Escondido City Council
February 28, 2024

Resolution No. 2024-16
Exhibit "A"

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16 (4) The withholding of contract payments when, after investigation, it is established that underpayment or other violations have occurred requires the prior approval of the Labor Commissioner under sections 16436 and 16437 of these regulations.

M. Provisions Relating to the Penalties Under Labor Code Sections 1775, 1776, 1777.7, 1813 and 1741

(1) Pursuant to Labor Code Section 1775, the contractor and any subcontractor under the contractor shall, as a penalty to the state or political subdivision on whose behalf the contract is made or awarded; forfeit not more than two hundred dollars ($200) for each day, or portion thereof, for each worker paid less than the prevailing wages:
a. The penalty may not be less than forty dollars ($40) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, unless the failure of the contractor or subcontractor to pay the correct rate of per diem wages was a good faith mistake and, if so, the error was promptly and voluntarily corrected when brought to the attention of the contractor or subcontractor. b. The penalty may not be less than eighty dollars ($80) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, if the contractor or subcontractor has been assessed penalties within the previous three years for failing to meet its prevailing wage obligations on a separate contract, unless those penalties were subsequently withdrawn or overturned. c. The penalty may not be less than one hundred twenty dollars ($120) for each calendar day, or portion thereof, for each worker paid less than the prevailing wage rate, if the Labor Commissioner determines that the violation was willful, as defined in Labor Code Section 1777.1. d. When the amount due under Labor Code Section 1775 is collected from the contractor or subcontractor, any outstanding wage claim under Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code against that contractor or subcontractor shall be satisfied before applying that amount to the penalty imposed on that contractor or subcontractor pursuant to Section 1775.

The prime contractor of the project is not liable for any penalties under Labor Code 1775(a) unless the prime contractor had knowledge of that failure of the subcontractor to pay the specified prevailing rate of wages to those workers or unless the prime contractor fails to comply with the requirements of Labor Code 1775 (b) (1-4).

(2) In the event that the contractor or subcontractor fails to comply subsequent to receipt of a written notice requesting the records enumerated in Labor Code Section 1776 (a) 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 Apprenticeship Standards or 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 Labor Code Section 1776 due to the failure of a subcontractor to comply with this section.

(3) In the case of overtime violations , Labor Code Section 1813 establishes that the contractor or subcontractor shall, as a penalty to the state or political subdivision on whose behalf the contract is made or awarded, forfeit twenty-five dollars ($25) for each worker employed in the execution of the contract by the respective contractor or subcontractor for each calendar day during which such worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week, in violation of the provisions of Article 3, Chapter 1, Part 7 of Division 2 of the Labor Code. The Awarding Agency shall take cognizance of all violations of Article 3 (Labor Code Sections 1810-1815).

(4) Pursuant to Labor Code Section 1777.5, the contractor and subcontractor are required to employ registered apprentices on public works projects. Each contractor and subcontractor shall keep an accurate payroll record relative to apprentices per Section 1776 of the Labor Code. The contractor or subcontractor found in violation of Labor Code Section 1777.5 shall forfeit as a civil penalty an amount not to exceed one hundred dollars ($100) for each full calendar day of noncompliance. Any contractor or subcontractor who knowingly commits subsequent violations of Labor Code Section 1777.5 within a three year period could face a civil penalty of not Attachment "A"

Resolution No. 2024-16
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17 more than three hundred dollars ($300) for each full day of noncompliance and the possibility of being denied the right to bid on, be awarded or perform work on any public works project for up to three years.

(5) Pursuant to Labor Code Section 1741(b), interest shall accrue on all due and unpaid wages at the rate described in subdivision (b) of Section 3289 of the Civil Code. The interest shall accrue from the date that the wages were due and payable, as provided in Article 1, Chapter 1, Part 7 (commencing with Section 1720) of Division 2 of the Labor Code, until the wages are paid.

(6) Pursuant to Labor Code Section 1741(c), the Labor Commissioner shall maintain a public list of the names of each contractor and subcontractor who has been found to have committed a willful violation of Section 1775 or to whom a final order, which is no longer subject to judicial review, has been issued. The list shall include the date of each assessment, the amount of wages and penalties assessed, and the amount collected. The list shall be updated at least quarterly, and the contractor's or subcontractor's name shall remain on that list until the assessment is satisfied, or for a period of three years beginning from the date of the issuance of the assessment, whichever is later.

N. Forfeitures Requiring Approval by the Labor Commissioner (8 CCR Section 16436)

(1) For purposes of 8 CCR Sections 16436 and 16437, “forfeitures” means the amount of wages, penalties, and forfeitures assessed by the Labor Compliance Program and proposed to be withheld pursuant to Labor Code section 1771.6(a), and includes the following: (1) the difference between the prevailing wage rates and the amount paid to each worker for each calendar day or portion thereof for which each worker was paid less than the prevailing wage rate by the contractor or subcontractor; and (2) penalties assessed under Labor Code Sections 1775, 1776 and 1813.
(2) If the aggregate amount of forfeitures assessed as to a contractor or subcontractor is less than $1000.00, the forfeitures shall be deemed approved by the Labor Commissioner upon service and the Labor Commissioner's receipt of copies of the following: (1) the Notice of Withholding of Contract Payments authorized by Labor Code Section 1771.6(a); (2) an Audit as defined in section 16432(e) of these regulations, and (3) a brief narrative identifying the Bid Advertisement Date of the contract for public work and summarizing the nature of the violation, the basis of the underpayment, and the factors considered in determining the assessment of penalties, if any, under Labor Code Section 1775.
(3) For all other forfeitures, approval by the Labor Commissioner shall be requested and obtained in accordance with section 16437 below.

O. Determination of Amount of Forfeiture by the Labor Commissioner (CCR Section 16437)

(1) Where the Labor Compliance Program requests a determination of the amount of forfeiture, the request shall include a file or report to the Labor Commissioner which contains at least the information specified in subparts (a) through (i) below. Appendix D is a suggested format for a Request for Approval of Forfeiture under this section.
a. Whether the public work has been accepted by the awarding body and whether a valid notice of completion has been filed, the dates if any when those events occurred, and the amount of funds being held in retention by the Awarding Body;
b. Any other deadline which if missed would impede collection; c. Evidence of violation, in narrative form;
d. Evidence of violation obtained under section 16432 of these regulations and a copy of the Audit prepared in accordance with section 16432(e) setting forth the amounts of unpaid wages and applicable penalties; e. Evidence that before the forfeiture was sent to the Labor Commissioner (A) the contractor and subcontractor were given the opportunity to explain why there was no violation, or that any violation was caused by good faith mistake and promptly corrected when brought to the contractor or subcontractor's attention, and (B) the contractor and subcontractor either did not do so or failed to convince the Labor Compliance Program of its position;
f. Where the Labor Compliance Program seeks not only wages but also a penalty as part of the forfeiture, and the contractor or subcontractor has unsuccessfully contended that the cause of violation was a good Attachment "A"

Resolution No. 2024-16
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18 faith mistake that was promptly corrected when brought to the contractor or subcontractor's attention, a short statement should accompany the proposal for a forfeiture, with a recommended penalty amount pursuant to Labor Code Section 1775(a);
g. Where the Labor Compliance Program seeks only wages or a penalty less than $50 per day as part of the forfeiture because the contractor or subcontractor has successfully contended that the cause of the violation was a good faith mistake that was promptly corrected when brought to the contractor or subcontractor's attention, the file should include the evidence as to the contractor or subcontractor's knowledge of his or her obligation, including the program's communication to the contractor or subcontractor of the obligation in the bid invitations, at the pre-job conference agenda and records, and any other notice given as part of the contracting process. With the file should be a statement, similar to that described in (6), and recommended penalty amounts, pursuant to Labor Code Section 1775(a); h. The previous record of the contractor and subcontractor in meeting their prevailing wage obligations; and i. Whether the Labor Compliance Program has been granted approval on only an interim or temporary basis under sections 16425 or 16426 above or whether it has been granted extended approval under section 16427 above.

(2) The file or report shall be served on the Labor Commissioner as soon as practicable after the violation has been discovered, and not less than 30 days before the final payment, but in no event not less than 30 days before the expiration of the limitations period set forth in Labor Code Section 1741. (3) A copy of the recommended forfeiture and the file or report shall be served on the contractor and subcontractor at the same time as it is sent to the Labor Commissioner. The Labor Compliance Program may exclude from the documents served on the contractor and subcontractor copies of documents secured from the contractor or subcontractor during an audit, investigation, or meeting if those are clearly referenced in the file or report. (4) The Labor Commissioner shall affirm, reject, or modify the forfeiture in whole or in part as to the wages and penalties due.
(5) The Labor Commissioner's determination of the forfeiture is effective on one of the two following dates:

a. For all programs other than those having extended authority under section 16427 of these regulations, on the date the Labor Commissioner serves by first class mail, on the Labor Compliance Program, on the Awarding Body if different, on the contractor and on the subcontractor, if any, an endorsed copy of the proposed forfeiture, or a newly drafted forfeiture statement which sets out the amount of forfeiture approved. Service on the contractor or subcontractor is effective if made on the last address supplied by the contractor or subcontractor in the record. The Labor Commissioner's approval, modification or disapproval of the proposed forfeiture shall be served within 30 days of receipt of the proposed forfeiture. b. For programs with extended authority under section 16427 above, approval is effective 20 days after the requested forfeitures are served upon the Labor Commissioner, unless the Labor Commissioner serves a notice upon the parties, within that time period, that this forfeiture request is subject to further review. For such programs, a notice that approval will follow such a procedure will be included in the transmittal of the forfeiture request to the contractor. If the Labor Commissioner notifies the parties of a decision to undertake further review, the Labor Commissioner's final approval, modification or disapproval of the proposed forfeiture shall be served within 30 days of the date of notice of further review.

P. Withholding Procedures after Forfeiture Determination by the Labor Commissioner

(1) The LCPR shall provide a Notice of Withholding of Contract Payments to the contractor and subcontractor, if applicable. The notice shall be in writing and shall describe the nature of the violation and the amount of wages, penalties and liquidated damages being withheld. Service of the notice shall be completed pursuant to Code of Civil Procedure Section 1013 by first-class and certified mail to the contractor and subcontractor, if applicable. The notice shall advise the contractor and subcontractor, if applicable, of the procedure for obtaining review of the withholding of contract payments. (2) The LCPR shall also serve a copy of the notice by certified mail to any bonding company issuing a bond that secures the payment of wages covered by the notice and to any surety on a bond, if their identities are known to the Awarding Agency.

Attachment "A"

Resolution No. 2024-16
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19 (3) 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. (4) A release bond under Civil Code Section 3196 may not be posted for the release of the funds being withheld for the violation of the prevailing wage law.
(5) The withholding of contract payments in accordance with Labor Code Section 1726 or 1771.5 shall be reviewable under Labor Code Sections 1771.6 (b) and 1742 and Code of Regulations sections 17201- 17270 in the same manner as if the notice of the withholding was a civil penalty order of the Labor Commissioner. If review is requested, the LCPR may request the Labor Commissioner to intervene to represent it.
(6) Pending a final order, or the expiration of the time period for seeking review of the notice of the withholding, the Awarding Agency shall not disburse any contract payments withheld.

Q. Settlement Meeting

(1) In accordance with Labor Code section 1742.1 (b), the LCPR shall, upon receipt of a request from the affected contractor or subcontractor within 30 days following the service of the Notice of Withholding of Contract Payments, afford the contractor or subcontractor the opportunity to meet with the LCPR to attempt to settle a dispute regarding the notice.
a. The settlement meeting may be held in person or by telephone and shall take place before the expiration of the 60-day period seeking a hearing as set forth below under the heading Request for Review of Notice of Withholding of Contract Payments;
b. No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, the settlement meeting is admissible or subject to discovery in any administrative or civil proceeding;
c. No writing prepared for the purpose, in the course of, or pursuant to, the settlement meeting, other than a final settlement agreement, is admissible or subject to discovery in any administrative or civil proceeding;
d. This opportunity to timely request an informal settlement meeting is in addition to the right to obtain a formal hearing; and
e. A settlement meeting may be requested even if a written Request for Review has already been made.

(2) Requesting a settlement meeting does not extend the 60-day period during which a formal hearing may be requested.

R. Request for Review of Notice of Withholding of Contract Payments

(1) An affected contractor or subcontractor may obtain review of a Notice of Withholding of Contract Payments under this chapter by transmitting a written request for a review hearing to the LCPR within 60 days after service of the Notice of Withholding of Contract Payments. The LCPR shall have the rights and responsibilities of the Enforcing Agency (Code of Regulations section 17202 (f)) in responding to the request for review, including but not limited to the obligations to serve notices, transmit the Request for Review to the hearing office, and provide an opportunity to review evidence in a timely manner, to participate through counsel in all hearing proceedings, and to meet the burden of establishing prima facie support for the Notice of Withholding of Contract Payments. If no hearing is requested within 60 days after the service of the Notice of Withholding of Contract Payments, the Notice of Withholding of Contract Payments shall become final.

(2) If a contractor or subcontractor seeks review of the LCPR’s enforcement action, the Labor Commissioner may intervene to represent the Awarding Agency, or to enforce relevant provisions of the Labor Code consistent with the practice of the Labor Commissioner, or both.

(3) Except in cases where the Labor Commissioner has intervened pursuant to subpart (b) above, the LCPR shall have the authority to prosecute, settle, or seek the dismissal of any Notice of Withholding of Contract Payments issued pursuant to Labor Code Section 1771.6 and any review proceeding under Labor Code Section 1742, without any further need for approval by the Labor Commissioner. Whenever the LCPR settles Attachment "A"

Resolution No. 2024-16
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20 in whole or in part or seeks and obtains the dismissal of a Notice of Withholding of Contract Payments or a review proceeding under Labor Code Section 1742, the LCPR shall document the reasons for the settlement or request for dismissal and shall make that documentation available to the Labor Commissioner upon request.

S. Review of Notice of Withholding of Contract Payments

(1) Within ten days following the receipt of the request for a review hearing, the LCPR shall transmit to the Office of the Director-Legal Unit the request for review and copies of the Notice of Withholding of Contract Payments, any audit summary that accompanied the notice, and a proof of service or other documents showing the name and address of any bonding company or surety that secures the payment of the wages covered by the notice.

(2) The LCPR shall be represented by an attorney in prevailing wage hearings conducted pursuant to Labor Code Section 1742(b) and Code of Regulations sections 17201 – 17270.

T. Determination and Ruling on the Review by the Department of Industrial Relations

(1) Upon receipt of a timely request, a hearing shall be commenced within 90 days before the director, who shall appoint an impartial hearing officer possessing the qualifications of an administrative law judge pursuant to subdivision (b) of Section 11502 of the Government Code. The appointed hearing officer shall be an employee of the department, but shall not be an employee of the Division of Labor Standards Enforcement. The contractor or subcontractor shall be provided an opportunity to review evidence, pursuant to Labor Code Section 1742 (b), to be utilized by the LCPR at the hearing within 20 days of the receipt by the LCPR of the written request for a hearing. Any evidence obtained by the LCPR subsequent to the 20-day cutoff shall be promptly disclosed to the contractor or subcontractor. The contractor or subcontractor shall have the burden of proving that the basis for the Notice of Withholding of Contract Payments is incorrect. The Notice of Withholding of Contract Payments shall be sufficiently detailed to provide fair notice to the contractor or subcontractor of the issues at the hearing. Within 45 days of the conclusion of the hearing, the director shall issue a written decision affirming, modifying, or dismissing the assessment. The decision of the director shall consist of a notice of findings, findings, and an order. This decision shall be served on all parties pursuant to Section 1013 of the Code of Civil Procedure by first-class mail at the last known address of the party on file with the LCP. Within 15 days of the issuance of the decision, the director may reconsider or modify the decision to correct an error, except that a clerical error may be corrected at any time. The director has adopted regulations setting forth procedures for hearings under this subdivision. These regulations are found in Code of Regulations sections 17201-17270.

(2) An affected contractor or subcontractor may obtain review of the decision of the director by filing a petition for a writ of mandate to the appropriate superior court pursuant to Section 1094.5 of the Code of Civil Procedure within 45 days after service of the decision. If no petition for a writ of mandate is filed within 45 days after service of the decision, the order shall become final. If it is claimed in a petition for writ of mandate that the findings are not supported by the evidence, abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record.

(3) A certified copy of a final order may be filed by the Labor Commissioner in the office of the clerk of the superior court in any county in which the affected contractor or subcontractor has property or has or had a place of business. The clerk, immediately upon the filing, shall enter judgment for the state against the person assessed in the amount shown on the certified order.

(4) A judgment entered pursuant to this procedure shall bear the same rate of interest and shall have the same effect as other judgments and shall be given the same preference allowed by law on other judgments rendered for claims for taxes. The clerk shall not charge for the service performed by him or her pursuant to this section.

(5) This procedure shall provide the exclusive method for review of a decision by the LCPR to withhold contract payments pursuant to Section 1771.5.

Attachment "A"

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21 U. Settlement Authority

Except in cases where the Labor Commissioner has intervened pursuant to Code of Regulations Section 16439 (b), The LCPR shall have the authority to prosecute, settle, or seek the dismissal of any Notice of Withholding of Contract Payments issued pursuant to Labor Code Section 1771.6 and any review proceeding under Labor Code Section 1742, without any further need for approval by the Labor Commissioner. Whenever the LCPR settles in whole or in part or seeks and obtains the dismissal of a Notice of Withholding of Contract Payments or a review proceeding under Labor Code Section 1742, The LCPR shall document the reasons for the settlement or request for dismissal and shall make that documentation available to the Labor Commissioner upon request.

V. Deposits of Penalties and Forfeitures Withheld

(1) Where the involvement of the Labor Commissioner has been limited to a determination of the actual amount of penalty, forfeiture, or underpayment of wages and the matter has been resolved without litigation by or against the Labor Commissioner, the LCPR shall deposit penalties and forfeitures with the Awarding Agency. (2) Where collection of fines, penalties, or forfeitures results from administrative proceedings or court action to which the Labor Commissioner and Awarding Agency are both parties, the fines, penalties or forfeitures shall be divided between the general funds of the State and Awarding Agency as the Hearing Officer or court may decide.
(3) All penalties recovered in administrative proceedings or court action brought by or against the Labor Commissioner, and to which the Awarding Agency is not a party, shall be deposited in the General Fund of the State of California.
(4) All wages and benefits which belong to a worker and are withheld or collected from a contractor or subcontractor, either by withholding or as a result of administrative hearings or any court action and which have not been paid to the worker or irrevocably committed on the worker’s behalf to a benefits fund, shall be deposited with the Labor Commissioner, who will handle such wages and benefits in accordance with Labor Code Section 96.7.

W. Debarment Policy

It is the policy of the Awarding Agency that the public works prevailing wage requirements set forth in the California Labor Code, Section 1720-1861, be strictly enforced. In furtherance thereof, construction contractors and subcontractors found to be repeat violators of the California Labor Code shall be referred to the Labor Commissioner for debarment from bidding on or otherwise being awarded any public work contract, within the state of California, for the performance of construction and/or maintenance services for the period not to exceed three (3) years in duration. The duration of the debarment period shall depend upon the nature and severity of the labor code violations and any mitigating and/or aggravating factors, which may be presented at the hearing conducted by the Labor Commissioner for such purpose.

X. Disposition of Forfeited Sums

(1) The prevailing wage recovery process of this Labor Compliance Program is established pursuant to Labor Code Section 1775 which provides that out of any funds withheld, recovered, or both, there shall first be paid the amount due each worker notwithstanding the filing of any Stop Notice by any person pursuant to Civil Code Section 3179, et seq. Thus, all workers employed on the public works project who are paid less than the prevailing wage rate shall have PRIORITY over all Stop Notices filed against the prime contractor.

(2) In the event that there are "insufficient funds" available in the prime contractor account to pay the total amount of prevailing wage violations and penalty amounts due, the unpaid prevailing wages shall have PRIORITY STATUS and must be paid first, pursuant to Labor Code Section 1775. Furthermore, if insufficient funds are withheld, recovered, or both, to pay each underpaid worker in full, the money shall be prorated among all workers affected. From the amount recovered by the Awarding Agency, the wage claim shall be satisfied prior to the amount being applied to penalties. If insufficient money is recovered to pay each worker in full, the money shall be prorated among all workers. Wages for workers who cannot be located shall be placed in the Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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22 Industrial Relations Unpaid Wage Fund and held in trust for the workers pursuant to Section 96.7. Penalties shall be paid into a general fund or other fund of the Awarding Agency's choosing.

Y. Reporting of Willful Violations to The Labor Commissioner

(1) If an investigation reveals that a willful violation of the Labor Code has occurred, the LCPR will make a written report to the Labor Commissioner which shall include:
a. An audit consisting of a comparison of payroll records to the best available information as to the actual hours worked; and
b. The classification of workers employed on the public works contract.

(2) Six types of willful violations are reported as follows:
a. For Failure to Comply with Prevailing Wage Rate Requirements Failure to comply with prevailing wage rate requirements as set forth in the Labor Code and Code of Regulations is determined a willful violation whenever less than the stipulated basic hourly rate is paid to trades workers, or if overtime, holiday rates, fringe benefits, and/or employer payments are paid at a rate less than stipulated. The facts related to such willful violations may result in a determination that the contractor intended to defraud its employees of their wages. b. For Falsification of Payroll Records, Misclassification of Work, and/or Failure to Accurately Report Hours of Work
Falsification of payroll records and failure to accurately report hours of work is characterized by deliberate underreporting of hours of work; underreporting the headcount; stating that the proper prevailing wage rate was paid when, in fact, it was not; clearly misclassifying the work performed by the worker; and any other deliberate and/or willful act which results in the falsification or inaccurate reporting of payroll records.

Such violations are deemed to be willful violations committed with the intent to defraud.

c. For Failure to Submit Certified Payroll Records
Refusing to comply with a request for certified payroll reports or substantiating information and records as contained in Section IV.1. will be determined to be a willful violation of the Labor Code. Additionally, refusing to correct inaccuracies or omissions that have been discovered will also be determined to be willful violation of the Labor Code.

d. For Failure to Pay Fringe Benefits
Fringe benefits are defined as the amounts stipulated for employer payments or trust fund contributions and are determined to be part of the required prevailing wage rate. Failure to pay or provide fringe benefits and/or make trust fund contributions in a timely manner is equivalent to payment of less than the stipulated wage rate and shall be reported to the Awarding Agency and Labor Commissioner as a willful violation, upon completion of an investigation and audit.

e. For Failure to Pay the Correct Apprentice Rates and/or Misclassification of Workers as Apprentices
Failure to pay the correct apprentice rate or classifying a worker as an apprentice when not properly registered is equivalent to payment of less than the stipulated wage rate and shall be reported to the Awarding Agency and Labor Commissioner as a willful violation, upon completion of an investigation and audit.

f. For the Taking of Kickbacks

Accepting or extracting kickbacks from employee wages under Labor Code Section 1778 constitutes a felony and may be prosecuted by the appropriate enforcement agency.

Attachment "A"

Resolution No. 2024-16
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23 VIII. Apprenticeship

(1) The duties of the LCPR with respect to apprenticeship standards are as follows:
a. Inform contractors and subcontractors bidding public works about apprenticeship requirements, b. Send copies of awards to the Department of Industrial Relations as required under Section 1773.3 of the Labor Code, and;
c. Refer complaints and promptly report suspected violations of apprenticeship requirements to the Division of Labor Standards Enforcement.

(2) The LCPR shall be responsible for enforcing prevailing wage pay requirements for apprentices consistent with the practice of the Labor Commissioner, including the following:
a. That any contributions required pursuant to Labor Code Section 1777.5(m) are paid to the appropriate entity;
b. That apprentices are paid no less than the prevailing apprentice rate; c. That workers listed and paid as apprentices on the certified payroll records are duly registered as apprentices with the Division of Apprenticeship Standards; and d. Requiring that the journeyman prevailing wage rate be paid to any worker who is not a duly registered apprentice and for all hours in excess of the maximum ratio permitted under Labor Code Section 1777.5(g), as determined at the conclusion of the employing contractor or subcontractor's work on the public works contract.

Attachment "A"

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24 APPENDIX A

Definitions

A. "Withhold" means to cease payments by the Awarding Agency, or others who pay on its behalf, or agents, to a prime or 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.

B. "Contracts" except as otherwise provided by agreement, means 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 pursuant to Labor Code Sections 1720, 1720.2, 1720.3, 1720.4, 1771, and 1771.5; C. "Delinquent payroll records" means those not submitted on the date set in the contract; D. "Inadequate payroll records" are any one of the following:
• A record lacking any of the information required by Labor Code Section 1776; • A record which contains all of the required information but which is not certified, or certified by someone who is not an agent of the contractor or subcontractor;
• A record remaining uncorrected for one (1) payroll period, after the LCPR 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 one percent (1%) 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 Code of Regulations section 16401.

E. "Amount equal to the underpayment" is the total of the following determined by payroll review, audit, or admission of the contractor or subcontractor:
• The difference between the amounts paid to workers and the correct General Prevailing Wage Rate of Per Diem as defined in Code of Regulations section 16000 and 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;
• The difference between the amounts paid on behalf of workers and the correct amounts of Employer Payments, as defined in Code of Regulations section 16000 and 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; • Estimated amounts of "illegal taking of wages,";
• Amounts of apprenticeship training contributions paid to neither the program sponsor’s training trust nor the California Apprenticeship Council; and
• Estimated penalties under Labor Code sections 1775, 1776 and 1813.

F. "Forfeitures" means the amount of wages, penalties, and forfeitures assessed by the Awarding Agency and proposed to be withheld pursuant to Labor Code section 1771.6(a), and includes the following:
• The difference between the prevailing wage rates and the amount paid to each worker for each calendar day or portion thereof for which each worker was paid less than the prevailing wage rate by the contractor or subcontractor;
• Penalties assessed under Labor Code Sections 1775, 1776 and 1813.

If the aggregate amount of forfeitures assessed as to a contractor or subcontractor is less than $1000.00, the forfeitures shall be deemed approved by the Labor Commissioner pursuant to Code of Regulations Section 16436(b).

G. "Failing to pay the correct rate of prevailing wages" means those public works violations which the Labor Commissioner has exclusive authority to approve before they are recoverable by the Labor Compliance Program, and which are appealable by the contractor in court or before the Director of the Department of Industrial Relations under Labor Code Section 1742, and 1771.6 pursuant to the Code of Regulations Sections 17201 through 17270. Regardless of what is defined as prevailing "wages" in contract terms, noncompliance with the following are considered failures to pay prevailing wages:
• Nonpayment of items defined as "Employer Payments" and "General Prevailing Rate of Per Diem Wages" in Code of Regulations Section 16000 and Labor Code Section 1771. • Payroll records required by Labor Code Section 1776;
Attachment "A"

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25 • Labor Code Section 1777.5 but only insofar as the failure consists of paying apprentice wages lower than the journey level rate to a worker who is not an apprentice as defined in Labor Code Section 3077, working under an apprentice agreement in a recognized program;
• Labor Code Section 1778, Kickbacks;
• Labor Code Section 1779, Fee for Registration;
• Labor Code Sections 1813, 1815, and Code of Regulations Section 16200 (a) (3) (F) overtime for work over eight (8) hours in any one (1) day or forty (40) hours in any one (1) week. All work performed on Saturday, Sunday, and/or a holiday shall be paid pursuant to the prevailing wage determination.

Attachment "A"

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26 APPENDIX B

Initial Review of Certified Payroll Records

Step 1- Each Payroll Record received by the LCPR for processing is date stamped as to the date received by the Awarding Agency.

Step 2- Within 30 days of receipt, the LCPR will compare the payrolls received to the list of payrolls required for the period.

For any payroll that is not included or is incomplete, a 10-day letter is prepared by the LCPR and placed into tracking mode.

A Payment Application Hold & Notification of Temporary Withholding Letter will be prepared & sent to the Awarding Agency and all affected Contractors and Subcontractors.

Step 3- The LCPR will begin the initial review of Certified Payroll Records that have been received. Each Contractor or Subcontractor will have a comparison spreadsheet that has been prepared at the initiation of the contract which will have displayed all prevailing wage determination data, based on the Trades, Classifications, Fringe Benefits and Apprentice requirements identified as being utilized by the company.

Step 4- The LCPR will compare the comparison spreadsheet against the Certified Payroll to determine if the gross prevailing wage for the Trade and Classification meets with the prevailing wage of that Trade and Classification. Check of certified payroll for hours worked by day/week to determine if Overtime, Holiday, Travel or Subsistence pay was to be paid. If so, check the payroll to ensure the correct prevailing wage was paid. Check for the proper utilization of Apprentices and that correct prevailing wages have been paid to Apprentices.

Step 5- For each month in which a contractor or subcontractor reports having workers on the project, confirmation of furnished payroll records will be undertaken randomly for at least one worker for at least one weekly period within that month. The LCPR will compare confirmation/backup records to corroborate prevailing wage payments.

Step 6- Upon completion of initial review, provided no initial violation has been detected, Certified Payroll Records are logged into the file system of the project.

Step 7- If an initial violation or potential violation has been detected by the LCPR, they will proceed to a “Confirmation” of Certified Payroll Records.

Step 8- The LCPR will complete a labor compliance review and enforcement summary that indicates the status of the initial review and confirmation for each company for the period, if any of the contractors or subcontractors Certified Payrolls have not been received, and the status of any 10 day letters that have been prepared.

Step 9- When the Awarding Agency or LCPR receives a complaint of suspected violation(s), an accusation or any alleged wrong doing; the LCPR will proceed to a “Confirmation” of Certified Payroll Records.

After review of the initial complaint the Initial Complaint Information form will be completed. The basic information required to initiate a complaint include:
• Name of the complainant, including address and phone number; • Name of the alleged violating contractor;
• Name of the prime contractor (if different); and
• Nature of the complaint.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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27 APPENDIX C

Confirmation and Audit of Certified Payroll Records

Step 1- By written request the LCPR will notify the affected contractor of any potential violation and request further payroll records for confirmation and corroboration of prevailing wage payments as correct. Confirmation of Certified Payroll Reports may be accomplished through:
• Examination of Paychecks or Paycheck stubs;
• Confirmation/Documentation of “Employer Payments” as made to third party recipients; • Worker Interviews; and
• Whatever other reasonable methods, as needed, to corroborate the reported prevailing wage payments.

Step 2- If after review and corroboration of the payroll records it is determined that no violation has occurred or documentation is received that reflects corrections and restitution payments have been made to the employees, all records will be filed into the file system of the project.

Step 3- If after review and corroboration of the payroll records it is determined that a violation has occurred and no documentation has been received to reflect that the violation has been corrected the LCPR will initiate a comprehensive audit to ascertain the amount of wages due the worker(s) as well as the statutory penalties that are to be assessed.

Step 4- A comprehensive audit is based on the LCPR’s review of all documents and issues pertaining to the complaint or violation and has arrived at a decision concerning issues that must be audited. The LCPR will prepare & request documents listed on the Referral Checklist for a full audit. Documents needed to process the audit may include but are not limited to the following:
• Certified Payroll Records
• Fringe Benefit Statement/Statement of Employer Payments • Time Cards
• Copy of Checks
• Inspector Logs
• Prevailing Wage Rates Spreadsheet for Company Concerned. • Special Wage Determination(s) for the trades and crafts on the Certified Payroll • Listing of Holidays
• Travel and Subsistence Information
• List of Indentured Apprentices (by name and classification) • Any Special Instructions.

Step-5- An Audit Spreadsheet is created containing the following information:
• Auditor will make notes when audit entries are different from what is contained in the Certified Payroll. • Any instance that data was entered that seems to be in contradiction to any other record. Examples:
 Premium pay not paid for work on Saturday, Sunday or Holiday.  Travel and subsistence not paid.
 Apparent underpayments where the contractor appears to be paying less than the required prevailing wages.  Hours obtained from time cards or records other than the Certified Payroll.  Individuals shown on the Certified Payroll as “apprentices” that are not properly registered.

Results of the Audit upon completion will be transferred to the Awarding Agency’s Investigations Department.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

311
Item8.
28 APPENDIX D

Public Works Case Audits

Step 1- After the LCPR completes the review of certified payroll, initiates contact with the affected contractor and produces the initial 10 day letter(s) without resolution; the LCPR shall meet with the Investigations Team to determine if the project file contains sufficient detail to request an Investigation and/or Audit. Provided there is sufficient probable cause to believe that a violation has or may have occurred the Investigation Supervisor (IS) assigns the case to an Investigation Auditor (IA), who initiates a complete audit of the c ertified payroll to determine the nature of the violation(s), ascertain the amount of wages due the worker(s) as well as the statutory penalties that are to be assessed.

Step 2- The primary responsibility of the Investigation Team is to complete case au dits, relieving the LCPR from this lengthy process in as many cases as possible. The initiation of comprehensive audit requirements is based on the IA’s review of all documents and issues pertaining to the complaint and has arrived at a decision concerning issues that must be audited. Should issues arise during the course of the audit, the IA must resolve the issue in question and provide specific resolutions. Requests for audits by the LCPR will contain the documents needed to complete the audit. (Not all documents on this list may be available or needed in all audits):
• Case Log Summary to date
• All correspondence to try and address the violation
• Certified Payroll Records
• Fringe Benefit Statement
• Prime Contract
• Sub-Contract (if applicable)
• Scope of Work
• General Conditions
• Notice of Completion
• Amount of Held Funds
• Time Cards
• Copy of Checks
• Contractor Logs
• Inspector Logs
• Prevailing Wage Cheat Sheets
• Wage Determination(s) for the trades and crafts on the Certified Payroll • Listing of Holidays
• Travel and Subsistence Information
• List of Indentured Apprentices (by name and classification) • Any Special Instructions.

Case Logs are created on a “Word” document that will be titled with the case number assigned. (This document will be kept current during the progress of the audit). The IA will make notes on all activities done relative to the audit / investigation.

Step 3- Results of the Case Audit upon completion will be documented and reviewed by the IS to determine validity.

Step 4- At the point the IS had determined that there is sufficient evidence to determine that a violation has occurred, a Notice of Intent to Request Forfeiture of Monies will be sent to the relative parties notifying them of the findings.

Step 5- At the completion of the contractor’s appeal rights if no response to the Notice of Intent is received, from any affected party, the case file will be prepared and submitted to the Department of Industrial Relations (DIR) for forfeiture determination.

Step 6- Once the determination and approval of forfeiture is received by the Investigation Team a Notice of Withholding Contract Payments is produced and mailed first class and certified to the a ffected parties, to include the Awarding Agency, Construction Manager and Bonding Company.

Step 7- A settlement meeting is held by the Awarding Agency upon timely request of the contractor or other parties.

Step 8- A hearing is held by DIR upon timely request of the contractor or other parties.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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Item8.
29 APPENDIX E

Investigation Case Processing

Step 1- Written complaints or investigation requests are received by the Investigations Supervisor (IS). After a review of the complaint or audit if a determination is made that an investigation is required, the Investigation Supervisor (IS) will assign an Investigation Auditor (IA) to obtain the initial information to investigate the complaint.

Step 2 - The Investigations Department will prepare the Case Binder to include, but not limited to, the following:
• Contractor’s name and case number
• Project Name
• Awarding Agency
• Prime Contractor (if different)
• Original complaint(s) and supporting documentation
• Copy of 1st bid advertisement
• Contract
• Sub Contract (if applicable)
• Second tier sub contract (if applicable)
• CSLB print outs on the contractors
• Entity information (Secretary of State print-outs, fictitious business statement, etc.) • Prevailing Wage rates in effect and predetermined increases received from DLSR. • Certified Payroll Records received from defendant contractor • Certified Payrolls obtained from different sources (AB, prime contractor, etc. as required) • Inspector Logs
• Audit and Audit notes
• Prior Violations
• Copies of executed Notice(s) to withhold and supporting documents • Correspondence (filed in order mailed or received)
Additional information and documents will be inserted as needed consistent with the facts of the investigation. (Example would be if Certified Payroll(s) were not submitted timely and penalties pursuant to Labor Code 1776(h) were imposed, the Request for Certified Payroll, including the certified receipt and the green return receipt, become evidence, supporting the penalty assessment and should be tabbed).

Step 3- Processing the Investigation
This provides the general steps to be taken in processing an investigation. As the facts of each investigation are different, not all steps need to be taken in every case or in the order presented.

An investigation of a public works case is a conscientious attempt to ascertain all pertinent facts relative to a suspected violation(s) based on a complaint, an accusation or any alleged wrong doing. The Investigation Team is required to exercise sound discretion in employing the investigative method or methods best suited to the type of violation involved. • The IA will assign a case number and begin the Case Log. • The IA will determine the Statutes of Limitations for action against the contractor and indicate the date on the Case Log. The statutes compel the LCP to complete the investigation, issue the proper notices to the parties, prepare and submit the case all within the time limits.
• The IA will research to see if any previous public work cases were filed against affected contractor. Specific attention is given to previous complaints filed against the same project. The results of the research are to be recorded on the Case Log and will be provided to the Department of Industrial Relations (DIR) if a Request for Forfeiture is needed.
• The IA will prepare the initial case notifications and requests. These notices and requests are the initial mailing package and consist of the:
 Notification of Complaint Filed. 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. The Notice of Complaint Filed is sent to complainant and all other relative parties. This Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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30 form advises all parties (or potential parties) that the Awarding Agency’s LCP has initiated a formal investigation.
 An Employee Inquiry Form. Mailed to complainant and all other workers identified on certified payroll reports in possession of the Awarding Agency’s LCP for the affected contractor.  A formal request for information/records is prepared and mailed to all affected parties, if not previously received as part of the LCPR’s audit. Examples of items that may still be needed include the following:
• Inspectors Logs
• Contract(s)
• Copies of the performance, Labor/Material and/or payment bonds • Copy of 1st bid advertisement
• Page(s) (from the contract) listing the prevailing wage rate(s) on this contract. • Page(s) (from the contract advising the contractor of legal requirements to pay the prevailing wages.
• Notice of Completion (if/when filed)
• Date project began
• Project completion (or estimated completion)
• Amount of money being held by the Awarding Agency.
• Location of the project.
• Certified Payroll Records.
• Fringe Benefit Statement/Statement of Employer Payments • Letter requesting supporting documentation (time cards and canceled checks, etc.) • The IA will verbally contact all affected parties and the complainant to notify them that a complaint has been received and an investigation is commencing into the merits of the alleged violation of the Labor Code. • The IA will attempt to identify and contact anyone who can verify the accuracy of the allegations and obtain permission for a written affidavit.
• The IA will keep the complainant informed timely throughout the entire investigative process but no less than:
 Notify the complaining party in writing of the resolution of the complaint within ten days after the complaint has been resolved by the Investigations Team;
 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 Investigations Team; and
 Notify the complaining party in writing at least once every 90 days of the status of a complaint that has been resolved by the Investigations Team but remains under review or in litigation before another entity. • Upon receipt of all information and records the IA’s audit will include the following steps:
 The IA will take note of any data that does not seem to match.  The IA will compare the hours reported in the complaint and find out if they match.  The IA will review the Fringe Benefit Statement and compare this statement with the Certified Payroll(s) to insure that the amounts claimed on the statement are reflected in the Certified Payroll(s).  Time Cards: Are the time cards original – written in different hands, at different times, or do they appear to be written by the same person at a later time?
 Cancelled checks: Review checks submitted to be sure that the documents appear to have been cleared through a bank. Look at the check numbers and make sure that they correspond to the check numbers reported on the Certified Payroll(s).
 Certified Payroll(s): Review the information reported on the Certified Payroll(s)  Determine if the information provided complies with the requirements of Labor Code 1776(c)  Review the Certified Payroll to identify any additional issues such as:
• Correct utilization of reported apprentices
• Obvious violations (failure to pay overtime over 8 hours per day or ratio violations within certain crafts or failure to report wages for “owners” or “partners”). • Hourly Rate of Pay: The rate that should be reflected in this column is the “total hourly wage” paid to (and on behalf of) the employee.
• Check the certification statement for compliance with the Labor Code.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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31 • Review the Fringe Benefits Statement. If the contractor is claiming employer contributions, these contributions must be documented on the Fringe Benefit Statement. The contractor must provide proof of the payments in prevailing rate of per diem wages. • Provided the Certified Payrolls are accepted being accurate, and violations are substantiated, audit the certified payroll(s) to determine the amount of wages and penalties that are due. • If false Certified Payroll(s) are indicated, note this fact for possible filing of a felony complaint for violation of Labor Code 1778.
• Indicate any failure to submit or faulty submission of Certified Payroll Reports. If the Certified Payrolls are not submitted, or if ALL the information is not provided, AND the time for submission has lapsed, initiate penalties pursuant to Labor Code 1776(h) to compel compliance. • If the IA discovers potential violations of the Labor Code not pertaining to Public Works law, such as payment with insufficient fund checks, not providing paycheck stubs, apprenticeship issues, false Certified Payroll or kickbacks, the IA shall submit these findings to the appropriate enforcing agency. • At the point the IA has determined that there is sufficient evidence that a violation has occurred, a Notice of Intent to Request Forfeiture will be prepared and submitted to all affected parties notifying them of our findings and offering them an opportunity to meet. The purpose of the pre-withhold meeting is to review and discuss the initial audit results with the contractor(s), inform the contractor(s) of his/her due process rights, schedule a due date (10 days) for any mitigating evidence to be submitted by the contractor(s). • After review and consideration of any mitigating evidence submitted by the contractor, the audit findings will be finalized. A letter is sent to the contractor with directions on how to make the payments along with the finalized audit. In the event that a settlement cannot be reached, the case is then forwarded to the State Labor Commissioner for approval of the “Request for Approval of Forfeitures and Penalties”. • If the aggregate amount of forfeitures assessed to a contractor or subcontractor is less than $1,000.00, the forfeitures shall be deemed approved by the Labor Commissioner upon service and the Labor Commissioner's receipt of copies of the following:
 The Notice of Withholding of Contract Payments authorized by Labor Code Section 1771.6(a);  An Audit as defined in section 16432(e) of the Regulations, and  A brief narrative identifying the Bid Advertisement Date of the contract for public work and summarizing the nature of the violation, the basis of the underpayment, and the factors considered in determining the assessment of penalties, if any, under Labor Code Section 1775. • If the aggregate amount of forfeitures assessed to a contractor or subcontractor is $1,000.00 or more the IA must submit, in writing, a Request for Approval of Forfeiture to the State Labor Commissioner. The file or report shall be served on the Labor Commissioner as soon as practicable after the violation has been discovered, and not less than 30 days before the final payment, but in no event not less than 30 days before the expiration of the limitations period set forth in Labor Code Section 1741.
 The assessment shall be served not later than 18 months after the filing of a valid notice of completion in the office of the county recorder in each county in which the public work or some part thereof was performed, or not later than 18 months after acceptance of the public work, whichever occurs last.  A copy of the Request for Approval of Forfeiture and Penalties shall be served on the Contractor, Subcontractor, bonding company or surety and the Awarding Agency. • The Labor Commissioner's determination of the forfeiture is effective on the date the Labor Commissioner serves by first class mail, on the Labor Compliance Program, on the Awarding Agency if different, on the contractor and on the subcontractor, if any, an endorsed copy of the proposed forfeiture, or a newly drafted forfeiture statement which sets out the amount of forfeiture approved. Service on the contractor or subcontractor is effective if made on the last address supplied by the contractor or subcontractor in the record. The Labor Commissioner's approval, modification or disapproval of the proposed forfeiture shall be served within 30 days of receipt of the proposed forfeiture.
• Upon receipt of approval, the IA will prepare and issue a Notice of Withholding of Contract Payments against the affected contract(s). The Notice of Withholding of Contract Payments and the Notice of Right to Obtain Review procedures pursuant to Labor Code Section 1742 shall be served on the contractor(s) and bonding companies of the affected contractor(s) by certified mail and first class mail.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

315
Item8.
32 • In accordance with Labor Code sections 1742 and 1771.6, an affected contractor or subcontractor may obtain review of the Notice of Withholding of Contract Payments by transmitting a written request to the office of the Awarding Agency’s LCP that appears on the Notice within 60 days after service of the notice. • In accordance with Labor Code section 1742.1 (c), the Awarding Agency’s LCP shall, upon receipt of a request from the affected contractor or subcontractor within 30 days following the service of this Notice of Withholding of Contract Payments, afford the contractor or subcontractor the opportunity to meet with the Awarding Agency’s designee to attempt to settle a dispute regarding the notice. The settlement meeting may be held in person or by telephone and shall take place before the expiration of the 60-day period seeking a hearing as set forth below. No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, the settlement meeting is admissible or subject to discovery in any administrative or civil proceeding. No writing prepared for the purpose, in the course of, or pursuant to, the settlement meeting, other than a final settlement agreement, is admissible or subject to discovery in any administrative or civil proceeding. This opportunity to timely request an informal settlement meeting is in addition to the right to obtain a formal hearing, and a settlement meeting may be requested even if a written Request for Review has already been made. Requesting a settlement meeting, however, does not extend the 60-day period during which a formal hearing may be requested. A written request to meet with the Awarding Agency’s designee to attempt to settle a dispute regarding this notice must be transmitted to the Awarding Agency.
• A Request for Review either shall clearly identify the Notice of Withholding of Contract Payments from which review is sought, including the date of the notice, or it shall include a copy of the notice as an attachment, and shall also set forth the basis upon which the notice is being contested. In accordance with Labor Code section 1742, the contractor or subcontractor shall be provided an opportunity to review evidence to be utilized by the Awarding Agency at the hearing within 20 days of receipt by the Awarding Agency of the written Request for Review. • The Awarding Agency shall make evidence available for review within 20 days of its receipt of the Request for Review; provided that, this deadline may be extended by written request or agreement of the Affected Contractor or Subcontractor. The Awarding Agency’s failure to make evidence available for review as required by Labor Code section 1742(b) and Rule 24 (CCR 17224) shall preclude the Awarding Agency from introducing such evidence in proceedings before the Hearing Officer or the Director. • Within ten (10) days following the receipt of a Request for Review, the Awarding Agency shall transmit to the Office of the Director - Legal Unit, the Request for Review and copies of the Assessment or Notice of Withholding of Contract Payments, any Audit Summary that accompanied the Assessment or Notice, and a Proof of Service or other document showing the name and address of any bonding company or Surety. • Within ten (10) days following the receipt of a Request for Review, the Awarding Agency shall also notify the Affected Contractor or Subcontractor of its opportunity and the procedures for reviewing evidence to be utilized by the Awarding Agency at the hearing on the Request for Review. • Once the Request for Review is transmitted to DIR, DIR will contact all parties to begin Pre-Hearing Meetings, Settlement Meetings and a Hearing, if necessary.
• Failure by a contractor or subcontractor to submit a timely Request for Review will result in a final order which shall be binding on the contractor and subcontractor, and which shall also be binding, with respect to the amount due, on a bonding company issuing a bond that secures the payment of wages and a surety on a bond. Labor Code section 1743
• In accordance with Labor Code section 1742(d), a certified copy of a final order may be filed by the Labor Commissioner in the office of the clerk of the superior court in any county in which the affected contractor or subcontractor has property or has had a place of business. The clerk, immediately upon filing, shall enter judgment for the State against the person assessed in the amount shown on the certified order.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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Item8.
33 APPENDIX F

Prevailing Wage Hearing Regulations

The following listing is provided to facilitate the identification of regulatory sections that may bear upon the duties and responsibilities of the Labor Compliance Program. The actual text of each section should be accessed on-line at http://www.dir.ca.gov/dlse/CCR.htm in order to ensure that the most current wording of each regulatory section is relied upon.

CALIFORNIA CODE OF REGULATIONS
TITLE 8, CHAPTER 8, SUBCHAPTER 6, SECTIONS 17201 through 17270

ARTICLE 1. GENERAL
17201. Scope and Application of Rules.
17202. Definitions.
17203. Computation of Time and Extensions of Time to Respond or Act. 17204. Appointment of Hearing Officers; Delegation of Appointment Authority to Chief Counsel. 17205. Authority of Hearing Officers..
17206. Access to Hearing Records.
17207. Ex Parte Communications.
17208. Intervention and Participation by Other Interested Persons. 17209. Representation.
17210. Proper Method of Service.
17211. Filing and Service of Documents by Facsimile or Other Electronic Means. 17212. Administrative Adjudication Bill of Rights.

ARTICLE 2. ASSESSMENT OR NOTICE AND REQUEST FOR REVIEW 17220. Service and Contents of Assessment or Notice of Withholding of Contract Payments. 17221. Opportunity for Early Settlement.
17222. Filing of Request for Review.
17223. Transmittal of Request for Review.
17224. Disclosure of Evidence.
17225. Withdrawal of Request for Review; Reinstatement. 17226. Dismissal or Amendment of Assessment or Notice of Withholding of Contract Payments. 17227. Early Disposition of Untimely Assessment, Withholding, or Request for Review. 17228. Finality of Assessment or of Withholding of Contract Payments When No Timely Request for Review is Filed; Authority of Awarding Body to Disburse
Withheld Funds.
17229. Finality of Notice of Withholding of Contract Payments; Authority of Awarding Body to Recover Additional Funds.

ARTICLE 3. PREHEARING PROCEDURES
17230. Scheduling of Hearing Date; Continuances and Tolling. 17231. Prehearing Conference.
17232. Consolidation and Severance.
17233. Prehearing Motions; Cut-Off Date.
17234. Evidence by Affidavit or Declaration.
17235. Subpoena and Subpoena Duces Tecum.
17236. Written Notice to Party in Lieu of Subpoena.
17237. Depositions and Other Discovery.

ARTICLE 4. HEARINGS
17240. Notice of Appointment of Hearing Officer; Objections. 17241. Time and Place of Hearing.
17242. Open Hearing; Confidential Evidence and Proceedings; and Exclusion of Witnesses.

Attachment "A"

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Exhibit "A"

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34 17243. Conduct of Hearing.
17244. Evidence Rules; Hearsay.
17245. Official Notice.
17246. Failure to Appear; Relief from Default.
17247. Contempt and Sanctions.
17248. Interpreters.
17249. Hearing Record; Recording of Testimony and Other Proceedings. 17250. Burdens of Proof on Wages and Penalties.
17251. Liquidated Damages.
17252. Oral Argument and Briefs.
17253. Conclusion of Hearing; Time for Decision.

ARTICLE 6. DECISION OF THE DIRECTOR
17260. Decision.
17261. Reconsideration.
17262. Final Decision; Time for Seeking Review.
17263. Preparation of Record for Review.
17264. Request for Participation by Director in Judicial Review Proceeding.

ARTICLE 7. TRANSITIONAL RULE
17270…Applicability of these Rules to Notices Issued Between April 1, 2001 and June 30, 2001.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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Item8.
35 APPENDIX G

FIELD REPRESENTATIVE (FR) MINIMUM STANDARDS

These protocols have been developed to provide the Field Representative (FR) with minimum standards to be followed while in the process of conducting interviews on construction project sites. In all instances, the Awarding Agency’s FR will conduct themselves in a professional and authoritative manner. The Awarding Agency’s FR’s will be familiar with applicable provisions of the Labor Code in order to converse with administrators or construction personnel of any level.

A. On-Site Visitations
Each construction project is unique and all of the listed protocols will not necessarily be utilized, precisely as stated, during the course of each site visit. However, in most cases the Awarding Agency FR’s will employ the basic concepts expressed in each protocol to accomplish the purpose of their site visit in an efficient manner.

1. All FR’s visiting any construction site are required to wear a visible picture ID (badge), and to properly identify themselves as such. Additionally, all FR personnel are required to wear hard hats, safety vests and safety shoes.

2. Safety is the paramount factor for any site visit to any construction project. FR’s will not enter any area that appears unsafe. Areas of concern include, but are not limited to, grading operations, trenching and work within a trench, hazardous materials abatement, concrete placement, demolition or the removal roofing materials. FR’s are expected to exercise reasonable caution at all times.

3. Should FR’s witness what they consider to be a potentially unsafe condition, they will contact the site inspector or job superintendent of their findings immediately and make note on the site visitation interview form of what they observed. Upon return to the office, the FR will report their findings to the Awarding Agency’s Labor Compliance Officer (LCO).

4. When inspections are conducted on Owner-occupied sites, the FR shall, upon arrival:
a. Check in at the Administrative office;
b. Identify themselves and state the purpose of the visit; and c. Sign in if required to do so
If the opportunity presents itself and, dependent on the nature of any questions, the FR will take a few minutes to answer any questions and discuss activities or the services provided by the Awarding Agency’s LCP with administrative level personnel, but will not seek personnel out.

5. Prior to any interviewing, the FR shall:
a. Check in at the site superintendent’s trailer;
b. Take a few minutes to talk with the Superintendent;
c. Develop a working relationship;
d. Gain information pertaining to the project such as:
i. Duration or phasing;
ii. What contractors are on-site that day;
iii. Work activities in process or anticipated, etc.

6. In the event there is not a construction trailer or job superintendent, the FR will locate each contractor’s foreman.

7. If for some reason the FR is denied access to the site, or informed that they may not interview the workmen:
a. FR will promptly and politely remove themselves;
b. FR will immediately contact the Awarding Agency’s LCO, by phone, to report the incident.
c. Make a note of this occurrence on the site visitation interview form along with all available details such as:
i. Time of day;
ii. Name of party denying access;
iii. Stated reason for denying access, etc.

FR will include this note in their report to the Awarding Agency’s LCO.

Attachment "A"

Resolution No. 2024-16
Exhibit "A"

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Item8.
36 8. There will be times when the site superintendent is somewhere on the site and/or there is no contractor present in the trailer. The FR will check in at the Inspector of Record (IOR) trailer. If all trailers are empty or locked, FR will try to locate the site superintendent or IOR, on the site prior to commencing interviewing. If the FR is unable to locate the superintendent or IOR they will proceed with interviews after speaking with each contractor’s foremen.

9. FR will check to see that the following are displayed in the contractor’s trailer or the Administrative Office:
a. Equal Opportunity Employment Posters
b. Required jobsite posting NOTICE that the project is a prevailing wage public work c. Prevailing wage sheets available for review by the tradesmen d. Sign-in Log
e. Listing of subcontractors on site
If any of these items are not readily visible, the FR will remind the CM, GM, PM that these postings are part of the contractual and legal requirements. On subsequent visits, the FR will make sure that these items are posted or readily available upon request. If these items are not posted or readily available, the FR will advise the Awarding Agency LCPR, CM, GM, PM of the non-compliance with the law and the contract requirements.

10. The Field Representative shall visit all sites on an unannounced random weekly basis. During inclement weather contact will be made with the Prime/General Contractor or Construction Manager in an attempt to determine if there will be any activity at the site that day.

B. Interviewing

1. Once the FR has checked in and obtains access to the site:
a. FR will locate the Foreman for each contractor on the project prior to conducting the interviews.
b. Identify themselves as the Awarding Agency LCPR acting on behalf of the Awarding Agency; and, if necessary
c. Explain that the FR activity is a legal requirement placed on the Awarding Agency as a result of the ongoing construction work.

2. The FR shall conduct all interviews on a non-interference basis. The contractor’s foreman may want to accompany the FR during the interview process, such action is not to be considered as interference, however interference does result when a foreman restricts questioning or the specific tradesmen that may be interviewed.

3. A minimum amount of the workers’ time will be taken for interview purposes. When making the decision regarding whom to interview, the FR will look for tradespersons working in clusters. For instance, several painters, electricians, roofers, etc. working in one area. a. Workers will be approached individually, in a non-threatening, professional manner; b. The FR will identify themselves;
c. Inform workers why they are there and that they need only a few minutes of their time to ask some very generic questions to ensure that they are receiving the proper rate of pay for the type of work they are doing.
d. The FR will not endanger themselves or any tradesperson’s safety in conducting these interviews.
e. The FR will not insist that someone on a scaffold 40 feet in the air come down for an interview or attempt to interview tradesmen actively involved in activities such as a concrete pour, crane operation, etc.
f. The FR will not ask anyone to stand by until they can get to them; they will be allowed to continue working until the FR can get to them individually.

4. These interviews are random; two or three tradespersons for each contractor/subcontractor is more than sufficient for one visit. Any persons missed are usually picked up on the next visit. If only one tradesperson is at the site, then that person will be interviewed, if possible. Thirty minutes of interviewing per site is typically sufficient, depending upon the site size and/or number of subcontractors present.

5. Interviews will not be conducted during the Tradesmen’s breaks or lunch periods.

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37 C. Site Visitation Interview Form

1. The FR will use the Site Visitation Interview form and ask each person the following:
a. Name;
b. Last four digits of their social security number;
c. Employer;
d. Title (trade);
e. Rate of pay; and
f. Task being performed at the time of interview

2. Should someone decline to speak with the FR, those wishes will be respected. If someone asks if this is union-related, the FR will advise them that they work as the Awarding Agency’s LCPR on the project.

3. If someone refuses to disclose his/her social security number, those wishes will be respected.

The FR will assure that person that all information given is kept strictly confidential and make the attempt to get his/her complete name.

4. If someone does not know their rate of pay, FR will ask for an approximate amount. If the response is, “Whatever prevailing wage is”, that is what will be indicated on the form.

5. If a worker states that he/she does not know what contractor they are working for, the FR will track down the site superintendent and ask his assistance in determining the responsible contractor. (Workers who don’t know their employing contractor are often an indication of an “underground” crew being employed by the contractor.

6. If someone indicates that he/she is an apprentice, they will be asked their current apprentice level. If he/she is not sure, they will be asked how many years he/she has been apprenticed in the specific trade or to approximate, and this will be indicated on the interview form.

7. If someone is interviewed that does not speak English and the FR cannot communicate in the appropriate language, the FR will try to locate a coworker who can interpret. If an entire crew is unable to speak English and there is no interpreter, this will be included on the report.

8. The FR is there to collect information only, tradesmen will not be told how to do their jobs or that the amount of hourly wage they are reporting is below the determined wage. The FR will not solicit or invite the tradesmen to initiate a complaint through them or give them the impression that it is within the FR duties. The FR will explain that for reasons of confidentiality, they should contact the Awarding Agency’s LCP office and speak with the LCPR and a business card will be left with them.

9. Within the Site Observations portion of the interview form the FR will give as much information as they can that pertains to the work in progress. The FR will approximate the total number of tradesmen on the site and ask each foreman how many employees he has on the project that day.

10. All tradesmen will be thanked for their time.

D. Site Superintendents Daily Reports

1. A copy of the site superintendent’s daily reports for the previous week will be obtained and submitted to the LCPR no later than the end of each workweek.

E. Reporting

1. All original interview forms and daily reports shall be submitted to the LCPR no later than the end of each workweek.

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GRANT AGREEMENT BETWEEN THE STATE OF CALIFORNIA (DEPARTMENT OF WATER RESOURCES) AND THE CITY OF ESCONDIDO, AGREEMENT NO. 4600009575
PROPOSITION 1E ROUND 1 STORMWATER FLOOD MANAGEMENT GRANTS CALIFORNIA WATER CODE §83002 and PUBLIC RESOURCES CODE §5096.827 ET SEQ AMENDMENT 3

THIS GRANT AGREEMENT is entered into by and between the Department of Water Resources of the State of California, herein referred to as the "State" and the City of Escondido, a public agency, in the County of San Diego, State of California, duly organized, existing, and acting pursuant to the laws thereof, herein referred to as the "Grantee", which parties do hereby agree as follows:

1. PURPOSE. State shall provide a grant from the Disaster Preparedness and Flood Prevention Bond Act of 2006 (Public Resources Code (PRC) §5096.827 et seq.) to Grantee to assist in financing the project associated with the City of Escondido – Lake Wohlford Dam Replacement Project for the Stormwater Flood Management (SWFM) Program, collectively referred to as “SWFM Program.”

2. TERM OF GRANT AGREEMENT. The term of this Grant Agreement begins on the date this Grant Agreeme nt is executed by the State, and terminates on June 30, 2026, or when all of the Parties’ obligations under this Grant Agreement are fully satisfied, whichever occurs earlier. Execution date is the date the State signs this Grant Agreement indicated on page 7.

3. GRANT AMOUNT. The maximum amount payable by State under this Grant Agreement shall not exceed $14,900,000.00. Reimbursement of grant funds may be claimed after December 21, 2011.

4. GRANTEE COST SHARE. The reasonable costs for this Grant Agreement are estimated to be $38,000,000.

Grantee shall provide a Cost Share (Funding Match) in the amount of at least 50% of the total project cost.

Grantee’s Funding Match is estimated to be $19,380,000 Grantee’s Funding Match may include cost share performed after September 30, 2008. Funding Match consists of non-State funds including in-kind services.

In-kind services are defined as work performed (i.e., dollar value of non-cash contributions) by the Grantee (and potentially other parties involved) directly related to the execution of the sco pe of work (examples:
volunteer services, equipment use, and facilities). For Funding Match guidance, see Exhibit G.

5. GRANTEE'S RESPONSIBILITY. Grantee shall faithfully and expeditiously perform or cause to be performed all project work as described in Exhibit A (Work Plan) and in accordance with Exhibit B (Schedule) and Exhibit C (Budget). Grantee shall comply with all of the terms and condition s of this Grant Agreement and applicable PRC and CWC requirements.

6. BASIC CONDITIONS. State shall have no obligation to disburse money for a project under this Grant Agreement unless and until Grantee has satisfied the following conditions in accordance with the Disaster Preparedness and Flood Prevention Bond Act of 2006.
a) Grantee demonstrates the availability of sufficient funds to complete the project, as stated in the Grant Award/Commitment Letter, by submitting the most recent 3 years of audited financial statements. b) For the term of this Grant Agreement, Grantee submits timely Quarterly Progress Reports as required by Paragraph 16, “Submission of Reports.”
c) Grantee submits all deliverables as specified in Paragraph 16 of this Grant Agreement and in Exhibit A. d) For each project, prior to the commencement of construction or implementation activities, Grantee shall submit the following to the State:
1) Final plans and specifications certified by a California Registered Civil Engineer as to compliance for each approved project as listed in Exhibit A of this Grant Agreement. 2) Work that is subject to the California Environmental Quality Act (CEQA) and or environmental permitting shall not proceed under this Grant Agreement until the following actions are perfor med:
i. Grantee submits all applicable environmental permits as indicated on the Environmental Information Form to the State,
ii. Documents that satisfy the CEQA process are received by the State, iii. State has completed its CEQA compliance review as a Responsible Agency, and iv. Grantee receives written concurrence from the State of Lead Agency’s CEQA document(s) and State notice of verification of environmental permit submittal.

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State’s concurrence of Lead Agency’s CEQA documents is fully discretionary and shall constitute a condition precedent to any work (i.e., construction or implementation activities) for which it is required. Once CEQA documentation has been completed, State will consider the environmental documents and decide whether to continue to fund the project or to require changes, alterations or other mitigation. Grantee must also demonstrate that it has complied with all applicable requirements of the National Environmental Policy Act by submitting copies of any environmental documents, including environmental impact statements, Finding of No Significant Impact, mitigation monitoring programs, and environmental permits as may be required prior to beginning construction/implementation.
3) A monitoring plan as required by Paragraph 21, “Project Monitoring Plan Requirements.”

7. DISBURSEMENT OF GRANT FUNDS. Following the review of each invoice, State will disburse to Grantee the amount approved, subject to the availability of funds through normal State processes. Notwithstanding any other provision of this Grant Agreement, no disbursement shall be required at any time or in any manner which is in violation of, or in conflict with, federal or state laws, rules, or regulations, or which may require any rebates to the federal government, or any loss of tax-free status on state bonds, pursuant to any federal statute or regulation. Funds will be disbursed by State in response to each approved invoice in accordance with the Exhibit C. Any and all money disbursed to Grantee under this Grant Agreement and any and all interest earned by Grantee on such money shall be used solely to pay Eligible Costs.

8. ELIGIBLE PROJECT COST. Grantee shall apply State funds received only to eligible Project Costs in accordance with applicable provisions of the law and Exhibit C. Eligible project costs include the reasonable costs of studies, engineering, design, land and easement acquisition, legal fees, preparation of environmental documentation, environmental mitigations, monitoring, and project construction. Work performed after the date of grant award, December 21, 2011, shall be eligible for reimbursement.

Reasonable administrative expenses may be included as Project Costs and will depend on the complexity of the project preparation, planning, coordination, construction, acquisitions and implementation.

Reimbursable administrative expenses are the necessary costs incidentally but directly related to the project including the portion of overhead and administrative expenses that are directly related to the project included in this Grant Agreement in accordance with the standard accounting practices of the Grantee.

Advanced funds will not be provided. Costs that are not reimbursable with grant funds cannot be counted as cost share. Costs that are not eligible for reimbursement include but are not limited to:
a) Costs, other than those noted above, incurred prior to the award date of the Grant. b) Operation and maintenance costs, including post construction performance and monitoring costs. c) Purchase of equipment not an integral part of a project. d) Establishing a reserve fund.
e) Purchase of water supply.
f) Monitoring and assessment costs for efforts required after project construction is complete. g) Replacement of existing funding sources for ongoing programs. h) Travel and per diem costs.
i) Support of existing agency requirements and mandates (e.g. punitive regulatory agency requirements). j) Purchase of land in excess of the minimum required acreage necessary to operate as an integral part of a project, as set forth and detailed by engineering and feasibi lity studies, or land purchased prior to the effective date of the grant award with the State.
k) Payment of principal or interest of existing indebtedness or any interest payments unless the debt is incurred after execution of this Grant Agreement, the State agrees in writing to the eligibility of the costs for reimbursement before the debt is incurred, and the purposes for which the debt is incurred are otherwise eligible costs. However, this will only be allowed as Grantee Cost Share (i.e. Funding Match) l) Overhead not directly related to project costs.

9. METHOD OF PAYMENT. After the disbursement requirements in Paragraph 6 “Basic Conditions” are met, State will disburse the whole or portions of the Grant Amount to Grantee, following receipt from Grantee via US mail or Express mail delivery of a “wet signature” invoice or an electronic invoice certified and DocuSign Envelope ID: 3E3E9A8D-5098-43C8-940D-7BDC5CFC0096 Attachment "A"

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transmitted via DocuSign for costs incurred, including Cost Share, and timely Quarterly Progress Reports as required by Paragraph 16, “Submission of Reports.”

Invoices submitted by Grantee shall include the following information:
a) Costs incurred for work performed in implementing the project during the period identified in the particular invoice.
b) Costs incurred for any interests in real property (land or easements) that have been necessarily acquired for a project during the period identified in the particular invoice for the implementation of a project.
c) Appropriate receipts and reports for all costs incurred. d) Invoices shall be submitted on forms provided by State and shall meet the following format requirements:
1) Invoices must contain the date of the invoice, the time period covered by the invoice, and the total amount due.
2) Invoices must be itemized based on the categories (i.e., tasks) specified in the Exhibit C. The amount claimed for salaries/wages/consultant fees must include a calculation formula (i.e., hours or days worked times the hourly or daily rate = the total amount claimed). 3) One set of sufficient evidence (i.e., receipts, copies of checks, time sheets) must be provided for all costs included in the invoice.
4) Each invoice shall clearly delineate those costs claimed for reimbursement from the State’s grant amount, as depicted in Paragraph 3, “Grant Amount” and those costs that represent Grantee’s costs, as applicable, in Paragraph 4, “Grantee Cost Share.” 5) Original signature and date (in ink) of Grantee’s Project Manager.

Payment will be made no more frequent than monthly, in arrears, upon receipt of an invoice bearing the Grant Agreement number.

10. WITHHOLDING OF GRANT DISBURSEMENT BY STATE. If State determines that a project is not being implemented in accordance with the provisions of this Grant Agreement, or that Grantee has failed in any other respect to comply with the provisions of this Grant Agreement, and if Grantee does not remedy any such failure to State’s satisfaction, State may withhold from Grantee all or any portion of the Grant Amount and take any other action that it deems necessary to protect its interests. State may requi re the Grantee to immediately repay all or any portion of the disbursed grant amount with interest, consistent with its determination. State may consider Grantee’s refusal to repay the requested disbursed grant amount a contract breach subject to the default provisions in Paragraph 12, “Default Provisions.”

11. CONTINUING ELIGIBILITY. Grantee must meet the following ongoing requirements to remain eligible to receive State grant funds:
a) Timely adoption of an IRWM Plan that meets the requirements contained in Part 2.2 of Division 6 of the CWC, commencing with Section 10530.
b) An urban water supplier that receives grant funds governed by this Grant Agreement shall maintain compliance with the Urban Water Management Planning Act (CWC§10610 et. seq.);

12. DEFAULT PROVISIONS. Grantee will be in default under this Grant Agreement if any of the following occur:
a) Breach of this Grant Agreement, or any supplement or amendment to it, or any other agreement between Grantee and State evidencing or securing Grantee’s obligations. b) Making any false warranty, representation, or statement with respect to this Grant Agreement. c) Failure to operate or maintain project in accordance with this Grant Agreement. d) Failure to make any remittance required by this Grant Agreement. e) Failure to comply with Labor Compliance Plan (LCP) requirements. f) Failure to meet any of the requirements set forth in Paragraph 11, “Continuing Eligibility.”

Should an event of default occur, State may do any or all of the following:
g) Declare the Grant be immediately repaid, with interest, which shall be equal to State of California general obligation bond interest rate in effect at the time of the default.

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h) Terminate any obligation to make future payments to Grantee. i) Terminate the Grant Agreement.
j) Take any other action that it deems necessary to protect its interests .

13. PERMITS, LICENSES, APPROVALS, AND LEGAL OBLIGATIONS: Grantee shall be responsible for ensuring any and all permits, licenses, and approvals required for performing their obligations under this Grant Agreement are obtained, and shall comply with CEQA (PRC Section 21000 et seq.) and other applicable federal, State and local laws, rules, and regulations, guidelines, and requirements for each project described in Exhibit A of this Grant Agreement.

14. RELATIONSHIP OF PARTIES. Grantee is solely responsible for design, construction, and operation and maintenance of project within this Grant Agreement. Review or approval of plans, specifications, bid documents, or other construction documents by State is solely for the purpose of proper administration of grant funds by State and shall not be deemed to relieve or restrict responsibilities of Grantee under this Grant Agreement.

15. GRANTEE REPRESENTATIONS. Grantee accepts and agrees to comply with all terms, provisions, conditions, and commitments of this Grant Agreement, including all incorporated documents, and to fulfill a ll written assurances, declarations, representations, and statements made by Grantee in the application, documents, amendments, and communications filed in support of its request for The Disaster Preparedness and Flood Prevention Bond Act of 2006 financing.

16. SUBMISSION OF REPORTS. The submittal and approval of all reports is a requirement for the successful completion of this Grant Agreement. Reports shall meet generally accepted professional standards for technical reporting and shall be proof read for content, numerical accuracy, spelling, and grammar prior to submittal to State. All reports shall be submitted to the State’s Project Manager, and shall be submitted in both electronic and hard copy forms. If requested, Grantee shall promptly provide any additional information deemed necessary by State for the approval of reports. Reports shall be presented in the formats described in the applicable portion of Exhibit E. The timely submittal of reports is a requirement for initial and continued disbursement of State funds. Submittal and subsequent approval by the State, of a Project Completion Report is a requirement for the release of any funds retained for such project.

 Quarterly Progress Reports: Grantee shall submit Quarterly Progress Reports to meet the State’s requirement for disbursement of funds. Quarterly Progress Reports shall be sent via e -mail, to the State’s Project Manager. Quarterly Progress Reports shall, in part, provide a brief description of the work performed, Grantees activities, milestones achieved, any accomplishments and any problems encountered in the performance of the work under this Grant Agreement during the reporting period.

The first Quarterly Progress Report should be submitted to the State no later than September 30, 2013 with future reports then due on successive three-month increments based on the invoicing schedule and this date.
 Project Completion Reports: Grantee shall prepare and submit to State a separate Project Completion Report for each project included in Exhibit A. Grantee shall submit a Project Completion Report within ninety (90) calendar days of project completion. Each Project Completion Report shall include , in part, a description of actual work done, any changes or amendments to each project, and a f inal schedule showing actual progress versus planned progress, copies of any final documents or reports generated or utilized during a project, and how the project will further the goals of the IRWM Plan and identify any changes to the IRWM Plan, as a result of project implementation. The Project Completion Report shall also include, if applicable, certification of final project by a registered civil engineer, consistent with Standard Condition D-15,”Final Inspections and Certification of Registered Civil Engineer.” A DWR “Certification of Project Completion” form will be provided by the State.  Post-Performance Reports: Grantee shall submit Post-Performance Reports. Post-Performance Reports shall be submitted to State within ninety (90) calendar days after the first operational year of a project has elapsed. This record keeping and reporting process shall be repeated annually for a total of 10 years after the completed project begins operation.

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17. PROJECT PERFORMANCE AND ASSURANCES. Grantee agrees to faithfully and expeditiously perform or cause to be performed all project work as described in the final plans and specifications for each project under this Grant Agreement and implement the project in accordance with applicable provisio ns of the law. In the event State finds it necessary to enforce this provision of this Grant Agreement in the manner provided by law, Grantee agrees to pay all costs incurred by State including, but not limited to, reasonable attorneys' fees, legal expenses, and costs.

18. LABOR COMPLIANCE. Grantee agrees to comply with all applicable California Labor Code requirements, including prevailing wage provisions.

19. OPERATION AND MAINTENANCE OF PROJECT. For the useful life of construction and implementation project and in consideration of the Grant made by State, Grantee agrees to ensure or cause to be performed the commencement and continued operation of the project, and shall ensure or cause the project to be operated in an efficient and economical manner; shall ensure all repairs, renewals, and replacements necessary to the efficient operation of the same are provided; and shall ensure or cause the same to be maintained in as good and efficient condition as upon its construction, ordinary and reasonable wear and depreciation excepted. The State shall not be liable for any cost of such maintenance, management, or operation. Grantee may be excused from operations and maintenance only upon the written approval of the State. For purposes of this Grant Agreement, “useful life” means period during which an asset, property, or activity is expected to be usable for the purpose it was acquired or implemented; “operation costs” include direct costs incurred for material and labor needed for operations, utilities, insurance, and similar expenses, and “maintenance costs” include ordinary repairs and replacements of a recurring nature necessary for capital assets and basic structures and the expenditure of funds necess ary to replace or reconstruct capital assets or basic structures. Refusal of Grantee to ensure operation and maintenance of the project in accordance with this provision may, at the option of State, be considered a breach of this Grant Agreement and may be treated as default under Paragraph 12, “Default Provisions.”

20. STATEWIDE MONITORING REQUIREMENTS. Grantee shall ensure that all projects that include groundwater monitoring requirements are consistent with the Groundwater Quality Monitoring Act of 2001 (Pa rt 2.76 (commencing with Section 10780) of Division 6 of CWC) and, where applicable, that projects that affect water quality shall include a monitoring component that allows the integration of data into statewide monitoring efforts, including where applicable, the Surface Water Ambient Monitoring Program carried out by the State Water Resources Control Board.

21. PROJECT MONITORING PLAN REQUIREMENTS. Exhibit A of this Grant Agreement shall contain activities to develop and submit to State a Project Monitoring Plan. Along with the Attachment 6 Project Performance Measures Table requirements outlined on page 19 of the Proposition 1E Round 1 SWFM Proposal Solicitation Package, the Project Monitoring Plan should also include:
a) Baseline conditions.
b) Brief discussion of monitoring systems to be utilized. c) Methodology of monitoring.
d) Frequency of monitoring.
e) Location of monitoring points.

A Project Monitoring Plan shall be submitted to the State prior to disbursement of grant funds for construction or monitoring activities.

See Exhibit F (“Requirements for Data Submittal”) for web links and information regarding other State monitoring and data reporting requirements.

22. NOTIFICATION OF STATE. For each project, Grantee shall promptly notify State, in writing, of the following items:
a) Grantee agrees that no substantial change in the scope of a project will be undertaken until written notice of the proposed change has been provided to State and State has given written approval for such change. Substantial changes generally include changes to the wording/scope of work, schedule or term, and budget. See Exhibit G for guidance on Agreement Amendment requirements.

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b) Any public or media event publicizing the accomplishments and/or results of this Grant Agr eement and provide the opportunity for attendance and participation by State’s representatives. Grantee shall make such notification at least fourteen (14) calendar days prior to the event. c) Completion of work shall include final inspection of project by a Registered Civil Engineer, as determined and required by State, and in accordance with Standard Condition D -15 (Final Inspections and Certification of Registered Civil Engineer). Furthermore, the Grantee shall provide the State the opportunity to participate in the inspection. Grantee shall make such notification at least fourteen (14) calendar days prior to the final inspection.

23. NOTICES. Any notice, demand, request, consent, or approval that either party desires or is required to give to the other party under this Grant Agreement shall be in writing. Notices may be transmitted by any of the following means: (i) by delivery in person; (ii) by certified U.S. mail, return receipt requested, postage prepaid; (iii) by “overnight” delivery service; provided that next-business-day delivery is requested by the sender; or (iv) by electronic means. Notices delivered in person will be deemed effective immediately on receipt (or refusal of delivery or receipt). Notices sent by certified mail will be deemed effective given ten (10) calendar days after the date deposited with the U. S. Postal Service. Notices sent by overnight delivery service will be deemed effective one business day after the date deposited with the delivery service.

Notices sent electronically will be effective on the date of transmission. Notices shall be sent to the below addresses. Either party may, by written notice to the other, designate a different address that shall be substituted for the one below.

24. PERFORMANCE EVALUATION. Upon completion of this Grant Agreement, Grantee’s performance will be evaluated by the State and a copy of the evaluation will be placed in the State file and a copy sent to the Grantee.

25. PROJECT REPRESENTATIVES. The Project Representatives during the term of this Grant Agreement are as follows:

Department of Water Resources City of Escondido
Carmel K. Brown Christopher McKinney
Manager, Division of Regional Assistance Director of Utilities P.O. Box 942836
Sacramento CA 94236-0001
201 North Broadway
Escondido, CA 92025
Phone: (916) 651-9226 Phone: (760) 839-4090
e-mail: [email protected] e-mail: [email protected]

Direct all inquiries to the Project Manager:

Department of Water Resources City of Escondido
Eddie Pech Angela Morrow
Division of Regional Assistance
770 Fairmont Avenue, Suite 200
Glendale, CA 91203
Deputy Director of Utilities
Construction and Engineering
1521 S. Hale Ave.

Escondido, CA 92029
Phone: (818) 621-9318 Phone: (760) 839-6290 ext.7030
e-mail: [email protected] e-mail: [email protected]

Either party may change its Project Representative or Project Manager upon written notice to the other party.

26. STANDARD PROVISIONS. The following Exhibits are attached and made a part of this Grant Agreement by this reference:

Exhibit A – Work Plan
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Exhibit B – Schedule
Exhibit C – Budget
Exhibit D – Standard Conditions
Exhibit E – Report Formats and Requirements
Exhibit F – Requirements for Data Submittal
Exhibit G – Guidelines for Grantees
Exhibit H – Grantee Resolution

IN WITNESS WHEREOF, the parties hereto have executed this Grant Agreement.

STATE OF CALIFORNIA

DEPARTMENT OF WATER RESOURCES

______________________________
Carmel K. Brown
Manager, Financial Assistance Branch
Division of Regional Assistance
Date__________________________

CITY OF ESCONDIDO

______________________________
Christopher W. Mckinney
Director of Utilities

Date__________________________

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5/10/2023
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EXHIBIT A

WORK PLAN
Project Description
In 2004, the Federal Energy Regulatory Commission (FERC) directed the City of Escondido to complete an evaluation of the potential for liquefaction-induced failure to occur at Lake Wohlford Dam. The geotechnical study conducted for the City of Escondido found that a liquefaction-induced mudflow slide of the upstream slope of the dam would likely occur as a result of the design earthquake loading. As a result, in 2007, FERC began requiring the City of Escondido to maintain Lake Wohlford at least 20 feet below the spillway crest level for dam safety purposes, which results in 57% reduction of its 6,500 AF capacity (2,800 AF).

Following FERC’s determination, the City of Escondido began pursuing alternatives to retrofit Lake Wohlford Dam in order to restore the lake to its full design capacity. An Environmental Opinion prepared in 2008 determined that the least environmentally damaging way to address potential envi ronmental impacts associated with mitigating the liquefaction potential from Lake Wohlford Dam would be to construct a new roller compacted concrete (RCC) dam downstream of the existing dam.

Therefore, the Lake Wohlford Dam Replacement Project will assist with construction and implementation of a RCC dam to replace the existing Lake Wohlford Dam structure. The dam proposed to replace the existing Lake Wohlford Dam would contain five major components: dam structure, spillway, outlet works, road reali gnment, and dam access. Specifically, the proposed project would involve construction of a new dam immediately downstream of the existing dam. The top portion of the existing dam would be removed and the material di sposed. A new spillway would be cut through the north abutment of the new dam. A temporary access road may need to be constructed from Oakvale Road east to Guejito Road for use by local residents/businesses and fire trucks.

Tasks
The following sections ou tline the specific activities that will be performed to implement the Lake Wohlford Dam Replacement Project.

Row (a) Direct Project Administration
Task 1 – Project Administration
Project administration will involve coordination meetings with staff, project partners, and consultants as necessary.

Deliverables that will be produced from these project administration efforts include updated budgets, schedules, and change orders.

Task 2 – Labor Compliance Program
Details of the LCP will be included within the Lake Wohlford Dam Replacement Project’s quarterly reports.

The City of Escondido Utilities has established and adopted Labor Compliance Program (LCP) in accordance with CCR §16421-16439, which has been approved by the California Department of Industr ial Relations (DIR); therefore, no budget is included here.

Task 3 – Reporting
Reporting will include three components as listed below and be performed by staff members from the City of Escondido under the Project Administration task (see Task 1). The Project Monitoring Plan and quarterly reports will be generated by the Utilities Construction Manager, approved by the Deputy Director of Utilities Construction and Engineering, and sent and filed by the Department Assistant. Quarterly invoices will be generat ed by Utilities Analyst and the Management Analyst II, and approved by the Construction Manager and Deputy Director. The Project Completion Report will be generated by the Utilities Construction Manager and Deputy Director, and sent and filed by the Depart ment Assistant.

Row (b) Land Purchase Easement
A land purchase easement is not applicable to this project.

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Row (c) Planning/Design/Engineering/Environmental Documentation Task 4 – Assessment and Evaluation
All technical documents, data, and studies have been completed for the Lake Wohlford Dam Replacement Project . Two main studies used to evaluate the dam replacement alternatives are:
 The Lake Wohlford Dam Replacement Geotechnical Data report presents details of a subsurface exploration program that was performed as a part of an evaluation of alternatives to replace the existing Lake Wohlford Dam.  The Evaluation of Alternatives for Replacement of Lake Wohlford Dam report w presents the results of an evaluation to identify a preferred dam type to replace the existing Lake Wohlford Dam. Reviews of the results by the selected consultant of the final design documents for the dam determined that an RCC dam was constructible.

Assessment and Evaluation Deliverables
Evaluation of Alternatives for Replacement of Lake Wohlford Dam Lake Wohlford Dam Replacement Geotechnical Data Report

Task 5 – Final Design
As discussed below, final design for this project will include 30%, 60%, 90%, and 100% designs. 30% design efforts will include preliminary siting of project components, including the replacement dam, spillway, outlet tunnel, and other factors of major co nsideration. The 30% design will also include location of suitable onsite or nearby excavated materials for use in construction of the replacement dam. The 30% design will utilize previously performed geological investigations and reports as well as all additional geological investigations, draft reports and recommendations. 60% design will be considered advanced design that will include preliminary details and sections of the proposed project.

This design will define actions and activities associated wit h abutment and foundation tie -ins, spillway and piping, and all required demolition. The 60% design will include all final geological recommendations. The 60% design will include draft technical specifications, bid schedule and preliminary construction cost estimates. A 3-D finite element analysis will also be performed on the proposed dam layout to determine the stress on the dam during the maximum credible earthquake.

90% design will include a complete set of construction plans and technical specificati ons, bid schedule, and final construction cost estimates. This design will be available for review and quality assurance and quality control (QA/QC). 100% final design will include preparation of a final design package that is ready to advertise. The final design package will be signed and sealed by the design engineer of record.

Design Submittals
100% Design – Bid Package

Task 6 – Environmental Documentation
The project will need to comply with federal (National Environmental Policy Act – NEPA) and state (California Environmental Quality Act – CEQA) environmental laws, regulations, and guidelines because of the potential for significant adverse impacts to wetlands, waters of the United States, and waters of the State. The City will prepare a draft Environmental Impact Report (EIR) and release it for a 45 -day public review. Public comments will be addressed and a final EIR will be prepared. The Army Corps of Engineers, as lead agency under NEPA, will rely on the EIR to prepare an Environmental Asses sment for NEPA compliance as part of their permitting process.

Project Administration Deliverables
Project Monitoring Plan
Quarterly Reports and Invoices
Project Completion Report
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Environmental Documentation Deliverables
Lake Wohlford Dam Environmental Opinion
Lake Wohlford Dam Replacement Project EIR

Task 7 – Permitting
The City of Escondido would likely need multiple permits to complete the Lake Wohlford Dam Replacement Project , therefore the following is a list of all of the regulations and agencies that may require permits for completion of the project.  Section 404 of the Federal Clean Water Act (CWA) and Section 10 of the Rivers and Harbor Act from the United States Army Corps of Engineers (USACE);
 Section 106 of the National Historic Preservation Act from the State Historic Preservation Office;  Sections 7 and 10 of the Federal Endangered Species Act from the U.S. Fish and Wildlife Service and the National Oceanic and Atmospheric Administration’s National Marine Fisheries Service;  Section 1602 of the California Fish and Game Code and the Endangered Species Act (ESA) from the California Department of Fish and Wildlife (CDFW); and
 Sections 401 and 402 of the CWA from the Regional Water Quality Control Board (RWQCB).

The aforementioned list provides the potential regulatory requirements of the Lake Wohlford Dam Replacem ent Project; however the full scope of required permitting will be determined upon completion of design and preliminary environmental analyses.

Permitting Deliverables
Section 401 Water Quality Certification
Section 404 Authorization Permit
Section 1602 Permit from California Department of Fish and Wildlife

Row (d) Construction / Implementation
Task 8 – Construction / Implementation Contracting
Tasks associated with construction contracting include advertising the project for public bids, evaluating contractor bids, and preparing all documents required to award the project to a contractor. It is anticipated that this work will be completed by City of Escondido staff.

Task 9 – Construction / Implementation
Materials and/or Design Standards
The Evaluation of Alternatives for Replacement of Lake Wohlford Dam Study found that the most viable alternatives were for a replacement dam downstream of the existing dam. The replacement dam will be constructed to meet all current codes and regulations including those of DWR’s Division of Safety of Dams (DSOD).

The alternatives evaluation specifically evaluated the potential for a roller compacted concrete dam (RCC dam) or a rock fill dam to replace the existing Lake Wohlford Dam. A geological investigation, which included geological mapping, subsurface explorations, downhole geophysical surveys, in -situ hydraulic conductivity testing, piezometer data, seismic refraction surveys, laboratory testing, and test pits, was performed to support the alternatives analysis (see Lake Wohlford Dam Replacement Geotechnical Data Report). Subsequent reviews of the geological data by the consultant doing the dam final design indicates that an RCC dam may be feasible an d DSOD views RCC dams the preferred dam type over earth fill providing a better quality long term facility. Based on this information, RCC was selected as the dam type.

An RCC mix design program was also developed for the project. Different mix design com ponents of aggregates, water, cement, admixtures, sand and fly ash were tested to determine the best mix design for the project. This program and final mix design where reviewed and approved by DSOD. The information obtained from the mix design program was used to develop the final RCC design specification that will be used to bid the dam construction.

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Construction Tasks
Task 9.1 Road Realignment
A portion of Oakvale Road will need to be relocated as its current alignment interferes with the proposed left dam abutment.

The road realignment will require significant grading to push the canyon slope away from the dam abutment. The realigned portion of Oakvale Road shall match the road width to the existing roadway with a minimum drivable pavement width of 24 feet plus shoulders in accordance with the San Diego County Public Road Standards and will include any necessary drainage system. In addition, the County of San Diego has requested that a 10 -foot no-motorized lane be provided along the north edge of the roadway. The estimated realignment length is approximately 1,000 feet.

Task 9.2 Mobilization and Site Preparation
The initial phase of construction will include mobilization, staging area setup, clearing, grubbing, grading and foundation excavation. The new dam will be constructed just downstream of the existing dam as such a large area of trees and other vegetation may be cleared for both the ultimate new dam site as well as the required staging area. Where possible, high value vegetation will be protected in place within staging areas. Preparation of the dam foundation is critical t o the quality of the facility. Excavation of the foundation will result in significant volumes of removed material in order to reach acceptable foundation level which must be approved by the design geologist and DSOD. It is estimated that the foundation excavation may require depths of up to 40 to 60 feet to reach competent material with a width of approximately 200 feet. Foundation grouting may be required to fill imperfections in the basement rock including cracks to reduce the potential for seepage below the foundation.

Task 9.3 Dam Access
An all-weather drivable access for maintenance vehicles will be constructed from Oakvale Road to reach the toe of the dam, minimum of 12 feet wide and approximately 550 feet in length . Another access drive shall be constructed from Oakvale Road to reach the crest of the dam, minimum of approximately 40 feet wide and approximately 280 feet in length . These approach drives will be constructed of either asphaltic or concrete pavement. A bridging structure will also be included on the dam crest to enable access across the spillway located generally near the center of the dam. These access drives will accommodate the daily inspections performed of the operating dam including seepage monitoring and periodic movement surveys.

A construction access roadway w ill also be built along the north shoreline from the existing lake marina to the crest of the proposed new dam along the right abutment. This roadway will be approximately 20 feet wide and approximately 2,785 feet in length. It may be constructed of aggregate base material. Storm drains will be provided a ravine crossing so not to impact the existing drainage ways. Once dam construction is completed, this roadway will be blocked to general public. This roadway will be available to the City as needed.

Task 9.4a Foundation Excavation
The foundation excavation is based on the excavation requirements and procedures necessary to achieve a satisfactory foundation for the proposed new roller -compacted concrete (RCC) dam, stilling basin, intake tower, and appurtena nces.

The foundation grade shown on the drawings was established such that all soil, decomposed rock, and rock that is generally excavatable using large earthwork equipment would be removed. In order to construct a generally level foundation (from upstream to downstream), controlled blasting is also likely required. The foundation will be considered adequate when its too hard to excavate with large excavation equipment as identified by a licensed engineering geologist.

Prior to foundation preparation, a dewatering system will be installed to monitor and remove groundwater during construction. In addition, additional ground and dam monitoring instrumentation will be installed for construction. An erosion control system will be installed prior to any grading disturbance activities.

Task 9.4b Foundation Prep and Grouting Program – Abutments The foundation surface will be irregular with exposed joints, seams, fractures, and other discontinuities. The entire foundation surface will be cleaned by barring a nd prying loose all drummy rock, using an air/water jet to remove as much loose material as possible; and removing by hand (and/or vacuum truck) loose material missed by previous steps. In addition, portions of the surface will require treatment to 1) protect the exposed bedrock from deterioration, 2) backfill joints, DocuSign Envelope ID: 3E3E9A8D-5098-43C8-940D-7BDC5CFC0096 Attachment "A"

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and 3) eliminate drastic slope changes. Applicable treat measures include over -excavation, dental excavation, dental concrete, stitch grouting, and slush grout. The treatment measurements w ill provide a smooth final surface for foundation approval.

Once foundation preparation and approval are complete, the Contractor will begin the Abutment grouting program. The grouting program includes two grouting tasks 1) Grout Curtains and 2) Consol idation Grouting. A double row grout curtain will be installed using the split -spacing method. Both curtains will be installed from the final excavated rock foundation surface along the right and left abutments axis, to depths where the rock permeability is estimated to be 1 x 10-5 cm/sec (~1 Lu) or less. Maximum hole spacing along both curtain rows will be 10 feet. Consolidation grouting will be performed across the entire right and left abutments footprints downstream of the grout curtain using the spli t-spacing method. Spacing between rows will be 10 feet and maximum spacing between holes along each row will be 10 feet. Hole depths will generally be 20 feet. Stitching grouting of geologic features will be performed as required by the Owner’s Represen tative. Through- grouting stitch features will be treated for their entire length across the dam abutments.

Task 9.4c Foundation Prep and Grouting Program – Valley Floor The foundation surface will be irregular with exposed joints, seams, fractures, and other discontinuities. The entire foundation surface will be cleaned by barring and prying loose all drummy rock, using an air/water jet to remove as much loose material as possible; and removing by hand (and/or vacuum truck) loose material missed by pre vious steps. In addition, portions of the surface will require treatment to 1) protect the exposed bedrock from deterioration, 2) backfill joints, and 3) eliminate drastic slope changes. Applicable treat measures include over -excavation, dental excavatio n, dental concrete, stitch grouting, and slush grout. The treatment measurements will provide a smooth final surface for foundation approval.

Once foundation preparation and approval are complete, the Contractor will begin the Valley Floor grouting pro gram. The grouting program includes two grouting tasks 1) Grout Curtains and 2) Consolidation Grouting. A double row grout curtain will be installed using the split -spacing method. Both curtains will be installed from the final excavated rock foundation surface along the valley floor axis, to depths where the rock permeability is estimated to be 1 x 10 -5 cm/sec (~1 Lu) or less.

Maximum hole spacing along both curtain rows will be 10 feet. Consolidation grouting will be performed across the entire valley floor footprints downstream of the grout curtain using the split-spacing method. Spacing between rows will be 10 feet and maximum spacing between holes along each row will be 10 feet. Hole depths will generally be 20 feet. Stitching grouting of geologic features will be performed as required by the Owner’s Representative. Through-grouting stitch features will be treated for their entire length across the dam abutments.

Implementation Deliverable
Statement of completion for Tasks 9.4a thru 9.4c by a registered engineer

The following Tasks 9.5, 9.6, 9.7, and 9.8 are outside of the scope of the agreement due to current availability of grant funds, however they are needed to complete the construction of the Dam.

Task 9.5 RCC Trial Placement and Dam Construction (Outside of Agreement Scope) RCC Trial Placement
Prior to start of the RCC dam construction, the contractor will be required to construct a RCC trial placement dam section.

This trial placement will be used to confirm the contractor’s ability to perform the following: 1) proper foundation surface preparation, and 2) using proposed equipment and methods to place the RCC in accordance with the contract documents.

The RCC trial placement will be approximately 125 feet long by 75 feet wide by 7 feet tall.

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Dam
Construction of the RCC dam requires near continuous placement of a lean concrete mixture. The concrete will be prepared at an onsite or near site batch plant which will truck or c onveyor the material to the dam for placement where it is roller compacted. The RCC dam will have a vertical or near vertical upstream face with a 0.8H:1V downstream face. The crest of the dam will be approximately 6 60 feet in len gth at an elevation of 1, 490’± and a spillway elevation of 1,480’ . The new dam will also include a dam adit and gallery. The gallery will be approximately 8 feet wide by 9 feet high and 323 feet long.

The gallery will allow for visual inspection of the dam and foundation drains fr om inside the dam . The new dam shall be constructed to a height which will provide for a maximum water surface elevation equal to the existing dam. Dam maintenance and security facilities will be constructed and installed including access drive, monitorin g equipment for movement and seepage, fencing and surveillance equipment . Foundation piezometers, inclinometers, and an accelerometer will be installed in the dam and along the foundation.

Task 9.6 Spillway (Outside of Agreement Scope)
The spillway of an RCC dam is constructed integral to the dam as it rises. The spillway crest wil l have an elevation of 1,480’±. The spillway will be designed to pass a flow of approximately 8,265 cfs, with an estimated width of approximately 90 feet and depth of approximat ely 8 feet. The spillway will terminate in a stilling pond at the base of the dam to dissipate the waters energy before reaching the existing natural stream bed.

Task 9.7 Outlet Works (Outside of Agreement Scope)
New
The new outlet tower will be constructed on the upstream face of the new dam. This type of outlet tower is a concrete shaft structurally integrated into the dam. The tower shall have four (4) automated gates at various elevations that can be operated from the Water treatment Plant depending on need or water quality. The multiple gates provide the ability to draw water from different levels within the contained lake; the gate shall also include fish screens to prevent fish from entering the tower and pipe system . During times of drought or other low water events the upper port(s) may become exposed as the water surface drops. The outlet piping will be placed through the foundation as the concrete reaches the appropriate elevation. The concrete placement continues until the design elevation is achieved. Following the construction of the dam itself the new outlet piping will be connected to the existing 48-inch downstream piping and the new emergency release valve facility.

Existing
Activation of the new outlet works will require removal of the top portion of the existing dam as well as notching through the existing dam to an approximate elevation of 1,420’ in order to flood the area between the old and new dams. The notch must be stabilized so there is no future movement of the old structures. The existing outlet tower and piping will be abandoned in place (filled with concrete) or removed in a manner that will provide optimal facility security and public safety.

The existing outlet tunnel through the existing dam will be filled with concrete for safety reasons.

Task 9.8 Test Dam Facilities and Regulatory Approval (Outside of Agreement Scope) The new dam facilities will undergo startup and testing including the tower, penstock, outlet gates, and emergency release valve. Once testing is complete, the reservoir can be filled and regulatory acceptance granted.

Row (e) Construction Administration
Task 10 – Construction Administration for Tasks 9.1 through 9.4c This task involves administration, coordination, and re view of the construction contract and all other related construction tasks. This task will require labor from City of Escondido staff members and consultant construction managers and inspectors to oversee construction, testing, mitigation, and other aspects of the project.

Labor Category
Construction Management

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Task 10a – Construction Administration for Tasks 9.5 through 9.8 (Outside of Agreement Scope) This task involves administration, coordination, and review of the construction contract and all other related construction tasks for Task 9.4d RCC Trial Placement and Dam Construction, Task 9.5 Spillway, and Task 9.6 Outlet Works. This task will require labor from City of Escondido staff members and consultant construction managers and inspectors to oversee construction and other aspects of the project.

Row (f) Other Costs
Other costs associated with the Lake Wohlford Dam Replacement Project include establishment of a Board of Consultants, as required by FERC. The Board of Consultants shall oversee the analysis, design, construction, and any potential problems that might arise during the design and construction of the Lake Wohlford Dam replacement structures. The Board of Consultants shall be comprised of at least three members with expertise in the following areas: geotechnical engineering, engineering geologist, and hydraulic structures.

The City of Escondido will solicit and bring under contract the Board of Consultants, invite review and comment on all design submittals, and monitor construction procedures and progress. Formal meetings of the Board of Consultants will be convened at important milestones.

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EXHIBIT B

SCHEDULE

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EXHIBIT C
BUDGET

Table 6 – Project Budget
Budget Category Non-State Share
(Funding Match) Grant Funding Other Cost Share Total
%
Funding
Match
(a)
Direct Project
Administration
Costs
$400,000 $0 $0 $400,000 100%
(b) Land
Purchase/Easement $0 $0 $0 $0 N/A
(c)
Planning/ Design/
Engineering/
Environmental
Documentation
$2,749,050 $2,250,950 $0 $5,000,000 55%
(d) Construction $15,596,314.87 $12,614,414.87 $3,720,000 $31,930,729.74 49% (e) Construction
Administration $600,000 $0 $0 $600,000 100%
(f) Other Costs $34,635.13 $34,635.13 $0 $69,270.26 50% (g) Grand Total $19,380,000 $14,900,000 $3,720,000 $38,000,000 51% (h) Calculation of
Funding Match % 51% 29% 20% 100%
Sources of Funds for Non-State Share (Funding Match):

The non-state share funding match will be provided by the sale of municipal bonds (City of Escondido) and potentially through federal funding sources.

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EXHIBIT D

STANDARD CONDITIONS

D.1 ACCOUNTING AND DEPOSIT OF GRANT DISBURSEMENT:
a) SEPARATE ACCOUNTING OF GRANT DISBURSEMENT AND INTEREST RECORDS : Grantee shall account for the money disbursed pursuant to this Grant Agreement separately from all other Grantee funds.

Grantee shall maintain audit and accounting procedures that are in accordance with generally accepted accounting principles and practices, consistently applied. Grantee shall keep complete and accurate records of all receipts, disbursements, and interest earned on expenditures of such funds. Grantee shall require its contractors or subcontractors to maintain books, records, and other documents pertinent to their work in accordance with generally accepted accounting principles and practices. Records are subject to inspection by State at any and all reasonable times. b) FISCAL MANAGEMENT SYSTEMS AND ACCOUNTING STANDARDS: The Grantee agrees that, at a minimum, its fiscal control and accounting procedures will be sufficient to permit tracing of grant funds to a level of expenditure adequate to establish that such funds have not been used in violation of state law or this Grant Agreement.
c) REMITTANCE OF UNEXPENDED FUNDS: Grantee, within a period of sixty (60) calendar days from the final disbursement from State to Grantee of grant funds, shall remit to State any unexpended funds that were disbursed to Grantee under this Grant Agreement and were not needed to pay Eligible Project Costs.

D.2 ACKNOWLEDGEMENT OF CREDIT: Grantee shall include appropriate acknowledgement of credit to th e State and to all cost-sharing partners for their support when promoting the project or using any data and/or information developed under this Grant Agreement. During construction of the project, Grantee shall install a sign at a prominent location, which shall include a statement that the project is financed under the, Disaster Preparedness and Flood Prevention Bond Act of 2006, administered by State of California, Department of Water Resources. Grantee shall notify State that the sign has been erected by providing them with a site map with the sign location noted and a photograph of the sign.

D.3 AMENDMENT: No amendment or variation of the terms of this Grant Agreement shall be valid unless made in writing, signed by the parties and approved as required. No oral understanding or agreement not incorporated in the Grant Agreement is binding on any of the parties. For guidance on the Amendment Requirements, see Exhibit H.

D.4 AMERICANS WITH DISABILITIES ACT: By signing this Grant Agreement, Grantee assures State that it complies with the Americans with Disabilities Act (ADA) of 1990, (42 U.S.C., 12101 et seq.), which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA.

D.5 AUDITS: State reserves the right to conduct an audit at any time between the execution of this Grant Agreement and the completion of the project, with the costs of such audit borne by State. After completion of the project, State may require Grantee to conduct a final audit, at Grantee’s expense, such audit to be conducted by and a report prepared by an independent Certified Public Accountant. Failure or refusal by Grantee to comply with this provision shall be considered a breach of this Grant Agreement, and State may take any action it deems necessary to protect its interests.

Pursuant to Government Code Section 8546.7, the parties shall be subject to the examination and audit of State for a period of three years after final payment under this Grant Agreement with respect of all matters connected with this Grant Agreement, including but not limited to, the cost of administering this Grant Agreement. All records of Grantee or subcontractors shall be preserved fo r this purpose for at least three (3) years after project completion. See Exhibit H for a listing of documents/records that State Auditors would need to review in the event of a grant being audited.

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D.6 BUDGET CONTINGENCY: LIMIT ON STATE FUNDS. The Disaster Preparedness and Flood Prevention Bond Act of 2006 is subject to the availability of funds including any mandates from the Department of Finance, the Pooled Money Investment Board or any other state authority. The State will not make payments of any kind, including advances or reimbursements, until funding is made available by the State Treasurer.

D.7 CHILD SUPPORT COMPLIANCE ACT: For any Grant Agreement in excess of $100,000, the Grantee acknowledges in accordance with Public Contract Code 7110 , that:
a) The Grantee recognizes the importance of child and family support obligations and shall fully comply with all applicable state and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and b) The Grantee, to the best of its knowledge is fully complying with the earnings assignment orders of a ll employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department.

D.8 COMPETITIVE BIDDING AND PROCUREMENTS: Grantee shall comply with all applicable laws and regulations regarding securing competitive bids and undertaking competitive negotiations in Grantee’s contracts with other entities for acquisition of goods and services and construction of public works with funds provided by State under this Grant Agreement.

D.9 COMPUTER SOFTWARE: The Grantee certifies that it has appropriate systems and controls in place to ensure that state funds will not be used in the performance of this Grant Agreement for the acquisition, operation, or maintenance of computer software in violation of copyright laws.

D.10 CONFLICT OF INTEREST
a) Current State Employees: No State officer or employee shall engage in any employment, activity, or enterprise from which the officer or employee receives compensation or has a financial interest and which is sponsored or funded by any State agency, unless the employment, activity, or enterprise is required as a condition of regular State employment. No State officer or employee shall contract on his or her own behalf as an independent contractor with any State agency to provide goods or services. b) Former State Employee: For the two-year period from the date he or she left State employment, no former State officer or employee may enter into a contract in which he or she engaged in any of the negotiations, transactions, planning, arrangements, or any part of the decision-making process relevant to the contract while employed in any capacity by any State agency. For the twelve -month period from the date he or she left State employment, no former State officer or employee may enter into a contract with any State agency if he or she was employed by that State agency in a policy -making position in the same general subject area as the proposed contract within the twelve -month period prior to his or her leaving State service.

D.11 DELIVERY OF INFORMATION, REPORTS, AND DATA: The Grantee agrees to expeditiously provide, during work on the project and throughout the term of this Grant Agreement, such reports, data, information, and certifications as may be reasonably required by the State.

D.12 DISPOSITION OF EQUIPMENT: Grantee shall provide to State, not less than 30 days prior to submission of the final project invoice, a final inventory list of equipment purchased with grant funds provided by State.

Grantee shall consult with State on the scope of the inventory not less than 60 days prior to the submission of the final project invoice. The inventory shall include all items with a current estimated fair market value of more than $5,000 per item. Within 60 days of receipt of such inventory, State shall provide Grantee with a list of the items on the inventory that State will take title to. All other items shall become the property of Grantee. State shall arrange for delivery from Grantee of items that it takes titl e to. Cost of transportation, if any, shall be borne by State.

D.13 DISPUTES: In the event of an invoice dispute, payment will not be made until the dispute is resolved and a corrected invoice submitted. Failure to use the address exactly as provided may result in return of the invoice to the Grantee. Payment shall be deemed complete upon deposit of the payment, properly DocuSign Envelope ID: 3E3E9A8D-5098-43C8-940D-7BDC5CFC0096 Attachment "A"

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addressed, postage prepaid, in the United States mail. Any claim that Grantee may have regarding the performance of this Grant Agreement including, but not limited to claims for additional compensation or extension of time, shall be submitted to the Director, Department of Water Resources, within thirty (30) calendar days of Grantee’s knowledge of the claim. State and Grantee shall then at tempt to negotiate a resolution of such claim and process an amendment to the Grant Agreement to implement the terms of any such resolution.

D.14 DRUG-FREE WORKPLACE CERTIFICATION
Certification of Compliance: By signing this Grant Agreement, Grantee, its contractors or subcontractors hereby certify, under penalty of perjury under the laws of State of California, compliance with the requirements of the Drug-Free Workplace Act of 1990 (Government Code 8350 et seq.) and have or will provide a drug-free workplace by taking the following actions:
a) Publish a statement notifying employees, contractors, and subcontractors that unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees, contractors, or subcontractors for violations, as required by Government Code Section 8355(a).
b) Establish a Drug-Free Awareness Program, as required by Government Code Section 8355(b) to in form employees, contractors, or subcontractors about all of the following:

1. The dangers of drug abuse in the workplace,

2. Grantee’s policy of maintaining a drug-free workplace,

3. Any available counseling, rehabilitation, and employee assistance programs, and

4. Penalties that may be imposed upon employees, contractors, and subcontractors for drug abuse violations.
c) Provide as required by Government Code Sections 8355(c), that every employee, contractor, and/or subcontractor who works under this Grant Agreement:

1. Will receive a copy of Grantee’s drug-free policy statement, and

2. Will agree to abide by terms of Grantee’s condition of employment, contract or subcontract.

D.15 FINAL INSPECTIONS AND CERTIFICATION OF REGISTERED CIVIL ENGINEER: Upon completion of a construction project and as determined by State, Grantee shall provide for a final inspection and certification by a California Registered Civil Engineer that the project has been completed in accordance with submitted final plans and specifications and any modifications thereto and in accordance with this Grant Agreement and to the State’s satisfaction.

D.16 GOVERNING LAW: This Grant Agreement is governed by and shall be interpreted in accordance with the laws of the State of California.

D.17 GRANTEE COMMITMENTS: Grantee accepts and agrees to comply with all terms, provisions, conditions, and commitments of this Funding Agreement, including all incorporated documents, and to fulfill all assurances, declarations, representations, and statements made by Funding Recipient in the application, documents, amendments, and communications filed in support of its request for California Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Act of 2006 financing.

D.18 INCOME RESTRICTIONS: The Grantee agrees that any refunds, rebates, credits, or other amounts (including any interest thereon, accruing to or received by the Grantee under this Grant Agreement shall be paid by the Grantee to the State, to the extent that they are properly allocable to costs for which the Grantee has been reimbursed by the State under this Grant Agreement.

D.19 INDEPENDENT CAPACITY: Grantee, and the agents and employees of Grantee, if any, in the performance of the Grant Agreement, shall act in an independent capacity and not as officers, employees, or agents of the State.

D.20 INSPECTIONS: State shall have the right to inspect the work being performed at any and all reasonable times, providing a minimum of a 24-hour notice, during the term of the Grant Agreement. This right shall extend to any subagreements, and Grantee shall include provisions ensuring such access in all its contracts DocuSign Envelope ID: 3E3E9A8D-5098-43C8-940D-7BDC5CFC0096 Attachment "A"

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or sub-contractors entered into pursuant to its Grant Agreement with State. Grantee acknowledges that project documents may be subject to the Public Records Act (California Government Code Section 6250 et. seq.). State shall have the right to inspect these documents at any and all reasonable times after completion of the project to ensure compliance with the terms and conditions of this Grant Agreement.

During regular office hours, State shall have the right to inspect and to make copies of any books, records, or reports of the Grantee relating to this Grant Agreement. Grantee shall maintain and shall make av ailable at all times for such inspection accurate records of its costs, disbursements, and receipts with respect to its activities under this Grant Agreement. Failure or refusal by Grantee to comply with this provision shall be considered a breach of this Grant Agreement, and State may withhold disbursements to Grantee or take any other action it deems necessary to protect its interests.

D.21 NONDISCRIMINATION: During the performance of this Grant Agreement, Grantee and its contractor s shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, physical disability (including HIV and AIDS), mental disability, medical condition (cancer) , age (over 40), marital status, and denial of family care leave. Grantee and contractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. Grantee and contractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 12990 (a-f) et seq.) and the applicable regulations promulgated there under (California Code of Regulations, Title 2, Section 7285 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code Section 12990 (a-f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations, are incorporated into this Grant Agreement by reference and made a part hereof as if set forth in full. Grantee and its contractor s shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. Grantee shall include the nondiscrimination and compliance provisions of this clause in all contracts to perform work under the Grant Agreement.

D.22 NO THIRD PARTY RIGHTS: The parties to this Grant Agreement do not intend to create rights in, or grant remedies to, any third party as a beneficiary of this Grant Agreement, or of any duty, covenant, obligation or undertaking established herein.

D.23 OPINIONS AND DETERMINATIONS: The parties agree that review or approval of any IRWM Program applications, documents, permits, plans and specifications or other program information by the State is for administrative purposes only and does not relieve the Grantee of its responsibility to properly plan, design, construct, operate, maintain, implement, or otherwise carry out the IRWM Program.

D.24 PERMITS, LICENSES, APPROVALS, AND LEGAL OBLIGATIONS. Grantee shall be responsible for obtaining any and all permits, licenses, and approvals required for performing its obligations under this Grant Agreement. Grantee shall comply with the California Environmental Quality Act (PRC Section 21000 et seq.) and other applicable federal, State, and local laws, rules, and regulations, guidelines, and requirements prior to disbursement of funds under this Grant Agreement.

Grantee shall keep informed of and take all measures necessary to ensure compliance with Cal ifornia Labor Code requirements.

D.25 PROHIBITION AGAINST DISPOSAL OF PROJECT WITHOUT STATE PERMISSION: Grantee shall not sell, abandon, lease, transfer, exchange, mortgage, hypothecate, or encumber in any manner whatsoever all or any portion of any real or other property necessarily connected or used in conjunction with the IRWM Program without prior permission of State. Grantee and shall not take any action concerning the performance of this Grant Agreement, including but not limited to actions relating to user fees, charges, and assessments that could adversely affect the ability of Grantee to meet its obligations under this Grant Agreement, without prior written permission of State. State may require that the proceeds from the disposition of any real or personal property acquired with funds disbursed under this Grant Agreement be remitted to State.

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D.26 REMEDIES, COSTS, AND ATTORNEY FEES: The Grantee agrees that any remedy provided in this Grant Agreement is in addition to and not in derogation of any other legal or equitable remedy available to the State as a result of breach of this Grant Agreement by the Grantee, whether such breach occurs bef ore or after completion of the project, and exercise of any remedy provided by this Grant Agreement by the State shall not preclude the State from pursuing any legal remedy or right which would otherwise be available. In the event of litigation between the parties hereto arising from this Grant Agree ment, it is agreed that the prevailing party shall be entitled to such reasonable costs and/or attorney fees as may be ordered by the court entertaining such litigation.

D.27 RETENTION: Notwithstanding any other provision of this Grant Agreement, State shall, for each project, withhold five percent (5.0%) until January 1, 2016 and ten percent (10.0%), thereafter, of the funds requested by Grantee for reimbursement of Eligible Costs. Each project in this Grant Agreement will be eligible to release its respective retention when that project is completed and Grantee has met requirements of Paragraph 16, “Submissions of Reports,” excluding the “Post-Performance Reports.”

D.28 RIGHTS IN DATA: To the extent permitted by law, the Grantee agrees that all data, plans, drawings, specifications, reports, computer programs, operating manuals, notes, and other written or graphic work produced in the performance of this Grant Agreement shall be in the public domain. The Grantee may disclose, disseminate and use in whole or in part, any final form data and information received, collected, and developed under this Grant Agreement, subject to appropriate acknowledgement of credit to the State for financial support. The Grantee shall not utilize the materials for any profi t-making venture or sell or grant rights to a third party who intends to do so.

D.29 SEVERABILITY OF UNENFORCEABLE PROVISION: If any provision of this Grant Agreement is held invalid or unenforceable by a court of final jurisdiction, all other provisions of this Grant Agreement shall be construed to remain fully valid, enforceable, and binding on the parties.

D.30 STATE REVIEWS AND INDEMNIFICATION: The parties agree that review or approval of project applications, documents, permits, plans and specifications or other project information by the State is for administrative purposes only and does not relieve the Grantee of their responsibility to properly plan, design, construct, operate, maintain, implement, or otherwise carry out the project. To the extent permitted by law, the Grantee agrees to indemnify, defend and hold harmless the State and the State against any loss or liability arising out of any claim or action brought against the State from and against any and all losses, claims, damages, liabilities or expenses, of every conceivable kind, character and nature whatsoever arising out of, resulting from, or in any way connected with:
a) The project or the conditions, occupancy, use, possession, conduct or management of, work done in or about, or the planning, design, acquisition, installation, or construction, of the project or any part thereof;
b) Performing any of the terms contained in this Grant Agreement or any related document; c) Any violation of any applicable law, rule or regulation, any environmental law (including, without limitation, the Federal Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the California Hazardous Substance Account Act, the Federal Water Pollution Control Act, the Clean Air Act, the California Hazardous Waste Control Law and CWC Section 13304, and any successors to said laws), rule or regulation or the release of any toxic substance on or near the natural water system; or
d) Any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements required to be stated therein, in light of the circumstances under which they were made, not misleading with respect to any information provi ded by the Grantee for use in any disclosure document utilized in connection with any of the transactions contemplated by this Grant Agreement. Grantee agrees to pay and discharge any judgment or award entered or made against the State with respect to any such claim or action, and any settlement, compromise or other voluntary resolution. The provisions of this section shall survive the term of the Grant Agreement.

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D.31 SUCCESSORS AND ASSIGNS: This Grant Agreement and all of its provisions shall apply to and bind the successors and assigns of the parties. No assignment or transfer of this Grant Agreement or any part thereof, rights hereunder, or interest herein by the Grantee shall be valid unless and until it is approved by State and made subject to such reasonable terms and conditions as State may impose.

D.32 TIMELINESS: Time is of the essence in this Grant Agreement.

D.33 TRAVEL: Grantee agrees that travel and per diem costs shall NOT be eligible for reimbursement with State funds, and shall NOT be eligible for computing Grantee cost match. Travel includes the costs of transportation, subsistence, and other associated costs incurred by personnel during the term of this Grant Agreement.

D.34 WAIVER OF RIGHTS: None of the provisions of this Grant Agreement shall be deemed waived unless expressly waived in writing. It is the intention of the parties here to that from time to time either party may waive any of its rights under this Grant Agreement unless contrary to law. Any waiver by either party of rig hts arising in connection with the Grant Agreement shall not be deemed to be a waiver with respect to any other rights or matters, and such provisions shall continue in full force and effect.

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EXHIBIT E

REPORT FORMAT AND REQUIREMENTS
The following reporting formats should be utilized. Please obtain State approval prior to submitting a report in an alternative format.

QUARTERLY PROGRESS REPORT
Grantee shall submit Quarterly Progress Reports on a consistent basis to meet the State’s requirement for disbursement of funds. The Quarterly Progress Report should describe the work performed during the reporting period. For each project, describe the work performed including:

CONTINUING ELIGIBILITY
 For Urban Water Suppliers who have not submitted a complete Urban Water Management Plan, the status of the plan development and submittal.
 A brief summary of the status of adoption of an IRWM Plan that complies with Part 2.2 of Division 6 of the CWC commencing with Section 10530.

PROJECT INFORMATION (INCLUDE ANY OF THE BELOW THAT WERE APPLICABLE DURING THE REPORTING PERIOD)  Legal matters.
 Engineering matters.
 Environmental matters.
 Status of permits, easements, rights-of-way, and approvals as may be required by other State, federal, and/or local agencies.
 Major accomplishments during the quarter (i.e., tasks completed, milestones met, meetings held or attended, press releases, etc).
 Discussion of data submittal effort(s) for the previous quarter, including a description of the data submitted and date(s) of submittal.
 Issues/concerns that have, will, or could affect the schedule or budget, with a recommendation on how to correct the matter.
 Description of any differences between the work performed and the work outlined in this Grant Agreement’s Work Plan.

COST INFORMATION
 Provide a list showing all costs incurred during the quarter by the Grantee and each contractor working on the project. The list should include for all non-construction, or implementation costs, (i.e., design, and admin charges) the hours per task worked on during the quarter for above personnel.  A discussion on how the actual budget is progressing in comparison to Exhibit C.

SCHEDULE INFORMATION
 A discussion on how the actual schedule is progressing in comparison to the schedule in Exhibit B.  A revised schedule, by task, if changed from the schedule in Exhibit B. Note: a revised schedule may require an official amendment to the Grant Agreement before it is accepted as final.

ANTICIPATED ACTIVITIES NEXT QUARTER
 Provide a description of anticipated activities for the next quarterly reporting period.

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PROJECT COMPLETION REPORT
A Project Completion Report is required for each project identified in Exhibit A. This report will include the following Sections:

EXECUTIVE SUMMARY
The Executive Summary consists of a maximum of ten (10) pages summarizing projec t information (see report status section below for topics). The Executive Summary should include the following:
 Brief description of work proposed to be done in the original Grant application.  Description of actual work completed and any deviations from Exhibit A. List any official amendments to this Grant Agreement, with a short description of the amendment.  Describe how the implemented project will meet the program preferences identified in the original Grant Application.
 Describe the mechanism or process that allows for continued performance monitoring of the project in meeting the objectives of the IRWM Plan.
 Identify any changes to the IRWM Plan as a result of implementation of the project.

REPORTS AND/OR PRODUCTS
 Provide a copy of any final technical report or study, produced for the project as described in the Work Plan, if applicable.
 Provide a map and shapefile(s) showing the location of the completed project. A description of the geographic projection and datum used for the shapefile must be submitted with the shapefile (a NAD ’83 datum and either a UTM 10 or UTM 11 projection, dependent on the project’s location in the state, should be utilized).
 If any wells were constructed as part of the project, provide the following information: well logs; borehole geophysical logs; state well number; site information to include horizontal (NAD ‘83) and vertical (NAVD ‘88) datum to be determined within 0.5 feet.  Provide an electronic copy of any as-built plans (media: CD-ROM; PDF format).  Provide copies of any data collected along with location maps.  If applicable, describe the findings of any study and whether the study determined the engineering, hydrologic, hydrogeologic, environmental, economic and financial feasibility of the project.

COST & DISPOSITION OF FUNDS INFORMATION
 A list of invoices showing:
 The date each invoice was submitted to State.
 The amount of the invoice.
 The date the check was received.
 The amount of the check (If a check has not been received for the final invoice, then state this in this section).
 A spreadsheet summary of the original budget costs by task versus the final project costs.  A summary of final funds disbursement including:
 Labor cost of personnel of agency/ major consultant /sub-consultants (Indicate personnel, hours, rates, type of profession and reason for consultant, i.e., design, CEQA work, etc).  Construction cost information, shown by material, equipment, labor costs, a nd change orders.  Any other incurred cost detail.
 A statement verifying separate accounting of grant disbursements.

 Summary of project cost including:

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 Accounting of the cost of project expenditure.
 Include all internal and external costs not previously disclosed.  A discussion of factors that positively or negatively affected the project cost and any deviation from the original project cost estimate.

ADDITIONAL INFORMATION
 Benefits derived from the project, with quantification of such benefits provided, if applicable.  A final project schedule showing actual progress verse planned progress as shown in Exhibit B.  Certification from a California Registered Civil Engineer that the project was conducted in accordance with the approved work plan and any approved modifications thereto.  Submittal schedule for the Post Performance Report and an outline of the proposed reporting format.

POST-PERFORMANCE REPORT
Post Performance Reports are required annually for each project for a period of 10 years beginning after the first year of operation, and includes the following:

REPORTS AND/OR PRODUCTS

 Time period of the annual report.
 Short project description and benefits.
 An assessment of any explanations for any differences between the expected ve rsus actual project benefits. Where applicable, the reporting should include quantitative metrics, i.e., new acre-feet of water recharged that year, acres of wildlife habitat added, etc.  Summary of any additional costs and/or benefits deriving from the project since its completion, if applicable.
 Continued reporting on meeting the Output Indicators and Targets discussed in the Projec t Monitoring Plan discussed in Paragraph 21 of this Grant Agreement.  Any additional information relevant to or generated by the continued operation of the project.

ELECTRONIC REPORT FORMATTING
Grantee agrees that work funded under this Grant Agreement will be provided in an el ectronic format to State.

Electronic submittal of final reports, plans, studies, data, and other work performed under this grant shall be as follows:
 Text preferably in MS WORD or text PDF format.
 Files generally less than 10 MB in size.
 Files named so that the public can determine their content. For example, file naming of reports must have the title and, if subdivided into smaller sized files, the chapter number/letter and names in the report Table of Content (TOC); files of maps, figures, and tables by number/letter as referenced in the TOC; well logs files with DWR-required naming convention; and Appendix number/letter and named in the TOC.
 For a project involving a modeling component, G rantee shall provide the major input data files, parameters, calibration statistics, output files, and other information requested by State’s Project Manager.

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Exhibit G
Guidelines for Grantees
Under DWR Financial Assistance Programs

The following provides a list of documents typically required by State Auditors and general guidelines for Grantees. List of documents pertains to both Grant funding and Grantee’s Funding Match and details the documents/records that State Auditors would need to review in the event of this Grant Agreement is audited.

Grantees should ensure that such records are maintained for each funded project.

List of Documents for State Audit

Internal Controls:

1. Organization chart (e.g., Agency’s overall organization chart and organization chart for this Grant Agreement’s funded project.

2. Written internal procedures and flowcharts for the following:
a. Receipts, deposits and disbursements
b. State reimbursement requests
c. Grant expenditure tracking
d. Guidelines, policy, and procedures on grant funded Programs/Project

3. Audit reports of the Agency internal control structure and/or financial statements within the last two years.

4. Prior audit reports on grant funded Programs/Project.

Agreements and Contracts:

1. Original signed Grant Agreement, any amendment(s) and budget modification documents.

2. A listing of all bond-funded grants received from the State.

3. A listing of all other funding sources for each project.

4. All subcontractor and consultant contracts and related or partners documents, if applicabl e.

5. Contracts between the Agency and member agencies as related to this Grant Agreement.

Invoices:

1. Invoices from vendors and subcontractors for expenditures submitted to the State for payments under th is Grant Agreement.

2. Documentation linking subcontractor invoices to State reimbursement, requests and related budget line items under this Grant Agreement.

3. Reimbursement requests submitted to the State for this Grant Agreement.

Cash Documents:

1. Receipts (copies of warrants) showing payments received from the S tate.

2. Deposit slips (or bank statements) showing deposit of the payments received from the State.

3. Cancelled checks or disbursement documents showing payments made to vendors, subcontractors, consultants, and/or agents under this Grant Agreement.

4. Bank statements showing the deposit of the receipts.

Accounting Records:

1. Ledgers showing entries for receipts and cash disbursements.

2. Ledgers showing receipts and cash disbursement entries of other funding sources.

3. Bridging documents that tie the general ledger to requests for grant reimbursement.

Administration Costs: Supporting documents showing the calculation of administration costs.

Personnel:

1. List of all contractors and Agency staff that worked on this grant funded Program/Project.

2. Payroll records including timesheets for contractor staff and the Agency personnel who provided services charged to this Grant Agreement.

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Project Files:

1. All supporting documentation maintained in the project files.

2. All correspondence related to this Grant Agreement.

General Grant Agreement Guidelines

Amendment Requirements:

Amendments to the Work Plan, Budget, and/or Schedule of this Grant Agreement are triggered when the proposed changes are deemed by the State to be substantial. Substantial changes generally include changes to the wording/scope of work, schedule or term, and budget. For example, a formal budget change to an Agreement is required when the culmination of proposed Grant amount budget change(s) for a Task is greater than 10% of the original Grant amount budget for that particular Task or the Task to be exchanged.

Funding Match Contribution
Funding Match (often referred to as Grantee Cost Share) is the amount defined in Paragraph 4 of this Grant Agreement. Provided below is guidance for claiming funding match with and without in-kind services.

1. Adequate documentation supporting value of in-kind service (or volunteer service) as funding match claimed shall be maintained. Although tracked separately, in-kind services shall be documented and, to the extent feasible, supported by the same methods used by the Grantee for its own employees. Provide formal (on official letterhead) and substantial documentation of in-kind service by including the following:
o Describe contributed item(s) or service(s)
o Purpose for which contribution was made (tie to scope of work) o Name of contributing organization and date of contribution o Real or approximate value of contribution. Who valued the contribution and how was the value determined? (e.g., actual, appraisal, fair market value, etc.). Justification of rate. (see item #4, below) o Person’s name and function of the contributing person o Hours of contribution
o If multiple sources exist, summarize these on a table with summed charges o Was contribution provided by, obtained with, or supported by government funds? If so, indicate source.

2. Funding match contribution (including in kind services) shall be for costs and services directly attributed to activities included in this Grant Agreement’s Work Plan. These services, furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as in -kind if the activities are an integral and necessary part of this Grant Agreement. Evaluate eligibility with State in advance of submittal.

3. Do not track cash contributions made to a project as an expenditure as you would for an in -kind service.

When providing funding match, track cash contributions to the project (i.e. revenues) and expenditures (typically in-kind contribution) separately in an accounting system.

4. Rates for volunteer or in-kind services shall be consistent with those paid for similar work in the Grantee’s organization. For example, volunteer service of clearing vegetation performed by an attorney shall be valued at a fair market value for this service, not the rate for professional legal services. In those instances in which the required skills are not found in the recipient organization, rates shall be consistent with those paid for similar work in the labor market. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.

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EXHIBIT H

GRANTEE RESOLUTION

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UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

WIFIA LOAN AGREEMENT
For Up to $65,147,348
With
ESCONDIDO JOINT POWERS FINANCING AUTHORITY and

CITY OF ESCONDIDO
For the

LAKE WOHLFORD DAM REPLACEMENT PROJECT
(WIFIA – N20149CA)
Dated as of [●]
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INTERPRETATION ..........................................................2 Section 1. Definitions................................................................................................................2 Section 2. Interpretation ..........................................................................................................19 ARTICLE II THE WIFIA LOAN ..............................................................................................20 Section 3. WIFIA Loan Amount .............................................................................................20 Section 4. Disbursement Conditions .......................................................................................20 Section 5. Term .......................................................................................................................22 Section 6. Interest Rate ...........................................................................................................22 Section 7. Security and Priority; Flow of Funds .....................................................................22 Section 8. Payment of Principal and Interest ..........................................................................24 Section 9. Prepayment ............................................................................................................27 Section 10. Fees and Expenses .................................................................................................28 ARTICLE III CONDITIONS PRECEDENT ...........................................................................30 Section 11. Conditions Precedent .............................................................................................30 ARTICLE IV REPRESENTATIONS AND WARRANTIES .................................................35 Section 12. Representations and Warranties of the Borrower ..................................................35 Section 13. Representations and Warranties of the City ...........................................................39 Section 14. Representations and Warranties of WIFIA Lender ...............................................44 ARTICLE V COVENANTS .......................................................................................................44 Section 15. Affirmative Covenants of the Borrower ................................................................44 Section 16. Negative Covenants of the Borrower .....................................................................47 Section 17. Affirmative Covenants of the City .........................................................................48 Section 18. Negative Covenants of the City .............................................................................55 Section 19. Reporting Requirements of the Borrower ..............................................................58 Section 20. Reporting Requirements of the City ......................................................................61 ARTICLE VI EVENTS OF DEFAULT ....................................................................................66 Section 21. Events of Default and Remedies ............................................................................66 ARTICLE VII MISCELLANEOUS ..........................................................................................70 Section 22. Disclaimer of Warranty..........................................................................................70 Section 23. No Personal Recourse ............................................................................................70 Section 24. No Third Party Rights ............................................................................................71 Section 25. Borrower’s Authorized Representative..................................................................71 Section 26. City’s Authorized Representative ..........................................................................71 Section 27. WIFIA Lender’s Authorized Representative .........................................................71 Section 28. Servicer ..................................................................................................................71 Section 29. Amendments and Waivers .....................................................................................71 Attachment "A"

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Section 30. Governing Law ......................................................................................................72 Section 31. Severability ............................................................................................................72 Section 32. Successors and Assigns..........................................................................................72 Section 33. Remedies Not Exclusive ........................................................................................72 Section 34. Delay or Omission Not Waiver..............................................................................72 Section 35. Counterparts ...........................................................................................................72 Section 36. Notices ...................................................................................................................72 Section 37. Indemnification ......................................................................................................73 Section 38. Sale of WIFIA Loan...............................................................................................74 Section 39. Effectiveness ..........................................................................................................75 Section 40. Termination ............................................................................................................75 Section 41. Integration ..............................................................................................................75

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SCHEDULE I – Project Budget
SCHEDULE II – Construction Schedule
SCHEDULE III – Existing Indebtedness
SCHEDULE 13(m) – Existing Construction Contracts
EXHIBIT A – Form of WIFIA Note
EXHIBIT B – Anticipated WIFIA Loan Disbursement Schedule EXHIBIT C – Form of Non-Debarment Certificate
EXHIBIT D – Requisition Procedures
EXHIBIT E – Form of Non-Lobbying Certificate
EXHIBIT F – WIFIA Debt Service
EXHIBIT G-1 – Form of Opinion of Borrower’s General Counsel EXHIBIT G-2 – Form of Opinion of Borrower’s Bond Counsel EXHIBIT G-3 – Form of Opinion of City Attorney
EXHIBIT G-4 – Form of Opinion of City’s Bond Counsel
EXHIBIT H-1 – Form of Closing Certificate of Borrower
EXHIBIT H-2 – Form of Closing Certificate of City
EXHIBIT I – Form of Certificate of Substantial Completion EXHIBIT J – Form of Quarterly Report
EXHIBIT K – Form of Public Benefits Report

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WIFIA LOAN AGREEMENT
THIS WIFIA LOAN AGREEMENT (this “Agreement”), dated as of [●], is by and among 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, with an address at 201 North Broadway , Escondido, CA 92025 (the “Borrower”), CITY OF ESCONDIDO, a municipal corporation and general law city duly organized and existing under and by virtue of the laws of the State of California (the “State”), with an address at 201 North Broadway, Escondido, CA 92025 (the “City”), and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency (the “Administrator”), with an address at 1200 Pennsylvania Avenue NW, Washington, DC 20460 (the “WIFIA Lender”).

RECITALS:

WHEREAS, the Congress of the United States of America enacted the Water Infrastructure Finance and Innovation Act (“WIFIA”), § 5021 et seq. of Public Law 113-121 (as amended, and as may be further amended from time to time, the “Act”), which is codified as 33 U.S.C. §§ 3901- 3914;
WHEREAS, t he Act authorizes the WIFIA Lender to enter into agreements to provide financial assistance with one or more eligible entities to make secured loans with appropriate security features to finance a portion of the eligible costs of projects eligible for assistance; WHEREAS, the Borrower was formed for the purpose of providing for the financing of public capital improvements for the members of the Borrower, including the City; WHEREAS, the City has requested that the WIFIA Lender make the WIFIA Loan (as defined herein) to the Borrower in a principal amount not to exceed $65,147,348 to be used to pay a portion of the Eligible Project Costs (as defined herein) related to the Project (as defined herein) pursuant to the application for WIFIA financial assistance dated June 1, 2021 (the “Application”); WHEREAS, as of the date hereof, the Administrator has approved WIFIA financial assistance for the Project to be provided in the form of the WIFIA Loan, subject to the terms and conditions contained herein;
WHEREAS, based on the Application and the representations, warranties and covenants set forth herein, the WIFIA Lender proposes to make funding available to the Borrower through the purchase of the WIFIA Note (as defined herein), upon the terms and conditions set forth herein; WHEREAS, as of the date hereof, the Borrower has entered into th e WIFIA IPA (as defined herein) with the City, pursuant to which (i) Borrower agrees to purchase the Project from the City in exchange for the provision of funds, in the amount of the WIFIA Loan, and (ii) the City agrees to purchase the Project from the Bo rrower in exchange for the payment of WIFIA Installment Payments (as defined herein) by the City to the Borrower, such payments being secured by the City Pledged Collateral (as defined herein);
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WHEREAS, the Borrower agrees to repay any amount due pursuant to this Agreement and the WIFIA Note in accordance with the terms and provisions hereof and of the WIFIA Note; WHEREAS, the Borrower has agreed to pledge and assign to the WIFIA Lender the Borrower Assigned Rights (as defined herein) for the purpose of sec uring (x) the payment of all sums due and owing by the Borrower to the WIFIA Lender under this Agreement and (y) the observance, performance and discharge of each agreement, condition, covenant and term of the Borrower and the City hereunder and of the City under the WIFIA IPA; and WHEREAS, the WIFIA Lender has entered into this Agreement in reliance upon, among other things, the information and representations of the City set forth in the Application and the supporting information provided by the Borrower and the City.

NOW, THEREFORE, the premises being as stated above, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged to be adequate, and intending to be legally bound hereby, it is hereby mutually agreed by and among the Borrower, the City and the WIFIA Lender as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION
Section 1. Definitions.

Unless the context otherwise requires, capitalized terms used in this Agreement shall have the meanings set forth below in this Section 1 or as otherwise defined in this Agreement. Any term used in this Agreement that is defined by reference to any other agreement shall continue to have the meaning specified in such agreement, whether or not such agreement remains in effect. “Acquisition Fund” means the account by that name created and maintained by the City in accordance with Section 3.04 of the WIFIA IPA.
“Act” means the Act as defined in the recitals hereto.
“Additional Construction Contract ” means, with respect to the Project, each Construction Contract entered into after the Effective Date. “Additional Obligations ” means Additional Parity Obligations and Addi tional Subordinate Obligations.
“Additional Parity Obligations ” means any Parity Obligations permitted under Section 18(a) (Negative Covenants of the City – Additional Obligations ), which Parity Obligations are issued or incurred on or after the Effective Date.
“Additional Subordinate Obligations ” means any Subordinate Obligations permitted under Section 18(a) (Negative Covenants of the City – Additional Obligations), which Subordinate Obligations are issued or incurred on or after the Effective Date. “Administrator” has the meaning provided in the preamble hereto.

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“Agreement” has the meaning provided in the preamble hereto. “Anticipated WIFIA Loan Disbursement Schedule ” means the schedule set forth in Exhibit B (Anticipated WIFIA Loan Disbursement Schedule ), reflecting the anticipated disbursement of proceeds of the WIFIA Loan, as such schedule may be amended from time to time pursuant to Section 4(d) (Disbursement Conditions).
“Application” has the meaning provided in the recitals hereto. “Authority Revenues ” means (a) the WIFIA Installment Payments rec eived by the Borrower pursuant to or with respect to the WIFIA IPA and (b) all interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder or thereunder. “Bankruptcy Related Event” means, with respect to either the Borrower or the City, (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of either the Borrower or the City or any of its debts, or of a substantial part of the assets thereof, under any Insolvency Laws, or (ii) th e appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for either the Borrower or the City or for a substantial part of the assets thereof and, in any case referred to in the foregoing subclauses (i) and (ii), such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; (b) either the Borrower or the City (other than with respect to clause (iii) below, which applies to the Borrower only) shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official therefor or for a substantial part of the assets thereof, (ii) generally not be payin g its debts as they become due unless such debts are the subject of a bona fide dispute, or become unable to pay its debts generally as they become due, (iii) fail to make a payment of WIFIA Debt Service in accordance with the provisions of Section 8 (Payment of Principal and Interest ) and such failure is not cured within thirty (30) days following notification by the WIFIA Lender of failure to make such payment, (iv) make a general assignment for the benefit of creditors, (v) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition with respect to it described in clause (a) of this definition, (vi) commence a voluntary proceeding under any Insolvency Law, or file a voluntary petition seeking liquidation, reorganization, an arrangement with creditors or an order for relief, in each case under any Insolvency Law, (vii) file an answer admitting the material allegations of a petition filed against it in any proceeding referred to in the foregoing subclauses (i) through (v), inclusive, of this clause (b), or (viii) take any action for the purpose of effecting any of the foregoing; (c) (i) any Person shall commence a pro cess pursuant to which all or a substantial part of the Revenues or Authority Revenues may be sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure of the Liens thereon securing the Obligations, or (ii) any Person shall commence a process pursuant to which all or a substantial part of the Revenues or Authority Revenues may be sold or otherwise disposed of pursuant to a sale or disposition of such Revenues or Authority Revenues in lieu of foreclosure; or (d) any r eceiver, trustee, liquidator, custodian, sequestrator, conservator or similar official shall transfer, pursuant to directions issued by the holders of Obligations, funds on deposit in any of the System funds or accounts upon the occurrence and during the c ontinuation of an Event of Default under this Agreement or an event of default under any Obligation Document for application to the Attachment "A"

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prepayment or repayment of any principal amount of the Obligations other than in accordance with the provisions of this Agreement.
“Base Case Financial Model” means a financial model prepared by the City forecasting the capital costs of the System (including the Project) and the rates, revenues, operating expenses and major maintenance requirements of the System for time period s through the Final Maturity Date and based upon assumptions and methodology provided by the City and acceptable to the WIFIA Lender as of the Effective Date, which model shall be provided to the WIFIA Lender as a fully functional Microsoft Excel -based fin ancial model or such other format requested by the WIFIA Lender.
“Borrower” has the meaning provided in the preamble hereto. “Borrower Assigned Rights ” has the meaning provided in Section 7(c) (Security and Priority; Flow of Funds).
“Borrower Closing Certificate ” has the meaning provided in Section 11(a) (ix) (Conditions Precedent – Conditions Precedent to Effectiveness). “Borrower Event of Default ” has the meaning provided in Section 21 (a) (Events of Default).
“Borrower Financial Statements” means the audited income statement and balance sheet of the Borrower as of the end of the Borrower Fiscal Year and the related audited statements of operations and of cash flow of the Borrower for such Borrower Fiscal Year. “Borrower Fiscal Year” means (a) as of the Effective Date, a fiscal year of the Borrower commencing on July 1 of any calendar year and ending on June 30 of the immediately succeeding calendar year or (b) such other fiscal year as the Borrower may hereafter adopt after giving thirty (30) days’ prior written notice to the WIFIA Lender in accordance with Section 16 (c) (Negative Covenants of the Borrower – Borrower Fiscal Year).
“Borrower Material Adverse Effect” means a material adverse effect on (a) the Authority Revenues, (b) the business, operations, properties, condition (financial or otherwise) or prospects of the Borrower, (c) the legality, validity or enforceability of any material provision of any WIFIA Loan Document to which the Borrower is a party , (d) the ability of the Borrower to enter into, perform or comply with any of its material obligations under any WIFIA Loan Document to which it is a party, (e) the validity, enforceability or priority of the pledge and assignment of the Borrower Assigned Rights provided under the WIFIA Loan Documents or (f) the WIFIA Lender’s rights or remedies available under any WIFIA Loan Document to which the Borrower is a party. “Borrower Payment Default ” has the meaning provided in Section 21(a)(i) (Events of Default and Remedies – Borrower Payment Default).
“Borrower’s Authorized Representative” means any Person who shall be designated as such pursuant to Section 25 (Borrower’s Authorized Representative).

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“Business Day” means any day other than a Saturday, a Sunday or a day on which offices of the Government or the State are authorized to be closed or on which commercial banks are authorized or required by law, regulation or executive order to be closed in New York, New York or Escondido, California.
“City Closing Certificate ” has the meaning provided in Section 11(a) (x) (Conditions Precedent – Conditions Precedent to Effectiveness).
“City Event of Default” has the meaning provided in Section 21(b) (Events of Default and Remedies).
“City Financial Statements ” means the audited income statement and balance sheet of the City as of the end of the City Fiscal Year and the related audited statements of operations and of cash flow of the City for such City Fiscal Year.
“City Fiscal Year” means (a) as of the Effective Date, a fiscal year of the City commencing on July 1 of any calendar year and ending on June 30 of the immediately succeeding calendar year or (b) such other fiscal year a s the City may hereafter adopt after giving thirty (30) days’ prior written notice to the WIFIA Lender in accordance with Section 18 (f) (Negative Covenants of the City – City Fiscal Year).
“City Material Adverse Effect ” means a material adverse effect on (a) the System, the Project or the Revenues, (b) the business, operations, properties, condition (financial or otherwise) or prospects of the City, (c) the legality, validity or enforceability of any material provision of any WIFIA Loan Document to which the City is a party, (d) the ability of the City to enter into, perform or comply with any of its material obligations under any WIFIA Loan Document to which it is a party, (e) the validity, enforceability or priority of the Liens on the City Pledged Collateral provided under the WIFIA Loan Documents or (f) the WIFIA Lender ’s rights or remedies available under any WIFIA Loan Document to which the City is a party. “City Payment Default” has the meaning provided in Section 21(b)(i) (Events of Default and Remedies – City Payment Default).
“City Pledged Collateral ” has the mea ning provided in Section 7(a) (Security and Priority; Flow of Funds).
“City’s Authorized Representative” means any Person who shall be designated as such pursuant to Section 26 (City’s Authorized Representative). “Code” means the Internal Revenue Code of 1986, or any successor tax code, as amended from time to time, and the applicable regulations proposed or promulgated thereunder. “Congress” means the Congress of the United States of America. “Construction Contract” means any prime contract entered into by the City with respect to the Project that involves any construction activ ity (such as demolition, site preparation, civil works construction, installation, remediation, refurbishment, rehabilitation, or removal and replacement services). For the avoidance of doubt “ Construction Contract” shall include each Attachment "A"

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Existing Construction Contract and, upon the effectiveness thereof, each Additional Construction Contract.
“Construction Contractor” means any Person (other than the Borrower or the City) party to a Construction Contract.
“Construction Period” means the period from the Effective Date through the Substantial Completion Date.
“Construction Period Servicing Fee” has the meaning provided in Section 10(a)(ii) (Fees and Expenses – Fees).
“Construction Schedule ” means (a) the initial schedule or schedules on which the construction timetables for the Project are set forth, attached as Schedule II (Construction Schedule), and (b) any updates thereto included in the periodic reports submitted to the WIFIA Lender pursuant to Section 20(c)(i) (Reporting Requirements of the City – Construction Reporting) most recently approved by the WIFIA Lender.
“CPI” means the Consumer Price Index for All Urban Consumers (CPI -U) for the U.S.

City Average for All Items, 1982-84=100 (not seasonally adjusted) or its successor, published by the Bureau of Labor Statistics and located at https://www.bls.gov/news.release/cpi.t01.htm. “Debt Management Policy ” means that certain Debt Management Policy of the City , adopted by the Board of Directors of the City on April 5, 2017 pursuant to Resolution No. 2017 - 47, as may be amended by the City from time to time.
“Debt Service Payment Commencement Date ” means the Interest Payment Date immediately succeeding the date of the initial disbursement of the WIFIA Loan. “Default” means any event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means an interest rate equal to the lesser of (a) the sum of (i) the WIFIA Interest Rate plus (ii) two hundred (200) basis points and (b) the maximum interest rate permitted by law.
“Development Default ” means (a) the City abandons work or fails, in the reasonable judgment of the WIFIA Lender, to diligently prosecute the work related to the Project or (b) the City fails to achieve Substantial Completion of the Project by January 31, 2027. “Dollars” and “$” means the lawful currency of the United States of America. “DUNS Number” has the meaning provided in Section 15(i) (Affirmative Covenants of the Borrower – DUNS Number).
“Effective Date” means the date of this Agreement.

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“Eligible Project Costs” means amounts in the Project Budget (as of the Effective Date) approved by the WIFIA Lender, which are paid by or for the account of the City, as agent of the Borrower pursuant to the WIFIA IPA , in connection with the Project (including, as applicable, Project expenditures incurred prior to the receipt of WIFIA credit assistance, or the repayment of amounts borrowed to make such expenditures prior to the receipt of WIFIA credit assistance), which shall arise from the following:
(a) development-phase activities, including planning, feasibility analysis (including any related analysis necessary to carry out an eligible project), revenue forecasting, environmental review, permittin g, preliminary engineering and design work and other preconstruction activities;
(b) construction, reconstruction, rehabilitation, and replacement activities; (c) the acquisition of real property or an interest in real property (including water rights, lan d relating to the Project and improvements to land), environmental mitigation (including acquisitions pursuant to Section 3905(8) of Title 33 of the United States Code), construction contingencies, and acquisition of equipment; or (d) capitalized interest (with respect to Obligations other than the WIFIA Loan) necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction; provided that Eligible Project Costs must be consistent with all other applicable federal law, including the Act.
“Eligible Project Costs Documentation ” has the meaning provided in Section 1 of Exhibit D (Requisition Procedures).
“EMMA” means the Electronic Municipal Market Access system as described in 1934 Act Release No. 59062 and maintained by the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)1 of the Securities Exchange Act of 1934, as amended, and its successors.
“Environmental Laws” has the meaning provided in Section 13(o) (Representations and Warranties of the City – Environmental Matters).
“EPA” means the United States Environmental Protection Agency. “Event of Default” means any City Event of Default or any Borrower Event of Default. “Existing Construction Contract” means each Construction Contract of the City existing as of the Effective Date, as set forth in Schedule 13(m) (Existing Construction Contracts). “Existing Indebtedness” means all (a) Obligations and indebtedness of the City and (b) indebtedness of the Borrower, in each case that has been issued or incurred prior to the Effective Date, as listed and described in Schedule III (Existing Indebtedness).

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“Existing Parity Obligations” means the Parity Obligations listed and described in Part A of Schedule III (Existing Indebtedness).
“Existing Subordinate Obligations ” means the Subordinate Obligations listed and described in Part B of Schedule III (Existing Indebtedness). “Federal Fiscal Year” means the fiscal year of the Government, which is the twelve (12) month period that ends on September 30 of the specified calendar year and begins on October 1 of the preceding calendar year.
“Federal Securities ” means any direct, noncallable general obligations of the United States of America (including obligations issued or held in book -entry form on the books of the Department of the Treasury of the United States of America), or noncallable obligations the timely payment of principal of and interest on which are fully and unconditiona lly guaranteed by the United States of America.
“Final Disbursement Date” means the earliest of (a) the date on which the WIFIA Loan has been disbursed in full; (b) the last anticipated date of disbursement set forth in the then-current Anticipated WIFIA Loan Disbursement Schedule; (c) the date on which the Borrower has certified to the WIFIA Lender that it will not request any further disbursements under the WIFIA Loan; (d) the date on which the WIFIA Lender terminates its obligations relating to disbursem ents of any undisbursed amounts of the WIFIA Loan in accordance with Section 21 (Events of Default and Remedies); and (e) the date that is one (1) year after the Substantial Completion Date. “Final Maturity Date” means July 1, 2055 (or such earlier date as is set forth in an updated Exhibit F (WIFIA Debt Service ) pursuant to Section 8(f) (Payment of Principal and Interest – Adjustments to Loan Amortization Schedule)).
“Fixed Level Payment” has the meaning provided in Section 8(b) (Payment of Principal and Interest – Fixed Level Payments).
“Flow of Funds ” means the req uirements specified in Section 5.02 (Allocation of Revenues) of the WIFIA IPA.
“Flow of Funds Following Acceleration ” means the requirements specified in Section

8.02 (Application of Funds Upon Acceleration) of the WIFIA IPA. “GAAP” means the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or of any other generally accepted authority on such procedures, and includes, as applicable, the s tandards set forth by the Governmental Accounting Standards Board or its successor. “Government” means the United States of America and its departments and agencies. “Governmental Approvals ” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions and declarations of or with any Governmental Authority.

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“Governmental Authority ” means any federal, state, provincial, county, city, town, village, municipal or other government or governmental d epartment, commission, council, court, board, bureau, agency, authority or instrumentality (whether executive, legislative, judicial, administrative or regulatory), of or within the United States of America or its territories or possessions, including the State and its counties and municipalities, and their respective courts, agencies, instrumentalities and regulatory bodies, or any entity that acts “on behalf of” any of the foregoing, whether as an agency or authority of such body. “Hedging Transaction” means any interest rate protection agreement, interest rate swap transaction, interest rate “cap” transaction, interest rate future, interest rate option or other similar interest rate hedging arrangement commonly used in loan transactions to hedge against i nterest rate increases; provided that in no event shall any such transaction be for any speculative purpose. “Indemnitee” has the meaning provided in Section 37 (Indemnification). “Independent Accountant ” means any certified public accountant or firm of certified public accountants duly licensed or registered or entitled to practice and practicing as such under the laws of the State, appointed by the City who, or each of whom: (a) is in fact independent and not under the direct or indirect control of the City or the Borrower; (b) does not have any substantial interest, direct or indirect, in the City or the Borrower ; and (c) is not connected with the City or the Borrower as an officer or employee of the City or the Borrower , but who may be regularly retained to make reports to the City or the Borrower.
“Independent Consultant” means any consultant or firm of such consultants judged by the City to have experience in matters relating to the collection of Revenues or other experience with respect to the financing of System projects, as appropriate, appointed and paid by the City who, or each of whom: (a) is in fact independent and not under the direct or indirect control of the City or the Borrower; (b) does not have any substantial interest, direct or indirect, in the City or the Borrower; and (c) is not connected with the City or the Borrower as a member, officer or employee of the City or the Borrower, but who may b e regularly retained to make reports to the City or the Borrower.
“Insolvency Laws” means the United States Bankruptcy Code, 11 U.S.C. § 101 et seq., as from time to time amended and in effect, and any state bankruptcy, insolvency, receivership, conservatorship or similar law now or hereafter in effect. “Installment Payment Date” means the fifth (5th) day prior to each Interest Payment Date, or if said date is not a Business Day, then the preceding Business Day. “Interest Only Period ” means the pe riod commencing on the Debt Service Payment Commencement Date and ending on the date that is six (6) months prior to the Level Payment Commencement Date (or on such earlier date as all amounts due or to become due to the WIFIA Lender hereunder have been irrevocably paid in full in cash). “Interest Payment Date” means each January 1 and July 1. “Investment Agreement” means an investment agreement by a provider, supported by appropriate opinions of counsel, provided that any such Investment Agreement shall: (i) be from Attachment "A"

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a provider rated by S&P or Moody ’s at “A-” or “A3”, respectively, or above; (ii) require the Borrower or the City to terminate such agreement and immediately reinvest the proceeds thereof in other Permitted Investments if the rating assigned to the provider by S&P or Moody’s falls to “BBB” or “Baa2”, respectively, or below; and (iii) expressly permit the withdrawal, without penalty, of any amounts necessary at any time to fund any deficiencies on account of debt service requirements with respect to the Obligations.
“Investment Grade Rating” means a public rating no lower than ‘BBB-’, ‘Baa3’, ‘bbb-’, ‘BBB (low)’, or higher, from a Nationally Recognized Rating Agency. “Level Payment Commencement Date” means July 1, 2026.
“Level Payment Period ” means the period commencing on the Level Payment Commencement Date and ending on the Final Maturity Date (or on such earlier date as all amounts due or to become due to the WIFIA Lender hereunder have been irrevocably paid in full in cash). “Lien” means a ny mortgage, pledge, hypothecation, assignment, mandatory deposit arrangement, encumbrance, attachment, lien (statutory or other), charge or other security interest, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any sale-leaseback arrangement, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or any other applicable law.
“Loan Amortization Schedule ” means the loan amortization schedule reflected in the applicable column of Exhibit F (WIFIA Debt Service ), as amended from time to time in accordance with Section 8(f) (Payment of Principal and Interest – Adjustments to Loan Amortization Schedule).
“Material Adverse Effect” means a material adverse effect on (a) the System, the Project, the Revenues or the Authority Revenues, (b) the business, operations, properties, condition (financial or otherwise) or prospects of either the Borrower or the City, (c) the legality, validity or enforceability of any material provision of any WIFIA Loan Document, (d) the ability of either the Borrower or the City to enter into, perform or comply with any of its material obligations under any WIFIA Loan Document to which it is a party, (e) the validity, enforceability or priority of the pledge and assignment of the Borrower Assigned Rights or the Liens on the City Pledged Collateral, in each case provided under the WIFIA Loan Documents , or (f) the WIFIA Lender ’s rights or remedies available under any WIFIA Loan Document. “Maximum Annual Debt Service” means as of the date of calculation, the greatest total Parity Debt Service payable in any City Fiscal Year during which this Agreement is in effect. “Nationally Recognize d Rating Agency ” means any nationally recognized statistical rating organization identified as such by the Securities and Exchange Commission. “NEPA” means the National Environmental Policy Act of 1969, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time.

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“NEPA Determination”1 means the [Categorical Exclusion] [Finding of No Significant Impact] [Record of Decision] for the Project issued by EPA on [●] in accordance with NEPA. “Net Proceeds” means, when used with respect to any casualty insurance or condemnation award, the proceeds from such insurance or condemnation award remaining after payment of all expenses (including attorneys’ fees) incurred in the collection of such proceeds. “Net Revenues” means for any City Fiscal Year , all Revenues received by the City for such City Fiscal Year less the Operations and Maintenance Costs for such City Fiscal Year. “Non-Debarment Certificate” means a certificate, signed by the Borrower’s Authorized Representative or the City ’s Authorized Representative , as applicable, as to the absence of debarment, suspension or voluntary exclusion from participation in Government contracts, procurement and non-procurement matters with respect to the Borrower or the City, as applicable, and its principals (as defined in 2 C.F.R. § 180.995 and supplemented by 2 C.F.R. 1532.995), substantially in the form attached hereto as Exhibit C (Form of Non-Debarment Certificate). “Non-Lobbying Certificate” means a certificate, signed by the Borrower’s Authorized Representative or the City ’s Authorized Representative , as applicable , with respect to the prohibition on the use of appropriated funds for lobbying pursuant to 49 C.F.R. § 20.100(b), substantially in the form attached hereto as Exhibit E (Form of Non-Lobbying Certificate). “Obligation Document ” means any indenture, bond, credit agreement, note, reimbursement agreement, letter of credit, guarantee or any other agreement, instrument or document pursuant to which any Obligation is incurred by the City. “Obligations” means, collectively, the Parity Obligations and the Subordinate Obligations. “Operating Period Servicing Fee ” has the meaning provided in Section 10(a)(iii) (Fees and Expenses – Fees).
“Operations and Maintenance Costs” means (a) costs spent or incurred for maintenance and operation of the System calculated in accordance with GAAP, including the reasonable expenses of management and repair and other expenses necessary to maintain and preserve the System in good repair and working order, and including administrative costs of the City that are charged directly or apportioned to the System, including but not limited to salaries and wages of employees, payments to the Public Employees Retirement System, overhead, insurance, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges (other than debt service payments) required to be paid by it to comply with the terms of this Agreement or the Obligation Documents with respect to Parity Obligati ons and (b) all payments under any contract for the purchase of water, but excluding in all cases depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. “Organizational Documents” means, with respect to either the City or the Borrower, (a) the constitutional and statutory provisions that are the basis for the existence and authority of such 1 NTD: Definition to be updated following issuance.

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entity, including any enabling statutes, ordinances or public charters and any other organic laws establishing such entity and (b) the resolutions, bylaws, code of regulations, operating procedures or other organizational documents (including any amendments, modifications or supplements thereto) of or adopted by such entity by which such entity, its powers, operations or procedures or its securities, bonds, notes or other obligations are governed or from which such powers are derived.
“Outstanding” means, with respect to Obligations, Obligations that have not been cancelled or legally defeased or discharged.
“Outstanding WIFIA Loan Balance ” means (a) the aggregate principal amount of the WIFIA Loan drawn by the Borrower minus (b) the aggregate principal amount of the WIFIA Loan repaid by the Borrower, as determined in accordance with Section 8(f) (Payment of Principal and Interest – Adjustments to Loan Amortization Schedule).
“Parity Debt Service”2 means, for any period, the sum of:
(a) the interest payable during such period on all outstanding Parity Obligations, assuming that all outstanding serial Parity Obligations are retired as scheduled and that all outstanding term Parity Obligations are prepaid or paid from sinking fund payments as scheduled (except to the extent that such interest is capitalized); (b) that portion of the principal amount of all outstanding serial Parity Obligations maturing in such period; and
(c) that portion of the principal amount of all outstanding term Parit y Obligations required to be prepaid or paid in such period; provided that, as to any such Parity Obligations bearing or comprising interest at other than a fixed rate, the rate of interest used to calculate Parity Debt Service shall be the greatest of:
(i) the actual interest rate on such Parity Obligations on the date of calculation, or if the indebtedness is not yet outstanding, the initial interest rate (if established and binding); and
(ii) if the Parity Obligations have been outstanding for at least twelve (12) months, the average rate over the period of the same length as the period of calculation of Parity Debt Service immediately preceding the date of calculation; and (iii) (A) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Code, the most recently published Bond Buyer “Revenue Bond Index” (or comparable index if no longer published) plus fifty (50) basis points; or (B) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus fifty (50) basis points; provided that for purposes of any portion of Section 18(a) (Negative Covenants of the City – Additional Obligations) or Section 17(a) (Affirmative Covenants of the City – Rate Covenant ), measuring actual debt service 2 NTD: EPA prefers to use the definition adapted from the IBank ISAs.

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coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period; and provided further that if any series or issue of such Parity Obligations have twenty -five percent (25%) or more of t he aggregate principal amount of such series or issue due in any one year, Parity Debt Service shall be determined for the period of calculation of determination as if the principal of and interest on such series or issue of such Parity Obligations were being paid from the date of incurrence thereof in substantially equal annual amounts over a period of twenty-five (25) years from the date of calculation; and
provided further that, as to any such Parity Obligations or portions thereof bearing no interest but which are sold at a discount and which discount accretes with respect to such Parity Obligations or portions thereof, such accreted discount shall be treated as interest in the calculation of Parity Debt Service; and
provided further that the amount on d eposit in a debt service reserve fund on any date of calculation of Parity Debt Service shall be deducted from the amount of principal due at the final maturity of the Parity Obligations for which such debt service reserve fund was established and in each preceding year until such amount is exhausted; and provided further that Parity De bt Service shall not include interest which is paid from investment earnings on amounts on deposit in any reserve fund and transferred to the WIFIA Debt Service Account.
“Parity Obligations” means the WIFIA Installment Payments and all other obligations of the City which are secured by a pledge of and lien on the Revenues and rank pari passu in right of payment and right of security with the WIFIA Installment Payments, including the Existing Parity Obligations and any Additional Parity Obligations.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, and all regulations promulgated thereunder.
“Payment Date” means each Interest Payment Date and each Principal Payment Date. “Payment Default” means any Borrower Payment Default or any City Payment Default. “Permitted Investment” means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein:
(a) for all purposes, including: (i) as defeasance investments in refunding escrow accounts; and (ii) for the purpose of investing (and receiving p remium credit for) accrued and capitalized interest: (1) cash; or (2) Federal Securities; and
(b) for all purposes other than: (i) defeasance investments in refunding escrow accounts; and (ii) investing (and receiving credit for) accrued and capitalized interest: (1) obligations of any of the following federal agencies which obligations represent full faith and credit of the United States of America: the Export -Import Bank; Farmers Home Administration; General Services Attachment "A"

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Administration; U.S. Maritime Administ ration; Small Business Administration; Government National Mortgage Association (GNMA); U.S. Department of Housing & Urban Development (PHAs); and Federal Housing Administration; (2) bonds, notes or other evidences of indebtedness rated “AAA” and “Aaa” by the applicable Rating Agency issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation with remaining maturities not exceeding three years; (3) U.S. dollar denominated deposit accounts, demand deposits, including interest bearing money market accounts, trust funds, trust accounts, overnight bank deposits, interest-bearing deposits, other deposit products, certificates of deposit, federal funds and banker's acceptances with domestic commercial banks, which: (I) have a rating on their short term certificates of deposit on the date of purchase of “A-1” or “A-1+” by S&P and “P-1” by Moody’s; or (II) deposits insured by the Federal Deposit Insurance Corporation maturing no more than three hundred sixty ( 360) days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (4) commercial paper which is rated at the time of purchase in the single highest classification, “A-1+” by S&P and “P-1” by Moody’s and which matures not more than two hundred seventy (270) days after the date of purchase; (5) investments in a money market fund rated “AAAm”, “AAAm-G”, “AAm” or “AAm-G” or better by S&P; (6) pre-refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been gi ven by the obligor to call on the date specified in the notice and which are rated, based on the escrow, in the highest rating category of S&P and Moody ’s, or any successor thereto; (7) any Investment Agreement; (8) the Local Agency Investment Fund of the State of California; and (9) any other investment permitted by law. “Permitted Liens” means:
(a) Liens imposed pursuant to the WIFIA Loan Documents and the other Obligation Documents;
(b) Liens imposed by law, including Liens for taxes that are not yet due or are being contested in compliance with Section 15(g) (Affirmative Covenants of the Borrower – Material Obligations; Payment of Claims) and Section 17(k) (Affirmative Covenants of the City – Material Obligations; Payment of Claims);
(c) carriers’, warehousemen ’s, mechanics ’, materialmen ’s, repairmen ’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 15(g) (Affirmative Covenants of the Borrower – Material Obligations; Payment of Claims ) and Section 17 (k) (Affirmative Covenants of the City – Material Obligations; Payment of Claims);
(d) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance, and other social security laws or regulations;
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(e) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (f) judgment Liens in respec t of judgments that do not constitute an Event of Default under Section 21(a)(iv) (Events of Default and Remedies – Borrower Material Adverse Judgment) or Section 21(b)(vi) (Events of Default and Remedies – City Material Adverse Judgment); and
(g) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that, in any case, do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of either the Borrower or the City.
“Person” means and includes an individual, a general or limited partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and any Governmental Authority.
“Principal Payment Date” means each July 1.
“Project” means the Lake Wohlford Dam Replacement Project, the purpose of which is to replace the existing Lake Wohlford Dam, restore the reservoir to its former capacity, mitigate the effects of drought in the region, improve water quality and address safety hazards identified by the California Department of Water Resources, Division of Safety of Dams. Project elements include:
(a) dam construction downstream of the existing dam; (b) new spillway construction; (c) new outlet tower construction; and (d) demolition of the existing dam. “Project Budget” means the budget for the Project attached to this Agreement as Schedule I (Project Budget) showing a summary of Total Project Costs with a breakdown of all Eligible Project Costs and the estimated sources and uses of funds for the Project, as amended from time to time with the approval of the WIFIA Lender.
“Project EPC Documentation” has the meaning provided in Section 4(e) (Disbursement Conditions).
“Projected Substantial Completion Date” means January 31, 2025, as such date may be adjusted in accordance with Section 20(c)(i) (Reporting Requirements of the City – Construction Reporting).
“Prop 218 Law ” means, collectively, the California Constitution Article XIII D, the statutes implementing it, and the published California Appellate Court and Supreme Court decisions interpreting it in effect on the Effective Date and as such law may be amended o r interpreted from time to time.
“Public Benefits Report ” has the meaning provided in Section 20(d) (Reporting Requirements of the City – Public Benefits Report).

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“Rate Covenant ” means the requirements specified in Section 17(a) (Affirmative Covenants of the City – Rate Covenant).
“Related Documents ” means the WIFIA Loan Documents and each other Obligation Document.
“Report” means a written document signed by an Independent Consultant or an Independent Accountant, and including: (a) a statement that the person or firm making or giving such Report has read the pertinent provisions of this Agreement to which such Report relates; (b) a brief statement as to the nature and scope of the examination or investigation upon which the Report is based; and (c) a statement that, in the opinion of such person or firm, sufficien t examination or investigation was made as is necessary to enable said consultant to express an informed opinion with respect to the subject matter referred to in the Report. “Requisition” has the meaning provided in Section 4(a) (Disbursement Conditions). “Revenue Fund” means the water enterprise fund established by the City into which all Revenues are deposited and maintained by the City. The Revenue Fund is composed of the funds received from water treatment, transmission, distribution, and sales services provided to the City’s customers.
“Revenues” means all income, rents, rate s, fees, charges and other moneys derived from the ownership of or operation of the System, including, without limiting the generality of the foregoing: (a) all in lieu charges and groundwater augmentation charges (including investment earnings thereon) collected by or on behalf of the City; ( b) all income, rents, rates, fees, charges, business interruption insurance proceeds or other moneys derived by the City from the sale, furnishing and supplying of the water, drainage or other services, facilities, and commodities sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the System; and (c) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, proceeds or other moneys, including City reserves, but excluding in all cases:
(x) customers’ deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City; (y) revenues of the City’s recycled water system; and (z) proceeds of taxes or benefit assessments restricted by law to be used by the City to pay amounts due on bonds or other obligations hereafter incurred. “Sanctions Laws” means collectively, any applicable anti-drug trafficking, anti-terrorism, anti-money laundering, anti -bribery, or anti -corruption laws or regulations, as applicable, including those contained in the Bank Secrecy Act of 1970 (as amended) and the U.S. Patriot Act. “Servicer” means such entity or entities as the WIFIA Lender shall designate from time to time to perform, or assist the WIFIA Lender in performing, certain duties hereunder. “Servicing Fee” means the Servicing Set -Up Fee and any Construction Period Servicing Fee or Operating Period Servicing Fee.
“Servicing Set-Up Fee” has the meaning provided in Section 10(a)(i) (Fees and Expenses – Fees).

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“State” has the meaning provided in the preamble hereto. “Subordinate Obligations ” means all obligations of the City which are secured by a pledge of and lien on th e Revenues and are fully subordinated in right of payment and right of security to the Parity Obligations, including the Existing Subordinate Obligations and any Additional Subordinate Obligations.
“Substantial Completion ” means, with respect to the Project, the stage at which the Project is able to perform the functions for which the Project is designed. “Substantial Completion Date” means the date on which the City certifies to the WIFIA Lender, with evidence satisfactory to the WIFIA Lender, that Substantial Completion has occurred. “System” means the whole and each and every part of the waterworks system serving the City, whether owned or operated by the City or another party, including the portion thereof existing on the date hereof, and including all additions, betterments, extensions and improvements to such water system or any part thereof hereafter acquired or constructed , but excluding the City’s recycled water system.
“Total Project Costs” means (a) the costs paid or incurred or to be paid or incurred by the City, as agent of the Borrower pursuant to the WIFIA IPA, in connection with or incidental to the acquisition, design, construction and equipping of the Project, including legal, administrative, engineering, planning, design, insurance and financing (including costs of issuance); (b) amounts, if any, required by th e WIFIA Loan Documents to be paid into any fund or account upon the incurrence of the WIFIA Loan or any other Obligation, in each case in respect of the Project; (c) payments when due (whether at the maturity of principal, the due date of interest, or upon optional or mandatory prepayment) during the Construction Period in respect of any obligations of the City in connection with the Project (other than the WIFIA Loan); and (d) costs of equipment and supplies and initial working capital and reserves required by the City for the commencement of operation of the Project, including general administrative expenses and overhead of the City. “Uncontrollable Force” means any cause beyond the control of the Borrower and the City, including: (a) a hurricane, tornado, flood or similar occurrence, landslide, earthquake, fire or other casualty, strike or labor disturbance, freight embargo, act of a public enemy, explosion, war, blockade, terrorist act, insurrection, riot, general arrest or restraint of government and people, civil disturbance or similar occurrence, sabotage or act of God (provided that neither the Borrower nor the City shall be required to settle any strike or labor disturbance in which it may be involved) or (b) the order or judgment of any federal, stat e or local court, administrative agency or governmental officer or body, if it is not also the result of willful or negligent action or a lack of reasonable diligence of the Borrower or the City and neither the Borrower nor the City controls the administrative agency or governmental officer or body; provided that the diligent contest in good faith of any such order or judgment shall not constitute or be construed as a willful or negligent action or a lack of reasonable diligence of the Borrower or the City. “Uniform Commercial Code ” or “UCC” means the Uniform Commercial Code, as in effect from time to time in the State.

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“Updated Financial Model ” means the Base Case Financial Model, updated in accordance with Section 20(a) (Reporting Requirements of the City – Updated Financial Model). “Variable Interest Rate ” means a variable interest rate to be borne by any Obligations.

The method of computing such variable interest rate shall be specified in the Obligation Document pursuant to which such Obligations are incurred. Such Obligation Document shall also specify either (a) the particular period or periods of time for which each value of such variable interest rate shall remain in effect or (b) the time or times upon which any change in such variable interest rate shall become effective.
“Variable Interest Rate Obligations” means Obligations which bear a Variable Interest Rate but does not include any Obligations fo r which the interest rate has been fixed during the remainder of the term thereof to maturity.
“WIFIA” has the meaning provided in the recitals hereto. “WIFIA Borrower Resolution” means Resolution No. EJPFA-2022-[●], adopted by the Borrower on [May 11, 202 2], authorizing the execution and delivery of this Agreement and the WIFIA Note and certain related actions by the Borrower in connection with the issuance of the WIFIA Loan.
“WIFIA City Resolution” means Resolution No. 2022-[●], adopted by the City on [May 11, 2022 ], authorizing the execution and delivery of this Agreement and the WIFIA IPA and certain related actions by the City in connection therewith. “WIFIA CUSIP Number” means a CUSIP number for the WIFIA Loan obtained for the purposes of monitoring through EMMA.
“WIFIA Debt Service” means with respect to any Payment Date, the principal portion of the Outstanding WIFIA Loan Balance and any interest payable thereon (including interest accruing after the date of any filing by the Borrower of any petition in bankruptcy or the commencement of any bankruptcy, insolvency or similar proceeding with respect to the Borrower), in each case, (a) as set forth on Exhibit F (WIFIA Debt Service) and (b) due and payable on such Payment Date in accordance with the provisions of Section 8(a) (Payment of Principal and Interest – Payment of WIFIA Debt Service).
“WIFIA Debt Service Account ” means the debt service account established and maintained by the City, as agent of the Borrower pursuant to the WIFIA IPA, pursuant to Section 17(i) (Affirmative Covenants of the City – WIFIA Debt Service Account). “WIFIA Installment Payments” means the installment payments of interest and principal scheduled to be paid by the City under and pursuant to the WIFIA IPA. “WIFIA Interest Rate” has the meaning provided in Section 6 (Interest Rate). “WIFIA IPA” means that certain Installment Purchase Agreement, dated as of the date hereof, by and between the City and the Borrower with respect to the Project.

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“WIFIA Lender” has the meaning provided in the preamble hereto. “WIFIA Lender’s Authorized Representative” means the Administrator and any other Person who shall be designated as such pursuant to Section 27 (WIFIA Lender ’s Authorized Representative).
“WIFIA Loan” means the secured loan made by the WIFIA Lender to the Borrower on the terms and conditions set forth herein, pursuant to the Act, in a principal amount not to exceed $65,147,348, to be used in respect of Eligible Project Costs. “WIFIA Loan Documents” means this Agreement, the WIFIA Note, the WIFIA IPA and the WIFIA Resolutions.
“WIFIA Note ” means the note delivered by the Borrower in substantially the form of Exhibit A (Form of WIFIA Note).
“WIFIA Resolutions” means, collectively, the WIFIA City Resolution and the WIFIA Borrower Resolution.

Section 2. Interpretation.
(a) Unless the context shall otherwise require, the words “hereto,” “herein,” “hereof” and other words of similar import refer to this Agreement as a whole. (b) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders and vice versa. (c) Words importing the singular number shall inc lude the plural number and vice versa unless the context shall otherwise require.
(d) The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”
(e) Whenever the Borrower’s knowledge or the City’s knowledge is implicated in this Agreement or the phrase “to the Borrower ’s knowledge” or the phrase “to the City ’s knowledge” or a similar phrase is used in this Agreement, the Borrower’s knowledge or the City’s knowledge or such phrase(s) shall be interpreted to mean to the best of the Borrower’s knowledge or the best of the City’s knowledge, as applicable, after reasonable and diligent inquiry. Unless the context shall otherwise require, references to any Person shall be deemed to include such Person’s successors and permitted assigns.
(f) Unless the context shall otherwise require, references to preambles, recitals, sections, subsections, clauses, schedules, exhibits, appendices and provisions are to the applicable preambles, recitals, sections, subsections, clauses, schedules, exhibits, appendices and provisions of this Agreement.

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(g) The schedules and exhibits to this Agreement, and the appendices and schedules to such exhibits, are hereby incorporated by reference and made an integral part of this Agreement.
(h) The headi ngs or titles of this Agreement and its sections, schedules or exhibits, as well as any table of contents, are for convenience of reference only and shall not define or limit its provisions.
(i) Unless the context shall otherwise require, all references to any resolution, contract, agreement, lease or other document shall be deemed to include any amendments or supplements to, or modifications or restatements or replacements of, such documents that are approved from time to time in accordance with the terms thereof and hereof. (j) Every request, order, demand, application, appointment, notice, statement, certificate, consent or similar communication or action hereunder by any party shall, unless otherwise specifically provided, be delivered in writing in accordance w ith Section 36 (Notices) and signed by a duly authorized representative of such party. (k) References to “disbursements of WIFIA Loan proceeds” or similar phrasing shall be construed as meaning the same thing as “paying a portion of the purchase price of the WIFIA Note”.
(l) Whenever this Agreement requires a change in principal amount, interest rate or amortization schedule of the WIFIA Loan, it is intended that such change be reflected in the WIFIA Note. Whenever there is a mandatory or optional prepayment of the WIFIA Loan, it is intended that such prepayment be implemented through a prepayment of the WIFIA Note.

ARTICLE II

THE WIFIA LOAN
Section 3. WIFIA Loan Amount. The principal amount of the WIFIA Loan shall not exceed $65,147,348. WIFIA Loan proceeds available to be drawn shall be disbursed from time to time in accordance with Section 4 (Disbursement Conditions ) and Section 11(b) (Conditions Precedent – Conditions Precedent to Disbursements).

Section 4. Disbursement Conditions.
(a) Pursuant to the WIFIA IPA, the Borrower has appointed the City as its agent to request funds from time to time under this Agreement and the City has accepted such appointment and assumed all rights, liabilities, duties and responsibilities of the Borrower under this Agreement regarding the requisition of funds from time to time under this Agreement. WIFIA Loan proceeds shall be disbursed solely in respect of Eligible Project Costs . If the Borrower intends to utilize the WIFIA Loan proceeds to make progre ss payments for Project construction work performed under the Construction Contracts, the City, as agent of the Borrower pursuant to the WIFIA IPA , shall demonstrate to the satisfaction of the WIFIA Lender that such progress payments are commensurate with the cost of the work that has been completed. Each disbursement of the WIFIA Loan shall be made pursuant to a requisition and certification (a “Requisition”) in the form set forth in Appendix One (Form of Requisition) to Exhibit D (Requisition Procedures), Attachment "A"

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along with all documentation and other information required thereby, submitted by the City, as agent of the Borrower pursuant to the WIFIA IPA, to, and approved by, the WIFIA Lender, all in accordance with the procedures of Exhibit D (Requisition Procedures ) and subject to the requirements of this Section 4 and the conditions set forth in Section 11(b) (Conditions Precedent – Conditions Precedent to Disbursements ); provided that no disbursements of WIFIA Loan proceeds shall be made after the Final Disbursement Date. (b) Each Requisition shall in clude a certification by the City, as agent of the Borrower pursuant to the WIFIA IPA , certifying as to the following : (i) whether reimbursement or payment is being requested with respect to (A) Eligible Project Costs that have been submitted by it pursuant to Section 4(e) and approved by the WIFIA Lender pursuant to Section 4 (f) or (B) other Eligible Project Costs incurred by the City, as agent of the Borrower pursuant to the WIFIA IPA; (ii) the amount for which reimbursement or payment is being requested has not been reimbursed or paid by any previous disbursement of WIFIA Loan proceeds; and (iii) to the extent any Eligible Project Costs described in clause (i)(B) above are included in the Requisition, that such Eligible Project Costs have not and will not be submitted by the City for approval pursuant to Section 4(e) and Section 4(f).
(c) The City shall deliver copies of each Requisition to the WIFIA Lender and the Servicer (if any) on or before the first (1 st) Business Day of each month for which a disbursement is requested. If the WIFIA Lender shall expressly approve a Requisition or shall not expressly deny a Requisition, disbursements of funds shall b e made on the fifteenth (15 th) day of the month for which a disbursement has been requested, or on the next succeeding Business Day if such fifteenth (15th) day is not a Business Day. Express WIFIA Lender approval or denial shall be substantially in the f orm annexed hereto as Appendix Three ([Approval/Disapproval] of the WIFIA Lender) to Exhibit D (Requisition Procedures). In no event shall disbursements be made more than once each month.
(d) At the time of any disbursement, the sum of all prior disbursements of WIFIA Loan proceeds and the disbursement then to be made shall not exceed the cumulative disbursements through the end of the then-current Federal Fiscal Year set forth in the Anticipated WIFIA Loan Disbursement Schedule, as the same may be amended from time to time in accordance with the terms of this Agreement. Subject to this Section 4, any scheduled disbursement (as reflected in the Anticipated WIFIA Loan Disbursement Schedule) that remains undrawn at the end of any Federal Fiscal Year shall automatically roll forward to be available in the succeeding Federal Fiscal Year up to the last anticipated date of disbursement set forth in the Anticipated WIFIA Loan Disbursement Schedule, having the effect of automatically updating the Anticipated WIFIA Loan Disbursement Schedule without need for the WIFIA Lender’s approval.

The City may also amend the Anticipated WIFIA Loan Disbursement Schedule by submitting a revised version thereof to the WIFIA Lender no later than thirty (30) days prior to the proposed effective date of such amendment, together with a detailed explanation of the reasons for such revisions. Such revised Anticipated WIFIA Loan Disbursement Schedule shall become effective upon the WIFIA Lender ’s approval thereof, which approval shall be granted in the WIFIA Lender’s sole discretion.
(e) On a quarterly basis, the City , as agent of the Borrower pursuant to the WIFIA IPA, shall submit to the WIFIA Lender invoices and records, satisfactory to the WIFIA Attachment "A"

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Lender in form and substance, with respect to any costs incurred by the City , as agent of the Borrower pursuant to the WIFIA IPA , in respect of the Project evidencing that such costs are Eligible Project Costs (the “Project EPC Documentation”), or, if the City elects in any quarter not to submit the documentation described above, a written statement indicating such election; provided that no such submission shall be required (x) before the date that is sixty (60) days after the Effective Date or (y) for any costs incurred prior to the Effective Date. (f) The Project EPC Documentation and the related statement submitted pursuant to Section 4(e) shall contain sufficient detail to enable the WIFIA Lend er to verify that any costs submitted by the City for reimbursement are Eligible Project Costs. Within thirty (30) days following the receipt of the Project EPC Documentation and the accompanying statement, the WIFIA Lender shall deliver a notice to the Borrower and the City confirming (i) which Eligible Project Costs incurred by the City, as agent of the Borrower pursuant to the WIFIA IPA, set forth in the statement have been approved or denied (and, if denied, the reasons therefor ) and (ii) the cumulative amount of Eligible Project Costs that have been approved with respect to the City, as agent of the Borrower pursuant to the WIFIA IPA . Any approved amounts of Eligible Project Costs shall be disbursed at such time as the City submits a Requisition in respect of such approved amounts in accordance with Section 4(a) and Section 4(b). The City shall not submit a Requisition that seeks reimbursement of Eligible Project Costs for which the related Project EPC Documentation was not delivered to the WIFIA Lender and the Servicer (if any) at least one (1) month prior to the date such Requisition is submitted.

Section 5. Term. The term of the WIFIA Loan shall extend from the Effective Date to the Final Maturity Date or to such earlier date as all amounts due or to become due to the WIFIA Lender hereunder have been irrevocably paid in full in immediately available funds.

Section 6. Interest Rate. The interest rate with respect to the Outstanding WIFIA Loan Balance (the “WIFIA Interest Rate”) shall be [●] and [●] hundredths percent ([●]%) per annum.

Interest will accrue and be computed on the Outstanding WIFIA Loan Balance (as well as on any past due interest) from time to time on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months; provided that, upo n the occurrence of an Event of Default, the Borrower shall pay interest on the Outstanding WIFIA Loan Balance at the Default Rate, (a) in the case of any Payment Default, from (and including) its due date to (but excluding) the date of actual payment and (b) in the case of any other Event of Default, from (and including) the date of such occurrence to (but excluding) the earlier of the date on which (i) such Event of Default has been cured or waived (if applicable) in accordance with the terms of this Agre ement and (ii) the Outstanding WIFIA Loan Balance has been irrevocably paid in full by the Borrower in immediately available funds. For the avoidance of doubt, interest on the WIFIA Loan and the WIFIA Note shall accrue and be payable only on those amounts for which a Requisition has been submitted and funds (or such portion of funds as have been approved by the WIFIA Lender) have been disbursed to the Borrower for use on the Project in accordance with Section 4 (Disbursement Conditions).

Section 7. Security and Priority; Flow of Funds.
(a) Pursuant to the WIFIA IPA, as security for the WIFIA Installment Payments, and c oncurrently with the issuance and delivery of th is Agreement, the City has Attachment "A"

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pledged, assigned and granted to the Borrower for its benefit, Liens on (i) the Revenues, (ii) other amounts that are on deposit in the Revenue Fund and the Acquisition Fund and (iii) any other amounts (including proceeds of the WIFIA Loan) which are held in any fund or account that is established pursuant to the WIFIA IPA (collectively, the “City Pledged Collateral”). The WIFIA Installment Payments are and shall (i) be secured by th e Liens on the Revenues, (ii) not be subordinate in right of payment (other than with respect to Operations and Maintenance Costs) or in right of security to any Lien on the Revenues, (iii) be pari passu in right of payment and right of security only to th e Lien on the Re venues for the benefit of the Parity Obligations and (iv) be senior in right of payment and right of security to the Lien on the Revenues for the benefit of the Subordinate Obligations. The obligation of the City to make the WIFIA Installm ent Payments constitutes Parity Obligations.
(b) Except for Permitted Liens, the Revenues shall be free and clear of any pledge, Lien, charge or encumbrance thereon or with respect thereto, that is of equal rank with or senior to the pledge of the Borrower created under the WIFIA Loan Documents for the benefit of the WIFIA Lender, and all organizational, regulatory or other necessary action on the part of the City with respect to the foregoing has been duly and validly taken. (c) The Borrower hereby unconditionally pledges and assigns to the WIFIA Lender for its benefit (i) all of its right, title and interest to receive the Authority Revenues, (ii) any other amounts (including proceeds of the WIFIA Loan) held in any fund or account that is established pursuant to this Agreement, (iii) all of its rights with respect to the WIFIA Debt Service Account and (iv) all of its rights and remedies to enforce compliance with the provisions of the WIFIA IPA (including enforcement of payment obligations and the Rate Covenant or otherwise to protect the interest of the WIFIA Lender) (collectively, the “Borrower Assigned Rights”), in each case for the purpose of securing (x) the payment of all sums due and owing to the WIFIA Lender under this Agreement and ( y) the observance, perfo rmance and discharge of each agreement, condition, covenant and term of the Borrower and the City hereunder and of the City under the WIFIA IPA. Such pledge and assignment shall constitute a lien on and security interest in such rights and amounts.3 The City hereby consents to such pledge and assignment.

Notwithstanding anything in this Agreement or any other WIFIA Loan Document to the contrary, the Borrower does not and shall not assign, and the WIFIA Lender does not and shall not assume, any obligation, duty or liability of the Borrower under the WIFIA IPA. The WIFIA Loan is and shall be secured by the Liens on the Authority Revenues. The Authority Revenues shall be free and clear of any pledge, Lien, charge or encumbrance thereon or with respect ther eto other than the Liens with respect to the WIFIA Loan . The WIFIA Debt Service Account shall be free and clear of any pledge, Lien, charge or encumbrance thereon or with respect thereto other than the Liens with respect to the WIFIA Installment Payments.
(d) The City shall not use any Revenues to make any payments or satisfy any obligations other than in accordance with the Flow of Funds, the provisions of this Section 7 and the Related Documents and shall not apply any portion of the Revenues in contravention of this Agreement or the other Related Documents. The City shall not use any amounts on deposit in the 3 NTD: Revised language adapted from the 2019 Trust Indenture , including references to lien and security interest.

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WIFIA Debt Service Account to make any payments or satisf y any obligations other than the payment of WIFIA Debt Service on the Borrower’s behalf. (e) The Borrower shall not use any Authority Revenues to make any payments or satisfy any obligations other than the payment of WIFIA Debt Service and other amounts payable to the WIFIA Lender hereunder and under the WIFIA Note. (f) All Revenues shall, immediately upon receipt thereof, be deposited by the City into the Revenue Fund. Amounts deposited in the Revenue Fund shall be applied in the order of priority described in, and in accordance with, the Flow of Funds. (g) Following the acceleration of amounts payable by the Borrower hereunder or payable by the City under the WIFIA IPA pursuant to Section 21(c) (Events of Default and Remedies) or Section 21(d)(vi) (Events of Default and Remedies ), amounts deposited in the Revenue Fund shall be applied in the order of priority described in, and in accordance with , the Flow of Funds Following Acceleration.

Section 8. Payment of Principal and Interest.
(a) Payment of WIFIA Debt Service.
(i) Pursuant to the WIFIA IPA, not later than each Installment Payment Date occurring on or after the Debt Service Payment Commencement Date, the City shall, from moneys in the Revenue Fund, transfer to the WIFIA Debt Service Account the WIFIA Installment Payment due and payable on the relevant Payment Date. All WIFIA Installment Payments shall be paid directly by the City to the WIFIA Debt Service Account for the benefit of the WIFIA Lender. All WIFIA Installment Payments and any other amounts deposited into the WIFIA Debt Service Account shall be held by the City, as agent of the Borrower pursuant to the WIFIA IPA, in trust for the benefit of the WIFIA Lender until the immediately succeeding Payment Date, whereupon such money shall be applied to the payment of WIFIA Debt Service.
(ii) No WIFIA Debt Servic e shall be due or payable prior to the Debt Service Payment Commencement Date. T he Borrower shall pay, or the City, as agent of the Borrower pursuant to the WIFIA IPA , shall transfer from the WIFIA Debt Service Account on the Borrower ’s behalf, (A) WIFIA Debt Service in the amounts and manner and on the Payment Dates as set forth in the Loan Amortization Schedule, as the same may be revised pursuant to Section 8(f) (Payment of Principal and Interest – Adjustments to Loan Amortization Schedule), and (B) payments of any other amounts on each other date on which payment thereof is required to be made hereunder (including the Final Maturity Date and any date on which payme nt is due by reason of the mandatory redemption or prepayment or the acceleration of the maturity of the WIFIA Loan or otherwise); provided that if any such date is not a Business Day, payment shall be made on the next Business Day following such date . WIFIA Loan proceeds borrowed and repaid may not be reborrowed.
(iii) Notwithstanding anything herein to the contrary, the Outstanding WIFIA Loan Balance and any accrued interest thereon shall be due and payable in full on Attachment "A"

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the Final Maturity Date (or on any earlier date on which the WIFIA Loan and WIFIA Note are subject to mandatory redemption or prepayment prior to the maturity thereof). (iv) Any defeasance of the WIFIA Loan in accordance with applicable law shall not be deemed a repayment or prepayment of the WIFIA Loa n in full, and each of the Borrower and the City shall comply with all of its respective obligations hereunder and under the other WIFIA Loan Documents (other than with respect to payments of WIFIA Debt Service, which payments shall continue to be made in accordance with the Loan Amortization Schedule by the succeeding entity assuming the Borrower’s payment obligations), unless otherwise agreed by the WIFIA Lender, until the irrevocable payment in full in immediately available funds by the Borrower of the O utstanding WIFIA Loan Balance, together with all accrued interest, fees and expenses with respect thereto. (b) Interest Payments and Interest Only Period.
(i) Interest shall accrue on the WIFIA Loan commencing on the date of the first disbursement of the WIFIA Loan and shall be payable commencing on the Debt Service Payment Commencement Date.
(ii) During the Interest Only Period, the WIFIA Debt Service payable by the Borrower shall consist of one hundred percent (100%) of the amount of interest then due and payable o n the Outstanding WIFIA Loan Balance, and no payment of principal will be due and payable.
(c) Fixed Level Payments . During the Level Payment Period, each amount consisting of (i) the interest payment due on January 1 of any year plus (ii) the sum of the principal and interest payments due on July 1 of such year will be approximately equal (each such amount, a “Fixed Level Payment”). The amount of the Fixed Level Payment shall be calculated in such manner that the Outstanding WIFIA Loan Balance as of the Level Payment Commencement Date shall be reduced to $0 on the Final Maturity Date (assuming that interest accrues during such period on the Outstanding WIFIA Loan Balance at the rate per annum set forth in Section 6 (Interest Rate) in the absence of an Event of Default, that all Fixed Level Payments are made in a timely manner during such period, and that no additional payments of principal of or interest o n the WIFIA Loan are made during such period). Within thirty (30) days prior to the beginning of the Level Payment Period, the WIFIA Lender shall give written notice to the Borrower and the City of the amount of the related Fixed Level Payment, which amount shall be deemed conclusive absent manifest error, but no failure to provide or delay in providing the Borrower and the City with such notice shall affect any payment obligation or other obligation of the Borrower hereunder or under any other WIFIA Loan Document to which the Borrower is a party, or any payment obligation of the City under the WIFIA IPA or other obligation of the City hereunder or under any other WIFIA Loan Document to which the City is a party. To the extent that any prepayment of the WIFIA Loan is made during the Level Payment Period in addition to the Fixed Level Payments, such prepayment shall be applied to the remaining Outstanding WIFIA Loan Balance and the resulting Fixed Level Payments shall be recalculated as provided in Section 9(d) (Prepayment – General Prepayment Instructions) and reflected in a revised Exhibit F (WIFIA Debt Service).

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(d) WIFIA Note. As evidence of the Borrower’s obligation to repay the WIFIA Loan, the Borrower shall issue and deliver to the WIFIA Lender, on or prior to the Effective Date, the WIFIA Note substantially in the form of Exhibit A (Form of WIFIA Note), having a maximum principal amount of $65,147,348, bearing interest at the WIFIA Interest Rate and having principal and interest payable on the same dates set forth herein. Any payment in respect of the WIFIA Note shall be treated as a payment in respect of the WIFIA Loan and any prepayment of principal in respect of the WIFIA Loan shall be treated as a redemption in respect of the WIFIA Note. (e) Manner of Payment. The Borrower hereby assigns all its right and interest in and to the WIFIA Installment Payments to the WIFIA Lender and directs the City to transfer, on the Borrower’s behalf, all amounts on deposit in the WIFIA Debt Service Account to the WIFIA Lender by wire transfer on or before each Payment Date in Dollars and in immediately available funds (without counterclaim, offset or deduction) in accor dance with the payment instructions provided by the WIFIA Lender prior to the relevant payment, as may be modified in writing from time to time by the WIFIA Lender ; provided that neither the assignment of such rights by the Borrower nor such direction by the Borrower to the City with respect to payments hereunder shall affect in any manner any payment obligation or other obligation of the Borrower hereunder or under any other WIFIA Loan Document to which the Borrower is a party, or any payment obligation of the City under the WIFIA IPA or other obligation of the City hereunder or under any WIFIA Loan Document to which the City is a party.
(f) Adjustments to Loan Amortization Schedule.
(i) The Outstanding WIFIA Loan Balance will be (A) increased on each occasion on which the WIFIA Lender disburses loan proceeds hereunder, as applicable, by the amount of such disbursement of loan proceeds; and (B) decreased upon each payment or prepayment of the Outstanding WIFIA Loan Balance , by the amount of principal so paid. The WIFIA Lender may in its discretion at any time and from time to time, or when so requested by the Borrower or the City, advise the Borrower or the City by written notice of the amount of the Outstanding WIFIA Loan Balance as of the date of such notice, and its determination of such amount in any such notice shall be deemed conclusive absent manifest error.
(ii) The WIFIA Lender is hereby authorized to modify the Loan Amortization Schedule included in Exhibit F (WIFIA Debt Service) from time to time, in accordance with the principles set forth below in this Section 8(f), to reflect (A) any change to the Outstanding WIFIA Loan Balance, (B) any change to the date and amount of any principal or interest due and payable or to become due and payable by the Borrower under this Agreement, (C) any mathematical corrections as the WIFIA Lender may determine are necessary and (D) with the consent of the Borrower (not to be unreasonably withheld), such other information as the WIFIA Lender may determine is necessary for administering the WIFIA Loan and this Agreement. Any calculations described above shall be rounded up to the nearest whole cent. Any adjustments or revisions to the Loan Amortization Schedule as a result of changes in the Outstanding WIFIA Loan Balance shall be applied to reduce future payments due with respect to the WIFIA Loan in inverse order of maturity, other than prepayments which shall be applied in accordance with Section 9(d) (Prepayment – General Prepayment Instructions ). Absent manifest error, the WIFIA Attachment "A"

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Lender’s determination of such matters as set forth on Exhibit F (WIFIA Debt Service ) 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 any payment obligation or other obligation of the Borrower hereunder or under any other WIFIA Loan Document to which the Borrower is a party, or any payment obligation of the City under the WIFIA IPA or other obligation of the City hereunder or under any WIFIA Loan Document to which the City is a party. The WIFIA Lender shall provide the Borrower and the City with a copy of Exhibit F (WIFIA Debt Service) as revised, but no failure to provide or delay in providing the Borrower or the City with such copy shall affect any of the obligations of the Borrower or the City under this Agreement or the other WIFIA Loan Documents.
(g) WIFIA Loan Not City Indebtedness. The WIFIA Loan and the WIFIA Note are limited obligations of the Borrower, payable solely from the Authority Revenues, and do not constitute 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 Agreement, the City is not a borrower with respect to the WIFIA Loan, the WIFIA Note, or this Agreement and the City has no obligation to make any payment or provision for payment of the WIFIA Loan or the WIFIA Note. This Agreement does not constitute a contract between the City and the WIFIA Lender by which the City has incurred an indebtedness.

Section 9. Prepayment.
(a) Mandatory Prepayment from Net Proceeds or Eminent Domain Proceeds .

The Borrower, or the City as agent of the Borrower, shall prepay the WIFIA Loan from and in the amount of any prepayments of the WIFIA Installment Payments received from the City pursuant to the WIFIA IPA and Section 1 7(f)(iii) (Affirmative Covenants of the City – Insurance; Net Proceeds) or Section 17(t) (Affirmative Covenants of the City – Eminent Domain Proceeds). The amount of any such prepayment shall be equal to the portion of the Outstanding WIFIA Loan Balance required to be prepaid hereunder plus accrued interest thereon to the date of prepayment.

All such prepayments shall be paid to the WIFIA Lender by the City as agent of the Borrower substantially concurrently with the receipt of such amount by the Borrower and applied against the Outstanding WIFIA Loan Balance in accordance with Section 9(d) (Prepayment – General Prepayment Instructions).
(b) Optional Prepayments . Following the F inal Disbursement Date, t he Borrower (or the City as agent of the Borrower) may prepay the WIFIA Loan in whole or in part (and, if in part, the amounts thereof to be prepaid shall be determined by the Borrower; provided that such prepayments shall be in principal amounts of $1,000,000 or any integral multiple of $1.00 in excess thereof), from time to time, but not more than annually, without penalty or premium, by paying to the WIFIA Lender such principal amount of the W IFIA Loan to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment, which shall be a Payment Date unless otherwise agreed by the WIFIA Lender. Each prepayment of the WIFIA Loan pursuant to this Section 9(b) shall be made on such Payment Date and in such principal amount as shall be specified by the Borrower in a written notice delivered to the WIFIA Lender not less than ten (10) days or more than thirty (30) days prior to the date set for prepayment, unless otherwise agreed by the WIFIA Lender. At any time between delivery of such Attachment "A"

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written notice and the applicable optional prepayment, the Borrower m ay, without penalty or premium, rescind its announced optional prepayment by further written notice to the WIFIA Lender. Anything in this Section 9(b) to the contrary notwithstanding, the failure by the Borrower to make any optional prepayment shall not constitute a breach or default under this Agreement. (c) Borrower’s Certificate. Each prepayment pursuant to this Section 9 shall be accompanied by a certificate signed by the Borrower’s Authorized Representative identifying the provision of this Agreement pursuant to which such prepayment is being made and containing a calculation in reasonable detail of the amount of such prepayment. (d) General Prepayment Instructions . Upon the WIFIA Lender ’s receipt of confirmation that payment in full in immediately available funds of the entire Outstanding WIFIA Loan Balance and any unpaid interest, fees and expenses with respect thereto has occurred as a result of a mandatory or optional prepayment, the WIFIA Lender shall surrender the WIFIA Note to the Borrower or its representative at the principal office of the WIFIA Lender. If the Borrower prepays only part of the unpaid balance of principal of the WIFIA Loan, the WIFIA Lender may make a notation on Exhibit F (WIFIA Debt Service ) indicating the amount of principal of and interest on the WIFIA Loan then being prepaid. Absent manifest error, the WIFIA Lender ’s determination of such matters as set forth on Exhibit F (WIFIA Debt Service) 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 any payment obligation or other obligation of the Borrower hereunder or under any other WIFIA Loan Document to which the Borrower is a party, or any payment obligation of the City under the WIFIA IPA or any othe r obligation of the City hereunder or under any WIFIA Loan Document to which the City is a party . All partial prepayments of principal shall be applied to reduce future payments due on the WIFIA Loan ratably by an equal amount . If such funds have not bee n so paid on the prepayment date, such principal amount of the WIFIA Loan shall continue to bear interest until payment thereof at the rate provided for in Section 6 (Interest Rate).

Section 10. Fees and Expenses.
(a) Fees. The City shall pay, on behalf of the Borrower, to the WIFIA Lender:
(i) a servicing set -up fee equal to $ 10,790 (the “Servicing Set -Up Fee”), which shall be due and payable within thirty (30) days after receipt of an invoice from the WIFIA Lender with respect thereto (or, if earlier, the first disbursement date of the WIFIA Loan);
(ii) an annual construction period servicing fee equal to $ 10,790 (the “Construction Period Servicing Fee ”), which shall accrue on the first Business Day of the then -current Federal Fiscal Year and shall be due and payable on or prior to each November 15 during the Construction Period (including the Federal Fiscal Year du ring which the Substantial Completion Date occurs); provided that the initial Construction Period Servicing Fee shall be due and payable within thirty (30) days after receipt of an Attachment "A"

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invoice from the WIFIA Lender with respect thereto (or, if earlier, the first disbursement date of the WIFIA Loan), in a pro-rated amount equal to $[●]4; and (iii) an annual operating period servicing fee equal to $ 8,100 (the “Operating Period Servicing Fee”), which shall accrue on the first Business Day of the then-current Federal Fiscal Year and shall be due and payable on or prior to each November 15, beginning with the first November 15 following the end of the Federal Fiscal Year during which the Substantial Completion Date o ccurs, until (and including) the Final Maturity Date; provided that the Operating Period Servicing Fee due and payable with respect to the Federal Fiscal Year during which the Final Maturity Date occurs shall be equal to the pro-rata monthly portion of the then applicable Operating Period Servicing Fee multiplied by the number of partial or whole months remaining between October 1 and the Final Maturity Date.
(b) The amount of each Construction Period Servicing Fee (other than the initial Construction Period Servicing Fee) and each Operating Period Servicing Fee shall be adjusted in proportion to the percentage change in CPI for the calendar year immediately preceding the calendar year during which such fee is due. The WIFIA Lender shall notify the City of the amount of each such fee at least thirty (30) days before payment is due, which determination shall be conclusive absent manifest error.
(c) Expenses. The City agrees, whether or not the transactions hereby contemplated shall be consummated, to reimburse the W IFIA Lender on demand from time to time, within thirty (30) days after receipt of any invoice from the WIFIA Lender, for any and all fees, costs, charges, and expenses incurred by it (including the fees, costs, and expenses of its legal counsel, financial advisors, auditors and other consultants and advisors) in connection with the negotiation, preparation, execution, delivery, and performance of this Agreement and the other WIFIA Loan Documents and the transactions hereby and thereby contemplated, includin g attorneys’ and engineers’ fees and professional costs, including all such fees, costs, and expenses incurred as a result of or in connection with : (i) the enforcement of or attempt to enforce, or the protection or preservation of any right or claim under, the Authority Revenues, the Revenues, the WIFIA Debt Service Account, or any provision of this Agreement or any other WIFIA Loan Document or the rights of the WIFIA Lender thereunder; (ii) any amendment, modification, waiver, or consent with respect to this Agreement or any other Related Document; and (iii) any work-out, restructuring, or similar arrangement of the obligations of the Borrower or the City under this Agreement or the other WIFIA Loan Documents, including during the pendency of any Event of Default; provided that nothing in this Section 10 (c) shall obligate the City to pay principal or interest on the WIFIA Loan or WIFIA Note.
(d) The obligations of the City under this Section 10 shall survive the payment or prepayment in full in accordance with Section 8 or Section 9, respectively, of the WIFIA Note, the enforcement of any provision of this Agreement or the other WIFIA Loan Documents, any such amendments, waivers or consents, any Event of Default, and any such workout, restructuring, or similar arrangement.
4 NTD: Subject to month of closing (May: $3,590; June: $2,690; July: $1,790; August: $890).

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ARTICLE III

CONDITIONS PRECEDENT
Section 11. Conditions Precedent.
(a) Conditions Precedent to Effectiveness . Notwithstanding anything in this Agreement to the contrary, this Agreement shall not become effective until each of the following conditions precedent has been satisfied or waived in writing by the WIFIA Lender in its sole discretion:
(i) The Borrower and the City shall each have duly executed and delivered to the WIFIA Lender this Agreement and the WIFIA IPA and the Borrower shall have duly executed and delivered to the WIFIA Lender the WIFIA Note, each in form and substance satisfactory to the WIFIA Lender.
(ii) The Borrower and the City shall each have delivered to the WIFIA Lender complete and fully executed copies of each Related Document and each Existing Construction Contract to which it is a party, together with any amendments, supplements, waivers or modifications thereto, that has been entered into on or prior to the Effective Date, along with a certification in the Borrower Closing Certificate and the City Closing Certificate, respectively, that each such document is complete, fully executed and in full force and effect, and that all conditions contained in such documents that are necessary to the closing of the WIFIA transactions contemplated hereby have been fulfilled. (iii) The Borrower and the City shall each have delivered to the WIFIA Lender a copy of its Organizational Documents, as in effect on the Effective Date, along with a certification in the Borrower Closing Certificate or City Closing Certificate , as applicable, that such Organizational Documents are in full force and effect. (iv) The City shall have delivered to the WIFIA Lender a copy of the WIFIA City Resolution, along with a certification that 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 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.
(v) The Borrower shall have delivered to the WIFIA Lender a copy of the WIFIA Borrower Resolution, along with a certification that the WIFIA Borrower Resolution is in full force 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.
(vi) (A) Counsel to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit G-1 (Opinions Required from Counsel to Borrower)), Attachment "A"

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(B) bond counsel to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit G-2 (Opinions Required from Borrower Bond Counsel)), (C) counsel to the City shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit G-3 (Opinions Required from Counsel to City)), and (D) bond counsel to the City shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit G-4 (Opinions Required from City Bond Counsel)).
(vii) The Borrower and the City shall each have delivered to the WIFIA Lender the Non-Debarment Certificate.
(viii) The Borrower and the City shall each have delivered to the WIFIA Lender the Non-Lobbying Certificate.
(ix) The Borrower shall have delivered to the WIFIA Lender a certificate, signed by the Borrower’s Authorized Representative, substantially in the form attached hereto as Exhibit H-1 (Form of Closing Certificate of Borrower) (the “Borrower Closing Certificate”), designating the Borrower’s Authorized Representative, confirming such person ’s position and incumbency, and certify ing as to the satisfaction of the following conditions precedent (and, if requested by the WIFIA Lender, shall have provided evidence satisfactory to the WIFIA Lender of such compliance):
(A) the Borrower has obtained all Governmental Approvals necessary 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);
(B) as of the Effective Date, (x) 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 (y) 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; (C) the Borrower has (x) obtained a Federal Employer
Identification Number, (y) obtained a Data Universal Numbering System number, and (z) registered with, and obtained confirmation of active registration status from, the federal System for Award Management (www.SAM.gov);
(D) the Borrower has obtained the WIFIA CUSIP N umber,
provided that the WIFIA Lender shall not submit or post any document or information on EMMA relating to this Agreement or the Borrower without the Borrower’s prior written consent;
Attachment "A"

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(E) the representations and warranties of the Borrower set forth in this 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; and
(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.
(x) The City shall have delivered to the WIFIA Lender a certificate, signed by the City’s Authorized Representative, substantially in the form attached hereto as Exhibit H-2 (Form of Closing Certificate of City ) (the “City Closing Certificate ”), designating the City’s Authorized Representative, confirming such person ’s position and incumbency, and certifying as to the satisfaction of the following conditions precedent (and, if requested by the WIFIA Lender, shall have provided evidence satisfactory to the WIFIA Lender of such compliance):
(A) the City has obtained all Governmental Approvals necessary (x) as of the Effective Date in connection with the Project and (y) to ex ecute 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);
(B) as of the Effective Date, (x) 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 (y) 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; (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;
(D) the City has (x) obtained a Federal Employer Identification Number, (y) obtained a Data Universal Numbering System number, and (z) registered with, and obtai ned confirmation of active registration status from, the federal System for Award Management (www.SAM.gov);
(E) the representations and warranties of the City set forth in this 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; and Attachment "A"