Gonzales City Council
April 4, 2022

Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

A G E N D A

JOINT MEETING OF THE

GONZALES CITY COUNCIL AND

GONZALES SUCCESSOR AGENCY
CITY COUNCIL CHAMBERS – 117 FOURTH STREET
GONZALES, CA 93926
MONDAY, APRIL 4, 2022
6:00 P.M.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

1. ROLL CALL- City Council/Successor Agency
Mayor Pro Tem/Vice Chair Scott Funk, Council/Agency Member Liz Silva, Council/Agency Member Lorraine Worthy, Council/Agency Member Paul Miller, Mayor/Chair Jose L. Rios
Youth Commissioners
Sherlyn Flores and Autumn Escobedo
Successor Agency Item

PUBLIC NOTICE
This meeting is being conducted consistent with State of California Executive Order N-29-20 dated March 17, 2020, regarding the COVID-19 pandemic. The public may participate in person or online via zoom at https://us06web.zoom.us/j/87241296989 or call 1-1669-900-6833 and use Meeting ID: 872 4129 6989.

If you wish to make either a general public comment or to comment on a specific agenda item, please use the Raise Hand function. You will be allowed three minutes for your comments.

If you choose not to attend the City Council meeting but wish to make a comment on a specific agenda item, please submit your comment limited to 250 words or less by 12:00p.m. on Monday, April 4th to the City Clerk at [email protected].

PRESENTATIONS

2. Swearing in of Fire Department Personnel

BUSINESS FROM THE PUBLIC

3. Business from the Public not on the Agenda; any member of the Public may address the Council/Agency for a period not to exceed three minutes on any subject not on the Agenda. The Council/Agency will listen to all communications but may take no action. *
Any writing or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at City Hall located at 147 Fourth Street, Gonzales, California, during normal business hours.

CONSENT AGENDA
All matters listed under the Consent Agenda are considered routine by the City Council and will be adopted by one action of the Council unless any Council Member has a question or wishes to make a statement or discuss an item. In that event, the Mayor will remove the item from the Consent Calendar for separate consideration.

4. Approve the Joint City Council and Successor Agency - Regular Meeting - March 21, 2022 Minutes

5. Approve City Accounts Payable Warrants #46565-46652

6. Consider Approval of Resolution No. 2022-16, A Resolution of the City Council of the City of Gonzales Authorizing Execution of an Operation & Maintenance Agreement with ENGIE Services in the Amount of $225,000, Which Includes a Contingency Budget of $17,029 for Maintenance of Six City-Owned Solar Arrays for a Five-Year Period

REGULAR AGENDA

7. Discussion and Consideration of an Increase of ½ Percent (.5%) Transaction and Use Tax a) Staff Report
b) Public Comment
c) Council Discussion
d) Council Action
Staff Recommended Action-Discuss and provide direction on bringing forth to the voters (electorate): 1) Extending the sunset timeframe of both Measure K and Measure X another 20 years, from 2044 to 2064; and 2) An additional ½ Percent (.5%) Transaction and Use Tax Increase

BUSINESS FROM CITY COUNCIL

8. City Council Board/Committee Reports
a. Transportation Agency for Monterey County
b. Mayor Selection Committee
c. Salinas Valley Recycles
d. Measure K Oversight Committee
e. Salinas Valley Basin Groundwater Sustainability
f. City’s 75th Anniversary Committee

9. Oral Communications

BUSINESS FROM CITY MANAGER

10. Oral Communications

CLOSED SESSION
Any member of the public may address the Council on a closed session item appearing on the agenda.

Speakers shall have a limited time of three (3) minutes. Please be brief and to the point.

11. The City Council will recess to closed session to consider personnel matters pursuant to Government Code Section 54957(B)(1) - City Manager Evaluation.

ADJOURNMENT

In compliance with the American with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk at (831) 675-5000. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. (CFR 35.102-

35.104 ADA Title II). This is a public meeting and as such, can be seen live by people present or online and is being recorded; therefore; anything you say or do here is public information. The recordings are available online.
*

MINUTES

JOINT MEETING OF THE

GONZALES CITY COUNCIL AND

GONZALES SUCCESSOR AGENCY
MONDAY, MARCH 21, 2022
6:00 P.M.

CALL TO ORDER
The meeting was called to order at 6:00 PM by Mayor Jose L. Rios.

PLEDGE OF ALLEGIANCE
The flag salute was recited by all present.

ROLL CALL
Attendee Name Title Status
Jose L. Rios Mayor/Chair Present
Scott Funk Mayor Pro Tem/Vice Chair Present
Liz Silva Council/Agency Member Present
Lorraine Worthy Council/Agency Member Present
Paul Miller Council/Agency Member Present

YOUTH COMMISSIONERS
Sherlyn Flores.

Excused absence: Autumn Escobedo.

STAFF PRESENT
City Manager René L. Mendez, City Attorney Michael F. Rodriguez, Director of Community Engagement and Strategic Partnerships Carmen Gil, Executive Assistant to the City Manager/Deputy City Clerk Mary Villegas, Finance Director Mike Howard, Administrative Assistant I Noemi Gregorio, Police Chief Keith Wise, Assistant City Manager Mark Hartunian, Fire Chief Jason Muscio, and Public Works Director/City Engineer Patrick Dobbins.
* Successor Agency Item
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Minutes Acceptance: Minutes of Mar 21, 2022 6:00 PM (CONSENT AGENDA) AGENDA
ITEM
4

PUBLIC NOTICE
This meeting is being conducted consistent with State of California Executive Order N-29-20 dated March 17, 2020, regarding the COVID-19 pandemic. The public may participate in person or online via zoom at https://us06web.zoom.us/j/89145261252 or call 1 (669) 900-6833 and use Meeting ID: 891 4526 1252. If you wish to make either a general public comment or to comment on a specific agenda item, please use the Raise Hand function. You will be allowed three minutes for your comments.

If you choose not to attend the City Council meeting but wish to make a comment on a specific agenda item, please submit your comment limited to 250 words or less by 12:00p.m. on Monday, March 21st to the City Clerk at [email protected].

PRESENTATIONS

2. Presentation of Resolution in Commemoration of the City’s 75th Year Anniversary Senator Caballero, via zoom, said it was an honor to recognize the City's 75th Anniversary. She elaborated on the City's history, the City's commitment to improve the quality of life of its residents, and what it has accomplished. She shared her experience has always been totally supportive, not only of the plans, visions and expectations of its citizens, but also the incredible activism of its youth through the Youth Council. She was very proud of the City, its activism, visionary perspective on how to move forward, and the center of economic activity that it has become.

Senator Caballero's Office Representative Marisa Hernandez, and Assemblymember Rivas' Office Representative Isabel Meza, presented the joint resolution prepared by the Senate District 12 and Assembly District 30 to the City.

Mayor Rios thanked them on behalf of the City of Gonzales.

Director of Community Engagement & Strategic Partnerships Gil invited the ladies to stay afterwards for a small reception.

Supervisor Lopez elaborated on his inspiration on the history of Gonzales, the heritage, and the way this community remembers its past in order to inform its future, as well as the power that Gonzales has built. He congratulated the City and presented a Certificate of Recognition celebrating its 75th Anniversary.

Mayor Rios thanked him on behalf of the City of Gonzales.

3. Quilt Presentation by Anna Mae Gazo
Director of Community and Strategic Partnerships Gil introduced Ms. Anna Mae Gazo, a Quilter and retired Teacher from Gonzales.

Anna Mae Gazo gifted a quilt she handmade to the City representing a sky view of Gonzales.

Mayor Rios thanked her on behalf of the City of Gonzales.

Packet Pg. 4
Minutes Acceptance: Minutes of Mar 21, 2022 6:00 PM (CONSENT AGENDA)

BUSINESS FROM THE PUBLIC

4. Business from the Public not on the Agenda; any member of the Public may address the Council for a period not to exceed three minutes on any subject not on the Agenda. The Council will listen to all communications, but may take no action.

Henry Martinez Sr. commented about a LULAC member who passed away last year and worked with him to find injustice in this town like noticing three white people from the east side on the board, and no one representing the north side; zones controlling the City; number of complaints in the Police Department; his last act was proceeding against the school to redistrict. He told the Council, except for the Mayor, they were the problems because they refused to work with him to file charges against the Police Department and he has now LULAC in the back of him. He said he hoped to have a meeting with the Chief to file charges against the officer who pushed him out the door. He said he wanted to make sure Miller takes the credit for LULAC for coming.

Henry Martinez Jr., 114 Tenth Street, talked about the Gonzales real news and a petition going around for the removal of the current Chief and several accusations against him and Officers; promoting an officer who was accused of rape to Captain; accepting responsibility of those in charge; and nothing being done. He said he will help push this petition. He also talked about no one representing the north side and having district voting.

April Martinez talked about coming for some of the officers and pointed to Council Member Miller saying he should not be on the Council at all; didn’t support Wise anymore; and supporting the Mayor and the Fire Chief.

Monica Rico talked about the Gloria students and their parents enjoying the visit from the Fire Department and thanked them for going. She commented that in appreciation, the parents want to help do fundraisers to help with whatever is needed in the fire house. She asked if someone could direct them where to start because the community is very thankful of what they do.

CONSENT AGENDA

5. Approve the Joint City Council and Successor Agency - Regular Meeting - March 7, 2022 Minutes

6. Approve City Accounts Payable Warrants #46492-46564

7. Community Engagement & Strategic Partnerships Activity Report

8. Fire Department Activity Report

9. Police Department Activity Report

10. Public Works/City Engineer Department Activity Report

11. Recreation Department Activity Report
RESULT: APPROVED [UNANIMOUS]
MOVER: Scott Funk, Mayor Pro Tem
SECONDER: Paul Miller, Council Member
AYES: Jose L. Rios, Scott Funk, Liz Silva, Lorraine Worthy, Paul Miller

REGULAR AGENDA

12. Fiscal Year 2020-2021 Audited Financial Statements and Management Report Staff Report: Finance Director Howard presented the staff report. *
*
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Minutes Acceptance: Minutes of Mar 21, 2022 6:00 PM (CONSENT AGENDA)

Public Comment: There was none.

Council Discussion: General discussion took place.

RESULT: APPROVED [UNANIMOUS]
MOVER: Scott Funk, Mayor Pro Tem
SECONDER: Liz Silva, Council Member
AYES: Jose L. Rios, Scott Funk, Liz Silva, Lorraine Worthy, Paul Miller

13. Fiscal Year 2021-2022 Mid-Year Financial Report
Staff Report: City Manager Mendez presented the staff report.

Public Comment: There was none.

Council Discussion: General discussion took place.

RESULT: APPROVED [UNANIMOUS]
MOVER: Scott Funk, Mayor Pro Tem
SECONDER: Paul Miller, Council Member
AYES: Jose L. Rios, Scott Funk, Liz Silva, Lorraine Worthy, Paul Miller

BUSINESS FROM CITY COUNCIL

14. City Council Board/Committee Reports
a. League of California Cities Monterey Bay Division
No report.
b. Association of Monterey Bay Area Governments
Mayor Pro Tem Funk reported on the last meeting regarding the housing allocations. c. Monterey Salinas Transit
Council Member Worthy reported on the electric vehicles by 2030; purchase of 6 hybrid vehicles; and donation of buses.
d. City & School Joint Steering Committee
City Manager Mendez mentioned due to the changes in the district, it will take longer to have a meeting.
e. Economic Development Committee
City Manager Mendez reported that he was waiting for an Economic Development report for the industrial park area and once the draft is out, he will work on scheduling a meeting.

Mayor Rios said he had the information he was going to report at the last Council meeting on the TAMC meeting about approval of four projects, two in Castroville, one in Salinas and one in King City. In regard to the Mayors meeting, he reported on the State budget: $2 billion for homelessness, $1.5 billion for mental health, $2 billion to low income housing.

15. Oral Communications
Youth Commissioner Flores reported on the meeting they had with the Soledad Youth Council where they discussed what projects they're doing and what similar interest Gonzales has; and participation in a summit with Blue Zones and the school to learn about healthy foods.

Council Member Miller said it was great to see the financial reports and good outlook for the City.

He thanked staff for all their work.

Packet Pg. 6
Minutes Acceptance: Minutes of Mar 21, 2022 6:00 PM (CONSENT AGENDA)

Mayor Pro Tem Funk appreciated staff's effort on the financial reports, as well as the Fire and Public Works Departments.

Council Member Worthy reminded everyone about the food distribution this Friday at the Community Church and people should start lining up around 9am since the food truck has been getting there late.

BUSINESS FROM CITY MANAGER

16. Oral Communications
City Manager Mendez reported on setting up a committee of the Council to meet with staff on the Community Center Complex Project. He said there will be a lot of decisions coming to the Council in the near future and he believes it makes sense to work with the Mayor and a Council Member before presenting them to the whole Council.

Director of Community Engagement and Strategic Partnerships Gil reminded everyone about the April 2nd Car Show event with entertainment and food to continue the celebration of the 75th Anniversary.

ADJOURNMENT
RESULT: APPROVED [UNANIMOUS]
MOVER: Scott Funk, Mayor Pro Tem
SECONDER: Liz Silva, Council Member
AYES: Jose L. Rios, Scott Funk, Liz Silva, Lorraine Worthy, Paul Miller The meeting was adjourned at 6:54 PM.

ATTEST:

Mary Villegas, Deputy City Clerk
Packet Pg. 7
Minutes Acceptance: Minutes of Mar 21, 2022 6:00 PM (CONSENT AGENDA) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 1
Time: 12:09 pm
Date: 03/18/2022
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
46565 03/18/22 Printed 1922 A & G PUMPING, INC. Porta Potties Centennial Park 416.25 ACTION COUNCIL OF 500.00

MONTEREY
46566 03/18/22 Printed 4233 Supplies & Activities for 75th 46567 03/18/22 Printed 108 AIRGAS Propane & Oxygen 157.03 46568 03/18/22 Printed 2 ALL - SAFE ALARMS Monthly Monitoring 520.00 ALVAREZ TECHNOLOGY 4,241.37
GROUP, INC.
46569 03/18/22 Printed 3893 New Laptop - Finance Dept.
46570 03/18/22 Printed 3033 ASAP SIGNS & PRINTING Nameplates 61.95 46571 03/18/22 Printed 2830 AT&T Internet Charges Acct # 157272955 100.94 46572 03/18/22 Printed 4117 AT&T Monthly Charges - March 399.28 46573 03/18/22 Printed 1618 AVAYA FINANCIAL SERVICES Maintenance Agreement - March 641.26 BANUELOS ENTERPRISES, 119.12
INC.
46574 03/18/22 Printed 1054 Fuel - Patrol Car
46575 03/18/22 Printed 3229 BRYANT JOLLEY C.P.A. FY 2020-21 Audit 38,000.00 CAL-WEST LIGHTING AND 1,142.47
SIGNAL
46576 03/18/22 Printed 3838 Signal Repair
46577 03/18/22 Printed 372 CALBO Webinar ADU 70.00
46578 03/18/22 Printed 1117 CALIFORNIA RURAL WATER Subscription 857.00 CALIFORNIA STRATEGIES, 20,000.00
LLC
46579 03/18/22 Printed 3789 Community Center Grant Appl. 46580 03/18/22 Printed 3187 ANDREA CASILLAS Employee Computer Loan 2,000.00 CASNER EXTERMINATING, 260.00
INC.
46581 03/18/22 Printed 889 Extermination Services
CENTRAL VALLEY 78.00

TOXICOLOGY, INC
46582 03/18/22 Printed 3061 CVT
46583 03/18/22 Printed 1007 CORELOGIC INFORMATION Metroscan Online - Feb. 199.00 46584 03/18/22 Printed 2856 COUNTY OF SANTA CLARA Cop Link Information System 344.18 46585 03/18/22 Printed 1482 CSC OF SALINAS Backhoe Repair/Maint. 132.84 46586 03/18/22 Printed 3095 CSG CONSULTANTS INC. February Plan Checks 1,010.65 46587 03/18/22 Printed 1821 CSK AUTO, INC. Vehicle Maint. 372.66 CYPRESS COAST FORD 293.65

LINCOLN
46588 03/18/22 Printed 4063 Vehicle Maint. Unit # 5
46589 03/18/22 Printed 3164 DAVID M. RAMIREZ DDS Utility Reimbursement - March 50.00 46590 03/18/22 Printed 3876 DAY CARTER & MURPHY LLP GEA Microgrid Project - Feb. 3,610.00 DE LAGE LANDEN PUBLIC 22,692.17

FINANCE
46591 03/18/22 Printed 2895 Solar Project Payment
46592 03/18/22 Printed 4184 DIMES MEDIA CORPORATION Sports Sponsorship - Feb. 340.00 46593 03/18/22 Printed 3595 JULIE DOUGLAS Per Diem-Pool School Cert Trng 3/23/22 - 100.00 3/25/22
46594 03/18/22 Printed 3752 DUDEK Design of IW System 78,822.50 46595 03/18/22 Printed 3466 ECMS, INC. Uniform Repair 947.54 46596 03/18/22 Printed 507 EMC PLANNING GROUP INC. CEQA Svcs. for Community Ctr. 7,119.52 GOLDEN STATE TRUCK & 2,633.01

TRAILER
46597 03/18/22 Printed 3653 Repairs to Water Tender
GOLDSTAR BUICK PONTIAC 543.92
GMC
46598 03/18/22 Printed 1084 Vehicle Maint. PW # 6
46599 03/18/22 Void 03/18/22 Void Check 0.00
GONZALES ACE HARDWARE 442.18
INC.
46600 03/18/22 Printed 3274 Primer Spray
GREEN VALLEY FARM 367.04
SUPPLY
46601 03/18/22 Printed 1319 Gloves & Masks
46602 03/18/22 Printed 2215 HINDERLITER, DE LLAMAS & Sales Tax January - March 990.88 46603 03/18/22 Printed 3485 INFOSEND, INC. Utility Billing 1,190.33 46604 03/18/22 Printed 3351 INTRADO ENTERPRISE Maintenance Fee 2.16 46605 03/18/22 Printed 2818 JARVIS, FAY & GIBSON, LLP. Legal Svcs. - Vista Lucia January 2022 34,078.50 46606 03/18/22 Printed 3827 JC TREE EXPERTS INC. Tree Removal 3,250.00 46607 03/18/22 Printed 3878 JCR FENCING, INC. Gate Repair 2,000.00 46608 03/18/22 Printed 2450 ANGEL H. JOHNSTONE Consulting Svcs - CDBG Loan 13,941.53 Administration
46609 03/18/22 Printed 2684 ANITA KEREZSI SB 90 Administration 1,000.00 46610 03/18/22 Printed 68 LA PLAZA BAKERY Mix Bread & Coffee 23.05 LAW ENFORCEMENT 800.00

PSYCHOLOGICAL
46611 03/18/22 Printed 1852 Employment Psych. Assessments AGENDA
ITEM
Packet Pg. 8
Attachment: Warrants #46565-46652 (2377 : Approve City Accounts Payable Warrants #46565-46652) 5 City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number Vendor Name Check Description
RABOBANK Page: 2
Time: 12:09 pm
Date: 03/18/2022
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
46612 03/18/22 Printed 2686 DAVID & DONA LLOYD After Hours Answering Services 89.00 46613 03/18/22 Printed 204 LN CURTIS & SONS Charging System 205.27 46614 03/18/22 Printed 72 MISSION UNIFORM SERVICE Mats & Towels 991.33 MONTEREY COUNTY 500.00

BUSINESS
46615 03/18/22 Printed 2721 Partner Membership
MONTEREY COUNTY 909.63

DISTRICT
46616 03/18/22 Printed 815 Blood Alcohol Fees for DWI 11550 H&S Cases
46617 03/18/22 Printed 245 MONTEREY COUNTY HEALTH Industrial 7,346.25 MONTEREY COUNTY 2,043.11

INFORMATION
46618 03/18/22 Printed 243 Monthly Radio I.T. Charges December 2021
46619 03/18/22 Printed 3270 ISABEL NAVARRO Reimb. Girls Softball Jerseys 282.45 46620 03/18/22 Printed 91 P. G. & E. Utilities Acct # 1024308210-3 18,709.74 46621 03/18/22 Printed 91 P. G. & E. Utilities Acct # 0006301263-7 4,392.87 46622 03/18/22 Printed 3821 PASSPORT LABS, INC. Citation Management Fees 400.00 46623 03/18/22 Printed 3538 PECKHAM & MCKENNEY Community Dev. Director Search 8,500.00 PUBLIC AGENCY 477.62

RETIREMENT
46624 03/18/22 Printed 3194 Plan Admin Fees - Jan
46625 03/18/22 Printed 4092 RAZZO LINK, INC. Internet Service 75.09 SAFETY-KLEEN SYSTEMS, 240.85
INC.
46626 03/18/22 Printed 189 Solvent
SALINAS VALLEY PRO 122.34
SQUAD
46627 03/18/22 Printed 2979 Uniform Pants
SALINAS VALLEY SOLID 27,942.81
WASTE
46628 03/18/22 Printed 258 Tonage Fees - February
SCHAAF & WHEELER, 1,200.00

CONSULTING
46629 03/18/22 Printed 3894 Alpine Camp Water/Sewer Design 46630 03/18/22 Printed 2449 SMITH & ENRIGHT Irrigation Repair 1,496.50 46631 03/18/22 Printed 2673 SPECTRUM Cable Services 428.48 46632 03/18/22 Printed 1857 SUMMIT UNIFORM CORP. Uniforms & Equipment 2,839.38 46633 03/18/22 Printed SWINERTON SWINERTON BUILDERS PM Svcs for Community Center 38,754.00 46634 03/18/22 Printed 3445 TELSTAR INSTRUMENTS Flow Meter Replacement 4,624.78 46635 03/18/22 Printed 3880 THE MAYNARD GROUP Video Conferencing 280.30 THE SPCA OF MONTEREY 830.00
COUNTY
46636 03/18/22 Printed 1890 SPCA Monthly Services - Jan 46637 03/18/22 Printed 4086 TRANS UNION LLC Background - Officer Hire 3.46 TRANS UNION RISK AND 110.00

ALTERNATI
46638 03/18/22 Printed 3175 TLO Monthly
46639 03/18/22 Printed 27 TRI - CITIES DISPOSAL Drop Box Services - Feb. 799.69 TRI-COUNTY FIRE 631.42

PROTECTION, IN
46640 03/18/22 Printed 142 Fire Sprinkler Annual Inspect. 46641 03/18/22 Printed 3718 TRINI'S PLUMBING Parks - Spray Paint 416.86 46642 03/18/22 Printed 3287 TIFFANY TWISSELMANN Per Diem-Pool School Cert Trng 3/23/22 - 100.00 3/25/22
46643 03/18/22 Printed 3577 U.S. BANK 2/7/22 Keith Wise Acct # 4866 9145 5550 768.67 8537
46644 03/18/22 Printed 3577 U.S. BANK 3/7/22 Patrick Dobbins Acct # 4866 9145 4,782.09 5550 8537
46645 03/18/22 Printed 3577 U.S. BANK 3/7/22 City of Gonzales Acct # 4866 9145 706.13 5550 8537
VALLEY ELECTRIC MOTOR 6.24

SERVICE
46646 03/18/22 Printed 132 Cordgrip
46647 03/18/22 Printed 3471 VERIZON WIRELESS Police Mobile Broadband - Feb. 304.08 46648 03/18/22 Printed 3895 VESTRA RESOURCES INC. GIS Support 571.25 46649 03/18/22 Printed 99 VOSTI'S, INC. Proxy Sys. Tester -Nissan Leaf 673.42 46650 03/18/22 Printed 2919 WAGEWORKS Aflac Compliance & Admin Fees 200.00 February
WINZER FRANCHISE 178.33

COMPANY
46651 03/18/22 Printed 3615 Brake Cleaner
Total Checks: 87 Checks Total (excluding void checks): 380,795.42 Total Payments: 87 Bank Total (excluding void checks): 380,795.42 Total Payments: 87 Grand Total (excluding void checks): 380,795.42 Packet Pg. 9
Attachment: Warrants #46565-46652 (2377 : Approve City Accounts Payable Warrants #46565-46652) City Of Gonzales
Check Register Report
Check
Date
Check
Number
Status Amount
BANK:

Vendor
Number
Vendor Name Check Description
RABOBANK Page: 1
Time: 9:45 am
Date: 03/29/2022
Void/Stop
Date
Reconcile
Date
RABOBANK Checks
VALLEY TROPHIES & 934.09

DETECTORS
46652 03/29/22 Printed 4189 Award Plaques Car Show
Total Checks: 1 Checks Total (excluding void checks): 934.09 Total Payments: 1 Bank Total (excluding void checks): 934.09 Total Payments: 1 Grand Total (excluding void checks): 934.09 Packet Pg. 10
Attachment: Warrants #46565-46652 (2377 : Approve City Accounts Payable Warrants #46565-46652) City of Gonzales

PUBLIC WORKS / CITY ENGINEER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: April 4, 2022
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: René L. Mendez, City Manager
SUBJECT: Resolution No. 2022-16 Authorizing Execution of an Agreement with ENGIE Services

RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2022-16, A Resolution of the City Council of the City of Gonzales Authorizing Execution of an Operation & Maintenance Agreement with ENGIE Services in the amount of $225,000 which includes a contingency budget of $17,029 for maintenance of six City-owned solar arrays for a five-year period.

BACKGROUND
The City of Gonzales currently has solar arrays located at the following facilities:

1. Well #6

2. Police Station

3. Corporation Yard

4. Community Pool

5. Constellation Winery (provides electric power for City Well #4)

6. Wastewater Treatment Plant
The City solar array facilities referenced above were installed between 2011 and 2016 by Chevron Energy Solutions. On December 1, 2011, the City entered into an agreement with Chevron Energy Solutions for maintenance of City solar facilities (#1 through #4) for a 5-year term. During the term of said agreement, Chevron Energy Solutions transferred its rights and obligations under the agreement to OpTerra Energy Services. Additionally, on February 25, 2016, the City entered into an agreement with OpTerra Energy Services for maintenance of City solar facilities (#5 and #6) for a 5-year term. Therefore, OpTerra AGENDA
ITEM
6 Packet Pg. 11
Energy Services was obligated, under the two (2) agreements (Chevron Energy Solutions and OpTerra Energy Services), to provide maintenance for all City solar facilities (#1 through #6) for a 5-year term. • The agreement with Chevron Energy Solutions for the installation and maintenance of the solar arrays at Constellation Winery, which provides electric power for City Well #4 and at the City Wastewater Treatment Plant, was executed on December 1, 2011. • The agreement with OpTerra Energy Services (successor to Chevron Energy Solutions) was executed on February 25, 2016. The agreement provided for installation and maintenance of the City solar arrays at Well #6, the Police Station, Corporation Yard, and the Community Pool.

Note: During the term of the OpTerra Energy Services agreement, OpTerra Energy Services transferred its rights and obligations under the agreement to ENGIE Services, Inc.

REVIEW & ANALYSIS
The maintenance agreements referenced above have expired. As such, staff coordinated with staff of ENGIE Services to prepare the subject Operations and Maintenance Agreement to provide for continued solar array maintenance, and to incorporate the maintenance of the six City-owned solar array facilities into one agreement. The maintenance tasks under the Agreement include:

1. Visual inspections

2. Cleaning the solar array panels

3. System testing

4. Inverter cleaning

5. System monitoring
The cost for services provided by ENGIE Services is presented in the Annual Cost Table below:

Year 1 $39,172
Year 2 $40,347
Year 3 $41,558
Year 4 $42,805
Year 5 $44,089
Total = $207,971
Staff recommends that the City Council authorize execution of the Operations and Maintenance Agreement with ENGIE Services for maintenance of the six City-owned solar arrays for a five-year period.

How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.

Explain: The City of Gonzales’ decision to use alternative energy to save funds and preserve our environment, shows a commitment to preservation of our small-town charm.

Explain how the Recommendation Directly Implements the Mission Packet Pg. 12
The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: The quality of life in the City of Gonzales has been enhanced through the development of alternative energy sources. The City of Gonzales will recognize better air quality, save money, and meet government regulations by operating the solar array facilities.

City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: See Vision explanation above.

ALTERNATIVES
Amend or modify staff recommendation.

BUDGET IMPACT
This Agreement will be funded from Solar Project funds (Budget Fund 550).

CONCLUSION
It is recommended that the City Council adopt Resolution No. 2022-16, A Resolution of the City Council of the City of Gonzales Authorizing Execution of an Operation & Maintenance Agreement with ENGIE Services in the amount of $225,000 which includes a contingency budget of $17,029 for maintenance of six City-owned solar arrays for a five-year period.

Attachments:

1. Resolution No. 2022-16

2. Engie Services Agreement
Packet Pg. 13
RESOLUTION NO. 2022-16

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GONZALES

AUTHORIZING EXECUTION OF AN OPERATION & MAINTENANCE
AGREEMENT WITH ENGIE SERVICES IN THE AMOUNT OF $225,000, WHICH INCLUDES A CONTINGENCY BUDGET OF $17,029 FOR MAINTENANCE OF SIX

CITY-OWNED SOLAR ARRAYS FOR A FIVE-YEAR PERIOD
WHEREAS, the City has solar arrays at Well 6, the Police Station, the Corporation Yard, the Community Pool, Constellation Winery (provides electric power for City Well 4) and the Wastewater Treatment Plant; and
WHEREAS, an agreement with Chevron Energy Solutions for the installation and maintenance of solar arrays at Constellation Winery which provides electric power for City Well 4 and at the Wastewater Treatment Plant was executed on December 1, 2011; and WHEREAS, an agreement with OpTerra Energy Services (successor to Chevron Energy Solutions) was executed on March 21, 2016 for installation and maintenance of the solar arrays at Well 6, the Police Station, Corporation Yard and the Community Pool; and WHEREAS, Engie Services acquired OpTerra Energy Services and took over these contracts and provided City staff with an Operations and Maintenance Agreement for all six of the city owned solar arrays; and
WHEREAS funding for maintenance of the City-owned solar arrays comes from Fund 550 (Solar Project Fund); and
WHEREAS, staff recommends that the City Council authorize execution of a new Operation and Maintenance Agreement with ENGIE Services for maintenance of all six Cityowned solar arrays for a five-year period.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Gonzales hereby authorizes the execution of an Operation & Maintenance Agreement with Engie Services for maintenance of the City-owned solar arrays for an initial five-year term for a not-toexceed contract amount of $225,000, which includes a contingency budget of $17,029 in the form attached hereto as 'Exhibit A' and by reference incorporated herein.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Gonzales duly held on the 4
th day of April 2022, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
_______________________________
Jose L. Rios, The Honorable Mayor
ATTEST:
__________________________
Mary Villegas, Deputy City Clerk
Packet Pg. 14
Attachment: Resolution No. 2022-16 [Revision 1] (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement Rev. Date: _______ Page 1 of 13 O&M
V 4/23/19

EXHIBIT A
DIR Project Registration # _ _ _ _ _ _
ENGIE Services Project #: _ _ _ _ _ -_ _ _
ENGIE Services Contract # R _______

OPERATION & MAINTENANCE AGREEMENT
DATED 22 March 2022
This OPERATION & MAINTENANCE AGREEMENT (this “Agreement”) is made and entered into as of May 1, 2022 by and between ENGIE Services U.S. Inc., a Delaware corporation, with California State Contractor’s License Number 995037 (“ENGIE Services U.S.”), and The City of Gonzales (“Customer”) and together with ENGIE Services U.S. the “Parties” and each of Customer and ENGIE Services U.S. a “Party”).

RECITALS
WHEREAS, Chevron Energy Solutions Company (as predecessor-in-interest to OpTerra Energy Services, Inc. and ENGIE Services U.S.) and Customer entered into that certain Energy Services Contract dated as of December 1, 2011 (“Phase 1 Contract”), pursuant to which ENGIE Services U.S, engineered, installed, monitored and maintained certain Generating Facilities. (“Phase 1 Generating Facilities”); and WHEREAS, OpTerra Energy Services, Inc. (as predecessor-in-interest to ENGIE Services U.S.) and Customer entered into that certain Energy Services Contract dated as of March 7, 2016 (“Phase 2 Contract”), pursuant to which ENGIE Services U.S, designed, installed, monitored and maintained certain additional Generating Facilities (“Phase 2 Generating Facilities”). The Phase 1 Generating Facilities and the Phase 2 Generating Facilities are collectively referred to herein as the “Generating Facilities”; and
WHEREAS, Customer desires to supersede the Phase 1 Contract and the Phase 2 Contract and combine the monitoring and maintenance services for the Generating Facilities under one contract; and WHEREAS, ENGIE Services U.S. is a full-service energy services company with the technical capabilities to provide services to Customer including, but not limited to, maintenance of Generating Facilities (as defined below); and WHEREAS, the Parties agree that the Phase 1 Contract and Phase 2 Contract are hereby superseded by this Operations & Maintenance Agreement and ENGIE Services U.S. has agreed to monitor and maintain the Generating Facilities on the terms and subject to the conditions of this Agreement; NOW, THEREFORE, Customer and ENGIE Services U.S. hereby agree as follows:

ARTICLE 1. DEFINITIONS
For purposes of this Agreement and its Attachments, defined terms will have the following meanings:
“Abnormally Severe Weather Conditions” means typhoons, hurricanes, tornadoes, lightning storms and other climatic and weather conditions that are abnormally severe for the period of time when, and the area where, such storms or conditions occur, in each case occurring at a property, the access roads to a property, or any other location where O&M Services are then being performed. For the avoidance of doubt, the term “Abnormally Severe Weather Conditions” specifically includes rain, snow or sleet in excess of one hundred fifty percent (150%) of the median level over the preceding ten (10) year period for the local geographic area and time of year in which such rain, snow or sleet accumulates.
“Agreement” is defined in the Preamble, and includes all Attachments hereto (all of which are incorporated herein), as well as all amendments, restatements, supplements and other modifications hereto. “Annual O&M Fee” means a fee payable annually in advance by Customer to ENGIE Services U.S., in consideration of the provision of O&M Services. The Annual O&M Fee for the first O&M Period will be as stated in the below payment Schedule.

Packet Pg. 15
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

Rev. Date: _______ Page 2 of 13 O&M
V 01/05/22
Payment Schedule:

Year Site kW DC Electrical
Services
Panel
Washing
PV
Monitoring
Services
Total
Police Station 55.0 $ 1,951 $ 790 $ 536 $ 3,278
Swimming Pool 16.0 $ 568 $ 222 $ 536 $ 1,325
2022 Well #3 Corporation
Yard 53.0 $ 1,880 $ 721 $ 536 $ 3,137
Y1 Well #6 78.0 $ 5,534 $ 1,054 $ 536 $ 7,124
Constellation Winery
(Leased Premises,
Adjacent to Well#4) 252.0 $ 4,951 $ 5,052 $ 536 $ 10,539 Wastewater Treatment
Plant 210.0 $ 6,053 $ 7,180 $ 536 $ 13,769
Total 664.0 $ 20,937 $ 15,019 $ 3,216 $ 39,172
Police Station 210.0 $ 2,010 $ 814 $ 552 $ 3,376
Swimming Pool 252.0 $ 585 $ 229 $ 552 $ 1,365
2023 Well #3 Corporation
Yard 55.0 $ 1,937 $ 743 $ 552 $ 3,231
Y2 Well #6 16.0 $ 5,700 $ 1,085 $ 552 $ 7,338
Constellation Winery
(Leased Premises,
Adjacent to Well#4) 53.0 $ 5,100 $ 5,204 $ 552 $ 10,856 Wastewater Treatment
Plant 78.0 $ 6,234 $ 7,395 $ 552 $ 14,182
Total 664.0 $ 21,565 $ 15,470 $ 3,312 $ 40,347
Police Station 210.0 $ 2,070 $ 838 $ 569 $ 3,477
Swimming Pool 252.0 $ 602 $ 235 $ 569 $ 1,406
2024
Well #3 Corporation
Yard 55.0 $ 1,995 $ 765 $ 569 $ 3,328
Y3 Well #6 16.0 $ 5,871 $ 1,118 $ 569 $ 7,558
Constellation Winery
(Leased Premises,
Adjacent to Well#4) 53.0 $ 5,252 $ 5,360 $ 569 $ 11,181 Wastewater Treatment
Plant 78.0 $ 6,421 $ 7,617 $ 569 $ 14,607
Total 664.0 $ 22,212 $ 15,934 $ 3,412 $ 41,558
Police Station 210.0 $ 2,132 $ 864 $ 586 $ 3,581
Swimming Pool 252.0 $ 620 $ 242 $ 586 $ 1,448
2025 Well #3 Corporation
Yard 55.0 $ 2,055 $ 788 $ 586 $ 3,428
Y4 Well #6 16.0 $ 6,048 $ 1,151 $ 586 $ 7,785
Constellation Winery
(Leased Premises,
Adjacent to Well#4) 53.0 $ 5,410 $ 5,521 $ 586 $ 11,517 Packet Pg. 16
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

Rev. Date: _______ Page 3 of 13 O&M
V 01/05/22
Wastewater Treatment
Plant 78.0 $ 6,614 $ 7,845 $ 586 $ 15,045
Total 664.0 $ 22,879 $ 16,412 $ 3,514 $ 42,805
Police Station 210.0 $ 2,196 $ 890 $ 603 $ 3,689
Swimming Pool 252.0 $ 639 $ 250 $ 603 $ 1,492
2026
Well #3 Corporation
Yard 55.0 $ 2,116 $ 811 $ 603 $ 3,531
Y5 Well #6 16.0 $ 6,229 $ 1,186 $ 603 $ 8,018
Constellation Winery
(Leased Premises,
Adjacent to Well#4) 53.0 $ 5,572 $ 5,686 $ 603 $ 11,862 Wastewater Treatment
Plant 78.0 $ 6,813 $ 8,081 $ 603 $ 15,497
Total 664.0 $ 23,565 $ 16,904 $ 3,620 $ 44,089
“Applicable Law” means any statute, law, treaty, building code, rule, regulation, ordinance, code, enactment, injunction, writ, order, decision, authorization, judgment, decree, protocol, procedure or other legal or regulatory determination or restriction by a court or Governmental Authority of competent jurisdiction, as may be in effect at the time the O&M Services are undertaken.
“Applicable Permits” means all permits, approvals, inspections and certifications required to be issued by any Governmental Authority in connection with the O&M Services. “Arbitration Rules” is defined in ARTICLE 9.
“Customer” is defined in the Preamble.
“Dispute” is defined in ARTICLE 9.
“ENGIE Services U.S.” is defined in the Preamble.
“Force Majeure” means acts or events that are beyond the reasonable control of the affected Party and not caused by the negligence or fault of the Party affecting, including but not limited to any of the following: (i) acts of God; (ii) acts of the public enemy or terrorist acts; (iii) relocation or construction of transmission facilities or the shutdown of such facilities for the purpose of necessary repairs; (iv) work by local utility; (v) flood, earthquake, tornado, storm, fire, explosions, lightning, landslide or similar cataclysmic occurrence; (vi) sabotage, vandalism, riots or civil disobedience; (vii) labor disputes or strikes; (viii) labor or material shortages, delay in manufacturing and deliveries of equipment and supply chain disruptions (if such delay is caused by an event that would otherwise constitute Force Majeure); (ix) restraint by court order or public authority (whether valid or invalid); (x) inability to obtain or keep in force any Applicable Permit; (xi) epidemic or pandemic; (xii) Abnormally Severe Weather Conditions; (xiii) an annual level of direct beam solar resource availability that is less than or equal to 90% of historical averages as measured by long-term weather data (minimum 5 years) collected at the applicable Project Location and/or other reliable calibrated and appropriate weather station representative of such Project Location; (xiv) requirement by utility that any Generating Facility discontinue operation for any reason; (xv) appropriation or diversion of electricity by sale or order of any Governmental Authority; (xvi) any other action by any Governmental Authority which prevents or inhibits the Parties from carrying out their respective obligations under this Agreement (including an unstayed order of a court or administrative agency having the effect of subjecting the sales of energy output to federal or state regulation of prices and/or services); or (xvii) any utility power outage at any Project Location. “Generating Facility” means each photovoltaic, solar powered generating facility located at a Project Location, and includes all associated photovoltaic panels, mounting assemblies, inverters, converters, metering, lighting fixtures, transformers, ballasts, disconnects, combiners, switches, wires and other equipment that may be necessary to connect such solar power plant to the applicable utility meter. “Governmental Authority” means any federal, state, regional, town, county, city, municipal or local government agency, department or regulatory body having jurisdiction under Applicable Law over the matter in question. “Hazardous Substances” means (i) any hazardous, toxic, or dangerous wastes, substances, chemicals, constituents, contaminants, pollutants, and materials and any other carcinogenic, liquids, corrosive, ignitable, radioactive, reactive, toxic, or otherwise hazardous substances or mixtures (whether solids, liquids, gases) now or at any time subject to regulation, control, remediation, or otherwise addressed under Applicable Laws; (ii) any “hazardous substance” as defined by the Resource, Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et Packet Pg. 17
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

Rev. Date: _______ Page 4 of 13 O&M
V 01/05/22
seq.), as amended, and regulations promulgated thereunder; (iii) any “hazardous, toxic or dangerous waste, substance or material” specifically defined as such in 42 U.S.C. §9601 et seq.), as amended and regulations promulgated thereunder; and (iv) any hazardous, toxic or dangerous waste, substance, or material as defined in any so-called “superfund” or “superlien” law.
“Interest” means interest calculated at the lesser of (i) the prime rate plus two percent (2%) or (ii) the maximum rate permitted by Applicable Law. The “prime rate” will be “Prime Rate” of interest per annum for domestic banks as published in The Wall Street Journal in the “Money Rates” section. “O&M Commencement Date” means the first day of the month immediately following the later of (i) the full execution of this Agreement, and (ii) ENGIE Services U.S.’s receipt of the Annual O&M Fee for the first O&M Period. “O&M Period” means each one-year period following the O&M Commencement Date. “O&M Services” means the maintenance services to be performed by ENGIE Services U.S. in accordance with the terms and subject to the conditions of this Agreement.
“Party” and “Parties” are defined in the Preamble.
“Project Location” means that area or areas where the Generating Facilities are installed, as set forth in Attachment A.
“Term” is defined in Section 2.02.

ARTICLE 2. ANNUAL O&M FEE; TERM
Section 2.01 The Annual O&M Fee for the first O&M Period will be invoiced by ENGIE Services U.S. to Customer in a lump sum upon the execution of this Agreement. All subsequent Annual O&M Fees will be invoiced by ENGIE Services U.S. on the first day of the corresponding O&M Period. The Customer, or its designee, will pay ENGIE Services U.S. the Annual O&M Fee, without any retention amount withheld, within thirty (30) calendar days after its receipt of the corresponding invoice. Unless Customer gives ENGIE Services U.S. prior written notice of its intent to terminate the O&M Services, any failure to timely pay the Annual O&M Fee in accordance with this Agreement will be a material default by Customer hereunder, and ENGIE Services U.S., in addition to any other legal, contractual and equitable remedies available to it, will have no obligation thereafter to provide O&M Services. Any amount not paid when due will, from and after the due date, bear Interest. Accrued and unpaid Interest on past due amounts (including Interest on past due Interest) will be due and payable upon demand. The Annual O&M Fee is not refundable for any reason.

Section 2.02 So long as Customer pays to ENGIE Services U.S. the Annual O&M Fee, ENGIE Services U.S. will provide the O&M Services with respect to the Generating Facilities at the Project Locations, all as described in this Agreement, for an initial term of up to five (5) years (the “Initial Term”) from the O&M Commencement Date on an annualized basis. Customer may renew this Agreement for an initial five (5) year term (“Renewal Term”) by providing ENGIE Services U.S. written notice at least ninety (90) days in advance fo the expiration of the Initial Term. The Annual O&M Fee for the Renewal Term will be negotiated by the Parties in good faith and will be based on then-current prevailing market wages and conditions.

Section 2.03 If (i) Customer notifies ENGIE Services U.S. in writing of its intent to terminate the O&M Services, or (ii) Customer is in default of any of its obligations under this Agreement (including its obligation to pay the Annual O&M Fee), the obligation of ENGIE Services U.S. to provide the O&M Services will also be terminated.

ARTICLE 3. MAINTENANCE SERVICES
Section 3.01 ENGIE Services U.S. will provide the following O&M Services during the term as stated in attachment A.:

Section 3.02 Repair O&M Services. If a Generating Facility is damaged and requires safe-off, repair, demolition and/or reconstruction, or otherwise requires repair outside of warranty, Customer must contact the ENGIE Services U.S. PV Operations & Maintenance Manager. In the event of damage, any component of the Generating Facility installed by ENGIE Services U.S. can be repaired or reconstructed by ENGIE Services U.S. at Customer’s request. Customer must submit a request for quotation to the ENGIE Services U.S. PV Operations & Maintenance Manager. ENGIE Services U.S. will inspect the damage and provide a written quotation and complete scope of work to Customer to restore the Generating Facility to normal operational condition. Before proceeding with repairs, ENGIE Services U.S. and Customer must execute a work order, on ENGIE Services U.S.’s form, for the agreed scope of work and quotation amount. Repair work is done on a time and materials basis. Standard Business Hours are M-F, 7am to 5pm. Non-business Hours & Saturdays Equals 1.5x Rates. Sundays & Holidays Equals 2.0x Rates.

Packet Pg. 18
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

Rev. Date: _______ Page 5 of 13 O&M
V 01/05/22
Labor Category Straight
Time
Hourly Rate – PV Electrical Journeyman Technician1 $/hr. County Labor Rate
Hourly Rate – PV Electrical Apprentice Technician1 $/hr. County Labor Rate
Hourly Rate – Engineering2 $/hr. $ 170.00
Hourly Rate – Administrative2 $/hr. $ 65.00
Mileage $ IRS Rate
Material mark-up % % 15.00
Lift rental fee $
Current
Market Price
1Trade Hourly rate will be adjusted based on the current year of the local prevailing wage determination plus Burden, requirement for either travel or subsistence and lodging, and markup for services being requested.
2Escalated according to an inflation rate to the year in which service will occur .

Section 3.03 Upon completion of any maintenance or repair work, ENGIE Services U.S. will update service logs detailing the work performed, location and any notes relevant to safe and efficient operations. These service logs will be compiled and submitted to Customer on a semi-annual basis.

ARTICLE 4. O&M SERVICES AND EQUIPMENT TO BE COVERED BY CUSTOMER Section 4.01 ENGIE Services U.S.’s obligations under this Agreement are expressly conditioned upon Customer’s payment of the Annual O&M Fee and providing and being responsible for the following, without cost to ENGIE Services U.S.:
(i) Making the Generating Facilities described herein available to ENGIE Services U.S. as of the O&M Commencement Date.
(ii) Operating and maintaining security systems associated with the Generating Facilities. (iii) Maintaining all landscaping in and around Generating Facilities including tree trimming. (iv) Allowing ENGIE Services U.S. and its personnel access as necessary to the Generating Facilities, and any related areas that may be reasonably necessary for performance of the O&M Services, including reasonable work, parking, and equipment staging areas. (v) Allowing ENGIE Services U.S. and its personnel to access electrical power and other utilities then existing at the Generating Facilities as necessary for ENGIE Services U.S. to satisfy its obligations under this Agreement.
(vi) Remediating, pursuant to Applicable Law, any known Hazardous Substances encountered by ENGIE Services U.S. during the performance of the O&M Services which Hazardous Substances were not deposited by ENGIE Services U.S., including any backfill with clean soil as may be reasonably required.
(vii) Insuring the Generating Facilities against loss due to acts of God and the public enemy; flood, earthquake, tornado, storm, fire; civil disobedience, sabotage, and vandalism.

Section 4.02 ENGIE Services U.S. will have no obligation to provide the O&M Services to the extent such provision of O&M Services is materially adversely affected by Customer’s failure to satisfy the conditions set forth in this Agreement.

ARTICLE 5. SUBCONTRACTORS
Section 5.01 Authority to Subcontract. ENGIE Services U.S. may delegate its duties and performance under this Agreement, and has the right to enter into agreements with any subcontractors and other service or material providers as ENGIE Services U.S. may select in its discretion to perform the O&M Services. ENGIE Services U.S. will not be required to enter into any subcontracts with parties whom ENGIE Services U.S. has not selected or subcontractors whom ENGIE Services U.S. has objection to using.

Section 5.02 Prevailing Wages. To the extent required by California Labor Code §1771 or other Applicable Law, all employees of ENGIE Services U.S. and ENGIE Services U.S.’s subcontractors performing O&M Services at the Project Location will be paid the per diem prevailing wages for the employee’s job classification in the locality in which the Packet Pg. 19
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

Rev. Date: _______ Page 6 of 13 O&M
V 01/05/22
O&M Services is performed. In accordance with California Labor Code §§1773 and 1773.2, Customer will obtain from the Director of Industrial Relations the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work, in the locality in which the O&M Services is to be performed, for each craft, classification or type of worker needed to execute the O&M Services at the Project Location, and will cause copies of such determinations to be kept on file at its principal office and posted at each Project Location. Customer will promptly notify ENGIE Services U.S. of any changes to any such prevailing wage determination.

ARTICLE 6. WARRANTY
EXCEPT FOR THE WARRANTIES PROVIDED IN THIS ARTICLE 6, ENGIE SERVICES U.S. MAKES NO WARRANTIES

IN CONNECTION WITH THE SERVICES PROVIDED UNDER THIS AGREEMENT, WHETHER EXPRESS OR IMPLIED

IN LAW, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES AGAINST INTELLECTUAL PROPERTY INFRINGEMENT. CUSTOMER WILL HAVE NO REMEDIES AGAINST EITHER ENGIE SERVICES U.S. OR ANY ENGIE SERVICES U.S.

SUBCONTRACTOR OR VENDOR FOR ANY DEFECTIVE MATERIALS OR EQUIPMENT INSTALLED, EXCEPT FOR

THE REPAIR OR REPLACEMENT OF SUCH MATERIALS OR EQUIPMENT IN ACCORDANCE WITH THE WARRANTIES INDICATED BELOW. SPECIFICALLY, NEITHER ENGIE SERVICES U.S., NOR ENGIE SERVICES U.S.’S SUBCONTRACTORS OR VENDORS, WILL BE LIABLE TO CUSTOMER FOR LOSS OF PROFITS OR FOR ANY

SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY.

Section 6.01 ENGIE Services U.S. warrants to Customer that material and equipment furnished under this Agreement will be of good quality and new, unless otherwise specifically required or permitted by this Agreement.

ENGIE Services U.S. further warrants that its workmanship provided hereunder, including its subcontractors’ workmanship, will be free of material defects for a period of one (1) year from the date of installation (“ENGIE Services U.S. Warranty”).

Section 6.02 Equipment and material warranties that exceed the ENGIE Services U.S. Warranty period will be provided directly by the equipment and/or material manufacturers and such warranties will be assigned directly to Customer, after the one (1) year period. During the ENGIE Services U.S. Warranty period, ENGIE Services U.S. will be Customer’s agent in working with the equipment and material manufacturers in resolving any equipment or material warranty issues. If any material defects are discovered within the ENGIE Services U.S. Warranty period, ENGIE Services U.S., or ENGIE Services U.S.’s subcontractors, will correct its defects, and/or ENGIE Services U.S. will work with the equipment or material manufacturer as Customer’s agent to facilitate the manufacturer’s correction of the equipment or material defect. Such warranty services will be performed in a timely manner and at the reasonable convenience of Customer. If a warranty issue arises on any equipment or material installed after the ENGIE Services U.S. Warranty period, and the equipment or material has a warranty period that exceeds one (1) year, Customer will contact the manufacturer directly to resolve such warranty issues and Customer acknowledges that the manufacturer will have sole responsibility for such issues.

Section 6.03 The warranties in this ARTICLE 6 expressly exclude any remedy for damage or defect caused by improper or inadequate maintenance of the installed equipment by service providers other than ENGIE Services U.S. or its subcontractors, corrosion, erosion, deterioration, abuse, modifications or repairs not performed by an authorized ENGIE Services U.S. subcontractor, improper use or operation, or normal wear and tear under normal usage. ENGIE Services U.S. will not be responsible for the cost of correcting a breach of warranty or defect to the extent that the manufacturer of the equipment that is the subject of a warranty hereunder does not honor its equipment warranty as a result of its termination of operations, insolvency, liquidation, bankruptcy or similar occurrence. Unless otherwise specified, all warranties hereunder, including without limitation those for defects, whether latent or patent, in design, engineering, or construction, will terminate one (1) year from the date of installation; and thereafter, ENGIE Services U.S. will have no liability for breach of any warranty or for any latent or patent defect of any kind pursuant to California Code of Civil Procedure §§337.15 and 338.

ARTICLE 7. LIMITATION OF LIABILITY; INSURANCE
Section 7.01 Waiver of Consequential Damages and Limitation of Liability. The liability of a defaulting Party will be limited to direct, actual damages. Neither Party will be liable to the other Party for any special, indirect, incidental or consequential damages whatsoever, whether in contract, tort (including negligence) or strict liability, including, but not limited to, operational losses in the performance of business such as lost profits or revenues or any increase in operating expense. Additionally, each Party waives any claims for negligence against the other Party to the greatest extent permitted by Applicable Law.

Section 7.02 ENGIE Services U.S. Insurance. ENGIE Services U.S. will maintain, or cause to be maintained, for the duration of this Agreement, the insurance coverage outlined in (a) through (f) below, and all such other insurance as required by Applicable Law. Evidence of coverage will be provided to Customer via an insurance certificate.

Packet Pg. 20
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

Rev. Date: _______ Page 7 of 13 O&M
V 01/05/22
(a) Workers’ Compensation/Employers Liability for states in which ENGIE Services U.S. is not a qualified selfinsured. Limits as follows:
* Workers’ Compensation: Statutory
* Employers Liability: Bodily Injury by accident $1,000,000 each accident Bodily Injury by disease $1,000,000 each employee
Bodily Injury by disease $1,000,000 policy limit
(b) Commercial General Liability insurance with limits of:
* $2,000,000 each occurrence for Bodily Injury and Property Damage * $4,000,000 General Aggregate - other than Products/Completed Operations * $2,000,000 Products/Completed Operations Aggregate
* $2,000,000 Personal & Advertising Injury
* $ 100,000 Damage to premises rented to ENGIE Services U.S.

Coverage to be written on an occurrence form. Coverage to be at least as broad as ISO form CG 0001 (04/13) or its equivalent forms, without endorsements that limit the policy terms with respect to: (1) provisions for severability of interest or (2) explosion, collapse, underground hazard. (c) Auto Liability insurance for owned, hired and non-owned vehicles with limits of $1,000,000 per accident.

Coverage to be written on an occurrence form.
(d) Professional Liability insurance with limits of:
* $1,000,000 per occurrence
* $1,000,000 aggregate
Coverage to be written on a claims-made form.
(e) Umbrella/Excess Liability Insurance. Limits as follows:
* $1,000,000 each occurrence
* $1,000,000 aggregate
Coverage terms and limits to apply excess of the per occurrence and/or aggregate limits provided for Commercial General Liability and Professional Liability written on a claims made form. Coverage terms and limits also to apply in excess of those required for Employers Liability and Auto Liability written on an occurrence form.
(f) Policy Endorsements.
* The insurance provided for Workers’ Compensation and Employers’ Liability above will contain waivers of subrogation rights against Customer. * The insurance provided for Commercial General Liability and Auto Liability above will:
(i) include Customer as an additional insured with respect to O&M Services performed under this Agreement, and
(ii) provide that the insurance is primary coverage with respect to all insureds.

ARTICLE 8. CONDITIONS BEYOND CONTROL OF THE PARTIES
If any Party is delayed in, or prevented from, performing or carrying out its obligations under this Agreement by reason of any Force Majeure, such circumstance will not constitute a default, and such Party will be excused from performance hereunder and will not be liable to the other Party for or on account of any loss, damage, injury or expense resulting from, or arising out of, such delay or prevention. Notwithstanding the foregoing, no Party will be excused from any payment obligations under this Agreement as a result of any Force Majeure.

ARTICLE 9. DISPUTE RESOLUTION; APPLICABLE LAW; VENUE; SEVERABILITY If a dispute arises out of or relates to this Agreement, or the services contemplated by this Agreement (a “Dispute”), either Party may initiate the dispute resolution process set forth in this ARTICLE 9 by giving notice to the other Party.

Senior executives for the Parties will meet, within thirty (30) calendar days after notice of the Dispute, in an attempt to resolve the Dispute and any other identified disputes or any unresolved issues that may lead to a dispute. If the senior executives of are unable to resolve a Dispute or if a senior management conference is not held within the time provided herein, either Party may submit the Dispute to mediation.

If the Dispute is not settled by senior management conference, the Parties will endeavor to settle the Dispute by mediation under the Commercial Mediation Procedures of the American Arbitration Association. Mediation is a condition Packet Pg. 21
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

Rev. Date: _______ Page 8 of 13 O&M
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precedent to arbitration or the institution of legal or equitable proceedings by either Party. Once one Party files a request for mediation with the other Party and with the American Arbitration Association, the Parties agree to conclude the mediation within sixty (60) calendar days after filing the request. Either Party may terminate the mediation at any time after the first session, but the decision to terminate must be delivered in person by the Party’s representative to the other Party’s representative and the mediator.

If the Dispute is not resolved by mediation within sixty (60) calendar days after the date of filing of the request for mediation, then the exclusive means to resolve the Dispute is final and binding arbitration. Either Party may initiate arbitration proceedings by notice to the other Party and the American Arbitration Association. The following provisions apply to all arbitration proceedings pursuant to this Article: (i) The place of arbitration will be the American Arbitration Association office closest to where the O&M Services were performed; (ii) one arbitrator will conduct the arbitral proceedings in accordance with the Commercial Arbitration Rules and Mediation Procedures (Excluding the Procedures for Large, Complex Commercial Disputes) of the American Arbitration Association currently in effect (“Arbitration Rules”) (to the extent of any conflicts between the Arbitration Rules and the provisions of this Agreement, the provisions of this Agreement prevail); (iii) the Parties will submit true copies of all documents considered relevant with their respective statement of claim or defense, and any counterclaim or reply (in the discretion of the arbitrator, the production of additional documents that are relevant and material to the determination of the Dispute may be required); (iv) the arbitrator does not have the power to award, and may not award, any punitive, indirect or consequential damages (however denominated); all arbitration fees and costs are to be shared equally by the parties, regardless of which Party prevails, and each Party will pay its own costs of legal representation and witness expenses; (v) the award must be in the form of a reasoned award; (vi) the Dispute will be resolved as quickly as possible, and the arbitrator will endeavor to issue the arbitration award within six (6) months after the date on which the arbitration proceedings were commenced; and (vii) the award will be final and binding and subject to confirmation and enforcement proceedings in any court of competent jurisdiction.

This Agreement is governed by and must be interpreted under the laws of the State where the O&M Services are performed, without regard to the jurisdiction’s choice of law rules.

If any term of this Agreement is declared by a court to be illegal, invalid or unenforceable, the legality, validity and enforceability of the other terms of this Agreement will not be affected or impaired thereby, and the rights and obligations of the Parties will be enforced as if the illegal, invalid or unenforceable term were revised to the minimum extent necessary to make such term legal, valid and enforceable.

ARTICLE 10. NOTICE
Any notice required or permitted hereunder will be deemed sufficient if given in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or delivered to a nationally recognized express mail service, charges prepaid, receipt obtained, to the address shown below or to such other persons or addresses as are specified by similar notice.

TO ENGIE SERVICES U.S.: ENGIE Services U.S.
500 12th St., Suite 300
Oakland CA, 94607
(844) 678-3772
Attention: Jamal Aboueljoud, Director of Project Management With a COPY TO: ENGIE Services U.S.
150 East Colorado Boulevard, Suite 360
Pasadena, CA 91105-3711
Tel: 626-377-4948
Attention: Contract Administrator
TO CUSTOMER: City of Gonzales
P.O. Box 647
Gonzales CA 93926
Tel: 831.675.2644
Fax: 831.675.2644
Attention: Rene Mendez, City Manager
ARTICLE 11. CONSENTS
Whenever a Party’s consent, approval, satisfaction, or determination will be required or permitted under this Agreement, and this Agreement does not expressly state that the Party may act in its sole discretion, such consent, approval, satisfaction, or determination will not be unreasonably withheld, qualified, conditioned, or delayed, whether or Packet Pg. 22
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

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not such a “reasonableness” standard is expressly stated in this Agreement. Whenever a Party’s cooperation is required for the other Party to carry out its obligations hereunder, each Party agrees that it will act in good faith and reasonably in so cooperating with the other Party or its designated representatives or assignees or subcontractors. Each Party will furnish decisions, information, and approvals required by this Agreement in a timely manner so as not to delay the other Party’s performance under this Agreement.

ARTICLE 12. CONSTRUCTION OF AGREEMENT
This Agreement is the result of arms-length negotiations between two sophisticated parties and ambiguities or uncertainties in it will not be construed for or against either Party, but will be construed in a manner that most accurately reflects the intent of the Parties when such Agreement was executed. Each of the Parties acknowledges and agrees that neither Party has provided the other with any legal, accounting, regulatory, financial or tax advice with respect to any of the transactions contemplated hereby, and each Party has consulted its own legal, accounting, regulatory, financial and tax advisors to the extent it has deemed appropriate.

ARTICLE 13. BINDING EFFECT
Except as otherwise provided herein, the terms and provisions of this Agreement will apply to, be binding upon, and inure to the benefit of the Parties hereto and their respective heirs, legal representatives, successors, and permitted assigns.

ARTICLE 14. NO WAIVER
The failure of ENGIE Services U.S. or Customer to insist upon the strict performance of this Agreement will not constitute or be construed as a waiver or relinquishment of either Party’s right to thereafter enforce the same in accordance with this Agreement in the event of a continuing or subsequent default on the part of ENGIE Services U.S. or Customer.

ARTICLE 15. HEADINGS
Headings and subtitles used throughout this Agreement are for the purpose of convenience only, and no heading or subtitle will modify or be used to interpret the text of any section.

ARTICLE 16. COUNTERPARTS; INTEGRATION
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which will constitute an original, but all of which when taken together will constitute a single contract. This Agreement constitutes the entire agreement among the Parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of this Agreement by email or fax will be effective as delivery of a manually executed counterpart of this Agreement.
[the Parties’ signatures appear on the following page]
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Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

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IN WITNESS WHEREOF, and intending to be legally bound, the Parties hereto subscribe their names to this Agreement by their duly authorized officers on the date first above written.

ENGIE SERVICES U.S.: CUSTOMER:

ENGIE Services U.S. Inc. City of Gonzales
By: ___________________________________ By:______________________________________ Name: Name:

Title: Title:

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Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

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ATTACHMENT A

SOLAR PREVENTATIVE MAINTENANCE STANDARD SCOPE OF WORK
Project Locations:

Site Name Site Address City State Zip Code
Police Station 109 4th Street Gonzales CA 93926
Swimming Pool 205 Elko Street Gonzales CA 93926
Well #3 Corportation Yard End C St. at Park Gonzales CA 93926 Well #6 375 Alta Street Gonzales CA 93926
Constellation Winery (Leased
Premises, Adjacent to Well#4)
800 S. Alta Street Gonzales CA 93926
Wastewater Treatment Plant End of Short Road Gonzales CA 93922 All work shall comply with the following:
 ENGIE Services U.S. will provide all equipment and materials required.  ENGIE Services U.S. will be responsible for all tools, equipment, lifts, storage containers, on-site supervision, labor, materials, and transportation necessary to complete the preventative maintenance activities. Equipment and tools are not to be borrowed from the Customer or Site Host.  All aspects of the work will comply with all applicable local, state, and national codes and regulations.  When moving heavy equipment (forklifts, scissor lifts, etc.) between sites, ENGIE Services U.S. must follow local traffic ordinances.
 Heavy equipment left overnight shall be secured to be inoperable. Keys shall not be left in equipment.
 When moving heavy equipment or driving large trucks on site during occupied periods, vehicle shall be accompanied by a person on foot.
 ENGIE Services U.S. is responsible for the timely cleanup of the site on a daily basis and removal of all loose packaging materials and trash from the site.
 Stop Work Authority -All workers have the authority and responsibility to stop work activities if an unsafe act is observed or imminent danger or dangerous condition is noted or perceived. These conditions may include danger of serious injury or fatality, or concern about a potential environmental release. ENGIE Services U.S. O&M manager will determine if conditions can be abated or mitigated in the field. As appropriate, a Stop Work Notice may be issued. The Stop Work Notice normally stops a specific activity within a project, not the entire project, unless dictated by the situation.  All equipment shall be confirmed to be secured and locked before leaving site.  Before leaving the site, all Modbus communications must be confirmed to be working correctly, this can be done at the Acquisuite or by calling an ENGIE Services U.S. monitoring or O&M representative.
 Any work done on WWTP solar array shall ensure continuity of GridLock Solar Panel alarming wiring upon completion of work.

SCOPE of Work:

System Inspections: Annual
 Visually inspect arrays, panel mounting, wiring, combiner boxes, sub combiner boxes, and disconnect switches.
 Visually inspect combiner boxes, sub combiner boxes, and disconnect switch panels.  Visually inspect top side of solar panels and mark on array site plan any broken panels found.  Visually inspect bottom side of solar panels looking for discoloration or any other abnormalities.

Photograph and mark locations on array site plan.
o Panels showing signs of electrical shorting shall be removed from circuit by opening string fuse, disconnect MC connectors and mark panel with an X on the backside using black electrical tape. Wires shall be secured and not left hanging down.  Visually inspect array racking components
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Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

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o Visually inspect racking hardware and components for abnormal wear or excessive corrosion.
o Visually inspect any roof or building penetrations for signs of damage or compromised seals. o Inspection of structural system for any abnormal movement or settling.  Visual inspection of exposed array wiring.
o DC wiring not installed in a raceway will be inspected for chaffing, deterioration, and proper MC connections.

System Testing: Annual
 Perform string testing on all solar source circuits utilizing Solmetric PV Analyzer and provide resulting report.
 Infrared scan inverters, combiner boxes, disconnects and switchgear.  Service inverter internal components per manufacturer’s guidelines to be performed by technician holding Inverter Manufacturer training certificate.
 Continuity test all fuses.

Inverter Cleaning: Semi-annual
 Replacement of inverter Intake air filters.
 Clean inverter air intake and vent ducts.
 Clean and remove dust from inverter control boards. (Using canned compressed, non-static air)  Clean outside of inverter cabinet, louvres, transformer cabinet and louvres, and switchboard cabinets. Remove all spider webs and debris.
 Remove all dirt and debris from equipment pad areas pertaining to solar equipment.

Solar Array Inspection and Washing: Semi-annual
Solar Array Visual Inspection:
 Visually inspect arrays, panel mounting clips, solar panel ground clips, solar panel ground wire, DC string wiring, and DC combiner boxes. Note any rust, missing labels, clips, wire chaffing/deterioration, hanging wires, water infiltration, structural damage, or other problems.  Identify broken modules on a site plan for follow up replacement.  Take ‘Before Washing’ Photos.

Solar Array Cleaning
 Proper lift equipment will be used if necessary when reaching above solar modules.  Water used shell be near ambient temperature.
 Will avoid washing broken solar panels.
 Only Deionized Water will be used for the module cleaning.  Clean modules surface & frames, according to solar panel manufacturer’s warranty specifications.

Monitoring: Monitor system performance on a daily basis. (i) System performance is evaluated by comparing actual production data and actual local weather data to the production values predicted by PVsyst modeling software. These evaluations are performed monthly; greater-than-predicted Packet Pg. 26
Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE Operation & Maintenance Agreement
The City of Gonzales and ENGIE Services U.S.

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degradations may indicate the need for further inspection and possible recommendation for panel washing.
(ii) Reporting: A web portal will be provided for users to view and download solar production data. A monthly email report showing: production for the month, production year to date, and monthly percent of expected production.

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Attachment: Engie Services Agreement (2371 : Resolution No. 2022-16 Authorizing Execution of an Operation & Maint. Agreement with ENGIE City of Gonzales

CITY MANAGER DEPARTMENT

STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: April 4, 2022
FROM: Rene Mendez, City Manager
SUBJECT: Discussion and Consideration of an Increase of 1/2 Percent (.5%) Transaction and Use Tax

RECOMMENDATION
As directed by the Council, this item is being brought forward to discuss and provide direction on bringing forth to the voters (electorate):

1. Extending the Sunset Timeframe of both Measure K and Measure X another 20 years, from 2044 to 2064; and

2. An additional ½ Percent (.5%) Transaction and Use Tax Increase.

BACKGROUND
In 2014, your Council considered and placed on the ballot a ½ percent (.5%) Transaction and Use Tax (TUT) measure, Measure K, which was ultimately approved by the voters. Subsequently, your Council considered and placed on the ballot an additional ½ percent (.5%) Transaction and Use Tax (TUT) measure, Measure X, which was also approved by the voters with a sunset through 2044, and an oversight Advisory Sub Committee. This measure also extended the life of Measure K, through 2044.

Since the passage of both measures, the City has worked very hard to meet all the requirements set forth by the voters, which staff is pleased to report have all been met. A prime example is the establishment of the TUT Advisory Committee for Measure K, which since its inception, has been very engaged, proactive, and effectively represented the community. To date, all the projects and program recommendations by the Advisory Committee to the Council have been approved. Projects and/or programs for Measure K funds have included:
• Funding the debt service for the renovation of the Community Pool AGENDA
ITEM
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• Youth Services and Leadership Development
• New restrooms at Central and Meyer Parks
• Tot Lot at Centennial Park
• Improvements to the Skate Park
• Resurfacing of the Tennis Courts (split with the GUSD) • Gonzales Day Camp
• A very successful Community Participation Grants Program • Expanded After School and Summer Youth Program
• Senior Programs
• Accessibility Improvements to the Council Chambers and City Hall • New Playground equipment at Meyer Park
• Internet for All
• A critically needed expansion of Fire Fighter personnel.

For Measure X, both the Advisory Subcommittee and the City Council have shown a desire to focus Measure X expenditures on the Community Center Complex Project.

Over the last year, there has been a lot of great work on the Community Center Complex Project and while everything is moving forward nicely on the design and community input, estimated costs have increased significantly beyond what was initially projected. First, the impacts caused by the COVID-19 Pandemic drove cost up, and now the Russian – Ukraine conflict is also having a significant impact; as a result, the project has gotten significantly more challenging to finance.

The project team comprised of City staff, the Project Manager (Swinerton), and the City’s Financial Advisors (NHA Advisors), have been spending a lot of time developing financial strategies. One of the more promising financing alternatives is to pursue a 40-year United States Department of Agriculture (USDA) loan. While the USDA loan option has shorter duration timeframes, a 40-year loan would provide the most capital for the project and be the most financially feasible. However, two of the potential annual financing sources, Measure X and Measure K, currently sunset in 2044. In order to provide maximum feasibility, it would be important to extend the sunset timeframe of both of these measures at least through 2064.

Another important piece that has been discussed is the possibility of placing before the voters an additional ½ percent (.5%) TUT to help provide additional funding.

As part of the most recent project update to your Council, extending the sunset of the existing tax measures and the possibility of an additional ½ percent (.5%) TUT were presented, and staff was directed to bring those items back for a full discussion.

REVIEW & ANALYSIS
Extending the Sunsets of Both Measure K and X
In order to extend the sunset, the question would need to be placed before the community during the next general election in November. Because General Purpose taxes can only be brought before the electorate during a General Election, any proposed changes, like extending the sunset, would need to similarly occur1.
1 Cal Const Article 13C, Section 2(b) No local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body.

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Language for this ballot measure would be fairly straightforward and based on the high community interest for the Community Center Complex Project, staff feels a compelling case would be presented to the electorate for support.

New ½ cent Transaction and Use Tax
As it pertains to the additional ½ percent (.5%) TUT, like the existing measures, the option exists whether to place it before the voters as a General-Purpose Tax or Special-Purpose Tax. There are several key differences between both:
• A general-purpose tax only requires a 50% +1 voter result to pass, as a oppose to a special dedicated tax which would require a 2/3 voter approval. • Depending on the nature of the tax, if general, it would be set to be overseen by a Committee that will bring forward recommendations to the Council. On the other hand, a special-purpose tax would need to reflect what that tax is intended to fund so there would be no need for an oversight Committee.
• A General-Purpose tax could only be brought before the voters during a General Election; however, a Special-Purpose Tax could be placed before the voters during one of the established dates for regular elections or at a special election date set by the Council. In order to save the costs involved with a special election, the Council could also seek approval of a Special-Purpose Tax at an all-mail election. However. there are limitations on the dates at which all-mail elections may be held. The next available date for an all-mail election is August 30, 2022.

Based on the discussion around the Community Center Complex Project and the need to generate additional funding sources, it makes sense to consider an additional ½ percent (.5%) TUT, especially with the large interest in and discussion around the Community for the Center. While, this is certainly positive and bodes well for the success of the measure, it will likely need to be placed before the voters as a Special-Purpose Tax that would require 2/3 support votes to pass. This will be more challenging, but with the “right” compelling message and support, it would have a good chance for success.

If a special tax, your Council could direct staff to specify the purpose and use for the tax, which could certainly include the Community Center as priority number 1. In addition, unlike a general purpose, a special dedicated tax could be placed in front of a special election in 2022.

How does Gonzales Tax Rate Compare to Other Cities?
The following table compares existing local tax rates.

Tax Rate Comparison by City/County
City/County Tax Rate %
Greenfield 9.50%
Salinas 9.25
Seaside 9.25
Marina 9.25
Del Rey Oaks 9.25
Soledad 9.25
Monterey 9.25
Carmel-by-the-Sea 9.25
Sand City 8.75
King City 8.75
Gonzales 8.75
Monterey County (unincorporated area) 7.75
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As has been the case before, the simple fact of the matter is that our community when shopping outside the City or online, is paying a higher sales tax rate already so a .5% would have minimal impact.

Furthermore, because many communities around us have higher Transaction and Use Tax rates, when large purchases are made outside the City (i.e., automobiles, large appliances, etc.), the City is losing tax revenue as a result of not having a comparable TUT. This is because while the base Sales & Use Tax (commonly known as the Bradley-Burns), is generally allocated to the jurisdiction where the sale is negotiated or the order is taken, the transactions and use tax is allocated to the district where the goods are delivered or placed into use. As a result, we currently are only capturing 1 percent of a large purchase outside the City made in Salinas and they are capturing the remaining .5% (the difference between 9.25% and 8.75%), which is significant when large purchases are made.

Also, one only needs to look at the revenue generated by the City’s base Bradley-Burns Sales and Use Tax of 7.75%, which is approximately $1.1 million and compared to what is generated by the ½ percent TUT, approximately $700,000, to understand the revenue benefit of out-of-town sales that are captured by the TUT.

Next Steps
If your Council directs staff to bring back the required next steps to move one of both of these measures, it will be important to consider how they are placed and drafted. Careful consideration would need to be given to the timing of both measures and whether to place them together as one ballot measure and/or separate measures.

Based on the direction from your Council, staff would work with the City Attorney to bring back the necessary actions to take before the voters extending the sunset life of both Measures K and X, and also consideration for an additional ½ percent (.5%) TUT.

Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.

Explain: This item is being brought forward for discussion purposes.

Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ___No ___ NA
Explain: Please see above.

Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes ____No __NA
• Housing X Yes ____No NA
• Recreation X Yes ____No NA
• Environment X Yes ____No __NA
• Education X Yes ____No NA
Explain: Please see above.

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ALTERNATIVES
Your Council has maximum flexibility to decide whether to move forward to extend the sunset timeframe by 20 years to 2064 of both Measure K and X and place another ½ percent (.5%) TUT before the voters.

This item is being brought forward as directed for discussion purposes and direction.

BUDGET IMPACT
Based on the direction provided by your Council, there will be costs to the City which would range from $5,000 to $50,000 to place the measures before the voters during the next General Election and also a Special Election. Based on the direction provided, this cost will be more refined as part of the next item brought before your Council.

On the revenue side, should the Council approve, and the voters pass an additional ½ percent (.5%) increase to the TUT, the increase would generate an additional $700,000 annually. Extending the sunset timeframe through 2064 would improve the City’s financial ability to pursue financing for projects like the Community Center Complex.

CONCLUSION
As directed by the Council, this item is being brought forward to discuss and provide direction on bringing forth to the voters (electorate):

1. Extending the Sunset Timeframe of both Measure K and Measure X another 20 years, from 2044 to 2064; and

2. An additional ½ Percent (.5%) Transaction and Use Tax Increase.

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