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(i) WIFIA Debt Service Account. The City, as agent of the Borrower pursuant to the WIFIA IPA, shall (i) establish the WIFIA Debt Service Account on or prior to the Effective Date and (ii) maintain the WIFIA Debt Service Account in accordance with the WIFIA Loan Documents for the benefit of the WIFIA Lender. The WIFIA Debt Service Account shall be subject to a Lien and has been pledged by the Borrower hereunder to the WIFIA Lender as security solely for the benefit of the WIFIA Lender and shall not be subject to any security interest in favor of any Person other than the WIFIA Lender. Amounts on deposit in the WIFIA Debt Service Account shall be applied by the City, as agent of the Borrower pursuant to the WIFIA IPA, solely to pay WIFIA Debt Service and other amounts due with respect to the WIFIA Loan or the WIFIA Note.
(j) Compliance with Laws.
(i) The City shall, and shall require the contractors and subcontractors at all tiers with respect to the Project to, comply with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141 -3144, 3146, and 3147 (relating to Davis - Bacon Act requirements) (and regulations relating thereto) , 33 U.S.C. §3914 (relating to American iron and steel products) , 20 C.F.R. § 180.320 and 20 C.F.R. §1532 (relating to non-debarment), 31 U.S.C. §1352 (relating to non-lobbying), and any applicable Sanctions Laws.
(ii) To ensure such compliance, the City shall include i n all contracts with respect to the Project (A) the contract clauses relating to the Davis -Bacon Act requirements that are set forth in the Code of Federal Regulations, Title 29 Part 5.5 and (B) requirements that its contractors (1) shall comply with all a pplicable laws, rules, regulations, and requirements set forth in this Section 17(j) and follow applicable federal guidance and (2) incorporate in all subcontracts (and cause all subcontractors to include in lower tier subcontracts) such terms and conditions as are required to be incorporated therein by any applicable laws, rules, regulations and requirements set forth in this Section 17(j) (including with respect to the Davis-Bacon Act requirements). (k) Material Obligations; Payment of Claims.
(i) The City shall pay its material obligations promptly and in accordance with their terms.
(ii) The City shall pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon it or upon the Revenues or other assets of the System, before the same shall become delinquent or in default; provided that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy, claim or Lien so long as the validity or amount thereof shall be contested by the City in good faith by appropriate proceedings and so long as the City shall have set aside adequate reserves with respect thereto in accordance with and to the extent required by GAAP, applied on a consistent basis.
(iii) The City shall pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a Lien on the System (or any part Attachment "A"
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thereof), the WIFIA Debt Service Account, the Project, the Revenues or any fund or account of the City pledged to pay Parity Obligations.
(l) SAM Registration. The City shall obtain prior to the Effective Date (and provide such registration information to the WIFIA Lender) and maintain through the Final Disbursement Date an active registration status with the federal System for Award Management (www.SAM.gov) (or any successor system or registry).
(m) DUNS Number . The City shall obtain prior to the Effective Date (and provide such number to the WIFIA Lender) and maintain from Dun & Bradstreet (or a successor entity) a DUNS Number.
(n) Immunity. To the fullest extent permitted by applicable law, the City agrees that it will not assert any immunity (and hereby waives any such immunity) it may have as a governmental entity from lawsuits, other actions and claims, and any judgments with respect to the enforcement of any of the obligations of the City under this Agreement or any other WIFIA Loan Document to which the City is a party.
(o) Accounting and Audit Procedures.
(i) The City shall establish fiscal controls and accounting procedures sufficient to assure proper accounting for all of the following : (A) Revenues, Authority Revenues, operating expenses, capital expenses, depreciation, reserves, debt issued and outstanding and deb t payments; and (B) Project -related costs, WIFIA Loan requisitions submitted, WIFIA Loan proceeds received, payments made by the City, as an agent of the Borrower pursuant to the WIFIA IPA , with regard to the Project, and other sources of funding for the Project (including amounts paid from such sources for Project costs so that audits may be performed to ensure compliance with and enforcement of this Agreement).
The City shall use accounting, audit and fiscal procedures conforming to GAAP, including, with respect to the WIFIA Installment Payments , accounting of principal and interest payments, disbursements, prepayments and calculation of interest and principal amounts Outstanding.
(ii) The City shall have a single or program-specific audit conducted in accordance with 2 C.F.R. Part 200 Subpart F and 31 U.S.C. § 7502 from (and including) the first City Fiscal Year in which a disbursement is made under this Agreement and annually thereafter to the extent required by applicable law , except to the extent biennial audits are permitted for the City pursuant to 2 C.F.R. § 200.504 and 31 U.S.C. § 7502(b).
Upon reasonable notice, the City shall cooperate fully in the conduct of any periodic or compliance audits conducted by the WIFIA Lender, or designees thereof, pursua nt to 40 C.F.R. Part 35, 31 U.S.C. § 7503(b), or 31 U.S.C. § 6503(h) and shall provide full access to any books, documents, papers or other records that are pertinent to the Project or the WIFIA Loan, to the WIFIA Lender, or the designee thereof, for any s uch project or programmatic audit.
Attachment "A"
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(p) Access; Records.
(i) So long as the WIFIA Loan or any portion thereof shall remain outstanding and until five (5) years after the WIFIA Loan shall have been paid in full by the Borrower, the WIFIA Lender shall have the right, upon reasonable prior notice, to visit and inspect any portion of the Project, to examine books of account and records of the City relating to the Project, to make copies and extracts therefrom at the City’s expense, and to discuss the City’s affairs, fin ances and accounts relating to the Project with, and to be advised as to the same by, its officers and employees and its independent public accountants (and by this provision the City irrevocably authorizes its independent public accountants to discuss wit h the WIFIA Lender the affairs, finances and accounts of the City, whether or not any representative of the City is present, it being understood that nothing contained in this Section 17(p) is intended to confer any right to exclude any such representative from such discussions), all at such reasonable times and intervals as the WIFIA Lender may request. The City agrees to pay all out -of-pocket expenses incurred by the WIFIA Lender in connection with the WIFIA Lender ’s exercise of its rights under this Section 17(p) at any time when an Event of Default shall have occurred and be continuing.
(ii) The City shall maintain and retain all files relating to the Project and the WIFIA Loan until five (5) years after t he later of the date on which (A) all rights and duties of the City or the Borrower under this Agreement and of the Borrower under the WIFIA Note (including payments) have been fulfilled and any required audits have been performed and (B) any litigation relating to the Project, the WIFIA Loan or this Agreement is finally resolved or, if the WIFIA Lender has reasonable cause to extend such date, a date to be mutually agreed upon by the WIFIA Lender and the City. The City shall provide to the WIFIA Lender in a timely manner all records and documentation relating to the Project that the WIFIA Lender may reasonably request from time to time. (q) Compliance with Contracts. The City will comply with, keep, observe and perform all agreements, conditions, covenants an d terms, express or implied, required to be performed by it contained in all contracts affecting or involving the System, to the extent that the City is a party thereto.
(r) Protection of Security and Rights of the Borrower. The City will preserve and protect the security and the rights of the Borrower to the City Pledged Collateral and will warrant and defend such rights against all claims and demands of all persons. (s) Collection of Rates and Charges . The City will have in effect at all times by-laws, rules and regulations requiring each customer to pay the rates and charges applicable to the System and providing for the billing thereof and for a due date and a delinquency date for each bill.
(t) Eminent Domain Proceeds. If all or any part of the System shall be taken by eminent domain proceedings, the Net Proceeds thereof shall be applied by the City either to additions, betterments, extensions or improvements to the System or, if the City elects not to apply such Net Proceeds to such capital items or if such Net Proceeds are not fully expended for such Attachment "A"
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purposes, such Net Proceeds which are not required by the City for such purposes shall be deposited in the Revenue Fund.
(u) Further Assurances. The City will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the WIFIA Lender the rights and benefits provided to it herein.
Section 18. Negative Covenants of the City. The City covenants and agrees as follows until the date the WIFIA Note and all of the obligations of the Borrower under this Agreement (other than contingent indemnity obligations) are irrevocably paid in full by the Borrow er in immediately available funds and the WIFIA Lender no longer has any commitment to make disbursements to the Borrower, unless the WIFIA Lender waives compliance in writing:
(a) Additional Obligations.
(i) The City shall not create, incur or suffer to exist (x) any obligations which are senior or prior in right of payment or right of security with respect to the Revenues to the Parity Obligations; or (y) any obligations, all or a portion of the proceeds of which are or will be applied at any time to fund all or any portion of Total Project Costs, that are secured by a Lien on any assets or property of the City other than the Revenues. (ii) The City may, after the Effective Date, issue or incur Parity Obligations in such principal amount as shall be determined by the City subject to the requirements for additional obligations as set forth in all existing instruments with respect to Parity Obligations and the following specific conditions, which are hereby made conditions precedent to the City’s issuance and delivery of such Parity Obligations:
(A) no Event of Default hereunder or under any other instrument secured by the Revenues shall have occurred and be continuing unless such Event of Default shall be cured by the issuance or incurrence of such proposed Parity Obligations, and the City shall otherwise be in compliance with all covenants set forth in this Agreement; and
(B) the Net Revenues calculated pursuant to GAAP, consistently applied, and excluding the proceeds of any taxes and also excluding any balances in any fund at the beginning of the period of the computation, as shown by the books of the City for the latest City Fiscal Year, or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Parity Obligations is issued or incurred, as shown by the books of the City, plus, at the option of the City, any of the allowances referred to in paragraph ( iii) below, shall have amounted to at least 1.20 times the Maximum Annual Debt Service taking into consideration the maximum annual debt service payable in any City Fiscal Year on the proposed Parity Obligations, as set forth in the Report of an Independent Accountant or Independent Consultant delivered to the WIFIA Lender.
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(iii) Either or both of the following allowances may be added to Net Revenues for the purpose of meeting the condition contained in Section 18(a)(ii)(B):
(A) an allowance for increased Revenues from any additions to or improvements or extensions of the System to be made with the proceeds of such proposed Parity Obligations, and also for Revenues f rom any such additions, improvements, or extensions which have been made from moneys from any source but which, during all or any part of such City Fiscal Year or any more recent twelve (12) month period, were not in service, all in an amount equal to ninety percent (90%) of the estimated additional average annual Revenues to be derived from such additions, improvements, and extensions for the first thirty -six (36) month period following closing of the proposed Parity Obligations, all as shown in the Report of an Independent Accountant or Independent Consultant delivered to the WIFIA Lender; provided that in those instances where the proposed Parity Obligations are held by the WIFIA Lender, no Report of an Independent Accountant or Independent Consultant shall be required; and/or
(B) an allowance for increased Revenues arising from any increase in the charges made for service from the System which has become effective prior to the incurring of such proposed Parity Obligations but which, during all or any part of such City Fiscal Year or any more recent twelve (12) month period, was not in effect, in an amount equal to one hundred percent (100%) of the amount by which Revenues would have been increased if such increase to charges had been in effect during the whole of such time period and any period prior to the incurring of such proposed Parity Obligations, as shown in the Report of an Independent Accountant or Independent Consultant delivered to the WIFIA Lender.
(iv) Notwithstanding Sections 18(a)(ii) and (iii), (A) proposed Parity Obligations to be issued for the purpose of refunding outstanding Parity Obligations may be issued without compliance with Section 18(a)(ii)(B) so long as such refunding results in lower Parity Debt Service in each City Fiscal Year after such refunding and the final maturity date of the refunding Parity Obligations is no later than the final maturity date of the refunded Parity Obligations and ( B) to the extent that an y instrument with respect to Outstanding Parity Obligations conflicts with any of the requirements set forth in this Section 18(a), the more restrictive provision shall prevail. (v) The City may issue or incur Subordinate Obligations following the Effective Date in such principal amount as shall be determined by the City subject to the following conditions precedent to the issuance or incurrence of such Subordinate Obligations:
(A) no Event of Default hereunder or under any other instrument secured by the Revenues shall have occurred and be continuing unless such Event of Default shall be cured by the issuance or incu rrence of such proposed Subordinate Obligations, and the City shall otherwise be in compliance with all Attachment "A"
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covenants set forth in this Agreement and any other instrument securing, evidencing, governing, or relating to other obligations secured by, the Revenues; (B) Net Revenues calculated pursuant to GAAP, consistently applied, and excluding the proceeds of any taxes and also excluding any b alances in any fund (other than any rate stabilization fund held by the City) at the beginning of the period of the computation, as shown by the books of the City for the latest City Fiscal Year, or any more recent twelve (12) month period selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which instrument such Subordinate Obligations are issued or incurred, as shown by the books of the City, shall have amounted to at least 1.0 times the aggregate sum of the Maximum Annual Debt Service of all debt secured by Net Revenues and/or legally available amounts in the Revenue Fund and the maximum annual debt service payable in any City Fiscal Year on all Subordinate Obligations, including the proposed Subord inate Obligations, as set forth in the Report of an Independent Accountant or Independent Consultant delivered to the WIFIA Lender.
(vi) The City shall not incur any Additional Obligations that bear interest at a Variable Interest Rate if such incurrence would (A) cause the principal amount of all Outstanding Variable Interest Rate Obligations to exceed twenty-five percent (25%) of the principal amount of all Outstanding Obligations at such time or ( B) violate any term set forth in the Debt Management Policy.
(vii) Upon the incurrence of any Additional Obligations, the City shall provide to the WIFIA Lender a certificate signed by the City’s Authorized Representative (x) specifying the closing date with respect to such Additional Obligations and (y) confirming that suc h Additional Obligations are authorized pursuant to, and satisfy the applicable requirements under, this Section 18(a).
(b) No Lien Extinguishment or Adverse Amendments. The City shall not, and shall not permit any Person to, without the prior written consent of the WIFIA Lender, (i) extinguish or impair the Liens on the City Pledged Collateral granted pursuant to the WIFIA IPA, (ii) amend, modify, terminate, assign, replace or supplement, or permit a waiver of any provision of, the WIFIA IPA, (iii) amend, modify, replace or supplement any Related Document to which the City is a party (other than the WIFIA IPA) or permit a waiver of any provision th ereof in a manner that could adversely affect the WIFIA Lender or could reasonably be expected to result in a City Material Adverse Effect, or (i v) terminate or assign any Related Document to which the City is a party (other than (A) the WIFIA IPA and (B) Obligation Documents relating to Subordinate Obligations) in a manner that could adversely affect the WIFIA Lender or could reasonably be expected to have a City Material Adverse Effect. The City shall not take or omit to take any action under any contrac t if the effect of such act or failure to act would in any manner impair or adversely affect the ability of the City to secure adequate Net Revenues to meet the requirements of the WIFIA IPA.
Attachment "A"
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(c) No Prohibited Liens. Except for Permitted Liens, the City shall not create, incur, assume or permit to exist any Lien on the System, the Project, the City Pledged Collateral, or the City’s respective rights therein.
(d) Restricted Payments and Transfers. The City shall not permit Revenues or any funds in any other fund or account held by or on behalf of the City with respect to the System to be paid or transferred or otherwise applied for purposes other than ownership, operation or maintenance of the System.
(e) Against Sale or Other Disposition of Property.
(i) The City shall not enter into any agreement or lease which impairs the operation of the System or any part thereof necessary to secure adequate Net Revenues to meet the requirements of the WIFIA IPA, or which would otherwise impair the rights of the Borrower under the WIFIA IPA or the operation of the System. Any real or personal property which has become nonoperative or which is not needed for the efficient and proper operation of the System, or any material or equipment whi ch has become worn out, may be sold if such sale will not impair the ability of the City to pay the WIFIA Installment Payments and if the proceeds of such sale are deposited in the Revenue Fund. (ii) Nothing herein shall restrict the ability of the City to sell any portion of the System if such portion is immediately repurchased by the City and if such arrangement cannot by its terms result in the purchaser of such portion of the System exercising any remedy which would deprive the City of or otherwise interfere with its right to own and operate such portion of the System.
(f) City Fiscal Year. The City shall not at any time adopt any fiscal year other than the City Fiscal Year, except with thirty (30) days’ prior written notice to the WIFIA Lender. (g) Against Competitive Facilities. The City will not, to the extent permitted by law, acquire, construct, maintain or operate and will not, to the extent permitted by law and within the scope of its powers, permit any other public or private agency, corporation, district or political subdivision or any person whomsoever to acquire, construct, maintain or operate within the City any water system competitive with the System.
(h) Hedging. Other than Hedging Transactions, the City shall not enter into any swap or hedging transaction with respect to the Obligations, including inflation indexed swap transactions, “cap” or “collar” transactions, futures, or any other hedging transaction, without the prior written consent of the WIFIA Lender.
Section 19. Reporting Requirements of the Borrower.
(a) Annual Financial Statements . The Borrower shall deliver to the WIFIA Lender, as soon as available, and within one hundred eighty ( 180) days after the end of each Borrower Fiscal Year (provided that the failure of the Borrower to furnish the documents required by this Section 19(a) within such one hundred eighty (180)-day period shall not constitute a Default or an Event of Default hereunder so long as the Borrowe r furnishes to the WIFIA Lender such documents within ninety (90) days after the end of such period, and provided further that the parties Attachment "A"
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agree that delivering the documents required by this Section 19(a) within such additional ninety (90) day period shall not, in and of itself, constitute a default under this Agreement, an event of acceleration under this Agreement, the WIFIA Loan, or the WIFIA Note, a termination event under this Agreement, the WIFIA Loan, or the WIFIA Note, a modification of terms with respect to this Agreement, the WIFIA Loan, or the WIFIA Note, or other similar event under this Agreement, the WIFIA Loan, or the WIFIA Note reflecting financial difficulties):
(i) a copy of the audited Borrower Financial Statements as of the end of such Borrower Fiscal Year, (A) setting forth in each case in comparative form the figures for the previous fiscal year, (B) certified without qualification or exception, or qualification as to the scope of the audit, by an independent public accounting firm selected by the Borrower and (C) which shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied c onsistently throughout the periods reflected therein (except for changes approved or required by the independent public accountants certifying such statements and disclosed therein); and (ii) together with each delivery of such audited Borrower Financial Statements, a certificate signed by the Borrower ’s Authorized Representative, stating whether or not, to the Borrower ’s knowledge, during the annual period covered by such Borrower Financial Statements, there occurred any Default or Event of Default and, if any such Default or Event of Default shall have occurred during such period, the nature of such Default or Event of Default and the actions that the Borrower has taken or intends to take in respect thereof.
(b) Notices.
(i) The Borrower shall, within fifteen (15 ) days after it learns of the occurrence, give the WIFIA Lender notice of any of the following events or receipt of any of the following notices, as applicable, setting forth details of such event (provided that the Borrower shall not be obligated to provi de such notice to the WIFIA Lender if notice of such event has already been provided to the WIFIA Lender by the City):
(A) Defaults; Events of Default : any Default or Event of Default;
(B) Litigation: (1) the filing of any litigation, suit or action, or the commencement of any proceeding, against the Borrower before any arbitrator, Governmental Authority, alternative dispute resolution body, or other neutral third- party, or the receipt by the Borrower in writing of any threat of litigation, suit, action, or proce eding, or of any written claim against the Borrower that, in each case, could reasonably be expected to have a Borrower Material Adverse Effect, and any material changes in the status of such litigation, suit, action or claim, and (2) any judgments against the Borrower that could reasonably be expected to have a Borrower Material Adverse Effect, either individually or in the aggregate; (C) Amendments: except as otherwise agreed by the WIFIA Lender in writing, copies of fully executed amendments, modifications, Attachment "A"
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replacements or supplements to any Related Document to which the Borrower is a party within ten (10) days following execution thereof; provided that such notice can be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(D) Related Document Defaults: any material breach or default or event of default on the part of the Borrower or any other party under any Related Document to which the Borrower is a party; provided that such notice can be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(E) 2 C.F.R. § 180.350 Notices : any notification required pursuant to 2 C.F.R. § 180.350, whether attributable to a failure by the Borrower to disclose information previously required to have been disclosed or due to the Borrower or any of the Borrower ’s principals meeting any of the criteria set forth in 2 C.F.R. § 180.335;
(F) Issuance of Indebtedness: copies of any final issuing instrument (together with any continuing disclosure documents, ordinances, official statement, certifications or cash flow projections in connection therewith), prepared in connection with the incurrence of any indebtedness; provided that such notice can be accompli shed through the posting of the relev ant documents on EMMA under the WIFIA CUSIP Number;
(G) Postings on EMMA : the posting of any document of the Borrower on EMMA in accordance with the requirements of any continuing disclosure agreement or similar document r elating to annual financial information and operating data and the reporting of significant events; provided that such notice can be accomplished through the posting of the relevant document on EMMA under the WIFIA CUSIP Number;
(H) SAM/DUNS: any change in th e Borrower’s SAM
registration status (including any exclusions, expiration or inactive registration) or DUNS Number (including any expiration or change in effectiveness); provided that such notice can be accomplished through the posting of the relevant document on EMMA under the WIFIA CUSIP Number; and
(I) Other Adverse Events: the occurrence of any other event or condition that could reasonably be expected to result in a Material Adverse Effect. (ii) Within thirty (30) calendar days after the Borrower learns of the occurrence of an event specified in clause (i) above (other than sub -clauses (C) (Amendments), (F) (Issuance of Indebtedness ) or (G) (Postings on EMMA )), the Borrower’s Authorized Representative shall provide a statement to the WIFIA Lender setting forth the actions the Borrower proposes to take with respect thereto ; provided that the Borrower shall not be required to provide such information if and to the extent such information has been provided by the City. The Borrower shall also provide the WIFIA Attachment "A"
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Lender with any further information reasonably requested by the WIFIA Lender from time to time concerning the matters described in clause (i) above. (c) Requested Information. The Borrower shall, at any time while the WIFIA Loan remains outsta nding, promptly deliver to the WIFIA Lender such additional information regarding the business, financial, legal or organizational affairs of the Borrower or the Authority Revenues as the WIFIA Lender may from time to time reasonably request.
Section 20. Reporting Requirements of the City.
(a) Updated Financial Model.
(i) The City shall provide to the WIFIA Lender not later than one hundred eighty (180) days after the beginning of each City Fiscal Year, an updated Base Case Financial Model reflecting the then-current and projected conditions. (ii) The Updated Financial Model shall demonstrate to the satisfaction of the WIFIA Lender that the City has developed and identified adequate revenues to implement a plan for operating, maintaining and repairing the Project over its useful life, and shall include : (A) the City ’s capital improvement plan, major maintenance plan, projected rates and charges, projected debt outstanding and annual debt service, projected Revenues and projected Operations and Maintenance Cost s; (B) evidence of compliance with the Rate Covenant for the most recent City Fiscal Year and the projected Rate Covenant coverages through the Final Maturity Date; (C) a written narrative identifying any material changes to the underlying assumptions from the previous Updated Financial Model; and (D) a certificate signed by the City’s Authorized Representative, certifying that (1) the Updated Financial Model, including the assumptions and supporting documentation, as of its date, is accurate and reasonable to the best of the City’s knowledge and belief, (2) the annual projected Net Revenues will be sufficient to meet the Loan Amortization Schedule and to satisfy the Rate Covenant through the Final Maturity Date, and (3) the City is in compliance with its obligations in respect of the Rate Covenant pursuant to Section 17(a) (Affirmative Covenants of the City – Rate Covenant). (iii) The delivery of the Updated Financial Model to the WIFIA Lender shall constitute a representation and warranty by the City that the Updated Financial Model reflects the City’s reasonable expectations, using assumptions that the City believes to be reasonable, of the System’s expected operations, including capital costs, capital spending schedule, rates and revenues or charges (if applicable), Revenues, Operations and Maintenance Costs, major maintenance costs, financing structure and other scheduling, cost and financing elements required to be included in the Base Case Financial Model. The Updated Financial Model shall independently model the Project (as well as the System) addressing each of the foregoing as it may apply to the Project. (b) Annual Financial Statements. The City shall deliver to the WIFIA Lender, as soon as available, and within one hundred eighty (180) days after the end of each City Fiscal Year (provided that the failure of the City to furnish the documents required by this Section 20(b) within such one hundred eighty (180) -day period shall not constitute a Default or an Event of Attachment "A"
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Default hereunder so long as the City furnishes to the WIFIA Lender such documents within ninety (90) days after the end of such period , and provided further that the parties agree that delivering the documents required by this Section 20(b) within such additional ninety (90) day period shall not, in and of itself, constitute a default under this Agreement, an event of acceleration under this Agreement, the WIFIA Loan, or the WIFIA Note, a termination event under this Agreement, the WIFIA Loan, or the WIFIA Note, a modification of terms with respect to this Agreement, the WIFIA Loan, or the WIFIA Note, or other similar event under this Agreement, the WIFIA Loan, or the WIFIA Note reflecting financial difficulties):
(i) a copy of the audited City Financial Statements as of the end of such City Fiscal Year , (A) setting forth in each case in comparative form the figures for the previous fiscal year, (B) certified without qualification or exception, or qualification as to the scope of the audit, by an independent public accounting firm selected by the City and (C) which shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therei n (except for changes approved or required by the independent public accountants certifying such statements and disclosed therein); and (ii) together with each delivery of such audited City Financial Statements, a certificate signed by the City’s Authorized Representative, stating whether or not, to the City’s knowledge, during the annual period covered by such City Financial Statements, there occurred any Default or Event of Default and, if any such Default or Event of Default shall have occurred during such pe riod, the nature of such Default or Event of Default and the actions that the City has taken or intends to take in respect thereof. (c) Construction Reporting.
(i) The WIFIA Lender shall have the right in its sole discretion to monitor (or direct its agents to m onitor) the development of the Project, including environmental compliance, design, and construction of the Project. The City shall be responsible for administering construction oversight of the Project in accordance with applicable federal, state and loc al governmental requirements. The City agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such Construction Contracts (together with any related contracts, side letters or other understandings) and such reports, documentation or other information as shall be requested by the WIFIA Lender or its agents, including any independent engineer reports, documentation or information. During the period beginning from the first quarte r following bid advertisement of the first Construction Contract for the Project, through and until Substantial Completion of the Project, the City shall furnish to the WIFIA Lender, on a quarterly basis, a report on the status of the Project, substantially in the form of Exhibit J (Form of Quarterly Report). The report shall be executed by the City’s Authorized Representative and, for any quarter, shall be delivered to the WIFIA Lender within thirty (30) days of the following quarter (or if such day is not a Business Day, on the next following Business Day). If the then -current projection for the Substantial Completion Date is a date later than the Projected Substant ial Completion Date, the City shall provide in such report a description in reasonable detail to the reasonable satisfaction of the WIFIA Lender of the reasons for such projected delay, an Attachment "A"
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estimate of the impact of such delay on the capital and operating c osts of the System (if any), and a certification of the City’s Authorized Representative that the new date could not reasonably be expected to result in a Material Adverse Effect. (ii) The City shall deliver to the WIFIA Lender, prior to bid advertisement for the Project (including each sub -project or component, if applicable) , a copy of the final specifications relating to the development and construction of the Project (or such sub-project or component, as the case may be), demonstrating compliance with all applicable federal requirements, and including a summary of the scope of work thereunder. (d) Public Benefits Report . The City shall deliver to the WIFIA Lender a report, in the form of Exhibit K (Form of Public Benefits Report) (the “Public Benefits Report”), (i) prior to the Effective Date, (ii) within ninety (90) days following the Substantial Completion Date and (iii) within ninety (90) days following the fifth (5 th) anniversary of the Substantial Completion Date. The City agrees that information described under this Section 20(d) may be made publicly available by the WIFIA Lender at its discretion. (e) Operations and Maintenance. The WIFIA Lender shall have the right, in its sole discretion, to monitor (or direct its agents to monitor) the Project ’s operations and, as the WIFIA Lender may request from time to time, to receive rep orting on the operation and management of the Project, and copies of any contracts relating to the operation and maintenance of the Project. The City agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly pro viding the WIFIA Lender with such reports, documentation, or other information requested by the WIFIA Lender. The WIFIA Lender has the right, in its sole discretion, to retain such consultants or advisors, to carry out the provisions of this Section 20(e).
On or prior to the Substantial Completion Date, the City shall deliver to the WIFIA Lender an operations and maintenance manual with respect to the Project, in form and substance reasonably acceptable to the WIFIA Lender.
(f) Notices.
(i) The City shall, within fifteen (15) days after it learns of the occurrence, give the WIFIA Lender notice of any of the following events or receipt of any of the following notices, as applicable, setting forth details of such event (provided that the City shall not be obligated to provide such notice to the WIFIA Lender if notice of such event has already been provided to the WIFIA Lender by the Borrower):
(A) Substantial Completion : the occur rence of Substantial Completion, such notice to be provided in the form set forth in Exhibit I (Form of Certificate of Substantial Completion);
(B) Defaults; Events of Default : any Default or Event of Default;
(C) Litigation: (1) the filing of any litigation, suit or action, or the commencement o f any proceeding, against the City before any arbitrator, Governmental Authority, alternative dispute resolution body, or other neutral third- party, or the receipt by the City in writing of any threat of litigation, suit, action, or Attachment "A"
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proceeding, or of any w ritten claim against the City that, in each case, could reasonably be expected to have a City Material Adverse Effect , and any material changes in the status of such litigation, suit, action or claim, and (2) any judgments against the City that could reasonably be expected to have a City Material Adverse Effect, either individually or in the aggregate;
(D) Delayed Governmental Approvals: any failure to receive or delay in receiving any Governmental Approval or making any required filing, notice, recordation or other demonstration to or with a Governmental Authority, in each case to the extent such failure or delay will or could reasonably be expected to result in a delay to any major milestone date (including the Projected Substantial Completion Date) set forth in the Construction Schedule, together with a written explanation of the reasons for such failure or delay and the City’s plans to remedy or mitigate the effects of such failure or delay;
(E) Environmental Notices: any material notice of violation or material change in finding under any Environmental Law related to the Project or any material changes to the NEPA Determination;
(F) Amendments: except as otherwise agreed by the WIFIA Lender in writing, copies of fully executed amendments, modifications, replacements or supplements to any Related Document to which the City is a party within ten (10) days following execution thereof; provided that such notice can be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(G) Related Document Defaults: any material breach or default or event of default on the part of the City or any other party under any Related Document to which the City is a party ; provided that such notice can be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(H) Uncontrollable Force: the occurrence of any Uncontrollable Force that could reasonably be expected to materially and adversely affect the Project;
(I) Ratings Changes: any change in the rating assigned to the WIFIA Loan or any other Obligations by any Nationally Recognized Rating Agency that has provided a public rating on the WIFIA Loan or such Obligations, and any notices, reports or other written materials (other than those that are ministerial in nature) rec eived from any such rating agencies; provided that such notice can be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(J) 2 C.F.R. § 180.350 Notices : any notification required pursuant to 2 C.F.R. § 180.350, wh ether attributable to a failure by the City to disclose information previously required to have been disclosed or due to the City Attachment "A"
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or any of the City’s principals meeting any of the criteria set forth in 2 C.F.R. § 180.335;
(K) Postings on EMMA : the posting of any document of the City on EMMA in accordance with the requirements of any continuing disclosure agreement or similar document relating to annual financial information and operating data and the reporting of significant events; provided that such notice can be accomplished through the posting of the relevant document on EMMA under the WIFIA CUSIP Number;
(L) SAM/DUNS: any change in the City’s SAM registration status (including any exclusions, expiration or inactive registration) or DUNS Number (including any expiration or change in effectiveness); provided that such notice can be accomplished through the posting of the relevant document on EMMA under the WIFIA CUSIP Number;
(M) Issuance of Obligations : copies of any final issuing instrument (together with any continuing disclosure documents, ordinances, official statement, certifications or cash flow projections in connection therewith), prepared in connection with the incurrence of any Additional Obligations (including any Variable Interest Rate Obligations); provided that such notice can be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number;
(N) Amendment to Debt Management Policy: any material
amendment or modification to the Debt Management Policy, along with a copy of such amendment or modification; and
(O) Other Adverse Events: the occurrence of any other event or condition, including any notice of breach from a contract counterparty or any holder of any Obligations, that could reasonably be expected to result in a Material Adverse Effect or have a material and adverse effect on the Project. (ii) Within thirty (30) calendar days after the City learns of the occurrence of an event specified in clause (i) above (other than sub-clauses (A) (Substantial Completion), (F) (Amendments), (I) (Ratings Changes) (in the case of a ratings upgrade), (K) (Postings on EMMA ), (M) (Issuance of Obligations ) or (N) (Amendment to Debt Management Policy)), the City’s Authorized Representative shall provide a statement to the WIFIA Lender setting forth the actions the City proposes to take with respect thereto.
The City shall also provide the WIFIA Lender with any further information reasonably requested by the WIFIA Lender from time to time concerning the matters described in clause (i) above.
(g) Requested Information. The City shall, at any time while the WIFIA Loan remains outstanding, promptly deliver to the WIFIA Lender such additional information regarding the business, financial, legal or organizational affairs of the City or regarding the System Attachment "A"
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(including the Project), the WIFIA Debt Service Account or the Revenues as the WIFIA Lender may from time to time reasonably request.
ARTICLE VI
EVENTS OF DEFAULT
Section 21. Events of Default and Remedies.
(a) A “Borrower Event of Default” shall exist under this Agreement if any of the following occurs:
(i) Borrower Payment Default . The Borrower shall fail to (A) pay when due any part of the principal amount of or interest on the WIFIA Loan (including WIFIA Debt Service required to have been paid pursuant to the provisions of Section 8 (Payment of Principal and Interest )) or (B) make any mandatory prepayment required pursuant to the provisions of Section 9 (Prepayment), in each case when and as the payment thereof shall be required under this Agreement or the WIFIA Note or on the Final Maturity Date (each such failure, a “Borrower Payment Default”). (ii) Borrower Covenant Default. The Borrower shall fail to observe or perform any covenant, agreement or obligation of the Borrower under this Agreement, the WIFIA Note or any other WIFIA Loan Document to which the Borrower is a party (other than in the case of any Borrower Payment Default), and such failure shall not be cured within thirty (30) days after the earlier to occur of (A) receipt by the Borrower from the WIFIA Lender of written notice thereof or (B) the Borrower’s knowledge of such failure; provided that if such failure is capable of cure but cannot reasonably be cured within such thirty (30) day cure period, then no Borrower Event of Default shall be deemed to have occurred or be continuing under this Section 21(a)(ii), and such thirty (30) day cure period shall be extended by up to one hundred fifty (150) additional days, if and so long as (x) within such thirty (30) day cure period the Borrower shall commence actions reason ably designed to cure such failure and shall diligently pursue such actions until such failure is cured and (y) such failure is cured within one hundred eighty (180) days of the date specified in either (A) or (B) above, as applicable.
(iii) Borrower Misrepresentation Default . Any of the representations, warranties or certifications of the Borrower made in or delivered pursuant to any WIFIA Loan Document to which the Borrower is a party (or in any certificates delivered by the Borrower in connection with any WIFIA Loan Document to which the Borrower is a party) shall prove to have been false or misleading in any material respect when made or deemed made (or any representation and warranty or certification that is subject to a materiality qualifier shall prove to have been false or misleading in any respect); provided that no Borrower Event of Default shall be deemed to have occurred under this Section 21(a)(iii) if and so long as (A) such misrepresentation is not intentional, (B) such misrepresentation is not a misrepresentation in respect of Section 12(h) (Representations and Warranties of the Borrower – No Debarment ), or Section 12(j) (Representations and Warranties of the Borrower – Compliance with Laws ), (C) in the reasonable determination of the WIFIA Lender, such misrepresentation has not had, and would not reasonably be expected to result Attachment "A"
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in, a Borrower Material Adverse Effect, (D) in the reasonable determination of the WIFIA Lender, the underlying issue giving rise to the misrepresentation is capable of being cured and (E) the underlying issue giving rise to the misrepresentation is cured by the Borrower within thirty (30) days after the date on which the Borrower first became aware (or reasonably should have become aware) of such misrepresentation. (iv) Borrower Material Adverse Judgment . Any final, non -appealable judgment related to the Authority Revenues shall be entered against the Borrower which has a Material Adverse Effect.
(v) Occurrence of Borrower Bankruptcy Related Event. A Bankruptcy Related Event shall occur with respect to the Borrower. (vi) Invalidity of WIFIA Loan Do cuments. (A) Any WIFIA Loan Document to which the Borrower is a party ceases to be in full force and effect (other than as a result of the termination thereof in accordance with its terms) or becomes void, voidable, illegal or unenforceable, or the Borrower contests in any manner the validity or enforceability of any WIFIA Loan Document to which it is a party or denies it has any further liability under any WIFIA Loan Document to which it is a party, or purports to revoke, terminate or rescind any WIFIA Lo an Document to which it is a party; ( B) this Agreement ceases to grant a valid and binding security interest on any material portion of the Authority Revenues, other than as a result of actions or a failure to act by, and within the control of, the WIFIA L ender; or ( C) any event occurs that results in the material impairment in the priority of (1) the Borrower ’s security interest in the City Pledged Collateral or in the value of the City Pledged Collateral or (2) the WIFIA Lender’s security interest in the Borrower Assigned Rights or in the value of the Borrower Assigned Rights or the pledge and assignment to the WIFIA Lender of the Borrower’s rights thereto. (b) An “City Event of Default” shall exist under this Agreement if any of the following occurs:
(i) City Payment Default. (A) The City shall fail to pay when due any part of any WIFIA Installment Payment required to have been paid pursuant to the provisions of the WIFIA IPA or (B) the City, as agent of the Borrower pursuant to the WIFIA IPA , shall fail to make any mandatory prepayment required pursuant to the provisions of Section 9 (Prepayment) (each such failure, an “City Payment Default”). (ii) City Covenant Default . The City shall fail to observe or perform any covenant, agreement or obligation of the City under this Agreement, the WIFIA IPA or any other WIFIA Loan Document to which the City is a party (other than in the case of any City Payment Default or any Development Default), and such failure shall not be cured within thirty (30) days after the earlier to occur of (A) receipt by the City from the WIFIA Lender of written notice thereof or (B) the City’s knowledge of such failure; provided that if such failure is capable of cure but cannot reasonably be cured within such thirty (30) day cure period, then no Event of Default shall be deemed to have occurred or be continuing under this Section 21(b)(ii), and such thirty (30) day cure period shall be extended by up to one hundred fifty (150) additional days, if and so long as (x) within such thirty (30) day Attachment "A"
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cure period the City shall commence actions reasonably designed to cure such failure and shall diligently pursue such actions until such failure is cured and (y) such failure is cured within one hundred eighty (180) days of the date specified in either (A) or (B) above, as applicable.
(iii) City Misrepresenta tion Default . Any of the representations, warranties or certifications of the City made in or delivered pursuant to any WIFIA Loan Document to which the City is a party (or in any certificates delivered by the City in connection with any WIFIA Loan Docume nt to which the City is a party) shall prove to have been false or misleading in any material respect when made or deemed made (or any representation and warranty or certification that is subject to a materiality qualifier shall prove to have been false or misleading in any respect); provided that no City Event of Default shall be deemed to have occurred under this Section 21(b)(iii) if and so long as (A) such misrepr esentation is not intentional, (B) such misrepresentation is not a misrepresentation in respect of Section 13(h) (Representations and Warranties of the City – No Deb arment), or Section 13(j) (Representations and Warranties of the City – Compliance with Laws ), (C) in the reasonable determination of the WIFIA Lender, such misrepresentation has not had, and would not reasonably be ex pected to result in, a City Material Adverse Effect , (D) in the reasonable determination of the WIFIA Lender, the underlying issue giving rise to the misrepresentation is capable of being cured and (E) the underlying issue giving rise to the misrepresentation is cured by the City within thirty (30) days after the date on which the City first became aware (or reasonably should have become aware) of such misrepresentation.
(iv) Acceleration of Obligations . Any acceleration shall occur of the maturity of any Obligation, or any such Obligation shall not be paid by the City in full upon the final maturity thereof.
(v) Cross Default with Obligation Documents. Any default shall occur in respect of the performance of any covenant, agreement or obligation of the City under any Obligation Document relating to any Parity Obligation (other than the WIFIA Loan Documents), and such default shall be continuing after the giving of any applicable notice and the expiration of any applicable grace period specified in such Obligation D ocument relating to any Parity Obligation with respect to such default, and the City shall have failed to cure such default or to obtain an effective written waiver thereof in accordance with the terms thereof.
(vi) City Material Adverse Judgment . Any final, n on-appealable judgment related to the Revenues, the System or the Project shall be entered against the City which has a Material Adverse Effect.
(vii) Occurrence of City Bankruptcy Related Event . A Bankruptcy Related Event shall occur with respect to the City.
(viii) Invalidity of WIFIA Loan Documents . (A) Any WIFIA Loan Document to which the City is a party ceases to be in full force and effect (other than as a result of the termination thereof in accordance with its terms) or becomes void, voidable, Attachment "A"
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illegal or unenforceable, or the City contests in any manner the validity or enforceability of any WIFIA Loan Document to which it is a party or denies it has any further liability under any WIFIA Loan Document to which it is a party, or purports to revoke, terminate or rescind any WIFIA Loan Document to which it is a party; or (B) the WIFIA IPA ceases (other than as expressly permitted thereunder) to be effective or to grant a valid and binding security interest on any material portion of the City Pledged Collateral, and with the priority purported to be created thereby.
(ix) Development Default. A Development Default shall occur. (c) Upon (i) the occurrence of any Bankruptcy Related Event (other than any Bankruptcy Related Event under clause (b)(iii) of the definition thereof) or (ii) the acceleration of any amounts under the WIFIA IPA, all obligations of the WIFIA Lender hereunder with respect to the disbursement of any undisbursed amounts of the WIFIA Loan shall automatically be deemed terminated, and the Outstanding WIFIA Loan Balance, together with all interest accrued thereon and all fees, costs, expenses, indemnities and other amounts payable under this Agreement, the WIFIA Note or the other WIFIA Loan Documents, shall automatically become immediately due and payable, witho ut presentment, demand, notice, declaration, protest or other requirements of any kind, all of which are hereby expressly waived.
(d) Upon the occurrence of any Event of Default, the WIFIA Lender, by written notice to the Borrower and the City, may exercise any or all of the following remedies:
(i) the WIFIA Lender may suspend or terminate all of its obligations hereunder with respect to the disbursement of any undisbursed amounts of the WIFIA Loan;
(ii) the WIFIA Lender may apply the Default Rate provisions of Section 6 (Interest Rate);
(iii) the WIFIA Lender may suspend or debar the Borrower or the City (or both) from further participation in any Government program administered by the WIFIA Lender and notify other departments and agencies of such default; (iv) the WIFIA Lender shall be entitled and empowered to institute any actions or proceedings at law or in equity against the Borrower for the collection of any sums due from the Borrower and unpaid hereunder or under the WIFIA Note or the other WIFIA Loan Documents, and may prosecute any such judgment or final decree against the Borrower and collect in the manner prov ided by law out of the property of the Borrower the moneys adjudged or decreed to be payable, and the WIFIA Lender shall have all of the rights and remedies of a creditor and may take such other actions at law or in equity as may appear necessary or desira ble to collect all amounts payable by the Borrower under this Agreement, the WIFIA Note or the other WIFIA Loan Documents then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Agreement, the WIFIA Note or the other WIFIA Loan Documents, including directing the Borrower to exercise any rights or remedies under the Attachment "A"
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WIFIA IPA pursua nt to Article VIII ( Events of Default and Remedies of the Authority ) thereto;
(v) the WIFIA Lender shall be entitled and empowered to institute any actions or proceedings at law or in equity against the City for the collection of any sums due from the City and unpaid hereunder or under the WIFIA IPA, and may prosecute any such judgment or final decree against the City and collect in the manner provided by law out of the property of the City the moneys adjudged or decreed to be payable, and the WIFIA Lender shall have all of the rights and remedies of a creditor and may take such other actions at law or in equity as may appear necessary or desirable to collect all amounts payable by the City under this Agreement or the WIFIA IPA then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the City under this Agreement or the WIFIA IPA; and (vi) the WIFIA Lender may declare the unpaid principal amount of the WIFIA Note to be, and the same shall thereupon forthwith become, immediately due and payable, together with the interest accrued thereon and all fees, costs, expenses, indemnities and other amounts payable under this Agreement, the WIFIA Note and the other WIFIA Loan Documents, all without presentment, demand, notice, protest or other requirements of any kind, all of which are hereby expressly waived. (e) Notwithstanding anything to the contrary set forth in any WIFIA Loan Document, the Borrower shall not have the right to (i) accelerate the WIFIA Installment Payments or (ii) exercise any other rights or remedies under the WIFIA IPA following th e occurrence of an “Event of Default” under and as defined in the WIFIA IPA without the prior written direction of the WIFIA Lender.
(f) No action taken pursuant to this Section 21 shall relieve either the Borrower or the City from its obligations pursuant to this Agreement, the WIFIA Note or the other WIFIA Loan Documents, all of which shall survive any such action.
ARTICLE VII
MISCELLANEOUS
Section 22. Disclaimer of Warranty . The WIFIA Lender makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for a particular purpose or fitness for use of the Project or any portion thereof or any other warranty with respect thereto. In no event shall the WIFIA Lender be liable for any incidental, indirect, special or consequential damages incidental to or arising out of this Agreement or the System (including the Project) or the existence, furnishing, functioning or use of the Project or any item or products or services provided for in this Agreement.
Section 23. No Personal Recourse. No official, employee or agent of the WIFIA Lender or either the Borrower or the City or any Person executing this Agreement or any of the other WIFIA Loan Documents shall be personally liable on this Agreement or such other WIFIA Loan Documents by reason of the issuance, delivery or execution hereof or thereof.
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Section 24. No Third Party Rights. The parties hereby agree that this Agreement creates no third party rights against the Borrower, the City, the Government, or the WIFIA Lender, solely by virtue of the WIFIA Loan, and the Borrower and the City each agree to indemnify on a joint and several basis and hold the WIFIA Lender, the Servicer (if any), the Admi nistrator, and the Government harmless, to the extent permitted by law and in accordance with Section 37 (Indemnification), from any lawsuit or claim arising in law or equity solely by reason of the WIFIA Loan, and that no third party creditor of either the Borrower or the City shall have any right against the WIFIA Lender with respect to the WIFIA Loan made pursuant to this Agreement.
Section 25. Borrower’s Authorized Representative . The Borrower shall at all times have appointed a Borrower ’s Authorized Representative by designating such Person or Persons from time to time to act on the Borrower’s behalf pursuant to a written certificate furnished to the WIFIA Lender and the Servicer, if any, containing the specimen signature or signatures of such Person or Persons and signed by the Borrower.
Section 26. City’s Authorized Representative . The City shall at all times have appointed a City’s Authorized Representative by designating such Person or Persons from time to time to act on the City’s behalf pursuant to a written certificate furnished to the WIFIA Lender and the Servicer, if any, containing the specimen signature or signatures of such Person or Persons and signed by the City.
Section 27. WIFIA Lender’s Authorized Representative . The WIFIA Lender hereby appoints the Director of the WIFIA Program, whose notice details are set forth below in Section 36 (Notices), to serve as the WIFIA Lender ’s Authorized Representative under this Agreement until such time as a successor or successors shall have been appointed. Thereafter, the successor in office shall serve as the WIFIA Lender ’s Authorized Representative. The WIFIA Lender shall provide notice to the Borrower and the City within a reasonable time period following the succession.
Section 28. Servicer. The WIFIA Lender may from time to time designate another entity or entities to perform, or assist the WIFIA Lender in performing, the duties of the Servicer or specified duties of the WIFIA Lender under this Agreement and the WIFIA Note. The WIFIA Lender shall give the Borrower and the City written notice of the appointment of any successor or additional Servicer and shall enumerate the duties or any change in duties to be performed by any Servicer. Any references in this Agreement to the WIFIA Lender shall be deemed to be a reference to the Servicer with respect to any duties which the WIFIA Lender shall have delegated to such Servicer. The WIFIA Lender may at any time assume the duties of any Servicer under this Agreement and the WIFIA Note. The Borrower and the City shall cooperate and respond to any reasonable request of the Servicer for information, documentation or other items reasonably necessary for the performance by the Servicer of its duties hereunder.
Section 29. Amendments and Waivers. No amendment, modification, termination, or waiver of any provision of this Agreement or the WIFIA Note shall in any event be effective without the prior written consent of each of the parties hereto.
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Section 30. Governing Law. This Agreement shall be governed by the federal laws o f the United States of America if and to the extent such federal laws are applicable and the internal laws of the State, if and to the extent such federal laws are not applicable.
Section 31. Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal, or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 32. Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective permitted successors and assigns and shall inure to the benefit of the parties hereto and their permitted successors and assigns. Neither the rights nor obligations of the Borrower hereunder or under the WIFIA Note nor any interest herein or therein may be assigned or delegated by the Borrower without the prior written consent of the WIFIA Lender. Neither the rights nor obligations of the City hereunder nor any interest herein may be assigned or delegated by the City without the prior written consent of the WIFIA Lender.
Section 33. Remedies Not Exclusive . No remedy conferred herein or in the WIFIA Note or reserved to the WIFIA Lender is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the WIFIA Note or now or hereafter existing at law or in equity or by statute.
Section 34. Delay or Omission Not Waiver. No delay or omission of the WIFIA Lender to exercise any right or remedy provided hereunder or under the WIFIA Note upon a default of either the Borrower or the City (except a delay or omission pursuant to a written waiver) shall impair any such right or remedy or constitute a waiver of any such default or acquiescence therein.
Every right and remedy given by this Agreement or the WIFIA Note or by law to the WIFIA Lender may b e exercised from time to time, and as often as may be deemed expedient by the WIFIA Lender.
Section 35. Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument; signature pages may be detached from mul tiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Electronic delivery of an executed counterpart of a signature page of this Agreement or of any document or instrument delivered in connection herewith in accordance with Section 36 (Notices) shall be effective as delivery of an original executed counterpart of this Agreement or such other document or instrument, as applicable.
Section 36. Notices. Notices hereunder shall be (a) in writing, (b) effective as provided below and (c) given by (i) nationally recognized courier service, (ii) hand delivery, or (iii) email, in each case to:
If to WIFIA Lender: Environmental Protection Agency
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WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
If to Borrower:6 Escondido Joint Powers Financing Authority 201 North Broadway
Escondido, California 92025
Attention: [●]
Email: [●]
If to City:
City of Escondido
201 North Broadway
Escondido, California 92025
Attention: [●]
Email: [●]
Unless otherwise instructed by the WIFIA Lender ’s Authorized Representative, all notices to the WIFIA Lender should be made by email to the email address noted above for the WIFIA Lender.
Notices required to be provided herein shall be provided to such different addresses or to such further parties as may be designated from time to time by the Borrower’s Authorized Representative, with respect to notices to the Borrower, or by the City ’s Authorized Representative, with respect to notices to the City , or by the WIFIA Lender ’s Authorized Representative, with respect to notices to the WIFIA Lender or the Servicer. Each such notice, request or communication shall be effective (x) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section 36 (or in accordance with the latest unrevoked written direction from the receiving party) and (y) if given by email, when such email is delivered to the address specified in this Section 36 (or in accordance with the latest unrevoked written direction from the receiving party); provided that notices received on a day that is not a Business Day or after 5:00 p.m. Eastern Time on a Business Day will be deemed to be effective on the next Business Day. Notwithstanding the foregoing, nothing in this Section 36 obligates the City to pay principal of or interest on the WIFIA Loan or the WIFIA Note.
Section 37. Indemnification. The Borrower and the City shall, to the extent permitted by law, indemnify on a joint and several basis the WIFIA Lender and any official, employee, agent, advisor or representative of the WIFIA Lender (each such Person being herein referred to as an “Indemnitee”) against, and hold each Indemnitee harmless from, a ny and all losses, claims, damages, liabilities, fines, penalties, costs and expenses (including the fees, charges and disbursements of any counsel for any Indemnitee and the costs of environmental remediation), whether known, unknown, contingent or otherwise, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (a) the execution, delivery and performance of this Agreement or any of the other Related Documents, (b) the WIFIA Loan or the use of the proceeds the reof, or (c) the violation of any law, rule, regulation, order, decree, judgment or administrative decision relating to the environment, the preservation or reclamation of natural 6 Note to City: Please provide remaining notice information for the Borrower and the City.
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resources, the management, release or threatened release of any hazardous ma terial or to health and safety matters; in each case arising out of or in direct relation to the Project; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities, fines, penalt ies, costs or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. In case any action or proceeding is brought against an Indemnitee by reason of any claim with respect to which such Indemnitee is entitled to indemnification hereunder, the Borrower and the City shall each be entitled, at its expense, to participate in the defense thereof; provided that such Indemnitee has the right to retain its own counsel, at the expense of the Borrower or the City, as applicable, and such participation by the Borrower and/or the City in the defense thereof shall not release the Borrower or the City of any liability that it may have to such Indemnitee. Any Indemnitee against whom any indemnity claim contemplated in this Section 37 is made shall be entitled, after consultation with the Borrower and the City and upon consultation with legal counsel wherein such Indemnitee is advised that such indemnity claim is meritorious, to compromise or settle any such indemnity claim. Any such compromise or settlement shall be binding upon the Borrower and the City for purposes of this Section 37. Nothing herein shall be construed as a waiver of any legal immunity that may be available to any Indemnitee. To the extent permitted by applicable law, none of the Borrower, the City, or the WIFIA Lender shall assert, and the Borrower, the City, and the WIFIA Lender each hereby waives, any claim against any Indemnitee, the Borrower, or the City, respectively, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any of the other Related Documents, the other transactions contemplated hereby a nd thereby, the WIFIA Loan or the use of the proceeds thereof, provided that nothing in this sentence shall limit the Borrower’s or the City’s indemnity obligations to the extent such damages are included in any third party claim in connection with which an Indemnitee is entitled to indemnification hereunder.
All amounts due to any Indemnitee under this Section 37 shall be payable promptly upon demand therefor. The o bligations of the Borrower and the City under this Section 37 shall survive the payment or prepayment in full of the WIFIA Note pursuant to Section 8 (Payment of Principal and Interest) or Section 9 (Prepayment), the enforcement of any provision of this Agreement or the other Related Documents, any amendments, waivers (other than amendments or waivers in writing with respect to this Section 37) or consents in respect hereof or thereof, any Event of Default, and any workout, restructuring or similar arrangement of the obligations of the Borrower or the City hereunder or thereunder.
Section 38. Sale of WIFIA Loan. The WIFIA Lender shall not sell the WIFIA Loan at any time prior to the Substantial Completion Date. After such date, the WIFIA Lender may sell the WIFIA Loan to another entity or reoffer the WIFIA Loan into the capital markets only in accordance with the provisions of this Section 38. Such sale or reoffering shall be on such terms as the WIFIA Lender shall deem advisable. However, in making such sale or reoffering the WIFIA Lender shall not change the terms and conditions of the WIFIA Loan without the prior written consent of the Borrower and the City in accordance with Section 29 (Amendments and Waivers).
The WIFIA Lender shall provide, at least sixty (60) days prior to any sale or reoffering of the WIFIA Loan, written notice to the Borrower and the City of the WIFIA Lender ’s intention to consummate such a sale or reoffering; provided that no such notice shall be required during the continuation of any Event of Default. The provision of any notice pursuant to this Section 38 shall neither (x) obligate the WIFIA Lender to sell nor (y) provide either of the Borrower or the City Attachment "A"
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with any rights or remedies in the event the WIFIA Lender, for any reason, does not sell the WIFIA Loan. Neither the Borrower nor the City shall have any obligation to provide any disclosure, representation, warranty, estoppel, certificate, consent, agreement, approval, or other assistance to the WIFIA Lender or any proposed purchaser or assignee of the WIFIA Loan i n connection with any proposed sale or assignment of the WIFIA Loan.
Section 39. Effectiveness. This Agreement shall be effective on the Effective Date.
Section 40. Termination. This Agreement shall terminate upon the irrevocable payment in full in immediately available funds by the Borrower of the Outstanding WIFIA Loan Balance, together with all accrued interest, fees and expenses with respect thereto; provided that the indemnification requirements of Section 37 (Indemnification), the reporting and record keeping requirements of Section 15(l) (Affirmative Covenants of the Borrower – Access; Records ) and Section 17 (p) (Affirmative Covenants of the City – Access; Records ), and the payment requirements of Section 10 (Fees and Expenses) shall survive the termination of this Agreement as provided in such sections.
Section 41. Integration. This Agreement, together with the other WIFIA Loan Documents, constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
[The remainder of this page intentionally left blank; signature pages immediately follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
ESCONDIDO JOINT POWERS FINANCING
AUTHORITY, by its authorized representative
By: ______________________________
Name:
Title:
Attachment "A"
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CITY OF ESCONDIDO,
by its authorized representative
By: ______________________________
Name:
Title:
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UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and through
the Administrator of the Environmental Protection
Agency
By: ______________________________
Name: Michael S. Regan
Title: Administrator
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SCHEDULE I
PROJECT BUDGET7
SOURCES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
WIFIA Loan $65,147,348 [49.00]%
Cash $30,759,161 31.27%
Previously Incurred Costs $4,512,400 4.59%
CA Prop 1E Grant $14,900,000 15.15%
Total Sources of Funds $[$115,318,909] 100.0%
USES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
Construction $78,525,881 79.82%
Design $6,165,903 6.27%
Contingency $13,383,825 13.60%
Financing Costs $300,000 0.30%
Total Uses of Funds $98,375,609 100.0%
Total Eligible Project Costs $98,375,609 100.0%
Total Project Costs $98,375,609 100.0%
7 Note to Draft: Sources of Funds table to be updated.
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SCHEDULE II
CONSTRUCTION SCHEDULE
Planning Design Construction
Projected
Substantial
Completion
9/10/2012 – 6/8/2014 3/31/2014 – 5/10/2021 2/8/2022 – 9/25/2024 1/31/2025
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SCHEDULE III
EXISTING INDEBTEDNESS
A. Parity Obligations
Agreement/Series Outstanding Principal
1. Funding Agreement (Project No. 3710006-004; Contract No. SRF00CX112), dated November 18, 2002, between
the City and the State of California Department of Water Resources, as amended
$315,311.69
2. Funding Agreement (Alexander Area Phase II) (Project No. 3710006-004; Agreement No. AR09FP27), dated
October 15, 2009, between the City and the State of
California Department of Public Health
$1,519,087.98
3. Installment Sale Agreement, dated June 1, 2019, between the City and the California Infrastructure and Economic Development Bank
$14,326,608.26
4. Installment Purchase Agreement, dated November 1,
2019, between the City and the Borrower
$47,615,000
5. Installment Sale Agreement, dated September 1, 2021, between the City and the California Infrastructure and
Economic Development Bank
$25,000,000
B. Subordinate Obligations
Agreement/Series Outstanding Principal
1. N/A
C. Other Obligations of the City
Agreement/Series Outstanding Principal
1. N/A
D. Indebtedness of the Borrower
Agreement/Series Outstanding Principal
1. Water System Revenue Refunding Bonds, Series 2019A $19,195,000
2. Water System Revenue Refunding, Bonds, Series 2019B
(Taxable)
$28,420,000
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SCHEDULE 13(m)
EXISTING CONSTRUCTION CONTRACTS8
Contract Name Effective Date Construction
Contractor
Amount Description
8 Note to City: Please provide this schedule.
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EXHIBIT A
FORM OF WIFIA NOTE
ESCONDIDO JOINT POWERS FINANCING AUTHORITY
LAKE WOHLFORD DAM REPLACEMENT PROJECT
(WIFIA – N20149CA)
WIFIA NOTE
Maximum Principal Amount: $65,147,348 (Sixty Five Million, One Hundred Forty-Seven Thousand, Three Hundred Forty-Eight Dollars)
Effective Date: [●]
Interest Rate Per Annum: [●]%
Due: July 1, 2055
ESCONDIDO JOINT POWERS FINANCING AUTHORITY , a joint exercise of powers agency duly organized and existing under and by virtue of the laws of the State of California (the “Borrower”), for value received, hereby promises to pay to the order of the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY , acting by and through the Administrator of the United States Environmental Protection Agency, or its assigns (the “WIFIA Lender”), the lesser of (x) the Maximum Principal Amount set forth above and (y) the aggregate unpaid principal amount of all disbursements (the “Disbursements”) made by the WIFIA Lender (such lesser amount being hereinafter referred to as the “Outstanding Principal Sum”), together with accrued and unpaid interest (including, if applicable, i nterest at the Default Rate, as defined in the WIFIA Loan Agreement (as defined below)) on the Outstanding Principal Sum and all fees, costs and other amounts payable in connection therewith, all as more fully described in the WIFIA Loan Agreement. The principal hereof shall be payable in the manner and at the place provided in the WIFIA Loan Agreement in accordance with Exhibit F (WIFIA Debt Service) to the WIFIA Loan Agreement, as revised from time to time in accordance with the WIFIA Loan Agreement, until paid in full (which Exhibit F, as modified from time to time in accordance with the terms of the WIFIA Loan Agreement, is incorporated in and is a part of this WIFIA Note). The WIFIA Lender is hereby authorized to modify the Loan Amortization Schedule included in Exhibit F to the WIFIA Loan Agreement from time to time in accordance with the terms of the WIFIA Loan Agreement to reflect the amount of each disbursement made thereunder and the date and amount of principal or interest paid by the Borrower thereunder. Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on Exhibit F to the WIFIA Loan Agreement shall be conclusive evidence thereof; provided that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the Borrower ’s obligations hereunder or under any other WIFIA Loan Document.
Payments hereon are to be made in accordance with Section 8(e) (Payment of Principal and Interest – Manner of Payment) and Section 36 (Notices) of the WIFIA Loan Agreement as the Attachment "A"
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same become due. Principal of and interest on this WIFIA Note shall be paid in funds available on or before the due date and in any lawful coin or currency of the United States of America that at the date of payment is legal tender for the payment of public and private debts.
This WIFIA Note has been executed under and pursuant to that certain WIFIA Loan Agreement, dated as of the date hereof, among the WIFIA Lender, the Borrower and the City (the “WIFIA Loan Agreement”) and is issued to evidence the obligation of the Borrower under the WIFIA Loan Agreement to repay the loan made by the WIFIA Lender and any other payments of any kind required to be paid by the Borrower under the WIFIA Loan Agreement or the other WIFIA Loan Documents referred to therein. Reference is made to the WIFIA Loan Agreement for all details relating to the Borrower’s obligations hereunder. All capitalized terms used i n this WIFIA Note and not defined herein shall have the meanings set forth in the WIFIA Loan Agreement.
This WIFIA Note may be prepaid at the option of the Borrower in whole or in part (and, if in part, the principal installments and amounts thereof to be prepaid are to be determined in accordance with the WIFIA Loan Agreement; provided such prepayments shall be in principal amounts of at least $1,000,000 or any integral multiple of $1 in excess thereof), from time to time, but not more than annually, witho ut penalty or premium, by paying to the WIFIA Lender all or part of the principal amount of the WIFIA Note in accordance with the WIFIA Loan Agreement.
This WIFIA Note shall be subject to mandatory prepayment on the terms and conditions set forth in the WIFIA Loan Agreement.
Payment of the obligations of the Borrower under this WIFIA Note is secured pursuant to the WIFIA Loan Agreement.
This WIFIA Note is a limited obligation of the Borrower, payable solely from the Authority Revenues, and does not constitu te a debt of the members of the Borrower, the State or any of its political subdivisions (including the City), except the Borrower. Notwithstanding anything to the contrary set forth in this WIFIA Note, the City is not a borrower with respect to this WIFIA Note and the City has no obligation to make any payment or provision for payment of this WIFIA Note.
This WIFIA Note does not constitute a contract between the City and the WIFIA Lender by which the City has incurred an indebtedness.
Any delay on the part of the WIFIA Lender in exercising any right hereunder shall not operate as a waiver of any such right, and any waiver granted with respect to one default shall not operate as a waiver in the event of any subsequent default.
All acts, conditions and things required by the Constitution and laws of the State to happen, exist, and be performed precedent to and in the issuance of this WIFIA Note have happened, exist and have been performed as so required. This WIFIA Note is issued with the intent that the federal laws of the United States of America shall govern its construction to the extent such federal laws are applicable and the internal laws of the State shall govern its construction to the extent such federal laws are not applicable.
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IN WITNESS WHEREOF, ESCONDIDO JOINT POWERS FINANCING AUTHORITY has caused this WIFIA Note to be executed in its name and its seal to be affixed hereto and attested by its duly authorized officer, all as of the Effective Date set forth above. (SEAL)
ESCONDIDO JOINT POWERS
FINANCING AUTHORITY,
by its authorized representative
By ______________________________
Name:____________________________
Title:_____________________________
ATTEST:
_________________________
Secretary
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EXHIBIT B
ANTICIPATED WIFIA LOAN DISBURSEMENT SCHEDULE9
Federal Fiscal Year Amount
2022 $[1,723,800]
2023 $[18,390,467]
2024 $[18,390,467]
2025 $[9,699,314]
Total $65,147,348
9 Note to Draft: To be updated.
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EXHIBIT C
FORM OF NON-DEBARMENT CERTIFICATE
The undersigned, on behalf of [ESCONDIDO JOINT POWERS FINANCING AUTHORITY (the “Borrower”)] [CITY OF ESCONDIDO (the “City”)], hereby certifies that the [Borrower] [City] has fully complied with its verification obligations under 2 C.F.R. § 180.320 and hereby further confirms, based on such verification, that, to its knowledge, the [Borrower] [City] and each of the [Borrower ’s] [ City’s] principals (as defined in 2 C.F.R. § 180.995 and supplemented by 2 C.F.R. 1532.995):
(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any federal department or agency; (b) Have not within a three (3) year period preceding the Effective Date been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attem pting to obtain, or performing a public (federal, state or local) transaction or contract under a public transaction; violation of federal or state antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of r ecords, making false statements, or receiving stolen property;
(c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (federal, state or local) with commission of any of the offenses enumerated in paragraph (b) of this certification; and
(d) Have not within a three (3) year period preceding the Effective Date had one or more public transactions (federal, state or local) terminated for cause or default.
Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among the [Borrower] [City], [City of Escondido] [Escondido Joint Powers Financing Authority ] and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency.
Dated: [●]
[ESCONDIDO JOINT POWERS FINANCING
AUTHORITY] [CITY OF ESCONDIDO], by its
authorized representative
By: ____________________________________
Name:
Title:
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EXHIBIT D
REQUISITION PROCEDURES
This Exhibit D sets out the procedures which the Borrower and the City agree to follow in submitting Requisitions for the disbursement of WIFIA Loan proceeds in respect of the Eligible Project Costs incurred in connection with the Project. Section 1 sets out the manner in which Requisitions are to be submitted and reviewed. Sections 2 through 4 set out the circumstances in which the WIFIA Lender may reject or correct Requisitions submitted by the City, as agent of the Borrower pursuant to the WIFIA IPA , or withhold a disbursement . The Borrower and the City expressly agree to the terms hereof, and further agree that (i) the rights of the WIFIA Lender contained herein are in addition to (and not in lieu of) any other rights or remedies available to the WIFIA Lender under the WIFIA Loan Agreement, and (ii) nothing contained herein shall be construed to limit the rights of the WIFIA Lender to take actions including administrative enforcement action and actions for breach of contract against the Borrower or the City if it fails to carry out its obligations under the WIFIA Loan Agreement during the term thereof.
Section 1 General Requirements. All requests by the City, as agent of the Borrower pursuant to the WIFIA IPA , for the disbursement of WIFIA Loan proceeds shall be made by electronic mail or overnight delivery service by submission to the WIFIA Lender, in accordance with Section 36 (Notices) of the WIFIA Loan Agreement, of a Requisition, in form and substance satisfactory to the WIFIA Lender and completed and executed by the City ’s Authorized Representative. The form of Requisition is attached as Appendix One (Form of Requisition) to this Exhibit D. Any disbursement request shall be accompanied by a certificate completed and executed by the Borrower ’s Authorized Representative in the form of Appendix Two (Form of Borrower Disbursement Certificate) to this Exhibit D.
Supporting documentation should be submitted with the Requisition. If the City, as agent of the Borrower pursuant to the WIFIA IPA, anticipates that it will draw down all or a portion of the proceeds of the WIFIA Loan to reimburse the Borrower or the City for Eligible Project Costs paid by or on behalf of the Borrower or the City prior to such disbursement of WIFIA Loan proceeds, whether paid from funds of the Borrower or the City or from proceeds of Obligations issued by the City, including for the purpose of paying or redeeming such Obligations, the City, as agent of the Borrower pursuant to the WIFIA IPA , shall deliver appr opriate documentation, including invoices and records, evidencing such incurred or paid Eligible Project Costs (the “Eligible Project Costs Documentation ”). The Eligible Project Costs Documentation must provide sufficient detail to enable the WIFIA Lender to verify that such costs are Eligible Project Costs paid by the Borrower or the City, as agent of the Borrower pursuant to the WIFIA IPA , in connection with the reimbursement of such Eligible Project Costs. The WIFIA Lender shall review the Eligible Project Costs Documentation for compliance with WIFIA disbursement requirements, and any amounts approved by the WIFIA Lender as Eligible Project Costs will be disbursed at such time as the City, as agent of the Borrower pursuant to the WIFIA IPA, submits a Requisition in respect of such approved amounts.
The WIFIA Lender agrees to promptly send to the Borrower and the City in accordance with Section 36 (Notices) of the WIFIA Loan Agreement, an acknowledgement of receipt of each Requisition in the form attached as Appendix Three ([Approval/Disapproval] of the WIFIA Attachment "A"
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Lender) to this Exhibit D setting forth the date of receipt by the WIFIA Lender of such Requisition and setting forth the Business Day on which disbursement w ill be made absent denial by the WIFIA Lender. All disbursement requests must be received by the WIFIA Lender at or before 5:00 P.M. (EST) on the first (1st) Business Day of a calendar month in order to obtain disbursement by the fifteenth (15th) day of such calendar month or, if either such day is not a Business Day, the next succeeding Business Day. If a Requisition is approved by the WIFIA Lender, the WIFIA Lender will notify the Borrower of such approval and of the amount so approved.
Section 2. Rejection. A Requisition may be rejected in whole or in part by the WIFIA Lender if it is : (a) submitted without signature; (b) submitted under signature of a Person other than the City’s Authorized Representative; (c) submitted after prior disbursement of all proceeds of the WIFIA Loan; (d) submitted without adequate Eligible Project Costs Documentation, including (i) copies of invoices and records evidencing the Eligible Project Costs, ( ii) a summary of the progress of construction of the Project and a general description of the work done for which the funds being requisitioned are being applied (or a certification that no change has occurred since the date of the latest quarterly report provided pursuant to Section 20(c)(i) (Reporting Requirements of the City – Construction Reporting), and (iii) a copy of the most recent update to the City’s risk register, if requested by the WIFIA Lender.
The WIFIA Lender will notify the Borrower and the City of any Requisition so rejected, and the reasons therefor. Any Requi sition rejected for the reasons specified above (other than Section 2(c)) must be resubmitted in proper form in order to be considered for approval. If a Requisition exceeds the balance of the WIFIA Loan proceeds remaining to be disbursed, the request will be treated as if submitted in the amount of the balance so remainin g, and the WIFIA Lender will so notify the Borrower and the City.
Section 3. Correction. A Requisition containing an apparent mathematical error will be corrected by the WIFIA Lender, after telephonic or email notification to the Borrower or the City, and will thereafter be treated as if submitted in the corrected amount.
Section 4. Withholding. The WIFIA Lender shall be entitled to withhold approval (in whole or in part) of any pending or subsequent requests for the disbursement of WIFIA Loan proceeds if: (a) a Default or an Event of Default shall have occurred and be continuing; (b) either the Borrower or the City (i) knowingly takes any action, or omits to take any action, amounting to fraud or violation of any applicable law, in connection with the transactions contemplated hereby; (ii) prevents or materially impairs the ability of the WIFIA Lender to monitor compliance by either the Borrower or the City with applicable law pertaining to the Project or with the terms and conditions of the WIFIA Loan Agreement; (iii) fails to observe or comply with any applicable law, or any term or condition of the WIFIA Loan Agreement; (iv) fails to satisfy the conditions set forth in Section 4 (Disbursement Conditions ) and Section 11(b) (Conditions Precedent – Conditions Precedent to Disbursements) of the WIFIA Loan Agreement; or (v) fails to deliver Eligible Project Costs Documentation satisfactory to the WIFIA Lender at the times and in the manner specified by the WIFIA Loan Agreement; provided that in such case of Section 4, clause (v) above, the WIFIA Lender may, in its sole discretion, partially approve a disbursement request in respect of any amounts for which adequate Eligible Project Costs has been provided and may, in its sole discretion, disburse in respect of such properly documented amounts.
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APPENDIX ONE TO EXHIBIT D
FORM OF REQUISITION
United States Environmental Protection Agency
1200 Pennsylvania Avenue NW
WJC-W 6201A
Washington, D.C. 20460
Attention: WIFIA Director
Re: LAKE WOHLFORD DAM REPLACEMENT PROJECT (WIFIA Ref N20149CA) Ladies and Gentlemen:
Pursuant to Section 4 (Disbursement Conditions) of the WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among ESCONDIDO JOINT POWERS FINANCING AUTHORITY (the “Borrower”), CITY OF ESCONDIDO (the “City”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator (the “WIFIA Lender”), the City, as agent of the Borrower pursuant to the WIFIA IPA, hereby requests disbursement in the amount set forth below in r espect of Eligible Project Costs paid or incurred by the City , as agent of the Borrower pursuant to the WIFIA IPA .
Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Loan Agreement.
In connection with this Requisition th e undersigned, as the City ’s Authorized Representative, hereby represents and certifies the following:
1. Project name Lake Wohlford Dam Replacement
Project
2. Borrower name Escondido Joint Powers Financing
Authority
3. WIFIA reference number N20149CA
4. Requisition number [___]
5. Requested disbursement amount $[___]
6. Requested disbursement date
(the “Disbursement Date”)
[___]
7. Total amounts previously disbursed
under the WIFIA Loan Agreement
$[___]
8. Wire instructions [___]
9. The amounts hereby requisitioned are being requested with respect to [Eligible Project Costs previously submitted to and approved by the WIFIA Lender in accordance with the WIFIA Loan Agreement] [Eligible Project Costs which have not and will not be otherwise submitted to the WIFIA Lender for approval].
10. The amounts hereby requisitioned have been paid or incurred and approved for payment by or on behalf of the City, as agent of the Borrower pursuant to the WIFIA IPA , for Attachment "A"
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Eligible Project Costs and have n ot been paid for or reimbursed by any previous disbursement from WIFIA Loan proceeds. No portion of the amounts requisitioned will be applied to pay for Eligible Project Costs that have been previously paid, or are expected to be paid, with proceeds of debt that is not the WIFIA Loan.
11. The aggregate amount of all disbursements of the WIFIA Loan (including the amount requested under this Requisition) does not exceed (a) the maximum principal amount of the WIFIA Loan or (b) the aggregate amount of Eligible Project Costs paid or incurred by the City, as agent of the Borrower pursuant to the WIFIA IPA.
12. Each of the insurance policies maintained by the City pursuant to Section 17(f) (Affirmative Covenants of the City – Insurance; Net Proceeds) of the WIFIA Loan Agreement is in full force and effect, and no notice of termination thereof has been issued by the applicable insurance provider.
13. As of the date hereof and on the Disbursement Date (immediately after giving effect to the above-requested disbursement of WIFIA Loan proceeds), (a) no Default or Event of Default, and no event of default under any other Related Document to which the City is a party and (b) no event that, with the giving of notice or the passage of time or both, would constitute an event of default under any Related Document to which the City is a party, in each case, has occurred and is continuing. No City Material Adverse Effect, or any event or condition that could reasonably be expected to have a City Material Adverse Effect, has occurred or arisen since the Effective Date.
14. The City and each of the contractors and subcontractors at all ti ers with respect to the Project have complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141 -3144, 3146, and 3147 (relating to Davis -Bacon Act requirements) (and regulations relating thereto) and 33 U.S.C. §3914 (relating to American iron and steel products). Supporting documentation, such as certified payroll records and certifications for all iron and steel products used for the Project, are being maintained and are available for review upon request by the WIFIA Lender.
15. The representations and warranties of the City set forth in the WIFIA Loan Agreement and in each other WIFIA Loan Document to which the City is a party are true and correct as of the date hereof and as of the Disbursement Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties are true and correct as of such earlier date).
16. Each Related Document that has been delivered by the City to the WIFIA Lender pursuant to Section 11(b)(iv) (Conditions Precedent – Conditions Precedent to Disbursements ) is complete, fully executed and in full force and effect.
17. The current estimated percentage of physical completion of the Project is [___]%. The City, as agent of the Borrower pursuant to the WIFIA IPA , is in compliance with Section 20(c) (Reporting Requirements of the City – Construction Reporting ) and no change has occurred since the date of the most recently delivered semi-annual construction progress report that could reasonably be expected to cause a Material Adverse Effect.
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18. All documentation evidencing the Eligible Project Costs to be reimbursed to the City, as agent of the Borrower pursuant to the WIFIA IPA , by the above -requested disbursement has been delivered by the City, as agent of the Borrower pursuant to the WIFIA IPA, to the WIFIA Lender at the times and in the manner specified by the WIFIA Loan Agreement, including the details set forth [in the attachment hereto, which is in form satisfactory to the WIFIA Lender][below:
WIFIA USE ONLY
Vendor or
Contractor
Name10
Invoice
Number11
Invoice
Date
Payment
Date
Invoice
Amount
WIFIA
Requested
Amount12
Activity
Type13
Description
of Activity14
Approved
Amount
Notes
The undersigned acknowledge s that if the City makes a false, fictitious, or fraudulent claim, statement, submission, or certification to the Government in connection with the Project, the Government reserves the right to impose on the City the penalties of 18 U.S.C. § 1001, to the extent the Government deems appropriate.
Date: ______________________ CITY OF ESCONDIDO,
By its authorized representative
By: _______________________________
Name:
Title:___________________________
10 If seeking reimbursement for internal costs, enter “Internally financed activities.” 11 Vendor’s number indicated on the invoice sent to the Borrower. 12 If the amount requested for reimbursement by the WIFIA Lender is less than the total amount of the invoice, include an explanation for the difference.
13 Specify whether activity is : (a) Development phase activity , which inc ludes planning, preliminary engineering, design, environmental review, revenue forecasting and other pre -construction activities; (b) Construction, which includes construction, reconstruction, rehabilitation and replacement activities; (c) Acquisition of r eal property , which includes acquiring an interest in real property, environmental mitigation, construction contingencies and acquisition of equipment; (d) Carrying costs , including capitalized interest, as necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction; (e) WIFIA fees, including for application and credit processing; or (f) Other, with an explanation in the “Description of Activity” column. 14 Provide a brief description of the activities included in the invoice for which WIFIA funds are being requested and any other notes that will aid in the review of the disbursement request.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
229
Item8.
APPENDIX TWO TO EXHIBIT D
FORM OF BORROWER’S DISBURSEMENT CERTIFICATE
United States Environmental Protection Agency
1200 Pennsylvania Avenue NW
WJC-W 6201A
Washington, D.C. 20460
Attention: WIFIA Director
Re: LAKE WOHLFORD DAM REPLACEMENT PROJECT (WIFIA Ref N20149CA) Ladies and Gentlemen:
Reference is made to that certain WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among ESCONDIDO JOINT POWERS FINANCING AUTHORITY (the “Borrower”), CITY OF ESCONDIDO (the “City”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and t hrough the Administrator (the “WIFIA Lender”). Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Loan Agreement.
Pursuant to Section 11(b) (iii) (Conditions Precedent – Conditions Precedent to Disbursements) of the WIFIA Loan Agreement , the undersigned, as the Borrower ’s Authorized Representative, hereby represents and certifies the following:
1. As of the date hereof and on the requested disbursement date (immediately after giving effect to the requested disbursement of WIFIA Loan proceeds), (a) no Default or Event of Default, and no event of default under any other Related Document to which the Borrower is a party and (b) no eve nt that, with the giving of notice or the passage of time or both, would constitute an event of default under any Related Document to which the Borrower is a party, in each case, has occurred and is continuing.
2. No Borrower Material Adverse Effect, or any event or condition that could reasonably be expected to have a Borrower Material Adverse Effect, has occurred or arisen since the Effective Date.
3. The Borrower has complied with all applicable laws, rules, regulations and requirements.
4. The representations and warranties of the Borrower set forth in the WIFIA Loan Agreement (including Section 12 (Representations and Warranties of the Borrower)) and in each other WIFIA Loan Document to which the Borrower is a party are true and correct as of the date hereof and as of the requested disbursement date, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties shall be true and correct as of such earlier date).
The undersigned acknowledges that if the Borrower makes a false, fictitious, or fraudulent claim, statement, submission, or certification to the Government in connection with the Project, the Attachment "A"
Resolution No. 2024-15
Exhibit "A"
230
Item8.
Government reserves the right to impose on the Borrower the penalties of 18 U.S.C. § 1001, to the extent the Government deems appropriate.
Date: ______________________ ESCONDIDO JOINT POWERS FINANCING
AUTHORITY,
By its authorized representative
By: _______________________________
Name:
Title:___________________________
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
231
Item8.
APPENDIX THREE TO EXHIBIT D
[APPROVAL/DISAPPROVAL] OF THE WIFIA LENDER
(To be delivered to the Borrower and the City)
Requisition Number [_______________] is [approved in the amount of $[________]] [approved in part in the amount of $[_________]] [not approved, for the reasons set forth in Annex A attached hereto,] 15 by the WIFIA Lender (as defined herein) pursuant to Section 4 (Disbursement Conditions ) of the WIFIA Loan Agreement, dated as of [●], by and among Escondido Joint Powers Financing Authority (the “Borrower”), City of Escondido (the “City”) and the United States Environmental Protection Agency, acting by and through the Administrator (the “WIFIA Lender”).
Any determination, action or failure to act by the WIFIA Lender with respect to the Requisition set forth above, including any withholding of a disbursement, shall be at the WIFIA Lender’s sole discretion, and in no event shall the WIFIA Lender be responsible for or liable to the Borrower or the City for any and/or all consequence(s) which are the result thereof.
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and through
the Administrator
By: ___________________________
WIFIA Lender’s Authorized Representative
Name:
Title:
Dated:
15 If there is any partial or full denial of approval, the WIFIA Lender should provi de a separate attachment setting forth the reasons for such partial or full denial of approval.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
232
Item8.
EXHIBIT E
FORM OF NON-LOBBYING CERTIFICATE
The undersigned, on behalf of [ESCONDIDO JOINT POWERS FINANCING AUTHORITY (the “Borrower”)] [CITY OF ESCONDIDO (the “City”)], hereby certifies, to the best of his or her knowledge and belief, that:
(a) No Federal appropriated funds have been paid or will be paid, by or on behalf of the [Borrower] [City], to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or empl oyee of Congress, or an employee of a Member of Congress in connection with the making of the WIFIA Loan. (b) If any funds other than proceeds of the WIFIA Loan have been paid or will be paid to any person for influencing or attempting to influence an offi cer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the WIFIA Loan, the [Borrower] [City] shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. (c) The [Borrower] [City] shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.
Capitalized terms used in the certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among the [Borrower] [City], [City of Escondido] [Escondido Joint Powers Financing Authority ] and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency.
This certification is a material representation of fact upon which reliance was placed when the WIFIA Lender entered into the WIFIA Loan Agreement. Submission of this certification is a prerequisite to the effectiveness of the WIFIA Loan Agreement imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
Dated: [●]
[ESCONDIDO JOINT POWERS FINANCING
AUTHORITY] [CITY OF ESCONDIDO], by its
authorized representative
By: ____________________________________
Name:
Title:
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
233
Item8.
EXHIBIT F
WIFIA DEBT SERVICE16
16 NTD: To be provided by the WIFIA Lender on the Effective Date.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
234
Item8.
EXHIBIT G-1
FORM OF OPINION OF BORROWER’S GENERAL COUNSEL
[●]
United States Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Re: Lake Wohlford Dam Replacement Project – City of Escondido and Escondido Joint Powers Financing Authority (WIFIA – N20149CA)
Ladies and Gentlemen:
We have acted as general counsel to the Escondido Joint Powers Financing Authority (the “Borrower”) in connection with the execu tion and delivery by the Borrower of (a) the WIFIA Installment Purchase Agreement, dated as of [●] (the “WIFIA IPA”), by and between the Borrower and the City of Escondido (the “City”), (b) the WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreeme nt”), by and among the Borrower, the City and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”), (c) the WIFIA Note, dated as of [●] (the “WIFIA Note”), delivered to the WIFIA Lender by the Borrower, and (d) Resolution No. EJPFA-2022-[●], adopted by the Board of Directors of the Borrower on [May 11, 2022 ] (the “WIFIA Borrower Resolution” and, collectively with the WIFIA IPA, the WIFIA Loan Agreement and the WIFIA Note, the “WIFIA Borrower Documents”). In arriving at the opinions expressed below, we have reviewed and are familiar with (i) the [Joint Exercise of Powers Agreement], dated [●] (the “Joint Powers Agreement”), by and between [●], (ii) the WIFIA Borrower Documents and (iii) such other information and documents as we deem necessary to render this opinion on behalf of the Borrower.
Our opinions, statements and representations herein made are on behalf of the Borrower and not on behalf of the individua l member agencies of the Borrower. All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to such terms in the WIFIA Loan Agreement.
Based upon the foregoing and our review of such other matters of law as we considered necessary, we are of the opinion that:
1. The Borrower has been duly created and validly exists as a joint exercise of powers agency under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California.
2. The Borrower has all requisite power and authority to conduct its business and to execute and deliver, and to perform its obligations under, the Related Documents to which it is a party.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
235
Item8.
3. The execution and delivery by the Borrower of, and the performance of its respective obligations under, the Related Documents to which it is a party, have been duly authorized by all necessary organizational or regulatory action , and the WIFIA Borrower Resolution was duly adopted at a regular meeting of the governing board of the Borrower which was duly called and held and at which a quorum was present and acting throughout.
4. The Borrower has duly executed and delivered each Related Document to which it is a party and each such Related Document constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its respective terms.
5. No authorization, consent, or other approval of, or registration, declaration or other filing with any governmental authority of the United States of America or of the State is required on the part of the Borrower for the execution and delivery by the Borrower of, and the performance of the Borrower under, any Related Document to which it is a party other than authorizations, consents, approvals, registrations, declarations and filings that have already been timely obtained or made by the Borrower.
6. The execution and delivery by the Borrower of, and compliance by the Borrower with the provisions of, the Related Documents to which it is a party in each case do not (i) violate the Joint Powers Agreement, (ii) violate the law of the United States of America or of the State, or (iii) conflict with or constitute a breach of or defau lt under any material agreement or other instrument known to us to which the Borrower is a party, or to the best of our knowledge, after reasonable review, any court order, consent decree, statute, rule, regulation or any other law to which the Borrower is subject.
7. To our knowledge after due inquiry, there are no actions, suits, proceedings or investigations against the Borrower by or before any court, arbitrator or any other Governmental Authority in connection with the Related Documents or the System (including the Project) that are pending.
8. The Borrower is not entitled to claim governmental immunity in any breach of contract action under the WIFIA Borrower Documents.
With respect to the opinions expressed herein, the rights and obligations under the Related Documents to which the Borrower is a party are subject to bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance or transfer and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State. We express no opinion on the requirements of or compliance with securities or tax laws.
This opinion is rendered only with respect to the laws of the State and the laws of the United States of America and is addressed only to the WIFIA Lender. No other person is entitled to rely on this opinion, nor may you rely on it in connection with any transaction other than those described herein. No attorney-client relationship has existed or exists between this office and you in connection with the WIFIA Borrower Documents or any other Related Document or by virtue of this letter.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
236
Item8.
Respectfully,
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
237
Item8.
EXHIBIT G-2
FORM OF OPINION OF BORROWER’S BOND COUNSEL
[●]
United States Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Re: Lake Wohlford Dam Replacement Project – City of Escondido and Escondido Joint Powers Financing Authority (WIFIA – N20149CA)
Ladies and Gentlemen:
We have acted as Special Counsel to the Escondido Joint Powers Financing Authority (the “Borrower”) in connection with the execution and delivery , or adoption, by the Borrower of ( i) that certain WIFIA Installment Purchase Agreement, dated as of [●] (the “WIFIA IPA”), by and between the Borrower and the City of Escondido (the “City”), (ii) the WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among the Borrower, the City and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”), (iii) that certain WIFIA Note, dated as of [●] (the “WIFIA Note” and, collectively with the WIFIA IPA and the WIFIA Loan Agreement, the “WIFIA Borrower Documents”), delivered to the WIFIA Lender by the Borrower, and ( iv) Resolution No. EJPFA-2022-[●], adopted by the Board of Directors of the Borrower on [May 11, 2022] (the “WIFIA Borrower Resolution”). All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to such terms in the WIFIA Loan Agreement.
Based upon the foregoing and our review of such other information, documents and matters of law as we considered necessary and in reliance on the foregoing, as appropriate, we are of the opinion that:
1. The Borrower has all requisite power and authority under the laws of the State, including but not limited to Article 4 of the Joint Exercise of Powers Act of the State, to adopt the WIFIA Borrower Resolution, to execute and deliver the WIFIA Borrower Docum ents and to issue the WIFIA Note, and each WIFIA Borrower Document and the WIFIA Resolution has been duly authorized, executed and delivered by the Borrower, and each WIFIA Borrower Document and the WIFIA Borrower Resolution is in full force and effect, an d constitutes a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its respective terms and conditions.
2. (a) The WIFIA Loan (as evidenced by the WIFIA Note) is secured by the pledge and assignment of the Borrower Assigned Rights, and (b) the WIFIA Loan (as evidenced by the WIFIA Note) is enforceable under the laws of the State without any further action by the Borrower or any other Person.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
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Item8.
3. The WIFIA Loan Agreement creates a valid and binding pledge and assignment of and lien on the Borrower Assigned Rights to secure the payment of the principal of, interest on, and other amounts payable in respect of, the WIFIA Loan in accordance with the WIFIA Loan Agreement, irrespective of whether any party has not ice of the pledge and without the need for any physical delivery, recordation, filing or further act.
4. All actions by the Borrower that are required for the application of the Authority Revenues as required under the WIFIA Loan Agreement have been duly a nd lawfully authorized.
5. The Borrower has complied with the requirements of State law to lawfully pledge and assign the Borrower Assigned Rights and to authorize the use of the Authority Revenues as required by the terms of the WIFIA Loan Agreement.
6. The Borrower is not an investment company required to register under the Investment Company Act of 1940, as amended.
The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. Such conclusions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform you or any other person, whether any such actions are taken or omitted after the date hereof or whether such events do occur or any other matters come to our attention after the date hereof. We have assumed, but not independently verified, that the signatures on all documents, letters , opinions and certificates which we have examined are genuine and that all documents submitted to us are authentic and were duly and properly executed by the parties thereto. As to any facts relevant to the opinions stated herein that we did not independ ently establish or verify, we have relied upon, without independent verification, the accuracy of the factual matters represented, warranted or certified in such documents.
This opinion is limited to matters governed by the laws of California and the United States of America, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. We call attention to the fact that the rights and obligations under the WIFIA Loan Agreement, the WIFIA Borrower Do cuments and the WIFIA Borrower Resolution are subject to bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance or transfer and other similar laws affecting creditors’ rights, to the application of equitable principles if eq uitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State.
By delivering this letter, we are not expressing any opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non -exclusivity of remedies, waiver or severability provisions contained in the WIFIA Borrower Documents, nor are we expressing any opinion with respect to the state or quality of title to or interest in any assets, other than the Borrower Assigned Rights , and the WIFIA Borrower Documents or the accuracy or sufficiency of the description of such assets, other than Attachment "A"
Resolution No. 2024-15
Exhibit "A"
239
Item8.
the Borrower Assigned Rights, and the WIFIA Borrower Documents, or the remedies available to enforce liens on any such assets, other than the Borrower Assigned Rights under the WIFIA Loan Agreement and the WIFIA Note. Our services as Special Counsel to the Borrower did not involve the rendering of financial or other non -legal advice to you, the Borrower, the City or any other party to the transaction.
This letter is furnished by us to you solely fo r your benefit and we are not assuming any professional responsibility to any other person whomsoever. This letter is not to be used, circulated, quoted or otherwise referred to for any other purpose, except (a) to the extent disclosure of this opinion is required pursuant to applicable law, and (b) that this opinion may be included in applicable closing transcript. No attorney -client relationship has existed or exists between our firm and you in connection with the WIFIA Borrower Documents or the WIFIA B orrower Resolution or by virtue of this letter.
Respectfully submitted,
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
240
Item8.
EXHIBIT G-3
FORM OF OPINION OF CITY ATTORNEY
[●]
United States Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Re: Lake Wohlford Dam Replacement Project – City of Escondido and Escondido Joint Powers Financing Authority (WIFIA – N20149CA)
Ladies and Gentlemen:
We have acted as general counsel to the City of Escondido (the “City”) in connection with the execution and delivery by the City of (a) the WIFIA Installment Purchase Agreement, dated as of [●] (the “WIFIA IPA”), by and between the City and the Escondido Joint Powers Financing Authority (the “Borrower”), (b) the WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among the City , the Borrower and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”), and (c) Resolution No. 2022-[●] of the City Council of the City, adopted on [May 11, 2022] (the “WIFIA City Resolution” and, collectively with the WIFIA IPA and the WIFIA Loan Agreement, the “ WIFIA City Document s”). In arriving at the opinions expressed below, we have examined and are familiar with the following documents: (i) documents relating to the existence, organization and operation of the City provided to us by the City, (ii) the City Closing Certificate, dat ed the date hereof and executed by the City Manager or other duly authorized officer, (iii) the WIFIA City Documents, (iv) all necessary documentation of the City relating to the authorization, execution and delivery of the WIFIA City Documents, and (v) certain consents to the adoption of the WIFIA City Resolution and execution and delivery of the WIFIA City Documents. All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to such terms in the WIFIA Loan Agreement.
In rendering our opinions herein we have relied only on our examination of the foregoing documents and we have made no independent verification of the factual matters set forth in such documents. In addition, we have relied on discussions with the City Manager, Finance Director, Director of Utilities and other officers of the City and information made available in the ordinary course of business in our role as general counsel to the City. In rendering the opinions expressed below, we have assu med, but not independently verified, that the signatures on all documents which we have examined are genuine.
Based upon the foregoing and such other matters of law as we deemed necessary for purposes of rendering this opinion, and subject to the qualifications set forth below, we are of the opinion that:
1. The City is a municipal corporation and general law city duly organized and validly existing under the Constitution and the laws of the State of California.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
241
Item8.
2. The City has all requisite power and authority to conduct its business and to execute and deliver, and to perform its obligations under, the WIFIA City Documents.
3. The execution and delivery by the City of, and the performance of its obligations under, the WIFIA City Documents have been duly authorized by all necessary organizational or regulatory action.
4. The City has duly executed and delivered each WIFIA City Document , and each such WIFIA City Document constitutes the legal, valid and binding obligation of the City , enforceable against the City in accordance with its respective terms.
5. No authorization, consent, or other approval of, or registration, declaration or other filing with any governmental authority of the United States of America or of the State is required on the part of the City for the execution and delivery by the City of, and the performance of the City under, the WIFIA City Document s other than authorizations, consents, approvals, registrations, declarations and filings that have already been timely obtained or made by the City.
6. The execution and delivery by the City of, and compliance by the City with the provisions of, the WIFIA City Documents do not (i) violate the law of the United States of America or of the State, (ii) violate any or dinance, regulation or other legislative action of the City or (iii) conflict with or constitute a breach of or default under any material agreement or other instrument known to us to which the City is a party, or to the best of our knowledge, after reasonable review, any court order, consent decree, statute, rule, regulation or any other law to which the City is subject.
7. To our knowledge after due inquiry, there are no actions, suits, proceedings or investigations against the City by or before any court , arbitrator or any other Governmental Authority in connection with the WIFIA City Document s or the System (including the Project) that are pending.
8. The City is not entitled to claim governmental immunity under the California Government Claims Act or any other law of the State, or under any ordinance, regulation or other legislative action of the City in any breach of contract action under the WIFIA City Documents.
With respect to the opinions expressed herein, the rights and obligations under the WIFIA City Documents are subject to bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance or transfer and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sough t, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State. We express no opinion on the requirements of or compliance with securities or tax laws.
This opinion is rendered only with respect to the laws of the State and the laws of the United States of America and is addressed only to the WIFIA Lender. No other person is entitled to rely on this opinion, nor may you rely on it in connection with any transaction other than those described herein. No attorney-client relationship has existed or exists between this office and you in connection with the WIFIA City Documents or by virtue of this letter.
Respectfully,
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
242
Item8.
EXHIBIT G-4
FORM OF OPINION OF CITY’S BOND COUNSEL
[●]
United States Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Ladies and Gentlemen:
We have acted as Special Counsel to the City of Escondido (the “City”) in connection with the execution and delivery, or adoption, by the City of (i) that certain WIFIA Installment Purchase Agreement, dated as of [●] (the “WIFIA IPA”), by and between the City and the Escondido Joint Powers Financing Authority (the “Borrower”), (ii) that certain WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement” and collectively with the WIFIA IPA, the “ WIFIA City Documents”), by and among the City , the Borrower and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency, and (iii) Resolution No. 2022-[●] of the Board of Directors of the City, adopted on [May 11, 2022 ] (the “ WIFIA City Resolution ”), in each case relating to the Lake Wohlford Dam Replacement Project. All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to such terms in the WIFIA Loan Agreement.
Based upon the foregoing and our review of such other information, documents and matters of law as we considered necessary and in reliance on the foregoing, as appropriate, we are of the opinion that:
1. The City has all requisite power and authority under the laws of the State, including Section 37350, 37351, 38730 and 38742 of the California Government Code, as amended and supplemented from time to time, to adopt the WIFIA City Resolution and to execute and deliver the WIFIA City Documents. Each WIFIA City Document has been duly authorized, executed an d delivered by the City , and each WIFIA City Document and the WIFIA City Resolution is in full force and effect and constitutes a legal, valid and binding obligation of the City enforceable against the City in accordance with its respective terms and conditions.
2. The WIFIA Installment Payments (a) are secured by liens on the City Pledged Collateral , (b) are payable from Net Revenues, (c) are Parity Obligations, (d) are enforceable under the laws of the State without any further action by the City or any other Person, and (e) rank pari passu in right of payment and right of security with all other Parity Obligations and senior in right of payment and right of security to all Subordinate Obligations.
3. The WIFIA IPA creates a valid and binding assignment of the City Pledged Collateral to secure the payment of the principal of, interest on, and other amounts payable in respect of, the WIFIA Installment Payments, irrespective of whether any party has notic e of the pledge and without the need for any physical delivery, recordation, filing or further act.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
243
Item8.
4. All actions by the City that are required for the application of the Revenues as required under the WIFIA IPA have been duly and lawfully authorized.
5. The City has complied with the requirements of State law to lawfully pledge the City Pledged Collateral and to authorize the use of the Net Revenues as required by the terms of the WIFIA IPA.
6. The City is not an investment company required to register u nder the Investment Company Act of 1940, as amended.
The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. Such conclusions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform you or any other person, whether any such actions are taken or omitted after the date h ereof or whether such events do occur or any other matters come to our attention after the date hereof. We have assumed, but not independently verified, that the signatures on all documents, letters, opinions and certificates which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly executed by the parties thereto. As to any facts relevant to the opinions stated herein that we did not independently establish or verify, we have relied upon, without independent verification, the accuracy of the factual matters represented, warranted or certified in such documents.
This opinion is limited to matters governed by the laws of the State and the laws of the United States of America, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. We call attention to the fact that the rights and obligations under the WIFIA City Document s and the WIFIA City Resolution are subject to bankruptcy, insolvency, re organization, moratorium, arrangement, fraudulent conveyance or transfer and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State.
By delivering this letter, we are not expressing any opinion with respect to any indemnification, contribution, liquidated damages, penalty (including any remedy deemed to constitute a penalty), right of set-off, arbitration, judicial reference, choice of law, choice of forum, choice of venue, non -exclusivity of remedies, waiver or severability provisions contained in the WIFIA City Documents, nor are we expressing any opinion with respect to the state or quality of title to or interest in any assets, other than the City Pledged Collateral and the WIFIA IPA, described in or as subject to the lien of the WIFIA City Documents, or the accuracy or sufficiency of the description of s uch assets, other than the City Pledged Collateral and the WIFIA City Documents, or the remedies available to enforce liens on any such assets, other than the City Pledged Collateral, under the WIFIA IPA. Our services as Special Counsel to the City did not involve the rendering of financial or other non-legal advice to you, the City, the Borrower or any other party to the transaction.
This letter is furnished by us to you solely for your benefit and we are not assuming any professional responsibility to any other person whomsoever. This letter is not to be used, Attachment "A"
Resolution No. 2024-15
Exhibit "A"
244
Item8.
circulated, quoted or otherwise referred to for any other purpose, except (a) to the extent disclosure of this opinion is required pursuant to applicable law, and (b) that this opinion may be included in applicable closing transcript. No attorney-client relationship has existed or exists between our firm and you in connection with the WIFIA City Documents or the WIFIA City Resolution or by virtue of this letter.
Respectfully submitted,
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
245
Item8.
EXHIBIT H-1
FORM OF CLOSING CERTIFICATE OF BORROWER
[●]
Reference is made to that certain WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among the Escondido Joint Powers Financing Authority, as Borrower (the “Borrower”), the City of Escondido, and the United States Environmental Protection Agency, acting by and through the Administrator of the Environme ntal Protection Agency (the “WIFIA Lender”). Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement and section references shall refer to the WIFIA Loan Agreement.
In connection with Section 11(a) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the undersigned, [●], as Borrower’s Authorized Representative, does hereby certify on behalf of the Borrower and not in his/her personal capacity, as of the date hereof:
(a) pursuant to Section 11(a)(ix), attached hereto as Annex A is an incumbency certificate that lists all persons, together with their positions and specimen signatures, who are duly authorized by the Borrower to execu te the WIFIA Loan Documents to which the Borrower is a party and make the certifications of the Borrower delivered in connection therewith, and who have been appointed as a Borrower’s Authorized Representative in accordance with Section 25 (Borrower’s Authorized Representative) of the WIFIA Loan Agreement; (b) pursuant to Section 11(a)(ii), the Borrower has delivered to the WIFIA Lender copies of each Related Document and each Existing Construction Contract to which the Borrower is a party, together with any amendments, waivers or modifications thereto, that has been entered into on or prior to the Effective Date, and each such document is complete, fully executed, and in full force and effect, and all conditions contained in such documents that are necess ary to the closing of the WIFIA transactions contemplated by the WIFIA Loan Agreement have been fulfilled;
(c) pursuant to Section 11(a)(iii), the Borrower has delivered to the WIFIA Lender a copy of the Borrower’s Organizational Documents, as in effect on the Effective Date, each of which Organizational Documents is in full force and effect; (d) pursuant to Section 11(a)(v), the Borrower has delivered to the WIFIA Lender a copy of the WIFIA Borrower Resolution, the WIFIA Borrower Resolution is in full forc e and effect, and no further instruments or documents (including any resolutions, ordinances, and supplements) are necessary for the Borrower to execute and deliver, and to perform its obligations under, the WIFIA Loan Documents to which it is a party and to consummate and implement the transactions contemplated by the WIFIA Loan Documents to which it is a party; (e) pursuant to Section 11(a)(ix)(A), the Borrower has obtained all Governmental Approvals necessary to execute and deliver, and perform its oblig ations under, the WIFIA Loan Attachment "A"
Resolution No. 2024-15
Exhibit "A"
246
Item8.
Documents to which it is a party, and all such Governmental Approvals are final, non-appealable, and in full force and effect (and are not subject to any notice of violation, breach or revocation); (f) pursuant to Section 11(a)(ix)(B), as of the Effective Date, (i) the maximum principal amount of the WIFIA Loan, together with the amount of any other credit assistance provided under the Act to the Borrower, does not exceed forty -nine percent (49%) of reasonably anticipated Eligib le Project Costs and (ii ) the total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan, does not exceed eighty percent (80%) of Total Project Costs;
(g) pursuant to Section 11(a)(ix)(C), (i ) the Borrower’s Federal Employe r Identification Number is [●], as evidenced by the Borrower’s W -9 which is attached hereto as Annex B-1, (ii) the Borrower’s Data Universal Numbering System number is [●], and (iii ) the Borrower has registered with, and obtained confirmation of active registration status from, the federal System for Award Management (www.SAM.gov), which confirmation is attached hereto as Annex B-2;
(h) pursuant to Section 11(a)(ix)(D), the WIFIA CUSIP Number is [●]; (i) pursuant to Section 11(a)(ix)(E), the representations and warranties of the Borrower set forth in the WIFIA Loan Agreement and in each other WIFIA Loan Document to which the Borrower is a party are true and correct on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date; (j) pursuant to Section 11(a)(ix)(F), no Borrower Material Adverse Effect, or any event or condition that could reasonably be expected to have a Borrower Material Adverse Effect, has occurred or arisen since June 1, 2021;
(k) pursuant to Section 11(a)(xi), none of the rating letters delivered to the WIFIA Lender pursuant to such Section 11(a)(xi) has been reduced, withdrawn or suspended as of the Effective Date;
[Signature Page Follows]
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
247
Item8.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first mentioned above.
ESCONDIDO JOINT POWERS FINANCING
AUTHORITY
By:
Name: Jasmin A. Hall
Title: President
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
248
Item8.
ANNEX A
INCUMBENCY CERTIFICATE
The undersigned certifies that he/she is the [Secretary] of the Escondido Joint Powers Financing Authority, a joint exercise of powers agency duly organized and existing under the Constitution and laws of the State of California (the “Borrower”), and as such he/she is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting as officers or authorized persons of the Borrower in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. He/She further certifies that any of the officers listed below is authorized to sign agreements and give written instructions with regard to any matters pertaining to the WIFIA Loan Documents to which the Borrower is a party on behalf of the Borrower as the Borrower’s Authorized Representative:
Name Title Signature
________________________
________________________
Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement, dated as of the date hereof, by and among the Borrower, the City of Escondido , and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of this [●] day of [●].
ESCONDIDO JOINT POWERS FINANCING
AUTHORITY
By:
Name:
Title:
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
249
Item8.
EXHIBIT H-2
FORM OF CLOSING CERTIFICATE OF CITY
[●]
Reference is made to that certain WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among Escondido Joint Powers Financing Authority, as Borrower (the “Borrower”), the City of Escondido (the “City”), and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”). Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement and section references shall refer to the WIFIA Loan Agreement . Notwithstanding anything to the contrary set forth in the WIFIA Loan Agreement, the City is not a borrower with respect to the WIFIA Loan, the WIFIA Note, or the WIFIA Loan Agreement and the City has no obligation to make any payment or provision for payment of the WIFIA Loan or the WIFIA Note. The WIFIA Loan Agreement does not constitute a contract between the City and the WIFIA Lender by which the City has incurred an indebtedness.
In connection with Section 11(a) (Conditions Precedent – Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the undersigned, [●], as City’s Authorized Representative, does hereby certify on behalf of the City and not in his/her personal capacity, as of the date hereof:
(a) pursuant to Section 11(a)(x), attached hereto as Annex A is an incumbency certificate that lists all persons, together with their positions and specimen signatures, who are duly authorized by the City to execute the WIFIA Loan Documents to which the City is a party and make the certifications of the City delivered in connection therewith, and who have been appointed as a City’s Authorized Representative in accordance with Section 26 (City’s Authorized Representative) of the WIFIA Loan Agreement;
(b) pursuant to Section 11(a)(ii), the City has delivered to the WIFIA Lender copies of each Related Document and each Existing Con struction Contract to which the City is a party , together with any amendments, waivers or modifications thereto, that has been entered into on or prior to the Effective Date, and each such document is complete, fully executed, and in full force and effect, and all conditions contained in such documents that are necessary to the closing of the WIFIA transactions contemplated by the WIFIA Loan Agreement have been fulfilled; (c) pursuant to Section 11(a)(iii), the City has delivered to the WIFIA Lender a copy of the City ’s Organizational Documents, as i n effect on the Effective Date , each of which Organizational Documents is in full force and effect;
(d) pursuant to Section 11(a)(iv), the City has delivered to the WIFIA Lender a copy of the WIFIA City Resolution, the WIFIA City Resolution is in full force and effect, and no further instruments or documents (including any resolutions, ordinances, and supplements) are necessary for the City to execute and deliver, and to perform its obligations under, the WIFIA Loan Attachment "A"
Resolution No. 2024-15
Exhibit "A"
250
Item8.
Documents to which it is a party and to consummate and implement the transactions contemplated by the WIFIA Loan Documents to which it is a party.
(e) pursuant to Section 11(a)(x)(A), the City has obtained all Governmental Approvals necessary (i) as of the Effective Date in connection with the Project and (ii) to execute and deliver, and perform its obligations under, the WIFIA Loan Documents to which it is a party, and all such Governmental Approvals are final, non-appealable and in full force and effect (and are not subject to any notice of violation, breach or revocation);
(f) pursuant to Section 11(a)(x)(B), as of the Effective Date, (i) the maximum principal amount of the WIFIA Loan, together with the amount of any other credit assistance provided under the Act to the Borrower , does not exceed forty -nine percent (49%) of reasonably anticipated Eligible Project Costs and (ii ) the total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan, does no t exceed eighty percent (80%) of Total Project Costs;
(g) pursuant to Section 11(a)(x)(C), the City is in compliance with NEPA and any applicable federal, state or local environmental review and approval requirements with respect to the Project;
(h) pursuant to Section 11(a)(x)(D), (i ) the City ’s Federal Employe r Identification Number is [●], as evidenced by the City’s W -9 which is attached hereto as Annex B -1, (ii) the City’s Data Universal Numbering System number is [●], and (iii) the City has registered with, and obtained confirmation of active registration status from, the federal System for Award Management (www.SAM.gov), which confirmation is attached hereto as Annex B-2; (i) pursuant to Section 11(a)(x)(E), the representations and warr anties of the City set forth in the WIFIA Loan Agreement and in each other WIFIA Loan Document to which the City is a party are true and correct on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date; (j) pursuant to Section 11(a)(x)(F), no City Material Adverse Effect , or any event or condition that could reasonably be expected to have a City Material Adverse Effect, has occurred or arisen since June 1, 2021;
(k) pursuant to Section 11(a)(xii), the City has delivered to the WIFIA Lender the Base Case Financial Model, which demonstrates that (i) projected Revenues and Authority Revenues are each sufficient to meet the Loan Amortization Schedule and (ii) the City has developed, and identified adequate revenues to implement, a plan for operating, maintaining and repairing the Project over the useful life of the Project; and
(l) pursuant to Section 11(a)(xiii), the City has delivered to the WIFIA Lender certificates of insurance, and each such insurance certificate is true and correct and demonstrates compliance with the requirements of Section 17(f) (Affirmative Covenants of the City – Insurance; Net Proceeds) of the WIFIA Loan Agreement.
[Signature Page Follows]
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
251
Item8.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first mentioned above.
CITY OF ESCONDIDO
By:
Name:
Title:
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
252
Item8.
ANNEX A
INCUMBENCY CERTIFICATE
The undersigned certifies that he/she is the [●] of the City of Escondido , a municipal corporation and general law city duly organized and existing under the Constitution and laws of the State of California (the “City”), and as such he/she is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting as officers or authorized persons of the City in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. He/She further certifies that any of the officers listed below is authorized to sign agreements and give written instructions with regard to any matters pertaining to the WIFIA Loan Documents to which the City is a party on behalf of the City as the City ’s Authorized Representative:
Name Title Signature
________________________
________________________
Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement, dated as of the date hereof, by and among the City, the Escondido Joint Powers Financing Authority , and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of this [●] day of [●].
CITY OF ESCONDIDO
By:
Name:
Title:
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
253
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EXHIBIT I
FORM OF CERTIFICATE OF SUBSTANTIAL COMPLETION
[Letterhead of Borrower]
[Date]
Environmental Protection Agency
WIFIA Director
WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, DC 20460
Project: Lake Wohlford Dam Replacement Project (WIFIA – N20149CA) Dear Director:
This certificate is provided pursuant to Section 20(g)(i)(A) (Reporting Requirements of the City – Notices – Substantial Completion) of that certain WIFIA Loan Agreement (the “WIFIA Loan Agreement”), dated as of [●] by and among Escondido Joint Powers Financing Authority (the “Borrower”), City of Escondido (the “City”) and the United States Environmental Protection Agency, acting by and through its Administrator (the “WIFIA Lender”).
Unless otherwise defined herein, all capitalized terms in this certificate have the meanings assigned to those terms in the WIFIA Loan Agreement.
I, the undersigned, in my capacity as the City’s Authorized Representative and not in my individual capacity, do hereby certify to the WIFIA Lender that:
(a) on [insert date Substantial Completion requirements were satisfied], the Project satisfied each of the requirements for Substantial Completion set forth in the [insert reference to the design-build or similar agreements for the Project];
(b) Substantial Completion has been declared under each of the above-referenced agreements and copies of the notices of Substantial Completion under such agreements are attached to this certification; and
(c) Substantial Completion, as defined in the WIFIA Loan Agreement, has been achieved.
CITY OF ESCONDIDO,
by its authorized representative
By: _______________________________
Name:
Title:
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
254
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EXHIBIT J
FORM OF QUARTERLY REPORT
United States Environmental Protection Agency
WIFIA Director
WJC-W 6201A
1200 Pennsylvania Avenue NW
Washington, DC 20460
[email protected]
Re: Lake Wohlford Dam Replacement Project (WIFIA – N20149CA) This Quarterly Report for the period of [ insert relevant period ] (the “ Quarterly Period ”) is provided pursuant to Section 20(c)(i) (Reporting Req uirements of the City – Construction Reporting) of the WIFIA Loan Agreement, dated as of [●] (the “WIFIA Loan Agreement”), by and among Escondido Joint Powers Financing Authority (the “Borrower”), City of Escondido (the “City”) and the United States Enviro nmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”). Unless otherwise defined herein, all capitalized terms in this Quarterly Report have the meanings assigned to those terms in the WIFIA Loan Agreement.
1. Project Status. Provide a narrative summary of the Project’s construction progress during the Quarterly Period, including with respect to the P roject components or sub -projects where appropriate. Complete the table in Appendix A to update the Project scope, schedule, and costs with the latest information.
2. Current Projected Substantial Completion Date:
If the current Projected Substantial Completion Date differs than the date set forth in the Quarterly Report most recently delivered to the WIFIA Lender ( or, if no such report has yet been provided, the date of the Projected Substantial Completion Date set forth in the WIFIA Loan Agreement as of the Effective Date ), provide a des cription in reasonable detail for such projected delay or difference:
3. Material Problems (if any)
Note any problems encountered or anticipated during the construction of the Project during the Quarterly P eriod that (1) impedes Project completion within the scope, costs, and schedule outlined in the WIFIA Loan Agreement or (2) relates to unforeseen complications
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
255
Item8.
in connection with the construction of the Project. This may include commissioning/start- up issues, constructability issues for the Project as planned, adverse impacts to Project surroundings, changes in or issues with meeting environmental or federal compliance requirements, and unanticipated or abnormal permit approval timelines. Include an assessment of the impact and any current plans to address the problems.
4. Other Matters Related to the Project (if applicable)
Date: _______________________ CITY OF ESCONDIDO,
By: _______________________________
Name: _____________________________
Title:_______________________________
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
256
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APPENDIX A
Project Scope Project Schedule Project Costs
Project
Component
Completed
(Y/N)
Contract/
Vendor
Bid
Advertisem
ent Date
Contract
Award Date
NTP
Effective
Date
Original
Substantial
Completion
Date
Estimated
Substantial
Completion
Date
Original
Contract
Amount
Estimated
Costs to
Complete
Costs
Earned or
Paid to
Date
Total
Table Definitions:
Project Component – project name or ID as tracked by the borrower Complete (Y/N) – indication that project is complete, and no additional updates will be provided Description (program of projects only) – brief overview of scope of work for the project component.
Location (program of projects only) – physical project boundaries Covered by existing NEPA? (program of projects only) – refer to the environmental review documents that is the basis for the NEPA finding. Is the project within the geographic scope and scope of activities described in the documents?
Contract/Vendor – the contract identifier and contractor that is/will be completing the project construction.
Bid Advertisement Date – the date the bid was advertised Contract Award date – the date the contract was awarded NTP Effective date – the effective date to proceed with the construction in the Notice to Proceed Original Substantial Completion Date – the substantial completion date for the given project as noted in the original contract award Estimated Substantial Completion Date – the latest date estimate for substantial completion for the given project component
Original Contract Amount – the original contract award amount Estimated Costs to Complete – the latest cost estimates to complete the given project component Costs Earned or Paid to Date – the latest incurred contract costs for the given project component Total – Total the cost amounts across all project components and contracts
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
257
Item8.
EXHIBIT K
FORM OF PUBLIC BENEFITS REPORT
Pursuant to Section 11(a)(xiv) and Section 20(d) of the WIFIA Loan Agreement, dated as of the date hereof, by and among Escondido Joint Powers Financing Authority, the City of Escondido (the “City”), and the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Loan Agreement”), the City is providing this Public Benefits Report in connection with the Lake Wohlford Dam Replacement Project (WIFIA – N20149CA). Capitalized terms used in this Public Benefits Report and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement.
Reporting Period: [Prior to the Effective Date][within ninety (90) days following the Substantial Completion Date][within ninety (90) days following the fifth (5th) anniversary of the Substantial Completion Date]
(i) The number of total jobs and direct jobs projected to be created by the Project during the period between the Effective Date and the Substantial Completion Date:
WIFIA projects that the Project will create [__] total jobs, of which the City projects [__] will be direct jobs.
(ii) Indicate (yes or no) whether the Project will assist the City in complying with applicable regulatory requirements, and if yes, describe how the project assists with regulatory compliance:
Yes ☐
If yes, additional description: [___]
No ☐
(iii) The Project will assist the City with the following environmental measure:17 [Amount by which Project will provide new, expanded, improved, more reliable, more resilient, or more efficient treatment capacity for wastewater treatment (measured in MGD capacity at Substantial Completion)]
[Amount by which Project will provide higher level of treatment at wastewater treatment plants (measured in MGD capacity at Substantial Completion)] [Frequency and volume of CSOs events per year eliminated by the Project (measured in gallons and events per year at Substantial Completion)] 17 NTD: Appropriate environmental measure to be selected by WIFIA engineering.
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
258
Item8.
[Reduce levels of Nitrogen, Phosphorus, biochemical oxygen demand (BOD) and total suspended solids (TSS) (measured by percentage annually)] [Increase the volume of potable water produced (measured by MGD annually)] [Increase the volume of water recycled, recharged or redirected (measured by MGD annually)]
[Increase Class [A][B] biosolids (measured by tons annually)] [Prevent/eliminate collection sewer failures (measured by number per 100 miles)] [Increase amount of grit removed (measured by tons annually)] [Reduce frequency and volume of SSO discharges to local watersheds [provide standby power] (measured by [___])
[Provide increased stormwater and flood protection (measured by total number of acreage)]
[Prevent water main breaks (measured by number annually)]
Attachment "A"
Resolution No. 2024-15
Exhibit "A"
259
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Consulting Agreement (v2) - 14 - CAO:2/16/2023
ATTACHMENT “B”
Personnel List
Pursuant to Section 4 of the Agreement, CONSULTANT shall only assign performance of Services to persons listed in Exhibit 1 to this Personnel List, which is attached hereto an incorporated by this reference.
CO
NSULTANT shall not add or remove persons from this Personnel List without the City’s prior written consent. If CONSULTANT has not designated a person to perform a component of the Services, CONSULTANT shall not assign such component of the Services to a person without obtaining the City’s prior written consent. CONSULTANT shall not subcontract any component of the Services without obtaining the City’s prior written consent.
Ac
knowledged by:
Dat
e: __________________ ___________________________________ Jerry Reed, Vice President
Attachment "B"
Resolution No. 2024-15
Exhibit "A"
260
Item8.
GEI CONSUL TANTS, INC. | Page 35
RFP 24-08 | Construction Management Services for the Lake Wohlford Dam Replacement Project Figure 4. Pre-Construction Phase Organizational Chart
Attachment "B"
Resolution No. 2024-15
Exhibit "A"
261
Item8.
GEI CONSUL TANTS, INC. | NOT COUNTED IN PAGE COUNT , PER RFP RFP 24-08 | Construction Management Services for the Lake Wohlford Dam Replacement Project Figure 5. Construction Phase Organizational Chart
Attachment "B"
Resolution No. 2024-15
Exhibit "A"
262
Item8.
GEI CO NSUL TANTS, INC. |
Resume # Na me Pr oposed Role
APPENDIX A: KEY STAFF INTRODUCED IN SECTION 2
1 Jerry Reed, PE Principal-In-Charge & Pre-Construction Manager 2 Steve Lindsay, PE Construction Manager
3 Dave Gutierrez, PE, GE DSOD Advisor
4 Wade Griffis, PE Contractor Prequalification & Bid Support; Senior Advisor 5 Aaron Trimm, PE, CCM Construction Contract Administrator 6 Michel (Mike) Jubran QA Manager; Resident Engineer – Foundation and Dam 7 Mike Kenny Resident Engineer – Outlet Works
8 Rodolfo Ruiz Gaekel Lead QA Inspector – Civil and RCC 9 Enrico Rufini, PE, GE, CEG Lead QA Inspector – Geotechnical, Geology and Grouting 10 Jay Losofsky Start-Up & Commissioning Coordinator; M/ E / I&C Inspector 11 Heather Geren Document Controller
12 Michalle Beringhaus, CCM, PMP Labor Compliance Specialist APPENDIX B: OTHER STAFF DETAILED IN ORGANIZATIONAL CHARTS IN SECTION 5 13 Arun Parsons, PE, CCM Risk Manager
14 Autumn Childers Scheduler
15 Bob Frazer, ACI, WAQTC QA Inspector - RCC
16 Bryan Reese, ASP, BCSP CM Safety Manager
17 Chad Davis, PE Constructability Reviewer – Materials & QC 18 Derick London, QSP QA Inspector - RCC
19 Edmond Jabbour, ACI, CTM QA Inspector - RCC
20 Eric Bennet Blasting Specialist
21 Geoff Swink, ACI Lab Technician
22 Jacob Cruz, CTM Lab Technician
23 Jeff Edwards, CWI, ICC, ACI, NACE QA Inspector – Welding and Coatings 24 Kody Vandervort Office Engineer
25 Lucy Vinnichenko CM Contract Administrator
26 Mark Bell CWI, NACE, ASNT Inspector – Cathodic Protection 27 Mike Magana ACI, ICC, NICET Lab Supervisor
28 Mike Pauletto Constructability Reviewer; Senior Advisor 29 Randy Lewis, ICC, ACI, CWI QA Inspector –Concrete & Structural 30 Raul Salazar, EIT Cost Estimator
31 Rob Fill, CCM Contractor Prequalification & Bid Support; Senior Advisor 32 Vance Sanford, CWI, ACI QA Inspector – Shop Inspections
STAFF RESUMES
Attachment "B"
Resolution No. 2024-15
Exhibit "A"
263
Item8.
RESOLUTION NO. 2024-16
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ESCONDIDO, CALIFORNIA, AUTHORIZING THE MAYOR
TO EXECUTE, ON BEHALF OF THE CITY, A CONSULTING
AGREEMENT WITH GOLDEN STATE LABOR
COMPLIANCE FOR LABOR COMPLIANCE MONITORING
SERVICES FOR THE LAKE WOHLFORD DAM
REPLACEMENT PROJECT
WHEREAS, the City of Escondido (“City”) desires to construct the Lake Wohlford Dam Replacement Project (“Project”); and
WHEREAS, the Project work will replace the existing dam with a new roller compacted concrete dam with integrated spillway and outlet works immediately downstream of the existing dam; and WHEREAS, the City desires labor compliance monitoring services for the Project; and WHEREAS, the use of a formal Labor Compliance Program (LCP) is required for funding of the Project; and
WHEREAS, Golden State Labor Compliance is the City of Escondido Utilities Department’s administrator for the LCP; and
WHEREAS, the Interim Director of Utilities recommends that the Consulting Agreement (“Agreement”) be approved; and
WHEREAS, this City Council desires at this time and deems it to be in the best public interest to accept the recommendations of the Interim Director of Utilities and approve said Agreement in an amount not to exceed $256,824.
264
Item8.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Escondido, California , as follows:
1. That the above recitations are true.
2. That the Mayor and City Council accepts the recommendation of the Interim Director of Utilities.
3. That the Mayor is authorized to execute, on behalf of the City, a Consulting Agreement with Golden State Labor Compliance , in substantially the sa me format as Exhibit “ A,” which is attached hereto and incorporated by this referenc e, subject to final approval as to form by the City Attorney.
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CITY OF ESCONDIDO
CONSULTING AGREEMENT
This Consulting Agreement (“Agreement”) is made and entered into as of the last signature date set forth below (“Effective Date”),
Between: CITY OF ESCONDIDO
a California municipal corporation
201 N. Broadway
Escondido, CA 92025
Attn: Randy Manns
760-839-6290, ext. 7031
("CITY")
And: Golden State Labor Compliance, LLC
a California limited liability company
38733 Ninth St. E., Suite W
Palmdale, CA 93550
Attn: Vic Conklin
661-267-0940
("CONSULTANT").
(The CITY and CONSULTANT each may be referred to herein as a “Party” and collectively as the “Parties.”)
WHEREAS, the CITY has determined that it is in the CITY’s best interest to retain the professional services of a consultant to provide comprehensive labor compliance services for the Lake Wohlford Dam Replacement Project; and
WHEREAS, CONSULTANT is considered competent to perform the necessary professional services for the CITY; and
WHEREAS, the CITY and CON SULTANT desire to enter into this Agreement for the per - formance of the Services described herein.
NOW, THEREFORE, in consideration of the mutual covenants, promises, terms, and conditions set forth herein, and the mutual benefits derived therefrom, the Parties hereby agree as follows:
1. Description of Services. CONSULTANT shall furnish all of the Services described in the Scope of Work, which is attached to this Agreement as Attachment “A” and incorporated herein by this reference (“Services”).
2. Compensation. In exchange for CONSULTANT’s completion of the Services, the CITY shall pay, Resolution No. 2024-16
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and CONSULTANT shall accept in full, an amount not to exceed the sum of $ 256,824.
CONSULTANT shall be compensated only for performance of the Services described in this Agreement. No compensation shall be provided for any other work or services without the CITY’s prior written consent. If this Agreement is amended at any time, additional compensation of CONSULTANT contained in any subsequent amendments shall not exceed a cumulative total of 25% of the maximum payment provided for in this Section 2, unless approved by resolution of the City Council.
3. Performance. CON SULTANT shall faithfully perform the Services in a proficient manner, to the satisfaction of the CITY, and in accord with the terms of this Agreement . CONSULTANT shall be responsible for the professional quality, technical accuracy, timely completion, and coordination of all reports and other information furnished by CONSULTANT purs uant to this Agreement, except that CONSULTANT shall not be responsible for the accuracy of information supplied by the CITY.
4. Personnel. The performance of the Services by certain professionals is significant to the CITY. As such, CONSULTANT shall only assign the persons listed on Attachment “B”, attached to this Agreement and incorporated herein by this reference (“Personnel List”), to perform the Services.
CONSULTANT shall not add or remove persons from the Personnel List without the City’s prior written consent. If CONSULTANT has not designated a person to perform a component of the Services, CONSULTANT shall not assign such component of the Services to a person without obtaining the City’s prior written consent. CONSULTANT shall not subcontract any component of the Services without obtaining the City’s prior written consent.
5. Termination. The Parties may mutually terminate this Agreement through a writing signed by both Parties. The CITY may terminate this Agreement for any reason upon providing CONSULTANT with 10 days’ advance written notice. CONSULTANT agrees to cease all work under this Agreement on or before the effective date of any notice of termination. If the CITY terminates this Agreement due to no fault or failure of performance by CON SULTANT, then CONSULTANT shall be compensated based on the work satisfactorily performed at the time of such termination. In no event shall CONSULTANT be entitled to receive more than the amount that would be paid to CONSULTANT for the full performance of the Services.
6. City Property. All original documents, drawings, electronic media, and other materials prepared by CONSULTANT pursuant to this Agreement immediately become the exclusive property of the CITY, and shall not be used by CON SULTANT for any other purpose without the CITY’s p rior written consent.
7. Insurance Requirements.
a. CONSULTANT shall pro cure and maintain, at its own cost, during the entire term of this Agreement, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the Services, and the results of such work, by CONSULTANT, its agents, representatives, employees, or subcontractors. Insurance coverage shall be at least as broad as the following:
(1) Commercial General Liability. Insurance Services Office (“ISO”) Form CG 00 01 covering Commercial General Liability on an “occurrence” basis, including products and completed operations, property damage, bodily injury, and personal & advertising injury, with limits no less than $2,000,000 per occurrence and $4,000,000 general aggregate. (2) Automobile Liability. ISO Form CA 00 01 covering any auto (Code 1), or if CONSULTANT has no owned autos, hired (Code 8) and non -owned autos (Code 9), with limits no less than $1,000,000 per accident for bodily injury and property damage, unless waived by the CITY and approved in writing by the CITY’s Risk and Safety Division.
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(3) Workers’ Compensation. Worker’s Compensation as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease.
(4) Professional Liability (Errors and Omissi ons). Professional Liability (Errors and Omissions) appropriate to CONSULTANT’s profession, with limits no less than $2,000,000 per occurrence or claim and $2,000,000 aggregate.
(5) If CONSULTANT maintains broader coverage and/or higher limits than the minimu ms otherwise required by this Agreement, the CITY requires and shall be entitled to the broader coverage and/or the higher limits maintained by CONSULTANT. b. Each insurance policy required by this Agreement must be acceptable to the City Attorney and shall meet the following requirements:
(1) Acceptability of Insurers. Insurance coverage must be provided by an insurer authorized to conduct business in the state of California with a current A.M. Best’s rating of no less than A-: FSC VII, or as approved by the CITY.
(2) Additional Insured Status . Both the Commercial General Liability and the Automobile Liability policies must name the CITY (including its officials, officers, agents, employees, and volunteers) specifically as an additional insured under the policy on a separate endorsement page. The Commercial General Liability additional insured endorsement shall be at least as broad as ISO Form CG 20 10 11 85, or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38, and CG 20 37 if a later edition is used. The Automobile Liability endorsement shall be at least as broad as ISO Form CA 20 01.
(3) Primary Coverage. CONSULTANT’s insurance coverage shall be primary coverage at least as broad as ISO CG 20 01 04 13 with respect to the CIT Y, its officials, officers, agents, employees, and volunteers. Any insurance or self -insurance maintained by the CITY, its officials, officers, agents, employees, or volunteers shall be in excess of CONSULTANT’s insurance and shall not contribute with it. (4) Notice of Cancellation. Each insurance policy shall provide that coverage shall not be canceled, except with prior written notice to the CITY. (5) Subcontractors. If applicable, CONSULTANT shall require and verify that all subcontractors maintain insurance meeting all the requirements stated within this Agreement, and CONSULTANT shall ensure that the CITY (including its officials, officers, agents, employees, and volunteers) is an additional insured on any insurance required from a subcontractor.
(6) Waiver of Subrogation. CONSULTANT hereby grants to the CITY a waiver of any right to subrogation that any insurer of CONSULTANT may acquire against the CITY by virtue of the payment of any loss under such insurance. CONSULTANT agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this subsection shall apply regardless of whether or not the CITY has received a waiver of subrogation endorsement from the insurer. Any Workers’ Compensation policy required by this Agreement shall be endorsed with a waiver of subrogation in favor of the CITY for all work performed by the CONSULTANT, its agents, representatives, employees, and subcontractors.
(7) Self-Insurance. CONSULTANT may, with the CITY’s prior written consent, fulfill some or all of the insurance requirements contained in this Agreement under a plan of self - insurance. CONSULTANT shall only be permitted to utilize such self -insurance if, in the opinion of the CITY, CONSULTANT’s (i) net worth and (ii) reserves for payment of claims of liability against CONSULTANT are sufficient to adequately compensate for the lack of Resolution No. 2024-16
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other insurance coverage required by this Agreement. CONSULTANT’s utilization of self- insurance shall not in any way limit the liabilities assumed by CONSULTANT pursuant to this Agreement.
(8) Self-Insured Retentions. Self-insured retentions must be declared to and approved by the CITY.
c. Verification of Coverage. At the time CONSULTANT executes this Agreement, CONSULTANT shall provide the CITY with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting the insurance coverage required by this Agreement), which shall meet all requirements under this Agreement. The CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by this Agreement, at any time. d. Special Risks or Circumstances. The CITY reserves the right , at any point during the term of this Agreement, to modify the insurance requirements in this Agreement, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. e. No Limitation of Obligations. The insurance requirements in this Agreement, including the types and limits of insurance coverage CONSULTANT must maintain, and any approval of such insurance by the CITY, are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by CONSULTANT pursuant t o this Agreement, including but not limited to any provisions in this Agreement concerning indemnification. f. Failure to comply with any of the insurance requirements in this Agreement, including, but not limited to, a lapse in any required insurance coverage during the term of this Agreement, shall be a material breach of this Agreement. In the event that CONSULTANT fails to comply with any such insurance requirements in this Agreement, in addition to any other remedies the CITY may have, the CITY may, at its sole option, (i) immediately terminate this Agreement; or (ii) order CONSULTANT to stop work under this Agreement and/or withhold any payment that becomes due to CONSULTANT until CONSULTANT demonstrates compliance with the insurance requirements in this Agreement.
8. Indemnification, Duty to Defend, and Hold Harmless.
a. CONSULTANT (including CONSULTANT’s agents, employees, and subcontractors, if any) shall indemnify, defend, and hold harmless the CITY, its officials, officers, agents, employees, and volunteers from and against any and all claims, demands, actions, causes of action, proceedings (including but not limited to legal and administrative proceedings of any kind), suits, fines, penalties, judgments, orders, levies, costs, expenses, liabilities, losses, damages, or injuries, in law or equity, including without limitation the payment of all consequential damages and attorney’s fees and other related litigation costs and expenses (collectively, “Claims”), of every nature caused by, arising out of, or in connection with CONSULTANT’s performance of the Services or its failure to comply with any of its obligations contained in this Agreement, except where caused by the active negligence, sole negligence, or willful misconduct of the CITY. b. CONSULTANT (including CONSULTANT’s agents, employees, and subcontractors, if any) shall indemnify, defend, and hold harmless the CITY, its officials, officers, agents, employees, and volunteers from and against any and all Claims caused by, arising under, or resulting from any violation, or claim of violation, of the San Diego Municipal Storm Water Permit (Order No. R9 - 2013-0001, as amended) of the California Regional Water Quality Control Board, Region 9, San Diego, that the CITY might suffer, incur, or become subject to by reason of, or occurring as a result of, or allegedly caused by, any work performed pursuant to this Agreement. c. All terms and provisions within this Section 8 shall survive the termination of this Agreement.
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9. Anti-Assignment Clause. Because the CITY has relied on the particular skills of CONSULTANT in entering into this Agreement, CONSULTANT shall not assign, delegate, subcontract, or otherwise transfer any duty or right under this Agreement, including as to any portion of the Services, without the CITY’s prior written consent. Any purported assignment , delegation, subcontract, or other transfer made without the CITY’s consent shall be void and ineffective. Unless CONSULTANT assigns this entire Agreement, including all rights and duties herein, to a third party with the CITY’s prior written consent, CONSULTANT shall be the sole payee under this Agreement. Any and all payments made pursuant to the terms of this Agreement are otherwise not assignable.
10. Attorney's Fees and Costs. In any action to enforce the terms and conditions of this Agreement, the prevailing Party shall be entitled to reasonable attorney’s fees and costs.
11. Independent Contractor . CONSULTANT is an independent contractor , and no agency or employment relationship is created by the execution of this Agreement.
12. Amendment. This Agreement shall not be amended except in a writing signed by the CITY and CONSULTANT.
13. Merger Clause. This Agreement , together with its attachments or other documents described or incorporated herein, if any, constitutes the entire agreement and understanding of the CITY and CONSULTANT concerning the subject of this A greement and supersedes and replaces all prior negotiations, understandings, or proposed agreements, written or oral, except as otherwise provided herein. In the event of any conflict between the provisions of this Agreement and any of its attachments or related documents, if any, the provisions of this Agreement shall prevail.
14. Anti-Waiver Clause. None of the provisions of this Agreement shall be waived by the CITY because of previous failure to insist upon strict performance, nor shall any provision be waived because any other provision has been waived by the CITY, in whole or in part.
15. Severability. This Agreement shall be performed and shall be enforceable to the full extent allowed by applicable law, and the illegality, invalidity, waiver, or unenforceability of any provision of this Agreement shall not affect the legality, validity, applicability, or enforceability of the remaining provisions of this Agreement.
16. Governing Law. This Agreement and all rights and obligations arising out of it shall be construed in accordance with the laws of the State of California. Venue for any action arising from this Agreement shall be conducted only in the state or federal courts of San Diego County, California.
17. Counterparts. This Agreement may be executed on separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement by electronic means, including an attachment to an email, shall be effective as delivery of an executed original. The Agreement on file with the City is the copy of the Agreement that shall take precedence if any differences exist between or among copies or counterparts of the Agreement.
18. Provisions Cumulative. The foregoing provisions are cumulative to, in addition to , and not in limitation of any other rights or remedies available to the CITY.
19. Notice. Any statements, communications , or notices to be provided pursuant to this Agreement shall be sent to the attention of the persons indicated herein, and the CITY and CONSULTANT shall promptly provide the other Party with notice of any changes to such contact information.
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20. Business License. CONSULTANT shall obtain a City of Escondido Business License prior to execution of this Agreement and shall maintain such Business License throughout the term of this Agreement.
21. Compliance with Laws , Permits, and Licenses. CONSULTANT shall keep itself informed of and comply with all applicable federal, state, and local laws, statutes, codes, ordinances , regulations, rules, and other legal requirements in effect during the term of this Agreement. CONSULTANT shall obtain any and all per mits, licenses, and other authorizations necessary to perform the S ervices.
Neither the CITY, nor any elected or appointed boards, officers, officials, employees, or agents of the CITY, shall be liable, at law or in equity, as a result of any failure of CON SULTANT to comply with this section.
22. Prevailing Wages . If applicable, pursuant to California Labor Code section 1770 et seq. , CONSULTANT agrees that a prevailing rate and scale of wages, in accordance with applicable laws, shall be paid in performing this Agreement. CONSULTANT shall keep itself informed of and comply with all applicable federal, state, and local laws, statutes, codes, ordinances, regulations, rules, and other legal requirements pertaining to the payment of prevailing wages. The prevai ling rate and scale to be paid shall be the same as the applicable “ General Prevailing Wage Determination” approved by the Department of Industrial Relations as of the Effective Date of this Agreement, which are available online at http://www.dir.ca.gov/oprl/dprewagedetermination.htm and incorporated into this Agreement by this reference . Neither the CITY, nor any elected or appointed boards, officers, officials, employees, or agents of the CITY, shall be liable, at law or in equity, as a result of any failure of CONSULTANT to comply with this section.
23. Department of Industrial Relations Compliance. This public project is subject to compliance monitoring and enforcement by the Department of Industrial Relations. CONSULTANT shall post all job site notices required by regulation. CONSULTANT, as well as any subcontractors, shall be registered pursuant to California Labor Code section 1725.5 to be qualified to bid on, be listed in a bid proposal (subject to the requirements of Public Contract Code section 4104), or engage in the performance of any public works contract subject to the requirements of Division 2, Part 7, Chapter 1 of the California Labor Code. Neither the CITY, nor any elected or appointed boards, officers, officials, employees, or agents of the CITY, shall be liable, at law or in equity, as a result of any failure of CONSULTANT to comply with this section.
24. Immigration Reform and Control Act of 1986. CONSULTANT shall keep itself informed of and shall comply with the Immigration Reform and Control Act of 1986 (“IRCA”). CONSULTANT represents and warrants that all of its employees and the employees of any subcontractor retained by CONSULTANT who perform any of the Services under this Agreement, are and will be authorized to perform the Services in full compliance with the IRCA. CONSULTANT affirms that as a licensed contractor and employer in the State of California, all new employees must produce proof of eligibility to work in the United States within the first three days of employment and that only employees legally eligible to work in the United States will perform the Services. CON SULTANT agrees to comply with the IRCA before commencing any Services, and continuously throughout the performance of the Services and the term of this Agreement.
25. Effective Date. Unless a different date is provided in this Agreement, the effective date of this Agreement shall be the latest date of execution set forth by the names of the signatories below.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, this Agreement is executed by the Parties or their duly authorized representatives as of the Effective Date:
CITY OF ESCONDIDO
Date: __________________ ___________________________________ Dane White, Mayor
GOLDEN STATE LABOR COMPLIANCE, LLC
Date: __________________ ___________________________________ Victor Conklin, President
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
MICHAEL R. MCGUINNESS, CITY ATTORNEY
B
Y: __________________________
THE CITY OF ESCONDIDO DOES NOT DISCRIMINATE AGAINST QUALIFIED PERSONS WITH DISABILITIES.
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ATTACHMENT “A”
Scope of Work
A. General
Golden Stat
e Labor Compliance, LLC, a California limited liability company (“Consultant”) will provide the City of Escondido, a California municipal corporation (“City”) with consulting services related to the City’s Lake Wohlford Dam Replacement Project (“Project”).
B. Location
Consultant
to provide services at various locations including the Pr oject Site at Lake Wohlford , having assessor’s parcel number (“APN”) 240-030-02, 24, Escondido, CA.
C. Services
Consultant
will perform comprehensive monitoring and enforcement services for the City’s Utilities Department Labor Compliance Program (“LCP”) and other related requirements of the California Department of Industrial Relations (“DIR”) for Public Works projects including Federal (Davis - Bacon) prevailing wage requirements, and Skilled and Trained Workforce (“STW”) requirements for the Project.
The services described in this Section C were approved by the DIR on June 9, 2020, as part of the City’s LCP. The DIR’s June 9,2020 approval letter is attached to this Scope of Work as Exhibit 1 and is incorporated by reference.
1. Pre-Bid Services
a. Consultant will provide three copies (1 for the City; 1 for the Program/Project/Construction Manager; 1 for jobsite posting) of the Prevailing Wage Determinations applicable to the specific Project, based on the date of first advertising for bids. b. Receive from the City, record, and retain a copy of the first advertisement for bids for the Project.
c. Investigate and record the City’s progress payment procedures as identified within the Construction Documents, for the purpose of adjusting Certified Payroll Report (“CPR”) procedures to the requirements of the Project.
d. Provide the City (or its authorized representative) with all forms required for bid and post-bid document collection from the bidders.
e. In the event that the City conducts a Pre- bid Conference for the Project, provide one 30- minute segment, as part of that conference, familiarizing prospective bidders with the Labor Compliance Program (“LCP”), its requirements and the duties and responsibilities of all bidders with respect to the LCP.
2. Post-Bid /
Pre-Notice to Proceed (“NTP”) Services
a. Provide the prime contractor or City’s Program/Project/Construction Manager with appropriate jobsite posting materials, as required by the LCP, pursuant to law. b. Conduct, as part of a mandatory Pre- Construction Conference with the prime contractor(s) and listed subcontractors having been awarded contracts, a one hour briefing with questions and answers, covering all required aspects of the LCP. c. Receive and record required company data on all prime contractor(s) and listed subcontractors having been awarded contracts.
d. Receive and record “Fringe Benefits Statements” from all prime contractor(s) and listed subcontractors having been awarded contracts.
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e. Provide Form DAS 140, “Public Works Contract Award Information”, to all prime contractor(s) and listed subcontractors having been awarded contracts, to facilitate the proper filing of such forms with the appropriate Apprenticeship Committees. f. Distribute Pre -Construction Checklist of Labor Law Requirements to all prime contractor(s) and listed subcontractors having been awarded contracts, requiring that each sign and submit the checklist, acknowledging receipt and understanding of materials describing LCP requirements and their obligations under Labor Law. Collect and secure, within the permanent Project files, all signed checklists.
3. Post-NT
P Services
a. Receive and record LCP Weekly Superintendent’s Reports (GS Form 21). b. Receive, from the City or its Program/Project/Construction Manager, on a monthly basis, CPRs and STW Reports for all contractors or subcontractors of every tier who are required to submit such reports. Verify receipt of all required CPRs and related documents and port clearance for progress payment to all contractors or subcontractors who’s CPRs and related documents comply with basic submittal requirements. c. Issue and track “Requests for Certified Payroll Records” (GS Form 06) for any contractors or subcontractors for which complete CPRs were required but have not been received or have been found to be incomplete.
d. Notify the City and its Program/Project/Construction Manager (if any), and all p rime contractors of any deficiency involving any contractor or subcontractor who fails to properly render or correct any missing or incomplete CPRs or related documents following a request by the LCP. Such failure is grounds for withholding contract payments until resolution of the deficiency is achieved.
e. Review all CPRs submitted for payment of the proper prevailing per-diem wage rate for the listed classification, to include payment of the proper prevailing per -diem wage rate for overtime and/or holidays.
f. Conduct regular, random audits of CPRs for proper worker classification as well s proper classification and use of registered apprentices.
g. Conduct regular, random field inspections (not less than one per month), at the jobsite, for the purpose of:
i. Confirming proper jobsite postings as required by the LCP. ii. Conducting random interviews of workers on the jobsite to confirm Labor Law compliance and worker awareness of their rights under such law. iii. Consulting with the jobsite Superintendent regarding any questions, issues or concerns within the scope of the LCP.
4. As-Needed Enf
orcement and Reporting Services
a. Consultant will take cognizance of any apparent violation of Labor Law that is within the purview of the LCP and will fully investigate and seek resolution of any apparent violations through administrative procedures. Any reported violation or substantive complaint received will always be treated as a potential violation. b. Upon taking cognizance of an apparent violation, Consultant, to the degree necessary to resolve the issue, will:
• Assign a case number and a qualified investigator to investigate the circumstances, extent and apparent cause of any apparent violation. • Request additional Payroll Records, as required, to establish the circumstances, extent and apparent cause of any apparent violation. • Audit all Payroll Records pertinent to the case to establish the facts pertaining to an apparent violation.
• Request, from various State agencies, copies of all records that would be required to file a case with the Department of Industrial Relations.
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• Notify the contractor or subcontractor who may have committed a violation of the LCP’s initial findings, offering the opportunity to explain any apparent discrepancies and to provide additional records in support of its position. • Notice and conduct an informal interview with the contractor or subcontractor who may have committed a violation for the purpose of reviewing evidence and allowing the contractor or subcontractor the opportunity to prove that a violation has not taken place or was inadvertent. • Provide notice to the City, the Prime Contractor and the Program/Project/Construction Manager (as appropriate) of all investigations initiated and all informal conferences scheduled to be conducted. c. In the event that the investigation and informal conference procedures fail to resolve an apparent violation, prepare, for submission, an appropriate case file and application for DIR review. Preparation of the case file will include calculation of the apparent amount of underpayment and penalty applicable to the violation.
d. Provide notice, to the City, the apparent violating contractor and, if applicable, the Prime Contractor, of the LCP’s intent to submit a case to the Labor Commissioner for adjudication and potential forfeiture. The notice will include the total calculated amount of underpayment plus penalty, which amount may be withheld by any higher tier contractor and by the City, pending a finding by the Labor Commissioner.
5. Other
Basic Services
a. Provi
de general administration and management of the LCP.
b. Provide unlimited phone consultation or, if scheduled to be on-site for other purposes, in- person consultation with the City on any matters pertaining to the LCP. c. Provide secure storage of all received payroll records for a Project throughout the course of that Project and for three calendar years from completion of the Project, after which all records will be provided to the City digitally. (Note: some funding requires Project records to retained for as long 36 years.)
d. Provide documents requested by City for audits and/or Public Records Requests (“PRR”). e. Produce, once a year, within 60 days after the close of GSLC’s fiscal year, or at such time as a request for an extension of initial approval is submitted, whichever comes first, an Annual Report on the operation of the City’s LCP. This report will be submitted to the Director of the Department of Industrial Relations (“Director”) and to the City. Pursuant to CCR 16431, the Annual Report shall contain, at the minimum, the following information:
i. Number of construction contracts subject to the LCP which were awarded, and their total value;
ii. The number, description, and total value of construction contracts which were exempt from the requirement of payment of prevailing wages pursuant to Labor Code Section 1771.5a);
iii. A summary of wages due to workers resulting from failure by contractor to pay prevailing wage rates, the total amount withheld from money due to the contractor, and the total amount recovered by action in any court of competent jurisdiction; iv. An LCP whose contract responsibilities are statewide, or which involves w idely dispersed and numerous contracts, or which is required to report contract enforcement to federal authorities in a federal format, may adopt a summary reporting format to aggregate small contracts and estimate numbers and dollar values required by i and ii (above). A summary reporting format may be adopted by agreement with the Director after advance notice to interested parties, and a list of parties requesting such notice shall be kept by the Director. GSLC has adopted such a format.
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D. Scheduling
Consult
ant to schedule specific dates of work in advance by contacting Vicki Ferguson at 760-839- 6290 ext. 7032 or [email protected]. Further instructions will be provided upon scheduling.
E. Contract Price and Payment Terms
The c
ontract price shall not exceed $256,824. The contract price includes all labor, materials, equipment, and transportation required to perform the work. Services will be billed as services are performed. Payment will be made after services have been performed and within 30 days of receipt of an invoice for those services.
F. Term
The ter
m of this Agreement shall be from the Effective Date of the Agreement through completion of all Project LCP activities following the Notice of Completion.
G. Other
Consult
ant acknowledges that:
1. The term of this Agreement will extend over multiple fiscal years, and that services and compensation under this Agreement are contingent on the City Council appropriating funding for and authorizing such work and compensation for those fiscal years. Thi s Agreement may be terminated at the end of the fiscal year for which sufficient funding is not appropriated and authorized. The City is not obligated to pay Consultant for any amounts not duly appropriated and authorized by City Council.
2. The services provided under this Agreement shall be paid for in whole or in part by PROPOSITION 1E (ROUND 1) STORMWATER FLOOD MANAGEMENT GRANT (“Grant”) funds which are administered by the the Department of Water Resources of the State of California. Accor dingly, Consultant (including its subconsultants and subcontractors, if any) shall abide by all applicable terms and conditions of the Grant, including but not limited to those set forth in the Grant Agreement between the Department of Water Resources of t he State of California and the City, which is attached hereto as Exhibit 2 and incorporated by this reference.
3. The services provided under this Agreement shall be paid for in whole or in part by funds pursuant to the WIFIA Loan Agreement between the Escondido Joint Powers Financing Authority, the United States Environmental Protection Agency, and the City (“WIFIA Loan Agreement”). Accordingly, Consultant (including its subconsultants and subcontractors, if any) shall abide by all applicable terms and conditions of the Grant, including but not limited to those set forth in the WIFIA Loan Agreement, which is attached hereto as Exhibit 3 and incorporated by this reference.
Attachment "A"
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STATE OF CALIFORNIA GAVIN NEWSOM, Governor
DEPARTMENT OF INDUSTRIAL RELATIONS
Katrina S. Hagen, Director
1515 Clay Street, 17th Floor
Oakland, CA 94612
Tel: (510) 286-7087 Fax: (510) 622-3265
June 9, 2020
City of Escondido Utilities Department
201 North Broadway
Escondido, CA 92025
Attention: Vicki Ferguson, Utilities Construction Coordinator
RE: Application for Approval of Labor Compliance Program LCP ID No. 2020.00464
Dear Vicki Ferguson:
In accordance with the provisions of Title 8, California Code of Regulations, section 16425, approval of the City of Escondido Utilities Department Labor Compliance Program (LCP) is hereby granted, effective June 5, 2020.
This approval covers any project for which your agency is required by state statute to have an approved LCP, including a project subject to the requirements of Section 75075 of the Public Resources Code (public works projects funded by Proposition 84).
An LCP must comply with the requirements of Title 8, California Code of Regulations, sections 16421 through 16439, as well as with all other statutes and regulations pertaining to the monitoring and enforcement of the state's prevailing wage requirements. Among other things, your agency must file an annual report in accordance with the requirements of section 16431 of the regulations, regardless of whether your LCP has conducted any monitoring or enforcement during the preceding year. The annual reporting period is July 1 through June 30, and annual reports are due by no later than August 31.
Please also note that Labor Code section 1773.3 requires your agency to notify the Department of Industrial Relations (DIR) within thirty (30) days of the award, but in no event later than the first day in which a contractor is employed on the public work. The awarding body must complete the PWC -100 form online at https://www.dir.ca.gov/pwc100ext/.
Additional information and resources pertaining to labor compliance programs are available on the DIR’s website at http://www.dir.ca.gov/lcp.asp. Questions about enfo rcement policy must be directed to the Division of Labor Standards Enforcement. If you have any other questions, including questions about this notice, please contact Jonathan LeGaux at (510) 622-5054.
Sincerely,
Katrina S. Hagen
Director
Department of Industrial Relations
cc: Susan Nakagama, Regional Manager, Division of Labor Standards Enforcement
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Applic
ation to Director for Approval of Awarding Body’s Labor Compliance Program (8 CCR §16425)
NOTE: If necessary, you may attach additional sheets.
The Director may ask for additional documentation as to any information provided or any other information that may have a bearing on your ability to do labor compliance enforcement.
Awarding Body Seeking Approval:
CITY OF ESCONDIDO
UTILITIES DEPARTMENT
Name
201 North Broadway Escondido, CA 92025
Address
Awarding Body’s Contact Person:
VICKI FERGUSON
Name
201 North Broadway Escondido, CA 92025
Address
760-839-6290 x7032 [email protected]
Phone Fax E-Mail
A. Identify the individuals who will be enforcing the Labor Compliance Program (LCP). (Note: If using outside consultants or an approved third party contract provider, identify the awarding body personnel who will monitor or supervise the outside work as well as the individuals and affiliations of the individuals who will perform the enforcement work.)
1. VICKI FERGUSON
Name
UTILITIES CONSTRUCTION COORDINATOR
Title
Experience/training on public works/labor compliance issues (Please provide specific dates, details and examples of public works prevailing wage rate enforcement activities, including whether such experience involve federal, state, or local law. In addition, please include private sector experience on behalf of unions or contractors or on a joint labor management committee pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. section 175a). Furthermore, please include participation in any public works enforcement training provided by the Division of Labor Standards Enforcement (DLSE)):
Vicki Ferguson’s experience with prevailing wage on public works projects spans the past ten years, plus. Training on public works prevailing wage includes a one-day training put on by the California Association of Procurement Officials (CAPPO) on 12/10/15; a one-day training put on by the San Diego Associated General Contractors on 2/27/18; and a one-day training put on by the DIR Labor Commissioner’s Office in association with the Center for Contract Compliance on 7/18/19.
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LCP
duties and responsibilities to be performed including percentage of time to be devoted to LCP work:
Overall management of the LCP on behalf of the Awarding Agency. Will establish policy and enforce compliance with policy. Establish and enforce performance standards. Monitor the performance of consultant resources and provide direction or correction where required.
Receive regular reports of key performance parameters from support staff. Review and approve any formal enforcement actions at the Awarding Body level (withholdings, requests for determination of forfeiture, filing of complaints regarding apprenticeship violations, etc.).
LCP work approximately 10% of workload
2. Andrea Richards – Golden State Labor Compliance, LLC (GSLC) Name
Labor Compliance Program Manager / Labor Compliance Officer Title
Experience/training on public works/labor compliance issues (Please provide specific dates, details and examples of public works prevailing wage rate enforcement activities, including whether such experience involve federal, state, or local law. In addition, please include private sector experience on behalf of unions or contractors or on a joint labor management committee pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. section 175a). Furthermore, please include participation in any public works enforcement training provided by the Division of Labor Standards Enforcement (DLSE)):
See attached professional profile
LCP duties and responsibilities to be performed including percentage of time to be devoted to LCP work:
Preconstruction meetings, training as required, consultation with client agency, quality control of ongoing LCP operations
100% of time is dedicated to LCP work for all programs
3. Christy Yates, Martha Delany, Lisa Sylvester, Mandy Romo & Harvey Kuch – GSLC Name
Labor Compliance Specialists- Administration & Records Specialist and Field Representative Title
Experience/training on public works/labor compliance issues (Please provide specific dates, details and examples of public works prevailing wage rate enforcement activities, including whether such experience involve federal, state, or local law. In addition, please include private sector experience on behalf of unions or contractors or on a joint labor management committee pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. section 175a). Furthermore, please include participation in any public works enforcement training provided by the Division of Labor Standards Enforcement (DLSE)):
See attached professional profiles
LCP duties and responsibilities to be performed including percentage of time to be devoted to LCP work:
100% of each Specialist’s & Representatives time is dedicated to LCP work for all programs.
Approximate 15% to 20% time commitment to each major project on a program.
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4. Victor Conklin
Name
Principal in Charge /Labor Compliance Officer
Title
Experience/training on public works/labor compliance issues (Please provide specific dates, details and examples of public works prevailing wage rate enforcement activities, including whether such experience involve federal, state, or local law. In addition, please include private sector experience on behalf of unions or contractors or on a joint labor management committee pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. section 175a). Furthermore, please include participation in any public works enforcement training provided by the Division of Labor Standards Enforcement (DLSE)):
See attached professional profile
LCP duties and responsibilities to be performed including percentage of time to be devoted to LCP work:
Precon meetings, training as required, general consultation with client agency, quality control of ongoing LCP operation. Time committed is on an as-required basis. Work on any given client LCP approximates 5% of time per month.
B. State the average number of public work projects the awarding body annually administers:
40 C. State whether the proposed LCP is a joint or cooperative venture among awarding bodies; and, if so, how the resources and expanded responsibilities of the LCP compare to the awarding bodies involved:
The proposed LCP is intended for the sole use of CITY OF ESCONDIDO UTILITIES DEPARTMENT, for the completion of its present Prop 84 project and for any similarly funded projects that require the Awarding Body to have an LCP as a condition of funding.
D. Describe the awarding body’s record of taking cognizance of Labor Code violations in the preceding five years, including any withholding of funds from public works contractors pursuant to LC 1726.
The CITY OF ESCONDIDO UTILITIES DEPARTMENT has, when needed, delayed contractor progress payments to achieve compliance on our projects regarding prevailing wage requirements; and, we have filed Public Works complaints against subcontractors, as needed. The CITY OF ESCONDIDO UTILITIES DEPARTMENT has put forth a good faith effort to take cognizance of Labor Code violations in the preceding five years by having complete labor compliance monitoring by a labor compliance consultant on CIP projects during that time.
Further, our retained labor compliance consultants, Golden State Labor Compliance have a long history of successful withholdings and collections through Notices of Withholding and, where necessary, by sustaining such withholdings through DIR appeal hearings.
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E. Iden
tify the attorney or law firm available to provide legal support for the LCP, including handling of the LCP’s responsibilities during the administrative review process set forth in Labor Code Section 1771.6.
For the purpose of supporting the requested LCP, the following law firm will be engaged, as required.
City of Escondido City Attorney
Attorney/Law Firm Name
201 North Broadway
Escondido, Ca. 92025
Address
Jennifer True, Deputy City Attorney, 760-839-4608
Contact Person & Phone Number
F. Identify the method by which the LCP will notify the Labor Commissioner of willful violations as defined in Labor Code Section 1777.1(d):
In the event of an unresolved violation following reasonable efforts by the LCP to reach resolution, a Request for Determination of Amount of Forfeiture will be submitted to the Labor Commissioner, along with a comprehensive record of our investigation and the evidence supporting a potential forfeiture. As part of the Request for Determination of Amount of Forfeiture, CITY OF ESCONDIDO UTILITIES DEPARTMENT will present any evidence that the violation(s) were willful and will make a recommendation regarding penalties or possible debarment.
G. Indicate whether the Awarding Body has established its own Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) and subchapter 4 of chapter 8 of Title 8 of California Code of Regulations or has contracted with a third party that has been approved by the Director to operate a Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) and subchapter 4 of chapter 8 of Title 8 of California Code of Regulations. If the Awarding Body has contracted with one or more persons or entities to operate all or any part of the Awarding Body’s Labor Compliance Program, please identify (name, address, telephone, and principal contact) all of those persons or entities.
The CITY OF ESCONDIDO UTILITIES DEPARTMENT has retained the services of Golden State Labor Compliance, LLC (GSLC) to provide substantial training & support in operating the requested LCP. GSLC was approved by the Director to operate a Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) and subchapter 4 of chapter 8 of Title 8 of California Code of Regulations on March 24, 2003 through which time the DIR discontinued its recognition of private third party consultants as approved LCPs on September 1, 2011.
Contact information is:
Golden State Labor Compliance, LLC
38733 9
th Street East, Suite W, Palmdale, CA 93550
Ph (661) 267-0940 Fax(661) 267-0981
Contact: Victor Conklin, President [email protected]
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H. Indicate whether the Awarding Body intends to enforce labor compliance on all of its public works projects (i.e ., not limited to projects that are funded by bonds or other statutes that require the Awarding Body to have an LCP as a condition of funding). If not, please indicate the kinds of projects on which you intend to enforce labor compliance and whether you are required to have a labor compliance program as a condition for obtaining funding for the project or projects.
The
CITY OF ESCONDIDO UTILITIES DEPARTMENT intends to enforce labor compliance on the present Proposition 84 funded project and any future public works projects that are funded out of Proposition 84 funds or other statutes that require the Awarding Body to have a Labor Compliance Program as a condition of funding.
I. Atta
ch a copy of the Awarding Body’s resolution adopting the LCP and, if applicable, any other resolution approving any contracts with persons or entities identified in G above.
J. Att
ach the proposed manual outlining the responsibilities and procedures of the LCP. _______________________________________ __________5/18/2020____________ Christ
opher W. McKinney, Director of Utilities Date Signed
Mail t
wo copies of this form and attachments to:
OFFIC
E OF THE DIRECTOR
DEPARTMENT OF INDUSTRIAL RELATIONS
455 GOLDEN GATE AVENUE, 10th FLOOR
SAN FRANCISCO, CA 94102
ATTENTION: EXECUTIVE ASSISTANT TO THE DIRECTOR
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1 CITY OF ESCONDIDO UTILITIES
DEPARTMENT
"[Click here and paste agency logo]"
Labor Compliance Program
Program, Policies, and Procedures
City of Escondido Utilities Department
201 North Broadway
Escondido, CA 92025
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TABLE OF CONTENTS
Page
I. Introduction 2
II. Public Works Subject to Prevailing Wage Laws …………………………………….. 2 III. Competitive Bidding on District Public Works Contracts …………………………. 2 IV. Composition, Components and Responsibilities of Labor Compliance Prog ram 3 A. Overview ………………………………………………………………………………… 3
B. Duty of the Awarding Agency ………………………………………………………. 3 C. Responsibility and Authority of Awarding Agency to Enforce LC 1726 …… 3 D. Responsibilities of a Labor Compliance Program ………………………………. 3 E. Responsibility to Maintain Written Record ……………………………………….. 4 F. Labor Commissioner’s Right to Provide for Training …………………………... 4 G. Failure to Enforce Not a Defense …………………………………………………… 4 H. Filing of Statements of Economic Interest ……………………………………….. 4 I. Annual Report …………………………………………………………………………. 4
V. Job Conference Meeting
A. Agenda ……………………………………………………………………….. 5
B. Document Distribution / Opportunity for Questions and Answers ……… 5 VI. Responsibility of Contractors
A. Certified Payroll ……………………………………………………………………… 6
B. Furnishing of Certified Payroll Reports …………………………………………. 6 C. Reporting Format ……………………………………………………………………. 7
D. Cost of Preparation of Records Requested ……………………………………. 7 E. Use of Electronic Reporting Forms ……………………………………………… 8 F. Submission of Certified Payroll Records ………………………………………. 8 G. Full Accountability …………………………………………………………………. 8
H. Responsibility for Subcontractors ………………………………………………. 8 I. Payment to Employees ……………………………………………………………. 8
J. Subcontractors ……………………………………………………………………… 9
K. Required Wage Rates and Overtime …………………………………………….. 9 L. Apprentices ………………………………………………………………………….. 9
VII. Enforcement
A. Duty of the Awarding Agency and LCP ……………………………………………… 10 B. Request for Certified Payroll Records ………………………………………………. 11 C. Records Requested for Use by the Labor Compliance Program…………. 12 D. Privacy Considerations ……………………………………………………………………... 12 E. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate ………………………………………………………………… 12
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F. On-Site Visits ……………………………………………………………………………………. 13 G. Complaints ………………………………………………………………………………………. 14
H. Review of Certified Payroll Records …………………………………………………. 14 I. Confirmation of Certified Payroll Records ………………………………………… 14 J. Audit of Certified Payroll Records …………………………………………………….. 14 K. Notification and Informal Resolution ……………………………………………….. 15 L. Withholding Contract Payments When, After Investigation, It is Established That Underpayment or Other Violation Has Occurred …….. 15 M. Provisions Relating to Penalties …………………………………………………………. 16 N. Forfeitures Requiring Approval by the Labor Commissioner ………………. 17 O. Determination of Amount of Forfeiture by the Labor Commissioner …. 17 P. Withholding Procedures After Forfeiture Determination …………………… 18 Q. Settlement Meeting …………………………………………………………………………… 19 R. Request for Review of Notice of Withholding of Contract Payments …. 19 S. Review of Notice of Withholding of Contract Payments …………………….. 20 T. Determination and Ruling on the Review by DIR ………………………………… 20 U. Settlement Authority …………………………………………………………………………. 21 V. Deposits of Penalties and Forfeitures Withheld ………………………………….. 21 W. Debarment Policy ……………………………………………………………………………….. 21 X. Disposition of Forfeited Sums ……………………………………………………………. 21 Y. Reporting of Willful Violations to the Labor Commissioner …………………. 22 VIII. Enforcement of Apprenticeship Requirements…………………………………. 23
Appendix A Definitions ………………………………………………………………………. 24 Appendix B Initial Review of Certified Payroll Records ……………………….. 26 Appendix C Confirmation and Audit of Certified Payroll Records ………… 27 Appendix D Public Works Case Audits …………………………………………………. 28 Appendix E Investigation Case Processing …………………………………………… 29 Appendix F Prevailing Wage Hearing Regulations ……………………………….. 33 Appendix G Field Representative Minimum Standards …………………………. 35 Appendix H Forms ………………………………………………………………………………… 38
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2 I. INTRODUCTION
A. The City of Escondido Utilities Department issues this Labor Compliance Program (LCP) manual for the purpose of identifying its policy relative to the responsibilities and procedures applicable to the labor compliance provisions of State and Federally-funded construction contracts.
B. California Labor Code Section 1770 et seq. and various other statutes require that building trade contractors on public works projects pay their workers based upon prevailing wage rates established and issued by the Department of Industrial Relations (DIR), Office of Policy Research and Legislation (OPRL).
C. In establishing this LCP, City of Escondido Utilities Department adheres to the statutory requirements as outlined in Section 1771.5(b) of the Labor Code and the provisions contained in California Code of Regulations Section 16000 et seq.
D. It is the intent of City of Escondido Utilities Department to actively enforce this LCP on all projects required by statute to enforce or contract to enforce a LCP that contains or meets the requirements of Labor Code Section 1771.5. Should any applicable Labor Code or Code of Regulations undergo revision or deletion, CITY OF ESCONDIDO will modify that portion of the program to comply with the modified or deleted sections.
E. Questions regarding City of Escondido Utilities Department LCP Program should be directed to:
VICKI FERGUSON
201 North Broadway
Escondido, CA 92025
760-839-6290 x7032
[email protected]
II. PUBLIC WORKS SUBJECT TO PREVAILING WAGE LAWS
A. State prevailing wage rates apply to all public works contracts valued over $1,000, as set forth in Labor Code Section 1771 et seq., including, but not limited to, such types of work as construction, alteration, demolition, installation or repair, work, as set forth in Labor Code Sections 1720 et seq. The Director of Industrial Relations determines, from time to time, the appropriate prevailing wage rates for particular construction trades and crafts by county and publishes those determinations through the Office of Policy Research and Legislation (OPRL).
B. Types of Contracts to Which Prevailing Wage Requirements Apply
Whenever an Awarding Agency is required by statute to enforce or contract to enforce a Labor Compliance Program that contains or meets the requirements of Labor Code Section 1771.5, the Awarding Agency must have its own program that has been approved by the Director pursuant to Code of Regulations Section 16425.
C. A list of statutes that require Awarding Agencies to have a Labor Compliance Program as a condition of project authorization, project funding, or use of specified contracting authority shall be maintained on the Department of Industrial Relations’ website.
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3 III. COMPETITIVE BIDDING ON PUBLIC WORKS CONTRACTS
Awarding Bodies publicly advertise upcoming public works projects to be awarded according to a competitive bidding process. All bid advertisements or bid invitations and all construction contracts shall contain appropriate language concerning the requirements of the Public Works chapter of the Labor Code, comprised of Labor Code Sections 1720- 1861.
IV. COMPOSITION, COMPONENTS AND RESPONSIBILITIES OF LABOR COMPLIANCE PROGRAM
A. In accordance with the California Labor Code and California Code of Regulations, a Labor Compliance Program shall include, but not be limited to, the following requirements:
(1) The Call for Bids, Design-Build Request, and the contract or purchase order shall contain appropriate language concerning the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code. (2) A pre-job conference shall be conducted before commencement of the work with contractors and subcontractors listed in the bid or who are required to be identified or prequalified in a Design-Build Contract.
At the pre-job conference applicable federal and state labor law requirements shall be discussed, and copies of suggested reporting forms furnished. A checklist, showing which federal and state labor law requirements were discussed, shall be kept for each conference. A checklist in the format of Appendix A presumptively meets this requirement.
(3) A requirement that certified payroll records be kept by the contractor in accordance with Labor Code Section 1776 and furnished to the Labor Compliance Program at times designated in the contract, which shall be at least monthly, or within 10 days of any request by the Awarding Body. Use of the current version of DIR's “Public Works Payroll Reporting Form” (A-1-131) and Statement of Employer Payments (PW26) constitute presumptive compliance with the requirement for certified payroll records kept in accordance with Labor Code Section 1776, provided the forms are filled out accurately and completely. These suggested forms are available from the Department of Industrial Relations.
(4) A program for orderly review of payroll records and, if necessary, for audits to verify compliance with the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code. (5) A prescribed routine for withholding penalties, forfeitures, and underpayment of wages for violations of the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code. (6) All contracts to which prevailing wage requirements apply shall include a provision that contract payments shall not be made when payroll records are delinquent or inadequate. (7) The Labor Compliance Program shall review and, if appropriate, audit payroll records to verify compliance with the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code. (8) The awarding body shall, with the approval of the Labor Commissioner, withhold contract payments equal to the amount of underpayment and applicable penalties when, after investigation, it is established that underpayment has occurred.
(9) The awarding body shall comply with any other prevailing wage monitoring and enforcement activities that are required to be conducted by labor compliance programs by the Department of Industrial Relations.
B. Duty of the Awarding Agency
The Awarding Agency, pursuant to its approved LCP, has a duty to the Director of the Department of Industrial Relations to ensure compliance of contractors and enforce the Public Works Chapter of the Labor Code and Title 8 of the Code of Regulations in a manner consistent with the practice of the Labor Commissioner. The LCPR for the Awarding Agency will maintain records relating to activities and relevant facts that pertain to each project that demonstrates that reasonable and sufficient efforts have been made to enforce prevailing wage requirements.
C. Nothing in this section shall be construed as limiting the responsibility and authority of an Awarding Body to take cognizance of prevailing wage violations under Section 1726 of the Labor Code and take any appropriate action pursuant to and in accordance with that responsibility and authority.
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4 D. It is the responsibility of a Labor Compliance Program to enforce prevailing wage requirements, consistent with the policy of the state as expressed in Labor Code Section 90.5(a). A Labor Compliance Program shall take reasonable, vigorous, and prompt action to (1) determine whether violations exist, and (2) enforce compliance, including through imposition of appropriate penalties and formal enforcement action, when violations are found. A Labor Compliance Program shall neither avoid use of its enforcement authority based on cost considerations nor shall it use that authority in an unreasonable manner to gain leverage over a contractor or subcontractor. Unreasonable use of enforcement authority includes, but is not necessarily limited to, prolonged or excessive withholdings of contract payments without making a determination that a violation has occurred.
E. For each public work project subject to a Labor Compliance Program's enforcement of prevailing wage requirements, a separate, written summary of labor compliance activities and relevant facts pertaining to that particular project shall be maintained. That summary shall demonstrate that reasonable and sufficient efforts have been made to enforce prevailing wage requirements consistent with the practice of the Labor Commissioner. Appendix C following this section provides a suggested format for tracking and monitoring enforcement activities. Compliance records for a project shall be retained until the later of (1) at least one year after the acceptance of the public work or five years after the cessation of all labor on a public work that has not been accepted, or (2) one year after a final decision or judgment in any litigation under Labor Code Section 1742. For purposes of this section, a written summary or report includes information maintained electronically, provided that the summary or report can be printed out in hard copy form or is in an electronic format that (1) can be transmitted by e-mail or compact disk and (2) would be acceptable for the filing of documents in a federal or state court of record within this state.
F. The Labor Commissioner may provide, sponsor, or endorse training on how to enforce prevailing wage requirements, including but not necessarily limited to the subjects of (1) ascertaining prevailing wage requirements and rates from the Division of Labor Statistics and Research, (2) monitoring and investigation under section 16432 above, (3) enforcement responsibilities under this section and sections 16435-16439 below, and (4) procedural requirements and responsibilities as an enforcing agency under Labor Code sections 1741-1743 and 1771.6 and sections 17201-17270 of Title 8 of the California Code of Regulations.
G. The failure of an Awarding Body or Labor Compliance Program to comply with any requirement imposed by this subchapter shall not of itself constitute a defense to the failure to pay prevailing wages or to comply with any other obligation imposed by Chapter 1 (commencing with Section 1720), Part 7, Division 2 of the Labor Code.
H. Filing of Statements of Economic Interest (FPPC Form 700) by Designated Employees and Consultants of Labor Compliance Program.
(1) An Awarding Body that operates either its own labor compliance program or that contracts with a third party to operate all or part of its labor compliance program shall determine and designate those employees and consultants of the program who participate in making governmental decisions for the Awarding Body within the meaning of Title 2, California Code of Regulations, sections 18700 - 18702.4.
Those designated employees and consultants shall be required to file Statements of Economic Interest (FPPC Form 700) and to comply with other applicable requirements of the Political Reform Act (commencing with Section 87100 of the Government Code) in connection with work performed on behalf of the Awarding Body.
(2) Designated employees and consultants who operate or are employed by a third party labor compliance program shall file their Statements of Economic Interest (FPPC Form 700) with the filing officer of each Awarding Body with which the third party program contracts, unless the Department of Industrial Relations or the Fair Political Practices Commission specifies a different or alternative filing location.
I. Annual Report
(1) The Labor Compliance Program shall submit to the Director an annual report on its operation by no later than August 31 of each year. The annual report shall cover the twelve month period commencing on July Attachment "A"
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5 1 of the preceding calendar year and ending on June 30 of the year in which the report is due. For good cause, the Director may authorize a Labor Compliance Program to use a different reporting period and provide for the annual report to be due no later than 60 days following the close of that reporting period. (2) The annual report shall be made on the appropriate form [LCP-AR1, LCP-AR2, or LCP-AR3], for the type of Labor Compliance Program that is submitting the report, unless the Director has agreed to a different reporting format for a Program that has been granted extended authority under section 16427 above. A third party Labor Compliance Program that contracted with more than one Awarding Body or Joint Powers Authority during the annual reporting period shall separately report on Labor Code Section 1771.5(b) enforcement activities for each Awarding Body or Joint Powers Authority covered by the report. (3) Information in the Annual Report shall be reported in sufficient detail to afford a basis for evaluating the scope and level of enforcement activity of the Labor Compliance Program. An annual report shall also include such additional information as the Labor Compliance Program may be required to report as a condition of its approval.
V. JOB CONFERENCE MEETING
A. Agenda
A Pre-Job conference meeting shall be held prior to the start of construction with all contractors and subcontractors. At that meeting, the Labor Compliance Program Representative (LCPR) will discuss applicable State and Federal labor law requirements applicable to the contract and will provide the contractor and each attending subcontractor with a Checklist of Labor Law Requirements which addresses:
(1) The contractor’s and subcontractors’ duty to pay prevailing wages under Labor Code Section 1770, et seq., should the project exceed the exemption amounts;
(2) The contractors and subcontractor’s duty to employ registered apprentices on public works projects under Labor Code Section 1777.5;
(3) The penalties for failure to pay prevailing wages for nonexempt projects, failing to employ apprentices, and failing to submit Certified Payroll reports which include forfeitures and debarment (Labor Code Sections 1775, 1776, 1777, and 1813);
(4) The requirement to maintain and submit copies of certified payroll reports records to the Awarding Agency’s LCP Representative (Labor Code Section 1776) on a weekly basis and as stipulated in contract documents. This requirement includes and applies to all subcontractors performing work on agency projects even if their portion of the work is less than one- half of 1 percent of the total amount of the contract, and penalties for failure to do so (Labor Code Section 1776(h); (5) The prohibition against employment discrimination under Labor Code Sections 1735 and 1777.6; the Government Code; and Title VII of the Civil Rights Act of 1964, as amended; (6) The prohibition against accepting or extracting kickbacks from employee wages under Labor Code Section 1778;
(7) The prohibition against accepting fees for registering any person for public works under Labor Code Section 1779 or for filling work orders on public works under Labor Code Section 1780; (8) The requirement to list all subcontractors under Public Contracts Code Section 4104; (9) The requirement to be properly licensed and to require all subcontractors to be properly licensed, and the penalty for employing workers while unlicensed under Labor Code Section 1021 and 1021.5, and under California Contractors License Law, found at Business and Professions Code Section 7000, et seq.; (10) The prohibition against unfair competition under Business and Professions Code Sections 17200-17208; (11) The requirement that the contractor and subcontractor be properly insured for Workers’ Compensation under Labor Code Section 1861;
(12) The requirement that the contractor abide by the Occupational Safety and Health laws and regulations that apply to the particular public works projects;
(13) The Federal Prohibition against hiring undocumented workers and the requirement to secure proof of eligibility/citizenship from all workers;
(14) The requirement to provide itemized wage statements to employees under Labor Code Section 226; and (15) The Contractor’s & Subcontractor’s requirement under Labor Code Section 1725.5, et seq. that a contractor shall be registered pursuant to this section to be qualified to bid on, be listed in a bid proposal, Attachment "A"
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6 subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any public work contract that is subject to the requirements of this chapter. For the purposes of this section, "contractor" includes a subcontractor as defined by Section 1722.1.
B. The contractor(s) and subcontractor(s) present at the meeting will be given the opportunity to ask questions of the LCPR relative to any of the Labor Law Requirements Checklist. The Checklist of Labor Law Requirements will then be signed by the attending contractor and subcontractor representatives and submitted to the LCPR.
At the Pre-job conference the LCPR will provide the General Contractor (GC), or in the case of multi-prime Construction Management (CM) project, the Construction Manager, with two (2) copies of applicable Prevailing Wage Rate Determinations. All attending contractors and subcontractors shall be provided with instructions, samples and blank certified payroll record forms, DAS-140 form, fringe benefit statements, State apprenticeship requirements, and appropriate reference materials regarding Labor Code authorities for program requirements. It will be the GC or CM’s responsibility to provide copies of the LCP package to any substituted or non-attending contractor or subcontractor performing work on the Project.
VI. RESPONSIBILITY OF CONTRACTORS
A. Certified Payroll
(1) Certified Payroll Records Required
Each contractor and subcontractor shall keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by him or her in connection with the public work. Each payroll record shall contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
a. The information contained in the payroll record is true and correct. b. The employer has complied with the requirements of Sections 1771, 1811, and 1815 for any work performed by his or her employees on the public works project.
(2) Payroll records consist of, but are not limited to, time cards, front and back copies of canceled checks, records of cash receipts, trust fund forms, accounting ledgers, tax forms, Superintendent and foreman daily logs, employee sign in sheets and/or any other record maintained for the purpose of reporting payroll etc. during the course of the work and shall preserve them for a period of three (3) years thereafter for all trades workers working on the Awarding Agency’s project sites. Such records shall include the name, address, and social security number of each worker, his or her classification, a general description of the work each employee performed each day, the rate of pay including rates of contributions for, or costs assumed to provide fringe benefit, daily and weekly number of hours worked, deductions made, and actual wages paid.
B. Furnishing of Certified Payroll Records
(1) Unless required to be furnished directly to the Labor Commissioner in accordance with paragraph (3) of subdivision (a) of Section 1771.4, the certified payroll records shall be on forms provided by the Division of Labor Standards Enforcement or shall contain the same information as the forms provided by the division.
The payroll records may consist of printouts of payroll data that are maintained as computer records, if the printouts contain the same information as the forms provided by the division and the printouts are verified in the manner specified in subdivision VI.(1)(a.).
(2) A contractor or subcontractor shall file a certified copy of the records enumerated in subdivision (a) with the entity that requested the records within 10 days after receipt of a written request. (3) Except as provided in subdivision “d”, below, any copy of records made available for inspection as copies and furnished upon request to the public or any public agency by the awarding body or the Division of Labor Standards Enforcement shall be marked or obliterated to prevent disclosure of an individual’s name, address, and social security number. The name and address of the contractor awarded the contract or the Attachment "A"
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7 subcontractor performing the contract shall not be marked or obliterated. Any copy of records made available for inspection by, or furnished to, a multiemployer Taft-Hartley trust fund (29 U.S.C. Sec. 186(c)(5)) that requests the records for the purposes of allocating contributions to participants shall be marked or obliterated only to prevent disclosure of an individual’s full social security number, but shall provide the last four digits of the social security number. Any copy of records made available for inspection by, or furnished to, a joint labor-management committee established pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) shall be marked or obliterated only to prevent disclosure of an individual’s social security number. (4) Notwithstanding any other provision of law, agencies that are included in the Joint Enforcement Strike Force on the Underground Economy established pursuant to Section 329 of the Unemployment Insurance Code and other law enforcement agencies investigating violations of law shall, upon request, be provided non-redacted copies of certified payroll records. Any copies of records or certified payroll made available for inspection and furnished upon request to the public by an agency included in the Joint Enforcement Strike Force on the Underground Economy or to a law enforcement agency investigating a violation of law shall be marked or redacted to prevent disclosure of an individual’s name, address, and social security number.
(5) An employer shall not be liable for damages in a civil action for any reasonable act or omission taken in good faith in compliance with this subdivision.
(6) The contractor shall inform the body awarding the contract of the location of the records enumerated under subdivision (a), including the street address, city, and county, and shall, within five working days, provide a notice of a change of location and address.
(7) The contractor or subcontractor has 10 days in which to comply subsequent to receipt of a written notice requesting the records enumerated in subdivision (a). In the event that the contractor or subcontractor fails to comply within the 10-day period, he or she shall, as a penalty to the state or political subdivision on whose behalf the contract is made or awarded, forfeit one hundred dollars ($100) for each calendar day, or portion thereof, for each worker, until strict compliance is effectuated. Upon the request of the Division of Labor Standards Enforcement, these penalties shall be withheld from progress payments then due. A contractor is not subject to a penalty assessment pursuant to this section due to the failure of a subcontractor to comply with this section.
C. Reporting Format
(1) The format for reporting of payroll records requested pursuant to Labor Code Section 1776 shall be on a form provided by the public entity. Copies of the forms may be procured at any office of the Division of Labor Standards Enforcement (DLSE) throughout the state and/o Office of Policy Research and Legislation (OPRL) P.O. Box 603 San Francisco, CA 94101, ATTENTION: Prevailing Wage Unit. (2) Acceptance of any other format shall be conditioned upon the requirement that the alternate format contain all of the information required pursuant to Labor Code Section 1776. If, however, the contractor does not comply with the provisions of Labor Code Section 1776, the Labor Commissioner may require the use of DIR's suggested format, “Public Works Payroll Reporting Form” (Form A-1-131). (3) Words of Certification. The form of certification shall be as follows: I, ________________ (Name-print) the undersigned, am ________________ (position in business) with the authority to act for and on behalf of ________________, (name of business and/or contractor) certify under penalty of perjury that the records or copies thereof submitted and consisting of ________________ (description, no. of pages) are the originals or true, full and correct copies of the originals which depict the payroll record(s) of the actual disbursements by way of cash, check, or whatever form to the individual or individuals named.
Date:_________________ _____Signature:_______________ _____________ (4) A public entity may require a more strict and/or more extensive form of certification.
D. Cost of Preparation of Records Requested (CCR 16402)
Where records are requested by other than the Awarding Agency and its LCPR, the Division of Labor Standards Enforcement (DLSE), the Division of Apprenticeship Standards or the worker, the cost of preparation to each contractor, subcontractor, or public entity when the request was made shall be provided in Attachment "A"
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8 advance by the person seeking the payroll record. Such cost shall be $1 for the first page of the payroll record and 25 cents for each page thereafter, plus $10 to the contractor or subcontractor for handling costs. Payment in the form of cash, check or certified money order shall be made prior to release of the documents to cover the actual costs of preparation.
E. Use of Electronic Reporting Forms (CCR 16404)
Certified payroll records required by Labor Code Section 1776 may be maintained and submitted electronically, subject to the following conditions:
(1) Reports must contain all of the information required by Labor Code Section 1776; (2) Information must be organized in a manner that is similar or identical to the Department of Industrial Relations “Public Works Payroll Reporting Form” (Form A-1-131); (3) Reports shall be in a format and use software that is readily accessible and available to Contractors, Awarding Bodies, Labor Compliance Programs and the Department of Industrial Relations; (4) Reports must be in the form of a non-modifiable image or record; and (5) Reports must bear an electronic signature or include a copy of an original certification made on paper or printed out and submitted on paper with an original signature. (6) No contractor or subcontractor shall be mandated to submit or receive electronic reports when it otherwise lacks the resources or capacity to do so, nor shall any contractor or subcontractor be required to purchase or use proprietary software that is generally not available to the public.
F. Submission of Certified Payroll Records (CCR 16421(a)(3)
Certified payroll records shall be kept by the contractor in accordance with Labor Code Section 1776 and furnished to the Labor Compliance Program at times designated in the contract, which shall be at least monthly, or within 10 days of any request by the Awarding Body. Use of the current version of DIR's “Public Works Payroll Reporting Form” (A-1-131) and Statement of Employer Payments (PW26) constitute presumptive compliance with the requirement for certified payroll records kept in accordance with Labor Code Section 1776, provided the forms are filled out accurately and completely. These suggested forms are available from the Department of Industrial Relations.
G. Full Accountability
(1) The name, address and social security number of every individual, laborer or craftsperson working at the project site must appear on the payroll. The basic concept is that the employer who pays the trade’s worker must report that individual on its payroll. This includes individuals working as apprentices in an apprenticeable craft. Licensed Owner-operators under contract shall report their own wages as provided herein. Non-licensed Owner-Operators or those operating on a basis other than a formal contract shall be reported by the contractor employing them. Rental equipment operators are to be reported by the rental company paying the workers’ wages.
(2) Sole owners and partners who work on a contract must also submit a certified payroll record listing the days and hours worked, and the trade classification descriptive of the work actually done. (3) Contractors and subcontractors shall make the records required under this section available for inspection by the LCPR , an authorized representative of the Awarding Agency, or the DLSE and the Division of Apprenticeship Standards of the DIR, and shall permit such representatives to interview trades workers during working hours on the project site
H. Responsibility for Subcontractors
A contractor shall be responsible for ensuring adherence to labor standards provisions by its subcontractor(s) in accordance with Labor Code Sections 1725.5, 1771.4, 1774, 1775, 1776, 1777.5 and 1777.7.
I. Payment to Employees
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9 Employees must be paid unconditionally, and not less often than once every two weeks, the full amounts that are due and payable for the period covered by the particular payday. An employer must, therefore, establish a fixed workweek (e.g., Sunday through Saturday) and an established payday such as every Friday or the preceding day should such payday fall on a holiday. On each and every payday, each worker must be paid all sums due as of the end of the preceding workweek and must be provided with an itemized wage statement.
J. Subcontractors
If an individual is called a subcontractor, when, in fact, he/she is merely a journey-level mechanic supplying only his/her labor, such an individual would not be deemed a bona fide subcontractor and must be reported on the payroll of the prime contractor who contracted for his or her services as a trade worker. Moreover, any person who does not hold a valid contractor’s license cannot be a subcontractor, and anyone hired by that person is the worker or employee of the general contractor who contracted for his or her services for purposes of prevailing wage requirements, certified payroll reporting and workers’ compensation laws.
K. Required Wage Rates and Overtime
A worker’s rate for straight time hours must equal or exceed the rate specified in the contract by reference to the Prevailing Wage Rate Determinations for the class of work actually performed. Any work performed on Saturday, Sunday, and/or a holiday, or a portion thereof, must be paid the prevailing rate established for those days regardless of the fixed workweek. The hourly rate for hours worked in excess of 8 hours in a day or 40 hours in a workweek shall be premium pay. All work performed in excess of 8 hours per day, 40 hours per week, on Saturday, on Sunday, and on holidays shall be paid in accordance with the applicable Prevailing Wage Determination
L. Apprentices
(1) Apprentices shall be permitted to work as such only when they are registered, individually, under a bona fide Apprenticeship program registered with a State apprenticeship agency that is recognized by the State Division of Apprenticeship Standards (DAS).
(2) Pursuant to Labor Code Section 1777.5 and Code of Regulations (CCR) Section 1, apprentices on public works must be employed according to the ratio set by the apprenticeship standards under which each Joint Apprenticeship Committee operates, the ratio of work performed by apprentices to journeymen employed in a particular craft or trade on the public work may be no higher than the ratio stipulated in the apprenticeship standards under which the apprenticeship program operates but in no case shall the ratio be less than one (1) apprentice hour to each five (5) journeyman hours. (3) Any worker listed on payroll records at an apprentice wage rate who is not a duly registered apprentice, works in excess of the stipulated ratios permitted under Labor Code section 1777.5(g), works outside of the scope of work for the craft/trade for which they are registered or perform work outside of the prescribed geographic area of the apprenticeship program is not qualified to receive the apprentice rate and shall be paid the journeyman level wage rate determined by the Department of Industrial Relations for the classification of and locality in which the work was actually performed. (4) If requested by the LCPR, the contractor shall furnish written evidence of the Apprenticeship Agreement, Statement of Registration of its training program and apprentices, as well as the ratios allowed and the wage rates required to be paid.
(5) Pre-apprentice trainees, trainees in non-apprenticeable crafts, and others who are not duly registered will not be permitted on public works projects unless they are paid full prevailing wage rates as journeypersons.
(6) Compliance with California Labor Code Section 1777.5 requires all public works contractors and subcontractors to:
a. Provide specified contract award information to an applicable apprenticeship program for each applicable apprenticeable craft (Labor Code Section 1777.5 (e); Attachment "A"
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10 b. All contractors must request dispatch of an apprentice from an apprenticeship program (for each apprenticeable craft or trade) by giving the program actual notice of at least 72 hours (business days only) before the date on which apprentices are required. If the apprenticeship committee from which apprentice dispatch are requested does not dispatch apprentices as requested, the contractor must request apprentice dispatch from another committee providing training in the applicable craft or trade in the geographic area of the site of the public work, and must request apprentice dispatch from each such committee, either consecutively or simultaneously, until the contractor has requested apprentice dispatches from each such committee in the geographic area. c. Employ apprentices on public works projects in a ratio to journeypersons as stipulated in the Apprenticeship Standards under which each Joint Apprenticeship Committee operates, but in no case shall the ratio be less than one (1) apprentice to each five (5) journeyperson hours unless a Certificate of Exemption is provided to the LCPR for the Awarding Agency; and d. Contribute to the training fund in the amount identified in the prevailing wage rate publication for journeypersons and apprentices. Where the trust fund administrators cannot accept the contributions, then payment shall be made to the California Apprenticeship Council, P. O. Box 511283, Los Angeles, California 90051-7838.
(7) It should be noted that a prior approval for a separate project does not confirm approval to train on any project. The contractor/subcontractor must check with the applicable Joint Apprenticeship Committee to verify status.
VII. ENFORCEMENT
A. Duty of the Awarding Agency and LCP
(1) The Awarding Agency, pursuant to its approved LCP, has a duty to the Director of the Department of Industrial Relations to ensure compliance of contractors and enforce the Public Works Chapter of the Labor Code and Title 8 of the Code of Regulations in a manner consistent with the practice of the Labor Commissioner. The LCPR for the Awarding Agency will maintain records relating to activities and relevant facts that pertain to each project that demonstrates that reasonable and sufficient efforts have been made to enforce prevailing wage requirements.
(2) Nothing in this section shall be construed as limiting the responsibility and authority of an Awarding Body to take cognizance of prevailing wage violations under Section 1726 of the Labor Code and take any appropriate action pursuant to and in accordance with that responsibility and authority. The LCPR shall take reasonable, vigorous, and prompt action to (1) determine whether violations exist, and (2) enforce compliance, including through imposition of appropriate penalties and formal enforcement action, when violations are found. A Labor Compliance Program shall neither avoid use of its enforcement authority based on cost considerations nor shall it use that authority in an unreasonable manner to gain leverage over a contractor or subcontractor. Unreasonable use of enforcement authority includes, but is not necessarily limited to, prolonged or excessive withholdings of contract payments without making a determination that a violation has occurred.
(3) [CCR 16432(a)] The primary function of the Labor Compliance Program is to ensure that public works contractors comply with the prevailing wage requirements found in the Public Works Chapter of the Labor Code. This regulation is intended to establish minimum requirements which all Labor Compliance Programs shall meet or exceed in carrying out that function. Definitions found throughout this regulation are intended to provide Labor Compliance Programs and representatives of the Department of Industrial Relations and the Division of Labor Standards Enforcement with common terminology as they each perform their respective roles in prevailing wage enforcement in furtherance of the Labor Code provisions establishing Labor Compliance Programs. This regulation is also intended to confirm that the proactive investigation methods, as described in detail herein, only comprise the minimum obligations required of Labor Compliance Programs to satisfy their duty to the Director to operate a Labor Compliance Program as specified in CCR Sections 16428 and 16434.
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11 (4) A Labor Compliance Program shall have a duty to the Director to enforce the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code and these regulations in a manner consistent with the practice of the Labor Commissioner. It is the practice of the Labor Commissioner to refer to the Director's ongoing advisory service of web-posted public works coverage determinations as a source of information and guidance in making enforcement decisions. It is also the practice of the Labor Commissioner to be represented by an attorney in prevailing wage hearings conducted pursuant to Labor Code Section 1742(b) and sections 17201-17270 of Title 8 of the California Code of Regulations. (CCR 16434(a)).
(5) The failure of an Awarding Body or Labor Compliance Program to comply with any requirement imposed by this subchapter shall not of itself constitute a defense to the failure to pay prevailing wages or to comply with any other obligation imposed by Chapter 1 (commencing with Section 1720), Part 7, Division 2 of the Labor Code.
B. Request for Certified Payroll Records
(1) Requests may be made by any person for certified copies of payroll records. Requests shall be made to any of the following:
a. the body awarding the contract, or
b. any office of the Division of Labor Standards Enforcement, or the Division of Apprenticeship Standards.
(2) Requests for certified copies of payroll records pursuant to Section 1776 of the Labor Code may be made by any person. However, any such request shall be in writing and contain at least the following information:
a. The body awarding the contract;
b. The contract number and/or description;
c. The particular job location if more than one;
d. The name of the contractor;
e. The regular business address, if known.
(3) Requests for records of more than one contractor of subcontractor must list the information regarding that contractor individually, even if all requests pertain to the same particular public works project. Blanket requests covering an entire public works project will not be accepted; unless contractor and subcontractor responsibilities regarding the project are not clearly defined.
(4) Acknowledgment of Request. The public entity receiving a request for payroll records shall acknowledge receipt of such, and indicate the cost of providing the payroll records based on an estimate by the contractor, subcontractor or public entity. The acknowledgment of the receipt of said request for payroll records may be accomplished by the public entity's furnishing a copy of its written correspondence requesting certified copies of the payroll records sent to the specific contractor pursuant to Section 16400(d) below, to the person who requested said records.
(5) Request to Contractor. The request for copies of payroll records by the requesting public entity shall be in any form and/or method which will assure and evidence receipt thereof. The request shall include the following:
a. Specify the records to be provided and the form upon which the information is to be provided; b. Conspicuous notice of the following:
(i) that the person certifying the copies of the payroll records is, if not the contractor, considered as an agent acting on behalf of the contractor; and
(ii) that failure to provide certified copies of the records to the requesting public entity within 10 working days of the receipt of the request will subject the contractor to a penalty of one-hundred ($100.00) dollars per calendar day or portion thereof for each worker until strict compliance is effectuated;
(iii) Cost of preparation as provided in Section 16402; and (iv) Provide for inspection.
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12 (6) Inspection of Payroll Records. Inspection of the original payroll records at the office of the contractor(s) pursuant to subdivision (b) of Section 1776 of the Labor Code shall be limited to the public entities upon reasonable written or oral notice.
(7) In the conduct of investigations reasonably required to undertake its responsibilities as set forth in CCR Section 16421, the LCPR shall request such additional records as may reasonably be required for that purpose, to include but not limited to those enumerated within CCR Section 16000.
(8) The request for copies of payroll records by the LCPR shall be in any form and/or method which will assure and evidence receipt thereof. The request shall include the following: (i) Specify the records to be provided and the form upon which the information is to be provided; (ii) Conspicuous notice that the person certifying the copies of the payroll records is, if not the contractor, considered as an agent acting on behalf of the contractor; and; (iii) that failure to provide certified copies of the records to the requesting public entity within 10 working days of the receipt of the request will subject the contractor to a penalty of one hundred ($100.00) dollars per calendar day or portion thereof for each worker until strict compliance is effectuated and; provide for inspection, where feasible.
C. Records Requested for Use by the Labor Compliance Program
Where records are requested from a contractor or subcontractor by the Awarding Agency’s LCPR in the normal course of its duties, those records shall be provided to the LCPR un-redacted and without cost.
D. Privacy Considerations (CCR 16403)
(1) Records received from the employing contractor shall be kept on file in the office or entity that processed the request for at least 6 months following completion and acceptance of the project. Thereafter, they may be destroyed unless administrative, judicial or other pending litigation, including arbitration, mediation or other methods of dispute resolution, are in process. Copies on file shall not be obliterated in the manner prescribed in subdivision (b) below;
(2) Copies provided to the public upon written request shall be marked, obliterated or provided in such a manner that the name, address and Social Security number, and other private information pertaining to each employee cannot be identified. All other information including identification of the contractor shall not be obliterated;
(3) the public entity may affirm or deny that a person(s) was or is employed on a public works contract (by a specific contractor) when asked, so long as the entity requires such information of an identifying nature which will reasonably preclude release of private or confidential information.
E. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate (CCR § 16435)
(1) “Withhold” means to cease payments by the Awarding Body, or others who pay on its behalf, or agents, to the general contractor. Where the violation is by a subcontractor, the general contractor shall be notified of the nature of the violation and reference made to its rights under Labor Code Section 1729.
(2) “Contracts.” Except as otherwise provided by agreement, only contracts under a single master contract, including a Design-Build contract, or contracts entered into as stages of a single project, may be the subject of withholding.
(3) “Delinquent payroll records” means those not submitted on the date set in the contract.
(4) “Inadequate payroll records” are any one of the following:
a. A record lacking any of the information required by Labor Code Section 1776; Attachment "A"
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13 b. A record which contains all of the required information but is not certified, or is certified by someone who is not an agent of the contractor or subcontractor;
c. A record remaining uncorrected for one payroll period, after the Labor Compliance Program has given the contractor or subcontractor notice of inaccuracies detected by audit or record review. However prompt correction will stop any duty to withhold if such inaccuracies do not amount to 1 percent of the entire Certified Weekly Payroll in dollar value and do not affect more than half the persons listed as workers employed on that Certified Weekly Payroll, as defined in Labor Code Section 1776 and section 16401 of Title 8 of the California Code of Regulations.
(5) The withholding of contract payments when payroll records are delinquent or inadequate is required by Labor Code Section 1771.5(b)(5), and it does not require the prior approval of the Labor Commissioner.
The Awarding Body shall only withhold those payments due or estimated to be due to the contractor or subcontractor whose payroll records are delinquent or inadequate, plus any additional amount that the Labor Compliance Program has reasonable cause to believe may be needed to cover a back wage and penalty assessment against the contractor or subcontractor whose payroll records are delinquent or inadequate; provided that a contractor shall be required in turn to cease all payments to a subcontractor whose payroll records are delinquent or inadequate until the Labor Compliance Program provides notice that the subcontractor has cured the delinquency or deficiency.
(6) When contract payments are withheld under this section, the Labor Compliance Program shall provide the contractor and subcontractor, if applicable, with immediate written notice that includes all of the following:
(1) a statement that payments are being withheld due to delinquent or inadequate payroll records, and that identifies what records are missing or states why records that have been submitted are deemed inadequate; (2) specifies the amount being withheld; and (3) informs the contractor or subcontractor of the right to request an expedited hearing to review the withholding of contract payments under Labor Code Section 1742, limited to the issue of whether the records are delinquent or inadequate or the Labor Compliance Program has exceeded its authority under this section.
(7) No contract payments shall be withheld solely on the basis of delinquent or inadequate payroll records after the required records have been produced.
(8) In addition to withholding contract payments based on delinquent or inadequate payroll records, penalties shall be assessed under Labor Code Section 1776(g) for failure to timely comply with a written request for certified payroll records. The assessment of penalties under Labor Code Section 1776(g) does require the prior approval of the Labor Commissioner under CCR Title 8 Section 1643.
F. On-Site Visits (CCR 16432(d) )
(1) The Awarding Agency’s LCPR shall conduct in-person inspections at the site or sites at which the contract for public work is being performed (“On-Site Visits”). On-Site Visits may be undertaken randomly or as deemed necessary by the LCPR, but shall be undertaken during each week that workers are present at sites at which the contract for public work is being performed. All On-Site Visits shall include visual inspection of:
a. The copy of the determination(s) of the Director of Industrial Relations of the prevailing wage rate of per diem wages required to be posted at each job site in compliance with Labor Code Section 1773.2, and b. The Notice of Labor Compliance Program Approval required to be posted at the job site in accordance with Code of Regulations Section 16429, listing a telephone number to call for inquiries, questions, or assistance with regard to the Labor Compliance Program and/or; c. On each job site that is subject to compliance monitoring and enforcement by the Department of Industrial Relations, the Awarding Agency shall post or require the prime contractor to post a Notice containing the language in Code of Regulations Section 16451(d).
(2) On-Site Visits may include other activities deemed necessary by the Awarding Agency’s LCPR to independently corroborate prevailing wage payments reported on payroll records furnished by contractors and subcontractors.
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14 G. Complaints
Upon receipt of a written complaint alleging that a contractor or subcontractor has failed to pay prevailing wages as required by the Labor Code, the LCPR shall do all of the following:
(1) Within 15 days after receipt of the complaint, send a written acknowledgment to the complaining party that the complaint has been received and identifying the name, address, and telephone number of the investigator assigned to the complaint;
(2) Within 15 days after receipt of the complaint, provide the affected contractor with the notice required under Labor Code section 1775(c) if the complaint is against a subcontractor; (3) Notify the complaining party in writing of the resolution of the complaint within ten days after the complaint has been resolved by the LCPR;
(4) Notify the complaining party in writing at least once every 30 days of the status of a complaint that has not been resolved by the LCPR; and
(5) Notify the complaining party in writing at least once every 90 days of the status of a complaint that has been resolved by the LCPR but remains under review or in litigation before another entity.
H. Review of Certified Payroll Records (CCR Sections 16432(b)
Payroll records furnished by contractors and subcontractors in accordance with section 16421(a)(3) above, and in a format prescribed at section 16401 of Title 8 of the California Code of Regulations, shall be reviewed by the Labor Compliance Program as promptly as practicable after receipt thereof, but in no event more than 30 days after such receipt. “Review” for this purpose shall be defined as inspection of the records furnished to determine if (1) all appropriate data elements identified in Labor Code Section 1776(a) have been reported; (2) certification forms have been completed and signed in compliance with Labor Code Section 1776(b); and (3) the correct prevailing wage rates have been reported as paid for each classification of labor listed thereon, with confirmation of payment in the manner and to the extent described in subpart (c) below.
I. Confirmation of Certified Payroll Records (CCR 16432(c) )
(1) “Confirmation” of payroll records furnished by contractors and subcontractors shall be defined as an independent corroboration of reported prevailing wage payments. Confirmation may be accomplished through worker interviews, examination of paychecks or paycheck stubs, direct confirmation of payments from third party recipients of “Employer Payments” (as defined at section 16000 of Title 8 of the California Code of Regulations), or any other reasonable method of corroboration. (2) For each month in which a contractor or subcontractor reports having workers on the project, confirmation of furnished records will be undertaken randomly for at least one worker for at least one weekly period within that month. Confirmation will also be undertaken whenever the Awarding Agency’s LCPR receives a complaint or other circumstances or information suggests that payroll records may be inaccurate.
J. Audit of Certified Payroll Records (CCR 16432(e) )
(1) Audits will be conducted by the Awarding Agency’s LCPR when it is determined that a violation of the Public Works Chapter of the Labor Code has occurred. Audits shall also be conducted at the request of the Labor Commissioner.
(2) An audit shall consist of a written summary reflecting prevailing wage deficiencies for each underpaid worker and include any penalties to be assessed under Labor Code Sections 1775 and 1813, as determined by the LCPR, after a comparison and consideration of the best information available as to the actual hours worked, amounts paid and classifications of workers employed in connection with the project. Such available information may include, but is not limited to:
a. Worker Interviews;
b. Complaints from workers or other interested persons; c. All time cards, cancelled checks, cash receipts, trust fund forms; Attachment "A"
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15 d. All books, documents, schedules, forms, reports, receipts or other evidences which reflect job assignments;
e. Work schedules by days and hours; and
f. The disbursement by way of cash, check, or in whatever form or manner, of funds to a person(s) by job classification and/or skill pursuant to the public works project.
(3) The audit record form as provided for in Code of Regulations Section 16432 Appendix B, accompanied by a brief narrative identifying the Bid Advertisement Date of the public work contract, a summary of the nature of the violation and the basis upon which the determination was made, presumptively demonstrates the sufficient detail that will enable the Labor Commissioner to determine the amount, if requested, of forfeiture under Code of Regulations Section 16437, draw reasonable conclusions as to the compliance with the requirements of the Public Works Chapter of the Labor Code and enable accurate computation of underpayments of wages and applicable penalties and forfeitures.
K. Notification and Informal Resolution (CCR 16432(f) )
After the Labor Compliance Program has determined that violations of the prevailing wage laws have resulted in the underpayment of wages and an audit has been prepared, notification shall be provided to the contractor and affected subcontractor of an opportunity to resolve the wage deficiency prior to a determination of the amount of forfeiture by the Labor Commissioner pursuant to these regulations. The contractor and affected subcontractor shall be provided at least 10 days following such notification to submit exculpatory information consistent with the “good faith mistake” factors set forth in Labor Code Section 1775(a)(2)(A)(i) and (ii). If, based upon the contractor's submission, the Labor Compliance Program reasonably concludes that the failure to pay the correct wages was a good faith mistake, and has no knowledge that the contractor and affected subcontractor have a prior record of failing to meet their prevailing wage obligations, the Labor Compliance Program shall not be required to request the Labor Commissioner for a determination of the amount of penalties to be assessed under Labor Code Section 1775 if the underpayment of wages to workers is promptly corrected and proof of such payment is submitted to the Labor Compliance Program. For each instance in which a wage deficiency is resolved in accordance with this regulation, the Labor Compliance Program shall maintain a written record of the failure of the contractor or subcontractor to meet its prevailing wage obligation.
The record shall identify the public works project, the contractor or affected subcontractor involved, and the gross amount of wages paid to workers to resolve the prevailing wage deficiency; and the record shall also include a copy of the Audit prepared pursuant to subpart (e) above along with any exculpatory information submitted to the Labor Compliance Program by the affected contractor or subcontractor.
L. Withholding Contract Payments When, After Investigation, It Is Established That Underpayment or Other Violation Has Occurred (CCR 16435.5)
(1) “Withhold” and “contracts” have the same meaning set forth in CCR Sections 16435(a) and 16435(b). (2) Where the violation is by a subcontractor, the general contractor shall be notified of the nature of the violation and reference made to its rights under Labor Code Section 1729. (3) “Amount equal to the underpayment” is the total of the following determined by payroll review, audit, or admission of contractor or subcontractor:
a. The difference between amounts paid workers and the correct General Prevailing Rate of Per Diem Wages, as defined in Labor Code Section 1773, and determined to be the prevailing rate due workers in such craft, classification or trade in which they were employed and the amounts paid; b. The difference between amounts paid on behalf of workers and the correct amounts of Employer Payments, as defined in Labor Code Section 1773.1 and determined to be part of the prevailing rate costs of contractors due for employment of workers in such craft, classification or trade in which they were employed and the amounts paid;
c. Estimated amounts of “illegal taking of wages”;
d. Amounts of apprenticeship training contributions paid to neither the program sponsor's training trust nor the California Apprenticeship Council;
e. Estimated penalties under Labor Code Sections 1775, 1776, and 1813.
Attachment "A"