Garden Grove City Council
April 11, 2023

City of Garden Grove
Certificate of Warrants
Register Dates:
3/15/2023

This is to certify the demands covered by Wire numbers 00001515 through 00001546, EFT numbers 00034776 through 00034804, and check numbers 00685609 through 00685731 inclusive as listed on this register and have been verified by the Fi nance Di
vision as properly issued a nd bear all pr oper
signatures.

Note:

Finance Director
Patricia Song

CITY OF GARDEN GROVE
GGFEFM001 Warrant Register
Check Dates Between Mar 9, 2023 and Mar 15, 2023
Bank(s): AP - Checking Account, WT - Checking Account
Report Generated on Mar 16, 2023 8:05:17 AM Page 1
AP - Checking Account
Check Vendor # Vendor Name
Issue
Date
Check
Amount
00001515 V02724 DEPARTMENT OF THE TREA 03/15/2023 $340,207.37 00001516 V01375 EMPLOYMENT DEVELOPMENT 03/15/2023 $106,073.93 00001517 V02725 EMPOWER RETIREMENT, LL 03/15/2023 $118,842.78 00001518 V02152 EXPERT PAY CHILD SUPPO 03/15/2023 $2,456.30 00001519 V02091 MARYLAND CHILD SUPPORT 03/15/2023 $343.38 00001520 V00732 THE LINCOLN NATIONAL L 03/15/2023 $7,516.82 00001521 V01539 DELTA DENTAL OF CALIFO 03/15/2023 $26,254.13 00001522 V01539 DELTA DENTAL OF CALIFO 03/15/2023 $2,703.54 00001523 V02087 DELTA CARE USA 03/15/2023 $5,516.96 00001524 V01539 DELTA DENTAL OF CALIFO 03/15/2023 $2,741.22 00001525 V00541 MUNICIPAL WATER DISTRI 03/15/2023 $60,930.36 00001526 V01596 PUBLIC EMPLOYEES' RETI 03/15/2023 $679,022.42 00001527 V00732 THE LINCOLN NATIONAL L 03/15/2023 $8,883.36 00001528 V00732 THE LINCOLN NATIONAL L 03/15/2023 $7,399.22 00001529 V00691 CITY OF GARDEN GROVE-W 03/15/2023 $286,114.31 00001530 V01545 CITY OF GARDEN GROVE-L 03/15/2023 $41,486.07 00001531 V01596 PUBLIC EMPLOYEES' RETI 03/15/2023 $4,500.00 00001532 V01478 ANAHEIM ORANGE COUNTY 03/15/2023 $153,678.85 00001533 V01478 ANAHEIM ORANGE COUNTY 03/15/2023 $121,704.61 00001534 V02036 US BANK TRUST NA 03/15/2023 $22,800.00 00001535 V02036 US BANK TRUST NA 03/15/2023 $380,748.57 00001536 V02036 US BANK TRUST NA 03/15/2023 $697,247.74 00001537 V01596 PUBLIC EMPLOYEES' RETI 03/15/2023 $15.38 00001538 V01579 ORANGE COUNTY FIRE AUT 03/15/2023 $2,089,073.58 00001539 V00620 COUNTY OF ORANGE 03/15/2023 $18,926,967.33 00001540 V02088 VISION SERVICE PLAN - 03/15/2023 $8,020.08 00001541 V00789 SO CALIF EDISON CO 03/15/2023 $384.14 00001542 V00789 SO CALIF EDISON CO 03/15/2023 $8,276.32 00001543 V00789 SO CALIF EDISON CO 03/15/2023 $13.91 00001544 V00792 SO CALIF GAS CO 03/15/2023 $386.67 00001545 V00789 SO CALIF EDISON CO 03/15/2023 $3,135.08 00001546 V00805 TIME WARNER CABLE 03/15/2023 $2,922.43 00034776 V00093 ABSOLUTE INTERNATIONAL SECURITY 03/15/2023 $610.68 Server Name: cognos.ggcity.org User Name: evar

CITY OF GARDEN GROVE
GGFEFM001 Warrant Register
Check Dates Between Mar 9, 2023 and Mar 15, 2023
Bank(s): AP - Checking Account, WT - Checking Account
Report Generated on Mar 16, 2023 8:05:17 AM Page 2
Check Vendor # Vendor Name
Issue
Date
Check
Amount
00034777 V00175 CALIFORNIA YELLOW CAB 03/15/2023 $11,031.25 00034778 V00224 CDW-GOVERNMENT, INC 03/15/2023 $2,155.18 00034779 V01036 CITIBANK %CITIGROUP 03/15/2023 $3,900.79 00034780 V00718 DANGELO CO (JWD ANGELO CO INC) 03/15/2023 $2,600.51 00034781 V00259 DTNTECH MARKETING 03/15/2023 $138.11 00034782 V00103 GARDEN GROVE AUTOMOTIVE 03/15/2023 $2,000.00 00034783 V01546 GEOCON WEST, INC 03/15/2023 $2,010.00 00034784 V00218 GRAINGER 03/15/2023 $1,213.81 00034785 V01391 INTELEPEER CLOUD COMMUNICATIONS, LLC 03/15/2023 $2,249.79 00034786 V00722 KEYSER/MARSTON ASSOCIATES, INC 03/15/2023 $2,700.00 00034787 V00356 LA OPINION, EL DIARIO, LA RAZA, LA OPINION DE LA 03/15/2023 $860.00 00034788 V03000 LANCE, SOLL & LUNGHARD LLP 03/15/2023 $1,980.00 00034789 V03069 NV5, INC 03/15/2023 $55,666.00 00034790 V02205 OCAPICA 03/15/2023 $5,578.03 00034791 V00747 OCEAN BLUE ENVIRONMENTAL SERVICES, INC 03/15/2023 $1,034.88 00034792 V00425 PETDATA 03/15/2023 $1,796.80 00034793 V02903 PRESENTATION FOLDER, INC 03/15/2023 $350.00 00034794 V00230 SCHAFER CONSULTING, INC 03/15/2023 $2,437.50 00034795 V00261 STRICTLY TECHNOLOGY, LLC 03/15/2023 $3,695.29 00034796 V02539 THE SOLIS GROUP 03/15/2023 $444.00 00034797 V01458 TOYOTA OF GARDEN GROVE 03/15/2023 $7,000.00 00034798 V00591 U S ARMOR CORP 03/15/2023 $920.19 00034799 V00035 VERITIV OPERATING COMPANY 03/15/2023 $29.36 00034800 V00826 WEST COAST ARBORISTS, INC 03/15/2023 $20,068.50 00034801 V01469 WEST YOST ASSOCIATES, INC. 03/15/2023 $18,768.68 00034802 V01729 WESTERN PROPANE SERVICES, INC 03/15/2023 $68.73 00034803 V00202 WIRELESS TELEMATICS, LLC 03/15/2023 $360.00 00034804 V03139 ZENCITY TECHNOLOGIES US INC. 03/15/2023 $31,000.00 00685609 V01502 AGRI-TURF DISTRIBUTING 03/15/2023 $633.25 00685610 OTV002676 AMANDA JUPITER AGUNDEZ 03/15/2023 $27.00 00685611 V00573 ALAN'S LAWN AND GARDEN CENTER, INC 03/15/2023 $270.92 00685612 V00635 ALL CITY MANAGEMENT SERVICES, INC 03/15/2023 $12,079.80 00685613 V00640 ANGELUS QUARRIES, INC 03/15/2023 $492.64 00685614 V03021 ARDURRA GROUP, INC. 03/15/2023 $30,003.55 Server Name: cognos.ggcity.org User Name: evar

CITY OF GARDEN GROVE
GGFEFM001 Warrant Register
Check Dates Between Mar 9, 2023 and Mar 15, 2023
Bank(s): AP - Checking Account, WT - Checking Account
Report Generated on Mar 16, 2023 8:05:17 AM Page 3
Check Vendor # Vendor Name
Issue
Date
Check
Amount
00685615 V00145 AUTONATION FORD TUSTIN 03/15/2023 $1,363.06 00685616 V00179 BC TRAFFIC SPECIALIST 03/15/2023 $2,262.00 00685617 V00091 BEGINNERS EDGE SPORTS TRAINING, LLC 03/15/2023 $1,771.01 00685618 OTV002681 THANH BINH 03/15/2023 $1,000.00 00685619 OTV002679 LANIEE BROUGHMAN 03/15/2023 $250.00 00685620 V00649 BROWNELLS, INC 03/15/2023 $182.41 00685621 H4756 TAN H BUI 03/15/2023 $1,460.00 00685622 V00660 CAMERON WELDING SUPPLY 03/15/2023 $258.31 00685623 V00554 CARL WARREN & CO 03/15/2023 $450.00 00685624 V00664 CIVILTEC ENGINEERING, INC 03/15/2023 $1,662.50 00685625 V00579 COASTLINE EQUIPMENT 03/15/2023 $1,157.30 00685626 V00667 CONTINENTAL CONCRETE CUTTING 03/15/2023 $3,432.00 00685627 V00011 CORE AND MAIN, LP 03/15/2023 $29.15 00685628 OTV002670 TRAN H DANG 03/15/2023 $200.73 00685629 V01183 DEPARTMENT OF JUSTICE 03/15/2023 $597.00 00685630 V00184 DIAMOND ENVIRONMENTAL SERVICES 03/15/2023 $1,523.51 00685631 V01367 DIGITAL SCEPTER CORPORATION 03/15/2023 $2,532.00 00685632 OTV002672 DINO X PLACE LLC 03/15/2023 $17.77 00685633 V01541 DISNEYLAND RESORT 03/15/2023 $10,360.00 00685634 V01089 DISPENSING TECHNOLOGY CORP 03/15/2023 $4,905.16 00685635 V00336 EXCLUSIVE AUTO DETAIL 03/15/2023 $468.00 00685636 V00022 EXTRA PACKAGING, LLC 03/15/2023 $80.85 00685637 V00233 FACTORY MOTOR PARTS CO BIN 139107 03/15/2023 $473.30 00685638 OTV002684 KELLY FARRIS 03/15/2023 $232.00 00685639 V00276 FG SOLUTIONS, LLC 03/15/2023 $2,250.14 00685640 V00229 FIS ACCOUNTING DEPT 03/15/2023 $88,035.31 00685641 V01379 FIVESTAR RUBBER STAMP ETC, INC 03/15/2023 $61.96 00685642 V00143 FRYE SIGN CO 03/15/2023 $990.00 00685643 V00054 GALLS LLC 03/15/2023 $2,334.08 00685644 OTV002668 ZOE GARCIA 03/15/2023 $2.96 00685645 V00690 GARDEN GROVE CHAMBER OF COMMERCE 03/15/2023 $2,500.00 00685646 V01382 GARDEN GROVE NISSAN, LP 03/15/2023 $2,500.00 00685647 V00696 GARDEN GROVE UNIFIED SCHOOL DIST 03/15/2023 $500.00 00685648 V00588 GMS AUTOGLASS 03/15/2023 $265.11 Server Name: cognos.ggcity.org User Name: evar

CITY OF GARDEN GROVE
GGFEFM001 Warrant Register
Check Dates Between Mar 9, 2023 and Mar 15, 2023
Bank(s): AP - Checking Account, WT - Checking Account
Report Generated on Mar 16, 2023 8:05:17 AM Page 4
Check Vendor # Vendor Name
Issue
Date
Check
Amount
00685649 V00097 GOLDENWEST LAWNMOWERS & SCOOTERS 03/15/2023 $46.33 00685650 V00702 GRAFFITI PROTECTIVE COATINGS, INC 03/15/2023 $59,904.00 00685651 V01386 GREEN HALO SYSTEMS 03/15/2023 $273.00 00685652 OTV002685 OSIRIS HEREDIA 03/15/2023 $232.00 00685653 V00503 HF&H CONSULTANTS, LLC 03/15/2023 $20,388.25 00685654 V00711 HILL'S BROS LOCK & SAFE, INC 03/15/2023 $425.72 00685655 V02308 HIRSCH PIPE & SUPPLY CO. INC 03/15/2023 $332.75 00685656 V03036 JANET K. HOLGUIN 03/15/2023 $350.00 00685657 V00034 HOME DEPOT CREDIT SERVICES 03/15/2023 $5,801.58 00685658 OTV002683 CASSEY L HUBBARD 03/15/2023 $53.00 00685659 V00135 IMPERIAL SPRINKLER SUPPLY, INC 03/15/2023 $1,365.14 00685660 V00182 INFOSEND, INC 03/15/2023 $9,059.18 00685661 V00012 INNER-TITE CORP 03/15/2023 $222.22 00685662 V00683 JOHN B EWLES, INC 03/15/2023 $9,250.00 00685663 V00220 LABSOURCE, INC 03/15/2023 $5,952.98 00685664 OTV002686 SANTIAGO LARRERA 03/15/2023 $1,000.00 00685665 V00728 LAWSON PRODUCTS, INC 03/15/2023 $4.75 00685666 OTV002667 CHRISTINE LE 03/15/2023 $59.04 00685667 V01407 TIFFANY LE 03/15/2023 $2,642.00 00685668 V00769 LEGAL SHIELD 03/15/2023 $1,301.50 00685669 V01563 LIFE-ASSIST, INC 03/15/2023 $948.74 00685670 V00555 LIFECOM, INC 03/15/2023 $65.00 00685671 OTV002638 ISAAC LOPEZ 03/15/2023 $15.21 00685672 OTV002637 LUDEN LLC 03/15/2023 $7.93 00685673 OTV002677 ARTURO RAMOS LUEVANOS 03/15/2023 $1,000.00 00685674 H4820 VIVIAN Q LUU 03/15/2023 $1,883.00 00685675 V01411 MAGNUM OIL SPREADING, INC 03/15/2023 $890.66 00685676 OTV002678 DIANA MARTINEZ 03/15/2023 $200.00 00685677 V00736 MC MASTER-CARR SUPPLY CO 03/15/2023 $474.46 00685678 V00737 MERCHANTS BLDG MAINT, LLC 03/15/2023 $2,798.32 00685679 V00270 MONTROSE ENVIRONMENTAL SOLUTIONS 03/15/2023 $7,464.35 00685680 V00905 MELISSA MURPHY 03/15/2023 $2,000.00 00685681 V00219 NAHRO 03/15/2023 $3,702.46 00685682 OTV002666 STEVE NGO 03/15/2023 $10.66 Server Name: cognos.ggcity.org User Name: evar

CITY OF GARDEN GROVE
GGFEFM001 Warrant Register
Check Dates Between Mar 9, 2023 and Mar 15, 2023
Bank(s): AP - Checking Account, WT - Checking Account
Report Generated on Mar 16, 2023 8:05:17 AM Page 5
Check Vendor # Vendor Name
Issue
Date
Check
Amount
00685683 OTV002636 TOAN NGO 03/15/2023 $104.97 00685684 OTV002675 LANG NGUYEN 03/15/2023 $42.37 00685685 OTV002674 LARRY NGUYEN 03/15/2023 $69.87 00685686 H00175 NAM V NGUYEN 03/15/2023 $1,271.00 00685687 OTV002662 TONY NGUYEN 03/15/2023 $36.61 00685688 OTV002669 TU NGUYEN 03/15/2023 $38.31 00685689 OTV002671 VY NGUYEN 03/15/2023 $19.76 00685690 V00459 O'REILLY AUTO PARTS 03/15/2023 $36.04 00685691 V00209 WHJ OCN,IND 03/15/2023 $360.00 00685692 V01580 OCTAVIO RUBEN RODRIGUEZ 03/15/2023 $1,760.00 00685693 V00375 OLD GROVE AUTO 03/15/2023 $2,764.00 00685694 V01649 ORANGE COUNTY TRANSIT AUTHORITY 03/15/2023 $3,897.14 00685695 OTV002664 TAYLOR OWENS 03/15/2023 $19.76 00685696 OTV002682 ANGELO PAZMINO 03/15/2023 $1,000.00 00685697 OTV002665 UYEN PHAM 03/15/2023 $49.80 00685698 V00767 POSTMASTER 03/15/2023 $290.00 00685699 V00744 R J NOBLE COMPANY 03/15/2023 $301,316.25 00685700 V02840 RECESS REVOLUTION 03/15/2023 $750.00 00685701 V01468 RESOURCE BUILDING MATERIALS 03/15/2023 $50.46 00685702 OTV002635 LETICIA ROBLES, REYES & SANDOVAL 03/15/2023 $46.26 00685703 V00199 ROSS CREATIONS DJ 03/15/2023 $1,195.00 00685704 V00779 S C YAMAMOTO, INC 03/15/2023 $93.00 00685705 OTV002680 CONCEPCION SALGADO 03/15/2023 $95.00 00685706 OTV002673 DANIEL SAO 03/15/2023 $6.11 00685707 V00785 SHRED CONFIDENTIAL, INC 03/15/2023 $210.00 00685708 OTV002644 ESTHER SOTO- SCHWARTZ 03/15/2023 $37.17 00685709 V00367 SOUTHERN COMPUTER WAREHOUSE 03/15/2023 $12,985.47 00685710 V01199 STANDARD INSURANCE COMPANY 00 643061 0001 03/15/2023 $24,532.33 00685711 V00570 STRADLING, YOCCA,CARLSON & RAUTH 03/15/2023 $2,755.00 00685712 V02701 T2 UES INC. 03/15/2023 $21,410.00 00685713 V01389 THE HOME DEPOT PRO 03/15/2023 $725.74 00685714 V01389 THE HOME DEPOT PRO 03/15/2023 $3,596.16 00685715 V02881 THOMCO CONSTRUCTION, INC. 03/15/2023 $25,176.49 00685716 V00804 THOMSON REUTERS- WEST 03/15/2023 $2,302.96 Server Name: cognos.ggcity.org User Name: evar

CITY OF GARDEN GROVE
GGFEFM001 Warrant Register
Check Dates Between Mar 9, 2023 and Mar 15, 2023
Bank(s): AP - Checking Account, WT - Checking Account
Report Generated on Mar 16, 2023 8:05:17 AM Page 6
Check Vendor # Vendor Name
Issue
Date
Check
Amount
00685717 V00806 TOXGUARD FLUID TECHNOLOGIES 03/15/2023 $364.18 00685718 V00809 TURBO DATA SYSTEMS, INC 03/15/2023 $11,528.03 00685719 V00424 TYLER TECHNOLOGIES, INC 03/15/2023 $1,041.86 00685720 V00811 UNDERGROUND SERVICE ALERT OF SOUTHERN

CALIFORNIA
03/15/2023 $163.72
00685721 V00812 UNIFIRST CORP 03/15/2023 $1,006.47 00685722 OTV002663 NANCY VAN NERYNEN 03/15/2023 $35.02 00685723 V01075 VIET BAO DAILY, INC 03/15/2023 $350.00 00685724 V01465 VOLKSWAGEN OF GARDEN GROVE 03/15/2023 $2,500.00 00685725 V00398 VULCAN MATERIALS COMPANY WESTERN DIVISION 03/15/2023 $39,683.76 00685726 V00564 WEST COUNTY TIRE & AUTO, INC 03/15/2023 $1,342.40 00685727 V00827 WESTATES MARKING DEVICES & RUBBER STAMP MFG 03/15/2023 $159.57 00685728 V00112 WM OF SOUTHERN CALIFORNIA 03/15/2023 $1,018.00 00685729 V00582 WOODRUFF, SPRADLIN & SMART, A PROFESSIONAL CORP
03/15/2023 $163.10
00685730 V01208 YO-FIRE SUPPLIES 03/15/2023 $920.03 00685731 V00836 ZEP SALES & SERVICE 03/15/2023 $135.31 EFT: 29 $182,668.08
Check: 155 $24,905,560.35
Total: 184 $25,088,228.43
Server Name: cognos.ggcity.org User Name: evar

Agenda Item - 4.a.

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM
To: Lisa L. Kim From: Craig Beck
Dept.: City Manager/Director Dept.: Community and Economic Development Department
Subject: Approval of a Preliminary Award
Letter between the City of Garden
Grove, Garden Grove Housing
Authority, and New Tamerlane, LLC.
(Joint Action Item with the Garden
Grove Housing Authority.)
Date: 4/11/2023

OBJECTIVE
To request the City Council and Housing Authority consider for approval the proposed “ Preliminary Award Letter” between the City of Garden Grove, the Garden Grove Housing Authority, and New Tamerlane, LLC (“Developer”), which will provide Developer an enforceable commitment of housing funds to implement the substantial rehabilitation and reset of affordable housing covenants for 78-unit “New Tamerlane Project.”

BACKGROUND
Between 2004 and 2012, the City provided financial assistance to Tamerlane Associates, LLC, (“Prior Owner”) to acquire and operate 15 multifamily properties with a total of 78 apartments (“Tamerlane Properties”). Pursuant to 15 separate loan agreements, regulatory agreements, option agreements, and subsequent amendments (together, “Original Tamerlane Agreements”), the City made 15 residual receipts loans to the Prior Owner. Of the 78 units, 60 units were restricted for occupancy by households earning between 50% and 65% of the Orange County area median-income (“AMI”) at an affordable rent. The funding sources for the 15 City loans (in whole or part) included CDBG, HOME, HOME Match from the City’s General Fund, and Former Agency low to moderate income housing funds.

On October 27, 2022, the Prior Owner sold all of the Tamerlane Properties to the Developer, New Tamerlane, LLC, and the Prior Owner assigned, and Developer assumed, all rights and obligations under all of the Original Tamerlane Agreements. Prior to that sale, the City loans on eight properties had matured and the affordability covenants for 49 of 78 units had expired, so those properties were “at-risk” of conversion to market rate housing. In connection with that sale, on October 11, 2022, the Housing Authority and City approved an “Amendment” affecting all of the Original Tamerlane Agreements by which the maturity dates of those eight City loans and the expired affordability covenants were extended for those 49 of 78 units to December 31, 2025. Further, under the Amendment, Developer and Garden Grove agreed to negotiate in good faith toward the restructure of the City Loans, the scope of the substantial rehabilitation of all properties and improvements, the reset of the affordability period for 55 years, and other terms and conditions for a “New Tamerlane Project”.

As stated in the Amendment, Garden Grove has a primary objective to preserve existing affordable housing at-risk of conversion to market rate, and thereby achieve the local, state and federal goals to preserve affordable housing in the community. The Preliminary Award Letter presented to the City Council and Housing Authority board for consideration and recommended approval would provide Garden Grove’s “enforceable financial commitment” in connection with Developer’s application to the California Tax Credit Allocation Committee (TCAC) for reservations of state and federal Tax Credits. This TCAC funding reservation, plus investor equity, construction and permanent financing, and Garden Grove’s refinancing and additional subsidy will facilitate successful implementation of the New Tamerlane Project.

DISCUSSION
Developer submitted a proposal to Garden Grove detailing the request for an enforceable financial commitment to apply for the Tax Credits and, if awarded, undertake the New Tamerlane Project. This Preliminary Award Letter is required by the Tax Credit Rules and will commit Garden Grove to provide to Developer the new “Garden Grove Loan” comprised of: (a) up to Three Million Six Hundred Forty-Six Thousand Dollars ($3,646,000) of additional funds sourced (i) fifty percent (50%) from the Low and

Thousand Dollars ($3,646,000) of additional funds sourced (i) fifty percent (50%) from the Low and Moderate Income Housing Asset Fund (“LMIHAF) and (ii) fifty percent (50%) from the City’s Permanent Local Housing Allocation funds (“PLHA”), and/or (b) up to eight (8) Section 8 project-based housing vouchers (“PBVs”), and (c) the restructure of the 15 City Loans in the reset principal amount of $8,879,321, which Garden Grove Loan cumulatively will be in a principal amount of Twelve Million Five Hundred Nineteen Three Hundred Twenty-One Dollars ($12,519,321). The new Garden Grove Loan will be a residual receipts loan, subordinate to construction and permanent financing, accrue three percent (3%) simple interest, and have a term up to 58 years. (See Exhibit B.)

Developer retained the services of Partner Engineering to conduct and prepare a Physical Needs Assessment (PNA) of all existing improvements; the PNA report describes the conditions of, and necessary and recommended improvements. Therefore, as a part of the New Tamerlane Project, the substantial rehabilitation will include extensive renovation, interiors and exteriors, of all 15 buildings and all 78 apartments. The scope of work will include, but will not be limited to; interior renovations of every apartment with new kitchen and bathroom upgrades and renovations, interior paint, new flooring, new doors, electrical upgrades, new lighting, HVAC replacement, new electrical and plumbing fixtures and other interior amenities. Major system upgrades will include unit electric subpanels and plumbing re-pipe of all units with new water distribution systems along with hot appliance replacement. Exterior and additional renovations and improvements will include, but not be limited to, re-imagined facades, new roof systems, wood replacement, new windows, exterior paint and stucco, demolition of exiting non-conforming garages and carports, new and reconfigured concrete and paver parking, construction of two ADA compliant laundry rooms, construction of a management office and community room, reconfiguration of drive aisle for ingress and egress, modification of eight (8) existing units to conform to Uniform Federal Accessibility Standards (“UFAS”) for accessibility and mobility, and four (4) units designated as communication accessible.

Developer’s goal is to harmonize the site to create a single, contiguous community by eliminating division between buildings, tying the site together with new ADA-compliant paths of travel, landscape renovation, new patio fencing, reconstructed staircases and landings. At the end of Tamerlane Drive, which is a cul-de- sac street, Developer intends to install a playground that will also serve as an artistic expression embracing the vision of community buildings in addition to various forms or sculpture or mural art. A new reciprocal easement agreement and joint use of amenities agreement will be entered into at the time of closing of construction financing presuming an award of Tax Credits, which ensure the 15 properties operate as a single affordable housing development for the reset 55-year Affordability Period.

Developer intends to preserve and covenant all 78 units as affordable housing for tenant households of Extremely Low, Very Low and Low Income at an Affordable Rent, including the Manager’s Unit for a 100% AMI household. Exhibit B to the Preliminary Award Letter has a full-explanation with tables of the “Prescribed Unit Mix” for the New Tamerlane Project. This is an increase of 18 covenanted units as compared to 60 under the Original Tamerlane Agreements; the 55-year Affordability Period will implement the Amendment and mutual objective to achieve a long-term affordable housing development. Specifically, the Prescribed Unit Mix, Exhibit B, shows income and affordable rent among the 78 units as follows:
(a) eight (8) Extremely Low Income units that will comply with LMIHAF requirements; (b) 41 Low Income units (at 60% AMI) per PLHA requirements; and (c) 29 Low Income units (at 65% AMI) with High HOME rent per the applicable Original Regulatory Agreements that will expire during the reset Affordability Period.

When those current 65% AMI covenants expire, the units would continue to be restricted as affordable under the TCAC regulatory agreement. (See Exhibit B.) If not for this Preliminary Award Letter and reset 55-year Affordability Period as required by the Tax Credit Rules, LMIHAF and PLHA, many units could convert to market rate as early as December 31, 2025, and other covenants will expire in 2027, 2032, and 2065.

As required by Tax Credit Rules, Developer will assign this Preliminary Award Letter to New Garden Grove Community, LP, of which Affordable Housing Access, Inc., and Kingdom Development, Inc., as co-general partners, to undertake, complete and operate the New Tamerlane Project. Affordable Housing Access, Inc., (“AHANP”) is a non-profit public benefit corporation founded in 1999 with a mission to create and preserve quality affordable housing and to empower low income individuals and communities through social services and community building. AHANP and its development partners have constructed, or acquired and rehabilitated over 20,000 affordable housing apartments and homes throughout the West. Kingdom Development, Inc., is a nonprofit public benefit corporation (“Kingdom”) founded in 2015 with a mission to enrich the lives of disadvantaged youth through the strengthening of families and the development of housing. Kingdom carries out its exempt purpose, to improve the welfare of people by developing affordable housing, expediting the development process and by providing policy makers and industry practitioners insightful analysis to amplify the impacts they make for low-income families.

FINANCIAL IMPACT

FINANCIAL IMPACT
Approval of the Preliminary Award Letter includes a new restructured Garden Grove Loan of: (1) a subsidy of new funds of up $3,646,000 sourced equally from LMIHAF and PLHA funds, and/or (2) up to eight (8) PBVs, and (3) restructure of the 15 City Loans in a reset principal amount of $8,879,321; this totals to a new Garden Grove Loan of $12,519,321. Funds are available presently and this Preliminary Award Letter will commit and encumber such funds pursuant to applicable laws and regulations.

RECOMMENDATION
It is recommended that City Council and Housing Authority:

Approve the Preliminary Award Letter and authorize the City Manager/Director to make minor modifications as needed, and sign the Award Letter on behalf of the City and Housing Authority; and Authorize the City Manager/Director on behalf of the City and the Housing Authority to execute the Affordable Housing Agreement, and any pertinent related documents, including all exhibits, instruments, implementing agreements, and to make minor modifications as needed on behalf of the City and Housing Authority.

By: Monica Covarrubias, Sr. Project Manager

ATTACHMENTS:

Description Upload
Date Type File Name
Preliminary
Award
Letter and
Exhibits
4/3/2023 Letter PDF_Preliminary_Award_Letter_New_Tamerlane_03_31_2023_for_April_11_2023_CC_HA_joint_meeting_agenda.pdf

•
•

4887-6403-1824v9/022627-0027
April 11, 2023
NE

W TAMERLANE, LLC
c/o Affordable Housing Access, Inc.

Bill Salamandrakis, President
Shawn Boyd, Chief Investment Officer
3920 Birch Street, Ste 103
Newport Beach, CA 92660
Re: Preliminary Award Letter (Enforceable Financial Commitment) by the Garden Grove Housing Authority and City of Garden Grove to New Tamerlane, LLC Related to the Substantial Rehabilitation and Operation of a 78- Unit Affordable Housing Project Located on Tamerlane Drive, Garden Grove, California; Award Letter Issued pursuant to California Code of Regulations, Title 4, Division 17, Chapter 1, Section 10325(f)(3), in Connection with Application(s) by New Tamerlane, LLC to the California Tax Credit Allocation Committee (TCAC) for a Reservation of Tax Credits
Dear Mr. Salamandrakis and Mr. Boyd:

This Preliminary Award Letter (Enforceable Financial Commitment) (“Award Letter”) is dated as of April 11, 2023 (“Date of Award Letter”) and is issued to New Tamerlane, LLC, a California limited liability company (“Developer”), by the Garden Grove Housing Authority (“Authority”) and City of Garden Grove (“City)

1. This Award Letter sets forth the basic terms
between and among the Parties to fulfill the requirements for the commitment of certain funds (“Garden Grove Loan”) for Developer’s substantial rehabilitation and long-term operation of the New Tamerlane Project (defined herein) as required by the California Tax Credit Allocation Committee (“TCAC”).

Under the California Code of Regulations (“C CR”), Title 4, Division 17, Chapter 1, Section 10300, et seq., in particular Sections 10322, 10325, 10325(f)(3) (as amended as of February 1, 2023, herein “Tax Credit Rules”) and in connection with any application to TCAC for a Reservation of 9% Tax Credits a developer is required to evidence, among

1 The Authority is a public body corporate and politic organized and existing pursuant to the California Housing Authorities Law, Health and Safety Code Section 34200, et seq. (“HAL”) and serves as the housing successor to the former Garden Grove Agency for Community Development pursuant to Health and Safety Code Section 34170, et seq., in particular Sections 34176 and 34176.1, (“Dissolution Law” or “Housing Successor Law”). The City of Garden Grove is a California municipal corporation (“City”) and participating jurisdiction under certain HUD funding programs, including the HOME Program and CDBG Program. In this Award Letter, the City and the Authority may be referred to together as “Garden Grove”. Statutory references in this Award Letter are to the California Health and Safety Code (“HSC”) unless otherwise stated. Herein, each of the Authority, City and Developer is a “Party” and together the “Parties”.

GARDEN GROVE CITY OF GARDEN GROVE
Steve Jones
Mayor
George S. Brietigam
Mayor Pro Tern - District 1
John R. O'Neill
Council Member - District 2
Cindy Ngoc Tran
Council Member - District 3
Joe DoVinh
Council Member - District 4
Stephanie Klopfenstein
Council Member - District 5
Kim Bernice Nguyen
Council Member - District 6
11222 Acacia Parkway • P.O.Box 3070 • Garden Grove, CA 92842 ggcity.org

NEW TAMERLANE, LLC
Bill Salamandrakis, President
Shawn Boyd, Chief Investment Officer
April 11, 2023
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other requirements, its “Enforceable Financing Commitments” for its affordable housing project, including commitments, if any, from the local jurisdiction. Developer is also seeking an award of competitively awarded State of California Tax Credits (State Tax Credits) (together with federal credits, Tax Credits”). This Award Letter is intended to evidence Garden Grove’s part of Developer’s Enforceable Financial Commitment that will be part of the funding for the New Tamerlane Project as defined and further described herein.

Developer intends to cause the planning, substantial rehabilitation, and long term operation of that certain 78- unit multifamily affordable housing project, comprised of fifteen (15) separate small multi-family buildings (that total 78 units), all located on Tamerlane Drive, Garden Grove, California (as combined, “New Tamerlane Properties”), which are described in Exhibit A, Legal Description of New Tamerlane Properties, attached hereto and fully incorporated by this reference, and are identified by the following Assessor Parcel Numbers (“APNs”): 231 -471-31; 231-471-32; 231-471-33; 231 -471-34; 231-471-35; 231-471-36; 231-471-37; 231-471-38; 231-471-39; 231- 471-40; 231- 471-41; 231-471-42; 231-471-43; 231-471-44; and 231-471-45.
2 Garden Grove’s Enforceable Financial Commitment to Developer by this Award Letter includes that certain new, restructured “Garden Grove Loan” that will fund, in part, Developer’s substantial rehabilitation of the New Tam erlane Properties.

The “Garden Grove Loan Amount” includes: (1) up to Three Million Six Hundred Forty -Six Thousand Dollars ($3,646,000) subsidy of new funds from the following sources:
(a) fifty percent (50%) of such amount from the Low and Moderate Income Housing Asset Fund (“LMIHAF”) pursuant to HSC Section 34176.1, and (b) fifty percent (50%) of such amount from the City’s formula allocation and award of Permanent Local Housing Allocation funds (“PLHA”) pursuant to HSC Section 50470, et seq. and the implementing guidelines issued by the State of California, Housing and Community Development Department (“State HCD”), and/or (c) up to eight (8) project -based housing vouchers (“PBVs”) (subject to the United States Department of Housing and Urban Development (“HUD”) procedures), along with (2) the reset and restructure of the fifteen outstanding loans issued by the City to the Prior Owner (defined below) and assumed by Developer, with the principal amount of restructured loan at $8,879,321, which, as combined, would be issued by Garden Grove as a new residual receipt loan of Twelve Million Five Hundred Nineteen Three Hundred Twenty -One Dollars ($12,519,321). (See Exhibit B.) The Garden Grove Loan is further described herein and in the implementing affordable housing agreement (“AHA”) are expressly subject to the Award Letter Condition Precedent (defined herein) and all terms and conditions herein and therein.

2 The New Tamerlane Properties are located at the following common addresses: (1) 12131 Tamerlane, (2) 12132 Tamerlane, (3) 12141 Tamerlane, (4) 12142 Tamerlane, (5) 12161 Tamerlane, (6) 12162 Tamerlane, (7) 12171 Tamerlane, (8) 12172 Tamerlane, (9) 12181 Tamerlane, (10) 12182 Tamerlane, (11) 12201 Tamerlane, (12) 12202 Tamerlane, (13) 12211 Tamerlane, (14) 12212 Tamerlane, and (15) 12222 Tamerlane.

NEW TAMERLANE, LLC
Bill Salamandrakis, President
Shawn Boyd, Chief Investment Officer
April 11, 2023
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1. Term of Award Letter. This Award Letter shall expire automatically on the date that is the earliest to occur of: (i) Developer’s failure to receive a reservation of Tax Credits for the New Tamerlane Project as awarded by TCAC in either (A) the 2023 first round application, or if not awarded during the first round, then (B) the 2023 second round application, or (ii) December 31, 2023 (“Letter Expiration Date”), at which time the terms set forth herein shall be null and void, unless prior to the Letter Expiration Date this Award Letter is amended and extended in writing by the Authority Director and City Manager (together, “Director”), which decision to amend and extend, or not, is and shall remain in the sole and absolute discretion the Director. In the event, Developer does receive the reservation of Tax Credits for the New Tamerlane Project awarded from either the 2023 first round or 2023 second round application processes, then this Award Letter will remain in effect until the parties reach agreement on and enter into the AHA and cause the Closing of Financing (defined in Section 6 hereinafter).

2. Background
of New Tamerlane Properties.

2.1 Original City Loan Agreements and Original Regulatory Agreements.

Between 2004 to 2012, the City provided financial assistance to Developer’s predecessor - in-interest, Tamerlane Associates, LLC, a California limited liability company that was/is wholly owned and controlled by Charles H. "Chuck" Fry ("Prior Owner"), related to his original acquisition of the 15 multifamily properties with a total of 78 residential units (together, "Original Tamerlane Properties"). Pursuant to fifteen (15) separate affordable housing loan agreements, each with a regulatory agreement, related attachments, option agreements, and subsequent amendments (together, "Original Tamerlane Agreements"), the City made 15 deferred payment loans to the Prior Owner sourced from federal and local program sources to assist the Prior Owner in the acquisition and operation of the properties. Of the 78 apartments, 60 units, were restricted of record for tenancy and occupancy by households earning between 50% to 65% of the Orange County area median income ("AMI"); and, all 15 properties were covenanted of record as to ongoing ownership, property management, maintenance, insurance, and related obligations. The funding sources for the 15 loans issued by the City to the Prior Owner when he acquired each of the Original Tamerlane Properties and as set forth in the Original Tamerlane Agreements included:
(a) Community Development Block Grant (“CDBG”) funds allocated to the City as a participating jurisdiction and loaned to the Prior Owner as to one (1) property (12131 Tamerlane);
(b) HOME Program funds allocated to the City as a participating jurisdiction for nine (9) properties (12141 Tamerlane, 12161 Tamerlane, 12181 Tamerlane, 12182 Tamerlane, 12210 Tamerlane, 12202 Tamerlane, 12211 Tamerlane, 12212 Tamerlane, and 12222 Tamerlane);
(c) City General Fund money designated as HOME "Match" funds for two (2) properties (12211 Tamerlane and 12142 Tamerlane);

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Shawn Boyd, Chief Investment Officer
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(d) Combination of HOME Program funds plus former redevelopment low to moderate income “20%” set-aside funds as to one (1) property (12132 Tamerlane); and (e) former redevelopment low to moderate income 20% set -aside funds for two (2) properties (12162 Tamerlane and 12172 Tamerlane).

2.2 Sale and Assignment. On October 27, 2022, the Prior Owner sold all of the Original Tamerlane Properties to New Tamerlane, LLC. In connection therewith, t he Prior Owner assigned, and Developer assumed, all rights and obligations under the Original Tamerlane Agreements pursuant to an unrecorded Assignment and Assumption Agreement (“Assignment”).

2.3 Amendment of Original Tamerlane Agreements. At and prior to the sale by
the Prior Owner to Developer, a number of the Original Tamerlane Agreements had expired, both the loan maturity dates under the loan agreements and the term of the affordable housing covenants under the regulatory agreements, including 12131, 121 41, 12161, 12171, 12181, 12182, 12201, 12202, 12212, and 12222 Tamerlane Drive.

Therefore, concurrent with the sale, Garden Grove and Developer negotiated the terms of and entered into that certain Amendment to Tamerlane Affordable Housing Loan Agreements and Regulatory Agreements dated as of October 11, 2022 (“Amendment”) by which the maturity dates of those certain loans were reinstated and extended, and the expiration dates of the affordable housing and other covenants as to 49 of 78 units were extended, to December 31, 2025. This Amendment facilitated the assumption of the Original Tamerlane Agreements, as amended by the Amendment, and presently facilitates the restructure and terms of the new Garden Grove Loan that is committed by this Award Letter. Without such Amendment, certain housing units at the New Tamerlane Properties were “at-risk” of conversion to market rate housing; instead, the Developer now owns and continues to operate the New Tamerlane Properties as affordable housing, albeit such units, and the properties overall, are in dire need of substantial rehabilitation and new investment, and are “at risk” of conversion to market rate housing upon the expiration of the term of the affordable housing covenants as early as December 31, 2025 as to those 49 (of 78) units. The objective of this Award Letter is to provide Garden Grove’s Enforceable Financial Commitment, which will be a part of Developer’s application to TCAC for a reservation of Tax Credits, with other sources of funding to include the equity investment by an investor limited partner, proceeds of primary construction and permanent financing, along with the new and restructured Garden Grove Loan and the amendment and restatement of the affordable housing covenants under an Authority Regulatory Agreement that will have a reset “Affordability Term” of fifty -five (55) years, all pursuant to this Award Letter and in the implementing AHA described herein. (a) The terms and conditions of the AHA will include affirmation of the ex
isting Original Regulatory Agreements that have expiration dates later than December 31, 2025 (see Exhibit B); and, such affordable housing covenants as to income and rent (65% AMI and High HOME rent) will continue until and through the original expiration dates.

This includes: (i) 12131, 12132, 12171 Tamerlane as to twelve (12) units (funded with

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Shawn Boyd, Chief Investment Officer
April 11, 2023
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HOME Program funds), which covenants expire in 2027; (ii) 12142 and 12211 Tamerlane as to seven (7) units (funded with City general fund HOME “Match” dollars), which covenants will expire in 2032; and (iii) 12162 and 12172 Tamerlane as to ten (10) units (funded with Former Agency set -aside funds, now treated as housing assets/LMIHAF funds), which covenants will expire in 2065. These 29 units will continue to be restricted for occupancy by 65% AMI tenant households at an affordable rent not exceeding “High HOME” rent. Upon expiration, these units would be covered by and subject to the TCAC regulatory agreement for the remaining term of the 55-year TCAC affordability period in connection with the reservation and implementation of the Tax Credits and the AHA after the Award Condition Precedent is satisfied by Developer. (i) Therefore under the terms of the AHA, 29 (of 78) units will remain covenanted for occupancy by tenants with income up to 65% AMI at “High HOME” rent and shall not be subject to upward adjustment and increased rent under the AHA, but will be subject to the TCAC regulatory agreement and no longer be at -risk of conversion to market rent at the expiration of such existing covenants in 2027, 2032 and 2065 as noted above.
(ii) Further, under the AHA, 49 (of 78) units will be covenanted by the new Garden Grove Regulatory Agreement for occupancy by (A) Extremely Low Income 30% AMI tenants as to eight (8) units at an Affordable Rent pursuant to HSC 50053 based on the LMIHAF funding allocated to such units, and (B) Low Income 60% AMI tenants as to forty-one (41) units based on the PLHA funding allocated to such units, all as set forth in the “Prescribed Unit Mix” for the New Tamerlane Project, Exhibit B. (iii) If the New Tamerlane Project receives the reservation of Tax Credits, then pursuant to the TCAC regulatory agreement, all 78 units will be restricted as affordable housing for Low, Very Low and Extremely Low income households at an affordable rent in compliance with the Tax Credit Rules and pursuant to the TCAC regulatory agreement, including the Manager’s Unit that will be restricted for occupancy by a 100% AMI household.
(b) Further, Developer agrees that the AHA will include provisions that an existing tenant who might have been subject to a rent adjustment and increase based on the Prescribed Unit Mix for the New Tamerlane Project will be allowed to remain a tenant in that unit under the affordable income and rent restrictions that fit such tenant’s household income pursuant to the applicable covenants of the Amendment, or the AHA, or the Tax Credit Rules, whichever is applicable and more favorable to the tenant, until and when such tenant household voluntarily moves from the New Tamerlane Project in order to not cause an increase in the monthly rent due from such existing tenant, and to prevent permanent displacement of existing tenant(s) by implementation of the AHA, which is subject to the Relocation Law (defined herein). Based on the verified household income for the existing tenants, some may benefit from the Prescribed Unit Mix under the AHA, which may result in reduced monthly rent to the Affordable Rent applicable to such unit.

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Bill Salamandrakis, President
Shawn Boyd, Chief Investment Officer
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(c) Upon each move-out of such existing tenant from, and then a new tenancy at, each applicable Housing Unit (whether move-out occurs voluntarily by the existing tenant at their sole decision, or if move-out occurs in the event of eviction for cause) the next tenant household to occupy a New Tamerlane Housing Unit will be subject to the income and Affordable Rent covenants of the AHA based on the Prescribed Unit Mix set forth in the AHA and implementing Regulatory Agreement (or the TCAC Rules under the TCAC regulatory agreement, whichever is more favorable to the tenant household.)

2.4 Dissolution of Former Agency; Authority as Housing Successor. Prior to February 1, 2012, the Garden Grove Agency for Community Development (“Former Agency”) was public body, corporate and politic and community redevelopment agency duly organized and existing under the California Community Redevelopment Law, HSC Section 33000, et seq. (“CRL”), and was authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council of the City of Garden Grove (“City Council”).
(a) Assembly Bill x1 26, chaptered and effective on June 27, 2011, added Parts 1.8 and 1.85 to Division 24 of the HSC that caused the dissolution of all California redevelopment agencies and winding down of the affairs of former agencies, including as such laws were amended by Assembly Bill 1484, chaptered and effective on June 27, 2012 (together, the “Dissolution Law”); and on and as of February 1, 2012 the Former Agency was dissolved under the Dissolution Law.
(i) On January 17, 2012, the City Council adopted Resolution No. 9089-12 by which the City declined to assume the housing assets and responsibility to perform the housing functions performed previously by the Former Agency and designated the Housing Authority to serve and act as the “housing successor” under HSC Section 34176(b).
(ii) Under HSC Section 34176(a)(2), the Authority, as housing successor to the Former Agency, prepared a Housing Asset Transfer Schedule (“HAT”) and submitted the HAT to the State of California, Department of Finance (“DOF”) for review and approval. On August 30, 2012, the DOF approved the HAT with certain modifications that are unrelated to the New Tamerlane Properties. The DOF -approved HAT, among other housing assets, includes the several original loans that were sourced in all or part with monies from the Former Agency’s low to moderate income housing fund, which loans and covenants thereof are housing assets under the Dissolution Law.

3. Assignment by Developer to New Garden Grove Community, LP.

3.1 Developer Obligation to Assign Award Letter to New Joint Non -Profit Entity. In connection with implementation of this Award Letter, the AHA, and the application(s) to TCAC for funding approval, Developer intends to form and assign this Award Letter to a new joint entity of Affordable Housing Access, Inc., a California nonprofit corporation (“AHANP”) and Kingdom Development Inc., a California nonprofit public benefit corporation (“Kingdom NP”), either as a limited partnership or limited liability company, to

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Shawn Boyd, Chief Investment Officer
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undertake and complete the New Tamerlane Project. Developer has informed Garden Grove that the new entity will be called New Garden Grove Community, LP, a California limited partnership , of which AHANP and Kingdom NP are the co-managing general partners. After such assignment and assumption, the new entity is referred to as the “Developer” or the Joint Non-Profit.
(a) Developer shall cause and complete the assignment of this Award Letter to the Joint Non-Profit, as soon as practicable after the Award Letter is approved by Garden Grove, with a primary objective to complete such assignment prior to submitting an application to TCAC.
(b) Developer shall provide the assignment and assumption agreement to Garden Grove and its legal counsel for review prior to execution of such instrument.

Once executed and recorded in the Official Records, the assignee Developer entity shall submit evidence of the formation of the new entity as filed with the Secretary of State; and thereafter, wherever the term Developer is used herein, it shall mean the Joint Non-Profit.

4. Developer Ownership of New Tamerlane Properties. A
s noted in Section 2
above, presently, Developer owns in fee the New Tamerlane Properties. (a) Developer represents and warrants to Garden Grove: (i) i t is the fee owner of the New Tamerlane Properties, and (ii) it is not default as to each or any of such New Tamerlane Properties under the Original Regulatory Agreements, the Original Loan Agreements, all as amended by the Amendment, and any other contracts or instruments affecting the New Tamerlane Properties.

5. New Affordable Housing Agreement.

5.1 Description of the New Tamerlane Project . The New Tamerlane Project will include the 78 apartment units within the 15 New Tamerlane Properties (together, “Housing Units” and each a “Housing Unit”). As of the Date of Award Letter, the New Tamerlane Project will include 31 one- bedroom units, 38 two -bedroom units, and 9 three-bedroom units, including one of the three-bedroom units to be reserved as the Manager’s Unit for occupancy by an onsite manager, which unit will be either restricted at 100% AMI or unrestricted as to income and rent. The allocation of income and rent restrictions, this is the “Prescribed Unit Mix”, for the 78 Housing Units is set forth in Exhibit B, attached to this Award Letter and fully incorporated by this reference; this Prescribed Unit Mix is also set forth in the March 29 Proforma, Exhibit C, attached hereto and fully incorporated by this reference.
(a) Description of the Substantial Rehabilitation . Developer retained the services of Partner Engineering to conduct and prepare a physical needs assessment of the New Tamerlane Properties, including all improvements both exterior areas and interiors of all Housing Units, the results of which are set forth in that certain “Property Condition Report, Tamerlane Apartments, 12131-12222 Tamerlane Drive, Garden Grove, California 92843, Project No. 23- 400094.1” dated as of March 6, 2023 (“PNA”). The PNA describes

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Shawn Boyd, Chief Investment Officer
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the conditions of, and necessary and recommended improvements to the New Tamerlane Properties that will be required as a part of the substantial rehabilitation and overall improvements that comprise the New Tamerlane Project. Developer provided the following summary of the scope of rehabilitation and the full scope of rehabilitation will be set forth in the AHA and shall not be less in scope and costs of rehabilitation required by the Tax Credit Rules.
(i) The scope of construction and substantial rehabilitation will include, but will not be limited to; interior renovations of every apartment with new kitchen and bathroom upgrades and renovations, interior paint, new flooring, new doors, electrical upgrades, new lighting, HVAC replacement, new electrical and plumbing fixtures and other interior amenities. Major system upgrades will include unit electric subpanels, possible main electrical switchgear, and plumbing re-pipe of all units with new water distribution systems along with hot appliance replacement. Exterior and additional renovations and improvements will include, but not be limited to, architectural elements, re-imagined facades, new roof systems, wood replacement, corrective measures to address wood destroying organism damage, new windows, exterior paint and stucco, demolition of exiting non-conforming garages and carports, new and reconfigured concrete and paver parking, construction of two ADA compliant laundry rooms, construction of a management office and community room, elimination of five unnecessary driveways, reconfiguration of drive aisle for ingress and egress, construction of four ADA compliant trash enclosures, modification of eight (8) existing units to conform to Uniform Federal Accessibility Standards (“UFAS”) for accessibility and mobility, and four (4) units designated as communication accessible.

UFAS standards will ensure that the buildings and facilities are designed, built, altered or leased with are safe, accessible and usable by people of all ages and abilities. Developer’s goal is to harmonize the site to create a single, contiguous community by eliminating division between buildings, tying the site together with new ADA -compliant paths of travel, landscape renovation, new patio fencing, reconstructed staircases and landings. At the end of Tamerlane Drive, which is a cul -de-sac street, Developer intends to install a playground that will also serve as an artistic expression embracing the vision of community buildings in addition to various forms or sculpture or mural art. The mutual objective of Garden Grove, Developer and the community is to create an entirely new affordable housing community, restricted for the 55-year Affordability Period to serve residents income-eligible households at an Affordable Rent.
(A) A “Preliminary Site Plan” of the New Tamerlane Project is attached to this Award Letter as Exhibit D and is fully incorporated by this reference.

6. Award L
etter Condition Precedent; Reservation and Funding Award from TCAC for Tax Credits. Developer has applied to Garden Grove for issuance of this Award Letter, and subject to the satisfaction of the conditions precedent described herein, in particular the reservation of Tax Credits (herein, “Award Letter Condition Precedent”), desires to implement this Award Letter and enter into the AHA. The complete terms, conditions, and provisions of the AHA will be negotiated between Garden Grove and Developer representatives and then entered into between and among the parties at a time

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concurrent with (a) the closing of Developer’s construction financing, (b) entering into a limited partnership agreement between Developer and its investor limited partner as tax credit equity investor, and (c) related actions to commence substantial rehabilitation of the New Tamerlane Properties for the New Tamerlane Project (together, “Closing of Financing”). If the Award Letter Condition Precedent is satisfied by Developer, then under the AHA, Developer will substantially rehabilitate, operate, manage, and maintain the New Tamerlane Properties for affordable rental housing consisting of the 78 apartments with onsite parking, amenities, and ancillary improvements for tenancy/occupancy by qualified Extremely Low, Very Low, and Low Income households at an Affordable Rent with no units being restricted on the basis of age (collectively, the “New Tamerlane Project” or “Project”).

7. Commitment of Garden Grove Loan; Providing Garden Grove Loan under AHA.

7.1 Garden Grove Loan . Subject to the conditions described herein, the Garden Grove Loan will be evidenced by the Garden Grove Loan Note and secured by the Garden Grove Loan Deed of Trust. The Garden Grove Loan is a combination of:
(a) approximately $3.64M subsidy of new funds sourced 50% from LMIHAF and 50% from PLHA funds as described in the second full paragraph of page 2 herein. (a) The portion of the Authority Loan sourced from the LMIHAF is subject to the Dissolution Law, in particular Section 34176.1; and, the portion of the Authority Loan sourced from PLHA funds is subject to the requirements of, and in implementation of, Chapter 364, Statutes of 2017 (SB 2, Atkins) as authorized by HSC Section 50470, et seq., which created the Building Homes and Jobs Trust Fund and the PLHA program, and the Permanent Local Housing Allocation Final Guidelines dated October 2019 as promulgated, and hereafter supplemented and/or amended, by State HCD (together, “PLHA Program”).

And, the award of PBVs, if any, is subject to HUD requirements. (i) As of the Date of Award, Garden Grove will fund the Garden Grove Loan from one-half LMIHAF funds, and the other one-half from PLHA funds, which PLHA mon ies are “match” funds as set forth in the City’s five-year “PLHA 302 Plan” approved by State HCD.
(A) In this regard, the City’s PLHA 302 Plan approved by State HCD includes use and expenditure of allocated PLHA funds as the “Matching portions of funds available through the Low - and Moderate-Income Housing Asset Fund pursuant to subdivision (d) of HSC Section 34176.”
(B) Further, the New Tamerlane Project will implement
another PLHA Program eligible activity of “… rehabilitation, and preservation of multifamily, … rental housing that is Affordable to Extremely low-,Very low -, Low-, or Moderate-income households, including necessary Operating subsidies.”
(b) As set forth in Section 7.2 below, in the event, that Garden Grove elects to provide from one (1) up to eight (8) PBVs to the Developer for the New Tamerlane

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Project, then the cash subsidy amount and principal of the Garden Grove Loan Amount shall be reduced by $455,750 for each PBV awarded to the New Tamerlane Project.

In such event, Garden Grove reserves all rights and sole discretion to reduce pro rata the LMIHAF and PLHA funds for the cash subsidy, if less than eight (8) PBVs are awarded. (c) In connection with the restructure of the original City loans assumed by Developer, the City, with HUD’s knowledge and consent, can forgive the accrued interest on such original City loans, with only the original principal amount total of $8,879,321 carried over and made a part of the Garden Grove Loan Amount. The Garden Grove Loan shall accrue three percent (3%) simple interest per annum, and the term of the promissory note will be not less than 55 years. The new Garden Grove Loan is a part of the financing for, and to facilitate, the planning, design, construction of the substantial rehabilitation, operation, management and maintenance of the New Tamerlane Project for not less than the 55-year Affordability Period described herein and hereafter in the AHA, subject to satisfaction of the Award Letter Condition Precedent. The Garden Grove Loan Amount is hereby committed to the New Tamerlane Project subject to satisfaction of the Award Letter Condition Precedent and the other terms and conditions of this Award Letter. The final Garden Grove Loan Amount shall be determined after Developer meets the Award Letter Condition Precedent, based on an updated Financial Gap Analysis (defined and further described in Section 14) and subject to a subsidy layering review (“SLR”) and analysis, which shall occur prior to the Closing of Financing. In this regard, Garden Grove (and its consultant and counsel) will evaluate and establish more specifically in the AHA the terms and conditions of the Garden Grove Loan, the Garden Grove Promissory Note, and Garden Grove Deed of Trust, including its subordinate monetary lien position, which will take into consideration all sources of financing, in particular governmental funding and the applicable program requirements therefor.
(d) Garden Grove Loan Repaid from Residual Receipts. The new Garden Grove Loan will be a residual receipts loan in a lien position subordinate to the deed of trust securing the Developer’s loan obtained for construction financing and permanent financing (each a “Primary Loan”) and as will be more fully set forth in the AHA. (i) In the event, State HCD or other governmental entity funding sources, if any, do not require a share of Residual Receipts, the Garden Grove Loan shall be repaid from fifty percent (50%) of Residual Receipts and the Developer will retain from fifty percent (50%) of Residual Receipts.
(A) The term “Residual Receipts” will be fully defined in the AHA, but generally is defined as Project annual revenue less the sum of defined and eligible: (1) operating expenses; (2) debt service on the Primary Loan, (3) required operating and capital reserve deposits, (4) repayment of permitted operating, rehabilitation, or capital loans, if any, (5) property management fee, (6) eligible partnership related fees including an asset management fee, and (7) unpaid Deferred Developer Fee subject to funding the below-the-line amount for the Social Services Plan as described herein.

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Shawn Boyd, Chief Investment Officer
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(ii) If State HCD or other federal, state or local governmental funding sources require an allocation of Residual Receipts as between and/or among the City, the Authority, Developer, and other governmental entity(ies), if any, the split thereof shall be established after the Financial Gap Analysis described herein, provided however the percentage allocations among the governmental funding entities shall be established in a fair, reasonable manner and in compliance with applicable legal requirements. (A) In the event that governmental funding loan(s), if any, are repaid in full through Residual Receipts and the Garden Grove Loan Note remains outstanding, then the percentage and allocation of Residual Receipts shall be adjusted so that Authority receives not less than a proportionate percentage of fifty percent of Residual Receipts and the Developer will retain fifty percent (50%) of Residual Receipts.

7.2 PBVs . As of the Date of this Award Letter, Garden Grove has authorized the commencement and undertaking of certain federal procedures pursuant to HUD requirements, including Title 24, Chapter IX, Part 983, Subpart B -Selection of PBV Owner Proposals (“PBV Conversion Procedures”), to convert up to eight (8) of its tenant -based, portable housing choice vouchers to PBVs. With no prejudgment or premature exercise of discretion, if after conducting the PBV Conversion Procedures process, the Developer is selected for a commitment of one (1) or more but not more than eight (8) PBVs for the New Tamerlane Project, then such commitment of a PBV or PBVs shall be deemed part of this financial commitment under this Award Letter as described above in Section 7.1. (a) In the event, that Garden Grove elects to provide from one (1) to eight (8) PBVs to the Developer, then the new cash subsidy amount of the Garden Grove Loan Amount shall be reduced by $455,750 for each PBV awarded to the New Tamerlane Project as described in Section 7.1 above.

8. Compliance with Law; Statutory Requirements. Developer acknowledges, and the AHA will affirm, that the source of the Garden Grove Loan will be funded with monies sourced from and subject to the PLHA Program, HSC Section 34176.1 under the Dissolution Law, as amended by Senate Bill 341, HAL, CRL, and if applicable HUD and other federal requirements. Further, to the extent required by HUD, as to the HOME Program and CDBG Program funds originally invested by the City under the Original Tamerlane Agreements, Developer shall comply with applicable federal statutes, regulations and HUD notices. Therefore, this Award Letter, and then the AHA, and all other implementing documents and instruments are and shall remain subject to the applicable requirements of, and Developer covenants to comply with, all applicable requirements of:
(i) PLHA Program, (ii) CRL statutes affirmed and reinstated under the requirements of Senate Bill 341, (iii) HAL, (iv) Dissolution Law, (v) HOME Program, (vi) CDBG Program, (vii) Environmental Laws (as defined in AHA), (viii) Relocation Law (defined below); (ix) Government Code Sections 65863.10, 65863.11 and 65863.13 (herein together, “GC 65863.10, et seq. ”), and (x) all other applicable federal, state, and local laws and regulations.

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8.1 Prevailing Wage Laws; Labor Compliance. Developer shall comply with applicable provisions of California Labor Code Section 1720, et seq., and, applicable federal prevailing wage laws and regulations (together, “Prevailing Wage Laws”). In this regard, Authority and Developer acknowledge that such laws and regulations include c ertain exemptions that may, or may not, apply to the New Tamerlane Project. (a) In furtherance thereof, in implementation of the PLHA Program State HCD in published “FAQs” informs applicants and participants that Labor Code Section 1720 applies, including the statutory exemptions in subsection (c). In this regard, the Parties acknowledge that as of the Date of Award Letter, Labor Code Section 1720(c)(5) provides:
“Unless otherwise required by a public funding program, the construction or rehabilitation of privately owned residential projects is not subject to this chapter if one or more of the following conditions are met: … (E): The public participation in the project that would otherwise meet the criteria of subdivision (b) is public funding in the form of below -market interest rate loans for a project in which occupancy of at least 40 percent of the units is restricted for at least 20 years, by deed or regulatory agreement, to individuals or families earning no more than 80 percent of the area median income.” (i) As the potential for an award of PBVs is limited to not more than eight (8) PBVs, the applicable federal laws and regulations relating to payment of prevailing wages, including Davis -Bacon, are not triggered by the award of one up to eight PBVs.
(b) Notwithstanding subsection (a) above, under this Award Letter and the AHA, Developer assumes, and will assume, all responsibility, liability, obligation for payment and will indemnify, hold harmless, and pay for all claims, suits, and liabilities affecting Authority (and City and their Indemnitees) relating to Prevailing Wage Laws as such may be applicable to the New Tamerlane Project, to Developer, its General Contractor and all Subcontractors. Further, the New Tamerlane Project may be subject to a negotiated “Project Labor Agreement” that may be entered into between or among the Developer and one or more building trades, for which Developer shall be and remain solely legally and financially responsible.

8.2 Receipt of Subsidy Layering Review Approval from TCAC . The New Tamerlane Project and all sources of funding of the New Tamerlane Project are subject to SLR under applicable federal and state laws to ensure that excessive public assistance is not used when combining public assistance from federal, state, or local agencies including through Tax Credits. Pursuant to federal and state notices, TCAC may, and is now, performing SLRs for and on behalf of HUD, and TCAC may authorize the local jurisdiction to prepare the SLR for its review and approval.

8.3 Relocation Plan . As to this Award Letter, the New Tamerlane Properties, the New Tamerlane Project, Original Tamerlane Agreements, as amended by the Amendment, and implementation thereof, Developer shall comply timely and fully with applicable requirements of the California Relocation Assistance Law, Government Code Section 7260, et seq., and the Relocation Assistance and Real Property Acquisition

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Guidelines adopted by the Department of Housing and Community Development and set forth at Title 25, California Code of Regulations Section 6000, et seq. (“CRAL Guidelines”), and, if applicable, federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (“URA”), as amended, the implementing regulations of HUD Handbook 1378 (collectively, “Relocation Law”).
(a) Prior to the Date of Award Letter, Developer retained the services of OPC, Inc., an experienced professional relocation consultant, to conduct and evaluate the circumstances relating to potential displacement of existing tenants pursuant to the Relocation Law. Based on the information and supporting documentation provided to OPC by Developer, OPC a “Relocation Plan” for the New Tamerlane Project. The Relocation Plan describes that only temporary moves will occur due to the construction of the substantial rehabilitation and there will be no permanent displacement due to the implementation of the New Tamerlane Project.
(i) As to be implemented, the New Tamerlane Project will qualify as a “qualified affordable housing preservation project”, and as the Relocation Plan states affirmatively only temporary moves will occur. In other words, no tenants will be displaced and the project aligns with the exclusions in the definition of “displaced person” in 25 CCR 6008(f)(3)(D)(F).
(ii) Developer hereby agrees to indemnify and shall defend Garden Grove and its Indemnitees relating in any manner to the application of the Relocation Law arising from or related in any manner to the New Tamerlane Properties, implementation of this Award Letter, the AHA, and any and all issues and claims that may arise related thereto.

8.4 Government Code Section 65863.10, et seq . Until there is an AHA, the New Tamerlane Properties are subject to the Original Tamerlane Agreements, as amended by the Amendment, which properties comprise an existing “Assisted Housing Development” as defined and set forth in GC 65863.10, et seq. In connection with the sale by the Prior Owner to Developer, the Prior Owner caused to be recorded in the Official Records a certification of compliance with the applicable noticing requirements, including as applicable 5-year, 3-year, 12-month, 6-month and other notices, and other of GC 65863.10, et seq.

To the extent applicable, Developer agrees to comply with GC 65863.10, et seq. in connection with this Award Letter, its ownership, and operation of the New Tamerlane Properties and implementation of the New Tamerlane Project, the Original Tamerlane Agreements and Amendment (while in effect, as amended), the AHA, Regulatory Agreement and overall implantation thereof.

9. Pro
ject Proforma. As of the date of this Award Letter, the Garden Grove Loan Amount has been evaluated and determined, and this Award Letter is provided, based on the Authority’s material reliance on and review of the Developer's application to Garden Grove for the Garden Grove Loan and Developer’s March 29 Proforma for the proposed New Tamerlane Project with proposed sources of funding and financing, costs for substantial rehabilitation and 55-year projected cash flows for the New Tamerlane Project,

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which proforma is dated as of March 29, 2023 (“March 29 Proforma”). Developer shall update the New Tamerlane Project proforma after the award by TCAC of a reservation Tax Credits, which will be a part of the updated Financial Gap Analysis and applicable SLR in connection with preparation of and entering into the AHA concurrent with the Closing of Financing.

10. Cooperation; Application to TCAC .

The Parties shall cooperate in good faith in
connection with Developer’s application(s) to TCAC for the Tax Credits.

11. Developer and Guarantor Indemnification of Garden Grove and Indemnitees.

Developer and its “Guarantor”, Affordable Housing Access, Inc., a California nonprofit public benefit corporation, shall provide certain indemnifications of the Garden Grove Indemnitees (defined below), including without limitation a general indemnity, and specific indemnities related to Environmental Laws, HOME Program, CDBG Program, PLHA Program , Relocation Law, Prevailing Wage Laws, GC 65863.10, et seq., CRL and Senate Bill 341, to defend and pay for each and any challenge, claim, legal action and/or administrative action against or related to this Award Letter, the AHA, and/or implementation of the New Tamerlane Project.

11.1 Indemnity. In this regard, Developer and Guarantor hereby agree a n d will
indemnify, defend, pay for, assume all responsibility for, and hold harmless the Authority, the City, the Successor Agency, and their respective elected and appointed officials, officers, employees, attorneys, representatives, volunteers, contractors and agents (collectively, “Indemnitees”) from all claims, demands, damages, defense costs or liability of any kind or nature relating to the subject matter of, the terms conditions and provisions, and/or implementation, both action and inaction, under this Award Letter, the AHA, each and all implementing instruments for the New Tamerlane Properties and Project, including without limitation, the validity, applicability, interpretation, or implementation hereof and thereof, and all matters arising or alleged to arise under the Relocation Law, PLHA Program, HOME Program, CDBG Program, Prevailing Wage Laws, GC 65863.10, et seq., CRL and Senate Bill 341, the terms conditions, provisions of this Award Letter, and the AHA. Developer and Guarantor shall have the obligation to defend any such claim and/or action; provided, however, that this obligation to defend shall not be effective if and to the extent that Developer determines in its reasonable discretion that such action is meritorious or that the interests of the parties justify a compromise or a settlement of such action, in which case Developer and Guarantor shall compromise or settle such action in a way that fully protects Indemnitees from any liability or obligation. In this regard, Developer’s obligation and right to defend shall include the right to hire (subject to written reasonable approval by the Director and City Attorney) attorneys and experts necessary to defend, the right to process and settle reasonable claims, the right to enter into reasonable settlement agreements and pay amounts as required by the terms of such settlement, and the right to pay any judgments assessed against Indemnitees. If Developer and Guarantor defend any such action, as set forth above, (i) Developer and Guarantor shall indemnify and hold harmless Indemnitees from and against any claims, losses, liabilities, or damages assessed or awarded against either of them by way of judgment, settlement, or stipulation and

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(ii) Authority shall be entitled to settle any such claim only with the written consent of Developer and Guarantor and any settlement without Developer and Guarantor’s consent shall release Developer and Guarantor’s obligations hereunder with respect to such settled claim.

11.2 Security for Indemnity. Developer has identified Guarantor for the indemnification of the Garden Grove Indemnitees, which entity shall provide to Garden Grove a guaranty agreement evidencing the covenant to indemnify, hold harmless, defend and pay for each and any challenge, claim or legal action and/or administrative action as set forth in Section 11.1 above, which guaranty is subject to review and approval by the City Attorney and special counsel.

12. Affordable Housing Agreement . S ubj
ect to the Developer’s satisfaction of the
Award Letter Condition Precedent, the Authority and Developer will negotiate and enter into the AHA. The AHA will set forth a series of “Conditions Precedent”, to be satisfied by the Developer, as applicable, and Authority, as applicable.

12.1 Approval and Execution of AHA .

The final form of the AHA shall be
approved by Developer in its sole and absolute discretion; and, the Director, is hereby authorized to approve and execute in her/his sole discretion, provided however, she/he may elect in her/his sole and absolute discretion to present the AHA to the Authority Board and City Council for consideration and action. The AHA is also subject to approval as to form by the City Attorney/general counsel and special counsel, and shall be attested by the Authority Secretary and City Clerk.

12.2 Summary of Certain AHA Terms. A summary of the topics and basic terms to be set forth in the AHA shall include the following:
(a) Garden Grove Loan . The Garden Grove Loan shall be fully described in the AHA, including:
(i) Interest Rate. Principal amount of Garden Grove Loan shall bear three and No/100
ths percent (3%) simple interest per annum.
(ii) Term of Garden Grove Loan. Remaining principal and accrued interest on the Garden Grove Loan shall be due in full upon the 58 th anniversary of the completion of construction of the substantial rehabilitation that is part of the New Tamerlane Project or earlier upon transfer, sale, non-permitted refinancing, or default as will be set forth in the AHA.
(iii) Monetary Lien Priorities. The lien position of the Garden Grove Loan (and, if documented as two or more loans, the subordinate lien positions) will be subordinate to the Developer’s Primary Loan for construction and permanent financing of the New Tamerlane Project. In this regard and for avoidance of doubt, the new Garden Grove Regulatory Agreement and PLHA Covenant Agreement shall be and remain

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senior encumbrances and nonsubordinate to all monetary liens, including without limitation Developer’s Primary Loan for construction and permanent financing. (iv) Residual Receipts Allocation. Repayment of the Garden Grove Loan shall be from Residual Receipts as described above. Calculation of Residual Receipts will be subject to and calculated after payment of eligible operating expenses, approved debt service, Deferred Developer Fee, if any remaining, and eligible partnership related fees, also as provided above.

12.3 Additional AHA Terms and Conditions Precedent . The AHA will include additional terms and set forth a series of conditions precedent to the Closing of Financing, including without limitation:
(a) Readiness for Closing of Financing for the New Tamerlane Project. Developer shall be ready to cause the Closing of Financing for the New Tamerlane Project.
(b) Readiness for Construction of the Substantial Rehabilitation .

All building and other permits required to commence the substantial rehabilitation of the New Tamerlane Properties shall have been issued, or be ready to issue with payment of fees, and the City shall have issued a letter stating that building permits are ready to issue with payment of fees.
(c) Primary Loan . Developer shall have secured all necessary institutional financing and funding for the Primary Loan to undertake and complete construction and thereafter operation of the New Tamerlane Project and as approved by Garden Grove. The Primary Loan shall be sufficient to pay all costs of the New Tamerlane Project, through the New Tamerlane Project being placed in service under the Tax Credit Rules, as set forth in a final budget and approved by Garden Grove. (i) Developer will cause the lenders for the Primary Loan to provide Garden Grove staff and legal counsel Word versions of all drafts of the loan documents, including the estoppel, intercreditor and/or subordination agreements to be negotiated among the parties thereto. In this regard, Developer acknowledges and agrees, and as promised in the Amendment, the new Garden Grove Regulatory Agreement and PLHA Covenant Agreement for the New Tamerlane Project shall be and remain a senior, nonsubordinate encumbrance against the New Tamerlane Properties for the full 55-year Affordability Period.
(d) Insurance. Developer shall have provided evidence to Garden Grove that the Developer has obtained insurance policies, certificates, and additional insured or other endorsements acceptable to the Authority, the City Attorney, and City risk management staff for both Developer, its General Contractor and Subcontractors. (e) Indemnities. In addition to Section 11 herein, under the AHA Developer shall provide certain additional indemnifications, including Developer’s

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general indemnity of the Indemnitees for damage to property or injuries to persons, including accidental death (including attorneys’ fees and costs) that may be caused by any acts or omissions of Developer (and any person or entity acting by or through Developer), whether such activities or performance thereof (or inaction) be by Developer or by anyone directly or indirectly employed or contracted with by Developer and whether such damage shall accrue or be discovered before or after termination of the AHA. Developer shall not be liable for property damage or bodily injury to the extent occasioned by the gross negligence or willful misconduct of Authority or City or their employees. (f) Construction Security. Developer shall have provided construction security naming and in favor of the Authority and City, which may include:
(i) a completion guaranty from an entity (or person) with adequate capital and available liquid assets to and as the guarantor is approved by the Director and legal counsel in their sole discretion; in this regard, by way of example, the guarantor will have a Dun & Bradstreet PAYDEX score of 80 to 100; or
(ii) an unconditional standby letter of credit, or
(iii) payment and performance bonds from the general contractor and subcontractors for the New Tamerlane Project, or
(iv) some combination of any or all of (i), (ii) or (iii) above), in an amount sufficient to ensure the New Tamerlane Project will be completed, all invoices paid, and all workers paid in conformity with applicable federal and state labor laws, including Prevailing Wage Laws, and applicable Project documents and agreements, and placed in service within the time set forth in the schedule for the New Tamerlane Project as approved by Garden Grove.
(g) Additional Contracts. Developer shall submit and obtain approval of Garden Grove and legal counsel (which approval shall not be unreasonably withheld, conditioned or delayed) for:
(i) Construction Contract . the construction contract with its General Contractor and the subcontracts therefor;
(A) construction of the substantial rehabilitation work must be competitively bid in accordance with applicable federal, state and local laws and regulations, in particular the State HCD and HUD requirements, if any. (ii) LPA. the limited partnership agreement (“LPA”) for the limited partnership entity to be formed to own and operate the New Tamerlane Project under the AHA;
(iii) Property Management . qualifications and experience of the property manager to operate and manage affordable housing projects comparable to the New Tamerlane Project and the property management agreement;

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(iv) Social Services Plan . Memorandum of Understanding for implementation of the Social Services Plan (defined below) and other contract(s), if any, other social service provider(s);
(A) the detailed social and supportive services plan that describes the social and supportive services, goals and objective, with a detailed budget therefor (“Social Services Plan”);
(1) The Social Services Plan shall include a robust
level of social services offered at the New Tamerlane Project and suitable for the residents’ needs and provided by professionally trained staff. Services must include an assessment of clients’ needs, link to services and verification of services obtained. The Social Services Plan must also provide clear outcome measurements related to services provided and must clearly identify if services will be provided by the Developer or by third party entity(ies); (2) For services to be provided by the Developer, the
Social Services Plan shall clearly identify the budget and resources available for the services. For services to be provided by third party entity(ies), the Social Services Plan must include copies of the agreements or memoranda of understanding that govern provision of the services; and
(B) The Final Budget and each annual Operating Budget
shall include a line item for the Social Services Plan in an amount not less than $24,000/year with an annual escalator of the lesser of CPI or 3% (“Social Services Fee”) (1) Developer shall provide supportive and social
services to the tenant households of the New Tamerlane Project in accordance with the AHA throughout the entire Affordability Period.
(v) Marketing and Tenant Selection Plan. The marketing and tenant selection plans for the New Tamerlane Project, including Garden Grove’s reasonable preferences waterfall;
(A) Authority and Developer will implement a residency
preference plan that prioritizes occupancy for families who were previously displaced by a Garden Grove entity, and who live, work or have been hired to work in Garden Grove, subject to applicable Fair Housing laws.
(h) Cost Savings. Cost savings from the New Tamerlane Project, if any, and/or permanent funding sources in excess of project costs shall be used and applied to pay down the Garden Grove Loan, first toward principal then accrued interest, subject to compliance with the applicable Tax Credit Rules.
(i) Permitted Refinancing, Sale, Transfer; Authority Due Certain Share of Net Sale or Refinancing Proceeds. Sale, transfer, and refinancing will be subject to the terms of the Garden Grove Loan and AHA.

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(j) Post-Closing Conditions . The AHA will set forth terms and conditions related to the substantial rehabilitation and construction monitoring from commencement through completion, operations, financing, refinancing, transfer, management and maintenance of the New Tamerlane Project.

12.4 Multi-family Project . No housing units within the New Tamerlane Project shall be restricted on the basis of age; this is not a “senior” development.

12.5 Affordable Housing Unit Mix; Income and Rent Levels . The Prescribed Unit Mix and allocation among the Housing Units of the New Tamerlane Properties is set forth in Exhibit B, which, as noted, is as set forth in the March 29 Proforma.

12.6 Non-subordinate Garden Grove Regulatory Agreement and PLHA Covenant; Affordability Period. The Housing Units at the New Tamerlane Project will be restricted as set forth herein and in the AHA for a minimum of fifty -five (55) years (“Affordability Period”) and as set forth in a separate “Regulatory Agreement”, and as necessary a separate “PLHA Covenant” with conditions, covenants and restrictions affecting the use, ownership, operation, management, maintenance, transfer and financing of the New Tamerlane Project at the New Tamerlane Properties. The Regulatory Agreement and PLHA Covenant will be recorded in the Official Records as senior encumbrances against the New Tamerlane Properties, and shall remain senior for the Affordability Period, and thereby all monetary liens shall be subject to and remain subordinate to the Regulatory Agreement and PLHA Covenant.

12.7 Affordable Rent . The AHA will require that the Developer will not charge more and shall state in each lease agreement with a tenant that monthly rent shall be an “Affordable Rent” as applicable to the Extremely Low, Very Low and Low Income tenants for all Housing Units at the New Tamerlane Project excepting only the Manager’s Unit that may be restricted to 100% AMI.
(a) The term “Affordable Rent” means the maximum amount of out-of-pocket housing cost to be charged monthly by Developer and paid for a Housing Unit by each of the Extremely Low, Very Low, and Low Income Households. Affordable Rent will be determined and calculated pursuant to applicable provisions of the Tax Credit Rules, provided however, as to the eight (8) Housing Units funded from the LMIHAF and restricted for occupancy by Extremely Low Income households such units shall meet the requirements and definition of Affordable Rent as set forth in HSC Section 50053 in order to meet the income-targeting and compliance requirements set forth in HSC Section 34176.1.

For purposes of Affordable Rent, the monthly housing payment shall mean the total of monthly payments by each tenant household of a Housing Unit, inclusive of payments attributable to Section 8 portable vouchers under the Housing Choice Voucher (“HCV”) program (exclusive of PBVs, if any, awarded by Garden Grove), other rental subsidies, or other public subsidies by the Authority or any other local, state, or federal governmental agency for use and occupancy of a Housing Unit and facilities associated therewith, including a reasonable allowance for utilities for an adequate level of service.

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(i) Developer shall accept tenants holding Section 8 portable vouchers, including existing tenants at the New Tamerlane Properties holding Section 8 portable vouchers, or other tenant -based rental assistance certificates (each a “portable voucher”); provided however, each lease for a tenant holding a portable voucher shall state that monthly rent is the Affordable Rent, not fair market rent (“FMR”), provided that such is exclusive of PBVs, if any, awarded by Garden Grove.

12.8 Minimum and Maximum Occupancy Standards. The minimum occupancy of the Housing Units shall not be less than one person per bedroom. The maximum occupancy of the Housing Units shall not exceed more than such number of persons as is equal to two persons per bedroom, plus one; thus: (i) for the one-bedroom Housing Units the maximum occupancy shall not exceed three (3) persons, (ii) for the two (2) bedroom Housing Units the minimum occupancy is two (2) persons and the maximum occupancy shall not exceed five (5) persons; and (iii) for the three (3) bedroom Housing Units the minimum occupancy is three (3) persons and the maximum occupancy shall not exceed seven (7) persons.

12.9 Developer Fee; Deferred Developer Fee. In connection with the dev
elopment of the New Tamerlane Project and subject to compliance with the Tax Credit Rules, the Developer will be entitled to a total developer fee of $2,200,000 as listed in the March 29 Proforma in connection with the development of the New Tamerlane Project and subject to compliance with the Tax Credit Rules, the Developer will be entitled to a total developer fee of $2,200,000 as listed in the March 29 Proforma. Receipt of a portion of the Developer Fee will be deferred (“Deferred Developer Fee”), which is estimated at $223,332 in the March 29 Proforma.

12.10 Annual Monitoring Fee. Annually and concurrently with the delivery of each annual report and compliance certificate that will be required under the AHA, Developer shall pay a per unit fee with annual adjustment (“Annual Monitoring Fee”) to Garden Grove that shall compensate Authority for its costs incurred to monitor Developer’s compliance with the AHA.

12.11 Annual Financial Report . The AHA will require Developer to submit an “Annual Financial Report”, which is a certified financial statement by Developer for the New Tamerlane Project using generally accepted accounting principles (“GAAP”) and as separately accounted for by Developer.

13. Environmental Compliance.

13.1 Environmental Laws. Developer shall comply “Environmental Laws” including, all applicable laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, County of Orange, City of Garden Grove, or any other political subdivision, agency, or instrumentality exercising jurisdiction over the Developer, the Authority, the City or the New Tamerlane Properties, and the New Tamerlane Project.

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13.2 CEQA. Developer shall comply with applicable federal and state laws and regulations affecting environmental review of the New Tamerlane Project pursuant to all, including the California Environmental Quality Act ("CEQA") and, as and if applicable, the National Environmental Protection Act (“NEPA”) and approval thereof. (a) CEQA defines a “project” as an activity that (i) is a discretionary action by a governmental agency and (2) will either have a direct or reasonably foreseeable indirect impact on the environment. (Pub. Res. Code Section 21065.) This Award Letter is a commitment of funds to evidence TCAC’s requirement that the Developer, as applicant, evidences its “enforceable financial commitment” under the Tax Credit Rules. This Award Letter is not a project as the commitment of funding will not of itself have a significant effect on the environment; and, provided however, at such time that Developer is awarded a reservation of Tax Credits, if successful, then a complete review of the New Tamerlane Project, and discretionary actions, if any, will be evaluated by the City and findings and determination will be made at such time and as a condition precedent to the Closing of Financing.

14. Financial Gap Analysis. This Award Letter for the Garden Grove Loan has been determined based on a “Financial Gap Analysis” of the proposed development and operation of the New Tamerlane Project, including all funding and financing sources, and the March 29 Proforma, and other supporting documentation. This Award Letter is and shall remain subject to the Award Letter Condition Precedent and the Financial Gap Analysis. After the Award Letter Condition Precedent is satisfied by Developer, Garden Grove (with its consultant and counsel) will re-review and analyze all awarded and committed funding sources for all costs of development and operation of the New Tamerlane Project. Developer shall update the March 29 Proforma and provide to Gar den Grove requested supporting documentation. The Financial Gap Analysis will be conducted by the Garden Grove’s economic and housing consultant to evaluate, without limitation, supportable debt (construction and permanent financing), market value of Tax Credits, amount of other governmental funding source(s), if any, tax credit investor equity, Deferred Developer Fee, and other subordinate debt, if any, and the terms therefor. Developer agrees to cooperate with Garden Grove and its agents and provide complete, truthful supporting documentation in connection with conducting the Financial Gap Analysis.

Developer and Garden Grove agree to cooperate in good faith toward achieving a financially feasible New Tamerlane Project and to that end each shall provide the other and their respective agents with complete, truthful, and timely supporting documentation in connection with conducting the Financial Gap Analysis. To the extent that the Financial Gap Analysis were to show, if at all, that less than the cash subsidy of up to $3.64M is necessary to complete the scope of substantial rehabilitation presently expected, the additional funds shall be directed and allocated to enhanced improvements and/or services at the New Tamerlane Properties.

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15. Authorization to Implement Award Letter.

15.1 Director Authority. By consideration and action to approve this Award Letter, the Authority and City hereby authorize Lisa Kim, City Manage and Authority Director to sign this Award Letter on behalf of the City and the Authority. Further, the Director is (and her designees are) authorized to cause to be prepared and executed the AHA, in implementation hereof, so long as the terms and provisions of the AHA and each and all implementing agreements and instruments therefor are substantially, and materially consistent, financially and legally, with this Award Letter. (a) Further, the Director is (and her designees are) authorized to implement the AHA and take all further actions and execute all documents referenced therein and/or necessary and appropriate to carry out the transaction contemplated by this Award Letter, and thereafter the AHA, including all exhibits, instruments and implementing agreements thereto. To the extent necessary during the implementation hereof and thereof, the Director is authorized to make technical or minor changes and interpretations of this Award Letter, and thereafter the AHA, as reasonably necessary in her/his sole and absolute discretion, to properly implement and carry out the New Tamerlane Project provided any and all such changes shall not in any manner substantially or materially affect Garden Grove’s rights and obligations, or increase the value and monetary amount(s) under this Award Letter and the AHA.
(b) In addition, the Director is (and her designees are) authorized, on behalf of Garden Grove, to sign all other documents necessary or appropriate to carry out and implement this Preliminary Award Letter, the AHA, including all exhibits thereto and including causing the issuance of warrants in implementation thereto, and to administer Garden Grove’s obligations, responsibilities and duties to be performed thereunder so long as substantially and materially consistent with this Award Letter and the AHA. Any and all substantive changes, including monetary adjustments that increase the Garden Grove Loan Amount, to the terms and provisions of the AHA and implementing agreements and instruments thereto shall require the consideration and action of the Authority Board and/or City Council, as applicable.

16. Board Action . T
he governing board of the City is the City Council and the governing board of the Garden Grove Housing Authority is comprised of the elected members of the City Council and two tenant representatives (together, “Authority Board”).

The City Council and Authority Board each has reviewed Developer’s requests for each component of the Garden Grove financial assistance described in this Award Letter, and on April 11, 2023 at a public meeting of the City Council and the Authority Board authorized and approved issuance of this Award Letter to evidence the enforceable financing commitment of the Garden Grove Loan Amount and related matters described herein to satisfy the requirements of the Tax Credit Rules.

NEW TAMERLANE, LLC
Bill Salamandrakis, President
Shawn Boyd, Chief Investment Officer
April 11, 2023
Page | 23
4887-6403-1824v9/022627-0027
Should you have any questions or require additional information, please contact Monica Covarrubias Senior Project Manager, Office of Economic Development, (714) 741-5788 [email protected].

Sincerely,
CITY OF GARDEN GROVE and

GARDEN GROVE HOUSING AUTHORITY
Lisa Kim
City Manager and Authority Director
[Developer Signature Block on Next Page]

NEW TAMERLANE, LLC
Bill Salamandrakis, President
Shawn Boyd, Chief Investment Officer
April 11, 2023
Page | 24
4887-6403-1824v9/022627-0027
The Preliminary Award Letter to New Tamerlane, LLC is:

AGREED AND ACCEPTED
this __th day of April 2023:

NEW TAMERLANE, LLC,
a California limited liability company

By Affordable Housing Access, Inc.,
a California nonprofit public benefit corporation,
its Manager
By:

Name:

Its:
cc: Celeste Stahl Brady, Esq., Special Counsel
Omar Sandoval, Esq., City Attorney

4887-6403-1824v9/022627-0027
Exhibit A

LEGAL DESCRIPTION OF NEW TAMERLANE PROPERTIES

1. 12131 Tamerlane Drive; Title Prelim Parcel 8
LOT 3 OF TRACT NO. 5503, IN THE CITY OF GARDEN GROVE, COUNTY OF

ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 201, PAGES 29 AND 30 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, CALIFORNIA.

2. 12132 Tamerlane Drive; Title Prelim Parcel 7
LOT 4 OF TRACT NO. 5503, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 201, PAGES 29 AND 30 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THEREFROM ANY UNDERGROUND WATER WHICH MAY BE

DEVELOPED IN, UNDER, OR UPON SAID LAND, BUT WITHOUT THE RIGHT OF SURFACE ENTRY, AS PROVIDED IN THE DEED RECORDED IN BOO K 7111, PAGES 715, OFFICIAL RECORDS.

3. 12141 Tamerlane Drive; Title Prelim Parcel 9
Parcel 9A:

LOT 2 OF TRACT NO. 5503, IN THE CITY OF GARDEN GROVE, COUNTY OF

ORANGE COUNTY, STATE OF CALIFORNIA, AS SHOWN ON A MAP
RECORDED IN BOO K 201 PAGES 29 AND 30 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY.

Parcel 9B:

THE RIGHT OF ACCESS OVER THE EAST 27 FEET OF THE WEST 47 FEET AND THE ENTIRE 12.5 FEET EXCEPT THE WEST 20 FEET OF LOT 3 OF SAID TRACT.

Parcel 9C:

THE RIGHT OF ACCESS OVER THE EAST 27 FEET OF THE WEST 47 FEET OF LOT 1 OF SAID TRACT.

Exhibit A
Page | 2
4887-6403-1824v9/022627-0027

4. 12142 Tamerlane Drive; Title Prelim Parcel 15
Parcel 15A:

LOT 5 OF TRACT NO. 5503, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORD ED IN BOOK 201, PAGES 29 AND 30 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

Parcel 15B:

THE RIGHT OF ACCESS OVER THE WEST 27 FEET OF THE EAST 47 FEET OF LOT 6 OF SAID TRACT NO. 5503

5. 12161 Tamerlane Drive; Title Prelim Parcel 10
Parcel 10A:

LOT 1 OF TRACT NO. 5503, IN THE CITY OF GARDEN GROVE, COUNTY OF

ORANGE COUNTY, STATE OF CALIFORNIA, AS SHOWN ON A MAP
RECORDED IN BOO K 201 PAGES 29 AND 30 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY.

Parcel 10B:

THE RIGHT OF ACCESS OVER THE EAST 27 FEET OF THE WEST 47 FEET AND THE ENTIRE 12.5 FEET EXCEPT THE WEST 20 FEET OF LOT 3 OF SAID TRACT.

Parcel 10C:

THE RIGHT OF ACCESS OVER THE EAST 27 FEET OF THE WEST 47 FEET AND THE ENTIRE NORTH 12.5 FEET EXCEPT THE WEST 20 FEET OF LOT 2 OF SAID TRACT.

6. 12162 Tamerlane Drive; Title Prelim Parcel 6
Parcel 6A:

LOT 6 OF TRACT NO. 5503, IN THE CITY OF GARDEN GROVE, COUNTY OF

ORANGE COUNTY, STATE OF CALIFORNIA, AS SHOWN ON A MAP
RECORDED IN BOO K 201 PAGES 29 AND 30 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY.

EXCEPTING ALL UNDERGROUND WATER LYING BENEATH THE HEREIN

DESCRIBED TRACT, BUT WITHOUT THE RIGHT OF ENTRY TO THE SURFACE

THEREOF FOR THE PURPOSE OF PROCURING WATER, AS CONVEYED TO THE CITY OF GARDEN GROVE.

Exhibit A
Page | 3
4887-6403-1824v9/022627-0027
Parcel 6B:

THE RIGHT OF ACCESS OVER THE WEST 27 FEET OF THE EAST 47 FEET AND THE ENTIRE 12.5 FEET EXCEPT THE EAST 20 FEET OF LOT 5 OF SAID TRACT.

Parcel 6C:

THE RIGHT OF ACCESS OVER THE WEST 27 FEET OF THE EAST 47 FEET AND THE ENTIRE NORTH 12.5 FEET EXCEPT THE EAST 20 FEET OF LOT 4 OF SAID TRACT.

7. 12171 Tamerlane Drive; Title Prelim Parcel 11
LOT 1 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 92 PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

8. 12172 Tamerlane Drive; Title Prelim Parcel 5
LOT 10 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOO K 92, PAGE 31 AND 32 MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

9. 12181 Tamerlane Drive; Title Prelim Parcel 12
LOT 2 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF

ORANGE C OUNTY, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 92, PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

10. 12182 Tamerlane Drive; Title Prelim Parcel 4
LOT 9 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF

ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 92, PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

11. 12201 Tamerlane Drive; Title Prelim Parcel 13
LOT 3 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 92, PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

Exhibit A
Page | 4
4887-6403-1824v9/022627-0027

12. 12202 Tamerlane Drive; Title Prelim Parcel 3
LOT 8 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 92, PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, CALIFORNIA.

13. 12211 Tamerlane Drive; Title Prelim Parcel 14
LOT 4 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 92, PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

14. 12212 Tamerlane Drive; Title Prelim Parcel 2
LOT 7 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOO K 92, PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, CALIFORNIA.

15. 12222 Tamerlane Drive; Title Prelim Parcel 1
LOT 6 OF TRACT NO. 3050, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 92, PAGES 31 AND 32 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY, CALIFORNIA.

APN: 231-471-31; APN: 231-471-32; APN: 231-471-33; APN: 231-471-34; APN: 231-471-35; APN: 231-471-36; APN: 231-471-37; APN: 231-471-38; APN: 231-471-39; APN: 231-471-40; APN: 231-471-41; APN: 231-471-42; APN: 231-471-43; APN: 231-471-44; APN: 231-471-45

4887-6403-1824v9/022627-0027
Exhibit B
Prescribed Unit Mix
This Prescribed Unit Mix is based on the allocation of funds for the new Garden Grove Loan from the following sources:

Garden Grove Loan Funding Sources
Reset Original Loans – HOME/HUD
Source
5,556,033
Reset Original Loan – Former Agency
20% Set-Aside Source
1,572,725
Reset Original Loan – HOME Match/
City General Fund Source
1,740,573
New Cash Subsidy – LMIHAF Source 1,823,000
New Cash Subsidy - PHLA Source 1,823,000
Total Garden Grove Loan
(new restructured loan) $12,520,000
(rounded)

Nonetheless, the New Tamerlane Project income standards and affordable rent must adhere to the most restrictive of the requirements imposed by various and multiple funding sources pursuant to applicable statutes and regulations, including (i) State HCD and HSC, (ii) HUD/HOME Program and HOME Final Rule, and (iii) TCAC and Tax Credit Rules.

The affordable rents identified in this Exhibit B are based on the 2022 income limits published by State HCD, HUD for the HOME Program, and TCAC. By way of example and applying 2022 income and utilities allowance standards, allowable rents assume utilities allowances are $67 per month for one-bedroom units, $90 per month per two-bedroom units, and $114 per month per three-bedroom units, which are to be deducted for the utilities to be paid directly by the tenants as detailed in the last table of this Exhibit B.

Under the AHA and Garden Grove Regulatory Agreement 8 of 78 Housing Units shall be covenanted based on household income and affordable rent standards set forth in HSC Section 50106 as to household income and HSC Section 50053 as to affordable rent in compliance with and in furtherance of the income targeting requirements of HSC 34176.1 (“LMIHAF Units”):

LMIHAF Units
Garden Grove Regulatory Agreement
Extremely Low Income
HCD/HSC 30% AMI
and same complies
with 20% AMI per
Tax Credit Rules
1-Bedroom Units 1
2-Bedroom Units 4
3-Bedroom Units 3

Exhibit B
Page | 2
4887-6403-1824v9/022627-0027
Under the AHA and Garden Grove Regulatory Agreement 41 of 78 Housing Units shall be covenanted as per PLHA requirements based on household income and affordable rent standards set forth in HSC Section 50470, et seq. and the Permanent Local Housing Allocation Final Guidelines (“PLHA Units”):

PHLA Units
Garden Grove Regulatory Agreement Low Income 60% AMI
1-Bedroom Units 30

2-Bedroom Units 11
3-Bedroom Units 0
Total Units 41

Under the AHA and Garden Grove Regulatory Agreement, the affordability covenants of the Original Regulatory Agreements that will expire during the reset 55-year Affordability Period will continue in effect as to 29 of 78 Housing Units with household income and affordable rent standards of 65% AMI and “High HOME” rent. As and when such existing affordability covenants expire as of the dates summarized in the table below, each Housing Unit shall continue to be covenanted as affordable housing pursuant to the TCAC regulatory agreement.

EXISTING COVENANTS 12131 12132 12172 12142 12211 12162 12172 TOTALS Expiration Date 6/30/2027 6/30/2027 6/30/2027 1/26/1932 5/8/2032 2/9/1965 2/9/1965

UNIT MIX
1-Bedroom Units 0 0 0 0 0 0 0 0
2-Bedroom Units 3 3 3 2 3 3 6 23
3-Bedroom Units 1 1 1 2 0 1 0 6
Total Units 4 4 4 4 3 4 6 29

On the next page is a table with a full summary of the unit mix showing income and rent standards for each and all funding sources, including the affordability restrictions to be set forth in the TCAC regulatory agreement.

Exhibit B
Page | 3
4887-6403-1824v9/022627-0027

FULL SUMMARY OF UNIT AND AFFORDABILITY MIX

NEW TAMERLANE PROPERTIES
(applying 2022 standards as to income and utilities allowances)3

Number of
Units
New TCAC
Rent
LMIHAF
Units

HCD/HSC
Rent
PHLA
Units Rent
Existing
High
HOME
Rent
Applicable
Gross
Rent
Utility
Allowance
Applicable
New
Affordable
Rent
New GG Covenant 7 20% AMI ELI HCD N/A N/A
1-Bdrm Units 1 $508 $715 N/A N/A $508 $67 $441
2-Bdrm Units 4 $610 $804 N/A N/A $610 $90 $520
3-Bdrm Units 2 $704 $893 N/A N/A $704 $114 $590

New GG Covenant 9 40% AMI N/A 60% PHLA N/A
1-Bdrm Units 0 $1,016 N/A $1,524 N/A $1,016 $67 $949
2-Bdrm Units 9 $1,220 N/A $1,830 N/A $1,220 $90 $1,130
3-Bdrm Units 0 $1,409 N/A $2,114 N/A $1,409 $114 $1,295

New GG Covenant 16 50% AMI N/A 60% PHLA N/A
1-Bdrm Units 16 $1,270 N/A $1,524 N/A $1,270 $67 $1,203 2-Bdrm Units 0 $1,525 N/A $1,830 N/A $1,525 $90 $1,435
3-Bdrm Units 0 $1,761 N/A $2,114 N/A $1,761 $114 $1,647

New GG Covenant 16 60% AMI N/A 60% PHLA N/A
1-Bdrm Units 14 $1,524 N/A $1,524 N/A $1,524 $67 $1,457 2-Bdrm Units 2 $1,830 N/A $1,830 N/A $1,830 $90 $1,740
3-Bdrm Units 0 $2,114 N/A $2,114 N/A $2,114 $114 $2,000

New/Existing GG
Covenant 1 20% AMI ELI HCD N/A
High
HOME
1-Bdrm Units 0 $508 $715 N/A $1,633 $508 $67 $441
2-Bdrm Units 0 $610 $804 N/A $1,961 $610 $90 $520
3-Bdrm Units 1 $704 $893 N/A $2,257 $704 $114 $590

Existing GG
Covenant 14 50% AMI N/A N/A
High
HOME
1-Bdrm Units 0 $1,270 N/A N/A $1,633 $1,270 $67 $1,203
2-Bd rm Units 14 $1,525 N/A N/A $1,961 $1,525 $90 $1,435 3-Bdrm Units 0 $1,761 N/A N/A $2,257 $1,761 $114 $1,647

Existing GG
Covenant 11 60% AMI N/A N/A
High
HOME
1-Bdrm Units 0 $1,524 N/A N/A $1,633 $1,524 $67 $1,457
2-Bdrm Units 9 $1,830 N/A N/A $1,961 $1,830 $90 $1,740
3-Bdrm Units 2 $2,114 N/A N/A $2,257 $2,114 $114 $2,000

Existing GG
Covenant 3 70% AMI
High
HOME
1-Bdrm Units 0 $1,778 N/A N/A $1,633 $1,633 $67 $1,566
2-Bdrm Units 0 $2,135 N/A N/A $1,961 $1,961 $90 $1,871
3-Bdrm Units 3 $2,466 N/A N/A $2,257 $2,257 $114 $2,143

Manager Unit 1
3-Bdrm Unit
(may be restricted for
manager household at
100% AMI) 1 $0

3 Subject to annual adjustment based on income limits issued by applicable governmental agency and applying applicable statutory or regulatory rent formula, with the most restrictive of the requirements to apply based on the various and multiple funding sources, including (i) State HCD and HSC, (ii) HUD/HOME Program and HOME Final Rule, and (iii) TCAC and Tax Credit Rules.

I
•
I

4887-6403-1824v9/022627-0027
Exhibit C
March 29 Proforma
(attached)

Exhibit C
Page | 2
4887-6403-1824v9/022627-0027 Page 162 of 211
PROJECT SUMMARY Affordable Housing Access, Inc TAMERLANE APTS. 77 units plus 1 mgr. unit
Acq Rehab
PW Famil;i: er9ect
Perm Loan $6,610,755
Tax Credit Proceeds 22,687,202
GG Recycled Soft Loans 8,879,321
GG New Financing 3,646,000
Interest Income 0
Operating Income 0
Deferred Developer Fee 4,751
$41,828,030
Perm Loan $6,610,755
Tax Credit Proceeds 4,537,440
Tax Credit Proceeds 1,000,000
Tax Credit Proceeds 12,262,321
Tax Credit Proceeds 4,537,440
Tax Credit Proceeds 350,000
GG Recycled Soft Loans 8,879,321
GG New Financing 3,646,000
MGR 3

ELI HCD
ELI HCD 4 2
ELI HCD 2 3
ELI/H-HOME 3
60% PHLA 9 2
60% PHLA 16
60% PHLA 14
60% PHLA 2 2
H-HOME 14 2
H-HOME 2 3
H-HOME 9 2
H-HOME 3 3
Printed on 3/29/23 at 1:31 PM

7.00% 35 $84,753
NA NA 290,862

3.00% 55 11 3,837

3.00% 55 46,744
NA NA 0
NA NA 0

6.00% NA 61
$536,257
Feb-24 aose
Feb-24 Close
~..,..

Land Costs $18,798,304
Permits, Fees, & Studies 1,256,000
Direct Construction Costs 13,264,128
Offsites 0
Contingency 1,876,413
Devel oper Fee 2,200,000
Indirect Construction Costs 1,411,328
Rent-Up Costs 120,000
Reserves 279,475
Financing Costs 2,622,382
$41,828,030
Perm Loan 6,610,755
Tax Credit Proceeds 5,537,440
9% Credits
Non-Rural
QCT-No ODA-No
$241,004
16,103
170,053
0 24,057
28,205
18,094
1,538
3,583
33,620
$536,257
$84,753.27
70,992.83
Sep-24 50% Comp. GG Recycled Soft Loans 8,879,321 11 3,837.45 May-25 Lease up
Sep-25 Convert
Dec-25 8609s
Feb-24 Close
Sep-25 Convert
100% $0 $0
20% 441 67
20% 520 00
20% 590 114
20% 500 114
40% 1,130 00
50% 1,203 67
60% 1,457 67
60% 1,740 00
50% 1,435 00
60% 2,000 114
60% 1,740 00
70% 2,143 114
Version: 22.10.1
Construction Loan 18,249,300 233,965.39
Deferred Costs 2,55 1,213 32,707.86
Totals 41,828,030 $536,256.79
~l•• ,I '
Bedrooms Quantity % of Units Avg. Rent
0 1 31 40% 1,293.13
2 38 49% 1,354.74
3 8 10% 1,525.03
4+
~
Expenses Amount Per Unit
Management 46,800 $600
Administration 32,020 411
Salaries & Benefits 225,000 2,885
Maintenance 122,380 1,569
utilities 88,000 1,128
Insurance 30,000 385
Taxes 13,500 173
Services 30,000 385
Reserves 23,400 300
Fees 0 0
Totals $611,100 $7,835
Assum pt ions Assum pt ions
TCAC Tiebreaker
Site (acres)
Debt Cov . Ratio
Vacancy Factor

40.21% Con. Length 14
000 CLOosi ng: 2/1/24

1.15 Est. Completion 4/1/25

5.0% Con. Loan 18,249,300
Con. Int. Rate 8 .80%
Updated by: David Paredes on 3/29/23
Exhibit C
Page | 3
4887-6403-1824v9/022627-0027 Page 163 of 211
USES, EXPENSES AND CREDll Affordable Hous ing Access, Inc TAMERLANE APTS. 77 units plus 1 mgr. unit
Acq Rehab
PW Famil~ er9ect
I . . . .

Acquisition Cost $18,500,000 $0 $12,500,000 $237,179
Appraisals 10,000 0 0 128
Birdge Loan Fees 288,304 0 0 3,696
Building Fees & Permits 406,000 406,000 0 5 ,205
Architectural & Engineering 850,000 850,000 0 10,897
Landscaping & Irrigation 390,000 390,000 0 5,000
Property Improvements 600,000 600,000 0 7,692
Residential Construction 10,530,000 10,530,000 0 135,000 General Conditions 691,200 691,200 0 8,862
Contractor's overhead & Profit 921,600 921,600 0 11,815 Performance Bond 131,328 131,328 0 1,684
Construction Contingency 1,326,4 13 1,326,413 0 17,005
Developer Fee 2,200,000 2,200,000 0 28,205
Consulting 250,000 250,000 0 3,205
Construction Manager 250,000 250,000 0 3,205
Builders Risk Insurance 131,328 131,328 0 1,684
Accounting 80,000 60,000 0 1,026
Legal Fees 100,000 55,000 0 1,282
Relocation, Temporary 585,000 585,000 0 7,500
Market Study 15,000 15,000 0 192
Project Contingency 550,000 275,000 0 7,051
Marketing & Advertising 50,000 0 0 6 41
Capitalized Operating Reserve 279,475 0 0 3,583
Common Area Furnishings 70,000 70,000 0 897
Construction Period Interest 2,135,537 883,864 0 27,379 Construction Loan Fees 232,493 96,225 0 2,981
Permanent Loan Fees 66,108 0 0 848
TCAC Fees 128,245 0 0 1,644
Title and Recording 60,000 25,000 0 769
Totals $41,828,030 $20,742,958 $12,500,000 $536,257
Printed on 3/29/23 at 1 :31 PM Version: 22.10.1
9% Credits
Non-Rural
OCT-No ODA-No
I .

Property Management $46,800
Marketing 7,020
Audit 12,000
Legal 5,000
Office Expenses 8,000
On-site Manager 80,000
Assistant Manager 40,000
Maintenance Personnel 60,000
Payrol I Taxes 15,000
Insurance 15,000
Workers Corrpensat ion 15,000
Supplies 45,000
Repairs Contract 35,000
Pest Control 14,000
Grounds Contract 20,000
Interior Painting 8,380
Trash Removal 18,000
Electricity 14,000
Water & Sewer 48,000
Gas 8,000
Property & Liability Ins. 30,000
Business Taxes & License 1,800
Real Estate Taxes 11,700
Social Services 30,000
Replacement Reserves 23,400
Total $611,100
~on~to:eo.t
Construction Loan 18,249,300
Total Project Cost 41 ,828,030
Under 80% LTC by 15,213,123
Excluded 0 0
20,742,958 12,500,000 Unadjusted
Basis Limit
Boost
41 ,520,888
Adjusted
Applicable
Qualified
Reduction
Adj. Qualified
Rate Factor
Annual Credits
Federal Credits
Credit Price
Proceeds
Total
100%
20,742,958
100.0%
20,742,958
0 20,742,958

9.00%
2,366,866
23,668,660

0.85 20,116,349
$22,687,202
100%
12,500,000
100.0%
12,500,000
0 12,500,000

4.00%
500,000
state Credits
$600
90 154
64 103
1,026
513
769
192
192
192
577
449
179
256
107
231
179
615
103
385
23 150
385
300
$7,835
!
= 43.63%
20,742,958
100.0%
20,742,958
3000%
3,213,887

0.80 2,570,853
Updated by: David Paredes on 3/29/23
Exhibit C
Page | 4
4887-6403-1824v9/022627-0027 Page 164 of 211
CASH FLOW YR 1-10 Affordable Housing Access, Inc TAMERLANE APTS. 77 units plus 1 mgr. unit 9% Credits
Acq Rehab Non-Rural
PW Famil;i: er9ect QCT-No DOA-No
c..;~
Rental Income 1.245.206 1.276.337 1,308.245 1,340.951 1.374.475 1.408.837 1.444.058 1.480.159 1.517.163 1,555.092 other Income 11,550 11,839 12,135 12,438 12,749 13,068 13,394 13,729 14,073 14,424 Vacanst Loss 62.838 64.409 66,019 67,669 69.361 71.095 72.873 74,694 76,562 78,476 Adjusted Gross Income 1.193.919 1,223,767 1,254,361 1,285,720 1.317.863 1.350.809 1.384.580 1.419.194 1.454,674 1.491,041 Standard Expenses 544,200 563,247 582,961 603,364 624,482 646,339 668,961 692,374 716,607 741,689 Property Taxes 13,500 13,770 14,045 14,326 14,613 14,905 15,203 15,507 15,817 16,134 Supportive Services 30,000 30,750 31,519 32,307 33,114 33,942 34,791 35,661 36,552 37,466 Reelacernent Reserves 23,400 23,634 23,870 24,109 24,350 24,594 24,840 25,088 25,339 25,592 Total Exeenses 611,100 631,401 652,395 674,106 696,559 719,780 743,794 768,630 794,316 820,881 Perm Debt Service 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 Total Debt Service 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 Operating Reserve Balance 279,475 279,475 279,475 279,475 279,475 279.475 279,475 279,475 279,475 279,475 Draws on Reserves 0 0 0 0 0 0 0 0 0 0
Net Operating Income 582,819 592,366 601,966 611 ,613 621,303 631,029 640,785 650,564 660,358 670,160 Debt Service Coverage 1.15 1.17 1.19 1.21 1.23 1.25 1.26 1.28 1.30 1.32 Cash after Exe & OS 76,020 85,567 95,167 104,8 15 114,505 124,231 133,986 143,765 153,559 163,361 LP Fee Balance 0 0 0 0 0 0 0 0 0 0
LP Fee Due 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 LP Fee Paid 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 Cash Flow 71,020 80,417 89,862 99,351 108,877 118.434 128,016 137,616 147,225 156,837 Deferred Developer Fee 4,751 0 0 0 0 0 0 0 0 0
Dev. Fee Payments 4,751 0 0 0 0 0 0 0 0 0
Cash Flow 66,268 80,417 89,862 99,351 108,877 118.434 128,016 137,616 147,225 156,837 Year 1 2 3 4 5 6 7 8 9 10
Printed on 3/29/23 at 1:31 PM Version: 22.10.1 Updated by: David Paredes on 3/29/23 Exhibit C
Page | 5
4887-6403-1824v9/022627-0027

CASH FLOW YR 11-20 Affordable Housing Access, Inc TAMERLANE APTS. 77 units plus 1 mgr. unit 9% Credits
Acq Rehab Non-Rural
PW Famil;i: er9ect QCT-No DOA-No
c..;~
Rental Income 1.593.969 1,633.819 1.674.664 1.716.531 1.759.444 1.803.430 1.848.516 1,894.729 1.942.097 1,990.649 other Income 14,785 15,155 15,533 15,922 16,320 16,728 17,146 17,575 18,014 18,464 Vacanst Loss 80.438 82.449 84,510 86,623 88.788 91.008 93.283 95,615 98,006 100,456 Adjusted Gross Income 1.528.317 1,566,525 1,605,688 1,645,830 1.686.976 1.729.150 1.772.379 1.816,688 1,862,106 1,908,658 Standard Expenses 767,648 794,516 822,324 851,105 880,894 911,725 943,635 976,662 1,010,846 1,046,225 Property Taxes 16.456 16,786 17,121 17,464 17.813 18,169 18,533 18.903 19,281 19,667 Supportive Services 38.403 39,363 40,347 41,355 42,389 43.449 44,535 45,649 46,790 47,960 Reelacernent Reserves 25,848 26,107 26,368 26,631 26.898 27.167 27.438 27,713 27,990 28,270 Total Exeenses 848.355 876,770 906,159 936,555 967.993 1.000.510 1.034.141 1,068,927 1.104,907 1,142,121 Perm Debt Service 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 Total Debt Service 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 506,799 Operating Reserve Balance 279.475 279,475 279,475 279,475 279,475 279.475 279.475 279,475 279.475 279,475 Draws on Reserves 0 0 0 0 0 0 0 0 0 0
Net Operating Income 679,962 689,754 699,529 709,275 718,982 728,640 738,238 747,761 757,199 766,537 Debt Service Coverage 1.34 1.36 1.38 1.40 1.42 1.44 1.46 1.48 1.49 1.51 Cash after Exe & OS 173,163 182,956 192,730 202,476 212,183 221,842 231,439 240,963 250,400 259,738 LP Fee Balance 0 0 0 0 0 0 0 0 0 0
LP Fee Due 6,720 6,921 7,129 7,343 7,563 7,790 8,024 8,264 8,512 8,768 LP Fee Paid 6,720 6,921 7,129 7,343 7,563 7,790 8,024 8,264 8,512 8,768 Cash Flow 166,443 176,034 185,601 195,133 204,621 214,052 223,415 232,698 241,888 250,970 Deferred Developer Fee 0 0 0 0 0 0 0 0 0 0
Dev. Fee Payments 0 0 0 0 0 0 0 0 0 0
Cash Flow 166,443 176,034 185,601 195,133 204,621 214,052 223,415 232,698 241,888 250,970 Year 11 12 13 14 15 16 17 18 19 20
Printed on 3/29/23 at 1:31 PM Version: 22.10.1 Updated by: David Paredes on 3/29/23

4887-6403-1824v9/022627-0027
Exhibit D
Proposed Site Plan for New Tamerlane Project
(attached)

Exhibit D
Page | 2
4887-6403-1824v9/022627-0027 Page 167 of 211
studioneleven Affordable Housing Access, Inc. Tamerlane Drive Level 1 Plan Lo ng BcQCh, CA I 56 2.901.1500 I studio-111. com 392 0 B irch Street, S uite 103 , Newpo rt Beach, CA 92660 121 31-1 2222 To.mc rl.1110 Dri ve , G.irdc11 Grove , CA 92840 c:::::::::J
c::::::::J
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Exhibit D
Page | 3

4887-6403-1824v9/022627-0027 Page 168 of 211
studioneleven
Long Beach. CA I 56 2.901.1500 I studio-111.com
Affordable Housing Access, Inc.
3920 Birch Strei:t. Suit,: 103, Newport B each. CA 926 60 Tamerlane Drive Level 2 Plan
12 131- 12222 Tamerl ane Dri~c. Garde n Grove, CA 9284 0 C=:J
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23.03 6
Exhibit D
Page | 4

4887-6403-1824v9/022627-0027 Page 169 of 211
studioneleven
Long Beach. CA I 5 6 2.901.1500 I studio-111.com
Affordable Housing Access, Inc.
3920 Birch Strei:t. Suit,: 103, Newport B each. CA 926 60 Tamerlane Drive. n Grove CA 92840
12 131- 12222 Tamerl ane Dr,~c. Garde '
-
Fire Access Diagram A0.10

23.03 6
Exhibit D
Page | 5

4887-6403-1824v9/022627-0027

studioneleven
Long Beach. CA I 56 2.901.1500 I studio- 111.com
Affordable Housing Access, Inc.
3920 Birch Strei:t. Suit,: 103, Newport B each. CA 92660 Tamerlane Drive
12 131- 12222 Tamerl ane Dri~c. Garde n Grove, CA 9284 0 -
Setbacks Diagram
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23.03 6
Agenda Item - 4.b.

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM
To: Lisa Kim From: William E. Murray
Dept.: City Manager Dept.: Public Works
Subject: Award a contract to Sully-
Miller Contracting Company,
for Acacia Neighborhood
Improvements Project, which
includes road, pavement and
waterline improvements.
(Cost: $6,988,665) ( Action
Item)
Date: 4/11/2023

OBJECTIVE
For City Council to award a contract to Sully-Miller Contracting Company for Acacia Neighborhood Improvements project which includes Louise Street, Adelle Street, and Lorna Street from Garden Grove Boulevard to Stanford Avenue; Josephine Street from Anthony Avenue to Stanford Avenue; Acacia Avenue and Stanford Avenue from Dale Street to Josephine Street. It also includes pavement rehabilitation of Woolley Lane east of Josephine Street; Acacia Avenue and Anthony Avenue from Josephine Street to Magnolia Street.

The project also includes upgrades of approximately 120 old water service laterals and water meters within the vicinity.

BACKGROUND
The majority of streets within the project scope lack curbs, gutters, sidewalks, and driveway approaches and good pavement. New or replacement curb, gutter, sidewalk and driveway approaches are proposed for most streets except for those that already have those improvements. The pavement in this area will all be reconstructed to new condition. Additionally, this project includes pavement rehabilitation along Woolley Lane, Acacia Ave and Anthony Avenue.

The following is a partial listing of work items: clearing and grubbing, construction of new concrete curb and gutter, cross gutters, sidewalk, access ramps, and driveway approaches; roadway excavation and grading, reconstruction by full depth reclamation and new asphalt paving; street rehabilitation by cold milling and asphalt overlay; removal of existing water services, meters, and fire hydrants; and installation of new ones in their places.

DISCUSSION
Staff solicited bids for this project pursuant to Municipal Code Section 2.50.100.

Three (3) qualified bids were received at the City Clerk's office by 11:00 a.m. on March 21, 2023. The bid amount from Sully-Miller Contracting Company, the lowest qualified contractor, is within the current project budget. The licenses and references of the contractor have been reviewed and verified by staff, and all other documentation is in order.

The anticipated contract schedule is as follows:

Milestone Date
Award Contract April 11, 2023
Begin Construction (estimated) May 8, 2023
Complete Construction (estimated) December 15, 2023

FINANCIAL IMPACT
There is no impact to the General Fund. These improvements were included in the Fiscal Year 2022-2023 Capital Improvement Plan budget and are funded by Community Development Block Grant (CDBG), Gas Tax, Measure M2, and Water funds.

RECOMMENDATION
It is recommended that the City Council:

Award a contract to Sully-Miller Contracting Company, in the amount of $6,988,665 for Acacia Neighborhood Improvements project; and Authorize the City Manager to execute the contract with Sully-Miller Contracting Company, and make minor modifications as appropriate on behalf of the City.

By: Mark Uphus, P.E., Sr. Civil Engineer
ATTACHMENTS:

Description Upload Date Type File Name
ATTACHMENT 1: BID
SUMMARY 3/28/2023 Backup Material ATTACHMENT_1-_BID_SUMMARY.pdf ATTACHMENT 2: SULLY-

MILLER CONSTRUCTION

AGREEMENT
3/28/2023 Agreement ATTACHMENT_2-_SULLY-
MILLER_CONSTRUCTION_AGREEMENT.pdf

•
•

ATTACHMENT 1

CITY OF GARDEN GROVE

PUBLIC WORKS DEPARTMENT

ENGINEERING DIVISION

BID SUMMARY SHEET

FOR

ACACIA NEIGHBORHOOD IMPROVEMENTS PROJECT

BID OPENING DATE: March 21, 2023 TIME: 11:00 A.M.

ENGINEER’S ESTIMATE: $ 7,020,400.00

Bidder’s Name Total Bid % Under/Over
Engrs. Est
Sully-Miller Contracting Co.
135 S. State College Blvd Ste 400
Brea, CA 92821
$6,988,665.00 -0.45% Under
R.J. Noble Company
15505 E. Lincoln Avenue
P.O. Box 620
Orange, CA 92856
$7,076,240.00 +0.80% Over
Palp, Inc DBA Excel Paving
2230 Lemon Avenue
Long Beach, CA 90806
$7,689,880.00 +9.54% Over

SECTION 5 – AGREEMENT
- 51 -

C O N S T R U C T I O N A G R E E M E N T

SULLY-MILLER CONTRACTING COMPANY

THIS AGREEMENT is made this 11th day of April, 2023 by the CITY OF GARDEN GROVE, a municipal corporation, ("CITY"), and SULLY-MILLER CONTRACTING COMPANY , hereinafter referred to as ("CONTRACTOR").

CITY desires to utilize the services of CONTRACTOR to furnish material, equipment, and labor for the ACACIA NEIGHBORHOOD IMPROVEMENTS, CITY PROJECT NO. CP1259000.

CONTRACTOR is qualified by virtue of experience, training, education, and expertise to accomplish services.

WHEREAS, the Federal Department of Housing and Urban Development is providing partial funding for this Contract to CITY through a Community Development Block Grant;

WHEREAS, CITY has solicited bids for a public works project, hereinafter referred to as “PROJECT," more fully described as ACACIA NEIGHBORHOOD IMPROVEMENTS , in the City of Garden Grove; and

CONTRACTOR has been selected to perform said services,

NOW, THEREFOR, in consideration of the promises and agreements hereinafter made and exchanged, the parties covenant and agree as follows:

1. STATEMENT OF WORK ACCEPTANCE OF RISK
CONTRACTOR shall complete and construct the PROJECT pursuant to this Agreement and the Contract Documents (as hereinafter defined) and furnish, at its own cost and expense, all labor, plans, tools, equipment, supplies, transportation, utilities and all other items, services and facilities necessary to complete and construct the PROJECT in a good and workmanlike manner.

CONTRACTOR agrees to fully assume the risk of all loss or damage arising out of the nature of the PROJECT, during its progress or prior to acceptance by CITY, from the action of the elements, from any unforeseen difficulties which may arise or be encountered in the prosecution of work, and for all other risks of any description in connection with the work, including, but not limited to, all expenses incurred by or in consequence of the suspension or discontinuance of work, except such as are herein expressly stipulated to be borne by CITY, and for well and faithfully completing the work within the stipulated time and in the manner shown and described in this Agreement, and in accordance with the requirements of CITY for the compensation set forth in the accepted bid proposal.

2. ACCEPTANCE OF CONDITIONS OF WORK• PLANS AND

SPECIFICATIONS

CONTRACTOR acknowledges that it is fully familiar with all the terms, conditions and obligations of this Agreement and the Contract Documents (as defined below in this Section), the location of the job site, and the conditions under which the work is to be performed, and that it enters into this Agreement based upon its thorough investigation of all such matters and is relying in no way upon any opinions or representations of CITY.

SECTION 5 – AGREEMENT
- 52 -

It is agreed that the Contract Documents are incorporated into this Agreement by this reference, with the same force and effect as if the same were set forth at length herein, and that CONTRACTOR and its subcontractors, if any, shall be bound by the Contract Documents insofar as they relate in part or in any way, directly or indirectly, to the work covered by this Agreement.

"Contract Documents" as defined herein mean and include:

A. This Agreement;
B. Bonds covering the work herein agreed upon;
C. The CITYs standard Plans and Specifications and special contractual provisions, including those on file in the office of the Director of Public Works of CITY and adopted by the City Council, and any revisions, amendments or addenda thereto; D. The edition of Standard Specifications for Public Works Construction, published by Builders' News, Inc., 10801 National Boulevard, Los Angeles, CA 90064, and all amendments thereto, written and promulgated by the Southern California chapter of the American Public Works Association and the Southern California District Associated General Contractors of the California Joint Cooperative Committee as specified in the particular Plans, Specifications, Special Provisions and Addenda applicable to the Project;
E. All bid documents, including the Notice Inviting Bids, the Special Instructions to Bidders, the CONTRACTOR's proposal, (attached as Exhibit "A"), "Form HUD- 4010," the Federal Labor Standards Provision of the United States (attached as Exhibit "B"), and "Standard Federal Equal Employment Opportunity Construction Contract Specifications," as established by Federal Executive Order 11246 (attached as Exhibit "C").

F. The particular Plans, Specifications, Special Provisions and Addenda applicable to the PROJECT. Anything mentioned in the Specifications and not indicated in the Plans or indicated in the Plans and not mentioned in the Specifications, shall be of like effect as if indicated and mentioned in both. In case of a discrepancy between any Plans, Specifications, Special provisions, or Addenda, the matter shall be immediately submitted by CONTRACTOR to the Department of Public Works of CITY (hereinafter referred to as "DPW"), and CONTRACTOR shall not attempt to resolve or adjust the discrepancy without the decision of DPW, save only at its own risk and expense.

Should there be any conflict between the terms of this Agreement and the bid or proposal of CONTRACTOR, then this Agreement shall control and nothing herein shall be considered as an acceptance of the terms of the bid or proposal which is in conflict herewith.

3. COMPENSATION

CITY agrees to pay and CONTRACTOR agrees to accept as full compensation for the faithful performance of this Agreement, subject to any additions or deductions made under the provisions of this Agreement or the Contract Documents, a sum not to exceed $6,988,665.00 ($Six Million Nine Hundred Eighty-Eight Thousand Six Hundred Sixty-Five Dollars and No Cents), as set forth in the Contract Documents, to be paid as provided in this Agreement.

4. COMMENCEMENT OF PROJECT

SECTION 5 – AGREEMENT
- 53 -

CONTRACTOR agrees to commence the PROJECT within ten (10) working days after the Notice to Proceed is issued and diligently prosecute the PROJECT to completion within One Hundred Fifty (150) working days from the day the Notice to Proceed is issued by DPW excluding delays provided for in this Agreement.

5. TIME OF THE ESSENCE

The parties hereto recognize and agree that time is of the essence in the performance of this Agreement and each and every provision of the Contract Documents.

CONTRACTOR shall prepare and obtain approval as required by the Contract Documents for all shop drawings, details and samples, and do all other things necessary and incidental to the prosecution of its work in conformance with the progress schedule set forth in the Contract Documents. CONTRACTOR shall coordinate its work with the work of all other contractors, subcontractors, and CITY forces working on the PROJECT in a manner that will facilitate the efficient completion of the PROJECT and in accordance with the terms and provisions of this Agreement. CITY shall have complete control of the premises on which the work is to be performed and shall have the right to decide the time and order in which the various portions of the work shall be performed and the priority of the work of other contractors, subcontractors and CITY forces and, in general, all matters concerning the timely and orderly conduct of the work of CONTRACTOR on the premises.

6. CHANGES

CONTRACTOR shall adhere strictly to the plans and specifications set forth in the Contract Documents unless a change therefrom is authorized in writing by DPW. CONTRACTOR agrees to make any and all changes, furnish materials and perform all work necessary within the scope of the PROJECT as DPW may require in writing. Under no condition shall CONTRACTOR make any changes without the prior written order or acceptance of DPW, and CITY shall not pay any extra charges made by CONTRACTOR that have not been agreed upon in writing by DPW.

When directed to change the work, CONTRACTOR shall submit immediately to DPW a written cost proposal reflecting the effect of the change. Should DPW not agree to such cost proposal, the work shall be performed according to the changes ordered in writing by DPW and the proper cost thereof shall be negotiated by the parties upon cost and pricing data submitted by CONTRACTOR; thereupon, CITY will promptly issue an adjusted change order to CONTRACTOR and the Agreement price will be adjusted upward or downward accordingly.

7. NOTICE TO PROCEED

No work, services, material, or equipment shall be performed or furnished under this Agreement unless and until a Notice to Proceed has been given to CONTRACTOR by CITY. CITY does not warrant that the work will be available on the date the Notice to Proceed is issued. In the event of a delay in commencement of the work due to unavailability of the job site, for any reason, relief to CONTRACTOR shall be limited to a time extension equal to the delay due to such unavailability.

8. BONDS

CONTRACTOR shall, prior to entering into performance of this Agreement, furnish a performance bond, on the CITY's bond form in the amount of one hundred percent (100%) of th e Contract price, to guarantee the faithful performance of the work, and a payment bond, on the CITY's form in the amount of one hundred percent (100%) of the Contract price, to guarantee payment of all

SECTION 5 – AGREEMENT
- 54 -

claims for labor and materials furnished. Bonds submitted on any form other than the CITY's form will be rejected. The required bonds shall be from a surety licensed to do business in the State of California and with a current A.M. Best's rating of A-, VII. This Contract shall not become effective until such bonds are supplied and approved by the CITY.

In addition, CONTRACTOR shall submit to CITY a bond in the amount of one hundred percent (100%) of the final Agreement price, including all change orders, to warrant such performance for a period of one (1) year after CITY's acceptance thereof within ten (10) days of filing of the Notice of Completion.

9. WARRANTIES

The CONTRACTOR agrees to perform all work under this Contract in accordance with the CITY’s designs, drawings and specifications.

The CONTRACTOR guarantees for a period of one (1) year from the date of the notice of completion of the work that the completed work is free from all defects due to faulty materials, equipment or workmanship and that he shall promptly make whatever adjustments or corrections which may be necessary to cure any defects, including repairs or any damage to other parts of the system resulting from such defects. The CITY shall promptly give notice to the CONTRACTOR of observed defects. In the event that the CONTRACTOR fails to make adjustments, repairs, corrections or other work made necessary by such defects, the CITY may do so and charge the CONTRACTOR the cost incurred. The performance bond shall remain in full force and effect through the guarantee period.

The CONTRACTOR'S obligations under this clause are in addition to the CONTRACTOR'S other express or implied assurances of this Contract or state law and in no way diminish any other rights that the CITY may have against the CONTRACTOR for faulty materials, equipment or work.

10. INDEPENDENT CONTRACTOR

It is understood and agreed that CONTRACTOR is, and shall be, acting at all times hereunder as an independent contractor and not an employee of CITY. CONTRACTOR shall secure at its own cost and expense, and be responsible for any and all payment of all taxes, social security, state disability insurance compensation, unemployment compensation and other payroll deductions for CONTRACTOR and its officers, agents and employees and all business licenses, if any, in connection with the PROJECT and/or the services performed hereunder.

11. LIQUIDATED DAMAGES/DELAYS

It is agreed by the parties hereto that in case the total work called for hereunder is not in all parts and requirements finished or completed within the number of calendar days as set forth herein, damage will be sustained by CITY; and that it is, and would be, impractical and extremely difficult to ascertain and determine the actual damage which CITY would sustain in the event of and by reason of such delay. It is, therefor, agreed that CONTRACTOR will pay to CITY, as liquidated damages and not as a penalty, the sum of Five Thousand Dollars ($ 5,000.00 ) per each calendar days delay in completing the work in excess of the number of working/calendar days set forth herein, which represents a reasonable endeavor by the parties hereto to estimate a fair compensation for the foreseeable damages CITY would sustain in the event of and by reason of such delay; and CONTRACTOR agrees to pay these damages herein provided, and further agrees that CITY may deduct the amount thereof from any monies due or that may become due to CONTRACTOR hereunder.

SECTION 5 – AGREEMENT
- 55 -

For projects on the National Highway System (NHS), the local formula for liquidated damages will be provided.

CONTRACTOR will be granted an extension of time and will not be assessed damages for any portion of the delay in the completion of the work due to unforeseeable causes beyond the control and without the fault or negligence of CONTRACTOR, including, but not limited to, acts of God or of the public enemy, fire, floods, epidemics, quarantine restrictions, strikes, unsuitable weather, or delays of subcontractors due to such causes.

CONTRACTOR shall, within fifteen (15) days from the beginning of any such delay (unless DPW shall grant a further period of time), notify DPW in writing of the cause of the delay and CITY shall extend the time for completing the work if, in its judgment, the findings of fact thereon justify the delay; and the decision of DPW shall be conclusive on the parties hereto.

Should CONTRACTOR be delayed in the prosecution or completion of the work by the act, neglect or default of CITY, or should CONTRACTOR be delayed by waiting for materials required by this Agreement to be furnished by CITY, or by damage caused by fire or other casualty at the job site for which CONTRACTOR is not responsible, or by the combined action of the workers, in no way caused by or resulting from default or collusion on the part of CONTRACTOR, or in the event of a lockout by CITY, then the time herein fixed for the completion of the work shall be extended by the number of days CONTRACTOR has thus been delayed, but no allowance or extension shall be made unless a claim therefor is presented in writing to CITY within fifteen (15) days of the commencement of such delay.

No claims for additional compensation or damages for delays, irrespective of the cause thereof, and including without limitation the furnishing of materials by CITY or delays by other contractors or subcontractors, will be allowed and an extension of time for completion shall be the sole remedy of CONTRACTOR.

12. DEMANDS FOR ADDITIONAL TIME OR MONEY
A. Definitions.
(1) "Change Order" means a document signed by the CONTRACTOR and CITY which authorizes an addition, deletion or revision in the work, or an adjustment in the Compensation under Section 3, or the Completion Time specified at Section 4. (2) "Demand" means a written demand for a Change Order by the CONTRACTOR for any of the following:
(a) A time extension;
(b) Payment of money or damages arising from work done by, or on behalf of, the CONTRACTOR pursuant to this Agreement and payment of which is not expressly permitted pursuant to Section 3 of this Agreement;
(c) Payment of an amount the CITY disputes;
(d) Any disputes and other matters relating to the acceptability of the work performed or the interpretation of the Contract Documents; (e) A request for a time extension or additional payment based upon differing site conditions, such as subsurface or latent physical conditions at the job site differing materially from those indicated in this Agreement or the Contract Documents, or unknown physical

SECTION 5 – AGREEMENT
- 56 -

conditions at the job site, of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent to work of the PROJECT; or (f) A request for a time extension or additional payment based upon acts of neglect by CITY or due to fires, floods, labor disputes, epidemics, abnormal weather conditions or acts of God.

B. A Demand for a time extension or payment of money or damages may only be granted by a Change Order.

C. No Change Order may be granted except where the Contractor has submitted a Demand to the DPW (or his or her written designee). All Demands shall be submitted promptly, but in no event later than thirty (30) days after the occurrence of the event giving rise to the Demand. The Demand shall be in writing and include all documents necessary to substantiate the Demand. The DPW shall act on the Demand within fifteen (15) days after receipt, including by requesting additional information from the CONTRACTOR to determine whether to approve the Change Order the Demand seeks. The DPW shall act on the Demand within fifteen (15) days after receipt of the additional information or within a period of time no greater than the time the CONTRACTOR took to produce the additional information requested, whichever is greater.

D. Notwithstanding the thirty (30) days to submit a Demand under Subparagraph C, in the case of differing or unknown site conditions, immediately upon encountering the conditions, CONTRACTOR shall notify the DPW in writing of the conditions, so that the CITY may promptly investigate the conditions.

E. If the CONTRACTOR disputes the DPW's written response on the Demand, or the CITY fails to respond within the time prescribed, the CONTRACTOR may so notify the City Engineer, in writing, either within fifteen (15) days of receipt of the City Engineer's response or within fifteen (15) days of the DPW's failure to respond within the time prescribed, respectively, and request an informal conference to meet and confer for settlement of the Demand. Upon the CONTRACTOR's request, the DPW shall schedule a meet and confer conference within thirty (30) days to seek to resolve.

F. CITY and CONTRACTOR shall execute appropriate Change Orders covering changes to the time or price by executing the Change Order by mutual agreement. If the CITY and CONTRACTOR are unable to reach a mutual agreement, then the City Engineer shall issue a written decision on the claim within a reasonable time.

G. Following the meet and confer conference, if the Demand remains in dispute, the CONTRACTOR may file a claim with the City as provided in Chapter I (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of Division 3.6 of Title 1 of the Government Code. For purposes of those provisions, the running of the period of time within which a claim must be filed shall be tolled from the time the time the CONTRACTOR submits his or her Demand until the Demand is denied as a result of the meet and confer process, including any period of time utilized by the meet and confer process.

13. VARIATIONS IN ESTIMATED QUANTITIES

The quantities listed in the bid schedule will not govern final payment. Payment to CONTRACTOR will be made only for the actual quantities of Agreement items used in construction of the PROJECT, in accordance with the plans and specifications. Upon completion of the PROJECT, if the actual quantities used are either more than or less than the quantities listed in the bid schedule, the bid price shall prevail subject to the provisions of this Section. DPW may, at its sole discretion, when warranted by the facts and circumstances, order an equitable adjustment, upwards or downwards, in payment to CONTRACTOR where the actual quantities used in construction of the PROJECT are in variation to the quantities listed in the bid schedule. No claim by CONTRACTOR for an equitable

SECTION 5 – AGREEMENT
- 57 -

adjustment in price or time for completion shall be allowed if asserted after final payment under this Agreement. If the quantity variation is such as to cause an increase in the time necessary for completion, DPW shall ascertain the facts and circumstances and make such adjustment for extending the completion date as in its sole judgment the findings warrant.

14. PROGRESS PAYMENTS

Each month DPW will make an estimate in writing of the work performed by CONTRACTOR and the value thereof. From each progress estimate, five percent (5%) will be deducted and retained by CITY and the remainder of the progress estimate, less the amount of all previous payments since commencement of the work, will be paid to CONTRACTOR.

When CONTRACTOR has, in the judgment of DPW, faithfully executed fifty percent (50%) or more of the value of the work as determined from the bid schedule, and if DPW finds that satisfactory progress has been and is being made, CONTRACTOR may be paid such sum as will bring the payments of each month up to one hundred percent (100%) of the value of the work completed since the commencement of the PROJECT, as determined in its sole discretion by DPW, less all previous payments and less all previous retained amounts.

CITY's final payment to CONTRACTOR, if unencumbered, or any part thereof unencumbered, shall be made thirty (30) days after the acceptance of the work and the filing of a Notice of Completion by CITY. Provided, however, that in the event of a dispute between CITY and CONTRACTOR, CITY may withhold from the final payment an amount not to exceed 150 percent of the value of any disputed amount of work. Payments shall be made on demands drawn in the manner required by law, each payment to be accompanied by a certificate signed by DPW, affirming that the work for which payment is demanded has been performed in accordance with the terms of the Agreement and that the amount stated in the certificate is due under the terms of the Agreement. Partial payments on the contract price shall not be considered as an acceptance of any part of the work.

15. WITHHELD CONTRACT FUNDS SUBSTITUTION OF SECURITIES

At the request and at the sole cost and expense of CONTRACTOR, who shall retain beneficial ownership and receive interest, if any thereon, CITY shall permit the substitution and deposit therewith of securities equivalent to the amount of any monies withheld by CITY to ensure performance under the terms of this Agreement.

16. AFFIDAVITS OF SATISFACTION OF CLAIMS

After the completion of the work contemplated by this Agreement, CONTRACTOR shall file with DPW its affidavit stating that all workers and persons employed, all firms supplying materials and all subcontractors working upon the PROJECT have been paid in full and that there are no claims outstanding against the PROJECT for either labor or material, except certain items, if any, to be set forth in CONTRACTOR's affidavit covering disputed claims, or items in connection with Notices to Withhold, which have been filed under the provisions of the statutes of the State of California.

17. WAIVER OF CLAIMS

The acceptance by CONTRACTOR of the payment of the final certificate shall constitute a waiver of all claims against CITY under or arising out of this Agreement.

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18. RISK AND INDEMNIFICATION

All work covered by this Contract done at the site of construction or in preparing or delivering materials to the site shall be at the risk of CONTRACTOR alone. CONTRACTOR agrees to save, indemnify and keep the CITY, its Officers, Agents, Employees, Engineers, and Consultants for this Contract, and all public agencies from whom permits will be obtained and their directors, Officers, Agents and Employees harmless against any and all liability, claims, judgments, costs and demands, including demands arising from injuries or death of persons (CONTRACTOR'S employees included) and damage to property, arising directly or indirectly out of the obligations herein undertaken or out of the operations conducted by CONTRACTOR, save and except claims or litigation arising through the active negligence or willful misconduct of CITY and will make good to reimburse CITY for any expenditures, including reasonable attorneys' fees CITY may incur by reason of such matters, and if requested by CITY, will defend any such suits at the sole cost and expense of CONTRACTOR.

19. INSURANCE
COMMENCEMENT OF WORK. CONTRACTOR shall not commence work under this Agreement until all certificates and endorsements have been received and approved by the CITY. All insurance required by this Agreement shall contain a statement of obligation on the part of the carrier to notify the city of any material change, cancellation, or termination at least thirty (30) days in advance.

A waiver of subrogation shall be provided by the insurer for each policy waiving subrogation against CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, Claims made and modified occurrence policies shall not be accepted for any policy.

All Subcontractors shall be required to provide and maintain the same insurances as required of CONTRACTOR under this contract. CONTRACTOR shall be required to collect and maintain all required insurances from all Subcontractors.

CONTRACTOR is aware of the provisions of Section 3700 of the Labor Code, which requires every employer to be insured against liability for Workers’ Compensation or undertake self-insurance in accordance with the provisions of that Code, and will comply with such provisions before commencing the performance of the work of this Contract.

CONTRACTOR and all Subcontractors shall carry workers' compensation insurance for the protection of its employees during the progress of the work. The insurer shall waive its rights of subrogation against the CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, and shall issue a waiver of subrogation.

Before CONTRACTOR performs any work at, or prepares or delivers materials to, the site of construction, CONTRACTOR shall furnish:

Additional Insured Endorsements, ongoing and products-completed operations, for the Commercial General Liability policy , including mobile equipment and not excluding XCU.

Endorsements shall designate CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, as additional insureds for liability arising out of work or operations performed by or on behalf of the CONTRACTOR. CONTRACTOR shall provide to CITY proof of insurance and endorsement forms that conform to CITY’s requirements, as approved by the CITY. (Form CG 20 26 07 04 & Form CG 20 37 07 04 or equivalent) ( Claims made and modified occurrence policies are not acceptable; Insurance companies must be acceptable to CITY and have a minimum A.M. Best Guide rating of A-, class VII or better, as approved by CITY).

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An Additional Insured Endorsement for an Automobile Liability policy and shall designate CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, as additional insureds for automobiles owned, leased, hired, or borrowed by the CONTRACTOR. CONTRACTOR shall provide to CITY proof of insurance and endorsement forms that conform to CITY’s requirements, as approved by the CITY. (Form CA 20 48 02 99 or equivalent) (Claims made and modified occurrence policies are not acceptable; Insurance companies must be acceptable to CITY and have a minimum A.M. Best Guide rating of A-, class VII or better, as approved by CITY).

A Loss Payee Endorsement for the Course of Construction policy designating the City of Garden Grove as Loss Payee. ( Claims made and modified occurrence policies are not acceptable; Insurance companies must be acceptable to CITY and have a minimum A.M. Best Guide rating of A-, class VII or better, as approved by CITY).

In the event any of CONTRACTOR’S underlying policies do not meet policy limits as required here in, CONTRACTOR shall provide the schedule of underlying polices for a follows form excess liability policy, state that the excess policy follows form on the insurance certificate, and an additional insured endorsement for the excess liability policy designating CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, as additional insureds. ( Claims made and modified occurrence policies are not acceptable; Insurance companies must be acceptable to CITY and have a minimum A.M. Best Guide rating of A-, class VII or better, as approved by CITY).

For any claims related to this Project, the CONTRACTOR’s insurance coverage shall be primary insurance as respects CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY. Any insurance or self-insurance maintained by the CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, shall be excess of the CONTRACTOR’s insurance and not contribute with it.

Before CONTRACTOR performs any work at, or prepares or delivers materials to, the site of construction, CONTRACTOR shall furnish:

CONTRACTOR shall maintain all of the foregoing insurance coverage in force until the work under this Contract is fully completed. The requirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of CITY by CONTRACTOR under this Contract.

Notwithstanding nor diminishing the obligations of CONTRACTOR with respect to the foregoing, CONTRACTOR shall subscribe for and maintain in full force and effect during the life of this Contract, the following insurance in amounts not less than the amounts specified and issued by a company admitted and licensed in California and having a Best's Guide Rating of A-Class VII or better (claims made and modified occurrence policies are not acceptable):

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Workers’ Compensation As required by the State of
California.

Employer’s Liability

Not less than $1,000,000 per
accident for bodily injury or disease.

Commercial General Liability
(including on-going operations, products
- completed operations, and mobile
equipment, and not excluding XCU)

Not less than $5,000,000 per
occurrence for bodily injury,
personal injury and property
damage.

Automobile Liability, for all automobiles
including non-owned and hired vehicles

Not less than $2,000,000 combined
single limit for bodily injury and
property damage.

Course of Construction

Completed value of the project with
no coinsurance penalty provisions.

Follows Form Excess Liability

Required for any underlying policy
that does not meet the underlying
policy limits required herein.

If contractor maintains higher insurance limits than the minimums shown above, CONTRACTOR shall provide coverage for the higher limits otherwise maintained by the CONTRACTOR.

CITY or its representatives shall at all times have the right to inspect and receive a certified copy of all said policies of insurance, including certificates and endorsements at CONTRACTORS sole cost and expense. CONTRACTOR shall pay the premiums on the insurance hereinabove required.

20. CALIFORNIA PREVAILING WAGE LAW AND FEDERAL DAVIS-BACON ACT.

A. General Prevailing Rate. CITY has ascertained CONTRACTOR shall comply with all applicable requirements of Division 2, Part 7, Chapter 1 of the California Labor Code and all applicable federal requirements respecting the payment of prevailing wages. If there is a difference between the minimum wage rates predetermined by the Secretary of Labor and the prevailing wage rates determined by the Director of the Department of Industrial Relations (DIR) for similar classifications of labor, the CONTRACTOR and its Subcontractors shall pay not less than the higher wage rate. The DIR will not accept lower State wage rates not specifically included in the Federal minimum wage determinations. This includes "helper" (or other classifications based on hours of experience) or any other classification not appearing in the Federal Wage determinations. Where Federal wage determinations do not contain the State wage rate determination otherwise available for use by the CONTRACTOR and Subcontractors, the CONTRACTOR and its Subcontractors shall pay not less than the Federal Minimum wage rate which most closely approximates the duties of the employees in question."

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B. Forfeiture for Violation. CONTRACTOR shall, as a penalty to the CITY, forfeit one hundred dollars ($100.00) for each calendar day or portion thereof for each worker paid (either by the CONTRACTOR or any subcontractor under it) less than the prevailing rate of per diem wages as set by the Director of Industrial Relations, in accordance with Sections 1770 1780 of the California Labor Code for the work provided for in this Contract, all in accordance with Section 1775 of the Labor Code of the State of California.

C. Apprentices. Section 1777.5, 1777.6 and 1777.7 of the Labor Code of the State of California, regarding the employment of apprentices is applicable to this Contract and the CONTRACTOR shall comply therewith; provided, however, that this requirement shall not apply i f and/or to the extent that the Contract of the general CONTRACTOR, or the contracts of specialty contractors not bidding for work through a general or prime contractor involve less than thirty thousand dollars ($30,000.00).

D. Workday. In the performance of this Contract, not more than eight (8) hours shall constitute a day's work, and CONTRACTOR shall not require more than eight (8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (5.14.2) above.

CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Sections 1810 et seq.) of the Labor Code of the State of California and shall forfeit to the CITY as a penalty, the sum of twenty five Dollars ($25.00) for each worker employed in the execution of this Contract by CONTRACTOR or any subcontractor for each calendar day during which any worker is required or permitted to labor more than eight (8) hours in any one
E. Calendar day and forty (40) hours in any one week in violation of said Article.

CONTRACTOR shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by CONTRACTOR in connection with the Project.

F. Record of Wages: Inspection. CONTRACTOR agrees to maintain accurate payroll records showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by it in connection with the Project and agrees to require that each of its subcontractors does the same. The applicable CONTRACTOR or subcontractor or its agent having authority over such matters shall certify all payroll records as accurate.

CONTRACTOR further agrees that its payroll records and those of its subcontractors shall be available to the employee or employee's representative, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards and shall comply with all of the provisions of Labor Code Section 1776, in general. CONTRACTOR shall comply with all of the provisions of Labor Code Section 1776, and shall submit payroll records to the Labor Commissioner pursuant to Labor Code section 1771.4(a)(3). The CONTRACTOR shall submit copies of certified payroll reports and cancelled checks for labors, every two weeks to the Engineer. Certified payroll and cancelled checks submittals are due one month after start of construction and every two weeks thereafter. If the certified payroll and cancelled checks are not submitted, the CONTRACTOR will be notified that compliance is required within five (5) working days or contract work must cease. The CITY will not be responsible for any delay or acceleration charges or any incurred costs or damages as a result of the work stoppage due to CONTRACTOR’s failure to comply. Work shall be ceased in an orderly, safe fashion with all vehicle access restored. Should this not occur, CITY will correct the deficiencies and deduct the cost from funds due to the CONTRACTOR. In addition, no progress payment shall be made until the copies of certified payroll reports and cancelled checks are submitted.

G. Contractor Registration. CONTRACTOR and its subcontractors must be registered with the California Department of Industrial Relations pursuant to Labor Code Section 1725.5. This Agreement shall not be effective until CONTRACTOR provides proof of registration to the CITY.

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H. Posting of Job Site Notices. CONTRACTOR shall comply with the job site notices posting requirements established by the Labor Commissioner pursuant to Title 8, California Code of Regulations Section 16461(e) or other regulation promulgated pursuant to Labor Code Section 1771.4(a) (2).

I. Notice of DIR Compliance Monitoring and Enforcement. Pursuant to Labor Code Section 1771.4, this Project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

21. TERMINATION

This Contract may be terminated in whole or in part in writing by the CITY for its convenience, provided that the CONTRACTOR is given (1) not less than ten (10) calendar days written notice (delivered by certified mail, return receipt requested) of intent to terminate, and (2) an opportunity for consultation with the terminating party prior to termination.

If termination for default or convenience is effected by the CITY, an equitable adjustment in the price provided for in this Contract shall be made, but (1) no amount shall be allowed for anticipated profit on unperformed services or other work, and (2) any payment due to the CONTRACTOR at the time of termination may be adjusted to cover any additional costs to the CITY because of the CONTRACTOR'S default.

Upon receipt of a termination action, the CONTRACTOR shall (1) promptly discontinue all affected work (unless the notice directs otherwise), and (2) deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summaries and such other information and materials as may have been accumulated by the CONTRACTOR in performing this Contract whether completed or in process.

Upon termination, the CITY may take over the work and may award another party an agreement to complete the work under this Contract.

22. DISPOSITION OF PLANS ESTIMATES AND OTHER DOCUMENTS

CONTRACTOR agrees that upon completion of the work to be performed hereunder, or upon expiration or earlier termination of this Agreement, all original plans, specifications, drawings, reports, calculations, maps and other documents pertaining to this Agreement shall be delivered to CITY and become its sole property at no further cost.

23. NONASSIGNABILITY

CONTRACTOR shall not sell, assign, transfer, convey or encumber this Agreement, or any part hereof, or any right or duty created herein, without the prior written consent of CITY and the surety.

24. CITY EMPLOYEES AND OFFICIALS

CONTRACTOR shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any financial interest in this Agreement in violation of the California Government Code.

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25. STOP NOTICES• RECOVERY OF ADMINISTRATIVE COSTS

CITY shall be entitled to all reasonable administrative costs and necessary disbursements arising out of the processing of Stop Notices, Notices to Withhold, or any similar legal document. This obligation shall be provided for in the labor and materials payment bond required of CONTRACTOR. CITY may charge an administrative fee of One Hundred Dollars ($100) for every Stop Notice filed in excess of two (2), regardless of whether or not CITY is named in an action to enforce such stop notices. CITY may set off any unreimbursed cost or expense so incurred against any sum or sums owed by CITY to CONTRACTOR under this Agreement.

26. NOTICES

Any notices, certificates, or other communications hereunder shall be given either by personal delivery or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below; provided that CITY and CONTRACTOR, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent:

TO CITY: TO CONTRACTOR:

City of Garden Grove Sully-Miller Contracting Company ATTN: Mike Santos Scott Bottomley, Vice President 11222 Acacia Parkway 135 S. State College Blvd Ste 400 Garden Grove, CA 92840 Brea, CA 92821
(714) 741-5179 Phone (714) 578-9600 Ofc
(714) 741-5578 Fax (714) 578-9672 Fax

27. SECTION HEADINGS

The titles, captions, section, paragraph, and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of maters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement.

28. IMMIGRATION

CONTRACTOR shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the Immigration Reform and Control Act of 1978 (8 USC Section 1324a) regarding employment verification.

29. ATTORNEY'S FEES

If any action at law or in equity is necessary to enforce or interpret the terms of this Contract, each shall bear its own attorneys' fees, costs and necessary disbursements. Notwithstanding the foregoing, if any action is brought against the CONTRACTOR or any subcontractor to enforce a Stop Notice or Notice to Withhold, which named the CITY as a party to said action, the CITY shall be entitled to reasonable attorneys' fees, costs and necessary disbursements arising out of the defense of such action by the CITY. The CITY shall be entitled to deduct its costs for any Stop Notice filed, whether court action is involved or not.

SECTION 5 – AGREEMENT
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30. INTERPRETATION OF THIS AGREEMENT

The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law.

31. GOVERNING LAW

This Agreement shall be governed and construed in accordance with the laws of the State of California and venue shall be in Orange County.

32. DUPLICATE ORIGINAL

The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it.

33. CONSENT

Where CITYs consent/approval is required under this Agreement, its consent/approval for one transaction or event shall not be deemed to be consent/approval to any subsequent occurrence of the same or any other transaction or event.

34. CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT

CONTRACTOR agrees to comply with all requirements and utilize fair employment practices in accordance with California Government Code Sections 12900 et seq.

35. SIGNATORIES

Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn.

36. ENTIRETY

The foregoing, and Exhibits "A" through "C" attached hereto, set forth the entire Agreement between the parties. No waiver or modification of this Agreement shall be valid unless in writing duly executed by both parties.

SECTION 5 – AGREEMENT
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The parties acknowledge and agree that they are entering into this Agreement freely and voluntarily following extensive arm's length negotiations, and that each has had the opportunity to consult with legal counsel prior to executing this Agreement. The parties also acknowledge and agree that no representations, inducements, promises, agreements or warranties, oral or otherwise, have been made by that party or anyone acting on that party's behalf, which are not embodied in this Agreement, and that that party has not executed this Agreement in reliance on any representation, inducement, promise, agreement, warranty, fact or circumstance not expressly set forth in this Agreement.

Local Assistance Procedures Manual EXHIBIT A Required Federal-Aid Contract Language Exhibit 12-G

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FHWA-1273 -- Revised May 1, 2012

REQUIRED CONTRACT PROVISIONS

FEDERAL-AID CONSTRUCTION CONTRACTS

I. General
II. Nondiscrimination
III. Nonsegregated Facilities
IV. Davis-Bacon and Related Act Provisions
V. Contract Work Hours and Safety Standards Act Provisions VI. Subletting or Assigning the Contract
VII. Safety: Accident Prevention
VIII. False Statements Concerning Highway Projects
IX. Implementation of Clean Air Act and Federal Water Pollution Control Act
X. Compliance with Governmentwide Suspension and Debarment Requirements
XI. Certification Regarding Use of Contract Funds for Lobbying

ATTACHMENTS

A. Employment and Materials Preference for Appalachian Development Highway System or Appalachian Local Access Road Contracts (included in Appalachian contracts only)

I. GENERAL

1. Form FHWA-1273 must be physically incorporated in each construction contract funded under Title 23 (excluding emergency contracts solely intended for debris removal). The contractor (or subcontractor) must insert this form in each subcontract and further require its inclusion in all lower tier subcontracts (excluding purchase orders, rental agreements and other agreements for supplies or services).

The applicable requirements of Form FHWA-1273 are incorporated by reference for work done under any purchase order, rental agreement or agreement for other services. The prime contractor shall be responsible for compliance by any subcontractor, lower-tier subcontractor or service provider.

Form FHWA-1273 must be included in all Federal-aid design-build contracts, in all subcontracts and in lower tier subcontracts (excluding subcontracts for design services, purchase orders, rental agreements and other agreements for supplies or services). The design-builder shall be responsible for compliance by any subcontractor, lower-tier subcontractor or service provider.

Contracting agencies may reference Form FHWA-1273 in bid proposal or request for proposal documents, however, the Form FHWA-1273 must be physically incorporated (not referenced) in all contracts, subcontracts and lower-tier subcontracts (excluding purchase orders, rental agreements and other agreements for supplies or services related to a construction contract).

2. Subject to the applicability criteria noted in the following sections, these contract provisions shall apply to all work performed on the contract by the contractor's own organization and with the assistance of workers under the contractor's immediate superintendence and to all work performed on the contract by piecework, station work, or by subcontract.

3. A breach of any of the stipulations contained in these Required Contract Provisions may be sufficient grounds for withholding of progress payments, withholding of final payment, termination of the contract, suspension / debarment or any other action determined to be appropriate by the contracting agency and FHWA.

4. Selection of Labor: During the performance of this contract, the contractor shall not use convict labor for any purpose within the limits of a construction project on a Federal-aid highway unless it is labor performed by convicts who are on parole, supervised release, or probation. The term Federal-aid highway does not include roadways functionally classified as local roads or rural minor collectors.

II. NONDISCRIMINATION

The provisions of this section related to 23 CFR Part 230 are applicable to all Federal-aid construction contracts and to all related construction subcontracts of $10,000 or more. The provisions of 23 CFR Part 230 are not applicable to material supply, engineering, or architectural service contracts.

In addition, the contractor and all subcontractors must comply with the following policies: Executive Order 11246, 41 CFR 60, 29 CFR 1625- 1627, Title 23 USC Section 140, the Rehabilitation Act of 1973, as amended (29 USC 794), Title VI of the Civil Rights Act of 1964, as amended, and related regulations including 49 CFR Parts 21, 26 and 27; and 23 CFR Parts 200, 230, and 633.

The contractor and all subcontractors must comply with: the requirements of the Equal Opportunity Clause in 41 CFR 60-1.4(b) and, for all construction contracts exceeding $10,000, the Standard Federal Equal Employment Opportunity Construction Contract Specifications in 41 CFR 60-4.3.

Note: The U.S. Department of Labor has exclusive authority to determine compliance with Executive Order 11246 and the policies of the Secretary of Labor including 41 CFR 60, and 29 CFR 1625-1627. The contracting agency and the FHWA have the authority and the responsibility to ensure compliance with Title 23 USC Section 140, the Rehabilitation Act of 1973, as amended (29 USC 794), and Title VI of the Civil Rights Act of 1964, as amended, and related regulations including 49 CFR Parts 21, 26 and 27; and 23 CFR Parts 200, 230, and 633.

The following provision is adopted from 23 CFR 230, Appendix A, with appropriate revisions to conform to the U.S. Department of Labor (US DOL) and FHWA requirements.

1. Equal Employment Opportunity: Equal employment opportunity (EEO) requirements not to discriminate and to take affirmative action to assure equal opportunity as set forth under laws, executive orders, rules, regulations (28 CFR 35, 29 CFR 1630, 29 CFR 1625-1627, 41 CFR 60 and 49 CFR 27) and orders of the Secretary of Labor as modified by the provisions prescribed herein, and imposed pursuant to 23 U.S.C. 140 shall constitute the EEO and specific affirmative action standards for the contractor's project activities under this contract. The provisions of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.) set forth under 28 CFR 35 and 29 CFR 1630 are incorporated by reference in this contract. In the execution of this contract, the contractor agrees to comply with the following minimum specific requirement activities of EEO:

a. The contractor will work with the contracting agency and the Federal Government to ensure that it has made every good faith effort to provide equal opportunity with respect to all of its terms and conditions of employment and in their review of activities under the contract.

b. The contractor will accept as its operating policy the following statement:

"It is the policy of this Company to assure that applicants are employed, and that employees are treated during employment, without regard to their race, religion, sex, color, national origin, age or disability. Such action shall include: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship, pre-apprenticeship, and/or on- the-job training."

2. EEO Officer: The contractor will designate and make known to the contracting officers an EEO Officer who will have the responsibility for and must be capable of effectively administering and promoting an active EEO program and who must be assigned adequate authority and responsibility to do so

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3. Dissemination of Policy: All members of the contractor's staff who are authorized to hire, supervise, promote, and discharge employees, or who recommend such action, or who are substantially involved in such action, will be made fully cognizant of, and will implement, the contractor's EEO policy and contractual responsibilities to provide EEO in each grade and classification of employment. To ensure that the above agreement will be met, the following actions will be taken as a minimum:

a. Periodic meetings of supervisory and personnel office employees will be conducted before the start of work and then not less often than once every six months, at which time the contractor's EEO policy and its implementation will be reviewed and explained. The meetings will be conducted by the EEO Officer.

b. All new supervisory or personnel office employees will be given a thorough indoctrination by the EEO Officer, covering all major aspects of the contractor's EEO obligations within thirty days following their reporting for duty with the contractor.

c. All personnel who are engaged in direct recruitment for the project will be instructed by the EEO Officer in the contractor's procedures for locating and hiring minorities and women.

d. Notices and posters setting forth the contractor's EEO policy will be placed in areas readily accessible to employees, applicants for employment and potential employees.

e. The contractor's EEO policy and the procedures to implement such policy will be brought to the attention of employees by means of meetings, employee handbooks, or other appropriate means.

4. Recruitment: When advertising for employees, the contractor will include in all advertisements for employees the notation: "An Equal Opportunity Employer." All such advertisements be placed in publications having a large circulation among minorities and women in the area from which the project work force would normally be derived.

a. The contractor will, unless precluded by a valid bargaining agreement, conduct systematic and direct recruitment through public and private employee referral sources likely to yield qualified minorities and women. To meet this requirement, the contractor will identify sources of potential minority group employees, and establish with such identified sources procedures whereby minority and women applicants may be referred to the contractor for employment consideration.

b. In the event the contractor has a valid bargaining agreement providing for exclusive hiring hall referrals, the contractor is expected to observe the provisions of that agreement to the extent that the system meets the contractor's compliance with EEO contract provisions. Where implementation of such an agreement has the effect of discriminating against minorities or women, or obligates the contractor to do the same, such implementation violates Federal nondiscrimination provisions.

c. The contractor will encourage its present employees to refer minorities and women as applicants for employment. Information and procedures with regard to referring such applicants will be discussed with employees.

5. Personnel Actions: Wages, working conditions, and employee benefits shall be established and administered, and personnel actions of every type, including hiring, upgrading, promotion, transfer, demotion, layoff, and termination, shall be taken without regard to race, color, religion, sex, national origin, age or disability. The following procedures shall be followed:

a. The contractor will conduct periodic inspections of project sites to insure that working conditions and employee facilities do not indicate discriminatory treatment of project site personnel.

b. The contractor will periodically evaluate the spread of wages paid within each classification to determine any evidence of discriminatory wage practices.

c. The contractor will periodically review selected personnel actions in depth to determine whether there is evidence of discrimination.

Where evidence is found, the contractor will promptly take corrective action. If the review indicates that the discrimination may extend beyond the actions reviewed, such corrective action shall include all affected persons.

d. The contractor will promptly investigate all complaints of alleged discrimination made to the contractor in connection with its obligations under this contract, will attempt to resolve such complaints, and will take appropriate corrective action within a reasonable time. If the investigation indicates that the discrimination may affect persons other than the complainant, such corrective action shall include such other persons. Upon completion of each investigation, the contractor will inform every complainant of all of their avenues of appeal.

6. Training and Promotion:

a. The contractor will assist in locating, qualifying, and increasing the skills of minorities and women who are applicants for employment or current employees. Such efforts should be aimed at developing full journey level status employees in the type of trade or job classification involved.

b. Consistent with the contractor's work force requirements and as permissible under Federal and State regulations, the contractor shall make full use of training programs, i.e., apprenticeship, and on-the-job training programs for the geographical area of contract performance.

In the event a special provision for training is provided under this contract, this subparagraph will be superseded as indicated in the special provision. The contracting agency may reserve training positions for persons who receive welfare assistance in accordance with 23 U.S.C. 140(a).

c. The contractor will advise employees and applicants for employment of available training programs and entrance requirements for each.

d. The contractor will periodically review the training and promotion potential of employees who are minorities and women and will encourage eligible employees to apply for such training and promotion.

7. Unions: If the contractor relies in whole or in part upon unions as a source of employees, the contractor will use good faith efforts to obtain the cooperation of such unions to increase opportunities for minorities and women. Actions by the contractor, either directly or through a contractor's association acting as agent, will include the procedures set forth below:

a. The contractor will use good faith efforts to develop, in cooperation with the unions, joint training programs aimed toward qualifying more minorities and women for membership in the unions and increasing the skills of minorities and women so that they may qualify for higher paying employment.

b. The contractor will use good faith efforts to incorporate an EEO clause into each union agreement to the end that such union will be contractually bound to refer applicants without regard to their race, color, religion, sex, national origin, age or disability.

c. The contractor is to obtain information as to the referral practices and policies of the labor union except that to the extent such information is within the exclusive possession of the labor union and such labor union refuses to furnish such information to the contractor, the contractor shall so certify to the contracting agency and shall set forth what efforts have been made to obtain such information.

d. In the event the union is unable to provide the contractor with a reasonable flow of referrals within the time limit set forth in the collective bargaining agreement, the contractor will, through independent recruitment efforts, fill the employment vacancies without regard to race, color, religion, sex, national origin, age or disability; making full efforts to obtain qualified and/or qualifiable minorities and women. The failure of a union to provide sufficient referrals (even though it is obligated to provide exclusive referrals under the terms of a collective bargaining agreement) does not relieve the contractor from

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the requirements of this paragraph. In the event the union referral practice prevents the contractor from meeting the obligations pursuant to Executive Order 11246, as amended, and these special provisions, such contractor shall immediately notify the contracting agency.

8. Reasonable Accommodation for Applicants / Employees with Disabilities: The contractor must be familiar with the requirements for and comply with the Americans with Disabilities Act and all rules and regulations established there under. Employers must provide reasonable accommodation in all employment activities unless to do so would cause an undue hardship.

9. Selection of Subcontractors, Procurement of Materials and Leasing of Equipment: The contractor shall not discriminate on the grounds of race, color, religion, sex, national origin, age or disability in the selection and retention of subcontractors, including procurement of materials and leases of equipment. The contractor shall take all necessary and reasonable steps to ensure nondiscrimination in the administration of this contract.

a. The contractor shall notify all potential subcontractors and suppliers and lessors of their EEO obligations under this contract.

b. The contractor will use good faith efforts to ensure subcontractor compliance with their EEO obligations.

10. Assurance Required by 49 CFR 26.13(b):

a. The requirements of 49 CFR Part 26 and the State DOT’s U.S.

DOT-approved DBE program are incorporated by reference.

b. The contractor or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR Part 26 in the award and administration of DOT-assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the contracting agency deems appropriate.

11. Records and Reports: The contractor shall keep such records as necessary to document compliance with the EEO requirements. Such records shall be retained for a period of three years following the date of the final payment to the contractor for all contract work and shall be available at reasonable times and places for inspection by authorized representatives of the contracting agency and the FHWA.

a. The records kept by the contractor shall document the following:

(1) The number and work hours of minority and non-minority group members and women employed in each work classification on the project;

(2) The progress and efforts being made in cooperation with unions, when applicable, to increase employment opportunities for minorities and women; and

(3) The progress and efforts being made in locating, hiring, training, qualifying, and upgrading minorities and women;

b. The contractors and subcontractors will submit an annual report to the contracting agency each July for the duration of the project, indicating the number of minority, women, and non-minority group employees currently engaged in each work classification required by the contract work. This information is to be reported on Form FHWA-
1391. The staffing data should represent the project work force on board in all or any part of the last payroll period preceding the end of July. If on-the-job training is being required by special provision, the contractor will be required to collect and report training data. The employment data should reflect the work force on board during all or any part of the last payroll period preceding the end of July.

III. NONSEGREGATED FACILITIES

This provision is applicable to all Federal-aid construction contracts and to all related construction subcontracts of $10,000 or more.

The contractor must ensure that facilities provided for employees are provided in such a manner that segregation on the basis of race, color, religion, sex, or national origin cannot result. The contractor may neither require such segregated use by written or oral policies nor tolerate such use by employee custom. The contractor's obligation extends further to ensure that its employees are not assigned to perform their services at any location, under the contractor's control, where the facilities are segregated. The term "facilities" includes waiting rooms, work areas, restaurants and other eating areas, time clocks, restrooms, washrooms, locker rooms, and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing provided for employees. The contractor shall provide separate or single-user restrooms and necessary dressing or sleeping areas to assure privacy between sexes.

IV. DAVIS-BACON AND RELATED ACT PROVISIONS
This section is applicable to all Federal-aid construction projects exceeding $2,000 and to all related subcontracts and lower-tier subcontracts (regardless of subcontract size). The requirements apply to all projects located within the right-of-way of a roadway that is functionally classified as Federal-aid highway. This excludes roadways functionally classified as local roads or rural minor collectors, which are exempt. Contracting agencies may elect to apply these requirements to other projects.

The following provisions are from the U.S. Department of Labor regulations in 29 CFR 5.5 “Contract provisions and related matters” with minor revisions to conform to the FHWA-1273 format and FHWA program requirements.

1. Minimum wages
a. All laborers and mechanics employed or working upon the site of the work, will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics.

Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph 1.d. of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in 29 CFR 5.5(a)(4). Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, That the employer's payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed

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under paragraph 1.b. of this section) and the Davis-Bacon poster (WH–1321) shall be posted at all times by the contractor and its subcontractors at the site of the work in a prominent and accessible place where it can be easily seen by the workers.
b. (1) The contracting officer shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the contract shall be classified in conformance with the wage determination. The contracting officer shall approve an additional classification and wage rate and fringe benefits therefor only when the following criteria have been met:
(i) The work to be performed by the classification requested is not performed by a classification in the wage determination; and (ii) The classification is utilized in the area by the construction industry; and
(iii) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination.
(2) If the contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the contracting officer agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken shall be sent by the contracting officer to the Administrator of the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Washington, DC 20210. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification action within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30- day period that additional time is necessary.
(3) In the event the contractor, the laborers or mechanics to be employed in the classification or their representatives, and the contracting officer do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the contracting officer shall refer the questions, including the views of all interested parties and the recommendation of the contracting officer, to the Wage and Hour Administrator for determination. The Wage and Hour Administrator, or an authorized representative, will issue a determination within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30-day period that additional time is necessary. (4) The wage rate (including fringe benefits where appropriate) determined pursuant to paragraphs 1.b.(2) or 1.b.(3) of this section, shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification.
c. Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof.
d. If the contractor does not make payments to a trustee or other third person, the contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, Provided, That the Secretary of Labor has found, upon the written request of the contractor, that the applicable standards of the Davis-Bacon Act have been met. The Secretary of Labor may require the contractor to set aside in a separate account assets for the meeting of obligations under the plan or program.

2. Withholding
The contracting agency shall upon its own action or upon written request of an authorized representative of the Department of Labor, withhold or cause to be withheld from the contractor under this contract, or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the contractor or any subcontractor the full amount of wages required by the contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work, all or part of the wages required by the contract, the contracting agency may, after written notice to the contractor, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased.

3. Payrolls and basic records
a. Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work. Such records shall contain the name, address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in section 1(b)(2)(B) of the Davis-Bacon Act), daily and weekly number of hours worked, deductions made and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits.

Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs.
b. (1) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the contracting agency. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. Instead the payrolls shall only need to include an individually identifying number for each employee ( e.g. , the last four digits of the employee's social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH–347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site.

The prime contractor is responsible for the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the full social security number and current address of each covered worker, and shall provide them upon request to the contracting agency for transmission to the State DOT, the FHWA or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a subcontractor to provide addresses and social security numbers to the prime contractor for its own records, without weekly submission to the contracting agency..

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(2) Each payroll submitted shall be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following:
(i) That the payroll for the payroll period contains the information required to be provided under §5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under §5.5 (a)(3)(i) of Regulations, 29 CFR part 5, and that such information is correct and complete;
(ii) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3;
(iii) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. (3) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH–347 shall satisfy the requirement for submission of the “Statement of Compliance” required by paragraph 3.b.(2) of this section.
(4) The falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under section 1001 of title 18 and section 231 of title 31 of the United States Code.
c. The contractor or subcontractor shall make the records required under paragraph 3.a. of this section available for inspection, copying, or transcription by authorized representatives of the contracting agency, the State DOT, the FHWA, or the Department of Labor, and shall permit such representatives to interview employees during working hours on the job. If the contractor or subcontractor fails to submit the required records or to make them available, the FHWA may, after written notice to the contractor, the contracting agency or the State DOT, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds.

Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR 5.12.

4. Apprentices and trainees
a. Apprentices (programs of the USDOL).

Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice.

The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the contractor as to the entire work force under the registered program.

Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman's hourly rate) specified in the contractor's or subcontractor's registered program shall be observed.

Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice's level of progress, expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination.

In the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved.
b. Trainees (programs of the USDOL).

Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training
Administration.

The ratio of trainees to journeymen on the job site shall not be greater than permitted under the plan approved by the Employment and Training Administration.

Every trainee must be paid at not less than the rate specified in the approved program for the trainee's level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed.

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In the event the Employment and Training Administration withdraws approval of a training program, the contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved. c. Equal employment opportunity. The utilization of apprentices, trainees and journeymen under this part shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended, and 29 CFR part 30.
d. Apprentices and Trainees (programs of the U.S. DOT).

Apprentices and trainees working under apprenticeship and skill training programs which have been certified by the Secretary of Transportation as promoting EEO in connection with Federal-aid highway construction programs are not subject to the requirements of paragraph 4 of this Section IV. The straight time hourly wage rates for apprentices and trainees under such programs will be established by the particular programs. The ratio of apprentices and trainees to journeymen shall not be greater than permitted by the terms of the particular program.

5. Compliance with Copeland Act requirements. The contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in this contract.

6. Subcontracts. The contractor or subcontractor shall insert Form FHWA-1273 in any subcontracts and also require the subcontractors to include Form FHWA-1273 in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR 5.5.

7. Contract termination: debarment. A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.12.

8. Compliance with Davis-Bacon and Related Act requirements.

All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are herein incorporated by reference in this contract.

9. Disputes concerning labor standards. Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and the contracting agency, the U.S. Department of Labor, or the employees or their representatives.

10. Certification of eligibility.
a. By entering into this contract, the contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
b. No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
c. The penalty for making false statements is prescribed in the U.S.

Criminal Code, 18 U.S.C. 1001.

V. CONTRACT WORK HOURS AND SAFETY STANDARDS ACT
The following clauses apply to any Federal-aid construction contract in an amount in excess of $100,000 and subject to the overtime provisions of the Contract Work Hours and Safety Standards Act.

These clauses shall be inserted in addition to the clauses required by 29 CFR 5.5(a) or 29 CFR 4.6. As used in this paragraph, the terms laborers and mechanics include watchmen and guards.

1. Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.

2. Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (1.) of this section, the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (1.) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (1.) of this section.

3. Withholding for unpaid wages and liquidated damages. The FHWA or the contacting agency shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (2.) of this section.

4. Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (1.) through (4.) of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (1.) through (4.) of this section.

VI. SUBLETTING OR ASSIGNING THE CONTRACT

This provision is applicable to all Federal-aid construction contracts on the National Highway System.

1. The contractor shall perform with its own organization contract work amounting to not less than 30 percent (or a greater percentage if specified elsewhere in the contract) of the total original contract price, excluding any specialty items designated by the contracting agency.

Specialty items may be performed by subcontract and the amount of any such specialty items performed may be deducted from the total original contract price before computing the amount of work required to be performed by the contractor's own organization (23 CFR 635.116).

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a. The term “perform work with its own organization” refers to workers employed or leased by the prime contractor, and equipment owned or rented by the prime contractor, with or without operators.

Such term does not include employees or equipment of a
subcontractor or lower tier subcontractor, agents of the prime contractor, or any other assignees. The term may include payments for the costs of hiring leased employees from an employee leasing firm meeting all relevant Federal and State regulatory requirements.

Leased employees may only be included in this term if the prime contractor meets all of the following conditions:

(1) the prime contractor maintains control over the
supervision of the day-to-day activities of the leased employees; (2) the prime contractor remains responsible for the quality of the work of the leased employees;
(3) the prime contractor retains all power to accept or exclude individual employees from work on the project; and
(4) the prime contractor remains ultimately responsible for the payment of predetermined minimum wages, the submission of payrolls, statements of compliance and all other Federal regulatory requirements.

b. "Specialty Items" shall be construed to be limited to work that requires highly specialized knowledge, abilities, or equipment not ordinarily available in the type of contracting organizations qualified and expected to bid or propose on the contract as a whole and in general are to be limited to minor components of the overall contract.

2. The contract amount upon which the requirements set forth in paragraph (1) of Section VI is computed includes the cost of material and manufactured products which are to be purchased or produced by the contractor under the contract provisions.

3. The contractor shall furnish (a) a competent superintendent or supervisor who is employed by the firm, has full authority to direct performance of the work in accordance with the contract requirements, and is in charge of all construction operations (regardless of who performs the work) and (b) such other of its own organizational resources (supervision, management, and engineering services) as the contracting officer determines is necessary to assure the performance of the contract.

4. No portion of the contract shall be sublet, assigned or otherwise disposed of except with the written consent of the contracting officer, or authorized representative, and such consent when given shall not be construed to relieve the contractor of any responsibility for the fulfillment of the contract. Written consent will be given only after the contracting agency has assured that each subcontract is evidenced in writing and that it contains all pertinent provisions and requirements of the prime contract.

5. The 30% self-performance requirement of paragraph (1) is not applicable to design-build contracts; however, contracting agencies may establish their own self-performance requirements.

VII. SAFETY: ACCIDENT PREVENTION

This provision is applicable to all Federal-aid construction contracts and to all related subcontracts.

1. In the performance of this contract the contractor shall comply with all applicable Federal, State, and local laws governing safety, health, and sanitation (23 CFR 635). The contractor shall provide all safeguards, safety devices and protective equipment and take any other needed actions as it determines, or as the contracting officer may determine, to be reasonably necessary to protect the life and health of employees on the job and the safety of the public and to protect property in connection with the performance of the work covered by the contract.

2. It is a condition of this contract, and shall be made a condition of each subcontract, which the contractor enters into pursuant to this contract, that the contractor and any subcontractor shall not permit any employee, in performance of the contract, to work in surroundings or under conditions which are unsanitary, hazardous or dangerous to his/her health or safety, as determined under construction safety and health standards (29 CFR 1926) promulgated by the Secretary of Labor, in accordance with Section 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 3704).

3. Pursuant to 29 CFR 1926.3, it is a condition of this contract that the Secretary of Labor or authorized representative thereof, shall have right of entry to any site of contract performance to inspect or investigate the matter of compliance with the construction safety and health standards and to carry out the duties of the Secretary under Section 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C.3704).

VIII. FALSE STATEMENTS CONCERNING HIGHWAY PROJECTS

This provision is applicable to all Federal-aid construction contracts and to all related subcontracts.

In order to assure high quality and durable construction in conformity with approved plans and specifications and a high degree of reliability on statements and representations made by engineers, contractors, suppliers, and workers on Federal-aid highway projects, it is essential that all persons concerned with the project perform their functions as carefully, thoroughly, and honestly as possible. Willful falsification, distortion, or misrepresentation with respect to any facts related to the project is a violation of Federal law. To prevent any misunderstanding regarding the seriousness of these and similar acts, Form FHWA-1022 shall be posted on each Federal-aid highway project (23 CFR 635) in one or more places where it is readily available to all persons concerned with the project:

18 U.S.C. 1020 reads as follows:

"Whoever, being an officer, agent, or employee of the United States, or of any State or Territory, or whoever, whether a person, association, firm, or corporation, knowingly makes any false statement, false representation, or false report as to the character, quality, quantity, or cost of the material used or to be used, or the quantity or quality of the work performed or to be performed, or the cost thereof in connection with the submission of plans, maps, specifications, contracts, or costs of construction on any highway or related project submitted for approval to the Secretary of Transportation; or

Whoever knowingly makes any false statement, false representation, false report or false claim with respect to the character, quality, quantity, or cost of any work performed or to be performed, or materials furnished or to be furnished, in connection with the construction of any highway or related project approved by the Secretary of Transportation; or

Whoever knowingly makes any false statement or false
representation as to material fact in any statement, certificate, or report submitted pursuant to provisions of the Federal-aid Roads Act approved July 1, 1916, (39 Stat. 355), as amended and supplemented;

Shall be fined under this title or imprisoned not more than 5 years or both."

IX. IMPLEMENTATION OF CLEAN AIR ACT AND FEDERAL

WATER POLLUTION CONTROL ACT

This provision is applicable to all Federal-aid construction contracts and to all related subcontracts.

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By submission of this bid/proposal or the execution of this contract, or subcontract, as appropriate, the bidder, proposer, Federal-aid construction contractor, or subcontractor, as appropriate, will be deemed to have stipulated as follows:

1. That any person who is or will be utilized in the performance of this contract is not prohibited from receiving an award due to a violation of Section 508 of the Clean Water Act or Section 306 of the Clean Air Act.

2. That the contractor agrees to include or cause to be included the requirements of paragraph (1) of this Section X in every subcontract, and further agrees to take such action as the contracting agency may direct as a means of enforcing such requirements.

X. CERTIFICATION REGARDING DEBARMENT, SUSPENSION,

INELIGIBILITY AND VOLUNTARY EXCLUSION

This provision is applicable to all Federal-aid construction contracts, design-build contracts, subcontracts, lower-tier subcontracts, purchase orders, lease agreements, consultant contracts or any other covered transaction requiring FHWA approval or that is estimated to cost $25,000 or more – as defined in 2 CFR Parts 180 and 1200.

1. Instructions for Certification – First Tier Participants:

a. By signing and submitting this proposal, the prospective first tier participant is providing the certification set out below.

b. The inability of a person to provide the certification set out below will not necessarily result in denial of participation in this covered transaction. The prospective first tier participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the prospective first tier participant to furnish a certification or an explanation shall disqualify such a person from participation in this transaction.

c. The certification in this clause is a material representation of fact upon which reliance was placed when the contracting agency determined to enter into this transaction. If it is later determined that the prospective participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the contracting agency may terminate this transaction for cause of default.

d. The prospective first tier participant shall provide immediate written notice to the contracting agency to whom this proposal is submitted if any time the prospective first tier participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

e. The terms "covered transaction," "debarred," "suspended," "ineligible," "participant," "person," "principal," and "voluntarily excluded," as used in this clause, are defined in 2 CFR Parts 180 and 1200. “First Tier Covered Transactions” refers to any covered transaction between a grantee or subgrantee of Federal funds and a participant (such as the prime or general contract). “Lower Tier Covered Transactions” refers to any covered transaction under a First Tier Covered Transaction (such as subcontracts). “First Tier Participant” refers to the participant who has entered into a covered transaction with a grantee or subgrantee of Federal funds (such as the prime or general contractor). “Lower Tier Participant” refers any participant who has entered into a covered transaction with a First Tier Participant or other Lower Tier Participants (such as subcontractors and suppliers).

f. The prospective first tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction.

g. The prospective first tier participant further agrees by submitting this proposal that it will include the clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transactions," provided by the department or contracting agency, entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions exceeding the $25,000 threshold.

h. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that is not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous.

A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any lower tier prospective participants, each participant may, but is not required to, check the Excluded Parties List System website (https://www.epls.gov/
), which is compiled by the General
Services Administration.

i. Nothing contained in the foregoing shall be construed to require the establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of the prospective participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

j. Except for transactions authorized under paragraph (f) of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default.

* * * * *

2. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion – First Tier Participants:

a. The prospective first tier participant certifies to the best of its knowledge and belief, that it and its principals:

(1) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency;

(2) Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property;

(3) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph (a)(2) of this certification; and

(4) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default.

Local Assistance Procedure Manual Exhibit 12-G
Required Federal-Aid Contract Language

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b. Where the prospective participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

2. Instructions for Certification - Lower Tier Participants:

(Applicable to all subcontracts, purchase orders and other lower tier transactions requiring prior FHWA approval or estimated to cost $25,000 or more - 2 CFR Parts 180 and 1200)

a. By signing and submitting this proposal, the prospective lower tier is providing the certification set out below.

b. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department, or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment.

c. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous by reason of changed circumstances.

d. The terms "covered transaction," "debarred," "suspended," "ineligible," "participant," "person," "principal," and "voluntarily excluded," as used in this clause, are defined in 2 CFR Parts 180 and 1200. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations. “First Tier Covered Transactions” refers to any covered transaction between a grantee or subgrantee of Federal funds and a participant (such as the prime or general contract). “Lower Tier Covered Transactions” refers to any covered transaction under a First Tier Covered Transaction (such as subcontracts). “First Tier Participant” refers to the participant who has entered into a covered transaction with a grantee or subgrantee of Federal funds (such as the prime or general contractor). “Lower Tier Participant” refers any participant who has entered into a covered transaction with a First Tier Participant or other Lower Tier Participants (such as subcontractors and suppliers).

e. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated.

f. The prospective lower tier participant further agrees by submitting this proposal that it will include this clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions exceeding the $25,000 threshold.

g. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that is not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous.

A participant is responsible for ensuring that its principals are not suspended, debarred, or otherwise ineligible to participate in covered transactions. To verify the eligibility of its principals, as well as the eligibility of any lower tier prospective participants, each participant may, but is not required to, check the Excluded Parties List System website (https://www.epls.gov/
), which is compiled by the General
Services Administration.

h. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

i. Except for transactions authorized under paragraph e of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment.

* * * * *

Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Participants:

1. The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency.

2. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.

* * * * *

XI. CERTIFICATION REGARDING USE OF CONTRACT FUNDS

FOR LOBBYING

This provision is applicable to all Federal-aid construction contracts and to all related subcontracts which exceed $100,000 (49 CFR 20).

1. The prospective participant certifies, by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that:

a. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.

b. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions.

2. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into.

Submission of this certification is a prerequisite for making or entering into this transaction imposed by 31 U.S.C. 1352. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

3. The prospective participant also agrees by submitting its bid or proposal that the participant shall require that the language of this certification be included in all lower tier subcontracts, which exceed $100,000 and that all such recipients shall certify and disclose accordingly.

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IN WITNESS THEREOF, these parties have executed this Construction Agreement on the day and year shown below.

Date: "CITY"

CITY OF GARDEN GROVE

By:

Lisa Kim
City Manager
ATTEST:

City Clerk

Date:
"

"CONTRACTOR"

SULLY-MILLER CONTRACTING COMPANY
CONTRACTOR'S State License No. 747612
Expiration Date: 03/31/2024

CONTRACTOR'S DIR No.1000003664
Attach a copy of your DIR Certificate.

By:

Title:

Date:

APPROVED AS TO FORM:

______________________________
Garden Grove City Attorney
If CONTRACTOR is a corporation, a Corporate
Resolution and/or Corporate Seal is required.

Date__________________________

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EXHIBIT B
(Form HUD-4010, the Federal Labor Standards Provision of the United States) Federal Labor Standards Provisions U.S. Department of Housing and Urban Development Office of Labor Relations

1 Applicability
The Project or Program to which the construction work covered by this contract pertains is being assisted by the United States of America and the following Federal Labor Standards Provisions are included in this Contract pursuant to the provisions applicable to such Federal assistance.
(i) Minimum Wages. All laborers and mechanics employed or working upon the site of the work, will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR Part 3), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. Contributions made or costs reasonably anticipated for bona fide fringe benefits under Section I(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of 29 CFR )(iv); also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs, which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in 29 CFR.

Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, That the employer's payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under 29 CFR 5.5(a)(1)(ii) and the Davis-Bacon poster (WH1321) shall be posted at all times by the contractor and its subcontractors at the site of the work in a prominent and accessible, place where it can be easily seen by the workers. (ii) (a) Any class of laborers or mechanics which is not listed in the wage determination and which is to be employed under the contract shall be classified in conformance with the wage determination. HUD shall approve an additional classification and wage rate and fringe benefits therefor only when the following criteria have been met:
(1) The work to be performed by the classification requested is not performed by a classification in the wage determination; and
(2) The classification is utilized in the area by the construction industry; and (3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination. (b) If the contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and HUD or its designee agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken shall be sent by HUD or its designee fo the Administrator of the Wage and Hour

. s(a)(1

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Division, Employment Standards Administration, U.S. Department of Labor, Washington, D.C. 20210. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification action within 30 days of receipt and so advise HUD or its designee or will notify HUD or its designee within the 3D-day period that additional time is necessary. (Approved by the Office of Management and Budget under OMB control number 1215* 0140.) (c) In the event the contractor, the laborers or mechanics to be employed in the classification or their representatives, and HUD or its designee do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), HUD or its designee shall refer the questions, including the views of all interested parties and the recommendation of HUD or its designee, to the Administrator for determination.

The Administrator, or an authorized representative, will issue a determination within 30 days of receipt and so advice HUD or its designee or will notify HUD or its designee within the 30-day period that additional time is necessary. (Approved by the Office of Management and Budget under OMB Control Number 1215-0140.)
(d) The wage rate (including fringe benefits where appropriate) determined pursuant to subparagraphs (l)(ii)(b) or (c) of this paragraph, shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification.
(iv) If the contractor does not make payments to a trustee of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, Provided, That the Secretary of Labor has found, upon the written request of the contractor, that the applicable standards of the Davis Bacon Act have been met.

The Secretary of Labor may require the contractor to set aside in a separate account assets for the meeting of obligations under the plan or program. (Approved by the Office of Management and Budget under OMB Control Number 1215-0140.)

2. Withholding. HUD or its designee shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld from the contractor under this contract or any other Federal contract with the same prime contractor, or any other Federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees and helpers, employed by the contractor or any subcontractor the full amount of wages required by the contract in the event of failure to pay any laborer or mechanic, including any apprentice, trainee or helper, employed or working on the site of the work, all or part of the wages required by the contract, HUD or its designee may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased. HUD or its designee may, after written notice to the contractor, disburse such amounts withheld for and on account of the contractor or subcontractor to the respective employees to whom they are due. The Comptroller General shall make such disbursements in the case of direct Davis-Bacon Act contracts.

3. (i) Payrolls and basic records. Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the work preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work. Such records shall contain the name, address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described (iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determination or sha ll pay another bona fide fringe benefit or an hourly cash equivalent thereof.

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in Section I(b)(2)(B) of the Davis-bacon Act), daily and weekly number of hours worked, deductions made and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5 (a)(l)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in Section I(b)(2)(B) of the Davis Bacon Act, the contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs. (Approved by the Office of Management and Budget under OMB Control Numbers 1215-0140 and 1215-0017.) (ii) (a) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to HUD or its designee if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant sponsor, or owner, as the case may be, for transmission to HUD or its designee. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR except that full social security numbers and home addresses shall not be included on weekly transmittals, Instead the payrolls shall only need to include an individually identifying number for each employee (e.g., the last four digits of the employee's social security number)- The required weekly payroll information may be submitted in any form desired. Optional Form WH-347 is available for this purpose from the Wage and Hour Division Web site at htto://www. dol. aov/esa/whdJforms/wh347instr.htm or its successor site. The prime contractor is responsible for the submission of copies of payrolls by all subcontractors.

Contractors and subcontractors shall maintain the full social security number and current address of each covered worker, and shall provide them upon request to HUD or its designee if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant sponsors or owner, as the case may be, for transmission to HUD or its designee, the contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this subparagraph for a prime contractor to require a subcontractor to provide addresses and social security numbers to the prime contractor for its own records, without weekly submission to HUD or its designee. (Approved by the Office of Management and Budget under OMB Control Number 1215-01 49.)
(b) Each payroll submitted shall be accompanied by a "Statement of Compliance," signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following:
(1) That the payroll for the payroll period contains the information required to be provided under 29 CFR 5.5 (a)(3)(ii), the appropriate information is being maintained under 29 CFR

5.5(a)(3)(i), and that such information is correct and complete;

(2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in 29 CFR Part 3;
(3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract.

5.5(a)(3 )(i)

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(c) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submission of the "Statement of Compliance" required by subparagraph A.3.(II)(b).
(d) The falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under Section 1001 of Title 18 and Section 231 of Title 31 of the United States Code.
(iii) The contractor or subcontractor shall make the records required under subparagraph A.3- (i) available for inspection, copying, or transcription by authorized representatives of HUD or its designee or the Department of Labor, and shall permit such representatives to interview employees during working hours on the job. If the contractor or subcontractor fails to submit the required records or to make them available, HUD or its designee may, after written notice to the contractor, sponsor, applicant or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR 5.12.

4. Apprentices and Trainees.

Expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved.
(i) Trainees- Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be greater than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee's level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees• shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In the event the Employment and Training Administration withdraws approval of a training program, the contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved-

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(ii) Equal employment opportunity. The utilization of apprentices, trainees and journeymen under 29 CFR Part 5 shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended, and 29 CFR Part 30.

5. Compliance with Copeland Act requirements. The contractor shall comply with the requirements of 29 CFR Part 3 which are incorporated by reference in this contract

6. Subcontracts. The contractor or subcontractor will insert in any subcontracts the clauses contained in subparagraphs I through 11 in this paragraph A and such other clauses as HUD or its designee may by appropriate instructions require, and a copy of the applicable prevailing wage decision, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in this paragraph. 7, Contract termination; debarment. A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the contract and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.1 2.

8. Compliance with Davis-Bacon and Related Act Requirements. All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR Parts 1, 3, and 5 are herein incorporated by reference in this contract

9. Disputes concerning labor standards. Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract.

Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR Parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and HUD or its designee, the U.S.

Department of Labor or the employees or their representatives.

10. (i) Certification of Eligibility. By entering into this contract the contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of Section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1) or to be awarded HUD contracts or participate in HUD programs pursuant to 24 CFR Part 24.
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of Section 3(a) of the Davis-Bacon Act or 29 CFR or to be awarded HUD contracts or participate in HUD programs pursuant to 24 CFR Part 24. (iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C- 1001 . Additionally, U.S- Criminal Code, Section 1 01 0, Title 1 8, U.S.Cs, "Federal Housing Administration transactions", provides in part: "Whoever, for the purpose of influencing in any way the action of such Administration. makes, utters or publishes any statement knowing the same to be false shall be fined not more than $5,000 or imprisoned not more than two years, or both-
I l . Complaints, Proceedings, or Testimony by Employees. No laborer or mechanic to whom the wage, salary, or other labor standards provisions of this Contract are applicable shall be discharged or in any other manner discriminated against by the Contractor or any subcontractor because such employee has filed any complaint or instituted or caused to be instituted any proceeding or has testified or is about to testify in any proceeding under or relating to the labor standards applicable under this Contract to his employer.

B. Contract Work Hours and Safety Standards Act The provisions of this paragraph B are applicable where the amount of the prime contract exceeds $100,000- As used in this paragraph, the terms "laborers" and "mechanics" include watchmen and guards. (1) Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which the individual is

5.12(a}(1)

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employed on such work to work in excess of 40 hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of 40 hours in such workweek. (2) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in subparagraph (1) of this paragraph, the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in subparagraph (1 ) of this paragraph, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of 40 hours without payment of the overtime wages required by the clause set forth in sub paragraph (1) of this paragraph.
(3) Withholding for unpaid wages and liquidated damages. HUD or its designee shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contract, or any other Federally-assisted contract subject to the Contract Work Hours and Safety Standards Act which is held by the same prime contractor such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided jn the clause set forth in subparagraph (2) of this paragraph.
(4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in subparagraph (I) through (4) of this paragraph and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in subparagraphs (I) through (4) of this paragraph.

C. Health and Safety. The provisions of this paragraph C are applicable where the amount of the prime contract exceeds $100,000.
(1) No laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous, or dangerous to his health and safety as determined under construction safety and health standards promulgated by the Secretary of Labor by regulation.
(2) The Contractor shall comply with all regulations issued by the Secretary of Labor pursuant to Title 29 Part 1926 and failure to comply may result in imposition of sanctions pursuant to the Contract Work Hours and Safety Standards Act, (Public Law 91-54, 83 stat 96). 40 USC 3701 et seq.
(3) The contractor shall include the provisions of this paragraph in every subcontract so that such provisions will be binding on each subcontractor. The contractor shall take such action with respect to any subcontractor as the Secretary of Housing and Urban Development or the Secretary of Labor shall direct as a means of enforcing such provisions

SECTION 5 - AGREEMENT (Continued)

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EXHIBIT C

STANDARD FEDERAL EQUAL EMPLOYMENT OPPORTUNITY

CONSTRUCTION CONTRACT SPECIFICATIONS
(EXECUTIVE ORDER 11246)

1. As used in these specifications:
a. "Covered area" means the geographical area described in the solicitation from which this contract resulted.
b. "Director" means Director, Office of Federal Contract Act Compliance Program, United States Department of Labor, or any person to whom the Director delegates authority.
c. "Employer identification number" means the Federal social security number used on the Employer's Quarterly Federal Tax Return, U.S. Treasury Department Form 941.
d. "Minority" includes:
(i) Black (all persons having origins in any of the black African racial groups not of Hispanic origin)
(ii) Hispanic (all persons of Mexican, Puerto Rican, Cuban Central or South American, or other Spanish Culture or origin, regardless of race) (iii)
Asian and Pacific Islander (all persons having origins in any of the original peoples of the Far East, Southeast Asia, the Indian Subcontinent, or the Pacific Islands)
(iv) American Indian or Alaskan Native (all groups having origins in any of the original peoples of North America and maintaining identifiable tribal affiliations through membership and participation or community identification)

2. Whenever the Contractor or any Subcontractor at any tier subcontracts a portion of the work involving any construction trade, it must physically include in each subcontract in excess of $10,000 the provisions of these specifications and the Notice that contains the applicable goals for minority and female participation and which is set forth in the solicitations from which the contract resulted.

3. If the Contractor is participating (pursuant to 41 CFR Part 60-4.5) in a Hometown Plan approved by the U.S. Department of Labor in the covered area either individually or through as association, its affirmative action obligations on all work in the Plan area (including goals and timetables) must be in accordance with that Plan for those trades which have unions participating in the Plan. Contractors must be able to demonstrate their participation in and compliance with the provisions of any such Hometown Plan. Each Contractor or Subcontractor participating in an approved Plan is individually required to comply with its obligations under the Equal Employment Opportunity (EEO) Clause, and to make a good faith effort to achieve each goal under the Plan in each trade in which it has employees. The overall good faith performance by other Contractors or Subcontractors toward a goal in an approved Plan does not excuse any covered Contractors or Subcontractors failure to take good faith efforts to achieve the Plan goals and timetables.

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4. The Contractor must implement the specific affirmative action standards provided in Section VIl, Paragraphs 7a through 7p of these specifications. The goals set forth in the solicitation from which this contract resulted are expressed as percentages of the total hours of employment and training of minority and female tuition that the Contractor should reasonably be able to achieve in each construction trade in which it has employees in the covered area. Covered construction contractors performing construction work in geographical areas where they do not have a Federal or federally assisted construction contract must apply the minority and female goals established for the geographical area where the work is being performed. Goals are published periodically in the Federal Register in notice of and such notices may be obtained from any Office of Federal Contract Compliance Programs or from Federal procurement Contracting Officers. The Contractor is expected to make substantially uniform progress toward meeting its goals in each craft during the period specified.

5. Neither the provisions of any collective bargaining agreement, nor the failure by a union with whom the Contractor has a collective bargaining agreement, to refer either minorities or women will excuse the Contractors obligations under these specifications, Executive Order 11246, nor the regulations promulgated pursuant thereto.

6. In order for the nonworking training hours of apprentices and trainees to be counted in meeting the goals, apprentices and trainees must be employed by the Contractor during the training period and the Contractor must have made a commitment to employ the apprentices and trainees at the completion of their training, subject to the availability of employment opportunities. Trainees must be trained pursuant to training programs approved by the U.S. Department of Labor.

7. The Contractor must take specific affirmative actions to ensure equal employment opportunity. The evaluation of the Contractors compliance with these specifications must be based upon its effort to achieve maximum results from its actions. The Contractor must document these efforts fully and must implement affirmative action steps at least as extensive as the following:
a. Ensure and maintain a working environment free of harassment, intimidation, and coercion at all sites and in all sites at which the Contractors employees are assigned to work. The Contractor, where possible, will assign two or more women to each construction project. The Contractor must specifically ensure that all foremen, superintendents, and other onsite supervisory personnel are aware of and carry out the Contractor's obligations to maintain such a working environment, with specific attention to minority or female individuals working at such sites or in such facilities. b. Establish and maintain a current list of minority and female recruitment sources, provide written notification to minority and female recruitment sources and to community organizations when the Contractor or its unions have employment opportunities available, and maintain a record of the organization's responses. c. Maintain a current file of the names, addresses, and telephone numbers of each minority and female off-the-street applicant; and minority and female referral from a union, a recruitment source or community organization; and of what action was taken with respect to each such individual. If such individual was sent to the union hiring hall for referral and was not referred back to the Contractor by the union or, if referred, not employed by the Contractor; this must be documented in the file with the reason therefor, along with whatever additional actions the Contractor may have taken.

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d. Provide immediate written notification to the director when the union or unions with which the Contractor has a collective bargaining agreement have not referred to the Contractor a minority person or woman sent by the Contractor or when the Contractor has other information that the union referral process had impeded the Contractor's efforts to meet its obligations.
e. Develop on-the-job training opportunities or participate in training programs for the area that expressly includes minorities and women, including upgrading programs and apprenticeship and trainee programs relevant to the Contractors employment needs, especially those programs funded or approved by the Department of Labor. The Contractor must provide notice of these programs to the sources compiled under Section VII 7b above.
f. Disseminate the Contractor's EEO policy by providing notice of the policy to unions and training programs and requesting their cooperation in assisting the Contractor in meeting its EEO obligations; by including it in any policy manual and collective bargaining agreement; by publicizing it in the company newspaper, annual report, etc.; specific review of the policy with all management personnel and with all minority and female employees at least once a year; and by posing the company EEO policy on bulletin boards accessible to all employees at each location where construction work is performed.

Review, at least annually, the company's EEO policy and affirmative action obligations under these specifications with all employees having any responsible for hiring, assessment, layoff, termination, or their employment decisions, including specific review of these items with onsite supervisory personnel such as superintendents, general foreman etc., prior to the initiation of construction work at any job site. A written record must be made and maintained identifying the time and place of these meetings, persons attending, subject matter discussed, and disposition of the subject matter.
h.

Disseminate the Contract's EEO policy externally by including it in any advertising in the news media, specifically including minority and female news media, and providing written notification to and discussing the Contractor's EEO policy with other contractors and subcontractors with whom the Contractor does or anticipates doing business.
i. Direct its recruitment efforts, both oral and written, to minority, female, and community organizations: to schools with minorities and female students, and to minority and female recruitment and training organizations serving the Contractor's recruitment area and employment needs. Not later than one month prior to the date for the acceptance of the applications for apprenticeship or other, training by any recruitment sources, the Contractor must send written notification to organizations such as the above, describing the openings, screening procedure, and tests to be used in the selection process.
j. Encourage present minority and female employees to recruit other minority persons and women and, where reasonable, provide after school, summer, and vacation employment to minority and female youth both on the site and in other areas of a Contractor’s workforce.
k.

Validate all tests and other selection requirements where there is an obligation to do so under 41 CFR Part 60-3.

g.

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1. Conduct, at least annually, an inventory and evaluation at least of all minority and female personnel for promotional opportunities and encourage these employees to seek or to prepare for, through appropriate training, etc., such opportunities. m. Ensure that seniority practices, job classification work assignments, and other personnel practices, do not have a discriminatory effect by continually monitoring all personnel and employment related activities to ensure that the EEO policy and the Contractor's obligations under these specifications are being carried out. n.

Ensure that all facilities and company activities are non-segregated except that separate or single-user toilet and necessary changing facilities must be provided to assure privacy between the sexes.
o.

Document and maintain a record of all solicitations of offers for subcontracts from minority and female construction contractors and suppliers, including circulation of solicitations to minority and female contractor associations and other business associations.
p.

Conduct a review, at least annually, of all supervisors' adherence to and performance under the Contractor's EEO policies and affirmative action obligations.

8. Contractors are encouraged to participate in voluntary associations that assist in fulfilling one or more of the affirmative action obligations (Section VIl 7a through 7p). The efforts of a contractor association, joint contractor-union, contractor-community, or other share group of which the Contractor is a member and participant, may be asserted as fulfilling any one or more of its obligations under Section VIl 7a through 7p of these specifications provided that the Contractor actively participates in the group, makes every effort to assure that the group has a positive impact on the employment of minorities and women in the industry, ensures that the concrete benefits of the program are reflected in the Contractors minority and female workforce participation, makes a good faith effort to meet its individual goals and timetables, and can provide access to documentation which demonstrates the effectiveness of actions taken on behalf of the Contractor. The obligation to comply, however, is the Contractor's and failure of such a group to fulfill an obligation will not be a defense for the Contractor's noncompliance.

9. A single goal for minorities and a separate single goal for women have been established.

The Contractor, however, is required to provide equal employment opportunity and to take affirmative action for all minority groups, both male and female, and all women, both minority and nonminority. Consequently, the Contractor may be in violation of the Executive order if a particular group is employed in a substantially disparate manner (for example, even though the Contractor has achieved its goals for women generally, the Contractor may be in violation of the Executive order if a specific minority group of women is underutilized).

10. The Contractor must not use the goals and timetables of affirmative action standards to discriminate against any person because of race, color, religion, sex, or national origin.

11. The Contractor must not enter into any subcontract with any person or firm debarred from Government contracts pursuant to Executive Order 1 1246.

12. The Contractor must carry out such sanctions and penalties for violation of these specifications and of the Equal Opportunity Clause, including suspension, termination, and cancellation of existing subcontracts as may be imposed or ordered pursuant to Executive Order 11246, as amended, and its implementing regulations, by the Office of Federal Contract Compliance Programs. Any Contractor who fails to carry out such sanctions and penalties will be in violation of these specifications and Executive Order 11246, as amended.

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13. The Contractor must designate a responsible official to monitor all employment related activity to ensure that the company EEO policy is being carried out, to submit reports relating to the provisions hereof as may be required by the Government, and to keep records. Records must at least include for each employee the name, address, telephone numbers, construction trade, union affiliation if any, employee identification number when assigned, social security number, race, sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer), dates of changes in status, hours worked per week in the indicated trade, rate of pay, and locations at which the work was performed. Records must be maintained in an easy understandable and retrievable form; however, to the degree that existing records satisfy this requirement, Contractors will not be required to maintain separate records.

14. The Contractor, in fulfilling its obligations under these specifications, must implement specific affirmative action steps, at least as extensive as those standards prescribed in Section VIl 7, so as to achieve maximum results from its efforts to ensure equal employment opportunity. If the Contractor fails to comply with the requirements of the Executive order, the implementing regulations, or these specifications, the director will proceed in accordance with 41 CFR Section 604.8.

15. Nothing herein provided will be construed as a limitation upon the application of other laws that establish different standards of compliance or upon the application of requirements for hiring of local or other area residents (e.g., those under the Public Works Employment Act of 1977 and the Community Development Block Grant Program).