landfill deferred payment program users; (ix) amounts held by the County in the Environmental Fund (provided, however, that such amounts in the Environmental Fund will be made available and used by the County if required to pay costs relating to environmental remediation or other related costs);
(x) AB 939 surcharges;
(xi) amounts held by the County in the Corrective Action Fund held pursuant to CCR Title 27 to demonstrate financial assurance to pay for potential groundwater contamination; and (xii) an amount equal to three (3) months of budgeted expenses for the Disposal System for the current fiscal year, representing working capital of the Disposal System.

SECTION 4.6 AUDITED FINANCIAL STATEMENTS. The County shall annually, on or before January 1 each year, prepare or cause to be prepared and have on file for inspection an annual report for the preceding Contract Year, accompanied by a certificate of an independent public accountant or of the County Auditor and Controller as to the examination of the financial statements therein (describing such statements as fairly presenting the information therein in conformity with generally accepted accounting principles) relating to the Waste Infrastructure System, services, and the fiscal activities of the OC Waste Disposal Enterprise Fund, and including statements in reasonable detail of the financial condition of the OC Waste Disposal Enterprise Fund as of the end of the Contract Year and revenue and expenses for the Contract Year.

SECTION 4.7 ANNUAL UPDATE OF TEN-YEAR FINANCIAL PROJECTION. The County shall annually, on or before May 1 of each year, prepare or cause to be prepared, an updated Ten-Year Financial Projection for the Waste Infrastructure System. Said Financial Projection shall include at least two full years of prior actual data and ten years of future projections including the following elements:

1. County Acceptable Waste, in tons;

2. Imported Acceptable Waste, in tons;

3. Revenues and expenditures;

4. Cash fund balances, including all monies in the County Solid Waste Enterprise Fund, with specific delineation of monies in the Environmental Fund, Restricted Reserves, Unrestricted Reserves, and all other funds of the System; and

5. Projected liabilities for closure and post closure as well as reasonable reserves for other environmental costs.

The purpose of the Ten-Year Financial Projection is to keep the City fully informed about the future financial condition of the Waste Infrastructure System. The County shall cause a copy of the Ten-Year Financial Projection to be delivered to the City Manager/General Manager of the City no later than May 1 of each year. Upon request, the County shall make available to the Cities supporting information related to the ten-year financial projection Within thirty (30) calendar days of finalizing each annual update of the Ten-Year Projection, County shall transmit the Ten-Year Projection via email to the City and OCCMA. If requested by the City or OCCMA, the County shall reasonably respond to requests from the City and/or OCCMA for additional information including, but not limited to, requests to meet and discuss the updated Ten-Year Projections at the next regularly scheduled OCCMA meeting or other forum mutually agreed to by the County and OCCMA.

ARTICLE V

BREACH, ENFORCEMENT AND TERMINATION
SECTION 5.1 BREACH. The Parties agree that in the event either Party breaches any obligation under this Agreement or any representation made by either Party hereunder is untrue in any material respect, the other Party shall have the right to take any action at law or in equity (including actions for injunctive relief, mandamus and specific performance) it may have to enforce the payment of any amounts due or the performance of any obligations to be performed hereunder. Neither Party shall have the right to terminate this Agreement except as provided in Section 5.2 and Section 5.3 hereof or as otherwise provided in this Agreement.

SECTION 5.2 CITY CONVENIENCE TERMINATION. The City shall have the right to terminate this Agreement in its sole discretion, for its convenience and without cause at any time during the Term hereof upon ninety (90) days’ written notice to the County. If the City exercises its rights to terminate the Agreement pursuant to this Section, the City shall pay the County a termination fee equal to the Contract Rate in effect at the time of such termination (or any higher rate with respect to which the County has provided notice pursuant to Section 4.2) multiplied by the number of tons of City Acceptable Waste delivered to the Disposal System during the preceding twelve (12) months (or, if the City had been in breach of the Waste Disposal Covenant during such prior months, such amount as would have been delivered if the City had complied with the Waste Disposal Covenant), multiplied by the number of years remaining in the Term of the Agreement.

SECTION 5.3 TERMINATION.
(A) By City. Except as expressly provided herein, the City shall have no right to terminate this Agreement for cause except in the event of the failure or refusal by the County substantially to perform any material obligation under this Agreement unless such failure or refusal is excused by an Uncontrollable Circumstance; except that no such failure or refusal shall give the City the right to terminate this Agreement for cause under this subsection unless:
(1) The City has given prior written notice to the County stating that a specified failure or refusal to perform exists which will, unless corrected, constitute a material breach of this Agreement on the part of the County and which will, in its opinion, give the City the right to terminate this Agreement for cause under this subsection unless such breach is corrected within a reasonable period of time, and (2) The County has neither challenged in an appropriate forum (in accordance with Section 5.5) the City’s conclusion that such failure or refusal to perform has occurred or constitutes a material breach of this Agreement nor corrected or diligently taken steps to correct such breach within a reasonable period of time not more than ninety (90) days from the date of the notice given pursuant to clause (1) of this subsection (but if the County shall have diligently taken steps to correct such breach within such reasonable period of time, the same shall not constitute a breach giving rise to the right of termination for as long as the County is continuing to take such steps to correct such breach).
(B) By County. Except as expressly provided herein, the County shall have no right to terminate this Agreement for cause except in the event of the failure or refusal by the City or its Franchise Hauler to substantially perform any material obligation under this Agreement unless such failure or refusal is excused by an Uncontrollable Circumstance; except that no such failure or refusal shall give the County the right to terminate this Agreement for cause under this subsection unless:
(1) The County has given prior written notice to the City stating that a specified failure or refusal to perform exists which will, unless corrected, constitute a material breach of this Agreement on the part of the City and which will, in its opinion, give the County right to terminate this Agreement for cause under this subsection unless such breach is corrected within a reasonable period of time, and (2) The City has neither challenged in an appropriate forum (in accordance with Section 5.5) the County’s conclusion that such failure or refusal to perform has occurred or constitutes a material breach of this Agreement nor corrected or diligently taken steps to correct such breach within a reasonable period of time not more than ninety (90) days from the date of the notice given pursuant to clause (1) of this subsection (but if the City shall have diligently taken steps to correct such breach within such reasonable period of time, the same shall not constitute a breach giving rise to the right of termination for as long as the City is continuing to take such steps to correct such breach).

SECTION 5.4 NO WAIVERS. No action of the County or the City pursuant to this Agreement (including, but not limited to, any investigation or payment), and no failure to act, shall constitute a waiver by either Party of the other Party’s compliance with any term or provision of this Agreement. No course of dealing or delay by the County or the City in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof or otherwise prejudice such Party’s rights, powers and remedies. No single or partial exercise of (or failure to exercise) any right, power or remedy of the County or the City under this Agreement shall preclude any other or further exercise thereof of the exercise of any other right, power or remedy.

ARTICLE VI
TERM
SECTION 6.1 EFFECTIVE DATE AND TERM.
(A) Initial Term. This Agreement shall become effective, shall be in full force and effect and shall be legally binding upon the City and the County from the Contract Date and shall continue in full force and effect until June 30, 2036, unless earlier terminated in accordance with its terms, in which event the Term shall be deemed to have expired as of the date of such termination.
(B) Option to Renew. This Agreement shall be subject to renewal by mutual agreement of the Parties, on or before June 30, 2036 for an additional term of ten (10) years (the “Renewal Term”) on the same terms and conditions as are applicable during the Initial Term hereof or on amended terms as may be mutually agreed to by the Parties. The City shall give the County written notice of its election to renew this Agreement on or before June 30, 2035. If the parties do not execute a renewal of this Agreement prior to June 30, 2036 it shall expire. (C) Contract Rate During Renewal Term. In connection with the parties’ right to renew this Agreement for an additional ten-year term pursuant to Section 6.1(C), the parties shall, on or before January 31, 2036 negotiate an applicable change in the Contract Rate for such renewal term. In determining any revisions to the Contract Rate to be applicable during any renewal period, in addition to the circumstances described in Section 4.2(A), the parties may take into consideration the following parameters, including but not limited to:
(i) actual cost of operations;
(ii) population growth;
(iii) increase or decrease in available tonnage;
(iv) economic and disposal market conditions in the Southern California region; (v) new regulatory requirements;
(vi) Changes in Law;
(vii) changes in transportation and technology;
(viii) closure and expansion of nearby landfills;
(ix) capacity of the Disposal System;
(x) provision of new and/or expanded services; and
(xi) available reserves which are in excess of the amount reasonably required as reserves.
(D) Survival; Accrued Rights. The rights and obligations of the parties hereto pursuant to Sections 3.1(E)(2), 5.1, 5.3, 7.2, 7.3, 7.6, 7.7, 7.8, and 7.9 hereof shall survive the termination or expiration of this Agreement, and no such termination or expiration shall limit or otherwise affect the respective rights and obligations of the parties hereto accrued prior to the date of such termination or expiration. At the end of the Term of this Agreement, all other obligations of the parties shall terminate.

SECTION 6.2 COMMENCEMENT DATE.
(A) Obligations of the Parties Prior to the Commencement Date. The Parties acknowledge that the Agreements may be executed and delivered on different dates and that, except as provided in thissubsection, neither the County nor the City shall be obligated to perform its obligations hereunder until the Participation Threshold provided herein has been met and the other conditions to the occurrence of the Commencement Date have occurred.

Prior to the Commencement Date, each Party hereto shall at its own expense exercise good faith and due diligence and take all steps within its reasonable control in seeking to satisfy the conditions to the Commencement Date set forth herein as soon as reasonably practicable. The County and the City, each at its own expense, shall cooperate fully with each other and the other Participating Cities in connection with the foregoing undertaking. Until the Commencement Date occurs, the Original WDAs shall remain in full force and effect until they expire or are terminated. (B) Condition to the Commencement Date. The Commencement Date for the Agreement shall be the date on which Participating Cities reach the Participation Threshold. Unincorporated County is assumed to be a Participating City for the purposes of determining the Commencement Date in accordance with this Section 6.2(b) and Appendix 1 of this Agreement.
(C) Satisfaction of Condition and Commencement Date. Upon the satisfaction or waiver of the condition to the Commencement Date, the County shall give written notice thereof to the Cities which have theretofore executed Agreements. The parties shall thereupon hold a formal closing acknowledging the satisfaction or waiver of the condition to the Commencement Date, certifying that the Commencement Date has occurred and designating the Participating Cities. Copies of all of the documents or instruments constituting or evidencing satisfaction of the Commencement Date conditions shall be furnished to each party prior to or on the Commencement Date. (D) Newly Incorporated Cities. Any city within Orange County which becomes incorporated after the Commencement Date shall upon request be offered the opportunity by the County to become a Participating City on substantially the same terms and conditions as this Agreement. (E) Failure of Condition. If by June 30, 2026, or such later date as the County may agree, the condition to the Commencement Date specified in this Section is not satisfied, either party hereto may, by notice in writing to the other party, terminate this Agreement. Neither party shall be liable to the other for the termination of this Agreement pursuant to this subsection, and each of the parties shall bear its respective costs and expenses incurred in seeking to satisfy the condition to the Commencement Date.

ARTICLE VII

GENERAL PROVISIONS
SECTION 7.1 OPERATION AND MAINTENANCE OF THE WASTE INFRASTRUCTURE SYSTEM.

The County, at its cost and expense through the County Solid Waste Enterprise Fund, shall at all times operate, or caused to be operated, the Waste Infrastructure System in accordance with Applicable Law and the operating rules and regulations of the Department and other applicable regulatory agencies.

SECTION 7.2 UNCONTROLLABLE CIRCUMSTANCES GENERALLY.
(A) Performance Excused. Except as otherwise specifically provided in this Agreement, neither the County nor the City shall be liable to the other for any failure or delay in the performance of any obligation under this Agreement (other than any payment at the time due and owing) to the extent such failure or delay is due to the occurrence of an Uncontrollable Circumstance.
(B) Notice, Mitigation. The Party experiencing an Uncontrollable Circumstance shall notify the other Party by telecommunication or telephone and in writing, on or promptly after the date the Party experiencing such Uncontrollable Circumstance first knew of the commencement thereof, followed within fifteen (15) days by a written description of (1) the Uncontrollable Circumstance and the cause thereof (to the extent known), (2) the date the Uncontrollable Circumstance began and the cause thereof, its estimated duration, the estimated time during which the performance of such Party’s obligations hereunder will be delayed, (3) the estimated amount, if any, by which the Contract Rate may need to be adjusted as a result of such Uncontrollable Circumstance, (4) its estimated impact on the other obligations of such Party under this Agreement and (5) potential mitigating actions which might be taken by the County or City and any areas where costs might be reduced and the approximate amount of such cost reductions. Each Party shall provide prompt written notice of the cessation of such Uncontrollable Circumstance. Whenever such act, event or condition shall occur, the Party claiming to be adversely affected thereby shall, as promptly as reasonably possible, use its best efforts to eliminate the cause therefor, reduce costs and resume performance under this Agreement. In addition, with respect to Changes in Law, the County shall diligently contest any such changes the imposition of which would have a material adverse impact on the Waste Infrastructure System. While the delay continues, the County or City shall give notice to the other Party, before the first day of each succeeding month, updating the information previously submitted.
(C) Impact on Contract Rate. If and to the extent that Uncontrollable Circumstances interfere with, delay or increase the cost to the County of meeting its obligations hereunder and providing Waste Infrastructure Services to the Participating Cities in accordance herewith, the County shall be entitled to an increase in the Contract Rate as provided in Section 4.2 herein or an extension in the schedule for performance equal to the amount of the increased cost or the time lost as a result thereof. The proceeds of any insurance available to meet any such increased cost shall be applied to such purpose prior to any determination of cost increases payable under this subsection. Any cost reductions achieved through the mitigating measures undertaken by the County pursuant to subsection 7.2(B) hereof upon the occurrence of an Uncontrollable Circumstance shall be reflected in a reduction of the amount by which the Contract Rate would have otherwise been increased or shall serve to reduce the Contract Rate to reflect such mitigation measures, as applicable.

SECTION 7.3 INDEMNIFICATION. To the extent permitted by law, the County agrees that, it will protect, indemnify, defend (with counsel selected by County) and hold harmless the City from and against all Loss-andExpense arising from the City’s activity as an “arranger” (for purposes of and as such term is defined under CERCLA or comparable State statutes) of municipal solid waste disposal pursuant to this Agreement. In the event the City shall determine for any reason, other than a disabling conflict of interest, that it wishes to be defended by legal counsel other than the legal counsel provided by the County, the cost of providing such legal counsel shall be the City’s sole responsibility. Any costs incurred by the County pursuant to this Section shall be considered an Uncontrollable Circumstance cost and the County shall be entitled to adjust the Contract Rate as provided in subsection 4.2(A) herein.

The County shall not, however, be required to indemnify or defend the City from and against all Loss-and-Expense arising from any willful, knowing, illegal or negligent disposal of hazardous waste (other than incidental amounts of Household Hazardous Waste commonly found in municipal solid waste and permitted to be disposed in Class III landfills under RCRA) which violates the County’s landfill permits or Applicable Law. The parties agree that this provision constitutes an indemnity under CERCLA (to the extent of the specific provisions of this Section). The parties acknowledge that this subsection is not intended to and does not create any obligation on the part of the County to provide any indemnification or defense to any Franchise Hauler, whether franchised or not, or any Independent Hauler or Transfer Station, under any circumstances. The City acknowledges the County’s legitimate interest in actively participating in any defense, litigation or settlement, whether the County or the City provides legal counsel and shall, as a condition to County’s provision of this indemnity, coordinate and cooperate fully with the County in the defense of any claims to which this Section applies.

SECTION 7.4 RELATIONSHIP OF THE PARTIES. Neither party to this Agreement shall have any responsibility whatsoever with respect to services provided or contractual obligations or liabilities assumed by the other party hereto, whether accrued, absolute, contingent or otherwise, or whether due or to become due. The County is an independent contractor of the City and nothing in this Agreement shall be deemed to constitute either party a partner, agent or legal representative of the other party or to create any fiduciary relationship between the parties.

SECTION 7.5 LIMITED RECOURSE.
(A) To the City. No recourse shall be had to the general funds or general credit of the City for the payment of any amount due the County hereunder, or the performance of any obligation incurred hereunder, including any Loss-and-Expense of any nature arising from the performance or non-performance of the City’s obligations hereunder. If the City maintains a City Solid Waste Enterprise Fund with at least one year’s anticipated costs for disposal and processing of City Acceptable Waste the sole recourse of the County for all such amounts shall be to the funds held in any such City Solid Waste Enterprise Fund. All amounts held in any City Solid Waste Enterprise Fund shall be held for the uses permitted and required thereby, and no such amounts shall constitute property of the County. The City shall make adequate provision in the administration of any City Solid Waste Enterprise Fund for the payment of any amount or the performance of any obligation which may be due hereunder. (B) To the County. No recourse shall be had to the general funds or general credit of the County for the payment of any amount due the City hereunder, or the performance of any obligation incurred hereunder, including any Loss-and-Expense of any nature arising from the performance or non-performance of the County’s obligations hereunder. The sole recourse of the City for all such amounts shall be to the funds held in the County Solid Waste Enterprise Fund in accordance with the terms of this Agreement. All amounts held in the County Solid Waste Enterprise Fund shall be held for the uses permitted and required thereby, and no such amountsshall constitute property of the City. The County shall make adequate provision in the administration of the County Solid Waste Enterprise Fund for the payment of any amount or the performance of any obligation which may be due hereunder.

SECTION 7.6 PRE-EXISTING RIGHTS AND LIABILITIES. Nothing in this Agreement is intended to affect, release, waive or modify any rights, obligations or liabilities which any Party hereto may have to or against the other Party as of the Contract Date relating to the receipt of Acceptable Waste in the Waste Infrastructure System or any other related matter.

SECTION 7.7 NO VESTED RIGHTS. The City shall not acquire any vested property, license or other rights in the Waste Infrastructure System by reason of this Agreement.

SECTION 7.8 LIABILITY FOR COLLECTION, TRANSPORTATION AND PROCESSING. Any liability incurred by the City as a result of collecting, transporting or processing of Acceptable Waste, or as a result of causing, franchising, permitting, licensing, authorizing or arranging any of the foregoing, shall be the sole liability of City, except as expressly otherwise provided herein.

SECTION 7.9 NO CONSEQUENTIAL OR PUNITIVE DAMAGES. In no event shall either Party hereto be liable to the other or obligated in any manner to pay to the other any special, incidental, consequential, punitive or similar damages based upon claims arising out of or in connection with the performance or non- performance of its obligations or otherwise under this Agreement, or the material inaccuracy of any representation made in this Agreement, whether such claims are based upon contract, tort, negligence, warranty or other legal theory.

SECTION 7.10 AMENDMENTS. Neither this Agreement nor any provision hereof may be changed, modified, amended or waived except by written agreement duly authorized and executed by both Parties.

SECTION 7.11 NOTICE OF LITIGATION. Each Party shall deliver written notice to the other of any Legal Proceeding to which it is a party and which questions the validity or enforceability of this Agreement executed by the City or the County or any Legal Entitlement issued in connection herewith.

SECTION 7.12 FURTHER ASSURANCES. At any and all times the City and the County so far as may be authorized by law shall pass, make, do, execute, acknowledge and deliver any and every such further resolutions, acts, deeds, conveyances, instruments, assignments, transfers and assurances as may be necessary or reasonably requested by the other in order to give full effect to this Agreement.

SECTION 7.13 ASSIGNMENT OF AGREEMENT.
(A) Assignment. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either Party hereto without the prior written consent of the other Party, which may be withheld in the other Party’s sole discretion. Notwithstanding the foregoing, either Party may assign this Agreement to another public entity, subject to the reasonable consent of the other party. In such circumstances the Party not requesting the assignment shall have the right to demand assurances of the financial, technical and legal ability of the proposed assignee to undertake the responsibilities and obligations of the assigning Party. (B) Sale. The County shall not enter into any agreement for the sale of the Waste Infrastructure System which provides for an effective date for such sale prior to the termination of this Agreement.

SECTION 7.14 INTEREST ON OVERDUE OBLIGATIONS. Except as otherwise provided herein, all amounts due hereunder, whether as damages, credits, revenue or reimbursements, that are not paid when due shall bear interest at the Overdue Rate on the amount outstanding from time to time, on the basis of a 365-day year, counting the actual number of days elapsed, and all such interest accrued at any time shall, to the extent permitted by Applicable Law, be deemed added to the amount due, as accrued.

SECTION 7.15 BINDING EFFECT. This Agreement shall bind and inure to the benefit of the Parties hereto and any successor or assignee acquiring an interest hereunder consistent with the provisions of Section 7.13 hereof.

SECTION 7.16 NOTICES. Any notice or communication required or permitted hereunder shall be in writing and sufficiently given if delivered in person or sent by certified or registered mail, postage prepaid, to the notice address of the respective Parties set forth on the cover page of this Agreement. Changes in the respective addresses to which such notices may be directed may be made from time to time by any Party by notice to the other Party.

Section 7.17 ATTORNEYS FEES. In any action or proceeding to enforce or interpret any provision of this Agreement, each Party shall bear their own attorney’s fees, costs and expenses.

Signature Page to Follow
IN WITNESS WHEREOF, COUNTY and CITY have caused this Agreement to be executed by their duly authorized officers or representatives as of the day and year first above written.

COUNTY OF ORANGE
Date By
Director, OC Waste & Recycling
APPROVED AS TO FORM:

COUNTY COUNSEL

ORANGE COUNTY, CALIFORNIA
By
Date
Date By
Leo Medrano, Mayor
City of Cypress
APPROVED AS TO FORM:

By
William Wynder, City Attorney
Date
APPENDIX 1

ESTIMATED ANNUAL TONNAGE
APPENDIX 1

PERCENTAGE OF COUNTY ACCEPTABLE WASTE ATTRIBUTABLE TO PARTICIPATING CITIES FOR PURPOSE OF SECTIONS 3.6(F) AND 6.2(b)
Jurisdiction Percentage of County
Acceptable Waste
Aliso Viejo 0.82%
Anaheim 14.78%
Brea 2.62%
Buena Park 1.02%
Costa Mesa/Costa Mesa Sanitary District (2) 3.41%
Cypress 0.85%
Dana Point 1.33%
Fountain Valley 1.63%
Fullerton 4.08%
Garden Grove Sanitary District (Garden Grove) 4.74%
Huntington Beach 5.91%
Irvine 9.64%
La Habra 1.72%
La Palma 1.27%
Laguna Beach 1.18%
Laguna Hills 0.89%
Laguna Niguel 1.44%
Laguna Woods 0.28%
Lake Forest 2.14%
Los Alamitos 0.33%
Midway City Sanitary District (Westminster) 2.47%
Mission Viejo 2.33%
Newport Beach 3.58%
Orange 5.25%
Placentia 1.39%
Rancho Santa Margarita 1.03%
San Clemente 2.43%
San Juan Capistrano 2.93%
Santa Ana 9.45%
Seal Beach 0.52%
Stanton 1.47%
Tustin 2.04%
Unincorporated Orange County (1) 3.19%
Villa Park 0.16%
Yorba Linda 1.68%
Total 100%
(1) Unincorporated County Area is assumed to be a Participating City for the purposes of determining the Commencement Date in accordance with Section 6.2(b) of this Agreement. For the distribution of Net Import Revenues, the County of Orange shall receive 50% of any Net Import Revenues received in accordance with Section 3.6(F)(2)(i) of this Agreement. The County of Orange shall also receive the Unincorporated Area distribution set forth in this Appendix 1, as periodically modified in accordance with Section 3.6(F)(2)(ii) of this Agreement. (2) The City of Costa Mesa and the Costa Mesa Sanitation District have separate WISE Agreements. Costa Mesa Sanitation District Acceptable Waste tonnage is based on City of Costa Mesa Acceptable Wate tonnage and Importation Revenue is calculated based on City of Costa Mesa Acceptable Waste tonnage delivered to the Waste Infrastructure System. (3) NOTE: A participating City will only be included for purposes of determining the Commencement Date upon (i) execution of a WISE Agreement by that Participating City and (ii) execution of a Hauler Acknowledgement(s) by the Franchise Hauler(s) operating within such Participating City.

APPENDIX 2

CUMULATIVE TONNAGE
APPENDIX 2
Cumulative County Acceptable Waste Tonnage Target to be Used for Purposes of Section 4.2(B)
Fiscal Year
(Ending June 30)
County Acceptable Waste
Tonnage
Cumulative County Acceptable
Waste Tonnage
2026 3,343,282 3,343,282
2027 3,278,595 6,621,877
2028 3,029,924 9,651,801
2029 2,982,454 12,634,255
2030 2,411,983 15,046,238
2031 2,261,201 17,307,439
2032 2,225,152 19,532,591
2033 2,181,838 21,714,429
2034 2,187,041 23,901,470
2035 2,219,362 26,120,832
2036 2,224,792 28,345,624
APPENDIX 3

CUMULATIVE CAPITAL COSTS
APPENDIX 3

CUMULATIVE CAPITAL COSTS
to be Used
for Purposes of Section 4.2(A)vi
Fiscal Year
(Ending June 30) Annual Capital Costs Cumulative Capital Costs 2026 $72,599,664 $72,599,664
2027 $79,950,000 $152,549,664
2028 $155,135,000 $307,684,664
2029 $136,185,000 $443,869,664
2030 $41,171,500 $485,041,164
2031 $16,745,000 $501,786,164
2032 $18,165,000 $519,951,164
2033 $36,605,000 $556,556,164
2034 $30,100,000 $586,656,164
2035 $1,510,000 $588,166,164
2036 $25,000,000 $613,166,164
APPENDIX 4

FRANCHISE HAULER ACKNOWLEDGMENT

Appendix 5

ORGANIC SERVICES AGREEMENT
Appendix 5

ORGANIC SERVICES AGREEMENT
Between

THE COUNTY OF ORANGE, CALIFORNIA
and
__________________________
Dated , 2025
County Authorization Date: City Authorization Date:

County Notice Address:

Director
OC Waste & Recycling
601 N. Ross Street 5th Floor
Santa Ana, CA 92701
City Notice Address:

ORGANIC SERVICES AGREEMENT
THIS ORGANIC SERVICES AGREEMENT (“Organics Agreement” or “OSA”) is made and dated as of the date indicated on the cover page hereof between the County of Orange, a political subdivision of the State of California (the “County”), and the City designated on the cover page of this Agreement (the “City”). County and City may hereinafter be referred to singularly as “Party” or collectively as “Parties.”.

RECITALS
The County owns, manages and operates a Waste Infrastructure System to manage municipal and solid waste generated within the County of Orange or imported from outside the County pursuant to contractual agreements. The Waste Infrastructure System collectively includes active Class III sanitary landfills (“County Landfills”), resource recovery, recycling and organics programs, infrastructure and operations, and regional household hazardous waste collection centers and other waste management related systems as may be deemed necessary by the County.

A significant portion of municipal solid waste generated within the City historically has been and currently is delivered by such hauler or haulers to the County for disposal in the Disposal System.

Prior to the passage of Organics Legislation, Processed Green Material (“PGM”) could be utilized as Alternative Daily Cover (“ADC”) for landfill operations and qualified for diversion credit. However, passage of Assembly Bill 1594 resulted in PGM used as ADC no longer being eligible for diversion credit starting on January 1, 2020.

In addition to the loss of diversion eligibility for PGM used as ADC, SB 1383 requires a 50% reduction in the disposal of Organic Waste by January 1, 2020 and a 75% reduction of Organic Waste by January 1, 2025. In addition, the law requires 20% of edible food waste be recovered by 2025.

On April 23, 2019, the Orange County Board of Supervisors passed Resolution 19-031 to respond to the State’s increasing landfill diversion requirements and identified the need for additional organic processing infrastructure in the County and directed the Department to develop additional organics recycling infrastructure to support the region in meeting State organic recycling mandates. (See Attachment 4) To respond to Organics Legislation requirements, the County has developed an Organics Infrastructure that is comprised of organic processing facilities to receive and process Organic Waste to support the State’s Organic Legislation goals, promote local recycling, assist local jurisdictions in meeting their organic diversion requirements and correspondingly conserve capacity in the Disposal System.

In their effort to continue the concepts and purposes outlined in the WDAs and respond to Organics Legislation, the City and the County desire to enter into this Organics Agreement, on the terms and conditions set forth herein.

With the exception of the terms and organic specific provisions found in this Organics Agreement, the Parties intend that the provisions of the currently operative WDA and the replacement WISE Agreement that is being negotiated between the County and City are anticipated to become operative on July 1, 2026, be applied to this OSA.

The City has determined that the execution of this Organics Agreement by the City will serve the public health, safety and welfare of the City by providing enhanced organics processing to assist in the City in meeting its Organics Legislation diversion requirements, and the continuation of sound environmental management.

The County has determined that the execution by the County of this Organics Agreement will serve the public health, safety and welfare by providing a stable, predictable and reliable supply of organic material and the resulting service payment revenue to the Organics Infrastructure, thereby enabling the County to plan, manage, operate and finance improvements to the Organics Infrastructure System on a prudent and sound long term, businesslike basis consistent with its legal and regulatory obligations to the State and Federal government.

Official action approving this Organics Agreement and determining it to be in the public interest and authorizing its execution and delivery was duly taken by the County on the County authorization date indicated on the cover page hereof.

Official action approving this Organics Agreement and determining it to be in the public interest and authorizing its execution and delivery was duly taken by the City on the City authorization date indicated on the cover page hereof.

It is, therefore, agreed as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS. The definitions provided in the WDA and yet to be executed WISE Agreement shall be incorporated into this Agreement. The following terms shall be added and have the meanings set forth below.
“Acceptable Organic Waste” means Residential Organic Waste that consists of Green Material/Wood Waste, Agricultural Material, Manure, Vegetative Food Material, Food Waste and other organic material as may be authorized under the County’s Compostable Material Handling Permits. “Attachment” means an attachment to this OSA, as the same may be amended or modified from time to time in accordance with the terms hereof.
“CalRecycle” means the California Department of Resources Recycling and Recovery, which is a branch of the California Environmental Protection Agency. CalRecycle oversees the State’s waste management and waste reduction programs. CalRecycle was established in 2010 to replace the California Integrated Waste Management Board and is responsible for the enforcement of legislation and regulations and diversion requirements applicable to the Waste Infrastructure System.
”City Acceptable Organic Waste” means all Acceptable Organic Waste which was originally discarded by the first generator thereof within the geographical limits of the City and Residue Waste from the foregoing wherever produced, whether withing or outside the City.
“City Organic Tonnage Limit” the maximum amount of Controllable Organic Waste that County is committed to accept under the Organic Service Covenant as provided in Attachment 3. “Commencement Date” means the date on which the obligations of the parties hereto commence. “Contract Date” means the first date on which this OSA has been executed by both parties hereto. “Controllable Organic Waste” means all City Acceptable Organic Waste with respect to which the City has the legal or contractual ability to determine the processing location and procurement requirements as they relate to the City’s Organics Legislation compliance requirements.
“Consumer Price Index” or “CPI” means the Consumer Price Index published by the Bureau of Labor Statistics for Al Urban Consumers: Water and Sewer and Trash Collection Services in U.S. City Average (CUSR0000EHG). In the event the forgoing index is no longer published during the term of this Agreement, such other index identified by the Bureau of Labor Statistics as a replacement or otherwise generally accepted as a replacement shall be used for purposes of this Agreement; and, in the absence thereof, the County Board of Supervisors shall select an index that it determines most closely reflects the forgoing and best implements the intent of this Agreement.
“Initial Term” has the meaning specified in Section 5.1(A) hereof. “Manure/Stable Bedding Program” means the programs used by the County to mix source separated uncontaminated horse manure and stable bedding into its Organic Infrastructure to create organic product. Current permit requirements set a maximum percentage of 20% manure/stable bedding (“Material”) by weight of total incoming feedstock. County agreement to accept Material is subject to payment of the Organic Contract Rate, available capacity, and compliance with the terms found in Attachment 2.
“Organic Contract Rate” has the meaning specified in Section 4.2 hereof. “Organic Diversion Credit” means credit provided to a local jurisdiction or entity for implementing the diversion of Organic Waste from landfilling through specific activities recognized by the Department of Resources Recycling and Recovery (CalRecycle) including composting, anaerobic digestion, or other methods to meet the State’s waste diversion goals and statutes such as Assembly Bill 939, Assembly Bill 341, Assembly Bill 1594, Assembly Bill 1826, and SB 1383 through waste prevention, reuse, and recycling. “Organic Infrastructure” means the County’s organics processing facilities and programs used to recycle and promote the processing and diversion of Organic Waste into compost or other material that qualifies as diversion under Applicable Law as described in more detail in Attachment 1. “Organics Legislation” means organics recycling legislation including Assembly Bill 1594, Assembly Bill 1826, SB1383 and any future legislation pertaining to the management and diversion of Organic Waste. “Organic ROWP Procurement Credit” means credit provided to a jurisdiction to meet their Recovered Organic Waste Procurement Target under SB 1383 by procuring Recovered Organic Waste Products as permitted by CalRecycle.
“Organics Agreement” means this Organic Services Agreement (“OSA”) between the County and the City as the same may be amended or modified from time to time in accordance herewith. “Organic Take-Back Goal” means the programs that City and County will work toward to create City programs that have the goal of City taking back its Proportional Share of finished compost or other Recovered Organic Waste Product for local application.
“Organic Waste” means solid wastes containing material originated from living organisms and their metabolic waste products including, but not limited to, food, green material, landscape and pruning waste, organic textiles and carpets, lumber, wood, paper products, printing and writing paper, manure, biosolids, digestate, and sludges as defined in Title 14 of the California Code of Regulations, Section 18982(a)(46). “Processed Green Material” (“PGM”) as defined in Title 27, California Code of Regulations §20690(b)(3) means any plant material that is either separated at the point of generation, or separated at a centralized facility that employs methods to minimize contamination. Green material includes, but is not limited to, yard trimmings, untreated wood wastes, paper products, and natural fiber products. Green material does not include treated wood waste, mixed demolition or mixed construction debris, manure, or plant waste from the food processing industry, alone or blended with soil. Processed green material may include varying proportions of wood waste from urban and other sources and shall be ground, shredded, screened, source separated for grain size, or otherwise processed. This PGM standard is the standard that Controllable Organic Waste must meet in order to be accepted at County’s Organic Infrastructure under the OSA.
“Proportional Share” means 60% of the weight of Controllable Organic Waste City delivered by City to County’s Organics Infrastructure.
“Recovered Organic Waste Product” or “ROWP” means compost, mulch, renewable energy (transportation fuel, electricity, and gas for heating) from anaerobic digestion, and electricity from biomass conversion. “Recycled City Organic Waste” means any otherwise Controllable Organic Waste which is separated from Acceptable Organic Waste by the generator thereof and composted by generator at home, community gardens or other processing and which is not placed in Franchise Hauler bin for collection. “Renewal Term” has the meaning specified in Subsection 5.1(C) hereof. “Residential Organic Waste” means Acceptable Organic Waste normally disposed of by or collected from residential (single family and multi-family) residences. "Residual Waste” means any contaminants, inert materials, overs, or Acceptable Organic Waste that could not be processed at the Department’s Organic Infrastructure that required to be dispose within the Disposal System. “Waste Disposal Agreement” (“WDA”) means the currently operative agreement between the Parties for the disposal of municipal solid waste that is currently set to expire on June 30, 2026. With the exception of specific or conflicting provisions provided in this Organics Agreement, the Parties agree that the terms found in the WDA shall be applied to the interpretation of this OSA. For the purpose of interpretation of this OSA, the Parties also intend that the WDA be read to include terms such as Controllable Organic Waste, where appropriate. “Waste Infrastructure System” or “Disposal System” means active Class III sanitary landfills (“County Landfills”), closed landfills managed by the County, resource recovery operations, Organics Infrastructure, recycling and organics programs, infrastructure and operations, and regional household hazardous waste collection centers and other waste management related systems as may be deemed necessary by the County. “Waste Infrastructure System Enterprise Agreement” or “WISE Agreement” means each of the agreement between the parties that is expected to replace the current WDA that is set to expire on June 30, 2026.

SECTION 1.2 INTERPRETATION. In this Agreement, unless the context otherwise requires:

References Hereto. The terms “hereby”, “hereof”, “herein”, “hereunder”, “herewith”, and any similar terms refer to this Agreement, and the term “hereafter” means after, and the term “heretofore” means before, the Contract Date.

Gender and Plurality. Words of the masculine gender mean and include correlative words of the feminine and neuter genders and words importing the singular number mean and include the plural number and vice versa.

Persons. Words importing persons include firms, companies, associations, general partnerships, limited partnerships, trusts, businesstrusts, corporations and other legal entities, including public bodies, as well asindividuals.

Headings. The table of contents and any headings preceding the text of the Articles, Sections and subsections of this Agreement shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect.

No Third Party Beneficiaries. Nothing in this Agreement is intended to confer on haulers or any other person other than the parties hereto and their respective permitted successors and assigns hereunder any rights or remedies under or by reason of this Agreement.

Counterparts. This Agreement may be executed in any number of original counterparts. All such counterparts shall constitute but one and the same Agreement.

Applicable Law and Venue. This Agreement has been negotiated and executed in the State of California and shall be governed by and construed under the laws of the State of California. In the event of any legal action to enforce or interpret this Agreement, the sole and exclusive venue shall be a court of competent jurisdiction located in Orange County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394. Furthermore, the parties specifically agree to waive any and all rights to request that an action be transferred for adjudication to another county.

Severability. If any clause, provision, subsection, Section or Article of this Agreement shall be ruled invalid by any court of jurisdiction, then the parties shall: (1) promptly meet and negotiate a substitute for such clause, provision, subsection, Section or Article which shall, to the greatest extent legally permissible, effect the intent of the parties therein; (2) if necessary or desirable to accomplish item (1) above, apply to the court having declared such invalidity for a judicial construction of the invalidated portion of this Agreement; and (3) negotiate such changes in, substitutions for or additions to the remaining provisions of this Agreement as may be necessary in addition to and in conjunction with items (1) and (2) above to effect the intent of the parties in the invalid provision. The invalidity of such clause, provision, subsection, Section or Article shall not affect any of the remaining provisions hereof, and this Agreement shall be construed and enforced as if such invalid portion did not exist, unless such invalidity frustrates the underlying primary purpose of the Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE CITY. The City represents and warrants that:
(A) Existence. The City is a general law or charter city or a Special District or Sanitary District validly existing under the Constitution and laws of the State. (B) Due Authorization. The City has duly authorized the execution and delivery of this Organics Agreement, and this Organics Agreement has been duly executed and delivered by the City.

SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE COUNTY. The County represents and warrants that:
(A) Existence. The County is a political subdivision of the State of California validly existing under the Constitution and laws of the State.
(B) Due Authorization. The County has duly authorized the execution and delivery of this OSA, and this OSA has been duly executed and delivered by the County.

ARTICLE III

DELIVERY AND ACCEPTANCE OF

ORGANIC WASTE AND PROVISION OF

ORGANIC PROCESSING SERVICES
SECTION 3.1 DELIVERY OF ORGANIC WASTE.
(A) Organic Waste Covenant. Subject to the occurrence of the Commencement Date and throughout the Term of this OSA, and subject to available Organic Infrastructure capacity, the City shall exercise all legal and contractual power and authority which it may possess from time to time to deliver or cause the delivery of all Controllable Organic Waste (up to City’s Organic Tonnage Limit as provided in Attachment 3) to the Waste Infrastructure System in accordance with the terms of this OSA. (B) Recycled City Organic Waste.

1. Non-Mandatory Organic Waste City Programs: The parties hereto acknowledge the responsibility of the City to meet its own recycling and landfill diversion goals contained in the Act and Organics Legislation.

Nothing in this Agreement is intended or shall be interpreted to prohibit or impair the ability of the City to meet such responsibilities, or to restrict the right of the residents, businesses or organizations in the City to practice source separation, recycling, composting or other materials recovery activities, or to restrict the right of the City to conduct, sponsor, encourage or require such activities in any form. No reduction in the amount of Controllable Organic Waste generated in the City and delivered to the Organic Infrastructure by or on behalf of the City which may result from any such source separation or recycling program shall cause the City any liability hereunder (other than potential adjustment to the Organic Contract Rate as may be negotiated by the Parties as authorized under this OSA, and shall not constitute a breach of this Agreement.)

2. Mandatory Organic Waste City Collection Programs: City shall provide data and information to County regarding City’s mandatory Organic Waste collection programs including but not limited to the tonnage of organics collected by the City for diversion under this OSA. The information will be used to provide education and outreach for participation with the goal of minimizing contamination and increasing diversion. (C) Organic Diversion Credit. City shall receive Organic Diversion Credit for City’s Controllable Organic Waste minus any Residual Waste delivered by City and accepted by County and processed into Recovered Organic Waste Product at the County’s Organic Infrastructure. (D) Organic ROWP Procurement Credit. City shall receive Organic ROWP reports for finished recovered organics waste products procured from County that meets the procurement requirements of Title 14 of the California Code of Regulations, Section 18993.1 et seq. City shall receive Organic ROWP Procurement Credit as follows:

1. County will assist City in developing local City programs and opportunities designed to enable the City to meet its own ROWP requirements.

2. City shall be entitled to “take back” its Proportional Share of SB 1383 compliant, STA Certified compost, mulch or other ROWP products from County Organics Infrastructure and used as ROWP Procurement Credit.

3. County will provide reports and allocate credit associated with City resident ROWP pickup as well as commercial landscapers from City that collect ROWP from County Organic Infrastructure.

4. City will be eligible to receive ROWP Procurement Credit for excess Acceptable Recovered Organic Waste Product that County is able to market beyond that needed for the County unincorporated areas or that is not otherwise committed. (*County makes no guarantees that it will provide City with 100% ROWP Procurement Credit.)
(E) Organic Take-Back Goal. City is not required to “take back” its Proportional Share of STA Certified finished compost, mulch, or other ROWP from the County’s Organic Infrastructure, however City and County will work toward creating City programs that have the goal of City taking back its Proportional Share of finished compost or other Recovered Organic Waste Product for local application (“Organic Take-Back Goal”) to meet City’s ROWP procurement requirements.
(F) Procurement of Additional ROWP. Pursuant to terms agreeable to both Parties, City may request to procure Recovered Organic Waste Product in addition to its Proportional Share within the same Contract Year.
(G) OSA Conditions. As a condition of participating in the County’s Organics Infrastructure, City agrees to the following terms:

1. All Controllable Organic Waste delivered to the County’s Organics Infrastructure shall meet the standards as set forth in Attachment 2;

2. City or its Franchise Hauler shall pay the Organics Contract Rate for all Organic Waste delivered to the County’s Organic Infrastructure for processing into Recovered Organic Waste Product;

3. City shall provide information to County on a quarterly basis that identifies where Controllable Organic Waste being delivered to the County’s Organic Infrastructure originated and shall ensure that the organic material being delivered meets the definition of City Acceptable Organic Waste.

4. Bulk ROWP: City shall be entitled to arrange for the Take Back (at City cost) from County Organic Infrastructure compost, mulch and other Recovered Organic Waste Product in bulk form free of charge.

5. Non-Bulk ROWP: County may establish separate fees for provision of non-bulk material including but not limited to bagged material or compost wattles. City shall be entitled to arrange for the Take Back of Non-Bulk ROWP at City cost.

6. City’s Proportional Share shall be calculated as 60% of the weight of Controllable Organic Waste City delivers to County’s Organics Infrastructure by City. (H) No Right of Organic Waste Substitution. Nothing in this Agreement shall authorize or entitle the City to deliver, or cause the delivery to the County’s Organic Infrastructure, Acceptable Organic Waste originating from or generated outside the jurisdiction of the City, nor obligate the County to receive or dispose of any such Acceptable Organic Waste into the Waste Infrastructure System. The City shall not assign in whole or in part its right to deliver or cause to be delivered Controllable Organic Waste to the County hereunder, and shall not permit any Acceptable Organic Waste originating from or generated outside the jurisdiction of the City to be substituted for Controllable Organic Waste for any purpose hereunder.

SECTION 3.2 PROVISION OF ORGANIC PROCESSING SERVICES BY THE COUNTY. (A) Organic Service Covenant. Commencing on the Commencement Date, the County shall provide or cause the provision of the service of receiving and processing of City’s Controllable Organic Waste (up to the City Organic Tonnage Limit provided in Attachment 3) at the County’s Organics Infrastructure as described in more detail in Attachment 1. The County shall exercise all reasonable efforts to minimize the costs incurred in complying with the Organic Service Covenant consistent with prudent solid waste management practice and environmental considerations and under Applicable Law.
(B) Receipt of Controllable Organic Waste. Upon acceptance of the Controllable Organic Waste that meets the PGM standards provided in Attachment 2, County shall process the Organic Waste into compost, mulch or other ROWP as specified in Title 14 of the California Code of Regulations Section 18993.1 (C) Education and Outreach. The Department will assist the City and its hauler in their efforts on Organic education and outreach with the goal of the City meeting its organic diversion and ROWP procurement requirements.
(D) Designated Facilities. County and City will coordinate in determining the primary organic processing facilities and tonnages (as reflected in Attachment 1) used for receiving and processing of Controllable Organic Waste. The Department shall immediately advise the City by telephone of any situation, event or circumstance which results in the partial or complete inability of the County to receive Controllable Organic Waste at any particular County Organics Infrastructure within the Waste Infrastructure System, its effect on the County’s ability to perform its obligations hereunder, and the County’s best estimate of the probable duration. The Department shall confirm such advice in writing within twenty four (24) hours of the occurrence of any such inability. The County shall use its best efforts to resume normal operation of the Organics Infrastructure primarily used by the City as soon as possible. In the event a situation, event or circumstance results in the partial or complete inability of the County to receive Controllable Organic Waste at any particular County Organics Infrastructure within the Waste Infrastructure System the County shall have the right to redirect Controllable Organic Waste to another landfill or County Organics Infrastructure within the Waste Infrastructure System for the duration of the situation, event or circumstance; In no event shall the County be required to accept Controlled Organic Waste if it does not have sufficient permitted organic processing capacity within the Waste Infrastructure System.
(E) Compliance with Service Covenant Not Excused for any Reason. Commencing on the Commencement Date, and subject to the terms of this Agreement, the obligations of the County to duly observe and comply with the Organic Service Covenant, in accordance with Applicable Law, shall apply continuously and without interruption for the Term of this OSA. In the event that any Change in Law, situation, event or other Uncontrollable Circumstance impairs or precludes compliance with the Organic Service Covenant by the means or methods then being employed by the County, the County shall use best efforts to implement alternative or substitute means and methods to enable it to satisfy the terms and conditions of the Service Covenant. In the event that a Change in Law precludes the County from complying with such covenants with the means or methods then being employed and from utilizing any alternate or substitute means or methods of compliance, the County shall continuously use all reasonable efforts to effectuate executive, legislative or judicial change in or relief from the applicability of such law so as to enable the County lawfully to resume compliance with such covenants as soon as possible following the Change in Law.

County failure to duly observe and comply with the Organic Service Covenant due to its efforts to comply with Applicable Law, shall not constitute a breach under this Organics Agreement, and shall excuse County performance to the extent necessary to comply with Applicable Law.

If the alternative or substitute means and methods proposed for the County to observe and comply with the Organic Service Covenant are more costly than the previously used means and methods, the Parties shall negotiate a mutually agreeable new Organic Contract Rate. If the Parties are unable to agree on a new Organic Contract Rate, the Parties may terminate this agreement without penalty with ninety (90) days notice.

SECTION 3.3 COUNTY RIGHT TO REFUSE ORGANIC WASTE.
(A) Right of Refusal. Notwithstanding any other provision hereof, the County may refuse delivery of:
(1) Hazardous Waste;
(2) Acceptable Organic Waste delivered by City but originating from or generated outside the jurisdiction of the City;
(3) Acceptable Organic Waste delivered in excess of the City Organic Tonnage Limit listed in the Attachment 3;
(4) Acceptable Organic Waste in excess of permitted limits; (5) Acceptable Organic Waste that would result in County violating Applicable Law; (6) Controllable Organic Waste that does not meet the requirements found in Attachment 2;
SECTION 3.4 COUNTY PROVISION OF OTHER ORGANIC WASTE DIVERSION SERVICES. (A) Food Waste Processing and Diversion. County is in the process of evaluating the options and feasibility of development of a Commercial Food Waste Processing Infrastructure. If developed, City will be provided an opportunity to participate in this service on terms separately agreed to by the Parties. (B) Edible Food Recovery Programs. County is in the process of evaluating the options and feasibility of development of regional County-wide edible food recovery programs to assist Cities in meeting State mandated goals. The intent of Edible Food Recovery to address the food hierarchy and wasted food scale on a regional level through collaboration of all jurisdictions, key local, State and federal stakeholders, the non-profit sector and business sector. City agrees to cooperate with County efforts and collaborate on data analysis and reporting to provide jurisdictions reports for compliance under SB1383.
(C) Separate City -County Diversion Service Agreements. Nothing in this Agreement is intended to limit the right of the County to enter into a separate agreement with the City or any other person, jurisdiction, or entity to provide source reduction, materials recovery, recycling, composting or other waste diversion services.

ARTICLE IV

ORGANIC CONTRACT RATE
SECTION 4.1 CHARGING AND SECURING PAYMENT OF ORGANIC CONTRACT RATE.

The City acknowledges that the County shall have the right to charge and collect an Organic Contract Rate for the acceptance and processing of Controllable Organic Waste delivered to the Organic Infrastructure by City or its Franchise Hauler. City acknowledges that the County shall have the right to establish as part of the operating rules and regulations reasonable measures to secure the payment of all Organic Contract Rates.

SECTION 4.2 ORGANIC CONTRACT RATE.
(A) Establishment of Contract Rate. The Organic Contract Rate payable by each City or Franchise Hauler shall be $67/Ton up to the City Organic Tonnage Limit. (B) Special Charges. Notwithstanding Section 4.2(A), the County shall have the right to impose special charges for items such as bagged material or compost wattles; new or expanded services; or receipt of hard to handle materials, such as bulky materials, construction and demolition debris, tree stumps, biosolids and sludge. Such special charges shall be calculated to reflect the reasonable incremental costs to the County of providing the new or expanded services or accepting such hard to handle materials. (C) Escalation.

1. Annual CPI Adjustment: The Organics Contract Rate shall be adjusted each July 1, beginning 2027. The change will be equal to the percentage change in the Consumer Price Index - Consumer Price Index for Al Urban Consumers: Water and Sewer and Trash Collection Services in U.S. City Average (CUSR0000EHG) as measured from the October twenty one (21) months prior to the rate adjustment to the October immediately preceding the rate adjustment. In the event that the change in the change in CPI as described above is negative rather than positive, no rate adjustment will be made for that year.

Organic Contract Rate True-up: County will notify City prior to April 30, 2029 (and every three (3) years thereafter) and advise whether actual inflation rate since execution should be frozen for a period of time (in circumstances where Department revenues exceed Department Full Cost Recovery needs) or to determine whether the Organic Contract Rate should be increased beyond CPI as described above (in circumstances where Department costs exceed CPI) to ensure that Department revenues meet Full Cost Recovery.

2. Adjustment Resulting from Increased Fees: In addition to the other adjustments specified herein, the Organic Contract Rate shall be automatically adjusted to reflect the imposition of new fees or increases in existing fees relating to the County’s processing of Controllable Organic Waste imposed by State, federal or other agencies. The County shall provide notice of any increase pursuant to this Section as soon as practicable after becoming aware of the imposition of any fees described above.

ARTICLE V
TERM
SECTION 5.1 EFFECTIVE DATE AND TERM.
(A) Initial Term. This Organic Services Agreement shall become effective, shall be in full force and effect and shall be legally binding upon the City and the County from the Contract Date and shall continue in full force and effect until June 30, 2036, unless earlier terminated in accordance with its terms, in which event the Term shall be deemed to have expired as of the date of such termination. (B) Bi-Annual Opener. In light of the significant changes in law by the California Legislature to address climate change, the Parties agree to meet at least bi-annually or earlier at the request of County to review the Organic Contract Rate and discuss the need for additional investment into the Organic Infrastructure to respond to existing or new legislative requirements, diversion requirements, provision of new services, or other matters of mutual concern to the Parties.
(C) Option to Renew. This Agreement shall be subject to renewal by mutual agreement of the Parties, on or before June 30, 2036 for an additional term of 10 years (the “Renewal Term”) on the same terms and conditions as are applicable during the Initial Term hereof or on amended terms as may be mutually agreed to by the Parties. The City shall give the County written notice of its election to renew this Agreement on or before June 30, 2034. If the parties do not execute a renewal of this Agreement prior to June 30, 2036 it shall expire.

ARTICLE VI

GENERAL PROVISIONS
SECTION 6.1 NOTICES. Any notice or communication required or permitted hereunder shall be in writing and sufficiently given if delivered in person or sent by certified or registered mail, postage prepaid, to the notice address of the respective Parties set forth on the cover page of this Agreement. Changes in the respective addresses to which such notices may be directed may be made from time to time by any Party by notice to the other Party.

SECTION 6.2 ATTORNEYS FEES. In any action or proceeding to enforce or interpret any provision of this Agreement, each Party shall bear their own attorney’s fees, costs and expenses.

SECTION 6.3 RELATIONSHIP OF THE PARTIES. Neither party to this Agreement shall have any responsibility whatsoever with respect to services provided or contractual obligations or liabilities assumed by the other party hereto, whether accrued, absolute, contingent or otherwise, or whether due or to become due. The County is an independent contractor of the City and nothing in this Agreement shall be deemed to constitute either party a partner, agent or legal representative of the other party or to create any fiduciary relationship between the parties.

SECTION 6.4 NO CONSEQUENTIAL OR PUNITIVE DAMAGES. In no event shall either Party hereto be liable to the other or obligated in any manner to pay to the other any special, incidental, consequential, punitive or similar damages based upon claims arising out of or in connection with the performance or non- performance of its obligations or otherwise under this Agreement, or the material inaccuracy of any representation made in this Agreement, whether such claims are based upon contract, tort, negligence, warranty or other legal theory.

SECTION 6.5 AMENDMENTS. Neither this Agreement nor any provision hereof may be changed, modified, amended or waived except by written agreement duly authorized and executed by both Parties.

SECTION 6.7 NOTICE OF LITIGATION. Each Party shall deliver written notice to the other of any Legal Proceeding to which it is a party and which questions the validity or enforceability of this Agreement executed by the City or the County or any Legal Entitlement issued in connection herewith.

SECTION 6.8 FURTHER ASSURANCES. At any and all times the City and the County so far as may be authorized by law shall pass, make, do, execute, acknowledge and deliver any and every such further resolutions, acts, deeds, conveyances, instruments, assignments, transfers and assurances as may be necessary or reasonably requested by the other in order to give full effect to this Agreement.

SECTION 6.9 ASSIGNMENT OF AGREEMENT. Neither this Agreement nor any of the rights or obligations hereunder may be assigned by either Party hereto without the prior written consent of the other Party, which may be withheld in the other Party’s sole discretion. Notwithstanding the foregoing, either Party may assign this Agreement to another public entity, subject to the reasonable consent of the other party. In such circumstances the Party not requesting the assignment shall have the right to demand assurances of the financial, technical and legal ability of the proposed assignee to undertake the responsibilities and obligations of the assigning Party.

SECTION 6.10 BINDING EFFECT. This Agreement shall bind and inure to the benefit of the Parties hereto and any successor or assignee acquiring an interest hereunder consistent with the provisions of Section 6.9 hereof.

Signature Page to Follow
IN WITNESS WHEREOF, COUNTY and CITY have caused this Agreement to be executed by their duly authorized officers or representatives as of the day and year first above written.

COUNTY OF ORANGE
Date By
Director, OC Waste & Recycling
APPROVED AS TO FORM:

COUNTY COUNSEL

ORANGE COUNTY, CALIFORNIA
By
Date
Date By
[NAME]
City Representative
City of XX
Date By
[NAME]
City Representative
City of XX
APPROVED AS TO FORM:

By
City Attorney
Date
Attachment 1

COUNTY OF ORANGE ORGANIC INFRASTRUCTURE
Attachment 1

COUNTY OF ORANGE ORGANIC INFRASTRUCTURE
The County of Orange owns and operates a network of three commercial organic processing facilities co-located at each of the active landfills. Each of the organic processing facilities have the ability to receive organic material and to produce organic products for cities to meet their Take-Back requirements specified within this agreement. Products produced at the organic processing facilities meet CalRecycle’s SB 1383 procurement requirement and are certified under the US Composting Council’s Standard of Testing Assurance (STA) Program. Product offerings include compost and composted mulch. Additional products may be offered as determined by the County.

A summary of each of the organic processing facilities is listed below:

Valencia Greenery (Co-Located at Olinda Alpha Landfill) 1942 N. Valencia Avenue
Brea, CA 92823
Permitted Maximum Tonnage (Open Windrow): 94 tons per day Proposed Permitted Maximum Tonnage (Covered Aerated Static Pile): 228 tons per day Permitted Hours of Operation: Monday through Saturday 6:00 am to 4:00 pm Ancillary Operation Hours: 24 hours per day/7 days a week Bee Canyon Greenery (Co-Located at Frank R. Bowerman Landfill) 11002 Bee Canyon Access Road
Irvine, CA 92602
Permitted Maximum Tonnage (Open Windrow): 210 tons per day Proposed Permitted Maximum Tonnage (Covered Aerated Static Pile): 876 tons per day Permitted Hours of Operation: Monday through Saturday 7:00 am to 5:00 pm Ancillary Operation Hours: 24 hours per day/7 days a week Capistrano Greenery (Co-Located at Prima Deshecha Landfill) 32250 Avenida La Pata
San Juan Capistrano, CA 92675
Permitted Maximum Tonnage (Open Windrow): 204 tons per day Proposed Permitted Maximum Tonnage (Covered Aerated Static Pile): 536 tons per day Permitted Hours of Operation: Monday through Saturday 7:00 am to 5:00 pm Ancillary Operation Hours: 24 hours per day/7 days a week This list may be modified/expanded at the discretion of the County.

Attachment 2

SPECIFICATIONS FOR CONTROLLABLE ORGANIC WASTE AS PROCESSED GREEN WASTE

MATERIAL (PGM) AT COUNTY ORGANIC INFRASTRUCTURE
Attachment 2

SPECIFICATIONS FOR CONTROLLABLE ORGANICE WASTE AS PROCESSED GREEN WASTE

MATERIAL (PGM) AT COUNTY ORGANIC INFRASTRUCTURE

DESCRIPTION
Processed Green Material (PGM) consists of yard waste, grass clippings, leaves, tree trimmings and plant-based materials which have been sorted to remove contamination and processed by shredding or grinding. PGM should not contain manure, stable waste or pet waste, which can create odors.

Processed Green Material is defined as following (California Code of Regulations, Title 27, Division 2, Subdivision 1, Chapter 3, Subchapter 4, Section 20690 [b] [3]):
• Processed Green Material – means any plant material that is either separated at the point of generation or separated at a centralized facility that employs methods to minimize contamination. Green material includes, but is not limited to, yard trimmings, untreated wood wastes, paper products, and natural fiber products. Green material does not include treated wood waste, mixed demolition or mixed construction debris, manure, or plant waste from the food processing industry, alone or blended with soil. Processed green material may include varying proportions of wood waste from urban and other sources and shall be ground, shredded, screened, source separated for grain size, or otherwise processed.

CONTAMINANT DEBRIS
The PGM should be free from all contaminant debris (glass, plastic, film plastic, metals, etc.) as well as salt and deleterious material such as clods, coarse objects, rocks, inert debris, and Material Recovery Facility (“MRF”) fines.

County personnel visually inspect the PGM loads as they come in, making sure that the specifications are met and to determine if the loads are contaminated (i.e., mixed with paper, plastics and other trash.) If the loads appear to have unacceptable contamination in excess of 0.5% either by weight or volume, the PGM loads will not be allowed into the Organic Infrastructure and the City and/or hauler will be notified that contaminated PGM loads are unacceptable. The PGM will be deemed as municipal solid waste and the City and/or hauler will have the option to take the material to the landfill for disposal or be returned to the hauler’s facility for additional processing. For material that is physically dumped at the unloading area and is deemed unacceptable by OC Waste & Recycling staff, the material will be reloaded into the transfer vehicle for reprocessing at hauler’s processing facility or sent to the landfill for disposal.

Hauler will be charged the current “Hard-to-Handle” fee for re-loading services and disposal of unacceptable material.

SIZE
The particle size of the PGM acceptable is between ½-inch and 3 inches in length between ½-inch and 1 inch in width and between ½-inch and 1 inch in thickness. No particle should exceed 3 inches in any dimension.

MOISTURE CONTENT
The moisture content of the PGM should be in the range of 50-60 percent. If the PGM’s moisture content is unacceptable and cannot be received for processing at the County’s Organic Infrastructure Facilities, the material will be re-loaded into the transfer vehicle for reprocessing at hauler’s processing facility or sent to the landfill for disposal.

The hauler will be charged the current “Hard-to-Handle” fee for re-loading services and disposal of unacceptable material.

FOOD WASTE
Residential food waste mixed with PGM as part of a city organic collection program is acceptable provided that the food waste is free of contaminant debris (glass, plastic, food packaging, non-compostable silverware, soiled napkins, etc.). No commercial or source-separated food waste will be accepted except for cases where the County has entered into an agreement with a City to accept specific source separated organic material as Additional Feedstock as described below.

SOURCE SEPARATED MANURE
Subject to available capacity, City and/or Hauler may bring non-residential, source separated manure and stable bedding pursuant to the following Manure/Stable Bedding Program requirements:

1. Material Quantity: manure/stable bedding must be uncontaminated which means free of any hazardous materials, food waste packaging, plastics, glass, and any large bulky items and inert materials that need to be further sized or removed for composting. (“Material”)

2. Material Volume: County and City/Hauler will determine the anticipated volume of Material to ensure that the County’s Organic Infrastructure has sufficient capacity to manage the proposed amount of Material.

3. Material will be load checked to determine if it meets the established quality standards. If contaminants exceed

0.5% (by weight or volume), the load is deemed contaminated and not meeting quality standard for use in the Manure/Stable Bedding Program.

4. Material that is deemed unacceptable will be subject to the fees established by OCWR for this material type.

Material that does not meet the established quality standards will be charged as follows:
a. If determined not to meet quality standards before Material is unloaded, standard disposal rates will apply.
b. If determined not to meet quality standards after Material is unloaded (or partially unloaded), hard-to-handle disposal rates will apply.

5. Material Delivery:
a. All Material deliveries will be scheduled and coordinated with OCWR prior to delivery. Any changes to material delivery quantities or days will be coordinated with OCWR prior to making the change.
b. While OCWR will remain as flexible as possible on timing of deliveries, material deliveries will be limited to Monday through Friday between 8:00 am and 2:00 pm and subject to holiday schedules. Should the delivery times change, then OCWR shall give two (2) days prior notice of the delivery time change.
c. Upon delivery, OCWR staff will record exact tonnage, name of hauler/transporter provider, and note distinguishing characteristics of feedstock and other pertinent information. d. Deliveries made without OCWR prior approval may be refused or charged at the established rate.
e. OCWR reserves the right to deny a request to deliver for any reason. (i.e., OCWR does not guarantee that it will accept manure/stable bedding under this program. Instead, OCWR will accept Material based on its operational need and will make every effort to accommodate City’s/hauler Material except when a reduction or stoppage is needed.)

ADDITIONAL FEEDSTOCK
The County at its discretion may accept additional material types such as food waste and manure based on availability and permitting conditions at each of the County’s organic processing facilities. The County will work with City to identify the specifications for accepting the material types including scheduling of deliveries and quantities.

CHANGES TO SPECIFICATIONS
County reserves the right to modify the Specifications found in this Appendix due to a change in law or regulation or in consideration of operational or Organic Processing Infrastructure needs. County shall provide 90 days notice regarding changes to this Appendix.

Attachment 3

CITY ORGANIC TONNAGE LIMIT
Attachment 3

CITY ORGANIC TONNAGE LIMIT
The City Organic Tonnage Limit listed in the Attachment is the maximum amount of Controllable Organic Waste that County is committed to accept under the Organic Service Agreement.

Jurisdiction Designated Greenery City Organic Tonnage Limit Daily Limit1 Monthly Limit2 Annual
Limit
TBD ________tons _________ tons _______ tons
TBD
TBD
TBD

1. Daily Limit includes up to 20% by weight of source separated manure and stable bedding.

2. In the event City delivers less than their monthly limit, County may allocate unused City capacity at its discretion.

Attachment 4

ORGANIC INFRASTRUCTURE RESOLUTION

CITY RESIDENTIAL RATE COMMERCIAL RATE HAULER
Aliso Viejo $ 25.51 $ 149.89 CR&R
Anaheim $ 29.47 $ 218.73 Republic Services
Brea $ 31.27 $ 192.44 Republic Services
Buena Park $ 26.11 $ 186.52 EDCO
Costa Mesa $ 29.88 Franchise Hauler List Costa Mesa Sanitary District Cypress $ 25.25 $ 174.20 Valley Vista Services
Dana Point $ 26.13 $ 185.72 CR&R
Fountain Valley $ 29.35 $ 249.82 Republic Services
Fullerton $ 27.97 $ 239.73 Republic Services
Garden Grove $ 29.74 $ 238.37 Republic Services
Huntington Beach $ 29.06 $ 233.05 Republic Services
Irvine $ 24.82 $ 188.47 Waste Management
La Habra $ 30.10 $ 182.75 CR&R
La Palma $ 26.32 $ 169.61 EDCO
Laguna Beach $ 27.00 $ 229.42 CR&R
Laguna Hills $ 25.02 $ 154.00 CR&R
Laguna Niguel $ 24.81 $ 165.59 CR&R
Laguna Woods $ 24.88 $ 172.31 CR&R
Lake Forest $ 25.02 $ 174.79 CR&R
Los Alamitos $ 14.54 $ 151.70 Universal Waste
Midway City Sanitary District $ 17.30 $ 146.37 Midway City Sanitary District Mission Viejo $ 26.84 $ 184.78 Waste Management
Newport Beach $ 25.49 Franchise Hauler List CR&R
Orange $ 25.36 $ 187.93 CR&R
Placentia $ 44.86 $ 222.66 Republic Services
Rancho Santa Margarita $ 26.21 $ 169.14 CR&R
San Clemente $ 26.78 $ 178.90 CR&R
San Juan Capistrano $ 28.15 $ 178.38 CR&R
Santa Ana $ 27.71 $ 226.40 Republic Services
Seal Beach $ 24.56 $ 208.28 Republic Services
Stanton $ 27.09 $ 196.11 CR&R
Tustin $ 20.66 $ 151.16 CR&R
Villa Park $ 40.81 $ 199.88 Republic Services
Westminster $ 17.30 $ 146.37 Midway City Sanitary District Yorba Linda $ 34.18 $ 206.51 Republic Services
Unincorporated OC: Area
Unincorporated Rossmoor FA1 $ 24.41 $ 189.27 CR&R
Unincorporated BP & YL Islands FA2 $ 30.27 $ 214.74 Republic Services Unincorporated Orange Islands FA3 $ 23.29 $ 189.27 CR&R Unincorporated OPA/Canyons FA5 CA-1 $ 26.40 $ 302.89 Waste Management Unincorporated El Modena Islands FA5 CA-2 $ 23.29 $ 189.27 CR&R Unincorporated North Tustin FA6 $ 27.79 $ 302.89 Waste Management Unincorporated Emerald Bay FA7-B $ 34.07 $ 302.89 Waste Management Unincorporated South County FA8 $ 23.88 $ 219.01 Waste Management Unincorporated Rancho Mission Viejo FA9 $ 24.41 $ 189.27 CR&R Residential Rates are based on Single Family standard sets of refuse, recycling, and green waste carts (Monthly fee) Commercial Trash Rates are based on 3 cubic yard bins (Monthly Fee for 1X/weekly pickup) *Costa Mesa residential waste collection services are administered by the Costa Mesa Sanitary District *Newport Beach residential refuse collection is provided by the City and no disposal fees are collected; however, a recycling rate of $6.39/month per residential unit is included in their municipal bill *Seal Beach Utility Services provides water and trash collection for residences, the fee for trash collection is included with the water bill *Westminster residential waste collection services are administered by the Midway City Sanitary District *BP = Buena Park; YL = Yorba Linda
TRASH RATE SURVEY 2025

Cypress City CouncilApril 28, 2026

Cypress City Council
April 28, 2026